HomeMy WebLinkAbout12 Debt-compressed
FY2016 Annual Budget
DEBT
City employees in from of the Tin Barn Alley project 249
FY2016 Annual Budget
DEBT
Debt Management Policy ........................ 251
Outstanding Debt Summary ................. 252
Debt Service Charges (Tax-Supported) . 254
Ad Valorem Tax-Supported Debt ......... 255
Debt Service Charges (Self-Supported) 256
Utility Debt .............................................. 258
Proposed Debt Issues .............................. 260
Authorized General Obligation Debt ....... 261
250
FY2016 Annual Budget
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.
XII. 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 cannot 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:
Rating Agency General Obligation Date Obtained Utility Revenue Date Obtained2
Moody's Aa2 4/23/2010 Aa2 4/23/2010
Standard & Poor's AA+10/19/2015 AA 4/21/2014
251
FY2016 Annual Budget
OUTSTANDING DEBT SUMMARY – BY TYPE AS OF OCTOBER 1, 2015
Debt
Outstanding %
FY2016
Principal & Interest
FY2016
Handling Fees
GENERAL GOVERNMENT DEBT
General Government Tax Supported Debt
Certificate of Obligation and General Obligation Bonds:
Streets and Transportation 23,585,600 21%1,626,447 4,072
Parks and Recreation Facilities 11,972,846 11%1,316,149 1,640
Public Safety 37,942,596 34%2,925,762 2,668
Other City Facilities 30,979,218 28%4,365,373 4,182
Total Gen. Gov. Tax Supported Debt 104,480,260 10,233,731 12,562
Certificates of Obligation Bonds - Self-Supporting: .
Rivery TIRZ 6,470,000 8%265,828 750
Total CO Bonds - Self Supporting 6,470,000 265,828 750
TOTAL GENERAL GOVERNMENT DEBT 110,950,260 94%10,499,559 13,312
ENTERPRISE DEBT
Utility Revenue Bonds:
Electric 30,279,446 36%3,470,507 3,568
Water Services
Irrigation 997,720 1%129,152 118
Water 31,319,097 37%2,845,078 3,690
Wastewater 15,483,824 18%1,650,536 1,824
Total Utility Revenue Debt 78,080,087 8,095,273 9,200
Certificates of Obligation Bonds - Self-Supporting (2)
Airport 1,333,595 2%139,056 140
Stormwater Drainage 4,910,577 6%595,294 1,117
Total CO Bonds - Self Supporting 6,244,173 734,350 1,257
TOTAL ENTERPRISE DEBT 84,324,260 100%8,829,623 10,457
TOTAL CITY SUPPORTED DEBT 195,274,520 19,329,182 23,769
CONTRACTUAL OBLIGATIONS (1)
Brazos River Authority (BRA) Contractual Obligation 33,873,792 1,836,398
Total Contractual Obligations 33,873,792 1,836,398
(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.
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
2009 2010 2011 2012 2013 2014 2015 *2016 *2017 *2018
Ratio -Tax-Supported Debt to Taxable Value * Projected
252
FY2016 Annual Budget
Streets
Parks & Rec
Public Safety
Other City
Facilities
General Government Tax Supported Debt
Electric
Irrigation
Water
Airport Wastewater
Stormwater
Drainage
Enterprise Debt
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 of 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 for 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 $0.434)0.22684
Percentage of allowable levy used 15.12%
253
FY2016 Annual Budget
SUMMARY OF DEBT SERVICE CHARGES TO MATURITY
