Maximizing Your Bond Campaign

MAXIMIZING YOUR BOND PACKAGE

Do you smell trouble?

Please complete the public poll found at the link provided Your answers will be discussed at the end of the presentation

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Meet the Speakers

William Spencer

PRESIDENT & CIVIL ENGINEER

MHS Planning & Design FAVORITE RECREATIONAL ACTIVITY “Chasing our five children at their sporting events”

Dr. Laci McRee

ASSOCIATE PROFESSOR IN KINESIOLOGY FAVORITE RECREATIONAL ACTIVITY “I turn into a little kid on a swing. I will likely create a competition out of who can jump the farthest at the end.”

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Ziad Kharrat, RLA, MPA

ASSISTANT DIRECTOR OF PARKS & RECREATION

City of Denton PARD FAVORITE RECREATIONAL ACTIVITY “Walking in the park”

What You Can Expect to Walk Away With AGENDA

Learning Objective 1: Participants will know the key factors related to statewide bond trends.

Learning Objective 2: Participants will be able to identify common bond busters and strategies to address them.

Learning Objective 3: Participants will be able to identify the top bond management solutions.

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The Big Picture Our research, assessment tool, and tips fit within the following timeline:

MASTER PLAN

BOND READINESS ASSESSMENT

BOND CAMPAIGN

BOND PROGRAM IMPLEMENTATION

Sample Implementation Schedule from a Parks, Recreation, & Open Space Master Plan:

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Data Science: City, County, and State Bond Statistics DR. LACI MCREE What is the situation?

• Assess historical data of state-wide and community bond voting trends • Descriptive Analysis for year 2023 • Descriptive Analysis for years 2018 through 2023 • Cluster Analysis of 86 park bonds and a random sample of 86 non-park bonds in 2018-2023

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MASTER PLAN

BOND READINESS ASSESSMENT

BOND CAMPAIGN

BOND PROGRAM IMPLEMENTATION

Learning Outcome 1 Participants will know the key factors related to statewide bond trends.

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MASTER PLAN

BOND READINESS ASSESSMENT

BOND CAMPAIGN

BOND PROGRAM IMPLEMENTATION

DATA SCIENCE

Using the Scientific Method 1. Data Collection 2023 & 2018-2023 a. Downloaded all annual budgets to collect data from each city b. Public Websites i. Texas Secretary of State Voter information ii. Texas Bond Review Board 2. Data Transformation a. Calculations (Voter Factor, Bond Factor, Golden Factor) b. Simulations (What If Analysis) c. Aggregations (Regional Bond Volume - historical perspective) 3. Model Creation (n=172) a. Statistical Significance (Two-step Cluster Analysis) b. Practical Significance (What If Analysis)

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MASTER PLAN

BOND READINESS ASSESSMENT

BOND CAMPAIGN

BOND PROGRAM IMPLEMENTATION

DATA SCIENCE

2023 Descriptive Stats COUNT 357 246 73 4 2 2 684

5 Number of Park Bonds

BOND TYPE Independent School District (ISD) Water District (WD) City Bonds County Health & Hospitals District (HHD) Community College District (CCD) TOTAL BONDS

4

Carried Defeated

3 2 1 0

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60 $2 an th re 0 Mo $26 to 50 40 $2 $2 to 20 20 $2 $2 to 00 00 $2 $2 to 80 $1 80 $1 to 60 $1 60 $1 to 40 $1 40 $1 to 20 20 $1 $1 to 00 0 $1 10 o$ 0t $8 80 o$ 0t $6 60 o$ 0t $4 40 o$ 0t 0 $2 $2 an th ss Le

CITY BOND TYPE COUNT Non-Park Bond (carried) 45 Non-Park Bond (defeated) 8 Park Bond (carried) 17 Park Bond (defeated) 3 TOTAL CITY BONDS 73

Park Bond Amounts (in Millions)

MASTER PLAN

Average Carried Park Bond: $47,361,764 Average Defeated Park Bond: $11,833,333

BOND READINESS ASSESSMENT

BOND CAMPAIGN

BOND PROGRAM IMPLEMENTATION

DATA SCIENCE

Five Year Descriptive Stats 30

Number of Park Bonds

CITY BOND TYPE COUNT Non-Park Bond (carried) 290 Non-Park Bond (defeated) 52 Park Bond (carried) 65 Park Bond (defeated) 21 TOTAL CITY BONDS 428

