[00:04:20]
[I. CALL TO ORDER]
ALL RIGHT.UH, I'D LIKE TO GO AHEAD AND, UH, CALL THIS MEETING TO ORDER.
THIS MEETING IS THE GUTEN COUNTY BOARD OF SUPERVISORS FINANCE AND AUDIT COMMITTEE MEETING FOR MAY 2ND.
YES, IT IS MAY ALREADY MAY 2ND, UH, AT 1230.
UM, THERE'S SOME NEW FACES IN THE AUDIENCE.
I'D LIKE TO WELCOME EVERYBODY HERE TODAY.
AND, UH, SINCE THERE ARE SOME NEW FOLKS HERE, I THOUGHT I'D JUST, UM, LET YOU KNOW WHAT THE PURPOSE OF THIS COMMITTEE MEETING IS.
IT MEETS, UH, QUARTERLY AT LEAST, AND SOMETIMES WITH SPECIAL MEETINGS AS WELL.
BUT THE PURPOSE OF THE COMMITTEE IS TO, UH, REVIEW THE QUARTERLY FINANCIAL REPORTS AND REPORT BACK TO THE BOARD.
[00:05:01]
UM, REVIEW THE AUDITOR, THE SELECTION OF THE AUDITOR, THE ANNUAL AUDIT REPORTS, UM, ANALYZE AND REVIEW ANY KIND OF BOND OFFERINGS OR DEBT RESTRUCTURINGS THAT WE MIGHT CONSIDER HOW TO FUND THE CAPITAL IMPROVEMENT PLAN.MAKE RECOMMENDATIONS TO THE BOARD OF SUPERVISORS AND DISCUSS ANY OTHER FINANCIAL ISSUES OR TOPICS OF INTEREST THAT MIGHT COME UP.
THE MEETINGS TYPICALLY LAST ABOUT AN HOUR.
WE HAVE A HARD STOP BECAUSE THERE IS A BOARD OF SUPERVISORS MEETING THAT IMMEDIATELY FOLLOWS THIS, UH, IN THIS ROOM.
SO WE'LL HAVE A HARD STOP, UH, SO IT WON'T TAKE THAT LONG.
AND THE FIRST ITEM OF THE AGENDA TODAY FOR THE COMMITTEE IS TO APPROVE THE MINUTES FROM APRIL 4TH, 2023.
[II. APPROVAL OF MINUTES FROM APRIL 04, 2023]
THEY'VE BEEN DISTRIBUTED IN ADVANCE TO THE COMMITTEE.ARE THERE ANY ADDITIONS, DELETIONS, OR CORRECTIONS? ALRIGHT, SEEING NONE ENTERTAIN A MOTION.
UH, I MOVE TO APPROVE THE MINUTES.
SECOND, ALL IT'S BEEN MOVED IN SECOND.
ALL IN FAVOR, SIGNIFIED BY SAYING AYE.
THE NEXT ITEM ON THE AGENDA IS OUR, UH, FISCAL YEAR 2023 THIRD QUARTER
[III. FY2023 3RD QUARTER PROJECTIONS]
QUARTERLY REPRO PROJECTIONS.UM, FOR THOSE OF YOU THAT MAY OR MAY NOT KNOW, WE MEET QUARTERLY TO DISCUSS THE, UH, FINANCIAL POSITIONING OF THE COUNTY VERSUS ITS BUDGET THAT WAS ADOPTED PREVIOUSLY.
SO, FOR INSTANCE, IN APRIL LAST MONTH, WE JUST ADOPTED THE FY 24 BUDGET, WHICH BEGINS JULY 1ST OF THIS YEAR, AND ENDS JUNE 30TH OF NEXT YEAR.
SO WHAT WE DO IS WE TRACK IT AS WE GO TO MAKE SURE THAT WE'RE ON TRACK.
SO, UM, I'M GONNA TURN THIS OVER TO CARLA CAVE, OUR DIRECTOR OF FINANCE, TO GIVE US AN UPDATE ON THE THIRD QUARTER OF THE CURRENT FISCAL YEAR, WHICH ENDS JUNE 30TH OF THIS YEAR.
UM, SO AS KEN SAID, THIS WILL BE, UM, A FINANCIAL PROJECTION AS OF MARCH 31ST.
WE ARE DOING MUCH BETTER THAN WE BUDGETED FOR.
UM, IT SEEMS LIKE WE WILL COME OVER BUDGET, OVER REVENUES BY OVER 10 MILLION.
THAT'S PRIMARILY DUE TO PERSONAL PROPERTY.
UM, I THINK THIS BUDGET WAS APPROVED BEFORE THE DRAMATIC INCREASE IN ASSESSED VALUES.
SO OUR PERSONAL PROPERTY IS GONNA COME IN OVER 5 MILLION HIGHER THAN WE PROJECTED.
UM, SEVERAL OTHER INCREASES WE'VE SEEN ARE OUR INTEREST, AND, UM, ALSO OUR REAL ESTATE.
OUR COMMERCIAL, UM, BUILDINGS HAVE BEEN BOOMING MUCH HIGHER THAN WE PROJECTED.
SO BETWEEN OUR 10 MILLION OVERAGE AND REVENUE AND THE MONEY, WE EXPECT APARTMENTS TO RETURN, WHICH RIGHT NOW IS LOOKING TO BE SLIGHTLY UNDER 2 MILLION.
WE'RE LOOKING AT A RETURN TO THE GENERAL FUND RESERVES OF 8.3 MILLION.
THAT'S WHAT WE CAN EXPECT TO DUMP BACK INTO OUR POT AT THE END OF THE YEAR.
COMMITTEE, YOU'VE, UH, HEARD THE UPDATE.
ANY QUESTIONS FOR MS. CAVE? OKAY.
WELL, THE LIGHTS ARE STILL ON, AND SO I GUESS WE'RE STILL PAYING OUR BILLS, SO THAT'S A GOOD THING.
UH, THANK YOU FOR THAT UPDATE.
UH, IN ADDITION TO THE QUARTERLY UPDATE ON THE FINANCIALS, UH, AND VERSUS BUDGET, WE, UH, AS I MENTIONED EARLIER, ALSO DISCUSSED TOPICS OF INTEREST.
UM, AND WE'VE DISCUSSED TOPICS SUCH AS, UH, DEPRECIATION EXPENSE, UM, IN A TAX EXEMPT ENVIRONMENT.
UH, WHY DO YOU TRACK IT? WHY DO YOU NEED IT? WHAT IS IT? UH, WE'VE TALKED ABOUT INFLATION, UH, WHERE IT COMES FROM, WHAT ITS IMPACT IS ON THE BUDGET, AND, UH, BOTH ON REVENUES AND EXPENSES GOING FORWARD.
SO TODAY WE PICKED A LITTLE DIFFERENT TOPIC.
UM, THIS IS ABOUT THE TUCKO CREEK SERVICE DISTRICT, AND THE REASON THIS TOPIC CAME UP WAS, UM, BASED ON CITIZEN FEEDBACK THAT I'VE RECEIVED, UM, SOME INFORMATION THAT'S BEEN CIRCULATING OUT IN THE MARKET.
UM, WE'VE ALSO HAD A TURNOVER ON NEW STAFF.
OUR COUNTY ADMINISTRATOR HAS BEEN HERE A YEAR, 10 MONTHS, 10 MONTHS ROUNDING UP, AND CURRENTLY CAVE, OUR DIRECTOR OF FINANCE HAS BEEN HERE 11 MONTHS.
SO ROUNDING UP, UH, A LITTLE LESS THAN ONE YEAR EACH.
UM, WE'VE ALSO GOT SOME BOARD MEMBERS, UH, MR. VADERS, YOU'VE BEEN HERE EIGHT MONTHS.
EIGHT MONTHS, SORRY, WE'RE ROUNDING UP TO A YEAR AGAIN.
THE, THE PICTURE IS, THERE'S BEEN A FAIR AMOUNT OF TURNOVER BOTH IN COUNTY STAFF AND ON THE BOARD.
AND I'M GONNA VENTURE TO GUESS THERE MAY BE SOME CITIZENS IN THE AUDIENCE OR LISTENING AT HOME WATCHING THIS LIVE STREAM THAT MAY HAVE MAY MOVED INTO THE COUNTY SINCE 2002, 22 YEARS AGO WHEN THE TCSD WAS FORMED.
SO, WITH, WITH, WITH THAT AND THE FEEDBACK THAT I'VE GOTTEN, I THOUGHT IT MIGHT BE A GOOD TIME TO GO AHEAD AND TAKE A LOOK,
[IV. TCSD DISCUSSION PRESENTED BY KEN PETERSON]
UH, BACK IN TIME, TRAVEL BACK, AND KIND OF TELL THE STORY OF THE TCS D ITS ORIGINS, WHERE IT CAME FROM, WHY IT'S HERE, WHAT IT DOES, AND THEN GOING FORWARD, WHAT IT MIGHT LOOK LIKE.SO TO DO THAT, I'VE PULLED SELECTED SLIDES FROM PREVIOUS PUBLIC MEETINGS, RIGHT? SO THIS IS A COLLECTION OF SLIDES FROM PREVIOUS PUBLIC MEETINGS.
SO ALL OF THIS INFORMATION HAS BEEN SHARED WITH THE PUBLIC OVERTIME, UM, BUT, BUT MUCH OF IT YEARS AGO.
AND SO WE, UH, UH, ARE PRESENTING IT TODAY JUST TO BRING EVERYBODY BACK UP TO SPEED.
[00:10:01]
GONNA TAKE US BACK IN TIME 22 YEARS AGO TO 2002.I DON'T KNOW IF YOU CAN REMEMBER WHERE YOU WERE IN 2002.
YOU, YOU'RE NOT EXPECTED TO BE ABLE TO READ THIS.
ALL IT SAYS IS, THIS IS THE ORIGINAL TUCKAHOE CREEK SERVICE DEBT PLAN DATED MAY OF 2002.
AND THAT KINDA LAUNCHED THE DISTRICT, CREATED THE DISTRICT.
NOW, FOR THOSE THAT, UH, MAY OR MAY NOT UNDERSTAND WHAT A SERVICE DISTRICT IS, IT'S A PORTION OF THE COUNTY, BUT NOT THE ENTIRE COUNTY, WHERE INSIDE THE DISTRICT, YOU ARE ABLE TO RECEIVE CERTAIN BENEFITS THAT THOSE OUTSIDE THE DISTRICT DON'T GET.
UM, SCHOOLS, EVERY RESIDENT OF GUTZON HAS ACCESS TO THE PUBLIC SCHOOLS, WHETHER YOU SEND CHILDREN THERE OR NOT, YOU HAVE THE ABILITY TO SEND CHILDREN TO THE SCHOOLS IN THE TCS D THE TUCKER CREEK SERVICE DISTRICT.
IT PROVIDES PUBLIC WATER AND SEWER, BUT IT'S ONLY AVAILABLE TO THOSE INSIDE THE DISTRICT.
AND IF YOU LIVE IN GUTZON OUTSIDE THAT DISTRICT, YOU DO NOT, DO NOT HAVE, UH, THE ABILITY TO TAP INTO THAT, THAT, THAT PUBLIC SERVICE.
SO IT'S A PUBLIC SERVICE ONLY WITHIN THE DISTRICT AND NOT OUTSIDE THE DISTRICT.
