Navigating a Successful

Bond Referendum November 4, 2021

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DiningPresented by: Karen Rhodes-Whitley, MPA, CPM

Director of Budget & Research

City of Plano, Texas

Legacy West - Plano

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• Located 20 miles north of Dallas

• Population of 287,000

• Explosive growth since 1980’s

• Started transition to a mature City– Still have land for commercial development

– Last several years moved in Toyota Headquarter, Liberty Mutual, Chase Bank to Legacy West Area

• Combined budget of $1 Billon with a CIP of $305M

• Approximately 2,400 employees

• Heavy reliance on property tax and sale tax

About the City of Plano

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Bond Referendum 101

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The Road to Victory – A Capital Bond Program

Plan

City’s infrastructure

• Streets

• Major Water and Sewer Projects

• Flood Protection (Drainage)

• Traffic Signals

City facilities

• Police & Fire stations

• Libraries

• Convention centers

• Park and Recreation facilities

• Cultural facilities

Acquisition of specialized equipment and property

• Vehicles

• Computer hardware and software

• Open space

Economic development initiatives

• Investments in infrastructure for economic development

• Financing

• Matching funds

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Bond Referendum 101:

• A Bond Referendum is a voting process that gives voters the power to decide if a local government should be authorized to raise funds through the sale of bonds.

– A General Obligation (G.O.) bond is long-term borrowing instrument in which the local entity pledges its full faith and credit (taxing power) to repay over a specified term.

• The Bond Referendum must specify general categories of capital projects for which bond proceeds may be used.

– Example: Street Improvements, Public Safety Improvements, Park Improvements, etc.

– Due to the lengthy process involved in identifying, designing and implementing the specific projects may change over time.

• Bond Referendums ONLY provide Authorization!!

– Decisions on projects are made year to year by City Council with input from Citizens and City Staff

• Propositions will be listed A, B, C etc. along with dollar amount and purpose on the ballot.

– THE ISSUANCE OF $90,270,000 GENERAL OBLIGATION BONDS FOR STREET IMPROVEMENTS AND THE LEVY OF TAX IN PAYMENT THEREOF

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Bond Referendum 101: Continued

• How are projects determined?

– Projects included within the bond referendum are determined by City Council during regular work sessions after receipt of input from various City Boards and Commissions and from the public at several public hearings within the City.

› Planning & Zoning, Park Board, Senior Citizen, CAC, etc.

› New: Bond Referendum Citizen Advisory Committee

• If a Proposition does not pass?

– Can request again on next election

– Cannot issue Certificates of Obligation within three-years for the same purpose.

• The City of Plano is on a four-year cycle for Bond Referendum elections.

– Exclusion 2019 Bond Referendum for Capital Maintenance Projects only.

• Staff can only educate regarding projects listed on a Bond Referendum.

– Cannot be For or Against any project listed on the referendum

• All materials and community outreach must be communicated in both English and Spanish.

– Per State Law

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Bond Referendum 101: Continued

• Revocation of Bond Authority

– De-authorization of bond authority previously approved in a Bond Election

– 2013 BR – Revocation of previously authorized GO Bonds for the Creative and Performing Arts Center authorized in 1998

• Financial Impacts:

– Tax Rate Implications

› Based on assessed property valuation, if all propositions are approved, what would be the maximum tax rate impact for the average homeowner?

› Currently, one-cent of the tax rate equals $4.6 million

› Proposed tax rate is 44.82 cents per $100 of assessed property valuation

› Does not mean your tax rate will increase!

– CIP Coming On-Line

› Calculation of operating costs associated with the project

› Example: Cannot open a Fire Station without the Fire Personnel and equipment for the Fire Station

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YearTotal

Props.

Total Proposed

Amount

Props.

