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County of San Diego Credit Profile County of San Diego Credit Profile

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					County of San Diego
   Credit Profile
   Summer 1999
          Table of Contents
• Introduction
• Fiscal Discipline and Budgetary Re-Engineering
• Capital Improvements
• County Investment Pool
• Debt Management and Investor Relations
• East Mesa Refunding
• Economy
• Closing Remarks

                                                2
      County of San Diego Credit Profile 1999
                     Introduction
ý San Diego County
   – Mr. Walter F. Ekard, Chief Administrative Officer
   – Ms. Helen Robbins-Meyer, Assistant Chief Administrative Officer
   – Mr. Bart J. Hartman, Treasurer - Tax Collector
   – Mr. Barry I. Newman, Chairman of SANCAL
   – Mr. William J. Kelly, Chief Financial Officer
   – Mr. Neil Rossi, Chief Deputy Treasurer - Tax Collector
   – Ms. Lisa Keller-Chiodo, Debt Management Analyst

ý Sutro & Co. Incorporated - Financial Advisor
   – Ms. Catherine Bando, Senior Vice President
   – Ms. Sara Oberlies, Associate

ý Salomon Smith Barney
   – Mr. Raul Amezcua, Director
   – Ms. Tricia Jakubiak, Vice President
                                                               3
          County of San Diego Credit Profile 1999
     Executive Summary
• Strong Regional Economy
• Benefits of Financial Discipline and Budgetary
  Re-Engineering
• Quality Service is Core Value
• Broad Public Support
• Tobacco Settlement and Prop 10 Safety Net
• Continual Update of CIP to Reflect Priorities and
  Funding
• Reduced Cash Borrowing
• Low to Absence of Long-Term Borrowing
                                                   4
     County of San Diego Credit Profile 1999
                   CAO Vision
• Good Business Management Practices Stressing
  Customer Service and Teamwork
• Reinforce Fiscal Discipline Through the General
  Management System - Planning and Cost Control
• Stabilize County Change Curve
• Emphasize Quality Service as Core Value
• Focus on Employees as Front Line Providers of
  Quality Services
• Continually Review Performance and Measure
  Outcomes-Quality First Program
• Successful Conclusion of Information Technology
  Outsourcing
                                                  5
      County of San Diego Credit Profile 1999
Building a strong foundation for a
           stable future
 Financial Discipline and Budgetary
 Financial Discipline and Budgetary
           Re-Engineering
           Re-Engineering
 County Government Benefits
           from:
• Strong Regional Economy
• Financial Discipline through General
  Management System - Planning and Cost
  Control
• Tobacco and Proposition 10 Funds
• Multi-Year Agreements with Labor Groups


                                               7
     County of San Diego Credit Profile 1999
Building a
strong          Financial Discipline
foundation
for a stable
               • Two-Year Operating Plan Instituted
future            – Balanced Budget
                  – Continue On-going Revenues to Match
                    On-going Expenditures
                  – Significant One-Time Money for One-Time
                    Needs
                  – Prudent Reserves
               • Five-Year Strategic Plan Prepared
                  – Define Long-Term Objectives
                  – Develop Strategies to Reach Those Goals
                  – Allocate Resources to Carry Out Plan
                  – Recession Proof and Inflation Considered
                                                            8
                  County of San Diego Credit Profile 1999
Building a      Financial Discipline (cont.)
strong
foundation     • Monthly Reviews
for a stable
future           – Finance Officers Meeting
                 – On-Going Formal Evaluation of the Operational
                   and Strategic Plans with C.F.O., Group
                   Managers and Department Heads

               • Quarterly Reviews
                 – Presented to the C.A.O.
                 – Areas Covered: Financial and Management
                   Operations, Customer Satisfaction, Risk
                   Identification, Major Initiatives i.e. Deferred
                   Maintenance
                 – Quarterly Status Report to Board of
                   Supervisors
                                                               9
                 County of San Diego Credit Profile 1999
Increased Financial Stability
 •General fund cash balances exceed expectations


                                                                                                 123
                                                                                      113

              Goal:
                                              Cash                           101
                                              (In millions)
   to continue to improve cash
   management to decrease
   borrowing needs
                                                                    52

                                               29
                                        9               9

                                     94/95   95/96   96/97       97/98      98/99   99/00(f) 00/01(f)

                                                             (f) Forecast                   10
        County of San Diego Credit Profile 1999
Increased Financial Stability
                                                  Growth Assumptions
 •General Purpose Revenues
 increase in recent years due to • Secured Property Tax: 10.9% increase for
 economic upturn                 99/00 and forecast 5.0 - 6.2% annually

 $600                                                                           • Sales Tax/Other:       Growth estimated to be in
                   (In millions)                                                line with expected population growth and CPI (3%
 $500
                                                                                range)
 $400
                                                                                • Motor Vehicle Fees:                   Growth estimated at
 $300
                                                                                 3 - 4% range