NOW, BACK IN 2002, WHEN THEY SET IT UP, UH, THE COUNTY BORROWED ABOUT 62 MILLION AND USED IT TO BURY THE PIPES, THE TRUNK LINES, UH, BUILD, BUILD PUMP STATIONS TO PUMP THE, UH, WATER AND SEWER THROUGH THE SYSTEM AND PROCURE WATER RIGHTS.
ALL THE WATER THAT WAS PURCHASED COMES FROM HENRICO COUNTY.
WE DON'T HAVE A WATER TREATMENT PLAN IN GOLAND.
AND ALSO TO EN IN, UH, UH, ENGAGE RICHMOND, THE CITY OF RICHMOND, TO PROCESS ALL OF OUR SEWER.
WE DON'T HAVE A SEWERS TREATMENT PLANT.
SO THE IDEA WOULD BE TO BUY WATER FROM ENRICO, PUMP IT THROUGH THE SYSTEM ON THE DIS IN THE DISTRICT, AND THEN PUMP THE EFFLUENT DOWN TO RICHMOND FOR TREATMENT.
UH, SO AGAIN, BORROWED 62 MILLION, BURIED THE PIPES AND, UH, AND ENTERED INTO THOSE AGREEMENTS.
SO THAT WAS THE ESTABLISHMENT OF THE, UH, THE DISTRICT.
NOW, ONE OF THE QUESTIONS THAT I'VE GOTTEN IS YOU BORROWED 62 MILLION.
WAS THERE A BOND REFERENDUM? DID YOU ACTUALLY ASK THE CITIZENS BEFORE YOU BORROWED THAT KIND OF MONEY? UH, AND THE ANSWER IS NO.
AND SO SOME OF THE CITIZENS SAID, WAIT A MINUTE.
YOU SHOULD HAVE DONE A REFERENDUM.
BUT HERE'S THE WAY A BOND REFERENDUM WORKS.
UM, FOR THOSE THAT MAY OR MAY NOT HAVE GONE THROUGH THE BOND REFERENDUM PROCESS, IF YOU PUT A REFERENDUM BEFORE THE PUBLIC ON THE, ON THE BALLOT IN NOVEMBER, LET'S SAY IT PASSES 51 49, AND THE COUNTY DECIDES TO PROCEED WITH THAT REFERENDUM, THEN EFFECTIVELY YOU'VE GOT ABOUT 49% THAT VOTED AGAINST IT THAT ARE GONNA GET DRAGGED ALONG ANYWAY, ALL RIGHT? AND THAT DOESN'T SEEM ENTIRELY FAIR.
SO WHAT THEY DID WAS THEY WENT BEYOND A, A REFERENDUM AND WENT TO EACH INDIVIDUAL LOT OWNER AND SAID, YOU MAKE THE CALL YOURSELF FOR YOUR OWN INDIVIDUAL LOT.
SO SOME, UH, LOT OWNERS SAID, YES, I WANT IN THE DISTRICT.
AND SOME SAID, NO, I DON'T WANT THE DISTRICT.
WHEN YOU'RE IN THE DISTRICT, YOU AGREE TO PAY AN VALOR TAX THAT PAYS BACK THE DEBT THAT WAS INCURRED TO BURY THE PIPES.
THE, ON THE POSITIVE SIDE OF THAT, IN EXCHANGE FOR THAT PAYMENT, YOU GET THE ABILITY TO HOOK UP WHEN THE TIME IS RIGHT.
IF YOU CHOOSE NOT TO GO IN THE DISTRICT, YOU DON'T PAY THE AVOR TAX, BUT YOU CANNOT HOOK UP THE PUBLIC WATER AND SEWER, AND YOU'LL DO YOUR USUAL, UM, WELL, AND SEPTIC AND THAT KIND OF THING ON YOUR OWN.
SO CITIZENS, EVERY CITIZEN, EVERY LANDOWNER WAS GIVEN THAT OPTION.
DO YOU WANT IN OR DO YOU WANT OUT? SO ONLY THOSE THAT VOLUNTARILY SAID, I WANT IN AND I WILL PAY THE AORM.
ONLY THEM, ONLY THOSE INDIVIDUALS WERE, WERE ENTERED INTO THE DISTRICT.
SO NO ONE WAS DRAGGED ALONG THE WAY A REFERENDUM MIGHT HAVE DONE.
SO THEY WENT BEYOND THE REFERENDUM TO MAKE SURE THAT NOBODY, THAT THAT DID NOT WANT TO, UH, BE IN THE DISTRICT WAS FORCED IN THE DISTRICT, NO INVOLUNTARY, UH, ASSESSMENT OF THE, OF ALARM TAX.
SO, SO THAT'S THE WAY THE, UH, THE, UH, DISTRICT WAS SET UP IN, AND AGAIN, YOU'RE NOT EXPECTED TO READ THIS, BUT, UH, LET'S SEE.
IS THIS THE RIGHT PAGE? NO, IT'S NOT THE RIGHT PAGE.
YOU'RE NOT EXPECTED TO READ THIS EITHER.
BUT THE SECOND LINE DOWN THE DATE IS AUGUST 17TH, 2002.
AND THAT'S THE DATE THAT INDIVIDUALS WERE, UM, DUE TO SAY, I WANT IN THE DISTRICT OR OUT OF THE DISTRICT.
SO YOU HAD A CUTOFF DATE, BUT EVERYONE WAS GIVEN THAT OPTION TO BE ABLE TO JOIN OR NOT.
AND BECAUSE OF THAT, YOU HAVE AN EXTERIOR BOUNDARY TO THE DISTRICT, WHICH IS CALLED THE TUCKER CREEK DISTRICT'S BOUNDARY.
AND THE BOUNDARY IS THE OUTER EDGE OF WHAT COULD BE THE DISTRICT.
BUT BECAUSE INSIDE THAT BOUNDARY, SOME FOLKS SAID, I WANT IN, AND SOME SAID, I WANT OUT, YOU END UP WITH KIND OF A CHECKERBOARD HERE.
SO YOU SEE THE SHADED AREAS OF THE AIR, THE, THE LOT OWNERS INSIDE THAT BOUNDARY THAT SAID, I WANNA BE IN THE DISTRICT AND PAY THE AVOR TAX.
AND WHEN YOU SEE THE WHITE SPACE INSIDE THAT
[00:15:01]
BOUNDARY, THOSE ARE FOLKS THAT SAID, NO, THANKS.I DON'T WANNA PAY THE AVOR AND I DON'T WANNA HOOK UP THE PUBLIC WATER AND SEWER.
AND I'LL GIVE YOU AN EXAMPLE OF SOMEBODY WHO OPTED OUT, UM, CAPITAL ONE WITH THEIR LARGE CAMPUS OF MULTIPLE BUILDINGS OPTED OUT BECAUSE THEY PREEXISTED THE CREATION OF THE DISTRICT.
THEY PAID FOR THEIR OWN WATER AND SEWER OUTTA THEIR OWN POCKET AND HAD THAT ESTABLISHED BEFORE THE CREATION OF THE DISTRICT.
SO WHY WOULD THEY NEED TO JOIN THE, THE TCS D AND PAY FOR EVERYONE ELSE'S WATER AND SEWER? SO THEY OPTED OUT.
SO THAT'S A, A BIG LARGE WHITE SPACE THERE.
YOU CAN SEE IT'S ACTUALLY LABELED CAP ONE, BUT THERE ARE OTHER LANDOWNERS AS WELL THAT SAID, I DON'T WANNA PAY THE AVOR TAX AND I DON'T WANT TO HA BE ABLE TO HOOK UP THE PUBLIC WATER AND SEWER.
SO AGAIN, A HUNDRED PERCENT VOLUNTARY.
AND IN FACT, THAT WAS THE ORIGINAL LANDOWNERS EVERY LAND THAT THAT TRANSFERS WITH THE LAND.
SO EVERYONE THAT'S PURCHASED ANY OF THOSE LOTS SINCE 2002 HAS AGAIN, VOLUNTARILY AGREED TO EITHER PAY THAT AVOR AND BE IN THE DISTRICT OR NOT BUY THE PROPERTY AND NOT BE IN THE DISTRICT.
SO IT WAS A HUNDRED PERCENT VOLUNTARY IN 2002, AND IT'S BEEN A HUNDRED PERCENT VOLUNTARY EVER SINCE.
AND THERE WAS NO ONE WITH US DRAGGED ALONG THROUGH A REFERENDUM OR SOME OTHER PROCESS.
ALL RIGHT? SO THAT WAS THE CREATION OF THE DISTRICT.
UH, A LOT OF THAT SHADED AREA THOUGH WAS RAW LAND, AND IT DOESN'T PAY A LOT OF TAXES AND IT CERTAINLY COULDN'T PAY BACK THE DEBT.
SO WHAT THEY DID WAS THEY STRUCTURED THE DEBT TO BE ABLE TO BUY SOME TIME TO BE ABLE TO HAVE ECONOMIC DEVELOPMENT OCCUR SO THAT YOU COULD REPAY THE DEBT.
SO WHAT THEY DID WAS THEY MADE HEAVY USE OF WHAT'S CALLED ZERO COUPON BONDS, OR CAPITAL APPRECIATION BONDS, IN THIS CASE, CAS OR CABS, THE CAPITAL APPRECIATION BONDS DON'T PAY CURRENT INTEREST AS YOU GO.
WHAT IT DOES IS IT TAKES THE INTEREST ON THOSE BONDS AND BORROWS THE INTEREST AND ADDS THAT DEBT TO THE PRINCIPLE.
SO THE PRINCIPLE ACTUALLY GROWS OVER TIME.
AS YOU ACCUMULATE THE INTEREST AND DON'T PAY IT, YOU'RE KIND OF SNOWPLOWING THE, THE, THE PAYMENTS FORWARD THAT WAS DONE TO BUY SOME TIME UNTIL THERE'S ENOUGH ECONOMIC DEVELOPMENT TO BE ABLE TO START TO PAY BACK THE DEBT.
SO THE HEAVY USE OF CAPS OR CAPITAL APPRECIATION BONDS BOUGHT SOME TIME, BUT IT ALSO MEANT THAT THE DEBT OUTSTANDING WAS GONNA INCREASE EVERY YEAR AS THEY BORROWED THE INTEREST.
SO ONE OF THE QUESTIONS I GET IS, WHY IS THE DEBT TODAY LARGER THAN IT WAS ORIGINALLY? IT'S BECAUSE THE CAPITAL APPRECIATION BONDS WERE THE ZERO COUPON BONDS WHERE THEY'VE BEEN ACC ACCRUING THE INTEREST IN NOT PAYING IT.
SO THAT, THAT WORKED FOR MOST OF THE FIRST 10 YEARS.
UM, THEY MADE HEAVY USE OF CAPITAL APPRECIATION BONDS EARLY ON TO DRIVE BY SOME TIME, AND THEN HAD SOME CURRENT INTEREST PAYMENTS AND PRINCIPAL PAYMENTS ON THE BACK END.
WELL, DURING THOSE FIRST 10 YEARS, THERE WAS VERY, VERY LITTLE, IF ANY, UH, ECONOMIC DEVELOPMENT THAT OCCURRED.
SO WHAT HAPPENED WAS OVER THOSE 10 YEARS, YOU WERE CREATING ADDITIONAL DEBT, BUT YOU'RE NOT DEVELOPING THE PROPERTIES.
I GUESS SOMETIMES CITIZENS, YOU KNOW, EXPRESS THEIR THOUGHTS AND SAY, SAY, YEP, WE DON'T WANT ECONOMIC DEVELOPMENT IN GUTZON, SO DON'T DO IT.
