Item B4 Fiscal Year 2015
Monroe County Capital Plan Update
April 8, 2015
Marathon Government Center
Marathon, FL
Capital Plan Update
• Summarize PFM Debt Memorandum
• Review Proposed Five-Year CIP
• Discuss Debt-Funded . Projects
• Decision Roadmap
2
Capital Plan Update
• PFM Debt Evaluation
M arch 18, 2015
11L—
Page 1 of 3
March 18,2015
Memorandum
To: Monroe County Finance D eparlrn ent
From Public Financial Management
Re: Current Debt Evaluation
Intreductian
The purpose of this memorandum is to provide a snapshot of Monroe CountVs the "County") debt position,
and provide a general sense of the CountVs credit profile in comparison to other municipal issuers. For
purposes of our analysis PFM has relied on the County's most recent CAFR and the Moody's Financial Ratio
Database, Mich tracks financial metrics for municipal issuers. Currently, MoodVs rates the County's general
obligation debt at Al. As such, ve analyzed the data comparing the County to municipalities with comparable
populations and an Al credit rating,as%ell as to the other large neighboring Florida counties.
In order to perform our analysis vae included the CountyseAsting bonds, p sexisting available funds,suds as
the SRF loans and 2014 Line of Credit. The total principal amount assumed for this analysis is therefore about
$188 million,understanding that some of this amount has not been issued at this time.
Monroe County, Florida - Long Term Debt
Debt Series Amount outstanding*
Gotemmental Activities
htastructure Sales Surtax Revenue Bonds, Series 2007 13,010,000
htastructure Sales Surtax Revenue Bonds, Series 2014 31,886,000
SRF Construction Loan Agreement, Series 2010 7,019,343
SRF Construction Loan Agreement, Series 2013 40,000,000
Subtotal 01,814,343
Debt Issued I Not Yet Drawn
SRF Construction Loan Agreement, Series 2013 80,000,000
PNC Line of Credit 16,000,000
Subtotal 96,000,000
Total Debt 187,014,343
'Arnoukis ou1s1aidlIgas of Ptrct 2015
Executive Summary
Upon analysis of the information described above, overall it vas found that Monroe County has a smaller debt
burden relative to its full value than comparably rated issuers vdh a similar population. Even Men compared
vaith Florida counties%.ith higher ratings than Monroe,the County is only slightly higher than the median. The
other statistics that compare Monroe's debt to other municipalities are similarly strong. As a measure of overall
debt,the follovking key m etrics are used by the rating agencies
1
r March 18, 2015
no Page 2 of 3
awl'iW
• Direct Net Debt as a %of Fed Vak.e for Monroe County is calculated to be 0.7%. This falls in betv,een
the median for Al rated counties and the median for Florida counties,at 0.8%and 0.6%, respectively.
Direct Net Debi as%of Full Vale Direct Net Debt as%of Full Value
2.9 2.0 Fi'i11tt11i1i1i
181B1 412 10080804 ft
0.0 .
fr
• Debt Burden (Overall Net Debt as % of Fall Vak,e)is calculated to be 0.7%. This is lower than the
median for Al rated counties and Florida counties,at 1.4%and 1.5%,respedively.
• Debt Service as a % of Operating Expenditures is calculated to be 4.1%. This is also lover than the
median for Al rated counties and Florida counties,at 4.8%and 8.0%,respedively.
Debt Servsce as ,of Operatlrg E.penoaures Debt Service as%or Ope,aang EKpendll es
?n n,
I B li _
Is
12It
I2 10
I —
II !
U tI . IiII . ilj=ahhl ^ 1
l I
D"" /c,f: CYsr�t ,;v�dcP'CY�,cF�`` C}� i C�e�t, .,
de
.' ..iig F'' ,4,
Please note that this discussion is based purely on a numerical analysis of ratios that are derived from M oodys
median ratio information. Debt metrics are just one of many credit faders that go into a rating. As you're
aware the rating agencies perform a quantitative analysis and in addition consider qualitative factors vkien
rating an issuer's bonds. Other factors that are considered indude fund balance, operating history, and
management, among other items. Furthermore, the discussion of issuing new debt is not just a narrow
discussion of how rating agency ratios are affeded, but rather a broad discussion that should also consider
budgetary constraints and affordability from the CountVs perspective.
As reviewed,the County has the capacity to add additional debt without affeding their relative position to the
credit medians for debt ratios. For example,the CountVs Direct Net Debt as a percentage of Full Value is at
0.7%.The County v,,ould reach the 0.8% median for Al rated counties with an additional $20 million in debt.At
that point, the County would be in line with the "similarly-populated" county medians, although above
neighboring Florida counties.Similarly, debt service as a percentage of operating revenue would increase, yet
remain within the 4.8%to 8.0% medians discussed. The following page indudes summaries of the County's
statistics versus comparable municipalities.
