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HomeMy WebLinkAboutA023 - City of Ames Credit Presentation - $22,405,000 STY OF Ames, pfm C i lY ofi AMles wa �� � Cre�i� Presen�at�on i x�sw�at r � 22,4051000* ahfJ _ 'gation Corporate Pur ose and Refunding Bonds, Series 2021 A r "'let q k4 r i i 4' a 1. '•i Ilk AM'NN' � ? �n tal lary subject to change a' ��"�� ` ' ` � �• ! r:f 0 Ames, Presentation Participants City of Ames Duane Pitcher, Director of Finance Diane Voss, City Clerk Email: duane.pitcher@city.ames.org Email: diane.voss@city.ames.org Phone: (515)239-5113 Phone: (515)239-5105 Roger Wisecup, City Treasurer Nancy Masteller Email: roger.wisecup@city.ames.org Email: masteller@city.ames.ia.us Phone: (515)239-5119 Phone: (515)239-5122 PFM Financial Advisors LLC Susanne Gerlach, Director Jen Smith, Senior Managing Consultant E-mail: gerlachs@pfm.com E-mail: smithje@pfm.com Phone: (515)724-5734 Phone: (515)724-5728 Carrie Swartz, Financial Analyst Email: swartzc@pfm.com Phone: (515)724-5729 Moody's Investors Service Jennifer Card Bernhardt,Analyst E-mail: jennifer.bernhardt@moodys.com Phone: (312)716-9983 4 2 0 ADOW Ames, G.O. Corporate Purpose and Refunding Bonds, Series 2021 A Par Amount: $22,405,000* Term: June 1, 2022-2033 Purpose: FY 2021-22 annual CIP projects including constructing improvements to streets, installation of traffic control devices, and constructing sewer improvements. In addition, the Bonds are being issued to current refund the outstanding Series 2013 G.O. Bonds. Estimated net present value savings is $907,000 (8.2%) as of July 20, 2021. Source of Payment: The City will pledge its power of levy direct ad valorem taxes against all taxable property within the City without limitation as to rate or amount to the repayment of the Bonds. ' Preliminary;subject to change. n SEE 0 K Ames Council Goals WE VALUE COMMUNICATION AND ENGAGEMENT WITH THE PUBLIC • Adopt an attractive, single civic app by the end of 2021. • Use the best communication engagement techniques and modern technologies to engage the community by reaching people in geographic areas using multiple channels. WE VALUE DIVERSE HOUSING OPTIONS FOR THE COMMUNITY • Increase the stock of diverse housing types for a variety of income levels through zoning, including adjusting minimum lot area, multiple dwelling units on a lot, and accessory dwelling units. WE VALUE A FUN, VIBRANT COMMUNITY THAT ATTRACTS AND RETAINS PEOPLE • Begin construction on a downtown community space by 2021. • Obtain referendum approval to construct an indoor aquatic facility by summer 2021. • Create a Beautification Master Plan for community entryways and thoroughfares by the end of 2021. WE VALUE A DIVERSE, EQUITABLE,AND INCLUSIVE COMMUNITY • Develop a shared understanding of diversity, equity, and bias as they relate to City Council decisions and the policy- making process. • Through local ordinances, expand protections for Ames citizens beyond the Code of Iowa floor protections by 2021. WE VALUE ENVIRONMENTAL SUSTAINABILITY • Develop and adcpt a Climate Action Plan by the end of 2021. 4I FM 4 0 �; .. Ames, Recognition Excellence g o n of • GFOA Certificate of Achievement for Excellence in Financial Reporting -Awarded every year since 1978-79. • GFOA Distinguished Budget Presentation Award -Awarded every year since 1986-87. • The City of Ames Debt Policy was awarded the Certificate of Excellence by the Association of Public Treasurers of the United States and Canada in December 2017. • The City of Aries Investment Policy was awarded the Certificate of Excellence by the Association of Public Treasurers of the United States and Canada in May 2018. • Ames High School rated the