Greene County, Virginia

Transcription

1 Greene County, Virginia Comprehensive Financial Review & Reservoir Project Analysis March 8, 2016 Member NYSE FINRA SIPC

2 Table of Contents 1 Credit Rating Overview 2 Financial Review 3 Existing Debt 4 Reservoir Project Greene County, Virginia Comprehensive Financial Review 1

3 Overview In preparation for the County s decision to proceed on the water reservoir project, Davenport & Company LLC, has undertaken a review of the County s Financial Health including but not limited to: Historic General Fund operating results; Fund balance levels; and, The County s current debt burden including future borrowing capacity. The Financial Review is designed to provide an assessment of the County s Financial Capacity on a once-in-ageneration project such as the reservoir. The Estimated cost of the Water Reservoir is in the $45-$65 million range. A project of this size will require the confidence of the Credit Markets and/or potential lenders. This analysis will also present multiple preliminary alternatives for capital funding of the reservoir. Greene County, Virginia Comprehensive Financial Review 2

4 Initial Observations At the upper end of the cost estimate, a potential $65 million bond issuance is approximately double the County s current outstanding debt. While Davenport would evaluate all financing alternatives, we believe the Water Reservoir Project would qualify as an eligible project for the Virginia Resources Authority s ( VRA ) pooled bond issuances. VRA will do an extensive credit review (as will other potential investors and lenders) for a project of this size and may require Greene County to receive an initial Issuer Credit Rating from the three National Credit Rating Agencies (Moody s, Standard & Poor s and Fitch). Additionally, VRA may require a Moral Obligation/Support Agreement from the County depending on the issuer of the bonds. Greene County, Virginia Comprehensive Financial Review 3

5 Credit Rating Overview Greene County, Virginia Greene County, Virginia Comprehensive Financial Review 4

6 Locally Rated Counties Warren County (Aa2/AA/AA) Fauquier County (Aa1/AA+/AA+) Rockingham County (Aa2/AAA/AA) Culpeper County (Aa2/AA+/AA) Spotsylvania County (Aa2/AA+/AA+) Albemarle County (Aaa/AAA/AAA) Botetourt County (Aa3/AA+) Appomattox County (Aa3/A+) Fluvanna County (Aa2/AA) Greene County, Virginia Comprehensive Financial Review 5

7 Rating Scale Moody's Credit Rating S&P Fitch Aaa AAA AAA Top Tier "Highest Possible Rating" Aa1 AA+ AA+ (Highest) Aa2 AA AA 2nd Tier "Very Strong (Middle) Aa3 AA- AA- (Lowest) A1 A+ (Highest) A2 A A 3rd Tier "Strong" (Middle) A3 A- A- (Lowest) Baa1 BBB+ BBB+ (Highest) 4th Tier "Adequate Baa2 BBB BBB (Middle) Capacity to Repay" Baa3 BBB- BBB- (Lowest) Considered Investment Grade BB, B, CCC, CC, C, D 5th - 10th Tiers "Below Investment Grade" Below Investment Grade Greene County, Virginia Comprehensive Financial Review 6

8 What are the Key Drivers to a Credit Rating? 1. Economic Base The Foundation of an Entity s Fiscal Health. Incorporation of local, regional and national economic factors. Demographic characteristics including population trends, employment and wealth levels. Tax base size, structure and diversity. Industry mix and composition of employment base. Local and regional patterns of Growth. 2. Financial Performance and Flexibility. Revenue and expenditure structure and patterns. Annual operating and budgetary performance. Financial leverage and fund balance position. Budgeting and long-term financial planning. Pension funding and insurance risk. 3. Debt Factors. Nature of pledged security and debt structure. Balance between accelerated debt issuance and under-investment in capital facilities. Debt burden measured against: Tax base. Total budget. 4. Management Factors. Range and growth of services provided in relation to capacity to provide services. Financial forecasting and management. Consistent and prudent budgeting practices. Adherence to long-range financial planning and policies. Greene County, Virginia Comprehensive Financial Review 7

9 Financial Review Greene County, Virginia Greene County, Virginia Comprehensive Financial Review 8

10 Strong Reserves Unassigned Fund Balance Unassigned Fund Balance Unassigned Fund Balance as a % of Expenditures Millions $20 $18 $16 $14 $12 $10 $8 $6 $4 $2 $ % 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% Unassigned Fund Balance Target General Fund Unassigned Fiscal Year General Fund Unassigned F und Balance General Fund Ex penditures Fund Balance as a % of Ex penditures Target ,937,902 33,788, % 20.00% ,749,748 28,946, % 20.00% ,324,141 26,739, % 20.00% ,171,461 27,648, % 20.00% ,267,167 26,413, % 20.00% ,472,630 33,871, % 20.00% ,540,316 31,785, % 20.00% ,199,735 32,977, % 20.00% In the General Fund, the County strives to maintain an unassigned fund balance to be used for unanticipated emergencies of approximately 20% of the actual GAAP basis expenditures and other financing sources and uses. Source: Greene County s 2015 CAFR. Greene County, Virginia Comprehensive Financial Review 9

11 Importance of Unassigned Fund Balance Why is maintaining a healthy unassigned/undesignated fund balance important? Provides comfort to potential lenders and the rating agencies as it relates to the County s financial strength / flexibility and thus allows the County to obtain competitive financing. Provides funds for unforeseen expenditures or revenue shortfalls that occur during a fiscal year. Provides funds for emergency situations (i.e. natural disaster). Allows for bond funded capital projects to begin prior to having borrowed funds on hand. Provides adequate month-to-month cash-flow and eliminates the need for costly cash-flow borrowing. Greene County, Virginia Comprehensive Financial Review 10

