2011 TASA/TASB Presentation

transcript

Holding an Effective

Bond Election

Outline

• Bond Election Analysis – deciding to call an

election

• Bond Election Campaign – Once The Board

has voted

• Post-election - next steps

Bond Election Analysis

0 1 2 3 4 5 6 7 8 9 10 11 12 13

Do we have a need?

Needs Assessment

Board creates needs committee

Needs committee makes recommendations

Board reviews needs committee recommendations …

Board considers approval of bond election

Financial Impact Study

Board approves bond election

Bond election strategy implemented

Bond election

Months

“Keys to bonds passing” case study*

• Board and administration established diverse

citizen task force

• Disseminated info that focused on kids and

community

• Unanimous support of board

• Keeping school design simple

• Spending time getting “yes” voters out, not trying to

change “no” voters’ minds

*School Bond Case Study (by Holt, Wendt, and Smith – 2006)

Important Steps

• Indentifying district needs and projects.

• Identifying the financial impact to the

community.

• Creating a strategic election campaign.

Holding an Effective Bond Election 5

May and November pass/fail election results 2006-

November Bond Election Results (by # of Elections)

Passed Failed

May Bond Election Results (by # of Elections)

Passed Failed

May and November election amount ($) results

2006-2010:

May Bond Election Results (by Par Amount)

Passed Failed

November Bond Election Results (by Par Amount)

Passed Failed

1,000,000,000

2,000,000,000

3,000,000,000

4,000,000,000

5,000,000,000

6,000,000,000

7,000,000,000

8,000,000,000

9,000,000,000

1-May-06 1-Nov-06 1-May-07 1-Nov-07 1-May-08 1-Nov-08 1-May-09 1-Nov-09 1-May-10 1-Nov-10

Historical Bond Election Results

Passed Failed

Texas ISD bond election results vs. macroeconomic

market conditions:

• Success rate of bond elections decline from

85% in 2007 to 60% in 2010

• Number of elections decreased from 168 in 2007 to

81 elections in 2009. However, elections increased

to 110 in 2010

• May 2011 results

– 64 Elections

– 72% passed

• A well thought-out plan

– School Site

– Structural and Mechanical

– Maintainability

– School Safety and Security

– Educational Adequacy

– Environment for Education

• Specialized projects – needs vs. wants

• Location

• Who assesses district needs?

• Community surveys

Bond Election Analysis Indentifying district needs and projects:

• Construction team

• Cost overruns?

• Competitive factors?

• District’s best interests

Holding an Effective Bond Election 9

Develop accurate cost projections:

Identifying the financial impact to the community:

• Build financial team

• Review market conditions

• Project tax implication

• State formulas

• Financial team

Who is on my financial team?

• School Board

• Superintendent

• Business Manager/CFO

• Architect

• Construction Consultants

• Financial Advisor

• Underwriter

Market conditions and their effects on tax

• ISDs tax rate:

– Assessed Valuation (“AV”) within the district

– Borrowing amounts and costs

Effect on Tax Rate

Interest Rates Higher Interest Rates Lower AV Increases AV Decreases

Up Down Down Up

• For example, assuming that a district recently issued $50

million of bonds with level debt service over 30 years, the

District’s tax rate could be expected to increase by

approximately $0.33 per $100 (at current market rates) of

Assessed Valuation.1

Tax Rate Changes - Assuming $50 MM Bond Issue1

Rates Higher by 2% Rates Lower by 2% Assessed Value Increases 10%

Assessed Value Decreases 10%

$0.40 $0.26 $0.30 $0.36

1 Assumes total assessed valuation of $1 billion.

Market conditions and their effects on tax

rates continued

Accurate tax impact projections

– What are the chief variables that will impact the

tax rate?

– What are current market conditions?

– Are there innovative or cost saving financing

options?

– How do I know I have the right team?

BOND ELECTION CAMPAIGN

After the Board has voted to call an election…

Bond Election Campaign

• Know who is on your team

• Know your voters

• Clear communication

• Think outside the box

How are you going to succeed?

• Board (“cohesive”)

• Superintendent

• District staff

• Community leaders

• Financial advisor, architect, consultants

• Legal Council

Who’s on your

Election team?

• The perception “inside”

• Does each team member know their role?

• How will information be communicated?

• Is everyone aware of the rules?

Who’s on your team?

• The perception “outside”

• Factors that can impact

the minds of your voters

• Interviews/Surveys

Identify your voters

Evaluate organized opposition:

understand bond opponents

• Determine accuracy of opposition points and

develop response

• Meet with opponents to create a common ground

• Bring opponents into the “core” team

Understanding your district’s role*:

• Can a school district take an official position

in an election?

• Can a school district communicate anything

about an election?

• What about district staff and elected

officials?

• It’s complicated…

*source: TASB legal services

Communicating with Voters

Understanding your district’s role:

Q. Can a school district take an official position in

an election?

A. No, not if public funds will be used directly or

indirectly to reach or disseminate the position.