Best Public High School in Iowa U.S. News, 2019. • Ranked #2 of the Top 10 Cities for Working Parents, SmartAsset, 2020. • Named #1 of the 30 Best College Town in America by 24/7 Wall St., 2019. • Ranked #7 of the Top Cities for Career Opportunities in 2019, SmartAsset, 2019. • Ranked #4 for the Best Places for Millennials to Move, Reviews.org, 2019. • Ranked #33 for 2019 Top 100 Best Places to Live, Livability, 2019. PFM 5 0 A Ames. Debt Anticipated Future Borrowing Needs: • The City borrows annually in support of its capital improvement plan. • The City anticipates the following project needs based on the July 1, 2021 CIP: - FY 2021-22 $11,055,400 - FY 2022-23 $13,781,200 - FY 2023-24 $11,075,700 - FY 2024-25 $11,397,600 - FY 2025-26 $13,563,920 • The FY 2021-22 debt service levy is $2.99 per thousand. n tl'' 16 0 Ames, Outstanding Debt Current Debt Outstanding: Direct Debt/ Direct Debt/ G.O. Debt 100%Valuation') Operating Rev2) Total General Obligation Debt $74,585,000* 1.44%* 1.40x* Total Overall Debt: The City's total overall debt as of June 30, 2021, including overlapping debt, is approximately $192,572,1183. — Represents 3.71% of City's 100%Valuation and $3,265.87 3) per capita overall debt burden. 1) Based on City's January 1,2020 100%Actual Valuation of$5,191,529,367;which includes Ag.Land,Ag.Buildings,Utilities,and Taxable TIF Increment. 2) Includes FY 2020 General Fund,Debt Service Fund,and Local Option Sales Tax Revenues and Transfers In of$53,231,462. 3) Based on City's January 1,2020 100%Actual Valuation and the City's 2010 Census population of 58,965. Preliminary;subject to change. u F M 7 Pill a,, 0 Ames, Economy & Tax Base Taxable 100% ValuationYooimcalYear Valuation Valuation 2016 2017-18 $4,184,550,434 $2,701,440,748 $30,501,176 2017 2018-19 4,637,521,835 2,914,741,622 34,554,637 2018 2019-20 4,842,735,118 3,079,908,598 45,584,078 2019 2020-21 5,026,796,234 3,112,286,020 75,857,137 2020 2021-22 5,191,529,367 3,257,725,869 81,120,190 • 2020 Actual Valuation increased 3.28% over 2019&averaged 5.37% growth over 5 years. • 2020 Taxable Valuation increased 4.67%over 2019 &averaged 4.90% growth over 5 years. • 2020 Actual Valuation per capita is$88,044.25.1) • City's Median Family Income (MFI) is 110%of the United States MFI. — Based on the City's N1F1 of$85,424 and the U.S. MFI of$77,263.2) • City's May 2021 unemployment rate of 2.9%3)is significantly below national unemployment rate of 5.8%.4) 1) Based on the City's 2010 Census population of 58,965 and the City's January 1,2020 100%Actual Valuation. 2) Source:U.S.C<nsus — ne�l_ ,i FactFinder. 3) Source:Iowa Workforce Dev->Irp!n=-nt Center. 4) Source:U.S.e:�reau of Labcr;;i it_tics. i si 8 0 Ames, EconomyT •& Tax Base. Larger Taxpayers January 1, , , ValuationType of Property Taxable Iowa State University Research Park Commercial $66,799,716 Barilla America Inc. Industrial 49,273,616 Campus Investors IS LLC Commercial 36,834,293 Clinic Building Company, Inc. Commercial 33,471,630 FPA6 University West LLC Commercial 25,206,223 GPT Ames Owner LLC Commercial 21,346,650 Dayton Park LLC Commercial 20,717,133 ACA Stadium View Student Housing Dst Multi residential 20,166,373 C at Ames LLC Multiresidential 17,986,442 Tailwind 1854 Madison LLC Commercial 16,748,303 $308,550,379 The larger taxpayers listed represent 9.24% of the City's total January 1, 2020 taxable valuation (including TIF) of $3,338,846,059 2>. 1) This list represents some of the larger taxpayers in the City,not necessarily the 10 largest taxpayers. 2) The January 1, 20_ Taxable v;d anions li,ted represents only those valuations associated with the title holder and may not necessarily represent the entire taxable valuation. 