April-1-2019-BoardWorkSession-Segment-3
[00:00:00] For that.  go ahead Miss Miller. Okay. I've been emailed a staff person. I'm February 26th 27th, and I specifically asked to be involved in the task force for the district on the sex education curriculum and again asked about the 21st century school councils. I received a lengthy response on the task force which stated I would receive communication within 10 days about the March meeting.
I never received that email. I've been followed up again about the site councils and I still didn't get a response. It was mentioned in a. Board meeting district has a customer service problem. There may well be a customer service problem. But that problem is only a symptom of a far bigger problem.
So be clear my point in highlighting the lack of communication is not to focus on the lack of communication itself. But to uncover why there's a culture void of transparency in the first place. It would seem that in an attempt to respond to my inquiry the district's method of fulfilling the 21st century school council statute was to post on the district website that these counselor councils were being [00:01:00] fulfilled by the PTA.
I find it insulting to believe the PTA was fulfilling the school council rule considering the PGA didn't even know they were fulfilling the role. The PTA is not a site Council My ultimate concern is that the district is willing to do virtually anything to push their agenda even things as unethical is adding statements to their website which are both untrue and misleading if the district is willing to do something as unethical as this.
What else are you going to do? It's not too late to turn this around. But in order to do so the district needs to be honest and transparent lesson Wilson, the committee members are begging to be heard because of said with feeling like their concerns are being listened to they feel like a pest to our elected officials who have been elected to represent the children and families of this District.
Thank you. I am going to take a moment to respond. The issue [00:02:00] of the site council is a legislative statute and. When there is a matter of law or organ administrative rules, we need to make sure that we understand what the law requires of us and what we are doing in those accordance and sometimes that requires consultation with legal counsel as well as understanding what we have been doing as a.
And that can sometimes be perceived as a lack of transparency and a delay, but I will tell you that that is not a matter of culture of lack of transparency or an unethical conduct. But rather what we need to do to make sure that we are one fulfilling the statutes that govern our work as a district and as a board and that were responding in.
A way that is [00:03:00] consistent with our legal advice that we received and I apologize for not getting a response to you regarding that as I indicated I would and I will follow up on that if you would help remind me. Thank you. All right. We also want to take this time to recognize our. Board advisory committees, and I'm going to turn that to in this Mark dr.
King Mo mark. Thank you chair Fetch and looks like we have one.
Thanks for being here while this I know you were at every meeting last summer as well. So your dedication is definitely appreciated and noticed for some background for anybody who's listening or watching. We had some community members coming to the board [00:04:00] and speaking to the board about their concerns around school safety in general after some events occurred and the board listened to that advocacy and.
I believe it was chair Fitch who proposed a to create an advisory committee. If I'm getting the title, correct? I think it was school student and safety emergency preparedness advisory committee and that committee was comprised of students parents teachers and they met over the summer the course of several months last summer and discussed perceived strengths and.
Is and our School Safety and Security and emergency preparedness across the district. And from that they made some recommendations to the board and the board discussed in conjunction with the district. We reviewed [00:05:00] What policies and practices and nuts and bolts we had in place currently and what we could amend to improve and the recommendations of the advisory committee and turned into some concrete commitments to things we currently.
As well as some additions to the bond construction that we're considering for the near future.  And so I just would like to take a moment to say that. Serving as the liaison on that advisory committee was deeply rewarding for me. I remember one of the meetings or we sat in here and dr. Ludwig you were here and like Andrew kallstrom was here and chair Fitch and all of you community members and we sat in a circle and talked about safety and emergency preparedness in our schools.
And there was just a lot of heart and dedication and that conversation. And I think in light of what happened [00:06:00] in the Wilsonville neighborhood of valois. It's a nice reminder that our emergency preparedness and safety oftentimes. We think perceptually we go to it's a person threat but the truth is that those issues can be they come at us from a variety of ways and so are we prepared for whatever that may be and the advisory committee did a great job of addressing though, so.
We thank you as a student Advocate. We think all of the community members who attended those meetings. If you would like to say something Wallace, please sure just on behalf of everybody. I'm sure they're all just as grateful as I am for the opportunity to speak with the board about this.
