SLIDE 1 CALUMET COUNTY, WISCONSIN PRESENTATION TO ADMINISTRATIVE SERVICES COMMITTEE
BONDING PROGRAM FOR CAPITAL IMPROVEMENT PROJECTS DATED: AUGUST 12, 2014
══════════ PREPARED BY: ══════════
CAROL ANN WIRTH, PRESIDENT
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AUTHORITY TO BOND Calumet County Board of Supervisors Adopted an Initial Resolution on December 15, 2009 by a vote of at least ¾ of members elect. Initial Resolution provides “authority” to borrow. Satisfies debt issuance conditions of Section 67.045, Wisconsin Statutes. Levy limits do not apply to debt service on general obligation debt authorized after July 1, 2005. County Board has authority to adopt general obligation bond or note sale resolutions, within five years, to lock in the final terms (principal amounts and interest rates) of each borrowing.
RESOLUTION 2009-33 RESOLUTION AUTHORIZING GENERAL OBLIGATION BONDS AND/OR PROMISSORY NOTES IN AN AMOUNT NOT TO EXCEED $47,000,000 To the Honorable Chairperson and Board of Supervisors of Calumet County, Wisconsin: BE IT RESOLVED, By the Board of Supervisors of Calumet County herein assembled, that there may be issued, pursuant to Chapter 67, Wisconsin Statues, General Obligation Bonds and/or Notes in an amount not to exceed $47,000,000 for the public purpose of paying the cost
- f the Calumet County’s Outlays and Capital Improvement
Program for the years 2010 through 2014; and there shall be levied on all the taxable property of the County a direct, annual, irrepealable tax sufficient to pay the interest on said securities as it becomes due, and also to pay and discharge the principal thereof within twenty years of the date of issuance of the securities.
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BONDING PROCEDURE Review Projects to be Borrowed for Review and Approve Amortization Schedule Approval to Proceed with Preparing for Market Entry
- Official Statement Preparation
- Bond Rating Application – Standard & Poor’s (Higher Rating)
Outstanding Bond Ratings: Standard & Poor’s “AA+” – February 2014 Moody’s Investors Service – “Aa2” - October 2010
- Coordinate Preparation of Legal Documents with Bond Counsel (Quarles & Brady)
- Coordinate Marketing / Pricing / Underwriter Selection (Method of Sale)
Approval of Borrowing Resolution by County Board (majority vote)
- Final interest rates and tax levy are locked in
Closing – County Receives Borrowed Funds
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METHOD OF SALE – NEGOTIATED / PUBLIC
Calumet County Has Used the Negotiated Method of Sale for Prior Issues Negotiated Sale – Underwriter is Selected to Work with County through an RFP Process Underwriter Provides Assistance in Advance of Entering the Bond Market Updates and Advises County of Changes to Market Conditions, Interest Rates Investors and Local Banks are Contacted to Determine Level of Interest Prior to Locking in Rates Bonds are Pre-sold Before Underwriter Commits to County Eliminates Risk Lowers Cost of Underwriting Fees Underwriter Has Flexibility to Capture Market Opportunities Several Days in Advance of Award Expenses of Issuance May be Paid by Underwriter out of Premium from Investors (Included in Rate) Public Sale – County Advertises for Underwriter – Underwriter Unknown Until Sale Date Specific Date and Time are Advertised for Underwriters to Submit Bid – Notice of Sale County Does Not Benefit from Marketing Assistance in Advance of Sale Underwriters Bid Dependent Upon – Market Conditions on Day of Bid Number of Issues Underwriter Will Bid That Day Number of Issues Underwriter Purchased That Day No Flexibility to Capture Market Opportunities Limited Ability to Pre-sell Bonds - Risk Built Into Bid as Cost to County Expenses of Issuance Paid by County out of Principal Amount Borrowed Investor Premium Returned to County - Must be Used to Pay Next Year’s Debt Service
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2014 BORROWING $3.2 Million Borrowing - General Obligation Promissory Notes 2013 and 2014 Capital Improvement Projects: Information Services – H.T.E. One Solution Financial Software $ 459,125 Maintenance Department – Carpet Replacement, Duress System, Backup Generator Replacement, Parking Lot Repaving, Jail HVAC, Furniture $ 912,235 Sheriff’s Department – Radio Operations $ 80,757 Highway – Road Construction $1,747,883 $3,200,000 Historically Low Tax-exempt Interest Rates – Bank Qualified Federal Arbitrage Regulations – 3 Years to Spend Borrowed Funds Financing Team Expenses of Issuance (Estimated)
WPFP - $25,000; Quarles & Brady - $8,250; Standard & Poor’s – $9,500; Official Statement - $1,000; Underwriting - Determined Through RFP or Public Sale
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$3.2 Million General Obligation Promissory Notes 2014 Preliminary
