The URL can be used to link to this page

Home My WebLink About15 - DebtDEBT Debt DEBT TABLE OF CONTENTS Debt Management & Policy ....................................................... 249 Outstanding Debt By Type ........................................................ 250 General Debt Service Principal & Interest Requirements ........................................... 251 LegalDebtMargin for General Obligation ..................................... 253 Utility Debt Service Principal & Interest Requirements ........................................... 254 Utility Revenue Bond Debt Coverage ......................................... 255 Proposed Debt Issues............................................................ 256 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 usually required. Debt financed projects must meet the City's long-term financing criteria as included in the Budget & Financial Policies. "5.1 Debt Policy City staff recommend the use of debt financing when appropriate. It will be judged appropriate when the following conditions exist: (1) non -continuous capital improvements are desired, and (2) future citizens will receive a benefit from the improvement. When the City of Georgetown utilizes long-term financing, it will ensure that the debt is soundly financed by: (1) conservatively projecting the revenue sources that will be utilized to pay the debt, (2) financing the improvement over a period not greater than the useful life of the improvement, and (3) 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 A2 A2 Standard & Poor's A A ---- DEBT ANNUAL OPERATING PLAN ELEMENT 1998199 249 Outstanding Debt summary - By Type Debt 1998/99 Outstanding % Principal & Interest GENERAL OBLIGATION DEBT: Tax Supported: Streets and Transportation Parks and Recreation Facilities Public Safety Facilities Other Improvements Subtotal - Tax supported GO Debt Self Supported: Airport Stormwate'r Drainage Subtotal - Self supported GO Debt 5,741,222 36% 601,854 2,383,702 15% 275,460 3,129,696 20% 285,124 1,113,950 7% 227,579 12, 368, 570 1,390,017 502,370 3% 2,939,060 19% 3,441,430 51,950 169,843 221,793 Total General Obligation Debt 15,810,000 i00% 1,611,810 UTILITY REVENUE DEBT: Electric 8,205,585 28% 495,284 Water 9,713,325 34% 586,217 Wastewater 11,076,090 38% 668,376 Total Utility Revenue Debt 28,995,000 l00% 1,749,877 TOTAL DEBT OUTSTANDING 44,805,000 3,361,687 General Oblibation Debt Utility Revenue Debt Parks Public Saf Airport Other tormwater Water -ic vvdsiewdLer DEBT 250 ANNUAL OPERATING PLAN ELEMENT 1998/99 GENERAL DEBT SERVICE SUMMARY The City's general obligation debt is primarily funded from a dedicated portion of local ad valorem tax. Certain issues are for specific purposes and will be repaid through dedicated revenues. Summary of Debt ,Service Charges to Maturity: General Obligation Bonds and Certificates of Obligation - TAX SUPPORTED Year Ending Outstanding Total September 30 Beginning of Year Interest Principal Requirements 1999 12,368,570 660,628 729,418 1,390,045 2000 11,639,152 619,083 797,128 1,416,211 2001 10,842,023 574,683 840,154 1,414,836 2002 10,001,870 527,143 789,548 1,316,691 2003 9,212,322 486,031 816,024 1,302,055 2004 8,396,298 442,965 741,337 1,184,303 2005 7,654,961 404,215 384,061 788,277 2006 7,270,899 382,229 407,972 790,202 2007 6,862,927 358,643 435,324 793,967 2008 6,427,603 336,612 454,235 790,847 2009 5,973,368 313,214 478,146 791,360 2010 5,495,222 288,082 528,787 816,869 2011 4,966,434 260,980 554,579 815,559 2012 4,411,855 232,020 584,975 816,995 2013 3,826,880 201,366 613,069 814,435 2014 3,213,811 168,716 651,163 819,879 2015 2,562,647 134,413 681,955 816,369 2016 1,880,692 98,498 785,050 883,547 2017 1,095,642 57,070 825,842 882,912 2018 269,801 13,490 269,802 283,292 2000 V, 1500 Gos 2 1000 a 0 500 0 6,560,082 12,368,570 18,928,652 General Debt Service -Tax Supported '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 DEBT ANNUAL OPERATING PLAN ELEMENT 1998/99 251 Summary of Debt Service Charges to Maturity: General Obligation Bonds and Certificates of Obligation - SELF- SUPPORTING Year Ending Outstanding Total September 30 Beginning of Year Interest Principal Requirements 1999 3,441,430 171,210 50,583 221,793 2000 3,390,848 168,666 77,872 246,538 2001 3,312,976 165,104 84,846 249,950 2002 3,228,129 161,116 165,452 326,568 2003 3,062,677 153,480 173,976 327,456 2004 2,888,701 145,315 208,663 353,978 2005 2,680,038 135,497 160,939 296,436 2006 2,519,100 127,915 167,028 294,943 2007 2,352,072 119,918 174,676 294,594 2008 2,177,396 111,426 185,765 297,191 2009 1,991,631 102,211 191,854 294,065 2010 1,799,776 92,513 176,213 268,726 2011 1,623, 564 83,646 190,421 274,067 2012 1,433,143 73,881 195,025 268,906 2013 1,238,118 63,798 206,931 270,729 2014 1,031,187 52,970 213,837 266,807 2015 817,351 41,620 228,045 269,664 2016 589,306 29,465 174,950 204,416 2017 414,356 20,718 184,158 204,876 2018 230,197 11,510 230,198 241,708 800 600 e9 C 2 400 0 L 200 0 2,031,979 3,441,430 5,473,409 General Debt ,Service -Self Supporting '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 DEBT 252 ANNUAL OPERATING