Little Known Avenues for Funding Technology

Transcription

1 Little Known Avenues for Funding Technology Courtney James Business Development Executive Kathleen Hamilton Chief Financial Officer RJ Naughton Director

2 Agenda ST. JOSEPH PUBLIC SCHOOLS LOCAL LOOK FUNDING OPTIONS FOR TECHNOLOGY SINKING FUNDS NON-VOTED BONDS VOTED BONDS

3 St. Joseph Public Schools 2010 Bond Project with Four Basic Focus Areas Student Safety Infrastructure & Technology Energy & Building Efficiency Performing Arts $38,000,000

4 Created Classrooms of Today District spent $5,996,000 Core infrastructure, switches, servers, routers, interactive projectors, audio enhancements, wireless technology, surveillance systems, access controls, new labs... What is the sustainability plan? Enter Secant in July of 2015

5 Process to Identify Needs Technology Inventory all existing equipment Project life expectancy for each item Identify technology needs in strategic plan Safety/Security Camera Systems Access Controls Transportation

6 Promoting the Plan

7 Technology

8 Safety & Transportation

9 Bond Impact HOW HAS ST. JOSEPH P.S. SPENT THE MONEY? New Elementary Lab Spaces Student devices in classrooms Elementary Schools Enhanced access to student devices at High School Added access controls to Elementary Schools Enhanced video surveillance camera system at every school New core switches and firewall New wireless infrastructure at High School and Middle School Continued support of 1 to 1 program at Middle School

10 Future Bond Impact HOW DOES ST. JOSEPH PLAN TO SPEND THE NEXT SERIES? Classroom AV New servers Student devices and labs Elementary core infrastructure and wireless Communications systems (phone systems, PA, etc)

11 Voted Bonds Bond payments paid from debt levy tax receipts Single proposal or multiple bond proposals on ballot Bonds issued in one or more series For each series of bonds, at least 85% of bond proceeds should be spent within 3 years of issuance and all should be spent within 5 years of issuance. Bonds issued in more than one series is necessary for any of the following: For larger construction projects in order to comply with 85% rule Lower millage impact depending on structure of existing debt Expected to lower interest costs For refreshing technology, buses, roofs or other projects

12 Voted Bonds Issued in Series - Continued Ballot would reference a not-to-exceed amount to be issued in one or more series. Timing and amount of each series described in information provided to community. The actual timing and amount of each series and number of series could change from the original plan as long as total amount issued in all series is not more than the voted amount. The actual projects funded by future series could change from original plan as long as it is covered by project description in ballot and included in scope of the Preliminary Qualification application (State Qualified). These changes from original plan could be based on future needs or millage objective.

13 Ballot Language BONDING PROPOSAL Shall St. Joseph Public Schools, Berrien County, Michigan, borrow the sum of not to exceed Eight Million Four Hundred Thousand Dollars ($8,400,000), in one or more series, and issue its general obligation unlimited tax bonds therefor, for the purpose of: remodeling, furnishing and refurnishing and equipping and re-equipping school buildings, including equipping and re-equipping school buildings for security purposes; acquiring and installing educational technology and educational technology equipment for school buildings; and purchasing school buses? The following is for informational purposes only: The estimated millage that will be levied for the proposed bonds in 2016 is 0.35 mill ($0.35 on each $1,000 of taxable valuation). The maximum number of years the bonds may be outstanding for any single series, exclusive of any refunding, is ten (10) years. The estimated simple average annual millage anticipated to be required to retire this bond debt is 0.57 mill ($0.57 on each $1,000 of taxable valuation). The school district does not expect to borrow from the State to pay debt service on the bonds. The total amount of qualified bonds currently outstanding is $44,645,000. The total amount of qualified loans currently outstanding is $0.00. The estimated computed millage rate may change based on changes in certain circumstances. (Pursuant to State law, expenditure of bond proceeds must be audited, and the proceeds cannot be used for repair or maintenance costs, teacher, administrator or employee salaries, or other operating expenses.)

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15 Project Draws and Bond Sizing with Bonds Issued in Series Total Years from Draws for Years Issuance Fiscal Year Series 2016 Series 2020 Series 2024 Totals $1,232,000 $1,232, ,138,000 1,138, $2,200,000 2,200, , , $2,156,750 2,156, , , Project Cost Totals $2,370,000 $2,971,750 $2,815,000 $8,156,750 Estimated Issuance Costs 83,148 86,722 83, ,359 Less Estimated Interest Earned on Proceeds (3,148) (3,472) (3,489) (10,109) Bond Amount $2,450,000 $3,055,000 $2,895,000 $8,400,000

16 Example: Voted Bonds Issued in Series

17 What is a Sinking Fund? Voter approved millage Given recent changes in law, maximum millage authorized is limited to 3 mills for a maximum of 10 years for sinking funds voted in 2017 or later. Permitted uses expanded to allow for instructional technology and security equipment for sinking funds voted in 2017 or later. Projects are typically financed on a pay as you go basis. Usually interest free funding unless a non-voted bond is issued with debt payments expected to be covered by sinking fund receipts, known as bonding within projected sinking fund receipts. Millage could be reduced due to Headlee Rollback if the annual growth for existing property is greater than the rate of inflation.

18 THE REVISED SCHOOL CODE (EXCERPT) Act 451 of Sinking fund; creation; purpose; tax levy; audit; submission of proposition to school electors; election; ballot; approval; definitions. Sec

19 Sinking Funds Permitted Uses Compared to Bonds

20 Example: Sinking Fund

21 Non-Voted Bonds Bond payments paid from general fund or sinking fund receipts Outstanding principal of existing and new principal cannot exceed 5% of SEV unless bond proceeds are only for energy projects (includes roof projects). Bonding within sinking fund receipts Allowable when bond proceeds are used only for permitted sinking fund items General Fund would need to cover payments in the event the sinking fund receipts are not sufficient to cover bond Usually only bond for a portion of projected sinking fund receipts

22 Example: Non-Voted Bonding within Projected Sinking Fund Receipts

23 2018 Elections and Lead Time Election Dates State Qualified Preliminary Qual. Meeting Filing Deadline May 8, 2018 Dec./ Early Jan. Feb 13, 2018 Aug 7, 2018 April May 15, 2018 Nov 6, 2018 July Aug 14, 2018 Sept. Special May June /July Lead Time Usually 5 Months to 1 year before election, depending on project Ballot prepared at Preliminary Qualification meeting or by filing deadline if Non-State Qualified Project scope finalized no later than a week before ballot is to be written

24 Wrap-Up VISION REVENUE MAKING IT HAPPEN SINKING FUNDS NON-VOTED BONDS VOTED BONDS

25 Contacts Courtney James Secant Technologies (269) Kathleen Hamilton St. Joseph Public Schools (269) RJ Naughton PFM Financial Advisors (734)