Travis County Commissioners Court
September 5, 2006
Item 26
26. Receive update on Travis County debt model obligations, impact on debt capacity and future cash-flow assumptions.
>> our budget manage did the analysis, prepared the powerpoint. We will give you the presentation, she says since it's inevitable I will probably come to the table to add my two cents, I'm here for that purpose. With that I will pass the baton to jessica.
>> let me take one second here to set this up. I do have extra copies on the table. I want to make sure that all of the Commissioners also have their copies with them. Thank you.
>> thank you. I will go ahead and start right in. Please feel free to stop me at any time with any questions that you might have. We were asked to give an update on our current cash flow debt obligations as well as the impact on the debt capacity of our current assumptions. That's what this presentation does hopefully. Divided into two sections cleverly named, cash flow assumptions taken from the preliminary budgets, as well as what if, that incorporates some additional assumptions, including increased costs associated with the jail project and an accelerated cash flow that I believe is on your markup sheet requested by t.n.r. For some projects there. Both related to the 2005 voter approved bond and long-term co's related to that as well. The debt request for issuance in fy '06 includes 53.4 million in voter approved bonds and 27.4 million in bond voter -- in non-seart non-voter approved bonds. Those are the cash flow assumptions that I'm going to go into further. This is -- this does not look like the presentation.
>> let me get out of here for one sending, please. Helps when you have the right date. The assumed debt issuance as of the preliminary budget includes $10.9 million in short-term five year co's, for general needs. Those are the co's that you found in your preliminary budget. Also includes 14.3 million and 20 year co's or long-term pro's related to the jail project. 19.2 million in 2001 voter approved bonds, and 30.9 million in 2005 voter approved bonds for a total of $75.3 million. Going into each of those specifically, the preliminary budget co includes as I said 10.9 million, there's the projects that are listed currently in that preliminary budget co number and we know that this is probably incorrect. We don't know in what direction. There could be changes that occur during markup that could change this figure, there could be increases to car that would allow for more flexible within car that could change this figure. But it is in the preliminary budget.
>> elevator refurbishment is what elevator.
>> in the eob, I'm going to probably be recommended that be funded out of car after some discussion with the county auditor's office on maintenance versus improvements eligibility on the co. So that is [indiscernible] eob.
>> okay.
>> under 2001 voter approved bonds, it's important to note that this number includes that $12.6 million on budget number 2. That is for local projects that we had originally believed that we could use cash on hand related to savings on s.h. 45 north. We are not doing that. We are going to need to issue an additional 12 tonight $6 million in fy '07 to allow for those local projects to be completed.
>> [indiscernible] let me ask this question. I still need to get a determination from -- from t.n.r. And the determination is of that -- of that particular loan that we have left -- particular money that we have left, part of it is to give those f.m. 1826 right-of-way acquisition the amount of money that -- that we would like to maybe set aside for the right-of-way acquisition -- right-of-way acquisition for that 1826 road project, how much will be left in that particular bond where it may be defeased? Because somewhere along the line, I think there may be an intent and need to go ahead and defease so that the bonds at some stages, when that defeasement come across in that capacity at that point will -- will go away. But t.n.r. Can you give me some kind of where we are legally on -- I guess as far as the defeasing of --
>> I can tell you the process. I'm prone to give legal opinions without the appropriate degree, but yes the first thing that has to happen, we have to amend our agreement with txdot, that will basically unobligate the -- the money that they tell us they don't need.
>> all right.
