2. Outline
• Bond Election Analysis – deciding to call an
election
• Bond Election Campaign – Once The Board
has voted
• Post-election - next steps
3. Bond Election Analysis
0 1 2 3 4 5 6 7 8 9 10 11 12 13
Months
Do we have a need?
Needs Assessment
Board creates needs
committee
Needs committee makes
recommendations
Board reviews needs
committee recommendations…
Board considers approval of
bond election
Financial Impact Study
Board approves bond election
Bond election strategy
implemented
Bond election
4. Bond Election Analysis
“Keys to bonds passing” case study*
• Board and administration established diverse
citizen task force
• Disseminated info that focused on kids and
community
• Unanimous support of board
• Keeping school design simple
• Spending time getting “yes” voters out, not trying to
change “no” voters’ minds
*School Bond Case Study (by Holt, Wendt, and Smith – 2006)
5. Bond Election Analysis
Important Steps
• Indentifying district needs and projects.
• Identifying the financial impact to the
community.
• Creating a strategic election campaign.
Holding an Effective Bond Election 5
6. Bond Election Analysis
May and November pass/fail election results 2006-
2010:
May Bond Election Results (by # of Elections) November Bond Election Results (by # of Elections)
25%
33%
67%
75%
Passed Failed Passed Failed
7. Bond Election Analysis
May and November election amount ($) results
2006-2010:
May Bond Election Results (by Par Amount) November Bond Election Results (by Par Amount)
18%
17%
82% 83%
Passed Failed Passed Failed
8. Bond Election Analysis
Historical Bond Election Results
9,000,000,000
8,000,000,000
7,000,000,000
6,000,000,000
Total Bond Election Par Amount
5,000,000,000
4,000,000,000
3,000,000,000
2,000,000,000
1,000,000,000
-
1-May-06 1-Nov-06 1-May-07 1-Nov-07 1-May-08 1-Nov-08 1-May-09 1-Nov-09 1-May-10 1-Nov-10
Passed Failed
9. Bond Election Analysis
Texas ISD bond election results vs. macroeconomic
market conditions:
• Success rate of bond elections decline from
85% in 2007 to 60% in 2010
• Number of elections decreased from 168 in 2007 to
81 elections in 2009. However, elections increased
to 110 in 2010
• May 2011 results
– 64 Elections
– 72% passed
10. Bond Election Analysis
Indentifying district needs and projects:
• A well thought-out plan
– School Site
– Structural and Mechanical
– Maintainability
– School Safety and Security
– Educational Adequacy
– Environment for Education
• Specialized projects – needs vs. wants
• Location
• Who assesses district needs?
• Community surveys
11. Bond Election Analysis
Develop accurate cost projections:
• Construction team
• Cost overruns?
• Competitive factors?
• District’s best interests
Holding an Effective Bond Election 9
12. Bond Election Analysis
Identifying the financial impact to the community:
• Build financial team
• Review market conditions
• Project tax implication
• State formulas
• Financial team
13. Bond Election Analysis
Who is on my financial team?
• School Board
• Superintendent
• Business Manager/CFO
• Architect
• Construction Consultants
• Financial Advisor
• Underwriter
14. Bond Election Analysis
Market conditions and their effects on tax
rates
• ISDs tax rate:
– Assessed Valuation (“AV”) within the district
– Borrowing amounts and costs
Effect on Tax Rate
Interest Rates Higher Interest Rates Lower AV Increases AV Decreases
Up Down Down Up
15. Bond Election Analysis
Market conditions and their effects on tax
rates continued
• For example, assuming that a district recently issued $50
million of bonds with level debt service over 30 years, the
District’s tax rate could be expected to increase by
approximately $0.33 per $100 (at current market rates) of
Assessed Valuation.1
Tax Rate Changes - Assuming $50 MM Bond Issue1
Assessed Value Assessed Value
Rates Higher by 2% Rates Lower by 2%
Increases 10% Decreases 10%
$0.40 $0.26 $0.30 $0.36
1 Assumes total assessed valuation of $1 billion.
16. Bond Election Analysis
Accurate tax impact projections
– What are the chief variables that will impact the
tax rate?
– What are current market conditions?
– Are there innovative or cost saving financing
options?
– How do I know I have the right team?
17. After the Board has voted to call an election…
BOND ELECTION CAMPAIGN
18. Bond Election Campaign
How are you going to succeed?
• Know who is on your team
• Know your voters
• Clear communication
• Think outside the box
19. Bond Election Campaign
Who’s on your
Election team?
• Board (“cohesive”)
• Superintendent
• District staff
• Community leaders
• Financial advisor, architect, consultants
• Legal Council
20. Bond Election Campaign
Who’s on your team?
• The perception “inside”
• Does each team member know their role?
• How will information be communicated?
• Is everyone aware of the rules?
21. Bond Election Campaign
Identify your voters
• The perception “outside”
• Factors that can impact
the minds of your voters
• Interviews/Surveys
22. Bond Election Campaign
Evaluate organized opposition:
understand bond opponents
• Determine accuracy of opposition points and
develop response
• Meet with opponents to create a common ground
• Bring opponents into the “core” team
23. Bond Election Campaign
Communicating with Voters
Understanding your district’s role*:
• Can a school district take an official position
in an election?
• Can a school district communicate anything
about an election?
• What about district staff and elected
officials?