12 Strong Reserves Unassigned Fund Balance Unassigned Fund Balance Unassigned Fund balance as a % of Revenues Greene County, VA (NR) Greene County, VA (NR) National Aa1 Median National Aa2 Median National Aa3 Median National Aa1 Median National Aa2 Median National Aa3 Median Virginia Aa1 Median Virginia Aa2 Median Virginia Aa3 Median Virginia Aa1 Median Virginia Aa2 Median Virginia Aa3 Median Albemarle County, VA (AAA) Rockingham County, VA (Aa2) Orange County, VA (NR) Madison County, VA (NR) Albemarle County, VA (AAA) Rockingham County, VA (Aa2) Orange County, VA (NR) Madison County, VA (NR) $- $10,000,000 $20,000,000 $30,000,000 $40,000,000 0% 5% 10% 15% 20% 25% 30% 35% Source: Moody s Investor Service Municipal Finance Ratio Analysis. Note: While the County s Fund Balance Policy uses expenditures as the base for calculating reserves, the following utilizes revenues as the base for comparability purposes. Greene County, Virginia Comprehensive Financial Review 11

13 Assessed Value Comparison Assessed value per capita is a measure of wealth and an important metric to the credit markets in determining ability to pay. Assessed Value Assessed Value Per Capita Greene County, VA (NR) Greene County, VA (NR) National Aa1 Median National Aa2 Median National Aa3 Median Virginia Aa1 Median Virginia Aa2 Median Virginia Aa3 Median Albemarle County, VA (AAA) Rockingham County, VA (Aa2) Orange County, VA (NR) Madison County, VA (NR) $0 $5 $10 $15 $20 $25 Billions National Aa1 Median National Aa2 Median National Aa3 Median Virginia Aa1 Median Virginia Aa2 Median Virginia Aa3 Median Albemarle County, VA (AAA) Rockingham County, VA (Aa2) Orange County, VA (NR) Madison County, VA (NR) $0 $30,000 $60,000 $90,000 $120,000 $150,000 $180,000 Source: Moody s Investor Service Municipal Finance Ratio Analysis. Greene County, Virginia Comprehensive Financial Review 12

14 Demographic Profile Wealth Levels Relatively high income supports ability to pay from a lender/investor perspective. Per Capita Income Median Family Income Greene County, VA (NR) Greene County, VA (NR) National Aa1 Median National Aa2 Median National Aa3 Median National Aa1 Median National Aa2 Median National Aa3 Median Virginia Aa1 Median Virginia Aa2 Median Virginia Aa3 Median Virginia Aa1 Median Virginia Aa2 Median Virginia Aa3 Median Albemarle County, VA (AAA) Rockingham County, VA (Aa2) Orange County, VA (NR) Madison County, VA (NR) Albemarle County, VA (AAA) Rockingham County, VA (Aa2) Orange County, VA (NR) Madison County, VA (NR) $0 $10,000 $20,000 $30,000 $40,000 $0 $20,000 $40,000 $60,000 $80,000 $100,000 $120,000 Source: Moody s Investor Service Municipal Finance Ratio Analysis. Greene County, Virginia Comprehensive Financial Review 13

15 Rate Comparison Residential Water & Sewer Rate at 5,000 gal/month EPA Affordability Guidelines Water and sewer bills deemed affordable up to 4% of median household income. Rapidan Service Authority Rapidan Service Authority (Greene County) Virginia Average Greene County MHI ~ $60,000 4% equates to $200 per moth water and sewer bill. Albemarle County Service Authority Augusta County Service Authority Louisa County Water Authority Rivanna Water & Sewer Authority Rockingham County Water & Sewer $- $20 $40 $60 $80 $100 Residential Water Rate 5,000 gal/month Rapidan Service Authority Rapidan Service Authority (Greene County) Residential Wastewater Rate 5,000 gal/month Rapidan Service Authority Rapidan Service Authority (Greene County) Virginia Average Virginia Average Albemarle County Service Authority Augusta County Service Authority Louisa County Water Authority Rivanna Water & Sewer Authority Rockingham County Water & Sewer $- $5 $10 $15 $20 $25 $30 $35 $40 Albemarle County Service Authority Augusta County Service Authority Louisa County Water Authority Rivanna Water & Sewer Authority Rockingham County Water & Sewer $- $10 $20 $30 $40 $50 $60 Source: Draper Aden 2015 Rate Study. Greene County, Virginia Comprehensive Financial Review 14

16 Debt Management Greene County, Virginia Greene County, Virginia Comprehensive Financial Review 15

17 Observations on Existing County Debt Greene County currently has $38.5 million of total outstanding debt. This debt is split relatively evenly between general government and utilities. All debt is retired rapidly, which provides capacity (see following page) to address future needs. Rating agencies and investors/lenders focus primarily on tax-supported debt (i.e. that which is supported from general tax revenue versus that supported from rates and charges.) Presently, all of the County s debt would be deemed tax-supported. Some debt, but not all, may be self supporting from Facility Fees. One of the key challenges for the Water Reservoir Project will be to determine if it should be funded from general revenues, or solely from rates and charges, or a mixture of the two. Greene County, Virginia Comprehensive Financial Review 16

