HomeMy WebLinkAbout16 - DebtDebt
DEBT TABLE OF CONTENTS
DebtManagement & Policy......................................................................................................................289
OutstandingDebt By Type........................................................................................................................ 290
General Debt Service
Principal & Interest Requirements.............................................................................................. 291
Legal Debt Margin ifiv, General-Obligation.................................................................................293
Utility Debt Service
Principal & Interest Requiranents.............................................................................................. 294
Utility Revenue Bond Debt Coverage......................................................................................... 295
Proposed Debt Issues296
................................................................................................................................
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.
115.1 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 2000/01
General Obligation
A
I:`
A
Utility Revenue
A
0
F1
289
Outstanding Delft summary - By Type as of October 1, 2000
Debt 2000/2001
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
6,937,453 32%
746,629
2,009,553 9%
295,042
3,466,450 16%
336,565
4,534,900 21%
464,076
16,948,356 1,842,312
Self Supported:
Airport
2,191,545
10%
174,952
Stormwater Drainage
2,865,099
13%
192,760
Subtotal - Self supported GO Debt
5,056,644
367,712
Total General Obligation Debt
22,005,000
100%
2,210,024
UTILITY REVENUE DEBT:
Electric
9,426,548
29%
995,165
Water
12,209,492
38%
1,309,217
Wastewater
10,453,960
33%
1,117,916
Total Utility Revenue Debt
32,090,000
t00%
3,422,298
TOTAL DEBT OUTSTANDING
54,095,000
5,632,322
P:
Stre
General Obligation Debt Utility Revenue Debt
Public
Safety
,�tormwarer
Other
Electric
Wastewater
DEBT
290 ANNUAL OPERATING PLAN ELEMENT 2000/01
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
2001
16,948,356
914,852
927,460
1,842,312
2002
16,020,896
829,275
940,043
1,769,318
2003
15,080,853
779,716
989,708
1,769,424
2004
14,091,146
726,911
907,745
1,634,656
2005
13,183,400
679,985
642,776
1,322,761
2006
12,540,624
645,601
673,962
1,319,563
2007
11,866,661
609,710
713,590
1,323,300
2008
11,153,071
574,926
748,414
1,323,340
2009
10,404,657
537,867
783,238
1,321,105
2010
9,621,419
498,311
849,792
1,348,103
2011
8,771,627
455,925
887,860
1,343,785
2012
7,883,767
410,888
932,807
1,343,696
2013
6,950,960
363,163
980,452
1,343,616
2014
5,970,507
312,223
1,038,097
1,350,320
2015
4,932,410
258,234
1,088,440
1,346,675
2016
3,843,970
201,589
1,211,086
1,412,675
2017
2,632,884
138,433
1,275,067
1,413,499
2018
1,357,818
71,841
742,216
814,057
2019
615,602
33,182
495,602
528,784
2020
120,000
6,750
120,000
126,750
2,000,000
1,500,000
us
6,
a
°a 1,000,000
0
0
r
'r
500,000
0
'01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 12 '13 '14 '15 '16 '17 '18 '19 20
9,049,383 16,948,356 25,997,739
General Debt Service - Tax Supported
DEBT
ANNUAL OPERATING PLAN ELEMENT 2000/01 291
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
2001
5,056,644
250,171
117,540
367,712
2002
4,939,104
244,386
204,957
449,343
2003
4,734,147
234,577
220,292
454,869
2004
4,513,854
223,865
252,255
476,119
2005
4,261,600
212,085
237,224
449,309
2006
4,024,376
201,070
246,038
447,108
2007
3,778,339
189,676
256,410
446,086
2008
3,521,929
177,587
271,586
449,173
2009
3,250,343
164,511
281,762
446,273
2010
2,968,581
150,676
270,208
420,884
2011
2,698,372
137,463
287,140
424,602
2012
2,411,232
123,152
297,193
420,344
2013
2,114,039
108,165
314,548
422,712
2014
1,799,492
92,090
326,903
418,993
2015
1,472,589
75,087
346,560
421,646
2016
1,126,029
57,007
298,914
355,921
2017
827,116
42,061
314,933
356,994
2018
512,182
26,314
367,784
394,098
2019
144,398
7,581
144,398
151,979
600,000
500,000
400,000
m 300,000
Cl
3
0
tL- 200,000
100,000
0
'01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19
2,717,522 5,056,644 7,774,165
General Debt service - Self supporting
DEBT
292 ANNUAL OPERATING PLAN ELEMENT 2000101
4
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 $.31409) .11562
Percentage of allowable levy used 10.0%
RATIO OF DIRECT DEBT TO TAXABLE VALUATION
91193 93/94 94/95 95/96 96/97 97/98 98199 99/00 00/07 07!02- uzlu;5- u:5/u4' MUD-
