Greenville County Schools An Alternative Approach to Financing

Скачать презентацию Greenville County Schools An Alternative Approach to Financing

7341292027f4fb0ad4a204fea2eac023.ppt

Количество слайдов: 33

Greenville County Schools An Alternative Approach to Financing and Delivery of a Capital Program October 7, 2007 © In. Re Financial, LLC DO NOT DUPLICATE

Greenville County School District, SC • 2006 -2007 membership 66, 682 • District covers 800 square miles • 54 th largest school district in the US and growing • 94 Schools – – – Elementary – 47 Middle – 17 High – 14 Career / Technology – 4 Child Development – 5 Special Centers - 7 © In. Re Financial, LLC DO NOT DUPLICATE

This is Greenville… © In. Re Financial, LLC DO NOT DUPLICATE

But this is ALSO Greenville…. © In. Re Financial, LLC DO NOT DUPLICATE

The Growing Facilities Problem • In November of 1998, almost 10, 000 of the 61, 000 students in Greenville County were in “temporary” classrooms • Growing by around 1000 students per year • Lunch began at 10: 30 with 3 shifts, only ½ students had seats in each shift • Most of the 83 schools were old and in desperate need of repair or replacement • Inflation was growing faster than their ability to pay • 2 failed referenda © In. Re Financial, LLC DO NOT DUPLICATE

SDGC LRFP…What happened? • • The Baby Boom Schools got old Tax Cut Fever Parents became focused on Education Mold • Asbestos • Lead Paint • Plaintiffs’ Lawyers • Baby Boom Echo • Tax Cut Fever #2 • In-Migration © In. Re Financial, LLC DO NOT DUPLICATE

Impact of Inflation The same 1, 000 student school: 1995 Cost = $6, 000 2001 Cost = $11, 500, 000 (a real cost increase of 14% per year) © In. Re Financial, LLC DO NOT DUPLICATE

SDGC Long Range Building Plan • 1993 cost to cure = $336, 000 – annual expenditure $30, 000 • 1997 cost to cure = $554, 000 – annual expenditure $40, 000 • 1999 cost to cure = $712, 000 – annual expenditure $65, 000 • 2002 cost to cure = $783, 000 • Debt Situation – Constitutional Debt Limit = $100, 000 – Existing Debt = $100, 000 • Projected to take 28+ years to complete LRFP © In. Re Financial, LLC DO NOT DUPLICATE

Property Tax Increases (1990 -2000) ------------Reassessment------------ © In. Re Financial, LLC DO NOT DUPLICATE

The Bottom Line “An analysis of the district's long-range facilities plan last year showed that the district might never have been able to complete the remaining schools with conventional financing, and construction costs would have topped $1. 4 billion instead of the $800 million projected by Institutional Resources. ” Greenville News, May 21, 2002 © In. Re Financial, LLC DO NOT DUPLICATE

The Perfect Storm • Confluence of factors made a solution possible • A champion on the board of trustees • An administration willing to take the chance • A motivated group of minds from the private sector • A community fed up with the decaying schools AND rising taxes © In. Re Financial, LLC DO NOT DUPLICATE

The Plan • “Equal” school facilities across the district • Fund all construction now through innovative use of installment purchase bonds • Maintain millage at or below 42. 5 mills by using conservative growth assumptions in tax revenue • Complete the program in 5 years • Leverage economies of scale in design, procurement and construction to achieve cost savings • Allow the District to use a 5 year planning horizon © In. Re Financial, LLC DO NOT DUPLICATE

Installment Purchase Revenue Bond Structure © In. Re Financial, LLC DO NOT DUPLICATE

Labor Forecast- LRFP Construction Personnel Forecast – Direct Labor – Current LRFP CHART IIIb. 1(E)1 A © In. Re Financial, LLC DO NOT DUPLICATE

Labor Forecast- Recommended Construction Personnel Forecast – Direct Labor – Recommended In. Re Plan CHART IIIb. 1(E)1 B © In. Re Financial, LLC DO NOT DUPLICATE

The Reality • • Implementation was delayed by lawsuit First school groundbreaking in March 2002 Construction cost escalation impacted budgets Program converted from 2/3 renovate and 1/3 new to 2/3 new and 1/3 renovate • Assessed value of property and tax revenues grew faster than expected • Funds from additional growth were used to pay for “growth” schools • Expected completion of program mid-2008 (7 years versus projected 5) © In. Re Financial, LLC DO NOT DUPLICATE

Construction Cost Escalation Impacts Total Budget © In. Re Financial, LLC DO NOT DUPLICATE

