School District of Kewaskum Financial Overview

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1 School District of Kewaskum Financial Overview October 20, 2015

2 KEY FINANCIAL METRICS Revenue Limit State Equalization Aids Mill Rate Equalized Valuation (tax base) Outstanding Debt Debt Service as a percentage of overall expenses Debt Limit Debt Service Payments and Ledge Fund Balance Credit Rating Interest Rate Environment 2

3 KEWASKUM REVENUE LIMIT Revenue Limits have controlled Wisconsin school finance since Calculation worked off the base year of Calculation is based on 3-year rolling average of school district enrollment State provides a per pupil multiplier, subject to change with each biennial budget Determines maximum revenue amount Kewaskum Historical Revenue Limit Inputs Year Rolling Average Enrollment 2,030 2,021 1,983 1,943 1,908 1,891 Allowable Per Pupil Revenue Increase $ $ $ $50.00 $75.00 $75.00 Maximum Limited Revenue $19,792,657 $19,792,128 $18,628,126 $18,379,177 $18,343,546 $17,990,465 % Change in Max Limited Revenue 0.00% -5.88% -1.34% -0.19% -1.92% 3

KEWASKUM STATE EQUALIZATION AIDS Kewaskum Per Student Revenue By Source State Equalization All Other Revenues Federal Open Enrollment Other Local Other State Aid Per Pupil Categorical PROPERTY TAX

4 KEWASKUM STATE EQUALIZATION AIDS Kewaskum Per Student Revenue By Source State Equalization All Other Revenues Federal Open Enrollment Other Local Other State Aid Per Pupil Categorical PROPERTY TAX STATE EQUALIZATION AID 42% 41% 41% 47% 48% 37% 37% 28% 33% 31% Aids vary based on: State s overall funding AND individual school district factors including enrollment and relative property richness or poorness 4

5 MILL RATE REGIONAL PEER GROUP COMPARISON Kewaskum s Mill Rate for 2015 was $9.41 Average Mill Rate for regional peer group was $9.43 $ Mill Rates (per $1,000 of Equalized Valuation) $10.72 $10.22 $10.00 $9.41 $9.39 $8.95 $8.69 $8.61 $8.00 $6.00 $4.00 $2.00 $0.00 Campbellsport Sch Dist Random Lake Sch Dist Kewaskum Sch Dist Lomira Sch Dist Slinger Sch Dist Plymouth Joint Sch Dist West Bend Sch Dist 5

6 EQUALIZED VALUATION TREND REGIONAL PEER GROUP COMPARISON $5,000,000,000 Equalized Valuation (TID OUT) $4,500,000,000 $4,000,000,000 $3,500,000,000 $3,000,000,000 $2,500,000,000 $2,000,000,000 Campbellsport Sch Dist Kewaskum Sch Dist Lomira Sch Dist Plymouth Joint Sch Dist Random Lake Sch Dist Slinger Sch Dist West Bend Sch Dist $1,500,000,000 $1,000,000,000 $500,000,000 $

KEWASKUM EQUALIZED VALUATION TREND Kewaskum s Equalized Valuation showed a downward trend following the recession; 2014 and 2015 have shown signs of improvement State averages and regional peers had

7 KEWASKUM EQUALIZED VALUATION TREND Kewaskum s Equalized Valuation showed a downward trend following the recession; 2014 and 2015 have shown signs of improvement State averages and regional peers had similar trends in Equalized Valuation $1,300,000,000 Equalized Valuation Trend (TID OUT) $1,280,000,000 $1,260,000,000 $1,240,000,000 $1,220,000,000 $1,200,000,000 Average 2-Year Annual Increase was 1.30% $1,180,000,000 $1,160,000,000 Average 5-Year Annual Decrease was less than 2.00% $1,140,000,000 $1,120,000,000 $1,100,000,000 $1,080,000,

2014 DEBT SERVICE EXPENDITURES REGIONAL PEER GROUP COMPARISON Kewaskum School District s last successful facilities referendum election was in 1999 for

8 2014 DEBT SERVICE EXPENDITURES REGIONAL PEER GROUP COMPARISON Kewaskum School District s last successful facilities referendum election was in 1999 for $11,700,000 Kewaskum has the lowest debt service expense when measured as a percentage of operating expenses; and the second lowest when measured on a per student basis 8

9 DEBT SERVICE CAPACITY Debt Capacity for Wisconsin school districts is 10% of the Equalized Valuation (TID IN) Kewaskum School District s current outstanding debt is $5.635 million General Obligation Debt Oustanding = $5,635,000 (5%) 2015 Equalized Valuation (TID IN): $1,184,713,356 General Obligation Debt Limit (10% of EV TID IN): $118,471,336 General Obligation Debt Outstanding (net of 2015 payments): $5,635,000 Remaining Debt Capacity: $112,836,336 Remaining General Obligation Debt Capacity = $112,836,336 (95%) 9

10 DEBT SERVICE PAYMENT TREND Debt associated with the 1999 referendum will be paid off in 2019 Outstanding debt is callable (eligible for prepayment) starting in 2016 $1,200,000 DEBT SERVICE PAYMENTS (PRINCIPAL & INTEREST) REFERENDUM-RELATED DEBT FUND 39 $1,000,000 $800,000 $600,000 $400,000 $200,000 Through strategic levy management over the next few years, the District hopes to be able to prepay the final maturity of the existing debt $

