Every year when I work on our publication, Budget Suggestions, reading matter piles up. When I turned to my stack last week, the first item I grabbed was The GO Report 2010: An Analysis of Local Government Outstanding General Obligation Debt from the Bond Users Clearinghouse (BUC) of the Washington State Department of Commerce. This is always an interesting document and it had not been published for a couple years because the program was not staffed. But, the department redeployed two former Clearinghouse program managers, Liz Green-Taylor and Steve Salmi, from their current positions in the Research Services unit, to work with Cezanne Murphy-Levesque to produce this report. We are grateful that Liz and Steve (who might have thought they were done with this publication forever) were available to do so.
In the report are “GO Capacity Detail” tables tabulated from Department of Commerce surveys on GO bonds for cities, counties, school districts, port districts, hospital districts, and library districts. You probably have some cities/counties you use as comparables. You can peruse the tables (the county detail table starts on page 11 and the city table on page 23) to find them and check out the amount of non-voted (councilmanic), voted, and total debt they had outstanding at the end of 2010 as well as how much debt capacity they were using in each category. Note that the survey also asked entities to report their outstanding revenue debt and assessment debt and that information is included in the tables.
A note for those not familiar with the concept of debt capacity. All entities that are allowed to issue general obligation (GO) debt have statutory (RCW 39.36.020) and constitutional (art. 8, sec. 6) debt limits. Both cities and counties may issue an amount of non-voted debt equal to 1.5 percent of their assessed valuation (AV). A county’s total debt limit (non-voted plus voted) is 2.5 percent of its AV. Cities may issue a total amount of debt equal to 7.5 percent of their AV. (The special district debt limits for each category of debt are shown on page 3 of the report.) The percentage amounts shown in the “% of Cap.” columns in the tables reflect how much of that kind of debt limit the entity is currently using. If the “% of Cap.” for non-voted debt is 59 percent, for example, 59 percent of the entity’s non-voted debt capacity has been used and it has 41 percent left.
In addition, you can check out some of the summary tables, graphs, and charts that the BUC staff put together. For example, on page 8, the 20 counties that have used the highest amounts of non-voted GO debt capacity, voted GO debt capacity, and total GO debt capacity are shown. Page 14 provides the same information for cities. (Note that two of the column headings in the middle table on page 14 are incorrect. They should read “Voted GO Debt” and “% of Voted Capacity” rather than “Non-voted Debt” and “% of Non-voted Capacity.”) The analysts have also created tables and graphs that show total debt and total percent of capacity used for the years 2006 to 2010, for those who wish to look at recent trends.
I found it interesting that 18 cities had used 50 percent or more of their non-voted debt capacity, while the highest percent for any county was King County at 45 percent, with Mason County being the next highest at 30 percent. Note that we can’t compare voted or total debt of cities and counties because cities have a total debt capacity of 7.5 percent of AV, while the total debt capacity for counties is only 2.5 percent of AV.
Other BUC Reports
The Bond Users Clearinghouse produces other reports in addition to The GO Report. From the reports link, you should see the word “Publications.” To see what kinds of information are available here, scroll down until you see Public Debt Update, choose 2011 Quarter 4, and go to page 3.
The first entry is Issue No. 1106-027 for Public Hospital District No. 2 in Clallam County. This table is not that easy to read even if you print it out because the information for each bond issue is spread out over three pages. But, oh my, what a wealth of information! As you see, going across the page, we have:
- Rating agency used
- Debt Type (GO, Revenue, LID, etc.)
- Par Value
- Net Interest Cost
- Dated, Sale and Maturity Dates
- New issue, refunding or combo
- Voter Approved
- Underlying Security (Taxes, Revenue of System)
- Purpose of Proceeds
If you turn to page 15, the information for Issue No. 1106-027 continues with information on Issue Costs such as:
- Premium and Discount Amount
- Underwriter’s Spread per $1000 and Total Spread
- Bond Counsel Fee
- Escrow Costs
- Rating Agency Fee
- Financial Advisor Fee
The third page of entries begins on page 21 with
- Sale Type (Competitive Bid, Negotiated Sale, Private)
- Name of Financial Advisor
- Name of Bond Counsel
- Name of Lead Underwriter
- Name of Registrar
- Name of Trustee
The Bond Users Clearinghouse also offers this information in Excel format. It is even more difficult to read, but it allows you to manipulate the data. The links for the Excel spreadsheets are the first entries in the same Publications section. You can get monthly updates sent to you by email (June 2012, for example), and the staff also produces spreadsheets with annual data.
See the link 2011 ALL, for example. Do you want to know what cities used XYZ Investment Bank as the lead underwriter in 2011? Or how many counties had competitive sales? You can sort the data in Excel and get the answer for 2011. Other links provide information for bonds issued from 2000 to 2010.
Last Minute Update: As we were getting ready to “go to press,” we heard from Liz Green-Taylor at BUC that they are going to publish The Public Debt Report 2011 in the next week or two. Currently, the last complete report is for 2009, and a link to that report can be found in the Publications section under the Annual Debt Report, 2009. I assume that the 2011 report will be linked off the same webpage.
This report is full of tables, graphs, and analysis based on the information in the Public Debt Update tables described above. Most of the analysis looks at bond issues of all local governments or all issues of state and local governments together rather than cities or counties by themselves. Even though the latter might be the main interest of the reader, I have always found the reports interesting and was happy to hear that they are being resurrected. Take a look! You might get some ideas of the kinds of analysis you could do on city or county data.