CALUMET COUNTY, WISCONSIN PRESENTATION TO ADMINISTRATIVE SERVICES COMMITTEE BONDING PROGRAM FOR CAPITAL IMPROVEMENT PROJECTS 2018 GENERAL OBLIGATION NOTES DATED: A UGUST 14, 2018 ══════════ P REPARED B Y : ══════════ C AROL A NN W IRTH , P RESIDENT
Calumet County Bonding Program • Analyze Potential Tax Impact of Existing Debt and Future Debt Issues o Combined Debt Service o Estimated Mill Rate • Assumptions Used for Program: o Tax Base Growth 2017 Actual Equalized Valuation 2018 “Preliminary” Actual Equalized Valuation 3% cumulative increase for 3 years; 0% thereafter o Debt Existing - 4 Outstanding Issues 2018 Issue: $2,945,000 for Capital Improvement Projects Potential Future Project / Issues: $25 Million Jail Project 2
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2018 General Obligation Promissory Notes • Purposes : 2017 Budget Capital Improvement Projects Courthouse Chiller - $146,794 CTH AP (Lake Park - Coop) Overlay - $298,335 Furniture Replacement - $22,312 CTH BB (CTH B - USH 10) Pulverize/Pave - $629,222 Roof Jail Addition Replacement - $72,359 CTH C (USH 151 - CTH H) Overlay - $218,245 County Park Property Acquisition - $1,507,267 CTH LP (USH 10 - CTH AP) RAB Concrete Urban - $50,000 • Authority to Borrow Resolution 2014-26 Adopted November 3, 2014 Authorizing General Obligation Bonds and/or Promissory Notes in an Amount Not to Exceed $46 Million for the public purpose of paying the cost of the County’s Outlays and Capital Improvement Program for the years 2015 through 2019. Requires approval by ¾ of County Board members elect. Adopted unanimously by all County Board members present (20). • Levy Limits - Do not apply to debt service on general obligation debt authorized after July 1, 2005 • County Prepares to Access the Municipal Bond Market Review and approve amortization - Determine method of sale Prepare Official Statement - SEC required disclosure document Bond rating application - S&P Global Ratings (AA+ assigned in 2015, reaffirmed in 2016) County also has outstanding rating from Moody’s Investors Service (Aa2) on 2010 Notes only 4
2018 General Obligation Promissory Notes Sources Of Funds 2018 G.O. Notes $2,945,000.00 Reoffering Premium from Investors Est. 69,130.15 Total Sources $3,014,130.15 Uses Of Funds Est. Issuance Expenses Paid by Underwriter - Municipal Advisor, Bond Counsel, Rating, Underwriting 64,420.00 Capital Improvement Project Funding 2,945,000.00 Excess Premium - Deposit to Debt Service Est. 4,710.15 $3,014,130.15 Total Uses $2,945,000 General Obligation Promissory Notes (2018) Est. Debt Service Calendar Principal Estimated Total Est. Year (12/01) Rates Interest Debt Service 2018 - - - - 2019 100,000.00 3.000% 88,112.33 188,112.33 2020 100,000.00 3.000% 82,270.00 182,270.00 2021 330,000.00 3.000% 79,270.00 409,270.00 2022 330,000.00 3.000% 69,370.00 399,370.00 2023 350,000.00 3.000% 59,470.00 409,470.00 2024 385,000.00 3.000% 48,970.00 433,970.00 2025 400,000.00 3.000% 37,420.00 437,420.00 2026 470,000.00 2.600% 25,420.00 495,420.00 2027 480,000.00 2.750% 13,200.00 493,200.00 $3,448,502.33 - $2,945,000.00 TIC 2.82% $503,502.33 5
$2,945,000 G.O. Notes Preliminary Pricing Summary - Market of August 6, 2018 Type of Maturity Maturity Bond Rates Yield Value Price Dollar Price 12/01/2019 Serial Coupon 3.000% 1.750% 100,000.00 101.274% 101,274.00 12/01/2020 Serial Coupon 3.000% 1.850% 100,000.00 102.284% 102,284.00 12/01/2021 Serial Coupon 3.000% 1.950% 330,000.00 103.077% 340,154.10 12/01/2022 Serial Coupon 3.000% 2.050% 330,000.00 103.659% 342,074.70 12/01/2023 Serial Coupon 3.000% 2.150% 350,000.00 104.033% 364,115.50 12/01/2024 Serial Coupon 3.000% 2.300% 385,000.00 103.921% 400,095.85 12/01/2025 Serial Coupon 3.000% 2.450% 400,000.00 103.533% 414,132.00 12/01/2026 Serial Coupon 2.600% 2.600% 470,000.00 100.000% 470,000.00 12/01/2027 Serial Coupon 2.750% 2.750% 480,000.00 100.000% 480,000.00 Total - - - $2,945,000.00 - $3,014,130.15 Par Amount of Notes $2,945,000.00 Reoffering Premium Est. 69,130.15 Sub-Total $3,014,130.15 Issuance Expenses Paid by Underwriter (Est.) $(64,420.00) Total Paid to County $2,949,710.15 True Interest Cost (TIC) 2.8265273% 6
