HomeMy WebLinkAbout15 - DebtDEBT TABLE OF CONTENTS
Debt Management & Policy ....................................................... 261
Outstanding Debt By Type ........................................................ 262
General Debt Service
Principal & Interest Requirements ........................................... 263
Legal Debt Margin for General Obligation ..................................... 265
Utility Debt Service
Principal & Interest Requirements ........................................... 266
Utility Revenue Bond Debt Coverage ......................................... 267
Proposed Debt Issues............................................................ 268
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:
Fitch
Moody's
Standard & Poor's
DEBT
ANNUAL OPERATING PLAN ELEMENT 1999/00
General Obligation
A
A2
A
Utility Revenue
A
A2
A
261
Outstanding Debt ,Summary - By Type
as of October 1,
1999
Debt
1999/2000
Outstandina
%
Principal & Interest
GENERAL OBLIGATION DEBT:
Tax Supported:
Streets and Transportation
5,761,350
27%
626,745
Parks and Recreation Facilities
6,230,074
29%
557,485
Public Safety Facilities
3,590,940
17%
340,027
Other Improvements
941,550
4%
217,038
Subtotal - Tax supported GO Debt
16,523,914
1,741,295
Self Supported:
Airport
2,107,026
10%
162,315
Stormwater Drainage
2,914,060
14%
192,700
Subtotal - Self supported GO Debt
5,021,086
355,015
Total General Obligation Debt
21,545,000
,00%
2,096,310
UTILITY REVENUE DEBT:
Electric
8,165,665
28%
680,820
Water
11,192,840
39%
933,421
Wastewater
9,491,495
33%
791,484
Total Utility Revenue Debt 28,850,000 l00% 2,405,725
TOTAL DEBT OUTSTANDING 50,395,000 4,502,035
General Obligation Debt Utility Revenue Debt
Park
Public
Airport
:ts
Stormwater
Water
is
✓ater
DEBT
262 ANNUAL OPERATING PLAN ELEMENT 1999/00
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
2000
16,523,913
857,939
883,355
1,741,295
2001
15,640,558
808,797
930,130
1,738,926
2002
14,710,428
756,309
898,269
1,654,577
2003
13,812,159
709,216
943,490
1,652,706
2004
12,868,669
659,140
861,179
1,520,319
2005
12,007,491
614,992
594,005
1,208,997
2006
11,413,485
583,558
625,414
1,208,973
2007
10,788,071
550,622
660,264
1,210,886
2008
10,127, 807
518,694
690,422
1,209,116
2009
9,437,385
484,667
725,467
1,210,134
2010
8,711,918
448,153
787,468
1,235,621
2011
7,924,449
409,087
820,758
1,229,845
2012
7,103, 691
367,617
866,150
1,233,767
2013
6,237,541
323,466
909,240
1,232,707
2014
5,328,301
276,377
962,330
1,238,707
2015
4,365,970
226,517
1,008,118
1,234,636
2016
3,357,852
174,293
1,126,262
1,300,555
2017
2,231,590
115,808
1,185,746
1,301,554
2018
1,045,845
54,233
648,451
702,684
2019
397,394
20,863
397,394
418,257
2000
1500
v9
8,960,348 16,523,913 25,484,261
General Debt service -Tax Supported
500
0
'00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19
DEBT
ANNUAL OPERATING PLAN ELEMENT 1999/00 263
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
2000
5,021,086
248,370
106,645
355,015
2001
4,914,442
243,225
114,870
358,095
2002
4,799,572
237,586
201,731
439,317
2003
4,597,841
227,954
216,510
444,464
2004
4,381,331
217,450
248,821
466,271
2005
4,132,510
205,831
230,995
436,825
2006
3,901,515
195,096
239,586
434,682
2007
3,661,930
183,979
249,736
433,715
2008
3,412,194
172,184
264,578
436,762
2009
3,147,616
159,423
274,532
433,956
2010
2,873,082
145,927
262,532
408,459
2011
2,610,551
133,068
279,242
412,310
2012
2,331,309
119,128
288,850
407,978
2013
2,042,459
104,542
305,760
410,301
2014
1,736,699
88,896
317,670
406,566
2015
1,419,030
72,354
336,882
409,235
2016
1,082,148
54,758
288,738
343,496
2017
793,410
40,318
304,254
344,572
2018
489,155
25,105
356,549
381,654
2019
132,606
6,962
132,607
139,569
500
400
v 300
C
CU
co
7
t 200
H
100
IC
2,882,155 5,021,087 7,903,242
General Debt service - Self Supporting
'00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19
DEBT
264 ANNUAL OPERATING PLAN ELEMENT 1999/00
.V
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 2.25000
Proposed levy for debt service
(included in total adopted rate of $.34000) .13624
Percentage of allowable levy used
2.00%
1.50%
1.00%
0.50%
0.00%
10.9%
RATIO OF DIRECT DEBT TO TAXABLE VALUATION
92/93 93/94 94/95 95/96 96/97 97/98 98/99 99/00' 00/01' 01/02' 02/03' 03/04'
'Projected
J
J
DEBT
ANNUAL OPERATING PLAN ELEMENT 1999/00
265
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.
