Economic Development Funding Projects with Limited Options Cameron Arial, Vice President ZIONS BANK Public Finance 208.501.7481 Cameron.Arial@zionsbank.com June 10, 2015
ZIONS is the #1Advisor to Cities I am pleased to introduce to you our financial advisor Zions Bank Public Finance Zions has assisted us with almost every kind of public financing (revenue, tax increment, local improvement district, and pooled Bond Bank bonds) and has delivered excellent results on each During the process, Zions demonstrated they have a can do attitude. We know from experience that Zions will provide you with excellent financial service in what can often be a daunting process. -Greg Lanting, The Honorable Mayor, City of Twin Falls 1
and Public Finance Options Financing Tool State Authorization Security/Collateral Repayment Types of Projects General Obligation Bond 50% vote 66.67% vote Ad valorem property taxes Property tax or other available revenues Many public projects Revenue Bond Tax Increment Bond Authorization of governing body Revenues from water, sewer, electric, 50% vote or other enterprise funds Authorization of governing body Authorization of governing body and possibly judicial confirmation Tax increment from increased property value Revenues from water, sewer, electric, or other enterprise funds Tax increment or other revenue Projects related to the revenue source being pledged Water, sewer, road, and other infrastructure Equipment, fixtures, and real property Authorization of City Council Special Assessment/Local Improvement District Bond 60% vote of property owners or 1/2 plus one vote of City Council Property within assessment area Special assessment levied against property owners Public projects and infrastructure Certificates of Participation**** Authorization of governing body Judicial confirmation Financed improvements General fund or other revenues Equipment, fixtures, and real property Excise Tax/Local Option Tax Revenue Bond Authorization of City Council Resort Cities only. 60% vote to levy tax; 50% vote to borrow against tax Revenues - sales tax, class C road tax, franchise, other excise taxes Revenues from local option taxes Excise tax revenues or other available general fund revenues Roads and other public projects Revenues from local option taxes Lease Revenue Bonds/Lease Purchase Agreements**** Authorization of City Council and LBA Board Authorization of governing body and possibly judicial confirmation Financed equipment and improvements Annually appropriated general fund or other revenues Equipment, fixtures, and real property **** market is limited due to unresolved legal questions 2 Source: and State Statutes
and Credit Ratings Comparison AAA Rated Credits State of Salt Lake County Salt Lake City Weber County Davis County Jordan School District (South SL) AAA Rated Credits None Source: and State Statues; Moody's, S&P, and Fitch Rating Agencies 3
Total Volume 10 Year Trend Long Term Bonds Issued Per Capita 1,800 1,600 1,400 Debt Issued Per Capita 1,200 1,000 800 600 400 200 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Source: Bond Buyer Yearbooks 2004-2013 4
Bond Issuance by Category Per Capita Average Annual Bond Issuance by Category 350 300 250 200 150 100 50 Development Education Electrical Environment Health Housing Public Transportation Utilities 5 Source: Bond Buyer Yearbooks 2004-2013
Education 10 Year Trend Education Bonds Issued Per Capita 600 500 Debt Issued Per Capita 400 300 200 100 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Source: Bond Buyer Yearbooks 2004-2013 6
Utilities 10 Year Trend Utility Bonds Issued Per Capita 400 350 300 Debt Issued Per Capita 250 200 150 100 50 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Source: Bond Buyer Yearbooks 2004-2013 7
Transportation 10 Year Trend Transportation Bonds Issued Per Capita 350 300 250 Debt Issued Per Capita 200 150 100 50 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Source: Bond Buyer Yearbooks 2004-2013 8
Average Annual GDP Growth 4.5% 4.0% 2010-2013 3.9% 3.5% 3.0% 2.8% 2.9% 2.5% 2.4% 2.3% 2.0% 2.0% 2.0% 1.5% 1.0% 1.4% 1.3% 1.3% 0.5% 0.0% United States Mountain States Arizona Colorado Montana Nevada New Mexico Wyoming 9 Source: U.S. Bureau of Economic Analysis
Twin Falls URA and Chobani Yogurt Plant Video Link - http://www.youtube.com/watch?v=fsuh9bddrtw 10
URA Tax Increment Bonds Bid Results 11
School Bond Elections 20 School District Bond Elections Pass/Fail History Since 2002 Pass Fail Overall Success Rate since 2002: Pass 109; 57% Fail 81; 43% 18 16 73% Success Rate 14 74% 57% 12 92% 65% 10 8 53% 42% 73% 6 56% 31% 4 38% 43% 50% 2 0 17% 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Calendar Year 12
School Bond Elections 20 18 16 82% School District Bond Elections Hypothetical Pass/Fail History Since 2002 with 60% Threshold 84% 74% Pass Fail Success Rate Overall Success Rate since 2002: Pass 143; 75% Fail 47; 25% 14 12 10 92% 87% 76% 58% 75% 91% 8 6 86% 78% 4 2 50% 33% 50% 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Calendar Year 13
Market Update 9.0 BBI on 06/04/15 8.0 7.0 6.0 5.0 4.0 3.0 Jan-09 Aug-09 Mar-10 Oct-10 May-11 Dec-11 Jul-12 Feb-13 Sep-13 Apr-14 Nov-14 14 Weekly Interest Rate (%) Jan-88 Aug-88 Mar-89 Oct-89 May-90 Dec-90 Jul-91 Feb-92 Sep-92 Apr-93 Nov-93 Jun-94 Jan-95 Aug-95 Mar-96 Oct-96 May-97 Dec-97 Jul-98 Feb-99 Sep-99 Apr-00 Nov-00 Jun-01 Jan-02 Aug-02 Mar-03 Oct-03 May-04 Dec-04 Jul-05 Feb-06 Sep-06 Apr-07 Nov-07 Jun-08 Date
Thank You! Cameron Arial Vice President ZIONS Public Finance, Inc. (208) 501-7481 Cameron.Arial@zionsbank.com 15