Approved

New Authority

Approved

Projected

Tax Rate

Change

Actual

Tax Rate

Change

2021 7 $363,965,000 7 $363,965,000 +2.13 TBD

2019 3 $44,665,000 3 $44,665,000 0.00 0.00

2017 6 $224,120,000 5 $220,620,000 +0.43 0.00

2013 5 $98,313,000 5 $98,313,000 +0.66 0.00

2009 7 $128,622,500 7 $128,622,500 +3.29 +1.35

2005 6 $144,802,000 6 $144,802,000 +1.54 0.00

2001 9 $128,015,000 8 $112,415,000 +1.59 0.00

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1.00 = One Cent

Bond Referendums: Past 20 Years

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Tax Rate Impact

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Outstanding Current Authority

Proposition

Original

Approved

Authority

Issued to DatePlanned 2021 GO

Issue

2013 Public Infrastructure

Improvements $15,000,000 $13,000,000 $2,000,000

Total 2013 Authority $15,000,000 $13,000,000 $2,000,000

2017 Street Improvements $90,270,000 $69,664,500 $20,605,500

2017 Public Safety Facilities $29,000,000 $27,000,000 $2,000,000

2017 Park Improvements $78,850,000 $71,185,000 $7,665,000

2017 Library Facilities $10,000,000 $4,500,000 $5,500,000

Total 2017 Authority $208,120,000 $172,349,500 $35,770,500

2019 Street Improvements $18,750,000 $0 $18,750,000

2019 Park Improvements $17,890,000 $0 $17,890,000

2019 Existing Facility Improvements $8,025,000 $2,265,000 $5,760,000

Total 2019 Authority $44,665,000 $2,265,000 $42,400,000

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Scenario

2025

Tax Rate

Tax Rate

Change

Current Project List = $364M 46.95 2.13

Alternate Scenario (No Impact) = $181M 44.82 0.00

Alternate Scenario (No Bonds) = $0 42.77 -2.05

2021-22 2022-23 2023-24 2024-25

Assumptions:

Existing Property Tax Base $46,564,855,153 $47,788,003,705 $49,508,763,779 $50,804,939,054

Annual Tax Base Growth 0.00% 1.00% 2.00% 2.00%

New Property Added to Tax Base 750,000,000 750,000,000 300,000,000 300,000,000

Total Tax Base: $47,314,855,153 $48,538,003,705 $49,808,763,779 $51,104,939,054

Average Annual Interest Rate on New Debt: 3.00% 4.00% 4.00% 4.50%

O&M Tax Rate (1.00 = One Cent) 33.72 33.72 33.72 33.72

Project O&M Expenses < O&M Revenue Growth Yes Yes Yes Yes

$0.00

1.00 = One Cent Avg Plano Home = $378,396

2021 Bond Referendum: Financial Impact Scenario Summary Sheet

Referendum Impact to

Average Plano Home

$67.71

-$65.17

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Project 2021-22 2022-23 2023-24 2024-25 Total

Park and Recreational Facilities

Community Park Renovations 5,285,710 5,225,000 5,225,000 5,225,000 20,960,710

O&M 22,500 22,500 22,500 22,500 90,000

Neighborhood Park Renovations 2,264,290 2,250,000 2,250,000 2,250,000 9,014,290

O&M 18,750 18,750 18,750 18,750 75,000

Trail Replacements 1,625,000 1,625,000 1,625,000 1,625,000 6,500,000

O&M - - - - -

Park Improvements 1,250,000 1,250,000 1,250,000 1,250,000 5,000,000

O&M - - - - -

Recreational Trails 1,250,000 1,250,000 1,250,000 1,250,000 5,000,000

O&M 25,100 25,100 25,100 25,100 100,400

Maintenance Facility - 1,100,000 6,000,000 6,000,000 13,100,000

O&M - - - - -

Park Restroom Replacements - 1,325,000 1,900,000 1,575,000 4,800,000

O&M - 7,500 7,500 7,500 22,500

Irrigation Renovations 1,805,000 1,805,000 1,805,000 1,805,000 7,220,000

O&M - - - - -

Athletic Field Improvements 375,000 375,000 375,000 375,000 1,500,000

O&M - - - - -

Lighting Replacements 990,000 4,950,000 - - 5,940,000

O&M - - - - -

Median Renovations 375,000 375,000 375,000 375,000 1,500,000

O&M - - - - -

Oak Point Recreation Center Exterior Lighting 80,000 - - - 80,000

O&M (1,545) (1,545) (1,545) (1,545) (6,180)

Courtyard Theater Roof 600,000 - - - 600,000

Plano Center Roof - 720,000 - - 720,000

Total Park and Recreational Facilities Authority Needed 15,900,000 22,250,000 22,055,000 21,730,000 81,935,000

