Page 254 - Watauga FY21 Budget

DEBT SERVICE

Certificates of Obligation were sold in the amount of $2,300,000 in FY 2003 for
construction of a city hall and an animal shelter, as well as for additional street
reconstruction money. This debt is repayable within fifteen years.

During FY 2004 the City was once again able to take advantage of low interest rates
and refunded the General Obligation Debt Series 1994 and advance refunded the
Watauga Parks Development 1995 Sales Tax Revenue Bonds.

During FY 2005 the City issued $5,000,000 of Certificates of Obligation for
construction, purchasing, renovating, and improving the City’s public safety facilities,
expansion of the City library, and construction or improvements to streets, curbs, and
sidewalks within the City.

During FY 2007, the City issued $3,400,000 of Combination Tax and Limited Pledge
Revenue Certificates of Obligation for the purpose of paying contractual obligations for
constructing, purchasing, renovating, and improving the City’s public safety facilities,
including police, fire, and emergency medical services, and constructing street
improvements and drainage incidental thereto.

In March 2008, the City refinanced the bonds issued in 1996, which were used to pay
for acquisition, improvements, and extensions to the Water/Sewer system including
payment for professional services related to the construction and financing of
water/sewer improvements. The City was able to reduce interest from 4.783% to
3.12%, while also freeing up $360,000 from the Bond Reserve Fund, which is no
longer required.

During FY 2011, The City issued $7,365,000 Combination Tax and Limited Pledge
Revenue Certificate of Obligation Bonds, of which $4,585,000 are paid from property
tax levies. These bonds were issued to finance various equipment needs (i.e., radios,
computer hardware), street projects and improvements, specific use vehicles such as a
quint fire truck, ambulance, public works heavy equipment, traffic lights and traffic
safety equipment, and possible renovation of some buildings. This debt issuance was
timed for FY 2012 since the City’s total debt obligations decreased the end of FY 2011.
Also during FY 2011, the City refunded $1,000,000 in Certificates of Obligation, Series
1998. The City was able to reduce interest from 4.6% to 1.95%.

During FY 2012, the City issued $7,730,000 Combination Tax and Limited Pledge
Revenue Certificate of Obligation bonds, which will be paid from water and sewer fund
revenues. These bonds were issued to finance various utility system projects, to
include street improvements and storm water and drainage system improvements.
The City began these projects in FY2013 and the projects will continue through
FY2016.

During FY 2013 the City was once again able to take advantage of low interest rates
and refunded the Series 2003 and Series 2005 Certificate of Obligation. The gross
savings to the City was $126,523.12 through this refunding.

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