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021120pra revised
9:00 am 9:15 am 10:00 am 10:30 am 11:00 am 12:00 pm 12:30 pm 2:00 pm Harnett County Board of Commissioners Planning Retreat Tuesday, February 11, 2020 Shawtown Community Center Lillington, NC 27546 Welcome and Overview, Paula Stewart Financial Analysis, Davenport & Company Proposed Fiscal Policy Changes, Kimberly Honeycutt & Renee Paschal Financial Trends, Renee Pas chal Budget Kickoff, Renee Paschal Lunch Growth Pressures, Administration and Development Services Staff Wrap-up/ Adj o urn Background • Original policy adopted May 7, 2012 • Amendments adopted November 7, 2016 • Going forward: • Policy will be reviewed annually during the Budget Retreat • Current policy is good, but does not include a comprehensive set of policies regarding budget preparation and administration Changes to Fiscal Policy Change the Title • Take out "guidelines" to strengthen language / Changes to Fiscal Policy Tweak Purpose • T~!}5£3:?olicy will influence and guid~ the firiancial r,nanager_nent -efi-a--EB-1E-e---e--f Harnett County, North Carolina. /\ fiscal policy that 1s adopted, adhered to, and regularly revievved is recognized as the cornerstone of sound financial management. Effective fiscal policy:Harnett County government exists to meet the needs of residents through the services the County is mandated to provide or has elected to provide. In order to meet these needs, the County must maintain its financial integrity. In addition, the County must continually prepare to provide services for a growing population. The County's Fiscal Policy is intended to maintain and improve the County's financial condition and preserve its ability to meet future needs. This policy will be reviewed at least annualry and changes approved by the Board of Commissioners. An effective policy: Changes to Fiscal Policy CIP Policies • #2 adds language to make it clear the Manager is responsible for preparing the CIP, as set out in statute • #4 adds language that requires that all capital projects be requested through the CIP process • #5 makes it clear that the threshold for Cl P projects is $100,000 and above and expands the definition of what can be considered a capital project • #6 changes the timeframe for the CIP from 5 to at least 7 years and clarifies that schools and CCCC are encouraged to submit through the CIP process; the county cannot require participation Changes to Fiscal Policy CIP Policies • #7 sets out how CIP projects become "budgeted"-either through a project ordinance or through the operating budget • #8 adds the requirement that projects be assigned a project code for tracking and reporting purposes • #9 clarifies language for maintenance and ties it to availability of funding • #10 lays out the information required for CIP submissions (written justification, project cost, offsetting revenues, operating impact) Changes to Fiscal Policy Debt Policies • Minor tweaks to clarify language • Moves Enterprise Debt policies to this section Changes to Fiscal Policy Reserve Policies • Moves Enterprise Reserve policies to this section Changes to Fiscal Policy Budget Development Policies • For the most part, a new section • #1 sets forth goals of this section: • Meet debt obligations • Meet legal obligations • Ensure adequate funding of current services • Meet Commission priorities • Maintain the County's financial condition • Keep property tax increases to a minimum • #3 makes it clear the Manager is responsible for preparing the recommended budget, as set out in statute Changes to Fiscal Policy Budget Development Policies • #4 states Board of Commissioners' responsibility to adopt the operating budget • #5 clarifies that one-time revenues can only be used for one-time purposes and adds language that proceeds from the sale of capital assets should go into capital reserve • #6 adds language that the County will not waive fees and other revenues lawfully collected • #7 clarifies that producing reports is the duty of the Finance Officer • #9 prioritizes adequate funding of current services over new services Changes to Fiscal Policy Budget Development Policies • #10 add? language tt,at mid-year funding requests will only be allowed 1n extreme circumstances • #11 adds language that funding of nonprofits must meet the NC Constitutional test for public purpose and that nonprofits must follow the County's budget process • #12 adds language to address grant-funded programs and the approval process • Adds language requiring the Board of Commissioners to approve the assumption of programs and expenses that were previously grant funded • Lays out the grant aP.proval process; any grants that commit the county for matching fu.na~ in-l<ir)d .support or continuing programs beyond the grant period require Lomm1ss1oner approval • Clarifies that reporting requirements fall to effected departments Changes to Fiscal Policy Budget Development Policies • #13 adds language that adding new positons should be done only after all other alternatives have been explored • #14 sets forth the department level as default level at which budgets will be adopted; allows the Board of Commissioners to adopt budgets at a different level; sets forth department heads' ability to move money within their operating budgets; and requires approval of the Budget Officer for transfers to/from personnel and capital within a department budget • #15 sets out expectations for departments in justifying budget requests, including addressing service levels, measuring performance, and comparing to other jurisdictions Changes to Fiscal Policy Budget Development Policies • #16 adds language to prohibit departments from budgeting contingencies; sets the overall limit for contingency at 1 % of the budget or less • #17 adds language to allow the budget officer to: • Transfer funds within departments • Transfer up to $5,000 between departments with memo to Board • Transfer up to $50,000 from contingency with memo to Board • Employ temporary help • Execute contracts of $100,000 or less, provided that funds have been budgeted and term does not exceed 3 years • #18 moves Enterprise Fund budget policies to this section Changes to Fiscal Policy Education Funding Policies • Old #3 is deleted, as the teacher supplement was added to current expense in FY 2019 • New #3 clarifies that funds for capital are provided through lottery proceeds, rather than restricted sales tax, and removes reference to the CIP, since the Board of Education does not currently submit projects through the County's CIP and much of its capital outlay request would not meet the threshold for CIP Changes to Fiscal Policy Enterprise Funds Policies • All policies for Enterprise Funds have been moved to the appropriate section of the policy to clarify that enterprise funds must follow the county's financial policies, unless exceptions are noted Changes to Fiscal Policy ,,,-: -~ Harnett ~(~ COUNTY ~ NORTH CAROLINA Renee Paschal Budget Director rpascha l@ha rnett.o rg Changes to Fiscal Policy Fiscal Policy G1:Jidelines For: Harnett COUNTY I\IOR. H _AR Ll"lA Harnett County, North Carolina Originally Adopted: May 7, 2012 Approved Amendments as of November 7, 2016 Proposed Amendments as of February 11, 2020 FISCAL POLICY <;u1gn1Nli5 08JliC+IVli5 PURPOSE This fiscal policy will influence and guide the financial management practice of l-larnett Count•r, North Carolina. A fiscal policy that is adopted, adhered to, and regularly reviewed is recognized as the cornerstone of sound financial management. effective fiscal polic~·:Harnett County government exists to meet the needs of residents through the services the County is mandated to provide or has elected to provide. In order to meet these needs, the County must maintain its financial integrity. In addition, the County must continually prepare to provide services for a growing population . The County's Fiscal Policy is intended to maintain and improve the County's financial condition and preserve its ability to meet future needs. This policy will be reviewed at least annually and changes approved by the Board of Commissioners. An effective policy: • Contributes to the County's ability to insulate itself from fiscal crisis, • Enhances short:-term and long:-term financial credit ability by helping tocredit worthiness and helps the County achieve the highest credit and bond ratings possible, • Promotes long-term financial stability by establishing .2,_clear and consistent guidelinesframework for budget and financial decisions, • Directs attention to the total financial picture of the CountyL rather than single -: issue areas, • Promotes the view of linkinglinks long -fi:ffi-term financial planning with day_:-to:-day operations, and • Provides the County St aff, the County Board of Commissioners and the County citizens a framework for measuring the fiscal impact of government services against established fiscal parameters and guide lines . This policy will be reviewed periodically by Count~· staff and any changes will be approved by the Board of Commissioners. To these ends, the following fis ca l policy statements are presented.policy is adopted: CAPITAL IMPROVEMENT RUQ~H PLAN (CIP) POLICIES 1. It is the responsibility of the County Board of Commissioners to provide for the capital facilities equipment and facilities necessary to deliver municipal county services to the citizens residents of the County, as well as provide necessary capital equipment and facilities for the Harnett County Public Schools and the Central Carolina Community College system. 2 . The County will censieler all North Carolina statutes charge the County Manager w ith preparation of the capital budget. It shall be his/her responsibility or that of his/her designee to coordinate the CIP process; receive requests from County departments, Harnett County Publ ic Schools, and Central Carolina Community College; and propose a recommended CIP to the Board of Commissioners . b-3 . The Board of Commissioners is responsible for adopting a CIP annually and may amend it as needed . 4. All capital improvements projects in accorelance 'Nith an aelopteel Capital Improvement ~must be proposed through the County's CIP process,.:... ~_5 _. _The Capita l Improvement PlanCIP is inclusi .. ·e of Capital lmprm,1ements (renovations), Capital Replacement (\·chicles anel heavy eeiuipment) anel Major Capital Projects (new auilelings).includes all approved capital projects, including new construction, renovations, vehicles and heavy equ ipment, new software and other technology, and all other purchases and improvement s that meet the thre shold fo r definition as a capital project, currently $100,000 and above. 4:-_6_. _The County will develop a five year Capital Improvement Plan CIP of at least seven years and review and update the plan annually. The County, in consultation with the l-lamett County Pualic Scl:lool anel Community· College Systems, will coorelinate elevelopment of the capital improvement auelget witR elevelopment of the operating auelget. Future operating costs associateel 'NitR new capital improvements will ae projecteel anel inclueleel in operating auelget forecasts. The Hamett County Public Schools and the Community College Sy stem are strongly encouraged to will suamitsubmit their needs through this process, along with a prioritization of their requests. respective five year capital improvement reeiuests annually anel will pro1,i ele a prioritization for the impro·,ements witRin tl:leir reeiuest for tRe County Commissioner's review. 7. The County will enact an annlo:lal capital buelget baseel on tl:le fi\1 e year Capital --- Improvement Plan, wl:lile consielering changes in population, cl:langes in real estate elevelopment, or cl:langes in assumptions in the capital auelget projections. After projects are approved in the CIP and before the project can begin, the project mu st be authorized through one of t wo means : A. Capita l project ordinances: A separate capital budget ordinance shall be submitted to the Board of Commi ssioners for approval for all capita l projects that are projected to span more than one fiscal year; B. All other capital projects will be budgeted in the operating budget . 8 . All capital projects will be assigned a project code by the Finance Officer for tracking and reporting purposes. -3'7_9_. _The Capital Improvement Plan will inch.1de the estimated costs for the County to maintain all Cotinty, Public School and Commtinity College assets at a le>.«el adeeitiate to protect the ptiblic's welfare and safety, the Cotinty's capital investment and to minimize fottire maintenance and replacement costs. A maintenance and replacement schedule will be developed and followed based tipon these estimates.The CIP will prioritize the maintenance of existing facilities and equipment, and otherwise protect the county's past capital investments. A maintenance and replacement schedule will be developed and followed as funding allows. e,.]&___The Cotinty, in constiltation with theCounty l-larnett Cotinty Ptiblic School and Commtinity College Systems, willdepartments will provide a written justification and identify the estimated project costs L af*:1.-.potential funding sources, and impacts on the operating budget -for each proposed cap ital project proposal before it is submitted for approvaland include this information in their requests. The County Manager or his/her designee will review, modify as appropriate, and include this information in the recommended CIP . -7,.11...._ The County will pursue the most cost:-effective financing consistent withstrategies for financing the CIP, consistent with prudent financial management. DEBT POLICIES 1. h-The County will confine long -term borrowing to crit ical capital improvements or projects that cannot be financed from current revenues , unless financing results in a net financial benefit to the county . except where approved jtistification is provided . _2._The County will tak e a balanced approach to capita l fundingJ2y_-utilizing debt financing, capital reserves and pay-as-you -go funding where po ss ible . Pay -as-you -go funding will come from budgeted appropriations and funds set aside in capital reserves . b3. The county's capital funding strategy should re sult that will pro>.«ide the in the least financial impact on current and future tRe-taxp ayer~. Pa~1 as yoti go funding will come from btidgeted appropriations. ;A--'-When the County finances capital improvements or other projects by issuing bonds or entering into capital leases, it will repay the debt within a period not to exceed the expected useful life of the project. Target debt ratios wi ll be annually ca lcul ated and included in the review of financial trends. 4:L_Net debt as a percentage of estimated market va lue of taxable property shall not exceed 2.5%. Net debt is defined as a ny and all debt that is tax-supported. ~§.:_Debt Service expenditures as a percent of total governmenta l fund expend itures shou ld not exceed 15%. Should this ratio exceed 15%, staff must request an exception from the Board of Commissioners stating the justification and expected duration of the policy exception. Exceptions shall be reviewed and approved annually by the Board of Commissioners until compliance is achieved . e-:L_The County will retire tax anticipation debt, if any, annually and will retire bond anticipation debt within six months after completion of the project. _8._Payololt of aggregate oO utstanding tax-supported debt principal shall be no less than 50 .0% repaid in 10 years. 9. Enterprise Debt Policies: A. B. C. D. The Enterprise Fund is responsible for setting rates and charges at such a level which maintains the "self-supporting" nature of the fund. The County will target a min imum amount of equity funding of 10% of the Enterprise Fund capital improvement plan on a five-year rolling average. The Enterprise Fund will comply with all applicable bond covenants. The Enterprise Fund will maintain a debt service coverage ratio as defined by the General Indenture of the Enterprise System Revenue Bonds. These minimum requirements are summarized to be: 1) l.20x debt service coverage on Parity Indebtedness (Revenues for this measure may include 20% of the balance in the Surplus Account at the end of the preceding Fiscal Year) 2) l.OOx debt service coverage of Parity Indebtedness, General Obligation Indebtedness, Subordinate Indebtedness. Other Indebtedness, and any amount due to the Qualified Reserve Fund or Qualified Reserve Fund Substitute. RESERVE POLICIES l. Th e County will m aintain a minimum Un ass igned Fund Balanc e, as defin ed by the Governmental Accounting Standards Board, at the close of each fiscal year equal to 15% of Genera l Fund Expenditures with a targeted Unassigned Fund Balance equal to 20% of Gene ral Fund Expenditures. 2. In the event that funds are ava il ab le over and beyond the 20% targeted amount, those funds may be transferred to a cap ita l reserve fund, a capita l projects fund, to pay-down debt or to fund other one-time uses . Such tran sfers or uses shall be approved by the Board of County Commissione r s in conjunction with a staff recommendation based upon a fund ba lance ana lysis to be comp l eted within si x months of the close of each fiscal year taking into consideration the prior year's financia l statements, current year -to-date budget performance, current property tax va l uations and the County's most recently adopted capita l improvement plan. 3. The County Board may, from time-to-time, utilize fund balances that will reduce Unassigned Fund Balance below the 15% minimum for the purposes of a declared fiscal emergency or other such purpose as to protect or enhance the long-term fiscal security of the County. In such circumstances, the Board will adopt a plan to restore the Unassigned Fund Balance to the target level within 36 months. If restoration cannot be accomplished within such time period without severe hardship to the County, then the Board will establish a different but appropriate time period. 4. Enterprise Reserve Po l icies: The County has adopted a comprehensive strategy for the long-term stability and financial health of each Enterprise Fund that provides for annual increases in fund reserves to an established goal of 50% of operating and maintenance expenses BU DGET DEVELOPMENT POLIC I ES 1. The County will manage its annual budget to meet its legal and debt obligations, ensure adequate funding of current service levels, meet the priorities of the Board of Commissioners, maintain the County's financial condition, and keep property tax increases to a minimum. The County shall operate under an annual balanced budget ordinance whereby the sum of net revenues and appropriated fund balances equals the expenditure appropriations. "'"'2. __ The Budget Process will be compliantcomply with the North Carolina Local Government Budget and Fiscal Control Act. 3. 4. North Carolina statutes charge the County Manager with preparation of the recommended operating budget. It shall be his/her responsibility or that of his/her designee to coordinate the budget process; receive requests from County departments, Harnett County Public Schools, and Central Carolina Community College; and propose a recommended budget to the Board of Commissioners. The Board of Commissioners is responsible for adopting an annual operating budget and may amend it as needed . =s. __ One time or other special reven1::1es will not be 1::1sed to finance contin1::1ing Co1::1nt~' operations b1::1t instead will be 1::1sed for f1::1nding special projects . Use of one-time revenues : One-time revenues should not support ongoing personnel and operating costs . Use of one-time revenues is appropriate for capital outlay, CIP projects, debt retirement, contribution to capital reserve, and other non-recurring expenses. Proceeds from the sale of surplus capital items will go into the County's general capital reserve, unless proceeds are otherwise restricted. ~-· __ The County will pursue an aggressive policy seeking to collect the collection of current and delinquent property taxes, utility fees , license~, permit~ and other fee.s-revenues due to the County. The County will not waive any revenues due to the County unless those revenues were collected unlawfully. b_7. __ Co1::1nty staff The Finance Officer will generate reports that show actual revenues and expenditures compared to the budget and will present this to the County Board on a monthly basis. ~-· __ Budget amendments will be brought to the County Board for consideration as needed. 9. 10. 11 . 12 . 13. 