District of Columbia General Credit Update District of Columbia March 10, 2016
Presentation Participants District of Columbia Office of the Mayor Office of the Chief Financial Officer The Honorable Muriel Bowser Jeffrey S. DeWitt Mayor Chief Financial Officer John Falcicchio Chief of Staff Angell Jacobs Deputy CFO and Chief of Staff Rashad M. Young City Administrator Fitzroy Lee Matthew Brown Deputy CFO and Chief Economist Budget Director Jeffrey Barnette Council of the District of Columbia Deputy CFO and Treasurer The Honorable Phil Mendelson Carmen Pigler Council Chairman Associate Treasurer The Honorable Jack Evans Darryl Street Chairman, Finance and Revenue Committee Senior Financial Policy Advisor Jennifer Budoff Council Budget Director Ruth Werner Committee Director 2
Presentation Agenda District of Columbia I . Credit Highlights II. CAFR Highlights III. Fund Balance and Reserves IV. Economy and Revenue Estimates V. FY2016 Budget and FY2017 Budget Formulation VI. Debt Position, CIP and Transactions VII. Pension and OPEB VIII. Conclusion IX. Appendix 3
District of Columbia I. Credit Highlights 4
The District’s Overview District of Columbia Strong Economic Performance and Prudent Fiscal Management The District has strong, institutionalized and disciplined financial management Strong Fiscal The Mayor’s Administration and District Council leadership continue to support Management building the fund balance and fully funding the multiple reserve accounts The Washington, D.C. area has developed into a diverse economic region Historically Stable Estimated growth in future revenue reflects improved economic performances, Economy population growth, and a significant rebound in property values Long track record of balanced budgets and clean audits (no deficiencies in FY15) Sound Budgetary The FY 2015 CAFR shows an increase in the General Fund balance to $2.17 billion, Flexibility including $985 million of federal and District mandated reserves Outstanding and projected debt obligations remain within 12% limit of total General Prudent Debt/Pension Fund expenditures Management Pension and Other Post-Employment Benefit Plan (OPEB) remain well funded 5
a District of Columbia II. CAFR Highlights 6
FY2015 CAFR Highlights District of Columbia Clean audit opinion (19th Consecutive) No Material or Significant Deficiencies $2.17 Billion Cumulative General Fund Balance Increased $293 million over FY 2014 fund balance (GAAP) Mandated Federal and local reserves (working capital) increased by $121 million to $985 million (49 days of operating expenses) Increased reserves have allowed for steady decline in TRAN borrowing from a peak of $820 million to $250 million Revenue growth was helped by capital gains, real property transactions and legal settlements Funded reserve growth Fund future WMATA needs Fund FY16 budget priorities 7
District of Columbia III. Fund Balance and Reserves 8
General Fund Reserves and Bond Rating History District of Columbia $2.17 Billion Revitalization Act Fund Balance Restoration Act of 2010 Control Period -$518 million General Obligation Bond Ratings S&P: A ‐ A ‐ A ‐ B B B BB BBB BBB BBB+ BBB+ A ‐ A ‐ A A+ A+ A+ A+ A+ A+ A+ AA ‐ AA AA Moody's: Baa Baa Baa Ba Ba Ba2 Ba1 Baa3 Baa3 Baa1 Baa1 Baa1 A2 A2 A2 A1 A1 A1 Aa2 Aa2 Aa2 Aa2 Aa2 Aa1 Fitch: A ‐ A ‐ BB BB BB BB+ BBB BBB BBB+ BBB+ A ‐ A ‐ A A A+ A+ A+ AA ‐ AA ‐ AA ‐ AA ‐ AA AA Income Tax Secured Revenue Bonds: S&P: AAA Moody's: Aa1 Fitch: AA+
Federally and Locally Mandated Reserves District of Columbia % of Amount Reserves Expenditure/ Status ($ in Millions) Budget Emergency 2% $ 122.0 Full Contingency 4% 244.2 Full Fiscal 2.34% 174.9 Full Stabilization Cash Flow 8.33% 443.7 69% Total $984.8 49 days cash Additional $235M required to meet 60 days cash 10
District of Columbia IV. Economy and Revenue Estimates 11