 $200
                                                                                • Revenue from Other Agencies:        Main
                                                                                sources are Homeowner Property Tax Redemptions
 $100
                                                                                and State Mandated Reimbursements both sources and
                                                                                others, are expected to stay level
  $-
        94/95 95/96 96/97 97/98 98/99 99/00 00/01 01/02 02/03 03/04             • Miscellaneous:            Interest income estimated at
                           (e)   (f)   (f)   (f)   (f)   (f)   (f)
          Property Taxes (Current & Prior)       Sales Tax & Other              3.5 - 4 % growth
          MVL Tax                                Revenue from other Agencies
          Miscellaneous               94/ 95        95/96      96/97      97/98   98/99 (e) 99/00 (f) 00/01 (f) 01/02 (f) 02/03 (f) 03/04 (f)
Property Taxes (Current & Prior)        230.5         253.8      236.7      248.7     267.2      284       302       318       334       351
Sales Tax & other                           21         22.7       25.9       30.1      34.3        34        35        36        37        38
Motor Vehicle In-Lieu Tax                  100          106      113.7      122.5     136.4      134       139       144       150       157
Revenue from other Agencies               56.4         11.6       11.2       13.2      12.3        20        20        12        13        13
Miscellaneous                             29.8         38.5       42.1       33.5        25        16        14        15        15        15
                             Total      437.7         432.6      429.6        448     475.2      488       510       525       549       574
                                                                                                        (e) Estimated                   11
                      County of San Diego Credit Profile 1999                                           (f) Forecast
Increased Financial Stability

   • Unreserved Fund Balance                      Composition of 98/99 Unreserved Fund
                                                                 Balance
                                                 Fund Balance Available            $148.7M
                               211               Designations                       61.8M
    (In millions)                                  District Attorney 8.5M
                                           181     DPLU              3.0M
                                     169
                         156                       Contingency Gen. 50.0M
                                                   Other              .3M
                                                                           Total   $210.5M

                    64                              96/97 to 97/98 Increase Due to:
         51
  43                                             Sale of Solid Waste System
                                                 Sale of Solid Waste System         $32M
                                                                                    $32M
                                                 Cost Containment
                                                 Cost Containment                    48M
                                                                                     48M
                                                   (CERS, G.M.S.)
                                                   (CERS, G.M.S.)
94/95 95/96 96/97 97/98 98/99 99/00 00/01                                  Total
                                                                           Total    $80M
                                                                                    $80M
                                (f)   (f)

                                                            (f) Forecast             12
              County of San Diego Credit Profile 1999
    FY 1998/99 Estimated Year-End
   Reserves and Operating Balances

(in thousands)                                   3rd Qtr             4th Qtr
                                            Projected Reserves      Reserves +
                                               + Operating
   Category
                                                                 Operating Balance
                                            Balance at 6/30/99      at 6/30/99

Public Safety                                     $52,723         $61,314
Health and Human Services Agency                    6,124           12,781
Land Use and Environment                            5,699             8,604
Community Services                                  4,918           12,764

Finance & General Government                       12,999          16,323

Competition & Reengineering                            562               690

                            Group Totals $83,025                 $112,476

                                                                               13
        County of San Diego Credit Profile 1999
 1999/00 Highlights
• Adopted Two-Year Operational Plan
• Five New Libraries and Operational Costs Funded
• Secure Funding for Troubled Youths:
  Approximate Annual On-going Cost $7.5M
• Implemented Internal Service Funds to Align
  Expenses to Cost Centers
• Elimination of Major Maintenance Backlog Over
  Two Years
• Salary Increases: Contracts Negotiated Through
  June 2001 for Most Unions
• Includes MSCP Contribution of $3M Annually
• Vehicle Acquisition, 368 Vehicles at $8.6M Included
                                                 14
      County of San Diego Credit Profile 1999
   1999/00 Adopted Budget
                Appropriations


                                                                         Revenue


    Finance & General Government Group7%
    Public Safety Group 25%
    Health and Human Serv. Agency 42%
    Land Use & Environment Group 11%
    Community Services Group 8%                      State Aid 42%

    Finance - Other 5%                               Charges for Services, Fees & Fines 18%

    Capital Outlay Program 2%                        Federal & Other Governmental Aid 15%
          Proposed Budget                            Property & Other Taxes 14%
               00/01(f) 01/02(f) 02/03(f) 03/04(f)   Interest, Misc. Revenue & Other Financing Sources 8%
Revenues        2,585    2,723    2,788    2,856
                                                     Reserves 3%
Expenditures    2,585    2,723    2,788    2,856
                                                                       (f) Forecast            15
               County of San Diego Credit Profile 1999
Staff Year Analysis by Group
                                   1997-98     1998-99     1999-00       Staff
                                  Adopted     Adopted     Adopted      Year Net
Group                            Staff Years Staff Years Staff Years    Change


Public Safety                       6,609.2     6,943.0     7,115.4      172.4
Health & Human Services Agency      5,837.7     5,698.0     5,707.0          9.0
Community Services                    909.9       913.0       879.2       (33.8)
Land Use & Environment              1,583.5     1,388.0     1,395.6          7.6
Finance & General Government        1,558.1     1,439.0     1,453.0        14.0
Competition & Reengineering             -           8.0         5.0         (3.0)

