HomeMy WebLinkAbout13-Debt SummaryDebt
Debt Table of Contents
Debt Management & Policy.................................................................................................................203
Outstanding Debt Summary................................................................................................................204
General Debt Service
Outstanding Debt By Type.....................................................................................................205
Legal Debt Margin for General Obligation..............................................................................205
Principal & Interest Requirements -Tax-Supported................................................................206
Principal & Interest Requirements - Self-Supporting..............................................................207
Utility Debt Service
Principal & Interest Requirements..........................................................................................208
Utility Revenue Bond Debt Coverage.....................................................................................209
Proposed Debt Issues.........................................................................................................................210
Principal & Interest Requirements – GTEC – A Blended Component Unit for Reference Only).......211
203
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 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 may utilize the benefits of short-term debt financing to purchasing operating equipment
provided the debt doesn’t extend past the useful life of the asset, and the potential impact to the tax
rate is within policy guidelines. The I & S (interest and sinking) portion of the tax rate can not exceed
$0.04 for short-term debt (3-10 years).
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+
204
Ratio - Tax Supported Debt to Taxable Value
0.00%
0.50%
1.00%
1.50%
2.00%
93/94 96/97 99/00 02/03 05/06 *08/09
Outstanding Debt Summary - By Type as of October 1, 2005
Debt 2005/2006 2005/2006
Outstanding %Principal & Interest Handling Fees
GENERAL GOVERNMENT TAX SUPPORTED DEBT:
Certificate of Obligation Bonds:
Streets and Transportation 940,390 3%246,312 1,829
Parks and Recreation Facilities 1,384,600 5%130,193 300
Public Safety Facilities 4,174,239 15%742,073 1,594
Other City Facilities 21,635,672 77%1,872,439 2,773
TOTAL TAX SUPPORTED DEBT 28,134,901 100%2,991,017 6,496
ENTERPRISE DEBT:
Utility Revenue Bonds:
Electric 9,868,034 22%1,249,812 1,500
Water Services
Irrigation 833,186 2%66,665 1,000
Water 14,730,928 33%1,815,148 1,000
Wastewater 14,629,734 33%1,723,210 1,000
Total Utility Revenue Debt 40,061,882 4,854,835 4,500
Certificates of Obligation Bonds - Self-Supporting: (2)
Airport 1,740,820 4%186,402 392
Stormwater Drainage 2,771,685 6%259,257 512
Total CO Bonds - Self Supporting 4,512,505 445,659 904
TOTAL ENTERPRISE DEBT 44,574,387 100%5,300,494 5,404
TOTAL CITY SUPPORTED DEBT 72,709,288 8,291,511 11,900
CONTRACTUAL OBLIGATIONS (1):
Brazos River Authority (BRA) Contractual Obligation 32,465,639 584,214
Total Contractual Obligations 32,465,639 584,214
(1) Funds Georgetown's pro-rata share of the Williamson County Raw Water Line.
(2) Does not include CO's issued on behalf of the Georgetown Transportation
Enhancement Corporation (GTEC) that are repaid through GTEC sales tax.
205
General Government
Tax Supported Debt
Streets
Parks
Public Safety
Other City
Facilities
Enterprise Debt
Electric
Irrigation
Water
Airport
Wastewater
Stormwater
Drainage
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 $1.50 per $100 of valuation, based on 90% collection of tax.
Allowable levy per $100 valuation $1.50000
Proposed levy for debt service
(included in total adopted rate of $.34626) .13913
Percentage of allowable levy used 11.0%
Assuming the maximum tax rate for debt service of $1.50 on the January 1, 2005, certified assessed valuation of
$2,643,057,606 at 90% collection, tax revenue of $35,681,278 would be produced. This revenue could service
the debt on $426,404,920 issued as 20-year serial bonds at 5.50% (with level debt service payments).
