Agenda 02-20-24; 8-a - Minutes - Laserfiche WebLink

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35 1 BACKGROUND: The County engaged two facility consulting firms to evaluate the condition and 2 adequacy of both County and School facilities and to make prioritized recommendations on capital 3 improvements over a ten-year planning horizon. Both plans utilize the Facilities Conditions Index 4 which quantifies facility conditions and can be used to prioritize repairs and replacements. 5 6 County Facility Plan 7 The County selected O'Brien Atkins Associates in March 2022 to review the state of County 8 facilities from both a facility condition and space planning context over a ten-year period. O'Brien 9 Atkins Associates presented a final draft to the Board of Commissioners on November 9, 2023. 10 That draft identified eight decision points to improve public safety, justice, social services, and 11 recreational facilities over the next ten years. The lowest cost alternative identified a total of$130 12 million in renovation and construction needs. 13 14 School Facility Plan 15 The County and School Districts selected Woolpert in March 2023 to review the state of the school 16 facilities from a facility condition, space planning, and educational adequacy context. Woolpert 17 last presented to the County Board on December 4, 2023 outlining four options to address the 18 next five to fifteen years of school facility needs. The total cost of those options ranges from $219 19 million to $1.1 billion. Woolpert is recommending an option that would require $1 billion in capital 20 investment over the next 15 years. 21 22 County staff has worked with the County's financial advisors to determine alternative plans of 23 finance that would be needed to fund the various options. This presentation details the debt 24 metrics that are used to evaluate the amount of debt the County carries, the revenue and 25 expenditure assumptions contained in the debt model, and the tax rate and debt policy 26 implications of the options presented by Woolpert. 27 28 Debt Metrics 29 As credit rating agencies evaluate the County's financial condition, they examine three primary 30 metrics related to the amount of debt the County is obligated to pay. 31 32 • Ten Year Payout Ratio 33 This metric measures the amount of principal to be paid in the next ten-year period to 34 prevent backloading debt payments. One rating agency adds a positive adjustment if the 35 ten-year payout ratio is 65% or greater. This means that 65% of outstanding principal 36 payments are paid within ten years. The County's current payout ratio is 67.1% and is 37 managed by structuring level principal payments over the entire term of the debt issue. 38 39 • Debt to Assessed Value Ratio 40 This metric measures the amount of outstanding tax supported debt as a percentage of 41 the County's assessed value (tax base). This is one measure of the County's ability to 42 raise revenue to make debt service payments. As assessed values increase, the County's 43 ability to generate enough revenue to pay back existing debt also increases. The County's 44 current policy is that total outstanding debt will not exceed 3% of assessed value. The 45 County's current debt to assessed value ratio is 1.28%. Having a ratio under 3% also 46 results in a positive credit rating adjustment. All of the financing scenarios discussed 47 below maintain a debt to assessed value ratio of under 3%. 48 49 Debt Service to General Fund Revenue Ratio 50 This metric compares the amount of debt service payments the County is obligated to pay 51 on an annual basis to total projected general fund revenues. This is a quantitative