(Atlantic) At Wednesday’s regular meeting, the Atlantic City Council set a date for public hearings and approved additional action on proposals to enter into a General Obligation Loan Agreement.
Atlantic City Administrator John Lund said for many years, the City’s annual budget and 10-Year Capital Improvement Plan (CIP) projected funding for upcoming capital improvement projects through various revenue sources. These plans, along with the Debt Management Plan, outlined the need for two debt issuances to cover the City’s needs for 2026-2036. The first issuance was scheduled for FY 2026, and the second around FY 2028, with the amounts borrowed adjusted for inflation and changes in project needs. The first debt issuance was always expected to be the smaller of the two. Earlier this year, the City issued the first debt of $4,255,000 to fund EMS ambulances and equipment, police vehicles and equipment, and street improvement projects.
Lund says the second debt issuance, which was the larger of the two, was moved up to FY 2027 in the FY 2026 Budget to prevent delays in the street project schedule. Earlier this year, the total estimated debt needs over the next 10 years were projected at $9,730,000. This estimate did not account for refinancing, the potential benefit of a bond premium, or any issuance costs.
“In reviewing these needs—and with the upcoming legislative session in mind—the idea of beginning the debt-issuance process for long-term requirements was presented to the City Council during its October 29, 2025, Budget Work Session,” said Lund. “The goal was to ensure completion of essential street projects, fulfill landfill obligations, and address capital equipment, vehicle, and building needs. Following that discussion, the needs were refined and sent to the City’s bond broker and finance attorneys.”
In the end, here is the bottom line for the 2026 General Obligation Bond Series.
. • The City has 258 capital projects scheduled over the next ten years totaling $10,170,000, we will need $4,220,000 in additional funding to refinance callable debt and extend the terms on those debts. We will need $273,084 for issuance costs. Totaling $14,663,084 in needs.
• Uses of the funds include police vehicles and equipment, fire trucks, vehicles, and equipment, an ambulance, civil defense sirens, street projects, required landfill payments, airport projects, city hall improvements, and library equipment and improvements.
• The City will issue debt for only $13,300,000.00.
• $1,213,472.50 in a bond premium (free funding) will be given to the City from investors, making the difference between needs and debts issued.
• Instead of a flat debt service levy, that increases property tax dollar collections as assessments increase, the City is switching things up by refunding $4,220,000 in principal debt outstanding and extending the terms on those bonds and restructured the payments to align with our non-callable debts for a consistent need of $1,140,028 property tax dollars between July 1, 2026 and June 30, 2047. This will result in a declining debt service levy. 3
• 2038 is the next period where debt requirements will fall low enough to allow for another debt to be issued without increasing property taxes. Any other debts not financed with different cash flows will result in a property tax increase, but this debt will not.
