AGENDA #5e

 

MEMORANDUM

 

To:                   W. Calvin Horton, Town Manager

 

From:               Kay Johnson, Finance Director

 

Subject:            Excel Spreadsheets for Debt Service Alternatives and Schedules

 

Date:                February 24, 2005

 

 

During the previous meeting of the Budget Review Advisory Committee, it was requested that the Finance Department prepare an Excel spreadsheet on the bond issue projects that would assist in comparing various scenarios of financing costs per year if the project start dates were spread over a longer period of time.  Attached you will find spreadsheets with these various scenarios.

 

The attached spreadsheets list the various debt issuance amounts including the amount for the proposed phases of the General Obligation (G.O.) Bonds as well as the planned financing of the Town Operations Center through Certificates of Participation.  We have shown the debt payments by year over a 20-year period with interest rates of 4%, 5% and 6%.  By showing the debt payments by year, you can determine the effects on total cash outlays for debt payments if one or more of the debt issuances were delayed.  You can also see the effects on the payments if the interest rates were to increase prior to issuance.  Bonds are required to be sold within seven years of voter approval. Since voters approved the G.O. Bonds during the November 2003 election, all bonds would need to be sold no later than November 2010 in order to meet this requirement.  With cause, we can apply to the Local Government Commission for a three-year extension to November 2013.

 

Previous debt payment examples provided to the Committee have shown future G.O. debt in three phases and have assumed a 5% interest rate.  Below is a schedule of required debt payments based on these assumptions.

 

 

 

 

 

 

 

 

 

The information that we have provided should assist the Committee in their efforts to review and evaluate the Town’s debt financing alternatives.

 

ATTACHMENTS

 

  1. Schedule of Debt Payments @ 4% interest for 20 years (p. 3).
  2. Schedule of Debt Payments @ 5% interest for 20 years (p. 4).
  3. Schedule of Debt Payments @ 6% interest for 20 years (p. 5).