School district employees and officials cannot

knowingly use public funds, directly or indirectly,

for political advertising to advocate for or against a

candidate or measure that will appear on a ballot.

Q. May public funds be used to communicate

anything about an election?

A. Yes, public funds can pay for the dissemination of

factual information, but not advocacy.

Factual information includes information about

what is at stake in a bond or tax election, as well

as information about the conduct of the election

(date, polling sites, etc.).

Texas Election Code § 255.003 Unlawful Use of Public Funds for Political Advertising

a) An officer or employee of a political subdivision

may not knowingly spend or authorize the

spending of public funds for political advertising.

b) Subsection (a) does not apply to a communication

that factually describes the purposes of a measure

if the communication does not advocate passage

or defeat of the measure.

c) A person who violates Subsection (a) commits an

offense. An offense under this section is a Class A

misdemeanor.

DON’T “Advocate”

A communication that “contains a clear request for the

reader to support” the measure

• Vote for . . .

• Support . . .

• Defeat . . .

• Reject . . .

DO “Educate” (Objectively Verifiable Facts Only)

• Student capacity

• Growth rates

• Age/condition of facilities

• Projects to be funded with bonds

• Cost of projects

• Tax rate effect

• Voting dates and polling places

Q. May board members use their own time and

money to campaign for candidates and

causes?

A. Yes, public officials, who are acting independently,

without the use of public funds, have a free speech

right to engage in political advocacy.

This includes the use of private emails and

involvement with political action committees.

Q. Are school employees permitted to advocate

for or against particular candidates or

measures?

A. Not on work time or using district resources,

including office supplies and computer equipment.

Q. Is the superintendent ever “off the clock” and

free to advocate as a private citizen?

A. Advocacy by a superintendent on a school district

election matter may appear to others to be an

official statement by the district and thus a use of

district funds.

A superintendent should speak only about the

factual purposes of an election measure so as not

to encourage, promote, or imply that listeners

should vote for or against the measure.

Common Sense Approach

• Educate, Don’t Advocate

• Don’t Stir People Up!

It’s COMPLICATED…

Don’t try this without

Legal Counsel!!!

Presentations

• Factual

• Short (5-10 slides)

• Focus on District successes

• Bond project summary

• Brochures and fliers

• Website

• Social Media

• Ballot language

Don’t try this

without

Legal Council!!!

Think OUTSIDE the box

Thinking outside the box examples:

• Put bond opposition on your team

• Organized non-district staff support

• Catchy slogan

• Pulpit presence

• Senior involvement (i.e. Pancake Night)

• Captive audience – Fall Bazaar

– Choir/Band Concert

– Baseball/Football games/playoffs

• Early voting locations

• Awareness of other local Gov’t entities elections

POST ELECTION

Your election has passed – now what?

Post Election

• Canvas Election

• Construction Phases

• Sell Bonds

• Receive and Invest Bond Proceeds

Post Election

Construction Delivery Methods

Five Methods of Construction:

* Competitive Sealed Bid

* Competitive Sealed Proposal

* Construction Manager-Agent

* Construction Manager-At-Risk

* Design/Build

- Job Order Contracts

Texas Education Code: Chapter 44 – Fiscal Mgmt

* Board must determine delivery method

Post Election

• Underwrite Bonds – Firm that markets and sells

your bonds to investors

• Different firm than your Financial Advisor Firm

• Takes on Underwriting risk in the event of no

investors

Post Election

Investing Bond Proceeds

• Set up separate bond investment account

• Determine spend-down estimates, may invest in

term investments

• Options include: Treasuries, Agencies, CDs, Pools

Wrapping up…

Effective elections have common factors:

• Clearly identified needs

• Trust of the community

• Unified board members

• Community leaders and grass roots support

• Panel of experts helping with the election

Questions? • Jeff Clemmons, TASB

(800) 580-8272 extension 2220

jeff.clemmons@tasb.org

• Kara Ardis, First Public Subsidiary of TASB

(800)558-8875

kara.ardis@firstpublic.com

• Ron Greiner, Government Capital Corp.

(800) 883-1199

• Rudy Segura, Jr., McCall, Parkhurst, &Horton LLP

(214) 754-9268

Disclosure

This material is for informational purposes only and is not intended to be an offer to

sell or a solicitation of an offer to buy any security. Computational information is

subject to change, is for hypothetical purposes only and does not guarantee or

predict future results. For securities discussed herein, First Public may act as an

underwriter or agent. First Public is the primary distributor of a local government

investment pool, Lone Star Investment Pool. The Lone Star Information Statement

should be read carefully before investing. Investors should consider the

investment objectives, risks, charges and expenses associated with this or any

security prior to investing. Investment in Lone Star Investment Pool is not insured

or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other

government agency and although Lone Star seeks to preserve the value of the

investment at a fixed share price, it is possible to lose money by investing in Lone

Star. For further information or for an Information Statement contact First Public at

(800) 558-8875.