001[Music] all right good evening everyone today is Monday December 18 I'd like to call this meet the special meeting of the Board of Finance the order okay so please rise and pledge allegiance to the flag [Music] first Southwest Caleb McEwen Sousa Karen and Peter Bailey join us I think we'll have somebody else okay that's why there's many of us because emails show up places thank you for coming thank you it looks like a if I could just start the reason for this meeting is the town is looking at a number of different projects schools possible library possible police station who police radios and some other work and we want to make sure that we're comfortable with the projects we're comfortable with the size of these projects we're comfortable that we do financing without putting undue
002burdens and our residents in the form of taxes so Kayla and her team are going to walk us through what they would suggest if we do and move forward okay Caliban okay like in my mind this is being recorded as being aired over to the TV which means need to stand at the podium that's where the microphone is we've learned that on the Board of Ed and for everybody around the table if you haven't dealt with these microphones up is on down as off because we always forget it's nice to go but I our New Yorkers a lot of people I need to count I've been working with deeper what are we done is that but in the essence of kind of walking for this presentation we headed out inside one this is really are
003involved from the phase my favorite look at you know there's a lot of projects [Music] to get done in structure and none of that credit ratings or anything like that and that's kind of where we are at we're trying to figure out what is the best and then we're going to move into more strategy in terms of yz1 and everything and sale you want to do with a very specific so we're really there from day one and then afterwards as well with we've heard so we're there as well afterwards well after the bond [Music] verify that [Music] the worker actually took place and when 2016 so we're not changing it anyway our knees we've been along that they thought it would be a nice way to either do sizes in different painting you are fine
004so moving on just like to a little bit of information on the bond issue as a municipal advisor have a key will work really there like they said the end but there's a bunch of other players that are involved to help issue or Neufeld come to fruition and what we do is we made of your console will help you work with and trying to figure out who Elkin on and that's why the definitive team for each one so just kind of walking through this is just basically a lot of slides three and how do we help you issue in the next 10 years throughout this budget process of all of these projects that you want to get done without affecting the big thing with you your credit Li which helps you borrow at such low
005rates in today's market a step closer Oh okay so I'll talk about it first then first of all a credit rating is something very important when you're going out into the market for bones and notes basically it lets the market know how the rating agencies think the credit quality of the particular town or municipality is there are three different types of credit reading a credit companies that we work with Moody's S&P and Fitch you are graded by both Moody's and S&P you have something called a split rating at this time by Moody's you're a double-a two and by SP you're a triple-a those are great ratings anything that's a double-a for movies is a good rating a triple-a is the highest you can get from S&P so those are great ratings but you want to
006keep those ratings so you get better rates out in the market if you have a high rating so that's kind of one of the things that we wanted to talk about so one of the things that's affecting Connecticut especially right now I'm sure you've all read in the papers about the budget impasse that we had and because of that one of the things you'll see on the list here is that credit ratings look for the future and what's going to be happening in the future and they do use that as something that can affect your rating there was a list that went out that maybe had sent out of 29 municipalities that were on negative watch and there was 29 others that that were on a watch to be downgraded over the last three weeks
007we've had a bunch of interviews with different towns that we work with talking to Moody's doing reviews and it has affected a lot of communities at least two of ours were downgraded one one on a negative watch so it's really something that they do really look at your town is doing great you didn't have a lot of funding coming from the state compared to other ones your ratios we're really good so you're not on the list it's a really good thing and you're looking really good for the future but it is something that they do consider and you should be aware of so I guess I'm kind of going off of your explanations of future is because you already know about all these projects you want to fund and that you have a game plan
008if anything that wants me to because it shows the reading agency any stats you know this is this is the horizon this is the forecast of what you want to do and we're thinking about it today we're not just waiting as these projects come up and saying oh I'm going to issue this year and this infrastructure that we think we're going to go with we're able to plan ahead I mean we can't project interest rates but we can figure out a conservative way to project what you might be paying so that it doesn't affect your reading and and very low cost of borrowing and doesn't affect you know a lot of other things like your tax rate or anything like that so that's kind of what the goal was here and it's really good to
009present in this entire story to the rating agencies because it just shows that that's great management on the town and along those lines is showing the willingness and ability to repay that's an important thing that the credit rating agencies are looking for I think we can do suicide sex actually which just talks about information that the rating agencies look at when they're looking to rate you there's something called in a preliminary official statement or official statement that's actually what goes out into the market to tell the market that you're selling bonds or notes it's an additional document that's something that they look at it they look at your audits they look at your pension and no peb liabilities they look at something called disclosure that we were talking about earlier there's something called an EMA
