FINANCIAL/MUNICIPAL ADVISORY SERVICES AND OTHER AREAS OF EXPERTISE
A significant element of the Hobbs Ong service offerings includes assisting our clients in accessing capital markets to obtain financing for their projects. Since the firm was established, Hobbs Ong has assisted clients in the issuance of nearly $30 billion in bonds. We work closely with our clients and tailor the financing/bond issues to the specific needs of the client. There are a variety of financing instruments we evaluate to determine which will best suit our clients’ needs. The following is a brief description of the options from which our clients can choose.
General Obligations are obligations secured by the full faith, credit and taxing power of the issuer.
Revenue Obligations are obligations secured only by a designated "special" fund, which consists of monies from a designated source not derived from ad valorem taxation. Examples of revenue streams that have been pledged in support of revenue obligations include airport system revenues, motor vehicle fuel tax, street and highway sales tax and the room tax.
Special Assessment Obligations
Special Assessment Obligations are securities payable from "special" assessments levied against property within a municipality that is "specially" benefited by installation of the improvements financed with the bonds. Most frequently these types of bonds are used, for example, on a street paving project or sidewalk project.
Medium-Term Obligations are a note or bonds that have a term of 10 years or less, but not a note or bond with a term of less than one year and that is payable in full from money appropriated for the same fiscal year that the obligation is incurred. Medium-Term Obligations are a note or bonds that have a term of 10 years or less, but not a note or bond with a term of less than one year and that is payable in full from money appropriated for the same fiscal year that the obligation is incurred.
Certificates of Participation
Certificates of Participation is an entitlement or share in the lease payments from a particular project, such as an installment purchase or lease purchase which are each a type of obligation that does not count as a debt that needs to be voter approved as long as the municipality's obligation to make payment of the purchase price under the installment purchase contract or lease are extinguished by a failure to appropriate money.
Commercial Paper Notes
Commercial Paper Notes are short-term debt instruments with a fixed maturity of 1 to 270 days.
Tax Increment and Redevelopment Obligations
Tax Increment and Redevelopment Obligations is a method to use future gains in taxes to subsidize current improvements. These obligations are generally issued as special obligations payable from taxes allocated to a redevelopment agency or a tax increment area. In 2005, the legislature authorized a different type of tax increment area, a “Tourism Improvement District”, which is supported by the sales tax increment in the district, rather than the property tax. These districts are created by cities or counties for tourism related purposes after the creating agency makes a finding that it expects that a preponderance of the new sales tax in the district will come from sales to non-Nevada tourists in the district. The district can only be created in areas where no retails sales have occurred for 120 days prior to the creation of the district, so are often created on vacant to be developed land. Once created, the creating government can issue sales tax increment (sometimes called “STAR”) bonds for the district if there is enough sales tax to support the bonds.
Economic or Industrial Development Revenue Bonds
Economic Development Revenue Bonds or Industrial Development Revenue Bonds are issued by cities, counties, or the State for private companies, including nonprofit and for profit companies. They are secured by the credit of the private company, not the municipality and are payable solely from monies furnished by the company. The municipality's name is on such bonds, however, typically in order to obtain the benefits of the federal tax exemption for municipal bonds.
The following table illustrates the expenditure categories for the nearly $30 billion in bonds for our Nevada clients for the period 1996 through December 2016.
Economic and Fiscal Impact Assessments
The effects of projects or of changes in policies or programs on the economy and population of an affected region or local area are of substantial interest to decision makers. Impact assessment specialists have categorized these effects, often termed socioeconomic impacts, in a number of ways; but such classifications almost always include economic impacts (including changes in local employment, business activity, earnings, and income) and fiscal impacts (changes in revenues and costs of local government jurisdictions).
Economic Impact Assessment
The purpose of an economic impact assessment is to estimate the changes in employment, income, and levels of business activity (typically measured by gross receipts or value added) that may result from a proposed project or program. As with the assessment of other categories of impacts, the general approach involves projecting the levels of economic activity that would be expected to prevail in the study area with, and alternatively without, the project. The differences between the two projections measures the impact of the project. The economic effects of a project or program can be divided into direct effects (initial expenditures, persons directly employed, etc.) and secondary effects. To estimate the secondary effects of a project, most analysts employ input-output models, which quantify the linkages among sectors of the area economy. Others use employment or income multipliers derived by a variety of statistical methods.
Fiscal Impact Assessment
The purpose of fiscal impact assessment is to project the costs and revenues of governmental units that are likely to occur as a result of a development, policy, or program. The governmental units of primary interest generally are those local jurisdictions that may experience substantial changes in population and/or service demands as a result of the project. The fiscal implications of a new project are determined by a number of factors, including project characteristics (e.g., the magnitude of investment, the size and scheduling of the workforce) and site area characteristics (e.g., state and local tax structure, the capacity of existing service delivery systems) and by the nature of the economic and demographic effects resulting from the project. Furthermore, because the fiscal impacts of a project are of considerable interest to local officials and their constituents and to developers, the fiscal impact assessment should be designed to produce information in a form that is user-friendly to policymakers. Specific techniques employed to estimate the fiscal impacts of projects or programs differ somewhat in the details of the estimation procedure, and assessments differ substantially in the scope of costs and revenues addressed. In general, the revenues of local governments can be broadly classified as own-source revenues (i.e., taxes and charges assessed and collected directly by local jurisdictions) and intergovernmental transfers (i.e., funds received from state and federal levels). Own-source revenues can be further classified according to their primary determinants into those based on property valuation, those based on income or sales, those based on the level of production of some industry, and those based largely on changes in population. The techniques which are most appropriate for estimating revenues from these sources will differ depending on the revenue source. A number of approaches can be employed in estimating the community service costs associated with growth. Cost estimation methods can be categorized into average cost and marginal cost approaches. The average cost approaches include the per capita expenditure method, the service standards method, and the use of cost functions derived from statistical analysis. Marginal cost approaches the case study approach, comparable city analysis, and economic-engineering methods.
Source: Economic Assessment
See Sports & Entertainment for additional specialized services
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