Aug. 06--GRAHAM -- Alamance County's total debt is projected to be at $57 million by the end of the 2014-15 fiscal year, which compares favorably to counties its size, Finance Officer Tom Manning said.
"During the past five years, we haven't incurred substantial debt," Manning said. "We have been conservative because we didn't know what the economy would do."
In fiscal 2010-11, the county's total debt was at $90 million. The total debt decreased to $82 million in fiscal 2011-12, and in 2012-13 it decreased to $74 million. On June 30, 2014, the county's total debt was $65 million.
The county's annual debt service payment for the past five years has averaged $11 million. These annual debt service payments have been 8.3 percent to 8.5 percent of the county's annual budgeted revenues. Manning said since this percentage is less than 10 percent, the county continues to show that it can effectively manage its debt level and debt service payments.
The county's current debt is scheduled to be paid off by 2026.
IN A COMPARATIVE analysis using 2012-13 debt figures, Alamance County's debt commitment as a percentage of appraised valuation compares favorably with counties which have a population of 100,000 to 249,000.
The percentage scale range is 0.279 percent to 2.342 percent for the 21 counties that fall in the population category. The average for these counties is 1.187 percent, with Alamance County at 0.588 percent. The average for per-capita debt among the 21 counties is $1,134, with Alamance County's per-capita debt at $475.
"We fall less than midway on the low and the average," Manning said. "We have got the capacity to borrow more money and it wouldn't hurt our rating."
Manning said there would likely be future needs that had to be addressed, including funding options for an Alamance Community College building voters approved in November 2012. The building would provide space for the college's machining, welding, HVAC, automotive and carpentry programs.
The Alamance County Board of Commissioners placed a quarter-cent sales tax on the same ballot to be used to pay for a new ACC tech center and for economic development. Voters rejected the sales tax increase.
Manning said beginning in 2012 the county commissioners had seven years to decide whether to issue bonds to help pay for the tech center based on voters' approval of the bond.
OVERALL, MANNING SAID, conditions remained favorable for borrowing money with interest rates at low levels. The county could opt to borrow money in the future to pay for vehicles instead of using the general fund revenue to offset expenses.
Manning said there were no immediate plans to borrow money, but it wasn't realistic to think the county wouldn't incur any new debt over the next decade.
Manning also said the county will continue working to build its fund balance.
The county projects its fund balance will be $25,046,984 for fiscal 2013-14, which is 19.67 percent of total expenditures. In fiscal 2012-13, the fund balance ended with $20,046,984, which was 16.57 percent of total expenditures. Overall, the county's fund balance continues to improve since it was at $14,003,445, or 11.34 percent of total fund expenditures, on June 30, 2012.
The county's fund balance is projected to end fiscal 2014-15 with $23,996,984, which is 18.33 percent of total expenditures.
Manning said building the fund balance allows the county more flexibility in borrowing money in the future.
Also on Monday Manning discussed the county commissioners' decision to decrease the property tax rate by 1 cent for 2014-15. Manning said while the decrease wouldn't adversely affect the budget, it was a move made by the board that he didn't support.
"As you know, we dropped it a penny this year. Staff was not in favor of that, and I wasn't personally in favor of it because, like I said, I want to do whatever I can to keep the fund balance up," Manning said. "We dropped taxes. That's $1.2 million we don't have and we never make it up."
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