010website actually for municipal municipalities and on that site you have to put on your but your audits and you have to file every year certain information and we make sure that all that's on there that's part of our process is to make sure that you guys are compliant in that way too some of the things they really like just for the future so when you're looking to get a rating they like to see that you have multi-year projections that's something that's a credit positive they also like to see that you have a capital improvement planned anything that's five to ten years out is always a good thing they also like to see formal policies which you guys do have some so those are all great things beneficial for the town and then they do a
011lot of analysis using medians and comparable credits and things like that when they're looking at your reading going on this line seven these are the five categories the four categories excuse me the hesitate really look at your deposition which we kind of talked about to make sure you can pay for things your finances if things are in order and things like that your management team that would be like the policies that we talked about any economy and that's going on which we talked about how the state some has right now and they are all weighted if you see on the next slide if you view the ratings for the different types of thing it's 30% for a tax base and local economy which is very strong in climbing here you have a very wealthy tax
012base that's always a positive 30% for your financial position which kind of covers what we talked about earlier 20% for the management and institutional framework which talks about your policies and things like that again and 20% for your long-term debt liabilities which is what we're talking about this evening of what you're thinking that you're going to be putting into your debt on slide 9 this is actually a model that we work with this is what we call a duty scorecard so we ran using your audit numbers from 2016 to see kind of where you would be placed based on those numbers and you can see each of categories so you can see kind of where you know you can work if you can work because some things you can't change about it we need like
013there's a community that doesn't have a good wealth indicator you can't really change that right away it doesn't happen overnight you can work towards it but it doesn't always means it's going to change the one area that you have a kid working yeah I don't think you could but it's actually not the town that can do so much but Connecticut is penalized actually by the rating agencies because we don't have high reserves and the reason we don't have high reserves is because you have unlimited ability to taxed so you don't want to keep those reserves because your tax payers are going to say we've got all this money why aren't you using it and so we run into with the reading agencies that you have to explain that a lot to them and it is
014something that's a challenge at times we'll say so that's why you see those readings there you can't really do that much about it you can work a little bit to try to make your reserves as high as you're comfortable with and you guys have pretty good reserves so that's a great thing does anybody have any questions yeah sorry anything interrupt as we're going it's a work in progress - I mean I think ever since 2008 in 2009 it really showed its colors a lot of Susan said earlier you have a split rating and really what that says is investors are going to look at unfortunately the W rating they're going to educate themselves they're going to do they have their own credit analysis people on their desks before they purchase your bonds that have already
015done their own work too so it's it's you know the the rating process isn't the end of it completely you know you could have a rating and Connecticut the state what's going on with the state might do not directly impact your rating but there might be some bad you know press about it and that could affect you in the market so it's really great one of the other things that our friends we're not just a financial advisory firm or a book the dealer too so we act as an underwriter not for you all the separation of services here but we do have underwriters that are in the market and help us from the information that they're getting from investors also structure your bonds that will give you the lowest cost of borrowing slight 10 just
016goes over the different rating categories like I said you guys have a triple-a from SMP which we see is the highest reading you have a double A rating double-a 2 which is the next one anything that's in the double-a triple-a category is really a very strong rating so you really have a great rating I'm the yellow line that goes across anything that's above the line is a high credit quality anything below the line is more speculative slide 11 this shows some factors to consider but for fill trading in the last rating that you have done by movies say for the strengths that were listed we already talked about how you have a good wealth indicator you have very manageable long-term liabilities in both here your debt your pension and at OCAD those were all very
017positive things and then it lists your challenges which is a recruit weak reserve position which we talked about there's a reason and that always is something that is brought up by the rating agencies and you did have turnover in your financial areas for the last few years seems to be very good now so we're doing good and that's something that we can bring up to the reading agencies will say you know that we're working in a positive direction and things like that and then they list something on the readings that usually say factors that could lead to an upgrade in factors that came in to a downgrade absolutely Susan yeah and you have the factors that could lead to a downgrade the last one of course right large increase in the debt now no matter
