0. Capital Facilities Planning
June 29, 2017
Jon Gores
Managing Director
(206)

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

2. Washington State Election Results-School Districts Only
2015
M&O Levies 46 Passed and 2 Failed
Capital Project Levies 16 Passed and 2 Failed
Transportation Levies 2 Passed and 1 Failed
Bond Authorizations 23 Passed and 22 Failed
2016
M&O Levies 132 Passed and 3 Failed
Capital Project Levies 29 Passed and 3 Failed
Transportation Levies 3 Passed and 0 Failed
Bond Authorizations 26 Passed and 21 Failed
2017*
M&O Levies 41 Passed and 1 Failed
Capital Project Levies 11 Passed and 1 Failed
Transportation Levies 0 Passed and 0 Failed
Bond Authorizations 20 Passed and 11 Failed
* Includes the February 14, 2017 and April 25, 2017 elections 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 2017-Schools Only)
Source: State of Washington, Office of Superintendent of Public Instruction

4. Voting Patterns-Bond Issues Passed by Month Statewide
(Years 1992 through April 2017-Schools Only)
Source: State of Washington, Office of Superintendent of Public Instruction

5. Voting Patterns-Bond Issues Passed by Purpose Statewide
(Years 1992 through April 2017)
Source: State of Washington, Office of Superintendent of Public Instruction

6. 2017-2018 Special Election and Resolution Filing Dates

7. 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 = $31,973,616 – $3,335,000 (Outstanding Debt) = $28,638,616
Non-voted bonds are (LGO)
Repaid with existing revenue
Can’t be used for “new” construction
3/8 of 1% Debt Capacity = $2,398,021 – $0* = $2,398,021
* As of September 1, 2016

8. 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

9. District’s Current Debt
The District has one outstanding Unlimited Tax General Obligation Bond (UTGO) issues:
UTGOR Bonds, 2012
All of the District’s voter approved UTGOR Bonds will be repaid on or before December 1, 2019

10. Historical Bond Tax Rates
Over the past 18 years the District’s bond tax rate has ranged from $2.66 in 2000 to a 2017 bond tax rate of $1.52.
Year
Historical Bond AV
Bond Levy Rate/$1000
2000
$244,450,389
$2.66
2001
255,314,186
$2.04
2002
286,058,158
$1.89
2003
303,510,969
$1.78
2004
313,746,887
$1.50
2005
328,014,998
$1.59
2006
349,871,942
$2.46
2007
368,191,168
$2.22
2008
376,680,379
$2.17
2009
391,703,426
$2.30
2010
402,044,713
$2.24
2011
462,763,615
$1.99
2012
473,500,098
$2.11
2013
472,863,350
2014
481,901,900
$2.10
2015
624,938,562
$1.62
2016
599,659,302
2017
639,472,316
$1.52

11. Sample Bond Proposition
SCHOOL DISTRICT NO. 123
BONDS FOR CONSTRUCTION OF SCHOOL FACILITIES
The Board of Directors of XYZ School District No. 123, adopted Resolution No. 456, concerning a proposition to finance construction of school facilities. This proposition would authorize the District to construct a new elementary school (Grades K-3) to replace XYZ Elementary School on the existing site and construct additional classrooms to replace portable classrooms at XYZ Middle School; issue no more than $19,544,500 of general obligation bonds maturing within 20 years; and levy annual excess property taxes to repay the bonds, all as provided in Resolution No. 456.
Should this proposition be:
Approved………. ____
Rejected………… ____

12. Tax Rate Planning Interest Rates Bond Rating Assessed Value
Assumptions for Tax Rate Planning:
Interest Rates
Bond Rating
Assessed Value
Bond Structure

13. 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: Future Bond Sales Current rates plus 1.50% (150 basis points).