14. New or increased services: The County should ensure adequate funding of current services before funding new or enhanced services. Mid-year appropriations: All agencies supported by the county must function within the resources made available to them through the annual budget. The county will consider requests for new or expanded programs during the course of the regular budget process. Only in extreme circumstances will such requests be considered outside of the budget process. Funding -of Outside Agencies: From time to time, the County may elect to provide services through nonprofit agencies if those services meet the standard for public purpose as defined by the NC Constitution and the services can be achieved more cost effectively through the nonprofit. In order to receive county funding. nonprofits must abide by the county's budget process and deadlines and provide the information requested during budget process. Grants: The County w ill pursue federal. state, and private grants to enhance services to County residents. However, the County will strictly limit its financial support of grant-funded programs to avoid commitments, which continue beyond funding availability. The County will not continue programs after grants have expired, except as express ly approved by the Board of Commissioners as part of the annual budget process . The grant approval process will proceed as follows: [, F. G. H. If a grant does not require any county match, either cash or in-kind, and the funder does not expect the county to continue to fund a position or a program after the grant, then the proposal can be reviewed and approved by staff. However, the County Manager may choose to present a grant proposal to the Board for approval. if he/she feels that it is appropriate. If the grant requires a county match, either cash or in -kind, or the funder expects the county to continue to fund a position or program after the grant is complete, then the grant application must be submitted to the Board of Commissioners for approval. For grants that require Board of Commissioner approval, but approval cannot be obta ined before the grant deadline, the Manager's Office can authorize the application with prior notice to the Chair and Vice Cha ir and report to the Board of Commissioners at their next meeting. If the Board of Commissioners does not approve the grant proposal. the funder will be notified that the county chooses to withdraw the application. Departments shall be responsible for timely completion and filing of reports required by the grantor. Missing of report deadlines shall be grounds for denying approval of future grant applications. New positions : New positions for existing programs and services should be added when there is no other viable option. Alternatives, such as contracting. technology. and reassignment of duties should be fully explored and documented before new positions are funded. Level of budgeting: In order to tie costs to specific services, departments shall submit budgets for each of their divisions or program areas. Department heads are authorized to transfer operating funds between their divisions without prior approval. 15. 16 . 17. 18 . Transfers to and from personnel and capital outlay must be approved by the Budget Officer. The County shall adopt budgets at the department level. Commissioners reserve the right to review and/or adopt budgets at a greater level of detail. Justification for funding: Departments and agencies requesting funding from the county should justify their requests in terms of maintaining or increasing service levels. Departments should measure their performance in key service areas and periodically compare their performance to other jurisdictions to discover efficiencies and develop best management practices. Contingency funds: Departments shall not include contingency funds in their respective budgets. The county shall include a general contingency fund in its annual budget. The amount of the contingency fund shall not exceed one percent of the annual budget. Budget Officer: The County Manager serves as the budget officer. He/she is authorized to perform the following functions or delegate them: A. Transfer funds within a department without limitation. B. Transfer amounts of up to $5,000 between departments of the same fund with a memorandum report of such transfers at the next regular meeting of the Board of Commissioners. C. Transfer amounts of up to $50,000 from contingency to any department with a memorandum report of such transfers at the next regular meeting of the Board of Commissioners. Greater amounts can be made available upon agreement of the Board of Commissioners. D. Employ temporary help from time to time to meet circumstances. E. Execute contracts provided that funds for the contract have been approved as part of the annual budget and the contract does not exceed the funds appropriated, the contract's term does not exceed three years, all applicable state laws and county policies regarding purchasing are followed, and the contract does not exceed $100,000. Enterprise Funds: A. B. C. The County ma intains Enterprise Funds (primarily water and wastewater and solid waste) that are self-sustaining for both operational and capital purposes . The Enterprise Funds will adhere to the County Fiscal Policy with any exceptions noted in the policy. Any improvements required to meet new regulatory requirements or to meet changes in the service demands will be included in either the capital improvement plan or the annual budget request, depending on the cost of the improvement. Service rates : 1) Service rates will be reviewed annually as part of the budget process. 2) Service rates will be adjusted as needed to provide adequate funding for the proper operation, maintenance, and expansion of the system . 3) Service rates will be adjusted as necessary to meet bond covenants, debt service obligations. and the Adopted Fiscal Policy . EDUCATION FUNDING POLICIES l. 2. 3. It is the intent of the County to appropriate funding to the Board of Education to assure that the necessary resources are provided for current expense and to meet the low- wealth funding requirements. The County will provide current expense funding based upon the most recent known 2nd month average daily membership (ADM) times the most recent known Three-Year Average of Appropriations as determined by the NC Department of Public Instruction. The County will provide funding for an annual classroom teacher supplement to those teachers who were employed as of September 1 of the preceding fiscal year. To remain eligible for the payment, the teacher must remain in the employment of the l=larnett County School system, as a teacher, at the time the payment is made. i;or purposes of this funding, a Teacher is defined as those individuals who are included in the Public School Personnel Summary provided by the NC Department of Public Instruction. 4,_3._The County will provide funds for Capital and Capital Maintenance. The source of funding will be a portion of the sales ta>< e><pansion basis lottery proceeds and will be disbursed based upon the adopted budget ordinance. Board of Education' s latest approved Capital Improvement Plan (GIP) at the discretion of the Board of County Commissioners. ~_._The County will detail the amounts to be budgeted under this policy as part of the annual budget ordinance. CASH MANAGEMENT/ INVESTMENT POLICIES 1. It is the intent of the County that public funds will be invested in interest bearing acco unts to the extent possible to reduce the dependence upon property tax revenues. Funds will be invested with the chief objectives of safety of principal, liquidity, and yield, in that order. All deposits and investments of County funds will be in accordance with N.C.G.S. 159. 2. Up to one -half (50%) of the appropriations to Non-County Agencies and to non debt- supported capital outlays for County Departments can be encumbered prior to December 31. Any additional authorization shall require the County Manager's written approval upon justification. The balance of these appropriatio ns may be encumbered after Janu ary 1, upon a finding by the County Manager that there is a reasonable expectation that the County's Budgeted Revenues will be realized. 3. Th e County will use a Centra l Depository to maximize the availability a nd mobility of cash for all funds that can be lega lly and practically combined. 4. Cash Flows will be forecasted and investments will be made to mature when funds are projected to be needed to meet cash flow requirements. 5. Liquidity: No less than 20% of funds available for investment will be maintained in liquid investments at any point in time. 6. Maturity: All investments will mature in no more than thirty-six (36} months from their purchase date. 7. Custody: All investments will be purchased "payment-verses-delivery" and if certificated will be held by the Finance Officer in the name of the County. All non -certificated inve stments will be held in book-entry form in the name of the County with the County's third party Custodian (Safekeeping Agent). 8. Authorized Investments: The County may deposit County Funds into: Any Board approved Official Depository, if such funds are secured in accordance with NCGS-159 (31). The County may invest County Funds in: the North Carolina Capital Management Trust, US Treasury Securities, US Agency Securities specifically authorized in GS-159 and rated no lower than "AAA", and Commercial Paper meeting the requirements of NCGS - 159 plus having a national bond rating. 9. Diversification: No more than 10% of the County's investment funds may be invested in a specific company's commercial paper and no more than 25 % of the County's investment funds may be invested in commercial paper. No more than 25% of the County's investments may be invested in any one US Agency's Securities. 10. Allocation: Investment income will be allocated to each participating fund or account based on a fair and equitable formula determined by the Finance Director. l!NH:RPRISJi i;yNQS POLICY The Co1,1nty maintains ~nter13rise F1,1nds (13rimarily water and wastewater) that are self s1,1staining for both 013erational and ca13ital 131,1r13oses . The Enter13rise F1,1nds will adhere to the Co1,1nty' Fiscal Policy with an•t e><ce13tions being re13orted in this section . e e These 13olicies will allow for orderly e><13ansion of seri,iices and to allo•N 013eration within the financial framework ins1,1ring efficiency while woviding necessary services . They 13rornote long terrn financial stabi lity. They insme the fot1,1re viability of the system while 13roviding for 13redictable and reasonable rateincreases. Qwdget Peli&ies; e e Enterprise F1,mds will develop a multi year capital improvement plan, \•.«hich will be reviewed and updated annually. Any improvements required to meet ne\\' regulatory requirements or to meet changes in the service demands will be included in either the capital improvement plan or the annual budget request. Service rates will be revie·Ned annuall•t as part of the budget process. Service rates will be adjusted as needed to provide adequate funding for the proper operation, maintenance, and e><pansion of the system. Service rates will be adjusted as necessal)' to meet bond covenants, debt service obligations, and Adopted Financial Policy ~uidelines. Qelat Pelic;ies: e The Enterprise Fund is responsible for setting rates and charges at such a level which maintains the "self supporting" nature of the fund . The County will target a minimum amount of equity funding of 10% of the Enterprise Fund capital impro·.·ement plan on a five year rollingaverage . The Enterprise Fund will comply with all applicable bond covenants . The Enterprise Fund will maintain a debt service coverage ratio as defined by the General Indenture of the Enterprise Svstern Re·,enue Bonds . These minimum requirements are summarized to be: o 1.20>< debt service coverage on Parity Indebtedness (Revenues for this measure mav include 20% of the balance in the Surplus Account at the end of the preceding Fiscal Year) o 1.00>< debt service co·,erage of Parity Indebtedness, General Obligation Indebtedness, Subordinate Indebtedness, Other Indebtedness, and anv amount due to the Qualified Reserve Fund or Qualified Reserve Fund Substitute . SUMMARY OF KEY POLICY RATIOS I Ratio Target Tax Supported Debt to Assessed Value: <2.5% Tax Supported Debt Service vs. Expenditures: <15.0% Tax Supported 10-Year Payout Ratio: >50.0% General Fund Unassigned Fund Balance as a Percent of Operating Budget: >15.0% Enterprise Fund Pay-go Capital (5-year Rolling Average): >10.0% Enterprise Fund Parity Debt Service Coverage (with 20% of Surplus Account) >1.20x Enterprise Fund Debt Service Coverage on all Indebtedness: >I.OOx Enterprise Fund Reserves as a Percent of Operating and Maintenance: >50% 120,000 100,000 80,000 60,000 40,000 20,000 Chart 1: Historical Population Growth in Unincorprated Area and Municipalities ~Municipal ~Unincorporated L,., ~ • ~ • • 2010 2011 • • 2012 • • • • • • • • 2013 2014 2015 2016 Source: NC Demographer • • • • 2017 2018 Buckhorn 1111 Stewarts Creek -Y1 0 0 0 Lillington -Hectors Creek Duke Neills Creek Upper Little River Grove Black River Johnsonville Averasboro Barbecue Anderson Creek I-' 9 0 0 0 I-' V, b 0 0 N ... o 0 0 0 N V, ... 0 0 0 Vl 0 C ""'I (") (l) :t> 3 Cl) ""'I QJ ::, (") 0 3 3 C ::, ;:;: Cl) VI Vl C ""'I < Cl) -< n '::J" QJ ~ ,... 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N Q) 0 > u N .-1 .-1 .-1 .-1 .-1 Chart 4: Annual Number of Foreclosures in HarnettCounty 800 NC Administrative Office of the Courts 700 -t---~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 600 -+--~~~~--, 500 400 300 200 100 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 QJ ..., tU 0::: ..., C QJ E > 0 -C. E QJ C :::, > ..., C ::, 0 u = QJ C ... tU :I: a.n ~ tU .c u C 0 ·;;; ff) .E E 0 () ;:;. "§ 0 Cl) Cf) c Cl) E >, 0 a. E w () z ~ :5 0 Cf) ?:' C :::, 0 u t: cu C ... ta :I: I N .... Gt-uer St-uer Lt-uer 9t-uer St-uer 17t-uer £t-uer 00 N 0 Chart 6: Article 39 Collections for First Five Months 4,500,000 4,000,000 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 0 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 700,000 600,000 500,000 400,000 300,000 200,000 100,000 Chart 7: Register of Deeds Excise Tax by Quarter • July-Sept Jan-Mar FY 2015 Oct-Dec Apr-June FY 2016 FY 2017 Source: NC DOR Conveyance Tax Returns FY 2018 FY 2019 FY 2020 Chart 8: General Fund Operating Performance 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 0 I 2011 2012 2013 2014 2015 2016 2017 2018 -1,000,000 -2,000,000 -3,000,000 30% 25% 20% 15% 10% 5% 0% Chart 9: General Fund Types Unassigned Fund Balance as Percent of Budgeted Expenditures ·················· 2011 2012 .... .. 2013 . . . . . . . . . . . . . . . ············ 2014 2015 ......... 2016 Harnett County CAFRs ............ 2017 ······ ······ 2018 Chart 10: Revenues Per Capita in Constant Dollars 1,000 Source: Harnett County CAFRs Warning trend: Revenues per capita are 950 declining. Trend DOES APPLY. .............................................................................. ········· ············· 900 850 800 750 700 650 600 550 500 2010 2011 2012 2013 2014 2015 2016 2017 2018 Chart 11: Expenditures Per Capita in Constant Dollars 1,100.00 Source: Harnett County CAFRs 1,000.00 ······························································································ ........... ........... 900.00 800.00 700.00 600.00 500.00 2010 2011 2012 2013 2014 2015 2016 2017 2018 Chart 12: Debt Service as a Percentage of General Fund Expenditures 18% Source: Harnett County CAFRs 16% LGC and Financial Policy Max 14% 12% 10% 8% 6% 4% 2% 0% 2010 2011 2012 2013 2014 2015 2016 2017 2018 250.00 200.00 150.00 100.00 50.00 2010 Chart 14: Restricted Intergovernmental Revenue Per Capita in Constant Dollars Source: Harnett County CAFRs Warning trend: Revenues per capita are declining. Trend DOES APPLY. .... . ................ . 2011 2012 2013 2014 2015 2016 2017 2018 180.00 160.00 140.00 120.00 100.00 80.00 60.00 40.00 20.00 Chart 13: Sales Tax Per Capita in Constant Dollars Warning trend: Revenues per capita are declining. Trend does not apply. ........................ ........ 2010 2011 2012 2013 2014 Source: Harnett County CAFRs 2015 2016 2017 2018 - Chart 15: Property Tax Per Capita in Constant Dollars 550.00 Source: Harnett County CAFRs Warning trend: Revenues per capita are declining. Trend does not apply. 500.00 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ......... 450.00 400.00 350.00 300.00 250.00 200.00 2010 2011 2012 2013 2014 2015 2016 2017 2018 $800 $700 C1) $600 ::, C C1) > C1) $500 ci::: n:, .~ C. n:, u $400 I.. C1) 0.. $300 $200 $100 $0 -Taxes Harnett County I -$479 I • Avg. for Pop. Group $751 I --67 57 Chart 16: FY 2018 Per Capita Revenue Comparison For Counties 100,000+ Population Data Source: NC State Treasurer lntergovern Services mental Proceeds I .... 225 430 164 14 32_ J ----+---I 211 115 162 176 38 $800 $700 Cl.I $600 ::I r:: Cl.I > Cl.I $500 a: n, ... ·a n, u $400 .. Cl.I CL $300 $200 $100 $0 ---· Taxes Harnett County $479 ------4-• Avg. for Pop. Group $751 __.___ Chart 17: FY 2018 Per Capita Revenue Comparison For Counties 100,000+ Population Without Utilities Data Source: NC State Treasurer ----Sales & lntergovern Services mental Proceeds ----+----, $67 $225 $132 $164 $14 $32 $57 $211 $85 $162 -------. I $176 $38 Chart 18: Property Tax Collection Percentage 100.00% Source: Harnett County CAFRs 99.50% 99.00% 98.50% 98.00% 97.50% 97.00% 96.50% 96.00% FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 (1/ .... /:. X {J. (1/ .:? ~ £ w 1.2000 ~ Chart 19: Comparison of Effective Tax Rates Source: NC Department Of Revenue I -Surrounding County _ie;,t~tP A"°'"""ff.l, 1.0000 I .8000 .6000 ~. _ I I I .4000 .2000 .0000 -Harnett County Johnston State Aver<!~ Harnett Cumberland Sampson I Lee; ~ ----~w:-:'i'ac~~.TJ~~hlali 111111 ~ 11111111111111111111111-H+l 11111111111 Moore .1111111 I I J Chart 20: Harnett County's Historic Sales Assessment Ratio 106% Source: NC Department of Revenue .... .... Warning Trend: Ratio is above 104% 102% 100% C ~ ' 1.00. Trend does NOT apply. ,____ .... '\. '\. "-. 0 "' ... ~ .... cu 0.. 98% ... cu 0.. cu -= 111 96% > "C cu "' "' cu "' "' 94% ct ' "' '\. ~ 92% 90% 88% 86% I 2014 2015 2016 2017 2018 2019 C 0 II) ... QI Q. ... QI Q. QI :s ~ .,, QI II) II) QI II) II) ct $70,000 $60,000 $50,000 $40,000 $30,000 $20,000 $10,000 $0 Chart 21: Assessed Value Per Capita Warning Trend: Per capita assessed value is declining. Trend does not apply. Source: Harnett County CAFR 2009 Actual 2010 Actual 2011 Actual 2012 Actual 2013 Actual 2014 Actual 2015 Actual 2016 Actual 2017 Actual 2018 Actual According 2018-2019 data from the NC Department of Revenue, Harnett ranks 95th out of 100 counties in assessed value per capita. 100.00% 90.00% 80.00% 70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% Residential Chart 22: 2019 Real Tax Base Comparison: Harnett v. Benchmarks & State Average Source: NC Department of Revenue • Chatham • Harnett 1--~~~~~~~~~~~~~~~~~~~~~____,-0nn~on,~~~~~~~ Commercial Industrial • Lee • Moore State Other Chart 23: Per Capita Income -North Carolina Average --Harnett Source: U.S. Department of Commerce $50,000 Bureau of Economic Analysis $45,000 Warning Trend: Per capita income is declining. Trend does NOT apply. $46,117 $40,000 $34,604 ~ --$35,000 I =----$30,000 $25,000 $20,000 -+---------------------------------$15,000 i---------------------------------$10,000 i---------------------------------$5,000 i-------------------------------$0 -l---~-~--~-~-~--~---~----~--r------.