018what's on the next couple pages the five very important pages that are the last five they're all the projects that we're doing depending on who you ask are a large increase in debt right so is this a damned if you do damned if you don't because no matter what we are going to take on a large increase in debt no matter how you slice or dice too high in the next 10 12 years right so what how much that it is a large piece of debt but you can structure it so that it's not going to hurt you or cause a penalty so this is not an absolute statement right that is actually if we were to issue I think that statement would be more a hundred percent accurate as day you were going to
019issue all of that and heard that on your balance sheet today that would not be the most prudent thing for the town to do so at one time a large issuance adapting and it's all about structuring it too you know there's great now there's you know for some reason some spikes in 2026 it's just kind of working through how the town can afford that but also you know give you a low cost of art as well then we go back to that for a second we get can you do the same bond study and then include the model of our debt recording him can we get this movie score card based on the data you're presenting that we're going to take on this deck to see what else we can and we will it's just
020we're trying to kind of vet out the different options at this point with the ten-year forecast of what you want to issue and you know we're getting to the point where we have a very basic model with some assumptions and in the second part of that is really talking with you all and figuring out is this you know is this juice don't want to do all these projects where where what is the lowest project on the totem pole can you afford all of this how can we structure this and then the big thing because we're looking at than a 10-year span is where interest rates going to be in 2028 when you go to do issue the last project you have to be very conservative and what we're going to estimate here and I'm bringing
021back up the splitter rating I don't think if anything you would see maybe in effect from S&P because they have you rated triple-a but you're not being purchased as a triple-a and that's one thing to understand you're being purchased as a double-a you're paying paying double-a rates already so you might get a little bit negative press coming down the years once you start really issuing more and more but it's really not going to affect your borrowing cost because your your trading as a beverage so let me ask questions so we're gonna have some significant development in our new downtown area we've already got committed projects of about fifty million dollars and it looks like we could be adding two or three other projects with an equal value that's kind of way a lot in talking
022to rating agencies because 50 million dollars worth of projects is going to generate one heck of a lot of tax revenue and that's something that we would then bolster our ability right one of the things when you're you're doing a lot of economic development in your areas just having those projections with what their taxes are going to be I'm doing that balancing effort it's really just showing that that and then usually the type of sale just is kind of just getting a little bit into the leads he knows I would call it I'm talking structure but you know whether it be competitive and sometimes you know private placements I've worked for small towns and communities where you have a bank that wants to support its town and we'll give you a rate that you might
023not necessarily have to work into your balance sheet as direct as if you're a shrinkage in the market helps you with a little bit of disclosure for that year as well even then you'll have to disclose for your other bond issues but it just gives you that little bit of leverage right you don't have to do a rating if you do okay right and it usually though it's usually a ten-year term instead of 20 or something larger than that that's something to take into consideration and it's becoming more popular in Connecticut Connecticut didn't really do private placements for a long long time but it is something that's coming around you know my experience at private places are usually three to five years we have depending on the size and then what the everything going on
024with the banks and what they have to actually leave on them commit to their balance sheets in terms of liquidity it is very hard for them to go longer term but depending on the size of what you're trying to do they will commit up having that on their balance sheet you know it may be something with a five million dollar project versus fifty five million the five million dollar project is easier for them to take on over twenty years or ten years then a fifty dollar project so when you bring these out competitive negotiated private placement the biggest is competitive sales is that right um it depends on the market um if the market is relatively stable for instance not this past month at all at you know in your credit rating double-a to triple-a
025is a great rating the structure if it's not complicated at all if it's a very easy story to tell investors and they know your credit the competitive cells are usually the theme I would say a better way to choke competition between underwriters for the negotiated sale what we would do is put together a competitive process to choose your underwriter so it's not like we're calling a bank down the street same thing where do the steel this is great if we're going to make it a competitive process upfront and then our big job through the negotiated process would be working with our desk and making sure that whatever the interest in your deal is reflected from that process you're able to get the best rate from that thank you depending on the process what would be
