While governments issue bonds to pay for major buildings and other improvements, the Minnesota Taxpayers Association released a report in August warning that the amount of debt per capita is too high, especially in St. Paul. This is a panel discussion on local government debt, comprising of John Haynes, Governor Wendell Anderson's staff assistant for taxation and school finance; State Senator Joseph O'Neill, Independent-Republican from Saint Paul who serves on the Taxes, Education and Rules Committees in the State Senate; Don Patterich, executive director of the Minnesota Taxpayers Association; and Charles Hanna, executive Secretary of the Capital Long Range Improvements Committee for the city of Minneapolis.
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Benedetto's is a legal status that death of many public body is has it means that the Republic body has gone to the private Natural Market & Soul promises to pay at some future date at a certain interest rate promises to pay back a loan and they get money from private lenders that way and then over some long. Of time. The bonds are paid off what makes public Bond somewhat different from private funds is the amount of public guarantees. There are in the State Constitution and state laws to pay them off in Most states and served in Minnesota the State Constitution and a variety of State statutes. I give these public bonds a large amount of guarantee. You said they will be paid off that generally. It is made a a requirement that the bonds be paid before other public services are paid forGenerally, there is a provision that the state auditor or the state treasurer shall automatically levia special property tax, if the end of the government involved fails to pay off the bonds of right is guaranteed used to make sure that these bonds are paid off one of the results that is of that public bonds tend to have a very low interest rate because of the small amount of risk medicine ball. They also have a small interest rate because they are generally tax exempt from both state and local income taxes. What does all this mean to the individual taxpayer? How can a person find out just exactly what the impact of this Bond of debt is on the taxes that he or she pays?You really can't he really can't it is very difficult. Minnesota taxpayers Association is one of the few groups that I'm aware of that really does a job of trying to lay out for the taxpayer exactly. What a situation is take property tax. Most the people listening to this program. If you ask them how much property tax do they pee on their hose that goes to the state of Minnesota? They give you ovarian estimates from 10 to 50 to 60% The truth of the matter is there is not one single set of property tax and you and I pay on our home or any other place that goes to the state. It's completely with local government. Now local government sends out a notice and Charles can maybe tell us about Minneapolis or happy by the Ramsey County sends us out a notice but although it differentiates between the different elements of local government to raise money by property tax. It does not differentiate how much of that is byThe death and how much of it is for operating programs. Do you have some thoughts about that? How much the city? How much is a Coney much less know anything about how much their property taxes goes for Bond death St. Paul. For example, there has not city of st. Paul that is there has not been a referendum to the people since 1953 and bonded that the people really don't know within st. Paul how much debt there is and it's not adequately represented nor is it represented on their property tax statement itself presently in St. Paul 29% of the city of st. Paul's 1975 Levi payable in 1976 goes to Bonded thatIn the recent report to Minnesota taxpayers Association mentioned that there is a certain amount of debt per capita in the cities of Minneapolis-Saint Paul. Now one of those figures actually mean what what is the significance of knowing if there's a $350 per capita debt per cabin figures compared st. Paul with Minneapolis and some of the Metropolitan Community so I don't think you can compare cities within the United States because we vary so much and structure and taxing district district. It does give us a level is who are the high Spenders in our community who are the lowest fenders and who are average spend Spenders. You can't just take per capita figures at that and whatever meme on 24 Temple St. Paul some $950 per capita debt including overlap in debt is high when looked at at nationally and is high.Highest with in Minnesota, but you can't look at that $1,000 per capita figure alone there many other items that you must look at. For example, you hyper capita income Community can't afford Mart that will probably require. More dab, whereas in a rural area with per capita income may be considerably lower. You will not find that same level of debt and will be extremely more conservative the fact that the per capita death has swollen from Menace way for the average taxpayer and it said something that should concern all of us here and and listeners as well realistically the problem of New York the problem the Saint Paul School District the problem that was outlined by the Minnesota taxpayers Association, and I guess this program is really should be are utilized to help educate taxpayer as to what the situation really is in the fact that he or his children or someone is going to have to pick up these obligations. And as to exactly some of the problems that other communities have gotten into because they have continued to borrow for operating programs, which is one of the important Things about our Constitution, which is I indicated before it does not allow us to use General obligation bonds for operating program. That's why we have a balanced budget in, Minnesota. I think that's an important Point Bob in that in the City of Minneapolis. For example of there are no bonds sold for operating purposes by the City of Minneapolis. And I think in the school district that may not be true. They do sell some tax anticipation bonds to cover some of their operating them