Incredibly important issue and we're at least I'm and I'm sure they are as well very glad to see it turned into a substantive policy change, but I would just say from a [00:07:00] personal perspective that well. I really appreciate the effort being put into increased security and other changes. I think it's important to remember that no.
Barricade or lock does as much to keep a school safe as the work we do to bring people together in the community at the end of the day. The cause of these threats and the way we address them is through the tangible changes. We make not just to make our schools better walled-off or better blocks away, but more inclusive and to make our students feel more at home.
So as a student, I hope that will we of course consider security. We remember that security can be a two-way street and it can either be used to widen the gap. Between the less privileged and those who already have it between those are considered a threat already and those who [00:08:00] aren't or it can be used to uplift everybody and bring everyone closer together and I hope we remember that that this isn't a process that ever ends, but that we've taken a great first start.
So thank you for that.
Thank you Wallace. So, this is our thank you to you.
Nothing bundt cakes
go make friends. Yeah. Yeah, I can't leave the most popular you are going to be very popular and this this is our official conclusion to the advisory committee. I would like to just take a moment to say that that you know, this this closes the work and then I just opened the floor to dr. Ludwig or any fellow board members who would like to say anything while Wallace [00:09:00] I you know after hearing your words, like what else do you say because not only did you speak to the important work around?
Safety, but you also spoke to when our phrase safe and welcoming schools that when students feel a part of something when they're connected the research shows that they're less likely to feel marginalized or desperate or alone and resort to something that becomes a regret for an entire community and a tragedy so.
Thank you for reminding us about ways proactively that we can continue to have safe and welcoming schools. Thank you for the time that you gave it was great to have a student lens in perspective to our Advisory Group and I want to thank the parents weren't able to be here tonight for also giving their time and the teachers who served on the committee.
It did not have any administrators on it and the board Liaisons were there really to listen and. And to be a sounding board if there were some questions but it really was a community-led safety Advisory Group [00:10:00] and out of that came exactly what we knew. We needed going forward and as director King Martin mentioned some proponents in that report were things we were already doing or were in place and we're working on others were being tasked in the remaining Bond and then there are some which are large.
Financial items that the board as they consider about a potential Capital Bond your group will see as items on there. And so appreciate the work considerably and future communities will look back and and appreciate the work of your Advisory Group. So thank you very much Wallace and enjoy those cupcakes.
I will.  Thank you.
Ready
to [00:11:00] resume.  Okay, well being respectful of your time. I was just saying to Brendan once again, I am talking too much. So I'm going to move this along so that you have time to focus on the Geo bonds, but. If I'm going too fast or want to slow me down, I've got all evening. So let's talk about pension bonds which are the other mechanism available to you to create a side account.
Basically, what a pension bond is is a process by which you go into the market to borrow money. Send that money to pers they create a site account with that money. The analysis is actually fairly similar to the cache analysis except in this case. Your opportunity cost is your borrowing rate. So the general rule of thumb sound bite is if you [00:12:00] borrow it one rate send the money to pers and pers earns more than your borrowing costs in most cases.
Will come out ahead that's called Arbitrage and for a municipality. It's about the only legal form of Arbitrage. You will be allowed to earn reminder that Senate Bill 1566 will not match Bond funded side accounts. So I've got a lot of slides here on. I have a lot of slides here. There we go on History a lot of Oregon school districts and other municipalities have borrowed funds in this way including West Linn and at the end I can show you your results for the most part.
Everything has gone. Well for those who have [00:13:00] borrowed but not for everybody. There was a collection of school districts that borrowed in 2007 just prior to the market crash and that's about the worst set of circumstances you can have and they are still under water. So this is absolutely not a risk-free thing to consider doing.
Here is just a slide of.
A slide of those that have borrowed and Wesleyan was in the series 2004 pool your rate, which is hard to see up here was just under five and a half percent. This is some itemized savings for different school districts. This is more about the fact that this is an Arbitrage play while this says we are currently [00:14:00] projecting borrowing rates at five percent which is about half a percent lower than where you borrowed at.
This slide actually hasn't been updated recently. I would say you're closer to foreign half right now, so. On the borrowing side, you're in much better shape than you were the last time you borrowed. The question is the investment side of the house. So it's a two-sided equation. This is information on historical rates of return that the pers fund has.