13*MT-1'1�11` 11111'� n, 9 0 Ames. Economy & Tax Base: Larger Employers >Q Approximate Type of Business of Employees Iowa State University Higher Education 18,212 2> Mary Greeley Medical Center Health Care 1,407 City of Ames Municipal Government 1,382 McFarland Clinic, P.C. Health Care 1,200 Danfoss Corp. Hydro-Transmissions 1,052 Iowa Department of Transportation Public Transportation 975 USDA Federal Agency 750 Ames Community School District Education 700 Hach Chemical Water Testing 580 Workiva Software 550 1) Includes full-time,part-time and seasonal employees. 2) Total includes students and graduate assistants. Source: The City and company incp.iines. Sl, ©PFM 10 0 Ames, �• Building Permits Permits for the City as of June 30, 2021 are reported on a calendar year basis as follows: 2017 2018 2019 2020 2021 Residential Construction: Number of Units 451 441 379 461 234 Valuation $45,151,141 $42,309,518 $27,504,682 $34,947,523 $22,575,175 Commercial Construction: Number of Units 215 196 203 155 81 Valuation $145,078,724 $98,771,167 $210,645,223 $150,034,358 $10,086,821 Total Permits 666 637 582 616 315 Total Valuation $190,229,865 $141,080,685 $238,149,905 $184,981,881 $32,661,996 lu w 11 4,i pF 0 'a. AmeS- Economy & Tax Base: Economic Development AIPLOM��PROJECTS 72310Northcrest PROJLCT DESCRIPTION SQ FOOTAGE VALUATION Pk /Northcrest Retirement Assisted Livin Addition/Alteration 30,858 $9,000,000 rest Pk /Northcrest Retirement Skilled Nursing Addition/Alteration 21,594 $9 000 000 1810 SE 16TH St./Springhill Suites Hotel New Hotel 63,109 $8 131 250 315 S 16TH ST./Duff Plaza Old Kmart Site and Shell Work 120,422 $5 080 000 3215 Peridot Ave New 60 Unit Apartment Building 52,000 $4 200 000 138 Gray Ave./ACACIA Fraternity New Fraternity House 13,290 $4 000 000 315 S 16TH ST./PUff Plaza Old Kmart Conversion of Warehouse to Self- 99,962 $2 500 000 2300 Northcrest Pky/Northcrest Retirement Service&Admin Wing 19,018 $2,000,000 Addition/Alteration 2801 E 13TH St/ KUm & Go New Gas Station 5,600 $1,694,000 2801 E 13TH St/ Kum &Go New Gas Station 5,600 $1,694,000 3301 Stange Rd_`dorthridge Village New AUMemory Care Facility 9,408 $1,600,000 2925 Grand Ave. New Retail Building 7,164 $1,150,000 3321 Peridot New 60 Unit Apartment Building 52,000 $4,088,000 3420 Aurora New 36 Unit Apartment Building 35,685 $3,400,000 3311 E. Lincoln Way Barilla Plant Expansion 70,000 $15,020,000 214 Jade New 72 Unit Apartment Building 61,494 $6,000,000 3214 Peridot New 60 Unit Apartment Building 52,000 $4,200,000 2305 E. Lincoln VVaY New Warehouse Building $2,126,646 100 Dayton Hach Chemical Pit Renovation 3,0001 $1,500,000 4' '; IF©PFM 12 0 A- Ames, Economy & Tax Base: Economic Development w PROJECTS ADDRESS/PROJECT DESCRIPTION SQ FOOTAGE VALUATION 1801 Ridgewood Ave./Ames High School New High School 429,379 $100,938,598 1111 Duff Ave./Mary Greeley Med. Ctr. Birthwa s&Pediatric Renovation 39,000 $10,000,000 2111 Isaac Newton Drive/Sta brid e Suites New Hotel 66,633 $8,244,475 3521 Jewel Dr./Kate Mitchell Elementary School Addition & Remodel 11,987 $3,766,860 320 S Duff Ave/'arget Retail Store Remodel 105,675 $3,321,000 224 Ash Avenue TKE Fraternit Renovation 22,272 $2,600,000 3104 Quartz New 8 Unit Apartment Building 14,120 $1,404,642 2827 Hyatt New Stora e Facility 7,500 $1,500,000 ©PFM 13 -; ;, 0 00ft. Ames.. General Fund Financial Projections The City's policy is to maintain a Total General Fund balance of no less than 25% of Total Expenditures. ACCRUAL BAAudited Audited Audited SIS. Estimated Adopted Audited Audited FY Actual Budget 2016 FY 2017 FY 2018 FY 2019 FY 2020FY2021 FY2022 TOTAL REVENUES $ 22,890,562 $ 23,649,048 $ 24,417,692 $ 