Corporation $405,180,000* Subordinated Excise Tax Revenue & - - PowerPoint PPT Presentation
City of Phoenix Civic Improvement Corporation $405,180,000* Subordinated Excise Tax Revenue & Revenue Refunding Bonds, Series 2020 Subordinated Excise Tax Subordinated Excise Tax Subordinated Excise Tax Revenue Bonds Revenue Bonds
Subordinated Excise Tax Revenue Bonds Series 2020A $134,010,000* Subordinated Excise Tax Revenue Bonds Series 2020B (Taxable) $150,000,000* Subordinated Excise Tax Revenue Refunding Bonds Series 2020C (Taxable) $121,170,000*
*Preliminary, subject to change.
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Certain statements included or incorporated by reference in the Preliminary Official Statement and this presentation constitute “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995, Section 21E of the United States Securities Exchange Act of 1934, as amended, and Section 27A
identifiable by the terminology used such as “plan”, “expect”, “estimate”, “anticipate”, “forecast”, “budget”, or other similar words. The achievement of certain results or other expectations contained in such forward- looking statements involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements described to be materially different from any future results, performance or achievements expressed
statements if or when their expectations, or events, conditions or circumstances upon which such statements are based occur.
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Issuer City of Phoenix Civic Improvement Corporation Par Amount* $405,180,000 Subordinated Excise Tax Revenue Bonds, Series 2020, consisting of:
Purpose The Series 2020 Bonds are being issued to fund or reimburse the City for (i) the costs of certain projects, property and equipment and for the acquiring, repairing, equipping and improving real and personal property for the City; (ii) prepaying the Loan with respect to the Hotel. The Taxable Refunding Bonds are being issued for the purpose of refunding and refinancing all or portion of certain issues of the Corporation’s outstanding excise tax revenue bonds. Security Subordinated lien on all excise, transaction, privilege, franchise taxes, state-shared sales and income
taxes, and receipts from licenses and permits not restricted to use for a contrary or inconsistent purpose
Additional Bonds Test Preceding fiscal year pledged revenues are at least two times the highest combined interest and principal requirements for any succeeding fiscal year Maturity Structure* Series 2020A: July 1, 2021-2045 Series 2020B: July 1, 2021-2045 Series 2020C: July 1, 2023-2036 Tax Status Series 2020A: Tax-Exempt Series 2020B: Taxable Series 2020C: Taxable Ratings S&P AAA; Fitch AA+; Moody’s Aa2 POS Posting July 21, 2020 Expected Pricing* August 4, 2020 Expected Closing* August 25, 2020 *Preliminary, subject to change. Assumes market rates as of June 11, 2020, plus 50 basis points.
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government
The Phoenix City Council consists of a Mayor and eight Council members and is responsible for setting policy
The City Manager is responsible for executing Council policies and administering City operations
increase since 1990, with current population over 1.6 million
2018
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City Charter & State law requires a balanced budget
Transparent budgeting process; zero-based budget
Per City Charter, fully fund entire actuarial determined contribution
Significant pension reform for long-term affordability and sustainability
Six times as many housing permits issued in 2019 as 2011.
2019 City housing permit values up 29% since 2017 and 152% since 2010
All City building permits up 27% since 2017, up 99% since 2010
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City Population: 1,610,071 City Labor Force: 821,866 Regional Labor Force: 2.3 million Median Age: 34 Average HH Income: $80,264 Unemployment Rate: 8.8%
west in 2018, second in U.S. in 2019
Data sources: U.S. Census American Community Survey, 2017 1-year estimates; U.S. Bureau of Labor Statistics; U.S. Bureau of Economic Analysis, 2017, 2018, Arizona Economic Opportunity Office, 2019.