Total                              16,498.4    16,389.0    16,555.2      166.2




                                                                            16
         County of San Diego Credit Profile 1999
Borrowable Reserves at
     July 1, 1999
 Contingency Reserve General                 $ 50.0

 Contingency Reserve Operational                17.5

 Environmental Trust Fund Reserve              104.0

 Debt Reserves                                  31.0

 Workers Compensation                           16.0

 Public Liability                                7.5

Uses of Reserves:
                                 Total       $ 226.0
• Maintain Prudent Reserves          •     Quality First Payments
• Deferred Maintenance               •     Grant Matching Funds
• Capital Projects                   •     Automation

                                                                    17
 County of San Diego Credit Profile 1999
Looking to the Future
                                          19
County of San Diego Credit Profile 1999
Financial Goals 1999/00
Financial Goals 1999/00
                                                                   HEALTH &                          F INANCE
                                                                                                                    INFORMATION
        Quantitative                                 PUBLIC SAFETY  HUMAN
                                                                             LAND USE & COMMUNITY       AND
                                                                                                                    TECHNOLOGY        TOTAL
                                                                            ENVIRONMENT SERVICES     GENERAL
                                                                   SERVICES                                         OUTSOURCING
                                                                                                        GOVT


Achieve the Operating Plan
Expenditures                                                659.9   1,095.8      293.5      215.0       135.5               0.7       2,400.3
(salaries &benefits)                                        437.5    270.4        83.2       45.5        79.0               0.7         916.3
Revenues                                                    410.2   1,050.4      272.8      203.2        57.2               0.7       1,994.4

General Revenues                                            249.7     45.4        20.7       11.8        78.3               -           405.9

Deferred Major Maint/ Salary increases

Deferred Major Maintenance                                    6.2       3.2        1.5        1.0         2.0               -              13.9
ADA                                                           0.4       0.4        0.9        0.1         -                 -               1.8

IT Project
Es tablish IT ISF 99-00                                      10.5      23.1        8.3         5.0        16.8                              63.7
                                                                                                                                            -

IT Enterprise Resource Planning Projects:
 . Human Resources                                                                                                               0              0.0
  . Finance                                                                                                                      0              0.0
Training and tuition refund program                           2.2      1.3        0.41       0.22        0.39              0.00             4.5
Identify $8 million additional ongoing savings to
fund employee benefits above planned salary
increases
SUB-TOTAL                                             $      19.3      28.0       11.1         6.3        19.2                  0.0 $       84.0


Develop near- term funding to finance CIP Projects            5.8      41.0        2.0        48.4            4.0                          101.2
TOTAL                                                 $      25.1      69.0       13.1        54.7        23.2                  0.0   $ 185.2


                                                                                                                                      20
                County of San Diego Credit Profile 1999
   Financial Goals 2000/01
   Financial Goals 2000/01
                                                                    HEALTH &
                                                                                   LAND USE &    COMMUNITY      FINANCE AND
                                                    PUBLIC SAFETY    HUMAN                                                        TOTAL
Quantitative                                                        SERVICES
                                                                                  ENVIRONMENT     SERVICES     GENERAL GOVT
Achieve the Operating Plan
Expenditures                                                653.8       1,062.1         277.7         208.9           135.7        2,338.1
(salaries &benefits)                                        450.9         279.5          84.9          46.5            81.5          943.3
Revenues                                                    392.2       1,015.9         259.3         196.5            54.1        1,918.0
General Revenues                                            261.6          46.2          18.4          12.4            81.6          420.1
Deferred Major Maint/ Salary increases                        5.0                                                                      5.0
Deferred Major Maintenance                                    8.3           1.6           1.7           1.6             -             13.2
ADA                                                           0.3           0.2           1.3           0.3             -              2.1
IT Project
Establish IT ISF 99-00                                                                                                                -
Identify funding for IT services 00-01(6)                    12.6          29.7            7.1           5.6           29.7          84.7
IT Enterprise Resource Planning Projects:
 . Human Resources                                            2.6           2.1            0.5           0.3                0.5        6.1
  . Finance                                                   6.0           7.4            2.5           1.4                1.5      18.8
Training and tuition refund program                           2.3           1.4           0.42           0.2                0.4       4.8
Identify $8 million additional ongoing savings to
fund employee benefits above planned salary
increases                                                     3.4           2.8            0.7           0.4                0.7           8.0

SUB-TOTAL                                                    40.5          45.2           14.2           9.9           32.8 $        142.5

Develop near- term funding to finance CIP
Projects                                                                                                                                  0.0

TOTAL                                                        40.5          45.2           14.2           9.9           32.8 $        142.5




