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Wasco Union High School District - Page 1 © 2016 Government Financial Strategies
CLICK TO EDIT MASTER TITLE STYLE
Government Financial Strategies
Presented by Lori Raineri April 14, 2016
Wasco Union High School District
Bond Process and Opportunity for November 2016 Measure
Presentation materials provided for distribution at the meeting. Please see meeting record for verbal commentary and discussion.
Wasco Union High School District - Page 2 © 2016 Government Financial Strategies
Agenda
u Timeline and Process for Potential of New Bond Measure
u Pro-Forma New Measure Financial Plan
Wasco Union High School District - Page 3 © 2016 Government Financial Strategies
G.O. Bond Tax Rates
u Bond tax rate ≈ debt service ÷ assessed value u Each property in the District pays its pro rata share, based
on its individual assessed value (not market value)
Wasco Union High School District - Page 4 © 2016 Government Financial Strategies
Timeline and Process General Obligation Bond Measure Process Diagram
SHF 2/27/15
!
Evaluation of
Voter’s Opinions: - Analytical,
Independent Survey - Hired Through RFP - Using Data from Both the Facilities
Needs and GO Bond Plan
Election
Date
GO Bond Facilities Project List
Evaluation of Facilities Needs: Resulting Document Reflects
District’s Philosophy (ranging from list created by staff and community with cost estimates to a Facilities
Master Plan)
Public Engagement Process to Be Determined
Development of a Bond Financing Plan:
Understanding of Taxing and Bonding Capacity and Assumptions
GO Bond Measure Ballot
Language
Governing Board Decides Whether
to Call for GO Bond Election
Overview of Process for a General Obligation Bond Measure
Wasco Union High School District - Page 5 © 2016 Government Financial Strategies
Timeline and Process General Obligation Bond Measure Process Diagram
SHF 2/27/15
!
Evaluation of
Voter’s Opinions: - Analytical,
Independent Survey - Hired Through RFP - Using Data from Both the Facilities
Needs and GO Bond Plan
Election
Date
GO Bond Facilities Project List
Evaluation of Facilities Needs: Resulting Document Reflects
District’s Philosophy (ranging from list created by staff and community with cost estimates to a Facilities
Master Plan)
Public Engagement Process to Be Determined
Development of a Bond Financing Plan:
Understanding of Taxing and Bonding Capacity and Assumptions
GO Bond Measure Ballot
Language
Governing Board Decides Whether
to Call for GO Bond Election
Overview of Process for a General Obligation Bond Measure
Wasco Union High School District - Page 6 © 2016 Government Financial Strategies
Evaluation of Facilities Needs
u Facilities plan should guide facilities decisions u Some items to consider:
▶ Growth and/or modernization needs ▶ Community input ▶ Data needed ▶ Potential need for external assistance ▶ Range of results from a simple needs analysis to
facilities master plan
✔ Most appropriate process and result depends on district
Wasco Union High School District - Page 7 © 2016 Government Financial Strategies
Development of Bond Financing Plan
u Elements of Plan ▶ Tax Base Analysis ● Historical and projected assessed value
▶ Bonding capacity (maximum bonds outstanding) ▶ Taxing capacity (maximum projected tax levy) ▶ Interest rate assumptions ▶ Facilities funding cash flow needs ▶ 3-year Expenditure Reasonable Expectations Test
✔ Sound pre-election planning maximizes chances of successful post-election implementation.
Wasco Union High School District - Page 8 © 2016 Government Financial Strategies
Timeline and Process for New Measure
General Obligation Bond Measure Process Diagram
SHF 2/27/15
!
Evaluation of
Voter’s Opinions: - Analytical,
Independent Survey - Hired Through RFP - Using Data from Both the Facilities
Needs and GO Bond Plan
Election
Date
GO Bond Facilities Project List
Evaluation of Facilities Needs: Resulting Document Reflects
District’s Philosophy (ranging from list created by staff and community with cost estimates to a Facilities
Master Plan)
Public Engagement Process to Be Determined
Development of a Bond Financing Plan:
Understanding of Taxing and Bonding Capacity and Assumptions
GO Bond Measure Ballot
Language
Governing Board Decides Whether
to Call for GO Bond Election
Overview of Process for a General Obligation Bond Measure
✔ The facilities needs and bond financing plan are two inputs into the public opinion survey, which then inform the project list and ballot language.
