photo by: Chad Lawhorn/Journal-World

Lawrence City Hall is pictured on Oct. 11, 2024.

City commissioners will consider taking the first steps that would allow the City of Lawrence to issue around $98.6 million in debt to help fund infrastructure projects that are part of the city’s Capital Improvement Plan.

The city plans to issue just under $73 million of general obligation temporary notes and around $25.6 million of general obligation bonds to fund several projects, including phase one construction of the new Municipal Services and Operations campus and renovations to the Outdoor Aquatic Center.

Rachelle Mathews, the city’s finance director, told the Journal-World the temporary notes are typically shorter term debt that help fund construction. For example, according to a city memo, the city plans to issue $27 million in notes for the MSO campus — construction for the $130 million project is currently underway as the Journal-World reported — and around $3.8 million for upgrades to the Youth Sports Complex, which will be completed before the fall.

Meanwhile, the bonds are longer term debt, which Mathews said is similar to a mortgage because the bonds are taken out to pay for an asset that will be held for a long time. The bonds can range between a five-year to 20-year obligation, and Mathews said the city attempts to align the pay off process with the lifespan of the asset to make the costs more equitable over time.

All the projects that are planning to use debt service funds are incuded in the budget under the Capital Improvement Plan, which lists major infrastructure projects the city needs. The projects that would receive debt funding this year are paid by the city’s debt service fund, which is part of the property tax mill levy already approved by the City Commission. Mathews said each year, the team works to ensure the CIP does not have a “level of bonding we cannot sustain.”

Additionally, Mathews said the third-party underwriters who sell the city-issued bonds perform an independent analysis to rate the bonds on whether they believe the city can pay them back. Kansas state law also limits the amount that cities are able to issue based on assessed valuations.

If the commission approves the two procedural items at Tuesday night’s City Commission meeting, the bonds and temporary notes would be issued April 1. Despite the price tag on the debt the city is issuing, Mathews said there are no concerns that the city is issuing debt for projects at an unsustainable level.

“We are in great shape,’ Mathew said. “We are nowhere near our legal lending limit.”

Replacing streets or upgrading buildings and making them more efficient makes them last longer and saves costs because the city is not “constantly throwing repair and maintenance” at them, Mathews said. It’s part of a focus from the city to move to the “lowest cost of ownership” for the public, she said.

Lawrence city commissioners will begin the regular portion of their business meeting at approximately 5:45 p.m. on Tuesday at Lawrence City Hall.