18 Debt Capacity vs. Debt Affordability Debt Capacity versus Debt Affordability: Debt Capacity: The amount of debt the County can incur while staying within prudent financial guidelines. Think of Debt Capacity as the credit card limit. Debt Capacity is commonly measured by Debt to Assessed Value. Debt Affordability: The ability of the County to repay debt obligation with cash flow. Think of Debt Affordability as the ability to pay the credit card s monthly bill. Debt Affordability is commonly measured by Debt Service to Budget. Greene County, Virginia Comprehensive Financial Review 17

19 Debt as a Percentage of Assessed Value 4.0% 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% Debt as a Percentage of Assessed Value Historic General Government Debt Existing Debt Historic Water & Sewer Debt Existing Water & Sewer Debt Debt as a Percentage of Assessed Value Greene County, VA (NR) National Aa1 Median National Aa2 Median National Aa3 Median Virginia Aa1 Median Virginia Aa2 Median Virginia Aa3 Median Albemarle County, VA (AAA) Rockingham County, VA (Aa2) Orange County, VA (NR) Madison County, VA (NR) 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% Source: Moody s Investor Service Municipal Finance Ratio Analysis. Note: Taxable assessed values are assumed to grow 2.0% annually beginning in Fiscal Year Greene County, Virginia Comprehensive Financial Review 18

20 Debt Service as a Percentage of Revenues Debt Service as Percentage of Revenues 14% 12% 10% 8% 6% 4% 2% 0% Debt Service as a Percentage of Revenues Historic General Government Debt Existing General Government Debt Historic Water & Sewer Debt Existing Water & Sewer Debt Greene County, VA (NR) National Aa1 Median National Aa2 Median National Aa3 Median Virginia Aa1 Median Virginia Aa2 Median Virginia Aa3 Median Albemarle County, VA (AAA) Rockingham County, VA (Aa2) Orange County, VA (NR) Madison County, VA (NR) 0% 2% 4% 6% 8% 10% 12% 14% Source: Moody s Investor Service Municipal Finance Ratio Analysis. Note: Expenditures are assumed to grow 2.0% annually beginning in Fiscal Year Greene County, Virginia Comprehensive Financial Review 19

21 Payout Ratio Total Outstanding Debt 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Greene County 10-Year Payout Ratio Greene County, VA (NR) National Aa1 Median National Aa2 Median National Aa3 Median Virginia Aa1 Median Virginia Aa2 Median Virginia Aa3 Median Albemarle County, VA (AAA) Rockingham County, VA (Aa2) Orange County, VA (NR) Madison County, VA (NR) 10-Year Payout Ratio 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Source: Moody s Investor Service Municipal Finance Ratio Analysis. Greene County, Virginia Comprehensive Financial Review 20

22 Existing Water & Sewer Debt Exisiting Water & Sewer Debt Service FY Principal Interest Total Payout Ratio 2016 $1,214,152 $934,422 $2,148, % ,230, ,258 2,112, % ,311, ,235 2,134, % ,336, ,206 2,099, % ,303, ,553 2,005, % ,361, ,197 2,001, % ,429, ,521 2,003, % ,493, ,831 1,995, % ,571, ,299 1,996, % ,656, ,091 2,000, % ,741, ,615 2,001, % , , , % , , , % , , , % , , , % , , , % ,000 96, , % ,000 76, , % ,000 55, , % ,000 34, , % ,000 11, , % Total $21,141,799 $7,920,754 $29, 062, 553 Millions $2.5 $2.0 $1.5 $1.0 $0.5 $0.0 Existing Water & Sewer Debt Principal Interest Current 10-Year payout for utility debt is high at 66%. Industry median is 40% according to Fitch Ratings. Greene County, Virginia Comprehensive Financial Review 21

23 Reservoir Project Greene County, Virginia Greene County, Virginia Comprehensive Financial Review 22

24 Potential Structures Status Quo Approach County backs debt service for reservoir Use of Facility Fees and taxes retire debt Rapidan Service Authority (RSA) operates facilities RSA bills users Establish Enterprise Fund County enters water business Develop rates, fees, and charges to support water operations Hybrid Approach County takes larger role in RSA County becomes regional water provider (i.e. Rivanna Water & Sewer Authority) Greene County, Virginia Comprehensive Financial Review 23

25 Facility Fees Available Revenue Under the current rate structure, regardless of the user s consumption level, the Rapidan Service Authority charges a minimum $10 Facility Fee to Greene County residents and $20 to businesses. May wish to evaluate other approaches. The agreement between Greene County and RSA requires the County to put the EDU Capacity charges in separate water and sewer enterprise funds, this does not hold for the Facility Fee The Facility Fee generates approximately $360,000 annually. Assuming Level Debt Service over 30 years at an interest rate of 5.00%, the current facility fee revenue can support a roughly $5.5 million bond issuance. For every $10 increase in the facility fee, the County can support about an additional $5.5 million of debt from the increased revenues. FY Estimated Debt Service Principal Interest Total 2016 $83,296 $276,704 $360, , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,638 91, , ,069 77, , ,173 63, , ,982 49, , ,531 33, , ,857 17, ,000 Total $5,534,082 $5,265,918 $10,800,000 Greene County, Virginia Comprehensive Financial Review 24

26 Key Assumptions Case 1 Greene County, Virginia (the County ) is currently in the planning stages for a potential debt issuance for a Water Reservoir Project (the Project ). In order to see the effect of a potential new debt issuance, Davenport analyzed a $65 million borrowing for the Project. At this time, Davenport has assumed the following: Participation in the Virginia Resources Authority s ( VRA ) 2016 Fall Pool; Level debt service (payments) structure; 30 years amortization; and, 5.00% Interest Rate (inclusive of annual administration fee). Greene County, Virginia Comprehensive Financial Review 25