✔ The survey is scientific, and therefore a reliable way to get public input.
Wasco Union High School District - Page 9 © 2016 Government Financial Strategies
Public Opinion Survey
u A professional independent public opinion survey may be conducted to determine: ▶ Whether a measure could be successful ▶ Elements of a measure crucial for success
● Include facilities, bond amount and messaging ▶ Recommended election date
u Should employ scientific based research methods u Survey likely voters
✔ Recommend selecting survey firm through an RFP/RFQ
process
Wasco Union High School District - Page 10 © 2016 Government Financial Strategies
Ballot Language, Project List, Tax Rate Statement, and Ballot Arguments
u Drafted by bond counsel with input from District, public opinion survey firm and financial advisor
u Board Resolution and Ballot Statement ▶ Education Code 5320 - 5329 ▶ Elections Code Section 13247 dictates 75 word limit
u Project List ▶ 55% voter approval measure accountability feature as per
CA Constitution Article VIII A and Education Code 15264 - 15288
u Tax Rate Statement ▶ Elections Code 9400 et seq.
u Ballot Arguments ▶ Elections Code 9500 et seq.
Wasco Union High School District - Page 11 © 2016 Government Financial Strategies
Timeline and Process for New Measure General Obligation Bond Measure Process Diagram
SHF 2/27/15
!
Evaluation of
Voter’s Opinions: - Analytical,
Independent Survey - Hired Through RFP - Using Data from Both the Facilities
Needs and GO Bond Plan
Election
Date
GO Bond Facilities Project List
Evaluation of Facilities Needs: Resulting Document Reflects
District’s Philosophy (ranging from list created by staff and community with cost estimates to a Facilities
Master Plan)
Public Engagement Process to Be Determined
Development of a Bond Financing Plan:
Understanding of Taxing and Bonding Capacity and Assumptions
GO Bond Measure Ballot
Language
Governing Board Decides Whether
to Call for GO Bond Election
Overview of Process for a General Obligation Bond Measure
Wasco Union High School District - Page 12 © 2016 Government Financial Strategies
u The District is allowed to and should engage in sharing information with and receiving input from the public ▶ Public information, not campaigning ▶ Bond counsel will provide guidance
u Some items to think about: ▶ What does the public know about the condition and
suitability of the facilities? ▶ Does the public know about the District and how finances are
managed? ▶ Does the public know how good schools improve property
values? ▶ How do our traditional constituencies (students, parents,
staff) overlap with constituencies for bond measures (voters and property owners)?
Public Information and Engagement
Wasco Union High School District - Page 13 © 2016 Government Financial Strategies
A School Bond is a Community Endeavor
Wasco Union High School District - Page 14 © 2016 Government Financial Strategies
Takeaways From Recent Bond Measures
Elk Grove Unified School District
Election Analysis v2.xlsx (Table) 11/13/15 KW Page 1 of 1
California School Revenue Measures
Total % Pass Total % Pass Total % PassSchool Bond 55% 32 78% 92 92% 20 75%School Bond 2/3 14 50% 3 67% 0 ---School Parcel Tax 2/3 10 50% 21 81% 9 67%
Total % Pass Total % Pass Total % PassSchool Bond 55% 63 75% 34 74% 105 86%School Bond 2/3 0 --- 0 --- 1 100%School Parcel Tax 2/3 18 11% 13 69% 25 64%
Total % Pass Total % Pass Total % PassSchool Bond 55% 43 77% 112 81% 501 82%School Bond 2/3 1 100% 1 0% 20 55%School Parcel Tax 2/3 5 100% 8 100% 109 62%
Note: per California Local Government Finance Almanac (CaliforniaCityFinance.com).