cost in while they're waiting for estate aids to come through to them. What kinds of projects ought to be funded through Bonds in Wichita to be paid for out of General Revenue. Why is and everything just to on a pay-as-you-go basis all the time John? Well, I think as a general rule you should only use bonds to pay for a very large one time expenditure for something which will last a long time and makes a good deal of sense. If you're going to build a building which you will use for 30 or 40 years to pay for it over 30 or 40 years has no particular reason why taxpayers in one year should pay for what taxpayers It will be using over the next 20 or 30 years. Can't disagree with that. I think that's absolutely the criteria to fall and I guess what you have to be careful about is sliding over from the capital expenditure programs into the areas such as in my case. I thought the Vietnam veterans were absolutely entitled to a bonus. We had surplus funds were available but instead of pain in the butt that time and they were all going to be paid off supposed to be in 18 months to 24 month. We bonded for that. So instead of coming up with the 60 million dollars, it was necessary for the Vietnam veterans bonus. The taxpayers are probably paying closer than 90 million dollars cuz we're paying off over a. Of time now the Saint Paul School District attracted a lot of attention earlier in the year when it was unable to sell some of its bonds. What was that? What was that about? Let's review that briefly. John Well in the case of Saint Paul, we weren't dealing with long-term bonds for a capital expenditure. If you weren't dealing with their inability to sell bonds to build scooters. We were dealing with short-term notes. They are in a sense of form of bond that we don't normally called on that are they were borrowing for a short. Of time and at the same time when they paid back the short-term long, they brought it again. This was borrowing not for a one-time capital expenditure, but borrowing to finance current expenditures. There is some complicated parts of the story about how you account for money in a school district are some disagreements or worse than the screen in the Saint Paul school district and the state government about how many should be accounted for this was not an argument about who is right and who is wrong it's a case of you have to use one consistent method and steeple happened to using a method different than that which the state wish to use for all I just fixed in the State House results was that in light of that other kind of accounting method the Saint Paul School District was obviously Barling for a car. finishers I am with borrowing increasingly heavily every year for current expenditures and rolling over that dip and the the private rating agencies which review of these proposals to borrow decided. It was an unwise borrowing and remove the rating after a a good deal of discussion to The District in various legislators and state officials were involved a settlement was reached about how they would borrow and how they would get out of borrowing for current expenditures and their rating was restored the problems with the school school district should really have come as no surprise to anybody. Our organization did look at Saint Paul School District a year ago and were severely criticized by the school board for looking into their financing putting out some problems. Probably we should have stayed at it San Antonio's what happened. Problem in failures of governmental entities in the United States that is existence of at the end of a fiscal year and then steadily escalating that he analyzed going back to 1920 all governmental failures in United States at least have the two criteria that are extension in each of the problems that is that at short-term debt in a fiscal year and then steadily st. Paul's problem goes back to when it turned Independent School District 1966 that deficit just increased until 1976. It was a little Coterie of experts who knew what actually was happening, but for the broad general public and for the elected officials many of them were not aware until all of a sudden the investors rating service really Broad. The problem actually in my mind the problem was raised a little bit even before that by the state aid subcommittee, which I'm a member of and then we held some hearings a month or so before in which we indicated that there were I think a hundred and seventy out of the 440 school districts in the state who were borrowing against revenues from the next year. Let me just try to explain that if a person thinks to himself of a normal school year running from September to June. You've got two big as we pointed out before to Big local tax payments. The one is the October payment what you receive and the other one is the following made. It was like a 2 x and which property taxes come in now, we all are aware. Of course that does the school year runs from September their salaries at have to be paid and everything else. So that what happens is you did get the October payment in but then before you get to the Mets, which is really the end of the year you have need for revenues. She does realize they have an under our state statutes. We've allowed school districts to borrow against anticipated revenues for what happened here was they would borrow against anticipated revenues and then one that was enough to balance the budget they anticipated revenues are going to receive in may they would go ahead and borrow against the following October and that was even something that was permissible under the steip and under very restrictive conditions in St. Paul got to the situation where they're not only borrowing against the next April. I mean the next October but they were borrowing against the following me so they were actually borrowing the following years revenues that you may say what what difference does that make the difference in I hope this doesn't sound too complicated simply that's that are stayed for me is based upon what can be raised at a local level. What are we doing a fact that the state is we take a figure some people called