1. Georgia Fiscal Management Council
Annual Training Conference
October 2017
Georgia State Financing and Investment Commission

2. Our Role
General Bond Info
Compliance

4. HI AK FL MI ME NY PA VA WV OH IN IL WI NC TN AR MO GA SC KY AL LA MS IA MN OK TX NM KS NE SD ND WY MT CO ID UT AZ NV OR WA CA VT NH MA NJ DE MD CT RI

5. 12 Triple-A Rated States by all 3 Rating AgenciesHI AK FL MI ME NY PA VA WV OH IN IL WI NC TN AR MO GA SC KY AL LA MS IA MN OK TX NM KS NE SD ND WY MT CO ID UT AZ NV OR WA CA VT NH MA NJ DE MD CT RI
12 Triple-A Rated States by all 3 Rating Agencies
Issuer Credit Rating (No Outstanding G.O. Debt): IN, IA, SD, TX

6. GEORGIA STATE FINANCING AND INVESTMENT COMMISSION
Construction Division
Financing & Investment Division
Constitutional Amendment in 1972
GEORGIA STATE FINANCING AND INVESTMENT COMMISSION
“GSFIC”

7. CAPITAL PROJECT NEEDS
WHY BONDS?

8. Annual Debt Service Payment
DEBT SERVICE RATIO
Annual Debt Service Payment
10%
Prior Year’s Revenues

9. 5.9%
8.1%
5.5%

10. $767,565,000 General Obligation Bonds 2017A
$1,389,645,000
State of Georgia
$767,565,000 General Obligation Bonds 2017A
$273,450,000 General Obligation Bonds 2017B (Federally Taxable)
$348,630,000 General Obligation Refunding Bonds 2017C

11.
373383
373384
373385

12. WHAT IS THE PROCESS? APPROPRIATIONS BILL GOVERNOR’S BUDGET REPORT
Agency
Strategic Plan
CAPITAL FUNDING NEEDS
BUDGET DISCUSSIONS

13. Section 50 General Obligation Debt Sinking Fund
FY 2018 Appropriations Bill
University System of Georgia, Board of Regents
BOND: Georgia Gwinnett College: $11,500,000 in principal for 20 years at 5.77%: Fund construction of Phase IV addition to Academic Building C, Georgia Gwinnett College, Lawrenceville, Gwinnett County.
From State General Funds, $984,400 is specifically appropriated for the purpose of financing projects and facilities for the Board of Regents of the University System of Georgia by means of the acquisition, construction, development, extension, enlargement, or improvement of land, waters, property, highways, buildings, structures, equipment or facilities, both real and personal, necessary or useful in connection therewith, through the issuance of not more than $11,500,000 in principal amount of General Obligation Debt, the instruments of which shall have maturities not in excess of two hundred and forty months.
This slide gives an example of a bond authorization.
We look to 2 documents – the appropriations or budget bill and the tracking document.
The appropriations language often states a general purpose whereas the tracking document is more specific.
Principal amount is the maximum project amount. There are those unfortunate times when bids come in over this maximum project amount which requires scope modification or delay of project until additional funding is acquired.
Maximum debt service amount – this amount is important to us because it translates into a maximum interest rate that we are authorized to fund the project.
The state agency - the recipient of the bond proceeds
The maximum term of the bonds. Generally the state sells 5-year and 20-year bonds.
And finally – the purpose of the authorization. As shared earlier – the appropriations language is often more general which gives us flexibility to use the bond proceeds for various purposes without requiring additional legislative approvals.
In this example the $52 million is to be used for facility major improvements and renovations. If the Board of Regents wanted to use some of this money to purpose property they would need to request a redirection of bond proceeds – which I’m sure you’re all familiar with; we’ll go into more detail later in this presentation.