>> contractually we are bound to find a way to basically amend the agreement to cap the amount of money that we will pay txdot for the right-of-way acquisition on 45 north. That basically relieves our obligation to the state. We still have bond covenants that -- that was proposition number 2 as you may recall. There was two road projects in that proposition. One was state highway 45 north, the other was farm-to-market road 1826, the proposition does not stipulate how much money went from 45 north and for 1826. I asked our -- our bond council, glen oppel, whether we could partially defease that proposition, I think his informal response was yes, that we could. With that said, we have not initiated the right-of-way acquisition on 1826. We know that of that total amount that was authorized, we -- that the much smaller amount was right-of-way ago six on 1826 -- right-of-way acquisition of 1826, 700,000 was our estimate at the time. Whether or not that was current we probably need to add some money just to be on the safe side if we defease the 12 million or a portion of the 12 million, we still have enough authorized money in the -- in the proposition to pay for the right-of-way on 1826. So the bulk of that $12 million we probably will be able to defease once we amend the agreement with txdot.
>> okay. Well, I guess my point, though, is -- is I guess to -- to subtract the amount of money that -- that will be proposed for the whatever that cost is for right-of-way acquisition, right now we don't know. I mean, it's -- but there ought to be a safe number somewhere out there --
>> easily 10 million. I think that's very conservative estimate. If we originally estimate 700,000 on the 1826, I would probably add a couple hundred thousand dollars to it just to be on the safe side.
>> okay. So I guess the next I guess during this process and -- and -- especially looking at your debt capacity, issue, that we are faced here with right now, what -- what would be the time frame as far as us having something on the table as far as knowing what -- what and when to defease --
>> I did not talk to glen about the defeaseance process, I don't know how long that takes. What type of documentation would be needed and whether that was -- would even be a good idea from a financial point of view. It may be that -- that with the cash that we have from that issuance, is that an interest rate is better than what we might be able to get in the market today. So once we talked to our financial advisor, he may tell you instead of doing it that way, do it a different way. Those are totally, you know, subject matters that only they can advise you on. But we can get you the agreement with txdot within a couple of weeks. And then the legal advisors, bond council and the financial advisors can probably tell you how long it will take to get it from there to the point where it will no longer be on books as debt.
>> what have we done with the -- with the [indiscernible]
>> the 12.6 million in cash that we issued originally for s.h. 45 north is on our books. It's in our -- it's -- we are paying it off. The -- this schedule assumes an additional 12.6 million for local projects that we will need to issue to be able to -- to programmatically complete those projects. So it's a pick up--
>> $10 million left over.
>> what if anything have we done with it?
>> we are the process as joe said figuring out how to defease, in this model having a negative impact currently in this model.
>> as to the 10 million plus in cash, we haven't done anything with it?
>> no, we have not reused that 10 million in the model.
>> okay.
>> because we were not allowed to.
>> okay.
>> but at some point -- you have $10 million in the bank, contingent upon some sort of agreement with txdot before that money reverts back to us, at that point we have to decide what to do with it.
>> that's correct.
>> can he we can make that decision mid year any time after adoption of the budget. Okay.
>> and I should say on this slide you will see that we are already assuming that the 725,000 that t.n.r. Requested for f.m. 1826 for next year, that we would be able to use a portion of that money since it is in the same proposition. I still need to talk to legal and confirm that, but that is one way that we can use a very small portion of it and make use of that.
>> okay. [one moment please for change in captioners]
>> that 14.1 million is the -- this year we issued 9.4 million. I believe this is the remaining authorization from the voters. And that totals 30.9 million. Segmenting into that long-term c.o. For the jail project, the what now scenario is at 14.3 million, which was the original cash flow that we worked out with facilities management. I should state that facilities management had an original two-year cash flow of fy 2006-2007. We talked to roger and we think through reimbursement resolutions we could move that into a third year so we wouldn't have as large a chunk of issuance in fy 2007 and that's what this reflects. So that totals 28.4 million. So the question becomes what is the debt capacity impact of what we've assumed in the budget? One is the debt service impact, which is an important impact because it is basically hoich can we afford as far as the tax rate, as far as what people will be paying for this. And then the second is the key ratios in our debt policy, which is what christian and others have also referred to as the white line discussion. So referring to that first question, which is the debt service impact, you can see that the total debt issued kind of it's the first bolded section almost all the way down, totaled all those cash flow assumptions that we've been discussing and we are -- we would be issuing 75.3 million in fy 2007 and approximately 64 million in fy '08 and then that starts to decrease. The debt service impact basically from fy 2007 to fy 2008 you would experience an approximate 4.2-million-dollar increase in our debt service requirements related to this new debt. That would peak at about 70 million in fy 2007 and start to slowly decrease with no future debt iewmd here. -- assumed here.