• It’s complicated…
*source: TASB legal services
24. Bond Election Campaign
Communicating with Voters
Understanding your district’s role:
Q. Can a school district take an official position in
an election?
A. No, not if public funds will be used directly or
indirectly to reach or disseminate the position.
School district employees and officials cannot
knowingly use public funds, directly or indirectly,
for political advertising to advocate for or against a
candidate or measure that will appear on a ballot.
25. Bond Election Campaign
Communicating with Voters
Understanding your district’s role:
Q. May public funds be used to communicate
anything about an election?
A. Yes, public funds can pay for the dissemination of
factual information, but not advocacy.
Factual information includes information about
what is at stake in a bond or tax election, as well
as information about the conduct of the election
(date, polling sites, etc.).
26. Bond Election Campaign
Texas Election Code § 255.003
Unlawful Use of Public Funds for Political Advertising
a) An officer or employee of a political subdivision
may not knowingly spend or authorize the
spending of public funds for political advertising.
b) Subsection (a) does not apply to a communication
that factually describes the purposes of a measure
if the communication does not advocate passage
or defeat of the measure.
c) A person who violates Subsection (a) commits an
offense. An offense under this section is a Class A
misdemeanor.
27. Bond Election Campaign
DON’T “Advocate”
A communication that “contains a clear request for the
reader to support” the measure
• Vote for . . .
• Support . . .
• Defeat . . .
• Reject . . .
28. Bond Election Campaign
DO “Educate”
(Objectively Verifiable Facts Only)
• Student capacity
• Growth rates
• Age/condition of facilities
• Projects to be funded with bonds
• Cost of projects
• Tax rate effect
• Voting dates and polling places
29. Bond Election Campaign
Understanding your district’s role:
Q. May board members use their own time and
money to campaign for candidates and
causes?
A. Yes, public officials, who are acting independently,
without the use of public funds, have a free speech
right to engage in political advocacy.
This includes the use of private emails and
involvement with political action committees.
30. Bond Election Campaign
Understanding your district’s role:
Q. Are school employees permitted to advocate
for or against particular candidates or
measures?
A. Not on work time or using district resources,
including office supplies and computer equipment.
31. Bond Election Campaign
Understanding your district’s role:
Q. Is the superintendent ever “off the clock” and
free to advocate as a private citizen?
A. Advocacy by a superintendent on a school district
election matter may appear to others to be an
official statement by the district and thus a use of
district funds.
A superintendent should speak only about the
factual purposes of an election measure so as not
to encourage, promote, or imply that listeners
should vote for or against the measure.
32. Bond Election Campaign
Common Sense Approach
• Educate, Don’t Advocate
• Don’t Stir People Up!
It’s COMPLICATED…
Don’t try this without
Legal Counsel!!!
36. Bond Election Campaign
Thinking outside the box examples:
• Put bond opposition on your team
• Organized non-district staff support
• Catchy slogan
• Pulpit presence
• Senior involvement (i.e. Pancake Night)
• Captive audience
– Fall Bazaar
– Choir/Band Concert
– Baseball/Football games/playoffs
• Early voting locations
• Awareness of other local Gov’t entities elections
38. Post Election
• Canvas Election
• Construction Phases
• Sell Bonds
• Receive and Invest Bond Proceeds
39. Post Election
Construction Delivery Methods
Five Methods of Construction:
* Competitive Sealed Bid
* Competitive Sealed Proposal
* Construction Manager-Agent
* Construction Manager-At-Risk
* Design/Build
- Job Order Contracts
Texas Education Code: Chapter 44 – Fiscal Mgmt
* Board must determine delivery method
40. Post Election
• Underwrite Bonds – Firm that markets and sells
your bonds to investors
• Different firm than your Financial Advisor Firm
• Takes on Underwriting risk in the event of no
investors
41. Post Election
Investing Bond Proceeds
• Set up separate bond investment account
• Determine spend-down estimates, may invest in
term investments
• Options include: Treasuries, Agencies, CDs, Pools
42. Wrapping up…
Effective elections have common factors:
• Clearly identified needs
• Trust of the community
• Unified board members
• Community leaders and grass roots support
• Panel of experts helping with the election
43. Questions?
• Jeff Clemmons, TASB
(800) 580-8272 extension 2220
jeff.clemmons@tasb.org
• Kara Ardis, First Public
Subsidiary of TASB
(800)558-8875
kara.ardis@firstpublic.com
• Ron Greiner, Government Capital Corp.
(800) 883-1199
• Rudy Segura, Jr., McCall, Parkhurst, &Horton LLP
(214) 754-9268
44. Disclosure
This material is for informational purposes only and is not intended to be an offer to
sell or a solicitation of an offer to buy any security. Computational information is
subject to change, is for hypothetical purposes only and does not guarantee or
predict future results. For securities discussed herein, First Public may act as an
underwriter or agent. First Public is the primary distributor of a local government
investment pool, Lone Star Investment Pool. The Lone Star Information Statement
should be read carefully before investing. Investors should consider the
investment objectives, risks, charges and expenses associated with this or any
security prior to investing. Investment in Lone Star Investment Pool is not insured
or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other
government agency and although Lone Star seeks to preserve the value of the
investment at a fixed share price, it is possible to lose money by investing in Lone
Star. For further information or for an Information Statement contact First Public at
(800) 558-8875.
