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Bond Accountability Commission 2 Recommendations Page 110

and is smooth thereafter, retaining a more conventional structure. As we discuss further below, assuming there is no precipitous drop in expected tax revenue, this reduced debt service will not require the full 6.1 target millage rate. In turn, this differential between the target millage rate and CMSD’s need for project funds will be in effect if and when the District opts to put another Bond proposal on the ballot to complete the projects associated with Issue 14 in accordance with the District’s goals. Of course, the above structure will be viable only if CMSD receives sufficient revenue to repay the debt service. We are able to project potential tax revenue by applying the desired millage rate to the assumed assessed value. The currently desired millage rate of 6.1 is assumed to decrease by 0.5, beginning with collection year 2012, as a result of the repayment of the Library bonds. When the desired millage rate is applied to the assumed assessed value (which we assume to grow 1% in 2013 and 2016 during the mandated triennial assessed value adjustment, with all other years assumed to be stagnant), we are able to project potential tax revenue. To be conservative, we assumed that the revenue stream will experience delinquencies of 15%, and we did not include payments on delinquent taxes. We also maintained the millage rate at the target rate of 6.1%. The results of our projections are reflected in the following chart, which is a theoretical exercise to determine the viability of CMSD’s strategy throughout the life of Issue 14. As such, we are looking at revenue versus debt service from the onset. As shown in the chart, in most years there is ample tax revenue at the 6.1 millage rate to repay CMSD’s debt service. In collection years 2003 and 2006 through 2009,

BAC2 Recomendations Final 04062010  
BAC2 Recomendations Final 04062010  
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