Portola Valley School District Bond Sale Summary Overview On - PowerPoint PPT Presentation

May 15, 2019 Portola Valley School District Bond Sale Summary

Overview On February 6, 2019, the District Board of Trustees approved the issuance of two series of bonds: ◆ Measure Z, Series A Bonds – Not‐to‐exceed issuance amount: $10 million – Bonds to be issued to fund various projects in the District – The remaining $39.5 million of Measure Z bonds scheduled to be issued in 2021 ◆ 2020 General Obligation Refunding Bonds – Not‐to‐exceed issuance amount: $5 million – Bonds to be issued to refinance the District’s 2010 Refunding Bonds, Series B – Bonds to close in May 2020 in order to achieve tax‐exempt interest rates 1

Credit Rating Upgrade As part of the bond issuance process, the District met with Standard & Poor’s to update the District’s credit rating ◆ Standard & Poor’s gave the District a rare double rating upgrade from ‘AA‐’ to ‘AA+’ based on the strength of the District’s credit characteristics – ‘AA+’ is the second highest rating an issuer can achieve ◆ The rating was based upon: – Strong property tax base with very high resident wealth levels – Robust supplementary revenues bolstering financial position and per pupil resources – Good financial management practices with formal policies in place – Low debt burden relative to property values 2

Bond Sale Overview On March 19, 2019, the District sold its bonds to investors ◆ The District received more orders for bonds than there were bonds available for sale – This allowed the underwriter to slightly lower the interest rates for the benefit of District taxpayers Measure Z, Series A Bonds 2020 Refunding Bonds Par Amount Total Orders Par Amount Total Orders Maturity ($1,000) ($1,000) Subscription Maturity ($1,000) ($1,000) Subscription 1.0 x 1.00 x 2020 $ 1,625 $ 1,625 2020 $ 45 $ 45 0.9 x 1.00 x 2021 1,495 1,400 2023 115 115 0.0 x 1.00 x 2028 85 ‐ 2024 120 120 0.0 x 1.00 x 2029 110 ‐ 2025 110 110 2.0 x 1.00 x 2030 130 260 2026 115 115 2.0 x 1.00 x 2031 160 320 2027 120 120 1.0 x 1.00 x 2032 185 185 2028 105 105 1.0 x 1.00 x 2033 220 220 2029 120 120 1.0 x 1.00 x 2034 255 255 2030 1,280 1,280 2.7 x 1.00 x 2035 290 780 2031 1,345 1,345 2.0 x 1.00 x 2036 325 650 Subtotal: $ 3,475 $ 3,475 2.7 x 2037 365 980 2038 410 1,230 3.0 x 2.5 x 2039 455 1,160 1.8 x 2045 3,890 6,890 1.60 x Subtotal: $ 10,000 $ 15,955 3

List of Investors The District received orders from a number of different investors 4

Estimated Results vs. Final Results Estimated financing results were presented at the January 16, 2019 Board meeting ◆ Measure Z, Series A: – Estimated debt service cost: $17,588,261 • Estimated repayment ratio: 1.76 to 1 • Interest rate assumption: 4.50% ◆ 2020 Refunding Bonds: – Estimated savings: $233,156 • Present value savings: 4.88% The final results were much better than anticipated ◆ Measure Z, Series A: – Final debt service cost: $15,454,359.84 • Estimated repayment ratio: 1.55 to 1 • Interest rate assumption: 3.66% ◆ 2020 Refunding Bonds: – Estimated savings: $413,506 • Present value savings: 9.04% 5