1
•
AMIN
March 18,2015
VC --I LI Page 3 of 3
WEIIIIIM-
4.11111111L-
Moody's Financial Ratio Ana is
Analyst Adjusted-Local Governments-County -Comp Report
Rnancial Data Financial Statistics 6 Ratios
�Current Senior Total cieneralFund General Fund i Unreserved, Total Full Value Top Ten Ta,Payers Direct Net Debt as% Debt Burden(Overall Debt Service as %of Populaton2010
1A.r t Rabng Revenues(3003) ; Balance as%of I Undes ignated (gi cirri as%of Total of Full Value Net Debt as %Full Operating Census
Revenues General Fund Value) Eependtures •
Balance as%of
I Revenues I
Coffee County.TN Al 15993 13.4 9.0 3,4077,742 N/A 1.7 IVa. 83 52.796
De Kalb County.AL Al 10,472 39.1 28.9 2739,797 8.8 0.5 0.5 N/A 71.100
Gdgecorrbe County.NC Al 54814 25.9 12.9 3365955 11.8 1.0 1.4 172 58,552
Garland Countjr,AR Al 13,416 97.3 N/A 7971.435 N/A 0.8 WA 2 96.024
Greene County,IN Al 33520 21.3 30.8 4904.438 7.8 0.7 1.2 5.7 68.831
Hallax County,NC Al 55,397 53.7 44.0 4730.950 18.6 0.9 WA 43 541391
Laurel County,KY Al 14569 21.7 7.7 3934,564 9.9 0.8 2.6 154 58.843
Laurens County,SC Al 34,711 29.7 15.7 2567,382 12.3 0.5 WA 48 66,537
Liberty County,GA Al 24.705 89.1 38.4 3350.877 12.5 1.4 WA 12 63.453
Monroe County,FL Al 83,226 42.8 390 26,429,744 27 0.7 0.7 4.1 73,093
Spaldng ounty,GA Al 381382 5.0 8.4 4.045,609 9.1 0.3 1.1 10.5 64,073
Talladega County.AL Al 13,168 48.6 46.8 4255.569 46.5 0.7 1.7 0.7 82.291
Tioga County,NY Al 89,430 20.6 14.8 2,486.190 15.2 0.8 1.5 25 51,125
Waken County,1X Al 18,182 33.1 34.9 2,489,125 7.5 0.8 4.4 58 87.861
A County Median Al 22706 31.4 25.9 33E5399 121 0B 1.4 48 55,305
"The Rating displayed in MFRA s the most recent derved underyng ratrig ssued by Moody's Investors Service,Inc.
Mood 's Financial Ratio Ana sis
Analyst Adjusted-Local Governments-County-Comp Report
Rnennal Data:Financial Statistics 8 Ratios
Current Senior Total General Fund ' General Fund Unreserved, Total Full Value Top Ten TaxPayers Direct Net Debt as% DebtBurden(Overall Debt Service as %of Populaton2010
Must Rating' Revenues(3000) 1 Balance as%of Undesignated ($000) as%of Total of Full Value Net Debt as%Full Operating Census
Revenues General Fund Value) Bcpendtures
IBalance as%of
Revenues
Brow rd County.FL Aaa 1.044758 37.9 12.8 177 737.782 N/A 0.4 2.2 52 1.748.0W
Cofer County,FL Aa2 274,111 26.7 19.4 70,829.059 18 3 0.5 1.2 139 321,520
Lee County.FL Aa2 324893 34.4 39.6 68,544.339 2 0.4 1.7 72 618,754
MamiDade County,FL Aa2 1,863531 179 39 253,133.522 33 1.6 2.8 87 2408,435
Monroe County,FL Al 83,226 42.8 39.0 26429,744 27 0.7 0.7 4.1 73,090
arasota ourty,FL Aaa 245.189 51.3 20.6 51 334,581 3 0.6 0.6 95 370.443
Florida County Median Aa2 209,105 36.2 20.0 69.738909 3.0 08 1.5 80 409,101
"The Rating displayed in MFRA is the most recent derived underying rating issued by Moody's Investors Service.Inc.