14. Fiscal Year 2018 Appropriations Bill
Agency Type
Amount Authorized
Percent
Higher Education
$ 395,025,000
34%
K-12 Education
252,325,000
22%
Public Safety
131,230,000
11%
Economic Development and Water/Sewer
111,850,000
10%
Transportation
110,020,000 9%
Health Related Agencies
18,210,000 2%
Other
147,555,000
13%
Total Authorizations
$ 1,166,215,000

15. New Vertical Construction
Fiscal Year 2018 Appropriations Bill
Bridges – 9% - $100MM
Remaining – 6% - $72MM
IT Systems – 3% - $31MM
Equipment – 2% - $26MM
Rail Projects – 1% - $8MM
Land Acquisition – 0.4% - $5MM
Transit – 0.2% - $2MM
Grants
22%
$256MM
New Vertical Construction
39%
$460MM
MRR
24%
$278MM
TOTAL: $1.166 BILLION

16. WHAT CAN BE FUNDED WITH BOND PROCEEDS?
STATE LAW REQUIREMENTS

17. WHAT CAN BE FUNDED WITH BOND PROCEEDS?
STATE LAW REQUIREMENTS
PROPERTY OF THE STATE

18. WHAT CAN BE FUNDED WITH BOND PROCEEDS?
STATE LAW REQUIREMENTS
PROPERTY OF THE STATE
CAPITAL ASSET
In general, an outlay must be capitalizable to be reimbursed from bond proceeds, but not every capitalizable outlay will be approved for reimbursement.

19. WHAT CAN BE FUNDED WITH BOND PROCEEDS?
STATE LAW REQUIREMENTS
PROPERTY OF THE STATE
CAPITAL ASSET
USEFUL LIFE
In general, an outlay must be capitalizable to be reimbursed from bond proceeds, but not every capitalizable outlay will be approved for reimbursement.
Operational expenditures may not be paid from bond proceeds.

20. Non-Eligible Operational Expenditures
Eligible Projects
Non-Eligible Operational Expenditures
Owned by the State
Capital Asset
Useful Life
Personal Services
Land/Property Acquisitions
Lease Payments
Land Improvements
Disposable Items
Construction of new buildings
Office Supplies
Major Renovations of existing buildings
Maintenance Agreements for copiers/computers
Professional services related to construction/renovations
Annual License Agreements for software
When in doubt – PLEASE ASK
(Sooner is better than later)

21. TAX-EXEMPT Vs. TAXABLE?

22. TAX-EXEMPT Vs. TAXABLE?
Project Spend-Down

23. 85% 100% 5% Project Spend-Down Expensed Only TAX-EXEMPT Vs. TAXABLE?
6 Months 5%
Encumbered
3 Years
85%
5 Years
100%
Expensed Only

24. 85% 100% 5% Project Spend-Down Use of Project/Facility Expensed Only
TAX-EXEMPT Vs. TAXABLE?
Project Spend-Down
Use of Project/Facility
6 Months 5%
Encumbered
3 Years
85%
5 Years
100%
Expensed Only

25. Notify GSFIC as early as possible in the planning process
PRIVATE BUSINESS USE
Lease of space in the facility
Management or Service Contract
Research Contracts
Use of space by the Federal Government
Naming rights
Notify GSFIC as early as possible in the planning process

26. BOND ISSUANCE PROCESS BOND SALE Project List Project Requests
OPB and GSFIC Approval
Project Requests
Agency submissions and certifications
eBonds System
Bond Authorizations
After the passage of an appropriations bill, bond authorizations are entered in GSFIC’s eBonds system. This provides data for agencies to help submit what projects they want funded in the next bond sale. We work with GSFIC and OPB to determine which projects to approve for the sale and then our Finance team puts together a bond sale.
Because of the state’s high credit ratings we are able to sell our bonds competitively. Bids are received through an electronic platform and awarded on an all or none basis. Members of the Commission meet to approve the bids and provide the official award. This usually happens the morning following the day bids have been received.

28. Gsfic.georgia.gov

29. QUESTIONS?