HomeMy WebLinkAbout15 - Debt!,�= NO).,
Debt Table of Contents
DebtManagement & Policy................................................................................................................ 187
OutstandingDebt Summary ............................................................................................................... 188
General Debt Service
OutstandingDebt 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
ProposedDebt Issues........................................................................................................................ 194
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 Gig'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 Al Al
Standard & Poor's A+ A
187
Outstanding Debt Summary - By Type as of October 1, 2001
Debt
2001/2002
Outstanding
i
Principal & Interest
GENERAL OBLIGATION DEBT:
Tax Supported:
Streets and Transportation
6,601,750
25%
676,691
Parks and Recreation Facilities
2,307,488
9%
277,781
Public Safety Facilities
3,308,750
13°r
256,888
Other Improvements
8,952,628
34%
968,475
Subtotal - Tax supported GO Debt
21,170,616
2,179,835
Self Supported:
Airport
2,123,604
8%
194,938
Stormwater Drainage
2,815,780
it i
254,469
Subtotal - Self supported GO Debt
4,939,384
449,407
Total General Obligation Debt
26,110,000
100%
2,629,242
UTILITY REVENUE DEBT:
Electric
9,959,899
31%
1,092,290
Water
11,509,152
36%
1,321,745
Wastewater
10,605,949
33%
1,189,098
Total Utility Revenue Debt
32,075,000
l00%
3,603,133
CONTRACTUAL OBLIGATIONS:
Brazos River Authority (BRA) Contractual Obligation
43,574,969
88,749
Total Contractual Obligations
43,574,969
88,749
TOTAL DEBT & CONTRACTUAL OBLIGATIONS
101,759,969
6,321,124
Contractual Obligation — Brazos River Authority
Funds Georgetown's pro -rata share of William County Raw Water Line
188
Outstanding Debt by Type
General Obligation Debt Utility Revenue & Contractual Obligation Debt
Public
Safety Airport Electric
Parks
Wastewater
Other
Streets „
Water
Stormwater
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 $.30708) .11259
Percentage of allowable levy used
189
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
September 30
Outstanding
Beginning of Year
Interest
Principal
Total
Requirements
2002
21,170,616
1,074,846
1,104,989
2,179,835
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
17,818,282
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
15,203,006
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
General Debt Service - Tax Supported
2,000,000
1,500,000
ua
vt
Principal
w 1,000,000
0
s
F-
500,000
Interest
0
'01 '02 '03 '04 '05 '06
'07 '08 '09 '10 '11 '12
'13 '14 '15 '16 '17
'18 '19 '20
190
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
September 30
Outstanding
Beginning of Year
Interest
Total
Principal Requirements
2002
4,939,384
244,396
205,011
449,407
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
144,1.60
7,568
144,160
151,728
General Debt Service - Self Supporting
600,000
500,000
7
L
400,000
f7--�
H 300,000
Principal
0
~ 200,000
100,000
Interest
0
'01 '02 '03 '04 '05 '06
'07 '08 '09 '10
'11 '12 '13 '14 '15 '16
'17 '18
191
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
September 30
Outstanding
Beginning of Year
Interest
Principal
Total
Requirements
BRA
Contract
2002
32,075,000
1,533,134
2,070,000
3,603,134
88,749
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
Utility Debt Service & Contractual Obligations
4,500,000
4,000,000
3,500,000
BRA
3,000,000
2,500,000
2,000,000
Principal
1,500,000
1,000,000
500,000
Interest
02002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2034
192
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:
Utility Revenue Bond Coverage
8.00
6:56
6.00 200 5:77 5.7G
5:2
4.00 4.03 4'32 4.05 3.84-
'3570
2.00
0.00
93/94 94/95 95/96 96/97 97/98 98/99 99/00 00/01- 01/02-
1
"Projected
The 2001/02 Proposed Operating Plan provides the revenue to debt ratios shown below. The City's Budget and
Financial policies require 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.
193
Water
Fund
Electric
Fund
Wastewater
Fund
Total
REVENUE.
All Other Revenue
795,375
1,194,672
551,385
2,541,432
Interest
154,500
128,525
65,300
348,325
System Billings
8,091,000
21 188,600
4,807,000
34,086,600
Total Revenues
9,040,875
22,511,797
5,423,685
36,976,357
EXPENSES:
Departments
4,946,369
18 107,386
2,741,822
25 795 577
Total Expenditures
4,946,369
18,107,386
2,741,822
25,795,577
Net Available for Debt Service
4,094,506
4,404,411
2,681,863
11,180,780
Annual Debt Requirement
1,321,745
1,092,290
1,189,098
3,603,134
Times Coverage Ratio
3.10
4.03
2.26
3.10
193
Proposed 2001102 Debt
Utility Revenue Bonds:
Electric System Improvements 1,500,000
Total Utility Revenue Bonds 1,500,000
Total Proposed 2001/02 $-1;5001000—
Note: The City expects Total Debt Outstanding to be $56,305, 000 at September 30, 2002, which includes
the 2001/02 proposed issue and $3,380,000 of principal reduction.
Financial Impact:
Utility Revenue Debt:
► Debt proceeds will be used for system expansion and repaid through continued growth of the City's
customer base.
November Bond Election:
► The City will hold a $9.65 million bond election in November. Should the voters approve any of the three
propositions, additional General Obligation, tax -supported debt would be issued to fund the selected
improvements and therefore effect the 2003 property tax rate.
194