Bonded Debt Held by Aransas County
Don’t know about y’all, but financial information makes my eyes cross. During this wide ride called 2020, I have looked at historical financial information for the County and the City of Rockport and only absorbed part of it. Keeping with our mission to keep the EveryDay Citizens of Aransas County informed, the following is a very watered down version of the County’s debt situation in the offering statement required to be presented to possible investors dated September 17, 2020 for the issuance of a Limited Tax Refunding Bond.
In the recent past, it was mentioned by the County’s Financial Advisor, Robert Henderson, that part of the County’s debt would be refinanced at a lower interest rate. This is similar to refinancing your house. Bonds called Refunding Bonds do not require voters be informed. The objective here is to lower the tax rate by reducing annual debt obligation requirements. O-17-2020 was approved by the Commissioners Court to proceed with the Bond Issuance on September 14, 2020.
Aransas County Long Term Debt Obligations are listed below along with service requirements on this debt but does not include the 2020 Tax Refunding Bond. (The below is from the Sept 17, 2020 document mentioned above)
What does this mean? I will tell you right now with as much information as I have. The information below is from various County Financial Statements available here along with other information obtained through the Aransas County website.
But first, a couple of definitions. From Texas Statute, a “Refunding Bond is used to refund all or any part of the issuer’s outstanding bonds, notes or other general or special obligations.” Also from Texas Statute, a Venue Revenue Bond is one in which the voters voted to have the venue built. This vote also authorized the issuance of these bonds.
Certificate of Obligation, Series 2011 was issued for $5,480,000 for flood control projects.
The 2011 Tax-Exempt Venue Project Bond (Combined Venue Tax) was issued for $2,770,000. The Bond was issued to build the Aquarium Education Center.
Certificate of Obligation, Series 2012 was issued for $2,205,000 for dredging, road improvements, drainage and bay improvements.
Limited Tax Refunding Bond of 2012 was issued to “pay off” a significant portion of the 2003 CO (Building of the Jail and Public Safety Center) and issued in the amount of $7,255,00.
2016 Certificate of Obligation was issued for $2,600,000. Further inquiries are required to determine why this CO was issued.
Limited Tax Refunding Bond of 2016 was issued for $5,185,000) to “pay off” a significant portion of the 2007 CO ($2,995,000 for new Animal Shelter and improvements to the Jail, Airport and Courthouse) and 2009 CO ($4,475,000 for land and plans for new Courthouse, drainage study, building improvements, equipment and software).
Limited Tax Refunding Bond of 2020 has been issued for $3,270,000 and will be used to “pay off” the 2011 CO.
Putting this all together – the County’s current debt is $17,505,000. Using the current pay off plan, all of this debt will be paid in full in 2032.
An interesting observation. The 2003, 2007 and 2009 CO’s are still being carried as debt in all but name as well as the 2011 CO. While the Limited Tax Refunding Bonds allow for a decreased interest rate and “closure” of a bond, the bond is not part of the Tax Refunding Bond. Also, the Tax Refunding Bond cannot have a maturity date earlier than the bond(s) it is associated with.
Take a breath because this is a lot to absorb. Bottom Line Up Front – the County currently has six bond obligations. The Limited Tax Refunding Bond 2020 will not change the number of debts nor the principal due on those debts.