County debt portfolio

2:08:13Now we're pivoting out of our deep dive into capital projects, and now we're gonna talk about the county's debt portfolio. And so we are taking kind of a macro look, and how we've grouped our debt portfolio is based off of revenues that have been pledged to pay back the debt service. So the first grouping that you're seeing are general obligation bonds, and Commissioner Oakley talked about the a little while ago when he was talking about um when we went to the voters and we said would you all be interested in

2:08:43being taxed a little bit for us to expand the jail? To rehabilitate and construct some new fire stations? Renovate our existing libraries and help us with our backlog of deferred capital maintenance at our parks. And so um We're giving you some information here related to each of those groupings. Now, if you see a range under interest rates, it's because there's more than one issuance that's being paid

2:09:14back by that revenue source. And so here are general obligation bonds. They range anywhere from 2.2 to a 4.32% interest rates. Um Uh by and large, double A plus are our ratings and so there are three generally three rating agencies that we may engage with for each of these issuances, Fitch, Moody's, or S ⁇ P, and we really strategize is it going to be one, is it going to be two, and which rating agencies we engage with based

2:09:44off market conditions and what the nature of those projects are. Um so Um so we don't have all of those nitty gritty D you got it right. Details on these slides because we're keeping it kind of that macro view. Um So we borrowed roughly a hundred and ninety four million Outstanding $183 million for these general obligation bonds. Our annual debt payments are just under $13 million, and those are set to mature in 2050. And so

2:10:14the way the general obligation bonds work is each year the board adopts millage rates that will fund the annual debt service, principal and interest payments, for each of those different what we call tranches. And so those are millage rates that the board will set the ceiling on next week and trim, and they'll go out as part of the property tax notice. The next grouping is guaranteed entitlement. And so this is a revenue share that comes from the state. And it is one of our revenue

2:10:45streams in the general operating fund. And so we've got um because there's only one interest rate that tells you there's one bond out against this revenue, it is um scheduled to mature in 2034. Our annual payment is about one million a year. Uh 3.14% was the interest rate we secured. Uh uh. We borrowed 25 million. We have roughly 13 outstanding, and so you'll see uh a large kind of

2:11:16slew of projects that we've used this bond for and it really was just a general uh county capital bond when we got it. We have refinanced it a couple times. Um and again it is set to mature meaning we'll pay it off in twenty thirty four.

2:11:36All right, our half cent sales tax is another revenue stream that comes into our general operating fund. And so we have uh a couple bonds uh pledged against the half cent sales tax. We're looking at bond ratings of double A plus. Um for those of you who don't know, those are really stinking good bond ratings. Uh interest rates range anywhere from 2.74% to 4.32%. We're looking at just under 14 million of annual debt payments. We borrowed 121 million with 118

2:12:06outstanding, looking to mature in 2040. And so part of what that bond, what those bonds funded, jail expansion and the villages of Pasadena Hills Superpark.

2:12:18And then park impact fees. Um we've got interest rates ranging from 1.24% to 4.71%. Annual debt is um just under 6 million. We borrowed 80 million with 76 outstanding. Those are um scheduled to mature in 2042. And that was uh to construct Sunwest Mine Park and the Starkey Ranch District Park.

2:12:47All right, second local option fuel tax. Um you'll see we have a double-A-rated bond here, and it you know it's just one because there's only one interest rate listed there at 2.71%. Annual debt payment is under $5 million. We borrowed 74 with just under $70 million outstanding. And this was for Sun Lake Boulevard from south of Wilton Way to Anchor Dune Drive. And that is slated to mature in twenty fifty.

2:13:15And then our next um revenue source that we have pledged is the tourist development tax. And this was for the Wiregrass Ranch Sports Campus. And so our bond ratings range from AA to AA plus, with interest rates ranging from 2.37% to 5.42%. Our annual debt service is under $3 million. We borrowed 27%. We've got about twenty-three outstanding and those are slated to mature in twenty thirty-seven.

2:13:44Dave, could you talk about that for a minute? So what's our revenue right now out there?

2:13:51Is that are we around seven million annually? I think we're projecting roughly seven million annually. Six seven.

2:14:00Okay. So we're with paying for self-

2:14:02Oh he did it. I'm sorry guys.

2:14:05So we're paying for itself positively and paying it down.

2:14:07Yes. Yep. And then um Chairman you had asked us um when those might be paid off. So our twenty twenty one bond is um callable at any time now. That can be prepaid without any penalty. Our twenty twenty three bond, that one, that call date is in twenty thirty three. So can't look to pay that one back early until twenty thirty three. Just a little bit. Follow up on your question.

2:14:35Is that the last one on d on the deaths?

2:14:38We have one more slide.

