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Capital Financing Options

Jane A. Russo, SuperintendentJane A. Russo, Superintendent

Michael P. Bishop, Associate Superintendent, Business ServicesMichael P. Bishop, Associate Superintendent, Business ServicesJoe Dixon, Assistant Superintendent, Facilities & Governmental AffairsJoe Dixon, Assistant Superintendent, Facilities & Governmental Affairs

Kelvin Tsunezumi, Executive Director, Business ServicesKelvin Tsunezumi, Executive Director, Business Services

October 12, 2010October 12, 2010

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Measure G

• Measure G (Summary of Events)– Measure G approved by voters (68.8% approval) in June 2008 – Total authorization: $200 million– Bonds issued to date: $154.1 million

• 2008: $100 million• 2009: $54.1 million (including $19.24 million in Qualified School Construction Bonds)

– Remaining authorization: $45.9 million

• Qualified School Construction Bonds (QSCBs)– A form of bond financing– Purpose: To stimulate the economy & attract new investors to the market– Interest expense subsidized in part by the Federal government

• Property tax payers benefit from the lower interest rate– Limited amount of QSCB authorization– Authorization expires at the end of 2010– SAUSD’s allocation of QSCBs for 2010: $17.5 million

3 3

Completed Projects

Lowell

Martin

Kennedy

MadisonCarr

Completed in the last year:

• 8 new classroom buildings

• 156 classrooms

Greenville

Diamond

Santiago 3

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Saddleback High Solar & Energy Efficiency Project

Completed Projects

Lincoln Elementary

Modernization

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Santa Ana High Modernization

Projects Underway

New Brick

New Framing New Plumbing

Santa Ana High Spurgeon IntermediateHeninger Elementary

Projects Underway

Century HighSierra Intermediate

• 8 new classroom buildings currently under construction

• 134 classrooms

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• Mitchell Child Development Center Funded– Modernization – New Classroom and Multipurpose Room Buildings

• Garfield Elementary Funded– New 12 Classroom Building– New Joint Use Multipurpose Room Building

_______________________________________________________________________________________________________________________

• Davis Elementary– New 12 Classroom Building

• Edison Elementary– New 24 Classroom Building

• Saddleback High– Modernization

• Willard Intermediate– Modernization & New 12 Classroom Building

• Spurgeon Intermediate– Modernization

Projects To Come

8

Pending State Funding

Program State Funding

School Facilities Program Reimbursements

(Modernization)$16,431,478

Emergency Repair Program $34,756,496

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Measure G (Cont’d)

• The Board & District’s Goal with respect to Measure G– Continue momentum on Measure G construction and complete projects

as soon as possible– Benefit from favorable construction bidding climate– Manage increases in property tax rates

• To meet above goals, district staff recommends:– Issuance of remaining $45.9 million in bond authorization as follows:

• QSCBs: $17.5 million• Standard Tax Exempt: $28.4 million

– Without this issuance, work on additional Measure G projects will come to a halt by the end of this fiscal year

– Use of QSCBs will save Santa Ana property tax payers approximately $7.1 million

– Property tax rates over the term will range from approximately $36.30 to $38.80 per $100,000 of property valuation

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Next Steps – Issuance of Measure G Bonds

Date Event or Activity

Nov. 9 Board adopts resolution requesting County to issue bonds & approving the form of legal documents and the Preliminary Official Statement

Week of Dec. 6

Sale of:

(1) Measure G QSCBs

(2) Measure G Tax Exempt Bonds

(3) Measure C Series 2002 refinancing

Week of Dec. 27

Closing and bond proceeds deposited in County Treasury for district use

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Backup Slides

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District Issuance Scenarios

Scenario #1 Scenario #2 Scenario #3

Bond Issuance ($s in millions)

QSCBs

Tax Exempt

Capital Appreciation

Total

$17.5

---

---

$17.5

$17.5

$28.4

---

$45.9

$ 9.3

$33.0

$ 3.6

$45.9

Projected Tax Rate (per $100,000 valuation) $33.10 $36.30 / $38.80

$37.00

13Note: Scenario II is the recommended option

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ProjectACTUAL

1st

Quarter

ACTUAL2nd

Quarter

20103rd

Quarter

20104th

Quarter

2010 Totals

Beg. Bal $94,759,073 $87,461,316 $76,691,496 $105,163,768 $94,759,073

Revenue $0 $0 $58,208,033 $800,000 $59,008,033

COS $1,801,218 $1,736,421 $2,993,787 $2,993,787 $9,525,213COS Sav. $21,480 $757 $182,587 $182,587 $387,411

