General Shafter-Pre. Re. June 2016 Bond Measure Plan-DRAFT Pg...

General Shafter School District - Page 1 © 2015 Government Financial Strategies

For Reference

u September 3, 2015 Board Presentation

u Tax Base Demographics


CLICK TO EDIT MASTER TITLE STYLE

Government Financial Strategies

Presented by Lori Raineri September 3, 2015

General Shafter School District

Funding Facilities Needs with General Obligation Bonds

Presentation materials provided for distribution at the meeting. Please see meeting record for verbal commentary and discussion.


Our Agenda for Today

u Introductions

u Role of Financial Advisor

u Overview of General Obligation Bonds u Pro-Forma General Obligation Bond Financial Plan:

▶ Without Grapevine Development ▶ With Grapevine Development

u For Reference


Introductionsu Lori Raineri

▶ President & founder, Government Financial Strategies ▶ Certified Independent Professional Municipal Advisor ▶ Certified Fraud Examiner ▶ Serves on the Board of State and National Organizations

● California League of Bond Oversight Committees ● National Association of Municipal Advisors ● Collaborative for High Performance Schools

u Government Financial Strategies ▶ Public finance consulting firm dedicated to helping public

agencies meet their capital needs ▶ Established in 1988


Role of Financial Advisor

u Fiduciary duty to the District

u Provide independent financial analysis and advice

u Activities regulated by the Securities and Exchange Commission and the Municipal Securities Rulemaking Board as a result of the Dodd-Frank Act of 2010 ▶ Government Financial Strategies is registered with both

regulating agencies


General Obligation Bondsu Common in California since the early 20th Century

▶  In 1978, Proposition 13 superseded authority ▶  In 1986, restored at 2/3 voter approval level ▶  In 2000, 55% voter approval measures allowed with

additional accountability requirements ●  Maximum projected tax levy and specified citizens’

oversight u “Full Faith and Credit Bond” - Unlimited taxing authority u “Ad Valorem” taxation u Bonding capacity limited to 1.25% of AV for union districts

(2.50% of AV for unified districts) u County is responsible for ongoing administration u No political discretion


A Bond is a Loan

u A bond is a loan. Just like a home mortgage, a general obligation bond allows the taxpayers to buy and receive the benefit of the facilities now, and pay for them over time.

Bond Proceeds

Facilities Improvements Bond

Repayment

Community Benefit

Bond Investors


Timeline and Process General Obligation Bond Measure Process Diagram

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Public Information and Input Process: - Sharing Data on

Facilities Needs and Potential Growth of District from New

Development -Learning What the

Public Thinks

Election: June or

November 2016

GO Bond Facilities Project List

Evaluation of Facilities Needs: Resulting Document Reflects

District’s Philosophy (ranging from list created by staff and community with cost estimates to a Facilities

Master Plan)

Development of a Bond Financing Plan:

Understanding of Taxing and Bonding Capacity and Assumptions

GO Bond Measure Ballot

Language

Governing Board Decides if they will call for a GO Bond Election

(March or August 2016)

Overview of Process for a General Obligation Bond Measure



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Public Thinks

Election: June or

November 2016




Master Plan)




Language





Evaluation of Facilities Needs

u Facilities plan should guide facilities decisions u Some items to consider as a starting point:

▶  Adequacy ▶  Safety ▶  Staff and community input ▶  Data needed ▶  Potential need for external assistance ▶  Range of results from a simple needs analysis to

facilities master plan

✔  Most appropriate process and result should reflect the General Shafter community culture.


Development of Bond Financing Plan

u Elements of Plan ▶  Tax Base Analysis ●  Historical and projected assessed value

▶  Bonding capacity (maximum bonds outstanding) ▶  Taxing capacity (maximum projected tax levy) ▶  Interest rate assumptions ▶  Facilities funding cash flow needs ▶  3-year Expenditure Reasonable Expectations Test ✔ Are assumptions justified and reasonable?

✔ Sound pre-election bond financial planning maximizes chances of successful post-election bond issuance


Ballot Language, Project List, Tax Rate Statement, and Ballot Arguments

u Drafted by bond counsel with input from District, public opinion survey firm and financial advisor

u Board Resolution and Ballot Statement ▶  Education Code 5320 - 5329 ▶  Elections Code Section 13247 dictates 75 word limit

u Project List ▶  55% accountability measure in both CA Constitution Article

VIII A and Education Code 15264 - 15288 u Tax Rate Statement

▶  Elections Code 9400 et seq. u Ballot Arguments

▶  Elections Code 9500 et seq.



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Public Thinks

Election: June or

November 2016




Master Plan)




Language





u The District is allowed to engage in sharing information with the public, and should do so ▶  Public information, not campaigning ▶  Bond counsel will provide guidance

u Some items to think about: ▶  Does the public know about the condition of the facilities? ▶  Does the public know about the District and how finances

are managed? ▶  Does the public know how good schools improve property

values? ▶  Does the public know about the potential for future

development? ▶  What do we know about voters (as compared to our

traditional constituency of parents, staff and students)?

