Financial Snapshot January 2018 Brunswick CSD Middle School - - PowerPoint PPT Presentation

Brunswick CSD Financial Snapshot

January 2018

Brunswick CSD Middle School Project Update

February 20, 2018

Process

• Develop/implement financing strategy (Nov 2017- Mar 2018)
• Select construction team (Jan-Feb 2018)
• Architect
• CM (*District will utilize CM at-risk)
• Visionary-input session(s) held (March 2018)
• Development-design phase (Jan-July 2018)
• Early site work (Fall 2018)
• Final Design (Fall 2018)
• Construction (Feb 2019 to Fall 2020)
• New Building to open (anticipate 2020-21 school year)

Brunswick CSD – Financing of the Issue

Project Overview: On November 7, 2017 voters approved a $48m , 36-year, 2.3 mill bond issue to build a new middle school complex replacing 3 existing buildings and fund additional district improvements (Local share) Ohio Facilities Construction Commission (OFCC) will fund approximately 37% percent

• f the MS construction cost, or an estimated $18.6m million (State share)

Financing Strategy: District to issue short term notes in 2017 for slightly less than $10 million of the district’s share of the funding As a result it could lock in bank qualified status for those dollars which would ultimately result in lower interest rate/cost on the bonds to be issued in 2018 as well as retire the 2017 notes The remaining share of the district’s portion of the funding would also be issued as notes in January 2018 in order to be in position to execute the project agreement with OFCC.

Brunswick CSD – Financing of the Issue

Issuance Plan:

• $9,900,000 bank qualified note issue to be sold in December 2017,
• $25,805,000 non-bank qualified note issue to be sold in January 2018,
• Approximately $38,208,302 non-bank qualified bond issue to be sold in March

2018, the proceeds of which would retire the 2018 non-bank qualified notes and raise the rest of the voter approved funding, including locally funded initiatives, and

• Approximately $9,900,000 bank qualified bond issue to be sold in April 2018, the

proceeds of which would retire the 2017 bank qualified notes.

Results

In December, the financing team estimated that that two-bond strategy would save taxpayers nearly $1 million in interest over the life of the bonds by choosing the multi issue strategy.

• While interest rates increased somewhat in early 2018, they are still well below historic averages
• The red line indicates current market interest rates while the blue line represents the historic

average interest rates since 1991 and the gray shaded box represents the range of interest rates during that period Range of AAA Tax Exempt Interest Rates from 1991 to Present

AAA MMD Tax Exempt Interest Rate Comparison

• Currently interest rates are similar to a year ago but with a slightly flatter yield curve reflecting the

market expectation of short term rate increases in the near future

• Consensus suggests Federal Reserve to increase the Federal Funds rate 3 to 4 times (0.25% each) in

2018 contributing to short term rate increases

Emergency Levy Update/Discussion

February 20, 2018

Emergency Levies

• Four emergency levies in place (*40% revenue)
• 4.3 mill emergency levy expiring- Renewal May 2018
• History:

– $$ used for general operations – Emergencies account for 40% of operational revenue – Same amount received year to year – Renewal request every 2 years to local community – Renewals are NOT a tax increase – Community support extremely strong

Emergency Levies

• New Alternative

– Substitution Levy (2008) – ORC 5705.199 – Growing popularity-attempts to address problems

• What is it?

– Alternative levy – Can be continuing in nature – Can combine all emergency levies into one request – Does generate some additional income from NEW CONSTRUCTION – Does not impact current taxpayers (not a tax increase) – Car-load analogy

• Drive-In (Car-load is $20 ) (4 people in car) (Yields $5/person)
• Drive-In (Car-load is $20) (5 people in car) (Yield $4/person)
• Why?

– Preserves integrity of “no new tax” component of emergency Levies – Helps to acknowledge voter fatigue – Allows schools to recognize a small amount of growth on NEW CONSTRUCTION

Membership

Membership

Armour, Barbara Bova, Cynthia Conn, Tracy Fischer, Todd McNamara, Patrick Moll, Donald Morris, Dan Powalie, Thomas Powell, Calvin Wadsworth, David