Review of Preliminary Financing PlanFor 2014 Bond ProgramFo 2014 Bond P og am
Friday, March 6, 2015
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Goals of Financing Plan
Meet or exceed expectations of taxpayers – Implement 2014 Bond Program at or below the projected costcommunicated to voters during the November 2014 Bond Election;g
Comply with the State mandated “50-Cent Debt Test”;
Maintain bond repayment period of 30-years or less;
Short-Term Projects: Fully repay bonds issued for technology projects within their useful lives:j y p y gy p j
Devices – 5 Years Infrastructure – 10 Years
Provide bond capacity for future capital improvements; and
Provide flexibility to prepay bonds from the 2014 Bond Program prior to scheduled maturity to reduce theinterest cost of taxpayers.
1
Debt Factors – State Law – “50.0 Cent Bond Test”
Pursuant to State law, the District may only issue new bonds to the degree it can demonstrate its Interest &Sinking Fund (“I&S”) tax rate will not exceed 50.0 cents.
District voters were informed the District’s I&S tax rate would increase to 50.0 cents for the 2014 BondProgram.
Texas school districts with a 50-cent I&S tax rate include: Burleson ISD, Celina ISD, Ennis ISD, Forney
Historical Trend of Texas School District I&S Tax Rates – Years 2003/04 – 2014/15
, , , yISD, Keller ISD, Lake Dallas ISD, Little Elm ISD, McKinney ISD, Midlothian ISD, Royse City ISD andWhite Settlement ISD.
/ /
175
248
200
25030.0 Cents or Higher40.0 Cents or Higher45 0 Cents or Higher
102100
150
o. o
f ISD
s
45.0 Cents or Higher50.0 Cent Maximum Rate The District’s current I&S
tax rate is 37.00 cents.
45
4
67
3
31
66
5
2950
100
No
2
43 500
2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15
Source: Texas Comptroller of Public Accounts – Property Tax Assistance Division.
Debt Factors – Taxable Assessed Valuation
The District’s taxable assessed valuation is $3,499,363,902 for fiscal year 2014/15.
The financing plan for the 2014 Bond Program assumes District’s taxable value will increase by $50 millionper year in each of the next 5-years and no growth thereafter. The District’s taxable value has increased byan average of:
$29,867,302 – Last 5 Years $100,671,842 – Last 3 Years
Taxable value growth past the 5-year assumption will be used to either prepay existing bonds or help fundfuture bond programs.
Historical Increases in Taxable Valuations – Years 2005/06 – 2014/15
$212,938,384$235,922,334
$176,353,174$200 000 000
$300,000,000
$151,222,443$74,323,206
$25,023,753
$100,638,599
, ,
$0
$100,000,000
$200,000,000
Incr
ease
($182,410,108)
($111,812,472)
($40,866,542)
($200,000,000)
($100,000,000)
Dol
lar
3
( )
($300,000,000)2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15
Source: Dallas Central Appraisal District.
Debt Factors – Taxable Assessed Valuation (Continued)
Historical and Assumed Taxable Valuations(Net of Frozen Levy)( y)
$3,500,000,000
$4,000,000,00027
,390
14,9
18
8,37
6
72,1
29
010,
728
,363
,902
9,36
3,90
2
9,36
3,90
2
9,36
3,90
2
9,36
3,90
2
49,3
63,9
02
$2,000,000,000
$2,500,000,000
$3,000,000,000
esse
d V
alua
tion
$3,3
50,0
2
$3,2
38,2
1
$3,1
97,3
4
$3,2
22,3
7
$3,3
23,0
$3,4
99
$3,5
49
$3,5
9
$3,6
49
$3,6
99
$3,7
4
$1,000,000,000
$1,500,000,000
Tax
able
Ass
e
$0
$500,000,000
2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 &Thereafter
Average Annual 2020/21 & Increase – Years Fiscal Year 2015/16 2016/17 2017/18 2018/19 2019/20 Thereafter 2015/16 – 2019/20 Taxable Assessed Valuation $3,549,363,902 $3,599,363,902 $3,649,363,902 $3,699,363,902 $3,749,363,902 $3,749,363,902 ---D ll Ch $50 000 000 $50 000 000 $50 000 000 $50 000 000 $50 000 000 $ $50 000 000
4
Dollar Change $50,000,000 $50,000,000 $50,000,000 $50,000,000 $50,000,000 $--- $50,000,000Percentage Change 1.43% 1.41% 1.39% 1.37% 1.35% ---% 1.39%
Source: Dallas Central Appraisal District.