arbitrary. We try to claim it's the average maintenance cost of educating a pupil in Minnesota. If you take the figure $900, we multiply that times number of pupils are what we call people units in the school district and we subtract from that whatever that question is, 30 meals or 29 Mills, whatever that raises on the best. We call valuation of the property in that area. Now. The point is that if you're using the assessed valuation of the Year 7475, you're going to get one question, but if you're using that figure, but really raising it against what's received in the following year when your evaluation goes up the people of Saint Paul and these other hundred and seventy School District wherein affect receiving more and the state aid formula headset up to be equalized among all the 440 School District. We pointed that out in our joint state aid subcommittee to point out that the school district to work. Car went ahead to the following year. We're in effect receiving an unfair unequal advantage over there other school districts are receiving more money than the other school districts were entitled and that's why we put the kibosh on that and is John pointed out we set up a fiscal accounting tool which Saint Paul school district is the first one in the state to go on for this the school year and I will help. Somebody mentioned a little while ago the phrase revenue bonds, I believe. I wonder if one of you could explain what the difference is in the various kinds of bonds are issued better clarify that one Revenue Bond can be of Two Types on a pure Revenue Bond where only the revenues from a certain project or building are used to mature the bonds that were used to build this project. Whatever it maybe there's also a general obligation Revenue bond with her. If there isn't sufficient revenue from the project or the building that the full faith and credit of the taxing district is committed to make up that difference between me grabbing land Ebon shorties. And then there's the so-called tax increment. What is that? All the tax increment bondism is a general obligation Bond. It's it's issued to support Prime early development districts in Minneapolis. And there are number of urban renewal areas that have been designated as tax increment districts and then the simple term tax yield from one of those districts is Frozen at a given love and then has development occurs that increment in taxation is used to enrich with advertise. They the cost of those bonds it was viewed until the more recent play a fairly Good device to develop areas. Although I think the experience of of a number of municipalities across the country including Minneapolis shown that said there are problems with it. It's really not a Panacea for for developers. It does create the occasional yet some difficulties when anticipated revenues. Shortfall and there's not enough money coming into to pay for those Bonds in Minneapolis. I think there are a total of 10 tax increment districts that are under the administrative responsibilities of the housing Redevelopment Authority. They have sold Bonds in six of those they're all and in Good Financial condition. There are two districts commonly known as the Loring neighborhood Development Area and the Clear Lake Area both of those out of the development has Nick heard as anticipated and they are in some difficulty. Not really sure yet what the implications are, but some efforts are going to have to be made some majors are going to have to be taken to it to meet the principal interest payments on those first bonds do How is this I was just actually work at the bonds are used to purchase the property and to build a sylheti and then the revenue from the facility which is operated by private businesses pay that pays off Bonsai boy supposed to be a lot of desirable things maybe plan including public improvements the street improvements utilities acquisition of property that turnover of that property to the higher used by higher use something that would create the greater employment opportunities or up create, you know higher tax you to be used for for all of those kinds of things. Texting from a districts are fairly new in Minnesota. We've only had them for a short. And there have been a great many created in the past two years. We still don't have a great deal of experience with them. My office has begun to get rid of concerned about them because some of the things which are happening in there the rapid expansion districts are we think are building up a great deal of of depth and freezing a great deal of taxable property, but otherwise would be available to finance the rest of the services the city got to realize that once they tax increment district is created. And bonds are issued in all of the new tax for property in that district is essentially unavailable to finance anything except those bonds the next 20 or 30 years, which means as has police cost rise as Fire cost Rises school cost rise, everybody else in the city will have to pay for those things. But the people are they taxable property in that development District. They don't help to pay for. And I think as large sections of some cities going to technical districts. We're going to be developing a problem of shifting a huge amount of taxes for City Services on do everything that is left. Why is it they don't pay anything but their own their own Revenue funds why aren't there is possible for city of fire and police protection. Like that's the condition that all of the new evaluation all the taxes on that new property are used to pay off. The bonds are not used to pay for anything else. Should be made clear that the taxes paid the amount of taxes paid prior to that freeze Google toward the kinds of services that that John is talking about what he is saying is is is true. It's one of the principal criticisms of the tax process was the idea that the new property that would be there would be property that would otherwise never exist to be new buildings and a new evaluation that otherwise would exist except for the district doing new things. But that isn't always true. We found a number of districts the new property