Public Information and Input


A School Bond is a Community Endeavor


Takeaways From 2014California School Revenue Measures November 2014*

Total Pass % Passing

School Bond 55% 112 91 81%

School Bond 2/3 1 0 0%

School Parcel Tax 2/3 8 8 100%

California School Revenue Measures – November Comparison

Nov 2008 Nov 2010 Nov 2012

Total % Pass Total %Pass Total % Pass

School Bond 55% 92 92% 63 75% 105 86%

School Bond 2/3 3 67% 0 -‐-‐ 1 100%

School Parcel Tax 2/3 21 81% 18 11% 25 64%

* CaliforniaCityFinance.com Local Revenue Measure Results November 2014, November 2012, November 2010, and November 2008


Pro Forma Bond Financial Plans for General Shafter SD - Key Legal Constraints

u Bonding Capacity: limit on amount of outstanding bonds (this is for all bond measures combined)

▶ 1.25% of total assessed value for union districts ●  Education Code 15268✔

▶ 2.50% of total assessed value for unified districts ●  Education Code 15270(a)

u Taxing Capacity: limit on maximum projected tax levies (this is for 55% voter approval bond measures only)

▶ $30 per $100,000 of assessed value for union districts ●  Education Code 15268✔

▶ $60 per $100,000 of assessed value for unified districts ●  Education Code 15270(a)


G.O. Bond Tax Rates

u Bond tax rate ≈ debt service ÷ assessed value u Each property in the District pays its pro rata share, based

on its individual assessed value (not market value)


Tax Base Is Volatile and Complex

$0

$100,000,000

$200,000,000

$300,000,000

$400,000,000

$500,000,000

$600,000,000

$700,000,000

$800,000,000

$900,000,000

$1,000,000,000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Assessed Value

Fiscal Year Beginning July 1

While Annual Growth has Varied, Long-Term Growth has been Strong

Historical Compounded Annual AV Growth Since 2001-02:

Total AV: 10.92% Net Local Secured: 9.43% Net Unsecured: 30.46%

Mineral: 12.35% Other: -0.77%

6.76%

12.52%

14.03% 1.27%

25.83%

13.44%

11.29% 12.52%

3.65% 13.33%

32.56%

12.10% 5.20%

4.86% 5.42% 6.27%

11.70% 9.71%

3.51%

13.17%

7.29%

22.78%

Historic assessed value (AV) provided by the Kern County Auditor-Controller's Office. The District’s total AV is comprised of net local secured, net unsecured, mineral (oil) and other (utility & homeowners' exemption). Changes shown are annual changes. 2015-16 AV is preliminary.

3.18%

9.88%

2.69%

10.92%

8.50% 11.34%

963.45% 8.52% 5.24% 52.88%

-4.15% -3.84% -2.35%

38.84%

6.64% 30.93% 14.07% -0.76% 5.84%

0.23%

-16.80% 36.63% -13.60% 34.95% 76.35% 18.20% 15.19% 18.60% -14.31%

76.50%

50.99% -10.42% -5.40%

22.57%

18.94%

6.61%

7.30%

-30.07%

3.71%


Understanding Components is Key

87.35% 80.90% 80.03% 81.23%

75.69% 71.70% 71.38% 70.85% 68.17% 69.68%

62.67% 59.27%

63.42% 65.28%

72.37%

1.50% 12.00% 11.49% 11.67%

15.86%

15.08% 14.02% 14.21% 16.31%

17.18%

18.96%

16.32% 15.28%

14.61%

14.52%

10.91% 6.85% 8.26% 6.88% 8.25%

13.08% 14.48% 14.82% 15.42% 13.04% 18.30%

24.35% 21.24% 20.05%

13.07%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Assessed Value


Composition of Total AV has Fluctuated Since 2001-02

Historic assessed value (AV) provided by the Kern County Auditor-Controller's Office. The District’s total AV is comprised of net local secured, net unsecured, mineral & other (utility & homeowners' exemption). 2015-16 AV is preliminary.

Percentage of Total AV from 2001-02 - 2015-16 Net Local Secured:

Other:

Net Unsecured:

Mineral:

Maximum Minimum Average

0.25% 0.05% 0.14%

24.35% 6.85% 13.93%

18.96% 1.50% 13.93%

87.35% 59.27% 72.00%

Values that constitute less than 5% of total

AV are not shown


Net Local Secured is Largest Component

-1%

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

11%

12%

13%

$0

$50,000,000

$100,000,000

$150,000,000

$200,000,000

$250,000,000

$300,000,000

$350,000,000

$400,000,000

$450,000,000

$500,000,000

$550,000,000

$600,000,000

$650,000,000

$700,000,000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Annual AV Inflation Factor

Net Local Secured AV


Net Local Secured has Grown at a Compounded Annual Rate of 9.43% Since 2001-02

Annual CA AV Inflation Factor - 2% Annual CA AV Inflation Factor - CCPI

4.86% 5.42% 6.27%

11.70%

9.71% 3.51%

13.17%

7.29%

5.20%

12.10%

22.78%

Historic assessed value (AV) provided by the Kern County Auditor-Controller's Office. Annual California AV inflation factor provided by the California Sate Board of Equalization, and is the lesser of the annual change in the CA CPI or 2%. The District's total AV is comprised of net local secured, mineral (oil), utility, homeowners exemption, and unsecured. Changes shown are annual changes. Annual California AV inflation factor provided by California State Board of Equalization, and is the lesser of the annual change in the CA CPI or 2%.

18.94%

9.88%

Net local secured AV

3.18%


Reasons Assessed Value Can Change (for most properties)

u Pursuant to Proposition 13 (and embodied in Article 13A of the California Constitution), a school district’s property tax base can change for four reasons: ▶ Properties are sold (and reassessed at the sale price). ▶ Properties are improved (and reassessed with the value of

the improvement). ▶ A year passes (each property’s assessed value increases by

the lesser of 2% or the change in the California Consumer Price Index).

▶ Market value of one or more properties declines below assessed value - assessed value can be adjusted downward to the market value. If market value subsequently increases, assessed value can “catch up” to pre-decline AV plus allowable adjustments (e.g. 2% annual increase).