Debt Factors – State Funding Received for Payment of Bonds
State Funding Received for Payment of Bonds
Existing Bonds: Pursuant to current State funding regulations, the District is currently maximizingits State funding assistance for its existing bond payments. For year 2014/15, the District is estimatedto receive State funding assistance equal to approximately 18.1% of its annual bond payment or$2,786,662.$2,786,662.
2014 Bond Program: The District is not projected to receive any State funding assistance for the2014 Bond Program until year 2033/34 or until its Refined Average Daily Attendance exceeds 13,500.Beginning in year 2033/34, the District may receive additional State funding assistance for the 2014Bond Program in the amount of $848,604 per year.
The preliminary financing plan for the 2014 Bond Program assumes the District’s student enrollment The preliminary financing plan for the 2014 Bond Program assumes the District s student enrollmentover the next 4-years is between 12,745 and 12,945 (current enrollment).
5
Debt Factors –Dollar Amount and Structure of District’s Existing Bonds
$18,000,000
$20,000,000
g
The District has $102.545 million of bonds to be sold from the 2014 Bond Program.
$12,000,000
$14,000,000
$16,000,000
, ,
Paym
ents
g
$6 000 000
$8,000,000
$10,000,000
$ ,000,000
Ann
ual B
ond
$0
$2,000,000
$4,000,000
$6,000,000
$0
2014
/15
2015
/16
2016
/17
2017
/18
2018
/19
2019
/20
2020
/21
2021
/22
2022
/23
2023
/24
2024
/25
2025
/26
2026
/27
2027
/28
2028
/29
2029
/30
2030
/31
2031
/32
2032
/33
Unlimited Tax School Building & Refunding Bonds, Series 2001B Unlimited Tax Refunding Bonds, Series 2005
Unlimited Tax Refunding Bonds, Series 2006 Unlimited Tax Refunding Bonds, Series 2011
Unlimited Tax Refunding Bonds, Series 2012 Unlimited Tax Refunding Bonds, Series 2013-A
Unlimited Tax Refunding Bonds, Taxable Series 2013-B Unlimited Tax Refunding Bonds, Series 2014__________
6
Note: Debt service payments reflect payments from September 1 through August 31.
The District has a total principal amount of existing bonds equal to $143,620,236.
Debt Factors – Interest Rates
The Bond Buyer 20-Bond Index – A Tax-Exempt General Obligation Bond Yield Index –
January 1, 2000 To The Present
5.75
6.00
6.25 6.09%
5.00
5.25
5.50
%)
Average = 4.59%3.62%
4.25
4.50
4.75
Yie
ld (
%
3 50
3.75
4.00
4.25
3 27%
Fixed interest rates are currently 0.97% below the historical average and
i hi 0 35% f hi i l l3.25
3.50
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
3.27%are within 0.35% of a historical low.
7
Based upon the $102,545,000 2014 Bond Program, an interest rate difference of 0.25% changesthe District’s interest cost by approximately $5,600,000.
Preliminary Financing Plan – 2014 Bond Program
The remainder of this presentation is based upon the assumptions detailed herein. To the extent theDistrict’s actual results differ from the assumptions herein, the financial impact to the District will
di l hcorrespondingly change.
Scenario Presented
Finance Plan – Voter Education Material:
“Preliminary Financing Plan” for 2014 Bond Election – Voter EducationMaterial.
Preliminary Financing Implementation of 2014 Bond Program Approved by Voters Preliminary Financing Plan:
Implementation of 2014 Bond Program Approved by Voters.