27 Estimated Debt Service Case 1 Reservoir Project FY Principal Interest Total 2017 $1,165,000 $3,004,208 $4,169, ,005,000 3,166,625 4,171, ,055,000 3,115,125 4,170, ,110,000 3,061,000 4,171, ,165,000 3,004,125 4,169, ,225,000 2,944,375 4,169, ,290,000 2,881,500 4,171, ,355,000 2,815,375 4,170, ,425,000 2,745,875 4,170, ,495,000 2,672,875 4,167, ,575,000 2,596,125 4,171, ,655,000 2,515,375 4,170, ,740,000 2,430,500 4,170, ,825,000 2,341,375 4,166, ,920,000 2,247,750 4,167, ,020,000 2,149,250 4,169, ,125,000 2,045,625 4,170, ,230,000 1,936,750 4,166, ,345,000 1,822,375 4,167, ,465,000 1,702,125 4,167, ,595,000 1,575,625 4,170, ,725,000 1,442,625 4,167, ,865,000 1,302,875 4,167, ,015,000 1,155,875 4,170, ,165,000 1,001,375 4,166, ,330, ,000 4,169, ,500, ,250 4,168, ,680, ,750 4,168, ,870, ,000 4,170, ,065, ,625 4,166,625 Total $65,000,000 $60,074,333 $125,074,333 Greene County, Virginia Comprehensive Financial Review 26

28 Impact on Key Debt Ratios Case 1 Debt as a Percentage of Assessed Value Debt Service as a Percentage of Revenues 6.0% 30% 5.0% 25% 4.0% 20% 3.0% 15% 2.0% 10% 1.0% 5% 0.0% 0% Historic General Government Debt Existing Debt Historic General Government Debt Existing General Government Debt Historic Water & Sewer Debt Existing Water & Sewer Debt Historic Water & Sewer Debt Existing Water & Sewer Debt Potential New Money Debt Potential New Money Debt Greene County, Virginia Comprehensive Financial Review 27

29 Cash Flow Impact Existing Debt Service Projected $65 Million Reservoir Total Estimated Debt Service Total Revenues Available* Additional Revenues Needed 2016 $4,403,269 $0 $4,403,269 $4,403, ,171,754 4,169,208 8,340,962 4,403,269 3,937, ,144,823 4,171,625 8,316,448 4,403,269 3,913, ,761,483 4,170,125 7,931,608 4,403,269 3,528, ,300,024 4,171,000 7,471,024 4,403,269 3,067, ,284,446 4,169,125 7,453,571 4,403,269 3,050, ,269,171 4,169,375 7,438,546 4,403,269 3,035, ,248,503 4,171,500 7,420,003 4,403,269 3,016, ,237,491 4,170,375 7,407,866 4,403,269 3,004, ,187,813 4,170,875 7,358,688 4,403,269 2,955, ,130,481 4,167,875 7,298,356 4,403,269 2,895, ,857,648 4,171,125 6,028,773 4,403,269 1,625, ,697,298 4,170,375 5,867,673 4,403,269 1,464, ,076,892 4,170,500 5,247,392 4,403, , ,997 4,166,375 5,130,372 4,403, , ,184 4,167,750 5,135,934 4,403, , ,075 4,169,250 5,132,325 4,403, , ,300 4,170,625 5,136,925 4,403, , ,791 4,166,750 5,124,541 4,403, , ,755 4,167,375 5,130,130 4,403, , ,410 4,167,125 5,122,535 4,403, , ,040 4,170,625 4,513,665 4,403, , ,167,625 4,167,625 4,403, ,167,875 4,167,875 4,403, ,170,875 4,170,875 4,403, ,166,375 4,166,375 4,403, ,169,000 4,169,000 4,403, ,168,250 4,168,250 4,403, ,168,750 4,168,750 4,403, ,170,000 4,170,000 4,403, ,166,625 4,166,625 4,403,269 Millions $9 $8 $7 $6 $5 $4 $3 $2 $1 $0 Existing & Projected Tax-Supported Debt Service Existing Debt Service Projected $65 Million Reservoir Total Revenues Available* Total $50,851,646 $125,074,333 $175,925,979 *Total Revenues available is estimated based on 2016 Debt Service. Greene County, Virginia Comprehensive Financial Review 28