--~--,--~ 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 According to this survey, Harnett County's per capita income ranks 82nd out of 100 counties. At $51,225, Harnett ranks 30th in Median Household income. The state's median income is $53,922. (Source: US Census Small Area Income & Povery Estimates Program). Revenues: Actual to Budget 104% 102% 100% 98% 96% 94% 92% 90% 2010 2011 2012 2013 2014 2015 2016 2017 2018 Expenditures: Actual to Budget 100% 98% 96% 94% 92% 90% 88% 86% 2010 2011 2012 2013 2014 2015 2016 2017 2018 Tax Department The mission of the Harnett County Tax Department is to provide fair and equitable appraisal, assessment, billing, and collection of all taxable real, business, and personal property in Harnett County. The Tax Department is committed to excellent customer service and to fair and timely tax administration as guided by the North Carolina General Statutes. Budget Summary FY 18 FY 19 FY 20 FY20 FY 21 FY 21 FY 21 FY 21 Rec Rec% Actual Actual Rev Bud Est Total Req Rec Cont Rec Exp Total Rec Variance Inc/Dec Revenues Services Charges -50,128 50,128 50,611 50,611 50,128 0 0 0 -50,611 -100% Total -50,128 50,128 50,611 50,611 50,128 0 0 0 -50,611 -100% Expenses Salary & Benefits 1,303,878 1,320,544 1,380,123 1,380,123 1,320,544 0 0 0 -1,380,123 -100% Professional Services 23,425 16,000 37,600 37,600 16,000 0 0 0 -37,600 -100% Supplies & Materials 42,245 15,164 17,500 17,500 15,164 0 0 0 -17,500 -100% Current Services 51,460 94,971 77,436 77,436 94,971 0 0 0 -77,436 -100% Fixed Charges 188,033 144,040 228,358 228,358 144,040 0 0 0 -228,358 -100% Capital Outlay 61,825 0 0 0 0 0 0 0 0 0% Non Capitalized Assets 0 443 5,819 5,819 443 0 0 0 -5,819 -100% Total 1,670,866 1,591,162 1,746,836 1,746,836 1,591,162 0 0 0 -1,746,836 -100% Net Cost 1,720,994 1,541,034 1,696,225 1,696,225 1,541,034 0 0 0 -1,696,225 -100% Expansion & Other Notes Overview • Permitting Software Update • GIS Demo of New Online Tools • Harnett County Growth as a whole • NW Harnett Growth • NW Area Plan Implementation • US 421 Corridor Study Harnett County Growth Pressures Permitting Software Update • TRAKiT Implemented in July 2018 • 220K Investment • 18 Months in service • Overall things are working well • Inspectors use mobile devices and inspections are resulted in real time. • Streamlined training and the permitting process • Extracting Legacy Data, online permitting are a work in progress • Data is now more readily available to all departments -= I TRAKiT Harnett County Growth Pressures GIS Demo of New Online Tools • How are we getting this data .to the Citizens, Staff, Officials, and Business community? • Demo Online Permit Application • Demo Online Development Application Harnett County Growth Pressures Cerisurs ---au,-., Residential Growth 2000 to 2016 POPULATION CHANGE BY COUNTY: 2000-2010 s1see Miffti ltfii Harnett Count Growth Pressures -' ILi > r: ILi Cl .J f. 5 ! z! ,.. I:' \ !2 :.: ~ !I I , " .. ~ f! t& I ~ ,., ~1-,, .. .i)~ f&0v t,...,,~ Harnett County Population Growth Township Population Population Estimate 2020 25000 23090 19708 20000 15348 15000 12758 12125 I -12348 • 10412 10000 8850 6850 6390 I I I 5232 I I 5305 5000 I I 2975 0 I Duke Anderson Johnsonville Neills Creek Black Rrver Hectors Averasboro Stewarts Upper little Barbecue Lillington Buckhorn Grove Creek Creek Creek Rrver Harnett County Growth Pressures Current Growth Data Harnett County Growth Pressures All Permits Permits 2017 through 2019 3000 2500 2378 2444 2374 2000 1500 1000 500 0 • Residential Permits Commercial Permits Harnett County Growth Pressures 0) .-I 0 N ,+-J ... .-,,_ ~z ,_:::, roo I v "( \ '-{' ! ' 5 ' ! 1 1 ! i .. \ , .. i ! r I ( I ( f • i f f ~ • 4-J>,. ~ 4-J I-• Q)z C C f .. .. C ,, " " ' ~:), -.. I I C'Co "'·-.. ! Iu -"Ea. ..J "' ~ I r( .... I C Q.: s i I s : "' lf ,, 0 i IJ • N !il!l;! . ~ C &. I tr • e z </) Cl) SI' Hi!;:: , ::r It' '': :it ii lit!! (1) T'-1 0 N ' \0 T'-1 0 N ..c +J 3 0 '-C, iii ·a ... Cl) E E 0 u ' ' f I " r' I ~ , •• ;:;, C1 ...,,., I I ~. ' ' ,. , ··= rn r.: r ' I; / f ) NW Harnett Growth Key Facts • 37 New Developments • 4,469 Lots Under Review • 11,261 New Residents • 2,100 New Students • 44,469 New Vehicle Trips • 717 Acres Preserved in Open Space Harnett County Growth Pressures Town of Angier Residential Subdivisions Approved Subdivisions Total Lots/Units Property PIN(s) Status as of 1/23/2020 96 0674-04-1730.000 Final Phase Recorded 36 0674-95-4224.000 CDs Approved, Construction underway Kathryn's Retreat 88 0683-06-0225.000 Phases 1 & 2 Final Plat nearing Recordation Coble Farms 150 0665-90-0278.000 On Hold pending off-site utilities Bellewood (PUD) 164 (vVake)0674591289,0674684983 All Residential Phases recorded Honeycutt Oaks (PUD) 254 0673-38-2518.000, 0673-27-3950.000,0673-19-8126.000 Annexed, PUD Approved, CDs under review Glen Meadow Phase II 15 0674-95-6622.000 CDs nearing approval Lynn Ridge 77 0684-41-3103.000 Preliminary Approved, CDs under review Total Approved Lots 880 Not Yet Approved Subdivision Name Potential Lots/Units Property PIN(s) Status as of 1/23/2020 Chalybeate Springs Rd 206 0674-11-5217.000, 0674-01-6434.000 Annexed, Rezoned R-6 Kennebec Church Rd 100 (vVake)0675302448 Annexation, Rezoning Pending Rawls Church Rd 250 0675-00-1074.000 Rezoning Pending 238 {Vllakel684384989,0684485026 Annexation, Rezoning Ex_e_ected soon Total Potential Lots to be Approved in 2020 _ ~ Potential Total Lots to be Approved 2017-2020 ··•·· 421.Corridor Study ·. (Cape 'Fear Technology Corridor) I, A -· • US 421 Corridor: Brightwater, Lillington, Buies Creek, Erwin, to Dunn .~-. • 15 miles ·of existing roadway fronting 1,574 total parcels. 444 are non-~.\. residential parcels. ~. ··-Key compo·nents: • Transportation/ Access management :_·~. • Non-residential development standards along the corridor that will preserve the existing landscape providing attractive entrances or "gateways" into the county, utilizing architectural standards, etc. • Preservation of rural landscape • Economic Development recruitment tool Harnett County Growth Pressures . ; ·•-»· "O ...... H~ ~z 0 1,..::, 0 l'O c, l) :I:v rr "O Cl) V ~ Discussion Materials Harnett County, North Carolina r-s_(~ Harnett COUNTY NORTH CAROLINA February 11, 2020 DAVENPORT & COMPANY Member NYSE I FINRA I SIPC r L-Contents / Agenda Ill Credit Rating Overview Ill General Fund Balance Ill Existing Tax Supported Debt Profile •• Capital Funding Analysis Ill Department of Public Utilities Debt and Financial Profile 111!1 Solid Waste Debt and Financial Profile •• Appendix A: Capital Funding Analysis Case Details •• Appendix B: Existing Tax Supported Debt Ill Appendix C: Existing Department of Public Utilities Debt •• Appendix D: Existing Solid Waste Debt Ill Appendix E: Financial Policies Ill Appendix F: Rating Reports ~-~ Harnett COUNTY ll U• A!l(l: ':~' DAVENPORT & COMPANY--------------------------------------------February 11. 2020 Harnett County, NC 1 Topics for Discussion • Credit Rating Overview. • General Fund Balance. • Existing Tax Supported Debt Profile. -Key Financial Ratios and Financial Policies. -Debt Affordability. • Capital Funding Analysis. Key Financial Ratios and Financial Policies. Debt Affordability. • Department of Public Utilities Debt and Financial Profile. • Solid Waste Debt and Financial Profile. r-;.~ Harnett COUNTY 'I . ~ DAVENPORT& COMPANY------------------------------------------February 11, 2020 Harnett County. NC 2 ~~ Harnett COUNTY ll, ~• I DAVENPORT & COMPANY Harnett County, NC 3 February 11, 2020 Credit Rating Overview • The County is currently rated Aa2 by Moody's Investors Service (September 2019) and AA-by Standard and Poor's (September 2019). Moody's Investors Standard & Poor's Service Fitch Ratings Aaa Aa1 Aa2 Aa3 A1 A2 A3 Baa1 Baa2 Baa3 M()CIIJ'I\ .. <ai::c:=it AAA AAA AA+ AA+ AA AA AA-I AA-A+ A+ -A A A-A-BBB+ BBB+ BBB BBB BBB-BBB-Non Investment Grade ··--H-l{C-1yofJP,I( -...:::-·--~ .. -:·._-::: .. -·.::;---.. :-....:;-_-_-:;::-_ :::.-=:-=:=:.'.':"::...---... -.. -····-... -.. --! IJ l.1 llll II H1.,n,11 COi.iniy. N<M'lh Corohn~. Appropri11t1on11: c~neral Obli1~110ft ... .w.--.... -·-·-0<·-~·---·--------· .. -· .. ·-·--·---· .. -.. ---... ·--··-·----......... ------·--------.. --------··--------·-·---· ... ---·--· ________ ... _ ... __ . ___ _ -·-··-...... , ...... _._ .. ___ .. ___ , __ -·------·-.. "--"·-·---·----·--·-... ---Please see Appendix F for full credit rating reports. • Moody's Observations -Credit Strengths r-;~ Harnett COUNTY i1, ·~.I• -Sizable tax base with favorable location poised for further growth -Healthy reserves and cash levels -Credit Challenges -Below average wealth levels and elevated unemployment -Elevated debt compared to national medians -Factors That Could Lead to an Upgrade -Decreased debt burden -Increased reserve and liquidity levels -Significant economic expansion and diversification -Factors Tl1at Could Lead to a Downgrade -Reduction of General Fund balance and other available reserves -Deterioration of the county's tax base • S&P Observations -Weak economy; -Strong management; Strong budgetary performance; Very strong budgetary flexibility; Very strong liquidity; Strong debt and contingent liability profile; and Very strong institutional framework score. DAVENPORT & COMPANY--------------------------------------------February 11, 2020 Hamett County. NC 4 ~~ Harnett COUNTY ·, ,r DAVENPORT & COMPANY Harnett County, NC 5 February 11, 2020 General Fund Balance General Fund Balance 2013 2014 2015 2016 2017 2018 1 G!ilDf;ltDI E,rna 6:1,,1Q!l,Ct 2 Revenue,; 105,324,309 107.369.77] U0.487.763 117,731.957 120,318,571 118.907 .6·18 3 bpenchtLJf<'S 101.852 861 103.330.529 108.508,715 112,272.703 !J9.688.680 126,087 .29'1 4 5 ~~QlHDI fMD~ LHlli~ 6 Nonspcndol>k:' 451.088 111.181 159.025 1 418.606 232.245 216.378 7 Rcstnctcd Other 8 Rest11ctcd Stab1hzation by Slate Slatule 9.433.149 9.260.952 11.'196,063 11,966,027 9,068.575 10,337,775 9 Comm1tt,1d 10 ASSlgne·d 3,193,811 2.600.000 '122.916 11 UnaSSIGflCd 17.959.942 18,732.095 19,417.388 26.311.973 32.5'17,008 32.201,423 12 Total 27.844,179 31.298.039 33,673.076 39 696,606 41,8,17,828 43.178.'192 \3 J,1 Moody'sAva11ablc1 27.393.091 31186,858 JJ.513.451 38.278.000 41,615.583 '12,96211'1 15 16 (!g;mmal Euml E!:~!ilota: R'1:!ls:is l7 Uno~r~tas.1·, of Revenues 17.:1~ 17.<1:f. 17.G·:. 22.3• 27. l'J. 27.H:, 18 Unrtss1gnet1 as a of ['(pcn<htu1es 17.6' 18.1"~. l7.9~ 23.4 27.2Jli 25.5';(, 19 Mno(lv's A11H1l;ibto as a· . of Revenu<:s 26.0 29.Q'f. 30.3·:<. 32.5'! 34 G'"'-36.1 I 20 Moody's A11<11k1ble a5 a of E11peodllwes 26.9 30.2 30.9'> 34.1', 34.8., 34 l~ 21 Tomi Genrra! Fun() O;tlance as a ol Rc,.cnvcs 26.4 291 J0.5A, 33.7 34.8 II-36.]f. 22 Total G(!ne1ill F~1nd B.1la1,ce asa of fapend1tmes 27.3 30.J 31.0'4 354 35.0" 3,l.2'1i, ,1,v>1,,: : ... c,w..•,J. • The County has adopted the following Fund Balance Policy: The County will maintain a minimum Unassigned Fund Balance, as defined by the Governmental Accounting Standards Board, at the close of each fiscal year equal to 15% of General Fund Expenditures with a targeted Unassigned Fund Balance equal to 20% of General Fund Expenditures. In the event that funds are available over and beyond the 20% targeted amount, those funds may be transferred to a capital reserve fund, a capital projects fund, to pay-down debt or to fund other one-time uses. General Fund Balance as a% of Expenditures 40.0% 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% • • ;:> ~ 5.0% 0.0% 2013 2014 2015 -unassigned -lotal -Policy Target (Unassigned) 2016 2017 -Moody's Available -Policy Floor ( Unassigned) Unassigned Fund Balance as a% of Revenues Harnett -Aa2 (2018) National 'Aaa· Median National 'Aa1' Median National 'Aa2' Median NC 'Aaa' Median NC 'Aa1' Median NC 'Aa2' Median Min: 5.7% I Max 27.8% Min: 14.1 % I Max 32 9% , Min. 2.2% I Max 41.5'X ~~ Harnett COUNTY 'i:f'.I :.l'r,1·,j.\ .... 2018 0.0 5.0 10.0 15.0 Percent 20.0 25.0 30.0 DAVENPORT & COMPANY Source: Count CAFRs February 11, 2020 Harnett County, NC 6 ~~ Harnett COUNTY :1 11 :. DAVENPORT & COMPANY Harnett County, NC 7 February 11, 2020 Existing Tax Supported Debt Tax Su.12.2orted Debt Service (/) 20.0 C .2 18.0 -!!! • • ;i 16.0 14.0 12.0 10.0 •• 8.0 6.0 4.0 2.0 0.0 l!I!. ----·=:;ll:l:i-i-i-i-i i-l-1 I n • 0 ~ N M ~ ~ ~ ~ 00 m O ~ N M ~ ~ ~ ~ 00 m 0 N N N N N N N N N N M M M M M M M M M M ~ 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 N N N N N N N N N N N N N N N N N N N N N • School Debt • County Debt • Community College Debt Par Outstanding -Estimated as of 6/30/2019 Type Par Amount % of Total -School Debt $100,963,121 64.13% County Debt $38,814,799 24.66% Community $17,653,681 11.21% College Lease Total $157,431,600 100.00% Notes: 2004 and 2005 QZABs are shown net of balance fund transfer. 20128 QSCBs are shown gross of federal subsidy and net of sinking fund earnings. Includes tl1e County's $21,145.000 2019 Limited Obligation Bonds issued in October 2019. ~~ Harnett COUNTY tjl,Jtl•I !QI '.44 Tax Su.12.2orted Debt Service FY Principal Interest Total 10-yr Payout Total 15 7 .431,600 49,760,404 207,192,005 2020 12,928.817 4,557,420 17,486,237 71.0% 2021 12.880,099 4,752,336 17,632,435 72.2% 2022 12,773,155 4,423,722 17,196,877 73.6% 2023 12,606,509 4,098,066 16,704,575 75.3% 2024 12,470,894 3,770,638 16.241,532 77.5% 2025 10,886.495 3.464,368 14,350,863 80.3% 2026 10.304,982 3,184,017 13,488,999 84.2% --2027 9.965.931 2,917,611 12,883,542 89.0% 2028 9,837,745 2,654,012 12,491,757 93.1% 2029 7,142.680 2,439.257 9,581,938 96.0% 2030 5,459,858 2.275,996 7.735,854 97.7% 2031 5,443,840 2,173,435 7,617,275 100.0% 2032 5.429,562 2,068,894 7,498,456 100.0% 2033 5,413,547 1,964,215 7,377,762 100.0% 2034 5,394.378 1,861,238 7,255,616 100.0% 2035 5,384,876 1.763,393 7.148,269 100.0% 2036 5,154,029 986,235 6,140,265 100.0% -2037 3.646,433 208,928 3,855,361 100.0% 2038 2,197,771 112.223 2,309,994 100.0% -2039 1,055.000 63,300 1,118,300 100.0% 2040 1,055,000 21.100 1,076,100 100.0% DAVENPORT & COMPANY Source: LGC Bond Ledger. County Staff. and 2018 CAFR February 11. 2020 Harnett County, NC 8 Existing Tax Supported Debt Policies 100.0% 90.0% 80.0% 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% 10 Year Payout ~ ~ ~ ~ c=!i ~ ~ N ~ gJ g M ~ ~ ~ ~ ~ M ~ ~ ~ 000000000000000000000 N N N N N N N N N N N N C\I N N C'\I N N N N N -10-yr Payoul --Policy Harnett Aa2 (2020) National 'Aaa' Median Nallonal 'Aal' Median National 'Aa2' Median NC 'Aaa' Median Min: 61.0% I Max 100% NC 'Aal' Median Min: 23.1% I Max 100 Y, NC 'Aa2' Median Min: 38.0% I Max 100% 0 20 40 60 80 100 Percent • Existing 10-year Payout Ratio -FY 2020: 71.0% • The County has a policy establishing a minimum 10 Year Payout Ratio of 50.00%. 3.00% 2.50% 2.00% 1.50% 1.00% 0.50% 0.00% Debt to Assessed Value 11111111111111 ... __ g ~ ~ ~ ~ ~ ~ ~ ~ ~ g ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ 000000000000000000000 N N N C'\I N N N N C'\I N N N N N N N N N N N C'\I -Existing --Policy Harnett Aa2 (20201 National 'Aaa· Median -National 'Aal' Median -National 'Aa2' Med 1an NC 'Aaa· Median NC 'Aal' Median NC 'Aa2' Median Min. 1.1% I Max 1.6% Mrn. 0.2% I Max 2.3% Mrn: 0.3% I Max 1 9% 0.0 0.5 1.0 Percent • Existing Debt to Assessed Value 1.5 -FY 2020: 1. 79% 2.0 • The County has a policy establishing a maximum Debt to Assessed Value ratio of 2.50%. --,.....)(~ Harnett COUNTY .,,:. Debt Service to Expenditures 16% 14% 12% 10(111 8% 6% 4% 2% 0% 111111111111 ..... ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ g ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 O 0 N N C'\I N N N N N N N N N N N N N N N N N N -Existing --Policy Hdrnetl Aa2 (2020) Nauonal 'Aaa' Meehan National 'Aa1' Median -National 'Aa2' Median NC 'Aaa' Median NC 'Aa1' Median NC 'Aa2' Median 0 Min. 12.3% I Max 21.5% Min: 5 6 X, I Max 20.5% Min: 3 6% I Max 16.2% 2 4 6 8 Percent 10 12 14 16 • Existing Debt Service vs. Expenditures -FY 2020: 11.45% • The County has a policy establishing a maximum Debt Service to Expenditures Value ratio of 15.00%. DAVENPORT & COMPANY--------------------------------------------February 11, 2020 Hamett County, NC 9 Debt Affordability Analysis Existing Debt A FY 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2Q32 2033 2034 2035 2036 2037 2038 2039 2QilO 2041 2042 2043 2044 2045 B C j ExistingCounty ExisUngSchool Debt Scrvice1 Debt Service 3.81>2_._421 12.762.639 4.459,495 12,317.043 •l,33_~56() 11.986.441 4,218.149 11,600.310 4,092.125 11,247,785 3,953.580 9,479.882 3,346.760 9.208.783 3,220.295 8.713.456 3,093.163 8.432.181 l.603.450 6.995.163 _l '.~_4_~.~-?~-.5.1.89.746 1.492,825 5,106.408 l .~4_0~075_ 5,022,523 1.387.325 4,936,451 1,334,575 4,848.611 1,287,100 4,769.972 1:244,900 3,785.071 1.202,700 1.522.938 1.160.500 1.118.300 1,076.100 0 E F NFiiiiii:ii l'IIM::H:& Existing Red Potential Rock Debt Proposed Operating Servtee School OS Impact 841,177 855,897 870.875 886.116 901.623 917.401 933.456 9,19,191 966.412 _983.325 t.000.533 1.018.042 1.035.858 l.053,985 L.072.430 1.091.198 1.110.294 1.129.724 t. 149.494 Total 50.498.973 137,925.401 18,767,630 G School Capital Outlayl Lease pa~rnents on the County's ell.Isling OSS Facihly will go away when the new County Facility is occupied. H Total 17.486.237 17.632.435 1-7.196,877 16.704.575 16.241.532 14,350.863 1:3_,488.999 12,883.542 12.491,757 9.581.938 i .735.854 7.617.215 7.'198.456 7,377,762 7.255.616 7.~48,269 6,140.265 3.855.361 2.309.994 1.118.300 1.076.100 207 .192,005 Debt Service Fund Revenue3 Lottery/ ADM" 9.828.360 9.828.360 9.828.360 9.828,360 9.828,360 9.828,360 9,828.360 9.826.360 9.828.360 9,828.360 9.828.360 9.828.360 9.828.360 9,828.360 9.828.360 9.828.360 lOA 14.180 11.000.000 11.000.000 11.000.000 11.000.000 11.000.000 11.000.000 11.000.000 11.000,000 11.000.000 K Restricted Art. 40 & 42 Sales Taxs 6.461,017 6.557 .932 6,656,301 6,756,146 6.857.488 6,960.350 7,06<.756 7,170.727 7,278.288 7.387.462 7,498.274 7,610.748 7.7211.909 7,840.783 7.958.395 8.077.771 8.198.937 8.321.921 8,446.750 8.573,45! 8,702.053 8.832.584 8,965.073 9.099.549 9.236.042 9,374.583 1/4 • SOies Tax6 2,352.071 2,387.352 2.423.162 2.459.509 2A96.402 2.533.848 2.571.856 2.610.434 2.649,590 2.6~9.3311 2.729,67,1 2.770.619 2.812.178 2.854.361 2.897 .177 2,940.634 i.-984.744 3.029.515 3.074.958 3.121.082 3.167.898 3,215,417 3,263,648 3,312,603 3,362.292 3.412,726 M 0 Total Revenues: QSCB Subsidy7 Available l Surplus/ (Deficill 1,171.640 19.813.088 j 2.326.!!_51 1,171.640 19,945,284 i 2.312.849 1.171.640 20.079.463 i 2.882:-587 1.171.640 20.215,655 i 3.511.080 1.l 71.640 20.353.890 ! 4.11-2.358 1.171.640 20,494.198 \ 6.143.336 l.1-11.&,10 20:s3·G.611 1 7 .u-7 .s13 .l.Hl.640 20.1_81.161 T 7,897,619 1,171.640 20.927,878 [ 8,436.121 ~.l7~.~.4_g_ 1.171,640 1,171,6.40 1.171.640 1,17_1.64~ 1.171.640 1.171.640 2_1.0nu2.e 11.4!)_4.858 21.227 .948 13.492.094 21.381.367 13,764.092 21.537.088 14,038.632 21,695.144 14,317.382 21.855.571 14,599,955 22.018.405 14,870,136 565.820 22,183.681 16,043,416 18,496,075 22.351,436 22.521:108 20.211,.114 22.694.533 21,576,233 22.869.951 21:79:3.851 23.048.001 23.048.001 23.228.121 2.~.n{l.121 23.412.151 23.412.151 23,598,334 23,598.334 23.787.309 23,787.309 Total ~~ Harnett COUNTY 'j,,f '" /j', 9. Estimated Revenue From Capital Reserve Adjusted Surplus/ I incremental Tax Oebtservtee Fund Batance8 Prior Ta~l!!!_~c_t Utilized (Deficit) 2~._79~i851 23,048.001 23.228.721 23.412.151 23.598.334 23.787.309 Equivalent Tola! Tru l:.tfect 1 ... ..,. ..... .6,0'56,011 8,382.862 10.695.711 J3.,578.298 17,089,178. 21.201.736 3_!.3~.Q~1 50,826,424 62.321.282 75.813.376 89.577.469 103,616,101 117,933,483 132.533.438 147.403.574 163.446.990 181.943.065 223.731.01, 245,524.863 268,572.863 ~l.801.584 315.213.735 338,812.069 362.599.378 1'fl1e Cc,unty hns acloPtcd a funchngformul3 rorcap,tat and capital mainte,lancc. Appropnal•ons will be 0<1scd on an amountcQual to 65': of U1c prior fiscal year ADM Lottery proceeds. for the 2018 2019 budget ycnr. the following amount hL1s t>cen c.llculntcd: 65.00", x $1,571.581 • $1,021,528. Tilc rem,11nmg35':~ sh,)11 be rCtfHned 1n !he Pubhc Schoo! Bu1ldmg Capital Fund for futwc land purchase or debt payments. FY 2019 includes $1,Sti 7 .333 for land puichascs. NOlE: For purpases or thtS analysis. all school pay go capital 1s c.1ss1uned to tw funded lrom louery proc~eds .rnd ellCluded from this an;,11~1$. 1 lnclu{les the OcOt Serv1<'e Fund Revenue of $1 l.000.000, less QSCB Suhsichcs tColl,,nn Ml, ,. For pu,~e,;; of t111s ana!i,si~. lotter)/ 1>rocccds dre ClCludcd and asS1.Jmcd to rund school capital outlny outside of this arm1r-;;1s ·Restm.:lccl Anrcle 40 & 42 Goard of Educnlaon Sales ra,. FY 2019 Revenues of $6.36!.l.53,i are assume(.l to f/Ow at 1.50: pc, year. '· Tt1c J.'4¢ Sales rn, is dcd,ccucd solely to pay for New Schools debt service. FY 2019 Revenues of S.2.317.311.11e assumed to ~ow at J .50 ~ pcryci)r. 1 n 2019 Subsidy per County Budget QSCB Subsidies art? rcdu<;ed by 5.9 ... as d result of scqucstra1ton. Pct County Stall. lslnnatcd bal..mce as of 6/30/2019. • FY 2020 Value of a Penny9: $879,421 1.00% • Assumed Growth Rate: 9 Source: County Staff DAVENPORT & COMPANY February 11, 2020 • Note: Additional future changes in operating impacts have not been included. Harnett County, NC 10 ~·~ Harnett COUNTY 'j ~. I f A 11:1.' If'• DAVENPORT & COMPANY Harnett County. NC 11 February 11, 2020 Capital Funding Analysis -Case Summary ~~ Harnett COUNTY 'l,J' A 8 C D Case Case 1 Case 2 1 Debt Issued 2 Erwin Elementary GO Bonds (May 2020)* $ 23,481,723 $ 23,481,723 3 NW Harnett Elementary GO Bonds (August 2020)* 27,634.397 27.634,397 4 Remaining GO Authorization (Spring 2022)* 19,383,880 5 Total Debt Issued $ 51,116,120 $ 70,500,000 6 7 Total Debt Service $ 78,642,943 $ 108,203,360 8 9 Debt Ratios (Worst Shown) Policy 10 10-Year Payout 50.00% 65.69% 65.28% 11 Debt to Assessed Value 2.50% 2.20% 2.24% 12 Debt Service to Expenditures 15.00% 13.89% 14.46% 13 Years out of Compliance 0 0 14 15 Tax Equivalent Impact 16 2021 17 2022 18 2023 19 2024 20 2025 0.48¢ 21 Total 0.00¢ 0.48¢ 22 23 Equivalent Reserves Required $ $ 808,635 * Assumes 20-Year Level Principal at 5.00% with Interest beginning in the Fiscal Year of Issuance (except for t11e NW Harnett Elementary School. with 6 months of interest in the first year) and Principal beginning in the Fiscal Year Following Issuance. • After the issuance of the two school GO Bonds, there will be $19,383,880 of remaining GO Bond Authorization from the November 4, 2014 Referendum. The initial authorization will expire on November 4, 2021. The authorization can be extended for an additional 3 years through November 4, 2024. Please see Appendix A for details of these cases. DAVENPORT &COMPANY------------------------------------------February 11, 2020 Harnett County, NC 12 ~~ Harnett COUNTY ri,.1 DAVENPORT & COMPANY Harnett County, NC 13 February 11, 2020 -Existing Department of Public Utilities Supported Debt ,..........,(~ Harnett Department of Public Utilities Supported Debt Service rJl 5.0 .