HomeMy WebLinkAbout022608 Public Improvement Bonds$90,000,000 General Obligation
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Public Improvement Bonds
Series 2008
Today’s Agenda
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1.Overview of Debt Authorization Process
2.Overview of Debt Management and Administration
3.Description of Proposed March 11 New Money Bond
Sale
4.Description of Possible April Refunding Bond Sale
5.Next Steps
Overview –Debt Authorization Process
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•Starts with CIP –Approval each May
–Includes an Ordinance Authorizing the Issuance of Bonds by
City Council
•Preparations for a Bond Sale –2 or 3 years later
–Financing Team –Bond Counsel, Financial Advisor, City Staff
•Resolution Providing for the Sale Authorized by City
Council
•Advertise Sale and Market Activity
•Bond Ratings
•Sale of Bonds (competitive or negotiated)
•Report Results to City Council
•Closing
Total Debt
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March 1, 2008
(in millions)
After Bond SaleAuthorized But
OutstandingUnissued
GO Bonds
Schools307.235.5
General Govt.310.235.7
Total G.O.617.471.2
Public Facility Revenue Bonds362.4-0-
Leases13.6-0-
Total Tax Supported
Debt
$993.4$71.2
Revenue/Other Support:
Water and Sewer127.751.1
Stormwater8.220.4
ARP24.7-0-
Total Revenue Debt160.671.5
Total Debt$1,154.0$142.7
Debt Management Policies
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After the SalePolicy
Net Debt per Capita$2294$2400
Ratio to Estimated
Full Value 1.8%3.5%
Annual Debt Service to
Gen. Gov’t Expenditures
7.4%10%
Debt Per Capita to Per
Capita Personal Income
5.6%6.5%
Rapidity of Principal Retirement
Tax Supported Debt
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After March 11 Bond Sale
Percentage of
MaturingAmountTotal Debt
WithinMaturingOutstanding
5 years$362,274,20136.47%
10 years642,822,00564.71
15 years882,172,00588.80
20 years993,402,005100.00
Virginia Beach Bond Ratings
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GeneralWater &
Sewer
ObligationPFRBStorm Water
Standard and AAAAA+AAnot rated
Poor’s
Moody’sAa1Aa3Aa3Aa3
Fitch RatingsAA+AA-AA+AA+
Overview: Debt Management and Administration
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•Compliance Issues
–IRS
•Arbitrage
•Reimbursement Regs
•Tax Exempt Purposes
•Recordkeeping
–Securities and Exchange Commission –SEC
•Continuing Disclosure
•Potential Oversight
•Market and Environment: Bond insurer downgrades, auction rate securities
•Monitoring of Expenditures v. Bond Proceeds
–Goal: Reimbursement
•Debt Service
–46 issues, mostly twice a year = 76 interest payments and 44 principal payments
–ARP 128 interest payments annually
–Reconciliation of Debt Service Reserves, or other money held fordebt service by
Trustees, Escrow Agents and Paying Agents
Proposed $90,000,000 “New Money”G.O. Sale
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•Annual Charter Bond Sale
•From Charter Authorizations: 2005 & 2006
•City and School Projects Previously
Authorized
•Reimbursement from Previous Capital
Project Expenditures
•Competitive Sale on March 11, 2008
•Level Principal Payments -$4.5 million
annually over 20 years
Charter Authorizations
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PreviouslyRemaining
AuthorizationsSoldThis SaleAuthorizing
2005$55,200,000$17,597,407$37,602,593$ -0-
200659,800,000-0-52,397,4077,402,593
200763,800,000-0--0-63,800,000
Total$90,000,000$71,202,593
Included in CIP Adoption in May of each year.
Refunding Sale
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•Up to $90 million –Depends on Two Key Interest
Rates
–1) Rate bonds are sold at
–2) Rate to be earned on bond proceeds escrow
•Up to Six Issues as Candidates for Refunding
•Potential Gross Savings of $2.5 -$3.0 million total
•Annual Savings of Over $200,000 for 7 Years
•Competitive Sale on April 22, 2008
Next Steps
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1.City Council Authorizes Bond Sale(s)
–New Money in March
–Potential Refunding in April
2.Staff will pursue additional refundings
–PFRB
–Water and Sewer
–Stormwater
Council will be asked to authorize bond sales.
Recreation Center Referendum
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Funding Updated
February 26, 2008
Recreation Center Referendum
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•Provided $32.8 million in additional debt capacity to
construct 3 new Recreation Centers and expand 1 other
•City Council approved a Real Estate Tax increase of 3.8¢to
support:
–Debt service
–Operations
–Maintenance
–SeatackRecreation Center was also funded from tax rate
Recreation Center Dedicated Real Estate Tax
Revenue and Expenditures (April 2006)
$45
Tax Rate = 3.8¢
$40
$35
$30
Dollars (in Millions)
$25
$20
$15
$10
$5
$0
FY 2005FY 2009FY 2013FY 2017FY 2021FY 2025
Debt ServiceRecreation Center Operations
Maintenance & Rehabilitation CIPRecreation Center Dedicated Revenue
Changes since April 2006
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•City Council lowered the dedicated tax rate
from 3.8¢to 3.47¢which lowered capacity in
line with original intent to cover operations
and maintenance
•Real Estate assessments are reflecting the
market
Recreation Center Dedicated Real Estate Tax
Revenue and Expenditures (February 2008)
$45
Tax Rate = 3.47¢
$40
$35
Dollars (in Millions)
$30
$25
$20
$15
$10
$5
$-
FY 2005FY 2009FY 2013FY 2017FY 2021FY 2025
Debt ServiceRecreation Centers Operations
Maintenance & Rehabilitation CIP ProjectsRecreation Center Dedicated RE Tax Revenue
Next Steps
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•Current tax rate of 3.47¢appears to match
anticipated cost for maintenance and
operations
•Continue to monitor and hold costs within
expected revenues