Holding an effective bond election

Holding an Effective

Bond Election

Holding an Effective Bond Election

The charts below detail the relationship between May and November pass/fail election results since 2006:

75%

25%

May Bond Election Results (by # of Elections)

Passed Failed

72%

28%

November Bond Election Results (by # of Elections)

Passed Failed

Holding an Effective Bond Election 2

The charts below detail the relationship between May and November election amount ($) results since 2006:

85%

15%

November Bond Election Results (by Par Amount)

Passed Failed

82%

18%

May Bond Election Results (by Par Amount)

Passed Failed


November 2010 Results

• 41 elections• 70% passed

When do you consider holding a bond election?

Do we have a need?

Needs Assessment

Board creates needs commit-tee

Needs committee makes recommendations

Board reviews needs commit-tee recommendations and di-

rects staffBoard considers approval of

bond election

Financial Impact Study

Board approves bond election

Bond election strategy im-plemented

Bond election

0 1 2 3 4 5 6 7 8 9 10 11 12 13

Months


Important steps of calling a bond election:

• Indentifying district needs and projects.

• Identifying the financial impact.• Understanding the district’s responsibility

• Creating a strategic election campaign.


Indentifying district needs and projects:

• Identifying the needs of the district is critical to a bond election’s success.

• Projects that are too simplistic might not breed confidence for a well thought out plan.

• Specialized projects can sometimes create animosity or generate a positive, motivated electorate.

• Are improvements to meet needs spread throughout your district?

• Projects that are too costly and overreaching can cause mistrust.


• Who assesses your district’s needs?

– Staff

– Architect

– Specialized consultant

– Community committee


• What are the assessment criteria?– School Site– Structural and Mechanical– Maintainability– School Safety and Security

• Site Safety• Building Safety• Emergency Safety

– Educational Adequacy• Academic Learning Space• Specialized Learning Space• Support Space

– Environment for Education– Specialized district needs/wants


• Well researched cost estimates– It is important to have a qualified construction

team to assist.– Is there room for cost overruns?– Are you anticipating future competitive factors

from neighboring projects?– Will you have someone looking out for your

district’s best interests on proposed projects when the bond election is successful?


Identifying the financial impact:

• Bond elections typically mean tax increases, so accurate projections and achievable plans are critical for developing trust for the bond election.

• State formulas for Texas school district finance are some of the most complex state funding programs in the nation.

• Having a competent financial team is critical for achieving your District’s goals and communicating effectively with your voters.

What are the costs?


• Accurate tax impact projections

– What are the chief variables that will impact the tax rate?

– Where do other Districts sometimes get tripped up?

– Are there innovative or cost saving financing options?

– How do I know I have the right team?


Market conditions and their effects on tax rates• An ISDs tax rate is based on several factors,

with the two most prominent factors being:– Assessed Valuation (“AV”) within the district– Borrowing amounts and costs

• The table below details the general effect on a district’s tax rate based on various circumstances

Effect on Tax Rate

Interest Rates Higher Interest Rates Lower AV Increases AV Decreases

Up Down Down Up


• 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

• Depending on certain assumptions (see below), the table below details the effect on the tax rate:

Tax Rate Changes - Assuming $50 MM Bond Issue1

Rates Higher by 2% Rates Lower by 2% Assessed ValueIncreases 10%

Assessed ValueDecreases 10%

$0.40 $0.26 $0.30 $0.36

1 Assumes total assessed valuation of $1 billion.


Texas ISD bond election results vs macroeconomic market conditions:

• During the recession of the past couple years, ISDs have seen the success rate of bond elections decline from a high of 85% in May 2007 to 60% in May 2010

• The number of elections has also decreased from a high in 2007 of 168 separate bond elections to only 81 elections in 2009

• The following chart details the success rate for Texas ISDs since 2006 as compared with the unemployment rate and GDP growth rate


-

1,000,000,000

2,000,000,000

3,000,000,000

4,000,000,000

5,000,000,000

6,000,000,000

7,000,000,000

8,000,000,000

9,000,000,000

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

Tota

l Bon

d El

ecti

on P

ar A

mou

nt

Historical Bond Election Results

Passed Failed


Communicating with Voters

Ballot Language

How do you describe the projects?