PLAN ELEMENT 1998/99 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 JL.25000 Proposed levy for debt service (included in total adopted rate of $.35000) Percentage of allowable levy used .14325 11.46% DEBT ANNUAL OPERATING PLAN ELEMENT 1998/99 253 UTILITY DEBT SERVICE The City has issued debt in the form of revenue bonds to finance construction of electric, water and wastewater improvements. The debt is secured by the net operating revenue of all combined revenues of those utilities. The allocation of debt principal and costs is based on the use of each bond issue. Each utility fund pays debt service from operating revenues. ,Summary of Utility Debt Service Charges to Maturity: Year Ending Outstanding Total September 30 Beginning of Year Interest Principal Requirements 1999 28,995,000 1,604,878 145,000 1,749,878 2000 28,850,000 1,325,725 1,080,000 2,405,725 2001 27,770,000 1,282,525 1,805,000 3,087,525 2002 25,965,000 1,208,520 1,880,000 3,088,520 2003 24,085,000 1,130,500 1,945,000 3,075,500 2004 22,140,000 1,048,810 2,050,000 3,098,810 2005 20,090,000 956,935 2,105,000 3,061,935 2006 17,985,000 861,112 2,070,000 2,931,112 2007 15,915,000 767,164 2,020,000 2,787,164 2008 13,895,000 675,332 1,760,000 2,435,332 2009 12,135,000 595,380 1,800,000 2,395,380 2010 10,335,000 511,760 1,835,000 2,346,760 2011 8,500,000 424,637 1,520,000 1,944,637 2012 6,980,000 350,660 1,550,000 1,900,660 2013 5,430,000 274,405 1,295,000 1,569,405 2014 4,135,000 209,637 1,360,000 1,569,637 2015 2,775,000 140,320 1,445,000 1,585,320 2016 1,330,000 66,500 430,000 496,500 2017 900,000 45,000 420,000 465,000 2018 480,000 24,000 480,000 504,000 4 3 N C O 2 1 0 13,503,800 28,995,000 42,498,800 Utility Debt service '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 DEBT 254 ANNUAL OPERATING PLAN ELEMENT 1998/99 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. The times ratio is calculated using the net revenue available for debt service from the combine 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 service analysts when the City receives a rating for a potential bond issue. The following combined times coverage ratios have occurred, based on budgeted revenues and expenditures, for the fiscal years indicated: 1990 3.21 times 1995 3.43 times 1991 2.40 times 1996 3.76 times 1992 2.40 times 1997 4.05 times 1993 2.39 times 1998 5.77 times 1994 2.23 times 1999 6.56 times The 1998/99 Operating Plan provides in 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 transfers out as approved by the City Council. Total Revenues EXPENSES: Departments Total Expenditures Net Available for Debt Service Annual Debt Requirement 7,714,240 18,284,528 4,520,234 30,519,002 2,884,929 14,144,855 2,007,752 19,037,536 2,884,929 14,144,855 2,007,752 19,037,536 4,829,311 4,139,673 2,512,482 11,481,466 586,409 495,415 668,653 1,750,477 Times Coverage Ratio 8.24 8.36 3.76 6.56 DEBT ANNUAL OPERATING PLAN ELEMENT 1998/99 255 Water Electric Wastewater Fund Fund Fund Total REVENUE. All Other Revenue 1,595,640 800,967 965,139 3,361,746 Interest 155,000 298,726 180,600 634,326 System Billings 5,963,600 17,184,835 3,374,495 26,522,930 Total Revenues EXPENSES: Departments Total Expenditures Net Available for Debt Service Annual Debt Requirement 7,714,240 18,284,528 4,520,234 30,519,002 2,884,929 14,144,855 2,007,752 19,037,536 2,884,929 14,144,855 2,007,752 19,037,536 4,829,311 4,139,673 2,512,482 11,481,466 586,409 495,415 668,653 1,750,477 Times Coverage Ratio 8.24 8.36 3.76 6.56 DEBT ANNUAL OPERATING PLAN ELEMENT 1998/99 255 Proposed. 1998/99 Debt Certificates of Obligation: Street Improvements Holly Street $ 200,000 Fire Station 4 Shell Spur 686,000 Land Purchase Public Safety 400,000 Airport T -Hangars 750,000 Facility Expansions COU, Library, etc. 2,714,000 (planned for 1999100) Total Proposed 1998/99 Debt Issue $ 4,750,000 *Self-supporting (15.2%) Airport (8.4%) Land Purchase - Public Safety (57.851o) Future Facility Expansion %) Fire Station 4 - Shell Spur (4.2%) Street Improvements DEBT 256 ANNUAL OPERATING PLAN ELEMENT 1998/99 Financial Impact: General Obligation Debt. The resulting increase in debt service will be funded through continued growth of the City's property tax base and a 1/2 cent increase reflected in the 1998/99 property tax rate of $0.35. Utility Revenue Debt: No debt is projected until 1999/00. No rate increases for electric, water and wastewater are anticipated in the five year projection horizon. Summary of Estimated Debt Needs: Fiscal Year 98/99 99/00 00/01 01/02 02/03 General Obligation: Tax supported: Facilty Expansion 2,714,000 0 0 0 0 Public Safety 1,086,000 0 0 0 0 Street Improvements 200,000 575,000 950,000 2,500,000 2,235,000 Self-supporting: Airport Improvements 750,000 0 400,000 800,000 500,000 Stormwater Drainage 0 0 350,000 0 0 Utility Revenue: Electric 0 2,460,000 1,900,000 2,100,000 2,100,000 Water 0 0 0 1,000,000 830,000 Wastewater 0 0 0 0 2,050,000 Total Estimated Debt Needs 4,750,000 3,035,000 3,600,000 6,400,000 7,715,000 DEBT ANNUAL OPERATING PLAN ELEMENT 1998/99 257 This page intentionally left blank. DEBT 258 ANNUAL OPERATING PLAN ELEMENT 1998199