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Home My WebLink About12 Debt 2017 FY2017 Annual Budget DEBT Sheraton Groundbreaking 213 FY2017 Annual Budget DEBT Debt Management Policy ........................215 Outstanding Debt Summary .................216 Debt Service Charges (Tax Supported)218 Ad Valorem Tax Supported Debt .........219 Debt Service Charges (SelfSupporting)220 Utility Debt ...............................................222 Utility Revenue Bond Coverage ............223 Proposed Debt Issues...............................224 Authorized General Obligation Debt .......225 214 FY2017 Annual Budget DEBT MANAGEMENT POLICY The City’s goal is to fund capital improvement projects on a “pay as you go”basis whenever 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. The City’s Debt Management Policy is part of the Fiscal and Budgetary Policy.The complete policy can be found at the beginning of the Reference section of this document. 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 Obtained Standard &Poor's AA+ 4/8/2016 AA 4/14/2016 215 FY2017 Annual Budget OUTSTANDING DEBT SUMMARY –BY TYPE AS OF OCTOBER 1,2016 Debt Outstanding % FY2017 Principal &Interest FY2017 Handling Fees GENERAL GOVERNMENT DEBT: General Government Tax Supported Debt Certificate of Obligation and General Obligation Bonds: Streets and Transportation 20,063,150 15% 1,642,543 3,726 Parks and Recreation Facilities 9,361,743 7%719,067 963 Public Safety 35,909,554 27% 2,716,365 2,467 Other City Facilities 59,389,090 45% 6,870,581 5,710 Total Gen.Gov.Tax Supported Debt 124,723,537 11,948,557 12,866 Certificate of Obligation BondsSelf Supporting: Rivery TIRZ 8,115,000 9%341,274 750 Total CO BondsSelf Supporting 8,115,000 341,274 750 TOTAL GENERAL GOVERNMENT DEBT 132,838,537 94% 12,289,831 13,616 ENTERPRISE DEBT Utility Revenue Bonds: Electric 29,356,795 33% 3,462,471 2,883 Water Services Irrigation 891,091 1%153,270 88 Water Services 29,511,743 34% 2,651,812 2,898 Wastewater 22,098,289 25% 2,403,578 2,170 Total Utility Revenue Debt 81,857,918 8,671,131 8,038 Certificate of Obligation Bonds Self Supporting(2): Airport 1,242,658 1% 141,107 160 Stormwater Drainage 4,730,531 5% 580,818 1,112 Total CO BondsSelf Supporting 5,973,189 721,925 1,271 TOTAL ENTERPRISE DEBT 87,831,107 100% 9,393,056 9,309 TOTAL CITY SUPPORTED DEBT 220,669,644 21,682,887 22,925 CONTRACTUAL OBLIGATIONS(1) Brazos River Authority (BRA)Contractual Obligation 32,037,394 1,835,374 Total Contractual Obligations 32,037,394 1,835,374 (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. 216 FY2017 Annual Budget LEGAL DEBT MARGIN FOR GENERAL OBLIGATIONS All taxable property within the City is subject to the assessment,levy,and collection by the City.Annually,the City evaluates direct ad valorem tax revenue to ensure 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 $0.424)0.22734 Percentage of allowable levy used 15.16% 217 FY2017 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 FY2017 124,723,537 4,020,862 7,927,690 11,948,552 FY2018 116,795,848 3,704,484 7,974,530 11,679,014 FY2019 108,821,318 3,488,360 7,683,197 