Jun. 2014 Nov. 2014
Nov. 2012
Jun. 2008 Nov. 2008 Jun. 2010
Nov. 2010 Jun. 2012
Combined Total
Wasco Union High School District - Page 15 © 2016 Government Financial Strategies
Potential New Measure Financial Plan – Legal Constraints
u Taxing Capacity: limit on maximum projected tax levies ▶ For each 55% voter approval measure:
● $30 per $100,000 of assessed value for union districts – Education Code 15268✔
● $60 per $100,000 of assessed value for unified districts – Education Code 15270(a)
u Bonding Capacity: limit on amount of oustanding bonds ▶ For all measures combined
● 1.25% of total assessed value for union districts – Education Code 15268✔
● 2.5% of total assessed value for unified districts – Education Code 15270(a)
Wasco Union High School District - Page 16 © 2016 Government Financial Strategies
Pro Forma Max. 55% G.O. Bond Plan Scenarios
u No Action relative to Measure C u No Refinancing Now u No Issuance of Additional Measure C Bonds
u Refinancing Now and Additional Measure C Bonds Issued
✔ Bonding capacity is a significant consideration
Wasco Union High School District - Page 17 © 2016 Government Financial Strategies
$21.6 vs. $31.6 Million in Currently Available Bonding Capacity
$0
$10,000,000
$20,000,000
$30,000,000
$40,000,000
$50,000,000
$60,000,000
$70,000,000
$80,000,000
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Bonding Capacity/ Outstanding Bonds
Fiscal Year Beg Jul 1
Refinancing Measure C and New Issuance Reduces Available Bonding Capacity
Outstanding Bonds - Measure C
Outstanding Bonds - Refi. Measure C w/ New Issue
Projected
Net local secured AV is assumed to increase 4% for 2016-17, & 5% annually thereafter, while all other types of AV are assumed to remain unchanged. Actual AV from Kern County Auditor-Controller's department. Assessed value is as of Aug 20 when AV becomes "certified." Outstanding bonds reflect maximum amount of bonds outstanding during that year and are from Official Statements.
Actual
$21,580,000 in remaining bonding
capacity after Measure C refi & new money
issue
Bonding capacity
$31,550,000 in remaining bonding
capacity with no action on Measure C
Wasco Union High School District - Page 18 © 2016 Government Financial Strategies
Pro Forma Max. 55% G.O. Bond Plan - No Action Relative to Measure C
u New Measure Bonds Issued as Single Series
Wasco Union High School District - Page 19 © 2016 Government Financial Strategies
Projected Tax Levies ≤ $30 / $100,000 AV
$0
$5
$10
$15
$20
$25
$30
$35
$40
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
2042
2043
2044
2045
2046
2047
Tax Levy per $100,000 of AV
Fiscal Year Beg July 1
Projected Tax Levies Adhere to $30 Maximum Allowable Tax Levy Requirement
Projected tax levies calculated from assumed debt service from May 2017 sale, actual 2015-16 assessed value and assumed 4% net local secured growth for 2016-17, & 5% annually thereafter, while all other AV types are assumed to remain unchanged, and using Kern Co's 22 month debt service collection policy.
Maximum allowable projected tax levy of $30/$100,000 of AV
Projected Tax Levies
Maximum:
Average:
Minimum:
$30.00
$29.96
$29.91
Wasco Union High School District - Page 20 © 2016 Government Financial Strategies
Stable Tax Rate Payments Grow w/Proj. AVè
$0
$2,000,000,000
$4,000,000,000
$6,000,000,000
$8,000,000,000
$10,000,000,000
$12,000,000,000
$14,000,000,000
$0
$600,000
$1,200,000
$1,800,000
$2,400,000
$3,000,000
$3,600,000
$4,200,000
2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 2035 2037 2039 2041 2043 2045 2047
Total AV Revenue
Fiscal Year Beg July 1
Tax Revenue Available for Debt Service Increases with Growth in AV
Projected tax revenue
Notes: tax revenue based on assumed net local secured growth rate of 4% for 2016-17, & 5% annually thereafter, while all other types of AV are assumed to remain constant, and assumes a $30 annual tax levy per $100,000 of AV.