Learned, you know if you go and for whatever reason they go back to 1970 not earlier and they only produce information through 2017, but on the basis of that information, the fund has earned 10.3% over time probably a more relevant equation is how much have site accounts? Over an extended period of time taking into account the [00:15:00] 2008 decline that's pretty strong.
But then again in 2018 the fund practically lost money. Okay, I broke even and as I mentioned the good news we heard today is that the fund is doing well through February, who knows what will happen the rest of the year. There are other risks associated with pension mines and to the extent you start to think about this remotely seriously, you would want to drill down on some of these risks including a number one being timing matters.
It matters a lot. So going back to my 2007 example. If you think the market is about to head for a crash, then you don't want to do this because what really helps 20/20 hindsight is [00:16:00] buying low, so. If you think we're about we're at a peak level once you've lost money, it's really hard to dig yourself out of a hole.
Now the hole in 2008 was about as significant as we ever seen in that the fun lost 27 percent. Hopefully even if there is a correction in the next couple of years, it will not be that severe but I think most economists are starting to talk about the fact that the economy is starting to slow down and there are external factors like tariffs and other things that could cause the economy to slow down.
So those are the types of things you want to think about rate credits the credits you get off off of side accounts. This is true for a cash deposit as well as a bond deposit but it makes more difference with a bond because you have Debt Service to [00:17:00] pay as well is that your credit from pers is going to be volatile.
I'm going to show you some volatility that you've experienced even though the pers model showed an even 13 basis points every year. Again, that reflects the idea that it's going to earn 720 in every year for the rest of its life. Well, it's not going to earn 720. So some years you may get a huge rate credit other years.
You may get a smaller rate credit. So those things Factor how quickly your payroll grows matters and affects your rates and I'll show you an example of that. Turning to a pension Bond turns a soft liability one to pers into a hard liability where you have bondholders who are expecting you to make a payment so.
Anyway, those [00:18:00] are the types of things you want to get comfortable with before you went down this path. There are a couple of bills in the legislature that would make your ability to issue pension bonds a little trickier. So that's something we could talk about. But now I want to focus on what your history has been with your existing pension mind so.
Is a background slide. Let me see if I can make it a little bigger.  That looks back from 2007 and the valuation. They preceded the crash to the most recent valuation we have which is 2017. I am definitely not going over all of these numbers, but the numbers I want to focus on is this number so prior to the crash?
You had a side [00:19:00] account that was valued at about 50 million dollars because. When you borrowed the rates of return in the period of time after you borrowed were so strong your deposit actually grew despite the fact that it was being drawn down over time. So as of 2007 S valuation you had a side account of 50 million dollars, even though you'd only borrowed 35 million.
Pay grew hugely which led to a surplus. So this negative number here means that prior to 2008 you actually had more money in the system than the system said you owed fast forward that to today. You still have a robust side account again you borrowed I think 35. Was it 42 [00:20:00] apologies? You borrowed 42 million.
It's still worth thirty three million even after 15 years of draw down so it's doing well, but unfortunately the overall unfunded liability that is attributable just to wessling Wilsonville is now at 94 million dollars taking into account the fact that you have 34 3 million in a side account and whoops.
And your rates.  show that so back in 2007. Your rate was 4%.  It's now going to 24% starting in July.  Okay, next slide right here for Tier 1 tier 2. Sorry.
Okay. So how has [00:21:00] your previous Bond done? Well, here are the details you borrowed in 2004? You borrowed 42 million dollars, you're all in interest rate in my world called the true interest cost. That's what ticket stands for was. Just under five point five. You deposited the money in 2004 and then.
Sorry.
Okay, then it started to grow and you can see up until 2008 it grew to 50 million dollars. Why because the rates of return right out of the Chute 13:13, 15:9 and you borrowed at five and a half. So. That is the kind of circumstance that you couldn't have scripted better, which means that you were pretty protected for the [00:22:00] market crash, but you lost 12 almost 13 million dollars overnight so that by 2009.
