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County staff: no borrowing needed in 2014; commissioners review PAYGO, debt capacity and Spring Ridge timing
Summary
Finance staff told commissioners the county likely will not need to issue bonds in 2014; the board reviewed PAYGO needs, debt capacity and the timing of Spring Ridge spending, and directed staff to continue conservative planning and update cash-flow timing.
St. Mary's County finance staff told commissioners at the May 20 budget work session that, based on project timing, the county now projects no need to borrow in fiscal 2014 and instead will plan borrowing for 2015 and later years.
CFO Missy M. Kramer reviewed a six‑year capital funding plan showing planned PAYGO (pay‑as‑you‑go) transfers and general obligation bond needs. She said the largest FY14 PAYGO item is Spring Ridge, and that shifting Spring Ridge and other timing changes reduced projected borrowing in 2014. The presentation showed total bond authority available and a five‑year borrow plan that keeps legal and policy measures conservative: debt as a percentage of assessable base projected below the 2% legal limit, and debt service as a percentage of the operating budget remaining well under typical policy thresholds.
Kramer said staff will continue cash‑flow analysis with the CIP group to identify quarter‑by‑quarter needs and to time any market borrowing so debt service begins in the year after proceeds are drawn. Commissioners discussed the use of PAYGO versus bonds, the impact of using impact fees for Duke Elementary School, and whether to shift additional projects to bonds. The finance office recommended using PAYGO where useful-life and project size make bond financing inefficient and to preserve bond capacity for larger projects.
Commissioners directed staff to update the CIP to reflect the modular buildings moved into FY2015 and the Board of Education relocatables into FY2014 and to return a rebalanced budget at the May 28 adoption meeting. Kramer also advised holding supplemental OPEB (other post‑employment benefits) contributions until January to preserve flexibility pending November tax results and final audits; commissioners agreed to revisit OPEB timing in January.
The presentation included numerical illustrations: debt authority and projected borrowing levels across FY2014–FY2019, PAYGO projections of roughly $1.0–1.2 million in later years under the plan, and debt-service percentages of the operating budget rising gradually but remaining well under the 2% legal debt limit.
No formal bond authorization occurred at the session; staff recommended continued conservative planning and to consider market timing later in the fiscal year.
