Lay Facilities Committee

1. Lay Facilities Committee Finance Subcommittee Update January 9, 2013

2. Lay Finance Subcommittee UpdateFact Finding Meetings • 12/7/12 Meeting with Bond Counsel and District Representatives • Reps from Squire Sanders / StieffelNicolaus • Steve Shergalis and Scott Gainer - BOE • 1/4/13 - Meeting with representatives from OSFC, Regency Construction, Hammond Construction Lay Finance Sub-Committee is comprised of community members.

3. Summary of Findings / Observations (1 of 2) • The committee discussed “Plan C” costs with Regency Construction. It was concluded that a comprehensive project will likely cost $180-$200MM. This will facilitate a solid renovation/new build. • The committee reviewed line-by-line the $206MM funding plan for “Plan C”. We identified $140MM of firm funding, excluding grants, donation, OSFC. • While OSFC funding is not considered firm, staying in alignment with program guidelines for co-funding (~$20MM) makes sense.

4. Summary of Findings / Observations (2 of 2) • The District capacity for raising funds through a voted bond will decrease by $60MM in 2014. • Despite the short-term funding gap, a long-term facilities master plan is a critical need. • By establishing phases (HS/MS/Elementary) – elements of the master plan could be completed as funding becomes available. • Any new alternative(s) need to be approved by the Board of Education by the end of May 2013. This timeline will allow for a November 2013 bond issue.

5. financing review

6. District Debt Capacity - 2013 • The District has very little debt - $7.4 MM • Estimated assessed property valuation is $1.106BB. This should be updated on or around December 17th. • General debt limit - 9% of Assessed Valuation: $99MM-$7MM (current) = $92MM Limits are determined by State law

7. Special Needs Designation • Debt limit with special needs designation - $150.8 MM • Special Needs – provision of ORC 133 that allows as District to exceed 9% debt limit based on specific criterion. • The District will qualify for special needs designation in 2013 but not likely in 2014. • The assessed valuation would have to grow by more than 11% in 2014 to remain in special needs – not likely. 2014 – debt capacity restricted to 9%. An bond issue in 2014 would be limited to $92MM

8. How Much Money Can Likely Be Raised With A Voted Bond? • The District could request voter approval of up to $150MM. • Based on prior discussions, there was a desire to keep millage in the range of 6.0 mills • 1 mill can raise about $20.7MM (5%, 36 years) • 6.0 mills = $124 million • Approx $184 per $100,000 (est) • Bonds would likely be issued in increments during the project phases • The interest rate would be the prevailing rate at the time of issuance • The millage would adjust to ensure that the right amount of tax revenue was received for debt service 2013 Ballot Initiative

9. Alternate Forms of FinancingNon Voted • Alternate Forms of Financing • Tax Anticipation Notes (TANS) • District can borrow up to 50% of expected tax revenues for 10 years • $1MM annual Permanent Improvement (PI) tax revenues would support $8.5MM TANs • Lease Certificates of Participation (COPs) • Capitalize projected future PI tax revenues or other revenues without incurring bonded debt • Can amortize COPs over 30 years • $1MM annual PI tax revenues would support $15.7MM COPs at 5% over 30 years. • The District will pay off the 2003 Energy Conservation Bonds in 2013. This will free up $660,000 in PI tax revenuesto pay debt service. Improvement funds must be available for ongoing repairs

10. Plan C Funding EvaluationLay Committee Adjustments for Firm Dollars

11. Current District Finances Scott Gainer- CFO • District’s five-year forecast was filed October 2012 • Based on forecast – next operating levy is likely to be on 3-year cycle (2014). • Labor is major cost driver for school districts • CH-UH will enter contract negotiations in 2013. • Expected pressure on wages. Transparency is important. Under this current scenario, there will likely be back-to-back issues (bond & operating)

12. OSFC FundingCurrent Status - ELPP • The District is currently in the Expedited Local Partnership Program (ELPP). • The ELPP program allows a district to begin executing an approved master plan and receive credit for locally funded construction. • The District executed an agreement with the OSFC on August 20, 2012. • The agreement established a master plan and locked in co-funding at 14% (State). • The agreement must be updated annually if there is no ballot issue prior to August 2013.

13. Ohio School Facilities Commission FundingClassroom Facilities Assistance Program - CFAP • Funds are committed to the local district when the state approves the project for CFAP. • There is no specific timetable for when CHUH would be approved for CFAP. • CH-UH is in the 86th percentile – ranked 524. • There is no specific timetable for funding approval – likely not before 2020. • The state’s most recent CFAP approvals are listed below: State portion

14. Master Plan AdjustmentsTimeline to Meet November Ballot • The process to significantly amend the Master Plan for a new ELPP agreement will take a minimum of two months. There is a significant amount of work that needs to take place between OSFC and CHUH. • The work of this committee will likely generate significant changes. • February – April -> Work with consultant to update Master Plan Option • May – Final Master Plan Option (approved by BOE) • June – July 2013 • OFSC issues resolution to accept Master Plan • CHUH BOE adopts Resolution of Acceptance • OFSC approval of Master Plan • August 2013 • Execute new ELPP Agreement • BOE files for November ballot • September – November • Bond Campaign • November – Election Day 2013

15. Project Cost Discussion • Regency Construction provided a cost breakdown (percentage) for each facility. • The estimates includes both hard and soft costs. • Contingencies were estimated at 7% for renovation and 5% - new. • All detail is available within the project costs sheets provided in the Lay Committee binders • Regency walked through the buildings with architects and revised the original OSFC estimates based on a more critical analysis • Swing Space – all construction was designed to move kids off sites while construction is in progress. Safety was primary consideration

16. Project Cost DiscussionMajor Takeaways • The cost of a project in CHUH is likely to be $180mm-$200mm. • There is not a likely alternate configuration or consolidation that will significantly reduce the cost of a comprehensive plan that meets OSFC Standards • The CHUH master plan would be considered a “solid renovation” • The characteristics of CHUH that impacts costs are – age of facilities, multiple additions, inadequate systems, size of district, need for swing space, unknowns regarding sites and building renovation

17. Finance CommitteeGuidance • The District needs to establish a Facility Master Plan that garners community support. • The combination of a voted bond in 2013 Bond and a COPS loan could raise $140mm. • The District would have the capacity to start Phase I and II of a plan. • Items such as stadium upgrades would not be priority items.

18. Finance CommitteeGuidance • Stay in the ELP program, maintaining a pathway for State co-funding (14%). • There would be no specific timetable for Phase 3 – elementary schools, but a plan would be in place when funds become available. • If the District is approved for CFAP, debt limit restrictions are removed. • High Level Timeline • 2013 - 2020 Complete High School and Middle School • Beyond 2020 Receive CFAP Approval, Bond Initiative ($40-$50MM), Complete Elementary Schools