Value Delivered:

To meet the demands of a growing population in Santa Clara County, Evergreen Elementary School District has successfully obtained bond authorizations to build new schools four times over the past twenty years. Each of these bond programs was structured by KNN to allow the District to campaign based on a "no tax rate increase" pledge - assuring voters that even with approval of the new bond measure, tax rates would not increase beyond their present level. For the November 2006 election, KNN assisted Evergreen in obtaining its largest bond authorization to date: $150 million.
   
Strategic Implementation:

With $77 million in bonds outstanding and an escalating payment schedule, this was no easy task. KNN ultimately proposed a solution that involved multiple bond series, deferred debt service structures, and, initially, restructuring of the existing bond program to create additional capacity for debt service in the early years of the program. By refunding less than $5 million of the existing bonds, KNN reduced tax year 2007-08 payments to such that the combination of debt service on existing bonds and debt service on $30 million of new bonds was less than the original debt service prior to the refunding.

Although the original plan called for the two series of bonds to sell together, KNN developed a better solution that eliminated federal tax law concerns surrounding the issue of a common plan of financing by selling the 25-year, $30 million new bond competitively on February 7, 2007, and the $4 million refunding on February 22, 2007. While KNN is generally a strong advocate for fully competitive sales, the firm chose to sell the refunding by invited bid to allow more flexibility in bond structure and pricing.
   
Results:

By moving the bond payments for the $4 million out of the first three years, Evergreen realized enough cash flow savings to effectively issue the new bond at no new cost to taxpayers in 2007-08.