OUTSTANDING OBLIGATION REPORT SUMMARY INTRODUCTION Iowa Code chapter 12.1 requires all political subdivisions of the state to report outstanding obligations to the Treasurer of State. Obligations to be reported include bonds, notes, certificates of participation, leases and anticipatory warrants as defined by Iowa Code chapter 74.1. AGGREGATE State and local governments report $10,945,367,532 in outstanding obligations as of June 30, 2008. This is $591,758,921 greater than the $10,353,608,611 reported for fiscal year 2007, for an increase of 5.72% in total outstanding obligations. The outstanding obligations are categorized by cities, counties, schools/AEAs, state agencies, authorities, community colleges, other, and Board of Regents. CITIES Cities report the greatest amount of outstanding obligations with $4,112,136,361 outstanding as of June 30, 2008. This is a 3.32% increase from the $3,980,150,303 reported for the fiscal year ending June 30, 2007. Most of these obligations fall under the purpose category "utilities/sewers" (29%). The security classification most often reported is "general obligation" (60%), followed by "revenue" (26%). COUNTIES Counties report $571,312,651 in outstanding obligations as of June 30, 2008, for an increase of 9.03% compared to the $523,978,374 reported last year. The counties report “public safety” (32%), “parks/recreation” (21%), and "public buildings/schools" (17%) as the most common purposes for bonds they issue. Counties most commonly report the security classification "general obligation" (88%). SCHOOL DISTRICTS/AEAs School districts and area education agencies have a total of $2,195,023,634 in outstanding obligations as of June 30, 2008. This is $18,342,485 or .83% less than the $2,213,366,119 reported for fiscal year 2007. If short-term anticipatory debt is removed from the totals, long-term debt for fiscal year 2008 is $1,941,577,156 a decrease of 1.88% from the $1,978,841,473 reported in fiscal year 2007. Most of these obligations fall under the purpose categories "public buildings/schools" (88%) and "short-term anticipatory" (12%). Schools/AEAs report "general obligations" (64%), "general fund obligations" (11%), and “revenue” (13%) as the most common security classifications. School districts and area education associations report $253,446,478 in short term/anticipatory obligations for fiscal year 2008. Most of these obligations are part of a short-term cash flow borrowing issued by the Iowa School Cash Anticipation Program (ISCAP) and are not general obligation bonds repaid from property tax levies. Each school, area education agency and community college that participates, reports ISCAP obligations. ISCAP obligations are classified under the purpose category "short-term anticipatory" and the security classification "general fund obligation." These obligations are to be repaid from revenues, interest earnings, grants, and other money collected during the 2008 fiscal year. COMMUNITY COLLEGES Community colleges report $424,711,642 in outstanding obligations as of June 30, 2008. This is $61,215,365 or 16.84% greater than the $363,496,277 reported for fiscal year 2007. "Industrial related" is the most commonly reported purpose for community colleges (55%), while "general obligation" is the most commonly reported security classification (54%). STATE AGENCIES State agencies report $228,295,000 in outstanding obligations as of June 30, 2008. Outstanding obligations for state agencies declined 19.51% or $55,322,382 from the $283,617,382 reported for fiscal year 2007, as state agencies did not issue any new debt for fiscal year 2008. Bonds and certificates of participation in lease purchase agreements (COPs) of $49,135,000 have been issued and remain outstanding for the Department of Corrections and several of the judicial districts for the construction of correctional facilities. Vision Iowa has $146,520,000 in bonds outstanding while School Infrastructure has $32,640,000 in bonds outstanding as of June 30, 2007. Each fiscal year, State of Iowa agencies submit financial information to the Iowa Department of Revenue and Finance for the Comprehensive Annual Financial Report (CAFR). The CAFR reports loan and contracts payable, capital leases and installment purchases. These amounts are not included in the outstanding obligation report because such obligations are not classified as "bonds" and local governmental units are not required to report them. BOARD OF REGENTS As of June 30, 2008, the Board of Regents