Bedford Public Schools November 2018 Bond Proposal Update May 2018 pmcresa.com | (248) 223-3500
Presentation Overview • Due Diligence Activities • November 2018 Bond Program Review • Financial Considerations • Preliminary Schedule and Next Steps 2
Due Diligence Activities 3
Due Diligence Activities • BPS Facilities Committee conducted a deep dive into the capital needs for each District facility. • Categorized needs into critical, deferred, and enhancement items by building. • BPS engaged a professional structural engineer to review wooden beams at Douglas Road and Jackman Road Elementary Schools. Findings include that the beams are structurally sound and can remain in place with only minor repairs made at 8 select locations. BPS should continue to monitor the beams accordingly. • Reviewed operational, safety and security, and educational goals. • BPS reviewed financial considerations with the District’s financial advisor. Current options include 20-year and 25-year finance terms. 4
November 2018 Bond Program Review 5
November 2018 Bond Program Review • Identified $34,290,000 worth of needs District needs to address in the next 5 years • Douglas Road Elementary - $4.0M • Jackman Road Elementary - $4.5M Bedford Public Schools • Monroe Road Elementary - $860K Bond Program Cost Breakdown • Smith Road Elementary - $3.3M • Bedford Junior High - $8.8M • Bedford High - $12.7M Remodeling / Interior Finishes - $23.3M Contingency - $2.03M Sitework - $3.83M Soft Costs (Contingencies, Prof. Fees, Issuance Cost) $ 2.5M Construction Manager Fees & Costs - $2.7M Election/Issuance/Interest Earnings - $TBD 6
Presentation Overview • Due Diligence Activities • November 2018 Bond Program Review • Financial Considerations • Preliminary Schedule and Next Steps 2
May 2018 Bond Program Review Bond Features: Sitework • Repair and/or repave deteriorated parking lots at six (6) schools, the administration building and the transportation / maintenance building • Replace damaged concrete sidewalks • Repair damaged underground storm lines • Replace damaged fencing • Site restoration 14% 17% 12% 15% 12% 29% 8
May 2018 Bond Program Review Bond Features: Building Envelope • Replace roofing 12% 14% 12% 17% 15% 29% 9
May 2018 Bond Program Review Bond Features: Interior • Upgrade toilet rooms • Replace interior doors and hardware • Replace gym floor at Junior High and refinish gym floor at High School • Replace corridor lockers and gym lockers at Junior High • Replace gym bleachers at Junior High and High School • New food service equipment at High School 12% 12% 14% 29% 17% 15% 10
May 2018 Bond Program Review Bond Features: Sitework • Repair and/or repave deteriorated parking lots at six (6) schools, the administration building and the transportation / maintenance building • Replace damaged concrete sidewalks • Repair damaged underground storm lines • Replace damaged fencing • Site restoration 14% 17% 12% 15% 12% 29% 8
May 2018 Bond Program Review Bond Features: Air Conditioning • Install air conditioning at Douglas Road, Jackman Road and Smith Road Elementary Schools, Junior High and original building classrooms at the High School 15% 29% 17% 12% 14% 12% 12
May 2018 Bond Program Review Bond Features: Security & Life Safety • Install secure entry at Junior High and High School • Installation of new windows • Replacement of exterior entry doors • Install new exterior building lighting and parking lot lights • Install generator at high school • Fire alarm system upgrades 15% 17% • Install access control system at each school • Upgrade surveillance & security system at each school 14% 29% 12% 12% 13
Financial Considerations 14
