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Debt Table of Contents
Debt Management & Policy................................................................................................................ 189
Outstanding Debt Summary ............................................................................................................... 190
General Debt Service
Outstanding Debt By Type..................................................................................................... 191
Legal Debt Margin for General Obligation............................................................................. 191
Principal & Interest Requirements -Tax-Supported............................................................... 192
Principal & Interest Requirements - Self-Supporting............................................................. 193
Utility Debt Service
Principal & Interest Requirements......................................................................................... 194
Utility Revenue Bond Debt Coverage.................................................................................... 195
Proposed Debt Issues ........................................................................................................................ 196
189
Debt Management & Policy
The City’s goal is to fund capital improvement projects on a ”pay as you go” basis wherever possible. For large
infrastructure projects and during heavy growth, debt financing is sometimes required. Debt financed projects must
meet the City’s long-term financing criteria as included in the Fiscal and Budgetary Policy.
IX. Debt Management
The City of Georgetown recognizes the primary purpose of capital facilities is to provide services to
the community. Using debt financing to meet the capital needs of the community must be evaluated
according to efficiency and equity.
• Efficiency must be evaluated to determine the highest rate of return for a given investment of
resources.
• Equity is resolved by determining who should pay for the cost of capital improvements.
In meeting the demand for additional services, the City will strive to balance the needs between debt
financing and “pay as of you” methods. The City realizes that failure to meet the demands of growth
may inhibit its continued economic viability, but also realizes that too much debt may have
detrimental effects on the City’s long-term financial condition.
The City will issue debt only for the purpose of acquiring or constructing capital assets for the
general benefit of its citizens and to allow it to fulfill its various purposes as a city. Debt financing
will be considered for non-continuous capital improvements of which future citizens will be benefited.
Financing alternatives will be explored prior to debt issuance.
When the City of Georgetown utilizes long-term financing, it will ensure that the debt is soundly
financed by:
• Conservatively projecting the revenue sources that will be utilized to pay the debt.
• Financing the improvement over a period not greater than the useful life of the improvement.
• Determining that the cost benefit of the improvement including interest costs is positive.
The City’s debt management objective is to maintain level debt service that does not adversely impact tax or utility
rates and does not hinder the City’s ability to effectively operate the utility systems, street network, or other facilities.
The City’s debt payments must stay within provisions of state law, bond covenants and council adopted policies. All
of these criteria and objectives are met with the debt financing proposed in this budget.
The City of Georgetown’s bonds are rated:
General Obligation Utility Revenue
Fitch A A
Moody’s A1 A1
Standard & Poor’s A+ A+
190
Contractual Obligation – Brazos River Authority
Funds Georgetown’s pro-rata share of Williamson County Raw Water Line
Outstanding Debt Summary - By Type as of October 1, 2002
Debt 2002/2003 2002/2003
Outstanding %Principal & Interest Handling Fees
GENERAL OBLIGATION DEBT:
Tax Supported:
Streets and Transportation 6,283,392 25%679,709 4,854
Parks and Recreation Facilities 2,158,355 9%280,710 1,667
Public Safety Facilities 3,221,500 13%255,526 2,488
Other Improvements 8,402,380 34%961,577 6,491
Subtotal - Tax supported GO Debt 20,065,627 2,177,522 15,500
Self Supported:
Airport 2,033,613 8%201,095 200
Stormwater Drainage 2,700,760 11%253,831 350
Subtotal - Self supported GO Debt 4,734,373 454,926 550
Total General Obligation Debt 24,800,000 100%2,632,448 16,050
UTILITY REVENUE DEBT:
Electric 9,346,822 31%1,088,935 1,000
Water 10,734,846 36%1,315,719 1,000
Wastewater 9,923,332 33%1,184,916 1,000
Total Utility Revenue Debt 30,005,000 100%3,589,570 3,000
CONTRACTUAL OBLIGATIONS:
Brazos River Authority (BRA) Contractual Obligation 43,486,220 88,749
Total Contractual Obligations 43,486,220 88,749
TOTAL DEBT & CONTRACTUAL OBLIGATIONS 98,291,220 6,310,767 19,050
191
Legal Debt Margin for General Obligations:
All taxable property within the City is subject to the assessment, levy and collection by the City of a continuing,
direct annual ad valorem tax sufficient to provide for the payment of principal and interest on the Bonds within
the limits prescribed by law. Article XI, Section 5, of the Texas Constitution is applicable to the City, and limits
the maximum ad valorem tax rate to $2.50 per $100 assessed valuation (for all City purposes). The Charter of
the City adopts the provisions of the constitution without further limitation. Under rules promulgated by the Office
of the Attorney General of Texas, such office will not approve tax bonds of the City unless the City can
demonstrate its ability to pay debt service requirements on all outstanding City tax bonds, including the issue
to be approved, from a tax levy of $1.25 per $100 of valuation, based on 90% collection of tax.