Your side account balance when back to 33 million now the good news is despite. Draw Downs every year.  it's still 33 million.  So your overall savings how much you've saved to date show up here on a 42 million dollar bond issue. You have reduced your costs. This is calculable hard reduction in payroll costs by almost 13 million dollars.
So that worked beautifully.  Whether it would work that way again hard to know it really again depends on the [00:23:00] Dynamics between what can you borrow at right now? We're estimating about four and a half percent. It's been over the past year anywhere between 4 2 and 5, but the bigger side of the equation.
Is what happens on the investment side?  So I'm going to stop there because I know you want to talk to Brendan about. Geo bonds, but are there any questions if this is interesting to you? We can run you some what if scenarios on pension bonds what they could look like under various investment assumptions fundamentally.
I would strongly recommend that if you want to go down this path that you consider retaining a firm like Echo Northwest or some other economics or Actuarial firm to run some. Analyses, they have done so [00:24:00] before but it hasn't been updated for a while. So.
for your information last time I've been in December 31st 2016 outstanding funded liability was. 110 million. I think we have the current one with the December 2017. We have 94 million now.  But we thinking about my boss po born option. Then that's it and 94 million we talking.  And it declined because 2017 was a fifteen percent earnings here.
So before friend and start talking about Geo [00:25:00] Bond the history of our school district to your bond is in 2003. We went out for 75 million Bond. And in 2009, we have a bond for 98 million. And the last one is 2015. We have eighty four point five million.  So with that the total outstanding bond that we have out there as up 2017 is 180 4.8 million.
180 4.8 million.
What it's worth that table is on page 44 of your packet as well. So if you need a reference that number.
All right. Just reintroduce myself, Aaron and Watkins of [00:26:00] Piper. Jaffray here to talk Geo bonds. So kind of Switching gears a little bit. Hopefully something a little more familiar and a little less scary than first. And just fair warning. I realize were a little later in the clock and I have a tendency to talk really fast even about really complicated topics.
So if I am going to quickly, please interrupt. I just want to be respectful of everyone's time. But I also want to make sure I don't miss anything. So what is a general obligation Bond? So a bond is basically just alone that has been securitized which is a fancy way of saying it has been broken up into uniform parts and sold off to investors General obligation bonds particularly are secured by a fancy Latin term called ad valorem taxes, which is also known as property taxes the property taxes while it's also got the district's full faith and credit but generally speaking it's just property.
X is what is paying the debt service [00:27:00] and because of that voter-approved property tax security Geo bonds nationally speaking are viewed in the muni world or Public Finance world as the highest credit quality that you can purchase. And because of that the interest rate on Gio bonds tends to be the lowest and for a school district in Oregon where you have option to purchase the organ school bond guarantee and your guys very high underlying credit rating allow for you guys to enjoy some of the lower interest rate.
You'll find anywhere in the US Public Finance Market. So Geo Bonds in Oregon are unlike a permanent property tax levy they are not limited by measures 5 or 15. Excuse me, which some of you may remember from the coming out of the 1990s property tax reforms they can be voted on in four elections.
However, I can't recall [00:28:00] the last March or September 1. I know I personally never worked on 2 march to September Bond. Most people go to Mayor November. They don't have the double majority and typically speaking higher voter turnout at least historically has led to better results. Waltz in voter approval rates, so they tended like to go on a November election.
But we've seen more May elections and sometimes it's dependent on what you guys know about your own constituency. Districts in Oregon are limited to their total borrowing capacity as a function of real market value for here. It is or for school district is just under 8% 7.95. It is a comically high number as you can see.
It's nearly a billion dollars for you guys. Even if you subtract out the hundred Eighty-Four million that you have outstanding you're still looking at about three quarters of a billion dollars in borrowing capacity. I'm sure you [00:29:00] guys have a wish list that long. I think most school districts do but I don't think many people really approach even half of their statutory limit really only see that in very very fast growing districts who need to build lots of new schools vary.
Glee the ballot title, when you go to the voters you need to put a not to exceed amount which is the total amount. You would tend to borrow what you tend to intend to spend the money on and the maximum maturity length that you intend to go. You do not have to put your Levy rate. A lot of people think you need to do that or guarantee rate for so if you can't even guarantee the rate anyway, so those are really just kind of the three things that are required in there on the use of proceeds.