General Obligation Bonds and Certificates of Obligation – TAX SUPPORTED
Year Ending
September 30
Outstanding
Beginning of Year Interest Principal
Total
Requirements
2016 104,480,260 3,362,083 6,871,645 10,233,728
2017 97,608,615 3,172,521 7,228,319 10,400,840
2018 90,380,296 2,963,667 6,715,088 9,678,755
2019 83,665,208 2,774,958 6,386,891 9,161,849
2020 77,278,317 2,596,029 6,167,838 8,763,866
2021 71,110,479 2,420,051 6,290,388 8,710,439
2022 64,820,091 2,233,589 6,129,781 8,363,371
2023 58,690,310 2,037,006 6,181,908 8,218,914
2024 52,508,402 1,827,315 6,305,979 8,133,294
2025 46,202,423 1,601,743 6,285,576 7,887,319
2026 39,916,847 1,374,951 5,306,332 6,681,283
2027 34,610,515 1,187,465 5,274,162 6,461,627
2028 29,336,353 1,001,512 4,545,425 5,546,937
2029 24,790,928 845,209 4,609,089 5,454,297
2030 20,181,839 682,481 3,926,063 4,608,544
2031 16,255,776 549,814 3,181,063 3,730,877
2032 13,074,713 442,097 2,636,567 3,078,664
2033 10,438,146 355,714 2,662,072 3,017,786
2034 7,776,074 266,608 2,421,074 2,687,682
2035 5,355,000 183,675 2,005,000 2,188,675
2036 3,350,000 113,913 1,645,000 1,758,913
2037 1,705,000 45,031 1,705,000 1,750,031
32,037,432 104,480,260 136,517,692
0
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
20
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20
3
7
General Government Debt Service
Tax Supported
Principal
Interest
254
FY2016 Annual Budget
AD VALOREM TAX-SUPPORTED DEBT PAYMENTS
Year Ending
September 30
Certificates of
Obligation
Less
GTEC Portion*
Adjusted Net
Certificates of
Obligation
Voter Approved
General Obligation
Debt
Total
Requirements
2016 6,772,909 (1,732,562) 5,040,348 5,193,380 10,233,728
2017 6,555,414 (1,445,822) 5,109,592 5,291,248 10,400,840
2018 6,032,823 (1,466,308) 4,566,515 5,112,240 9,678,755
2019 5,561,596 (1,475,042) 4,086,554 5,075,295 9,161,849
2020 5,210,194 (1,390,396) 3,819,798 4,944,068 8,763,866
2021 5,139,429 (1,373,136) 3,766,293 4,944,146 8,710,439
2022 4,797,972 (1,309,552) 3,488,421 4,874,950 8,363,371
2023 4,525,074 (1,204,554) 3,320,520 4,898,394 8,218,914
2024 4,514,474 (1,185,390) 3,329,084 4,804,210 8,133,294
2025 3,830,391 (659,159) 3,171,232 4,716,087 7,887,319
2026 2,899,029 (478,312) 2,420,717 4,260,566 6,681,283
2027 2,638,551 (399,615) 2,238,935 4,222,692 6,461,627
2028 1,940,555 (219,362) 1,721,193 3,825,744 5,546,937
2029 1,801,069 (174,228) 1,626,841 3,827,456 5,454,297
2030 1,035,797 (66,009) 969,788 3,638,756 4,608,544
2031 1,035,893 (64,059) 971,833 2,759,044 3,730,877
2032 382,505 (64,609) 317,896 2,760,769 3,078,664
2033 253,448 - 253,448 2,764,338 3,017,786
2034 259,163 - 259,163 2,428,519 2,687,682
2035 119,169 - 119,169 2,069,506 2,188,675
2036 - - - 1,758,913 1,758,913
2037 - - - 1,750,031 1,750,031
65,305,457 (14,708,116)50,597,341 85,920,351 136,517,692
0
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
14,000,000
20
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7
Ad Valorem Tax-Supported Debt Payments
General Obligation
Certificates of Obligation
*GTEC Debt is self-supporting Certificates of Obligation (CO Bonds) repaid through dedicated sales tax revenue.