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General Fund Revenues by Major Source
(Budgetary Basis)
(in thousands)
Actual Estimated FY 2018 - 2019 FY 2019 - 2020 Local Taxes: Sales Tax $ 468,015 $ 470,100 Privilege License Fees 2,957 3,050 Other General Fund Excise Taxes 18,535 18,920 State-Shared: Sales Tax 165,066 168,964 State Income Tax 196,918 214,697 Vehicle License Tax 70,210 71,386 Primary Property Tax 162,130 170,899 User Fees/Other Revenues 136,936 136,012 Total General Fund $ 1,220,767 $ 1,254,028
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Resources: Actual 2018-19 Estimated 2019-20 Beginning Balance $ 134,620 $ 133,580 Revenue 1,220,767 1,254,028 Recoveries 1,857 3,500 Transfers (9,301) 5,026 Total Resources $ 1,347,943 $ 1,396,134 Expenditures: Operating $ 1,202,259 $ 1,284,500 Capital 12,104 21,870 Total Expenditures $ 1,214,363 $ 1,306,370 Ending Fund Balance (Budgetary) $ 133,580 $ 89,764
(in thousands)
Numbers do not include CARES Act Funds
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Actual FY 2019 Excise Tax Revenue Sources (in thousands) Sales & Use Tax $471,512* Utility & Franchise Fees 140,489 Licenses & Permits 2,969 State-Shared Sales Tax 165,066 State-Shared Income Tax 196,918 FY 2019 Total $976,954
Sales & Use Tax 48% Utility & Franchise Fees 15% Licenses & Permits 0% State-Shared Sales Tax 17% State-Shared Income Tax 20%
REVENUE SOURCES
* Sales & Use Tax includes taxes on retail, restaurant, bars, construction contracting, residential rental, hotels, vehicle rentals, and other activities. Does not include dedicated excise tax revenues approved by voters for a specific purpose
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responsibly to economic downturns and this time is no different.
impact of COVID-19 such as:
Hiring freeze initiated for all non-essential positions
Spending froze for non-essential projects
Procurement curtailed for non-essential items
Departments identified budget cuts of 25%
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* Projected Excise Tax Receipts for the Fiscal Years Ended June 30
Optimistic Model - Downturn Ends October 2020 Revenue Source 2020 2021 2022 2023 2024 2025 Privilege License Tax & Fees $474,447,000 $466,361,000 $486,620,000 $509,728,000 $530,793,000 $555,316,000 Utility & Franchise 131,853,000 130,207,000 132,390,000 134,636,000 136,867,000 139,114,000 Licenses & Permits 2,960,000 2,960,000 3,025,000 3,101,000 3,178,000 3,254,000 State Sales Tax 168,964,000 168,126,000 175,157,000 182,949,000 191,586,000 201,303,000 State Income Tax 214,697,000 241,167,000 204,000,000 250,000,000 245,000,000 259,000,000 Total $992,921,000 $1,008,821,000 $1,001,192,000 $1,080,414,000 $1,107,424,000 $1,157,987,000 Percent Growth 1.63% 1.60%
7.91% 2.50% 4.57% Coverage 11.56x 11.66x 13.50x 11.42x 11.89x 13.33x Official Statement Model - Downturn Ends December 2020 Revenue Source 2020 2021 2022 2023 2024 2025 Privilege License Tax & Fees $474,447,000 $448,747,000 $468,247,000 $490,495,000 $510,770,000 $534,372,000 Utility & Franchise 131,853,000 129,375,000 131,542,000 133,772,000 135,987,000 138,217,000 Licenses & Permits 2,960,000 2,960,000 3,025,000 3,101,000 3,178,000 3,254,000 State Sales Tax 168,964,000 163,493,000 170,331,000 177,908,000 186,307,000 195,757,000 State Income Tax 214,697,000 241,167,000 204,000,000 250,000,000 245,000,000 259,000,000 Total $992,921,000 $985,742,000 $977,145,000 $1,055,276,000 $1,081,242,000 $1,130,600,000 Percent Growth 1.63%
8.00% 2.46% 4.56% Coverage 11.56x 11.39x 13.18x 11.15x 11.61x 13.02x Pessimistic Model - Downturn Ends June 2021 Revenue Source 2020 2021 2022 2023 2024 2025 Privilege License Tax & Fees $474,447,000 $409,106,000 $426,909,000 $447,241,000 $465,751,000 $487,296,000 Utility & Franchise 131,853,000 127,426,000 129,555,000 131,747,000 133,924,000 136,116,000 Licenses & Permits 2,960,000 2,960,000 3,025,000 3,101,000 3,178,000 3,254,000 State Sales Tax 168,964,000 153,785,000 160,217,000 167,344,000 175,243,000 184,132,000 State Income Tax 214,697,000 241,167,000 204,000,000 250,000,000 245,000,000 259,000,000 Total $992,921,000 $934,444,000 $923,706,000 $999,433,000 $1,023,096,000 $1,069,798,000 Percent Growth 1.63%
8.20% 2.37% 4.56% Coverage 11.56x 10.80x 12.46x 10.56x 10.98x 12.32x
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825,000 865,000 905,000 945,000 985,000 2014-15 2015-16 2016-17 2017-18 2018-19
Growth in Actual Pledged Excise Tax Revenue Fiscal Years 2014-15 to 2018-19
From FY2014-2015 to FY2018-2019 Excise Tax Revenue has grown by 15.7%
3.65% 5-Year Average Growth
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Senior Lien – CIC Bonds $ 74,200,000 Junior Lien – CIC Bonds — Subordinated Lien – CIC Bonds1 544,830,000 Subordinated Lien – Excise Tax Loan 40,940,000 Total Outstanding Excise Tax Debt $ 659,970,000
bonds is paid from Solid Waste revenues July 1, 2020 Principal Balances (prior to 2020 issuances):
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August 1, 2020 Principal Balances (after 2020 issuances):
* Preliminary and subject to change. Assumes market rates as of June 11, 2020, plus 50 basis points.