Grapevine Development Would Increase AVu Up to 12,000 new homes and 10.7 million square feet of

commercial development u New homes = improvement to property = reassessment with

value of improvement u Two pro forma bond financial plan scenarios:

▶ Baseline without Grapevine Development ▶ With Grapevine Development


AV Increase Assumption Depends on Grapevine Development

$0

$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

$10,000,000,000

$11,000,000,000

$12,000,000,000

$13,000,000,000

$14,000,000,000

$15,000,000,000

$16,000,000,000

$17,000,000,000

2015 2018 2021 2024 2027 2030 2033 2036 2039 2042 2045 2048 2051 2054 2057 2060 2063

Revenue

Fiscal Year Beg July 1

Projected Development in Grapevine Would Add Significantly to District's Total AV and Potential Tax Revenue

Notes: assumes net local secured growth of 4% for 2016-17, & 5% annually thereafter, while all other types of AV are assumed to remain constant. Grapevine development is assumed to occur at constant rate over 30 years and assumes a 3% annual construction inflation rate; thereafter, Grapevine Development property is assumed to increase at 2% annually. A $30 annual tax levy per $100,000 of AV is assumed.

Total AV from existing development - net local secured is assumed to grow

4% for 2016-17, & 5% annually thereafter, while all other AV types are

assumed to remain unchanged

Total AV, including Grapevine Development- for existing development, net local secured is assumed to grow 4% for 2016-17, & 5%

annually thereafter, while all other AV types are assumed to remain unchanged

for Grapevine Development, equal development

is assumed over 30 years, with 3% annual construction inflation - after development, AV is

assumed to increase 2% annually


Baseline Pro Forma Analysis: Without Grapevine Development

u Pro Forma Analysis Without Grapevine Development


Net Local Secured AV Assumed to Increase

$0

$500,000,000

$1,000,000,000

$1,500,000,000

$2,000,000,000

$2,500,000,000

$3,000,000,000

2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040 2042

Assessed Value


Different AV Assumptions Based on the AV Types Lead to Moderate Long-Term AV Growth Assumptions

Total AV - Actual Total AV - Assumed

Net Local Secured - Actual Net Local Secured - Assumed

Mineral - Actual Mineral - Assumed

Unsecured - Actual Unsecured - Assumed

Other - Actual Other - Assumed

Net local secured AV is assumed to

grow 4% for 2016-17, & 5% annually thereafter, while all other types of AV are assumed to remain unchanged

Historic assessed value (AV) provided by the Kern County Auditor-Controller's Office; 2015-16 AV is preliminary The District’s total AV is comprised of net local secured, net unsecured, mineral (oil), and other (utility & homeowners exemption). As homeowners exemption & unsecured components are relatively small and tend to be subject to less predictable volatility, the AV focuses on net local secured. Mineral valuation is based on the lesser of two calculation methodologies, one taking proven reserves at market values less expenses, the other is based off base year values. With depletion rates varying by oil field and unknowable future oil prices making AV projections for mineral values nearly impossible to project over the term of a general obligation bond, mineral values are assumed to remain unchanged.


Taxing Rates ≤ $30 / $100,000 AV

$0.00

$5.00

$10.00

$15.00

$20.00

$25.00

$30.00

$35.00

2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 2035 2037 2039 2041

Tax Levies per $100,000 of AV


$6.2 Million in New Bonding Authority is Supported by Tax Levies That are Below the $30 Maximum Projection Allowed

Projected Tax Levies $30 maximum projected tax levy for 55% voter-approval bonds

Projected Tax Levies per $100,000 of AV

Maximum:

Average:

Minimum:

$29.97

$27.99

$27.12

Notes: tax levies based on assumed issuance with "AAA" MMD rates as of Aug 26, 2015, plus 125bp for assumed "A" rating of bonds, plus increases for potential rate changes before bond issuance (+125bp for 2016). Net local secured AV is assumed to increase 4% for 2016-17, & 5% annually thereafter, while all other AV types are assumed to remain unchanged. Net collection assumes County reserve policy (first 10 months of following FY debt service) less assumed revenue. Assumed revenue based on historical data for other Kern Co. districts: unitary revenue = 3% of debt service + reserve collection, other revenue = 1.0% of debt service + reserve collection, & additional receipts = 5% of debt service + reserve - prior reserve. Reserve collected by County applied to last payment.


Stable Tax Rate à Bond Payments Grow w/Proj. AV

$0

$500,000,000

$1,000,000,000

$1,500,000,000

$2,000,000,000

$2,500,000,000

$3,000,000,000

$0

$150,000

$300,000

$450,000

$600,000

$750,000

$900,000

2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 2035 2037 2039 2041

Total AV Revenue/

debt service


Tax Revenue Available for Debt Service Increases with Growth in AV

Projected tax revenue / debt service

Notes: tax revenue based on preliminary AV for 2015-16, and assumed net local secured growth of 4% for 2016-17, & 5% annually thereafter, while all other types of AV are assumed to remain constant, and assumes a $30 annual tax levy per $100,000 of AV.

Total AV


Conservatively Projected Proceeds

$6,200,000

$0

$1,000,000

$2,000,000

$3,000,000

$4,000,000

$5,000,000

$6,000,000

$7,000,000

2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 2035 2037 2039 2041

Issuance/ Debt Service


$6.2 Million Issuance Supported by Available Tax Revenue

Series 2016 net debt service - projected

Notes: debt service is assumed based on "AAA" MMD rates as of Aug 26, 2015, plus 125bp for assumed "A" rating of bonds, plus increases for potential rate changes before bond issuance (+125bp for 2016). Net local secured AV is assumed to increase 4% for 2016-17, & 5% annually thereafter, while all other AV types are assumed to remain unchanged. Net collection assumes County reserve policy (first 10 months of following FY debt service) less assumed revenue. Assumed revenue based on historical data for other Kern Co. districts: unitary revenue = 3% of debt service + reserve collection, other revenue = 1.0% of debt service + reserve collection, & additional receipts = 5% of debt service + reserve - prior reserve. Reserve collected by County applied to last payment.