consists of a re-evaluation of existing property revaluation of existing-home single-family homes for those homes would have gone up anyway technical District in have anything to do with increasing Vape everyone all the rest of the homes in Minneapolis have gone up and are paying higher taxes for sitting in school services, but not those in that District that money is going to pay off the taxes. There are also some other problem with texting from a district dealing with Equity between Howell County taxes are treated in School Street Exeter treated when they throw us go across a city lines that don't directly involved but I think the legislature and certainly the governor's office in the next couple years will be paying more attention to Texarkana districts and if paid in the past, how are these set up who initiates them while they're set up under a variety of laws the legislature authorized Housing and Redevelopment Authority has to do with create a text in Acoma districts. They also authorized Port Authority to create them and then a law passed a few years ago. The authorized City council's to create Redevelopment districts. The last law was a Statewide law. We seen dozens of cities all over the state. I create the Redevelopment districts are fairly new and they haven't done very much as yet and I hope that we will see if there any problems developing For too many cities get too deeply involved in using Texarkana districts because once they set them up is very little we can do about them for the next 20 or 30 years. Let me give you an example in St. Paul establish to texting from a development District miss the whole downtown area of st. Clair District. But St. Pauls made the whole downtown area a text about and District as of 1973 which means it's evaluation and the taxes are frozen going back to 1973. No increased value for the new developments in 73 will be available for services to the school district County city. And any other taxing district the first bond issue in St. Paul Downtown Development District amounted to $500,000 which is spread over 30 years. And it was only $500,000 bond issue which means if the 30 years st. Paul's values are going to be frozen for the other services that is outside of the debt to pay off a $500,000 Bond $500,000. If she would have eyes toward development and planning of the district. We find that this $500,000 to EUR Saint Paul should have hunted maybe over a short period timer to two or three years to plan the development but to with holy increase valuation St. Paul for 30 years manifestly unfair to the Saint Paul School District to the county and anybody else who shares their revenues whiskey city of Saint Paul and I suspect all of us might agree that there are problems with tax increment process. That might might be worth noting some of the reasons that the tax earned income tax breaks really came into being if you look at the if you look at the urban renewal program in a city such as Minneapolis, which were largely supported by the federal Turn it up until the last couple of years. There were money is available through federal grants to carry out certain developments in and residential areas primarily and to some extent and commercial industrial areas. But those money is a wild ride up there just simply isn't any new federal dollars coming down the road. They were getting them now in terms of Community Development block grant programs in General Revenue sharing and things of that sort. So the cities like Minneapolis and Isis set sister to 2nd St. Paul have been hard-pressed to find ways of financing the development of areas that the that they feel are underutilized and that's largely the reason that the tax increment has been employed in City of Minneapolis and her burrito Larry, even when the federal dollars were available few of them were available for industrial or commercial purposes. And I don't know it's you. It seems to me that it's a question of Alternatives. It may not be the best possible tool. It may be the in the long run. Maybe the best possible to on the short run to get some of those areas Movie Central City. I don't know what the case might be as John would it about cities naudline part of the state of the central cities are are really kind of devouring themselves. You know, we get all kinds of federal assistance and state assistance to provide transportation systems of free ways to help move people out of the city and we get federal aid to create social programs that attract other person's end of the city and its really caught cities like Minneapolis really caught between these conflicting pressures tax increment may not be the Panacea. It may be the most practical tools the moment. I would agree that there their hazards and needs to be watched very carefully. I think I'm in Minneapolis at least as far as the urban renewal type of tax in the preceding very very cautiously in relatively few bonds and And try and move some of those areas into more productive use, I guess so reluctance in recent years to say we are going to continue to pour money into the municipalities counties and townships without having some kind of a limitation on your ability to attack so that the taxpayers can actually receive some relief and also because of as Charles indicates the the whole problem there is with the lack of funds. City governments and local government units have look to other ways to get around. One of the ways is tax increment financing. The other way is to come to the legislature with all these kind of local bills with OP which obviate any necessary requirement of having the people vote as they normally do in a bond issue and I voted for a lot of those bills which have not required the people to be able to vote because I feel as an elected legislature that I do represent the people but the point is that people don't really know what actually the situation is because of legislators truthfully who passed bills like that because of tax increment financing him because of the way our tax structure is now at the present time that people can hardly tell where their money is going the situation that you have described is