25,963,805 $ 26,442,563 $ 29,615,798 $ 29,798,031 TOTAL EXPENDITURES (28,385,037) (29,983,936) (31,694,411) (31,703,829) (31,818,350) (38,129,273) (36,359,255) NET OTHE^SOURCES/(USES) 6,779,495 6,582,479 6,666,791 6,860,779 6,906,334 4,510,370 5,561,224 ANNUAL SURPLUS/(DEFICIT) $ 1,285,020 $ 247,591 % '• (609,928) $, 1,120;755 $ 1,630,547 $ (4,003,105) $ RESERVED FUND BALANCE 866,790 981,269 817,385 643,302 524,787 524,787 524,787 UNRESERVED FUND BALANCE 11,137,621 11,270,733 10,824,689 12,119,527 13,768,589 13,733,532 11,602,544 TOTAL FUND BALANCE $ 12,004,411 $ 12,252,002 $ 11,642,074 $ 12,762,829 $ 14,293,376 $ 10,290,271, $ 10,290,271 FUND BALANG' AS%OF REVE"41-!'> 48.661/6 47.66% 44.33% 46.68% 52.07% 46.37% 38.94% FUND BALAP,,E AS% EXPENL iTUF E$ 42.29% 40.86% 36.73% 40.26% 44.92% 26.99% 29.10% UNRESERVED CASH BALANCE $ 10,845,937 $ 14,369 06 10,477,328 $'t 11,510,770 $ 11,888,338 $ 11,443,762 $ 11,443,762 CASH BALPf!CE AS% REVENUES 47.38% 48.07% 42.91% 44.33% 44.96% 38.64% 38.40% CASH BALANCE AS%OF EXPENDITURES 38.21% 37.92% 33.06% 36.31% 37.36% 30.01% 32.36% k ©PFM '` 14 0 ANNOW Ames, Commitment to Fiscal Discipline FY 2020 Actual: • The City ended FY 2020 with a general fund surplus of$1,530,547, which was better than the original balanced budget. — Better than expected Local Option Tax revenue. — Reduced operating expenses in nearly all general fund expense areas, with significant savings in Public Safety. Estimated Actual FY 2021: • Preliminary estimate indicates an actual FY 2021 surplus of$390,039, which was an increase from the original planned budgeted surplus of$161,234. — Surplus is due to the increase in Local Option Tax revenue and CARES funding. Adopted Budget FY 2022: • The City adopted its FY 2022 Budget on March 9, 2021. The FY 2022 Budget plans for a balanced budget. a y xp PFM 15 0 Financial Flexibility Additional Revenue Flexibility: The City has over $14.8M of capacity within levy limits. • The City does not currently levy for franchise fees. — Potential franchise fees could be applied to cable, natural gas, and electric. • The City is not currently utilizing the full General Levy limit. — Regular General Levy for FY 2022 is$5.54979. — If the$8.10 limit was levied for FY 2022,the City could generate$8,307,885 of additional general fund revenues. • The City does not currently utilize the available Emergency Levy. If the City levied the $0.27 emergency levy for FY 2022,the City could generate$879,586 of additional general fund revenues. • The City does not currently utilize the Employee Benefits Levy. — It is estimated the City could generate the following additional general fund revenues for FY 2022 by utilizing the Employee Benefits Levy: $1,550,099 for FICAand IPERS ,�4,103,578 for health insurance PFM 16 ? �r drlf3 0 AmeS.. Financial Flexibility Additional Sources of Liquidity: • In case of an emergency,the City can access to over$66M of cash in enterprise and internal service funds: — Sewer $18,481,153 — Debt Service Reserve $1,003,904 — Stormwater $6,361,581 — Vehicle Replacement $10,599,960 — Electric Utility $11,204,326 — Water $13,441,668 Other Revenue Sottrces: • The City currently does collect Hotel/Motel Taxes: — Estimated actual revenues are$1,400,000 for FY 2021. — Budget revenues are$2,000,000 for FY 2022. • The City currently does collect Road Use Tax: — Estimated actual revenues are$7,488,555 for FY 2021. — Budget revenues are$7,835,270 for FY 2022. • The City currently does collect a$0.01 Local Option Sales Tax(LOST): — Estimated actual revenues are$10,351,680 for FY 2021. — Budget revenues are '-u 1,10,360 for FY 2022. — LOST revenues are allot--.fed 60%to property tax relief and 40%for"Community