Bonding Capacity Sufficient

$0

$2,000,000

$4,000,000

$6,000,000

$8,000,000

$10,000,000

$12,000,000

$14,000,000

$16,000,000

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Bonding Capacity

Fiscal Year as of Aug 20

Bonding Capacity Increases with Growth in Assessed Value

Outstanding Bonds

$11,750,000 = approximate current

bonding capacity

Note: The District's statutory legal bonding capacity limitation is 1.25% of the District's total assessed value. Projected bonding capacity is based on 2015-16 AV, and assumes net local secured AV growth of 4% for 2016-17, & 5% annually thereafter, while all other AV types remain constant. Bonding capacity is as of August 20 when secured roll becomes "equalized." Values rounded.

Actual Projected

Bonding Capacity

$5,900,000 = approximate projected bonding capacity available after issuance of new measure bonds

$6,200,000 issuance


Pro Forma Analysis: With Grapevine Development

u Pro Forma Analysis With Grapevine Development


Assumed Buildout of New Homes

$.00/sf

$40.00/sf

$80.00/sf

$120.00/sf

$160.00/sf

$200.00/sf

$240.00/sf

$280.00/sf

$320.00/sf

sf

100,000 sf

200,000 sf

300,000 sf

400,000 sf

500,000 sf

600,000 sf

700,000 sf

800,000 sf 2

01

8

20

19

20

20

20

21

20

22

20

23

20

24

20

25

20

26

20

27

20

28

20

29

20

30

20

31

20

32

20

33

20

34

20

35

20

36

20

37

20

38

20

39

20

40

20

41

20

42

20

43

20

44

20

45

20

46

20

47

Price/sf Annual

Development


Level Annual Grapevine Development Construction is Assumed, While Price/SF is Assumed to Increase 3% Annually

Annual Development (in SF)

Price/SF (3% Annual Increase)

Notes: Total Grapevine Development provided in units from The Grapevine Master Plan, Kern County, CA, by Myers Research - November 2014. Square footage and average price per square foot calculated. With 766,623 sf of development per year for 30 years assumed, total devleopment is 22,998,697 sf.


Taxing Rates ≤ $30 / $100,000 AV

$0.00

$5.00

$10.00

$15.00

$20.00

$25.00

$30.00

$35.00

20

15

2

01

6

20

17

2

01

8

20

19

2

02

0

20

21

2

02

2

20

23

2

02

4

20

25

2

02

6

20

27

2

02

8

20

29

2

03

0

20

31

2

03

2

20

33

2

03

4

20

35

2

03

6

20

37

2

03

8

20

39

2

04

0

20

41

2

04

2

20

43

2

04

4

20

45

2

04

6

20

47

2

04

8

20

49

2

05

0

20

51

2

05

2

20

53

2

05

4

20

55

2

05

6

20

57

2

05

8

20

59

2

06

0

20

61

2

06

2

20

63

2

06

4

20

65

Tax Levies per $100,000 of AV


Inclusion of Grapevine Development AV Brings Series 2016 Tax Levies Below Projected Levels, Permitting Additional Issuances

Tax Levies - Other Series

Tax Levies - Series 2016

$30 maximum projected tax levy for 55% voter-approval bonds

Projected Tax Levies per $100,000 of AV

Maximum:

Average:

Minimum:

$30.00

$29.41

$22.00

Notes: tax levies based on assumed issuance with "AAA" MMD rates as of Aug 26, 2015, plus 125bp for assumed "A" rating of bonds, plus increases for potential rate changes before bond issuance (+125bp for 2016). Net local secured AV is assumed to increase 4% for 2016-17, & 5% annually thereafter, while all other AV types are assumed to remain unchanged. Grapevine Development is assumed to occur at constant rate over 30 years and assumes a 3% annual construction inflation rate; thereafter, Grapevine Development property is assumed to increase at 2% annually. Net collection assumes County reserve policy (first 10 months of following FY debt service) less assumed revenue. Assumed revenue based on historical data for other Kern Co. districts: unitary revenue = 3% of debt service + reserve collection, other revenue = 1.0% of debt service + reserve collection, & additional receipts = 5% of debt service + reserve - prior reserve. Reserve collected by County applied to last payment.

Issuing 2nd series earlier takes advantage of available tax levy, but

would only support a small issuance


Stable Tax Rate à Bond Payments Grow w/Proj. AV

$0

$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

$10,000,000,000

$11,000,000,000

$12,000,000,000

$13,000,000,000

$14,000,000,000

$15,000,000,000

$16,000,000,000

$17,000,000,000

$0

$300,000

$600,000

$900,000

$1,200,000

$1,500,000

$1,800,000

$2,100,000

$2,400,000

$2,700,000

$3,000,000

$3,300,000

$3,600,000

$3,900,000

$4,200,000

$4,500,000

$4,800,000

$5,100,000

2015 2018 2021 2024 2027 2030 2033 2036 2039 2042 2045 2048 2051 2054 2057 2060 2063

Total AV Revenue/

Debt Service


Projected Grapevine Development Would Add Significantly to District's Total AV and Potential Tax Revenue/Debt Service

Projected tax revenue/debt service from existing development (from 1 series bond plan)

Notes: tax revenue based on preliminary AV for 2015-16, and assumed net local secured growth of 4% for 2016-17, & 5% annually thereafter, while all other types of AV are assumed to remain constant. Grapevine Development is assumed to occur at constant rate over 30 years and assumes a 3% annual construction inflation rate; thereafter, Grapevine Development property is assumed to increase at 2% annually. A $30 annual tax levy per $100,000 of AV is assumed.

