Bond and Override Election for

November 2019

School Community Forums

Fall, 2019

Today’s Discussion

A. $100 Million Bond – Question 1

1. The Need

2. Taxpayer Impact

3. Sustainable Bond Program Model

B. 15% M&O Override – Question 2

1. Override History

2. The Need

3. Taxpayer Impact & Comparison to Peers2

Bond/Override Information

Sessions

3

• The purpose of this informational session is to provide the public with factual and

neutral information regarding the Bond Election and M&O Override Election

• Fact Sheets that provide information on the election are available on the District’s

website

• Arizona law requires District officials to respond to questions using factual and neutral

information only

• District officials may not respond to questions with information designed to influence

the outcome of the election

• This information session is not intended to be a debate discussing the pros and cons

of either the Bond or Override Election

Important Dates

4

• Override/Bond Information Meetings: September 17 – Highland High School September 19 - Mesquite High School September 26 - Gilbert High School October 3 - Desert Ridge High School October 17 - Campo Verde High School

• OCTOBER 7 - Deadline for voter registration

• OCTOBER 30 - Last date to mark & mail in your ballot

What is a Bond?

5

• Voter approval provides the authority to the District to sell

General Obligation (G.O.) Bonds providing funds for capital

expenditures

• Voter approval allows for a secondary tax rate increase to

generate revenues to pay the annual debt service on the

G.O. Bonds.

• The State of Arizona has not funded capital to the statutory

limit over the past six years resulting in a cumulative funding

loss for Gilbert Public Schools of over $60 M.

What is an Override?

6

• Voter approval results in local taxpayers directing additional

monies to support local school systems by increasing the

Maintenance and Operations Budget - (Statutory

Reference: ARS 15-481)

• These additional monies supplement the state formula that

sets funding levels per student

• Funded through and increase in the secondary property tax

• Limited up to 15%

Bond vs Override

7

✓People (Salaries/Benefits)

✓Academic programs

✓Staff training

✓Contracted Services

Bonds pay for capitalexpenses such as:

M & O Override pays foroperational expenses such as:

✓Buildings

✓Renovations

✓Buses

✓Technology

✓Equipment

$100 M Bond Request

The Need

District Priorities for the Bond

A. Enhance Physical Safety and Security

B. Provide Safe Curricular & Extra-Curricular Programming

Spaces – Performing Arts, Stadiums, Athletic Venues

C. Reinvest in Facilities & Classroom Spaces Considering Cost Saving

Opportunities (Energy Controls, LED Lighting)

D. Upgrade/Enhance Technology Equipment to Include AV to Meet

Academic Program Requirements

E. Continue Transportation Vehicle & Equipment Replacements 9

2019 Preliminary Bond Projected

Spend Estimates (in Millions)

10

Security Camera System & Other Security Components*

$ 10.0 M

Performing Arts/Athletic Venue

Upgrades, Additions

$ 5.6 M

Facility Reinvestment

$61.0 M

Technology Infrastructure &

Equipment*

$ 19.4 M

Student Transportation Vehicles/Equipment*

$ 4.0 M

TOTAL = $100 M

Facility Reinvestment &

Upgrades

Budget Item Cost

Enhance and Protect School Learning Environments: Roofs, HVAC, Athletic &

Performing Arts Venues, Flooring, Restrooms$ 46.38 M

Enhance Health & Physical Safety: External Fencing, Bus Lane Improvements,

Kitchen Serving Line Replacement14.60 M

Add or Upgrade Performing Arts/Athletic Facilities at GPS High Schools 5.60 M

TOTAL $ 66.58 M

11

Technology Plan Details

Budget Item Cost

Device and Technology Infrastructure Upgrades to Include Switches, Routers,

Wiring, computer equipment and WAPs*10.00 M

Classroom Audio Visual Configuration & Implementation Project 9.42 M

TOTAL $ 19.42 M

* Wireless Access Points

12

$100 M Bond

Tax Rate Impact

No Increase to Debt Service

Tax Rate

14

The long term strategy for meeting Gilbert Public Schools ongoing

facility and equipment capital reinvestment includes the concept of

filling in debt service with new bond sales as existing debt is paid off.

The result is a sustainable model providing resources when they are

needed without increasing the tax payer cost.

FY 2019, Total Bond Debt Service Tax Rate = $ 1.106

FY 2023, Total Bond Debt Service Tax Rate = $ 1.106*

Average Tax Rate Associated with $100 M in Bonds =

$0.4553/($100 of AV)

*Planned tax rate

GILBERT UNIFIED SCHOOL DISTRICT NO. 41 OF MARICOPA COUNTY, ARIZONA | 15

15% Override & $100 M Bond (0% AV Growth)

$-

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$-

$5,000,000

$10,000,000

$15,000,000

$20,000,000

$25,000,000

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035

Gilbert Public SchoolsActual and Projected Debt Service and Tax Rates

(With $100M Bond Election and 15% M&O Override;Assumes 0% Growth Rate for Assessed Value)

Debt Service as of 7/1/2019 Project 2015, Series D

Project of 2019, Series A Project of 2019, Series B

Secondary Tax Rate for DS Secondary Tax Rate for DS & Override

15% M&O Override

The Need

M&O Override History

$0

$5,000,000

$10,000,000

$15,000,000

$20,000,000

$25,000,000

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

• Current 10% Override

fully funded through FY

2021

• Generates about $ 20 M

annually

17

Why Increase Override to 15%

- District Priorities

A. Reduce Class Size

B. Attract and Retain the Highest Quality Teachers and

Staff

C. Increase Social-Emotional Supports for GPS Students

18

Costs to Reduce Class Size

19

For every one student decrease in class size District-wide,

the cost is about $1.2 M. Total allocation to be $2.0 M.