Current State of the District’s Economy District of Columbia Personal Income Labor Markets & Employment Per capita personal income was 151.7% of the U.S. Resident employment in December 2015 was average in 2014 10,242, 2.9% increase over the same period last year In the quarter ended September 2015 personal The unemployment rate was 6.6% in December income grew by 4.8% and estimated wages of District 2015, down from the high of 10.4% in 2011 residents grew by 5.2%, compared to same period December 2015 wage and salary employment in the one year earlier District was up by 9,667 (1.3%) from one year earlier Most of the wage increase was due to growth in the private sector, but federal government wages also increased 4.7% in September 2015 over the prior year District Employment and Unemployment District Per Capita Personal Income (measured by the three-month moving average) (in thousands) 380 12% ($ in billions) $72,000 361.5 $69,838 10% $70,000 348.7 342.1 360 $68,973 $68,606 $67,359 8% $68,000 332.1 340 6% $66,000 315.2 320 $63,741 4% $64,000 300 2% $62,000 280 0% $60,000 2011 2012 2013 2014 2015 2010 2011 2012 2013 2014 Per Capita Personal Income DC Resident Employment Unemployment Rate Source: U.S. Department of Labor, Bureau of Labor Statistics, U.S. Department of Commerce, U.S. Census Bureau, Bureau of Economic Analysis 12
Current State of the District’s Economy (Continued) District of Columbia Diverse Economic Region Housing / Commercial Office Market One of the most popular tourist destinations, with The number of single family home sales in CY 2015 350 historic sites and major cultural attractions increased by 2.6% and the average sales price Washington Metro represents the 2nd busiest rapid increased 5.1%, compared to CY 2014 transit system in the nation, behind New York City Direct vacancy rate of commercial office space was Subway 10.0% at year-end 2015 Home to many institutions, including over 9 colleges and universities, more than 50 museums, 206 foreign embassies, and a number of international organizations Housing Market Is Strong and Growing Population Growth Since 2011 $786,003 690,000 9,000 $800,000 672,228 $748,023 659,836 $750,000 660,000 649,540 8,000 $708,410 635,342 $700,000 630,000 620,472 $654,874 7,000 $650,000 $592,070 600,000 6,000 $600,000 570,000 5,000 $550,000 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 Number of Home Sales Source: February 2015 Revenue Estimates Certification Letter, U.S. Census Bureau 13
Jobs in DC: Year-over-year change (December 2015) District of Columbia 3,600 Health Other Business services 3,133 Organizations 2,567 Other Professional and technical 1,200 Legal services 900 833 Federal government Finance 700 Employment services 467 467 Other private Food service 433 Construction 233 Amusement and recreation 133 Information 67 -67 Wholesale trade Retail trade -200 Accommodations -467 -733 Personal and miscellaneous ser. Local government -800 Education -2,800 -3,000 -2,000 -1,000 0 1,000 2,000 3,000 4,000 14
Jobs in DC, DC Suburbs, US: 2-year Trend District of Columbia Change in Private Sector Wage and Salary Jobs Change in Wage and Salary Employment (% change from prior year in 3-month moving (% change from prior year in 3-month moving average) average) 4.0 3.0 3.5 2.5 3.0 2.0 2.5 1.5 2.0 1.0 1.5 0.5 1.0 0.0 0.5 ‐ 0.5 0.0 ‐ 1.0 ‐ 0.5 Dec ‐ 13 Mar ‐ 14 Jun ‐ 14 Sep ‐ 14 Dec ‐ 14 Mar ‐ 15 Jun ‐ 15 Sep ‐ 15 Dec ‐ 15 Dec ‐ 13 Mar ‐ 14 Jun ‐ 14 Sep ‐ 14 Dec ‐ 14 Mar ‐ 15 Jun ‐ 15 Sep ‐ 15 Dec ‐ 15 DC (dec @ 1.3) DC suburbs (dec @ 2.4) US (dec @ 1.9) DC (dec @ 1.8) DC suburbs (dec @ 2.4) US (dec @ 2.2) 15
Jobs in DC, DC suburbs, US: 10-year Trend District of Columbia Change in Wage and Salary Employment Change in Private Sector Wage and Salary Employment (% change from prior calendar year average) (% change from prior calendar year average) 4.00 4.00 2.00 2.00 0.00 0.00 -2.00 -2.00 -4.00 -4.00 -6.00 -6.00 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 DC DC suburbs US DC DC suburbs US 16
Recommend
More recommend