Summary of Projected Cashflow Requirements – 2014 Bond Program
Project Type
Time Bond Funds Are
Needed Dollar Amount
Required Estimated
Bond Sale DateInterest Rate Assumption
■ New Construction & Expanded Facilitiesp■ Existing Facility Upgrades & Improvements ■ Safety and Security ■ Technology – Infrastructure & Classroom
Standardization
May 2015 $ 97,785,000 April/May 2015 Current Market
8
■ Technology – Classroom Standardization Various 4,760,000 May 2017 5.00%
Total --- $ 102,545,000 --- ---
Preliminary Financing Plan – 2014 Bond Program (Continued)
Summary of Preliminary Financing Plan – 2014 Bond ProgramSummary of Preliminary Financing Plan – 2014 Bond Program Description
Voter Education Material
Preliminary Financing
Plan
DifferenceDescription Material Plan Difference
Dollar Amount Deposited to Construction Fund – 2014 Bond Program $102,545,000 $102,545,000 ---
Projected I&S Tax Rate Increase 13.0 Cents 13.0 Cents --- Cents
Projected Interest Rate – Initial Bond Sale – 2014 Bond Program 5.00% 4.05% 0.96%
Projected Total Bond Payments – 2014 Bond Program $206,589,250 $185,877,214 $20,712,036
Final Maturity – 2014 Bond Program – 30-Years 2045 2045 ---
9
Preliminary Financing Plan – 2014 Bond Program (Continued)
A B C D E F G H I J K
Less: $50,000,000Total Plus: Plus: Less: Capitalized
Preliminary Financing Plan - 2014 Bond Program - Projected Results
Total Plus: Plus: Less: CapitalizedO utstanding Series 2015 Series 2017 Total Projected Interest - Net Taxable
Bonds $97,785,000 $4,760,000 Combined State Funding Year 2014/15 Combined Assessed Projected I&S Tax RateYear Payments @ 4.05% @ 5.00% Bond Payments Assistance Bond Payment Bond Payments Valuation I&S Tax Rate Difference
2014/15 $15,391,536 $1,280,708 $0 $16,672,245 $2,786,662 $1,280,708 $12,604,875 $3,499,363,902 $0.3702015/16 14,519,100 4,873,625 0 19,392,725 2,181,141 0 17,211,584 3,549,363,902 0.500 $0.1302016/17 14,705,625 4,736,750 0 19,442,375 1,988,335 0 17,454,040 3,599,363,902 0.5002017/18 14,163,300 4,781,125 550,506 19,494,931 1,795,528 0 17,699,403 3,649,363,902 0.5002018/19 14,335,850 4,739,375 469,250 19,544,475 1,602,722 0 17,941,753 3,699,363,902 0.5002019/20 13,576,178 5,605,375 456,750 19,638,303 1,457,722 0 18,180,582 3,749,363,902 0.5002020/21 13,217,031 4,982,875 1,438,750 19,638,656 1,457,722 0 18,180,935 3,749,363,902 0.5002021/22 13,082,756 5,120,125 1,438,625 19,641,506 1,457,722 0 18,183,785 3,749,363,902 0.5002022/23 12 956 606 5 243 500 1 440 125 19 640 231 1 457 722 0 18 182 510 3 749 363 902 0 5002022/23 12,956,606 5,243,500 1,440,125 19,640,231 1,457,722 0 18,182,510 3,749,363,902 0.5002023/24 12,918,756 6,723,125 0 19,641,881 1,457,722 0 18,184,160 3,749,363,902 0.5002024/25 12,915,391 6,724,875 0 19,640,266 1,457,722 0 18,182,544 3,749,363,902 0.5002025/26 12,849,094 5,798,250 0 18,647,344 1,457,722 0 17,189,622 3,749,363,902 0.473 ($0.027)2026/27 12,852,200 5,799,125 0 18,651,325 1,457,722 0 17,193,603 3,749,363,902 0.4732027/28 11,959,641 6,686,875 0 18,646,516 1,457,722 0 17,188,794 3,749,363,902 0.4732028/29 14,381,822 4,267,125 0 