Measure Z, Series A Bonds Coupon Yield Yield to Debt Net Date Principal (%) (%) Maturity (%) Interest Service Fund Debt Service 8/1/2019 $ ‐ ‐ ‐ ‐ $ 139,764.44 $ (139,764.44) $ ‐ 8/1/2020 1,625,000.00 4.000 1.350 ‐ 426,400.00 (426,400.00) 1,625,000.00 8/1/2021 1,495,000.00 5.000 1.360 ‐ 361,400.00 (103,590.16) 1,752,809.84 8/1/2022 ‐ ‐ ‐ ‐ 286,650.00 ‐ 286,650.00 8/1/2023 ‐ ‐ ‐ ‐ 286,650.00 ‐ 286,650.00 8/1/2024 ‐ ‐ ‐ ‐ 286,650.00 ‐ 286,650.00 8/1/2025 ‐ ‐ ‐ ‐ 286,650.00 ‐ 286,650.00 8/1/2026 ‐ ‐ ‐ ‐ 286,650.00 ‐ 286,650.00 8/1/2027 ‐ ‐ ‐ ‐ 286,650.00 ‐ 286,650.00 8/1/2028 85,000.00 5.000 1.820 2.098 286,650.00 ‐ 371,650.00 8/1/2029 110,000.00 5.000 1.960 2.439 282,400.00 ‐ 392,400.00 8/1/2030 130,000.00 5.000 2.120 2.740 276,900.00 ‐ 406,900.00 8/1/2031 160,000.00 5.000 2.260 2.982 270,400.00 ‐ 430,400.00 8/1/2032 185,000.00 5.000 2.380 3.177 262,400.00 ‐ 447,400.00 8/1/2033 220,000.00 5.000 2.480 3.334 253,150.00 ‐ 473,150.00 8/1/2034 255,000.00 5.000 2.540 3.448 242,150.00 ‐ 497,150.00 8/1/2035 290,000.00 4.000 2.900 3.353 229,400.00 ‐ 519,400.00 8/1/2036 325,000.00 4.000 2.990 3.430 217,800.00 ‐ 542,800.00 8/1/2037 365,000.00 4.000 3.070 3.495 204,800.00 ‐ 569,800.00 8/1/2038 410,000.00 4.000 3.140 3.550 190,200.00 ‐ 600,200.00 8/1/2039 455,000.00 4.000 3.210 3.600 173,800.00 ‐ 628,800.00 8/1/2040 505,000.00 4.000 3.410 3.745 155,600.00 ‐ 660,600.00 8/1/2041 555,000.00 4.000 3.410 3.745 135,400.00 ‐ 690,400.00 8/1/2042 615,000.00 4.000 3.410 3.745 113,200.00 ‐ 728,200.00 8/1/2043 675,000.00 4.000 3.410 3.745 88,600.00 ‐ 763,600.00 8/1/2044 735,000.00 4.000 3.410 3.745 61,600.00 ‐ 796,600.00 Note: Below the 8/1/2045 805,000.00 4.000 3.410 3.745 32,200.00 ‐ 837,200.00 4 to 1 legal Total $ 10,000,000.00 $ 6,124,114.44 $ (669,754.60) $ 15,454,359.84 maximum. Net Repayment Ratio: 1.55 to 1 All‐Inclusive Interest Rate: 3.66% % Capital Appreciation Bonds: 0.0% 6

2020 Refunding Bonds Coupon Yield Yield to Total Debt Prior Debt Date Principal (%) (%) Maturity (%) Interest Service Service Savings 8/1/2020 $ 45,000.00 5.000 1.950 ‐ $ 41,024.31 $ 86,024.31 $ 89,131.25 $ 3,106.94 8/1/2021 ‐ ‐ ‐ ‐ 171,500.00 171,500.00 178,262.50 6,762.50 8/1/2022 ‐ ‐ ‐ ‐ 171,500.00 171,500.00 178,262.50 6,762.50 8/1/2023 115,000.00 5.000 2.040 ‐ 171,500.00 286,500.00 328,262.50 41,762.50 8/1/2024 120,000.00 5.000 2.100 ‐ 165,750.00 285,750.00 327,262.50 41,512.50 8/1/2025 110,000.00 5.000 2.160 ‐ 159,750.00 269,750.00 316,256.26 46,506.26 8/1/2026 115,000.00 5.000 2.240 ‐ 154,250.00 269,250.00 315,443.76 46,193.76 8/1/2027 120,000.00 5.000 2.320 ‐ 148,500.00 268,500.00 314,050.00 45,550.00 8/1/2028 105,000.00 5.000 2.420 2.681 142,500.00 247,500.00 292,450.00 44,950.00 8/1/2029 120,000.00 5.000 2.560 3.001 137,250.00 257,250.00 301,650.00 44,400.00 8/1/2030 1,280,000.00 5.000 2.720 3.277 131,250.00 1,411,250.00 1,455,250.00 44,000.00 8/1/2031 1,345,000.00 5.000 2.860 3.494 67,250.00 1,412,250.00 1,454,250.00 42,000.00 Total $ 3,475,000.00 $ 1,662,024.31 $ 5,137,024.31 $ 5,550,531.27 $ 413,506.96 Gross Savings ($): $ 413,507 Present Value Savings ($): $ 341,779 Present Value Savings (%): 9.04% All‐Inclusive Interest Rate: 3.57% Note: Far above the 3% threshold for considering a refinancing. 7

Final Costs of Issuance Measure Z, 2020 Items Provider Series A Refunding Total Bond & Disclosure Counsel Stradling Yocca Carlson & Rauth $ 85,000 $ 35,000 $ 120,000 Bond & Disclosure Counsel Expenses Stradling Yocca Carlson & Rauth 1,750 1,750 3,500 Financial Advisor Keygent 55,000 35,000 90,000 Financial Advisor Expenses Keygent 2,500 2,500 5,000 Dissemination Agent Services (Rating Upgrade) Keygent 500 ‐ 500 Credit Rating Standard & Poor's 16,625 ‐ 16,625 Printing/Posting & Distribution AVIA Communications 1,800 1,500 3,300 Demographic Information California Municipal Statistics 1,500 1,500 3,000 County Paying Agent Services San Mateo County 1,500 1,500 3,000 Escrow Agent & COI Custodian Bank of New York 825 1,575 2,400 Verification Agent Causey Demgen & Moore ‐ 2,500 2,500 Contingency ‐ 6,205 6,205 Total $ 167,000 $ 89,030 $ 256,030 8