City of Georgetown officials gave the City Council an annual briefing on the city’s debt program at a workshop on Jan. 14, 2025, outlining the types of debt the city uses, recent ratings and planned 2025 issuances.

The presentation, led by Nathan Parris, assistant finance director, explained how general obligation bonds, certificates of obligation and revenue bonds are used, summarized the city's debt portfolio and showed preliminary coverage and rating metrics that inform issuance timing and structure.

Parris said the city’s outstanding principal across all issuances is about $943,000,000 and described how different types of debt are matched to asset useful life and revenue sources. “We are now a AAA city, which is fantastic,” Parris said, referring to the general obligation rating. He told council staff and the city’s financial adviser are modeling anticipated sales and will return with specific recommendations before any sale.

Why it matters: the city’s decisions on the timing, amount and structure of borrowing affect property tax-supported debt service, utility rates and the timing of capital projects. Staff said the presentation informs later decisions on what to authorize and when to sell bonds.

Details from the briefing

- Types of debt: Parris explained that general obligation (GO) bonds generally require voter authorization and are typically used for road projects and other tax-backed capital; certificates of obligation (COs) require council approval and public notice and may be tax-supported or self-supporting; revenue bonds back utility projects and are repaid from utility rates. He described refunding bonds as a tool to refinance outstanding debt at lower cost when market conditions permit.

- Ratings and coverage: staff said the city recently obtained two revenue ratings and a GO rating. For general obligation debt the city reported a AAA rating; for revenue bonds Standard & Poor’s rated the city A+ with a positive outlook and Fitch rated revenue bonds AA‑minus. Parris said the council’s fiscal policy targets a combined electric and water debt coverage ratio of 1.5x; the bond covenant minimum is 1.35x. Preliminary, unaudited 2024 coverage was reported at 2.54x, and the 2025 budgeted coverage is 2.39x.

- Tax rate context: staff presented the current tax rate as 36.47¢ per $100 of assessed value and showed the recent breakdown: about 23.9¢ toward debt service and 12.5¢ toward operations and maintenance. Parris said staff aims to maintain stability in the city’s tax rate and that timing, growth and interest earnings are among the variables used in modeling.

- Portfolio and planned issuance: staff showed roughly $943 million in outstanding principal, with the largest portion in utility revenue bonds (primarily water and electric). Self-supporting enterprise and special fund obligations total about $43,000,000; enterprise debt (electric, water, wastewater, airports, solid waste) was reported at about $576,500,000. For 2025 staff said they plan to authorize approximately $59,000,000 in tax-supported debt (GOs/COs) and about $110,200,000 in electric/water/wastewater revenue bonds. Parris described the five‑year model as “subject to change” based on market conditions and project timing and said annual modeling shows the city can reasonably afford the planned program under current assumptions.

- Market outlook: Jennifer Ritter, the city’s financial adviser from Specialized Public Finance, said the conservative assumption in the models is for rates to rise about a quarter percentage point per year but that market rates may stabilize. “We generally project them to go up about a quarter point each year going forward in the future,” Ritter said.

Staff notes and next steps

Parris told council staff are not asking for action at the workshop but will return with more detailed modeling and formal sale recommendations later in the spring. He said the timeline anticipates closing and receiving proceeds in June 2025 for planned 2025 issuances. Staff also noted several previously authorized propositions tied to voter-approved packages (customer service center, recreation center, animal shelter, YMCA) that remain in the issuance schedule until fully sold.

Sources: Nathan Parris, assistant finance director; Jennifer Ritter, Specialized Public Finance; presentation materials provided to council.