>> when you say no future debt, unfortunately we have debt issuance trends. Do we project that debt over the last five?
>> what we do is the what if scenario. We did make some assumptions for a future bond election in November of 2009, and you will see that. And it wasn't necessarily based on historical. It was based on the building I'd on what we based on the is civil courthouse and the existing courthouse. I'll get into that.
>> on page 8 you project that we issue less debt in 2009, '10 and 711 than we did in in 2006, 2007 and 2008.
>> there are a few key assumptions. '06, '07 and '08 on the co line is imbedded that long-term co related to the yale project. So once we finished that you will see it drops back down to 13 million. You may recall last fall we discussed that 13 million in short-term co's was our standard base assumption for co's with an assumption that we have approximately 10 million in car, 13 million in short-term co's totals 23 million for capital needs for everyday sort of business. That is based on a trend back to the 90's about 10 years that we did last year in the development of the bond election. The others that are here, the voter approved bonds, '00, 2005, as the bond obligations are completed, there isn't here an 'assumption that there would be anything -- that would be captured in the future bond election.
>> okay.
>> we have updated for county population, which you will see here the one that is highlighted. That's the net bonded debt per capita. I was able to get some additional flmpls the city domogralphers office and updated that. Our goal is $500 or less. We do have showing here in '06 through 2009 approximately 521 highlighted at 552 in '08 and then coming back down and you will see in fy '10 we are under that white line again. You will see that that will change in the future -- part two of the presentation because of that future bond election. Overlapping debt as you know in the past we've always been above that, at least since I can remember in the last five or six years. I should note that in talking with ladd I did have discussions with him on what our white lines are. What the rating agencies look for and what we should be concerned about. And obviously they take -- they don't take one white line and look at just that, they look at the whole big picture. This is part of that. We need to look at trends, we need to be aware of where we are, but I will note that the net bonded debt per taxable value is well within our guideline.
>> so what we're saying there is when the rating folks look at our ratings, make decisions on our ratings, if we have -- if our trend shows that there has been a decrease at a certain point, then you might have an increase as far as debt per capita, overall total net debt per capita, and then at a certain point you start seeing a decline in that debt capacity per capita. Are these some of the things you're saying they look at?
>> yeah. I think the trend line is much more important than the particular point, segment in each of the individual year. And if the attachments on your presentation include the debt service model and goes back to 2002, you will see that that net bonded debt per capita, which is the second key ratio down on that has gone up and then trended back downward. It kind of does a little hill, goes up a little bit and then trends back down and goes up a little bit. And I think that is really what we're talking about as far as talking with the rating agencies. I don't know if there's anything christian wants to add on that.
>> jessica, what year did we -- have we complied with the five percent on the debt taxable value? When did that come up, what year was the five percent put in there?
>> it was in the qulaits or 1990 when the model was established after all the discussion. And Travis County -- I don't know if wref ever we have ever been under that. If we have, it has only been what one would call a smidgeen. So it has been a consistent issue, which is the accumulated action of all governments.
>> not having gone to new york with you guys, is that something that they look at, christian?
>> yes.
>> and given the fact, so shouldn't we take -- did they ask us and say hey, why don't you do yourselves -- make it easier on yourselves and put that goal on seven percent versus five?
>> no whvment I say yes, they look at it, they acknowledge it. They acknowledge that it is a factor that governments should be worried -- concerned about. They also have never said, because of that we are going to modify our rating of Travis County. There are these other '-- and most importantly doing what you say over time. One would need to get all governmental bodies together in the same room and achieve a common direction '
>> so that's everybody from the hospital district to the city of Austin to aisd?
