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Home My WebLink AboutCash Reserves Debt Management - 2019-06-12CITY OF SOUTH BEND, IN City of South Bend Cash Reserves & Debt Position CITY OF SOUTH BEND, IN City of South Bend Financial Analysis Liquidity Debt Capital Assets Operations (Revenue & Expenditures) CITY OF SOUTH BEND, IN City of South Bend Financial Analysis Liquidity Debt Capital Assets Operations (Revenue & Expenditures) CITY OF SOUTH BEND, IN Cash Balance CITY OF SOUTH BEND, IN Cash Balance Source: Indiana Department of Local Government Finance Source (Cash): https://gateway.ifionline.org/report_builder/Default3a.aspx?rpttype=afr&rpt=cash_inv_combined&rptName=Cash%20and%20Investments Source (Expenditures): https://gateway.ifionline.org/report_builder/Default3a.aspx?rpttype=afr&rpt=PropPerCapita&rptName=Expenditures%20Per%20Capita Cash on Hand (as of 12/31/2018) All Repayment Sources City Cash & Investments Annual Expenditures Cash as a % of Expenditures Elkhart $144,451,624 $138,989,969 103.9% Noblesville $112,756,010 $119,138,417 94.6% Columbus $95,992,054 $104,447,337 91.9% Jeffersonville $91,554,536 $114,960,362 79.6% Bloomington $174,579,084 $221,153,535 78.9% South Bend $288,674,723 $368,227,709 78.4% Fishers $135,584,159 $177,699,149 76.3% Kokomo $81,069,648 $108,745,212 74.6% Fort Wayne $407,036,470 $577,212,410 70.5% Westfield $45,621,172 $69,903,591 65.3% Evansville $251,521,334 $396,583,395 63.4% New Albany $53,981,387 $85,382,261 63.2% Mishawaka $115,499,328 $186,404,957 62.0% Anderson $118,794,380 $221,421,833 53.7% Richmond $82,210,193 $165,452,736 49.7% Lafayette $122,151,234 $246,513,926 49.6% Hammond $123,262,003 $267,834,993 46.0% Portage $37,734,290 $86,036,412 43.9% Merrillville $20,909,183 $54,934,384 38.1% Terre Haute $39,157,473 $113,984,063 34.4% Carmel $66,499,479 $241,034,037 27.6% CITY OF SOUTH BEND, IN Cash Balance Projection •Cash balance projection if no action is taken to prioritize spending: CITY OF SOUTH BEND, IN Cash Reserve Requirements •What is the purpose of reserves? •Prepare for future fiscal challenges, satisfy debt covenants, and maintain bond rating •City Policy sets reserve requirement by Fund: •Most funds have a requirement of 25% of annual expenditures from that fund. •This is higher than the GFOA recommendation of 2 months reserve •Certain Governmental Funds (General Fund / Liability Fund) have higher reserve requirements •Cash Reserves in Debt Service Funds are largely governed by debt covenants •Capital Projects funds & grants funds do not have a cash reserve •Enterprise Funds have a lower cash reserve requirement •Several funds (such as Bowman Cemetery) have a specific dollar threshold that should allow those funds to operate in perpetuity with little additional cash infusion. CITY OF SOUTH BEND, IN Cash Reserve Requirements Cash Available Reserve Requirement Variance General Fund 24,861,911 22,943,592 1,918,319 EDIT / COIT 22,381,186 14,700,065 7,681,121 Special Revenue Funds 27,690,642 22,270,182 5,420,460 Capital Projects Funds 29,807,427 364,782 29,442,645 Debt Service Funds 9,326,200 8,404,137 922,063 Internal Service Funds 16,351,979 8,338,545 8,013,434 Enterprise Funds 35,126,519 20,485,310 14,641,209 Redevelopment / TIF Funds 32,935,578 18,291,749 14,643,829 Trust Funds 1,038,301 4,537,551 (3,499,250) Total 199,519,743 120,335,913 79,183,830 Cash Reserves (compared to requirements) as of April 30, 2019: Note that “Cash Available” is equal to total cash on hand minus outstanding encumbrances. CITY OF SOUTH BEND, IN City of South Bend Financial Analysis Liquidity Debt Capital Assets Operations (Revenue & Expenditures) CITY OF SOUTH BEND, IN What kind of Debt does the City issue? General Obligation Bonds Revenue Bonds Mortgage Bonds Loans Capital Leases Note: The City also occasionally issues Conduit Debt on behalf of other organizations. The City is not liable for the repayment of conduit debt. CITY OF SOUTH BEND, IN Why does the City issue debt? •Capital projects •Two reasons to finance capital projects with debt: •Inability to finance prudently with current