FUND BALANCE TREND Trend in General Fund Balance Total Fund Balance and Fund Balance as a Percentage of Operating Expenses The District s General Fund Balance has shown a positive trend Last

11 FUND BALANCE TREND Trend in General Fund Balance Total Fund Balance and Fund Balance as a Percentage of Operating Expenses The District s General Fund Balance has shown a positive trend Last Moody s Review March 2011 Moody s current rating methodology looks at 5- year trend in General Fund Balance and Cash Balance Current Moody s rating of Aa3, last rating review in March

12 CREDIT RATING REGIONAL PEER GROUP COMPARISON Kewaskum s credit rating is in line with regional peers Slinger and West Bend are rated higher S&P Rating Categories AAA AA+ AA AA- A+ A A- Baa1 CREDIT RATING SCALES Moody s Rating Categories Aaa Aa1 Aa2 Aa3 A1 A2 A3 Baa1 CREDIT RATINGS OF REGIONAL PEER GROUP SCHOOL DISTRICT Campbellsport Kewaskum Lomira Plymouth A+ Random Lake Slinger West Bend CREDIT RATING S&P Moody's AA AA Aa3 Aa3 Aa3 A1 12

13 CREDIT RATING IMPORTANCE OF RATING INTEREST COST Current Credit Spreads Interest rate differential between AA and Baa for a 10-year maturity was approximately 0.75% *The Municipal Market Data MMD is a municipal bond market index produced by TM3. As of September 17,

14 INTEREST RATE TREND Interest Rate market continues to be favorable for long-term municipal debt issuance HISTORICAL INTEREST RATE COMPARISON MMD "AAA" 20-Year Bond Index 10 Year History 6.50% 6.00% 5.50% 10-Year high point for the index = 5.74% on October 15, % 4.50% 4.00% 3.50% 3.00% 2.50% 2.00% 1.50% 1.00% 0.50% 0.00% Historical (data tracked since 1994) low point for the index = 2.10% on November 30, 2012 Current rate is 2.83% Information shown is the Municipal Market Data index for AAA-rated, 20-year bonds. 14

15 QUESTIONS 10/22/

16 DISCLAIMER The information contained herein is solely intended to suggest/discuss potentially applicable financing applications and is not intended to be a specific buy/sell recommendation, nor is it an official confirmation of terms. Any terms discussed herein are preliminary until confirmed in a definitive written agreement. The analysis or information presented herein is based upon hypothetical projections and/or past performance that have certain limitations. No representation is made that it is accurate or complete or that any results indicated will be achieved. In no way is past performance indicative of future results. Changes to any prices, levels, or assumptions contained herein may have a material impact on results. Any estimates or assumptions contained herein represent our best judgment as of the date indicated and are subject to change without notice. Examples are merely representative and are not meant to be all-inclusive. The information set forth herein was gathered from sources which we believe, but do not guarantee, to be accurate. Neither the information, nor any options expressed, constitute a solicitation by us for purposes of sale or purchase of any securities or commodities. Investment/financing decisions by market participants should not be based on this information. You should consider certain economic risks (and other legal, tax, and accounting consequences) prior to entering into any type of transaction with PMA Securities, Inc. or PMA Financial Network, Inc. It is imperative that any prospective client perform its own research and due diligence, independent of us or our affiliates, to determine suitability of the proposed transaction with respect to the aforementioned potential economic risks and legal, tax, and accounting consequences. Our analyses are not and do not purport to be appraisals of the assets, or business of the District or any other entity. PMA makes no representations as to the actual value which may be received in connection with a transaction nor the legal, tax, or accounting effects of consummating a transaction. PMA cannot be relied upon to provide legal, tax, or accounting advice. You should seek out independent and qualified legal, tax, and accounting advice from outside sources. This information has been prepared for informational and educational purposes and does not constitute a solicitation to purchase or sell securities, which may be done only after client suitability is reviewed and determined. Securities, public finance and institutional brokerage services are offered through PMA Securities, Inc. PMA Securities, Inc. is a broker-dealer and municipal advisor registered with the SEC and MSRB, and is a member of FINRA and SIPC. Prudent Man Advisors, Inc., an SEC registered investment adviser, provides investment advisory services to local government investment pools. All other products and services are provided by PMA Financial Network, Inc. PMA Financial Network, Inc., PMA Securities, Inc. and Prudent Man Advisors (collectively PMA") are under common ownership. Securities and public finance services offered through PMA Securities, Inc. are available in CA, CO, FL, GA, IL, IN, IA, KS, MI, MN, MO, NE, OH, OK, PA, SD, TX and WI. This document is not an offer of services available in any state other than those listed above, has been prepared for informational and educational purposes only and does not constitute a solicitation to purchase or sell securities, which may be done only after client suitability is reviewed and determined. All investments mentioned herein may have varying levels of risk, and may not be suitable for every investor. For more information, please visit us at PMA Securities, Inc. For institutional use only. 16

ROBERT LEWIS SVP / MANAGING DIRECTOR PMA SECURITIES, INC. Center Cass 66. Referendum Overview JANUARY 5, 2017

Center Cass 66 Referendum Overview ROBERT LEWIS SVP / MANAGING DIRECTOR PMA SECURITIES, INC. JANUARY 5, 2017 OVERVIEW OF REFERENDUM PLAN OF FINANCE What is a Municipal Bond? A Municipal Bond is a debt