Typically you are seeing very large capital projects for geo bonds. You don't. Tend to [00:30:00] see a Geo Bond specifically for something like iPads as you want to see a longer useful life than that. I don't know about you guys, but. I don't think kids tend to treat High Tech equipment with the best I guess care so, you know stuff like iPads or other high-tech equipment in school facility.
Probably don't last as long as maybe they do another. Other environments it's but it's important to remember though when you're talking about that basket of goods. It's the entire basket of goods. So if you're talking about building a new school, which will require some new computers. Well, the bulk of the cost is the new school so that gets to be included in that useful life of.
The of the money and of the projects, it's also important to remember the routine maintenance is not eligible that needs to be done on your om budget be used with capital funds and [00:31:00] any interest earnings on the bond proceeds because oftentimes when you do a large Capital Bond, you're not spending all your money all at once and oftentimes, it'll sit around typically.
In the state LG IP, which I think is two and a half percent about right now 2.7. It's so it's important to remember that, you know, if you're earning 2.7 percent on your project fund while you're waiting to let the money's those monies also have to be used on the same project uses again. I don't think many schools are hurting for places to spend project money, so I don't think.
Typically a problem, but it's just something to be mindful of I would just add that Brendan is correct.
IPads, but you can borrow for technology for thumb is it has to have a useful life?  establish a useful life of.  [00:32:00] so it's not uncommon to see school. A basket that includes technology maybe curriculum, maybe some school buses plus new buildings. Yeah. Yeah. Thank you. So with all that said kind of the while I said in the ballot title, you don't actually have to put a levy rate there that does seem to be what a lot of people focus on voters.
Especially is how much. How much is my bill going to go up for your new project? And so calculating? The bond Levy rate is fortunately a pretty simple calculation. It is The Debt Service Plus, whatever sort of uncollectible, 's you're assuming. / the property value of the entire district and it's being expressed in dollars per thousand.
So that's why we that 500 million which is the proper as sued property value in our scenario here divided by a thousand and that all comes together to a two [00:33:00] dollar per thousand Levy rate in our example up here and again in bright bold. Remember you cannot guarantee that right? Whenever you're talking to constituents, you have to remind them.
It's just an estimate or projection and subject change. So that election schedule I talked about earlier with the main elections in November and may ones highlighted in bold. We did include the other ones for informational purposes. The November 19 one has we have August 16th is the filing date.
Sorry that you guys would have with the county. Sorry. I should be reading off of here instead of up there. The other thing here though that I would like to bring your attention to is actually that far right column, which is kind of lost often times when people are thinking about their bond Levy that when they're going to the voters is [00:34:00] win that Levy will actually hit now in November 20 2011.
Which is the next presidential election, so a lot of people are obviously got that on their calendars. You actually won't even Levy till fiscal year 2022 and I'm just going to use that as an example is November 20 20 actually exists in the 2021 fiscal year because if you recall fiscal years for school district start on July 1 and N June 30, and so then the property tax year then would have to start in the very next year, which is actually fiscal year.
22 so your first actual Levy Bill wouldn't hit tell what would it be December of twenty December? 15 20 21 would be your first Debt Service payment would be that November of 2021. So when you first start getting property tax receipts, which is in the 2022 fiscal year am a election only has a one-year lag.
It does come with some other issues related towards budgeting [00:35:00] make sure you're properly budgeting over the summer and getting the proper Levy documents into the County Assessors and time. It's definitely doable not a problem, you know don't want to scare anyone away from that. It just there's just different scheduling idiosyncrasies between the two election Cycles.
So the awesome program. So we've talked in the pension bonds about various State matching or Grant programs. Well, here's one that is related just for Capital it stands for the Oregon State. Capital Improvement match program it is the state providing matching funds for voter approved. Cheo bonds.
It is right now subject for re approval in the legislature. I do not earn don't care on think you have any insight Beyond it. Well, it was in the governor's budget.
[00:36:00] We have no idea where thing. Yeah, we're still operating under the assumption that it was a well-liked and popular program in people will because of that like to continue it, but you know this point. We're not sure but for the sake of hopefully that opportunity still existing for you guys when you're going out for your bond would like to go over here.