Outstanding Debt by Type
206
Year Ending Outstanding Total
September 30 Beginning of Year Interest Principal Requirements
2006 28,134,901 1,201,851 1,789,166 2,991,017
2007 26,345,735 1,132,316 1,849,503 2,981,818
2008 24,496,232 1,062,358 1,677,585 2,739,943
2009 22,818,648 1,000,219 1,595,240 2,595,459
2010 21,223,407 931,748 1,673,154 2,604,902
2011 19,550,253 869,669 1,704,826 2,574,496
2012 17,845,427 797,030 1,701,633 2,498,663
2013 16,143,793 722,319 1,782,325 2,504,644
2014 14,361,469 647,936 1,860,027 2,507,963
2015 12,501,441 564,061 1,888,958 2,453,019
2016 10,612,483 475,398 1,882,140 2,357,538
2017 8,730,344 394,907 1,958,515 2,353,422
2018 6,771,829 310,972 1,542,185 1,853,156
2019 5,229,644 239,102 1,326,566 1,565,668
2020 3,903,079 178,098 925,812 1,103,910
2021 2,977,266 135,260 892,767 1,028,026
2022 2,084,500 93,575 520,756 614,331
2023 1,563,744 70,369 543,744 614,113
2024 1,020,000 45,900 500,000 545,900
2025 520,000 23,400 520,000 543,400
10,896,485 28,134,901 39,031,387
(300,000)
200,000
700,000
1,200,000
1,700,000
2,200,000
2,700,000
3,200,000
Th
o
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s
a
n
d
$
$
$
'06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22 '23 24 25
Principal
Interest
Summary of Debt Service Charges to Maturity
Debt funded by dedicated portion of local ad valorem tax
Certificates of Obligation – TAX SUPPORTED
General Government Debt Service
Tax Supported
207
Year Ending Outstanding Total
September 30 Beginning of Year Interest Principal Requirements
2006 4,512,505 201,707 243,952 445,659
2007 4,268,553 191,814 254,409 446,223
2008 4,014,145 180,933 294,316 475,248
2009 3,719,829 168,806 304,649 473,455
2010 3,415,181 155,031 291,791 446,821
2011 3,123,389 143,287 310,118 453,405
2012 2,813,271 129,135 321,300 450,435
2013 2,491,971 114,368 335,609 449,976
2014 2,156,363 99,574 349,917 449,491
2015 1,806,446 83,133 365,709 448,842
2016 1,440,737 65,491 381,661 447,151
2017 1,059,077 48,473 398,274 446,747
2018 660,803 30,678 351,616 382,293
2019 309,188 13,778 125,223 139,001
2020 183,965 8,192 38,965 47,157
2021 145,000 6,485 25,000 31,485
2022 120,000 5,385 30,000 35,385
2023 90,000 4,050 30,000 34,050
2024 60,000 2,700 30,000 32,700
2025 30,000 1,350 30,000 31,350
1,654,369 4,512,505 6,166,874
0
100,000
200,000
300,000
400,000
500,000
600,000
Th
o
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s
a
n
d
$
$
$
'06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22 '23 24 25
Principal
Interest
Summary of Debt Service Charges to Maturity
Debt issued for specific purpose and repaid through dedicated revenues
Certificates of Obligation – SELF SUPPORTING Enterprise Funds
208
Year Ending Outstanding Total BRA
September 30 Beginning of Year Interest Principal Requirements Contract
2006 40,061,882 1,852,953 3,001,882 4,854,835 584,214
2007 37,060,000 1,720,637 2,945,000 4,665,637 730,480
2008 34,115,000 1,591,057 2,725,000 4,316,057 767,132
2009 31,390,000 1,470,940 2,795,000 4,265,940 829,801
2010 28,595,000 1,345,465 2,875,000 4,220,465 883,764
2011 25,720,000 1,214,457 2,615,000 3,829,457 1,291,483
2012 23,105,000 1,094,380 2,685,000 3,779,380 1,368,091
2013 20,420,000 970,950 2,475,000 3,445,950 1,302,766
2014 17,945,000 854,662 2,590,000 3,444,662 1,297,741
2015 15,355,000 731,191 2,735,000 3,466,191 1,292,716
2016 12,620,000 600,101 1,775,000 2,375,101 1,292,716
2017 10,845,000 517,744 1,825,000 2,342,744 1,292,716
2018 9,020,000 432,054 1,955,000 2,387,054 1,292,716
2019 7,065,000 337,919 1,535,000 1,872,919 1,277,641
2020 5,530,000 263,616 1,615,000 1,878,616 1,274,173
2021 3,915,000 184,479 1,320,000 1,504,479 1,273,993
2022 2,595,000 121,508 1,240,000 1,361,508 1,275,074
2023 1,355,000 62,595 780,000 842,595 1,277,538
2024 575,000 26,575 280,000 306,575 1,277,629
2025 295,000 13,275 295,000 308,275 1,277,119
2026 1,275,903
2027 1,278,900
2028 1,277,158
2029 1,277,873
2030 1,276,925
2031 729,978
2032 728,927
2033 731,171
2034 729,298
15,406,557 40,061,882 55,468,439 32,465,639
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
'06 '08 '10 '12 '14 '16 '18 '20 '22 '24 '26 '28 '30 '32 '34
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.