25

Carried Defeated

20 15 10 5 0 80

60 $2 an th re 0 Mo $26 to 40 40 $2 $2 to 20 20 $2 $2 to 00 00 $2 $2 to 80 $1 80 $1 to 60 $1 60 $1 to 40 $1 40 $1 to 20 20 $1 $1 to 00 0 $1 10 o$ 0t

$8

60

o$ 0t

$6

40

$ to

o$ 0t

$4

0 $2

20 n$

ha

$38,730,485 $7,064,286

t ss Le

Average Carried Park Bond: Average Defeated Park Bond:

Park Bond Amounts (in Millions)

Additional Observation: Election Period may be inconsequential May = 1,113 carried, 314 defeated (1427 = 52% of total) Nov = 1,045 carried, 314 defeated (1359 = 48% of total)

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MASTER PLAN

BOND READINESS ASSESSMENT

BOND CAMPAIGN

BOND PROGRAM IMPLEMENTATION

DATA SCIENCE

Economic Clusters - Two-Step Cluster Analysis Categorical Variables: • Type of Bond: park (n=86) vs. non-park (n=86) • Bond History: amount of bond campaigns (low-, medium-, high-activity) in a specified time period based on Economic Region • Election Result: carried or defeated Continuous Variables: • Total City Taxes: total amount of property taxes collected by a city • Value of Property: market value of all taxable properties within a city • Golden Factor: Bond Factor (votes for/against) + Voter Factor (voter turnout/total population)

Key Note: Since 2018, bonds with the Golden Factor: Passed: 1.17 or higher Conditional: Between 1.169-1.12 (if less than 10% voter turnout it passes) Defeated: 1.12 or lower

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MASTER PLAN

BOND READINESS ASSESSMENT

BOND CAMPAIGN

BOND PROGRAM IMPLEMENTATION

DATA SCIENCE

Economic Clusters - 6 Identified Clusters Carried

C6

50

C4

40

C5 10 30

20

10

10 -10

C2

-20 -30 -40 -50

20

30

40

50

Park Bonds

Non-Park Bonds

C1

20

40

Cluster 2 Red Lights

30

C3

50

Cluster 1 Coin Flip

Cluster 3 All Systems Grow Cluster 4 Happy Campers Cluster 5 Big Fish, Little Cluster Cluster 6 Green Lights

Defeated - 12 -

MASTER PLAN

BOND READINESS ASSESSMENT

BOND CAMPAIGN

BOND PROGRAM IMPLEMENTATION

DATA SCIENCE

Economic Clusters - Cluster Data Cluster 1: Coin Flip

Cluster 2: Red Lights

Cluster 3: All Systems Grow

Cluster 4: Happy Campers

Cluster 5: Big Fish, Little Cluster

Count

23

21

24

44

12

48

Election Results

Carried: 14 Defeated: 9

Carried: 0 Defeated: 21

Carried: 23 Defeated: 1

Carried: 44 Defeated: 0

Carried: 12 Defeated: 0

Carried: 48 Defeated: 0

MHS Golden Factor Range

0.78 - 2.66

0.22 - 1.11

1.1 - 7.4

1.1 - 4.1

1.38 - 6.19

1.14 - 6.75

Type of Bonds

Non-Parks: 0 Parks: 23

Non-Parks: 9 Parks: 12

Non-Parks: 24 Parks: 0

Non-Parks: 0 Parks: 44

Non-Parks: 5 Parks: 7

Non-Parks: 48 Parks: 0

City Population

Low: 3,286 High: 974,000

Low: 1,737 High: 104,526

Low: 3,073 High: 326,406

Low: 1,954 High: 397,903

Low: 227,528 High: 2,302,878

Low: 1,782 High: 963,121

City Tax Collected ($)

Low: $408,939 High: $388,423,091

Low: $902,740 High: $58,206,802

Low: $137,425 High: $171,562,513

Low: $886,169 High: $216,335,228

Low: $523,412,470 High: $547,943,086

Low: $588,895 High: $216,335,228

Bond History

Low-Activity

High-Activity

Mid-Activity

High-Activity

High-Activity

High-Activity

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MASTER PLAN

BOND READINESS ASSESSMENT

BOND CAMPAIGN

Cluster 6: Green Lights

BOND PROGRAM IMPLEMENTATION

DATA SCIENCE

Texas Economic Regions The economic regional boundaries appear based around Council of Government (COG) boundaries.