ORG Const. $585,364 $1,950,637 $14,250,000 $80,461,666 $97,247,667

MOD (Soft) $311,717 $77,600 $88,889 $88,889 $567,095

MOD (New) $215,080 $466,782 $78,105 $78,105 $838,060

MOD Const. $352,159 $241,737 $3,221,625 $3,221,624 $7,037,144

ERP Const. $347,356 $1,322,310 $5,197,222 $5,371,806 $12,238,694

CTE Valley $280,820 $107,722 $871,307 $0 $1,259,849Priority Proj. $2,963,923 $0 $0 $10,552,325 $13,516,248Solar $0 $4,506,989 $2,418,084 $0 $6,925,073

Admin. Exp. $328,591 $358,866 $324,204 $324,204 $1,335,865

IRP $90,050 $0 $109,950 $0 $200,000YearlyTotals $7,297,757 $10,769,820 $29,735,761 $103,274,930 $151,078,318

Ending Balance

$87,461,316 $76,691.496 $105,163,768 $2,688,838 $ 2,688,788

Cash Flow (2010)

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Project 2011

1st

Quarter

20112nd

Quarter

20113rd

Quarter

20114th

Quarter

2011Totals

Beg. Bal $2,688,788 $(15,785,407) $(36,960,018) $(56,603,558) $2,688,788

Revenue $0 $0 $0 $0 $0

COS $0 $0 $0 $0 $0

COS Sav. $182,587 $2,346,207, $2,346,207 $2,346,207 $7,221,207

ORG Const. $0 $0 $0 $0 $0

MOD (Soft) $88,889 $88,889 $88,889 $88,889 $355,555

MOD (New) $78,093 $72,648 $72,648 $72,648 $296,038

MOD Const. $3,000,000 $4,000,000 $3,718,392 $1,799,077 $12,517,469

ERP Const. $4,248,097 $3,790,338 $2,540,875 $2,040,000 $12,619,311

CTE Valley $0 $0 $0 $0 $0

Priority Proj. $10,552,325 $10,552,325 $10,552,325 $10,552,325 $42,209,300

Solar $0 $0 $0 $0 $0

Admin. Exp. $324,204 $324,204 $324,204 $324,204 $1,296,816

IRP $0 $0 $0 $0 $0

YearlyTotals

$18,474,195 $21,174,611 $19,643,540 $17,223,349 $76,515,695

Ending Balance

$(15,785,407) $(36,960,018) $(56,603,558) $(73,826,907) $(73,826,907)

Cash Flow (2011)

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Project 2012

1st

Quarter

2012 2nd

Quarter

20123rd

Quarter

20124th

Quarter

2012Totals

Beg. Bal $(73,826,907) $(87,521,945) $(90,353,737) $(93,169,809) $(93,626,850)

Revenue $0 $0 $0 $0  

COS $0 $0 $0 $0 $0

COS Sav. $2,346,207 $2,346,207 $2,346,207 $0 $7,038,620

ORG Const. $0 $0 $0 $0 $0

MOD (Soft) $88,889 $88,889 $88,889 $88,889 $355,555

MOD (New) $72,648 $72,493 $56,773 $43,948 $245,862

MOD Const. $0 $0 $0 $0 $0

ERP Const. $310,766 $0 $0 $0 $310,766

CTE Valley $0 $0 $0 $0 $0

Priority Proj $10,552,325 $0 $0 $0 $10,552,325

Solar $0 $0 $0 $0 $0

Admin. Exp. $324,204 $324,204 $324,204 $324,204 $1,296,816

IRP $0 $0 $0 $0 $0

Yearly Totals $13,695,068 $2,831,792 $2,816,072 $457,041 $19,799,943

Ending Balance $(87,521,945) $(90,353,737) $(93,169,809) $(93,626,850) $ (93,626,850)

Cash Flow (2012)

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Project 2013

1st

Quarter

2013 2nd

Quarter

20133rd

Quarter

20134th

Quarter

2013Totals

Beg. Bal $(93,626,850) $(94,062,471) $(94,475,564) $(94,888,656) $(93,626,850)

Revenue $0 $0 $0 $0 $0

COS $0 $0 $0 $0 $0

COS Sav. $0 $0 $0 $0 $0

ORG Const. $0 $0 $0 $0 $0

MOD (Soft) $88,889 $88,889 $88,889 $88,889 $355,555

MOD (New) $22,528 $0 $0 $0 $22,528

MOD Const. $0 $0 $0 $0 $0

ERP Const. $0 $0 $0 $0 $0

CTE Valley $0 $0 $0 $0 $0

Priority Proj $0 $0 $0 $0 $0

Solar $0 $0 $0 $0 $0

Admin. Exp. $324,204 $324,204 $324,204 $324,204 $1,296,816

IRP $0 $0 $0 $0 $0

Yearly Totals $435,621 $413,093 $413,093 $413,093 $1,674,899

Ending Balance $(94,062,471) $(94,475,564) $(94,888,656) $(95,301,749) $(95,301,749)

Cash Flow (2013)