11,171,557 FY2020 101,138,121 3,276,181 7,486,848 10,763,029 FY2021 93,651,272 3,061,577 7,645,992 10,707,569 FY2022 86,005,280 2,844,546 7,475,402 10,319,948 FY2023 78,529,878 2,611,113 7,556,182 10,167,295 FY2024 70,973,696 2,359,845 7,726,580 10,086,425 FY2025 63,247,116 2,091,269 7,502,434 9,593,703 FY2026 55,744,682 1,823,135 6,562,343 8,385,479 FY2027 49,182,339 1,611,886 6,505,986 8,117,872 FY2028 42,676,353 1,399,756 5,945,425 7,345,181 FY2029 36,730,928 1,207,090 6,044,089 7,251,179 FY2030 30,686,839 1,006,081 5,401,063 6,407,144 FY2031 25,285,776 829,739 4,701,063 5,530,802 FY2032 20,584,713 675,222 4,201,567 4,876,789 FY2033 16,383,146 539,752 4,272,072 4,811,823 FY2034 12,111,074 400,885 4,081,074 4,481,959 FY2035 8,030,000 266,265 3,720,000 3,986,265 FY2036 4,310,000 142,713 2,605,000 2,747,713 FY2037 1,705,000 45,031 1,705,000 1,750,031 37,405,792 124,723,537 162,129,330 218 FY2017 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 Total Requirements FY2017 7,691,086 (2,575,604)5,115,482 6,833,070 11,948,552 FY2018 6,172,251 (2,083,891)4,088,360 7,590,654 11,679,014 FY2019 5,836,023 (2,080,287)3,755,736 7,415,822 11,171,557 FY2020 5,482,260 (1,994,402)3,487,859 7,275,170 10,763,029 FY2021 5,416,516 (1,976,420)3,440,096 7,267,473 10,707,569 FY2022 5,169,220 (1,871,722)3,297,497 7,022,451 10,319,948 FY2023 4,911,017 (1,761,861)3,149,156 7,018,139 10,167,295 FY2024 4,921,887 (1,746,564)3,175,323 6,911,102 10,086,425 FY2025 4,396,246 (1,472,868)2,923,378 6,670,325 9,593,703 FY2026 3,229,684 (1,290,757)1,938,928 6,446,551 8,385,479 FY2027 2,956,389 (1,186,585)1,769,804 6,348,068 8,117,872 FY2028 2,648,984 (946,568)1,702,416 5,642,765 7,345,181 FY2029 2,620,431 (903,253)1,717,178 5,534,000 7,251,179 FY2030 1,909,297 (795,784)1,113,513 5,293,631 6,407,144 FY2031 1,911,893 (794,209)1,117,683 4,413,119 5,530,802 FY2032 1,259,705 (795,759)463,946 4,412,844 4,876,789 FY2033 1,125,648 (726,150)399,498 4,412,325 4,811,823 FY2034 1,128,113 (726,800)401,313 4,080,646 4,481,959 FY2035 989,269 (726,850)262,419 3,723,846 3,986,265 FY2036 875,500 (731,300)144,200 2,603,513 2,747,713 FY2037 1,750,031 1,750,031 70,651,419 (27,187,634)43,463,785 118,665,545 162,129,330 *GTEC Debt is self supporting Certificates of Obligation (CO Bonds)repaid through dedicated sales tax revenue. 219 FY2017 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 FY2017 5,892,829 200,604 521,320 721,925 FY2018 5,371,508 184,958 518,582 703,540 FY2019 4,852,926 170,170 345,868 516,038 FY2020 4,507,058 161,803 317,868 479,671 FY2021 4,189,191 153,391 319,157 472,548 FY2022 3,870,034 143,670 323,425 467,094 FY2023 3,546,609 131,216 342,639 473,855 FY2024 3,203,970 117,007 346,918 463,926 FY2025 2,857,052 102,524 352,846 455,370 FY2026 2,504,206 87,737 291,544 379,281 FY2027 2,212,662 78,298 295,430 373,728 FY2028 1,917,232 68,680 293,992 362,672 FY2029 1,623,240 58,799 292,939 351,738 FY2030 1,330,301 48,934 218,937 267,871 FY2031 1,111,364 41,895 223,937 265,832 FY2032 887,427 34,244 235,933 270,176 FY2033 651,494 25,911 242,928 268,839 FY2034 408,566 17,442 248,926 266,368 FY2035 159,640 8,513 225,000 