HomeMy WebLinkAboutAgenda - 09-11-2014 - 51
ORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: September 11, 2014
Action Agenda
Item No. 5
SUBJECT: Potential Bond Issuance and Debt Capacity
DEPARTMENT: Finance and Administrative PUBLIC HEARING: (Y /N) No
Services
ATTACHMENT(S): INFORMATION CONTACT:
A) County Debt Capacity Schedule
Clarence Grier, 919 - 245 -2453
PURPOSE: To receive a report on a potential bond referendum and related debt capacity of a
future debt issuance for Orange County.
BACKGROUND: Over the past fiscal year, the Board of County Commissioners has
discussed the need for a future bond referendum to fund some County and school long -
range capital needs.
The County maintains excellent bond ratings.
S &P - AAA
Fitch - AAA
Moody's - Aa1 positive outlook
The issuance of debt for two of the County's largest projects most recently discussed — New
County Jail Facility and Middle School #5 for the Chapel Hill - Carrboro City School District —
total a combined $73.2 million dollars, and both projects are included in the current County
Capital Investment Plan for the fiscal years 2015 - 2020. It is not anticipated that the new jail
project will be included in a potential general obligation bond referendum, but would be financed
with alternative financing. Orange County Schools has indicated the need for a new Elementary
#8. That project is not scheduled until FY 2021 -2022, but could be a potential project for
inclusion in a potential bond referendum.
6
Additionally, in order to afford additional debt, the County would potentially have to increase the
property tax rate 2.82 cents for the new debt service. This projected tax increase would not
include 1) any future other operating expenditure increases or 2) any future operating
expenditure increases related directly to the new facilities and schools being built.
Based on current projects included in the County's Capital Investment Plan and future debt
service, the County could afford additional debt of the following after FY2018 — 19:
Fiscal
Capacity
Year
2016
$34,762,073
2017
21,359,811
2018
29,089,027
2019
11,405,556
2020
17,808,611
Total
$114,425,078
The Board of County Commissioners will need to finalize its decisions regarding outstanding
issues such as the need for a future jail and school, and any other potential projects that would
be financed with alternative financing and an approved bond referendum. Furthermore, the
decision to start an educational campaign and appoint a Capital Needs Advisory Task Force
will need to be completed as soon as possible.
FINANCIAL IMPACT: There is not a financial impact with the information being provided.
There will be a financial impact in future years as decisions are made to proceed with a bond
referendum and issuing debt for future County and School projects. All projects that are being
considered are currently in the County's Capital Investment Plan.
It is currently expected that projects totaling $100 million will be financed with the issuance of
general obligation or limited obligation bonds over a period not to exceed 20 years. At current
municipal bond interest rates, the total combined debt service is estimated to be $6.1.million
annually. This would represent 4.00 cents on the current property tax rate. Based the County
current budget and budgeted revenues, the County could afford an additional $25,000,000 of
additional general obligation debt capacity for a potential bond referendum if General Fund
revenues remain consistent. At current municipal bond interest rates, the total combined debt
service for $125 million is estimated to $ 7.6 million annually. This would represent 4.67 cents
on the current property tax rate.
RECOMMENDATION(S): The Manager recommends that the Board receive the information
and provide feedback and direction to staff.