Total AV - with Grapevine

Development

Projected tax revenue/debt service

from Grapevine Development

Projected tax revenue/debt service from existing development -

continuation past 1 series bond plan

Total AV - from existing development


Conservatively Projected Proceeds

$6,200,000

$3,700,000 $4,000,000

$5,900,000

$19,300,000

$0

$5,000,000

$10,000,000

$15,000,000

$20,000,000

$25,000,000

$30,000,000

20

15

2

01

6

20

17

2

01

8

20

19

2

02

0

20

21

2

02

2

20

23

2

02

4

20

25

2

02

6

20

27

2

02

8

20

29

2

03

0

20

31

2

03

2

20

33

2

03

4

20

35

2

03

6

20

37

2

03

8

20

39

2

04

0

20

41

2

04

2

20

43

2

04

4

20

45

2

04

6

20

47

2

04

8

20

49

2

05

0

20

51

2

05

2

20

53

2

05

4

20

55

2

05

6

20

57

2

05

8

20

59

2

06

0

20

61

2

06

2

20

63

2

06

4

20

65

Issuance/ Collection


$39.1M Total Bond Issuances - Extending Existing Property Taxation, & Projected Grapevine Development Would Generate $32.9M in Bonds More Than 1 Series from Existing Tax Base

Net Collection - Series 2040





Notes: debt service is assumed based on "AAA" MMD rates as of Aug 26, 2015, plus 125bp for assumed "A" rating of bonds, plus increases for potential rate changes before bond issuance (+125bp for 2016). Net local secured AV is assumed to increase 4% for 2016-17, & 5% annually thereafter for existing property, while all other AV types are assumed to remain unchanged. Grapevine Development is assumed to occur at constant rate over 30 years and assumes a 3% annual construction inflation rate; thereafter, Grapevine Development property is assumed to increase at 2% annually. Net collection assumes County reserve policy (first 10 months of following FY debt service) less assumed revenue. Assumed revenue based on historical data for other Kern Co. districts: unitary revenue = 3% of debt service + reserve collection, other revenue = 1.0% of debt service + reserve collection, & additional receipts = 5% of debt service + reserve - prior reserve. Reserve collected by Co. applied to last payment.


Bonding Capacity Sufficient

$0

$10,000,000

$20,000,000

$30,000,000

$40,000,000

$50,000,000

$60,000,000

$70,000,000

$80,000,000 2

01

5

20

16

20

17

20

18

20

19

20

20

20

21

20

22

20

23

20

24

20

25

20

26

20

27

20

28

20

29

20

30

20

31

20

32

20

33

20

34

20

35

20

36

20

37

20

38

20

39

20

40

Bonding Capacity

Fiscal Year as of Aug 20

Bonding Capacity is Not a Constraint for Projected $39.1M Measure

Outstanding Bonds - Other Series

Outstanding Bonds - Series 2016

$11,750,000 = approximate current

bonding capacity

Note: The District's statutory legal bonding capacity limitation is 1.25% of the District's total assessed value. Projected bonding capacity is based on 2015-16 AV, and assumes net local secured AV growth of 4% for 2016-17, & 5% annually thereafter, while all other AV types remain constant. Grapevine Developmentis assumed to occur at constant rate over 30 years and assumes a 3% annual construction inflation rate; thereafter, Grapevine Development property is assumed to increase at 2% annually. Bonding capacity is as of August 20 when secured roll becomes "equalized." Values rounded.

Act

ual

Projected

Bonding Capacity - with existing development

$22.63M = approximate projected available bonding capacity

$6,200,000 issuance

$3,700,000 issuance

$4,000,000 issuance

$5,900,000 issuance

$19,300,000 issuance

Bonding Capacity - with Grapevine Development


Additional Considerations

u Put bond measure on 2016 ballot, based on current conditions ▶  Current tax base not sufficient to take care of existing

needs

u Can put a larger authorization amount on ballot so that we can issue more bonds with future growth in AV

u There is no guarantee that the amount of bonds we can issue, given AV and tax rate constraints, will be sufficient to support future needs


Sample June 2016 Bond Election Schedule

u We need to understand the timing requirements to preserve options.

DATE ITEM RESPONSIBILITY

In Process Initial demographic/financial research and analysis to determine funding potential of existing tax base (completed) and tax base increase resulting from Tejon Ranch development.

Govt. Financial Strategies

Thursday, September 3, 2015

Board Meeting: Information presentation regarding potential bond measure and public engagement process.


September 2015 Bond counsel selection process - develop list of potential firms, obtain fee quotes, and select firm.

Govt. Financial Strategies District

To be Determined Public engagement process. Further Information: District Govt. Financial Strategies

October 2015 - November 2015

Development of bond measure facilities and financial plan. Govt. Financial Strategies

Tuesday, December 8, 2015

Board Meeting: Presentation of proposed bond measure facilities and financial plan. Informal approval of plan by Board.

District Govt. Financial Strategies

December 2015 Development of bond resolution and ballot statement. Bond Counsel District Staff


Tuesday, December 29, 2015

Board Agenda Deadline: Bond resolution and related documents delivered for Board Agenda packet.

Bond Counsel District

Tuesday, January 5, 2016

Board Meeting: Board considers resolution calling for election.

School Board Bond Counsel

Friday, March 11, 2016

Statutory deadline for filing election resolution & tax rate statement with County (88 days prior to election).

District

Tuesday, June 7, 2016

Election Day. District Voters


Questions or Comments?


For Reference

u Assessed Value ▶  Assumptions - Historical Tests

u Additional Information Regarding General Obligation (G.O.) Bonds


Assessed Value

u Assumptions - Historical Tests


Historical AV Analysis - 5 Year Periods

11.00%

6.85%

5.44%

7.03% 8.25% 7.75%

9.46%

8.36% 8.40% 8.32%

9.67%

4.75%

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

8.00%

9.00%

10.00%

11.00%

12.00%

2001 - 2005

2002 - 2006

2003 - 2007

2004 - 2008

2005 - 2009

2006 - 2010

2007 - 2011

2008 - 2012

2009 - 2013

2010 - 2014

2011 - 2015

2015 - 2019

Compounded Annual Growth Rate - Net Local Secured AV

Date Range

4.75% Net Local Secured AV Growth Assumption for Next 5 Years

5-Yr Compounded Annual Growth Rate

Assumed Growth Rate for Next 5 Years

Historical data from Kern County Auditor-Controller's office; 2015-16 AV is preliminary. Net local secured AV is assumed to increase 4% for 2016-17, & 5% annually thereafter, while all other AV types are assumed to remain unchanged.