                                                                                                                              21
                     County of San Diego Credit Profile 1999
Capital Improvements
 Capital Needs Addressed
• Major maintenance backlog eliminated
   – $13M 99/00 Budget
   – $14M 00/01 Budget
• Compliance with ADA over five years
   – ADA Barrier Removal Projects total $9.8M
   – $1.8M 99/00 Budget
• CIP has over 500 requested projects
   – Annually Update CIP Master Plan Guiding
     the County Over the Next 5-10 Years

                                               23
     County of San Diego Credit Profile 1999
Major County Projects - Seeded
– Downtown Courthouse Replacement $1.3M
– Kearny Mesa Traffic Court $800K
– Valley Center, Rancho San Diego, Fallbrook,
  Julian, and Pine Valley Substations $3.8M
– Las Colinas Women’s Detention Replacement
 $1.8M
– Animal Shelter Replacement, South County
  $175K and North County $200K
– CAC Renovations $3M
– Juvenile Hall Expansion $800K

                                              24
    County of San Diego Credit Profile 1999
Up-coming Major County Projects
• Juvenile Justice Facility
  – $32M State Grant Received
  – Land Owned by County of San Diego
  – to be Completed 2003
• Edgemoor Hospital Replacement
  – Public Private Partnership
  – County Offering Land
• Central Animal Shelter
  – Private Donations $2M Secured, $2M Anticipated
  – County General Fund $2M
  – City of San Diego $2M
• New or Replacement Libraries for
  – Rancho San Diego, Bonita, Spring Valley, Valley Center and
    Cardiff
  – $15M of County Funds Identified
                                                          25
       County of San Diego Credit Profile 1999
Spending Plan for Seeded Projects
   FY 1998-1999                     FY 1999-2000                       FY 2000-2001                     FY 2001-2002                         FY 2002-2003                         FY 2003-2004                      FY 2004-2005
         (in Millions)
                     1.00                             1.00                              0.50                                14.5                                  31.0                                 36.0

Downtown Courthouse
                            *$10 million Courthouse Land Acquisition
                     0.65                             1.35                              1.00                                23.0                                 22.00
                                                                                                                                                                         $.788M of $2M seed money for this

New County Juvenile Justice Center                                                                                                                                       project was transferred to Juvenile
                                                                                                                                                                         Hall
                     0.50                            1.288
                                                   $1 million grant from Federal
Juv Hall 30-bed Expans                             Violent Offenders Fund, $.788 from
                                                   No Cty Juv. Justice Center
                     0.10                             0.10                              2.30                                0.60
                                                                                                                                   Sheriff evaluating facility
Rancho San Diego Sheriff Station                                                                                                   scope and alternate sites

                     0.10                             1.80                              12.0                                3.00
                                                                                                                Preparing analysis for full replacement in
Las Colinas Womens Detention Facility                                                                           lieu of housing reconstruction, at projected
                                                                                                                cost of $52.7 million
                     0.80                             2.00                              2.20                                20.0                                  7.00

Traffic/Small Claims Court
                     1.00                             2.00

CAC Renovation
                                                      0.20                              0.20                                4.80                                  0.80
                                                                                               Animal Control evaluating potential Humane Society
No. County Inland Animal Shelter                                                               agreement for No Cty Inland, allowing expansion/replacement
                                                                                               of North Cty Coastal Animal Shelter

                     0.05                             0.20                              4.00                                3.75
                                                                                                                                                      $.175 of seed money transferred to
Central Animal Shelter                                                                                                                                Security Kennels at South County
                                                                                                                                                      Animal Shelter
                     0.07                            0.105

         South County Animal Shelter Security Kennels
                                                                                                                                                                                           LEGEND
                                                                                                                                                                                                    Planning, Programming
                                                                                                                                                                                                    Fundraising
                                                                                                                                                                                                    Developer Selection
                                                                                                                                                                                                    Design
                                                                                                                                                                                                    Bid, Award     26
                              County of San Diego Credit Profile 1999                                                                                                                               Construction
                                                                                                                                                                                                    Occupy
County Investment Pool
     Strength and Stability
• Liquidity Restored
   – Phased Withdrawal Completed
   – Vast Majority of Funds are Mandatory
   – Low Weighted Average Maturity
   – 52% of Securities Mature Within 365
     Days
   – Cash Flow Model Significantly
     Improved

                                               28
     County of San Diego Credit Profile 1999
Pool Participation as of
    July 31, 1999
                    6%     1%


                                                          47%


41%


                               5%
 County Funds                       Unapportioned Tax/Int. Funds
 Schools                            Community Colleges
 Voluntary Depositors




                                                                   29
 County of San Diego Credit Profile 1999
                   Safety First
• Portfolio Focus is Safety, Liquidity,
  Return
  – Holdings are AAA or A1/P1/F1
  – Last Derivative Matured 3/26/99
  – Diversified Asset Classes
  – Professional Money Managers
  – AAA/V1+ Rating


                                               30
     County of San Diego Credit Profile 1999
         Credit Quality as of
            July 31, 1999

                                                      45.18%

54.82%



              AAA                       A-1/P-1/F-1



                                                        31
     County of San Diego Credit Profile 1999
     Asset Allocation as of
        July 31, 1999
                               11.44%              1.52%
         10.03%