WELL, AFTER ABOUT 10 YEARS OF VERY, VERY LITTLE DEVELOPMENT, BUT INCREASING DEBT SERVICE REQ REQUIREMENTS, THE DISTRICT GOT IN SEVERE TROUBLE, UM, AND WAS FACING, UH, SO VERY, VERY DIFFICULT DECISIONS GOING FORWARD CUZ THE, UH, TAX REVENUES THAT WERE COMING AND WERE WHOLLY INADEQUATE FOR THE WAY THE DEBT WAS STRUCTURED.
SO WHAT HAPPENED WAS, AROUND THAT TIME, THE BOARD OF SUPERVISORS IN 2011, AGAIN, THIS PREDATES ME AND MOST OF MY COLLEAGUES UP HERE, UH, THE BOARD OF SUPERVISORS ENGAGED DAVENPORT, UH, COMPANY AND COMPANY TO COME IN AND DO AN ANALYSIS AND SAY, HOW IS THE TCSD DOING? HOW IS THE TUCKO CREEK SERVICE DISTRICT DEBT DOING? AND HOW ARE WE GONNA BE ABLE TO PAY THIS DEBT BACK? SO THEY WERE BROUGHT IN TO, UH, TO ASSESS THE SITUATION, AND THEY TOOK A LOOK AT THE PAYMENTS, THE ZERO COUPON BONDS, THE CURRENT INTEREST BONDS, AND THE VERY LITTLE GROWTH.
AND THEY DETERMINED THAT YOU'D HAVE TO INCREASE THAT, UH, AVOR TAX DRAMATICALLY TO BE ABLE TO PAY THE DEBT BACK BECAUSE OF HOW THE, THE STRUCTURE OF THE DEBT AND, AND THE LITTLE BIT OF DEVELOPMENT THAT OCCURRED.
SO THIS IS WHAT THE SLIDE, AGAIN, THESE ARE ACTUAL SLIDES FROM HISTORICAL PRESENTATIONS.
THIS, UH, THE BARS, THE STACK BARS OR THE, THE BARS INDICATE THE AD VALOR TAX RATE THAT YOU'D HAVE TO, UH, IMPOSE TO BE ABLE TO PAY THE DEBT BACK.
NOW YOU CAN SEE THIS RATE HERE AT AROUND 32 WAS THE YEAR THAT THIS WAS CREATED, 2011.
AND WHAT THEY SAID WAS THAT RATE WOULD'VE TO GO FROM 32 CENTS UP TO 85 CENTS, IT WOULD ALMOST HAVE TO TRIPLE TO PAY THE DEBT BACK.
AND THAT'S BECAUSE AGAIN, THE, UH, ESCALATING DEBT SERVICE PAYMENTS THAT MIRRORED THESE, UH, UH, AVOR TAX RATES.
SO BEHIND THESE TAX RATES WAS ESCALATING DEBT SERVICE PAYMENTS THAT REQUIRED, UH, THIS INCREASE IN THE AVOR TAX.
NOW, IF YOU RAISE THE AVOR TAX TO 85 CENTS, THAT'S ON TOP OF THE REAL ESTATE RATE
[00:20:01]
OF 53 CENTS, YOU GET ABOUT A DOLLAR 38.UH, AND OF COURSE WE ALL KNOW WHAT WOULD HAPPEN IF THE TAX RATE WENT FROM TO A DOLLAR 38, UH, DRAMATICALLY HIGHER THAN ANYBODY ELSE IN THE REGION.
YOU'D PROBABLY SEE, YOU KNOW, VERY, VERY LITTLE ECONOMIC DEVELOPMENT GOING FORWARD IN POSSIBLY LOSS OF EQUITY IN YOUR HOUSES OR BUSINESSES IF YOU TRIPLE THE TAXES ANYWHERE, PEOPLE WHO JUST VOTE WITH THEIR FEET AND MOVE OUT.
SO, SO THIS IS WHAT THE COUNTY WAS CONFRONTED WITH IN 2011.
DO WE TRIPLE THE TAX RATE IN THE A VALOR, THE, UH, WHAT THE, UH, COUNTY? WELL, SO DAVENPORT SECURITY SAYS YOU GOT A REAL PROBLEM, YOU KNOW, GOZ, AND I DUNNO HOW YOU'RE GONNA FIX IT, BUT YOU GOT, GOT A REAL PROBLEM.
THIS IS BACK IN 2011, WHO DOES A LOT OF ANALYSIS ON WATER AND SEWER SYSTEMS. AGAIN, YOU'RE NOT EXPECTED TO BE ABLE TO READ THIS, BUT WHERE THAT ARROW IS POINTING TO MERIT RESEARCH PUBLISHED WHAT IT THOUGHT WAS THE WORST WATER AND SEWER SYSTEMS IN THE COUNTRY.
AND NO SURPRISE, THE TUCKER CREEK SERVICE DISTRICT WAS RATED BY MERIT RESEARCH IN 2011 AS THE WORST WATER AND SEWER DISTRICT IN THE COUNTRY.
AND WHAT YOU CAN'T READ ALSO IS WHO THEY RATED SECOND, THE SECOND WORST, UH, IT WAS DETROIT, DETROIT, MICHIGAN.
SO WE WERE BELOW DETROIT IN TERMS OF THE QUALITY OF OUR WATER AND SEWER DISTRICT, UH, ACCORDING TO MERIT RESEARCH.
SO YOU'RE FACED WITH KIND OF A DIFFICULT SITUATION, THE PRESSURE TO ESCALATE THE AVOR TAX DRAMATICALLY, WHICH WOULD SHUT DOWN ANY KIND OF FUTURE DEVELOPMENT.
YOU'D NEVER BE ABLE TO GROW INTO THE DEBT.
SO ONE OF THE OTHER THINGS THAT CITIZENS SAID AT THE TIME WAS, WHY DON'T WE JUST TELL THE INVESTORS, YOU SCREWED UP, YOU INVESTED IN GIN, YOU SHOULDN'T HAVE YOU LOST YOUR MONEY AND JUST WALK AWAY FROM THE DEBT AND NOT REPAY IT.
WELL, ONE OF THE PROBLEMS WITH THAT, UM, IS, UM, IS THE COUNTY HAD PLEDGED ABOUT A DOZEN LEVELS OF COLLATERAL FOR THE REPAYMENT, UH, IN THE EVENT THAT THEY DIDN'T HAVE THE CASH FLOW.
AND I'LL JUST READ A COUPLE OF THE, UH, THE COLLATERALS THAT WERE PLEDGED FOR THE REPAYMENT OF THE DEBT.
UH, THE TCS D UTILITY REVENUES, THE TCS D PHYSICAL ASSETS, UH, THE COUNTY'S NON TCS TCSD UTILITY REVENUES, THE COUNTY'S NON TCSD UTILITY ASSETS, A CASH COLLATERAL ACCOUNT, A STATE MORAL OBLIGATION, UM, AND A VALOR TAX.
UH, THE REAL ESTATE TAX ON THE INCREASED VALUE IN THE TCS D A COUNTY MORAL OBLIGATION STATE SUBSIDIES FOR THE COUNTY'S PUBLIC SCHOOLS, SURETY BOND AND EARLY REDEMPTION PROTECTION OR NO-CALL PROTECTION.
THAT'S SOME OF THE COLLATERAL THAT WAS PLEDGED.
SO WHAT DOES THAT MEAN? UM, THE IDEA OF JUST WALKING AWAY AND SAYING, SORRY, YOU GUYS MADE A BAD INVESTMENT.
UH, AS I MENTIONED, ONE OF THE COLLATERALS, THIS IS, THIS IS A, A, A KIND OF A, A GRAPHIC THAT SHOWS THE REVENUES THAT ARE AVAILABLE FOR DEBT PAYMENT AND THE DEBT SERVICE PAYMENT GOING TO BOND HOLDERS.
AND AS I MENTIONED EARLIER, ONE OF THE, UH, LEVELS OF COLLATERAL WAS A STATE EIGHT INTERCEPT.
NOW THAT'S SHOWN HERE IN THE LOWER LEFT.
SO THAT STATE INTERCEPT COULD POTENTIALLY BE USED TO CONTRIBUTE AND THEN EVENTUALLY PAY THE DEBT SERVICE.
BASICALLY, UH, THE WAY THESE BONDS WERE STRUCTURED, IT WAS A TWO-STAGE, UM, UH, BOND OFFERING WITH A A, A PARA MIRROR NOTES THEY CALL 'EM.
SO WHAT HAPPENED WAS THE V R, THE VIRGINIA RESOURCES AUTHORITY ISSUED BONDS INTO THE MARKETPLACE IN EXCHANGE FOR CASH.
SO INVESTORS BOUGHT THOSE BONDS FOR CASH.
SO V R A SELLS BONDS, CASH COMES INTO V.
THEN ON THE SECOND STAGE, GLAND SOLD BONDS TO THE V GLAND BONDS IN EXCHANGE FOR THE CASH THAT V HAD TAKEN IN.
AND THAT'S HOW THE CASH GOT DOWN TO GLAND COUNTY IN A TWO-STAGE, UH, AFFAIR.
THE PROBLEM IS THAT IF GLAND DOESN'T PAY VRA, WHICH IS WHO THEY OWE, WE DON'T OWE THE OUTSIDE INVESTORS.
IF WE DON'T PAY THE V, THEN VRA HAS NO RESOURCES TO PAY THE OUTSIDE INVESTORS.
SO IN THE EVENT THAT WE DON'T CONTRIBUTE TO THE STATE, THE STATE DOESN'T WANNA HAVE A DEFAULT ON THEIR BONDS FOR THE V BONDS, THEY'RE OUTSTANDING.
SO THEY WOULD REDIRECT THE STATE SUBSIDY FOR OUR SCHOOLS.
UH, RIGHT NOW THE STATE PAYS ABOUT 20%, GIVE OR TAKE OF OUR SCHOOL BUDGET, AND THEY WOULD REDIRECT THAT SCHOOL BUDGET TOWARD THE REPAYMENT OF THIS DEBT IN THE EVENT THAT WE DECIDED TO WALK AWAY FROM IT AND NOT PAY IT.
SO WHAT THAT MEANS IS YOU CAN EITHER TRIPLE THE TAXES AND PAY IT BACK, OR YOU CAN KIND OF GO DARK WITH YOUR SCHOOLS.
AND I DON'T KNOW IF MAYBE SCHOOLS CAN GET ALONG WITH 20% CUTTING THEIR BUDGET, BUT I, IF THEY CAN, I'D LIKE TO HEAR ABOUT IT, BUT I DON'T THINK THEY CAN.
SO YOU END UP DOING MAYBE A LOT OF HOMESCHOOLING OR SOME OTHER SOLUTION.
SO THE WALKING AWAY, DIFFERENT SET OF CHALLENGES, RAISING THE TAXES TO PAY IT BACK.
NOW, LET'S SAY THAT YOU WERE A KING FOR A DAY
[00:25:01]
AND YOU'RE SITTING UP HERE AND YOU'RE FACED WITH A CHOICE OF EITHER TRIPLING TAXES OR CLOSING DOWN TO SCHOOLS.I DON'T KNOW WHAT CHOICE YOU'D MAKE, BUT AROUND THAT TIME, UM, SOME CONCERNED CITIZENS CAME TO ME AND SAID, YOU KNOW, CAN YOU, YOU USED TO MAKE A LIVING TO IN DEBT STRUCTURE CAUSE WE THINK WE'RE IN TROUBLE.