Historical AV Analysis - 10 Year Periods

8.92%

7.94% 7.41% 7.93%

7.74%

9.20%

4.89%

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

8.00%

9.00%

10.00%

2001 - 2010 2002 - 2011 2003 - 2012 2004 - 2013 2005 - 2014 2006 - 2015 2015 - 2024

Compounded Annual Growth Rate - Net Local Secured AV

Date Range

4.89% Net Local Secured AV Growth Assumption for Next 10 Years

10-Yr Compounded Annual Growth Rate

Assumed Growth Rate for Next 10 Years

Historical data from Kern County Auditor-Controller's office; 2015-16 AV is preliminary Net local secured AV is assumed to increase 4% for 2016-17, & 5% annually thereafter, while all other AV types are assumed to remain unchanged.


Additional Info. Regarding G.O. Bonds

u Comparison of 2/3 vs. 55% Voter Approval Bonds


2/3 vs. 55% Voter Approval G.O. BondsSubject 55% Voter Approval Two-Thirds Voter Approval

Board Approval Required To Place Measure on Ballot

Two-thirds Majority

Allowable Election Dates Primary or general election, regularly scheduled local election, or statewide special election

Any Tuesday that is not the day before or the day after a State holiday, or within 45 days of a regularly scheduled election

Maximum Projected Tax Rates/Levies

For unified district, $60 per $100,000 of assessed value; for union district, $30 per $100,000 of assessed value

No projected maximum tax rate

Bonding Capacity (i.e. Maximum Bonds Outstanding)

2.5% of assessed value for unified districts and 1.25% of assessed value for union districts

2.5% of assessed value for unified districts and 1.25% of assessed value for union districts

Audits Independent financial and performance audits must be conducted annually

None specifically required

Oversight Committee If election is successful, Board must establish independent citizens oversight committee within 60 days of Board adoption of resolution declaring election results

None specifically required

Allowable Expenditures Construction, reconstruction, rehabilitation, or replacement of school facilities, including furnishing and equipping of school facilities, or the acquisition or lease of real property for school facilities

Acquisition or improvement of real property

Facilities List State Constitution requires a list of the specified school facilities project(s) to be funded

No requirement for a specific facilities list


General Shafter Parcel Data-2014-15-v2.xlsx (Cover) 12/7/15 MET Page 1 of 20


for 2014-15

Updated December 2015

Tax Base Demographics


General Shafter Parcel Data-2014-15-v2.xlsx (Parcels-Chart) 12/7/15 MET Page 2 of 20

Agricultural; 778 parcels; 59%

Commercial; 46 parcels; 3%

Industrial; 22 parcels; 2%

MFR; 16 parcels; 1%

Miscellaneous; 6 parcels; 1%

Natural Resources; 19 parcels; 2%

SFR; 136 parcels; 10%

Vacant; 293 parcels; 22%

59% of District Parcels are Agricultural

Note: 2014-15 assessment roll as provided by Kern County Assessor's office. Percentages rounded. Outlets at Tejon still classified as "vacant," but treated as "Commercial" for this analysis.


General Shafter Parcel Data-2014-15-v2.xlsx (AV-Chart) 12/7/15 MET Page 3 of 20

Agricultural; $280,929,306; 49%

Commercial; $74,926,121;

13%

Industrial; $165,105,792; 29%

MFR; $3,196,107; 1%

Miscellaneous; $303,685; <1%

Natural Resources; $3,179,375; <1%

SFR; $29,531,876; 5%

Vacant; $14,633,888; 3%

49% of AV in District is Agricultural

Note: 2014-15 assessment roll as provided by Kern County Assessor's office. Percentages rounded. Outlets at Tejon still classified as "vacant," but treated as "Commercial" for this analysis.


General Shafter Parcel Data-2014-15-v2.xlsx (Avg & Median AV-Chart) 12/7/15 MET Page 4 of 20

$361,0

92

$1,6

28,8

29

$7,5

04,8

09

$199,7

57

$50,6

14

$167,3

36

$217,1

46

$49,9

45

$154,2

51

$423,7

00

$571,5

46

$178,9

70

$428

$38,8

10

$188,5

00

$3,8

99

$0

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

$3,000,000

$3,500,000

$4,000,000

$4,500,000

$5,000,000

$5,500,000

$6,000,000

$6,500,000

$7,000,000

$7,500,000

$8,000,000

Agricultural Commercial Industrial MFR Miscellaneous Natural Resources

SFR Vacant

Average & Median AV

Property Type Descriptions

In Addition to Agricultural Property, There Are Some High Value Commercial and Industrial Parcels Which Are Significant Taxpayers

Average Median

Note: 2014-15 assessed values as provided by Kern County Assessor's office. Outlets at Tejon still classified as "Vacant," but treated as "Commerical" for this analysis.


General Shafter Parcel Data-2014-15-v2.xlsx (SFR Parcel-Chart) 12/7/15 MET Page 5 of 20

$0 to $100,000; 36 parcels; 26%

$100,001 to $200,000; 37 parcels; 27%

$200,001 to $300,000; 35 parcels; 26%

$300,001 to $400,000; 15 parcels; 11%

$400,001 to $500,000; 10 parcels; 7%

$500,001 to $750,000; 2 parcels; 2%

$1,000,001 to $5,000,000; 1 parcel; 1%

In 2014-15, 79% of SFR Parcels Had an AV of $300,000 or Less

Note: 2014-15 assessed values as provided by Kern County Auditor-Controller's office. Percentages rounded.