                                                                 40.35%
29.47%

                               7.15% 0.04%
Time Deposits                 Med. Term Notes              Negotiable CD's
C. P.                         Repo                         Money Market
Agencies


                                                                       32
         County of San Diego Credit Profile 1999
          Communication
         First, Last, Always
• Oversight Committee Key Participant
  – Continuous, Involved Members
  – All Participants Represented
• All Information Provided to
  Participants
  – Extensive Monthly Reports
  – Web Site Information
  – Quarterly Letters In Plain English

                                               33
     County of San Diego Credit Profile 1999
  Outside Review and Input
• Rating Agency Review
  – Monthly Reports Sent to All Agencies
  – Annual Review During TRANS
  – Rated by Fitch
  – Guidelines Incorporated into Policies
• Financial Institution Review
  – Monthly Information Provided
  – Input and Concerns from Analysts

                                               34
     County of San Diego Credit Profile 1999
Debt Management and
  Investor Relations
Short & Long Term Borrowing Program
          Goals:                          Accomplishments:
• Active Investor                    • Conducted periodic
  Relations Program                    presentations to
   – Alert investors of                investors and rating
     upcoming                          agencies
     opportunities                   • Adopted a Debt
   – Ongoing dialogue with             Management Policy B-65
     financial community                – centralization of
   – Generate interest in                 function
     secondary market                   – aggressively refinance
• Maintain & Improve                 • Participated in municipal
  Credit Ratings                       industry conferences and
   – Achieve lower                     seminars
     financing costs                 • Web page on internet
• Comply with Disclosure                – Financial Information
  Requirements                          – Debt Financings
                                                            36
      County of San Diego Credit Profile 1999
                            Long-Term Obligations
                  Certificates of Participation $ 539,553,000
                  Pension Obligation Bonds      $ 395,475,000
                                          Principal Outstanding                                                $934,028,000

                                                                                                              •Moderately low debt burden
                            Principal and Interest
                                                                                                              •Highly Essential Projects
$100,000,000                                                                                                     – Public Safety
                                                                                                              •   03/04 Lease payment of
 $50,000,000                                                                                                  $114M
                                                                                                              •    07/08 Lease Payment
         $0                                                                                                   $74M
               F.Y. 98/99




                             F.Y. 03/04




                                                  F.Y. 08/09




                                                                       F.Y. 13/14




                                                                                    F.Y. 18/19




                                                                                                 F.Y. 23/24




                                                                                                              •    08/09 Lease Payment
                                                                                                              $32M
                                          COPS/Other           1994 Pension Bonds


                                                                                                                                     37
                            County of San Diego Credit Profile 1999
99/00 Budgeted Long-Term
     Payment Sources
            Districts/Funds AB189           Fees
                Special

      Reimb
   Fed/State/City




                                                                     General Fund


                        Fed/State/City     Special                                Total
         General Fund      Reimb       Districts/Funds   AB189         Fees      Payment
TOTALS     78,604,109      17,844,715       5,155,796    6,803,639     1,202,318 109,496,430




                                                                                          38
         County of San Diego Credit Profile 1999
    Reflects Possible New Debt
        for Seeded Projects
$140,000,000

$120,000,000

$100,000,000

 $80,000,000

 $60,000,000

 $40,000,000

 $20,000,000

         $0
               98/99




                       03/04




                                       08/09




                                                   13/14




                                                                18/19




                                                                        23/24
                               COP's   POB's   Potential New Debt

                                                                                39
          County of San Diego Credit Profile 1999
      Conduit Financing
• Housing
 – Multifamily

• Industrial Development Bonds
 – Viratec

• Other Conduit
 – San Diego Natural History Museum
 – Burnham Institute

                                             40
   County of San Diego Credit Profile 1999
 East Mesa Detention
Facility Refunding COPs
                               Contacts
County of San Diego                          Financial Advisor - Sutro & Co.
• Lisa Keller-Chiodo                         • Catherine Bando
  Debt Management Analyst…..(619) 685-2329     Senior Vice President….……..(213) 362-4137

• Neil Rossi                                 • Sara Oberlies
  Deputy Treasurer…………….(619) 531-5211         Associate………………..……..(213) 362-4119

•Rob Castetter                               Underwriter - Salomon Smith Barney
 Investment Manager…………(619) 531-5211        •Raul Amezcua
                                              Director……………….....……(213) 486-7159

SANCAL                                       •Tricia Jakubiak
• Barry Newman                                Vice President………………...(213) 486-7175
  Chairman……………………(619)557-2700
                                             •Kristina Stanier
                                              Associate………………………(213) 486-8995



                                                                                 42
            County of San Diego Credit Profile 1999
                                Contacts
Bond Counsel - Orrick Herrington & Sutcliffe    Trustee - State Street Bank & Trust Company
• Paul Webber, Esq.                             • Joni D’Amico
  ……………………………..…..(213) 612-2422                  ……………………….….……..(213) 362-7334

