Grandview School District No. 200 Capital Facilities Planning - PowerPoint PPT Presentation

Grandview School District No. 200 Capital Facilities Planning November 7, 2016 J ON G ORES M ANAGING D IRECTOR (206) 389-4043 JGORES @ DADCO . COM

1 Discussion Topics § Election Results § Capital Facilities Financing § Tax Rate Projections

2 Washington State Election Results-School Districts Only 2014 2015 2016* M&O Levies M&O Levies M&O Levies 160 Passed and 3 Failed 46 Passed and 2 Failed 131 Passed and 3 Failed Capital Project Levies Capital Project Levies Capital Project Levies 49 Passed and 3 Failed 16 Passed and 2 Failed 27 Passed and 2 Failed Transportation Levies Transportation Levies Transportation Levies 1 Passed and 1 Failed 2 Passed and 1 Failed 2 Passed and 0 Failed Bond Authorizations Bond Authorizations Bond Authorizations 13 Passed and 27 Failed 23 Passed and 22 Failed 21 Passed and 19 Failed * February 9, 2016 and April 26, 2016 election results only. Source: Washington Secretary of State: Election and Voting website and individual County Auditor websites

3 Voting Patterns-Bond Issues Passed per Year (Years 1993 through April 2016-Schools Only) Source: State of Washington, Office of Superintendent of Public Instruction

4 Capital Financing Options Types of School District Bonds Voted – Unlimited Tax General Obligation Bonds (UTGO) – Non-voted – Limited General Obligation Bonds (LGO) – Voter approved bonds are (UTGO) Repaid with property taxes – Approved with a 60% yes vote, 40% validation – 5% Debt Capacity = $38,689,489 – $5,010,000 (Outstanding Debt)* = $33,679,489 – Non-voted bonds are (LGO) Repaid with existing revenue – Can’t be used for “new” construction – 3/8 of 1% Debt Capacity = $2,901,712 – $1,600,000* = $1,301,712 – *Voted debt reflects amount after 12/1/16 payment. Non-voted debt as of 9/1/15.

5 Capital Financing Options Capital Projects Levy (no debt limit) Simple majority – Two to six year collection – No interest cost – Bonds are the primary method used by Washington School Districts to finance the “local share” of capital projects because Cash is generated upfront – Payments can be spread over time – Districts have some control over taxpayer impacts –

6 District’s Current Debt The District has one outstanding Unlimited Tax General Obligation Bond (UTGO) issues: UTGOR Bonds, 2015 – All of the District’s voter approved UTGO Bonds will be repaid on or before December 1, 2018 Grandview School District - Existing Debt Service $2,000,000 $1,950,000 $1,900,000 $1,850,000 $1,802,500 $1,800,000 $1,762,300 $1,729,700 $1,750,000 $1,700,000 $1,650,000 $1,600,000 $1,550,000 2016 2017 2018

7 Historical Bond Tax Rates Over the past 15 years the District’s bond tax rate has Bond Levy Year Historical Bond AV Rate/$1000 ranged from $3.43 in 2003 2003 $453,842,679 3.43 to $2.29 in 2017. 2004 480,593,787 3.27 2005 536,253,129 2.88 2006 571,738,801 2.69 2007 580,960,148 2.69 2008 664,112,392 2.38 2009 679,478,418 2.37 2010 665,219,106 2.48 2011 708,718,599 2.36 2012 678,139,798 2.54 2013 699,498,925 2.52 2014 711,431,949 2.53 2015 732,593,880 2.53 2016 760,257,838 2.49 2017* 773,789,784 2.29 *Preliminary value.

8 Tax Rate Planning Assumptions for Tax Rate Planning: § Interest Rates § Bond Rating § Assessed Value § Bond Structure

9 Tax Rate Planning Interest Rates § Lower interest rates result in lower tax rates for bonds. § Interest rates are determined when bonds are actually sold. § Assumption: 2017 Bond Sale Current rates plus 1.25% (125 basis points). 2018 Bond Sale Current rates plus 1.50% (150 basis points).