Allowable levy per $100 valuation $1.25000
Proposed levy for debt service
(included in total adopted rate of $.30261) .09954
Percentage of allowable levy used 8.0%
Outstanding Debt by Type
General Obligation Debt
Streets
Parks
Public Safety Airport
Other
Stormwater
Utility Revenue & Contractual
Obligation Debt
Electric
Water
Wastewater
192
Summary of Debt Service Charges to Maturity
Debt funded by dedicated portion of local ad valorem tax
General Obligation Bonds and Certificates of Obligation - TAX SUPPORTED
Year Ending Outstanding Total
September 30 Beginning of Year Interest Principal Requirements
2003 20,065,627 1,017,863 1,159,659 2,177,522
2004 18,905,968 957,408 1,087,686 2,045,094
2005 17,818,283 902,385 827,761 1,730,146
2006 16,990,521 859,676 868,946 1,728,622
2007 16,121,575 815,012 918,569 1,733,580
2008 15,203,007 771,003 958,393 1,729,397
2009 14,244,613 724,810 1,003,218 1,728,029
2010 13,241,395 675,466 1,079,775 1,755,241
2011 12,161,620 622,616 1,127,835 1,750,451
2012 11,033,785 566,420 1,182,785 1,749,205
2013 9,851,000 506,947 1,245,430 1,752,377
2014 8,605,570 443,419 1,313,075 1,756,494
2015 7,292,495 376,095 1,378,415 1,754,510
2016 5,914,080 305,096 1,516,060 1,821,156
2017 4,398,020 226,691 1,595,040 1,821,731
2018 2,802,980 144,101 1,077,140 1,221,241
2019 1,725,840 88,694 845,840 934,534
2020 880,000 44,750 490,000 534,750
2021 390,000 19,500 390,000 409,500
Interest
Principal
0
500,000
1,000,000
1,500,000
2,000,000
Th
o
u
s
a
n
d
$
$
$
'03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21
General Debt Service - Tax Supported
193
Summary of Debt Service Charges to Maturity
Debt issued for specific purpose and repaid through dedicated revenues
General Obligation Bonds and Certificates of Obligation - SELF SUPPORTING
Year Ending Outstanding Total
September 30 Beginning of Year Interest Principal Requirements
2003 4,734,373 234,585 220,341 454,926
2004 4,514,032 223,872 252,314 476,186
2005 4,261,718 212,090 237,239 449,329
2006 4,024,479 201,073 246,054 447,127
2007 3,778,425 189,678 256,432 446,110
2008 3,521,994 177,587 271,607 449,194
2009 3,250,387 164,512 281,782 446,293
2010 2,968,605 150,676 270,225 420,901
2011 2,698,379 137,461 287,165 424,626
2012 2,411,214 123,149 297,215 420,364
2013 2,113,999 108,160 314,570 422,730
2014 1,799,429 92,085 326,925 419,010
2015 1,472,504 75,079 346,585 421,664
2016 1,125,919 57,000 298,940 355,940
2017 826,980 42,053 314,960 357,013
2018 512,020 26,305 367,860 394,165
2019 144,160 7,568 144,160 151,728
Interest
Principal
0
100,000
200,000
300,000
400,000
500,000
600,000
Th
o
u
s
a
n
d
$
$
$
'03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19
General Debt Service - Self Supporting
194
Summary of Utility Debt Service Charges to Maturity
Revenue bonds issued to finance construction of electric, water and wastewater improvements, and secured by the net operating
revenue of all combined utilities. The allocation of debt principal is based on the use of each bond issue. Each utility fund pays
debt service from operating revenues. The Brazos River Authority Contractual Obligations are the liability of the Water Fund.
