DALLAS - Dallas may delay the sale of almost $400 million of general obligation bonds from November to May to save $15.7 million in debt service in an effort to cut the fiscal 2010 budget by another $100 million.
City manager Mary Suhm in February outlined a number of budget cuts and revenue increases that totaled $90 million. However, the materials prepared for today's budget briefing session by Suhm outline how a deteriorating revenue outlook will require additional reductions in next year's proposed $1.93 billion operating budget.
Suhm said maintaining services and expenditures at fiscal 2009 levels would cost $190.2 million more than Dallas expects to collect in revenue during fiscal 2010, which begins Oct. 1.
In February, Suhm said the next city budget included an increase of expenditures of $68.6 million and a drop in collections of $71.4 million. Since then, she said, expenditures have been cut by $9 million but revenue estimates have fallen by another $59.3 million to a total of $130.7 million less than expected.
Officials now expect drops of $42.8 million in court fines and red-light camera fees, $32.8 million in property taxes, and $24 million in sales taxes.
Dallas had planned a sale in November of GO bonds from $1.35 billion of debt approved by voters in 2006 for various purposes, including street and park projects. The proposed budget included $31.5 million of debt service on the bonds, but Suhm said a six-month delay would reduce debt service for the year by half.
The city's GO debt is rated Aa1 by Moody's Investors Service and AA-plus by Standard & Poor's.
Dallas sold $135.4 million of the 2006 bonds in June 2007, $363.3 million in November 2007, and $257 million in November 2008. The original schedule called for sales of approximately $300 million in November 2009 and in November 2010 to complete the 2006 authorization.
However, chief financial officer David Cook said the city's next GO sale could be closer to $400 million than $300 million.
"The original schedule called for a sale in November of about $300 million, but the last sale [in November 2008] was scaled back a little bit," he said. "We're still trying to determine how much we'll need, but it more than likely will be about $370 million."
Cook said the deferred sale could result in project delays of up to six months.
"This would affect any contracts we had planned to sign between November and May 2010," he said. "Whether they are design or construction contracts, we won't be able to sign them until we get the money."
In addition to the lowered debt service, the $99.5 million in cuts and enhanced revenues suggested by the city manager include a $66.3 million reduction in services and $3 million in additional revenues from higher court fines and parking meter fees. The plan would also cut 347 employees and eliminate the current $10,000 bonus for new police recruits.