30 Tax-Equivalent/Facility Fee Impact Case 1 FY Debt Service Requirements Projected Existing Tax- $65 Million Supported Reservoir Total Debt Service Debt Service Existing DS Budget Total Revenue Available for Debt Service Debt Service Cash Flow Surplus (Deficit) Revenue Adjusted Estimated Surplus/ from Prior Surplus/ Incremental Tax (Deficit) Tax Increase (Deficit) Equivalent ,403, ,403,269 4,403, ,171,754 4,169,208 8,340,962 4,403,269 (3,937,693) - (3,937,693) ,144,823 4,171,625 8,316,448 4,403,269 (3,913,179) 3,937,693 24, ,761,483 4,170,125 7,931,608 4,403,269 (3,528,340) 3,937, , ,300,024 4,171,000 7,471,024 4,403,269 (3,067,755) 3,937, , ,284,446 4,169,125 7,453,571 4,403,269 (3,050,302) 3,937, , ,269,171 4,169,375 7,438,546 4,403,269 (3,035,277) 3,937, , ,248,503 4,171,500 7,420,003 4,403,269 (3,016,735) 3,937, , ,237,491 4,170,375 7,407,866 4,403,269 (3,004,597) 3,937, , ,187,813 4,170,875 7,358,688 4,403,269 (2,955,419) 3,937, , ,130,481 4,167,875 7,298,356 4,403,269 (2,895,087) 3,937,693 1,042, ,857,648 4,171,125 6,028,773 4,403,269 (1,625,505) 3,937,693 2,312, ,697,298 4,170,375 5,867,673 4,403,269 (1,464,404) 3,937,693 2,473, ,076,892 4,170,500 5,247,392 4,403,269 (844,124) 3,937,693 3,093, ,997 4,166,375 5,130,372 4,403,269 (727,103) 3,937,693 3,210, ,184 4,167,750 5,135,934 4,403,269 (732,666) 3,937,693 3,205, ,075 4,169,250 5,132,325 4,403,269 (729,056) 3,937,693 3,208, ,300 4,170,625 5,136,925 4,403,269 (733,656) 3,937,693 3,204, ,791 4,166,750 5,124,541 4,403,269 (721,273) 3,937,693 3,216, ,755 4,167,375 5,130,130 4,403,269 (726,861) 3,937,693 3,210, ,410 4,167,125 5,122,535 4,403,269 (719,266) 3,937,693 3,218, ,040 4,170,625 4,513,665 4,403,269 (110,396) 3,937,693 3,827, ,167,625 4,167,625 4,403, ,644 3,937,693 4,173, ,167,875 4,167,875 4,403, ,394 3,937,693 4,173, ,170,875 4,170,875 4,403, ,394 3,937,693 4,170, ,166,375 4,166,375 4,403, ,894 3,937,693 4,174, ,169,000 4,169,000 4,403, ,269 3,937,693 4,171, ,168,250 4,168,250 4,403, ,019 3,937,693 4,172, ,168,750 4,168,750 4,403, ,519 3,937,693 4,172, ,170,000 4,170,000 4,403, ,269 3,937,693 4,170, ,166,625 4,166,625 4,403, ,644 3,937,693 4,174, Note: Raising the real estate tax rate by 21 cents would be approximately equal to increasing the Facility Fee from $10 to $110. Total Equivalent Tax Im pact: 21.0 Greene County, Virginia Comprehensive Financial Review 29

31 Key Assumptions Case 2 At this time, Davenport has assumed the following: 5 Year Bond Anticipation Note with 36 months of capitalized interest; Permanent Financing/Takeout of the BAN in Year 5; 5 years interest only; Structured Principal the next 5 years; and, Level Debt Service (payments) for the remaining 15 years. 5.00% Interest Rate under all scenarios. The surplus generated from the decline in debt service in Fiscal Years used to downsize the issue. Greene County, Virginia Comprehensive Financial Review 30

32 Estimated Debt Service Case 2 Reservoir Project FY Principal Interest Capitalized Int. Total 2017 $0 $3,493,000 $3,493,000 $ ,742,500 3,742, ,742,500 3,742, ,742, ,742, ,742, ,742, ,742, ,742, ,742, ,742, ,742, ,742, ,742, ,742, ,742, ,742, ,450,000 3,706, ,156, ,705,000 3,627, ,332, ,435,000 3,523, ,958, ,575,000 3,398, ,973, ,710,000 3,266, ,976, ,835,000 3,127, ,962, ,085,000 2,979, ,064, ,255,000 2,821, ,076, ,420,000 2,654, ,074, ,600,000 2,479, ,079, ,775,000 2,294, ,069, ,970,000 2,101, ,071, ,175,000 1,897, ,072, ,385,000 1,683, ,068, ,610,000 1,458, ,068, ,850,000 1,222, ,072, ,095, , ,068, ,360, , ,072, ,635, , ,072, ,925, , ,073,125 Total $74,850,000 $81,688, 250 $10,978,000 $145,560,250 Greene County, Virginia Comprehensive Financial Review 31

33 Impact on Key Debt Ratios Case 2 6.0% Debt as a Percentage of Assessed Value 25% Debt Service as a Percentage of Revenues 5.0% 20% 4.0% 3.0% 2.0% 15% 10% 1.0% 5% 0.0% 0% Historic General Government Debt Existing Debt Historic Water & Sewer Debt Existing Water & Sewer Debt Potential New Money Debt Historic General Government Debt Existing General Government Debt Historic Water & Sewer Debt Existing Water & Sewer Debt Potential New Money Debt Greene County, Virginia Comprehensive Financial Review 32

