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

William Spencer

PRESIDENT & CIVIL ENGINEER

MHS Planning & Design

FAVORITE RECREATIONAL ACTIVITY

“Chasing our five children at their sporting events”

Meet the Speakers

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.”

ASSISTANT DIRECTOR OF PARKS & RECREATION

City of Denton PARD

FAVORITE RECREATIONAL ACTIVITY

Ziad Kharrat, RLA, MPA

“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.

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:

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

Learning Outcome 1

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

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)

2023 Descriptive Stats

Independent School District (ISD)

Water District (WD)

City Bonds

County Health & Hospitals District (HHD)

Community College District (CCD) TOTAL

Non-Park Bond (carried)

Non-Park Bond (defeated)

Park Bond (carried)

Park

Morethan$260$250to$260$220to$240$200to$220$180to$200$160to$180$140to$160$120to$140$100to$120$80to$100$60to$80$40to$60$20to$40Lessthan$20

Park Bond Amounts (in Millions)

Five Year Descriptive Stats

Average Carried Park Bond: $38,730,485

Average Defeated Park Bond: $7,064,286

Morethan$260$240to$260$220to$240$200to$220$180to$200$160to$180$140to$160$120to$140$100to$120$80to$100$60to$80$40to$60$20to$40Lessthan$20

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)

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

Economic Clusters - 6 Identified Clusters

Cluster 1

Coin Flip

Cluster 2

Red Lights

Cluster 3

All Systems Grow

Cluster 4

Happy Campers

Cluster 5

Big Fish, Little Cluster

Cluster 6

Green Lights

Economic Clusters - Cluster Data

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.

Proposition 5

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

Proposition 14

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

Standard Deviation (SD)

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

NORTHWEST

SOUTH TEXAS

SOUTHEAST TEXAS

UPPER EAST TEXAS

WEST TEXAS

UPPER RIO GRANDE

ALAMO

CAPITAL

CENTRAL TEXAS

GULF COAST

HIGH PLAINS METROPLEX

2019 Prop 5 - Voting Patterns by County

Overall Votes:

Yes: 1,744,732 (88%)

No: 237,589 (12%)

Closest Vote % - Loving County

Yes: 16 (53%)

No: 14 (47%)

Biggest Turnout - Harris County

Yes: 321,132 (88%)

No: 44,913 (12%)

Biggest Blowout - Jim Hogg County

Yes: 101 (96%)

No: 4 (4%)

AMARILLO

DALLAS - FT WORTH

TYLER - LONGVIEW

EL PASO

MIDLAND - ODESSA

WACO

AUSTIN

HOUSTON

SAN ANTONIO

Less than -2

CORPUS CHRISTI

2023 Prop 14 - Voting Patterns by County

Overall Votes:

Yes: 1,928,021 (77%)

No: 591,658 (23%)

Closest Vote % - Ochiltree County

Yes: 417 (55%)

No: 341 (45%)

Biggest Turnout - Harris County

Yes: 326,101 (76%)

No: 103,431 (24%)

Biggest Blowout - Jim Hogg County

Yes: 250 (87%)

No: 36 (13%)

AMARILLO

DALLAS - FT WORTH

TYLER - LONGVIEW

EL PASO

MIDLAND - ODESSA

WACO

AUSTIN

HOUSTON

SAN ANTONIO

CORPUS CHRISTI

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.

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.

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

Bond Planning: How to Avoid Bond Busters

WILLIAM SPENCER

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.

CompetingPriorities

DistrustinGovernment

EInadequatePlanning conomicConcerns

Learning Outcome 2

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

Understand the Political Climate

The Past

• Historical Wins & Failures

• Distrust in Government

The Present

• Competing Priorities

• 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.

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.

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.

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.

Bond Implementation: Management Practices

ZIAD KHARRAT

How do you manage the plan?

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

Learning Outcome 3

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

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.

Schedule BOND IMPLEMENTATION

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.

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.

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.

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).

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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