• Kevin Hale, Esq.                              Trustee Counsel - Seed, Mackall & Cole
  ………………….…….…………(213) 612-2356                 •Kathleen Johnson, Esq.
                                                 ………...……………….....……(805) 963-0669
Disclosure Counsel - Hawkins Delafield & Wood
• Arto Becker, Esq.                             Verification Agent - Ernst & Young
  ……………..……………………(213) 236-9050                 Mike O’Drobinak
                                                 …………….…………………(901) 577-6353
• Russell Trice, Esq.
  …………………………………..(213) 236-9050




                                                                                    43
             County of San Diego Credit Profile 1999
                         Time Schedule1
                                      1


           Weeks of                   Rating Presentations.
           August 23 & 30


           September 2                Receive Ratings and Insurance
                                      Commitments.


           September 6                Print & Mail Preliminary Official
                                      Statement.


           September 13 & 14          Pre-Price & Price Certificates.


           September 28 & 29          Pre-Closing & Delivery of Proceeds.


1 Preliminary,   subject to change.
                                                                            44
           County of San Diego Credit Profile 1999
Debt Service Schedule
$3,500,000

$3,000,000

$2,500,000

$2,000,000

$1,500,000

$1,000,000

 $500,000

       $0
              2000 2001 2002 2003 2004 2005 2006 2007 2008 2009


             Prior Debt Service       Projected New Debt Service
             Cumulative Savings
                                                                   45
  County of San Diego Credit Profile 1999
Regional Economy
    Economic Highlights
ý   Manageable population growth, as demonstrated
    by steadily decreasing unemployment rates, rising
    per capita assessed value, and increasing median
    household EBI.

ý   Increasingly diversified economy with growth in
    biotechnology, information technology, tourism
    and telecommunications sectors.

ý   Healthy residential market evidenced by increasing
    home sales prices, growing residential building permits
    and dropping multifamily vacancy rates.


                                                      47
    County of San Diego Credit Profile 1999
                            Population &
                           Unemployment
      3,000,000                                                                                                                 9.0%
                                                                                                                                8.0%
      2,900,000                                                                                                                 7.0%
                                                                                                                                6.0%
      2,800,000
                                                                                                                                5.0%
                                                                                                                                4.0%
      2,700,000
                                                                                                                                3.0%

      2,600,000                                                                                                                 2.0%
                                                                                                                                1.0%
      2,500,000                                                                                                                 0.0%
                            1993          1994           1995          1996          1997           1998          1999

                                                Population                  Unemployment Rate
Note: Unemployment rate for 1999 is for June.
Sources: Population data as of January from California Department of Finance. Unemployment data from California Employment Development Department.
                                                                                                                                      48
              County of San Diego Credit Profile 1999
                                 AV Per Capita




                                                                                                                  89
                                                                                                                7,3
                                                                                                           85
                $ 60,000




                                                                                           64




                                                                                                                $5
                                                                                                   39


                                                                                                         4,6
                                                                                      5,4
                                                        56




                                                                              94




                                                                                                 4,6
                                                                  62




                                                                                                        $5
                                            40




                                                                                     $5
                                                     4,1




                                                                            4,0
                                                                3,9




                                                                                                $5
                                          3,4


                                                   $5




                                                                          $5
                                                              $5
                                        $5
                                 64
                $ 55,000
                               0,8
                             $5




                $ 50,000



                $ 45,000



                $ 40,000



                $ 35,000



                $ 30,000
                              1991       1992       1993       1994       1995        1996      1997    1998    1999




Source: County of San Diego Auditor and Controller and California Department of Finance.
                                                                                                                       49
              County of San Diego Credit Profile 1999
                    Per Capita Income




                                                                                                                        00
             $28,000




                                                                                                                      7,5
                                                                                                                00
                                                                                                                     $2
                                                                                                           6,5
                                                                                                   42

                                                                                                         $2
                                                                                                 5,3
             $26,000




                                                                                         50
                                                                                               $2
                                                                                       4,6
                                                                                     $2
                                                                               00
             $24,000




                                                                             3,5
                                                                      02
                                                                           $2
                                                                   2,3
                                                            22
                                                  88




                                                                 $2
                                                         1,6
             $22,000
                                        53

                                               1,2
                              81




                                                       $2
                                      0,7
                           0,2




                                             $2
                                    $2
                         $2




             $20,000

             $18,000

             $16,000

             $14,000

             $12,000

             $10,000
                          1990      1991      1992      1993      1994      1995      1996     1997      1998        1999 *
* Forecasted.
Source: Greater San Diego Chamber of Commerce, Economic Research Bureau and California Department of Finance.
                                                                                                                              50
              County of San Diego Credit Profile 1999
                  Median Effective Buying
                       Income (EBI)

$37,000                                                       $35,725
                                       $34,445
$35,000           $33,679
                                                                               County Households
$33,000                                                                        with EBI > $50,000
$31,000                                                                 Year         Share of Households
                                                                        1995          28.3%
$29,000
                                                                        1996          29.9%
$27,000
                                                                        1997          31.7%
$25,000
                1995                  1996                  1997