Total Costs* 2041 Completion $3. 21 Billion 2007 Completion $1. 88 Billion BEST Program Installment Purchase “Pay As You Go” 5% Inflation *Source- Greenville County School District © In. Re Financial, LLC DO NOT DUPLICATE 2052 Completion $4. 982 Billion “Pay As You Go” 6% Inflation

Other Highlights • Community brainstorming sessions yielded 528 documented suggestions of which 418 were implemented • Minority participation increased 9 times over previous construction programs • “Mass customization” through development of automated, district-wide ed specs customized for each school’s curriculum and programmatic needs © In. Re Financial, LLC DO NOT DUPLICATE

Other Highlights (cont. ) • Development of comprehensive, district-wide design guide • Innovative techniques and technologies to reduce future maintenance, operations or capital renewal expenditures • “Green Schools” implemented • Long-term maintenance plan and forecasting system developed • All school design, warranty and maintenance documentation electronically captured and stored in an online retrieval system © In. Re Financial, LLC DO NOT DUPLICATE

Prototype Design Mountain View ES Simpsonville ES Blythe ES Robert E. Cashion ES Paris ES Thomas E. Kerns ES Sue Cleveland ES © In. Re Financial, LLC DO NOT DUPLICATE Southeast Area ES Cherrydale ES Monaview ES

Tax Millage Used for Greenville Plan Where it Will Go if 5 Yr. Reassessments & Growth Match the Last 10 Years 80 70 60 50 40 30 20 10 14 19 90 19 92 19 94 19 96 19 98 20 00 20 02 20 04 20 06 20 08 20 10 20 12 20 14 20 16 20 18 20 20 20 22 20 24 20 26 20 28 0 © In. Re Financial, LLC DO NOT DUPLICATE

Wall Street Reaction “The associated Standard & Poor’s underlying rating upgrade on Greenville County School District, SC’s GO bonds to ‘AA’ from ‘AA-’ reflects the district’s addressing of its unmet and significant capital needs by the issuance of the $800 million installment purchase revenue bonds, issued through BEST Corp. Prior to this issuance, the district was hampered by a restrictive, unvoted GO bond debt limit that seriously hindered its ability to effectively address, on a timely basis, its capital requirements. ” Standard & Poor’s – March 11, 2002 “Moody’s Investors Service has upgraded the Greenville County School District general obligation underlying rating to Aa 3 from A 1. The rating upgrade affects $95 million of debt and is based on Moody’s belief that the district’s plan for funding its sizable capital program will result in a manageable debt burden while addressing pressing long term capital needs. ” MANAGEABLE DEBT POSITION EVEN WITH SIZABLE BORROWING PLAN “Moody’s believes that the district’s plan to issue $760 million of Installment Purchase Revenue bonds through a non-profit entity will enable the school © In. Re Financial, LLC DO NOT DUPLICATE district to address pressing capital needs without placing significant fiscal constraint on the district”

The Domino Effect School District Capital Needs Results Dorchester 2, SC $132 million Financed construction of 4 new schools, 6 renovations, and 2 site acquisitions to meet growing enrollment. The district was able to maintain the same tax millage and received a credit rating upgrade. Berkeley, SC $230 million Financed construction of 3 new schools and 7 additions and renovations while reducing millage by approximately 10%. $18 million in funds added to program from interest earnings. Lancaster, SC $39 million Financed construction of new schools for rapidly growing Indian Land area. Avoided 13. 5 mill increase to fund existing debt and received ratings upgrade. Newberry, SC $84 million Financed 2 new schools, 7 additions and renovations, and additional technology. Maintained millage below their 56 mill selfimposed cap. Laurens, SC $16 million Financed construction of high school wing and the replacement of primary school. Maintained millage. Fort Mill, SC $84 million Financed 2 new elementary schools, additional wing at new high school, athletic facilities and technology upgrades. Maintained millage. © In. Re Financial, LLC DO NOT DUPLICATE

This May Never be Done Again, but if you want to try: • • Have political courage Assemble a great team Clearly demonstrate and quantify needs Identify revenue source to pay for those needs with reasonable assumptions (including savings to be realized from program) • Develop a financing alternative that is cost effective Time = Money • Persevere, persevere © In. Re Financial, LLC DO NOT DUPLICATE

Contact Information Didi Abi-Arrage President, In Re Financial, LLC Tel. 864 -918 -3816 30 Patewood Drive, Suite 200 Greenville, SC 29615 dabiarrage@inrefin. com © In. Re Financial, LLC DO NOT DUPLICATE