Debt Service Schedule
Date Principal Rate Interest Total P+I Fiscal Total
10/06/2014
220,000.00 2.625% 11,370.49 231,370.49 231,370.49 06/01/2015
34,325.00
190,000.00 2.500% 34,325.00 224,325.00 258,650.00 06/01/2016
31,950.00
320,000.00 2.250% 31,950.00 351,950.00 383,900.00 06/01/2017
28,350.00
320,000.00 2.250% 28,350.00 348,350.00 376,700.00 06/01/2018
24,750.00
200,000.00 2.250% 24,750.00 224,750.00 249,500.00 06/01/2019
22,500.00
300,000.00 2.250% 22,500.00 322,500.00 345,000.00 06/01/2020
19,125.00
325,000.00 2.250% 19,125.00 344,125.00 363,250.00 06/01/2021
15,468.75
425,000.00 2.250% 15,468.75 440,468.75 455,937.50 06/01/2022
10,687.50
450,000.00 2.250% 10,687.50 460,687.50 471,375.00 06/01/2023
5,625.00
450,000.00 2.500% 5,625.00 455,625.00 461,250.00 Total $3,200,000.00
$3,596,932.99
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$3.2 Million General Obligation Promissory Notes Preliminary
Pricing Summary
Maturity Type of Bond Rate Yield Maturity Value Price Dollar Price
12/01/2014 Serial Coupon 2.625% 0.350% 220,000.00 100.346% 220,761.20 12/01/2015 Serial Coupon 2.500% 0.400% 190,000.00 102.412% 194,582.80 12/01/2016 Serial Coupon 2.250% 0.550% 320,000.00 103.632% 331,622.40 12/01/2017 Serial Coupon 2.250% 0.850% 320,000.00 104.345% 333,904.00 12/01/2018 Serial Coupon 2.250% 1.150% 200,000.00 104.447% 208,894.00 12/01/2019 Serial Coupon 2.250% 1.450% 300,000.00 103.957% 311,871.00 12/01/2020 Serial Coupon 2.250% 1.700% 325,000.00 103.199% 335,396.75 12/01/2021 Serial Coupon 2.250% 1.950% 425,000.00 101.971% c 433,376.75 12/01/2022 Serial Coupon 2.250% 2.250% 450,000.00 100.000% 450,000.00 12/01/2023 Serial Coupon 2.500% 2.500% 450,000.00 100.000% 450,000.00 Total
- $3,200,000.00
- $3,270,408.90
Bid Information
Par Amount of Bonds $3,200,000.00 Reoffering Premium or (Discount) 70,408.90 Gross Production $3,270,408.90 Total Underwriter's Discount (2.200%) $(70,400.00) Total Purchase Price $3,200,008.90 Bond Year Dollars $17,153.89 Average Life 5.361 Years Average Coupon 2.3139534% Net Interest Cost (NIC) 2.3139015%
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Calumet County Bonding Program Bonding Program Analyzes Tax Impact of Existing Debt and Potential Future Debt Issues Assumptions Used for Tax Base Growth: 2013 Equalized Valuation (TID Out) - $3,251,962,900 - Used for 2014 Budget 2014 Equalized Valuation (TID Out) – Preliminary Release by Department of Revenue $3,330,760,800 – 2.42% increase – Used for 2015 Budget 2015 – 2019 Equalized Valuations Projected at 2% Cumulative Increases Flat Valuation 2020 and Thereafter Assumptions Used for Debt Existing Debt - 3 Outstanding Issues Additional Future Debt Issues: 2014 - $3.2 Million @ 2.32% (Est) 2016 - $3.0 Million @ 3.50% (Est) 2018 - $3.0 Million @ 3.50% (Est)
All Debt Issued as Tax-Exempt, Bank Qualified
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Calumet County Bonding Program
Existing Debt and Estimated Tax Impact Projected 2009 2010 2013 Combined Budget Equalized $4,600,000 $5,000,000 $995,000 Existing Estimated Year Valuations (TID OUT) Actual Debt Service Actual Debt Service Actual Debt Service Debt Service Mill Rate 2014 3,251,962,900 $422,058 $478,195 $508,483 $1,641,486 0.505 2015 3,330,760,800 429,632 473,945 515,100 1,418,677 0.425 2016 3,397,376,016 446,128 569,570 1,015,698 0.298 2017 3,465,323,536 446,527 577,570 1,024,097 0.295 2018 3,534,630,007 436,380 615,070 1,051,450 0.297 2019 3,605,322,607 951,595 951,595 0.264 2020 3,677,429,059 936,845 936,845 0.254 2021 3,677,429,059 2022 3,677,429,059 2023 3,677,429,059 2024 3,677,429,059 2025 3,677,429,059 2026 3,677,429,059 2027 3,677,429,059 2028 3,677,429,059 Total $2,180,725 $4,602,790 $1,023,583 $8,039,848 Principal Balance $1,605,000 $3,715,000 $505,000 Interest Rates 3.65-3.90% 2.50-2.95% 2.00% Callable 12/1/2016 12/1/2018 Non Call
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Calumet County Bonding Program
2014 Financing and Estimated Tax Impact Projected 2014 Combined With Combined Budget Equalized $3.2 Million Estimated Existing Estimated Year Valuations (TID OUT) Estimated Debt Service Mill Rate Debt Service Mill Rate 2014 3,251,962,900 $1,641,486 0.505 2015 3,330,760,800 258,650 0.078 1,677,327 0.503 2016 3,397,376,016 383,900 0.113 1,399,598 0.411 2017 3,465,323,536 376,700 0.109 1,400,797 0.404 2018 3,534,630,007 249,500 0.071 1,300,950 0.368 2019 3,605,322,607 345,000 0.096 1,296,595 0.360 2020 3,677,429,059 363,250 0.099 1,300,095 0.353 2021 3,677,429,059 455,937 0.124 455,937 0.124 2022 3,677,429,059 471,375 0.128 471,375 0.128 2023 3,677,429,059 461,250 0.125 461,250 0.125 2024 3,677,429,059 2025 3,677,429,059 2026 3,677,429,059 2027 3,677,429,059 Total $3,365,562 $11,405,410 Estimated Interest Rate 2.32% Note: 2014 Budget Year Includes $232,750 for 2014 Note Issue.