CAN YOU KIND OF HELP US OUT AND RUN FOR OFFICE? AND I SO RUN FOR OFFICE WHEN THE CHOICES ARE TRIPLING TAXES OR CLOSING DOWN THE SCHOOLS.
I, WHY WOULD I? THEY SAID, BUT YOU KNOW, CAN YOU PLEASE DO IT? SO I DECIDED TO GO AHEAD AND, UH, TAKE A CUT AT IT AND RAN FOR THE SUPERVISORS AND, AND CAME UP HERE, WAS SWORN IN IN JANUARY, AND WE, UM, SET TO WORK TO TRY AND RESTRUCTURE THIS AND LOOK FOR A THIRD WAY.
CAUSE I WASN'T HAPPY WITH THE FIRST TWO WAYS.
I DIDN'T THINK WE WANNA DO EITHER ONE OF THOSE FIRST TWO THINGS.
SO THIS IS A SLIDE FROM THE PUBLIC PRESENTATION IN 2012.
AND WHAT WE SET OUT TO DO WAS RESTRUCTURE THE BONDS, UM, IN A WAY THAT WE COULD BUY SOME TIME, UM, UH, FOR THE GROWTH TO OCCUR AND KIND OF LOOK FOR A THIRD WAY OUT OR A, OR A, YOU KNOW, A MORE, A BETTER WAY OUT THAN THE TWO WAYS THAT WERE BEING PRESENTED SO FAR.
SO THE OBJECTIVES OF THAT DEBT RESTRUCTURING WERE TO STABILIZE THE AVOR TAX AT 32 CENTS AND HOPEFULLY NOT HAVE IT ESCALATE UP TO 85, WHICH WAS CRITICAL FOR ECONOMIC DEVELOPMENT AND REASONABLE COMPETITIVENESS FOR NEW ECONOMIC DEVELOPMENT.
IT WAS CRITICAL FOR TAXPAYERS IN THE DISTRICT TO TRY AND STABILIZE THAT RATE.
WE WANTED TO LOWER THE ANNUAL DEBT SERVICE AND ELIMINATE SOME OF THE DEBT SERVICE PEAKS THAT WERE IN THE ORIGINAL DEAL AND ALLOW TIME TO GROW THE TAX AND THE USER BASE TO PAY BACK THE DEBT.
AND WE ALSO WANTED TO TAKE ADVANTAGE OF HISTORICALLY LOW INTEREST RATE ENVIRONMENT.
SO THOSE WERE SOME OF THE OBJECTIVES WE SET OUT TO TRY AND ACCOMPLISH THROUGH THIS DEBT RESTRUCTURING.
TO DO IT, WE, UH, STARTED WITH A NEW TEAM.
THIS IS AGAIN, A SLIDE FROM THAT SAME PRESENTATION BACK IN 2012.
UM, I ARRIVED ON THE BOARD AS A NEW BOARD MEMBER.
UH, WE ENGAGED A NEW FINANCIAL ADVISOR, PUBLIC FINANCIAL MANAGEMENT, UH, PFM.
WE ENGAGED A NEW BOND COUNCIL, AN OUTSIDE COUNCIL CALLED KUOK ROCK.
UH, THE V HAD A TURNOVER IN LEADERSHIP AS WELL AND HAD NEW STAFF THERE.
AND WE, UH, SELECTED A DIFFERENT UNDERWRITER TO SELL THE NEW BONDS, THE RESTRUCTURED BONDS VERSUS THE ORIGINAL ONES.
SO WE PUT TOGETHER AN ENTIRELY NEW TEAM TO TAKE A NEW FRESH LOOK AT THIS AND SEE IF WE COULDN'T FIGURE OUT A WAY FORWARD.
NOW, YOU WON'T BE ABLE TO READ THE WRITING ON THIS, BUT YOU CAN SEE THE GRAPHIC POTENTIALLY ON A LEFT HAND SIDE IS THE ORIGINAL DEBT STRUCTURE FROM THE ORIGINAL DEAL.
AND THAT GRAY AREA, THE GRAYISH AREA ON THE LEFT, THAT BIG LARGE WEDGE THAT WAS WHAT THEY CALL THE NON CULLABLE CABS.
SO THESE ARE ZERO COUPON BONDS THAT COULD NOT BE REFINANCED, RIGHT? AND YOU CAN SEE HOW THE DEBT SERVICE PAYMENTS ARE ESCALATING DRAMATICALLY OVER TIME, AND THERE'S A COUPLE OF PEAKS IN THERE AS WELL.
MOVING TO THE RIGHT ON, ON THAT SAME LEFT HAND GRAPH, THE LIGHT BLUE WAS WHAT THEY CALL CULLABLE OR REFINANCEABLE CAPITAL APPRECIATION BONDS.
AND THEN THE DARK BLUE WAS, UM, THE PRINCIPLE FOR CURRENT INTEREST BONDS.
SO THESE ARE NOT ZERO COUPONS, THEY'RE CURRENT INTEREST, THEY PAY AS YOU GO.
AND THAT YELLOW IS THE INTEREST THAT YOU'RE PAYING ON THAT DARK BLUE UNTIL YOU PAY OFF THE DARK BLUE.
SO IT WAS A FAIRLY COMPLICATED STRUCTURE, BUT THE BOTTOM LINE IS YOU CAN SEE THE DEBT SERVICE PAYMENTS ESCALATING DRAMATICALLY, WHICH MIRRORS THAT DAVENPORT SECURITIES CHART OF WHERE THEY THOUGHT THE AVALON TAX RATE WOULD HAVE TO GO.
IT WOULD JUST FOLLOW UP THE DEBT SERVICE PAYMENTS.
NOW THE POST RESTRUCTURING IS ON THE RIGHT HAND SIDE.
IT TOOK US ABOUT 11 MONTHS TO TRY AND FIGURE OUT A WAY TO ACCOMPLISH ALL THE OBJECTIVES.
UM, BUT WE WERE ABLE TO DO THAT.
AND THE, ON THE RIGHT HAND GRAPHIC, THE RED LINE WAS THE ORIGINAL DEBT SERVICE PAYMENT REQUIREMENTS.
AND SHOWN BENEATH THAT, THOSE COLORED WEDGES ARE THE NEW REFINANCED, UM, OBLIGATIONS, DEBT SERVICE OBLIGATIONS.
SO YOU NOTICED A COUPLE OF THINGS.
ONE IS WE TOOK THE LIGHT BLUE AND DARK BLUE CULL BALLS AND PUSHED THOSE OUT A BIT, ABOUT FIVE YEARS TO BUY SOME TIME.
THE SECOND THING YOU NOTICE IS WE CLIPPED THE PEAKS, GOT RID OF THE PEAKS, UM, AND THE THIRD THING YOU'LL NOTICE IS THE, THE WEDGES.
WE, UH, UH, THE MAXIMUM DEBT SERVICE PAYMENTS ARE AROUND 6 MILLION, NOT 9 MILLION.
SO IF YOU FOLLOW THE AVA VALOR TAX ALONG THAT SAME KIND OF TRAJECTORY, YOU MAYBE ONLY HAVE TO DOUBLE INSTEAD OF TRIPLE THE A VALAR TAX IF YOU'RE WITH ME ON THAT AND GIMME A LITTLE LATITUDE ON THAT.
SO, BUT YOU'LL ALSO NOTICE THE, THE COLORED WEDGES ON THE RIGHT HAND GRAPH IN ALL CASES ARE BELOW THE RED LINE, WHICH MEANS IT WAS WHAT THEY CALL IMMEDIATELY ACCRETIVE, WHICH MEANS EVERY DAY FROM THE DAY IT WAS DONE, IT CONSERVED CASH AND, UH, SAVED THE COUNTY MONEY, UH, EVERY DAY.
SO IT DIDN'T COST ANYTHING TO DO WITH THE REFINANCE.
SO THAT'S THE RESTRUCTURED, UH, PAYMENT SCHEDULE ON THE RIGHT HAND SIDE.
[00:30:01]
THIS.IT TOOK 11 MONTHS TO NEGOTIATE THIS, BUT WE FOUND A WAY OUT.
AND, UM, THIS IS THE DEBT RESTRUCTURED.
IF ANYBODY WANTS TO READ THROUGH THIS, IF YOU HAVE TROUBLE SLEEPING SOME NIGHT, UM, I WAS GONNA READ IT TODAY, BUT I THINK I'LL SPARE EVERYONE THE, THE, UM, UH, THE GO THROUGH.
BUT WHAT, WHAT THAT ACCOMPLISHED, WHAT THAT ACCOMPLISHED WAS ALL OF THE OBJECTIVES, BUT IT ALSO SAVED MONEY.
THIS SHOWS THE FIRST 10 YEARS, THE NEXT 13 YEARS, AND THE LAST SIX YEARS OF RESTRUCTURED DEBT, THE 2002 ORIGINAL DEBT SERVICE REQUIREMENTS VERSUS THE 2012 RESTRUCTURED DEBT SERVICE REQUIREMENTS AND THE NET SAVINGS.
AND YOU CAN SEE IN THE FIRST 23 YEARS, IT CONSERVED 27 MILLION OF TAXPAYER, UH, REVENUE.
SO THAT MEANS THE BURDEN ON THE T C S D DROPPED BY ABOUT 27 MILLION DURING THE FIRST 23 YEARS.
AND THEN, OF COURSE, AS I MENTIONED, WE EXTENDED THE CALWELL CABS OUT A LITTLE BIT.
SO YOU'RE, YOU, UH, YOUR LAST SIX YEARS, YOU DO PAY THAT 27, BUT ON A NET PRESENT VALUE SAVINGS CUZ YOU'RE SHIFTING PAYMENTS OUT WAY INTO THE FUTURE, HOPEFULLY BUYING SOME TIME.
UM, THE NET PRESENT VALUE SAVINGS WAS ABOUT 4 MILLION.
AND WE MET ALL THE GOALS THAT WE SET OUT TO.
UM, WE SMOOTHED OUT THE DEBT SERVICE.
WE DID THAT THROUGH WHAT THEY CALL, UM, PARTIAL DIFF DEVIANTS.
UM, WE PROVIDED SHORT-TERM RELIEF.
UH, IT ALLOWS TIME TO GROW THE, UH, TAX BASE AND THE USER BASE TO BE ABLE TO GROW INTO THE DEBT.
UH, AND IT MOST IMPORTANTLY, WELL MOST, IT STABILIZED THE AVOR M TAX, UM, WHICH WAS VERY IMPORTANT TO OUR CUSTOMERS AND, AND TAXPAYERS.
AND IT WAS CRITICAL FOR FUTURE ECONOMIC DEVELOPMENT TO STABILIZE THAT RATE.
NOW, AS I MENTIONED BEFORE, IT WAS A TWO-STAGE PROCESS.
WE ISSUED, UH, BONDS THROUGH THE V SO ONCE WE IN THE COUNTY HAD A NICE RESTRUCTURING IDEA, WE HAD TO THEN GO TO THE V TO TO MAKE SURE THAT THEY WOULD APPROVE IT AS WELL.
SO WE HAD IT REVIEWED BY OUR IN-HOUSE COUNCIL, WE HAD IT REVIEWED BY OUR BOND COUNCIL, KUTA ROCK, WE TOOK IT TO V THEY HAD IT REVIEWED BY THEIR COUNCIL AND BROUGHT IT TO THE RISK MANAGEMENT COMMITTEE AND SAID, THIS IS WHAT WE'D LIKE TO BE ABLE TO DO TO TRY AND RELIEVE SOME OF THE PRESSURE AND SAVE SOME MONEY, SAVE 27 MILLION.
