Credit Rating Presentation Denver Public Schools General Obligation Bonds Tax-Exempt, Series 2012B Taxable Qualified Zone Academy Bonds, Series 2012C Taxable Refunding Bonds, Series 2012D November 14, 2012
Presentation Participants General Obligation Bonds, Series 2012 B – D Denver Public Schools Tom Boasberg, Superintendent David Suppes , Chief Operating Officer David Hart, Chief Financial Officer Charles Garcia, Financial Planning and Analysis Chuck Carpenter, Senior Manager of Finance Scott Smith, Senior Manager of Financial Planning and Analysis Kathy Rinkel, Executive Director of Finance Financial Advisor (Fiscal Strategies Group, Inc.) David Paul Series 2012 C& D Bookrunning Underwriter (RBC Capital Markets) Dan O’Connell, Director Rudy Andras, Vice President Series 2012 E Bookrunning Underwriter (Stifel Nicolaus) Josh Benninghoff, Managing Director 1 1 DENVER PUBLIC SCHOOLS GENERAL OBLIGATION BONDS, SERIES 2012 B – D
Presentation Outline 1. District Overview 2. District Tax Base 3. District Debt Management 4. School Finance Funding Trends 5. Economic and Demographic Statistics 6. Series 2012 B – D Plan of Finance 7. Concluding Remarks 2 2 DENVER PUBLIC SCHOOLS GENERAL OBLIGATION BONDS, SERIES 2012 B – D
Plan of Finance and Credit Ratings General Obligation Bonds Series 2012B Series 2012C Series 2012D Par Amount* $450.000 million $16.000 million $67.235 million 2035 Bullet w/ Funded Sinking 2013 – 2022 Serial & 2025 and Structure* 2013 – 2032 Serial Bonds Fund 2028 Term Bonds Tax Status Tax-Exempt Taxable Taxable Security General Obligation General Obligation General Obligation Refund remaining callable portion of New Money for school New Money for school Purpose Series 2004 and Series 2004C construction and improvements construction and improvements Bonds State Intercept Underlying Ratings Ratings Fitch AA+ NR Moody’s Aa2 Aa2 S&P AA- AA- The Bonds are general obligations of the District, and are secured by the District’s full faith and credit. All taxable property within the boundaries of the District is subject to ad valorem property taxation without limitation as to rate . 3 DENVER PUBLIC SCHOOLS * Preliminary, subject to change GENERAL OBLIGATION BONDS, SERIES 2012 B – D
Presentation Summary Student achievement continues to improve MISSION SUCCESS Graduation rates continuing to increase, with more students taking and passing AP tests Significant outperformance versus the State in academic growth over the past five years Enrollment trending upward as district becomes a model for success [Slide 9] ENROLLMENT AND Estimated 2012-13 enrollment for 2012-13 budget purposes is 83,230 GRADUATION ON DPS 2012-13 updated enrollment forecast is 84,134 THE RISE Highest enrollment in over 30 years, and fastest growing large school district in the country Electorate has approved 5 straight bond and/or override elections [Slide 11] Total Override Amount Approved: $111 Million VOTER SUPPORT Total Bond Amount Approved: $1.536 Billion 2012 Ballot Initiatives approved with 67% (MLO) and 64% (Bond) in a challenging economic and tax environment Largest and most diverse tax base in the State of Colorado [Slide 18] TAX BASE WHICH Preliminary 2012 assessed value of $10,816,373,040 (without TIF: $10,082,782,062) SUPPORTS G.O. Total Market Value: $77 Billion of value (down only about 7% from the 2010 peak) BOND REPAYMENT Same Tax Base as the City and County of Denver (Rated Aaa / AAA / AAA) Strong management and voter support allows general fund to grow [ Slide 32] STRONG FINANCIAL GAAP general fund balance now at 17% of revenue PERFORMANCE Strong cash position requiring relatively low Cash Flow Loan Program borrowing vs. past history 4 4 DENVER PUBLIC SCHOOLS GENERAL OBLIGATION BONDS, SERIES 2012 B – D
Presentation Outline 1. District Overview 2. District Tax Base 3. District Debt Management 4. School Finance Funding Trends 5. Economic and Demographic Statistics 6. Series 2012 B – D Plan of Finance 7. Concluding Remarks 5 5 DENVER PUBLIC SCHOOLS GENERAL OBLIGATION BONDS, SERIES 2012 B – D