Monroe County, Florida - Long-Term Debt
Debt Series Amount Outstanding* Debt Svc
Infrastructure Sales Surtax Revenue Bonds, Series 2007 13,010,000 3.6 M
Infrastructure Sales Surtax Revenue Bonds, Series 2014 31,885,000 4.2 M
SRF Construction Loan Agreement, Series 2010 7,019,343 0.7 M
SRF Construction Loan Agreement, Series 2013 40,000,000 2.6 M
Subtotal 91,914,343
Debt Issued / Not Yet Drawn
SRF Construction Loan Agreement, Series 2013 80,000,000 5.2 M
PNC Line of Credit 16,000,000 0.09 M
Subtotal 96,000,000
Total Debt 187,914,343
*Amounts outstanding as of March 2015
Capital Plan Update
• Proposed Five-Year CIP
6
FY15 FY16 FY17 FY18 FY19
Revenues
1 Cent Tax Revenue $ 19,521,179 . $ 18,000,000 $ 18,000,000 ' $ . 18,000,000 $ 18,000,000
Interest Income 25,000 25,000 25,000 25,000 25,000
Asset Sale 2,000,000
Fund Balance Fwd 17,479,730 10,284,668 8,202,238 10,111,543 9,364,275
$ 39,025,909 $ 28,309,668 . $ 26,227,238 $ 28,136,543 : $ 27,389,275
Expenditures
Canal Master Plan 3,652,215 1,021,994
Ocean Reef R.O. 2,600,000
Land Acquisition 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000
Misc. Physical.Env 1,060,156
Harvey Sr.Center 708,268
P.W. Magnolia St. 913,275
Mics General Gov 2,741,550
Higgs Beach 794,664 1,934,664 870,672
Old Seven Mile Br .2,700,000
Big.Pine Swim Hole 100,000 900,000
Misc Culture& Rec 105,403
Fire/EMS Veh Program 1,975,000
Key Largo Fire/EMS . 320,550 : 300,000
Ocean Reef Fire/EMS 200,000 800,000
Misc Public Safety 231,124
Road Paving . 3,328,942 4,571,574 . 3,500,000 4,500,000 2,000,000
Admin,Mics,contingency 3,248,858 1,853,098 1,853,098 853,098 853,098
$ 23,880,005 $ 15,181,330 $ 8,323,770 $ 8,253,098 $ 4,853,098
Debt Service
2007 Rev Bond 3,606,455 : 3,591,100 3,549,925 3,531,170 .i . -
2014 Fey Bond 1,204,781 ' 1,235,000 4,242,000 4,238,000 4,241,000 . .
Cudjoe Regional 5RF - - - 2,750,000 5,500,000
Line of Credit 50,000 100,000
$ 4,861,236 $ 4,926,100 $ 7,791,925 $ 10,519,170 ; $ 9,741,000
Change in Fund Balance (7,195,062) (9,277,492) (7,368,187) (8,115,455) (4,684,553)
Ending Balance $ 10,284,668 $ 8,202,238 $ 10,111,543 ` $ 9,364,275 $ 12,795,177
3
FY15 FY16 FY17 FY18 FY19
Revenues
1 Cent Tax Revenue $ 19,521,179 $ 18,000,000 $ 18,000,000 $ 18,000,000 $ 18,000,000
Interest Income 25,000 25,000 25,000 25,000 25,000
Asset Sale 2,000,000
Fund Balance Fwd 17,479,730 10,284,668 8,202,238 7,361,543 3,864,275
$ 39,025,909 $ 28,309,668 $ 26,227,238 $ 25,386,543 _ $ 21,889,275
Expenditures
Canal Master Plan 3,652,215 1,021,994
Ocean Reef R.O. 2,600,000
Land Acquisition 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000
Misc. Physical Env 1,060,156
Harvey Sr. Center 708,268
P.W. Magnolia St. 913,275
Mics General Gov 2,741,550
Higgs Beach 794,664 1,934,664 870,672
Old Seven Mile Br 2,700,000
Big Pine Swim Hole 100,000 900,000
Misc Culture& Rec 105,403
Fire/EMS Veh Program 1,975,000
Key Largo Fire/EMS 320,550 300,000
Ocean Reef Fire/EMS 200,000 800,000
Misc Public Safety 231,124
Road Paving 3,328,942 4,571,574 3,500,000 4,500,000 2,000,000
Admin,Mics,Contingency 3,248,858 1,853,098 1,853,098 853,098 853,098
$ 23,880,005 $ 15,181,330 $ 8,323,770 $ 8,253,098 $ 4,853,098
Debt Service
2007 Rev Bond 3,606,455 3,591,100 3,549,925 3,531,170 -
2014 Fey Bond 1,204,781 1,235,000 4,242,000 4,238,000 4,241,000
Cudjoe Regional SRF - - 2,750,000 5,500,000 5,500,000
Line of Credit 50,000 100,000 - - -
$ 4,861,236 $ 4,926,100 $ 10,541,925 $ 13,269,170 $ 9,741,000
Change in Fund Balance (7,195,062) (9,277,492) (10,118,187) (13,615,455) (10,184,553)
Ending Balance $ 10,284,668 $ 8,202,238 $ 7,361,543 $ 3,864,275 ; $ 7,295,177
4
. .
