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Regular City Council Meeting <br />June 16, 2003 <br />Page 7 <br /> <br />the years. Mr. Anderson said it would be a combination of your buy-down on the <br />city's debt. Mr. Anderson advised that there are several sub-funds that all come <br />under water and sewer. There is the operating account, construction fund, and <br />the interest and sinking fund. The ten million dollars is a combination of all of <br />those funds because you have to do a consolidated statement. Mr. Anderson <br />pointed out that if the Council would look at the statement on the far left hand <br />corner they would see just the Water and Sewer system separated from the on <br />going construction as well and the Interest and Sinking Fund and that is where <br />you get the 30 million, but if you combine all those fund together you will get a <br />total number. <br /> <br />Councilman Guest asked if there was such a thing as the city having debt to asset <br />ratios and there being any importance to those and can you feel comfortable with <br />that. Mr. Stowe advised that the debt to asset ratio is one of the things that the <br />rating agencies will look at even though it is a revenue bond and the city's <br />revenue is being pledged to cover it. They will still look at that for the city's <br />rating, and he felt that was significant to the numbers. Mr. Stowe said he was <br />looking at the City of Garland and they are at about 25% to 75% and the City of <br />Paris is about 40% to 60%, and if you look at the old rule of thumbs that the <br />PUC and all the regulatory agencies that use to apply here when they approved <br />financing they have from 25% - 75% to 40% - 60%, so, the city is up on the end <br />right there and every month your are adding to it, if you are borrowing money. <br />If you are not borrowing more money, then every month you are increasing you <br />equity and it is going down that percentage. <br /> <br />Mr. Anderson answered Councilman Bell' s question regarding the balance in the <br />bond fund, advising that there is approximately 3.8 million dollars that has not <br />been spent. Mr. Anderson further advised that this money is obligated for <br />projects such as the water storage tower and for the lines to feed the tower. He <br />said there may be a few hundred thousand dollars that is not obligated. City <br />Manager Malone said the Council will be furnished a break-down of the <br />construction fund. <br /> <br />Mr. Stowe said that one number he can tell the City Council is that for every <br /> <br /> <br />