So the awesome program allows for a matchup between four and eight million you guys as you can see in the orange down at the bottom art in that. I feel like it's kind of a rare range for a district actually fit in the formula group in between the four and eight most districts are too small and they're Max's for or they're very very large and they're Captivate think of like, you know, what PPS or something like that but your guys is eligible match is about seven point seven million dollars.
[00:37:00] I will say. The match as you can see from the line above it is mostly allocated based on need. I'm sure you're all very aware is wesen Wilsonville parents that West Linn was filled was not a poor area. So you guys do not rank very high on the needs basis as you'll see with that 188 ranked down there at the bottom.
However, 40% is allocated first in time. However, they kind of figure this out better and so it's. It seemed a little more random than the what sounded like they haven't figured out for the other purse Grant programs like yeah, so and there.  A very affluent districts including and Portland Sherwood who all cleared through the awesome Grant.
I wouldn't rule out that you might get. Yeah, absolutely worth your [00:38:00] time to still apply for the gram. Is this also applicable to other municipalities besides school districts like the person aside so the 188th ranking is out of the 197 school districts, correct? Not including counties and other municipalities.
I didn't want to highlight though the 197 part but yes, it is 188 out of 197. But yeah, you are right you do not have to compete against all the other constituencies out there, which is good. But yeah, Carol is right though. It is kind of creates an odd situation though. Where on Election Day you might be sitting around rooting for other people to fail so you can get your allocation, which is kind of a perverse incentive, but it is still.
An opportunity out there and you know 7.7 million dollars. I don't know about you guys if I saw that laying on the other side of the street, I would definitely walk across and pick it up.  [00:39:00] So part of the awesome facility plan requirements. Are you need the or the awesome grant program? You need the facilities plan first.
The submission is right now kind of on a delayed cycle because it hasn't been approved by the legislature yet. Typically they would be requiring that stuff. Alright, we would have already have had to have you guys seen this in as you can see from the projected November 20 20 Cycle. So hopefully we'll get better guidance on this going forward in terms of what the legislature is going to approve.
So the technical assistance grant that is required as a earth. Excuse me, the technical assistant program grants, which help you get your facilities plan complete, which is required for your awesome Grant application. Here are some of the grant options to get help with preparing your [00:40:00] facilities plan.
I can't recall if you guys have one.  Arden did you already applied?
Because we have not determined about going out for a bond yet. That would be putting the cart before the horse once the board makes a decision and.  Excellent. Well, these are some of the dollar amount available for you guys for facilities planning as required for the awesome grant program as you can see there.
My understanding was talking to Michael LEDs are much easier to get it eligibility for compared to the awesome program, which would be quite competitive. So even if you aren't really intending on applying for an awesome program might be worth your time just for the sake of getting a facilities plan together for future plans future Capital planning be on the spot.
So with all that said I'm going to get into some of the [00:41:00] numbers. I've already presented to the staff previous meetings. But before I do that, I want to give you guys a little overview of on Market or interest rates and what they've been doing. The big graph is kind of wish we had this going all the way back to the early 80s just so I can really show how much lower interest rates are now compared to where they used to be.
Yeah, showing the 10-year treasury rate all the way up at like 12 percent sure does make that four percent number seem really low or I should say like 2.4% number I think as a market closed today seem really low and affordable in that upper right and set box so you can see interest rates have. Been kind of trickling down the trend has continued and then yeah, I guess right here.
There's some kind of interesting spikes. I don't necessarily want to go into too much detail here, but you'll see the blue line is the treasury line and the Gray Line though that is [00:42:00] labeled 10 year AAA MMD that stands for the 10-year highest rated Triple-A rated Municipal Market data index, which is a basket of I believe.
It was 30 aaa-rated Geo bonds market closed that day. And so it represents the index that you guys when you sell Bonds in the market like we did in 2015 would be benchmarked against is a measure of your performance of your interest rate.  As you can see they largely move in lockstep with the treasury market with a very brief periods of Divergence.
Other part that goes into the baking of the cake. That is Geo bonds is the property values. So here's a historic. Look at the property value trends for West Linn will school school district. You guys have grown very fast, as you can see in the column on the right within the state of organ with our new property.