>> the big players are the aisd, the city, and then the county. And then there are a lot of other players. And I seem to remember a county judge endeavoring to try that once had tand didn't work very well because the school district in essence said we really need to achieve our mission. And the county then said we then neisd to achieve our mission noond one was interested in not achieving their mission in relationship to the other. Have.
>> I know you need something to do.
>> I'll tart that here in the next couple of hours. [ laughter ]
>> because of that the rating agencies are very much aware of had those dynamics. I should mention that probably the biggest one could be the impact on debt service because if you wish to stay at the effective tax rate, what those effective tax rate statutes say is you take that -- if have you a four-million-dollar increase in debt service, that comes off the top on m and o. So you start with four million less on the m and o side unless you lish to go above the effective tax rate, which is always your option. I'm sorry, but you were right.
>> and I was just thinking while y'all were discussing that, I haven't done this, but it might be curious for me to assume no future debt and see what that did to that overlapping debt per taxable value. I would venture to say it may still be above five percent, but I'm not 100% sure on that. If there's no further questions, I will move on to part 2, which is the what if. This is the assumed debt issuance, including some revised departmental cash flows as well as future debt. We have maintained here a five-year co for general needs. There is no change there. It's maintained at 10.9 million for preliminary budget. As I said before, I know it's wrong, but we don't know in what direction or by how much. So we didn't want to venture an uneducated guess there. Farce the jail project for the long-term co's, we have increased that by 9.5 million based on a revised cash flow we've received from facilities management. That does assume the cost increases related to the jail project of I think it's 10 million plus. I have it delineated a little bit further on later. It's just broken out over two years. The 2001 voter approved bonds, there is again no change here. With the assumptions that we laid out previously, including that $12.6 million that we've discussed and as far as the '05 voter approved bonds, you will see that the change is accentuated in the accelerated cash flow request from tnr that was on your markup sheet. That's $5.9 million. The difference between the 20-year co jail project and the '05 voter approved bonds, the increases, is the 5.9 million, we knew we were going to issue, we're just issuing it sooner. The 9.5 million is actually new, increased cost.
>> is that per year? 9.5, are we assuming that it's only going to be a 9.5 increase?
>> it's a 9.5-million-dollar increase in their cash flow for fy 2007 and then it's a 1 point something-million-dollar increase in '08. 1.3. And then that's it. So between those two is the 10 million plus that y'all have discussed previously related to that yale project.
>> that's -- jail project.
>> that's holding our breath hoping that --
>> we assumed that you would not modify the scope, but pay the tra check.
>> and it's kind of a worse case in that sense too because obviously there might be other options you need to explore with the departments, but that's what we had from the department and it seemed reasonable to plug it in here and see what happens. We also do have $175 million for that future bond election in 2009, assuming an '09 election, and I'll discuss that fur as well.
>> do you think this will take another 15 or 20 minutes?
>> yes.
>> why don't we call up the health care district? We've posted it for 10:00 and I'm visualizing tens of thousands of residents looking forward to our discussion of that. Why don't we take that up and we'll come back to this?
>> sure. This would be a good stopping point.
>> that way we woapt have any need to rush through it. So unless there's objection, we will basically discontinue our discussion of number 26 and come back to it immediately after our discussion of number 30 since we did advise -- the judge advised several managers and the ceo of the health care district that we'd call it up at 10:00.
>> judge, if you don't mind whrks we come back, jessica, why don't we start back with the what if? That way we finish the now and start over with the what if. Thanks.
this morning we started discussing item number 26, receive update on Travis County debt model obligations impact on debt capacity and future cash flow assumptions. And in the middle of that discussion we thought it better to basically address the health care district's budget, which was a wise decision because it took a little bit longer than I thought, but I think it was the right choice to make. Now, ms. Rio chs in the was in the middle of her presentation.
>> good morning again. What I will do is go back one slide and pick up with the beginning of the discussion of part two, which is the what if.