Overview of Denver Public Schools DPS is the Second Largest School District in Colorado To provide all students the opportunity to achieve the knowledge and skills necessary to become Mission Statement: contributing citizens in our society Board of Education: Seven elected members (two of which are elected at-large) Superintendent: Tom Boasberg – appointed in January 2009 Student Base 1 : Estimated Fall 2012 Funded Pupil Count of 76,438 students; Estimated Fall 2012 Enrollment for budget purposes is 83,230 students. DPS updated 2012 enrollment forecast of 84,134. Official count is expected on or around November 17. Employees: 14,469 total employees – 10,019 full-time and 4,550 part-time time Facilities: 72 elementary schools, 15 K-8 schools, 21 middle schools, 22 high schools, 11 alternative education centers, one adult opportunity school and seven additional education centers and seven support buildings Charter Schools: 41 charter schools, including six new charter schools in School Year 2012-2013; 21 charter schools using district facilities 6 DENVER PUBLIC SCHOOLS 1 Funded Pupil Count per CDE forecast with ECE=0 and K=.5. Enrollment per DPS forecast of ECE and K=1 GENERAL OBLIGATION BONDS, SERIES 2012 B – D
DPS’ Community Partnerships DPS Foundation 501(c)(3) established in 1992 Raises and manages funds to support the District Supported by private foundations, corporations, parents, alumni, DPS employees and community members 6/30/2012 Net Asset Balance: $6.93 million Tax Increment Financing Reimburses District from tax increment revenues which produce over $2 million per Agreements with Denver year. Funds flow into the District's capital reserve fund and began in calendar year 2006 Urban Renewal Authority Stapleton: Currently has helped fund the construction of three schools Lowry: Funded construction of one elementary school City and County of City/DPS Collaborative Partnership Initiative: Goal is to improve student achievement and Denver strengthen ties within neighborhoods Denver Pre-School Program: Voter approved initiative to provide tuition credits through 2015 to parents and improvement grants to pre-schools; 0012% sales tax, in FY 2013 this will generate approximately $5.25 million, providing assistance to 2,492 preschool age kids within DPS; Approved by Denver voters in 2006 7 7 DENVER PUBLIC SCHOOLS GENERAL OBLIGATION BONDS, SERIES 2012 B – D
Student Achievement Trends Achievement Continues to Improve Across All Grades AP Tests With Score of 3, 4 or 5 The number of students passing Advance Placement test 2,000 1,829 for School Year 2011-12 has more than doubled from 1,800 School Year 2004-05. Students achieving a score of 3, 4 1,579 1,584 1,600 or 5: 1,400 2004-05: 870 students 1,178 1,071 1,061 1,200 2011-12: 1,829 954 870 1,000 800 District CSAP scores have experienced a positive change 600 in proficiency in all tested areas (math, reading, science 400 and writing) in the past 7 years 200 0 04/05 05/06 06/07 07/08 08/09 09/10 10/11 11/12 Change in TCAP % Proficient: DPS vs. State CSAP Growth: District vs. State – All Grades DPS (2005-2012) State* (2005-2012) 16% 14% 14% 12% 11% 11% 12% 10% 8% 6% 4% 4% 2% 2% 0% -2% Reading Math Writing Science -2% -2% -4% *State data does not include DPS 8 DENVER PUBLIC SCHOOLS GENERAL OBLIGATION BONDS, SERIES 2012 B – D
District Enrollment & Graduation Count Trends Stable Enrollment Growth and Increasing Graduation Rate Funded Pupil Count Enrollment 83,230 84,000 81,870 80,000 82,000 77,276 78,000 79,423 75,005 80,000 78,352 76,000 72,770 74,000 78,000 72,115 75,269 72,000 76,000 69,394 73,866 70,000 73,399 67,521 67,663 74,000 68,000 72,000 66,000 64,000 70,000 62,000 68,000 06/07 07/08 08/09 09/10 10/11 11/12 12/13* 06/07 07/08 08/09 09/10 10/11 11/12 12/13* *Estimated figure; official count is expected to be available November 17, 2012 *Estimated figure; official count is expected to be available November 17, 2012 Graduation Count Fastest growing large school district in Colorado 1 3600 3,414 3,373 – School Year 2012-13 estimated enrollment is up 1.7% from School 3400 3,245 Year 2011-12 3200 2,893 – Average annual increase is 2% 3000 2,857 2,796 2800 2,642 – Enrollment forecast predicts significant growth through School Year 2600 2016-17 2400 School Year 2011-12 Graduation Count is 29% higher than 2005-06 2200 – Average annual increase is 4% 2000 05/06 06/07 07/08 08/09 09/10 10/11 11/12* – School Year 2011-12 Graduation Rate is up 8% from 2010-11 *Preliminary Data 9 DENVER PUBLIC SCHOOLS 1 Colorado Department of Education Pupil Membership Count among large Colorado school districts, GENERAL OBLIGATION BONDS, SERIES 2012 B – D 2008-09 to 2011-12
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