I have only included part of the document.
The presentation was given by KNN.
West Contra Costa USD
2012-13 Tax Rate Setting Process, November 2012 Bond Election, and Current Topics
Presentation to the Facilities Subcommittee
August 14, 2012
Amount of Authorization: $360 million.
Term of Capital Program: Improvements to be over 12 years.
Schedule of Bond Sales: In modeling the 2012 bond measure, we assumed five bond issuances in alternating years beginning in 2013 through 2021.
Repayment Structure: Our preliminary model has each series repaid over 30 years from issuance, with overall program repayment escalating approximately 4% annually.
Tax Rate Targets: Estimated at a maximum $48 per $100,000 assessed value.
Tax Base Growth: It is assumed that tax rate growth at or above 4% will allow for the issuance of bonds within target tax rates.
Interest Rates: Assumed 5.75% for each series of bonds sold.
The ballot language for the bond measure contained reference to two specific features designed to increase the District’s flexibility to implement the bond program as a whole to meet community desires. Bonding capacity waiver – the District will need to achieve a bonding capacity waiver prior to issuing any bonds under the new measure.
Tax rate stabilization – the ballot language specifically authorizes the use of bond proceeds under the new measure to refund, defease, or otherwise repay bonds issued under prior authorizations.
The purpose of including these items in the ballot language is to increase transparency and to ensure community buy-in on two features of the bond program that might be controversial to some audiences.
The new bond measure will be open to criticism from some members of the community and outside observers. The District has a lot of bonds outstanding relative to the size of its tax base.
Local tax rates for general obligation bonds are already higher than for any other school district in the State (and taxes on this measure will be added on to tax rates for previous bond measures).
The new measure continues to be structured around deferred debt service, with projections calling for 4% escalation in payments over time.
Given the term of the program, uncertainty with regard to District priorities and project costs, and the likelihood of emerging facility needs, it is possible that facility needs will remain after all of the new bond proceeds are expended.
General Response to Scrutiny
School districts should also be focused on broadening the conversation around bond financing on larger issues. Evaluating bond programs in aggregate rather than looking at individual components.
Focusing on critical need for school facilities improvement.
Highlighting equity issues around school facilities financing (Prop 39 tax rate targets and bonding capacity limit borrowing amounts by tax base value).
Improving transparency and communication with Board and community members.