Total AV
Wasco Union High School District - Page 21 © 2016 Government Financial Strategies
$29.2 Million For Needs Achievable
$30,800,000
$0
$3,000,000
$6,000,000
$9,000,000
$12,000,000
$15,000,000
$18,000,000
$21,000,000
$24,000,000
$27,000,000
$30,000,000
$33,000,000
2016 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040 2042 2044 2046
Issuance/ Net Collection
Fiscal Year Beg July 1
$30.8 Million Issuance Supported by Projected Tax Revenue
Series 2017
Notes: debt service is assumed based on "AAA" MMD rates as of Feb 29, 2016, plus 85bp for assumed "A+" rating of bonds, plus adjustments for potential rate increases prior to issuances +125bp (2017), +150bp (2019). Net local secured AV is assumed to increase 4% for 206-17, & 5% annually thereafter, while all other AV types are assumed to remain unchanged. Net collection assumes County reserve policy (first 10 months of following FY debt service) less assumed revenue. Assumed revenue = unitary revenue 3% of debt service + reserve collection [3.1% historical avg since 2008-09 ]) + other revenue (1% of debt service + reserve collection [1.2% historical avg since 2008-09]) + additional receipts (5% of debt service + reserve - prior reserve [6% historical avg since 2008-09]). Historic rates based on selected representative years due to skewing from deposits to debt service funds etc. Reserve collected by County applied to last payment.
Bond Proceeds Analysis - Conservative Assumptions
Series 2017Bond Issuance Amount $30,800,000Underwriter's Discount ($820,000)
Bond Insurance ($485,000)Other Costs ($125,000)
Total$30,800,000
($820,000)($485,000)($125,000)
Interest & Sinking Fund ($135,000)Cash for Projects $29,235,000
Debt Service $73,676,265Debt Service to Principal Ratio 2.39 : 1
Conservative AssumptionsUnderwriter's Discount - CIBs 1.75% (of issuance)
Underwriter's Discount - CABs 4.00% (of issuance)Bond Insurance - CIBs 0.60% (of debt service)
Bond Insurance - CABs 0.75% (of debt service)Other Costs $125,000
Values rounded
($135,000)$29,235,000
$73,676,2652.39 : 1
Conservative Assumptions(of issuance)(of issuance)(of debt service)(of debt service)
Wasco Union High School District - Page 22 © 2016 Government Financial Strategies
Bonding Capacity Sufficient
$0
$10,000,000
$20,000,000
$30,000,000
$40,000,000
$50,000,000
$60,000,000
$70,000,000
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Bonding Capacity/ Outstanding Bonds
Fiscal Year Beg Jul 1
There is Sufficient Remaining Bonding Capacity for a $30.8 Million Bond Measure, to be Issued in One Series
Outstanding Bonds - New Measure
Outstanding Bonds - Measure C
Projected
Net local secured AV is assumed to increase 4% for 2016-17, & 5% annually thereafter, while all other types of AV are assumed to remain unchanged. Actual AV from Kern County Auditor-Controller's department. Assessed value is as of Aug 20 when AV becomes "certified." Outstanding bonds reflect maximum amount of bonds outstanding during that year and are from Official Statements. Note: this does not reflect the potential issuance of additional Measure C bonds.
