Piedmont Unified School District › ...2016_Bond_Measure_Presentation_1_13… · $60 4.00%** CIBs 3 29 years $65,765,000 F Tax Rate Scenario: $38 Million Summary: Based on a tax

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A Division of Zions Public Finance, Inc.

Piedmont Unified School District

Overview of 2016 General Obligation Bond Authorization

January 13, 2016

Blake Boehm, Director

[email protected]; (949) 346-4902

Piedmont Unified School District | page 1

Current Bond Program Overview

Election of 2004 $11,000,000

Series Dated Date Par Bond Type Final Maturity Amount Outstanding

(as of 8/7/2015) Call Feature

Series 2004 12/16/2004 6,002,953.85 CIBs, CABs 8/1/2029 212,953.85 CIBs - 8/1/15@par

2006B 6/15/2006 2,570,903.50 CIBs, CABs 8/1/2030 1,781,813.25 Non-callable

2007C 3/14/2007 2,426,015.90 CIBs, CABs 2/1/2032 2,011,015.90 CIBs - 8/1/17@par

2015 Ref (Direct

Purchase) 3/31/2015 4,140,000.00 Direct Loan 8/1/2025 4,080,000.00 Non-callable

Total Issued 10,999,873.25

Election of 2008 $24,900,000

Series Dated Date Par Bond Type Final Maturity

Amount Outstanding

(as of 8/7/2015) Call Feature

Series 2009 8/11/2009 6,254,805.15 CABs 8/1/2044 5,988,687.60 Non-callable

Remaining Authorization $18,645,194.85

The District voters have authorized (3) bond measures for a total of $84.2 million.

All bonds authorized under the three measures have been issued.

Measure Series Dated Date Original Par Amount

Issued

Final

Maturity Date

Amount

Outstanding

(1/5/16)

Call Date / Refunded? Original

Repayment Ratio

Current

Repayment Ratio

1994 Measures H & I Series A 7/1/1994 $4,700,000 8/1/2018 $0 Refunded in 2001 1.94

Series B 7/14/1994 $7,201,875 8/1/2018 $0 Refunded in 2001 2.71

Series C 7/1/1994 $2,000,000 8/1/2018 $0 Refunded in 2001 1.95

Series D 5/18/1995 $6,897,456 8/1/2019 $0 Refunded in 2005 2.22

Series E 5/1/1995 $2,900,000 8/1/2019 $0 Refunded in 2005 1.91

$23,699,331

1996 Measure B Series A 7/11/1996 $4,498,781 8/1/2020 $0 Refunded in 2005 3.10

$4,498,781

2006 Measure E Series A 8/10/2006 $10,000,000 8/1/2025 $325,000 Refunded in 2015 1.66 1.05

Series B 8/10/2006 $4,999,934 8/1/2031 $0 Refunded in 2015 3.01

Series C 10/14/2009 $19,000,000 8/1/2034 $16,640,000 8/1/2019 1.98 1.83

2010 BAN 6/8/2010 $11,997,665 5/1/2015 $0 Called in Aug 2013 1.20

Series D(QSCBs)

5/4/2011 $10,000,000 5/1/2026 $10,000,000* Non Callable 1.07** 1.10**

Series E(2010 BAN Takeout)

8/21/2013 $11,998,678 8/1/2043 $11,998,678 8/1/2023 5.33 5.33

$55,998,612

6/1/2001 $17,225,000 8/1/2018 $0 Refunded in 2009 1.56

1/25/2005 $18,415,000 8/1/2020 $0 Refunded in 2014 1.38

10/14/2009 $13,145,000 8/1/2018 $5,680,000 Non Callable 1.14 1.06

11/26/2014 $9,965,000 8/1/2020 $8,575,000 Non Callable 1.12 1.11

3/24/2015 $16,075,000 8/1/2031 $16,075,000 8/1/2024 1.39 1.38

$69,293,678

** Election of 2006, Series D Bonds assumes Direct Federal Subsidy of 5.26% for Original Repayment Ratio; the Current Repayment Ratio assumes a reduction of Federal subsidies

by 7.3% from 10/1/2014 going forward.

* Does not consider Sinking Fund Deposits.

2014 Refunding

Total GO Bonds Outstanding

Total Issued under 1994 Measures H & I

Total Issued under 1996 Measure B

Total Issued under 2006 Measure E

2001 Refunding

2005 Refunding

2009 Refunding

2015 Refunding

Elements of a 2016 General

Obligation Bond Election

District Assessed Valuation

3 Piedmont Unified School District | page

Total assessed valuation in 2015-16 is $3.85 billion which is an increase of 8.26 percent

compared to the previous year.