34 Cash Flow Impact Case 2 Existing Debt Service Projected $65 Million Reservoir Total Estimated Debt Service Total Revenues Available* Additional Revenues Needed 2016 $4,403,269 $0 $4,403,269 $4,403, ,171, ,171,754 4,403,269 (231,515) ,144, ,144,823 4,403,269 (258,446) ,761, ,761,483 4,403,269 (641,785) ,300,024 3,742,500 7,042,524 4,403,269 2,639, ,284,446 3,742,500 7,026,946 4,403,269 2,623, ,269,171 3,742,500 7,011,671 4,403,269 2,608, ,248,503 3,742,500 6,991,003 4,403,269 2,587, ,237,491 3,742,500 6,979,991 4,403,269 2,576, ,187,813 3,742,500 6,930,313 4,403,269 2,527, ,130,481 3,742,500 6,872,981 4,403,269 2,469, ,857,648 5,156,250 7,013,898 4,403,269 2,610, ,697,298 5,332,375 7,029,673 4,403,269 2,626, ,076,892 5,958,875 7,035,767 4,403,269 2,632, ,997 5,973,625 6,937,622 4,403,269 2,534, ,184 5,976,500 6,944,684 4,403,269 2,541, ,075 5,962,875 6,925,950 4,403,269 2,522, ,300 6,064,875 7,031,175 4,403,269 2,627, ,791 6,076,375 7,034,166 4,403,269 2,630, ,755 6,074,500 7,037,255 4,403,269 2,633, ,410 6,079,000 7,034,410 4,403,269 2,631, ,040 6,069,625 6,412,665 4,403,269 2,009, ,071,000 6,071,000 4,403,269 1,667, ,072,375 6,072,375 4,403,269 1,669, ,068,375 6,068,375 4,403,269 1,665, ,068,500 6,068,500 4,403,269 1,665, ,072,000 6,072,000 4,403,269 1,668, ,068,375 6,068,375 4,403,269 1,665, ,072,000 6,072,000 4,403,269 1,668, ,072,125 6,072,125 4,403,269 1,668, ,073,125 6,073,125 4,403,269 1,669,856 Millions $8 $7 $6 $5 $4 $3 $2 $1 $0 Existing & Projected Tax-Supported Debt Service Existing Debt Service Projected $65 Million Reservoir Total Revenues Available* Total $50,851,646 $145,560,250 $196,411,896 *Total Revenues available is estimated based on 2016 Debt Service. Greene County, Virginia Comprehensive Financial Review 33

35 Tax-Equivalent/Facility Fee Impact Case 2 Debt Service Requirements Existing DS Budget Debt Service Cash Flow Surplus (Deficit) FY Projected Total Revenue Available Existing Tax- $65 Million Revenue Adjusted Estimated for Debt Service Surplus/ Supported Reservoir Total from Prior Surplus/ Incremental Tax (Budgeted 2016 Debt (Deficit) Debt Service Debt Tax Increase (Deficit) Equivalent Service) Service ,403, ,403,269 4,403, ,171, ,171,754 4,403, , , ,144, ,144,823 4,403, , , ,761, ,761,483 4,403, , , ,300,024 3,742,500 7,042,524 4,403,269 (2,639,255) - (2,639,255) ,284,446 3,742,500 7,026,946 4,403,269 (2,623,677) 2,639,255 15, ,269,171 3,742,500 7,011,671 4,403,269 (2,608,402) 2,639,255 30, ,248,503 3,742,500 6,991,003 4,403,269 (2,587,735) 2,639,255 51, ,237,491 3,742,500 6,979,991 4,403,269 (2,576,722) 2,639,255 62, ,187,813 3,742,500 6,930,313 4,403,269 (2,527,044) 2,639, , ,130,481 3,742,500 6,872,981 4,403,269 (2,469,712) 2,639, , ,857,648 5,156,250 7,013,898 4,403,269 (2,610,630) 2,639,255 28, ,697,298 5,332,375 7,029,673 4,403,269 (2,626,404) 2,639,255 12, ,076,892 5,958,875 7,035,767 4,403,269 (2,632,499) 2,639,255 6, ,997 5,973,625 6,937,622 4,403,269 (2,534,353) 2,639, , ,184 5,976,500 6,944,684 4,403,269 (2,541,416) 2,639,255 97, ,075 5,962,875 6,925,950 4,403,269 (2,522,681) 2,639, , ,300 6,064,875 7,031,175 4,403,269 (2,627,906) 2,639,255 11, ,791 6,076,375 7,034,166 4,403,269 (2,630,898) 2,639,255 8, ,755 6,074,500 7,037,255 4,403,269 (2,633,986) 2,639,255 5, ,410 6,079,000 7,034,410 4,403,269 (2,631,141) 2,639,255 8, ,040 6,069,625 6,412,665 4,403,269 (2,009,396) 2,639, , ,071,000 6,071,000 4,403,269 (1,667,731) 2,639, , ,072,375 6,072,375 4,403,269 (1,669,106) 2,639, , ,068,375 6,068,375 4,403,269 (1,665,106) 2,639, , ,068,500 6,068,500 4,403,269 (1,665,231) 2,639, , ,072,000 6,072,000 4,403,269 (1,668,731) 2,639, , ,068,375 6,068,375 4,403,269 (1,665,106) 2,639, , ,072,000 6,072,000 4,403,269 (1,668,731) 2,639, , ,072,125 6,072,125 4,403,269 (1,668,856) 2,639, , ,073,125 6,073,125 4,403,269 (1,669,856) 2,639, , Note: Raising the real estate tax rate by 14 cents would be approximately equal to increasing the Facility Fee from $10 to $73. Note: Any Additional revenues raised prior to 2020 can be used to downsize the takeout of the Bond Anticipation Note. Total Equivalent Tax Im pact: 14.1 Greene County, Virginia Comprehensive Financial Review 34

36 Enterprise Fund Approach Determine Enterprise Fund Revenue Requirements Operating budget (staffing, operation, administration) Capital investments (existing/future debt service) Reserve requirements Establishment of User Base Existing customer base Estimated quantities of water sales Forecast of future customers and water volumes Develop Financial Plan for Fund Beginning cash balances Current revenue streams Incremental revenues needs Develop rates, fees, and charges Greene County, Virginia Comprehensive Financial Review 35

