The URL can be used to link to this page

Home My WebLink AboutDavenport Presentation 10-04-00Presentation to Albemarle ~ounty, v rglnla October 4, 2000 Proposed Policy Guideline Modifications Debt as a Percentage of Market Value Net Debt as a Percentage of the Estimated Market Value of Taxable Property should not exceed 2%. Recommendation No Change. Alexandria Arlington Co. Charlottesville Chesterfield Co. Fail'fax Co. Henrico Co. AA Average AAA Average Albemarle Co. O% 1% 2% 3% 4% 5% Proposed Policy Guideline Modifications Fund Balance as a Percentage of Revenue Current Policy The Undesignated Fund Balance, plus the Designation for Fiscal Cash Liquidity Purposes, at the close of each FisCal Year should be Equal to no Less than 10% of the County's Total Operating Budget. Recommendation Change 10 % to 8 % and clarify that "Total Operating Budget" includes General Fund plus the School Fund. Alexandria Arlington Co. Charlottesville Chesterfield Co. Fairfax Co. Henrico Co. AA Average AAA Average Albemarle Co. 0% 10% 20% 30% III Undesignated Ii Other[ 40% Proposed Policy Guideline Modifications Debt Service as a Percentage of Revenues Ill I The Ratio of Debt Service Expenditures to General Fund Revenues should not exceed 10 %. Recommendation Change "General Fund Revenues" to "General Fund and the School Fund Revenues." Alexandria Arlington Co. Charlottesville Chesterfield Co. Fairfax Co. Henrico Co. AA Average AAA Average Albemarle Co. 0% 2% 4% 6% 8% '10% 12% 3 Proposed Policy Guideline Modifications Debt Per Capita I I Net Debt per Capita should remain under $1,000. Recommendation Delete Guideline as it is unnecessary since debt will be regulated by the Debt Service as percentage of Revenues guideline' Alexandria Arlington Co. Charlottesville Cbesterfield Co. Fairfax Co. Henrico Co. AA Average AAA Average Albemarle Co. 0 1,000 1,500 2,000 4 Proposed Policy Guideline Modifications Capital Reserve Policy Recommendation Contribute to Capital Reserve periodically to provide flexibility in meeting debt service and capital requirements and to mitigate tax rate increases related to future capital projects. Growth Rates 1993-98 2001-05 Population Valuation Income Expenditures 2.1% 5.5% 5.4% 9.8% 2.0% 4.0% 4.5% 7.0% Debt Capacity Analysis- Case 1 Assumptions Tax Rate Assumed Revenue Growth Operating BUdget Growth No Change 7.0% 0.5% Less than Revenue Balance of Growth is Contributed to Capital ,Maximum Debt Capacity Years 1-5 Years 6-10 $71 MM Debt $147 MM Debt Total Debt $218 MM 7 Cumulative GroWth in Operating Budget- II Illlll I Ill I I Ill Case 1 200 150 ---- 100 50 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Capital Operating Expenditures 8 Debt Capacity Alternative- Case 1 300 250 200 150 100 50 0 2001 2003 2005 2007 2009 --10 Year Projected Capital Needs Pay as You Go Debt Capacity Debt as a % of Market Value - Case 1 II 3.0% 2.5 % 2.0% 1.5 % 1.0% 0.5 % 0.0% 2001 2003 2005 2007 2009 l Existing Debt --"AA" Average New Debt "AAA" Average Debt Service as a % of Expenditures- Case 1 II 10% 8% 6% 4% 2% 0% 2001 2003 I Existing Debt --- "AA" Average 2005 2007 2009 I New Debt ~ "AAA" Average Debt Per Capita- Case 1 2,000 1,500 1,000 5OO 0 2001 2003 2005 2007 2009 I Existing Debt -" "AA" Average New Debt "AAA" Average 12 Debt as a % of Personal Income- Case I 6% 5% 4% 3% 2% 1% O% 2001 2003 2005 2007 2009 · Existing Debt ---"AA" Average · New Debt ,~,~,~,~ "AAA" Average 13 · 't Debt Capacl y Alternative - Case 2 Revenue and Operating Budget grow at same rate (7 %) 't 10 Year Capacl y $1 12 Million 14 Debt Capacity Alternative- I Case 2 300 250 200 150 100 50 0 2001 2003 '2005 2007 2009 --- 10 Year Projected Capital Needs I Revenue 7.0 % O&M 6.5 % I Revenue 7.0% O&M 7.0% Debt Capacity Alternative - Case 3 Revenue and Operating Budget grow at same rate (7 %) 10 Year Capacity $112 Million Tax Increase to Reach Capacity ($218 MM) 5¢ in 2004 & 5¢ in 2007 16 Debt Capacity Alternative - Case 4 I Ill II 300 250 ~ 200 ,- 150 100 50 0 2001 2003 2005 2007 2009 --10 Year Projected Capital Needs m Revenue 7.0% O&M 6.5% . m Reduce Tax Rate $0.01 Debt Capacity Alternative Total CIP Case 1 Debt Years 1-5 Years 6' 10 Debt Subtotal Pay as You Go Total $111 $71 153 14_~7 264 218 $264 $268 Case 2 $58 54 112 44 $156 Case 3 Millions $71 !42 218 5O $268 Case 4 $63 !4~ 2O8 51 $259 Revenue Growth Operating Budget Tax Decrease 2002 Tax IncreaSe 2004 Tax Increase 2007 7.0% 6.5% ' N/A N/A N/A 7.0% 7.O% N/A N/A N/A 7.0% 7.0% N/A $0.05 $0.05 7.0% 6.5% $O.Ol N/A N/A 18 Additional Considerations Revenues based on assumptions - revenue growth may not continue at this pace or may be more than projected. Therefore, numbers and financing ability may change. 2. The reduced operating expenditure growth (6.5 %) does not imply that all additional costs in next 5-10 Years can be absorbed without a tax increase. 3. Additional operating costs associated with new capital projects, i.e., firefighters, school openings, juvenile detention, etc. have not been included in this analysis. These may require additional revenues over the projected 6.5% 4. Limitations of making 10-year projections for both revenues and expenditures. Only based on what we know or think today. 19