UH, AND WE TOOK IT AND PRESENTED TO THEIR COMMITTEE AND THEIR RECOMMENDATION FROM THE V THEY RECOMMENDED APPROVAL, UM, BASED ON THE FACT THAT IT WOULD, UH, REDUCE THE RISK TO ALL PARTIES.
BUT THEY SAID, THIS LOAN IS SO UNUSUAL IN THE ACCELERATING DEBT SERVICE PAYMENTS, IT DEVIATES FROM THE V'S UNDERWRITING GUIDELINES.
THERE'S INHERENT RISK TO A PROJECT WHERE YOU SAY BUILD IT AND THEY'LL COME.
AND THE STATE AID INTERCEPT WAS INSUFFICIENT TO COVER THE, UH, THE DEBT, THE DEBT REPAYMENT.
SO WHAT THEY SAID WAS, THIS IS NICE, BUT IT'S STILL SO UNUSUAL.
I MEAN, IT DOES REDUCE RISK AND IT'S A GOOD IDEA, BUT IT, IT'S SO UNUSUAL THAT WE'RE NOT GONNA INCLUDE IT IN ONE OF OUR POOLS WHERE THEY PULLED TOGETHER RE UH, LOANS AND THEN AND BUNDLE THEM AND THEN ISSUE POOL, UH, NOTES.
THIS ONE WAS REQUIRED TO STAND ALONE BY ITSELF.
THEY DIDN'T WANT THE GOON TO GO INTO THAT POOL CUZ THERE WAS STILL A LOT OF RISK.
LOOK, LOOK, WE DID THE RESTRUCTURING, SAVED A LOT OF MONEY, REDUCED THE PAYMENTS, BUT IT DIDN'T CREATE ANY ECONOMIC DEVELOPMENT.
SO WE DIDN'T HAVE ANY INCREASE TO PAY THOSE INCREASE IN ACCELERATED TAXES.
SO IT ACCOMPLISHED A LOT OF OUR FINANCIAL GOALS, BUT IT DIDN'T, UM, NECESSARILY GET US OUTTA THE WOODS.
SO THEY DID APPROVE IT, UM, AND THEY BLESSED IT.
ONE OF THE QUESTIONS I GOT WAS, ANYTHING WE DID ILLEGAL, IT WAS BUILT BLESSED BY AT LEAST THREE OR FOUR DIFFERENT SETS OF COUNCIL AND, UH, AS BEING, UH, ENTIRELY APPROPRIATE.
SO ONCE THE GUTZON COUNTY ARRIVED ON THE, UH, AT THE RESTRUCTURING, WE TOOK IT TO V GOT THEIR BLESSING, THE NEXT THING WAS TO TAKE IT TO THE CITIZENS AND LET THEM KNOW BECAUSE WE BELIEVE IN TOTAL TRANSPARENCY.
SO THESE ARE SLIDES FROM A 2013, UH, COMMUNITY DISCUSSION AND THE TOWN HALL MEETINGS.
AND WE TOOK THIS RESTRUCTURING OUT TO FIVE DIFFERENT TOWN HALLS ALL THROUGHOUT THE COUNTY.
AND WE SHOWED THE, THE COUNTY THAT, UH, THE AVOR TAX WE HOPED WOULD REMAIN AT 32 FOR THE FORESEEABLE FUTURE, EVEN THOUGH THERE'S ESCALATIONS GOING FORWARD.
BUT THIS GRAPHIC SHOWS THAT THE DARK, UH, PURPLE LINE IS THE RESTRUCTURED DEBT SERVICE PAYMENTS AND THE BLUE WEDGE IS THE ORIGINAL.
SO IT JUST SHOWS YOU AGAIN, THE PEAKS WERE CLIPPED.
THE, UH, PEAK DEBT SERVICE WAS REDUCED BY ABOUT 30%.
AND THIS SHOWS THE ACTUAL, THE FIRST, UH, THE PREVIOUS WAS THE PROJECTED 3 MILLION NET PRESENT VALUE SAVINGS.
THIS IN THE LOWER LEFT SHOWS AN ACTUAL NET PRESENT VALUE OF SAVINGS OF 4.4 MILLION.
SO IT WAS A LITTLE BETTER THAN WE THOUGHT WHEN WE DID THE ORIGINAL PROPOSAL FOR RESTRUCTURING.
BUT WE TOOK THIS OUT TO THE CITIZENS IN TOTAL TRANSPARENCY TO EXPLAIN IT TO EVERYONE.
UM, BACK IN 2000 AND, AND 13 AND 14.
AND THEN, AS I MENTIONED, RESTRUCTURING THE DEBT FINANCIALLY DIDN'T GET US ANY ADDITIONAL ECONOMIC DEVELOPMENT TO SHARE THE BURDEN OF THE DEBT REPAYMENT.
SO WHAT WE DID WAS AFTER THE FIRST, UH, RESTRUCTURING, WE WANTED TO ATTRACT
[00:35:01]
ECONOMIC DEVELOPMENT, BUT WE, WE DIDN'T HAVE A CREDIT RATING.THE COUNTY HAD AN WAS NON-RATED OR AN NR THEY CALL IT.
SO WE TRAVELED UP TO NEW YORK CITY TO MEET WITH THE CREDIT RATING AGENCIES AND I WENT UP THERE AND MET WITH, UM, EACH OF THEM FOR THREE HOURS AND LET THEM ASK EVERY QUESTION UNDER THE SUN ABOUT GSON COUNTY'S FINANCES.
AND WE CAME AWAY FROM THOSE MEETINGS WITH A AAA CREDIT RATING FROM ALL THREE MAJOR RATING AGENCIES.
AND THAT'S CALLED THE COVETED TRIPLE.
THERE'S LESS THAN 1% OF THE COUNTIES IN, WELL, ABOUT 1% OF THE COUNTIES IN THE COUNTRY THAT HAVE A TRIPLE, TRIPLE.
AND OF THOSE, NO ONE WITH A POPULATION LESS THAN 75,000 HAS A TRIPLE, TRIPLE EXCEPT GSON.
AND WE HAVE A POPULATION MUCH LESS THAN 75,000, I THINK WE'RE DOWN AROUND 25.
SO WE'RE THE ONLY COUNTY OUR SIZE IN THE COUNTRY TO GET THAT TRIPLE, TRIPLE.
WHAT THAT TELLS YOU IS THE RATING AGENCIES, AFTER THREE HOURS OF GRILLING EVERY QUESTION ON THE SUN HAD CAME AWAY WITH A DEEP DIVE SAYING, YOU KNOW WHAT GUCCI COUNTY IS ON VERY, VERY SOLID FINANCIAL GROUND, TOP 1% IN THE COUNTRY.
SO THAT BY THAT TIME WE HAD KIND OF TURNED THINGS AROUND A BIT FINANCIALLY, GOT THE TRIPLE, TRIPLE.
NOW POTENTIAL BUSINESSES, INDIVIDUALS, INVESTORS LOOKED AT GUC AND SAID, YOU'RE NOT A NON-RATED ON THE VERGE OF, UH, INSOLVENCY.
YOU'RE AAA ACROSS THE BOARD AND YOU HAVE PLENTY OF CASH TO MEET YOUR NEEDS.
SO NOW THE ECONOMIC DEVELOPMENT'S STARTED TO COME IN IN BIG TIME, BUT IN 2020, IF YOU THINK BACK TO 2020, UM, THIS WAS THE PANDEMIC WHEN BUSINESSES WERE CLOSED AND RESTAURANTS WERE CLOSED AND EVERYTHING WAS CLOSED DOWN.
AND IF YOU WENT OUT YOUR FRONT DOOR, YOU WERE IN DIE KIND OF THING.
UH, THE BOARD HERE CONTINUED TO MEET EVERY MONTH LIKE WE ARE NOW IN PERSON THROUGHOUT THE PANDEMIC.
AND IN 2020 DURING THE PANDEMIC, UH, REFINANCED THE BONDS AGAIN AND SAVED THE COUNTY MILLIONS OF DOLLARS AGAIN.
AND WHAT YOU SEE HERE, THE BLUE LINE IS THE ORIGINAL DEBT SERVICE.
THE RED LINE IS RESTRUCTURING NUMBER ONE, WHICH SOLVED A LOT OF THE PROBLEMS. THEN THE WEDGES SH IS, UM, THE RESTRUCTURING NUMBER TWO.
AND THE BIG DIFFERENCE YOU CAN SEE IS THE DIFFERENT, THE DISTANCE BETWEEN THE RED LINE AND THE TOP OF THE COLORED WEDGES FROM ABOUT YEAR 10 THROUGH THE REST OF THE REMAINING, UH, LIFE OF THE NOTES.
SO THAT'S THIS AREA IN HERE AND ALL THAT RE REPRESENTS MILLIONS OF DOLLARS OF ADDITIONAL, UH, DEBT SERVICE SAVINGS TO THE, TO THE DISTRICT.
SO DURING 2020, WE WERE ABLE TO PULL THAT OFF, UM, AND SAVE AGAIN MILLIONS OF DOLLARS, UM, OF TAXPAYER REVENUE ON THAT AS WELL.
SO NOW WE'VE DONE TWO DEBT RESTRUCTURINGS.
EACH ONE SAVED MILLIONS OF DOLLARS.
WE DID THE THREE CREDIT RATING AGENCY, UH, AAAS.
AND NOW THE ECONOMIC DEVELOPMENT WAS REALLY STARTING TO PICK UP BECAUSE WE'RE NOW, WE'RE REALLY ON SOLID GROUND AND WE'RE NOW, WE'RE REALLY MOVING.
AND SO WHEN I MENTIONED EARLIER ON THAT YOU HAD TO EITHER TRIPLE THE AVOR TAX RATE OR SIGNIFICANTLY CHANGE THE WAY YOU DELIVER EDUCATION, MAYBE CLOSE THE SCHOOLS DOWN, THOSE WERE THE CHOICES.
THE THIRD WAY THAT WE SAW IT WAS INSTEAD OF RAISING THE AVOR TAX RATE, INCREASE THE ECONOMIC INVESTMENT IN THE DISTRICT AND KEEP THE TAX RATE, UM, AT 32 AND LET ECONOMIC DEVELOPMENT DOUBLE OR TRIPLE.
NOW IT'S A TALL ORDER TO TRY AND DOUBLE OR TRIPLE THE TOTAL ASSESSED VALUE OF AN ENTIRE SERVICE DISTRICT, BUT THAT WAS THE THIRD WAY THAT WE SAW IT.
SO TO DO THAT, YOU HAD TO GET THE CREDIT RATING.
YOU HAD TO LET PEOPLE KNOW THAT YOU'RE ON FINANCIAL GROUND, STRONG FINANCIAL GROUND.
THE ECONOMIC DEVELOPMENT STARTED TO COME AND OUR GOAL WAS TO DOUBLE OR TRIPLE THE ASSESSED VALUE OF THE ENTIRE DISTRICT AS OPPOSED TO LAYING THE AVOR TAX DOUBLE OR TRIPLE.
SO HOW'D WE DO ON THAT GOAL? UM, HERE'S THE TOTAL ASSESSED VALUE OF THAT DISTRICT SINCE THE 2012 DEBT RESTRUCTURING AND THE AAAS THAT FOLLOWED.
AND YOU CAN SEE THAT WE ACCOMPLISHED THAT WE MORE THAN DOUBLED THE ENTIRE ASSESSED VALUE OF THE ENTIRE DISTRICT AND THAT ALLOWED US TO KEEP THE 32 CENTS UNCHANGED FOR THE ENTIRE 12 YEAR PERIOD.