General Shafter Parcel Data-2014-15-v2.xlsx (Comm Parcel-Chart) 12/7/15 MET Page 6 of 20

$0 to $100,000; 8 parcels; 17%

$100,001 to $200,000;

5 parcels; 11%

$200,001 to $300,000; 5 parcels; 11%

$300,001 to $400,000; 4 parcels; 9%

$400,001 to $500,000; 3 parcels; 6%

$500,001 to $750,000; 4 parcels; 9%

$750,001 to $1,000,000; 3 parcels; 6%

$1,000,001 to $5,000,000;

11 parcels; 24%

$5,000,001 & Greater; 3 parcels; 7%

31% of Commercial Parcels Had an AV in Excess of $1,000,000



General Shafter Parcel Data-2014-15-v2.xlsx (Comm AV-Chart) 12/7/15 MET Page 7 of 20

$0 to $100,000; $269,283; <1%

$100,001 to $200,000; $642,496; 1%

$200,001 to $300,000; $1,251,461; 2% $300,001 to $400,000;

$1,473,016; 2%

$400,001 to $500,000; $1,343,408; 2%

$500,001 to $750,000; $2,578,808; 3%

$750,001 to $1,000,000; $2,579,772; 3%

$1,000,001 to $5,000,000;

$23,593,707; 32%

$5,000,001 & Greater; $41,194,170; 55%

87% of Commericial AV is from Parcels with an AV of $1 Million or More



General Shafter Parcel Data-2014-15-v2.xlsx (Indus Parcel-Chart) 12/7/15 MET Page 8 of 20

$0 to $500,000; 11 parcels; 50%

$500,001 to $1,000,000; 1 parcel; 4%

$1,000,001 to $5,000,000;

4 parcels; 18%

$5,000,001 to $10,000,000; 1 parcel; 5%

$10,000,001 to $20,000,000; 1 parcel; 5%

$20,000,001 & Greater; 4 parcels;

18%

50% of Industrial Parcels Had an AV of $500,000 or Less



General Shafter Parcel Data-2014-15-v2.xlsx (Indus AV-Chart) 12/7/15 MET Page 9 of 20

$0 to $500,000; $2,164,158; 1%

$500,001 to $1,000,000; $730,185; <1%

$1,000,001 to $5,000,000;

$7,687,479; 5%

$5,000,001 to $10,000,000;

$5,538,980; 3%

$10,000,001 to $20,000,000;

$17,500,000; 11%

$20,000,001 & Greater; $131,484,990 ; 80%

80% of Commericial AV is from Parcels with an AV of $20 Million or More




General Shafter Parcel Data-2014-15-v2.xlsx (Ag Parcel-Chart) 12/7/15 MET Page 10 of 20

$0 to $100,000; 333 parcels; 43%

$100,001 to $200,000; 100 parcels; 13%

$200,001 to $300,000; 54 parcels; 7%

$300,001 to $400,000; 62 parcels; 8%

$400,001 to $500,000; 31 parcels; 4%

$500,001 to $750,000; 74 parcels; 9%

$750,001 to $1,000,000; 48 parcels; 6%

$1,000,001 to $5,000,000;

75 parcels; 10%

$5,000,001 & Greater; 1 parcel; <1%

75% of Agricultural Parcels Had an AV of $500,000 or Less



General Shafter Parcel Data-2014-15-v2.xlsx (Ag AV-Chart) 12/7/15 MET Page 11 of 20

$0 to $100,000; $10,568,937; 4%

$100,001 to $200,000; $15,015,206; 5%

$200,001 to $300,000; $13,333,954; 5%

$300,001 to $400,000; $21,671,310; 8%

$400,001 to $500,000; $13,872,098; 5%

$500,001 to $750,000;

$44,938,143; 16%

$750,001 to $1,000,000;

$41,064,020; 14%

$1,000,001 to $5,000,000;

$108,562,165; 39%

$5,000,001 & Greater; $11,903,473; 4%

24% of Agricultural AV is from Parcels with an AV of $500,000 or Less



General Shafter Parcel Data-2014-15-v2.xlsx (Location Parcels-Chart) 12/7/15 MET Page 12 of 20

County; 817 parcels; 62%

California; 414 parcels; 32%

Foreign; 2 parcels; <1%

Out of State; 78 parcels; 6%

Unknown; 5 parcels; <1%

38% of Tax Bills are Sent Outside of the County

Note: 2014-15 assessment roll as provided by Kern County Assessor's office. Percentages rounded.


General Shafter Parcel Data-2014-15-v2.xlsx (Location AV-Chart) 12/7/15 MET Page 13 of 20

County; $284,077,647; 50%

California; $137,807,794; 24%

Foreign; $272,218; <1%

Out of State; $148,110,113; 26%

Unknown; $1,538,378; <1%

50% of District's AV Owned Outside County



General Shafter Parcel Data-2014-15-v2.xlsx (Top 20-Chart) 12/7/15 MET Page 14 of 20

Top 20 Parcels; $238,285,891; 42%

Excluding Top 20 Parcels; $333,520,259; 58%

Top 20 Parcels by AV Comprise 42% of Total District AV



General Shafter Parcel Data-2014-15-v2.xlsx (Top 20-Use-Chart) 12/7/15 MET Page 15 of 20

Agricultural; $24,942,602; 11%

Commercial; $55,793,701; 23%

Industrial; $157,549,588; 66%

Industrial Use is 66% of the AV for Top 20 Parcels



General Shafter Parcel Data-2014-15-v2.xlsx (Top 20-Location-Chart) 12/7/15 MET Page 16 of 20

County, $64,865,703, 27%

California, $39,413,814, 17%

Out of State, $134,006,374, 56%

For Top 20 Parcels, More Than 73% of AV is Owned Outside of Kern County



General Shafter Parcel Data-2014-15-v2.xlsx (Range Analysis) 12/7/15 MET Page 17 of 20

