CAPITAL FUNDING NEEDS

Horizon Council PresentationApril 22, 2015

District Funding Structure

Operating Funds-for day to day operations of the school district

Federal grants-for specific purposes or specific populations as defined in the grant

Capital dollars-for purchase of new buildings, land, technology, and maintenance of capital assets

THE CHALLENGE

Current capital plan is balanced in five year window Capital plans over last several years have been built

based on what we can afford Many items that are now desperately needed are not

reflected in the plan (unfunded capital needs)

THE CHALLENGE

UNFUNDED CAPITAL NEEDS District Technology

initiativesNecessary

infrastructureStudent devicesReplace/refresh plan

for new devices

THE CHALLENGE

UNFUNDED CAPITAL NEEDS Maintenance/Renovation Initiatives

Necessary maintenance on older buildings

Safety upgradesBuilding upgrades

THE CHALLENGE

UNFUNDED CAPITAL NEEDS Classroom Availability/Need for Seats

No new schools in the current plan in the five year window

Growth continues at 1.5-2.3% per yearMany schools at or very close to capacity

Shortfall: $45 million per year

The Challenge

Tax roll loss between 2009 and 2013: $400 mil Impact fees down from a high of $57 to $1.4 mil Capital dollars from state from $21 to $1.5 mil Total annual revenue from $264 mil in 2008 to

$103 mil in 2015FIVE YEAR IMPACT

$656 MILLION

Meetingthe

Challenge

Need viable options to generate capital revenue Determine ways revenue needs can be

met How much revenue could be raised Pros and Cons of our available options

OPTIONS

Option 1: Additional property tax capability Ask the legislature to give us the capability of increasing

property tax back to 2.0 (or at least higher than the current max of 1.50)

Each .25 mill generates approximately $15.5 million based on current tax roll

Must depend on the legislature to give us this capability Additional tax is paid entirely by local property tax

owners

OPTIONS

Option 2: General Obligation Bonds--The sale of bonds, the debt service of which will be paid back through revenue generated from an additional property tax levy Revenue potential is substantial, dependent on the

size of the bond Must be agreed to by voters in a referendum This is an additional property tax, so again, the local

taxpayers bear the brunt of the expense

OPTIONS

Option 3: COPs Currently, the District has over $505 million in

borrowing capacity (based on using 1 mill for debt service)

Board has expressed interest to stay away from more borrowing

Currently use 46% of property tax revenue for debt; more debt would increase this amount

Limitations on how that money could be used

OPTIONS

Option 4: Restoration/increase of impact fee Revenue before reduction was $4 million Authority is outside of board control Other options could raise more funds Limitations on how funds could be used

OPTIONS

Option 5: Sales Tax Potential of raising $50 million per year based on

current sales tax collections Revenue is raised by a broader population (23%

of sales tax collections come from tourism) Additional money is not acquiring new debt Must be approved by voter referendum

OPTIONS

56 out of 67 counties have some sort of sales surtax benefitting various county/district/government operations

15 counties have a school district sales tax 18 counties have a local government

infrastructure tax that could be shared with school districts by agreement

23 counties have other sales surtaxes