Senior Lien – CIC Bonds $6,180,000 Junior Lien – CIC Bonds — Subordinated Lien – CIC Bonds1 906,705,000* Subordinated Excise Tax Loan2 — Total Outstanding Excise Tax Debt $912,885,000
is paid from Solid Waste revenues
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Excise Tax Debt Service After Issuance of 2020 Bonds
$0 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 $80,000 $90,000 $100,000 2020-21 2021-22 2022-23 2023-24 2024-25 2025-26 2026-27 2027-28 2028-29 2029-30 2030-31 2031-32 2032-33 2033-34 2034-35 2035-36 2036-37 2037-38 2038-39 2039-40 2040-41 2041-42 2042-43 2043-44 2044-45 thousands
Senior Lien Subordinated Lien Series 2020 Bonds*
* Preliminary and subject to change. Assumes market rates as of June 11, 2020, plus 50 basis points.
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$0 $200,000 $400,000 $600,000 $800,000 $1,000,000 $1,200,000 FY 2015 11.8x FY 2016 10.4x FY 2017 10.7x FY 2018 11.0x FY 2019 11.1x FY 2020 11.6x FY 2021 11.4x FY 2022 13.2x FY 2023 11.2x FY 2024 11.6x FY 2025 13.0x
Privilege License (Sales) Taxes, Licenses & Permits Utility & Franchise Fees State-Shared Sales Tax State-Shared Income Tax Annual Debt Service (in thousands)
Agg Coverage
|----------------Forecasted-----------------|
* Preliminary and subject to change. Assumes market rates as of June 11, 2020, plus 50 basis points.
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represents 55.7% of Excise Tax Bonds outstanding
$912.885M
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* Preliminary and subject to change. Assumes market rates as of June 11, 2020, plus 50 basis points.
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plus any Senior bonds to be issued; and
lien bonds outstanding, plus any bonds to be issued
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Maturity (July 1) Series 2020A Principal* Series 2020B (Taxable) Principal* Series 2020C (Taxable) Principal* 2021 $1,240,000 $3,665,000 $— 2022 1,520,000 4,375,000 — 2023 5,470,000 4,450,000 7,365,000 2024 5,745,000 4,530,000 12,575,000 2025 6,040,000 4,625,000 10,320,000 2026 6,330,000 4,725,000 10,510,000 2027 6,650,000 4,845,000 13,605,000 2028 6,985,000 4,970,000 14,380,000 2029 7,335,000 5,105,000 8,650,000 2030 7,700,000 5,245,000 5,335,000 2031 8,085,000 5,395,000 5,485,000 2032 8,495,000 5,555,000 5,020,000 2033 8,910,000 5,725,000 5,180,000 2034 9,360,000 5,905,000 2,555,000 2035 9,830,000 6,090,000 17,735,000 2036 10,315,000 6,290,000 2,455,000 2037 2,175,000 6,525,000 — 2038 2,285,000 6,770,000 — 2039 2,400,000 7,025,000 — 2040 2,520,000 7,290,000 — 2041 2,645,000 7,565,000 — 2042 2,780,000 7,860,000 — 2043 2,915,000 8,165,000 — 2044 3,065,000 8,485,000 — 2045 3,215,000 8,820,000 — Total $134,010,000 $150,000,000 $121,170,000 * Preliminary and subject to change. Assumes market rates as of June 11, 2020, plus 50 basis points.
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https://www.phoenix.gov/finance/investor
(602) 262-7166 Denise Olson, Chief Financial Officer denise.olson@phoenix.gov Kathleen Gitkin, City Treasurer kathleen.gitkin@phoenix.gov Andrew Durket, Debt Manager andrew.durket@phoenix.gov
Piper Sandler Peter Phillippi, Managing Director peter.phillippi@psc.com (602) 808-5427