026the impact after play-doh enough the target access and interest rate impact the relations today I mean there's a lot of things that we the deal size and everything like that but the markets pretty volatile right now so in the past couple weeks it has been so I would say in a market like that you're going to have more of a spread difference between a doubling in single a but in a relatively stable market I can't really throw a spread at you but I mean we could definitely do that analysis with our dad right - yeah I mean and it's been there's actually a fourth rating agency Crowell rating because that is new they're they're the new Fitch Fitch was relatively new ten years ago and now crawls out there and and what they basically did
027is it's all about reading education - would be you know reserve funds we've we've managed to get reserves taken out of the criteria for a lot of water and wastewater and a lot of our municipal light and power clients because we're showing that what they should be emphasizing on not having all this cash that in the current market is an earning anything versus what are your coverage ratios for those types of debts it's a little bit tougher for geo but we're trying to make that argument all is really interesting because their marketing standpoint was we're pulling people from the insurance companies all other rating agencies banking but Advisors and they basically took the street kind of cherry picked different people to join this firm and they have a definite broad perspective of every credit and
028the criteria they're putting together is it's very interesting having said that you don't need to have them rate you but you know looking at different rating agencies might bond ball as well I mean you could look at Fitch instead of having Moody's if moody says you know you're not meeting our criteria standards well maybe your criteria standards aren't meeting what we need to do so there's a lot of do you need two ratings can you get away with you know just having one rating so there's a lot of analysis that what we can do is look at the investors that are currently would be interested in your beeper and ask them these questions and see was it because like I said they have their own credit staff it only put that much emphasis on these
029ratings anymore to have one and then have the ability to look at their own credit analysis and their credit analyst and say you know can you sign off on this credit at this level that's kind of what they're looking at now we don't need to have the what is it like the big free hugging every deal you know as a new it's more of just an education and there has been a lot of that in the past ten years with everything that happened in the market you know at that point the rating agencies really didn't help because they were reading all those things Triple A so if there's a lot more scrutiny on them and thankfully a lot of investor education on the part of buyers so that was great but more specifically is generally
030greater when you get from like there will be the dumper double-a to a in general in general like I can give you probably a for instance out of that is that because I don't want to base anything on your credit I have a client that is double-a plus triple-a and we looked at and what he calls a one bump would be not just from double-a to a because you have the Plus then you know or in the case of Moody's the one two and three one jump in a very steady market is only five bases figure out looking any any very relatively stable environment you're not looking at 100 basis points there's no so and I mean there is even though triple B is considered investment grade there is a very negative look on Triple
031D so if you're teetering around the double-a to any category you're you know in a nice environment you're not going to pay drastically for it and that's another thing to consider is you know a lot of times when you hit triple life our client they died and when I spoke on that troubling about five years ago and you have to make the decision at that point do we want to be held to this pedestal or do we want to have the flexibility to do the things that nothing that rippling allows us to and sometimes you just have to bite the bullet and kind of level off in a double-a and it gives the town or whoever the issuer is a lot more flexibility to do the things that they need to do whether it be
032you know issuing throughout ten years or what have you that a triple-a standard will not like you know not like you do especially the environment we're now paying off for it so that's a very bad thing so you wanna have new jobs in a kind of the current situation do what do you have questions first at all on what we've already talked about before we go into any of your dad kind of questions are you able to put any of this on the screen for anyone watching right now we cannot because it is technically going out to the public we need to have this signed off on as well as the model that we're going but we can definitely let you know and give you an electronic version if that's all you understand though that
033whoever we're looking at now that was cast out in the meeting that gets attached to our minutes that's not yet published tomorrow that's right we just can't it's a marketing thing it would be considered marketing material if we pass it out to more than the board sure so slide 13 and talks about your proposed debt basically what we're showing is doing notes pretty much every year to try and even out the flow of your debt before you bond also to give you enough time to be able to find out your actual costs on some of these things because sometimes you start a project and it ends a lot differently than what you start at and you don't want to over bond at any time so we broke it down into the next 10 years the
034first year you can see the notes I actually have that actual figures but the notes would be for like 1.7 million and your bonds would be for like seventeen point six and the bonds would include your streetscape project the streetscape one project and then you have some tax exempt and a small taxable piece which we had included but after talking to Steve that peeps actually is only water and sewer it's about a two million piece so that would actually be taken out but at the time I didn't realize that that actually is going to be self-supporting so that would change a tiny bit but not that much well the library's not even in anything yet it doesn't show up until 2020 but looking at this overall financing we can take out any self-sustaining debt the