37 Appendix Greene County, Virginia Greene County, Virginia Comprehensive Financial Review 36

38 Historic General Fund Results Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Revenues General Property Taxes $16,457,255 $16,630,394 $16,271,874 $17,202,455 $17,795,002 $18,093,338 Other Local Taxes 3,789,119 4,099,937 3,799,812 4,144,565 4,017,436 4,226,642 Permits, Privilege Fees & Regulatory Licenses 281, , , , , ,761 Fines & Forfeitures 183, ,098 79, , , ,057 Use of Money and Property 52,668 39,004 44,248 45,769 39,940 51,582 Charges for Services 2,258,311 1,919,950 2,207,860 2,266,141 2,251,331 2,429,070 Miscellaneous 200, , , , , ,391 Recovered Costs 7,955 17,003 10,863 11, , ,831 Intergovernmental 6,734,286 7,187,608 6,821,331 6,752,809 7,012,557 7,225,337 Total Revenues $29,965,007 $30,627,537 $29,651,467 $30,995,221 $31,892,977 $32,743,009 Expenditures General Government Administration $2,194,470 $2,289,610 $2,435,313 $2,456,653 $2,328,762 $2,469,394 Judicial Administration 651, , , , , ,349 Public Safety 5,260,704 5,770,110 5,706,798 6,159,573 6,483,005 6,691,754 Public Works 1,836,690 1,810,474 1,609,678 1,523,644 1,448,788 1,664,455 Health & Welfare 3,161,649 3,275,516 3,288,402 3,255,905 3,360,846 3,423,259 Education 8,642,007 9,362,405 9,733,700 11,554,274 13,131,659 12,741,966 Parks, Recreation & Cultural 498, , , , , ,156 Community Development 1,695,747 1,871,410 1,886,835 1,848,327 1,977,558 2,181,858 Nondepartmental 21,595 18,776 28,499 91,223 60,455 49,655 Capital outlays 1,369, , ,252 3,349, , ,305 Total Expenditures $25,331,724 $26,545,938 $26,183,167 $31,551,166 $30,778,581 $31,168,151 Excess (deficiency) of Revenues over Expenditures $4,633,283 $4,081,599 $3,468,300 ($555,945) $1,114,396 $1,574,858 Debt Service Principal Retirement $1,866,021 $1,913,782 $2,168,091 $1,812,188 $911,007 $1,035,199 Interest and Fiscal Charges 600, , , , ,756 71,063 Total Debt Service $2,466,192 $2,388,038 $2,721,550 $2,559,222 $1,039,763 $1,106,262 Other Financing Sources (Uses): Issuance of Notes Payable $0 $0 $0 $2,000,001 $0 $0 Issuance of Capital Leases 117, ,347 76, , , ,295 Transfers in 1,290, , , , Transfers out (1,190,107) (1,973,472) Total other financing sources (uses) $1,407,839 $1,102,137 $230,808 $2,320,630 ($1,006,947) ($1,809,177) Net change in fund balances $3,574,930 $2,795,698 $977,558 ($794,537) ($932,314) ($1,340,581) Fund Balance, Beginning of Year $9,918,981 $13,493,911 $16,289,609 $17,267,167 $16,472,630 $15,540,316 Fund Balance, End of Year $13,493,911 $16,289,609 $17,267,167 $16,472,630 $15,540,316 $14,199,735 Source: Greene County s CAFR. Greene County, Virginia Comprehensive Financial Review 37

39 Total Assessed Value Assessed Value of Taxable Real Property Billions $2.5 $2.0 $1.5 $1.0 $0.5 $ Real Estate Personal Property Public Service Assessed Value of Taxable Real Property Fiscal Year Real Personal Public Service Total Taxable Estate % Property % Corporation % Assessed Value % 2005 $997,124,352 N/A $86,977,145 N/A $36,472,249 N/A $1,120,573,746 N/A ,105,086,533 11% 94,736,819 9% 40,120,084 10% 1,239,943,436 11% ,367,588,892 24% 100,023,055 6% 29,459,777-27% 1,497,071,724 21% ,640,643,742 20% 106,142,606 6% 45,382,646 54% 1,792,168,994 20% ,793,032,015 9% 105,950,975 0% 41,346,332-9% 1,940,329,322 8% ,915,379,116 7% 103,821,194-2% 54,408,605 32% 2,073,608,915 7% ,894,195,815-1% 106,710,067 3% 54,004,950-1% 2,054,910,832-1% ,870,025,214-1% 110,638,820 4% 55,160,407 2% 2,035,824,441-1% ,823,328,015-2% 112,593,988 2% 58,554,406 6% 1,994,476,409-2% ,781,327,215-2% 111,246,053-1% 57,338,030-2% 1,949,911,298-2% ,795,290,615 1% 116,900,844 5% 60,309,478 5% 1,972,500,937 1% Source: Greene County s 2015 CAFR. Greene County, Virginia Comprehensive Financial Review 38

