ITEM TITLE:
#26-36 - Amending the 2026 City Budget by Accepting an Additional $25MM in Property Tax Revenue and by Appropriating $15.2MM to Debt Service Fund for Payment of Principal and Interest on Bonded Indebtedness
SUBMITTED BY: Jordan Nelson, Finance Director
FISCAL NOTES:
Expenditure Required: $15.2M
Unencumbered Balance: $25.0M
Funding Source: Unanticipated 2026 Property Tax Revenue
RECOMMENDATION:
Approve
SUMMARY STATEMENT:
Property tax revenue has certain statutory limitations that set the maximum amount of tax revenue the City is allowed to collect for municipal operations; often referred to as the “tax cap”. There is no limitation on the amount of tax revenue that can be collected to repay the bonded indebtedness of the City. Tax cap calculations necessitate a payment of $15.2MM on bonded indebtedness in order to collect the $25MM in additional, unanticipated revenue.
As a reminder, the unanticipated revenue is a result of the State Assessment Review Board (SARB) hearing the appeals from taxpayers and municipalities on the value of AS 43.56 (oil & gas) properties within municipal borders and deciding on an assessed value higher than projected during the formation of the 2026 City Budget.
This resolution means:
• $25,049,955.94 in new tax revenue will be collected
• $15,200,000.00 will be used to repay principal owed on the General Obligation (GO) 2022 Sewer Force Main Bond.
• $9,849,955.94 will not be appropriated and, at the end of the fiscal year, increase Unrestricted, Unassigned General Fund Balance (commonly referred to as “savings”)
$12,660,000 will remain on the GO22 Sewer Force Main bond after the end of the 2026 Fiscal Year following the above-mentioned prepayment of principal and regularly scheduled debt service payments.