§ 4.5 ~ 4.0 11111. 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 1111.1 111·1·1·········· . -1111·1·1·1111·11111·1111 ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ -~ ~ -~ ~ ~ C) 'l) C) <"J, C) ri; C) 'l) C) 'V C) f>J C) '? C) f">J C) "3 C) f">J C)t>l C)~ <;::i°' <;::ii>l C)Ot' C)vj do ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ • Principal • Interest Par Outstanding -Estimated as of 6/30/2019 Type General Obligation Bonds Revenue Bonds State Bonds Installment Purchases Total Par Amount $27,946,000 $8,730,000 $13,174,748 $297,840 $50,148,588 Note: In addition to the $50,148,588 of par outstanding, there is also $15,790,000 of LOBs outstanding linked to underlying GO debt of the Districts. The LOBs are excluded for purposes or this analysis COUNTY :j r1 .1i,,n r,, .. Department of Public Utilities Supported Debt Service FY Principal Interest Total 10-yr Payout Total 50.148.588 16,035,685 66.184,273 2020 3.248,327 1.487 ,919 4,736,246 62.7% ---2021 3.284,037 1,394,269 4,678,305 63.1% 2022 _ 3,341,687 1,294,946 4,636,632 63.5% 2023 3,394,307 1,193,774 4,588.081 64.0% 2024 3,454,867 1,092,382 4,547,249 64.0% 2025 3.459.077 992,745 4.451,821 62.9% 2026 3.488,077 891,514 4.379,591 61.6% ----2027 3.551.077 792,177 4.343,254 59.6% --2028 2,828,077 690.856 3,518,933 56.9% 2029 1,382,077 612.522 1.994,598 55.1% 2030 1,396,077 573.514 1,969,591 56.5% 2031 1,414.077 534.088 1,948.165 58.2% 2032 1,423.077 494,099 1.917,176 60.4% 2033 1,193.751 452,417 1,646,168 62.8% ---2034 883,000 416,019 1.299,019 66.5% ----2035 902,000 387,319 1.289,319 67.8% 2036 803,000 358.006 1,161,006 69.3% 2037 828,000 332.231 1,160.231 71.4% ------2038 854.000 305,069 1,159,069 73.9% 2039 879.000 277,044 1,156,044 77.0% 2040 905,000 248,188 1,153,188 80.9% 2041 937,000 218,469 1.155,469 85.8% 2042 913,000 187,675 1.100,675 92.4% 2043 940,000 157,838 1,097,838 100.0% 2044 448,000 127,106 575,106 100.0% 2045 461.000 114.306 575.306 100.0% 2046 474,000 101,131 575,131 100.0% 2047 488,000 87,581 575,581 100.0% 2048 501,000 73.625 574,625 100.0% 2049 516,000 59,294 575,294 100.0% 2050 531,000 44,531 575,531 100.0% 2051 546,000 29,331 575.331 100.0% 2052 481.000 13,700 494,700 100.0% DAVENPORT & COMPANY Source: LGC Bond Ledger. County Staff, and 2018 CAFR February 11, 2020 Harnett County, NC 14 Department of Public Utilities Financial Profile Fiscal Year 2013 2014 2015 Audited Audited Audited 1 Revenues 27,718,963 31,885,828 32,161,881 2 Expenditures 16,773,488 17,535,463 17,239,767 3 Net Revenue Available for Debt Service 10,945,475 14,350,365 14,922,114 4 5 Parity Debt Service 1,159,560 1,158,838 1,160,238 6 Other Debt Service 6,443,256 5,156,781 6,829,181 7 Total Debt Service 7,602,816 6,315,619 7,989,419 8 9 Net Revenue after Debt Service 3,342,659 8,034,746 6,932,695 10 11 Capital Outlay (567,086) (270,063) (502,598) -----.--,--------12 Revenue Bonds Issued 10,673,000 13 Other Debt Issued 20,065.000 14 Other Sources (Uses) of Funds (19.857,618) (4,075,157) (18,096,633) 15 16 System Surplus (Deficit) 2,982,955 3,689,526 (993,536) 17 18 Ending Unrestricted Cash 21,500,043 33,398,250 28,034,871 19 20 Parity Debt Service Coverage (1.20x)* 9.44x 12.38x 12.86x 21 Total Deb~ Service Coverage (1.00x)* 1.44x 2.27x 1.87x -22 Cash as % of Operating Expense 128.2% 190.5% 162.6% 23 Operating Days Cash on Hand 468 695 594 ·k Excludes 20% of Un restricted Net Position. DAVENPORT & COMPANY February 11, 2020 2016 2017 Audited Audited 34,467,182 35,869,631 18,139,567 20,013,015 16,327,615 15,856,616 1,094,528 1,095,916 5,264,320 3,779,468 6,358,848 4,875,384 9,968,767 10,981,232 (771,868) (1,299,255) --770,484 (11,639,179) 9,967,383 (1,957,202) 30,217,316 47,728,803 14.92x 14.47x 2.57x 3.25x 166.6% 238.5% 608 870 ~~ Harnett COUNTY '.f•.11 2018 Audited 39,230,328 22,682,392 16,547,936 1,096,575 3,332,072 4,428,647 12,119,289 (720,244) 2,103,866 13,502,911 52,102,997 15.09x 3.74x 229.7% 838 Source: County CAFRs Harnett County. NC 15 ~~ Harnett COUNTY ~ l , ~. T DAVENPORT & COMPANY Harnett County, NC 16 February 11, 2020 Existing Solid Waste Supported Debt Solid Waste SuQQ_orted Debt Service Solid Waste SuQ_Qorted Debt Service (/) 0.40 C ~ 0.35 ~ 0.30 0.25 0.20 0.15 0.10 0.05 0.00 2020 2021 2022 2023 2024 2025 2026 2027 2028 • Principal • Interest Par Outstanding -Estimated as of 6/30/2019 Type COPs /LOBS/ I PCs Special Obligation Bonds Total Par Amount $1,205,149 $752,000 $1,957,149 FY Total 2020 2021 2022 2023 2024 --2025 2026 --2027 2028 Principal Interest 1,957,149 179,996 324,310 47,289 327,793 39.190 329.632 31,012 332,287 22,792 134,943 14,507 131,908 11,144 128,598 7.862 125,471 4,661 122,207 1,540 ~·~ Harnett COUNTY ... Total 10-yr Payout 2.137,145 371,599 100.0% 366,983 100.0% 360,644 100.0% 355,079 100.0% 149,449 100.0% 143.052 100.0% 136,460 100.0% 130,132 100.0% 123.747 100.0% DAVENPORT & COMPANY Source: LGC Bond Ledger. County Staff, and 2018 CAFR February 11, 2020 Harnett County, NC 17 ~ Solid Waste Financial Profile ~-~ Harnett COUNTY '1.·PT• Fiscal Year 2013 2014 2015 2016 2017 2018 Audited Audited Audited Audited Audited Audited 1 Revenues 5,004,292 5,258,248 5,415,124 5,721,581 6,122,671 6,036,999 2 Expenditures 3,937,714 4,065,800 4,052,399 4,228,264 4,602,029 4,536,143 3 Net Revenue Available for Debt Service 1,066,578 1,192,448 1,362,725 1,493,317 1,520,642 1,500,856 4 5 Parity Debt Service 6 Other Debt Service 170,051 464,609 529,747 540,939 544,825 524,049 7 Total Debt Service 170,051 464,609 529,747 540,939 544,825 524,049 8 9 Net Revenue after Debt Service 896,527 727,839 832,978 952,378 975,817 976,807 10 -11 Capital Outlay (777,682) (351,680) (497,552) (942,628) (820,738) (682,974) 12 Revenue Bonds Issued 13 Other Debt Issued 739,763 1,402,161 14 Other Sources (Uses) of Funds 36,920 (1,396,177) 135,676 15,757 28,680 15 16 System Surplus (Deficit) 155,765 1,115,922 341,410 145,426 170,836 322,513 17 18 Ending Unrestricted Cash 134,656 1,343,046 1,374,488 1,860,984 2,027,213 2,504,781 19 20 Parity Debt Service Coverage O.OOx O.OOx O.OOx O.OOx O.OOx 0.00x -21 Total Debt Service Coverage 6.27x 2.57x 2.57x 2.76x 2.79x 2.86x -22 Cash as % of Operating Expense 3.4% 33.0% 33.9% 44.0% 44.1% 55.2% --23 Operating Days Cash on Hand 12 121 124 161 161 202 DAVENPORT & COMPANY Source: County CAFRs February 11, 2020 Harnett County. NC 18 I. -r-.)(~ Harnett COUNTY •j;)f..H 41(1 ir,r, Capital Funding Analysis Case Details DAVENPORT& COMPANY------------------------------------------February 11, 2020 Harnett County. NC 19 ~-~ Harnett COUNTY •j,,. Issue $23,481,723 for the Erwin Elementary School in May 2020 Issue $27,634,397 for the NW Harnett Elementary School in August 2020 DAVENPORT&COMPANY ------------------------------------------February 11, 2020 Harnett County, NC 20 r Case 1: Proposed Debt Service Progosed Debt Service (/) 25.0 C: .2 i 20.0 15.0 10.0 5.0 --·-·-· 11 •••••.• -1-• a DI -Bl-1-1 II I• I. a D Ila• m I --· lllllllih!. O~NM~~©~OOmO~NM~~©~oomo~ NNNNNNNNNNMMMMMMMMMM~~ 0000000000000000000000 NNNNNNNNNNNNNNNNNNNNNN • Existing • 2020 • 2021 Proposed Principal <ll 25.0 C: .Q ~ 20.0 15.0 10.0 5.0 ••• ... J:11• •• •• ·-1 ·1 ··1~·. -----------iiii·ii·i-ilmaa. O~NM~~©~oomo~NM~~©~oomo~ NNNNNNNNNNMMMMMMMMMM~~ 0000000000000000000000 NNNNNNNNNNNNNNNNNNNNNN • Existing • 2020 • 2021 Financing Summary • Financing Assumptions: Amortization: -Term: -Interest Rate: • Debt Issued: -Erwin Elementary School (May 2020): ~·~ Harnett COUNTY '1.,1-'.f 1,1, Level Principal 20 Years 5.00% $23,481,723 -NW Harnett Elementary School (August 2020): $27.634.397 -Total $51,116,120 • Debt Service: -Erwin Elementary School (May 2020): $35,809,628 -NW Harnett Elementary School (August 2020}: $42.833,315 -Total $78,642,943 DAVENPORT&COMPANY ------------------------------------------February J.1, 2020 Harnett County. NC 21 Case 1: Key Debt Ratios ~~ Harnett COUNTY •,·fl 10-Year Payout Debt to Assessed Value 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% -...... r"""'I ..... r--a r-, r--1 r"""'I ...... r""'I 3.00% ... ,--n 111111-11 2.50% ,-........ r,, ,11--• I I •--,-I I I I I I I-I I· I I I I I • I I I I I I I I L.a Ii• 1..1 _._ ................................. 1.-t .................. L.. 2.00% I 1.50% 1.1111 1.00% · · · · 1-1 • 1 •• ••• • • •••••• 0.50% ----1111111111:m~--0.00% 0 -rl N ("() s:t" LO <.D I'-00 m O -rl N ("() s:t" LO <.D I'-00 m O -rl N N N N N N N N N N ("() ("() ("() ("() ("() Cf) Cf) Cf) Cf) ("() 'St" s:t" 0000000000000000000000 NNNNNNNNNNNNNNNNNNNNNN 0 -rl N ("() s:t" LO <.!) I'-00 m O -rl N M s:t" LO <.!) I'-00 m O -rl N N N N N N N N N N ("() Cf) Cf) Cf) Cf) Cf) Cf) Cf) Cf) ("() 'St" s:t" 0000000000000000000000 NNNNNNNNNNNNNNNNNNNNNN -10-yr Payout -Policy Debt Service to Exgenditures 16% 14% 12% 111 -, 10% •-•-•. I 11 I I 8% •-•-•-•-•-•• - -I 6% •-•-• ••.•• -•·. 111111 -Existing -Proposed Debt •% ••-•-••·•-•-•-•-1-1-1-1-11·1 I I :: 1-1-1-1-1-1-1-1-1--- -----1-1111. 0 -rl N M s:t" LO <.!) I'-00 m O -rl N M ~ LO <.!) I'-00 m O -rl N N N N N N N N N N M M M M C') M M ("() ("() Cf) 'St" s:t" 0000000000000000000000 N N N N N N N N N N N N N N N N N N N N N N -Existing -Proposed Debt --Policy --Policy DAVENPORT & COMPANY--------------------------------------------Febl"Uary 11, 2020 Harnett County, NC 22 Case 1: Debt Affordability Analysis ~~ Harnett COUNTY Existing & Proposed Debt Natural rax lin.Qdc!.. 'jll:1 Erwin Elementary School: $23,481,723 in May 2020 (FY 2020) NW Harnett Elementary School: $27,634,397 in August 2020 (FY 2021) C D G H K M N 0 _()_ s Del)t Serv:ce Requ,remcnts Rcvcrn1e Available for OS Debt Sen.rice Cash Flow Surplus (Deficit) FY 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 Total Existing Red ExistingCounty ExistingSchool Rock Debt Proposed Debt Service1 Debt Service Service School OS 3,882.421 12.762.639 841.177 4.459.495 12,317,043 855.897 3.039.032 4.339,560 11.986,441 _1370.8_75 5.052_ . .§l.9~ 4.218.149 11,600.310 886.116 4.£125.117 4,092,125 11.247 .785 901..623 4,7_9__7.327 3.953,580 9.479.882 917,401 4.669.537 3,346,160 9.208.783 ~:33,456 4.541.746 3.220.295 8.713.456 949.791 4,413,956 3.093.163 8,_432,181 _96~~_1_2 4.286,166 l.603.450 6.995.163 983.325 4,158,376 1.545,575 5,_189.746 1,000,533 4,030.585 1,492.825 5,106.408 1,018,042 3.902.795 1,440.075 5.022.523 1,035.858 3.775.005 1.387,325 4,936.451 1,053.985 3,647,214 1.334.575 4,848.611 1,072.430 3.519.424 1.287.100 4.769,972 1.091.198 3.391.634 1,244.900 3.785,071 1.l.10.294 3.263,843 1.202.700 1.522.938 1.129,724 3.136.053 1.160.500 1.149,,194 3.008.263 1.118.300 2.880.473 1.076,100 2.752.682 1.450,806 ~4_9_8,973 137,925.401 18,767,630 78,642,943 Potential Operating School Capital Impact Outlay' 'Lease payments on tnc Count~'s eK1stmg DSS Fac1hty 10.·1tl go .iwa} when the new County Facility 1s occupn?d. Restricted Art. Debt Service 40 & 42 Sales Total / Fund Revenue3 Lottery/ AOM" Tax!i 17,4_86,23_7 [ 9,828,360 6,461.017 20.671,467) 9,828,360 6,557.932 22,24_\),7!!( 9,838,360 6,656,301 21,629,692 [ 9,828.360 6,756,146 21,038.859 : 9,828.360 6,857.488 19,020.400 j 9,828.360 ·-6.960.350 18,03().14-5: 9.828.360 -7 .06,1 :7-,.;6· 17.2!)7.498] 9.828.360 7 .170.727 16.777 .923 J 9.828.360 7.278.288 13.740,3131 9.828.360 -7.387.462 ll.7~6.4i9: ~.8_2!!d_G_O 7.498.27d 11.520,070 9,828.360 7.610.748 11,273,460: 9,828,360 7,724,909 11,024,976 j 9,828.360 7,840.783 10~775.040 ! 9,828,360 7,958,395 10,53i903 j 9,828,360 8,077,771 --9.404.108 : 10.414,180 8,198,937 6.991.414 j 11,000,000 8,321,921 5.318.257 ! 11,00_0.0()0 8.446,750 3.998.773 [ 11,000,000 8.573.451 3,828.782 : 11,0_(1(),0()0 8.702,053 1,450,8061 11,000,000 8.832.584 11.000.000 8.965.073 11.000.000 9.099.5•19 11.000.000 9,236.042 11.000.000 9,374,583 285,834,948 [ 1/4 4 Sales Total Revenues j Surplus/ Tax6 QSCBSut>sidy7 A11ailable (Deficit) 2.352,071 1.171,640 19,813.088 ! 2.326.851 2.387,352 l.171,640 19.945.284 r-i"i26.i83l 2.423,162 l,17 l.640 ~~:~:::::: i ~B:~:ri~~1 2.459.509 _l,171.640 },496~102 1,171.640 20,35_3.l:]90 j !684,96_9_) 2.533,848 1~171.640 20.494. 198 [ 1,473,799 2,571.856 1.171.640 20.63_6.61 t_j 2,605,866_ 2,610.434 1,171.GdO 20,781.161 [ 3.483,662 2,649.590 1.171.640 20.927,8~8 j__ _40149,95~ 2,689.334 1,171,640 21,076.796 [ 7,336.483 2.729,674 1.171.640 21.227.9~ j 9.461.509 2.770.619 1.li 1,640 21,381,367 [ 9.861.297 2.812.178 1.1/1,640 21.537,088 ! 10.263.627 2,854,361 1.171,640 21,695,144 ~670,168 2.897,177 1,111,6•0 21.855.571 . 11.080.531 2.940.634 1.171.640 22.018.405 11.<178.502 2,984,744 585,820 22.183.681 12,779.573 3.029,515 22.351.436 15.360.022 _:J,074.9~8 22.521.708 , 17.203.45 l 3,121.082 22.694.533: 18,69_5.7~1 3,167.898 22.869.951 ' 19.041.169 3,215.417 23,048,001 : 21,597,195 3.263.648 23,228.7£1' 23.228.721 3.312.603 23.412,151 j 23.412,151 3.362.292 23.598,33•1 23,598,334 3.412.726 23,787.309 23.787.309 Total Estimated Re\lenue From Capital Reserve Adjusted Surplus/ Incremental Tax Debt SeNFCe Prior Tax Impact Utilized (Deficit) Equivalent Fund Balance8 ----16~4,9__§9)_ 1.473,799 2,605.866 3,483,662 4,1.49.955 7,336.483 9.461.509 9.861.297 10,263.627 10,6_7_0,168 11,080.531 1_1,478502 12,779.573 15,360.022 17 .203.451 18.695.761 19.041.169 21,597,195 23.226.721 23,412:15_1 23.598,334 2_3.7_87.309 Tot.JI f;.:,; Ef 'e<.t (4,995,510) - ----. -------. -0.U04 6,056,011 8,382.862 7,656.679 5.486.358 4,072.321 3,387,351 4,861.150 7,467,016 10.950.679 15,100.634 2~~~_,!]._7 31,898,626 41.759.923 52,023.550 ~169_3.7_!~ 73.(74.249 85,252.751 98.032.3:24 113.392.345 130,595,796 149,291.557 168,332.726 189.929.921 213.158.6 236.570.7 260.169.1 2 lhe County has adopted a fundmgforrnula for capital and capital nwmtena11ce. /\pprop,mttons will UC based on an.imount equal to 65"t: of tile pnor r,scJl >'Car ADM Lotlery proceeds. For the 2018 2019 budget year. the to1Jowingamou1lt has been calculated; 65.00' ,. $1.5 71.581 • $1.021.528. lhe remaining 35 sh.'.'111 be 1eta1ned 1n the Pubhc School Ou1ld1ng Capital Fund for future land 1>u1chase or debt payinents. FY 2019 includes S.l.85 7 .333 for land purchases. NOTE: For purposes of 1h1s anal)Sis. all school pay go c<1p11al is assumed to oe funded from lottery proceeds and e:(cludcd f10,n this c1nal\'Si~ J Includes lht' Debi SeMcc Fund Revenue of Sl l.000.000 , less QSCO Subs1d1es (Column M). 1 ror purposes of this an,1tys1s. lottery proceeds are eAcludcd and assumed to fund schoot capital out~) outs1de of t111s analysis Restncted Article 40 & 42 Board of EducallOn Sales TaK. FY 2019 Revenues of $6,365.534 are assumed to ~ow at 1.so· per year "'lhe 1. 411+ Sates TaK 1s dedicated solely 10 paylorNcw Schoots debt service. FY 2019 Revenues of $2.317.31 l a1e assumed to grow at 1.50' ocryca,. FY 2019 Subs•<ly per County Budget QSCB Subs1cJ1es are reduced by 5.9';;.. t1S a i'Csult of ::.cquestml1on. M Per County Staff. t:stnnated balance as of 6/30/2019. • FY 2020 Value of a Penny9: • Assumed Growth Rate: 9 Source: County Staff $879,421 1.00% • Notes: Additional future changes in operating impacts have not been included. DAVENPORT& COMPANY------------------------------------------February 11, 2020 Harnett County, NC 23 ' t ------·----Issue $23,481,723 for the Erwin Elementary School in May 2020 Issue $27,634,397 for the NW Harnett Elementary School in August 2020 Issue $19,383,880 for the Remaining GO Bonds in Spring 2022 ~-~ Harnett COUNTY ll"P I .e.~, DAVENPORT&COMPANY ------------------------------------------February 11, 2020 Harnett County, NC 24 t .... --Case 2: Proposed Debt Service Pro2osed Debt Service (/) 25.0 C: ,g i 20.0 15.0 10.0 5.0 •• -111-al I a• ....... 1nIIImI11 • • • •-• 11 H!tl~ 1 .. lllllllliil!a. o~NMq~~~oomo~NMq~~~oomo~N NNNNNNNNNNMMMMMMMMMMqqq 00000000000000000000000 NNNNNNNNNNNNNNNNNNNNNNN • Existing • 2020 • 2021 • 2022 Proposed Principal (/) 25.0 C: ,g i 20.0 15.0 10.0 5.0 .. . ••• Al !!!!!!f!t•····· -rn!•• -11 t:111 • I • • • • • • · · · lliHiiii1n. o~NMq~~~oomo~NMq~~~oomo~N NNNNNNNNNNMMMMMMMMMMqqq 00000000000000000000000 NNNNNNNNNNNNNNNNNNNNNNN • Existing • 2020 • 2021 • 2022 Financing Summary • Financing Assumptions: Amortization: Term: Interest Rate: • Debt Issued: Erwin Elementary School (May 2020): NW Harnett Elementary School (August 2020): ~~ Harnett COUNTY i ~: I Ji Level Principal 20 Years 5.00% $23,481,723 $27,634,397 Remaining School GO Bonds (Spring 2022): $19.383.880 Total $70,500,000 • Debt Service: Erwin Elementary School (May 2020): $35,809,628 NW Harnett Elementary School (August 2020): $42,833,315 Remaining School GO Bonds (Spring 2022): $29.560,417 Total $108.203,360 DAVENPORT & COMPANY--------------------------------------------February 11, 2020 Harnett County, NC 25 I QJ ; (1) :::: (") 0 C ::; ,-+ :< z 0 "' 0) I rn X ui" ~-::; O"O. I -0 0 ""O 0 (/) (1) a. 0 (1) O"" ,-+ -u 0 (") '< 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 I-" CJ O'l (1) ;,s2 0 O' ,-+ (J) -(1) ~ < -(') (1) ,-+ 0 rn X (1) :J Q. rl C ~ (1) (/) --I ----• ·-·-• I I I-" 0 '< .... -0 Q) '< 0 C ,... -0 2. c=:;· '< I I -0 0 ""O 0 (/) (D a. 0 (D O"" ,... -0 0 -· (") '< 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 I I I I I I I I I I I I I I I I I I I I f r ' ' I ' . I I I I I ' I 0 0 I-" I-" b (J1 b (Jl 0 0 0 0 * * * * ---------•• •• •• •• •• I I I I ~ (l 0 .!.( ~ (1) C/'J. Q) ~ (D r "U Q) tv 0 • • J I I I C r ~ ,-+ ~ '-< t; I • I I I I I I I (D ~ .I I I r--t- ~ ~ r--t- ' I I I I I I ,..... 0 I I I I C/'J. I I I I I ' I I I I I I I I I I I I I\) I\) w CJ b (J1 b (1) 0 0 0 O' * * ;,s2 0 ,-+ ,-+ • 0 )> (/) (/) (1) (/) (/) (1) Q. ~ C (1) • Case 2: Debt Affordability Analysis ~~ Harnett Existing & Proposed Debt -Natura .. '"._ u.x.. hnpacL COUNTY 'i: ·J. I• .~ '1'1 Erwin Elementary School: $23,481,723 in May 2020 (FY 2020) NW Harnett Elementary School: $27,634,397 in August 2020 (FY 2021) Remaining Authorized GO Bonds: $19,383,880 in Spring 2022 (FY 2022) A FY 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 Total Existing County Existing School Debt Scrvice1 Debt service 3.88_?:•121 12,762.639 ,1,,159.495 12.317 ,043 4.3_~~·~'?.Q ~1.986.!~41 4.218.149 11.600.310 4.~!)2.125 11.24 7,785 3.953.580 9.4 79,882 3,3116,760 9.208,783 3.220.295 8,713,456 3,093.163 8,432.181 1,603,450 6,995,163 1.545,5 75 !l.189,7 4~ 1,492.825 5,106.408 1,440.075 5,022.523 .. -1.387 .325 4,936.451 1,334.575 4.848.611 1.287.100 4.769.972 1.244,900 3.785.07! 1.202,700 1.522.938 l.160,500 1,118,300 1,076.100 D Existing Red Rock Debt Service 841.177 855,897 870,875 886,116 901,623 917,401 933,456 949,791 966.412 983,325 1,000,533 1,018,042 1,035.858 1,053.985 1.072.430 1.091.198 1.110.294 1.129.724 1.149,-19.1 Proposed SChool OS 3.039,032 5.052.908 6.863.505 6.687.255 6.511.005 6,334,755 6,158,505 5.982.255 5,806,005 5.629.755 5.453.505 5.277.255 5.101,005 4,924.755 4.748.505 4.572.255 4.396.005 4.219.755 4,0•13.505 3,867.255 2,516.919 1.017,654 50,498.973 137,925,401 18,767,630 108.203,360 Potential Operating Impact G School Capital Dutta? 1 Lease paym~nts or\ the Couiny's eiustmg OSS Facility wm go away when !he new Count~' f-ac1l1ty 1s occupied. H . Debt Service Total l Fund Revenuc3 Lottery/ ADM4 17.486.2371 20.671.467 i 22.249.784 ) 23.568,080 i 22,928.788 ! 20.861.868 i 19.823.754 i 19.042.04 7 1 18.474.012 i 15.387 .943 : 13.365.609 : 13.070.780 ! 12~775,711 ; 12.478.767 i 12.180.37_!_] 11,896,775 i l0,712,520 [ 8,251.367 i s.s29.1,rn I 5,161,805 1 4,943.3!35 2.516,919 1.017 ,654 315,395.365 i 9,828.360 9,828.360 9,828.360 9.828,360 9,828.360 9.828.360 9,828.360 9.828.360 9.828.360 9.828.360 9.828.360 9.828.360 9.828,360 9,828,360 9,828,360 9,828.360 10.41d.180 11,000.000 tl,000,000 11,000,000 11,000.000 11,000,000 l t.000.000 11.000.000 11.000.000 ll.000.000 K Restricted Art. 40 & 42 Sales Tax5 6,d6l.Ol 7 6,557.932 6,_656.301 6.756.146 6,857,488 _6,960,35_0 7,064,756 7.170.727 7.278.268 7.387.462 7.498.274 7.610.748 7.724.909 7.840,783 7,958.395 8,077,771 8,198,937 8,321.921 8.446.750 8.573.451 8.70:1.053 8.832.584 8.965.073 9.099.549 9.236.042 9,374,583 1/4 e Sales Tax15 M QSC8Subsidr' 2.352.071 1.171,640 2,387.352 l.171.640 2._423.162 l.171.640 7,459.509 1.171,640 2 .496.40? 1.1 71,640 2.533.848 l, 171.640 2,571,856 1.171.640 2.610.<134 1.171,640 N Total Revenues i Available l9.8l3.088 l9.945,284 20.079.463 :>0.215.655 20.353.890 20.494.198 20.636.611 20,781.161 0 Surplus/ (Deficit) 2.3:>6.851 (726,183) (2. 170.-l?l_l, p,352.4251 12,574.8981_ (367.670) 812.857 1,739,113 2:f549j_9!J. 1.ill.~4~ 20,.9.21.878 i 2.4.?~·.8_6_(; 2.689.334 1.171.640 21.076,796 j 5.688,853 2.729.674 l.171.640 ~.2_2_7.94_8 i 7,862.339 2.770,619 1.171.640 21,381,367 i 8.310.587 ~s_1~.17!!_ t:!__71.640 ~-~~7.(?~8 L_ ~.1?_~:-~n 2.854,361 1.171,640 21.695.144 j 9.216.377 2.897.177 1,171,640 21.855.571 i 9.675.200 --2.940,634 1,171,640 22.018.405 10.121.630 2.984.744 585.820 22.183.681 11.411.161 3,029.515 22 .351.436 l4.100.069 3.074.958 22.521.708 l5.991.958 3,121.082 22,694.533 17.532,7?8 3.167 .898 22.869.951 1 7.926.596 3,2154t7 23.048,00l 20.531.081 3.263.648 23.228. 