40 Summary of Debt Outstanding Summary of Greene County General Government & Schools Outstanding Issues Final Lender Year of Issue Type Pupose Original Issued Outstanding Maturity Rate(s) Call Date IDA of Greene County 2003 Rev Capital Improvement $1,170,500 7/31/2003 $372,400 10/15/ % Anytime VPSA 2011 G.O Schools $5,120,000 5/5/2011 $5,030,000 8/1/ % 8/1/2021 IDA of Greene County 2010 Rev N/A $811,329 12/20/2010 $635,308 12/15/ % N/A VPSA (QSCB) 2010 G.O Schools $2,470,000 7/8/2010 $1,860,000 6/15/ % Anytime Greene County 1995 G.O Schools $2,427,547 12/21/1995 $143,268 7/15/ % N/A Greene County 1997 G.O N/A $3,170,000 5/1/1997 $465,000 1/15/ % N/A Literary Loan 2007 G.O Schools $9,000,000 7/15/2007 $5,850,000 7/15/ % Anytime Literary Loan 1997 G.O Schools $5,000,000 7/1/1997 $1,000,000 7/1/ % Anytime Greene County 2006 Note Capital Improvement $218,207 7/24/2006 $39,154 7/24/ % Unkown Greene County 2007 Note Capital Improvement $600,000 4/5/2007 $205,862 4/5/ % Unkown Greene County 2013 Note Capital Improvement $2,000,000 5/5/2011 $1,750,338 8/1/ % Unkown TOTAL $17,351,330 Summary of Greene County Water & Sewer Outstanding Issues Final Lender Year of Issue Type Pupose Original Issued Outstanding Maturity Rate(s) Call Date VRA 2004 W&S Revenue Sewer $13,500,000 6/30/2004 $625,000 11/1/ % 11/1/2014 VRA 2011 W&S Revenue Sewer $8,110,000 11/16/2011 $8,110,000 11/4/ % 11/1/2021 VRA 2005 W&S Revenue Sewer $2,556,000 12/7/2005 $41,000 11/1/ % 11/1/2015 VRA 2005 W&S Revenue Water $7,864,000 12/7/2005 $204,000 11/1/ % 11/1/2015 VRA 2012 W&S Revenue Sewer $945,000 8/2/2012 $935,000 11/1/ % 11/1/2022 VRA 2012 W&S Revenue Water $2,890,000 8/2/2012 $2,860,000 11/1/ % 11/1/2022 RSA (VRA) (2) 2008 W&S Revenue Water & Sewer $3,600,000 6/19/2008 $402,000 11/1/ % 11/1/2018 RSA (VRA) (3) 2009 W&S Revenue Water & Sewer $1,780,000 6/17/2009 $1,385,000 11/1/ % 11/1/2019 RSA (VRA) (4) 2009 W&S Revenue Water & Sewer $8,210,000 6/17/2009 $2,059,795 11/1/ % 11/1/2019 VRA 2014 W&S Revenue Sewer $945,000 8/2/2012 $1,125,000 11/1/ % 11/1/2024 VRA 2014 W&S Revenue Water $3,445,000 7/29/2014 $3,395,005 11/1/ % 11/1/2024 Total $21,141,800 (1) Assumes these issues were currently calling the refunded bonds. (2) Greene County assumed 30% of the Rapidan Service Authority Issuance.Orginial amount shown is total issue but outsanding amount is Greene County Obligation. (3) Greene County assumed 100% of the Rapidan Service Authority Issuance. (4) Greene County assumed 33% of the Rapidan Service Authority Issuance.Orginial amount shown is total issue but outsanding amount is Greene County Obligation. Note: Blue shade denotes refunding opportunity. Greene County, Virginia Comprehensive Financial Review 39

41 Total Outstanding Debt Total Outstanding Debt Service FY Principal Interest Total Payout Ratio 2016 $2,939,581 $1,463,688 $4,403, % ,820,000 1,351,754 4,171, % ,902,218 1,242,605 4,144, % ,628,404 1,133,079 3,761, % ,260,909 1,039,114 3,300, % ,333, ,997 3,284, % ,411, ,043 3,269, % ,488, ,551 3,248, % ,581, ,563 3,237, % ,640, ,237 3,187, % ,691, ,801 3,130, % ,496, ,205 1,857, % ,382, ,434 1,697, % , ,892 1,076, % , , , % , , , % , , , % , , , % , , , % ,000 72, , % ,000 35, , % ,000 8, , % Millions $5.0 $4.5 $4.0 $3.5 $3.0 $2.5 $2.0 $1.5 $1.0 $0.5 $0.0 Total Outstanding Debt Principal Interest Total $38,493,129 $12,358,517 $50, 851, 646 Greene County, Virginia Comprehensive Financial Review 40

42 Existing General Government & Schools Debt Exisiting General Government & Schools Debt Service FY Principal Interest Total Payout Ratio 2016 $1,725,429 $529,266 $2,254, % ,589, ,496 2,059, % ,590, ,370 2,009, % ,291, ,873 1,662, % , ,561 1,294, % , ,800 1,282, % , ,522 1,265, % , ,721 1,253, % ,010, ,264 1,240, % , ,147 1,187, % , ,187 1,129, % , ,775 1,117, % , , , % , , , % ,000 98, , % ,000 87, , % ,000 76, , % ,000 64, , % ,000 51, , % ,000 38, , % ,000 23, , % ,000 8, , % Millions $2.5 $2.0 $1.5 $1.0 $0.5 $0.0 Existing General Government & Schools Debt Principal Interest Total $17,351,330 $4,437,763 $21, 789, 093 Greene County, Virginia Comprehensive Financial Review 41

43 Contact Information Richmond Headquarters One James Center 901 East Cary Street, Suite 1100, Richmond, Virginia Telephone: (804) Toll-Free: (800) Courtney E. Rogers Senior Vice President Douglas J. Gebhardt Associate Vice President Joseph D. Mason Senior Vice President Gary D. LeClair, Jr. Analyst Greene County, Virginia Comprehensive Financial Review 42

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