I'VE BEEN ON THIS BOARD AS OPPOSED TO AT DOUBLE OR TRIPLE.
SO WE MANAGED TO ACCOMPLISH WHAT WE SET OUT TO DO.
FOUND A THIRD WAY, DID TWO RESTRUCTURINGS, GOT THE CREDIT RATINGS CARRIES ON SOLID GROUND AND UH, THE TCS D IS NOW, UM, UH, NOT OUTTA THE WOODS, BUT IT'S MORE THAN COVERING ENOUGH TO BE ABLE TO PAY THE DEBT SERVICE ON AN ANNUAL BASIS AND HAS TAKEN ALL THE PRESSURE OFF OF RAISING THAT 32 CENTS BEYOND THE TCS D WHAT ELSE HAVE WE BEEN DOING? UM, OUR REAL ESTATE TAX RATE, AS YOU KNOW, AT 53 CENTS IS THE LOWEST IN THE REGION BY FAR.
IT'S SOMETHING LIKE 20 OR 25% BELOW THE REST OF THE REGION.
UM, THAT'S PARTICULARLY, UH, NOTEWORTHY GIVEN THAT, UM, WE GET THE LOWEST SUBSIDY FOR OUR SCHOOLS OF ANY OF OUR NEIGHBORS.
UM, THEY HAVE A THING CALLED A LOCAL COMPOSITE INDEX.
UH, OURS IS 0.8, WHICH MEANS WE PAY ABOUT ABOUT 80% OF OUR LOCAL SCHOOLS OUT OF OUR LOCAL BUDGET.
SO OUTTA THAT 53, WE'RE PAYING FOR ABOUT 80% OF OUR SCHOOLS.
IF YOU LOOK AT CHESTERFIELD FOR EXAMPLE, THEY ONLY PAY ABOUT 35% OF
[00:40:01]
THEIR SCHOOLS LOCALLY.SO THAT MEANS THE STATE'S PICKING UP TWO THIRDS OF THEIR SCHOOL AND THEY STILL HAVE A TAX RATE IN THE NINETIES.
UH, SO WE'RE TRYING TO FIT 80% IN THAT 53.
THEY ONLY HAVE TO FIT 30%, 35% INTO THAT.
UH, AND SAME THING WITH HANOVER, I THINK IS, UH, CLOSER TO, UH, 50 SOME ODD PERCENT, 43% I GUESS IT IS STATEWIDE AVERAGE IS AROUND 45% IS PAID LOCALLY.
SO US PAYING 80 IS IS A MUCH HIGHER NUMBER AND YET WE'RE STILL ABLE TO DELIVER THE 53 ON THE PERSONAL PROPERTY TAX.
UH, FOR YOUR NEXT BILL THAT YOU MAY HAVE ALREADY GOTTEN, UM, YOU PROBABLY SEE A DRAMATIC REDUCTION IN THERE AS WELL.
SO WE'RE AMONG THE LOWEST IN THE REGION ON THE PERSONAL PROPERTY TAX.
UH, AND, AND YOU JUST HEARD THE THIRD QUARTER UPDATE THIS YEAR WE'RE ON TRACK WITH A, UH, A BUDGET SURPLUS SO FAR THIS YEAR.
NOW, WE'LL KNOCK ON WOOD NOW WHAT WE DON'T KNOW IS WE DON'T KNOW WHERE THINGS ARE HEADED IN THE FUTURE.
UM, THE FEDERAL RESERVE LIKELY TOMORROW IS GONNA RAISE INTEREST RATES AGAIN.
UH, WE'RE NOT SURE WHEN THAT MONETARY POLICY WORKS ITS WAY THROUGH WHAT THAT'S GONNA DO TO THE ECONOMY AND GDP.
THERE MAY BE SOME EXPECTATION OF A RECESSION GOING FORWARD AND ASSESSED VALUES MAY CHANGE AND THINGS MAY UM, CHANGE GOING FORWARD.
BUT AT THIS POINT, AS WE SIT HERE TODAY, UM, WE'VE TAKEN ALL THE PRESSURE OFF OF RAISING THAT 32 CENTS ON THE AVOR.
WE'VE GOTTEN A, UH, LIKE AS I SAID, THE AAA CREDIT RATING AND THE COUNTY'S ON FIRM FINANCIAL GROUND AND IS IS WE'RE ACTUALLY RUNNING A SMALL SURPLUS.
SO WITH THAT, UH, SAID, I'M GONNA CONCLUDE MY REMARKS HERE.
UM, AND WHAT I'M GONNA DO IS OPENING UP TO QUESTIONS FROM THE COMMITTEE CUZ THIS IS BASICALLY A COMMITTEE MEETING.
IT'S BEEN OPEN TO THE PUBLIC, BUT IT'S A COMMITTEE MEETING.
SO COMMITTEE MEMBERS, ARE THERE ANY QUESTIONS ABOUT ANYTHING WE'VE COVERED SO FAR? NO, NOT RIGHT NOW.
OKAY, CAN YOU HEAR ME? IS THIS ON? SURE.
UM, I WASN'T HERE AND YOU WENT OVER THE 2020 RESTRUCTURING, BUT UM, IT LOOKS LIKE WE BORROWED IN 2012 56 MILLION AND THEN IN 2020 WE TOOK OUT 61 MILLION.
IS THAT ACCURATE? THAT'S WHAT OUR AUDIT REPORT SAYS.
I'M SORRY, CAN YOU JUST GO THAT AGAIN? YEAH.
IN, IN 2012 WE RESTRUCTURED OUR DEBT MM-HMM.
AND THEN IN 2020 WHEN WE DID IT AGAIN, WE TOOK OUT 61 MILLION A HIGHER AMOUNT.
WAS THAT TO FUND A REPAIR? NO, UM, WE WERE, WE WERE, UM, LIMITED IN OUR ABILITY TO DO A COMPREHENSIVE RESTRUCTURING BASED ON THE CALLABILITY OR THE REFINANCE ABILITY OF THE BONDS.
AND I MENTIONED THE GRAY AREA.
UM, YOU COULDN'T REFINANCE THOSE, THOSE WERE KIND OF CHISELED IN STONE AND, AND, BUT THEY WERE CAPITAL APPRECIATION BONDS THAT WERE GROWING IN PRINCIPLE EACH YEAR.
AND SAME THING WITH THE LONGER DATED CALLABLE OR REFINANCEABLE CAPITAL APPRECIATION BONDS, THOSE WERE GROWING AS WELL.
SO WHAT WE DID EACH TIME, SINCE WHEN WE DID THE REFINANCINGS ONE N TWO INTEREST RATES WERE DRAMATICALLY LOWER THAN WHAT WE WERE PAYING.
WE REFINANCED BASICALLY EVERYTHING WE COULD TO THOSE LOWER LEVELS.
AND OVER TIME AS, UM, SOME OF THE ADDITIONAL ZERO COUPON BONDS THAT WERE GROWING BECAME CULLABLE, WE CALLED THOSE OUT AND REFINANCED THOSE AS WELL.
SO WE REFINANCED EACH TIME AS MUCH AS WE COULD AND TOOK AS BIG AS BIG ADVANTAGE OF THE LOWER INTEREST RATES AS WE COULD.
AND IT TURNS OUT THE SECOND TIME THERE WAS MORE THAT WE COULD TOUCH, UH, UH, THERE WAS INCREASED PRINCIPLE IN WHAT WE COULD TOUCH OR, OR REFINANCE.
THAT, UH, ADVANCED TOPIC DIDN'T MAKE IT IN HERE, DIDN'T IT? SURE.
UM, ANY OTHER QUESTIONS FROM THE COMMITTEE? UM, BY THE WAY, I SHOWED YOU THE, UH, THE, UH, ORIGINAL DEBT RESTRUCTURING.
THAT WAS WHEN THE COUNTY WAS NON-RATED AND HAD TO GO THROUGH THE VRA IN A TWO-STEP PROCESS, WHICH THEY GET PAID A FEE TO DO THAT.
ONCE WE GOT THE THREE AAAS, UM, WE DID, UH, RESTRUCTURING AND, UH, UH, FEBRUARY OF LAST YEAR, SO A LITTLE OVER A YEAR AGO, WE ISSUED THE FIRST EVER GENERAL OBLIGATION BONDS FOR THE COUNTY 50 MILLION DIRECTLY INTO THE CAPITAL MARKETS WITHOUT HAVING, HAVING TO GO THROUGH A TWO-STAGE PROCESS THROUGH THE STATE BECAUSE NOW WE HAVE A CREDIT RATING, WE CAN GO DIRECTLY OURSELVES AND SAVE THAT MONEY BECAUSE WE HAVE THE CREDIT RATING AND BECAUSE WE'VE, UH, GOT A AAA ACROSS THE BOARD, THIS IS THE BOND DOCUMENT FOR THE ONE WHERE WE WENT DIRECTLY TO THE CAPITAL MARKETS AND DIDN'T HAVE TO GO THROUGH, UM, THE V SO YOU CAN JUST GUESS THE, UH, LEGAL AND ACCOUNTING WORK THAT, UH, WE SAVED BY BEING ABLE TO GO DIRECTLY TO THE FINANCIAL MARKETS AS OPPOSED TO DOING A TWO-STAGE PROCESS.
THIS ONE, BY THE WAY, WE GOT AN INTEREST RATE THAT WAS AROUND 1.8%.
[00:45:02]
WE DID IT LAST YEAR BEFORE RATES SKYROCKETED.IF WE HAD TO DO THAT TODAY, IT WOULD PROBABLY COST US ANOTHER 10 MILLION.
SO WE AGAIN SAVED ANOTHER 10 MILLION DURING THE GENERAL OBLIGATION BONDS A YEAR AGO, DIRECTLY IN THE CAPITAL MARKETS.
UM, THANKS FOR THE ELEMENTARY SCHOOL, UM, TO FUND THE, THE, THE GES, THE GUC AND ELEMENTARY SCHOOL AND AT FIREHOUSE IN THE REASON WE DIDN'T DO THAT EARLIER, UM, 20 YEARS AGO, THE HIGH SCHOOL MIDDLE SCHOOL BORROWED SOME DEBT TO BUILD THOSE SCHOOLS.
WE WAITED UNTIL THAT 20 YEAR TERM WAS OVER AND THE DEBT WAS REPAID TO REBAR THAT SAME AMOUNT.
SO WE DIDN'T BORROW ON TOP OF EXISTING DEBT AND PUT PRESSURE ON THE TAX RATE ONCE THE HIGH SCHOOL DEBT WAS PAID OFF AND INTEREST RATES WERE 1.8, 1.9, WE BORROWED THE 50 MILLION TO BUILD ANOTHER SCHOOL AND JUST RE BORROWED THE UH, UH, THE AMOUNTS THAT WE HAD PAID BACK.
YEAH, AND ALSO MS. PETERSON, A POINT I'D LIKE TO MAKE IS, AS WE TALK ABOUT THAT GENERAL OBLIGATION BOND ISSUANCE OR AS WE TALKED ABOUT THE, UH, THE CURRENT POSITION OF THE COUNTY IN RELATION TO UM, T C S D, THOSE ARE TWO SEPARATE ENTITIES AND WE CAN'T MERGE, UM, RESOURCES FROM ONE TO THE OTHER.