>> [one moment, please, for change in captioners] ...that is southwest conference sell rated issuance, already -- that is accelerated issuance.
>> where are you?
>> page 10.
>> thank you.
>> I apologize for that.
>> we are at 90.7 million total. When you add all of those numbers up, that is approximately $15.4 million more than the -- than the first part of the presentation. Or more than what's in preliminary budget I should say as well. We also have an assumption of $175 million for future debt, which is -- assumes a November of -- excuse me, November of twine election in debt -- 2009 election in debt starts that year as well. We will go into that. As far as the 2005 voter approved bond with the revised cash flow, you can see that -- that cash flow from t.n.r. Is at now 22.8 million. I believe previously it was at 9.9 million. So -- so that has increased, that reflect that accelerated cash flow for fy '07. Prop 3 is -- which is the remaining authorization for the jail project has not changed. Where we are going to see the change is the long-term co's related to the jail project as I mentioned earlier, we only had 23.5 million approved from the voters under that authorization. This is the remaining amount. We issued about 9.4 million in '06. So that total is 36.8 million for total of 2005 voter approved bonds. As far as those long-term co's related to the jail project, that has increased to 37.9 million. That latest cash flow from facilities management does include 9.5 million more in '07, also includes 1.3 million more from '08 for increased costs related to the jail project. I should say as we we did modify this, processed it back to roarj and his staff, it was presented to us as a two year cash flow originally. This revised cash flow was presented as a three year, but we did move some additional costs on to the third career so that we wouldn't have to issue as much in '07, so that might mean that there might be some reimbursement resolutions need understand that last year. So I just wanted to mention that. Long term co's related to jail project, 23 million. There's a summary here of what when you take the 14.1 million in remaining authorization, plus the 23.8 million in long-term, you get a total for the jail project in '07 of 37.9 million. Moving on to the possible bond election, we have maintained a four year cycle, there has been discussion in the past of a four year versus a five year cycle. Since history at least recent history seems to -- to favor that four year cycle, we assumed a November of twine twine election. Our last election as you recall was in November of '05. What we did was assumed or posed the question, I should say of what happens if we were to issue $25 million a year for fy 10, fy 11 and fy 12 for a total of $75 million for this new civil courthouse as well as the renovation of the existing heman marion sweatt courthouse. We need a better cost estimate of the planning for the project. Let me say how we came up with our 75 mlz figure. Basically we took 250,000 square feet for the new building, proposed building, 100,000 square feet for the existing space at $150 per square foot plus in direct costs, plus cost escalation that's we have been seeing requested from facilities management on some other projects, that's how we rounded to 75 million. Once again, that will need to be -- we will need a better estimate at some point from facilities. Also on the road and park side assumed or possessed the question what would we -- what would we be able to do with 20 million a year for five years beginning in fy 10 for possible road and park projects, that totals 100 million. The 100 million was what we went into the original 2005 voter approved bond election process recommending discussions with joe in the past for 20 million a year seemed plausible. That's where those assumptions came from. We do not currently have assumptions for any other major projects or buildings, these are the two areas that we really focused in on to get that $175 million, obviously cash flows would need to be worked out and better estimates would need to be worked out, but that is a starting point for us to discuss. We go back to those two questions then. What impact, if we were to assume these cash flows, what impact on debt service and key ratios? As far as the debt service impact, slide 14 basically totals up everything again. Obviously more doubt out there now, especially in light of the future bond election, which shows $45 million a year for 3 years starting in fy 10 and then 20 million for the last two years. So it's a five year, assumed to be a five year program. The debt service -- the total issuance then is -- is -- starts in fy '06, goes out to fy 14, just the total then of those co's, 01, 01 and future. The debt service, as you can see, does go up fy '07 would stay the same obviously because we -- that reflects what we issued in fy '06 our debt service. 64.3 million. But jumps mow in fy '08 to 70.1 million. I believe previously 61.5 million in part 1 of this presentation in fy '08. Also then go up again in fy twine twine before it started to come down, then as you would see started to go up again because of that future bond election. 2009.