   Source: Sales and Marketing Magazine, “Survey of Buying Power.”
                                                                                                     51
                County of San Diego Credit Profile 1999
    Share of Households with EBI
    Greater than $50,000 (1997)
                                                                                                                            48.1%
              50%
              45%                                                                                               39.5%
              40%                                                                              37.3%

              35%                                         31.0%              31.7%
                                          27.1%
              30%
                           24.5%
              25%
              20%
              15%
              10%
               5%
               0%
                          San        R iversid e   S a c ra m e n t o   S a n D ie g o       San           Ala m e d a   C o ntra
                     B e rna rdino    C o unty         C o unty           C o unty       F ra n c is c o    C o unty     C o s ta
                       C o unty                                                            C o unty                      C o unty



Source: Sales and Marketing Magazine, “1997 Survey of Buying Power.”
                                                                                                                                    52
             County of San Diego Credit Profile 1999
     Employment by Industry
          (in Thousands)                                                                          1,100.3
                                                                    1,019.7        1,043.8
                      1200                             974.9
                                      949.3

                      1000
                                                                                                            32.8%

                        800


                        600                                                                                 22.5%


                        400                                                                                 17.7%

                                                                                                            11.6%
                        200
                                                                                                            5.8%
                                                                                                            4.1%
                         0
                                                                                                            5.6%
                                   1994              1995          1996           1997           1998




                        Mining                                    Transportation & Public Utilities
                        Construction                              Finance, Insurance & Real Estate
                        Manufacturing                             Government
                        Wholesale & Retail Trade                  Services
Source: State of California, Employment Development Department.
                                                                                                                    53
              County of San Diego Credit Profile 1999
 County’s Leading Industries
Medical/Biotechnology                                   Telecommunications
• The County is home to over 300 biotechnology          • San Diego serves as the corporate
  firms with 40 traded publicly.                          headquarters for Qualcomm (1998 revenues
                                                          of $3.3 billion), a leader in the digital wireless
• Leading firms        Gross Revenues (millions)          industry.
   –Beckman Coulter             $1,718.2 (1998)
                                                        • The County also hosts regional operations
   –Agouron Pharmaceuticals        466.5 (1997)           for other major telecommunications firms like
   –Alaris Medical Systems         380.1 (1998)           Nokia, Ericsson, and Motorola.
   –IDEC Pharmaceuticals           154.0 (1998)

Information Technology                                  Tourism
• Engineering and management services is the            • The tourist industry accounts for one in every
  fastest growing category for employment in the          eight non-government payroll jobs within the
  County.                                                 County.

                                                        • San Diego hosted 14.5 million overnight
• Leading firms include: Science Applications
                                                          visitors in 1998. These visitors spent an
  International (1997 gross revenues of $4.7 billion)
                                                          estimated $4.7 billion, a 7.7% increase from
  and Extex Information Services (1997 gross
                                                          1997.
  revenues of $2.8 billion).


     Source: San Diego Daily Transcript.
                                                                                                   54
                  County of San Diego Credit Profile 1999
                            Fastest Growing
                              Occupations
Job                                                    Projected Additional Jobs (1994 to 2001)   % Change

Computer Engineers                                                                       1,270       57.2%
Systems Analysts                                                                         2,210       52.5%
Home Health Care Workers                                                                   870       48.6%
Lobby Attendants                                                                           250       42.4%
Food Service Managers                                                                    1,000       39.4%
Demonstrators, Promoters, Models                                                           730       38.0%
Chemists                                                                                   460       36.2%
Occupational Therapists                                                                    200       34.5%
Correction Officers                                                                        810       34.0%
Amusement/Recreation Attendants                                                          1,000       33.0%
Construction Managers                                                                      560       32.6%
Medical Assistants                                                                         770       32.4%
Employee Interviewers                                                                      190       31.1%

 Source: State of California, Employment Development Department.
                                                                                                      55
               County of San Diego Credit Profile 1999
      Gross Regional Product
                       $100                                                                                         $91.6

                                                                                                            $87.1
                       $90                                                                          $82.6
                                                                                           $79.1

                       $80                                                         $73.6

                                                                           $66.8
          (billions)




                                                                  $64.8
                       $70                               $63.4
                                                $61.8
                                       $60.4
                              $56.8
                       $60


                       $50


                       $40
                              1989    1990     1991     1992     1993     1994     1995    1996    1997     1998 1999*
* Forecasted.
Source: Greater San Diego Chamber of Commerce, Economic Research Bureau.
                                                                                                                            56
                 County of San Diego Credit Profile 1999
                                   Taxable Sales
             $30,000                                                                                    $27,409
                                                                                      $25,139
                                                                    $23,434
             $25,000        $21,576               $22,375
                                                                                                                $18,402
             $20,000                                                                          $17,141
                                                          $15,719           $16,181
                                     $15,241
(millions)




             $15,000

             $10,000

              $5,000

                 $0
                             1993                  1994              1995              1996              1997