Orange County, NC
Debt Capacity for a Potential Bond Referendum
Attachment A
3
Assumptions
#1 $40,000,000 in Fiscal year 2015 -2016
#2 $35,000,000 in Fiscal year 2017 -2018
#3 $35,000,000 in fiscal year 2019 -2020
A
B
B -A
Total Debt
Projected
Debt
Debt
Existing
FY 2013 -19
New County Jail
Total
Debt Service
Service
General Fund
Policy
Service
Additional
FY
Debt Service
CIP Debt Service
Debt Service
Debt Service
Bond Issuance
With GO Bond
Revenues
Debt Service
Available
Capacity
2
2015
25,372,369
1,156,937
26,529,306
26,529,306
199,570,350
29,935,553
3,406,247
22,708,313
3
2016
22,873,042
1,651,168
24,524,210
-
24,524,210
201,566,054
30,234,908
5,710,698
38,071,320
4
2017
21,757,731
2,525,254
24,282,985
2,548,949
26,831,934
203,581,715
30,537,257
3,705,323
24,702,151
5
2018
22,348,509
1,075,453
-
23,423,962
2,548,949
25,972,911
205,617,532
30,842,630
4,869,719
32,464,793
6
2019
21,597,233
552,282
2,000,000
24,149,515
4,779,280
28,928,795
207,673,707
31,151,056
2,222,261
14,815,076
7
2020
20,946,777
548,675
2,000,000
23,495,452
4,779,280
28,274,732
209,750,444
31,462,567
3,187,835
21,252,231
8
2021
20,341,251
543,941
2,000,000
22,885,192
7,009,611
29,894,803
211,847,948
31,777,192
1,882,389
12,549,260
9
2022
19,601,039
539,101
2,000,000
22,140,140
7,009,611
29,149,750
213,966,427
32,094,964
2,945,214
19,634,757
10
2023
15,081,427
534,153
2,000,000
17,615,580
7,009,611
24,625,191
216,106,091
32,415,914
7,790,723
51,938,151
11
2024
10,569,721
530,100
2,000,000
13,099,821
7,009,611
20,109,432
218,267,152
32,740,073
12,630,641
84,204,275
12
2025
7,090,542
525,918
2,000,000
9,616,460
7,009,611
16,626,071
220,449,824
33,067,474
16,441,403
109,609,351
13
2026
4,753,048
520,609
2,000,000
7,273,657
7,009,611
14,283,268
222,654,322
33,398,148
19,114,880
127,432,533
14
2027
6,386,169
516,194
2,000,000
8,902,363
7,009,611
15,911,973
224,880,865
33,732,130
17,820,157
118,801,044
15
2028
1,568,129
510,650
2,000,000
4,078,779
7,009,611
11,088,390
227,129,674
34,069,451
22,981,061
153,207,074
16
2029
1,308,491
-
2,000,000
3,308,491
7,009,611
10,318,102
229,400,971
34,410,146
24,092,044
160,613,627
17
2030
1,257,283
2,000,000
3,257,283
7,009,611
10,266,894
231,694,981
34,754,247
24,487,353
163,249,021
18
2031
1,206,075
2,000,000
3,206,075
7,009,611
10,215,686
234,011,931
35,101,790
24,886,104
165,907,361
19
2032
1,154,868
2,000,000
3,154,868
7,009,611
10,164,479
236,352,050
35,452,808
25,288,329
168,588,861
20
2033
814,253
2,000,000
2,814,253
7,009,611
9,823,864
238,715,571
35,807,336
25,983,472
173,223,147
21
2034
-
2,000,000
2,000,000
7,009,611
9,009,611
241,102,727
36,165,409
27,155,798
181,038,654
22
2035
2,000,000
2,000,000
7,009,611
9,009,611
243,513,754
36,527,063
27,517,452
183,449,681
23
2036
2,000,000
2,000,000
7,009,611
9,009,611
245,948,892
36,892,334
27,882,723
185,884,821
24
2037
2,000,000
2,000,000
4,460,661
6,460,661
248,408,381
37,261,257
30,800,596
205,337,303
25
2038
2,000,000
2,000,000
4,460,661
6,460,661
250,892,465
37,633,870
31,173,209
207,821,390
26
2039
2,000,000
2,000,000
2,230,331
4,230,331
253,401,390
38,010,209
33,779,878
225,199,188
27
2040
-
-
2,230,331
2,230,331
255,935,404
38,390,311
36,159,980
241,066,535
-
-
-
-
-
258,494,758
38,774,214
38,774,214
258,494,760
Totals
$ 226,027,957
$ 11,730,434
$ 42,000,000
$ 279,758,391
$ 140,192,218
$ 419,950,609
$ 6,150,935,380
$ 922,640,311
$ 502,689,702 $
3,351,264,678
Assumptions
#1 $40,000,000 in Fiscal year 2015 -2016
#2 $35,000,000 in Fiscal year 2017 -2018
#3 $35,000,000 in fiscal year 2019 -2020