721 ?2.211.06 7 - ---·-· --- - -3.312.603 23.412.151 23.412.151 ---------------~.362.292 2_3.598.334 L_ 23.598.334 3.412.726 23.787.309 i 23,787.309 Total _g_ s Estimated Re1.ienue From Capital Reserve Adjusted Surplus/ !Incremental Tax Prior Tax Impact Utilized (Deficit) Equivalent 445,375 449.828 454.327 458.870 463.459 468.093 472.774 477.502 482.277 487.100 491.971 496.890 501.859 506.878 511.947 517.066 522.237 527.459 532.734 538.061 543.442 t;>,170,3211 {8,382,862) 2.326.851 1,262.686 6.152.312 9,238.879 9.698,654 10.162.299 10,613.601 11,968.051 14.601.929 21.053,318 22.738.526 23.944,885 24,136.395 24,330.750 rota! Td; iuC~i I 0.48C J Debt Service Fund Balance8 6.056.011 8.382.862 7.656.679 5.486.358 2.133,933 77.70[) 1,340,390 3,533.830 6,446.566 12.598.877 20,929.309 29,712.670 38,951.549 48,650,202 58.812,502 69,426.103 81.394,LS.1 95.996.082 ll2.494.9t9 130,539,593 148.983.255 170,036.573 192.775.099 216.719.984 240.856.378 265,187.129 '1he County has ocloptcd a funding formula forcap1lal and cap1t<1l ma1ntcoancc. App,opnat1ons will be based on an a111ount equal lo 65', ol me pnor fiscal year A.OM LOtl<'ry procecos. For lhe 2018 2019 budget yci)r, the following(tmo~mt Ms OCPn c<1lcula1ed: 65.00'' , $1,571.581 == $ t.021.528. The rcmoining35%, sti.111 be relmnect m lhe Public SchOO Building Capital Fune! fo, future land purchase or debt payments. FY 2019 includes $1,857,333 for land purchases. NOTE: For purposes of ttiis analysis. all school pay go capital is assumed to be funded from lottery proceeds nnd excluded from this anal)'SIS. Jlnc1udes the Debt Service Fund Revenue of $11,000.000, less QSCB Sut>s1d1~s(Column M). •1 For purposos of this analy51s. lollcry proceeds arc excluded and assumed to fund school c;;tp1tal oullayou1s1c1e of thlS nnalys1s. ''Hesrncted /\rt,cle 40 & 42 Board of E<Jucation Salos fa-... F'Y 2019 Re-..enuesof $6.365.534 Dre assumed 10 g,ow at 1.50·.-, per ~-car. 6The 1/4t Saics Tax is dedicated solely to 1:>ay for New Schools (lebt seMce. FY 2019 Revenues or $2,317.311 arl' assumed lo g,ov. at 1.so·x. per fear. FY 20 l9 Sul)<;1<ly per County Buclgct. QSCB Su1Js1d1cs arc ,educt>d by 5.0·N as n result of seques1r;:1tron. "'Per County Starr. lst1miJtecJ balance t1s of 6/30/2010 • FY 2020 Value of a Penny9: $879,421 1.00% • Assumed Growth Rate: 9 Source: County Staff DAVENPORT & COMPANY February 11, 2020 • Notes: Alternatively, the County could consider utilizing an additional $808,635 in Reserves/Other Revenues to avoid an Equivalent Tax Impact. Additional future changes in operating impacts have not been included. Harnett County, NC 27 ~~ Harnett COUNTY tj ... Existing Tax Supported Debt DAVENPORT&COMPANY ------------------------------------------February 11, 2020 Harnett County, NC 28 Existing Tax Supported Debt Summary ~~ Harnett COUNTY 'l 'RT I A• Total Tax Supported Debt Service School Debt FY Principal Interest Total FY Principal Interest Total Total 157,431,600 49,760,404 207,192.005 Total 100.963,121 36,962,281 137,925,401 ---2020 12,928,817 4,557,420 17,486,237 2020 9,179,766 3,582,873 12,762,639 ---2021 12,880,099 4,752,336 17,632.435 2021 8,951.484 3,365,559 12,317.043 -- -2022 12,773,155 4,423,722 17.196,877 2022 8.850,200 3,136,241 11,986,441 2023 12.606,509 4,098,066 16,704,575 2023 8,690,974 2,909,336 11,600,310 -2024 12,470,894 3,770.638 16,241,532 2024 8,562,395 2,685,390 11.24 7,785 2025 10,886.495 3,464,368 14,350,863 2025 6,992,649 2,487,232 9,479,882 2026 10,304,982 3,184,017 13,488,999 2026 6,894,595 2,314,188 9,208,783 2027 9,965,931 2,917,611 12,883,542 2027 6.570,463 2,142,993 8,713,456 -2028 9,837,745 2,654,012 12,491,757 2028 6,458,386 1,973,795 8,432,181 ----2029 7,142,680 2,439,257 9,581,938 2029 5.159,94 7 1,835,216 6,995.163 2030 5,459,858 2,275,996 7.735,854 2030 3,459,488 1,730,258 5,189,746 ------2031 5,443,840 2,173,435 7,617,275 2031 3,420,400 1,686,008 5,106,408 ---2032 5,429,562 2,068,894 7,498.456 2032 3,382,609 1.639,914 5,022,523 2033 5,413,547 1,964,215 7,377,762 2033 3,342.631 1,593,820 4,936,451 2034 5,394,378 1,861,238 7,255,616 2034 3.299,041 1,549,570 4,848,611 2035 5,384,876 1,763,393 7,148,269 2035 3,264,651 1,505,320 4.769,972 2036 5,154,029 986,235 6,140,265 2036 3,008,442 776,629 3,785,071 2037 3,646,433 208,928 3,855.361 2037 1,475,000 47,938 1,522,938 ---2038 2,197.771 112,223 2,309,994 2038 2039 1,055,000 63,300 1,118,300 2039 2040 1,055.000 21,100 1,076,100 2040 DAVENPORT&COMPANY ------------------------------------------February 11, 2020 Harnett County, NC 29 ..____ l... Existing Tax Supported Debt Summary ~~ Harnett COUNTY ., r :. County Debt Community College Debt FY Principal Interest Total FY Principal Interest Total Total 38,814,799 11.684,175 50,498.973 Total 17,653,681 1,113.949 18.767,630 -----2020 3,011,727 870,694 3,882.421 2020 737,323 103,853 841,177 --2021 3,172.234 1,287,261 4,459,495 2021 756,381 99,516 855,897 2022 3.14 7,145 1,192,415 4,339,560 2022 775,809 95,066 870,875 2023 3,119,922 1,098,228 4.218,149 2023 795,613 90,502 886,116 2024 3,092,698 999,427 4,092,125 2024 815,801 85,822 901,623 2025 3,057,467 896,113 3,953.580 2025 836.378 81,023 917,401 2026 2,553,034 793,727 3,346,760 2026 857,353 76,102 933,456 2027 2.516,735 703,560 3,220,295 2027 878,732 71.059 949,791 2028 2,478,836 614,327 3,093,163 2028 900,523 65,889 966,412 2029 1,060,000 543,450 1,603,450 2029 922,733 60,592 983,325 2030 1,055,000 490,575 1,545,575 2030 945,369 55,163 1,000,533 2031 1,055,000 437,825 1,492,825 2031 968,440 49,602 1,018,042 2032 1,055,000 385,075 1,440,075 2032 991,953 43.905 1,035,858 2033 1,055.000 332,325 1,387,325 2033 1,015.916 38,069 1,053,985 2034 1,055,000 279,575 1,334,575 2034 1.040,337 32,093 1,072.430 2035 1,055,000 232,100 1,287,100 2035 1,065,225 25,973 1.091,198 2036 1,055,000 189,900 1,244,900 2036 1,090,587 19,706 1,110,294 2037 1,055,000 147,700 1,202,700 2037 1,116,433 13.290 1,129,724 2038 1,055.000 105,500 1,160,500 2038 1,142.771 6,723 1,149,494 2039 1,055,000 63,300 1,118,300 2039 2040 1,055,000 21,100 1,076,100 2040 DAVENPORT&COMPANY ------------------------------------------February 11, 2020 Harnett County, NC 30 School Debt $4,000,000 2004 QZAB Schools FY Coupon Pnnc1pal Interest Total Total 197,790 197,790 2020 0.000% 197.790 197,790 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 Dated Date: 5/28/2004 Next Call: unknown Purpose: Schools Insurance: n/a Coupon Dates: May28 Maturity Date: May28 Shown net of balance fund transfer of $835,362.40 $789,500 2005 QZAB Schools FY Coupon Pnnc,pal Interest Total Total 121.617 121,617 2020 0.000% 40,539 40,539 2021 0.000% 40,539 40,539 2022 0.000% 40,539 40,539 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 Dated Date: 10/20/2005 Next Call: unknown Purpose: Schools Insurance: n/a Coupon Dates: Oct20 Maturity Date: Oct20 Shown net of balance fund transfer of $140,875.20 ~~ Harnett COUNTY 'jll,'l . $14,004,000 Series 2010 IPC (2008 IPC Refunding) -Bank of America Refinancing 2008 !PC, Angier Elementary FY Coupon Pnnc,pal Interest Total Total 6,936,000 826,632 7,762,632 2020 2.400% 786,000 166,464 952.464 2021 2.400% 782.000 147,600 929,600 2022 2.400% 779,000 128,832 907,832 2023 2.400% 775.000 110,136 885,136 2024 2.400% 771,000 91,536 862,536 2025 2.400% 767,000 73,032 840,032 2026 2.400% 763,000 54,624 817,624 2027 2.400% 759,000 36,312 795,312 2028 2.400% 754.000 18.096 772,096 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 Dated Date: 11/1/2010 Next Call: Current1 Purpose: Refinancing/ School Insurance: n/a Coupon Dates: Jun 1 / Dec 1 Maturity Date: Jun 1 1 Prepayment is allowed on any payment date at 102% of principal for first one-half of term, then reducing to 101% for remaining one-half of term. DAVENPORT& COMPANY------------------------------------------February 11, 2020 Harnett County, NC 31 School Debt $23,967,000 $29,435,000 2011 IPC (SunTrust Leasing)· School Portion Limited Obligation Bonds, Series 20128 (QSCB) Refunding of 2002 COPs, Elemental)', Overhills High Highland Middle FY Coupon Principal Interest Total FY Coupon Principal Interest Total Total 9,630,160 599,123 10,229,283 Total 21,644,624 22,525,722 44,170,346 2020 2.535% 2,012,750 218,613 2,231,363 2020 586,847 1.365,195 1,952,042 2021 2.535% 1,971,040 168,118 2,139,158 2021 667,932 1,365,195 2,033,127 2022 2.535% 1,927.390 118,706 2,046,096 2022 665,049 1,365,195 2,030,244 2023 2.535% 1,882,770 70.412 1,953,182 2023 669,413 1,365,195 2,034,608 2024 2.535% 1,836,210 23,274 1,859,484 2024 667,826 1,365,195 2,033,021 2025 2025 1,012,025 1,365,195 2,377,220 2026 2026 994,226 1,365,195 2,359,421 2027 2027 975.670 1,365,195 2,340,865 2028 2028 957,428 1,365,195 2,322,624 2029 2029 1,595,947 1,365,195 2,961,143 2030 2030 1,984,488 1,365,195 3,349,684 2031 2031 1,945,400 1,365,195 3,310,595 2032 2032 1,907,609 1,365,195 3,272,804 2033 2033 1.867,631 1,365,195 3,232,826 2034 2034 1,824,041 1,365,195 3,189,236 2035 2035 1.789,651 1,365,195 3,154,847 2036 2036 4.638% 1,533,442 682,598 2,216,040 2037 2037 2038 2038 2039 2039 2040 2040 Dated Date: 11/15/2011 Next Call: 12/1/2020 1 Dated Date: 11/15/2012 Next Call: Current1 Purpose: Refinancing/ Schools Insurance: n/a Purpose: Schools Insurance: n/a Coupon Dates: Jun 1/ Dec 1 Maturity Date: Dec 1 Coupon Dates: May 1/ Nov 1 Maturity Date: Nov 1 1The County Note: Interest is Subsidized by the Federal Government at a sequester reduced rate of 3.97%. Principal Deposits shown are net of the Sinking Fund Earnings at 3.48% through 10/16/34. $30 .4 9 7 ,000 2015 Refunding COPs (Regions). School Portion Refinancing 2007 COPs, Overhills Elemental)', Coats Elementaiy ~~ Harnett COUNTY ,j F FY Coupon Principal Interest Total Total 11,014,930 1,212.050 12,226,981 2020 2.520% 1,309,840 261,072 1,570,913 2021 2.520% 1,295,973 228,239 1,524.212 2022 2.520% 1,276,222 195,829 1,472,052 2023 2.520% 1,254,791 163,939 1,418,730 2024 2.520% 1,233,360 132,588 1,365,947 2025 2.520% 1,205.625 101,857 1,307,481 2026 2.520% 1,175,369 71,856 1,247,225 2027 2.520% 1,146,793 42,597 1,189.390 2028 2.520% 1,116,957 14,074 1,131,031 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 Dated Date: 4/15/2015 Next Call: Current1 Purpose: Refinancing/ Schools Insurance: n/a Coupon Dates: Jun 1/ Dec 1 Maturity Date: Dec 1 Note: School portion per County model. 1 In whole or in part on any day on or before May 1, 2020: 103%; after May 1, 2020 to and including May 1. 2025: 102%; after May 1, 2025: 101% DAVENPORT&COMPANY ------------------------------------------February 11, 2020 Harnett County, NC 32 School Debt $31,080,000 $2,200,000 2016 Installment Financing Contract, Series 2016 (Regions) Installment Financing Contract. Series 2016 (BB&T) Boone Trail Elementary, Harnett Central High, Johnsonville Elementary. Highland Elementary Various Schools1 FY Coupon Principal Interest Total FY Coupon Principal Interest Total Total 23,328,000 2,731,190 26,059,190 Total 1,540,000 1.540,000 2020 2.200% 2,551,000 513,216 3,064,216 2020 0.000% 220,000 220,000 2021 2.200% 2.499.000 457,094 2,956,094 2021 0.000% 220,000 220,000 2022 2.200% 2,467,000 402,116 2,869,116 2022 0.000% 220,000 220,000 2023 2.200% 2.414,000 347,842 2,761,842 2023 0.000% 220,000 220.000 2024 2.200% 2,359,000 294,734 2,653,734 2024 0.000% 220,000 220,000 2025 2.200% 2,313,000 242,836 2,555,836 2025 0.000% 220,000 220,000 2026 2.200% 2,267.000 191,950 2.458,950 2026 0.000% 220,000 220,000 2027 2.200% 2,214,000 142,076 2,356,076 2027 2028 2.200% 2,155,000 93,368 2,248,368 2028 2029 2.200% 2,089,000 45,958 2,134,958 2029 2030 2030 2031 2031 2032 2032 2033 2033 2034 2034 2035 2035 2036 2036 2037 2037 2038 2038 2039 2039 2040 2040 Dated Date: 4/21/2016 Next Call: urrent at 101% Dated Date: 5/20/2016 Next Call: n/a Purpose: Refunding of 2009 COPs Insurance: n/a Purpose: Various Schools 1 Insurance: n/a Coupon Dates: Jun 1 / Dec 1 Maturity Date: Jun 1 Coupon Dates: May1 Maturity Date: May1 1 Coats ES, Coats-Erwin MS, Harnett Central HS. Harnett Central MS, Lafayette ES, Ullington-Shawtown ES, Overhill HS, Triton HS. Western Harnett HS. Western Harnett MS. ~~ Harnett COUNTY j .• , $29,500.000 General Obligation School Bonds, Series 2017 Benhaven Elementary School FY Coupon Principal Interest Total Total 26.550,000 9,067,563 35,617,563 2020 4.000% 1,475.000 1,058,313 2,533,313 2021 5.000% 1.475.000 999,313 2,474,313 2022 5.000% 1,475,000 925,563 2,400,563 2023 5.000% 1,475,000 851.813 2,326,813 2024 5.000% 1,475,000 778,063 2,253,063 2025 5.000% 1.475.000 704,313 2,179,313 2026 5.000% 1,475.000 630,563 2,105,563 2027 5.000% 1,475,000 556,813 2,031,813 2028 4.000% 1,475,000 483.063 1,958,063 2029 4.000% 1,475.000 424,063 1,899.063 2030 3.000% 1,475,000 365,063 1,840,063 2031 3.125% 1,475,000 320,813 1,795,813 2032 3.125% 1,475.000 274,719 1,749,719 2033 3.000% 1.4 75,000 228,625 1,703.625 2034 3.000% 1.4 75,000 184,375 1,659,375 2035 3.125% 1.4 75,000 140.125 1,615,125 2036 3.125% 1.4 75,000 94.031 1,569.031 2037 3.250% 1.4 75,000 47,938 1,522,938 2038 2039 2040 Dated Date: 5/31/2017 Next Call: 5/1/2027 Purpose: Schools Insurance: n/a Coupon Dates: May 1/ Nov 1 Maturity Date: May1 DAVENPORT&COMPANY ------------------------------------------February 11, 2020 Harnett County. NC 33 County Debt ~~ Harnett COUNTY 'l•.f.!I t,1·r•1''<·' $30.497,000 $1,274.000 $4,664,000 2015 Refunding COPs (Regions) -County Portion 2015 IPC (First Bank) 2015 IPC (First Bank) -Taxable Refinancing 2007 COPs, Law Enforcement Center Refunding of 2005 IPC, Ag Center Harnett Forward Together Commi_tt_e~_Land Purchase FY Coupon Pnncrpal Interest Total FY Coupon Principal Interest Total FY Coupon Principal Interest Total Total 13.991,920 1,539,630 15,531,550 Total 245,000 2,786 247,786 Total 2,796,000 236,821 3,032,821 2020 2.520% 1,663,849 331,632 1,995.481 2020 1.490% 245,000 2,786 247,786 2020 2.420% 466,000 67,663 533,663 2021 2.520% 1,646,234 289,925 1,936,159 2021 2021 2.420% 466,000 56,386 522,386 2022 2.520% 1.621,145 248,756 1,869,901 2022 2022 2.420% 466,000 45,109 511,109 2023 2.520% 1,593,922 208,246 1,802,168 2023 2023 2.420% 466,000 33,832 499,832 2024 2.520% 1,566,698 168.422 1,735,120 2024 2024 2.420% 466,000 22,554 488,554 2025 2.520% 1,531.467 129,385 1,660,853 2025 2025 2.420% 466,000 11,277 477,277 2026 2.520% 1.493,034 91,277 1,584,310 2026 2026 2027 2.520% 1,456,735 54,110 1,510,845 2027 2027 2028 2.520% 1.418,836 17,877 1.436,713 2028 2028 2029 2029 2029 2030 2030 2030 2031 2031 2031 2032 2032 2032 2033 2033 2033 2034 2034 2034 2035 2035 2035 2036 2036 2036 2037 2037 2037 2038 2038 2038 2039 2039 2039 2040 2040 2040 --Dated Date: 4/15/2015 Next Call: Current1 Dated Date: 8/27/2015 Next Call: Current1 Dated Date: 8/27/2015 Next Call: Current1 Purpose: Refinancing/ Law Insurance: n/a Purpose: Refinancing/ Ag Center Insurance: n/a Purpose: HFTC Insurance: n/a Enforcement Center Coupon Dates: Jun 1 / Dec 1 Maturity Date: Dec 1 Coupon Dates: Jun 1/ Dec 1 Maturity Date: Jun 1 / Dec 1 Coupon Dates: Jun 1/ Dec 1 Maturity Date: Jun 1/ Dec 1 Note: County portion per County model. 1 In whole or in part on any day on or before May 1, 2020: 103%; after May 1, 1 In whole or in part at any time at par 1 In whole or in part at anytime at par 2020 to and including May 1, 2025: 102%; after May 1, 2025: 101 % DAVENPORT&COMPANY ------------------------------------------February 11, 2020 Harnett County, NC 34 County Debt $1,902,953 2017 Lease (PNC) Software Replacement FY Coupon Principal Interest Total Total 636,878 11,591 648,469 2020 1.820% 636,878 11.591 648,469 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 Dated Date: 8/25/2017 Next Call: Noncallable Purpose: Software Replacement Insurance: n/a Coupon Dates: Nov 15 Maturity Date: Nov 15 $21,145,000 Limited Obligation Bonds, Series 2019 Government Services Complex FY Coupon Principal Interest Total Total 21,145,000 9,893,346 31,038,346 2020 457,021 457,021 2021 4.000% 1,060,000 940,950 2,000,950 2022 4.000% 1,060,000 898,550 1,958,550 2023 4.000% 1,060,000 856,150 1,916,150 2024 5.000% 1,060,000 808,450 1,868,450 2025 5.000% 1,060,000 755,450 1,815,450 2026 5.000% 1,060,000 702,450 1,762,450 2027 5.000% 1,060,000 649,450 1,709,450 2028 5.000% 1,060,000 596,450 1,656,450 2029 5.000% 1,060,000 543,450 1,603,450 2030 5.000% 1,055,000 490,575 1,545,575 2031 5.000% 1,055,000 437,825 1,492,825 2032 5.000% 1,055,000 385,075 1,440,075 2033 5.000% 1,055,000 332,325 1,387,325 2034 5.000% 1,055,000 279,575 1,334,575 2035 4.000% 1,055,000 232,100 1,287,100 2036 4.000% 1,055,000 189,900 1,244,900 2037 4.000% 1,055,000 147,700 1,202,700 2038 4.000% 1,055,000 105,500 1,160,500 2039 4.000% 1,055,000 63,300 1,118,300 2040 4.000% 1,055,000 21,100 1,076,100 Dated Date: 10/10/2019 Next Call: 10/1/2029 Purpose: Government Services Insurance: n/a Complex Coupon Dates: Apr 1/ Oct 1 Maturity Date: Oct 1 ~~ Harnett COUNTY ,, DAVENPORT&COMPANY ------------------------------------------February 11, 2020 Harnett County. NC 35 r r • -....__ ~~ Harnett COUNTY ·i,r, Existing Department of Public Utilities Debt DAVENPORT & COMPANY------------------------------------------relJruary 11, 2020 Harnett County, NC 36 . .. Department of Public Utility Debt ~~ Harnett COUNTY 'I,-. I' I .', 1'ri, i~ I General Obligation Bonds Revenue Bonds State Bonds FY Principal Interest Total FY Principal Interest Total FY Principal Interest Total Total 27,946,000 13,040.975 40,986,975 Total 8.730,000 1,141,308 9,871.308 Total 13,174,748 1,834,872 15.009,620 - -2020 1,033,000 958.519 1,991,519 2020 875.000 220,869 1,095.869 2020 1.278,077 301.770 1.579,847 ----2021 1,049,000 917,556 1.966.556 2021 896.000 198.732 1,094,732 2021 1,278.077 272,782 1,550.858 ---2022 1.082.000 871,419 1,953.419 2022 922,000 176,063 1.098,063 2022 1,278,077 243,793 1,521,869 ---2023 1,114.000 824,056 1,938.056 2023 944,000 152.736 1.096.736 2023 1,278,077 214,804 1,492,881 -----------2024 1,150,000 776.994 1.926,994 2024 970.000 128,853 1,098.853 2024 1,278.077 185.815 1.463.892 - -2025 1,188.000 731.606 1.919,606 2025 993.000 104,312 1,097,312 2025 1.278.077 156,827 1,434,903 -2026 1,195,000 684,488 1,879.488 2026 1,015,000 79.189 1,094,189 2026 1.278,077 127,838 1,405.915 --------------2027 1,227.000 639,819 1,866,819 2027 1.046,000 53,510 1,099,510 2027 1,278,077 98.849 1,376,926 ------2028 1,231.000 593.950 1,824,950 2028 1,069.000 --27,046 1.096,046 2028 528,077 69.860 597,937 -2029 854,000 555,113 1,409,113 2029 2029 528,077 57,409 585,486 ----2030 868,000 528,556 1,396.556 2030 2030 528.077 44,958 573,035 -~ --2031 886,000 501,581 1,387.581 2031 2031 528,077 32.507 560.584 --~ ---~ ~~ -2032 895,000 474,044 1,369,044 2032 2032 528,077 20,056 548,132 - - -2033 884.000 444.813 1,328,813 2033 2033 309,751 7,604 317,355 ----2034 883,000 416.019 1,299,019 2034 2034 -----2035 902,000 387,319 1.289,319 2035 2035 ---------2036 803,000 358,006 1.161.006 2036 2036 -· ----~ ----2037 828,000 332,231 1,160,231 2037 2037 ---2038 854.000 305.069 1,159,069 2038 2038 -----------2039 879,000 277.044 1.156,044 2039 2039 ---------2040 905,000 248,188 1.153.188 2040 2040 2041 937,000 218,469 1,155.469 2041 2041 2042 913.000 187,675 1,100.675 2042 2042 ----2043 940,000 157,838 1,097,838 2043 2043 -------2044 448,000 127,106 575,106 2044 2044 --------2045 461.000 114,306 575.306 2045 2045 ------2046 474,000 101,131 575,131 2046 2046 ---· -2047 488.000 87.581 575,581 2047 2047 ---2048 501,000 73,625 574,625 2048 2048 --2049 516,000 59,294 575,294 2049 2049 2050 531,000 44,531 575.531 2050 2050 -----2051 546,000 29,331 575.331 2051 2051 --------2052 481,000 13,700 494,700 2052 2052 DAVENPORT & COMPANY--------------------------------------------February 11, 2020 Harnett County, NC 37 Department of Public Utility Debt ~·~ Harnett COUNTY 'l' F I !