>> are you making the assumption that the 2 million from the 00 bonds are at some point going to be ready to be issued for a project? That's the right-of-way money for 290 west kind of hanging out there. If you look at last year, we had that in '07. Pushing out. It is assumed at some point it would be issued. I would rely on t.n.r. To tell us if '08 is not the correct year.
>> this is fine whether you put it there, it's not going to -- I didn't know if you had the information that we didn't have.
>> no, no. And -- and I don't know next year at this time if we are making this presentation, we hadn't issued it, it would be -- so it's just kind of a worst case, as soon as possible but obviously not this upcoming fiscal year.
>> it's the only thing still left from the 00 pounds in terms of trying to close these things out.
>> so that's the impact on debt service. As christian mentioned earlier, that's kind of the real world impact that you see most -- it's easiest to explain at least because it does have such a direct impact on your tax rate as far as your resources are concerned. So -- so that is shown here. And the next part then is our impact on our key ratios. I think what I should highlight here, net bonded debt per capita, that trend that we were talking about earlier, kind of little hills where we go up about the $500 mark that we like to see, back down and then up again, gets to be somewhat of a plateau for a little bit until fy 15 where we come under it again. I should note if we were to have a bond election every four to five years, that might be impacted again. So -- so that's definitely out there as far as overlapping debt again, that is above that 5% marker. Going back up again, taxable value, as I stated this morning, that's a very important consideration, we are well within that guideline.
>> do we have an assumption for policy on what should be our goal as to Travis County aggregate debt? If we are issuing more than we are paying off annually, more than we issue, the total amount of debt that we owe remains roughly the same.
>> we don't have a policy to that he have. We could have a policy to that effect. It's never been part of our debt discussions. Most of the discussion has either been on the white lines or the total debt service. But you are assuming by the nature of your question let's say that we have $450 million worth of debt outstanding to try to keep that the same. At one time --
>> kind of like a credit card. If every time you pay off $200, you add $200 to it, I mean you never reduce your principle.
>> it requires one to say no to certain purchases on your credit card. At one time we had 0 debt. We now have 430 I think. To put that in perspective, in 2002 our debt service was 53 million. The growth is a result of well thought through individual decisions of -- that involve dozens and dozens of capital expenditures that were justified before the Commissioners court. And this Commissioners court voted to -- that it was worth the impact.
>> I wouldn't dare challenge or question a dollar of that issuance. My question really goes to should we have some policy that at least enables us or points us toward reducing to a certain amount of aggregate debt in trying to stay close to it. I mean otherwise --
>> if the court --
>> that's a good question.
>> it is a good question, it is a policy discussion that if you had it, you would then need to -- if you -- if you had that policy, that was -- that was generated, I would urge then the court in essence to follow it rather than have it and not follow it and have to explain it every year to the credit rating agencies.
>> it is also one of those things where, you know, are you needlessly tying your hands because of some internal policy as compared to is that something that -- that new york is going to look at and new york is going to benchmark. Because you could also take it off the top in term of -- you need to [indiscernible] take it off the o and m. I think that's someplace where we generally start our markup is okay, how do we get more on the o and m side for general fund expenditures that we all think are prudent and wanted, et cetera. So it's -- I would just guard against things that are self-imposed for purposes of being self-imposed as opposed to tying your hands because it's appropriate or tying your hand and regret that decision.
>> commission, if you do that --
>> credit cardinals though -- credit card northeast analysis though, it doesn't make sense to do what you are doing.
