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Change in EPS Bond Capacity Projections
<br />December 11, 2008
<br />A full audit of the model uncovered an additional error in the calculation of the term of
<br />the bond on Table 16. The error resulted from a three year gap between the calculation
<br />the maximum bond term possible from the start of the URA and the actual bond term.
<br />For example, if the year of floncl issuance was actually 2016, our model assumed 2019
<br />and calculated a bond term of 12 years as opposed to the correct 15 year bond term. As
<br />a result of this error, the previous bond capacity calculation underestimated the
<br />maximum bond capacity.
<br />RESULTING CHANGES
<br />The net effect of the two errors presented in EPS' draft report is a 9.8 percent reduction
<br />in the projected bond capacity from the first issuance of property tax based bonds,
<br />$5,590,000 previously compared to $5,042,000. The draft and revised projections are
<br />displayed in Table 1 and T~ible 2, respectively. When comparing total bond proceeds
<br />from property tax revenue, the change represents a 1.3 percent reduction in bond
<br />proceeds between the draft and revised projections. The original estimate of total bond
<br />proceeds from property tax revenue alone was $8,740,000. With the modifications to the
<br />model, the revised estimate of total bond proceeds from property tax alone is $8,630,000.
<br />Revenue projections including ;sales tax increased as a result of the changes in bond term
<br />length. This represents a 2.:? percent increase between the draft and revised projections
<br />in the bond capacity from the first issuance of sales and property tax bonds. The revised
<br />projection of total proceeds from sales and property tax increased 4.4 percent.
<br />Table 1
<br />Draft Bond Capacity Estimate
<br /> Bond E>roc~eeds from 1st Issuance Total Proceeds
<br />Year of Issuance Pro~~erty Sales & Property Property Sales & Property
<br />2013' --- --- $9,100,000 $15,020,000
<br />2014 $3,110,000 $6,780,000 $9,100,000 $15,020,000
<br />2015 $5,940,000 $10,490,000 $9,220,000 $14,920,000
<br />2016 $5,720,000 $10,600,000 $8,670,000 $14,500,000
<br />2017 $6,770,000 $11,770,000 $8,640,000 $13,970,000
<br />2018 $6,410,000 $11,300,000 $8,070,000 $13,080,000
<br />2019 $6,600,000 $11,170,000 $7,780,000 $11,270,000
<br />Average (2014 - 2018) $5,590,000 $10,188,000 $8,740,000 $14,298,000
<br />~ Not estimated to result in large enough Fond Ixoceed to warrant issuance
<br />Source: Economic & Planning Systems
<br />H \1882Mwncville Ma~kel, FeecibllM. Pudlc FlrmclrplMOtleICV~8B20-BaIJ Proc~e0c by Vea~_toatm.acSna~t
<br />2 EPS Revised Final Report Memo.doc
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