WASHINGTON COUNTY APPROVED BUDGET
FY 2026
Changes in Economic Assumptions
In addition to analyzing the impact of the capital program on debt ratios and capacity, to remain prudent, the County analyzes the impact of changing economic conditions on the recommended maximum level of annual debt issuance. Three economic scenarios are created: ‘Base’ case reflects future economic conditions based on historical and projected trends. ‘Best’ case reflects the best economic conditions based on historical high trends. ‘Worst’ case reflects the worst economic conditions based on historical low trends.
The assumptions used in determining debt capacity in each scenario are based on historical trends, judgment, and projected economic conditions. Each case assumption is applied to the 20-year projection.
The ‘Base’ case projects the most affordable program. The ‘Best’ and ‘Worst’ case scenarios assume major changes in economic conditions for the 20-year period and could require adjustments to the Capital Improvement Plan and the debt issuance plan. However , planning to issue debt on the ‘Best’ case scenario every year is not advisable because some bonding capacity should be kept in reserve in anticipation of sudden unexpected economic downturns.
Final Analysis
There are multiple factors that can affect the County’s affordability to incur future indebtedness, including the County’s economy and the availability of adequate financial resources. For that reason, the financial ratios and analysis used, take into account the entire County financial condition, as other factors can effectively deteriorate the County’s financial posture and affect its ability to incur debt. In addition, these managerial and unpredictable scenarios are considered and tested as part of the analysis, so that the known effects of ‘Worst’ and ‘Best’ case results can be examined. It is important for the County to monitor its financial condition, the economic trends, and debt affordability results on a regular basis, in order to continue to evalu ate the County’s credit position to determine whether annual issuance of debt should be adjusted to reflect a changing financial outlook for the County under altered circumstances. The estimated maximum debt capacity is not intended to be an absolute limit or a recommendation on the amount of debt that can be incurred. It should be used as a guide for better long-term financial planning and improving capital budgeting. Debt capacity estimates can assist long-term capital planning by showing the resources available to fund needed infrastructure, schools, and other capital needs. The estimates can then be used to allocate restricted resources to priority projects. The County’s annual de bt review analyzes the projected debt issuances to assure that long-term financial stability will remain intact.
2026 Budget Document
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