SO AS WE BORROW MONEY FOR THE COUNTY GENERAL PURPOSES FOR THE ELEMENTARY SCHOOL THAT'S INDEPENDENT AND SEPARATE OF WHAT WE'VE DONE FOR TC S D, AND THE SAME THING WITH THE COUNTY'S GENERAL FUND AS IT GENERATES REVENUE FROM TAXATION COUNTYWIDE, WE CAN'T TAKE THOSE REVENUES AND APPLY THEM JUST TOWARDS TCS D SO I JUST WANNA MAKE THAT POINT.
THAT'S, THAT'S A GOOD POINT AND THANK YOU FOR THAT.
UM, SO FOR INSTANCE, UM, IF YOU'RE OUTSIDE THE DISTRICT AND YOU'RE PAYING GOON COUNTY TAXES, BUT YOU'RE NOT ELIGIBLE TO GET THE SERVICES, WE DON'T, WE CAN'T TAKE THOSE DOLLARS AND THEN PAY, UH, FOR THE SERVICES THAT BENEFIT THE PEOPLE INSIDE THE DISTRICT.
SO THE GENERAL OBLIGATION BONDS ARE, UH, ALL TAXPAYERS PAY FOR THE SCHOOLS CUZ ALL TAXPAYERS CAN SEND CHILDREN TO THE SCHOOLS, BUT ALL TAX TAXPAYERS DON'T PAY THE DISTRICT DEBT BECAUSE ONLY THE PEOPLE INSIDE THE DISTRICT BENEFIT FROM THAT, THAT DEBT.
SO THANK YOU FOR THAT MR. MR. CHAIR.
UM, I THINK IT'S ALSO WORTH NOTING, WE, WE, MS. CAVE TALKED ABOUT THE 10 MILLION SURPLUS THAT WE OF REVENUES THAT WE SAW.
AND I THINK IT'S WORTH NOTING YOU MENTIONED IT, BUT I DID WANT TO CALL OUT THE, THE BOARD DECIDED LAST MONTH TO GIVE 3 MILLION OF THAT BACK TO THE CITIZENS IN THE FORM OF RELIEF, LOWERING OUR PERSONAL PROPERTY TAX RATE FROM THE HIGHEST IN THE REGION AT $3 AND 75 CENTS TO ONE OF THE LOWEST IN THE REGIONS.
THAT, UH, ONE OF THE HALLMARKS OF THIS LEADERSHIP TEAM HAS BEEN TO, UH, TO BE, UH, GOOD FISCAL STEWARDS OF TAXPAYER DOLLARS, UH, AT EVERY TURN.
UM, AND SO YES, WE DO TAKE A LOOK AT ALL OF OUR TAX RATES FROM TIME TO TIME AND, AND, UH, MAKE SURE THAT WE'RE NOT OVERTAXING CITIZENS AND, UH, AND RETURNING MONEY APPROPRIATE.
UM, WE'VE GOT ABOUT 15, 20 MINUTES OR SO.
UM, WHAT I MIGHT DO, UM, THIS IS A LITTLE DIFFERENT AND WE'LL TRY AND IS I MAY OPEN UP A CITIZEN COMMENT, UH, TIME FOR INDIVIDUALS OUT IN THE AUDIENCE THAT MAY OR MAY NOT WANT TO COME FORWARD AND MAKE SOME COMMENTS.
UH, IT WON'T BE AN INTERACTIVE DIALOGUE, BUT WE'D ALWAYS LIKE TO HEAR, WE DON'T WANNA MISS AN OPPORTUNITY TO HEAR FROM CITIZENS ON HOW WE'RE DOING OR WHAT WE SHOULD DO DIFFERENTLY.
SO I'M GONNA GO AHEAD AND OPEN UP A CITIZEN COMMENT PERIOD.
PLEASE LIMIT YOUR COMMENTS TO ABOUT THREE MINUTES.
UH, AND WHEN YOU COME UP, PLEASE GIVE US YOUR NAME AND ADDRESS FOR THE RECORD AND FOR THOSE PEOPLE AT HOME.
SO I'LL GO AHEAD AND OPEN UP A CITIZEN COMMENT PERIOD.
[VI. PUBLIC COMMENT]
I'M STEVE LEVITT, I LIVE AT 70 36 BEN HALL CIRCLE.SEE MR. LEVIT, COULD YOU TURN ON THE MICROPHONE PLEASE? THANK YOU.
HOW ABOUT, IS THAT BETTER? OKAY.
STEVE LEVITT, 70 36 BEN HALL CIRCLE.
I HAVE A FEW COMMENTS ABOUT THREE MINUTES, BUT I ALSO HAVE A PDF SLIDE TO SHOW IF IT'S POSSIBLE TO PUT THIS UP AT SOME POINT.
UM, IN, ON DECEMBER 16TH, 1773, A GROUP OF COLONISTS ANGRY AT BRITAIN FOR IMPOSING TAXATION WITHOUT REPRESENTATION DUMPED 342 CHESTS OF BRITISH, UH, TEA INTO THE BOSTON HARBOR.
THE INCIDENT WHICH BECAME KNOWN AS THE BOSTON TEA PARTY, HELPED FORMULATE THE NORMS AND EXPECTATIONS REGARDING GOVERNMENT AND TAXES.
FAST FORWARD TO 229 YEARS AND ON JULY 31ST, 2002, THE VIRGINIA RESOURCES AUTHORITY ISSUED A 62 MILLION PLUS BOND TO GLAND COUNTY TO FINANCE THE WATER AND SEWER INFRASTRUCTURE OF THE NEWLY CREATED TUCKAHOE CREEK SERVICE DISTRICT.
[00:50:01]
SCHEDULED TO MATURE OCTOBER 1ST, 2027, HAS BEEN REFINANCED TWICE, PUSHING THE MATURITY DATE OUT TO OCTOBER 1ST, 2041.WITH EACH REFINANCING, THE COUNTY HAS ACCRUED MORE DEBT AFTER 20 YEARS.
THE CURRENT TCS DEBT BOND, UH, THE CURRENT TCS D BOND DEBT HAS INCREASED 21% TO A WHOPPING $76,127,894.
ACCORDING TO THE TUCKAHOE CREEK SERVICE DISTRICT PLAN, WHICH YOU NOTED DATED MAY 7TH, 2002, THE BOND WILL NOT BE GUARANTEED BY GUC AND COUNTY.
ALTHOUGH THERE WILL BE A MORAL OBLIGATION ON THE COUNTY'S PART TO STAND BEHIND THE BOND, THERE WILL BE NO NEED TO HOLD A REFERENDUM ON THE BOND'S ISSUANCE SINCE IT WILL NOT BE BACKED BY THE FULL FAITH AND CREDIT OF THE COUNTY.
THE SERVICE TO SERVICES THAT THE COUNTY IMPLEMENTED, A REAL ESTATE SHARING PLAN IPO AND IMPOSED AN AD VALOREM TAX, THESE TAXES ARE BEING PAID ONLY BY THE RESIDENTS IN THE BUSINESSES LOCATED IN THE TCS D THE $76 MILLION DEBT SITS SQUARELY ON THE SHOULDERS OF 2,111 RESIDENTIAL HOUSEHOLDS AND 417 MOSTLY SMALL BUSINESSES.
COUNTY DIRECTOR OF FINANCIAL SERVICES, CARLA CAVE, INDICATED THE COUNTY'S GOAL IS TO PAY THE BOND OFF EARLY.
IT'S HARD TO SEE HOW THIS CAN BE ACCOMPLISHED OVER THE PAST 10 YEARS.
NOTHING BUT INTEREST HAS BEEN PAID.
THE AMOUNT WHICH IS BEING ACCRUED TO REPAY THE PRINCIPLE IS NOT ON TRACK FOR 2041.
BASED ON THE COUNTY'S HISTORY.
THE BOND WILL AGAIN BE REFINANCE AT SOME POINT IN THE FUTURE AFTER INCREASING THE BURDEN ON THE T C S D TAXPAYERS.
THE SAME MESSAGE ECHOES FROM THE BOSTON TEA PARTY.
WE, THE CITIZENS OF GLAND COUNTY VEHEMENTLY OPPOSE TAXATION WITHOUT THE REPRESENTATION AND YOUR MANAGEMENT OF THIS ESCALATING DEBT.
IS IT TIME FOR A CHANGE IN LEADERSHIP OR IS IT A TIME TO THROW TEA IN THE TUCKAHOE CREEK? NOW I'VE GOT A, A CHART THAT I'D LIKE TO SHOW, WHICH KIND OF SUMMARIZES THIS STUFF.
UM, PERHAPS YOU CAN JUST, UH, LEAVE THAT WITH LISA AND SHE CAN PRE, UH, OUT THE CHARTS AND GIVE IT TO THE BOARD SO THAT, WELL, I THINK THE, WE HAVE IT.
THE, I THINK THE CITIZENS WOULD LIKE TO SEE THIS, HOW WE DOING ON THREE MINUTES? PLUG IT INTO THE COMPUTER.
IT'S A PDF, JUST ONE PAGE THAT A TO THE RIGHT, THAT'S NEITHER HERE NOR THERE.
THE, THE, THE WHOLE THING BOILS DOWN TO EVERY TIME YOU REFINANCE, YOU'RE LEAVING MONEY ON THE TABLE.
YOU'VE, IN ADDITION TO YOUR MOST RECENT REFINANCE, YOU OWE $14,777,000 MORE.
WE'RE UP TO 76 MILLION AND YOU'VE GOT 200 AND TWO HUNDRED AND TWENTY ONE HUNDRED ELEVEN HOUSEHOLDS WHO ARE SHOULDERING THIS DEBT.
THE BOND RATINGS ARE GREAT, BUT I AM SHOULDERING THE DEBT AND MY NEIGHBORS ARE SHOULDERING THE DEBT.
YOU DON'T LIVE IN THE TUCKAHOE CREEK SERVICE DISTRICT, YOU DON'T SHOULDER THE DEBT.
YES, I'M PAYING $3,500 A YEAR ON AVERAGE FOR WATER BETWEEN MY MONTHLY BILL AND MY AD VALOR, WHICH WE JUST GOT $3,500 A YEAR FOR WATER.
YOU ALL DON'T HAVE A PLAN TO PAY IT OFF.
YOU, KARL SAID THAT YOU'RE GONNA PAY IT, HOPE TO PAY IT OFF EARLY.
YOU'RE GONNA REFINANCE IT AGAIN.
YOU'RE GONNA DRAW MORE CASH OUT THE BOND, THE, THE DEBT IS GONNA GET BIGGER AND YOU'RE CRUSHING THE PEOPLE IN THE TCS D THAT'S ALL I HAVE TO SAY.
[00:55:01]
UM, I MIGHT ASK FOR ONE POINT OF CLARIFY.UM, THE, UM, WELL FIRST OF ALL, BOTH THE RESTRUCTURINGS DID LIGHTEN THE LOAD.
NEITHER ONE OF 'EM INCREASED THE LOAD, UM, BY MILLIONS OF DOLLARS.
BUT HE MENTIONED THE, THE RESIDENTS ARE SHOULDERING THE DEBT.
UM, I BELIEVE IT'S SHOULDER BY THE COMMERCIAL AND THE KEN LOCK RESIDENCE, BUT NO RESIDENTS BEYOND THE KEN LOCK.
UH, I THINK THAT'S THE WAY IT'S SET UP ANYWAY, BUT BACK TO YOUR POINT, UM, BOTH, BOTH THE RESTRUCTURINGS DID, DID LIGHTEN THE LOAD, NOT INCREASE THE LOAD.