255
FY2016 Annual Budget
SUMMARY OF DEBT SERVICE CHARGES TO MATURITY
Certificates of Obligation – SELF-SUPPORTING – Enterprise Funds (Airport & Stormwater Drainage)
Debt issued for specific purpose and repaid through dedicated revenues
Year Ending
September 30
Outstanding
Beginning of Year Interest Principal
Total
Requirements
2016 6,244,171 226,955 507,396 734,351
2017 5,736,775 194,215 546,235 740,450
2018 5,190,540 178,985 509,667 688,651
2019 4,680,873 164,274 335,525 499,799
2020 4,345,348 156,032 307,831 463,864
2021 4,037,516 147,726 309,104 456,830
2022 3,728,413 136,534 305,684 442,217
2023 3,422,729 124,613 324,672 449,285
2024 3,098,057 111,142 328,669 439,812
2025 2,769,388 97,407 339,569 436,976
2026 2,429,819 83,219 278,210 361,429
2027 2,151,609 74,063 284,017 358,080
2028 1,867,592 64,692 283,992 348,685
2029 1,583,600 55,049 277,939 332,988
2030 1,305,661 45,559 203,937 249,496
2031 1,101,724 38,895 208,937 247,832
2032 892,787 31,844 220,933 252,776
2033 671,854 24,111 227,928 252,039
2034 443,926 16,092 233,926 250,018
2035 210,000 7,613 210,000 217,613
1,979,021 6,244,171 8,223,192
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
20
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20
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20
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2
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20
3
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20
3
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20
3
2
20
3
3
20
3
4
20
3
5
General Debt Service -Self Supported
Principal
Interest
256
FY2016 Annual Budget
SUMMARY OF DEBT SERVICE CHARGES TO MATURITY
Certificates of Obligation – SELF-SUPPORTING – Tax Increment Reinvestment Zones (TIRZ)
Year Ending
September 30
Outstanding
Beginning of Year Interest Principal
Total
Requirements
FY2016 6,470,000 265,828 - 265,828
FY2017 6,470,000 224,643 - 224,643
FY2018 6,470,000 224,643 250,000 474,643
FY2019 6,220,000 219,643 260,000 479,643
FY2020 5,960,000 214,443 280,000 494,443
FY2021 5,680,000 208,843 290,000 498,843
FY2022 5,390,000 202,695 295,000 497,695
FY2023 5,095,000 190,895 310,000 500,895
FY2024 4,785,000 181,595 320,000 501,595
FY2025 4,465,000 171,995 325,000 496,995
FY2026 4,140,000 162,245 335,000 497,245
FY2027 3,805,000 151,525 350,000 501,525
FY2028 3,455,000 139,625 360,000 499,625
FY2029 3,095,000 126,665 375,000 501,665
FY2030 2,720,000 111,665 395,000 506,665
FY2031 2,325,000 95,865 415,000 510,865
FY2032 1,910,000 79,265 440,000 519,265
FY2033 1,470,000 61,005 465,000 526,005
FY2034 1,005,000 41,708 490,000 531,708
FY2035 515,000 21,373 515,000 536,373
Total 3,096,163 6,470,000 9,566,163
0
100,000
200,000
300,000
400,000
500,000
600,000
FY
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3
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FY
2
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3
2
FY
2
0
3
3
FY
2
0
3
4
FY
2
0
3
5
General Government Debt Service -Self Supported
Principal
Interest
257
FY2016 Annual Budget
UTILITY DEBT
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
September 30
Outstanding
Beginning of Interest Principal
Total
Requirements
BRA
Contract
2016 78,080,087 2,778,104 5,317,169 8,095,273 1,836,398
2017 72,762,918 2,531,717 5,565,826 8,097,543 1,835,374
2018 67,197,092 2,369,125 5,790,826 8,159,951 1,834,234
2019 61,406,266 2,192,074 5,532,045 7,724,119 1,818,222
2020 55,874,221 2,004,056 5,337,592 7,341,648 2,371,890
2021 50,536,629 1,816,935 5,180,030 6,996,965 2,277,352
2022 45,356,598 1,632,778 5,273,687 6,906,466 2,273,009
2023 40,082,911 1,449,049 4,801,869 6,250,918 2,276,986
2024 35,281,041 1,268,343 4,507,665 5,776,008 2,271,146
2025 30,773,376 1,096,642 4,688,884 5,785,526 2,278,252
2026 26,084,492 923,331 4,583,212 5,506,543 2,269,972
2027 21,501,280 755,566 4,092,541 4,848,107 2,274,261
2028 17,408,739 612,034 3,673,760 4,285,794 2,274,571
2029 13,734,979 481,892 3,104,979 3,586,871 2,279,158
2030 10,630,000 376,505 2,120,000 2,496,505 2,275,635
2031 8,510,000 308,029 2,200,000 2,508,029 1,119,659
2032 6,310,000 233,256 1,855,000 2,088,256 307,674
2033 4,455,000 169,306 1,930,000 2,099,306 -
2034 2,525,000 96,962 1,730,000 1,826,962 -
2035 795,000 29,750 795,000 824,750 -
23,125,453 78,080,087 101,205,541 33,873,792
Interest
Principal
BRA Contract
0
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
20
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5
Utility Debt Service
258
FY2016 Annual Budget
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 both the Electric and Water Service Funds.
The times coverage ratio is also reviewed by bond rating agency analysts when the City receives a rating for a
potential utility bond issue.