Actual
$31,550,000 in remaining bonding
capacity
Bonding capacity
$30,800,000 new measure
issuance
Measure C Issuances: $15,500,000 - Series A
$7,000,000 - Series B
$2,600,000 remaining bonding capacity
Wasco Union High School District - Page 23 © 2016 Government Financial Strategies
Pro Forma Max. 55% G.O. Bond Plan - With Refi. & Additional Measure C Bonds
u New Measure Bonds Issued Over Three Series
Wasco Union High School District - Page 24 © 2016 Government Financial Strategies
$33 Million Available for Projects
$11,500,000
$0
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
$14,000,000
2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 2035 2037 2039 2041 2043 2045
Issuance/ Net Collection
Fiscal Year Beg July 1
$34.5 Million Issuance Supported by Projected Tax Revenue
Series 2017
Notes: debt service is assumed based on "AAA" MMD rates as of Feb 29, 2016, plus 85bp for assumed "A+" rating of bonds, plus adjustments for potential rate increases prior to issuances +125bp (2017), +150bp (2019). Net local secured AV is assumed to increase 4% for 206-17, & 5% annually thereafter, while all other AV types are assumed to remain unchanged. Net collection assumes County reserve policy (first 10 months of following FY debt service) less assumed revenue. Assumed revenue = unitary revenue 3% of debt service + reserve collection [3.1% historical avg since 2008-09 ]) + other revenue (1% of debt service + reserve collection [1.2% historical avg since 2008-09]) + additional receipts (5% of debt service + reserve - prior reserve [6% historical avg since 2008-09]). Historic rates based on selected representative years due to skewing from deposits to debt service funds etc. Reserve collected by County applied to last payment.
Series 2019
Series 2021
Bond Proceeds Analysis - Conservative Assumptions
Series 2017 Series 2019 Series 2021 TotalBond Issuance Amount $11,500,000 $11,500,000 $11,500,000 $34,500,000Underwriter's Discount ($200,000) ($200,000) ($260,000) ($660,000)
Bond Insurance ($125,000) ($135,000) ($165,000) ($425,000)Other Costs ($125,000) ($125,000) ($125,000) ($375,000)
Interest & Sinking Fund $0 $0 ($110,000) $0Cash for Projects $11,050,000 $11,040,000 $10,840,000 $33,040,000
Debt Service $20,552,520 $22,406,609 $26,341,417 $69,300,545Debt Service to Principal Ratio 1.79 : 1 1.95 : 1 2.29 : 1 2.01 : 1
Conservative AssumptionsUnderwriter's Discount - CIBs 1.75% (of issuance)
Underwriter's Discount - CABs 4.00% (of issuance)Bond Insurance - CIBs 0.60% (of debt service)
Bond Insurance - CABs 0.75% (of debt service)Other Costs $125,000
Values rounded
Wasco Union High School District - Page 25 © 2016 Government Financial Strategies
Tax Levies Still Within $30 Limit
$0
$5
$10
$15
$20
$25
$30
$35
$40
20
16
20
17
20
18
20
19
20
20
20
21
20
22
20
23
20
24
20
25
20
26
20
27
20
28
20
29
20
30
20
31
20
32
20
33
20
34
20
35
20
36
20
37
20
38
20
39
20
40
20
41
20
42
20
43
20
44
20
45
20
46
Tax Levy per $100,000 of AV
Fiscal Year Beg July 1
Projected Tax Levies Adhere to $30 Maximum Allowable Tax Levy Requirement
Projected tax levies calculated from assumed debt service from May 2017 sale, actual 2015-16 assessed value and assumed 4% net local secured growth for 2016-17, & 5% annually thereafter, while all other AV types are assumed to remain unchanged, and using Kern Co's 22 month debt service collection policy.
Maximum allowable projected tax levy of $30/$100,000 of AV
Projected Tax Levies
Maximum:
Average:
Minimum:
$29.92
$29.87
$29.76
Wasco Union High School District - Page 26 © 2016 Government Financial Strategies
Bonding Capacity Sufficient
$0
$10,000,000
$20,000,000
$30,000,000
$40,000,000
$50,000,000
$60,000,000
$70,000,000
$80,000,000
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Bonding Capacity/ Outstanding Bonds
Fiscal Year Beg Jul 1
There is Sufficient Remaining Bonding Capacity for a $34.5 Million Bond Measure, to be Issued in Three Series over Four Years
Outstanding Bonds - New Measure
Outstanding Bonds - Measure C
Projected
Net local secured AV is assumed to increase 4% for 2016-17, & 5% annually thereafter, while all other types of AV are assumed to remain unchanged. Actual AV from Kern County Auditor-Controller's department. Assessed value is as of Aug 20 when AV becomes "certified." Outstanding bonds reflect maximum amount of bonds outstanding during that year and are from Official Statements.