FY 2020 Average Teacher Compensation = $78,500 (Fully Loaded Cost - Includes Payroll Benefits and Health Insurance Costs)

$2.0 M provides about 25 additional teachers.

These 25 additional teachers will be deployed where needed

most.

Costs to Add Social Emotional

Supports for Students

Budget Item Cost*

Add Full-time Social Worker at Five Junior High Schools $ 0.393 M

Add Full-time Social Worker at Nine Elementary Schools 0.707 M

Add Full-time Mental Health Counselor at 7 High Schools (Canyon Valley & GCA) 0.550 M

Total Ongoing Cost for Social/Emotional Support for Students $ 1.650 M

* All Cost Estimates are Based on an Average Compensation

of $78,500 for Certified Staff Inclusive of Benefits20

Additional 5% Override

Budget $10.52 M

Budget Item Cost

Allocation for Class Size Reduction $ 2.00 M

Attract & Retain the Highest Quality Teachers and Staff 6.87 M

Increase Social Emotional Supports for GPS Students K-12 1.65 M

TOTAL Additional 5% Override Needs $ 10.52 M

The existing M&O Override will continue to maintain class sizes, maintain existing

programs at schools and maintain existing levels of compensation21

10% Override to 15% Override

22

FY 2019

10% Override Spend

FY 2021

Proposed Additional 5% Override Spend

$ 10.52 M$ 19.95 M

15% Override/Budget Increase = $30.47 M

Competitive Compensation

$ 15.30 M

Maintain or Reduce Class Size

$ 3.20 M

Delivers High Quality Student Academic

Programming

$ 0.073 M

Affordable Student Access to Visual/Performing Arts and Athletics

$ 0.69 M

Programs Supporting Career and College

Readiness

$ 0.69 M

Attract and Retain the Highest Quality

Teachers and Staff

$ 6.87 MIncrease Social Emotional

Supports K-12

$ 1.65 M

Reduce Class Size

$ 2.00 M

FY 2018 Per Pupil Revenues(From Auditor General’s Spending Report)

23

Funded $1,095

less than peer

districts and

$1,151 less than

State average

Spending in the Classroom(Year over Year Comparison)

2018 graph based upon original AFR submitted in October of 2018

Information obtained from the Auditor General School District Spending Report

20172018

2018

24

15% Override

Tax Rate Impact

Residential Tax Increase with

15% Override in Place

26

Residential

Limited

Property Value

(LPV)

Assessed

Value

(10% of LPV)

10%

Override

15%

Override

Annual

Difference

Monthly

Difference

$ 100,000 $ 10,000 $ 98.97 $146.46 $ 47.49 $ 4.00

*206,125 20,613 204.00 301.89 97.89 8.16

300,000 30,000 296.91 439.38 142.47 11.87

*Average LPV Home in Gilbert Public Schools Boundaries has an

Average Market Value of about $350,000.

*Source: Draft Ballot Informational Pamphlet

Commercial Tax Increase with

15% Override in Place

27

Commercial

Limited

Property Value

(LPV)

Assessed

Value

(18% of

LPV)

10%

Override

15%

Override

Annual

Difference

Monthly

Difference

$ 843,896* $ 151,901 $ 1,503.4 $ 2,224.8 $ 721.4 $ 60.1

*Average Commercial LPV within Gilbert Public Schools Boundaries

Source: Draft Ballot Informational Pamphlet

Est. Tax Rates with 15% Override

& $100 M Bond Thru 2028

28

Total

Aggregate

Tax Secondary

Year Tax Rate

2019 $ 2.10

2020 1.97

2021 2.59

2022 2.59

2023 2.39

2024 2.39

2025 2.39

2026 2.39

2027 2.39

2028 2.39

Tax Rate History & Other

Considerations

Gilbert Public Schools

Tax Rate History

30

0.000

1.000

2.000

3.000

4.000

5.000

6.000

7.000

8.000

FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020

Primary Secondary TOTAL

Gilbert Public Schools

Tax Rate History

31

Tax Rate

Elements

FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021*

Primary 5.260 4.862 4.306 4.010 3.866 ??

Secondary 1.200 2.076 2.118 2.100 2.037 2.517

TOTAL 6.460 6.938 6.424 6.110 5.903

Qualifying 4.195 4.159 4.047 3.936 3.791 ??

* First year 15% override is in place.

FY 2019 Comparison of GPS

Tax Rate to Peer Districts

32

School District Primary

Tax Rate

Secondary

Tax Rate

Total

Tax Rate

Queen Creek USD #95 4.228 3.386 7.614

Mesa USD #4 4.099 3.127 7.216

Higley USD #60 3.995 3.216 7.211

Chandler USD #80 4.012 2.653 6.665

Gilbert USD #41 4.010 2.095 6.105

FY 2019 Comparison of GPS

Tax Rate to Peer Districts

33

4.228 4.099 3.995 4.012 4.01

3.3863.127 3.216

2.653

2.095

7.614 7.216 7.2116.665

6.105

0

1

2

3

4

5

6

7

8

Queen Creek USD#95

Mesa USD #4 Higley USD #60 Chandler USD #80 Gilbert USD #41

Primary Tax Rate Secondary Tax Rate Total Tax Rate