18,648,947 1,457,722 0 17,191,225 3,749,363,902 0.4732029/30 14,379,231 4,269,250 0 18,648,481 1,457,722 0 17,190,760 3,749,363,902 0.4732030/31 14,381,856 4,269,125 0 18,650,981 1,457,722 0 17,193,260 3,749,363,902 0.4732031/32 14,403,900 4,247,250 0 18,651,150 1,457,722 0 17,193,428 3,749,363,902 0.4732032/33 14,313,350 4,336,250 0 18,649,600 1,457,722 0 17,191,878 3,749,363,902 0.4732033/34 0 7,133,625 0 7,133,625 853,352 0 6,280,273 3,749,363,902 0.173 ($0.300)2034/35 0 7,132,750 0 7,132,750 853,247 0 6,279,503 3,749,363,902 0.1732035/36 0 7 136 250 0 7 136 250 853 247 0 6 283 003 3 749 363 902 0 1732035/36 0 7,136,250 0 7,136,250 853,247 0 6,283,003 3,749,363,902 0.1732036/37 0 7,133,625 0 7,133,625 853,247 0 6,280,378 3,749,363,902 0.1732037/38 0 7,134,375 0 7,134,375 853,366 0 6,281,009 3,749,363,902 0.1732038/39 0 7,132,875 0 7,132,875 853,262 0 6,279,613 3,749,363,902 0.1732039/40 0 7,133,500 0 7,133,500 853,262 0 6,280,238 3,749,363,902 0.1732040/41 0 7,135,500 0 7,135,500 853,262 0 6,282,238 3,749,363,902 0.1732041/42 0 7,133,250 0 7,133,250 853,307 0 6,279,943 3,749,363,902 0.173
10
2042/43 0 7,136,000 0 7,136,000 853,619 0 6,282,381 3,749,363,902 0.1732043/44 0 7,133,000 0 7,133,000 853,277 0 6,279,723 3,749,363,902 0.1732044/45 0 7,123,750 0 7,123,750 852,170 0 6,271,580 3,749,363,902 0.172
Total $261,303,224 $180,083,208 $5,794,006 $447,180,438 $41,001,106 $1,280,708 $404,898,623
Approval of Parameters Order – Series 2015 Bond Sale –$97.785 Million Bond Sale from the 2014 Bond Program
As previously utilized for the District’s bond sales, the Board of Trustees may adopt a “Parameters BondOrder” to complete the sale of Unlimited Tax School Building Bonds, Series 2015 (the “Series 2015
$ g
p g (Bonds”).
The following is a representative listing of primary parameters we recommend the District utilize for itsSeries 2015 Bond saleSeries 2015 Bond sale.
1) A maximum of $97,785,000 (principal amount) may be issued;
2) The interest rate (All-In TIC) on the Series 2015 Bonds may not exceed 5.00%;
3) The final maturity may not exceed February 15, 2045; and
4) The District must complete the sale on or prior to September 12, 2015 (i.e. six-months after the“Parameters Bond Order” is adopted).
Unless each parameter listed above can be achieved, the Series 2015 Bonds will not be issued unlessadditional direction is received from the District.
11
Preliminary Timetable – Series 2015 Bonds
March 2015 April 2015 May 2015 June 2015
S M T W T F S S M T W T F S S M T W T F S S M T W T F S
1 2 3 4 5 6 7 1 2 3 4 1 2 1 2 3 4 5 68 9 10 11 12 13 14 5 6 7 8 9 10 11 3 4 5 6 7 8 9 7 8 9 10 11 12 13
15 16 17 18 19 20 21 12 13 14 15 16 17 18 10 11 12 13 14 15 16 14 15 16 17 18 19 2022 23 24 25 26 27 28 19 20 21 22 23 24 25 17 18 19 20 21 22 23 21 22 23 24 25 26 2729 30 31 26 27 28 29 30 24 25 26 27 28 29 30 28 29 30
31
Board Meeting Closing – Receipt of Funds
Preliminary Timetable
Date* Action Necessary
March 16, 2015 Board Meeting – Discuss Updated Financing Plan And Consider “Parameters Bond Order” Authorizing Issuance Of The Series 2015 Bonds.
