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VGFOA 2010 Innovation Award: Debt Management Tool VGFOA Presentation: June 2011

VGFOA 2010 Innovation Award: Debt Management Tool VGFOA Presentation: June 2011. Debt Management Issues. Augusta County Service Authority has 12 independent water systems and 9 independent sewer systems Lots of regulatory pressure to upgrade facilities:

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VGFOA 2010 Innovation Award: Debt Management Tool VGFOA Presentation: June 2011

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  1. VGFOA 2010 Innovation Award:Debt Management ToolVGFOA Presentation: June 2011

  2. 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

  3. 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

  4. 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

  5. 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

  6. 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

  7. 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

  8. 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

  9. Thank you! For a copy of the Debt Management Tool, e-mail Debbie White at dwhite@co.augusta.va.us

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