FY2016 CCDOA Financial Report as of 6302016.pdf - page 44

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Interest expense on the Department's outstanding bonds and interest rate swaps declined by $10.3 million, or 5.3
percent, to $183.0 million in FY 2016 from $193.3 million in FY 2015. This decline was due to a general decrease in
interest payments in accordance with scheduled bond payments and interest amortization. The Department made
all its required debt service payments in FY 2016, which included scheduled principal repayments of $68.1 million.
The Department continues to closely monitor and evaluate its debt portfolio.
With the implementation of GASB 72, the interest rate swaps determined to be investment derivative instruments
were required to be stated at fair value. As of June 30, 2016, these derivative instruments have a net balance of
$(17.2) on the Statements of Net Position. The information required to restate the interest rate swaps that were
hedging derivative instruments at fair value as of June 30, 2015, as required under GASB 72, was not available;
therefore, the investment interest rate swaps for FY 2015 are presented at their mark-to-market value and have a
net balance of $12.0 million on the Statements of Net Position. For FY 2016, the unrealized gain or loss on investments
in derivative instruments of $(29.2) million represents the change in these two values.
In FY 2016, the Department recognized $62.4 thousand in net gain from the disposition of capital assets. These
dispositions occurred in connection with normal asset turnover. The decline in net gain from disposition of capital
assets of $10.1 million from FY 2015 to FY 2016 was attributable to the sale of land parcels in FY 2015.
Discussion of FY 2015 Non-operating Revenues and Expenses
Interest income decreased during FY 2015 by 26.3 percent, from $7.6 million in FY 2014 to $5.6 million in FY 2015. This
decrease can be attributed to a decline in investment rates and the fair market value of investments held in the
County's pooled cash and to a decline in funds held by the Trustee. The average investment rate of return for the
County's pooled cash increased slightly from 0.81 percent in FY 2014 to 0.85 percent in FY 2015. The average
investment rate of return for the Trustee cash and cash investments was 0.41 percent in FY 2015 as compared to
0.85 percent in FY 2014.
Interest expense on the Department's outstanding bonds and interest rate swaps declined by $20.6 million, or 9.7
percent, to $193.3 million in FY 2015 from $213.9 million in FY 2014. Partially contributing to this decline was the full
termination of interest rate swap #12B and the partial termination of interest rate swap #14B, both of which
occurred in FY 2014. Prior to the terminations, these two swaps incurred $8.3 million of interest expense in FY 2014.
Also contributing to this decline was a general decrease in interest payments in accordance with scheduled bond
payments and interest amortization. The Department made all its required debt service payments in FY 2015, which
included scheduled principal repayments of $63.1 million. The Department continues to closely monitor and
evaluate its debt portfolio.
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