AND UH, YOU GREW THE AND AND, AND, AND, AND HAD WE, HAD, WE NOT DONE THE TWO RESTRUCTURINGS OR GOTTEN THE CREDIT RATINGS, DAVENPORT SECURITIES PROJECTION HAD THE AVALON TODAY AT 65 CENTS.
SO WHAT WE'VE DONE IS BE BEEN ABLE TO MAINTAIN THE 32 AND NOT HAVE IT GROW TO 65.
DO WE HAVE ANYTHING ELSE WE WOULD LIKE TO COME UP AND, UH, MAKE A COMMENT? HI, I'M SUE SARAI.
I LIVE AT 72 23 SHEFIELD AVENUE IN THIS, IN PARKSIDE VILLAGE WITH THEM.
UM, I AM CURIOUS AS TO THIS, IF THERE ARE 2,111 RESIDENTIAL PARCELS WE'RE INCLUDED IN, I'M KIND OF CURIOUS AS TO WHAT OTHER SUBDIVISIONS ARE INCLUDED IN THIS BECAUSE AS CHARLIE KNOWS, HE'S BEEN AND TALKED TO US, WE'RE DEFINITELY AFFECTED.
AND I BROUGHT THE, MY AD VALOR BILL, WHICH IS $914 AND 56 CENTS ON TOP OF, AND THIS IS FOR THE FIRST HALF ON TOP OF MY REGULAR FIRST HALF REAL ESTATE TAX BILL OF $1,514 AND 74 CENTS.
SO THE WAY I'M LOOKING AT IT, THIS IS $1,800 MORE A YEAR FOR WATER PLUS WHAT I'M PAYING FOR IT.
IF I EVER REFIED LOANS LIKE THIS PERSONALLY, MAN, I'D BE BANKRUPT.
SO I DON'T UNDERSTAND HOW ARE WE AAA RATED, WHICH IS SUPPOSED TO BE ALL THAT IN A BAG OF CHIPS IF THIS IS WHAT'S GOING ON.
AND WHO WERE THE 417 COMMERCIAL PARCELS? AND LIKE STEVE SAID, IT'S SMALL BUSINESSES.
WE HEARD AT THE LAST MEETING WHERE IT WAS A LADY WHO DOES SOMETHING WITH HORSES OR ANIMAL THINGS OR WHATEVER, AND I'M GUESSING SHE'S PART OF IT, BUT I REALLY AM CURIOUS WHAT OTHER SUBDIVISIONS ARE HELP SHOULDERING THIS TAX? CAUSE THIS IS A LOT OF MONEY AND WHEN WE'RE WATERING OUR YARDS, IT'S THAT MUCH MORE.
AND THEN IF YOU DON'T WATER YOUR YARDS, THEN YOU GET IN TROUBLE CUZ THEN YOUR GRASS ISN'T GREEN AND BLAH BLAH BLAH.
SO WHO, WHAT OTHER SUBDIVISIONS ARE DOING IT? CUZ I DON'T, I DON'T SEE IT BEING EVER PAID OFF.
AND TO SAY THEY WENT FROM HOUSE TO HOUSE, THAT'S AWESOME.
BUT IN 2002, I, I'VE LIVED IN NASHVILLE IN 2002, THAT'S LIKE A LIFETIME AGO.
SO WE DID END UP SH SHOULDERING THIS BURDEN BECAUSE APPARENTLY EAGLE SAID, OH YEAH, WE'LL DO IT.
AND TO BE HONEST, WHEN WE CLOSED ON THE LOAN, I DON'T EVEN THINK WE WERE TOLD THEN THAT WE GOT, WE WERE HAD THIS TAX.
I'D NEVER EVEN HEARD THE WORD AD VALOREM.
SO ANYWAY, I'M, I'M VERY CURIOUS IF Y'ALL HAVE AN ANSWER, WHAT OTHER SUBDIVISIONS ARE HELPING PAY FOR THIS AND WHAT ARE THOSE BUSINESSES? CUZ I DON'T SEE THIS GETTING PAID OFF AND I, I'M 62, I, YOU KNOW, SO I'LL BE DEAD BEFORE THIS THING IS PAID OFF.
SO ANYWAY, IF ANYBODY CAN ANSWER, I'D BE VERY OPEN TO AN ANSWER PLEASE.
YEAH, WE JUST GOT A COUPLE MINUTES LEFT.
UM, MANNY ALVAREZ, 29 60 WILLOW TRACE LANE IN SUNDAY HOOK.
I'D LIKE TO FIRST CLARIFY, I THINK YOU MADE IT PRETTY CLEAR THAT THIS BOARD AND THE BOARD FOUR YEARS AGO HAD NOTHING TO DO WITH THE ORIGINAL, UH, DEBT STRUCTURE OR THE BORROWING.
I THINK THE WEST CREEK DISTRICT WAS A GREAT IDEA.
I THINK IT WAS FUNDED, UH, BADLY.
AND I THINK IF, IF ANYBODY HERE HAS KIDS AND HAVE CO-SIGNED A LOAN IN ORDER TO GET THIS APPROVED ORIGINALLY BY THE, BY THAT BOARD IN 2002, THEY HAVE TO GET GOVERNOR KAIN TO SIGN IT.
SO THAT WAS, HE ACTUALLY WAS A CO-SIGNER OF THAT BOND.
SO IT WAS NOT A, NOT STRUCTURED WELL FOR THE COUNTY.
UM, BACK THEN, UM, UM, MR. LEVITT SAID THAT THERE WAS A, HE'S GOT HIS CHARGE SHOWS 14.7 MILLION IN, UH, ADDITIONAL OR IN ADDITIONAL COST.
[01:00:01]
IF YOU BORROW 62 MILLION, YOU'RE NEVER GONNA PAY JUST $62 MILLION.UH, THE COST OF THE ORIGINAL BONDS AT 7%, 5%, WHATEVER THEY WERE, UH, WOULD'VE BEEN MUCH HIGHER THAN THE 14 MILLION THAT WE'VE ALREADY PAID.
SO I, SO I THINK IT'S PRETTY OBVIOUS TO ME.
I THINK YOU DID A GREAT JOB EXPLAINING IT.
I HOPE YOU'LL TAKE THIS VIDEO AND PUT IT ON THE, ON THE TAHA CREEK SERVICE DISTRICT, UM, UM, INFORMATION SITE.
AND I WISH, UH, I HOPE MR. LEVER WILL GO BACK.
I THINK HE'S TOO UPSET TO ACTUALLY LISTEN BECAUSE I THINK YOU EXPLAINED IT ALL VERY WELL AND VERY CLEARLY.
SANDRA WARWICK, 360 7 SWINBURN ROAD.
UM, I'VE BEEN AROUND SINCE THE TUCKAHOE CREEK SERVICE DISTRICT WAS FIRST ESTABLISHED.
IT WAS A MESS AT THE START, AND YOU, YOU AND FORMER BOARD MEMBERS CLEANED IT UP.
I RECENTLY BOUGHT A HOUSE IN THE TUCKAHOE CREEK SERVICE DISTRICT, FULLY UNDERSTANDING THERE WOULD BE AN AD VALOREM TAX.
I DON'T KNOW WHAT KIND OF STATUTORY POWER YOU HAVE, BUT TOO MANY PEOPLE ARE MOVING INTO THIS COUNTY WITHOUT DOING ANY RESEARCH ABOUT WHAT THEY'RE MOVING INTO.
THERE'S LOTS OF INFORMATION ON THE WEBSITE ABOUT THE TAX RATES, AND PEOPLE DON'T LOOK AT IT UNTIL THEY GET THE BONUS BILL, AND YOU DO GET A SEPARATE BILL WITH THE AORM TAX AND PEOPLE GO, WHAT'S THIS? SOMEHOW DEVELOPERS, BUILDERS, AND REALTORS HAVE TO BE HELD TO ACCOUNT TO EXPLAIN THIS TO PEOPLE SO THEY CAN MAKE INFORMED DECISIONS.
I THINK WE, I THINK WE'RE RUNNING OUT OF TIME HERE.
UM, PART OF THIS, UM, SESSION IN THIS SLIDESHOW IS TO TRY AND HELP, UM, SPREAD INFORMATION, SHARE INFORMATION.
IF YOU'VE GOT RESIDUAL QUESTIONS IN YOUR MIND, FEEL FREE TO REACH OUT TO THE COUNTY.
UH, WE CAN GET YOU WHATEVER ANSWERS YOU NEED ON THIS.
WE, UM, HAVE UNDERTAKEN TO BE A, A COMPLETELY, TOTALLY TRANSPARENT, UM, GOVERNMENT UP HERE AND SHARE ANYTHING AND EVERYTHING THAT WE DO.
UM, I WILL CLEAR UP MAYBE, PERHAPS ONE OTHER CONFUSION THAT SOMETIMES COMES UP IS THE AVALON TAX IS, UM, IS, IS NOT TO GET YOU WATER AND SEWER, IT'S TO PAY BACK THE DEBT.
AND WHEN THE DEBT'S GONE, THEN WE CAN REVISIT THAT A VALOR TAX AND SEE WHAT HAPPENS TO IT.
BUT, BUT IT'S NOT, IT'S NOT A WATER BILL FOR YOUR WATER.
IT'S A SPECIAL TAX IN THE DISTRICT TO PAY BACK THE DEBT THAT WAS INCURRED TO LAST TIME.
THE SECOND THING IS THAT EVERYBODY THAT, UM, IN 2002 WHEN IT WAS SET UP, EVERYBODY THAT CAME INTO THE DISTRICT DID SO VOLUNTARILY, AND EVERYBODY THAT'S BOUGHT A HOUSE SINCE 2012 WITH THE DEBT RESTRUCTURING, UM, UH, VOLUNTARILY AS ASSUMED THAT DEBT, THAT REQUIREMENT TO PAY THAT DEBT AND THE 32 CENTS HASN'T CHANGED.
SO WE REALLY HAVEN'T CHANGED THE, THE RULES OF THE GAME, IF YOU WILL, UM, FOR PEOPLE THAT HAVE BOUGHT THE HOUSE SINCE THE 2012, UH, DEBT RESTRUCTURING.
SO, UH, WITH THAT, UM, I'M GOING TO CONCLUDE THIS MEETING AGAIN.
UM, SHOW OF HANDS, DID ANYBODY HERE LEARN ANYTHING TODAY? ANY NEW INFORMATION? ANYBODY LEARN SOMETHING NEW THAT THEY DIDN'T KNOW? UH, WAS THIS KIND OF A SESSION, A GOOD SESSION TO SHARE INFORMATION? SHOULD WE KEEP DOING THIS KIND OF A THING AND JUST BRINGING THIS OUT TO THE FOLKS? OKAY.
I'M SEEING A LOT OF BOBBLEHEADS, SO, UH, WE WILL CONTINUE TO DO THIS.
UM, WE THINK IT'S IMPORTANT TO SHARE INFORMATION BACK AND FORTH, UM, AND TRY TO ELIMINATE MISCOMMUNICATION AND MISUNDERSTANDINGS WHEREVER WE SEE THEM.
SO THANK YOU ALL FOR COMING OUT TODAY.
UM, IF YOU WANT TO GO INTO EXTRA INNINGS AT TWO O'CLOCK, IS OUR BOARD MEETING UP HERE IN THE SAME ROOM? UH, IF NOT, TRAVEL HOME SAFE.
THANK YOU FOR COMING OUT TODAY.
[VII. ADJOURNMENT TO 12:30 PM AUGUST 1, 2023]
IS.