-fir ~,A Installment Purchases LOBs (Linked to Offsetting District GO Bonds) FY Principal Interest Total FY Principal Interest Total Total 297,840 18.530 316,370 Total 15.790.000 6,300,138 22,090,138 ---2020 62,250 6.761 69,011 2020 805,000 611,950 1.416,950 ------------2021 60.960 5.200 66,160 2021 815,000 577,450 1,392,450 ---2022 59.610 3,671 63,281 2022 840.000 537.950 1,377.950 - -2023 58,230 2.178 60,408 2023 865,000 497,450 1,362,450 --2024 56.790 720 57,510 2024 895,000 457,450 1,352,450 --2025 2025 925.000 419.300 1,344,300 -2026 2026 925,000 379,650 1,304,650 2027 2027 950,000 342,650 1,292,650 2028 2028 945.000 304,650 1,249,650 2029 2029 560,000 273,938 833,938 2030 2030 565,000 255,738 820,738 2031 2031 575,000 237,375 812,375 ----------2032 2032 575,000 218,688 793,688 ------2033 2033 555,000 198,563 753,563 2034 2034 545.000 179,138 724,138 2035 2035 555,000 160,063 715,063 2036 2036 445,000 140,638 585,638 2037 2037 460,000 125,063 585,063 2038 2038 475,000 108,388 583,388 ----2039 2039 490,000 91.169 581.169 ·---~ 2040 2040 505,000 73,406 578,406 -2041 2041 525,000 55,100 580,100 2042 2042 490,000 36,069 526,069 ---2043 2043 505,000 18,306 523,306 -2044 2044 ----2045 2045 -2046 2046 . -----------~ 2047 2047 -----" -------2048 2048 ----------2049 2049 ------2050 2050 -2051 2051 2052 2052 DAVENPORT&COMPANY ------------------------------------------February 11, 2020 Harnett County, NC 38 ,. .._ General Obligation Bonds ~~ Harnett COUNTY ., ... ;, $3,449,000 $3,937,000 $3,239,000 South Central Water & Sewer GO, Series 2013A (USDA) South Central Water & Sewer GO, Series 20138 (USDA) South Central Water & Sewer GO, Series 2013C (USDA} Sanitary Sewer Sanitary Sewer Sanitary Sewer FY Coupon Pnnc,pal Interest Total FY Coupon Principal Interest Total FY Coupon Pnnc,pal Interest Total Total 3,186,000 1,945,813 5,131,813 Total 3,641,000 2,242,000 5,883,000 Total 2,964,000 1,421,775 4,385,775 2020 3.125% 57,000 99,563 156,563 2020 3.125% 65,000 113,781 178,781 2020 2.500% 59,000 74,100 133,100 2021 3.125% 59,000 97,781 156,781 2021 3.125% 67,000 111,750 178,750 2021 2.500% 60,000 72,625 132,625 2022 3.125% 61,000 95,938 156,938 2022 3.125% 69,000 109,656 178,656 2022 2.500% 62,000 71,125 133,125 2023 3.125% 63,000 94,031 157,031 2023 3.125% 71,000 107.500 178,500 2023 2.500% 64,000 69,575 133,575 2024 3.125% 65,000 92.063 157,063 2024 3.125% 73,000 105,281 178,281 2024 2.500% 65,000 67,975 132,975 2025 3.125% 67,000 90,031 157,031 2025 3.125% 76.000 103,000 179,000 2025 2.500% 67,000 66,350 133,350 2026 3.125% 69,000 87,938 156.938 2026 3.125% 78,000 100,625 178,625 2026 2.500% 68,000 64,675 132.675 2027 3.125% 71,000 85,781 156,781 2027 3.125% 80,000 98.188 178,188 2027 2.500% 70,000 62,975 132,975 2028 3.125% 73,000 83,563 156,563 2028 3.125% 83,000 95,688 178,688 2028 2.500% 72,000 61,225 133,225 2029 3.125% 76,000 81,281 157,281 2029 3.125% 85,000 93,094 178,094 2029 2.500% 74,000 59.425 133,425 2030 3.125% 78.000 78,906 156,906 2030 3.125% 88,000 90,438 178,438 2030 2.500% 76,000 57,575 133,575 2031 3.125% 81,000 76,469 157.469 2031 3.125% 91.000 87,688 178,688 2031 2.500% 77,000 55,675 132,675 2032 3.125% 83,000 73,938 156,938 2032 3.125% 94,000 84,844 178,844 2032 2.500% 79,000 53,750 132,750 2033 3.125% 86,000 71.344 157,344 2033 3.125% 97,000 81,906 178,906 2033 2.500% 81,000 51,775 132,775 2034 3.125% 88,000 68.656 156,656 2034 3.125% 100.000 78,875 178,875 2034 2.500% 83,000 49.750 132,750 2035 3.125% 91,000 65,906 156,906 2035 3.125% 103,000 75,750 178,750 2035 2.500% 85,000 47,675 132,675 2036 3.125% 94,000 63,063 157,063 2036 3.125% 106,000 72,531 178,531 2036 2.500% 88.000 45,550 133,550 2037 3.125% 97.000 60,125 157,125 2037 3.125% 109,000 69,219 178,219 2037 2.500% 90,000 43,350 133,350 2038 3.125% 100,000 57,094 157,094 2038 3.125% 113,000 65,813 178,813 2038 2.500% 92,000 41,100 133,100 2039 3.125% 103,000 53,969 156,969 2039 3.125% 116,000 62,281 178,281 2039 2.500% 94,000 38,800 132,800 2040 3.125% 106,000 50.750 156,750 2040 3.125% 120,000 58,656 178,656 2040 2.500% 97,000 36,450 133,450 2041 3.125% 110,000 47,438 157,438 2041 3.125% 124.000 54,906 178,906 2041 2.500% 99,000 34,025 133.025 2042 3.125% 113,000 44,000 157,000 2042 3.125% 127,000 51,031 178,031 2042 2.500% 102.000 31,550 133,550 2043 3.125% 117,000 40.469 157,469 2043 3.125% 131,000 47,063 178,063 2043 2.500% 104,000 29,000 133,000 2044 3.125% 120,000 36,813 156,813 2044 3.125% 136,000 42,969 178,969 2044 2.500% 107.000 26.400 133,400 2045 3.125% 124,000 33,063 157,063 2045 3.125% 140.000 38.719 178,719 2045 2.500% 109,000 23,725 132,725 2046 3.125% 128,000 29,188 157,188 2046 3.125% 144.000 34,344 178,344 2046 2.500% 112,000 21,000 133,000 2047 3.125% 132,000 25,188 157,188 2047 3.125% 149,000 29,844 178,844 2047 2.500% 115,000 18,200 133,200 2048 3.125% 136,000 21,063 157,063 2048 3.125% 153,000 25,188 178,188 2048 2.500% 118,000 15,325 133,325 2049 3.125% 140,000 16,813 156,813 2049 3.125% 158.000 20,406 178,406 2049 2.500% 121,000 12.375 133,375 2050 3.125% 145,000 12,438 157.438 2050 3.125% 163,000 15.469 178,469 2050 2.500% 124,000 9,350 133,350 2051 3.125% 149,000 7,906 156,906 2051 3.125% 168,000 10,375 178,375 2051 2.500% 127,000 6,250 133,250 2052 3.125% 104,000 3,250 107,250 2052 3.125% 164.000 5,125 169,125 2052 2.500% 123,000 3,075 126,075 Dated Date: 1/22/2013 Next Call: Current Dated Date: 1/22/2013 Next Call: Current Dated Date: 1/22/2013 Next Call: Current Purpose: Sanitary Sewer Insurance: n/a Purpose: Sanitary Sewer Insurance: n/a Purpose: Sanitary Sewer Insurance: n/a Coupon Dates: Jun 1 Maturity Date: Jun 1 Coupon Dates: Jun 1 Maturity Date: Jun 1 Coupon Dates: Jun 1 Maturity Date: Jun 1 DAVENPORT & COMPANY February 11, 2020 Harnett County, NC 39 General Obligation Bonds ~~ Harnett COUNTY 'li:PI 4,1 $2,586,000 $10,395,000 $1,485,000 South Central Water & Sewer GO, Series 2013D (USDA) General Obligation Refunding Bond, Series 2013 (County LOBs) South Central General Obligation Refunding Bond, Series 2013 (County LOBs) West Central Sanitary Sewer Refunding of USDA Bonds Refunding of USDA Bonds FY Coupon Pnnc1pal Interest Total FY Coupon Pnncrpal Interest Total FY Coupon Pnnc1pal Interest Total Total 2,365,000 1,131,250 3,496,250 Total 8,975,000 4,408,238 13,383,238 Total 1,000,000 206,675 1,206,675 2020 2.500% 47,000 59,125 106,125 2020 5.000% 280,000 336,825 616,825 2020 5.000% 100,000 42,575 142,575 2021 2.500% 48,000 57,950 105,950 2021 5.000% 290,000 324,875 614,875 2021 5.000% 105,000 38,275 143,275 2022 2.500% 50,000 56,750 106,750 2022 5.000% 300.000 310.775 610,775 2022 5.000% 110,000 33,175 143,175 2023 2.500% 51,000 55,500 106,500 2023 5.000% 305,000 296,325 601,325 2023 5.000% 115,000 27,875 142,875 2024 2.500% 52,000 54,225 106,225 2024 5.000% 325,000 282,225 607,225 2024 5.000% 115,000 22,575 137,575 2025 2.500% 53,000 52.925 105,925 2025 5.000% 340.000 268,425 608,425 2025 5.000% 115.000 17,675 132,675 2026 2.500% 55,000 51.600 106,600 2026 4.000% 345,000 253,875 598,875 2026 4.000% 115,000 12,775 127,775 2027 2.500% 56,000 50.225 106,225 2027 4.000% 365.000 240,075 605,075 2027 4.000% 115.000 8,175 123,175 2028 2.500% 58,000 48,825 106,825 2028 3.250% 375,000 225,475 600,475 2028 3.250% 110,000 3,575 113,575 2029 2.500% 59,000 47.375 106,375 2029 3.250% 320,000 213,288 533,288 2029 2030 2.500% 61,000 45,900 106,900 2030 3.250% 325,000 202,888 527,888 2030 2031 2.500% 62,000 44,375 106,375 2031 3.250% 340,000 192.325 532,325 2031 2032 2.500% 64,000 42,825 106,825 2032 3.500% 345,000 181,275 526,275 2032 2033 2.500% 65,000 41,225 106,225 2033 3.500% 360,000 169,200 529,200 2033 2034 2.500% 67,000 39,600 106,600 2034 3.500% 375,000 156,600 531,600 2034 2035 2.500% 68,000 37,925 105,925 2035 3.500% 385,000 143,475 528,475 2035 2036 2.500% 70,000 36,225 106,225 2036 3.500% 400,000 130.000 530,000 2036 2037 2.500% 72,000 34,475 106,475 2037 3.625% 410.000 116,000 526,000 2037 2038 2.500% 74,000 32,675 106,675 2038 3.625% 425,000 101,138 526,138 2038 2039 2.500% 76,000 30,825 106,825 2039 3.625% 440,000 85,731 525,731 2039 2040 2.500% 77,000 28,925 105.925 2040 3.625% 455,000 69.781 524,781 2040 2041 2.500% 79,000 27,000 106,000 2041 3.625% 475,000 53,288 528,288 2041 2042 2.500% 81,000 25,025 106,025 2042 3.625% 490.000 36,069 526,069 2042 2043 2.500% 83,000 23,000 106,000 2043 3.625% 505,000 18,306 523,306 2043 2044 2.500% 85,000 20,925 105,925 2044 2044 2045 2.500% 88,000 18,800 106,800 2045 2045 2046 2.500% 90,000 16,600 106,600 2046 2046 2047 2.500% 92,000 14,350 106,350 2047 2047 2048 2.500% 94,000 12,050 106,050 2048 2048 2049 2.500% 97,000 9,700 106,700 2049 2049 2050 2.500% 99,000 7,275 106,275 2050 2050 2051 2.500% 102,000 4,800 106,800 2051 2051 2052 2.500% 90,000 2.250 92,250 2052 2052 Dated Date: 1/22/2013 Next Call: Current Dated Date: 4/24/2013 Next Call: 6/1/2023 Dated Date: 4/24/2013 Next Call: 6/1/2023 Purpose: Sanitary Sewer Insurance: n/a Purpose: Refunding of USDA Bonds Insurance: n/a Purpose: Refunding of USDA Bonds Insurance: n/a Coupon Dates: Jun 1 Maturity Date: Jun 1 Coupon Dates: Jun 1 / Dec 1 Maturity Date: Jun 1 Coupon Dates: Jun 1 / Dec 1 Maturity Date: Jun 1 DAVENPORT & COMPANY February 11, 2020 Harnett County. NC 40 General Obligation Bonds ~-~ Harnett COUNTY ., . .:, $1,085,000 $2,315,000 $1,000,000 General Obligation Refunding Bond, Series 2013 (County LOBs) Northwest General Obligation Refunding Bond, Series 2013 (County LOBs) Southwest General Obligation Refunding Bond, Series 2013 (County LOBs) Southeast Refuridin_g_ of USDA Bonds Refunding of USDA Bonds Refunding of USDA Bonds FY Coupon Principal Interest Total FY Coupon Principal Interest Total FY Coupon Pnnc1pal Interest Total Total 530,000 105,638 635,638 Total 1,515,000 308,913 1,823,913 Total 740,000 197,075 937,075 2020 5.000% 65,000 22,688 87,688 2020 5.000% 170.000 64,663 234,663 2020 5.000% 50,000 29,300 79,300 2021 5.000% 60,000 19,888 79,888 2021 5.000% 165,000 57,363 222,363 2021 5.000% 50.000 27,150 77,150 2022 5.000% 60,000 16,988 76,988 2022 5.000% 165.000 49,363 214,363 2022 5.000% 55.000 24,750 79,750 2023 5.000% 60,000 14,088 74,088 2023 5.000% 170,000 41,413 211,413 2023 5.000% 55,000 22,100 77,100 2024 5.000% 60,000 11,288 71,288 2024 5.000% 170,000 33,563 203,563 2024 5.000% 60,000 19,550 79,550 2025 5.000% 60,000 8,738 68,738 2025 5.000% 175,000 26,263 201,263 2025 5.000% 60,000 17,000 77,000 2026 4.000% 55,000 6,188 61,188 2026 4.000% 165,000 18,763 183,763 2026 4.000% 60,000 14,400 74,400 2027 4.000% 55,000 3,988 58,988 2027 4.000% 170,000 12,163 182,163 2027 4.000% 60,000 12.000 72.000 2028 3.250% 55,000 1,788 56,788 2028 3.250% 165,000 5,363 170.363 2028 3.250% 55,000 9,600 64,600 2029 2029 2029 3.250% 55,000 7,813 62.813 2030 2030 2030 3.250% 55.000 6,025 61,025 2031 2031 2031 3.250% 55,000 4,238 59,238 2032 2032 2032 3.500% 50.000 2,450 52,450 2033 2033 2033 3.500% 20,000 700 20,700 2034 2034 2034 2035 2035 2035 2036 2036 2036 2037 2037 2037 2038 2038 2038 2039 2039 2039 2040 2040 2040 2041 2041 2041 2042 2042 2042 2043 2043 2043 2044 2044 2044 2045 2045 2045 2046 2046 2046 2047 2047 2047 2048 2048 2048 2049 2049 2049 2050 2050 2050 2051 2051 2051 2052 2052 2052 Dated Date: 4/24/2013 Next Call: 6/1/2023 Dated Date: 4/24/2013 Next Call: 6/1/2023 Dated Date: 4/24/2013 Next Call: 6/1/2023 Purpose: Refunding of USDA Bonds Insurance: n/a Purpose: Refunding of USDA Bonds Insurance: n/a Purpose: Refunding of USDA Bonds Insurance: n/a Coupon Dates: Jun 1/ Dec 1 Maturity Date: Jun 1 Coupon Dates: Jun 1/ Dec 1 Maturity Date: Jun 1 Coupon Dates: Jun 1/ Dec 1 Maturity Date: Jun 1 DAVENPORT & COMPANY February 11, 2020 Harnett County. NC 41 General Obligation Bonds $2,765,000 General Obligation Refunding Bond, Series 2013 (County LOBs) East Central Refunding of USDA Bonds FY Coupon Pnnc1pal Interest Total Total 2,155,000 669,925 2,824,925 2020 5.000% 115,000 83,263 198,263 2021 5.000% 120,000 78,363 198,363 2022 5.000% 125,000 72,563 197,563 2023 5.000% 130,000 66,513 196,513 2024 5.000% 135,000 60,463 195,463 2025 5.000% 145,000 54,713 199,713 2026 4.000% 150,000 48,513 198,513 2027 4.000% 145,000 42,513 187,513 2028 3.250% 145,000 36,713 181,713 2029 3.250% 145,000 32,000 177,000 2030 3.250% 145,000 27,288 172,288 2031 3.250% 140,000 22,575 162,575 2032 3.500% 135,000 18,025 153,025 2033 3.500% 130,000 13,300 143,300 2034 3.500% 125,000 8,750 133,750 2035 3.500% 125,000 4,375 129,375 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048 2049 2050 2051 2052 Dated Date: 4/24/2013 Next Call: 6/1/2023 Purpose: Refunding of USDA Bonds Insurance: n/a Coupon Dates: Jun 1/ Dec 1 Maturity Date: Jun 1 DAVENPORT & COMPANY February 11, 2020 $1,020.000 General Obligation Refunding Bond. Series 2013 (County LOBs) Riverside Refunding of USDA Bonds FY Coupon Pnnc1pal Interest Total Total 875,000 403,675 1,278,675 2020 5.000% 25,000 32,638 57,638 2021 5.000% 25.000 31,538 56,538 2022 5.000% 25,000 30,338 55,338 2023 5.000% 30,000 29,138 59,138 2024 5.000% 30,000 27,788 57,788 2025 5.000% 30,000 26.488 56,488 2026 4.000% 35,000 25,138 60,138 2027 4.000% 40,000 23,738 63,738 2028 3.250% 40,000 22,138 62,138 2029 3.250% 40,000 20,838 60,838 2030 3.250% 40,000 19,538 59,538 2031 3.250% 40,000 18.238 58,238 2032 3.500% 45,000 16,938 61,938 2033 3.500% 45,000 15.363 60,363 2034 3.500% 45,000 13,788 58.788 2035 3.500% 45,000 12,213 57,213 2036 3.500% 45,000 10,638 55,638 2037 3.625% 50,000 9,063 59,063 2038 3.625% 50,000 7,250 57,250 2039 3.625% 50,000 5,438 55,438 2040 3.625% 50,000 3,625 53,625 2041 3.625% 50,000 1,813 51,813 2042 2043 2044 2045 2046 2047 2048 2049 2050 2051 2052 ---Dated Date: 4/24/2013 Next Call: 6/1/2023 Purpose: Refunding of USDA Bonds Insurance: n/a Coupon Dates: Jun 1/ Dec 1 Maturity Date: Jun 1 ~~ Harnett COUNTY j·JJ;I !~I Harnett County, NC 42 .. Revenue Bonds $10,673,000 Enterprise System Revenue Refunding Bond, Series 2015 (Regions) Refunding of FY Coupon Principal Interest Total Total 8,730,000 1,141,308 9,871,308 2020 2.530% 875,000 220,869 1,095,869 2021 2.530% 896,000 198,732 1,094,732 2022 2.530% 922,000 176,063 1,098,063 2023 2.530% 944,000 152,736 1,096,736 2024 2.530% 970,000 128,853 1,098,853 2025 2.530% 993,000 104,312 1,097,312 2026 2.530% 1,015,000 79,189 1,094,189 2027 2.530% 1,046,000 53,510 1,099,510 2028 2.530% 1,069,000 27,046 1,096,046 2029 2030 2031 2032 2033 Dated Date: 4/15/2015 Next Call: Current1 Purpose: Refinancing/ W&S Insurance: n/a Coupon Dates: May 1/ Nov 1 Maturity Date: Mayl 1 In whole or in part on any day on or before May 1, 2020: 103%; after May 1, 2020 to and including May 1, 2025: 102%; after May 1, 2025: 101% ~~ Harnett COUNTY 'I ~'. I ! G ' d. DAVENPORT & COMPANY--------------------------------------------February 11, 2020 Harnett County, NC 43 L. --State Bond Loans $15,000.000 $4,366,515 2007 Revolving Loan 2011 East Central Revolving Loan sanitary Sewer Water FY Coupon Pnnc,pal Interest Total FY Coupon Pnnc1pal Interest Total Total 6,000,000 595.350 6,595,350 Total 2.838,235 441,062 3,279,296 2020 2.205% 750,000 132,300 882.300 2020 2.220% 218.326 63,009 281,335 2021 2.205% 750,000 115.763 865,763 2021 2.220% 218,326 58,162 276.488 2022 2.205% 750,000 99,225 849,225 2022 2.220% 218,326 53,315 271,641 2023 2.205% 750,000 82,688 832,688 2023 2.220% 218,326 48.468 266.794 2024 2.205% 750,000 66,150 816,150 2024 2.220% 218.326 43,621 261,947 2025 2.205% 750,000 49,613 799,613 2025 2.220% 218,326 38.775 257,100 2026 2.205% 750,000 33,075 783,075 2026 2.220% 218,326 33.928 252,254 2027 2.205% 750,000 16,538 766.538 2027 2.220% 218.326 29.081 247,407 2028 2028 2.220% 218,326 24,234 242,560 2029 2029 2.220% 218,326 19,387 237,713 2030 2030 2.220% 218.326 14,541 232,866 2031 2031 2.220% 218,326 9,694 228,019 2032 2032 2.220% 218,326 4,847 223,173 2033 2033 Dated Date: 5/11/2007 Next Call: Unknown Dated Date: 10/14/2011 Next Call: Unknown Purpose: sanitary Sewer Insurance: n/a Purpose: Water Insurance: n/a Coupon Dates: May 1/ Nov 1 Maturity Date: Mayl Coupon Dates: May 1/ Nov 1 Maturity Date: Mayl $6.195.019 2013 Erwin WW Revolving Loan Sanitary Sewer ~~ Harnett COUNTY r,,)Rl• A FY Coupon Principal Interest Total Total 4,336,513 798,461 5,134,974 2020 2.455% 309.751 106.461 416,212 2021 2.455% 309,751 98,857 408,608 2022 2.455% 309,751 91,253 401,004 2023 2.455% 309,751 83.648 393,399 2024 2.455% 309,751 76.044 385,795 2025 2.455% 309,751 68,439 378,190 2026 2.455% 309,751 60.835 370,586 2027 2.455% 309,751 53,231 362,982 2028 2.455% 309,751 45.626 355,377 2029 2.455% 309,751 38,022 347,773 2030 2.455% 309,751 30,418 340,168 2031 2.455% 309,751 22,813 332,564 2032 2.455% 309,751 15,209 324,960 2033 2.455% 309,751 7,604 317,355 Dated Date: 1/13/2013 Next Call: Unknown Purpose: sanitary Sewer Insurance: n/a Coupon Dates: May 1/ Nov 1 Maturity Date: Mayl DAVENPORT& COMPANY------------------------------------------February 11. 2020 Harnett County. NC 44 I.. Installment Purchases ~~ Harnett COUNTY 'l"PI A1·r' f•1t, $743,310 2011 IPC (SunTrust) -Public Utilities Portion only Refunding of 2002 COPs, Water & Sewer FY Coupon Principal Interest Total Total 297,840 18,530 316,370 2020 2.535% 62,250 6,761 69,011 2021 2.535% 60,960 5,200 66,160 2022 2.535% 59,610 3,671 63,281 2023 2.535% 58,230 2,178 60,408 2024 2.535% 56,790 720 57,510 2025 2026 2027 2028 2029 2030 2031 2032 2033 Dated Date: 11/15/2011 Next Call: 12/1/20201 Purpose: Refinancing/ W&S Insurance: n/a Coupon Dates: Jun1/Dec1 Maturity Date: Dec 1 1 The County may prepay, in whole on any regularly scheduled payment date at a prepayment price of 100% of such principal amount prepaid DAVENPORT&COMPANY------------------------------------------February 11, 2020 Harnett County. NC 45 ---... _ LOBs (Linked to Offsetting District GO Bonds) ~-~ Harnett COUNTY •11·,~, I .', Rt $20,065,000 Limited Obligation Bonds, Series 2013 District Refundings FY Coupon Principal Interest Total Total 15,790,000 6,300,138 22,090,138 2020 4.000% 805,000 611,950 1,416,950 2021 4.000% 815,000 577,450 1,392,450 2022 4.000% 840,000 537,950 1,377,950 2023 4.000% 865,000 497,450 1,362,450 2024 5.000% 895,000 457,450 1,352,450 2025 5.000% 925,000 419,300 1,344,300 2026 4.000% 925,000 379,650 1,304,650 2027 4.000% 950,000 342,650 1,292,650 2028 3.250% 945,000 304,650 1,249,650 2029 3.250% 560,000 273,938 833,938 2030 3.250% 565,000 255,738 820,738 2031 3.250% 575,000 237,375 812,375 2032 3.500% 575,000 218,688 793,688 2033 3.500% 555,000 198,563 753,563 2034 3.500% 545,000 179,138 724,138 2035 3.500% 555,000 160,063 715,063 2036 3.500% 445,000 140,638 585,638 2037 3.625% 460,000 125,063 585,063 2038 3.625% 475,000 108,388 583,388 2039 3.625% 490,000 91,169 581,169 2040 3.625% 505,000 73,406 578,406 2041 3.625% 525,000 55,100 580,100 2042 3.625% 490,000 36,069 526,069 2043 3.625% 505,000 18,306 523,306 Dated Date: 4/24/2013 Next Call: 6/1/2023 Purpose: District Refundings Insurance: n/a Coupon Dates: Jun1/Dec1 Maturity Date: Jun 1 DAVENPORT & COMPANY February 11, 2020 Harnett County, NC 46 • --r,c~ Harnett COUNTY rkJ:11-.'.Jl'.I Existing Solid Waste Debt DAVENPORT& COMPANY------------------------------------------February 11, 2020 Harnett County, NC 4 7 Existing Solid Waste Supported Debt Summary ~~ Harnett COUNTY 'l'-1::111 :.OJI! Total Solid Waste Supported Debt Service I PCs/ LOBs / COPs Special Obligation Bonds FY Principal Interest Total FY Principal Interest Total FY Principal Interest Total Total 1,957,149 179,996 2,137,145 Total 1.205,149 132.611 1.337.761 Total 752.000 47,385 799.385 2020 324.310 47,289 371.599 2020 143,310 28,564 171.874 2020 181,000 18,725 199,725 -2021 327.793 39,190 366,983 2021 141,793 24.972 166,765 2021 186,000 14,218 200.218 2022 329,632 3L012 --360,644 2022 139,632 21.426 161.058 2022 190.000 9,587 199,587 2023 332,287 22,792 355,079 2023 137.287 17,937 155,224 2023 195,000 4.856 199,856 2024 134,943 14,507 149,449 2024 134,943 14,507 149.449 2024 -2025 131,908 11.144 143,052 2025 131,908 11,144 143,052 2025 2026 128,598 7,862 136.460 2026 128,598 7,862 136,460 2026 2027 125,471 4,661 130,132 2027 125.471 4,661 130.132 2027 -2028 122.207 1.540 123.747 --~-2028 122,207 1.540 123,747 2028 DAVENPORT&COMPANY ------------------------------------------February 11, 2020 Harnett County, NC 48 COPs / LOBs / IPCs ~~ Harnett COUNTY f. t,~, 0lj '· $30,497,000 2015 Refunding COPs (Regions) Refinancing 2007 COPs, Solid Waste Transfer Station FY Coupon Principal Interest Total Total 1,205,149 132,611 1,337,761 2020 2.520% 143,310 28,564 171,874 2021 2.520% 141.793 24,972 166,765 2022 2.520% 139,632 21,426 161,058 2023 2.520% 137,287 17,937 155,224 2024 2.520% 134,943 14,507 149,449 2025 2.520% 131,908 11,144 143,052 2026 2.520% 128,598 7,862 136,460 2027 2.520% 125,471 4,661 130,132 2028 2.520% 122,207 1,540 123.747 2029 2030 2031 2032 2033 Dated Date: 4/15/2015 Next Call: Current1 Purpose: Refinancing/ Solid Waste Insurance: n/a Coupon Dates: Jun 1/ Dec 1 Maturity Date: Dec 1 Note: Solid Waste portion based on County model. 