                                                            Total Sales       Total Retail


Source: California State Board of Equalization.
                                                                                                                          57
                County of San Diego Credit Profile 1999
                   1997 Taxable Sales
                      Breakdown
                                                                 3%             5%
              28%
                                                                                                                      17%




  6%
                                                                                                                        12%
          2%
                                 14%                                            13%

                      Household Furnishings       Building Material                   Serv ice Stations/Automotiv e
                      General Merchandise         Apparel/Specialty Stores            Eating/Drinking and Food Stores
                      Other Retail                Business/Personal Serv ices         All Other Outlets



Source: California State Board of Equalization.
                                                                                                                        58
               County of San Diego Credit Profile 1999
  Building Permit Valuation
              $4,000
                                                                                                            $3,525.34
              $3,500    $3,236.63


              $3,000
                                     $2,438.19                                                  $2,375.34
              $2,500                                                                $2,096.95
 (millions)




                                                                        $1,815.25
              $2,000                                        $1,668.47
                                                $1,541.55
              $1,500

              $1,000

               $500

                 $0
                       1991         1992         1993        1994        1995       1996        1997        1998


                                                  R e s idential    N on-R e s idential

Source: Construction Industry Research Board.
                                                                                                                        59
                 County of San Diego Credit Profile 1999
                        Residential Permits
                     14,000
                                                                                                          12,173
                                                                                                 11,402
                     12,000


                     10,000
                              7,908
      (# of units)




                     8,000                                    6,935                      6,868
                                          6,059                            6,608
                                                   5,602
                     6,000


                     4,000


                     2,000


                         0
                              1991      1992      1993      1994         1995           1996     1997     1998

                                                    S ingle Family    Multi-F a m ily

Source: Construction Industry Research Board.
                                                                                                                   60
                     County of San Diego Credit Profile 1999
   Median Home Sale Price
                                                                                                         $216,000
              Orange County                                                                                 $231,000
                                                                                       $167,000
        Los Angeles County                                                               $175,500
                                                                          $130,000
           Riverside County                                             $127,000

                                                                      $120,000
         Sacramento County                                         $117,000
                                                                                          $180,000
          San Diego County                                                                    $186,000


                               $0             $50,000   $100,000       $150,000         $200,000          $250,000


            March 1999 Median Home Sale Price                 March 1998 Median Home Sale Price



Source: California Association of Realtors.
                                                                                                                       61
               County of San Diego Credit Profile 1999
Multifamily Vacancy Rates1
                         1

    and Median Rents
    14%                                                                                  Median Rent (2 Bedroom)

    12%                                                                             v   Spring 1998          $685
                                                                                    v   Fall 1998            $726
    10%
                                                   8.3%
             8.3%                                                                   v   Spring 1999          $746
    8%

    6%                                                           7.4%
                                      7.2%
                    6.5%
    4%
                                                                          4.7%
                                                                                 3.8%        3.4%
    2%                                                                                                2.9%

    0%
      1991           1992           1993            1994          1995   1996    1997       1998      1999




1Represents vacancies reported during the spring of each year.
Source: San Diego County Apartment Association.
                                                                                                             62
               County of San Diego Credit Profile 1999
                     Industrial and Office
                        Rental Markets
                                                                                                   Office Rent         % Change
                                                                Metropolitan Area            1      per Sq. Ft.       12 Months
                                                                San Diego                                  $24.82        10.6%
        County Industrial Space                                 San Jose/Silicon Valley                    $35.72          0.8%
            Vacancy Rate                                        San Francisco (Downtown)                   $46.29         10.0%
14 %                                                            Orange County (Airport)                    $26.57          3.0%
               12 .0 %                                          Sacramento                                 $21.96         -3.1%
12 %
                                  10 .0 %
10 %
                                                      8 .0 %                        7 .8 %
8%
                                                                       6 .0 %
6%

4%

2%

0%
      19 9 4             19 9 5              19 9 6               19 9 7               19 9 8

  1Includes suburban areas.
  Source: For office rental rates, Richard Ellis Global Research & Consulting, July 1999.
  Source: For industrial vacancy rates, John Burnham & Co. and San Diego Regional Economic Development Corporation.
                                                                                                                              63
                    County of San Diego Credit Profile 1999
Closing Remarks
                   CAO Vision
• Good Business Management Practices Stressing
  Customer Service and Teamwork
• Reinforce Fiscal Discipline Through the General
  Management System - Planning and Cost Control
• Stabilize County Change Curve
• Emphasize Quality Service as Core Value
• Focus on Employees as Front Line Providers of
  Quality Services
• Continually Review Performance and Measure
  Outcomes-Quality First Program
• Successful Conclusion of Information Technology
  Outsourcing
                                                65
      County of San Diego Credit Profile 1999
          Web Site
www.co.san-diego.ca.us

           FINANCE TEAM
    William J. Kelly (619) 531-5413
   Lisa Keller-Chiodo (619) 685-2329
      Neil J. Rossi (619) 531-5686

				
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