>> if you look at page 14 for '06, '07, sort of '08 we are kind of issuing more than we are satisfying. Then in '09 and 11, 12, the problem with those out there is -- is -- we show a much lower amount of debt issuance. The problem is that if the trend continues, those will not be the real amounts that we will use given those years. And it's for another discussion, but seems to me at some point we really ought to sit down and ask ourselves what should we do in order -- should we set some sort of goal, work toward it and back to Commissioner Daugherty's comments a few minutes ago, when we do that, we really ought to touch base with the other entities here because the cumulative debt really is important and I mentioned that last time Commissioner Gomez and I were in a meeting with city of Austin representatives and aisd representatives and basically all of us are issuing a whole lot of debt and probably satisfying much of it annually, but the -- the total keeps rising. And the amount of cumulative debt keeps rising, also. To me it's kind of like a car. You can take some of that money, instead of taking in debt services, you have a policy, tough expand our car -- you have to expand our car policy. The reason that I asked the question, these numbers are real revealing. They sort of show a little bit of a credit card mentality, but --
>> yeah, some of them get tired of paying everybody's credit cards.
>> right.
>> the other thing that -- that happens here is one of timing. See you hear compelling arguments to do something. Park, open space, courts, courthouse, buildings. And if you had a policy that said we are going to stay within a certain amount of cumulative debt. The way to do it is not to say oh, that's a bad idea. You would say that's just an idea before it's time. Allow time to reduce some of your cumulative debt before you take more on. And that would -- that would probably be the inevitable outcome of such a -- such an internal policy that one might consider tying your hands and another might consider maintaining discipline. It all depends upon your viewpoint.
>> less time around, we have talked about keeping our -- our issuance to about 120 million, there were very compelling arguments brought before this court related to more [indiscernible] space, more on road, things I didn't support because I thought it would get us to these white lines. Very compelling reasons were made to say you know we need to do this sooner, not later, but land is not available later if you decide to delay, cost of roads go up. It's, you know, seize the day. So I mean there are lots of -- lots of good arguments being made here. It also means that everybody else has to kind of go along. It's one thing for us to -- to my down this overlapping debt and then others go cool, thank you for making the room for us to continue on in our ways. But when you are in a -- in a fast growing city, region, set of states, I think that you are seeing these kinds of things happening not only just in the Austin area. Williamson county has had [indiscernible] we are a fast growing area. You need to respond on to that or you don't. The fact that all of this is presented to voters is appropriate because then they get to say yea or nay, once again get a chance to say yea or nay at least on the voter authorized piece question. City of Austin on November.
>> there's an entity that could constrain the Travis County Commissioners court along with all other governmental entities by talking about revenue caps. Appraisal caps one thing, revenue caps are another. This debt service you are seeing on page 14, it is conceivable it would be taken off the m and o side. That has current operating implications that are substantial.
>> currently you are not constrained of that.
>> by the way at the cuc meeting last Thursday, it was made pretty clear to us they are very serious about revenue caps.
>> oh, yeah.
>> my mom and I used to send my brother, she sent me brother and me out to play. If I'm following him, running down the street and a car hits him, I stop if I can, right? She never expected both of us to get hit by a car because one of us did. My point is some of the things the other entities are do and we ought to follow their lead. If they are not so good, we ought to try to set the pace. We can't change history. But we certainly can change how we deal with the future. There is a way to fund pretty much the same projects a little bit differently. Just that our goal has to be to do that, my only suggestion is in terms of future issues, that it seems to me that maybe we ought to have a strategy in place that enables us to arrive at some of the destinations that all of us would think are appropriate if we can get there. That's the only reason that I raise the question.
>> you will have an opportunity in the next three days to do take because you will have one-time money that you may discover --
>> I'm talking about after October 1 now.
>> talking about in the next three days. I understand what you are talking about. But it is right before you because there will be one-time resources and you will have to make a decision on what to do with them. You could conclude that you wish to reduce your debt issuance on short-term certificates of obligation and that would be a good thing. From many people's perspective who are sitting at least at this table.