1 In whole or in part on any day on or before May 1, 2020: 103%; after May 1, 2020 to and including May 1, 2025: 102%; after May 1, 2025: 101% DAVENPORT & COMPANY--------------------------------------------February 11, 2020 Harnett County, NC 49 . -Special Obligation Bonds ~~ Harnett COUNTY •4.i;_I I. "I"·' $1,750,000 2013 Special Obligation Bond (Cape Fear Farm Credit) Dunn-Erwin MSW Landfill, Convenience Center and Transfer Station FY Coupon Principal Interest Total Total 752,000 47,385 799,385 2020 2.490% 181,000 18,725 199,725 2021 2.490% 186,000 14,218 200,218 2022 2.490% 190,000 9,587 199,587 2023 2.490% 195,000 4,856 199,856 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 Dated Date: 1/23/2013 Next Call: Current1 Purpose: Solid Waste Insurance: n/a Coupon Dates: Feb 1/ Aug 1 Maturity Date: Feb 1 1 In whole or in part on any date at par DAVENPORT& COMPANY------------------------------------------February 11, 2020 Harnett County. NC 50 ~~ Harnett COUNTY '/.1·11 A1 ;/, Financial Policies DAVENPORT & COMPANY Harnett County, NC 51 Fcb1 uary 11, 2020 Fiscal Policy Guidelines For: Harnett COUNTY NORTH CAROLINA Harnett County, North Carolina Originally Adopted: May 7, 2012 Amendments Adopted: 11.7.16 FISCAL POLICY GUIDELINES Harnett County, North Carolina TABLE OF CONTENTS Objectives Capital Improvement Budget Policies Debt Policies Reserve Policies Budget Development Policies Education Funding Policies Cash Management/ Investment Policies Enterprise Funds Policy Summary of Policy Ratios .. Page 2 3-4 5 6 7 8 9-10 11-12 13 -Harnett COUNTY NORTH CAROLINA FISCAL POLICY GUIDELINES Harnett County, North Carolina FISCAL POLICY GUIDELINES -OBJECTIVES -Harnett COUNTY NORTH CAROLINA This fiscal policy will influence and guide the financial management practice of Hamett County, North Carolina. A fiscal policy that is adopted, adhered to, and regularly reviewed is recognized as the cornerstone of sound financial management. Effective fiscal policy: • Contributes to the County's ability to insulate itself from fiscal crisis, • Enhances short term and long term financial credit ability by helping to achieve the highest credit and bond ratings possible, • Promotes long-term financial stability by establishing clear and consistent guidelines, • Directs attention to the total financial picture of the County rather than single issue areas, • Promotes the view of linking long-run financial planning with day to day operations, and • Provides the County Staff, the County Board of Commissioners and the County citizens a framework for measuring the fiscal impact of government services against established fiscal parameters and guidelines. • This policy will be reviewed periodically by County staff and any changes will be approved by the Board of Commissioners. To these ends, the following fiscal policy statements are presented. 2 • I FISCAL POLICY GUIDELINES Harnett County, North Carolina CAPITAL IMPROVEMENT BUDGET POLICIES -Harnett COUNTY NORTH CAROLINA 1. It is the responsibility of the County Board of Commissioners to provide for the capital facilities necessary to deliver municipal services to the citizens of the County, as well as facilities for the Hamett County Public Schools and the Central Carolina Community College system. 2. The County will consider all capital improvements in accordance with an adopted Capital Improvement Plan. 3. The Capital Improvement Plan is inclusive of Capital Improvements (renovations), Capital Replacement (vehicles and heavy equipment) and Major Capital Projects (new buildings). 4. The County will develop a five-year Capital Improvement Plan and review and update the plan annually. The Hamett County Public Schools and the Community College System will submit their respective five-year capital improvement requests annually and will provide a prioritization for the improvements within their request for the County Commissioner's review. 5. The County will enact an annual capital budget based on the five-year Capital Improvement Plan, while considering changes in population, changes in real estate development, or changes in assumptions in the capital budget projections. 6. The County, in consultation with the Hamett County Public School and Community College Systems, will coordinate development of the capital improvement budget with development of the operating budget. Future operating costs associated with new capital improvements will be projected and included in operating budget forecasts. 7. The Capital Improvement Plan will include the estimated costs for the County to maintain all County, Public School and Community College assets at a level adequate to protect the public's welfare and safety, the County's capital investment and to minimize future maintenance and replacement costs. A maintenance and replacement schedule will be developed and followed based upon these estimates. 3 ') ~ } ~ , J I • l FISCAL POLICY GUIDELINES Harnett County, North Carolina -Harnett COUNTY NORTH CAROLINA 8. The County, in consultation with the Hamett County Public School and Community College Systems, will identify the estimated costs and potential funding sources for each capital project proposal before it is submitted for approval. 9. The County will pursue the most cost effective financing consistent with prudent financial management. 4 ~ I FISCAL POLICY GUIDELINES Harnett County, North Carolina RESERVE POLICIES Harnett COUNTY NORTH CAROLINA 1. The County will maintain a m1mmum Unassigned Fund Balance, as defined by the Governmental Accounting Standards Board, at the close of each fiscal year equal to 15% of General Fund Expenditures with a targeted Unassigned Fund Balance equal to 20% of General Fund Expenditures. 2. In the event that funds are available over and beyond the 20% targeted amount, those funds may be transferred to a capital reserve fund, a capital projects fund, to pay-down debt or to fund other one-time uses. Such transfers or uses shall be approved by the Board of County Commissioners in conjunction with a staff recommendation based upon a fund balance analysis to be completed within six months of the close of each fiscal year taking into consideration the prior year's financial statements, current year-to-date budget performance, current property tax valuations and the County's most recently adopted capital improvement plan. 3. The County Board may, from time-to-time, utilize fund balances that will reduce Unassigned Fund Balance below the 15% minimum for the purposes of a declared fiscal emergency or other such purpose as to protect or enhance the long-term fiscal security of the County. In such circumstances, the Board will adopt a plan to restore the Unassigned Fund Balance to the target level within 36 months. If restoration cannot be accomplished within such time period without severe hardship to the County, then the Board will establish a different but appropriate time period. 6 FISCAL POLICY GUIDELINES Harnett County, North Carolina -Harnett COUNTY NOR'H CAROLINA BUDGET DEVELOPMENT POLICIES 1. The Budget Process will be compliant with the North Carolina Local Government Budget and Fiscal Control Act. 2. One-time or other special revenues will not be used to finance continuing County operations but instead will be used for funding special projects. 3. The County will pursue an aggressive policy seeking the collection of current and delinquent property taxes, utility, license, permit and other fees due to the County. 4. County staff will generate reports that show actual revenues and expenditures compared to the budget and will present this to the County Board on a monthly basis. 5. Budget amendments will be brought to the County Board for consideration as needed. 7 FISCAL POLICY GUIDELINES Harnett County, North Carolina EDUCATION FUNDING POLICIES -Harnett COUNTY NORTH CAROLINA 1. It is the intent of the County to appropriate funding to the Board of Education to assure that the necessary resources are provided for current expense and to meet the low wealth funding requirements. 2. The County will provide current expense funding based upon the most recent known 2nd month average daily membership (ADM) times the most recent known Three-Year Average of Appropriations as determined by the NC Department of Public Instruction. 3. The County will provide funding for an annual classroom teacher supplement to those teachers who were employed as of September 1 of the preceding fiscal year. To remain eligible for the payment, the teacher must remain in the employment of the Hamett County School system, as a teacher, at the time the payment is made. For purposes of this funding, a Teacher is defined as those individuals who are included in the Public School Personnel Summary provided by the NC Department of Public Instruction. 4. The County will provide funds for Capital and Capital Maintenance. The source of funding will be a portion of the sales tax expansion basis and will be disbursed based upon the Board of Education's latest approved Capital Improvement Plan (CIP) at the discretion of the Board of County Commissioners. 5. The County will detail the amounts to be budgeted under this policy as part of the annual budget ordinance. 8 FISCAL POLICY GUIDELINES Harnett County, North Carolina CASH MANAGEMENT I INVESTMENT POLICIES -Harnett COUNTY NORTH CAROLINA 1. It is the intent of the County that public funds will be invested to the extent possible to reduce the dependence upon property tax revenues. Funds will be invested with the chief objectives of safety of principal, liquidity, and yield, in that order. All deposits and investments of County funds will be in accordance with N.C.G.S. 159. 2. Up to one-half (50%) of the appropriations to Non-County Agencies and to non debt-supported capital outlays for County Departments can be encumbered prior to December 31. Any additional authorization shall require the County Manager's written approval upon justification. The balance of these appropriations may be encumbered after January 1, upon a finding by the County Manager that there is a reasonable expectation that the County's Budgeted Revenues will be realized. 3. The County will use a Central Depository to maximize the availability and mobility of cash for all funds that can be legally and practically combined. 4. Cash Flows will be forecasted and investments will be made to mature when funds are projected to be needed to meet cash flow requirements. 5. Liquidity: No less than 20% of funds available for investment will be maintained in liquid investments at any point in time. 6. Maturity: All investments will mature in no more than thirty-six (36) months from their purchase date. 7. Custody: All investments will be purchased "payment-verses-delivery" and if certificated will be held by the Finance Officer in the name of the County. All non-certificated investments will be held in book-entry form in the name of the County with the County's third party Custodian (Safekeeping Agent). 8. Authorized Investments: The County may deposit County Funds into: Any Board approved Official Depository, if such funds are secured in accordance with NCGS-159 (31 ). The County may invest County Funds in: the North Carolina Capital Management Trust, US Treasury Securities, US Agency Securities specifically authorized in GS-159 and rated no lower than "AAA", and Commercial Paper meeting the requirements of NCGS-159 plus having a national bond rating. 9. Diversification: No more than 10% of the County's investment funds may be invested in a specific company's commercial paper and no more than 25% of the County's investment funds may be invested in commercial paper. No more than 9 FISCAL POLICY GUIDELINES Harnett County, North Carolina -Harnett COUNTY NORTH CAROLINA 25% of the County's investments may be invested in any one US Agency's Securities. 10. Allocation: Investment income will be allocated to each participating fund or account based on a fair and equitable formula determined by the Finance Director. 10 FISCAL POLICY GUIDELINES Harnett County, North Carolina -Harnett COUNTY NORTH CAROLINA ENTERPRISE FUNDS POLICY The County maintains Enterprise Funds (primarily water and wastewater) that are self-sustaining for both operational and capital purposes. The Enterprise Funds will adhere to the County' Fiscal Policy with any exceptions being reported in this section. • These policies will allow for orderly expansion of services and to allow operation within the financial framework insuring efficiency while providing necessary services. • They promote long-term financial stability. • They insure the future viability of the system while providing for predictable and reasonable rate increases. Budget Policies: • Enterprise Funds will develop a multi-year capital improvement plan, which will be reviewed and updated annually. • Any improvements required to meet new regulatory requirements or to meet changes in the service demands will be included in either the capital improvement plan or the annual budget request. • Service rates will be reviewed annually as part of the budget process. • Service rates will be adjusted as needed to provide adequate funding for the proper operation, maintenance, and expansion of the system. • Service rates will be adjusted as necessary to meet bond covenants, debt service obligations, and Adopted Financial Policy Guidelines. Debt Policies: • The Enterprise Fund is responsible for setting rates and charges at such a level which maintains the "self-supporting" nature of the fund. • The County will target a minimum amount of equity funding of I 0% of the Enterprise Fund capital improvement plan on a five-year rolling average. • The Enterprise Fund will comply with all applicable bond covenants. 11 FISCAL POLICY GUIDELINES Harnett County, North Carolina -Harnett COUNTY NORTH CAROLINA • The Enterprise Fund will maintain a debt service coverage ratio as defined by the General Indenture of the Enterprise System Revenue Bonds. These minimum requirements are summarized to be: o l .20x debt service coverage on Parity Indebtedness (Revenues for this measure may include 20% of the balance in the Surplus Account at the end of the preceding Fiscal Year) o l .OOx debt service coverage of Parity Indebtedness, General Obligation Indebtedness, Subordinate Indebtedness, Other Indebtedness, and any amount due to the Qualified Reserve Fund or Qualified Reserve Fund Substitute. Reserve Policies: • The County has adopted a comprehensive strategy for the long-term stability and financial health of each Enterprise Fund that provides for annual increases in fund reserves to an established goal of 50% of operating and maintenance expenses. 12 FISCAL POLICY GUIDELINES Harnett County, North Carolina -Harnett COUNTY NORTH CAROLINA SUMMARY OF KEY POLICY RATIOS Ratio Tax Supported Debt to Assessed Value: Tax Supported Debt Service vs. Expenditures: Tax Supported 10-Year Payout Ratio: General Fund Unassigned Fund Balance as a Percent of Operating Budget: Enterprise Fund Pay-go Capital (5-year Rolling Average): Enterprise Fund Parity Debt Service Coverage (with 20% of Surplus Account): Enterprise Fund Debt Service Coverage on all Indebtedness: Enterprise Fund Reserves as a Percent of Operating and Maintenance: 13 Policy_ <2.5% <15.0% >50.0% >15.0% >10.0% >l.20x >l.OOx >50% ~·~ Harnett COUNTY '• f.T ,,:, Rating Reports DAVENPORT & COMPANY Harnett County. NC 52 February 11. 2020 CREDIT OPINION 13 September 2019 "' Rate this Research Contacts Tiphany Lee-Allen +1.212.553.4772 VP-Senior Analyst tiphany.lee-allen@moodys.com Valentina Gomez + 1.212.553.4861 AVP-Analyst valentina.gomez@moodys.com Leonard Jones + 1.212.553.3806 ND-Public Finance leonard.jones@moodys.com CLIENT SERVICES Americas Asia Pacific Japan EMEA 1-212-553-1653 852-3551-3077 81-3-5408-4100 44-20-7772-5454 U.S. PUBLIC FINANCE Harnett (County of) NC Update to analysis Summary Harnett County (Aa2) will continue to benefit from its favorable location between Raleigh (Aaa stable) and Fayetteville (Aa1). Despite elevated unemployment and wealth levels that trail national medians, the county's overall economy is stable and its sizable tax base continues to grow modestly. The county's elevated debt burden exceeds the median for the rating category but debt and liability challenges are somewhat mitigated by Harnett's sound operating history and financial flexibility. Exhibit 1 Strong financial position helps mitigate challenges from elevated debt profile Available operating fund and cash balance as a % of revenues • Fund Balance as a % of Revenues •Cash Balance as a% of Revenues 40% 35% 30% 25% 20% 15% 10% 5% 0% 2014 2015 2016 2017 2018 Source: Hamett County, NC, fvloody's Investors Service On September 6th, we assigned a Aa3 rating to the county's $20.S million Limited Obligation Bonds Series 2019. Credit strengths » Sizable tax base with favorable location poised for further growth 2 MOODY'S INVESTORS SERVICE U.S. PUBLIC FINANCE » Healthy reserves and cash levels Credit challenges » Below average wealth levels and elevated unemployment » Elevated debt compared to national medians Rating outlook Moody's does not typically assign outlooks to local governments with this amount of debt outstanding. Factors that could lead to an upgrade » Decreased debt burden » Increased reserve and liquidity levels » Significant economic expansion and diversification Factors that could lead to a downgrade » Failure to appropriate debt service for Limited Obligation Bonds » Reduction of General Fund balance and other available reserves )) Deterioration of the county's tax base Key indicators Exhibit 2 Harnett (County of) NC Economy/Tax Base Total Full Value ($000) Population Full Value Per Capita Median Family Income (% of US Median) Finances Operating Revenue ($000) Fund Balance ($000) Cash Balance ($000) Fund Balance as a % of Revenues Cash Balance as a % of Revenues DebVPensions Net Direct Debt ($000) 3-Year Average of Moody's ANPL ($000) Net Direct Debt/ Full Value (%) Net Direci Debt I Operating Revenues (x) Moody's · adjusted Net Pension Liability (3-yr average) to Full Value (%) Moody's • adjusted Net Pension Liability (3-yr average) to Revenues (x) Source: Harnett County, NC, Moody's Investors Service, US Census 2014 2015 2016 $7,369,458 $7,827,919 $8,150,875 121,789 124,320 126,620 $60,510 $62,966 $64,373 81.1% 83.1% 83.2% $108,200 $110,760 $117,732 $31,187 $33,513 $38,278 $23,863 $26,249 $29,720 28.8% 30.3% 32.5% 22.1% 23.7% 25.2% $142,608 $138,213 $154,172 $51,225 $52,277 $50,919 1.9% 1.8% 1.9% 1.3x 1.2x 1.3x 0.5% 0.7% 0.6% O.Sx O.Sx 0.4x 2017 $8,148,044 128,753 $63,284 83.7% $121,840 $41,616 $36,150 34.2% 29.7% $170,012 $65,301 2.1% 1.4X 0.8% O.Sx This publication does not announce a credit rating action. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page on www.moodys com for the most updated credit rating action information and rating history 2018 $8,528,467 134,214 $63,544 83.7% $125,515 $42,962 $37,030 34.2% 29.5% $157,402 $77,205 1.8% 1.3x 0.9% 0.6x 13 September 2019 Harnett (County of) NC: Update to analysis ~ l MOODY'S INVESTORS SERVICE U.S. PUBLIC FINANCE Profile The County is located adjacent to Fort Bragg and 35 miles south of Raleigh. The County comprises 595 square miles with a population estimated at 136,031. Detailed credit considerations Continued tax base growth Harnett County has experienced continued economic expansion since the recession, with 3% average annual valuation growth from 2013-2018. The trend will continue given a number of ongoing economic development initiatives in the county. The county's $8.5 billion tax base benefits both from its adjacency to Fort Bragg and 30 mile commute to Research Triangle Park (RTP). Harnett County's central geographic location and role as a bedroom community to the Triangle area have spurred steady population growth and economic expansion during the past decade. The county has experienced significant growth as a result of the Department of Defense Base Realignment and Closure (BRAC) 2005 recommendation to relocate the Headquarters U.S. Army Forces and Headquarters U.S. Army Reserve Command to Fort Bragg, a U.S. Army installation located immediately south of the county. With approximately 57,000 military personnel, 14,000 civilian employees and 23,000 family members, Fort Bragg is one of the largest military complexes in the world. Unemployment in the county is elevated at 5.4%. Wealth indices remain considerably below state and national medians and full value per capital is only $63,544. Sound financial operations Moody's expects the county to maintain a sound financial position given management's strong record of maintaining healthy fund balance levels in step with budgetary growth The county has achieved six consecutive operating surpluses. Fiscal 2018 ended with another operating surplus and a $1.3 million addition to fund balance bringing total General Fund balance to $43.1 million or a sound 34.2% of General Fund revenues. Property taxes account for 50% of revenues; Sales tax/ Other taxes account for 18.4% and Intergovernmental Revenues account for 14% in fiscal 2018. Officials project balanced operations for 2019. The adopted 2020 budget increases by $6 million when compared to 2019 and primarily funds general government, public safety, education, and human services expenses LIQUIDITY The county's liquidity remains strong with General Fund cash of $37 million or 29.5% of General Fund revenues in fiscal 2018. Elevated, but manageable debt and pension profile The county's direct debt burden, equal to 1.8% of full valuation, is higher than the 0.9% statewide median for similarly-rated credits and partially reflects the impact of a sizeable school capital program to meet growth in student enrollment. Total fixed costs (pensions, OPEB ARC and debt service) made up a manageable 17% of expenses, slightly under the Moody's tread water indicator. The county's CIP totals $42.9 million and is primarily debt funded ($23 million). The CIP will fund various public safety projects as well as a county resource center, library and Department of Social Services addition. DEBT STRUCTURE All debt issued by the county is fixed rate. DEBT-RELATED DERIVATIVES The county