, •Projected
DEBT
ANNUAL OPERATING PLAN ELEMENT 2000/01 293
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
2001
32,090,000
1,617,298
1,805,000
3,422,298
2002
30,285,000
1,444,830
2,015,000
3,459,830
2003
28,270,000
1,358,879
2,085,000
3,443,879
2004
26,185,000
1,268,964
2,200,000
3,468,964
2005
23,985,000
1,168,276
2,265,000
3,433,276
2006
21,720,000
1,063,253
2,240,000
3,303,253
2007
19,480,000
959,530
2,200,000
3,159,530
2008
17,280,000
858,608
1,950,000
2,808,608
2009
15,330,000
768,966
1,995,000
2,763,966
2010
13,335,000
675,304
2,040,000
2,715,304
2011
11,295,000
577,521
1,740,000
2,317,521
2012
9,555,000
491,994
1,780,000
2,271,994
2013
7,775,000
403,664
1,535,000
1,938,664
2014
6,240,000
325,996
1,615,000
1,940,996
2015
4,625,000
242,973
1,715,000
1,957,973
2016
2,910,000
154,573
715,000
869,573
2017
2,195,000
117,540
720,000
837,540
2018
1,475,000
79,890
795,000
874,890
2019
680,000
38,250
330,000
368,250
2020
350,000
19,688
350,000
369,688
3,500,000
3,000,000
2,500,000
2,000,000
1,500,000
1,000,000
500,000
0
13,635,995 32,090,000 45,725,995
Utility Debt Service
'01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20
DEBT
294 ANNUAL OPERATING PLAN ELEMENT 2000/01
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:
8.00
6.00
4.00
2.00
UTILITY REVENUE BOND COVERAGE
0.00
92/93 93/94
94/95 95/96 96/97
97/98 98/99
99/00' 00/01'
'Projected
The 2000/01Proposed 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.
Water
Electric
Wastewater
Fund
Fund
Fund
Total
REVENUE:
All Other Revenue
1,231,235
865,657
771,925
2,868,897
Interest
100,500
106,100
51,225
257,825
System Billings
6,715,000
19,543,796
4,000,000
30,258,796
Total Revenues
8,046,735
20,515,553
4,823,150
33,385,438
EXPENSES:
Departments
4,294,252
15,661,382
2,153,576
22,909,290
Total Expenditures
4,294,252
15,661,382
2,153,576
22,909,290
Net Available for Debt Service
3,752,483
4,854,171
2,669,574
99,276,228
Annual Debt Requirement 1,309,217 995,165 1,117,916 3,422,298
Times Coverage Ratio 2.87 4.88 2.39 3.29
DEBT
ANNUAL OPERATING PLAN ELEMENT 2000101 295
296
Proposed 2000/01 Debt
Certificates of Obligation:
Parks Improvements Lighting of Athletic Complex $ 490,000
Street Improvements Street projects 640,000
Total Certificates of Obligation 1,130,000
`Not included in tax rate calculation; subject to future discussion as projects arise
Utility Revenue Bonds:
Electric System Improvements 1,530,000
Total Utility Revenue Bonds 1,530,000
Total Proposed 2000/01 $ 2,660,000
Electric System
Improvements
58%
nprovements
24%
rks Improvements
18%
Note: The City expects Total Debt Outstanding to be $53,905,000 at September 30, 2001, which includes
the 2000101 proposed issue and $2,850,000 of principal reduction.
DEBT
ANNUAL OPERATING PLAN ELEMENT 2000/01
Financial Impact:
General Obligation Debt:
=> Capital improvements are reviewed and adjusted each year by City Council and staff, with
debt issuances being adjusted accordingly. The on-going City facility needs assessment and
expansion, along with the finalization of major street projects, will compose the majority of
the need for additional debt issuance in the upcoming five year horizon.
=> The City will review its Stormwater Drainage project needs in the upcoming year and determine
funding sources for projects that are deemed necessary.
=> Additional funding sources being reviewed as a means to fund future streets and other General
Obligation projects, including Parks and Facilities.
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.
=> A rate study, which is planned for the 2000/01 fiscal year, will determine whether utility rates will
need any adjustments during the next five years.
Summary of Estimated Debt Needs:
Fiscal Year
00/01
01102
02103
03104
04/05
General Obligation:
Tax supported:
Facility Expansion
0
1,000,000
1,000,000
1,000,000
1,000,000
Parks Improvements
490,000
0
0
0
0
Street Improvements
640,000
4,280,000
2,450,000
2,645,000
2,225,000
Self-supporting.,
Stormwater Drainage
0
0
877,000
475,000
325,000
Utility Revenue:
Electric
1,050,000
1,800,000
1,800,000
1,700,000
1,700,000
Water
0
0
0
0
2,500,000
Wastewater
0
0
0
450,000
800,000
Total Estimated Debt Needs
2,180,000
7,080,000
6,127,000
6,270,000
B,550,000
DEBT
ANNUAL OPERATING PLAN ELEMENT 2000/01 297
�o� GEORG��o
Vn �ED �
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DEBT
299 ANNUAL OPERATING PLAN ELEMENT 2000/01