that A half million dollars worth of bonds of new shoot in the downtown Saint Paul Area and they have not sporadic and development that they were designed to sell. Something else is going to have to come along to make that development happen. But when it does the property taxes paid by the businesses will not be used to help support any other city services. You'll just be used to pay off those original Banda didn't do any good. Anyway, it's all right. Internet service at those bonds and doom do any good if they will most likely do something in st. Paul that is playing now is part of the Arts and Science Museum a medical complex in apartment complex and some shops in the Wabash area cost me arts and science museum. St. Paul has issued some additional bonds to fund the parking ramp portion of a prism 4.6 million dollars, but there will be ongoing development in downtown Saint Paul if this continues to any any great extent, there's going to be a shift. In property taxes from the downtown area eventually to the homeowners in Saint Paul. It's going to take 30 years to pay off the bonds in the downtown Saint Paul in the whole area. And then text me as soon as he is good and little dabs, but it's not an absolute fantasy to read about your entire downtown area. Text Hina Finance is quite popular in California Special Southern California. Some of the smaller City side with the great Panacea exorbitant amounts of tax and fee financing bonds and I are in difficulty presently because they have so much Dad in the tax reform in area freezing monies for the other city services impression know that everything that's been built in St. Paul in the downtown area is under this tax increment financing. The area isn't all large area. But it's only certain projects within the area that are included in this tax increment financing. So the city fathers have to make a decision on each proposal as to whether or not it will be involved or not. And it does not include every project that isn't in the downtown area. Castro, let's take a look at some specific controls which the state put stuck on local governments ability to issue bonds you Mentioned a few of these already. I think one of the chief ones which is San Antonio mentioned in which tended to get away from you in the past few years is a requirement that large Bond issues by referendum vote and this is still generally true, but there are rather large exceptions and quickly in Minneapolis-Saint Paul the way I we have by Statute created large exception. I think it's a it's a habit we should get away from and return to the previous practice of requiring referendum votes for large a bond issues because it is a commitment to spend an awful lot of money for a very very long time and I I feel personally that it should require more than a simple majority vote of the local governing board particularly when we're dealing with a governing board, which do not have as much a public exposure. And I think that a requirement for referendums on large Capital expenditures. He is by itself a rather significant checkup on any kind of unwise Barling there. There's also a general restriction on the amount which a governing body. I can borrow compared to its attacks base, but that General restriction is very large and it just big booty band's all the way up to that legal limit is heavily in debt. So that is restriction that prevent you from from borrowing so heavily it says you are in deep trouble, but you can be in trouble before you ever get to that legal limit. But we should note that time in Minneapolis. There is a recently enacted Charter provision, which says that if the project succeeds 15 million dollars are greater that a referendum action is required. I don't recall and my readings weather Minneapolis it ever has had a referendum requirement on bond issues, but it does have something somewhat unique in the fact that there is a board of estimate and Taxation which is ex-officio of elected members and has and forgive me for not being able to recall. I think two or three elected person is that directly elected to the board who is serve as the as the review body, Watchdog body for Minneapolis taxpayers, in terms of bond issues city council can cannot sell bonds General obligation net that bond without going to the board of estimate with its program and it's just Station arguments and attempt to persuade the board to sell those bonds. I think that's one key difference between Minneapolis and some of its some of the other cities in the state. Dan Patrick is the Minnesota taxpayers Association want to see some additional limits put on local governments ability to borrow governments have some kind of woman under Minnesota statutes. Are we feel that these historical sites are presently meaning for example In St. Paul, the dep outside of the statutory limits is greater than within the statutory limits and I think this is true in Minneapolis. Also, there are so many exceptions to the statutory limits and limits are really meaning was in when you get into overlapping debt. Will you have 3 and 4 taxing districts within a geographical imitation where every one of those taxing districts are nowhere close to there statutory debt limit when you add it all up for a geographical area. Any taxpayer was in that area we could get into some areas of taxes, which may be unreasonable for the geographical area. There is no limitation on overlapping that there's only limitation for individual taxing district such a school district's county has limitations cities have limitation the I may be reasonable. But when added together by for the taxpayer ultimately had to pay that obligation it may be unreasonable. This is what we planned out and called it Saint Paul's. Overlapping that is tending towards excessive and getting into an unreasonable Aryan the city of Father should take a good look at it going to have to be more concerned about this overlapping debt and also that the state that the state debt. Right now using again for Capital basis like he was using from June 30th 1971 per capita of $790. That's for each individual Minnesota including husband wife and children is now $1,158. If you ever took what the federal debt is settled that is where I bring programs as well. You got 450 billion dollars are divided that by 200 million and you've got an additional two and a half thousand dollars for each person in America. So all of a sudden you start to add on all these per capita of debts, and I think that's why I bonding houses. I have shown a concern and why some municipalities and state governments have shown a very legitimate concern as to whether or not we are going to be able to handle these in the future. Are there any proposals that you know of that will come up in the next session to deal with the problem of overlapping death has downpatrick light it up. We haven't done anything on the tax committee. And I'm sorry that we haven't met during the interim cuz I think we should the tax study commission. Would you be a natural place where the John and I are both on. We're studying the income tax and we haven't taken a look at that. But I think that there should be proposals and I think especially in in our metropolitan areas that you will see proposals that try to provide some kind of a limitation over all joint local units ability to borrow. It will not be a very easy problem to deal with because we're dealing with overlapping depth means we're dealing with overlapping governmental units. So are we going to tell at school district can't build a needed School building because the county has already used up their the debt when Bill to jail, they can't build a jail because the City built new source, and these things are going to be hard to balance between overlapping jurisdiction of the different governmental units you call for a constitutional In your report here. Do you not to limit state of Minnesota. Presently our constitution does not limit what amount of death the state of Minnesota May issue at the end of 1975 the state of Minnesota had some 625 million dollars in debt outstanding. I would think two or three years heard by any chance that debt will exceed a billion dollars and it could happen this next session of the legislature if he's 300 million-dollar Bridge bonding Bill does go through and I think I don't do have to look at it a local I will but I think we should look at it on the state level and provide some Maximum source of limitations on where we can go and state spending a 460 million. I don't believe all of that 168 million dollars in general obligation bonds. After I'd been an issue that you're in some states to have constitutional limits based on assessed value are percentages of revenues at one point. I wanted to make I I think that the the kind of interest and the kind of concerns that are being discussed here today with the with growing dead in Minnesota with our local government is very good night, and I am extremely concerned at 2, but I think citizens should remember that for most areas of the state. We're talkin about some things which may develop into a problem in the future Minnesota local governments has a hole in the state government. I have extremely good credit ratings better than most part of the country state of Minnesota self has a AAA credit rating. You can't get any higher than that. Our last Bonds were issued at 5.1% extremely low interest rate. And most of our our cities have AAA credit ratings. I believe Minneapolis has a AAA credit rating. Why we have a good many cities around the country that have quite low credit ready because they are in terrible trouble. Minnesota is in very good shape. It's just that if we have an attitude of unconcerned about the way our debt is operating we might but be in the same position as those cities in five or six years. We're not in that position now, so no one need Panic about it that we use simply have to learn to exercise some self-discipline and we will remain and the same good shape. We are in right now. The only caveat I would add to that. I think with John stated is is generally correct that we are in good shape, but there are some other things and it says subject of another complete area that I have some information about that's our whole retirement policy in the state and what has happened there in the tremendous additional obligations. We have placed on all our citizens in the large State program. So I think there's a whole it's just something we have to be concerned about and people should let their legislators know their concern so that this concern is reflected in the next session of legislature. Have another problem in the Twin City area. This is what's the Metropolitan agencies in with. The Metropolitan Council would presently has bonding Authority with the influx of these new bonding authorities and the resulting overlapped or communities in the metropolitan area is also reflection the geographical areas and has been no change to the statutory debt limit. This is another area of at making capacity place on top of the existing taxing districts. I wouldn't want that. No one is particularly concerned officials are not particularly concerned about the amount of debt. They've got and a kinds of death of God and the fact that they wouldn't want to beat the impression left if they're not aware that there is this overlapping that problem in Minneapolis. I can tell you that the council is deeply concerned about it in the in the hell in the in the council participation developing the bond program. Capital Improvement purposes 1977 they did they are taking into account the overlapping debt of the school district. They are taking into account of the overlapping debt of the other districts that have bonds outstanding. I think that the total amount of school school district alone. Overlapping debt is 44 million dollars the school district as an independent government jurisdiction this evening have became independent back in 59 prior to its independence if it had considerable more conservative Outlook and its capital investment. I didn't say that they don't need School those I certainly do but I think the City of Minneapolis is concerned about these issues and is currently working on debt management policies that it hopes to get into effect reasonably soon.