A il 3 2015 C l i Of All I N T S ll Th S i 2015 B d (i P li i Offi i lApril 3, 2015 Completion Of All Items Necessary To Sell The Series 2015 Bonds (i.e. Preliminary Official Statement Completed, Ratings Received, Permanent School Fund Guarantee Received, etc.).
April – May 2015 Pricing – Negotiated Sale Of The Series 2015 Bonds Within The Specified Parameters – Interest Rate Locked-In.
1-Business Day After Pricing
The District’s Administration Approves Sale Of Series 2015 Bonds.
Prior to June 2015
Closing – Proceeds Of Series 2015 Bonds Are Delivered To District.
12
* Preliminary, subject to change.
Recent Savings from District’s Debt Management Practices
Over the last 2-years, the District has implemented 3 refinancing programs to lower the interest rate on theDistrict’s existing bonds, generating more than $8.4 million of savings for District taxpayers!
Summary of Interest Cost Savings Achieved By The District – Since Year 2013
Principal Issue
Series Refunded
PrincipalAmount
Refunded
Total Savings
Unlimited Tax Refunding Bonds, Series 2013-A 2001B & 2003 $ 8,170,000 $ 2,062,386
U li i d T R f di B d T bl S i 2013 B 2005 33 865 000 4 379 971Unlimited Tax Refunding Bonds, Taxable Series 2013-B 2005 33,865,000 4,379,971
Unlimited Tax Refunding Bonds, Series 2014 2005 9,600,000 1,972,676
Totals --- $ 51,635,000 $ 8,415,033
13
Upcoming Refunding Opportunity –October 2015 or Thereafter
Pursuant to Federal Tax law, the District will have an additional opportunity to refund a portion of itsexisting bonds at a savings in October 2015. The District’s bonds eligible to be refunded at such time arei U li i d T R f di B d S i 2006its Unlimited Tax Refunding Bonds, Series 2006.
Based upon current market conditions, the table below summarizes the savings potentially available to theDistrict (net of estimated costs) from the potential refunding program.
2015 Refunding Program – Summary of Potential Savings
Summary Description Of ResultsPrincipal Amount of the Series 2006 Bonds to be Refunded $ 60,300,000
Interest Rate on the Series 2006 Bonds to be Refunded 4.72%All I T I C h R f di B d 3 42%All-In True Interest Cost on the Refunding Bonds 3.42%
Total Debt Service Savings $ 10,338,128Average Annual Savings (Years 2016/17 – 2031/32) (i.e. 16-Years) 646,133Present Value Debt Service Savings (@ All-In TIC) 7 193 405Present Value Debt Service Savings (@ All-In TIC) 7,193,405
Present Value Savings as a Percentage of the Principal Amount of the Series 2006 Bonds to be Refunded 11.93%
14
Depending on prevailing market conditions, the refunding program is anticipated to be presented to theDistrict’s Board of Trustees for approval in September 2015.
BOSC, Inc. –Specialized Texas School District Finance Professionals
Joshua M. McLaughlinManaging Director, Co-Director of Texas Public Finance
William J. GumbertHead of Municipal (Tier I) Sales, Trading and UnderwritingManaging Director, Co-Director of Texas Public Finance
p
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Securities offered by BOSC, Inc., Registered Investment Advisor, a registered Broker/Dealer, Member FINRA/SIPC
333 West Campbell Road, Suite 350 │ Richardson, Texas 75080E-Mail: [email protected]: 512.243.5917 │ Mobile: 512.565.7005 │ Fax: 214.576.0890
Securities offered by BOSC, Inc., Registered Investment Advisor, a registered Broker/Dealer, Member FINRA/SIPC
333 West Campbell Road, Suite 350 │ Richardson, Texas 75080E-Mail: [email protected]: 214.576.0881 │ Mobile: 254.744.4555 │ Fax: 214.576.0890
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16
1401 McKinney Street, Suite 1000 │ Houston, Texas 77010E-Mail: [email protected]: 713.289.5897 │ Mobile: 281.610.8335 │ Fax: 713.354.0257
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