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Debt Table of Contents
Debt Management & Policy.................................................................................................................217
Outstanding Debt Summary................................................................................................................218
General Debt Service
Outstanding Debt By Type.....................................................................................................219
Legal Debt Margin for General Obligation..............................................................................209
Principal & Interest Requirements -Tax-Supported................................................................220
Principal & Interest Requirements - Self-Supporting..............................................................221
Utility Debt Service
Principal & Interest Requirements..........................................................................................222
Utility Revenue Bond Debt Coverage.....................................................................................223
Proposed Debt Issues.........................................................................................................................224
Principal & Interest Requirements – GTEC – A Blended Component Unit for Reference Only).......225
217
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
$0.04 for short-term debt (3-10 years).
The City’s debt management objective is to maintain level debt service that does not adversely impact tax or utility
rates and does not hinder the City’s ability to effectively operate the utility systems, street network, or other facilities.
The City’s debt payments must stay within provisions of state law, bond covenants and council adopted policies. All of
these criteria and objectives are met with the debt financing proposed in this budget.
The City of Georgetown’s bonds are rated:
General Obligation
Utility Revenue
Moody’s
A2
A2
Standard & Poor’s
AA-
AA-
218
Outstanding Debt Summary - By Type as of October 1, 2007
Debt 2007/2008 2007/2008
Outstanding %Principal & Interest Handling Fees
GENERAL GOVERNMENT TAX SUPPORTED DEBT:
Certificate of Obligation and General Obligation Bonds:
Streets and Transportation 440,080 1%125,358 1,139
Parks and Recreation Facilities (excluding Recreation Center) 1,086,400 2%109,168 300
Public Safety Facilities 5,603,228 11%1,134,989 1,745
Other City Facilities (including Propositions 1-3) 45,196,404 86%4,098,029 6,116
TOTAL TAX SUPPORTED DEBT 52,326,112$ 100%5,467,544$ 9,300$
ENTERPRISE DEBT:
Utility Revenue Bonds:
Electric 23,801,842 43%2,326,204 1,500
Water Services
Irrigation 767,179 1%67,138 1,000
Water 12,547,788 23%1,628,653 1,000
Wastewater 13,953,191 25%1,621,865 1,000
Total Utility Revenue Debt 51,070,000 5,643,860 4,500
Certificates of Obligation Bonds - Self-Supporting: (2)
Airport 1,509,214 3%209,675 420
Sanitation 515,000 1%39,765 31
Stormwater Drainage 2,515,052 5%268,861 593
Total CO Bonds - Self Supporting 4,539,266 518,301 1,044
TOTAL ENTERPRISE DEBT 55,609,266$ 100%6,162,161$ 5,544$
TOTAL CITY SUPPORTED DEBT 107,935,378$ 11,629,705$ 14,844$
CONTRACTUAL OBLIGATIONS (1):
Brazos River Authority (BRA) Contractual Obligation 27,344,601 808,557
Total Contractual Obligations 27,344,601$ 808,557$
(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.
219
Outstanding Debt by Type
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 $.35659) 0.15337
Percentage of allowable levy used 11.0%
Assuming the maximum tax rate for debt service of $1.50 on the January 1, 2007, certified assessed valuation of
$3,611,204,319 at 90% collection, tax revenue of $48,751,258 would be produced. This revenue could service
the debt on $582,596,180 issued as 20-year serial bonds at 5.50% (with level debt service payments).
