Managing Our Debt

2012 Annual Town Meeting Debt Presentation. R. Hill Committee on Finance and Taxation

Total Town Debt (As of Jan 1st, 2012)

$34,230,496.

Source: Treasurer/Collector, Town of Stoughton

Authorized and Unissued Debt(Potential Additional Debt Liability)

$21,506,095(Includes Library Appropriation of $14,000,000)

Source: Statement of Indebtedness; FirstSouthwest, June 30 2011. Authorized and Unissued Debt a/o June 20, 2011

Unfunded Borrowing Authorizations

Debt Budget FY 2013Breakdown

Departments Principle Interest Total

Town $1,352,330 $374,750 $1,727,080

School $1,309,467 $384,272 $1,693,739

Water $575,033 $225,221 $800,254

Sewer $398,335 $133,718 $532,053

Ambulance $64,000 $10,070 $74,070

Cedar Hill $9,000 $4,800 $13,800

Total $3,708,165 $1,132,831 $4,840,996

*Source Treasurer/Collector, Town of Stoughton. Pages 5, 6, 8, & 9 2013 ATM Warrant

Retirement of Debt FY 2011-2013

Department 2011 2012 2013 (Budgeted)

Town $1,307,460 $1,198,520 $1,727,080School $1,305,100 $1,242,800 $1,693,739Water $363,340 $334,580 $800,254Sewer $280,100 $276,100 $532,053Ambulance $59,000 $49,000 $74,070Cedar Hill $9,000 $9,000 $13,800

MWRA/MWPA Misc. $499,081 $514,191 NA

$3,823,081 $3,624,191 $3,708,165

*Source Treasurer/Collector, Town of Stoughton.

Sources and FundingATM Articles - Funding Sources

RecapAll Articles Requested $ 14,164,688.00 FINCOM Approved $ 6,330,538.00        Funding Sources -

Fincom Approved Articles Article Appropriation ReimbursementsFunding Net of

Reimbursements

General Obligation (GO) Borrowing $ 2,470,000.00 $ 990,500.00 $ 1,479,500.00

Enterprise Fund Borrowing $ 2,545,000.00 $ 900,000.00 $ 1,645,000.00 Cash $ 940,538.00 $ - $ 940,538.00 CPA Funded $ 375,000.00 $ - $ 375,000.00

Total Approved $ 6,330,538.00 $ 1,890,500.00 $ 4,440,038.00

Net Borrowing = General Obligation Borrowing + Enterprise Fund Borrowing Less Reimbursements $ 3,124,500.00

Reimbursements

Betterments - Sewer Enterprise $ 500,000.00 Loan Repayment - Sewer Enterprise $ 400,000.00 MSBA Feasibility Study - Schools $ 566,000.00 MSBA Windows - Schools $ 424,500.00

Total Reimbursements $ 1,890,500.00

Formula: Total Debt/Pay down Rate = Number Of Years $34,290,496/*3,708,165 = 9.24 Years

*Pay down Rate Based on 2013 Budgeted Principle Payments

How Long to Pay Off Our Debt If No Additional Borrowing?

Moody’s Investors Service

Stoughton Bond Rating

Aa2Legend: “Obligations rated Aa are judged to be of high quality and are subject to very low credit risk”.

Source: Moody’s Rating Symbols & Definitions, June 2009. Moody’s Investors Service

Town Of Stoughton Bond Rating

Moody’s Rating Criteria

Source: Moody's Rating Methodology. General Obligation Bonds Issued by Local U.S. Governments. October 2009

“Moody's believes that the town's 1.2% overall debt burden will remain manageable given rapid amortization of principal (87% repaid within 10 years) and limited long-term borrowing plans”.

Source: Moody's Rating Methodology. General Obligation Bonds Issued by Local U.S. Governments. October 2009

Moody’s Comment

-Maintaining structural balance and increase reserves

-Increase in tax base, assessed valuation or demographic profile

Source: Moody’s Global Credit Research, Town of Stoughton-02-May 2011

“What Can Make Ratings Go Up”

-Decrease in reserves

-Inability to maintain structural balance

Source: Moody’s Global Credit Research, Town of Stoughton-02-May 2011

“What Can Make Ratings Go Down”

Goal: -Maintain or Reduce The Town’s Debt Burden While Maintaining Town Services and Assets

Some Objectives: -Maintain Borrowing at or Below Pay Down Rate-Maintain Borrowing Cap @ 3-5% of Revenues-Grow Revenue

Strategy

The End

2012 Annual Town Meeting Debt Presentation. R. Hill – Committee on Finance and Taxation