COGs are political subdivisions organized to guide unified development and improve efficiency within regions.

HIGH PLAINS

NORTHWEST UPPER RIO GRANDE WEST TEXAS

METROPLEX

UPPER EAST TEXAS

CENTRAL TEXAS SOUTHEAST TEXAS

Proposition 14 Create a trust fund for the creation and improvement of state parks.

CAPITAL GULF COAST ALAMO

SOUTH TEXAS

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Proposition 5 Dedicate revenue from the sales tax on sporting goods to the Texas Parks and Wildlife Department and the Texas Historical Commission.

MASTER PLAN

Standard Deviation (SD) Measures the spread of values in a dataset. Higher deviation means more variability, lower deviation indicates less variability around the average.

BOND READINESS ASSESSMENT

BOND CAMPAIGN

BOND PROGRAM IMPLEMENTATION

DATA SCIENCE

2019 Prop 5 - Voting Patterns by County Overall Votes: Yes: 1,744,732 (88%) No: 237,589 (12%)

AMARILLO

DALLAS - FT WORTH TYLER - LONGVIEW EL PASO MIDLAND - ODESSA WACO

Closest Vote % - Loving County Yes: 16 (53%) No: 14 (47%) Biggest Turnout - Harris County Yes: 321,132 (88%) No: 44,913 (12%)

Standard deviations away from the average Greater than 2 2 to 1 1 to 0

AUSTIN

0 to -1

HOUSTON SAN ANTONIO

-1 to -2 Less than -2

Biggest Blowout - Jim Hogg County Yes: 101 (96%) No: 4 (4%)

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Legend

CORPUS CHRISTI

MASTER PLAN

BOND READINESS ASSESSMENT

BOND CAMPAIGN

BOND PROGRAM IMPLEMENTATION

DATA SCIENCE

2023 Prop 14 - Voting Patterns by County Overall Votes: Yes: 1,928,021 (77%) No: 591,658 (23%)

AMARILLO

DALLAS - FT WORTH TYLER - LONGVIEW EL PASO MIDLAND - ODESSA WACO

Closest Vote % - Ochiltree County Yes: 417 (55%) No: 341 (45%) Biggest Turnout - Harris County Yes: 326,101 (76%) No: 103,431 (24%)

Standard deviations away from the average Greater than 2 2 to 1 1 to 0

AUSTIN

0 to -1

HOUSTON SAN ANTONIO

-1 to -2 Less than -2

Biggest Blowout - Jim Hogg County Yes: 250 (87%) No: 36 (13%)

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Legend

CORPUS CHRISTI

MASTER PLAN

BOND READINESS ASSESSMENT

BOND CAMPAIGN

BOND PROGRAM IMPLEMENTATION

DATA SCIENCE

Case Study #1 - City in Central Texas Economic Region CITY PROFILE Economic Region: Central Texas Total Population: 124,319 Total Property Taxes ($): $62,765,505 Total Property Value ($): $14,903,050,413 City Voter-Approval Tax Rate (%): 0.54

2022 BOND RESULTS - DEFEATED Bond Amount ($): $ 3,900,000 Votes For: 11,922 Votes Against: 13,364 Voter Turnout: 25,086 Voter Factor: 0.202 (20%) MHS Bond Factor: 0.906 MHS Golden Factor: 1.11 Identified Cluster: 1 - Coin Flip

Challenge: Defeated Bonds Get Deleted Websites are dedicated to tracking when bonds are passed, but they are deleted when they are defeated.

Future practices might consider keeping track of the defeated bonds to learn when and under what circumstances are bonds defeated to improve bond package creation.