The District has experienced varied growth in assessed value over the past 10 years:

5-Year AV Average Annual Growth Rate: 4.97%

10-Year AV Average Annual Growth Rate: 4.78%

Historical Assessed Valuation

$2,410 $2,594

$2,779 $2,931

$3,017 $3,018 $3,085 $3,203

$3,382 $3,552

$3,846

8.51%

7.61%

7.16%

5.46%

2.95%

0.02%

2.23%

3.84%

5.59%

5.02%

8.26%

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

8.00%

9.00%

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

$4,500

A.V

. (m

illio

ns)

Bonding Capacity


The California Education Code stipulates that a unified school district cannot issue bonds if

doing so causes the overall amount of bonds outstanding to exceed 2.5% of its current

assessed value.

The District’s remaining bonding capacity for fiscal year 2015-16 is approximately $27

million.

The District’s bonding capacity will increase based on future Assessed Valuation (AV)

growth and repayment of existing bond principal.

Section 33050 of the Education Code also allows the State Board of Education to waive

any provisions of the Education Code, following a public hearing on the matter (with

certain exceptions).

Total Assessed Valuation 2015-16: $3,845,936,400

Bonding Capacity @ 2.5% $96,148,410

Outstanding Bond Indebtedness* ($69,293,678)

Remaining Capacity $26,854,732

*Sinking Fund Deposits are not considered for capacity sizing

Key Considerations for General Obligation Measure

For a new general obligation bond measure, there are several considerations to determine the

optimal bond authorization.

Assessed Valuation (AV) growth assumptions.

Tax rate options – statutory maximum ($60 per $100k of AV) versus voter approval threshold.

Number of issues – plan of finance for project spending over life of authorization.

Bond repayment term – 25 to 40 years.

Repayment ratios/interest costs – current interest bonds versus capital appreciation bonds.

Statutory bonding capacity – 2.5% of total AV

Information and guidance from the District’s financing team is important when planning a

future bond election.

Polling firm.

Election Consultant.

Financial Advisor.

Bond Counsel.


New Bond Authorization – A Team Approach

6 Piedmont Unified School District | page

Collaboration amongst District, Election

Consultant, Polling Firm, Bond Counsel and

Financial Advisor.

Financial analysis is an instrumental piece to long-

range capital planning and consideration of a

future bond measure.

Financial Advisor:

Provides quantitative analysis and advice regarding facility funding,

bond authorization, tax rates, bond structure and timing; ensures project funding needs can be

delivered on time.

Bond Counsel

Drafts ballot language, election and bond resolutions

and other financing documents. Affirms issuer’s

bond authorization and confirms tax-exempt status.

Provides guidance in structuring issues related to

tax law.

Election Consultant & Polling Firm:

Evaluates voter profile and designs a community

outreach strategy. Provides input regarding project

prioritization and tax rate sensitivity. Prepares and conducts voter survey to

obtain data regarding voter support and priorities.

District’s Consulting Team

Component Description

Funding Analysis

• Analyze potential GO bond funding based upon

bonding capacity limits, tax rate constraints, and

financing assumptions.

• Align timing and availability of funding with prioritized

construction projects and schedule.

Political Strategy

• Design a voter survey that identifies key messages,

voter sensitivities and project specific information.

• Provide strategic recommendations based on voter

profile, community characteristics and polling data.

Voter Survey

• Voter survey identifies voter preferences,

sensitivities, and levels of support for various funding

scenarios.

Legal Analysis

• Ballot resolution outlines statutory bond parameters,

planned expenditures/use of bond proceeds and

other legal terms required of a new bond measure.

Range of Options

Given consistent structural assumptions (i.e. repayment term, CIBs only), the District has

several possible bond authorization amounts based on projected AV growth and targeted

tax rate.


* Subject to change based on market conditions

** Conservative growth assumption relative to District’s 5-year average annual A.V. growth

Tax Rate

Estimate

AV

Growth Rate

Bond

Type

Number

of Series

Repayment

Term

Total

Authorization*Scenario

$35 4.00%** CIBs 2 29 years $38,350,000 A

$40 4.00%** CIBs 3 29 years $43,835,000 B

$45 4.00%** CIBs 3 29 years $49,315,000 C

$50 4.00%** CIBs 3 29 years $54,805,000 D

$55 4.00%** CIBs 3 29 years $60,270,000 E

$60 4.00%** CIBs 3 29 years $65,765,000 F

Tax Rate Scenario: $38 Million

Summary: Based on a tax rate of $35 per $100,000 of assessed value and projected AV

growth of 4.0%, the District can seek bond authorization of approximately $38.35 million.