035waterlines of sewers what money comes in to pay for them we cover it more than enough hundred percent more than three years we've been doing it what's in your good on that we don't need to consider them because it's covered by coming and that's what we looked at when we did your debt model we didn't include any of your self-supporting debt in here good so for 2020 that's when you would start to have their first library piece it would be 7.5 million and it would be a band so that shows you the only thing you would have actually on that year is bands there's three small bands that are for your streetscape two three and four projects and then a larger band like I said the 7.5 that would be for the library the next
036year actually you'd also have bands it would be again for those three streetscape projects and then a larger piece thirteen point seven for the library and then the next year I just take take each one of these nice and slow please sure let's let me just start what number did you use for the school what number that use for the library was pretty spacious sure for the total cost for the library we'll start with this thirteen point seven seven five and that number is the bond the grandpa right exactly the next project would be the police radio project and we use the number of 3.5 million for that for the school project we used a thirty four point eight seven five million and that war is so where'd that come that does take out forty
037five million dollars - 22.5% stability if you built the rehab building right now it's thirty persons so you chose to be so we're banking on this data that we have that the state's going to give us twenty two percent in the current atmosphere so this data that we're gonna look at right now is a state of Connecticut's give us twenty two percent of this amount of money so we're not gross condemning this we're saying we're going to get this money we're making our projections based on gentlemen grants are available and historically to schools that's what they've done that could change in five years good that would change the scope for that project that dress we change it in let's say we got nothing could change if I have ten million based on conversations I've had
038with doctor for real and this is preliminary haven't done their study we're looking at about forty five million dollars that's a good number that's a reasonable number it might be a lot less and we may get surprised and it might be more you just have you can remember any time you're going out more than projects that you actually did it taking your best guesses based on other projects based on your knowledge base I'm talking to dr. Riehle it's not talking to our consultant and the numbers we have believe are as good as they can get right now and I think on the police station on the police radios we might be alive we might be so then can we get this model done with the full forty five million in it as well to show
039the town so we make a decision based on that's the state was supposed to give us a lot of money this year we didn't get the money we were supposed to get this year or shot a lot of money so to put a number before the town on this many big projects and not put the full costs and have a Christmas list as we might call the money gift it is not a regulator totally look we need to look at all aspects that's why we're here what is most probable right to make good decisions that's my opinion we do run the numbers at 45 million and the next project we had that was bonding actually was for the police station and we used a number of 8.5 million for that one now one of the
040things we did when we did the model is we used your capital projects the projections that you had most of them it was a range from like 1.25 million a year up to I think the highest was one point four nine five so it was in that range each year and I had those build over time and then you bonded it but after discussions with Steve it sounds like the town's actually going to try and pay most of those what we call pay-as-you-go so it will come out of your reserve funds and things like that and so that will be something that we will adjust out in the next model I would like on this I would like to pretend just for conservative purposes that we do say okay we're gonna bond all Oh still
041keeps away it is I would keep it the way it is okay finished that projection the second thing is so this year our long-term bond was 24000 inside right for ten years for this year it was larger in the short term but I think we conservative to look at it as if we're gonna borrow long okay right that's where I believe okay great thanks for the timings of the projects are given or were they model to try and manage it that they will modeled on my best guess as to what I could do the projects when we could afford them obviously our financial adviser may come back to us and say you know what the better idea if you've shifted this project a little bit we just found out on the street escapes that we
042may have to push them off because the grants are on hold and we're not going to do this without the grants for phase 3 and for the grants were faced with so those might push all right and those were also estimated very on those I know are ass banana I just saw this would say the big the big red oranges colored bars are they pretty much line up with the completion date of the project that's when you would go to bond it yeah that's why we looked at it so scroll seven years from now on police station ten years from now right my schools we did seven years and then ban it for three years so we get to drop off in 2026 of our long term borrowing so we don't have an immediate hit
043to our bottom line and how much we're going to pay in debt service it's less expensive to bandit so we could carry that over for three years so you can't carry the ban three years ago probably a total up to 11 years you do have to prepay them as you go along you have to pay them down you just can't borrow short-term and not pay them down but yeah you have to yeah this year on our bands we paid down almost $300,000 on our bands as its required as it so what assumption in here is when you think the school project would be completed in about seven years tradition seven years and then we ban it for three years get it to 2026 97 when we get the huge drop with the old school bonding