233,513 FY2036 (65,360)450 15,000 15,450 1,836,247 5,973,189 7,809,436 220 FY2017 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 FY2017 8,115,000 286,274 55,000 341,274 FY2018 8,060,000 273,068 315,000 588,068 FY2019 7,745,000 266,768 325,000 591,768 FY2020 7,420,000 260,268 345,000 605,268 FY2021 7,075,000 253,368 360,000 613,368 FY2022 6,715,000 245,820 365,000 610,820 FY2023 6,350,000 231,920 380,000 611,920 FY2024 5,970,000 219,120 395,000 614,120 FY2025 5,575,000 205,770 405,000 610,770 FY2026 5,170,000 192,020 415,000 607,020 FY2027 4,755,000 179,700 435,000 614,700 FY2028 4,320,000 165,994 445,000 610,994 FY2029 3,875,000 151,015 465,000 616,015 FY2030 3,410,000 133,765 485,000 618,765 FY2031 2,925,000 115,715 505,000 620,715 FY2032 2,420,000 95,515 535,000 630,515 FY2033 1,885,000 73,455 565,000 638,455 FY2034 1,320,000 51,158 590,000 641,158 FY2035 730,000 27,823 620,000 647,823 FY2036 110,000 3,300 110,000 113,300 3,431,835 8,115,000 11,546,835 221 FY2017 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 Year Interest Principal Total Requirements BRA Contract FY2017 81,857,918 2,825,306 5,845,826 8,671,132 1,835,374 FY2018 76,012,092 2,590,034 6,135,826 8,725,860 1,834,234 FY2019 69,876,266 2,411,853 5,877,045 8,288,898 1,818,222 FY2020 63,999,221 2,217,628 5,692,592 7,910,221 2,371,890 FY2021 58,306,629 2,024,445 5,540,030 7,564,475 2,277,352 FY2022 52,766,598 1,827,348 5,648,687 7,476,036 2,273,009 FY2023 47,117,911 1,630,839 5,191,869 6,822,708 2,276,986 FY2024 41,926,041 1,437,225 4,907,665 6,344,890 2,271,146 FY2025 37,018,376 1,257,094 6,173,884 7,430,978 2,278,252 FY2026 30,844,492 1,070,673 5,003,212 6,073,886 2,269,972 FY2027 25,841,280 899,627 4,517,541 5,417,168 2,274,261 FY2028 21,323,739 751,572 4,103,760 4,855,332 2,274,571 FY2029 17,219,979 615,473 3,619,979 4,235,452 2,279,158 FY2030 13,600,000 497,855 2,120,000 2,617,855 2,275,635 FY2031 11,480,000 413,479 2,200,000 2,613,479 1,119,659 FY2032 9,280,000 322,356 2,415,000 2,737,356 307,674 FY2033 6,865,000 241,606 2,505,000 2,746,606 FY2034 4,360,000 152,012 2,325,000 2,477,012 FY2035 2,035,000 66,950 1,405,000 1,471,950 FY2036 630,000 18,900 630,000 648,900 23,272,275 81,857,918 105,130,193 32,037,394 222 FY2017 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: The 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 Electric Fund Total REVENUE All Other Revenue 8,630,227 1,745,000 10,375,227 Interest 199,975 18,100 218,075 System Billings 37,836,975 65,018,216 102,855,191 Total Revenues 46,667,177 66,781,316 113,448,493 EXPENSES Departments 28,391,951 58,486,453 86,878,404 Total Expenditures 28,391,951 58,486,453 86,878,404 Net Available for Debt Service 18,275,226 8,294,863 26,570,089 Annual Debt Requirement 5,182,487 3,479,271 8,661,758 Times Coverage Ratio 3.53 2.38 3.07 223 FY2017 Annual Budget PROPOSED DEBT ISSUES GENERAL DEBT:Longterm obligations are proposed to fund capital projects as detailed below: General Debt Certificate of Obligation City Wide Radio Replacement 500,000 ADA Phase II 300,000 Grace Heritage Phase II 140,000 Public Safety Vehicles 1,988,000 Certificate of