Proposed Issuance Schedule

Issue Issue Date Proceeds

Series A 2/1/2017 $20,000,000

Series B 2/1/2019 18,350,000

Total $38,350,000

Assumptions: Current interest bonds only

Interest rates: - Series A: 3.981%

- Series B: 4.050%

Financing term: - Series A: 29 years

- Series B: 27 years

4.00% annual AV growth

rates

Estimated Tax Rates

$-

$10

$20

$30

$40

$50

$60

Estimated Tax Rate (Series A) Estimated Tax Rate (Series B)

Estimated Tax Rate (Series C) Maximum Tax Rate @ 4% AV

Targeted Tax Rate @ 4% AV

Tax Rate Scenario: $49 Million


growth of 4.0%, the District can seek bond authorization of approximately $49.32 million.




Series A 2/1/2017 $17,000,000

Series B 2/1/2019 16,315,000

Series C 2/1/2021 16,000,000

Total $49,315,000



- Series B: 4.135%

- Series C: 4.246%



- Series C: 27 years


rates

Estimated Tax Rates

$-

$10

$20

$30

$40

$50

$60

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

20

47



Targeted Tax Rate @ 4% AV

Maximum Tax Rate Scenario: $66 Million


growth of 4.0%, the District can seek bond authorization of approximately $66 million.




Series A 2/1/2017 $25,085,000

Series B 2/1/2019 26,940,000

Series C 2/1/2021 13,740,000

Total $65,765,000



- Series B: 4.195%

- Series C: 4.274%



- Series C: 27 years


rates

Estimated Tax Rates

$-

$10

$20

$30

$40

$50

$60



Bond Capacity – Scenario F


Fiscal Year 2015-16 2016-17 2017-18 2018-19 2019-20

Total A.V.* $3,845,936,400 $3,999,773,856 $4,159,764,810 $4,326,155,403 $4,499,201,619

Statutory Bonding Capacity @ 2.5% $96,148,410 $99,994,346 $103,994,120 $108,153,885 $112,480,040

Less Current Outstanding Bonds as of Aug. 1** $69,293,678 $65,498,678 $62,158,678 $58,663,678 $55,988,678

Less 2016 Election Series, Series A*** $25,085,000 $22,645,000 $22,550,000 $25,085,000

Less 2016 Election Series, Series B*** $26,940,000 $24,300,000

Less 2016 Election Series, Series C***

Remaining Capacity $26,854,732 $9,410,668 $19,190,442 $207 $7,106,362*A.V. assumes a 4% annual growth rate

**Sinking Fund Deposits are not considered for capacity sizing

***Subject to change. Based on AA GO market rates as 8/11/2015

Fiscal Year 2020-21 2021-22 2022-23 2023-24 2024-25

Total A.V.* $4,679,169,684 $4,866,336,471 $5,060,989,930 $5,263,429,527 $5,473,966,708

Statutory Bonding Capacity @ 2.5% $116,979,242 $121,658,412 $126,524,748 $131,585,738 $136,849,168

Less Current Outstanding Bonds as of Aug. 1** $53,023,678 $52,338,678 $51,553,678 $50,643,678 $49,613,678

Less 2016 Election Series, Series A*** $25,085,000 $25,085,000 $25,085,000 $25,070,000 $25,025,000

Less 2016 Election Series, Series B*** $25,130,000 $26,940,000 $26,940,000 $26,940,000 $26,940,000

Less 2016 Election Series, Series C*** $13,740,000 $12,070,000 $12,900,000 $13,075,000 $13,740,000

Remaining Capacity $564 $5,224,733 $10,046,070 $15,857,060 $21,530,489*A.V. assumes a 4% annual growth rate

**Sinking Fund Deposits are not considered for capacity sizing

***Subject to change. Based on AA GO market rates as 8/11/2015

Process Timeline – GO Bond Election


Election Day

November 8, 2016

February March April May June July August September October November

Feasibility Study/Needs Assessment:

(January-April)

Conduct poll, deliver poll results, deliver

final Facilities Master Plan and identify

key issues

Build Consensus:

(April-August)

Determine ballot question, non-advocacy

communication, develop priority project list,

community outreach, write resolution and

Board vote

Campaign Phase:

(Following Board decision)

Form campaign committee, fundraising, develop campaign

materials, create website, phone banking, and “get out the vote”

initiatives

Deadline for Board

to Call Election

(88 days prior to

election)

August 12, 2016

Facilities Planning/Community Outreach

(6 – 9 months)

January

Documents

Piedmont Unified School District › ...2016_Bond_Measure_Presentation_1_13… · $60 4.00%** CIBs 3 29 years $65,765,000 F Tax Rate Scenario: $38 Million Summary: Based on a tax