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Updated Bond Tax Rate Projections February 11, 2014 PowerPoint Presentation
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Sequim School District. Updated Bond Tax Rate Projections February 11, 2014. Jon Gores Managing Director (206) 389-4043 jgores@dadco.com. Bond Issue Planning. Assumptions for Bond Tax Rate Planning Interest Rates Bond Rating Assessed Value Bond Structure. Bond Issue Planning.

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Presentation Transcript
slide1

Sequim School District

Updated Bond Tax Rate Projections

February 11, 2014

Jon Gores

Managing Director

(206) 389-4043

jgores@dadco.com

slide2

Bond Issue Planning

Assumptions for Bond Tax Rate Planning

  • Interest Rates
  • Bond Rating
  • Assessed Value
  • Bond Structure
slide3

Bond Issue Planning

A. Interest Rates

- Lower interest rates result in lower tax rates for bonds.

- Interest rates are determined when bonds are actually sold.

- Assumption: Future Bond Sales Current rates plus 1.50 % (150 basis points).

slide4

Bond Issue Planning

B. Bond Rating

- A higher bond rating results in lower interest rates.

- Assumption: Aa1 (with State Guaranty)

Aa2 (District Rating) pending

bond rating factors
Bond Rating Factors
  • Bond raters consider the local economy, District finances, and other factors
  • Assumption: Aa1 (State Guarantee)
  • Aa2 (District Rating)

Debt

Factors

Economy

The Rating

Financial

Performance

Governmental

Factors

bond issue planning
Bond Issue Planning

Assessed Value

  • Projected Assessed Value Growth
    • Final 2014: -0.55%growth
    • Projected 2015-2016: 1.0% annual growth
    • Projected 2017-2041: 2.0% annual growth
  • Higher assessed values will lower the District’s tax rates (but not the overall payment)
  • An individual’s taxes will be based on the assessed value for their property
  • New construction vs. increase in value of existing property
bond issue planning1
Bond Issue Planning

Bond Structure

  • State law gives Districts great flexibility in determining bond structures
  • Options:
    • Level Debt
    • Level Tax Rate
    • Stepped Level Tax Rate
slide10

Bond Tax Rate Projection Summary

Interest Rates: Future bond sales current plus 150 basis points (1.50%)

Bond Rating: Aa1 State Guarantee

District Rating: Aa2 (Pending)

Assessed Value Growth: Final 2014: -0.55% growth; Projected 2015-2016: 1.0% growth;

Projected 2017-2041: 2.0% annual growth

Bond Structure: Level Tax Rate

slide19

Total Tax Rate Comparison

(1) Assessed Value does not include TAV.

Source: County Assessors Offices.

slide20

Total Tax Rate Comparison

  • Similar sized school districts

(1) Assessed Value includes TAV.

Source: Multiple County Assessors Offices.

slide21

Total Tax Rate Comparison

(1) Assessed Value does not include TAV.

Source: County Assessors Offices.

slide24

Neither this material nor any of its contents may be disclosed, sold, or redistributed, electronically or otherwise, without prior written consent of Davidson Companies. The information presented herein is based on public information we believe to be reliable, prevailing market conditions, as well as our views at this point in time. We make no representation or warranty with respect to the accuracy or completeness of this material. Past performance is not necessarily indicative of future results. Davidson Companies does not assume any liability for any loss which may result from the reliance by any person upon such material. We make no representations regarding the legal, tax, regulatory, or accounting implications of entering into a Transaction.

Required Disclosure Pursuant to MSRB Rule G-23: An underwriter’s primary role will be to purchase as principal, or arrange for the placement of the securities in a commercial arm’s length transaction with the issuer, and may have financial and other interests that differ from those of the issuer. In its capacity as underwriter and not as financial advisor, an underwriter may provide incidental financial advisory services at the issuer’s request, including advice regarding the structure, timing, terms and other similar matters concerning the issuance. However, an underwriter does not assume any financial advisory or fiduciary responsibilities with respect to the issuer.