is not party to any swap agreements PENSIONS AND OPES The county contributes to the North Carolina Local Government Employees Retirement System (NCLGERS), defined benefit retirement plan administered by the State of North Carolina. We determined the county's share of liability for the state-run plan in proportion to its contributions to the plan. The county also operates a small Law Enforcement Officers' Special Separation Allowance plan. 3 13 September 2019 Harnett (County of) NC: Update to analysis 4 MOODY'S INVESTORS SERVICE U.S. PUBLIC FINANCE The county's adjusted net pension liability, under Moody's methodology for adjusting reported pension data, is $85 million, or a manageable 0.68 times operating revenues. The county has not been fully funding OPEB annual contribution requirements the last few years as it devises a strategy to address the liability. It addresses the annual cost on a pay-go basis. The county's 2018 OPEB liability accounted for approximate 2.58 times revenues. Harnett County benefits from strong operating framework Management continually reviews and strengthens the county's already prudent financial policies further adding to operating stability. North Carolina counties have an institutional framework score of "Aaa," or very strong. Revenues mainly consist of property taxes, which are highly predictable. Counties have high revenue-raising ability primarily through the flexibility to increase property tax rates annually, virtually without limit. Expenditures, which are largely for personnel, are highly predictable and counties have a high ability to reduce expenditures. Rating methodology and scorecard factors The US Local Government General Obligation Rating Methodology includes a scorecard, a tool providing a composite score of a local government's credit profile based on the weighted factors we consider most important, universal and measurable, as well as possible notching factors dependent on individual credit strengths and weaknesses. Its purpose is not to determine the final rating, but rather to provide a standard platform from which to analyze and compare local government credits. Exhibit 3 Harnett (County of) NC Rating Factors Economy/Tax Base (30%) 111 Tax Base Size: Full Value (in 000s) Full Value Per Capita Median Family Income (% of US Median) Finances (30%) Fund Balance as a % of Revenues 5-Year Dollar Change in Fund Balance as% of Revenues Cash Balance as a % of Revenues 5-Year Dollar Change in Cash Balance as% of Revenues Management (20%) Institutional Framework Operating History: 5-Year Average of Operating Revenues/ Operating Expenditures Debt and Pensions (20%) Net Direct Debt/ Full Value (%) Net Direct Debt/ Operating Revenues (x) 3-Year Average of Moody's Adjusted Net Pension Liability/ Full Value(%) 3-Year Average of Moody's Adjusted Net Pension Liability/ Operating Revenues (x) [1]Economy measures are based on data from the most recent year available. ------------[2]Notching Factors are specifically defined in the US Local Government General Obligation Debt methodology dated December 16, 2016. [3]Standardized adjustments are outlined in the GO Methodology Scorecard Inputs for 2019 publication. Source: Harnett County CAFRs, Moody's Investors Service, US Census 13 September 2019 Measure Score $8,528,467 Aa $63,544 A 83.7% A ---34.2% Aaa 12.4% Aa 29.5% Aaa 13.2% Aa Aaa Aaa 1.0x Aa 1.8% A 1.3x A 0.9% Aa 0.6x Aa ---Scorecard-Indicated Outcome Aa2 Assigned Rating Aa2 Harnett (County of) NC: Update to analysis MOODY'S INVESTORS SERVICE U.S. PUBLIC FINANCE © 2019 Moody's Corpo,at,on, Moody's Investors Service, Inc, Moody's Analytics, Inc. and/or their !,censors and affiliates (collectively, "MOODY'S"). All nghts reserved CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. 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Therefore, credit ratings assigned by MSFJ are Non-NRSRO Credit Ratings. Non-NRSRO Credit Ratings are assigned by an ent,ty that is not a NRSRO and, consequently, the rated obligation will not qualify for certain types of treatment under U.S. laws. MJKK and MSFJ are credit rating agenc,es registered with the Japan Financial Services Agency and their reg,strat,on numbers are FSA Commissioner (Ratings) No 2 and 3 respectively. MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial pdper) and preferred stock rated by MJKK or MSFJ (as appl,cable) have, pnor to assignment of any rating, agreed to pay to MJKK or MSFJ (as applicable) for ratings opinions and serv,ces rendered by it fees ranging from JPY125,000 to approximately JPY250,000,000 MJKK and MSFJ also maintain polrcies and procedures to address Japanese regulatory requirements REPORT NUMBER 1194276 13 September 2019 Harnett (County of) NC: Update to analysis MOODY'S INVESTORS SERVICE U.S. PUBLIC FINANCE Contacts Tiphany Lee-Allen + 1.212.553.4772 VP-Senior Analyst t1phany.lee-allen@moodys.com Moony's INVESTORS SERVICE 6 13 September 2019 Valentina Gomez + 1.212.553.4861 AVP-Analyst valentina.gomez@moodys.com CLIENT SERVICES Americas Asia Pacific Japan EMEA 1-212-553-1653 852-3551-3077 81-3-5408-4100 44-20-7772-5454 Harnett (County of) NC: Update to analysis S&PGlobal Ratings RatingsDirect· Summary: Harnett County, North Carolina; Appropriations; General Obligation Primary Credit Analyst: Kimberly Barrett, Centennial (1) 303-721-4446; Kimberly.Barrett@spglobal.com Secondary Contact: Chase C Ashworth, Centennial + 1 (303) 721 4289; chase.ashworth@spglobal.com Table Of Contents Rationale Outlook WWW.STANDARDANDPODRSCOM/RATINGSDIRECT SEPTEMBER 10, 2019 1 Summary: Harnett County, North Carolina; Appropriations; General Obligation Credit Profile US$19.13 mil ltd oblig bnds ser 2019 due 10/01/2039 Long Term Rating A+/Stable New Harnett Cnty APPROP Long Term Rating A+/Stable Affirmed Harnett Cnty APPROP Long Term Rating A+/Stable Affirmed Harnett Cnty GO Long Term Rating AA-/Stable Affirmed Harnett Cnty ICR Long Term Rating AA-/Stable Affirmed Rationale S&P Global Ratings assigned its 'A+' rating to Harnett County, N.C.'s series 2019 limited obligation bonds. At the same time, S&P Global Ratings affirmed its 'A+' rating on the county's limited obligation debt outstanding and its 'AA-' rating on the county's general obligation (GO) debt outstanding. The outlook is stable. The rating reflects a long-term trend of strong financial performance and flexibility, supported by increasingly comprehensive management practices and policies. The limited obligation bonds are secured by annually appropriated available funds. We rate these obligations one notch lower than the county's general creditworthiness; this reflects appropriation risk associated with annual payments. We view these bonds as having a strong relationship to the obligor. These obligations provide funding for projects we believe are significantly important to the obligor. The county pledges to appropriate from operating revenue annually, and it has a long record of appropriating for similar obligations. We believe there is no unusual political, timing, or administrative risk related to debt payments. The GO bonds are secured by the faith and credit and taxing power of the county. Proceeds of the series 2019 limited obligation bonds will finance construction of a new government service complex and the expansion of the county's health and human services building. The rating reflects our opinion of the following credit factors: • Weak economy, with market value per capita of $65,753 and projected per capita effective buying income at 70.5% of the national level; WWW.STANDARDANDPOORS.COM/RATINGSDIRECT SEPTEMBER 10, 2019 2 Summary: Harnett County, North Carolina; Appropriations; General Obligation • Strong management, with good financial policies and practices under our Financial Management Assessment methodology; • Strong budgetary performance, with an operating surplus in the general fund and a slight operating surplus at the total governmental fund level in fiscal 2018; • Very strong budgetary flexibility, with an available fund balance in fiscal 2018 of 26% of operating expenditures; • Very strong liquidity, with total government available cash at 85% of total governmental fund expenditures and 6. lx governmental debt service, and access to external liquidity we consider strong; • Strong debt and contingent liability position, with debt service carrying charges at 14% of expenditures and net direct debt that is 105.8% of total governmental fund revenue, as well as low overall net debt at less than 3% of market value, and rapid amortization with 68.3% of debt scheduled to be retired in 10 years; and • Very strong institutional framework score. Weak economy We consider Harnett County's economy weak. The county has an estimated population of 133,747. The county has a projected per capita effective buying income of 70.5% of the national level and per capita market value of $65,753. Overall, the county's market value was stable over the past year at $8.8 billion in 2020. The county unemployment rate was 4.6% in 2018. Harnett County is located about 35 miles south of Raleigh, and about one hour from Research Triangle Park, where many of the county's residents commute for work. In addition, Fort Bragg is a large economic driver for the southwestern part of the county, with portions of the base located in Harnett, Cumberland, and Hoke counties. Fort Bragg is the nation's largest Army base by population, and its long-standing presence has brought a number of defense industry-related businesses to Harnett County. The county also benefits from the stability of its largest employers, which include government, higher education, and health services. Employers with 1,000 or more employees include Harnett Public Schools, Campbell University, Food Lion, and Harnett County itself. The county's tax base is very diverse, with the top 10 taxpayers accounting for just 3.4% of total assessed value. The top 10 consist of several utilities, a furniture distributor, retail, real estate, telecommunications, and transportation. The county's assessed value has increased 10.8% over the past five fiscal years, or about 2.4% annually on average. Management expects continued economic growth over the next few years, particularly residential expansion in the northern part of the county as Research Triangle Park continues to expand, and in the southern portion of the county due to the continued growth at at Fort Bragg and related developments. In addition, improvements are expected at the Hamett Regional Jetport, expansions are expected at Campbell University, Central Carolina Community College, and Harnett Health, and several mixed-use, industrial, and commercial projects are also underway. Strong management We view the county's management as strong, with good financial policies and practices under our Financial Management Assessment methodology, indicating financial practices exist in most areas, but that governance officials might not formalize or monitor all of them on a regular basis. WWW.ST ANDARDANDPOORS.COM/RA TINGSDIRECT SEPTEMBER 10, 2019 3 Summary: Harnett County, North Carolina; Appropriations; General Obligation The county evaluates historical data and trends when developing revenue and expenditure estimates for budgeting purposes. The budget can be amended throughout the fiscal year if needed, and performance is regularly monitored. Management provides comprehensive monthly financial reporting to the board, including budget-to-actual performance. The county's investment policy focuses on liquidity and investments are made with cash flow needs in mind. The county's debt management policy includes quantitative metrics that limit the amount of debt to 15% of total government expenditures, and requires 50% of debt to be paid within 10 years. The county's formal reserve policy requires maintenance of an unassigned fund balance of at least 15% of general fund expenditures, with a target level of 20%. The county recently updated and expanded its long-term capital plan, which now includes an annually updated seven-year forecast of capital needs. The plan includes detailed project descriptions as well as estimated costs and funding sources by year. The county recently upgraded its financial software, and plans to use the enhanced analytic capability of the system to develop a long-term financial forecast. If the county implements and regularly updates a long-term financial plan that includes multiyear revenue and expenditure projections, we could positively revise our characterization of the county's financial management assessment. Strong budgetary performance Hamett County's budgetary performance is strong in our opinion. The county had surplus operating results in the general fund of 1. 7% of expenditures, and slight surplus results across all governmental funds of 1.5% in fiscal 2018. The county's operating revenue base is diverse, with property taxes making up 53% of general fund revenues in fiscal 2018, followed by other local taxes ( 19.5%), intergovernmental revenues ( 14.9%), and sales and services, permits and fees, investment earnings, and other miscellaneous smaller fees (12.5%). After adjusting for recurring transfers into and out of the general fund, as well as backing out one-time capital expenditures from the general fund in fiscal 2018, the county experienced positive operating results in each of the past three audited fiscal years. Surpluses ranged from $2.2 million to $5.6 million, or 1.7% to 5.0% of general fund expenditures. After making additional adjustment for expenditure of bond proceeds from capital projects funds, the county also experienced positive results in each of the past three audited fiscal years across all governmental funds, ranging from $2 million to $3.9 million, or 1.5% to 3.1% of expenditures. The 2019 budget established a separate debt service fund outside of the general fund that will receive revenues from two newly established sales taxes. The new sales tax revenues will increase the overall size of the county's budget, while providing additional flexibility for payment of debt service and capital projects, and increasing transparency for monitoring debt payment and capacity. Management expects at least break-even results for fiscal 2019 and 2020, with no planned draws on reserves. The county has demonstrated a long-term trend of positive operating performance over the past 10 years, and we do not expect that to change; therefore, we believe budgetary performance will remain strong throughout the outlook period. Very strong budgetary flexibility Hamett County's budgetary flexibility is very strong, in our view, with an available fund balance in fiscal 2018 of 26% of operating expenditures, or $32.6 million. The county has consistently maintained very strong budgetary flexibility in each of the past three audited fiscal years, with available fund balance ranging from $26.3 million to $32.6 million, amounts equal to 23.5% to 27.2% of general fund expenditures. This level is consistent with the county's reserve policy, which requires maintenance of available fund balance sufficient to cover 15% to 20% of operating expenditures. WWW.ST AN DARDAN DPOORS. COM/RA Tl NGSDIRECT SEPTEMBER 10, 2019 4 Summary: Harnett County, North Carolina; Appropriations; General Obligation Management plans to maintain stability at this reserve level, as funds in excess of policy may be used to cash-fund capital projects. Based on historical trends and plans to maintain current reserve levels, we expect budgetary flexibility to remain very strong during the two-year outlook period. Very strong liquidity In our opinion, Harnett County's liquidity is very strong, with total government available cash at 85% of total governmental fund expenditures and 6. lx governmental debt service in 2018. In our view, the county has strong access to external liquidity if necessary. The county's access to external liquidity is demonstrated through its prior issuance of GO, limited obligation, and revenue bonds over the past decade. The county's investment policy prioritizes preservation of principal and liquidity over returns, requires at least 20% of funds to be held in liquid investments, and limits investments to those maturing within three years. The county's investments are primarily held in local government investment pools, which we do not consider to be aggressive. Harnett County has previously entered into six private placement agreements to finance or refinance debt obligations. The legal documents associated with three series of this debt allow for immediate acceleration of principal as a remedy in an event of default. However, we believe Section 160A-20 of North Carolina statutes, which prohibits deficiency judgments for appropriation debt, mitigates liquidity risk. This provision limits the available options for recourse in an event of default, but does allow the bank to acquire or sell the assets or mortgaged properties associated with the contract. Therefore, we do not consider this debt to be a contingent liability risk that would affect the county's liquidity position. Strong debt and contingent liability profile In our view, Harnett County's debt and contingent liability profile is strong. Total governmental fund debt service is 14% of total governmental fund expenditures, and net direct debt is 105.8% of total governmental fund revenue. Overall net debt is low at 1.9% of market value, and approximately 68.3% of the direct debt is scheduled to be repaid within 10 years, which we consider positive credit factors. Proceeds of the series 2019 limited obligation bonds will finance construction of a new government services complex and the expansion of the county's health and human services building. Subsequent to this issuance, the county plans to issue about $52 million of GO bonds within the next two years to finance two new elementary schools--Erwin Elementary ($24 million) and Northwest Harnett Elementary ($28 million). These bonds will be the 2nd and 3rd pieces of a $100 million 201 7 authorization, from which $3 0 million has been previously issued. We note that with this additional debt issuance, our view of the county's debt profile could deteriorate to adequate from strong, particularly if debt service carrying charges exceed 15% of total governmental fund expenditures. Harnett County's combined required pension and actual other postemployment benefits (OPEB) contributions totaled 2.8% of total governmental fund expenditures in 2018. Of that amount, 2.3% represented required contributions to pension obligations, and 0.5% represented OPEB payments. The county participates in two cost-sharing, multiple-employer, defined-benefit pension plans that are administered by the state, the Local Government Employees' Retirement System (LGERS), and the Register of Deeds' Supplemental Pension Plan. In addition, the county administers the Law Enforcement Officers' Special Separation Allowance, which is a single-employer, defined-benefit pension plan. LGERS is the county's primary plan and accounts for 90% of total WWW.ST ANDARDAN OPODRS.COM/RATI NG SOIRECT SEPTEMBER 10, 2019 5 Summary: Harnett County, North Carolina; Appropriations; General Obligation pension costs. The county consistently makes 100% of its actuarially determined contributions for the LG ERS and the plan has a strong funded ratio of 92% in fiscal 2018. The county provides post-employment health care benefits through a single-employer defined-benefit plan, which is funded on a pay-as-you-go basis. Very strong institutional framework The institutional framework score for North Carolina counties is very strong. Outlook The stable outlook reflects our opinion that the county will continue to maintain strong financial performance and flexibility, supported by strong management policies and practices. We do not expect to change the rating within the two-year outlook period. Upside scenario We could raise the rating if the county's economic indicators improve to levels we consider comparable to higher-rated peers. Downside scenario If the county's financial performance were to experience significant deterioration, leading to sustained decreases in reserves, we could lower the rating. 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WWW.STANDAROANOPOORS COM/RA TINGSOIRECT SEPTEMBER 10, 2019 7 Richmond Office One James Center 901 East Cary Street 11th Floor Richmond, VA 23219 Charlotte Office Independence Center 101 N. Tryon Street Suite 1220 Charlotte, NC 28246 Ted Cole Senior Vice President 804-697-2907 tco I e@i nvestd ave n po rt. com Mitch Brigulio Senior Vice President 704-644-5414 mbrigulio@investdavenport.com Brandon Decoste Analyst 704-644-5415 bdecoste@investdavenport.com DAVENPORT&COMPANY ------------------------------------------February 11, 2020 Harnett County, NC Municipal Advisor Disclosure ~~ Harnett COUNTY ,, ... ,, . The enclosed information relates to an existing or potential municipal advisor engagement. 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