Year Ending Outstanding Total BRA
September 30 Beginning of Year Interest Principal Requirements Contract
2003 30,005,000 1,444,570 2,145,000 3,589,570 88,749
2004 27,860,000 1,351,805 2,260,000 3,611,805 631,188
2005 25,600,000 1,248,268 2,330,000 3,578,268 670,374
2006 23,270,000 1,140,157 2,305,000 3,445,157 800,138
2007 20,965,000 1,033,347 2,270,000 3,303,347 945,102
2008 18,695,000 929,100 2,025,000 2,954,100 1,298,214
2009 16,670,000 835,895 2,070,000 2,905,895 1,339,651
2010 14,600,000 738,670 2,120,000 2,858,670 1,384,876
2011 12,480,000 637,087 1,825,000 2,462,087 1,791,901
2012 10,655,000 547,480 1,870,000 2,417,480 1,636,239
2013 8,785,000 454,740 1,625,000 2,079,740 1,651,314
2014 7,160,000 372,572 1,710,000 2,082,572 1,646,289
2015 5,450,000 284,799 1,815,000 2,099,799 1,636,239
2016 3,635,000 191,399 820,000 1,011,399 2,153,814
2017 2,815,000 149,116 830,000 979,116 1,927,689
2018 1,985,000 105,966 915,000 1,020,966 1,832,214
2019 1,070,000 58,206 455,000 513,206 1,876,309
2020 615,000 33,269 480,000 513,269 1,869,824
2021 135,000 6,919 135,000 141,919 1,874,755
2022 1,873,350
2023 1,876,144
2024 1,874,019
2025 1,873,690
2026 1,174,638
2027 1,175,009
2028 1,175,425
2029 1,178,221
2030 1,179,091
2031 763,079
2032 761,981
2033 764,326
2034 762,368
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
4,000,000
4,500,000
2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2034
Utility Debt Service & Contractual Obligations
BRA
Interest
Principal
195
Utility Revenue Bond Debt Coverage
The City has agreed through its bond ordinances to maintain a minimum "times coverage" ratio of 1.25. The
ordinance allows the City to eliminate its reserve fund requirement with coverage of 1.35 or better. The times ratio
is calculated using the net revenue available for debt service from the combined Water, Electric and Wastewater
utilities' operations divided by the combined debt service requirement of the utilities. The times coverage ratio is also
reviewed by bond rating agency analysts when the City receives a rating for a potential bond issue.
The following combined times coverage ratios have occurred, based on actual revenues and expenditures, for the
fiscal years indicated:
The 2002/03 Proposed Operating Plan provides the revenue to debt ratios shown below. The City’s Fiscal and
Budgetary Policy requires that each utility maintain separate coverage of at least 1.5. The excess coverage provided
by each fund is used to pay for related utility system capital improvements and other uses approved by the City
Council.
Water Electric Wastewater
Fund Fund Fund Total
REVENUE:
All Other Revenue 748,225 1,154,923 492,385 2,395,533
Interest 92,600 125,103 65,300 283,003
System Billings 9,465,000 24,419,064 4,875,000 38,759,064
Total Revenues 10,305,825 25,699,090 5,432,685 41,437,600
EXPENSES:
Departments 5,428,681 20,263,530 3,263,409 28,955,620
Total Expenditures 5,428,681 20,263,530 3,263,409 28,955,620
Net Available for Debt Service 4,877,144 5,435,560 2,169,276 12,481,980
Annual Debt Requirement 1,315,720 1,088,935 1,184,916 3,589,570
Times Coverage Ratio 3.71 4.99 1.83 3.48
4.03 4.32 5.20
4.05
5.77
6.56
5.70
3.96 3.67 3.48
0.00
2.00
4.00
6.00
8.00
93/94 94/95 95/96 96/97 97/98 98/99 99/00 00/01 01/02* 02/03*
Utility Revenue Bond Coverage
196
Financial Impact:
Utility Revenue Debt:
4 Debt proceeds will be used for system expansion and repaid through continued growth of the City’s customer
base.
4 The City is scheduled to issue $6.5 million of the proposed debt in the Fall of 2002. The remaining proposed debt
will be issued depending upon project timing and final costs.
Proposed 2002/03 Debt
Utility Revenue Bonds:
Electric System Improvements 585,000
Water System Improvements 5,530,000
Wastewater System Improvements 1,800,000
Irrigation System Improvements 1,075,000
Stormwater System Improvements 250,000
Total Utility Revenue Bonds 9,240,000
Total Proposed 2002/03 $9,240,000
Note:Issuance costs on the above debt issue total $235,000.
The City expects Total Debt Outstanding to be $60,325,000 at September 30, 2003, which includes
the 2002/03 proposed issue, and principal reductions of $3,955,000.