I [00:43:00] sting your 1990s property tax reforms AV growth. Is capped at an organic growth rate of 3% So what that means is excluding any new construction. The fastest your AV is allowed to grow is 3% per year. So all these numbers above 3% represent not just organic growth but requisite new development.
I'm sure you guys are all aware of living here that there's been quite a bit of development in this part of the Portland metro area over the last 20 years and it's as evidenced in that growth column on the far, right? The other columns here. I kind of want to bring your attention to if you're not familiar with Is that real market value number and that total assessed value number total assessed value at no point can go above real market value.
It's capped at that but the assessed value is what you're actually taxing on the real market value. Really just kind of now exists as a Catherine [00:44:00] doesn't didn't really do a whole lot else. Well, it does actually help calculate your debt limit, but as far as like actual function, it doesn't do a whole lot for you there.
It's that total assessed value in the net assessed value or the numbers that we really care about their. Here is that outstanding Geo bonds page that we were discussing earlier. You see that one eighty four point eight million outstanding currently. Most of that is the series 20 2015 bonds. There's a little bit left remaining of the 2003 Ace and it looks like of the 2009's the 2009's will be maturing and about two and a half months.
So those will be gone. And apologize for the small print on the slide, but here is what all those existing bonds and even prior bonds have equated to in terms of Levy rate for the district. And in the kind of lower right there. You can see what we're projecting the levy [00:45:00] rate to look like for the district on its current outstanding debt.
The other thing I want to draw your attention to is that % AV growth column. You'll see there what we're forecasting going forward for the district. We have just assumed a three percent growth rate going forward. We don't like to go whole lot above that. And even if we do we tend to keep it for a pretty brief period of time to just sort of capture no new developments that will be coming online over the next couple of years.
So if you guys are aware of you know, a billion dollar development being planned in the a district, please let us know so we can adjust her model. But otherwise, you know, we found this is a good safe starting point.  This is what that same table looks like in graphical form. There was pretty colors.
And now I want to start bringing our attention to what the [00:46:00] new bonds are potentially going to look like some of the scenarios we've been running from it's used. So I've sort of broken this scenarios out into. Two main groups of two each. So the first two columns the kind of blue heading there is a hundred Eighty-Four million dollar Bond of which a hundred eighty million is new authorization.
So in this scenario, you would ask the voters for a hundred eighty million dollars. The reason why it's a hundred eighty four really hundred and eighty four point five is because when we sold the 2015. We didn't sell all the authorization. We kept back 4.5 million dollars in order to maintain the levy rate that you guys promise to the voters again.
I know you can't guarantee it but you still made a promise and you wanted to be good stewards. So with that 4.5 million dollars. It doesn't go away. You still have that authorization all the same project requirement restrictions maturity length, all that stuff still [00:47:00] applies. But because you haven't sold it yet.
That 20 year much. I think it's 21 years is what you told the voters that clock won't start counting until you sell that 4.5 million is right now, it's just dry powder waiting to be used.  You can see the net effect there on the levy rates kind of. Yeah, it's again. I kind of wish it broke this up into multiple slides would be a little easier to see but what you can see there is we're going back.
We're taking that Levi back up to that $3 level that you guys talked communicated a voters in 2015 and we're doing that in all four of the scenarios here with Levi steps being planned in the future that will show and later graphs for. New unplanned projects that you guys are trying to keep capacity available for should you guys keep growing?
The next group of numbers actually, sorry before I move forward and that within each project each bonsais scenario. I [00:48:00] have a 20 and a 30-year amortization you guys use a 20-year amortization on your 15 year bonds. It's not uncommon to go all the way up to 30. I will say you can go beyond 30 but.
Bond market standards or kind of really between 10 and 30 often times 20 is kind of The Sweet Spot but shouldn't be afraid of going the full 30 that is still very normal. So you've completely lost me. Oh, sorry, that's okay, so it's either. My current sickness or something. So can you pull back tell me what it is?
You want me to know from this slide? What is the question that's being asked in this slide. What are the options? And what does this tell me about that?  Okay, the main the main things that you need to take away from this slide are between the four scenarios. You have [00:49:00] two different project size depending on what are the four scenarios?