220
Summary of Debt Service Charges to Maturity
Debt funded by dedicated portion of local ad valorem tax
Certificates of Obligation – TAX SUPPORTED
Year Ending Outstanding Total
September 30 Beginning of Year Interest Principal Requirements
2008 52,326,112 2,534,959 2,932,585 5,467,544
2009 49,393,527 2,106,827 3,178,443 5,285,270
2010 46,215,084 1,975,715 3,201,357 5,177,072
2011 43,013,727 1,853,933 3,123,029 4,976,962
2012 39,890,698 1,725,598 3,021,769 4,747,367
2013 36,868,928 1,597,823 3,114,167 4,711,990
2014 33,754,762 1,470,724 3,216,229 4,686,954
2015 30,538,532 1,333,936 3,121,775 4,455,710
2016 27,416,757 1,197,497 3,165,465 4,362,962
2017 24,251,293 1,068,220 3,262,348 4,330,568
2018 20,988,945 933,849 2,844,882 3,778,730
2019 18,144,063 811,777 2,625,235 3,437,012
2020 15,518,829 698,288 2,277,085 2,975,373
2021 13,241,743 599,333 2,297,243 2,896,576
2022 10,944,501 498,759 2,045,756 2,544,514
2023 8,898,745 407,940 2,133,744 2,541,684
2024 6,765,000 309,781 2,165,000 2,474,781
2025 4,600,000 211,350 2,255,000 2,466,350
2026 2,345,000 107,481 1,255,000 1,362,481
2027 1,090,000 49,913 1,090,000 1,139,913
21,493,703 52,326,112 73,819,815
221
Summary of Debt Service Charges to Maturity
Debt issued for specific purpose and repaid through dedicated revenues
Certificates of Obligation – SELF SUPPORTING Enterprise Funds
Year Ending Outstanding Total
September 30 Beginning of Year Interest Principal Requirements
2008 4,539,265 213,985 304,316 518,301
2009 4,234,950 186,745 326,446 513,191
2010 3,908,504 172,098 313,588 485,685
2011 3,594,917 159,482 331,915 491,397
2012 3,263,002 144,458 306,164 450,622
2013 2,956,838 130,727 318,767 449,494
2014 2,638,071 117,085 363,715 480,800
2015 2,274,356 100,644 382,892 483,536
2016 1,891,464 82,914 398,336 481,250
2017 1,493,129 65,852 414,441 480,293
2018 1,078,688 48,055 353,919 401,974
2019 724,769 31,745 191,554 223,299
2020 533,215 23,424 112,692 136,115
2021 420,524 18,620 100,524 119,144
2022 320,000 14,310 60,000 74,310
2023 260,000 11,700 60,000 71,700
2024 200,000 9,000 65,000 74,000
2025 135,000 6,075 65,000 71,075
2026 70,000 3,150 35,000 38,150
2027 35,000 1,575 35,000 36,575
1,541,644 4,539,266 6,080,909
222
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.
Year Ending Outstanding Total BRA
September 30 Beginning of Year Interest Principal Requirements Contract
2008 51,070,000 2,443,860 3,200,000 5,643,860 (1)(2) 808,557
2009 47,870,000 2,116,150 3,435,000 5,551,150 853,324
2010 44,435,000 1,965,075 3,545,000 5,510,075 963,297
2011 40,890,000 1,809,727 3,305,000 5,114,727 1,365,598
2012 37,585,000 1,667,483 3,395,000 5,062,483 1,023,396
2013 34,190,000 1,521,503 3,210,000 4,731,503 1,021,945
2014 30,980,000 1,382,335 3,345,000 4,727,335 1,011,637
2015 27,635,000 1,234,370 3,520,000 4,754,370 1,006,612
2016 24,115,000 1,079,710 2,580,000 3,659,710 1,011,637
2017 21,535,000 968,285 2,660,000 3,628,285 1,011,368
2018 18,875,000 854,225 2,810,000 3,664,225 1,011,096
2019 16,065,000 730,890 2,425,000 3,155,890 995,745
2020 13,640,000 623,044 2,540,000 3,163,044 1,359,667
2021 11,100,000 508,444 2,285,000 2,793,444 1,300,070
2022 8,815,000 404,354 2,270,000 2,674,354 1,295,007
2023 6,545,000 299,164 1,850,000 2,149,164 1,297,077
2024 4,695,000 214,288 1,400,000 1,614,288 1,296,546
2025 3,295,000 149,850 1,465,000 1,614,850 1,300,529
2026 1,830,000 83,156 1,225,000 1,308,156 1,288,528
2027 605,000 27,225 605,000 632,225 1,296,419
2028 1,293,666
2029 1,299,085
2030 1,297,491
2031 734,477
2032 201,829
20,083,136 51,070,000 71,153,136 27,344,601
223
Water
Services Electric
Fund Fund Total
REVENUE:
All Other Revenue 5,291,370 1,808,850 7,100,220
Interest 555,300 75,000 630,300
System Billings 19,366,550 56,387,000 75,753,550
Total Revenues 25,213,220 58,270,850 83,484,070
EXPENSES:
Departments 16,058,153 53,574,546 69,632,699
Total Expenditures 16,058,153 53,574,546 69,632,699
Net Available for Debt Service 9,155,067 4,696,304 13,851,371
Annual Debt Requirement 3,699,700 2,649,850 6,349,550
Times Coverage Ratio 2.47 1.77 2.18
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 2007/08 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.
