[bouldercouncilhotline] Hotline: FW: Hotline: Questions regarding Open Space Taxes and Ballot Measures

[cmosupport at bouldercolorado.gov]

Sender: Eichem, Bob

From: Eichem, Bob

Sent: Monday, June 17, 2013 4:01 PM
To: Lewis, Alisa
Subject: To post to the HOTLINE Spreadsheet information used for June 18 agenda memo section on open space


Attached is the spreadsheet that was used to prepare the conclusions reached regarding open space in the June 18 council agenda memo.  The spreadsheet is not the same as the one that was prepared by open space.  Staff was asked to respond
 to the following question.  Can open space issue bonds now if the .15% or .33% sales taxes are renewed.  To answer that question requires complying with the charter test for the issuance of additional bonds (one of the ratio tests mentioned in the agenda memo).
  A second question that arose was, can the action and vision plans be attained if either or both taxes are extended (the vision plan is estimated at $90 million dollars for purposes of this analysis?   The attached spreadsheet was used to reach the conclusions
 that are in the agenda memo.
 
In the top left corner of each of the spreadsheets for the two tabs it states   Open Space Mountain Parks renewal of .15 or .33. Then the analysis is completed for each tax renewal.
 
Conclusions:
If all assumptions and projections are met the renewal of the .15% indicates that all reserve targets will be met annually and there will be an ending fund balance at the end of the bond payoff of approximately $35 million. This is the
 amount of the fund balance after the vision plan is met. 
 
If all assumption are met the renewal of the .33% indicates that all reserve targets will be met annually and there will be an ending fund balance at the end of the bond payoff of approximately $199 million. This is the amount of the fund
 balance after the vision plan is met.
 
 
Assumptions to complete the look forward test charter test :
Growth increase is based on historical collection percentage increases for the past 20 years accounting for the .15% increase in sales and use tax that started in 2004.  A high and low range were used to account for ranges of collections
 in sales and use tax. These ranges take into account the two major recessions that occurred in the 2000s.
Operating expenditures were provided by Open Space.
The beginning fund balance is keyed to January 1, 2014 since 2013 includes supplemental appropriations and capital expenditures that may or may not occur. Doing this creates a lower fund balance as a starting point. Therefore, the analysis
 is  more conservative.  
The vision plan amount used for future acquisitions was $90 million.   In the spreadsheet this $90 million consists of a theoretical purchase of $50 million in cash and two bond issues of approximately $20 million each (a total of $90 million). 
 If the total can me made while paying interest on the bond issues it also means the $90 million could be attained by using cash. However it does not mean that the full amount of cash will be available and on hand at the time needed.

The bond issues are for 20 years and use a 5.00% rate of interest.  Five percent has been the historical rate for GO AAA open space bonds.  Actual rates are considerable lower at this time.
 
Additional information:
The analysis is not a funds financial flow that is found in the budget. It is the method that is used when bonds are issued by open space. It also provides a stress test to determine if the open space fund can cover all operating expenses,
 debt payments and reserve levels. 
 
 
Staff will have copies of the spreadsheet available Tuesday eveing and will be prepared to answer any questions council may have.
 
Thank you.
Bob
 
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