Su n,n„ary of Utility Debt Service Charges to Maturity:
Year Ending Outstanding Total
September 30 Beginning of Year Interest Principal Requirements
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
11,898,922 28,850,000 40,748,922
Utility Debt service
'00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18
DEBT
266 ANNUAL OPERATING PLAN ELEMENT 1999/00
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:
8
6
4
2
0
UTILITY REVENUE BOND COVERAGE
92/93 93/94 94/95 95/96 96/97 97/98 98/99' 99/00' *Projected
The 1999/00 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 transfers out as approved by the City
Council.
REVENUE:
All Other Revenue
Interest
System Billings
Total Revenues
EXPENSES.
Departments
Total Expenditures
Net Available for Debt Service
Annual Debt Requirement
Times Coverage Ratio
DEBT
ANNUAL OPERATING PLAN ELEMENT 1999/00
Water Electric Wastewater
Fund Fund Fund Total
1,621,005 754,643 1,019,105 3,394,753
197,130 255,904 183,361 636,395
6,375,000 18,408,000 3,658,000 28,449,000
8,193,135 19,418,547
4,860,466 32,472,948
3,683,694 14,429,251 2,176,881 20,289,826
3,683,694 14,429,251 2,176,881 20,289,826
4,509,441 4,989,296 2,683,585 92,982,322
933,421 680,820 791,484 2,405,725
4.83 7.33 3.39 5.06
267
Proposed. 1999/2000 Debt
Certificates of Obligation:
Street Improvements Country Club Road $ 1,300,000
College Street
Airport Facility Expansion 520,000 *Self-supporting
Total Certificates of Obligation 1,820,000
Utility Revenue Bonds:
Electric
Water
Wastewater
System Improvements
System Improvements
System Improvements
Total Utility Revenue Bonds
1,530,000
1,400,000
1,285,000
4,215,000
Total Proposed 1999/2000 Debt Issues $ 6,035,000
Electric System Improvements 25%
Water System Improvements 231.
Airport Expansion 9%
Beet Improvements 22%
stewater System Improvements 21
Note: The City expects Total Debt Outstanding to be $54,360,000 at September 30, 2000, which
includes the 1999/00 proposed issue and $2,070, 000 of principal reduction.
DEBT
268 ANNUAL OPERATING PLAN ELEMENT 1999/00
Financial Impact:
General Obligation Debt:
=> The resulting increase in tax supported debt service will be funded through continued growth
of the City's property tax base. Proposed debt in each year is adjusted to reflect tax base
growth realized in the previous year. For example, the debt payment on $1.3 million in proposed
C.O.'s are covered by increased tax base from 1998/99 growth.
=> Airport debt service will be repaid through increases in land lease fees.
=> Stormwater Drainage debt, if issued , would require fee increases of approximately $0.50 per
month. Funding for these projects will be considered during 1999/00.
Utility Revenue Debt:
=> Debt proceeds will be used for system expansion and repaid through continued growth of the
City's customer base. Capital projects and related debt are reviewed against actual needs and
customer growth in each year.
=> No rate increases for electric, water and wastewater are anticipated in the five-year projection
horizon.
Summary of Estimated Debt Needs:
Fiscal Year 99/00 00/01 01/02 02/03 03104
General Obligation:
Tax supported:
Facility Expansion
Street Improvements
Self-supporting:
Airport Improvements
Stormwater Drainage
Utility Revenue:
Electric
Water
Wastewater
Total Estimated Debt Needs
DEBT
ANNUAL OPERATING PLAN ELEMENT 1999/00
0 1,000,000 1,000,000 1,000,000 1,000,000
1,300,000 2,075,000 1,775,000 2,400,000 2,495,000
520,000 0 0 0 0
0 741,500 213,000 115,000 455,000
1,530,000 1,350,000 1,320,000 1,340,000 750,000
1,400,000 0 0 0 3,140,000
1,285,000 675,000 550,000 1,125,000 550,000
6,035,000 5,841,500 4,858,000 5,980,000 8,390,000
269
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DEBT
270 ANNUAL OPERATING PLAN ELEMENT 1999/00