Conservative Budgeting means Preparing for our Future
6 Things you should know about Napa County Finances
- Napa County has one of the highest bond ratings among California counties.
- The Board of Supervisors has a longstanding history of conservative fiscal practices.
- Napa County has healthy reserves, and policies in place on how to use them.
- We use performance measures as part of the budget process.
- The Board uses periodic 5-year forecasts, fiscal status reports, a Fiscal Contingency Plan and a Strategic Financial Plan to adhere to financial goals in a transparent way.
- You can review Napa County's current and past budgets and other financial documents online, at the County administration building or at any of the 4 Napa City-County libraries.
May 2, 2012 - Market confidence saves County $2.27 million in interest
(NAPA, California) Investor confidence, boosted by a high rating from Standard and Poor’s, will save Napa County more than $2.27 million in interest payments on the County’s sale of Certificates of Participation, County staff learned yesterday. This is approximately $500,000 more in savings than staff had expected when the Board authorized sale of the refinancing COPs in April.
Tuesday morning, financial advisor KNN Public Finance offered on behalf of the County $21.3 million in Certificates of Participation to refinance the 2003 debt that paid for the building of the Sheriff’s Office on Airport Boulevard and the Juvenile Justice Hall, among other things.
KNN received eight bids, including bids from major underwriters of municipal bonds such as US Bancorp Investments, UBS Financial Services, Morgan Stanley, Mitsubishi UFJ Securities, Bank of America Merrill Lynch and Citigroup Global Markets.
The low bid, from US Bancorp Investments, includes a True Interest Cost of 2.164%, compared to the 2.48% estimated in April. When the initial COPs were issued in 2003, the True Interest Cost was 4.17%.
“This is a great example of outside forces, in this case, the national financial markets, validating our Board and County’s careful fiscal management and conservative policies,” said Board Chairman Keith Caldwell. “This is where our hard work really pays off for our residents.”
KNN told County staff that a main reason for the favorable interest rate is the County’s healthy General Fund reserves, and the fact that the County was able to build up those reserves during the economic downturn. Napa County’s COPs include a 50% debt service reserve, meaning that the County has set aside half the amount of the required annual debt service to be used in the event the County is ever unable to make a payment. It is common for municipal COPs to include a debt reserve of 100% of the annual debt service payment. KNN indicated that one factor in the County’s ability to issue COPs with a lower debt service reserve was the County’s track record in building and maintaining General Fund reserves.
Staff was informed in late April that Standard & Poor’s had given the County’s COPs an AA rating, indicating a “very strong capacity to meet financial commitments.” That rating reflects an underlying General Obligation rating of AA+, close to the highest rating a local government can receive.
Tuesday morning, financial advisor KNN Public Finance offered on behalf of the County $21.3 million in Certificates of Participation to refinance the 2003 debt that paid for the building of the Sheriff’s Office on Airport Boulevard and the Juvenile Justice Hall, among other things.
KNN received eight bids, including bids from major underwriters of municipal bonds such as US Bancorp Investments, UBS Financial Services, Morgan Stanley, Mitsubishi UFJ Securities, Bank of America Merrill Lynch and Citigroup Global Markets.
The low bid, from US Bancorp Investments, includes a True Interest Cost of 2.164%, compared to the 2.48% estimated in April. When the initial COPs were issued in 2003, the True Interest Cost was 4.17%.
“This is a great example of outside forces, in this case, the national financial markets, validating our Board and County’s careful fiscal management and conservative policies,” said Board Chairman Keith Caldwell. “This is where our hard work really pays off for our residents.”
KNN told County staff that a main reason for the favorable interest rate is the County’s healthy General Fund reserves, and the fact that the County was able to build up those reserves during the economic downturn. Napa County’s COPs include a 50% debt service reserve, meaning that the County has set aside half the amount of the required annual debt service to be used in the event the County is ever unable to make a payment. It is common for municipal COPs to include a debt reserve of 100% of the annual debt service payment. KNN indicated that one factor in the County’s ability to issue COPs with a lower debt service reserve was the County’s track record in building and maintaining General Fund reserves.
Staff was informed in late April that Standard & Poor’s had given the County’s COPs an AA rating, indicating a “very strong capacity to meet financial commitments.” That rating reflects an underlying General Obligation rating of AA+, close to the highest rating a local government can receive.
