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West Contra Costa USD

West Contra Costa USD. 2014 General Obligation Refinancing Summary 2014-15 Tax Rate Resolution Presentation to the Board of Education August 13, 2014. I. 2014 Refunding Summary. Refunding Objectives Met. Refinanced existing bonds at lower interest rates.

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West Contra Costa USD

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  1. West Contra Costa USD 2014 General Obligation Refinancing Summary 2014-15 Tax Rate Resolution Presentation to the Board of Education August 13, 2014

  2. I. 2014 Refunding Summary

  3. Refunding Objectives Met • Refinanced existing bonds at lower interest rates. • Lowered debt service to achieve savings for taxpayers and satisfy State refunding law. • Applied savings to help the District meet the tax rate targets for 2002 Measure D and 2005 Measure J in 2014-15, 2015-16 and 2016-17 assuming 4% annual AV growth. West Contra Costa USD 2014 General Obligation Refunding Bonds |

  4. 2014 Refunding Results • The bonds refinanced: • All $24.6 million of 2002 Series C current interest bonds • All $59.0 million of 2005 Series A current interest bonds • $1.65 million of 2002 Series C capital appreciation bonds • The refunding generated $10.3 million in cashflow savings, equal to $9.6 million present value savings or 11.1% of the refunded principal & accreted value of the bonds. • The refunding used only current interest bonds – no capital appreciation bonds. Presentation to the West Contra Costa Unified School District Board of Education | page

  5. Excellent Market Timing • The lack of supply in the primary markets for municipal bonds have driven interest rates lower in recent months. • Municipal interest rates have increased since the District priced its bonds on July 24 due to improving economic news. Board of Education Meeting Pricing Date July 24 West Contra Costa USD 2014 General Obligation Refunding Bonds |

  6. 2014 Bond Investors • The 2014 transaction received significant interest from a large group of investors, as summarized below. West Contra Costa USD 2014 General Obligation Refunding Bonds |

  7. 2014 Pricing Compared to Prior Transactions Spread to MMD AAA GO Index by Financing(in basis points) • The District has priced General Obligation bonds in 2011-13, which can be compared to the pricing of the 2014 bonds. • The table below shows spreads to the AAA GO Index to the pricing of the bonds. • The 2014 Bonds priced favorably with lower spreads compared to the prior transactions in every maturity. Note: Spread is to stated yield. Differences in coupons affect yield comparisons. West Contra Costa USD 2014 General Obligation Refunding Bonds |

  8. 2014 Bond Pricing Improvements • The large investor demand allowed the pricing of the bonds to be improved in a series of adjustments from the pre-pricing scale. The largest adjustments benefitted the District by 9 basis points. West Contra Costa USD 2014 General Obligation Refunding Bonds |

  9. Comparable Transactions Pricing • The pricing of the bonds priced better than the Sweetwater Union HSD, which carried an A1/A+ underlying rating with BAM bond insurance. West Contra Costa USD 2014 General Obligation Refunding Bonds |

  10. Costs of Issuance Summary • Total costs of issuance and underwriter’s discount was $857,665 for the transaction. • Note: Does not include $3,080 of rounding. Presentation to the West Contra Costa Unified School District Board of Education | page

  11. 2014 Refunding Impact on Tax Rate Management • After the refunding, both 2002 Measure D and 2005 Measure J are projected to meet tax rate targets through 2017 under a 4% assessed value growth scenario. • Tax rate targets for fiscal year 2018 and beyond will need to be addressed in the future, depending on growth rates in assessed value. West Contra Costa USD 2014 General Obligation Refunding Bonds |

  12. II. 2014-15 Tax Rate Resolution

  13. 2002 Measure D & 2005 Measure J • The 2014 Bonds refinanced a portion of the outstanding 2002 Measure D and 2005 Measure J Bonds for debt service savings. • Both of the Measures are expected to be at the tax rate target of $60.00 per $100,000 through the 2016-17 fiscal year, assuming a 4.0% AV growth rate. • 2005 Measure J has remaining new money capacity, but is constrained by the tax rate target. • The resolution provides for the levy of the $60.00 tax rate for these two measures. Presentation to the West Contra Costa Unified School District Board of Education | page

  14. 2010 Measure D & 2012 Measure E • 2010 Measure D and 2012 Measure E have new money capacity available for the District. • The District currently estimates that $85 million in bonds from each of these series will be issued in March 2015. • Funds will need to be available to pay for debt service on the bonds when issued. • The resolution provides for the levy of the $48.00 tax rate for these two measures. Presentation to the West Contra Costa Unified School District Board of Education | page

  15. 1998 Measure E & 2000 Measure M • 1998 Measure E and 2000 Measure M have no remaining bonding capacity • Remaining debt service on the 1998 Measure E bonds results in a tax rate below the target tax rate of $26.40, even with no AV growth. • 2000 Measure M debt service is expected to be at the target tax rate of $55.60 per $100,000 of assessed value until 2018, when debt service declines from $15.1 million on an annual basis to $6.1 million. • The resolution provides for the levy of the $55.60 tax rate for the 2002 Measure M program. • The County will calculate the required levy for 1998 Measure E. Presentation to the West Contra Costa Unified School District Board of Education | page

  16. 2014-15 Tax Rate Resolution Summary Presentation to the West Contra Costa Unified School District Board of Education | page

  17. III. Long-Range Tax Management

  18. Long-Range Tax Outlook • The District’s long-term outlook on tax rates is dependent on the assumed growth of its assessed valuation. • In addition, certain measures have Stabilization Funds on hand that would serve to mitigate lower than expected growth rates. • Following charts show revenues at growth rates between 0% and 6% versus debt service expenditures. Debt service above a revenue line means County will have to set tax rates above the District’s target rate at that particular assessed value growth rate. Debt service below a revenue line means the County can maintain (or be under) the District’s target rate at that particular assessed value growth rate. Presentation to the West Contra Costa Unified School District Board of Education | page

  19. 1998 Measure E (non-Prop. 39) Presentation to the West Contra Costa Unified School District Board of Education | page

  20. 2000 Measure M (non-Prop. 39) Presentation to the West Contra Costa Unified School District Board of Education | page

  21. 2002 Measure D Presentation to the West Contra Costa Unified School District Board of Education | page

  22. 2005 Measure J Presentation to the West Contra Costa Unified School District Board of Education | page

  23. 2010 Measure D Presentation to the West Contra Costa Unified School District Board of Education | page

  24. 2012 Measure E Presentation to the West Contra Costa Unified School District Board of Education | page

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