L ONG R ANGE T AX R ATE P LANNING J ANUARY 6, 2015 J ON G ORES M ANAGING D IRECTOR P HONE : (206) E- MAIL : DADCO. COM Shelton School District
2012 M&O Levies 166 Passed and 6 Failed Capital Projects Levies 34 Passed and 3 Failed Transportation Levies N/A Bond Authorizations 12 Passed and 6 Failed 2013 M&O Levies 44 Passed and 1 Failed Capital Project Levies 16 Passed and 2 Failed Transportation Levies 1 Passed and 0 Failed Bond Authorizations 15 passed and 16 Failed 2014 M&O Levies 159 Passed and 3 Failed Capital Project Levies 49 Passed and 3 Failed Transportation Levies 1 Passed and 1 Failed Bond Authorizations 13 Passed and 27 Failed 1 Washington State Election Results School Districts Only Source: Washington Secretary of State: Election and Voting website and individual County Auditor websites.
2 February M&O Levies 152 Passed and 2 Failed Capital Projects Levies 44 Passed and 0 Failed Transportation Levies 1 Passed and 0 Failed Bond Authorizations 11 Passed and 13 Failed April M&O Levies 4 Passed and 0 Failed Capital Projects Levies 1 Passed and 0 Failed Transportation Levies N/A Bond Authorizations 1 Passed and 11 Failed August M&O Levies 1 Passed and 1 Failed Capital Projects Levies 1 Passed and 1 Failed Transportation Levies N/A Bond Authorizations 0 Passed and 1 Failed November M&O Levies 2 Passed and 0 Failed Capital Projects Levies 2 Passed and 2 Failed Transportation Levies 0 Passed and 1 Failed Bond Authorizations 1 Passed and 2 Failed Washington State Election Results School Districts Only
Voting Patterns 3 Source: State of Washington, Office of Superintendent of Public Instruction Bond Issues Passed per Year (Years 1993 through November 2014 Inclusive) Schools Only
4 Source: State of Washington, Office of Superintendent of Public Instruction Bond Issues Passed by Month – Statewide (Years 1992 through November 2014 inclusive) Schools Only 66% Voting Patterns
5 Bonds/M&O Levies on the Same Ballot Source: OSPI and County Auditors/Elections Departments.
6 M&O / Capital Levies on the Same Ballot
7 Assumptions for Tax Rate Planning Interest Rates Bond Rating Assessed Value Bond Structure Tax Rate Planning
8 A. Interest Rates - Lower interest rates result in lower tax rates for bonds. - Interest rates are determined when bonds are actually sold. - Assumption: Future Bond Sales Current rates plus 2.0 % (200 basis points). Tax Rate Planning
9 B.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 1909 Highest QualityAaa Aa1, Aa2, Aa3 A1, A2, A3 Baa1, Baa2, Baa3 Lowest QualityNR (Nonrated) Tax Rate Planning
C. Bond Rating (continued) Bond raters consider the local economy, District finances, and other factors Assumption: Aa1 (State Guarantee) A1 (District Rating, Pending) 10 Tax Rate Planning Debt Factors Economy The Rating Governmental Factors Economy Debt Factors Financial Performance
11 Tax Rate Planning D. Assessed Value * * Preliminary
12 Actual Growth -4.7% 5yr Avg. Annual Growth Rate Tax Rate Planning D. Assessed Value (continued)
13 Tax Rate Planning Projected Assessed Value Growth – Final 2014: -5.27% annual growth – Preliminary 2015:.053% growth – Projected 2016: 0% growth – Projected : 1% annual growth – Projected : 1.50% annual growth Higher assessed values will lower the District’s tax rates (but not the overall payment) An individual’s taxes will be based on the assessed value for their property New construction vs. increase in value of existing property D. Assessed Value (continued)
14 E. Bond Structure State law gives Districts great flexibility in determining bond structures Options: – Level Debt – Level Tax Rate – Stepped Level Tax Rate Tax Rate Planning
15
16
17
18 Total Tax Rate Comparison Mason County School Districts 2014 Total Tax Rates District Assessed Value (1) ($)Bonds ($)M&O ($) Capital Projects ($)Trans. ($)Total ($) Hood Canal School District No. 4041,062,903, Pioneer School District No. 4021,213,031, Grapeview School District No ,414, North Mason School District No. 403 (2) 1,925,028, Mary M. Knight School District No. 311 (3) 163,512, Elma School District No. 68/137 (3) 733,647, Southside School District No ,993, McCleary School District No. 65 (3) 188,583, Shelton School District No. 3091,603,237, (1) Bond Assessed Value does includes TAV. (2) Mason and Kitsap Counties (3) Mason and Grays Harbor Counties Source: County Assessors Offices.
19 Total Tax Rate Comparison Comparable-sized School Districts 2014 Total Tax Rates District Assessed Value (1) ($)Bonds ($)M&O ($) Capital Projects ($)Trans. ($)Total ($) Chimacum School District No. 491,643,229, Lake Chelan School District No. 129J1,721,208, Chehalis School District No. 3021,588,307, North Mason School District No. 4031,925,028, Othello School District No. 1471,036,175, Lakewood School District No. 3061,656,862, Yelm Community Schools No. 21,922,836, Shelton School District No. 3091,571,277, Aberdeen School District No. 51,210,852, Dieringer School District No. 3431,317,251, White River School District No. 4161,951,722, Granite Falls School District No. 3321,043,860, *Bond Assessed Value does not include TAV (1) Individual County Assessed Values
20 The 2015 special election dates and ballot resolution filing deadlines pursuant to the Revised Code of Washington (“RCW”) are listed below for your information. (1) These are the dates permitted under current law, which are subject to change by the Legislature E LECTION D ATE R ESOLUTION F ILING D EADLINE (2) A PPROXIMATE D ATE B ALLOTS ARE M AILED (3) February 10, 2015December 26, 2014January 23, 2015 April 28, 2015March 13, 2015April 10, 2015 August 4, 2015 (Primary)May 8, 2015July 17, 2015 November 3, 2015 (General)August 4, 2015October 16, 2015 (1) This data is for informational purposes only and does not take the place of local, state or federal laws. Specific RCW information can be found at: (2) Some dates may have been adjusted to reflect the business day prior to actual resolution filing date, according to RCW 29A , if falling on a weekend. (3) Applies to both mail and absentee ballots. Absentee ballots are required to be mailed no later than 18 days prior to the election date. RCW 29A Source: Washington Secretary of State’s Office, Elections and Voting website Special Election & Resolution Filing Dates
21 Neither this material nor any of its contents may be disclosed, sold, or redistributed, electronically or otherwise, without prior written consent of Davidson Companies. The information presented herein is based on public information we believe to be reliable, prevailing market conditions, as well as our views at this point in time. We make no representation or warranty with respect to the accuracy or completeness of this material. Past performance is not necessarily indicative of future results. Davidson Companies does not assume any liability for any loss which may result from the reliance by any person upon such material. We make no representations regarding the legal, tax, regulatory, or accounting implications of entering into a Transaction. Required Disclosure Pursuant to MSRB Rule G-23: An underwriter’s primary role will be to purchase as principal, or arrange for the placement of the securities in a commercial arm’s length transaction with the issuer, and may have financial and other interests that differ from those of the issuer. In its capacity as underwriter and not as financial advisor, an underwriter may provide incidental financial advisory services at the issuer’s request, including advice regarding the structure, timing, terms and other similar matters concerning the issuance. However, an underwriter does not assume any financial advisory or fiduciary responsibilities with respect to the issuer.