Actual
$21,580,000 in remaining bonding
capacity after Measure C refi & new money issue ($31,550,000
before)
Bonding capacity
Measure C Issuances: $15,500,000 - Series A
$7,000,000 - Series B
$620,000 remaining bonding capacity
$9,500,000 Issuance
$11,500,000 Issuance
$11,500,000 Issuance
$11,500,000 Issuance
Wasco Union High School District - Page 27 © 2016 Government Financial Strategies
Sample Nov. 2016 Bond Election ScheduleDATE ITEM RESPONSIBILITY
Completed Initial demographic/financial research and analysis to determine funding potential of tax base.
Govt. Financial Strategies
March 2016 Completed
Bond counsel selection process - develop list of potential firms, obtain fee quotes, and select firm.
Govt. Financial Strategies District
Tuesday, April 5, 2016
Board Agenda Deadline: Information presentation regarding status of Measure C, potential new bond measure, and public engagement process delivered for Board agenda packet.
Gov’t. Financial Strategies District Staff
Thursday, April 14, 2016
Board Meeting: Information presentation regarding status of Measure C, potential new bond measure, and public engagement process.
Gov’t. Financial Strategies District Staff
TBD
Public opinion survey firm selection process - develop list of potential firms, obtain proposals, and select firm.
Govt. Financial Strategies District
TBD Public opinion survey questionnaire developed, survey
conducted, and results analyzed. Survey Firm
Gov’t. Financial Strategies District Staff
To be Determined Public engagement process. Further Information:
District
Govt. Financial Strategies
Thursday, May 12, 2016
Board Meeting: Presentation of public opinion survey results.
Survey Firm District Staff
Wednesday, May 18, 2016
Board Workshop: Presentation regarding potential bond measure facilities and financial plan.
Govt. Financial Strategies District Staff
May 19, 2016 - June 1, 2016
Development of bond resolution and related documents. Bond Counsel District Staff
Govt. Financial Strategies
Tuesday, May 31, 2016
Board Agenda Deadline: Bond resolution and related documents delivered for Board agenda packet.
Bond Counsel District Staff
Thursday, June 9, 2016
Board Meeting: Board considers resolution calling for election.
School Board Bond Counsel District Staff
Friday, August 12, 2016
Statutory deadline for providing adopted resolution to County of Kern (at least 88 days prior to election).
District Staff
Tuesday, November 8, 2016
Election Day. District Voters
Wasco Union High School District - Page 29 © 2016 Government Financial Strategies
For Reference
u Additional Information Regarding General Obligation (G.O.) Bonds
Wasco Union High School District - Page 30 © 2016 Government Financial Strategies
2/3 vs. 55% Voter Approval G.O. BondsSubject 55% Voter Approval Two-Thirds Voter Approval
Board Approval Required To Place Measure on Ballot
Two-thirds Majority
Allowable Election Dates Primary or general election, regularly scheduled local election, or statewide special election
Any Tuesday that is not the day before or the day after a State holiday, or within 45 days of a regularly scheduled election
Maximum Projected Tax Rates/Levies
For unified district, $60 per $100,000 of assessed value; for union district, $30 per $100,000 of assessed value
No projected maximum tax rate
Bonding Capacity (i.e. Maximum Bonds Outstanding)
2.5% of assessed value for unified districts and 1.25% of assessed value for union districts
2.5% of assessed value for unified districts and 1.25% of assessed value for union districts
Audits Independent financial and performance audits must be conducted annually
None specifically required
Oversight Committee If election is successful, Board must establish independent citizens oversight committee within 60 days of Board adoption of resolution declaring election results
None specifically required
Allowable Expenditures Construction, reconstruction, rehabilitation, or replacement of school facilities, including furnishing and equipping of school facilities, or the acquisition or lease of real property for school facilities
Acquisition or improvement of real property
Facilities List State Constitution requires a list of the specified school facilities project(s) to be funded
No requirement for a specific facilities list