DEBT INFORMATION

• The City will not use long-term borrowing to finance current operations.
• Capital projects, financed through bond proceeds, will be financed for a period not to exceed the useful life of the project.
• Whenever possible, enterprise debt will be self-supporting. Regardless of the type of debt issued, the City will establish a one-year reserve for all self- supporting debt.
• The City will seek to maintain level debt service payments over the duration of an issue and consider the level of debt obligations across funding sources when recommending types and amounts of debt instruments.
• The City will keep the final maturity of general obligation bonds at or below 20 years, with the exception of water supply and land acquisition that will be limited to 30 years.
• The City will maintain a debt coverage ratio, i.e. net revenue to debt service of at least 125% for every debt issue.
• The State of Oregon limits non-self-supporting obligation debt to three percent of the real market value of all taxable property within the City boundaries.
• The City will seek to maintain and improve its bond rating to minimize borrowing costs and to ensure its access to credit markets.
• The City will maintain good communications with bond rating agencies about its financial condition.

The government has three promissory note agreements for financing:

• Garfield Park – In 2016 the City borrowed $870,000 for upgrade for the water park within Garfield Park. The debt is funded by park’s share of food and beverage tax.
• Biscoe School – In 2018 the City agreed to purchase Biscoe School from the Ashland School District for $1,540,000 at zero percent interest. The debt is paid by lease agreement.
• Biscoe Park – In 2018 the City agreed to purchase Biscoe Park from the Ashland School District for $500,000 at zero percent interest. The debt is paid by park’s share of food and beverage tax.

Government Activities:

• The citizens of Ashland authorized by vote in November 1999 for the construction of Fire Station #1. In 2005, the Fire Station #1 bond was issued as a refunding bond in 2005 resulting in a savings of at least 3%. This debt is being paid by property tax.
• The citizens of Ashland authorized by vote in May 2011 for the construction of Fire Station #2. This debt is being paid by property tax.
• In 2013, a new issue for AFN Debt as Full Faith and credit bonds was a result of refinancing a previous debt for AFN. The previous debt was at 5.328 to 2.80 interest. This debt is paid by rates.
• In 2013 a new debt of $ 4,765,000 as Full Faith and credit bonds was issued for 15 years. The purpose for these bonds are projects in the Street & Parks ($1,520,000) and Water, Wastewater and Stormwater Funds ($3,245,000). This debt is paid by user fees.

Business-Type Activities:

• In 2009, the City financed construction project of $1,000,000 for the Water and Wastewater Fund. This debt is paid by user fees.
• In 2010, the City refinanced the loan for the Wastewater treatment plant project. The refinancing generated approximately $1.34 million in net present value savings on the total debt. This debt is paid by Food and Beverage Tax.
• In 2013, the City refunded a portion of the 2003 Water Revenue Bonds in the amount of $1,580,000. The refund resulted in $162,000 gross savings, equivalent to $151,000 in net present value. This debt is paid by user fees.
• In 2013, a new debt of $ 4,765,000 as Full Faith and credit bonds was issued for 15 years. The purpose of this for these bonds are projects in the Street & Parks ($1,520,000) and Water, Wastewater and Stormwater Funds ($3,245,000). This debt is paid by user fees.

The government also issues bonds on which the government pledges income derived from the acquired or constructed assets to pay debt service.

• Clean Renewable Energy Bonds, authorized by U.S. Treasury, is for construction of a renewable resource photovoltaic system to generate “green power” for the city’s electrical system. Electric rate revenue is pledged to pay the related debt service.
• IFA #S14005 is complete as of this fiscal year, this loan was for three projects; TAP, Terrace St Pump Station and Park Estates Pump Station. This loan received $950,000 in principal forgiveness. Water revenue was pledged.
• The DEQ #R11751 loan is for the wastewater treatment plant for the membrane system upgrade in the amount of $1,645,280. This project is complete and the City is now paying on this loan.
• The Medford Water Commission loan is for the City’s portion of receiving services for TAP. This is being paid by SDC’s Revenue.
• IFA #S16021 is for the new water treatment plant. Total drawdown for this fiscal year was $1,103,851 bringing the loan to $2,549,591. No payments will be made until the project is complete. This loan is for a total of $14,811,865 with $1,030,000 in principal forgiveness.
• DEQ #R11753 is for the Ashland Canal Piping project. This project was cancelled. The drawdown of $231,697 was returned.
• DEQ #R11754 is for the Riparian Restoration and Outfall Relocation project. This loan is for a total of $4,829,000. To date, $817,588 has be received as a drawdown.

The City of Ashland has signed agreements in the amount of $23,426,065 as June 30, 2020. Of that amount, the City has drawn down a total of $1,226,580.