Minutes 01-31-2014 - Laserfiche WebLink

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Clarence Grier said they have been discussing a $100 million bond to be paid back in 20 years, as required by the Local Government Commission (LGC). Debt service on $100 million would be approximately $6.7 million, or 4.18 cents on the current tax rate. He reviewed current outstanding County debt and bond ratings (Fitch —AAA; Standard & Poors —AAA; Moody's —AA1 with a positive outlook). The assumptions built into the spreadsheet include $100m in staggered issues every two years of$40 million in 2015-16, then $30 million two years later, then the final $30 million two years after that. Bond approval date is assumed as November 2015 — if not done in November 2014, there is no primary in May 2015 so must wait until November general election for a bond referendum vote. He reviewed the spreadsheet for current debt and potential new County jail debt service. He pointed out that in this scenario, maximum outstanding debt would come in FY2020-21 with a tax rate effect of about 3.8 cents. To stay within County policy limiting debt service expenditures to15% of the General Fund, expenditures in that fiscal year would have to increase to about $221.3 million. He noted that if real property growth and sales tax growth continued with current projections, we would need about .28 cents on the tax rate to be able to cover the $221.3 million in expenditures. In response to Commissioner McKee's question, Clarence Grier confirmed that he assumed that the projected growth in revenues is not consumed by other expenses. Clarence Grier explained how CIP and possible new jail debt are incorporated in the spreadsheet. He noted options of how some of the $300 million in capital needs identified by the two school systems' assessments might be addressed with a $100 million bond. Discussion ensued about how jail debt service might be addressed through an alternative financing mechanism and not be included in a bond referendum, as it might be considered a controversial element that might lead to failure of a bond referendum. Clarence Grier reiterated that this particular scenario is just for illustrative purposes — no decisions have been made yet about a bond referendum. Commissioner Price asked about school needs and the need to build a new school. Michael Talbert said the schools had done their facility assessments and included some remodelings and additions of older schools, which may push out some of this further in time so that a new school might not be needed for 2, 5, or 10 years.. Commissioner Pelissier asked if there are longer term items in their CIP with debt service that are excluded in this scenario. Clarence Grier said all is included in the CIP Debt Service column. He wanted to show them how a $100 million bond referendum would affect their debt capacity going forward. The components of a bond referendum have not been decided. Chair Jacobs said he expected the school systems to come back to the Board with a couple hundred million dollars worth of proposed upgrades for health & safety reasons, structural reasons, and capacity reasons. There might be discussion of perhaps three separate $70million bond packages. They are looking to expand capacities of existing facilities, for example the new Culbreth Middle School wing. He noted the current plan for a new jail is for a 300-bed capacity, but it could start out as a phased project. Clarence Grier confirmed this, that the full capacity cost would be $30,250,000, saying that if they cut it in half, then debt capacity would go up.