Capital Budget Overview
As part of the annual budget process, the County reassesses its capital programming needs regarding capital improvements for facilities, capital equipment purchases, and transportation & highway planning. The County determines its ability and willingness to issue new taxpayer-funded debt for capital expenditures and fund less wide-ranging capital projects through the operating budget via Pay-As-You-Go (“Pay-Go”) financing. The determination of funding levels/funding types is made as part of the capital budget and re-evaluated annually considering legacy debt obligations, operating budget priorities, and debt service costs.
Total Principal Outstanding
As of November 30, 2022, the total debt portfolio is comprised of $3.1 billion worth of General Obligation (“GO”) Bonds, Sales Tax Revenue Bonds, and a GO Tax-Exempt Revolving Line of Credit. The following chart shows a breakdown of the County’s debt portfolio:
Debt Service
The County is best served by a long-term plan to manage its legacy debt service costs and future borrowing needs in a responsible manner so that these costs do not provide undue stress on its operating budget in future years. To that end, the County is utilizing recent and anticipated refinancing opportunities to focus savings in key years which will help to ultimately create a debt structure that rises by no more than 2.0% annually until it reaches a $400 million threshold, even when including all anticipated new issuances to support the Capital Budget. That growth rate would match the long-term Federal Reserve inflation target and ensure the County’s bonded debt service obligation doesn’t rise to a level that starts impacting funding for other critical services. The following table shows the County’s anticipated debt service due in coming years based on debt currently outstanding and anticipated new future borrowing:
Credit Facility Expiration Timing
The County currently has four outstanding variable rate bond issuances and two lines of credits. The bank credit facilities associated with variable rate bonds and lines of credit are subject to expiration. The table below summarizes the expiration timing for each facility and type of credit facility. Specifically, bonds are supported by either Direct Pay Letter of Credit (DPLoC) or direct bank placements. The County does not have any interest rate derivatives associated with any of its outstanding indebtedness and these credit agreements generally terminate if the County’s GO bond rating is downgraded below BBB/Baa2.