Obligation Total 2,928,000 General Obligation Bonds Garey Park 5,500,000 San Gabriel 1,000,000 Sidewalks (2015 Referendum) 2,632,000 General Obligation Bonds Total 9,132,000 Total Projected General Debt 12,060,000 Self Supporting Debt Fire State 6Design 300,000 GTECAirport Road 1,850,000 Self Supporting Debt Total 2,150,000 Utility Debt Electric CIP 3,750,000 Water/Wastewater CIP 20,000,000 Total Utility Debt 23,750,000 Total City Wide Debt Issue 37,960,000 Outstanding Debt Summary g 9/30/16 Debt Principal FY2017 Principal Reduction Estimated FY2017 New Debt 9/30/17 Outstanding Debt TAX SUPPORTED DEBT General Debt Service General Obligation/Certificates of Obligation 124,723,537 (7,927,690)12,060,000 128,855,847 SELF SUPPORTED DEBT General Debt Service Rivery TIRZ 8,115,000 (55,000)8,060,000 Electric Water Stormwater 4,650,171 (420,905)4,229,266 ESD #8 300,000 300,000 Airport 1,242,658 (100,415)1,142,243 GTEC Airport 1,850,000 1,850,000 Total General Debt Service 138,731,366 (8,504,010)14,210,000 144,437,356 Utility Revenue Debt Electric 29,356,795 (2,467,329)3,750,000 30,639,466 Water 52,501,123 (3,378,496)20,000,000 69,122,627 Total Utility Revenue Debt 81,857,918 (5,845,825)23,750,000 99,762,093 224 FY2017 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 2016 3,000,000 10,000,000 13,000,000 Total Issued 20,050,000 10,500,000 10,000,000 27,550,000 Authorization Remaining 25,950,000 25,000,000 95,000,000 158,950,000 225 FY2017 Annual Budget DEBT SERVICE FUND SCHEDULE FY2015 Actual FY2016 Budget FY2016 Projected FY2017 Base FY2017 Changes FY2017 Budget Beginning Fund Balance 1,268,186 1,493,107 1,489,193 1,543,287 1,543,287 Revenues FY2015 Actual FY2016 Budget FY2016 Projected FY2017 Base FY2017 Changes FY2017 Budget Property Tax 9,817,979 10,900,000 10,900,000 12,000,000 12,000,000 Transfer In:GTEC 1,699,395 1,686,759 1,732,562 2,575,604 2,575,604 Transfer In:Ri very 265,800 265,828 341,274 341,274 Interest 3,924 2,000 2,000 2,000 2,000 Bond Proceeds 5,684,703 7,871,156 All Other Revenue Grand Total 17,206,001 12,854,559 20,771,546 14,918,878 14,918,878 Expenses FY2015 Actual FY2016 Budget FY2016 Projected FY2017 Base FY2017 Changes FY2017 Budget Principal Reduction 6,194,648 7,496,645 7,322,468 7,927,690 7,927,690 Interest 3,532,401 3,610,560 3,362,083 3,938,146 3,938,146 Principal Reduction:GTEC 1,168,870 1,179,117 1,253,791 1,850,165 1,850,165 Interest Reduction:GTEC 304,505 507,642 478,771 725,439 725,439 Interest Reduction:Rivery TIRZ 265,828 286,274 286,274 Principal Reduction:Rivery TIRZ 55,000 55,000 Agent Fees 16,522 16,500 20,000 22,000 22,000 All Other Expenses 5,771,235 7,877,733 Bond Issuance Cost (3,186)136,778 Grand Total 16,984,994 12,810,464 20,717,452 14,804,714 14,804,714 FY2015 Actual FY2016 Budget FY2016 Projected FY2017 Base FY2017 Changes FY2017 Budget Ending Fund Balance 1,489,193 1,537,202 1,543,287 1,657,451 1,657,451 Total Tax Supported Debt Service 9,727,049 11,107,205 10,684,551 11,865,836 11,865,836 Contingency (45 Day Reserve) 1,199,225 1,369,381 1,317,273 1,462,911 1,462,911 Available Fund Balance 289,968 167,821 226,014 194,540 194,540 226