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Method of Sale Wisconsin Law allows General Obligation Notes and Refunding Bonds to be sold at Public or Negotiated Sale Public Sale – County Advertises for Underwriter Nation-wide – to Submit Bid on Specific Date and Time Underwriter’s Bid Dependent Upon – Market Conditions on Day of Bid Number of Issues Underwriter Will Bid on (Bidding Calendar) or Purchase That Day Limited Ability to Pre-sell Notes/Bonds - Risk May be Built into Bid as Cost to County Underwriting Cost Locked in on the Day of Sale Underwriter Submits Bid on Bid Form per Bidding Parameters in “Official Notice of Sale” Market Conditions are Monitored by Municipal Advisor Throughout Borrowing Timeline Local Banks Participate Through Their Broker/Dealer Relationships County May Change Dollar Amount and Structure with Approval of Successful Bidder on Sale Date Negotiated Sale – Underwriter is Selected By County Through an RFP Process Underwriter Provides Assistance to County in Advance of Entering the Bond Market - Updates and Advises County of Changes to Market Conditions, Interest Rates Investors and Local Banks Contacted Early to Determine Interest in Purchasing Notes/Bonds Reduces Underwriter’s Risk of Unsold Notes/Bonds - Potential for Lower Underwriting Cost Cost of Underwriting Locked in Prior to Sale Date Underwriter Has Flexibility to Capture Market Opportunities Several Days in Advance of Award County May Change Dollar Amount and Structuring Terms Up to Time of Order Period Underwriter Provides County with Comparable Sales in Market RFP Process : Municipal Advisor assists with the preparation and distribution of RFP to at least three qualified underwriters. Underwriters’ responses are analyzed and selection is made based on lowest overall cost to the County including interest rate and underwriting compensation and expenses. The County has historically used the Negotiated Sale method 8
Timeline for 2018 G.O. Notes August 14 Presentation to Administrative Committee Motion to Proceed August 21 Presentation to County Board Meeting Coordinate Financing Team - Municipal Advisor, Bond Counsel, Underwriter Prepare for Market Entry - Official Statement / S&P Rating Presentation October 10 Official Statement Completed October 18-19 S&P Global Rating Call October 30 Rating and Report Released November 5 County Board Adopts Final Award Resolution (Requires Majority Vote) Locks in Interest Rates and Tax Levy November 19 Closing – Delivery of Funds 9
Potential Future Project / Issues $25 Million Jail Project Preliminary Assumptions – Project Timeline o 2019 – Complete Design and Bid Documents o 2020 – Construction Commences Preliminary Assumptions - 3 Phase Financing – General Obligation Bonds o 2019 - $ 5 million @ 3.75% - 20 Year Repayment o 2020 - $10 million @ 4.00% - 20 Year Repayment o 2021 - $10 million @ 4.00% - 20 Year Repayment 10
$25 Million General Obligation Bonds Est. Combined Debt Service-3 Phases Calendar Estimated Total Combined Year Principal Interest Est. Debt Service 2019 - - - 2020 - 187,500.00 187,500.00 2021 - 587,500.00 587,500.00 2022 - 987,500.00 987,500.00 2023 - 987,500.00 987,500.00 2024 235,000.00 987,500.00 1,222,500.00 2025 245,000.00 978,687.50 1,223,687.50 2026 710,000.00 969,500.00 1,679,500.00 2027 740,000.00 941,725.00 1,681,725.00 2028 1,265,000.00 912,775.00 2,177,775.00 2029 1,315,000.00 862,850.00 2,177,850.00 2030 1,365,000.00 810,950.00 2,175,950.00 2031 1,425,000.00 757,075.00 2,182,075.00 2032 1,480,000.00 700,837.50 2,180,837.50 2033 1,535,000.00 642,425.00 2,177,425.00 2034 1,600,000.00 581,837.50 2,181,837.50 2035 1,660,000.00 518,687.50 2,178,687.50 2036 1,725,000.00 453,162.50 2,178,162.50 2037 1,790,000.00 385,075.00 2,175,075.00 2038 1,865,000.00 314,412.50 2,179,412.50 2039 1,935,000.00 240,787.50 2,175,787.50 2040 2,015,000.00 164,400.00 2,179,400.00 2041 2,095,000.00 83,800.00 2,178,800.00 $39,056,487.50 - $25,000,000.00 $14,056,487.50 11
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