So you have a hundred eighty million dollar new money scenario. Yeah right here. Okay, that is a hundred eighty million in new money projects amortized over 20 years. Also the 4.5 million is being sold in conjunction with it the next column to the right. Is the same hundred eighty million dollars in projects plus four point five, but amortized over 30 years.
And then it's important to note though that that 4.5 million be amortized only over 20 because that's what you'll do, but that's easy that's easy to do and to be clear one of the choices of the board is how long yes. Okay. All right in the big thing about determining length is two fold. Backwood we talked about earlier the use of the projects can determine like like if you guys are building news a [00:50:00] new school with this money and I imagine a hundred eighty million dollars very likely includes new facilities, you know, a 30-year useful life is not unreasonable at all.
They totally normal assumption. But let's say you were buying a hundred eighty million dollars in school buses 30 year. Bob Bond, you'd probably get laughed out of your bond counsel's office for trying to convince them that a school bus has a 30-year useful life. So that's important to remember but then the other thing is what that effect has on the levy rate and what that Levy rate communicates to your voters.
I can't tell you your Vote or sensitivity to that three dollar Bond Levy you guys are you know from. Living in talking with your neighbors probably have a much better idea of that sensitivity, but I do know from just anecdotally talking to lots of different school districts, you know, they sort oftentimes have kind of an idea of at least sort of what that I don't want a pain [00:51:00] threshold because that.
And overly negative connotation but you know, but sort of like what that financing level their Community can can support on like, you know in household cash flow basis and being mindful of that helps you kind of determine. Okay, what is a levy rate that is acceptable for our voters and then once you know that you can almost sort of reverse engineer what that final maturity length is.
But what we're trying to show here in set is actually kind of doing it the other way of saying, okay. Well if you have a 20 year or 30 or Levy this is what it does to the levy rate effect and you can see in that sort of second grey block of numbers right there what those changes of borrowing amount and maturity length what that equates to in terms of Levy rate to the bondholder to the property taxpayers.
Well and to be specific about that so under the assumption that [00:52:00] $3 was a comfortable level this brings it in both cases actually in all four it brings it back to three bucks. But where the difference is is at the next drop. So we've designed this to give you frequent reduction so that you can theoretically.
Back to the voters job. This drop was planned in the last election. And in this case with a 20-year because that's more expensive because you're concentrating the repayment of Debt Service. It goes to 280. At the first drop then it goes to 258 in 2032 and then it stays there until 2040 roughly when the dead goes away.
If you go to 30 years where that shows up is in the [00:53:00] magnitude of.  So to a degree, this is a trade-off between how long you want to pay for it how expensive the interest.
But how much me?
Versus you know, how big a drop you want. So a 30 year option if you knew in 20.  acted to have really big knees that might be a good option because it gives you a bigger Club. And we've got some visuals and a couple of slides that I was just going to say the next slides coming show that stair-step.
I also want to say when we asked Piper jaffray to put a couple scenarios. There's nothing magical about the 184 or the 204. We gave them some [00:54:00] possible numbers show a 20 and a 30 year with something that's under 200 million maybe around a hundred Eighty-Four show. A 20 to 30 year loan with something slightly over 200 million the capital bond that you're considering is about 207 so you could see it's close to the 204 unless you determine to run a capital Bond less than that for some reason between now and you know when you decide to go so there is nothing hard about those numbers.
We just. Gave them two numbers to run some scenarios. Any number would do we could say run it again for tonight with two hundred and six point seven or 207 and you'd get something very similar to the green.  Column there, but I think when we look at the next couple pages that stair-step and the benefit of the 30 over the 20-year [00:55:00] becomes apparent in the ability to go back to the community in a number of years and ask for another Bond allows you more space.
Under the three dollar cap to do that real quick before I skip to the next slide. I want to go back to what Carol mentioned about the longer maturity having a higher interest expense. You can see that in the very bottom group of numbers and that t IC number goes for in the hundred Eighty-Four million dollar series.
It goes from 510 to 5:45. It's worth mentioning. I do have an interest rate cushion in there. That is not what I expect your borrowing costs and be today, but when we're projecting out years in advance, we like to be conservative.