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Debt Table of Contents
Debt Management & Policy.................................................................................................................187
Outstanding Debt Summary................................................................................................................188
General Debt Service
Outstanding Debt By Type.....................................................................................................189
Legal Debt Margin for General Obligation..............................................................................189
Principal & Interest Requirements -Tax-Supported................................................................190
Principal & Interest Requirements - Self-Supporting..............................................................191
Utility Debt Service
Principal & Interest Requirements..........................................................................................192
Utility Revenue Bond Debt Coverage.....................................................................................193
Proposed Debt Issues.........................................................................................................................194
187
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.
X. 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+
188
Contractual Obligation – Brazos River Authority
Funds Georgetown’s pro-rata share of Williamson County Raw Water Line
Ratio - General Debt to Taxable Value
0.00%
0.50%
1.00%
1.50%
2.00%
93/94 94/95 95/96 96/97 97/98 98/99 99/00 00/01 01/02 02/03 03/04 04/05* 05/06* 06/07*
Outstanding Debt Summary - By Type as of October 1, 2003
Debt 2003/2004 2003/2004
Outstanding %Principal & Interest Handling Fees
GENERAL OBLIGATION DEBT:
Tax Supported:
Streets and Transportation 5,943,923 22%815,400 4,147
Parks and Recreation Facilities 1,998,626 7%335,640 1,394
Public Safety Facilities 3,131,000 12%256,716 2,184
Other Improvements 8,018,906 30%702,586 5,594
Subtotal - Tax supported GO Debt 19,092,455 2,110,342 13,320
Self Supported:
Airport 1,932,651 7%223,249 500
Stormwater Drainage 2,581,380 10%252,936 1,500
Georgetown Transportation Enhancement Corp (GTEC)
Component Unit 3,125,000 12%247,236 2,180
Subtotal - Self supported GO Debt 7,639,031 723,421 4,180
Total General Obligation Debt 26,731,486 100%2,833,763 17,500
UTILITY REVENUE DEBT:
Electric Fund 9,273,620 27%1,139,340 1,000
Water Services Fund
Water Utility 15,870,659 46%1,798,069 1,000
Wastewater Utility 9,354,235 27%1,240,401 1,000
Total Utility Revenue Debt 34,498,514 100%4,177,810 3,000
CONTRACTUAL OBLIGATIONS:
Brazos River Authority (BRA) Contractual Obligation 43,397,471 631,188
Total Contractual Obligations 43,397,471 631,188
TOTAL DEBT & CONTRACTUAL OBLIGATIONS 104,627,471 7,642,761 20,500
189
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 $.32194) .10017
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
Services
BRA
Contractual
Obligations
190
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
2004 19,092,455 962,407 1,147,936 2,110,342
2005 17,944,519 905,769 890,879 1,796,648
2006 17,053,640 861,368 932,064 1,793,432
2007 16,121,576 815,012 918,569 1,733,581
2008 15,203,007 771,004 958,393 1,729,397
2009 14,244,614 724,810 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
$
$
$
'04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21
General Debt Service - Tax Supported
191
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
Interest
Principal
0
100,000
200,000
300,000
400,000
500,000
600,000
Th
o
u
s
a
n
d
$
$
$
'04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19
General Debt Service - Self Supporting
Year Ending Outstanding Total
September 30 Beginning of Year Interest Principal Requirements
2004 4,514,031 223,872 252,314 476,185
2005 4,261,717 212,090 237,239 449,328
2006 4,024,478 201,074 246,054 447,128
2007 3,778,424 189,679 256,432 446,110
2008 3,521,993 177,589 271,607 449,196
2009 3,250,386 164,512 281,782 446,294
2010 2,968,605 150,677 270,225 420,902
2011 2,698,379 137,462 287,165 424,627
2012 2,411,214 123,150 297,215 420,365
2013 2,113,999 108,161 314,570 422,731
2014 1,799,429 92,086 326,925 419,011
2015 1,472,504 75,081 346,585 421,666
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
192
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 pays debt
service from operating revenues. The Brazos River Authority Contractual Obligations are the liability of the Water Services Fund.