10 Tax Rate Planning Bond Rating § A higher bond rating results in lower interest rates. § Assumption: Aa1 (with State Guarantee) A1 District Rating (Pending) A Guide to Bond Ratings Moody’s Investors Service – Founded 1860 Highest Quality Aaa Aa1, Aa2, Aa3 A1, A2, A3 Baa1, Baa2, Baa3 Lowest Quality NR (Nonrated)

11 Tax Rate Planning Bond Rating (Continued) § Bond raters consider the local economy, District finances, and other factors § Assumption: Aa1 (with State Guarantee) A1 District Rating (Pending) Governmental Debt Factors Economy Factors Economy Financial Performance Debt Factors The Rating

12 Tax Rate Planning Assessed Value Year Historical Bond AV New Construction Bond Levy Rate/$1000 % change 2006 571,738,801 4,938,590 $2.69 6.6% 2007 580,960,148 12,496,824 $2.69 1.6% 2008 664,112,392 13,218,479 $2.38 14.3% 2009 679,478,418 10,490,250 $2.37 2.3% 2010 665,219,106 10,605,742 $2.48 -2.1% 2011 708,718,599 5,555,463 $2.36 6.5% 2012 678,139,798 3,503,900 $2.54 -4.3% 2013 699,498,925 4,063,400 $2.52 3.1% 2014 711,431,949 6,124,459 $2.53 1.7% 2015 732,593,880 6,537,500 $2.53 3.0% 2016 760,257,838 6,537,501 $2.49 3.8% 2017* 773,789,784 5,775,191 $2.29 1.8% *Preliminary value. 5 year Compound Annual Growth Rate (2012-2017): 2.7% 10 year Compound Annual Growth Rate (2007-2017): 2.9%

13 Tax Rate Planning Assessed Value (Continued) Historical Assessed Value and Levy Rates for Bonds 900,000,000 $4.50 800,000,000 $4.00 Bond Levy Rate (per $1,000 AV) 700,000,000 $3.50 Bond Assessed Value 600,000,000 $3.00 500,000,000 $2.50 400,000,000 $2.00 300,000,000 $1.50 200,000,000 $1.00 100,000,000 $0.50 - $0.00 Historical Bond AV Bond Levy Rate/$1000 *Preliminary value.

̶ ̶ ̶ 14 Tax Rate Planning Assessed Value (continued) § Projected Assessed Value Growth Final 2016: 3.78% growth Preliminary 2017: 1.78% growth Projected 2018-2038: 1.50% annual growth § An individual’s taxes will be based on the assessed value for their property § Higher assessed values will lower the District’s tax rates (but not the overall payment ) § New construction vs. increase in value of existing property

̶ ̶ ̶ 15 Tax Rate Planning Bond Structure § State law gives Districts great flexibility in determining bond structures § Options Level Debt Level Tax Rate Stepped Level Tax Rate

16 Bond Tax Rate Summary Interest Rates: 2017 Bond Sale current rates plus 125 basis points; 2018 Bond Sale current rates plus 150 basis points Bond Rating: Aa1 State Guarantee District Rating: A1 (pending) Assessed Value Growth: Final 2016: 3.78% growth; Preliminary 2017: 1.78% growth; Projected 2018-2036: 1.50% annual growth Scenario #16 #17 Authorization Amount $37,250,000 $40,325,000 Bond Sale Dates and Amounts June 1, 2017 $5,000,000 $5,000,000 December 1, 2018 $32,250,000 $35,325,000 Bond and Capital Levy Tax Rates Actual 2016 $3.18 $3.18 Projected 2017 2.98 2.98 2018 3.25 3.50 2020 3.25 3.50 2025 3.25 3.50 2030 3.24 3.50 2035 3.25 3.50 Total Interest Cost $25,288,000 $27,209,000 Final Maturity 2038 2038 Term 20 years 20 years Projected 2018 Bond Tax Rate increase over 2017 $0.27 $0.52 Bond/Capital Levy Tax Rate