044drops often right that frees up a billion won and that's a big time that's a very important timing moment oh absolutely I just don't think we were operating for seven years yeah we why it was us I was is tomato-based them discussions with John and some other people that we designed the schools we get them going it's gonna take a while hit dirt in four and a half to five years take two years to complete the job you know that's what we did last time in the school it took about two years to finish the high school Steve scanner sorry and and just I mean we reference a model but this is a moving model it's this is the first stab at it it's something definitely that we want to work with you all on
045to make sure all of your concerns and any assumptions that you would like me that we can work at different renditions of the sensitivity analysis this is definitely not the end-all be-all this is kind of just working directly from the kind of return line that we we first got and what we can we think we can do I'm sorry go ahead did um this might be jumping ahead a little bit but looking through them looking through the slides I see lots of information on new debt and then information throughout the presentations yours and this one on debt service but nothing on total debt total leverage and even when you look at the Moonies scorecard there's nothing about debt service there's nothing about how much debt you issue in a given year it's all about how
046much debt do you have on the books compared to other things so what what I'd love to see a slide that shows what the total debt is in these in these numbers and my question to you is again it's going to ask you to state a number but given the projection and the framework of what our budget is what a grand list is what is an appropriate total debt range for us to consider in years five to ten what weird where would be below range where would be where you're getting getting risky and where there's a good range in total debt this is kind of justice making you there you go this is kind of the first what we have now we have a lot of projects that were looking at and then the timing
047of them is open but there is one project the library project that if we don't get it to referendum is approved by the end of February this will lose a million dollar grant so that is the one will I think the Board of Finance and the Board of Selectmen sue and I am inherently she's not here tonight and John Lucas is actually the guy who signs the checks for this sort of thing we want to get that comfort level that if we go ahead and approve a library project that we're going to be able to do our schools that we're going to be able to do these other projects even if we're the timing changes its creative schools are number one right anyway we go we've got a lead room in our budget to be
048able to do the schools yeah and I think the things about this model is I mean definitely the first couple of years are going to be more definitive as we kind of work through this and work out the kinks of it and yes I mean use five to ten are still going to be very uncertain no matter how we model this because you know there are so many variables that are going to be unexpected so I think you know if we possibly can I think you know prioritizing those projects is definitely one of the most important things in terms of timing because not to say that you know after that 2020s I care when you old school that is paid off that definitely gives you a lot more flexibility so kind of prioritizing the timing
049and the depth services both the project is going to be key and in structuring this to meet the town's needs as well as as a rating agency can I just jump in for one second whatever one like just a minute to look over the schedule that was just passed out I noticed there's a lot of there's a lot of trying to understand what was just passed out you want to take a minute to look at it see because it has not been approved sorry this is library starting [Music] see of all the assumptions yes tough they're all on here so yeah Okin I used to question do any of these numbers you know debt per capita that the full value general fund the general fund revenues that any of these jump out at you as
050anomalies outliers too far out but to keep our EE within triple-a ratings yeah yeah I mean definitely towards the end which is why I mean I don't want to call this like worst-case scenario but you know if we were to go forward exactly how you would like it structured and the amounts after a year I'd say five or six you're definitely pushing the limit here and that's why we need to kind of we're going to have another week I structured it as twenty year level debt and I did it yeah and I do twenty year level that you want correct principle right because that's the most cost efficient but that's not always the best thing for the town but that's the way the model is done just to keep it consistent so you see so
051what I'm hearing is that if we had to we could structure this in a way without impairing our bond rating but to make our debt load more bearable oh sorry Stephen was asking how we structured this and conservatively the town is in the past truck principle which means you're paying a lot more debt up front a very common structuring alternative is level debt and it's not frowned upon by the rating agencies it just sees that you want to consistent to you what you're issuing so this is actually structured a little bit more aggressively than what we possibly can and it's really trying to figure out I just want to make sure that we're we're staying on course here because now we jump to a new page so if I think we should finish up horizontal
052bar chart that we were on there before we move to other stuff we just we ran around a loop in our back at the hotel so if we could before we wanted a horizontal bars can I ask a question on your slide page 14 the first column 6:32 19 of existing proposed new debt your bar chart seems to look like a high three million the existing right and then the low four million your your little blue right you go to the next slide that shows a different picture that I'd say indeed the numbers don't seem to add up that you're a little bit about three million the pictures don't show the same data I see what you're saying you're saying like it shows four million across for your total debt and I'm under you and