14. Standard & Poor’s Global Ratings – Founded 1860
Tax Rate Planning
Bond Rating
A higher bond rating results in lower interest rates.
Assumption: AA+ (with State Guarantee) A+ District Rating (Pending)
A Guide to Bond Ratings
Standard & Poor’s Global Ratings – Founded 1860
Highest Quality
AAA
AA+, AA, AA-
A+, A, A-
BBB+, BBB, BBB-
Lowest Quality
NR (Nonrated)

15. Financial Performance
Tax Rate Planning
Bond Rating (Continued)
Bond raters consider the local economy, District finances, and other factors
Assumption: AA+ (with State Guarantee) A+ District Rating (Pending)
The Rating
Governmental Factors
Economy
Debt Factors
Financial Performance
Debt
Factors
Economy

16. Tax Rate Planning Assessed Value Year Historical Bond AV
New Construction
Bond Levy Rate/$1000
% change
2000
244,450,389
$2.66
N/A
2001
255,314,186
$2.04
4.4%
2002
286,058,158
$1.89
12.0%
2003
303,510,969
$1.78
6.1%
2004
313,746,887
$1.50
3.4%
2005
328,014,998
$1.59
4.5%
2006
349,871,942
$2.46
6.7%
2007
368,191,168
$2.22
5.2%
2008
376,680,379
$2.17
2.3%
2009
391,703,426
$2.30
4.0%
2010
402,044,713
$2.24
2.6%
2011
462,763,615
4,477,415
$1.99
15.1%
2012
473,500,098
5,223,700
$2.11
2013
472,863,350
2,532,349
-0.1%
2014
481,901,900
4,149,390
$2.10
1.9%
2015
624,938,562
9,249,531
$1.62
29.7%
2016
599,659,302
4,922,035
-4.0%
2017
639,472,316
8,098,887
$1.52
6.6%

17. Tax Rate Planning
Assessed Value (Continued)

18. Tax Rate Planning Assessed Value (continued)
Projected Assessed Value Growth
Final 2017: 6.64% growth
Projected : 1.00% 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

19. Increases in Property Values Will Not
Increase School District Tax Collections
Changes in property values don’t change the amount of taxes authorized
Local school taxes can only be increased by a vote of the people
Changing property values will change tax rates, but not tax collections
Year Home Value Tax Rate Tax Bill
XYZ School District Home Value 2016 $100,000 $5.00/$1,000 $500
Assume a 20% increase in Assessed Value for XYZ School District
#1: 20% increase 2017 $120,000 $4.17/$1,000 $500
#2: 10% increase 2017 $110,000 $4.17/$1,000 $459
#3: 30% increase 2017 $130,000 $4.17/$1,000 $542

20. 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

21. Level Debt
Results in level annual payments for the life of the bonds.

22. Level Tax Rate
Attempts to result in a level annual tax rate over the life for the bonds*
* Based on assessed value projections.

23. Stepped Level Tax Rate
Allows for the issuance of future bonds

24. Bond Tax Rate Summary * Actual proceeds for CPF: $13,765,000
Interest Rates: Current rates plus 150 basis points
Bond Rating: AA+ State Guarantee
District Rating: A+ (Pending)
Assessed Value Growth: Final 2017: 6.64% growth;
Projected : 1.00% annual growth
Scenario #7 #8 #9
#10
Authorization Amount
$28,600,000
$32,600,000
Bond Sale Dates
and Amounts
$14,300,000
$16,300,000
$14,300,000*
June 1, 2018
December 1, 2019
Bond Tax Rates
Actual 2017
$1.52
Projected 2018
1.82
2019
3.17
3.60
2.87
2.66
2020
3.61
2.65
2025
2030
2035
Final Maturity
2039
2044
2049
Interest Cost
$18,102,000
$20,565,000
$25,343,000
$33,197,000
Term
20 Years
25 Years
30 Years
2019 Bond Tax Rate increase over 2017 Bond Tax Rate
$1.65
$2.08
$1.35
$1.14
* Actual proceeds for CPF: $13,765,000

33. Tax Rate Comparison

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