vgfoa 2010 innovation award: debt management tool vgfoa presentation: june 2011
TRANSCRIPT
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VGFOA 2010 Innovation Award:Debt Management Tool
VGFOA Presentation: June 2011
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Debt Management Issues
• Augusta County Service Authority has 12 independent water systems and 9 independent sewer systems
• Lots of regulatory pressure to upgrade facilities:– 3 largest WWTPs needed ENR upgrades for Ches. Bay– 5 water supplies needed membrane filtration because
now under the influence of surface water
• Therefore, many opportunities from VDH and DEQ to award us subsidized loans paired with grants, especially in disadvantaged areas
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Debt Management Issues
• Augusta County Service Authority has 25 outstanding bonds and loans
• $25 Million recently borrowed for 3 largest WWTPs ENR upgrades and Authority is now at “debt capacity” because bond revenue covenants are now driving rate increases
• Therefore, being able to easily report on debt for Board discussions, the budget process and financial statement disclosures is very important
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Creation of Debt Management Tool
• Amortization schedules formerly kept in separate worksheets for budget and audit purposes and were time-consuming to keep updated
• No IT staff for the Authority so a college intern was hired during Christmas Break to convert files into one master spreadsheet– Staff came up with the vision and design, – Intern Googled the internet to find a solution, – Staff reviewed the work, and– Intern documented the work so that updates could be
made by staff
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Features of Debt Management Tool
Audit work papers:
• Current versus non-current debt totals for face of basic Statement of Net Assets
• Annual requirements to amortize debt by year and summarized for five year segments
• List of each debt issue with outstanding principal and amount due within one year
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Features of Debt Management Tool
Audit work papers:• Reconciliation between disclosure tables• G/L to amortization schedule reconciliation • Portfolio interest rate average for
Capitalized Interest calculations• Interest payable support calculations• New debt issue amortization schedules for
auditors
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Features of Debt Management Tool
Budget calculation and presentations:• Budget graph for Board: Debt “hump”• Interest expense for Operating Budget• Summarize by year and water versus sewer,
interest and principal payments for rate calculations and to insure we make bond revenue covenants for a six year financial plan
• Used this year to quickly determine the effect of not drawing several debt issues in full for budget discussions
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Features of Debt Management Tool
Used throughout year:• Periodically verify G/L for outstanding debt or
interest payable amounts• Can monitor due dates for debt issues from a cash
flow perspective• Continuously update amortization schedules and
keep notes in one place for individual bond issues• Use to support BAB interest subsidy
reimbursement requests