053you're a little under four on the other and then on the blue part I'm like just above three million and on the blue part of the page 14 and the high three Bunyan's where's the data cross over because that visual doesn't it could be there are two small interest payments and maybe but the title of the same existing four way and they should be they should be the same I'm I'm right up front they should be the same so I'm not sure if it's just the way that it generated it or if there's an interest payment that's missing on that one yeah but how do we know that and the rest of the data correlate this this graph well if you look at the bullet point yeah if you look at the points they were
054all pretty I mean I'm assuming you look at you know there's a peak here and a peak here and it goes down so if you look at the estimates that we handed out last week at the Board of Finance meeting for each project and what for Southwest had estimated the cost for each of those projects would be you'll see them if I understand this correctly they roll through here as you go so if you look at each of those and headed up the amounts but I would assume this data we have to look the same it's existing that new proposed death both the titles are the same I would assume the grafting formulation what the graph is actually the same I think it's just that first payment it might have a different start off time
055frames one might be a full fiscal year and one might be as a date so we'll have to check on that because the rest of them look like they correlate can't get back to the prison okay so slide 14 yeah can't wait 13 pleased with you I'm sorry or dirty somewhere you want [Music] oh I dig all the credit I gave all the amounts of the projects though Oh is there any project amount okay okay so 2021 sure yep we'll start with them 2019 okay so for the bonds it was seventeen point six and for the notes is one point seven two five you know the boss for labels in brother yep streetscape one was a bond yeah and then there were the two well there's a tax exempt rollover of the note that you
056have outstanding right now that's for some capital projects and some other things that towns been working on and like I said there was a taxable piece in there but that is the piece that is going to be backed out because it is self-supporting I just worked two million and then we'll go are you guys ready for 2020 I don't want to jump ahead okay for that one it's all notes and so it's eleven point five seven and that was made of a streetscape two three and four do you want the amounts range of over no we have another santa okay and then the library was 7.5 million okay I'll jump ahead to 2021 this is also all notes it's the same three pieces the streetscape two three and four the library increases though to the
057full amount at that time of a seventeen I mean excuse me a thirteen point seven seventy five and I just wanted we talked about those capital projects those are also included in the notes is that alone yeah they're right here but oh yeah okay all right so then we'll jump to you're going to be bonding your streets gave to three and four possibly and the libraries for the full amount of the thirteen point seven and then there's a band that's when you start for your police radio of three point five million we'll jump to 2023 you have a bond for the police radio of 3.5 million and you start your school project at an 18 million for the first note then in jump can I go to 20 24 18 million yet for the school
058yeah the bar on it goes up go heart the bar only goes up to like 11 and every on this thing you're ready all right I think we need to I need to I did these charts so I take full responsibility you'll probably need to recut that yeah I can send an updated chart for that one to you very good was 2024 then do you this every 15 doesn't really have a copy of this know what is them cuz now that's something that I did her oh and I was building it so okay maybe what we can do is provide that and that gives you a very detailed breakdown of everything yeah yeah I think either way you go this for this if you just give us the projects have you have them laid out
059for each of those years it's a little confusing diagram do you want to skip them to slide 14 okay don't say let's let that so this is proposed new debt and it breaks it down into each of the pieces and you can see each of the pieces listed below for your existing debt and then each of the notes your capital like I had talked about that we did the capital projects and we were putting them together so as we built them that would be capital projects where 2021 would be I don't understand this either okay for instance 20 26 tops out at nine million but on the this legal spreadsheet you're saying that 20 26 is going to be 70 million nine point our first oh there we are there without ever looking at scattered
060thank you yeah Thank You Ricky got it because this is dead this this I did service yeah yes this is how much principal and interest you're paying that these fiscal years has those two doesn't say it doesn't say under kind of a slide that's right doesn't take that survey doesn't none won't it says new dad right yes that service page as it visited services your engines no he notices next page it says interesting princess another five before if you have any other questions take questions on that slide that's light not make sense okay so you're saying for our bond issuance you're gonna have 25 bits of 20 2015-2020 175 so that's for what we would anticipate that the markets do better interest rates rise [Music] that's a reasonable assumption 20 year will travel AMM be
061in the past 10 years almost basis points depends on the year and and what's going on in the market all right and then slide 15 like you said is a comparison to the slide before it in this particular we're just trying to show what your existing debt is compared to what the proposed new debt service would be and you can see that one nice bike and that's one of the things that like Kela said you know this is a work in progress so that is something reduced like to try and adjust and the student I was expecting like that then the last contract actually just show the team that you have working on this for you so right back to the question that I had prior which was the appropriate total debt that these are