>> western talking about impact on key ratios, what christian said is obviously important, a discussion on ago gate is also important, we should look at that. Aggregate. As far as where these assumptions lead us then are the conclusions. Part 1 I have given you a summary of what we have discussed. Debt service requirements will increase by 4.2 million in fy '08, a total of 5.7 million in fy '09 compared back to fy '07 assuming no future debt obviously, that the county would go above some of our white line limitation that's we have discussed and keep in the forefront of our mind. As far as conclusions on part 2, exaggerated more, because there's more debt out there, so we would actually go up by nearly $6 million in fy '08 inket service and by a total of 7.4 million by fy '09. Future years you will -- you will kind of leading into that credit card discussion, our actually debt service could go and top 80 million at some point by about fy 13. We would also go above some of those white line limitation, perhaps maybe a little bit longer, touching back down might be an issue on that per capita one, because we probably most likely have another bond election, four to five years after the twine twine one that we have been assuming, that's really about it. I am happy to answer any further questions.
>> as far as determining the net bonded debt per capita, my understanding that -- that for every million dollars that we -- approximately [indiscernible] 1.10 cents added to --
>> I think that was a calculation that dereside did for [multiple voices]
>> is that about accurate.
>> I think it is for fy '07. It would be inaccurate I think to make that assumption going forward. The way it works. But I think for '07 the numbers in your what now scenario I think [multiple voices] that would be approximate, yes.
>> okay. Could we I guess there have been many requests, I guess we will look at this, I guess I heard christian say disbt next three days will end up looking at some things. I don't know what the intent of the [indiscernible] versus the voter approved bond, but -- but I guess has I'm trying to get to is in the what if's, because we are, you know, we are looking at maybe expedited and moving forward with some of these requests and I guess we will discuss that during budget markup. I may just reserve that for then. But -- but there are some projects that are -- that are ready to move forward, especially with people, probably partnership agreement type of scenarios. I guess that we will need joe gieselman in on that. Especially looking at the accelerated type of scenarios. That we may be having to look at. So I guess during that time when he gets to that, during budget markup we will discuss it. I just want to make sure that I got everything basically in focus as far as the impacts on even with that additional bonded capacities, adding to the bonding capacity, then looking at the indebtedness of that. So I want to be very clear as far as being informed when necessary of -- as we move to this process, the impact that we are having on our debt service. Even though we know it won't come up until some of this stuff won't come up until '08. Even so it's still critical in my opinion.
>> I think the programmatic discussion probably would occur during markup. Just to make sure, we have said this before, but just to make sure that you understand that acceleration means this was previously entered at model, not added. Just in future years, all that we are doing is issuing it sooner.
>> right, laying it out.
>> okay, thank you.
>> joe, how many of the public/private partnerships besides pecan have been executed by this court?
>> [indiscernible]
>> property owner actually one project where we believe that one -- may not make the December deadline but all of the others that are owe that are ongoing discussions, contract floating around --
>> is your anticipation that all of them, with the exception of the one that's in question, will be executed by this court by the December 31st deadline that we had?
>> yeah.
>> the other thing that I would add is that, you know, really a policy issue. The -- what we were just talking about is debt acceleration. We have not programmatically spoken to the acceleration of the bcp acquisition that was the desire of the court to do. Nor have we discussed anything about a pass through finance program. If at some point that -- that is a policy that the court wants to pursue. So that is not in any of the discussions that we are having this morning.
>> roger, when are the responses due in from the two -- two still in the running firms related to the jail project? When approximately are those due in?
>> [indiscernible]
>> first week of October. So we will know what is reality or not or somewhere in between.
>> thank you.
>> close all of that known debt issues [indiscernible]
>> calculations.
>> as far as the jail project, I have plugged in the latest that I had received from facilities management. I assumed I think that it reflects what they have presented to you previously that included 10 present -- included 10 million some odd. I didn't consider bcp or things that the court might want to --
>> this has been informative.
>> thanks.
>> thank you very much.
>> thank you.
>> thank you.
>> a lot good information.
>> yeah, a lot of good information, judge.
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Last Modified:
Tuesday, September 5, 2006 4:29 PM