Financial Considerations • BPS reviewed financial considerations with the District’s financial advisor. Current options include a 20-year and 25-year finance options. • Due to the useful life calculations for the majority of the proposed infrastructure improvements (i.e. building envelope, mechanical, electrical, and plumbing improvements) a 25- year bond program aligns with the District’s critical needs • BPS is submitting through the State of Michigan’s Department of Treasury with a Qualified School Bond proposal. • The School Bond Qualification and Loan program was established by the Michigan Constitution of 1963 and amended by Public Act 92 of 2005 to provide a state credit enhancement and loan mechanism for school district bond issues. The bonds must be qualified by the State Treasurer and the bond proceeds must be used for capital expenditure purposes. 15
Financial Considerations BEDFORD PUBLIC SCHOOLS COUNTY OF MONROE, STATE OF MICHIGAN SCHOOL BUILDING AND SITE BONDS (GNERAL OBLIGATION – UNLIMITED TAX) SUMMARY OF PROPOSED BOND Ballot Info for Bond Proceeds New Debt Alone Estimated Less: Est. Bond Estimate First Total Increase Scenario Capitalized Proceeds for Estimated Interest Year Average Mills (Decrease) Table No. Bond Amount Interest Project* Bond Term Interest Cost Rate Millage Millage All Debt in Debt Levy 20 Year Term Table_21a $35,340,000 $1,192,725 $34,377,752 20 yrs., 3 mo. $20,736,675 4.50% 1.99 1.87 1.99 1.99 NOTATION: - The interest rates used on the table represent conservative rates. If the bonds were sold in the current market, the interest rate would be less than shown above. However, due to the fact the bond sale is at least 6 months away, we recommend using a conservative interest rate when computing the millage impact. Otherwise, if the interest rates rise, the District would be forced to levy a higher millage than the millage given in the pre-election information ASSUMPTIONS: * Net capitalized interest, and estimated cost of insurance, plus estimated interest earnings during construction. - December 2017 and December 2018 Debt Levy of 0.00 mills - November 2018 vote, Bonds dated February 2019 - First debt levy for proposed bonds: December 2019 - An annual change in Taxable Value of 4.30% for 2018, 2.48% (the projected 5 year historical average) for the following 5 years and 3.0% thereafter. May 30, 2018 16
Financial Considerations BEDFORD PUBLIC SCHOOLS COUNTY OF MONROE, STATE OF MICHIGAN SCHOOL BUILDING AND SITE BONDS (GNERAL OBLIGATION – UNLIMITED TAX) SUMMARY OF IMPACT OF BONDING ON PROPERTY TAXPAYERS Estimated Initial Tax Increase* Estimated $50,000 $60,000 $75,000 $90,000 $100,000 $125,000 $150,000 $175,000 $200,000 $225,000 $250,000 $275,000 Scenario Table Increase in Taxable Taxable Taxable Taxable Taxable Taxable Taxable Taxable Taxable Taxable Taxable Taxable No. Bond Amount Debt Levy Value Value Value Value Value Value Value Value Value Value Value Value 20 Year Term Table_21a $35,340,000 1.99 99.50 119.40 149.25 179.10 199.00 248.75 298.50 348.25 398.00 447.75 497.50 547.25 $100,000 $200,000 Home Value Home Value Example tax impact for $35,000,00 bond at 20 year term: For a $200,000 Home Value ($100,000 Taxable Value): For a $100,000 Home Value ($50,000 Taxable Value): Approximately $16.58 per month ($199 annually) Approximately $8.29 per month ($99.50 annually) 17
Preliminary Schedule & Next Steps 18
Preliminary Schedule & Next Steps Key Dates (November 2018 Election) • May 29, 2018 – Pre-Bond Presentation • May 31, 2018 – Pre-Bond Presentation • May 31, 2018 – Committee of the Whole Meeting to Finalize Bond Scope • June 5, 2018 – Pre-Qualification Meeting with Department of Treasury • June 28, 2018 – Board of Education Approve Application for Pre-Qualification • August 2, 2018 – Board of Education Adopt Resolution Calling Election • November 6, 2018 – Election Day 19
Questions & Answers 20
Questions & Answers • Are there any additional critical facility needs that are not addressed in this proposal? • Should BPS consider a 20 year bond term or a 25 year bond term? • Other considerations? 21
Helping to Plan the Future pmcresa.com | (248) 223-3500
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