062debt service pages this is the the machine here which is helpful shows the total debt maxing out it growing from the current 30 or 40 group maxing out at about eighty million dollars in 2025 and staying in the 70 to 80 million dollar range for the rest of the projection period so based on the assumptions that you I'm guessing that the 75 to 80 million dollar ranging is what you're recommending is an appropriate total debt size for our budget an hour this is not a recommendation at all gotcha none of this is this is basically we weren't working with Steve on inputs this is kind of the base case this is if you keep issuing the amounts that you're assuming here the way the town is previously issued this is what it's going to look
063like and what okay so what would it if we did this plan if this plan worked out exactly the way the way it's laid out the debt issuance the budget assumptions the tax increase assumptions is this a would your recommendation be had that's an appropriate debt level with this structure now thank you in the structure and the timing a little bit because as you can see in the later here it's going to impact you is it this is this a good technical term is it way off I don't think it's way off that the problem is is like I said prioritizing what means what you can do now and structure now to the best of our ability and things are gonna shift things are gonna change in the next you know but especially five years
064on now and I think which we need to prepare for that and put together a structure that we can be flexible with if something changes if interest rates you know go up 200 basis points I'm learning the air 2024 what are our options can we ban instead of bond can we wait wait this out and that's kind of what we're trying to put together this is base case and and prioritizing products and kindly this is the very beginning of a very interim so 75 million years to I 70 and 75 to huh well they're also looking at that number absolute level we can you might also want to look at to is the ratios we have here yes you can say I think it'd be helpful if you compare the debt ratios with the existing
065debt to the debt percentages the full value for Moody's we would provide a better understanding maybe starting around 2025 so which is the ratio that should be a primary focus which which is the most impactful to the breathing's so she probably speaks about off-the-cuff but we would not want to represent that and what we could do and what I think what we should do is obviously talk about projects talking about structuring and then evaluate each year with our assumptions so how it would break with the Moonies scorecard don't just look at the overall we need to look at it each year as this is happening what we can do and when we start teetering in that area where you're going to get negatively affected by the debtor issuing whether it be a downgrade negative outlook
066and how we're going to work with that they were done by each year you're saying it's so like if you look at the 20th gonna go up 7.7 for the great work right so based on that structure at that particular method wrong what they'll also be included the prior year no that's just for that particular year into X so by compounding so we had talked a little bit of know about the faction repeal then this model assumes an even capital payment model and there's another options which is an even payment model do you know how much that shaves the top off here the issue with the model of course of the biggest issue you see if the peaking right now it's because they're all coming in relatively together if you were to spread and spread
067that in some logical way give a sense of how much you can come you know shave off the top here but because the current model is paying a lot of capital upfront which is usually very afraid because you're going to pay down the debt service a little bit faster and you are going to be pushing a little bit out these are doing this dream have grown to manage which is yeah I'm going to kind of expect that this would shave off a little bit and we're fill-in out of here right I just I'd love to see how much that was yeah another possible option the dependent everything I didn't meet the criteria but that all spread ideas from per second to here I don't know we really wanted to but like three years to market
068but [Music] what else you have a dinner throw it in here I know fire I mean our everyday life we lead to tomorrow so [Music] we are far off of our schedules [Music] we're right we [Music] so this is this long Google spreadsheet this any sort of recommendation that's one we only need some insulin release meaning it anyway it's sort of an eternity without talking with you all and by ignoring that at the scene in order to need what's the time classy I think we'd like to see okay this is the most amount I'm thinking she's far this year this is really okay and then you know anything but that's when we together [Music] or somewhat not prepared to do that yes we needed to really know how we engine straight exchange would eBay Chinese
069organizations but this is one time that's hot [Music] well I believe a day like reprioritize anymore all we gotta see one ways and it turns out that originally wouldn't visit I would say as I said so we've also sold over the week production assistant said to put on a minute and if we try to parley all these colleges together fool these years you send it over to the we with southerly leaders are you do you have any other in any of your clients even if I was like okay are you able to share with us any common rules you know okay I know you think this is a Pacific [Music] and you're probably using you're buying your whatever meaning well we were wondering [Music] what a good education that I can all those no never
070alright thank you education zoom along that but they wanna see me within three minutes time limited and must be relating to school business and the Board of Education so do be having when this is a scenic no occasion the cheesy meetings adjourned [Music] you [Music]