reserves •Interperiod equity •City Policy 2.17, Section 3.2: The City will not use short-term borrowing to finance operating needs except in the case of an extreme financial emergency, which is beyond its control or reasonable ability to forecast. CITY OF SOUTH BEND, IN Why does the City issue debt? Recent Issues of Debt: •2016 •$8.9 million in Capital Leases •$3.3 million Water Bond Refunding •2017 •$4.7 million in Capital Leases •$14 million Parks General Obligation Bond •$25 million TIF bond for Eddy St Commons Phase II •$3.5 million TIF bond for Studebaker Façade Improvements •2018 •$9.6 million in Capital Leases •$5 million General Obligation Bond for Fire Station #9 •$3.4 million Zoo Economic Dev Revenue Bond •$12 million TIF Bond for Parks •2019 YTD •$1.9 million in Capital Leases CITY OF SOUTH BEND, IN Total Debt Outstanding Total Debt Outstanding $ 254,935,846 Debt per Capita $ 2,493 Debt Repayment Source CITY OF SOUTH BEND, IN Total Debt Outstanding Debt per Capita All Repayment Sources City Debt Outstanding Population Debt per Capita Carmel 1,329,505,051$ 86,682 15,338$ Evansville 1,031,545,191$ 120,346 8,571$ Fishers 423,391,546$ 86,325 4,905$ Noblesville 274,460,375$ 57,584 4,766$ Fort Wayne 1,126,531,745$ 258,522 4,358$ Westfield 141,450,572$ 35,297 4,007$ Lafayette 279,601,497$ 70,654 3,957$ Jeffersonville 169,278,292$ 46,440 3,645$ New Albany 114,358,235$ 36,589 3,125$ Bloomington 233,605,754$ 83,322 2,804$ Mishawaka 130,572,465$ 48,174 2,710$ Anderson 143,251,462$ 55,455 2,583$ Columbus 116,562,715$ 46,124 2,527$ South Bend 254,935,846$ 102,245 2,493$ Portage 89,646,263$ 36,760 2,439$ Hammond 138,917,224$ 78,384 1,772$ Richmond 61,741,262$ 36,159 1,707$ Kokomo 75,247,991$ 57,085 1,318$ Merrillville 40,214,008$ 35,450 1,134$ Elkhart 52,940,230$ 51,421 1,030$ Terre Haute 28,298,813$ 60,956 464$ Source: Indiana Department of Local Government Finance. Indiana Gateway Total Debt by Unit Report https://gateway.ifionline.org/report_builder/Default3a.aspx?rpttype=debt&rpt=TotalDebtByUnit&rptName=Total%20Debt%20by%20Unit CITY OF SOUTH BEND, IN Total Debt Outstanding (per capita) CITY OF SOUTH BEND, IN Debt Capacity •Debt Limit: Defined by Indiana Law; the legal limit of debt that may be issued by a governmental unit •2% of 1/3 of Net Assessed Value of all property •However, only certain types of debt are included in debt limit, primarily General Obligation Bonds and Economic Development Income Tax Revenue Bonds •The City relies on economic analysis to ensure new debt is manageable. Before new debt is issued, the following analyses are performed: •Financial analysis •Governmental & administrative analysis •Economic analysis CITY OF SOUTH BEND, IN Debt Limit CITY OF SOUTH BEND, IN Debt Service Payments •If no new debt is issued: CITY OF SOUTH BEND, IN Debt Service Payments Source (Debt Payments): https://gateway.ifionline.org/report_builder/Default3a.aspx?rpttype=afr&rpt=Debt&rptName=Debt Source (Expenditures): https://gateway.ifionline.org/report_builder/Default3a.aspx?rpttype=afr&rpt=DetailedDisbursements_noDept&rptName=Disbursements%20by%20Fund Debt Service Payments as a % of Total ExpendituresCityAnnual Principal / Interest Payments Total Annual Expenditures Debt Payments as a % of total Carmel $59,371,290 $220,204,425 26.96% Noblesville $23,691,832 $108,194,230 21.90% Fort Wayne $86,777,799 $566,425,128 15.32% Westfield $8,719,915 $59,545,788 14.64% Evansville $46,808,076 $344,454,116 13.59% Jeffersonville $12,942,152 $100,177,984 12.92% Bloomington $16,865,196 $143,574,677 11.75% Merrillville $5,229,390 $46,091,178 11.35% Lafayette $16,609,600 $147,282,280 11.28% Fishers $20,286,128 $189,666,210 10.70% New Albany $8,349,692 $84,910,803 9.83% South Bend $32,562,437 $368,227,709 8.84% Columbus $10,285,845 $125,395,141 8.20% Hammond $22,073,126 $278,894,402 7.91% Anderson $15,955,309 $215,441,081 7.41% Mishawaka $10,439,947 $187,162,178 5.58% Kokomo $4,192,706 $86,615,284 4.84% Elkhart $4,098,328 $116,092,204 3.53% Richmond $5,404,851 $163,423,864 3.31% Portage $2,115,870 $95,545,983 2.21% Terre Haute $2,355,285 $128,929,999 1.83%