UTILITY REVENUE BOND COVERAGE
224
Outstanding Debt Summary 2007/08:
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 $1,257,100 to fund public safety vehicles and equipment.
4 Long-term obligations will be issued for $2.9 million to fund general capital projects and new fire truck.
(1) General Capital Projects & Equipment Summary:
Parking Lot rehabilitation 385,000
Old Library Renovations 300,000
Downtown Parking Garage 250,000
Facility Improvements 456,000
Public Safety Vehicles/Equipment 1,646,143
Early Warning System Sirens 214,200
Street Equipment 205,500
Oak Tree Drive Bridge 600,000
4,056,843
Bond Issue Costs 161,994
General Cpaital Projects & Equipment Bond Costs 4,218,837
Outstanding 9/30/07
Debt Principal
07/08 Principal
Reduction
Estimated 2008
Debt
Estimated 9/30/08
Outstanding Debt
TAX SUPPORTED DEBT:
General Debt Service:
General Obligation/Certificates of Obligation 52,326,112 (2,932,585) 4,218,837 (1) 53,612,363
SELF SUPPORTED DEBT:
General Debt Service:
Stormwater 2,515,052 (149,871) 750,000 3,115,181
Airport 1,509,214 (144,505) 1,364,709
Sanitation 515,000 (10,000) 505,000
total GDS: 56,865,378 (3,236,961) 4,968,837 58,597,253
Utility Revenue Debt:
Electric 23,801,842 (1,152,644) 5,425,000 28,074,198
Irrigation 767,179 (35,494) 670,000 1,401,685
Wastewater 13,953,191 (969,775) 5,810,000 18,793,416
Water 12,547,788 (1,042,087) 11,505,701
total Utility Revenue Debt: 51,070,000 (3,200,000) 11,905,000 59,775,000
TOTAL OUTSTANDING DEBT:107,935,378 (6,436,961) 16,873,837 118,372,253
Outstanding 9/30/07
Debt Principal
07/08 Principal
Reduction
Proposed New
2008 Debt
Estimated 9/30/08
Outstanding Debt
Georgetown Transportation Enhancement Corporation:
Self Supported 16,529,622 (348,100) 16,181,522
Sales Tax Supported 11,330,000 (215,000) 11,115,000
total GTEC: 27,859,622 (563,100) - 27,296,522
225
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.
Year Ending Outstanding Total
September 30 Beginning of Year Interest Principal Requirements
2008 11,330,000 654,493 215,000 869,493
2009 11,115,000 468,359 400,000 868,359
2010 10,715,000 452,359 415,000 867,359
2011 10,300,000 435,759 430,000 865,759
2012 9,870,000 418,559 450,000 868,559
2013 9,420,000 400,559 465,000 865,559
2014 8,955,000 381,959 485,000 866,959
2015 8,470,000 362,559 505,000 867,559
2016 7,965,000 342,359 525,000 867,359
2017 7,440,000 321,359 545,000 866,359
2018 6,895,000 299,559 570,000 869,559
2019 6,325,000 276,759 590,000 866,759
2020 5,735,000 252,421 615,000 867,421
2021 5,120,000 226,591 640,000 866,591
2022 4,480,000 199,391 670,000 869,391
2023 3,810,000 170,581 695,000 865,581
2024 3,115,000 140,175 730,000 870,175
2025 2,385,000 107,325 760,000 867,325
2026 1,625,000 73,125 795,000 868,125
2027 830,000 37,350 830,000 867,350
6,021,600 11,330,000 17,351,600