2014-15 Distribution of Assessed Value By Range

$0 $100,001 $200,001 $300,001 $400,001 $500,001 $750,001 $1,000,001 $5,000,001to to to to to to to to &

$100,000 $200,000 $300,000 $400,000 $500,000 $750,000 $1,000,000 $5,000,000 Greater TotalAgricultural $10,568,937 $15,015,206 $13,333,954 $21,671,310 $13,872,098 $44,938,143 $41,064,020 $108,562,165 $11,903,473 $280,929,306Commercial $269,283 $642,496 $1,251,461 $1,473,016 $1,343,408 $2,578,808 $2,579,772 $23,593,707 $41,194,170 $74,926,121

Industrial $270,634 $145,446 $260,955 $669,856 $817,267 $730,185 $0 $7,687,479 $154,523,970 $165,105,792MFR $370,583 $357,940 $455,566 $1,097,194 $914,824 $0 $0 $0 $0 $3,196,107

Miscellaneous $92,045 $0 $211,640 $0 $0 $0 $0 $0 $0 $303,685Natural Resources $385,559 $129,189 $226,455 $319,714 $0 $0 $787,160 $1,331,298 $0 $3,179,375

SFR $2,068,359 $5,873,642 $8,546,075 $5,294,211 $4,553,727 $1,306,973 $0 $1,888,889 $0 $29,531,876Vacant $3,171,070 $2,797,090 $1,921,623 $1,425,190 $890,044 $0 $894,040 $3,534,831 $0 $14,633,888

Total $17,196,470 $24,961,009 $26,207,729 $31,950,491 $22,391,368 $49,554,109 $45,324,992 $146,598,369 $207,621,613 $571,806,150

2014-15 Distribution of Parcels By Range

$0 $100,001 $200,001 $300,001 $400,001 $500,001 $750,001 $1,000,001 $5,000,001to to to to to to to to &

$100,000 $200,000 $300,000 $400,000 $500,000 $750,000 $1,000,000 $5,000,000 Greater TotalAgricultural 333 100 54 62 31 74 48 75 1 778Commercial 8 5 5 4 3 4 3 11 3 46

Industrial 5 1 1 2 2 1 0 4 6 22MFR 7 2 2 3 2 0 0 0 0 16

Miscellaneous 5 0 1 0 0 0 0 0 0 6Natural Resources 14 1 1 1 0 0 1 1 0 19

SFR 36 37 35 15 10 2 0 1 0 136Vacant 256 19 8 4 2 0 1 3 0 293

Total 664 165 107 91 50 81 53 95 10 1,316

Outlets at Tejon still classified as "Vacant," but treated as "Commercial" for this analysis.


General Shafter Parcel Data-2014-15-v2.xlsx (AV by Type) 12/7/15 MET Page 18 of 20

Parcels by Type

Value of Land Parcel Type Parcels Pct & Building Pct Average Median

Agricultural 778 59.12% $280,929,306 49.13% $361,092 $154,251Commercial 46 3.50% $74,926,121 13.10% $1,628,829 $423,700

Industrial 22 1.67% $165,105,792 28.87% $7,504,809 $571,546MFR 16 1.22% $3,196,107 0.56% $199,757 $178,970

Miscellaneous 6 0.46% $303,685 0.05% $50,614 $428Natural Resources 19 1.44% $3,179,375 0.56% $167,336 $38,810

SFR 136 10.33% $29,531,876 5.16% $217,146 $188,500Vacant 293 22.26% $14,633,888 2.56% $49,945 $3,899

Total 1,316 100.00% $571,806,150 100.00%

Outlets at Tejon still classified as "Vacant," but treated as "Commercial" for this analysis.


General Shafter Parcel Data-2014-15-v2.xlsx (Location) 12/7/15 MET Page 19 of 20

Location of Owner of All Parcels

OwnerLocation Parcels Pct Net Value Pct

County 817 62.08% $284,077,647 49.68%California 414 31.46% $137,807,794 24.10%

Foreign 2 0.15% $272,218 0.05%Out of State 78 5.93% $148,110,113 25.90%

Unknown 5 0.38% $1,538,378 0.27%1,316 100.00% $571,806,150 100.00%

Location of Owner of Single Family Residential Parcels

Owner Value of Land Location Parcels Pct & Building Pct

California 4 2.94% $1,023,227 3.46%County 132 97.06% $28,508,649 96.54%Foreign 0 0.00% $0 0.00%

Out of State 0 0.00% $0 0.00%Unknown 0 0.00% $0 0.00%

136 100.00% $29,531,876 100.00%


General Shafter Parcel Data-2014-15-v2.xlsx (Top 20-Table) 12/7/15 MET Page 20 of 20

Top 20 Parcels by Assessed Value

Net Value Owner/Business Use Description Owner Location$56,915,699 IKEA Industrial Out of State$25,062,789 Dollar General Industrial County$24,812,137 Famous Footwear Industrial California$24,694,365 Caterpillar Industrial Out of State$17,500,000 Paramount Farms Industrial Out of State$16,222,334 East Travel Plaza - Shell Commercial Out of State$15,930,976 Petro Travel Plaza Commercial Out of State$11,903,473 Ag Land - Dairy Agricultural County

$9,040,860 Outlets at Tejon Commercial * County$5,538,980 Desert Block Industrial California$3,912,800 Ag Land Agricultural County$3,792,867 Microtel Inn Commercial County$3,265,060 West Coast Grape Farms Agricultural California$3,186,782 Bolthouse Properties Agricultural County$3,025,618 Ag Land Industrial California$2,772,019 In-N-Out Commercial California$2,743,000 Petro Shopping Ctr - Chevron Commercial Out of State$2,696,627 Best Western Commercial County$2,674,487 Ag Land Agricultural County$2,595,018 Ramada Inn Commercial County

$238,285,891

*Outlets at Tejon still classified as "Vacant," but treated as "Commercial" for this analysis.

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