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MASTER PLAN

BOND READINESS ASSESSMENT

BOND CAMPAIGN

BOND PROGRAM IMPLEMENTATION

DATA SCIENCE

Case Study #2 - City in Alamo Economic Region CITY PROFILE Economic Region: Alamo Total Population: 20,707 Total Property Taxes ($): $13,576,991 Total Property Value ($): $3,987,669,954 City Voter-Approval Tax Rate (%): 0.45

2022 BOND RESULTS - CARRIED Bond Amount ($): $13,000,000 Votes For: 4,425 Votes Against: 2,973 Voter Turnout: 7,398 Voter Factor: 0.357 (36%) MHS Bond Factor: 1.488 MHS Golden Factor: 1.85 Identified Cluster: 1 - Coin Flip

Key Takeaways: Multi-purpose bond soon after an ISD bond The bond’s website page states “These bond propositions target specific areas for improvement to streets and mobility, as well as parks and open space.”

The ISD passed a 2-proposition bond earlier in that year with a close difference of 4 and 8 percentage points.

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MASTER PLAN

BOND READINESS ASSESSMENT

BOND CAMPAIGN

BOND PROGRAM IMPLEMENTATION

DATA SCIENCE

Case Study #3 - City in Metroplex Economic Region CITY PROFILE Economic Region: Metroplex Total Population: 239,782 Total Property Taxes ($): $124,650,336 Total Property Value ($): $20,219,242,600 City Voter-Approval Tax Rate (%): 0.78

2019 BOND RESULTS - CARRIED Bond Amount ($): $118,000,000 Votes For: 3,590 Votes Against: 2,361 Voter Turnout: 5,951 Voter Factor: 0.0248 (3%) MHS Bond Factor: 1.5205 MHS Golden Factor: 1.55 Identified Cluster: 4 - Happy Campers

Key Takeaways: Multi-purpose bond, several propositions, big $$ Over 5 different propositions touching various municipal services.

Proposition dollars ranged $5 million - $120 million

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MASTER PLAN

BOND READINESS ASSESSMENT

BOND CAMPAIGN

BOND PROGRAM IMPLEMENTATION

Bond Planning: How to Avoid Bond Busters WILLIAM SPENCER

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Do you have a plan?

Evaluate the issues that could impede a bond campaign’s success while managing the project list of an awarded bond.

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MASTER PLAN

BOND READINESS ASSESSMENT

BOND CAMPAIGN

BOND PROGRAM IMPLEMENTATION

Learning Outcome 2 Participants will be able to identify common bond busters and strategies to address them.

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MASTER PLAN

BOND READINESS ASSESSMENT

BOND CAMPAIGN

BOND PROGRAM IMPLEMENTATION

BOND PLANNING

Understand the Political Climate The Past The Present • Historical Wins & Failures • Competing Priorities • Distrust in Government • Perceived Lack of Need • Limited Benefits • Inadequate Planning

The Future • Increased/Additional Tax Concerns • Market Concerns

Key Takeaways: Benefits of Park Master Plans Better understanding of existing conditions and community needs.

Developed strategies to serve current and future citizens.

Establishes a priority list and cost range of short-term needs.

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MASTER PLAN

BOND READINESS ASSESSMENT

BOND CAMPAIGN

BOND PROGRAM IMPLEMENTATION

BOND PLANNING

Build the Team – Finances Procure Financial Advisory team or designate staff to: • Assess financial health and debt capacity.

• Create fiscal scenarios and projections.

• Advise funding strategy (sales tax revenue vs. property tax revenue).

• Financing mechanisms include: • Tax Notes: No election required; no notice period required; 7-year maturity period.

• Certifications of Obligation: Election required if 5% registered voter petition met; 46-day notice period required; flexible funding period.

• General Obligation Bonds: Election required; flexible funding period.

• Sales Tax Revenue Bonds: No election required; may require 60-day notice period depending on issuer; flexible funding period with rate cap.

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MASTER PLAN

BOND READINESS ASSESSMENT

BOND CAMPAIGN

BOND PROGRAM IMPLEMENTATION

BOND PLANNING

Build the Team – Design Procure Design team or designate staff to: • Conduct additional public input.

• Refine priority list and cost estimation.

• Create appealing, marketable schematic layouts based on real site conditions.

• The preliminary study is a foundation for future design.

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MASTER PLAN

BOND READINESS ASSESSMENT

BOND CAMPAIGN

BOND PROGRAM IMPLEMENTATION

BOND PLANNING

Build the Team – Marketing Procure Marketing team or designate staff to: • Clearly communicate the city’s financial health and the bond’s vision and fiscal impact.