reports $1,075,558,107 in outstanding debt, for an increase of 16.01% from the $927,159,096 reported in fiscal year 2007. A majority of this debt (65%) is issued for the construction of public buildings/schools. Ninety-nine (99%) of the obligations are revenue bonds. STATE AUTHORITIES State authorities that are authorized to issue bonds include the Iowa Agriculture Development Authority, Iowa Finance Authority, Iowa Higher Education Loan Authority, Iowa Lottery Authority, Iowa Railway Finance Authority, Iowa State Fair Authority and Tobacco Settlement Authority. Outstanding obligations of state authorities equal $2,287,940,442 as of June 30, 2008. This is $278,693,412 or 13.87% more than the $2,009,247,030 reported for fiscal year 2007. The Iowa Finance Authority reports $1,407,425,442 in outstanding obligations, the Iowa Higher Education Loan Authority reports $32,000,000 and the Iowa Lottery Authority reports $1,500,000. The Tobacco Settlement Authority reports $813,645,000 as of June 30, 2008 for outstanding obligations. OTHERS This category contains utility systems such as special sanitary sewer systems, electric systems, municipal light plants, etc. Usually these entities issue revenue bonds payable from net revenues generated by the system. The total for this category as of June 30, 2008, is $50,389,696 which is a decrease 4.19% compared to last year’s reported outstanding obligations of $52,594,029. DEFINITIONS Debt Purposes Public buildings/schools: Government office buildings, schools, classrooms, courthouses, city halls, dormitories, libraries, warehouses (includes construction of new buildings and renovation of existing structures). Health care: Buildings, renovation and equipment for hospitals, nursing homes and retirement centers. Housing/urban development: Single and multi-family dwellings and neighborhood renovation. Utilities/sewers: Generation, storage and delivery systems for electricity, water, telephone and gas; water treatment, sewers, and solid waste collection and disposal. Public Safety: Police stations, jails, detention centers, prisons, fire departments (includes vehicles and equipment). Short term and/or anticipatory: Obligations with a maturity of less than three years issued to provide funds for current expenditures until taxes or other revenues can be collected (includes ISCAP borrowings and other anticipation financing such as TANs, RANs, BANs, GANs, TRANs, etc.). Transportation: Streets, highways, bridges, tunnels, parking facilities, mass and rapid transit. Parks/Recreation: Convention and civic centers, sports complexes, pools, parks, zoos, tennis and golf facilities, theaters. Industrial Related: Industrial and economic development, new jobs training, pollution control, non- governmental office buildings, and shopping malls. Other: A purpose not described above Debt Security Type General obligations: Obligations backed by the "full faith and credit" of a governmental unit which are paid from property tax levies, general revenues and borrowings rather than from revenue generated by a specific facility or project. Revenue: Obligations repaid from money generated by the facility or project on which the borrowed funds were used or from the system of which the project is a part; the tolls, rents or other revenues generated go directly to retiring the obligations (projects include sewer systems, water systems, hospitals, stadiums, parking ramps, etc.). Leases: Obligations (which may be bonds or certificates of participation) repaid in the form of lease payments from the lessee (generally a governmental unit) to the issuer of the obligation or the lessor (usually a non- profit corporation or authority) of the project. General Fund Obligation: Obligations repaid from revenues, interest earnings, grants bond proceeds or other income of a governmental unit's general fund (must be repaid during a specified period of time.) Special Assessments: Obligations repaid from taxes imposed on those who benefit directly from a project (i.e., the homeowners and businesses which benefit from a new sewer line sometimes pay a special levy that goes toward repaying the bonds issued to build that sewer line). Tax Increment: Obligations secured by the increase in tax revenues resulting from a project or the redevelopment of an area. Tax Allocation: Obligations repaid from a specified, non-general obligation tax source, such as a hotel/motel tax. Other: A security class not described above.
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