Utility Debt Service
Enterprise Funds
209
4.05
5.77
6.56 6.67
4.16 4.03 3.42 3.32 3.25 3.11
0.00
2.00
4.00
6.00
8.00
96/97 97/98 98/99 99/00 00/01 01/02 02/03 03/04 04/05* 05/06*
UTILITY REVENUE BOND COVERAGE
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 2005/06 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 2,136,350 1,365,000 3,501,350
Interest 129,900 45,500 175,400
System Billings 16,868,430 34,300,000 51,168,430
Total Revenues 19,134,680 35,710,500 54,845,180
EXPENSES:
Departments 11,193,733 28,572,963 39,766,696
Total Expenditures 11,193,733 28,572,963 39,766,696
Net Available for Debt Service 7,940,947 7,137,537 15,078,484
Annual Debt Requirement 3,605,023 1,249,812 4,854,835
Times Coverage Ratio 2.20 5.71 3.11
210
**General Capital Projects & Equipment Summary:
Fire Station 1 - Construction 1,750,000
Street Equipment 187,600
Security Cameras - Parks/Animal Svc 25,000
Parking lot improvements 220,000
River Corridor Lighting 250,000
Williams Drive Pool Rehabilitation 150,000
Emergency Call Boxes 100,000
Park Equipment - Weight Room 20,000
Park Improvements 257,400
River Trails System Expansion 125,000
3,085,000
Bond Issue Costs 315,000
General Capital Projects & Equipment Bond Costs 3,400,000
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.
General Debt:
4 Short-term obligations will be issued for $603,000 to fund public safety vehicles and equipment.
4 Long-term obligations will be issued for $3.4 million to fund the following projects:
Proposed 2005/06 Debt
General Obligation Debt
Capital Projects Library Construction 7,100,000
Total General Obligation Debt Service (Voter Approved) 7,100,000
General Debt
Public Safety Vehicles & laptop program 603,000
Capital Projects General Projects & Equipment 3,400,000 **
Total General Debt Service (Tax Supported) 4,003,000
Utility Revenue Bonds:
Electric System Improvements 3,480,000
Total Utility Revenue Bonds 3,480,000
Total Proposed 2005/06 14,583,000
Note:Issuance costs on the above debt issue total $483,200.
The City expects its portion of outstanding debt to be $82,257,288 at September 30, 2006, which includes principal
reductions of $5,035,000 and the 2005/06 proposed debt issue. This amount does not include the debt issued on behalf
of the Georgetown Transporation Enhancement Corporation (GTEC) of $16,165,711, which includes a principal
reduction of $595,000 and will be fully serviced through GTEC revenue.
211
A Blended Component Unit of the City of Georgetown
Georgetown Transportation Enhancement Corporation
Summary of Debt Service Charges to Maturity
Certificates of Obligation issued by the City on behalf of GTEC, repaid by sales tax collections.
General Capital Projects & Equipment Summary:
Williamson County Appraisal District Building 400,000
Fire Station 1 - Design 150,000
Grace Heritage Center - Roof 50,000
Parks Administration - Community Room 75,000
Westside Park 125,000
Parks - Weight equipment 45,000
Information Technology - System Upgrades 50,000
Street Equipment - Caterpillar 110,000
Downtown Masterplan - Bridge & Sidewalks 268,000
Portable Computers - Building Inspections 11,775
1,284,775
Bond Issue Costs 55,225
General Capital Projects & Equipment Bond Costs 1,340,000
0
250,000
500,000
750,000
1,000,000
1,250,000
1,500,000
Th
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$
$
$
'05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22
Georgetown Transportation Enhancement
Corporation (GTEC) Debt Service
Year Ending Outstanding Total
September 30 Beginning of Year Interest Principal Requirements
2006 16,165,711 646,900 595,000 1,241,900
2007 15,570,711 628,063 626,089 1,254,151
2008 14,944,622 606,567 648,100 1,254,667
2009 14,296,522 582,724 675,111 1,257,835
2010 13,621,411 556,927 690,056 1,246,983
2011 12,931,354 400,846 7,195,056 7,595,901
2012 5,736,299 251,581 337,067 588,648
2013 5,399,232 239,046 357,067 596,113
2014 5,042,166 224,409 365,056 589,464
2015 4,677,110 209,406 425,333 634,740
2016 4,251,777 191,619 421,200 612,819
2017 3,830,578 173,798 438,211 612,009
2018 3,392,367 154,843 451,200 606,043
2019 2,941,167 134,918 478,211 613,129
2020 2,462,956 113,368 500,222 613,590
2021 1,962,733 90,243 517,233 607,476
2022 1,445,500 66,092 539,244 605,337
2023 906,256 40,781 321,256 362,037
2024 585,000 26,325 285,000 311,325
2025 300,000 13,500 300,000 313,500
5,351,957 16,165,711 21,517,668