• Facilitate discussion and respond to public inquiries.

• Highlight community benefits of the bond and address false information.

• Advertise and promote the bond campaign.

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MASTER PLAN

BOND READINESS ASSESSMENT

BOND CAMPAIGN

BOND PROGRAM IMPLEMENTATION

Bond Implementation: Management Practices ZIAD KHARRAT How do you manage the plan?

Discuss the process of bond management after a bond is approved.

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MASTER PLAN

BOND READINESS ASSESSMENT

BOND CAMPAIGN

BOND PROGRAM IMPLEMENTATION

Learning Outcome 3 Participants will be able to identify the top bond management concerns and solutions.

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MASTER PLAN

BOND READINESS ASSESSMENT

BOND CAMPAIGN

BOND PROGRAM IMPLEMENTATION

BOND IMPLEMENTATION

Define Roles and Responsibilities Challenge: Clarification and definition of roles and authority of staff members Solution: Clearly define the roles and responsibilities of team members so proper communication channels are known from the beginning.

Assign a senior staff member as the escalation point of contact for items such as establishing design intent to match the City’s vision, change order authorization, and re-distribution of fund balances at the end of the project.

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MASTER PLAN

BOND READINESS ASSESSMENT

BOND CAMPAIGN

BOND PROGRAM IMPLEMENTATION

BOND IMPLEMENTATION

Schedule

Challenge: Project implementation schedule based on the City’s debt capacity Solution: Work closely with the Finance department to discuss the City’s capacity to initiate projects and expend funds over the duration of the program.

Is there any preexisting debt that needs to “fall off” before major expenditures can move forward?

There is a bell curve associated with expenditures of bond funds throughout the program. The first year or two of the bond program will be heavy in design, which is much lower in cost than construction, and the duration of design phases are longer on complex projects and delays can be expected.

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MASTER PLAN

BOND READINESS ASSESSMENT

BOND CAMPAIGN

BOND PROGRAM IMPLEMENTATION

BOND IMPLEMENTATION

Utilize The Plan

Challenge: Identifying the highest priority projects to include in the list for the bond study committee Solution: Refer to the department-wide master plan for site-specific recommendations.

In addition, having a schematic site plan will be helpful to identify and prioritize improvements in each park and help to develop budget-level cost estimates.

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MASTER PLAN

BOND READINESS ASSESSMENT

BOND CAMPAIGN

BOND PROGRAM IMPLEMENTATION

BOND IMPLEMENTATION

Gather & Organize The Data

Challenge: Developing and refining scope of work with estimated costs for identified projects Solution: Hire a consulting firm to assist with this effort.

Allocate adequate time, if possible, to conduct site investigations for each project to identify any additional items that may need to be included in the scope.

Extensive discussion must be had regarding cost escalation over the duration of the bond program.

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MASTER PLAN

BOND READINESS ASSESSMENT

BOND CAMPAIGN

BOND PROGRAM IMPLEMENTATION

BOND IMPLEMENTATION

Contract & Administer Work Challenge: Program management contractor Solution: Scrutinize program management agreement with contractor to ensure all desired scope of work is identified.

Design reviews and construction inspections are critical items that must be considered for inclusion in addition to administrative responsibilities such as procurement, contracts, billing, and project management.

Ensure project managers assigned to your projects have the technical expertise to successfully manage the projects (otherwise, City staff will be required to perform a much higher level of quality control and quality assurance beyond a normal baseline).

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MASTER PLAN

BOND READINESS ASSESSMENT

BOND CAMPAIGN

BOND PROGRAM IMPLEMENTATION

Final Thoughts Learning Objective 1: Participants will know the key factors related to statewide bond trends.

Learning Objective 2: Participants will be able to identify common bond busters and strategies to address them.

Learning Objective 3: Participants will be able to identify the top bond management solutions.

Poll Results: Perceived Key Influences Poll Results: Bond Busters Audience Questions?

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Contact Us With Further Questions

Dr. Laci McRee

William Spencer

Ziad Kharrat, RLA, MPA

903.918.0262 LaciMcRee@gmail.com

903.597.6606 whs@mhsplanning.com

940.349.7275 ziad.kharrat@cityofdenton.com

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