2:14:42All right, so solid waste. Um so this particular bond, we just got it, which is why you're seeing ninety-two million borrowed and ninety-two million outstanding. And uh it was kind of a unique situation for the county where there was a period of time where we had no solid waste debt. So the team worked really hard with our financial advisors and um County Attorney's Office to refresh and modernize our debt covenants and update our MTI. And so we got a really good bond rating at AA

2:15:12plus, interest at four point nine three percent. Our annual debt payment is around six million, and those are slated to mature in 2056. And then under our water and wastewater, so there's a very complex debt portfolio that I don't think the slide really articulates. And so you'll see bond ranges, but again really strong ratings from double A to double A plus. We've got interest rates ranging from two point five two percent to four percent, annual debt payments of twenty-eight million we've

2:15:42borrowed, two hundred and fifty with um Just over 207 outstanding scheduled to mature in 2040. And so this complex debt portfolio funds things like wastewater treatment plan expansions, um accus uh accusations, what am I saying? Acquisitions. Um words are hard. And then ongoing utility infrastructure.

2:16:08And this is the end.

2:16:10So

2:16:11of the debt portfolio. Thank you.

2:16:12So go I'll go to Solid Waste, but I guess it won't matter much. But Solid Waste is it an enterprise fund?

2:16:18Yes.

2:16:18So that really won't be affected as far as bond ratings or will it for the county, for the future?

2:16:26So those may be safe. We can make some direct ties to and so what the Chairman is alluding to is the pending property tax reform and how that might impact um some of our debt portfolio. So there's really easy ties. To let's start with general obligation. So general obligation bonds, we will pay back those annual debt service. Now, let's say property tax reform passes. Let's talk through how that gets impacted, right? So we're gonna have um increased homestead

2:16:56exemptions, which means the portion that we need to tax to recoup that annual debt payment of roughly 12.6 million is just going to get spread over the other taxable value bit of properties, which means layman's terms, increase millage rates, and so those who have less exemption will be paying more in taxes because we need to cover those debt payments.

2:17:19And the chances if that does go through for us to actually in let's say a couple of years time, whatever when when maybe rates drop down, we want to try to refinance. If our ratings dropped, we're not gonna be able to save the money we normally would if we had the same rating.

2:17:33Correct. So um refinancing to maybe save some money from an interest rate perspective or be able to pay loans off maybe a little bit faster. Um yes, it would we would be in a a a tight situation where it might not be advantageous for us to refinance and find some of those cost savings that historically we would have um we would have looked at.

2:17:54So I think your original question was

2:18:00I think your original question was looking at the enterprise debt versus the rest of the organization. And while there's not a direct tie, I'd I would probably defer to Jeff. I mean there there probably could be some Interplay depending on how governments react, but uh Jeff, uh you know, maybe you could talk a little more about about that.

2:18:20So I It's sort of a crapshoot answering the question, to be honest. Um

2:18:28But I would anticipate that all of the Florida counties and municipalities will be treated the same way in the bond market. Now. That may mean that our ratings drop. As People look to buy bonds in another juris in another state that doesn't have the same restrictions we do. But I think we'll We'll we won't be treated any

2:18:58worse or any better than the surrounding counties in the bond market. It may be that there's no change in rating. I kinda doubt it. But there it it may be because It's across the board. But a general obligation bond that went that goes to referendum

2:19:23I would think Would kinda maintain its rating because the voters have said you're gonna tax us for this. Right. And it's a separate millage. The ones that I think you'll be

2:19:40have a bigger impact are are the things like park impact fee that you have to do a Covenant to budget and appropriate from general revenue to b as a backstop and that backstop is now a whole lot less than it was if the constitutional amendment passes.

2:20:04Well and Jeff I think also are guaranteed entitlement. half cent sales tax because those are revenue streams into the general operating fund and so they look at things like our debt coverage ratios and so if we're needing to use more of that revenue stream to offset operations because the tax revenue declined that's gonna apply some pressure on on those types of things as well.

2:20:26Yes.

2:20:26And then the second local option fuel tax, while that seems like that might be standalone, we actually offset the fund that that revenue comes into with the multimodal tax increment fund. And so that TIFF funding helps supplement the operations there. So that fund would see some pressure as well. And so there could be the potential to have um negative implications that we have.

2:20:50Yeah, and to be clear on that, that TIFF fund is is taken from your your general operating right. So we set that across. That is also used to supplement your capital program. So any sort of impact to ad valorem taxes would also

2:21:06But you don't pledge the TIFF to the bondholders. So in theory, the rating would not be any different.

2:21:13Correct. I'm just speaking into the general.

2:21:16I think you're already seeing the fact that that's AA and not double A plus, is the bond market going. you can stop buying gas and you have a harder time to pay pay those bonds back and so it it does have a discount as it sits.

2:21:33Alright, so I need to be educated just a little bit. So I know that if you're trying to refinance and your bond rating drops it hurts you. Is there any hurt that's in there that if let's say a bob bottom writing goes from double A to A Will that ever cost us to pay more money in interest?

2:21:51You don't get a rate you don't re rate. They

2:21:55don't re-rate it. Okay.

2:21:57My my recollection is you don't re rate a bond that's already on the street. It's only when you are going out to the rating agencies to float new debt.

2:22:06That's what I thought. I just want to make sure I wasn't.

2:22:08But if you refinance you'd have to you'd have to go to the the rating agencies. Right. So

2:22:14that's what I thought that, but I just want

2:22:16to

2:22:16do that.

2:22:16It's like your mortgage. They're not changing the money.

2:22:23Okay.

2:22:26Hmm. Any other questions about bonds?