Betterment'. Recent Supreme GOurt ruling regarding on-line sales tax will likely have a positive impact on future collections. ` t� FM 17 0 Ames. Finances : Other Considerations Union Contracts: Employees Date Adjustment Adjustment Adjustment International Association of Firefighters 52 6/30/2022 2.75% 2.75% N/A Public, Professional and Maintenance Employees 53 6/30/2023 3.00% 2.75% 2.75% International Brotherhood of Electrical Workers 17 6/30/2023 3.00% 3.00% 2.75% International Union cf Operating Engineers, Local 234C 163 6/30/2022 2.75% 2.75% N/A International Union of Operating Engineers, Local 234D 32 6/30/2022 3.00% 3.00% N/A Other Post-Employt.rPnt Benefits: • The City and hospital -).ide health and dental care benefits for retired participants funded by the City on a ;:gay-as-you go basis. — Total OPEB Liability: $6,943,338 1> — OPEB Expense FY 2020: $415,384 1> 1) Includes the Mary Greeley Medical Center. "k PPP � tk 18 IK 5 o- 0 50� Ames" Finances : Other Considerations Cybersecurity: • The City maintains a $2,000,000 cybersecurity liability insurance policy. • The City has put the following measures in place to protect against a cyber attack: — Focused on access management, system configuration, and backup/recovery contingency. — A firewall was replaced, and a second added and a different location with redundant failover. — Implemented Multi-Factor Authentication for City systems access. — Added full encryption to mobile devices. — Added cloud backup with local redundancy. — Added an email header to help prevent spoofing. — Removed local admin rights from PC's. — In-,hlementing Cisco Umbrella cloud-based network security. IN FM 19 � ilg_ 0 Ames Finances : Other Considerations Pensions — Utility Pension Contributions: NOE Fisca:1 Mary Greeley Yearl! twerFund Electric Fund Medical Center Total 2016 $170,930 $123,657 $578,099 $5,469,545 $6,342,231 2017 177,786 123,908 549,316 5,518,629 6,369,639 2018 184,115 128,204 578,455 6,814,839 7,705,613 2019 203,616 134,504 613,883 6,337,580 7,289,583 2020 199,224 134,517 627,489 6,555,708 7,516,938 its PFM 20 v rc`'f 0 Ames Finances : Other Considerations Pensions — Statewide Employee Retirement Systems: • Iowa Public Employees Retirement System (IPERS) - Pursuant to GASB Statement No. 68, the City reported a liability of $67,695,565 within its CAFR at June 30, 2020 for its proportionate share of the net pension liability. - At June 30, 2019, the City's proportion was 1.1690% which was an increase of 0.0173% from its proportion measured as of June 30, 2018. - For additional information, refer to Note IV Section F beginning on page 56 of the City's June 30, 2020 CAFR. • Municipal Fire and Police Retirement System of Iowa (MFPRSI) - Pursuant to GASB Statement No. 68, the City reported a liability of $17,470,814 within its CAFR at June 30, 2020 for its proportionate share of the net pension liability. - At June 30, 2019, the City's proportion was 2.66% which was a decrease of 0.0562% from its proportion measured as of June 30, 2018. - For additional information, refer to Note IV Section F beginning on page 61 of the City's June 30, 2020 C .� s, AD PFM. 21 C3'3''ti F' 0 OR Ames. Summary of Credit Strengths • Growing tax base anchored by the presence of Iowa State University. • Expanding local economy continues to maintain very low unemployment. • Active economic development including residential & commercial projects. • Diverse larger taxpayer base with very low concentration. • Strong general fund unrestricted cash balances. • Significant revenue raising flexibility. • Conservative budgeting practices leading to consistent positive budget- to-actual financial performance. E M 22