Total O&M 64,805 72,305 72,305 72,305 281,720

TO BE DISCUSSED BY CITY COUNCIL - MONDAY FEBRUARY 8, 2021

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Bond Referendum Citizen Advisory

Committee

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2021 Bond Referendum Citizen Advisory Committee

(Ad Hoc)

• Jim Watkins – Appointed by Mayor LaRosiliere

• Tracey Dry – Appointed by Mayor Pro Tem Prince

• Vinny Minchillo – Appointed by Deputy Mayor Pro Tem

Ricciardelli

• Janet Stovall – Appointed by Council Member Tu

• Craig Perry – Appointed by Council Member Grady

• Connor Barron – Appointed by Council Member

Williams

• Rohit Joy – Appointed by Council Member Bao

• Magesh Kandavadivel – Appointed by Council

Member Smith

• Rick Grady – Council Liaison

• Shelby Williams – Council Liaison

• Karen Rhodes-Whitley – Staff

Liaison – Director of Budget & Research

• Victoria Huynh – Legal Liaison –Deputy City Attorney

• Other staff members

– Jason Gregorash – CIP Budget

Administrator

– Jennifer Morvant – Budget Analyst II

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2020-21 Bond Referendum Citizen Advisory Committee

Next Steps • Aug 19, 2020 – First meeting & Educational Presentations

• Sept 16, 2020 – Discussion regarding how staff develops project listings by Streets,

Parks & Rec and Facilities

– BRCAC – Any additional recommendations for project inclusion

– Discuss preliminary staff proposed projects

• Oct 21, 2020 – Review all proposed Parks & Recreation Projects

• Nov 18, 2020 – Review all proposed Facility and Other Proposed Projects

• Dec 16, 2020 – Review all proposed Street Projects & Finalize Committee

Recommendation for City Council submittal

• Dec 18, 2020 – Recommendations from all Boards & Commissions due

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RESIDENTIAL & COLLECTOR STREET

RECONSTRUCTION

Type Reconstruction/Replacement

Projected Cost $ 24,000,000

Projected O&M $ N/A

Reconstruction/replacement of residential and collector

roadways throughout Plano.

Project Cost Need Option 1 Result Option 2 Result Option 3 Result

Residential and Collector Street Reconstruction

$2MM per Mile 12 Miles $24,000,000 12 Miles $20,000,000 10 Miles $16,000,000 8 Miles

Russell Creek Drive Reconstruction

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Roof Replacements

$ 3,556,400

• Parr Library

• Fire Station 4

• Courtyard Theater

• Plano Center (Atrium)

• Fire Station 3

• Day Labor Center

• Fire Station 7/old PD substation

• Haggard Library

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Roof Replacements

$ 3,556,400

• Parr Library

• Fire Station 4

• Courtyard Theater

• Plano Center (partial)

• Fire Station 3

• Day Labor Center

• Fire Station 7/old PD substation

• Haggard Library

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BRCAC Matrix

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Key Bond Program Questions

Can I Afford It? Do I Need It?• How much is the project really going to cost?

• How much of your tax rate is committed to debt service?

• Can you afford to issue existing authorized bonds?

• Do I have a sufficient tax base

• Can you afford the cost of operating your existing facilities?

• Can you afford the operating cost of new facilities

• Are construction prices up or down

• What are the interest rates and where are they going

• Does the project make sense

strategically?

• What is the driving force behind

the project?

• What is the desired outcome of the

project?

• Is the proposed project the best

way to achieve the desired

outcome?

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• Decide early on in the process if you are going to involve citizens in the process

• Importance of relationship with Bond Counsel

– Process proposition ordinance

– Set the language – do not limit – make broad statements

› Example – “The Issuance of $11,338,000 general Obligation Bonds for Public Safety Improvements”

– Assist with Bond Pamphlet and Video Language

• Ordering a Bond Election

– State of Texas Election Laws

– City of Plano has to be no earlier than January 23rd and no later than February 15th

• Remember to notify citizens regarding the operating cost coming on-line

– Can’t open a Fire Station without firemen

• State law says you must produce information in English and Spanish

Important Points to Remember

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• Timing of the Election

– Election year of City Council Members

• Promotion of the Bond Referendum

– Cannot be “for” or “against”

– Present facts only

• Social Media and the part they play

• Mass Marketing – Pamphlets

• Budget Video

Important Points to Remember

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Questions