The following combined times coverage ratios have occurred, based on actual revenues and expenditures, for the
fiscal years indicated:
3.32 3.28
3.90
2.18
2.79
3.32
2.87 2.76
3.46
4.17
2.45
3.01
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
4.50
20
0
4
20
0
5
20
0
6
20
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4
*
20
1
5
*
Utility Revenue Bond Coverage
The FY2016 Annual Budget 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
Fund ElectricFund Total
REVENUE
All Other Revenue 9,455,733 1,782,350 11,238,083
Interest 119,232 17,425 136,657
System Billings 32,243,822 63,400,000 95,643,822
Total Revenues 41,818,787 65,199,775 107,018,562
EXPENSES
Departments 27,428,713 49,786,179 77,214,892
Total Expenditures 27,428,713 49,786,179 77,214,892
Net Available for Debt Service 14,390,074 15,413,596 29,803,670
Annual Debt Requirement 4,635,034 3,487,307 8,122,341
Times Coverage Ratio 3.10 4.42 3.67
259
FY2016 Annual Budget
PROPOSED DEBT ISSUES
Outstanding Debt Summary
Outstanding
9/30/15
Debt
Principal
FY2016
Principal
Reduction
Estimated
FY2016
New Debt
Estimated
9/30/16
Outstanding
Debt
TAX SUPPORTED DEBT
General Debt Service
General Obligation/Certificates of Obligation 104,480,260 (6,871,645) 27,548,049 125,156,664
SELF SUPPORTED DEBT
General Debt Service
Rivery TIRZ 6,470,000 - - 6,470,000
Electric - - 950,000 950,000
Water - - 950,000 950,000
Stormwater 4,910,577 (416,752) 250,000 4,743,825
Airport 1,333,596 (90,644) - 1,242,952
Total General Debt Service 117,194,433 (7,379,041) 29,698,049 139,513,441
Utility Revenue Debt
Electric 30,279,446 (2,407,500) 1,795,000 29,666,946
Irrigation 997,720 (89,840) - 907,880
Wastewater 15,483,824 (1,033,745) 5,548,000 19,998,079
Water 31,319,097 (1,786,084) 2,462,000 31,995,013
Total Utility Revenue Debt 78,080,087 (5,317,169) 9,805,000 82,567,918
Issuance Costs 481,000
GENERAL DEBT: Long-term obligations are proposed to fund capital projects as detailed below:
General Debt
GO - Roads - Southwest Bypass 20,000,000
GO - Parks projects 4,700,000
CO - Austin Ave Bridges 675,000
CO - Facility/parks projects 1,224,049
CO - Public safety vehicles 949,000
Total Projected General Debt 27,548,049
Self-Supporting Debt
CO - Electric 950,000
CO - Water 950,000
CO - Stormwater 250,000
Total Self-Supporting Debt 2,150,000
Utility Debt
Revenue - Electric 1,795,000
Revenue - Water/Wastewater 8,010,000
Total Utility Debt 9,805,000
Issuance Costs 481,000
Total City-wide Debt Issue 39,984,049
260
FY2016 Annual Budget
AUTHORIZED GENERAL OBLIGATION DEBT
General Obligation Bonds (GO’s)
General obligation bonds must be authorized by a vote of the citizens of Georgetown. They are used only to fund
capital assets of the general government and are not to be used to fund operating needs of the City. The full faith
and credit of the City as well as the City’s ad valorem taxing authority back general obligation bonds. Conditions for
issuance of the general obligation debt include:
When the project will have a significant impact on the tax rate;
When the project may be controversial even through it is routine in nature; or
When the project falls outside the normal bounds of projects the City has typically done.
General Obligation Debt
Authorized by the Voters
2008
Roads
2008
Parks
2015
Roads Total
Amount Authorized by the Voters 46,000,000 35,500,000 105,000,000 186,500,000
Year & Issue
2010 1,370,000 - - 1,370,000
2010A 9,430,000 2,500,000 - 11,930,000
2012 - - - -
2012A - - - -
2013 - 5,000,000 - 5,000,000
2014 4,800,000 - - 4,800,000
2015 4,450,000 - - 4,450,000
Total Issued 20,050,000 7,500,000 - 27,550,000
Authorization Remaining 25,950,000 28,000,000 105,000,000 158,950,000
261
FY2016 Annual Budget
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