Capital Plan Update
• Discussion of Debt-Funded Projects
- -Core Tenet of Debt Funding Plan
Flexibility
Example — Cudjoe Funding Plan
• ILA with Key Largo Wastewater Treatment District —
Mayfield Funding Swap
Mayfield Year Three
These two efforts have the potential to reduce our SRF
borrowing need by 50%.
8
Example — Cudjoe Funding Plan (continued )
• KLWTD Mayfield Year Two & Three = $29.5 M
• County/FKAA Mayfield Year Three (County Share) = $12.5 "M
- Total Mayfield Funds Available $42 M
- Planned SRF Borrowing (service by Fund 304) = $85 M
-SRF Borrowing Reduced to $43 M
Example - Cudjoe Funding Plan (continued )
• Payments to KLWTD are accelerated (10 years versus 20 years for SRF)
but are Interest Free
a This Plan gives the County the ability to pay off % of the Cudjoe
Wastewater Project in % the time Without Appreciably Increasing The
Maximum Annual Debt Service
• Current Plan — Annual Debt Service $5.5 M for 20 years
• Potential Plan — Annual Debt Service $5.5 M-for 10 years followed by
Annual Debt Payments of $2.8 M for the remaining 10 years
Savings of$2. 7 M for the final 10 years, or $27 M in total
io
Example - Cudjoe Funding Plan (continued )
• The $27 M in total savings is comprised of:
- County Mayfield $12.5 M
- interest savings on County Mayfield $ 4:3 M
- Interest savings. on KLWTD funds $1ft2 M
Debt- Funded Projects, as Adopted
PK Courthouse & Jail $10.6 M
Fire Academy $ 1.9 M
Marathon Library $ 3.0 M
Summerland Fire Station $ 4.5 M
Jackson Sq (Rockland Key) $ 6.0 M
Total $26.0 M
•
Debt- Funded Projects, continued
Estimate-Low Estimate-High
PK Courthouse & Jail $10.6 M $14.0 M $20.0 M
Fire Academy $ 1.9 M $ 1.9 M $ 1.9 M
Marathon Library $ 3.0 M $ 4.5 M $ 4.5 M
Summerland Fire Station $ 4.5 M $ 4.0 M $ 4.5 M
Jackson Sq (Rockland Key) $ 6.0 M $11.0 M $14.0 M
Total $26.0 M $35.4 M $44.9 M
Proposed New Projects
Sugarloaf Fire Station $ 3.0 M $ 4.5 M
Gulf Seafood $ 5.0 M $ 5.0 M
Bernstein Park (moved from ciP) $ 5.0 M $ 5.0 M.
Total New Projects $13.0 M. $14.5 M
Grand Total $48.4 M $59.4 M
13
•
Debt- Funded J
Pro ' ects, continued
Estimate-Low Estimate-High Assumption
(for discussion)
PK Courthouse & Jail $10.6 M $14.0 M $20.0 M $17.0 M
Fire Academy •$ 1.9 M $ 1.9 M $ 1.9 M $ 1.9 M
Marathon Library $ 3.0 M $ 4.5 M $ 4.5 M $ 4.5 M
Summerland Fire Station $ 4.5 M $ 4.0 M $ 4.5 M $ 4.5 M
Jackson Sq (Rockland Key) $ 6.0 M $11.0 M $14.0 M $12.0 M
Total $26.0 M $35.4 M $44.9 M $39.9 M
Proposed New Projects
Sugarloaf Fire Station $ 3.0 M $ 4.5 M $ 4.5 M
Gulf Seafood $ 5.0 M $ 5.0 M $ 5.0 M
Bernstein Park (moved from CI.P) $ 5.0.M $ 5.0 M $ 5.0 M
Total New Projects $13.0 M $14.5 M $14.5 M
Grand Total $48.4 M $59.4 M $54.4 M
14
Debt- Funded Projects, continued
• Funding Plan for $54.4 M in Projects
- Borrow 75%,. or $40.8 M (54.4 x .75)
* IRS Spend Rules
* Very Aggressive and Complex Set of Construction Projects
* Latter Projects will be Funded as Pay-as-you-go
$40.8 M less existing debt issuance of $25 M leaves
$15.8 M of New Borrowing needed
15
Debt- Funded. Projects,
continued
• Debt Service Burden
• Current
2019 — 2024 54%
2025 — 2033 41%
• With $16 M of New Borrowing (10 years)
2019 — 2024 64%
2025 — 2033 41%
(with Mayfield proposal)
2025 - 2033 26%
16
Capital Plan Update
a Decison Roadmap
• -
Decision Roadmap
• Refine Budgets of the "Five Construction Projects"
• Determine which New Projects to Fund
• Set Debt Burden Parameters
• Determine New Borrowing Needs
• Line of Credit
- Adjust amount (if necessary)
- Decide when to convert to term loan (date, length)
18