Interest
Principal
BRA Contract
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
5,000,000
' 0 4' 0 5' 0 6' 0 7' 0 8' 0 9' 1 0' 1 1' 1 2' 1 3' 1 4' 1 5' 1 6' 1 7' 1 8' 1 9' 2 0' 2 1' 2 2' 2 3' 2 4' 2 5' 2 6' 2 7' 2 8' 2 9' 3 0' 3 1' 3 2' 3 3' 3 4
Utility Debt Service
Year Ending Outstanding Total BRA
September 30 Beginning of Year Interest Principal Requirements Contract
2004 34,498,514 1,643,060 2,534,751 4,177,810 631,188
2005 31,963,763 1,529,123 2,616,882 4,146,005 670,374
2006 29,346,882 1,410,156 2,601,882 4,012,038 800,138
2007 26,745,000 1,292,089 2,530,000 3,822,089 945,102
2008 24,215,000 1,177,442 2,295,000 3,472,442 1,298,214
2009 21,920,000 1,073,438 2,350,000 3,423,438 1,339,651
2010 19,570,000 965,013 2,415,000 3,380,013 1,384,876
2011 17,155,000 851,630 2,130,000 2,981,630 1,791,901
2012 15,025,000 750,128 2,185,000 2,935,128 1,636,239
2013 12,840,000 644,788 1,955,000 2,599,788 1,651,314
2014 10,885,000 548,265 2,055,000 2,603,265 1,646,289
2015 8,830,000 445,484 2,175,000 2,620,484 1,636,239
2016 6,655,000 336,424 1,195,000 1,531,424 2,153,814
2017 5,460,000 277,266 1,220,000 1,497,266 1,927,689
2018 4,240,000 216,176 1,325,000 1,541,176 1,832,214
2019 2,915,000 149,146 885,000 1,034,146 1,876,309
2020 2,030,000 103,569 930,000 1,033,569 1,869,824
2021 1,100,000 55,169 605,000 660,169 1,874,755
2022 495,000 24,750 495,000 519,750 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
13,493,113 34,498,514 47,991,627 43,397,471
193
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 2003/04 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
Services Electric
Fund Fund Total
REVENUE:
All Other Revenue 3,964,855 1,103,781 5,068,636
Interest 64,600 35,000 99,600
System Billings 15,766,293 27,850,186 43,616,479
Total Revenues 19,795,748 28,988,967 48,784,715
EXPENSES:
Departments 9,916,613 23,350,225 33,266,838
Total Expenditures 9,916,613 23,350,225 33,266,838
Net Available for Debt Service 9,879,135 5,638,742 15,517,877
Annual Debt Requirement 3,094,720 1,139,340 4,234,060
Times Coverage Ratio 3.19 4.95 3.67
4.32
5.20
4.05
5.77
6.56 6.67
4.16 4.03 4.40
3.67
0.00
2.00
4.00
6.00
8.00
94/95 95/96 96/97 97/98 98/99 99/00 00/01 01/02 02/03* 03/04*
UTILITY REVENUE BOND COVERAGE
*Projected
194
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 $6.8 million in conjunction with the debt amount issued for their component unit,
Georgetown Transportation Enhancement Corporation. This debt will be staged for one Fall and one Spring debt
issue.
General Debt:
4 Short- term obligations will be issued for $1.1 million to fund public safety vehicles, including patrol vehicles and
a fire truck.
Proposed 2003/04 Debt
General Debt - Short Term Obligations
Public Safety Vehicles & laptop program 1,150,000
Total General Debt Service (Tax Supported) 1,150,000
Utility Revenue Bonds:
Electric System Improvements 1,450,000 **
Water Services Irrigation System Improvements 1,250,000
Water System Improvements 625,000 **
Wastewater System Improvements 3,500,000 **
Total Utility Revenue Bonds 6,825,000
**Includes $3.5 million in utility debt for the Wolf Ranch development
Total Proposed 2003/04 7,975,000
Note:Issuance costs on the above debt issue total $370,750
The City expects Total Debt Outstanding to be $62,145,000 at September 30, 2004, which includes
the 2003/04 proposed issue, and principal reductions of $3,935,000.