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Calumet County Bonding Program
2016 Financing and Estimated Tax Impact Projected 2016 Combined With Combined Budget Equalized $3 Million Estimated 2014 + Existing Estimated Year Valuations (TID OUT) Estimated Debt Service Mill Rate Debt Service Mill Rate 2014 3,251,962,900 $1,641,486 0.505 2015 3,330,760,800 1,677,327 0.503 2016 3,397,376,016 297,167 0.087 1,696,765 0.498 2017 3,465,323,536 345,375 0.100 1,746,172 0.503 2018 3,534,630,007 336,625 0.095 1,637,575 0.463 2019 3,605,322,607 327,875 0.091 1,624,470 0.451 2020 3,677,429,059 294,125 0.080 1,594,220 0.433 2021 3,677,429,059 311,250 0.085 767,187 0.209 2022 3,677,429,059 352,500 0.096 823,875 0.224 2023 3,677,429,059 342,000 0.093 803,250 0.218 2024 3,677,429,059 481,500 0.131 481,500 0.131 2025 3,677,429,059 465,750 0.127 465,750 0.127 2026 3,677,429,059 2027 3,677,429,059 Total $3,554,167 $14,959,577 Estimated Interest Rate 3.5% Note: 2014 Budget Year Includes $232,750 for 2014 Note Issue.
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Calumet County Bonding Program
2018 Financing and Estimated Tax Impact Projected 2018 Combined With Combined Budget Equalized $3 Million Estimated 2014, 2016, & Existing Estimated Year Valuations (TID OUT) Estimated Debt Service Mill Rate Debt Service Mill Rate 2014 3,251,962,900 $1,641,486 0.505 2015 3,330,760,800 1,677,327 0.503 2016 3,397,376,016 1,696,765 0.498 2017 3,465,323,536 1,746,172 0.503 2018 3,534,630,007 142,167 0.040 1,779,742 0.503 2019 3,605,322,607 180,800 0.050 1,805,270 0.501 2020 3,677,429,059 223,000 0.061 1,817,220 0.493 2021 3,677,429,059 243,625 0.066 1,010,812 0.275 2022 3,677,429,059 338,375 0.092 1,162,250 0.316 2023 3,677,429,059 354,625 0.096 1,157,875 0.315 2024 3,677,429,059 545,000 0.148 1,026,500 0.279 2025 3,677,429,059 528,375 0.144 994,125 0.270 2026 3,677,429,059 561,750 0.153 561,750 0.153 2027 3,677,429,059 543,375 0.148 543,375 0.148 Total $3,661,092 $18,620,669 Estimated Interest Rate 3.5% Note: 2014 Budget Year Includes $232,750 for 2014 Note Issue.
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TIMELINE FOR 2014 BONDING August 12 - Present Report to Administrative Services Committee Motion to Proceed Through Coordinate Financing Team and Preparation of Legal Documents September 4 – Official Statement Completed September 10 –12 - Rating Conference Call September 17 – 18 – Bond Rating and Credit Report Released September 16 - Draft Sale Resolution Emailed to County September 22 -23 - Coordinate Sale of Notes September 23 – County Board Meeting to Approve Sale of $3.2 Million General Obligation Promissory Notes – Locks in Final Interest Rates and Tax Levy (Requires Majority Vote of Members Present) The final completed sale resolution will be hand delivered to the County Board meeting. October 6 – Closing, Delivery of Funds to County