Broad Language• “THE ISSUANCE OF $10,000,000 OF

SCHOOL BONDS . . . AND LEVYING THE TAX IN PAYMENT OF SUCH BONDS”

How do you describe the projects?

Specific Language• “FOR A PROFESSIONAL AND

TECHNICAL CAREER HIGH SCHOOL”• “TO RENOVATE, IMPROVE AND EQUIP

TWELVE ELEMENTARY SCHOOL BUILDINGS AND TWO MIDDLE SCHOOL BUILDINGS”

Communicating with Voters

Political Advertising

Texas Election Code § 255.003Unlawful 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.

“Political Advertising”

A communication that supports or opposes a measure and that:

(A) in return for consideration, is published in a newspaper, magazine, or other periodical or is broadcast by radio or television; or

(B) appears in a pamphlet, circular, flier, sign, internet website or similar form of written communication.

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

Clear “Advocacy”

A communication that “contains a clear request for the reader to support” the measure

• Vote for . . .• Support . . .• Defeat . . .• Reject . . .

“Cross[ing] the line from a communication that is factual to a communication that advocates passage of the bonds”• “Show that you care about

education”• “[C]itizens now have the

opportunity to position the [District] for the 21st century”

• “Good schools are the foundation of a good community”

• “Put children first”• Issuing bonds is the “best

solution”

On the Border

• Studies showing how bond passage or failure will affect education mission

• Citizen committee recommendations

• Art/essay contests• Voter registration drives

Common Sense Approach

• Know Your Community• Educate, Don’t Advocate• Don’t Stir People Up!• Don’t Try This Without Bond

Counsel!

Creating a strategic election campaign:

• Implementing an effective bond election takes a lot of hard work and dedication to a well-thought out comprehensive plan.

• Success comes from understanding the obstacles and clearly communicating your needs to your voters and getting educated voters to the polls.

How are you going to succeed?


• Clearly Identifiable Goals

– Are there several objectives or just one?

– Is everyone aware of the rules?

– Does each team member know their role?

– Who will be the quarterback?

– How will information be communicated?

Strategic campaign


• Professional Consultants

• Administrative Staff

• Community Leaders

Strategic campaign


Understanding the political landscape:

• Identifying your voters and understanding their perspective is critical to producing a positive election result.

• There are a host of factors that can impact the minds of your voters and how they will perceive your communication and the needs of the district.

• Interviews/Surveys

Who are your voters?


Effective elections have common factors:

• Clearly identifying the needs.

• Trust of the community.

• Unified board member support.

• Good dynamic communication.

• Community leaders and grass roots support.

• Panel of experts helping with the election.


What happens if you already called an election and it failed?


The bond election failed…Now What?

• Your district has been working feverishly for the last six months in preparation for the bond election and the bond fails.

• It is understandable that you are frustrated. However, the needs still exist.

• Understanding why a bond election failed can be critical and integral to the success of future bond elections.

Dealing with emotions and the fact that the needs remain


• Internal factors.

• External factors.

• Communication vehicles used (print, verbal, and media).

• Organized opposition.

Factors leading to bond failure:


Understanding the internal factors:The perception “inside”

• Compile an internal sample of opinions from district staff and board members.

• Interviews and/or surveys will provide insight of the election results through district eyes.

• Data will be compiled to understand if the district’s internal perception of the loss aligns with those of the voters.


Understanding the external factors:The perception “outside”• Conduct interviews and/or surveys with a

good cross-section of local residents to understand their perception of why the bond election failed.

• Interviews and data will be compared against the “inside” opinions and data to identify any variances between the “outside” and the “inside” perceptions.


Evaluating the communication:print and media spots

• Review media used for promotional and informative purposes during failed bond election…clarity, accuracy, and strategic input

• Example information reviewed:– Election ballot– Informative brochure(s)– Information produced by any PAC’s (political

action committees)– Any internet or other media presentations


Evaluating organized opposition:understanding bond opponents

• Review articles, editorials, and print ads that the opposition disseminated.

• Determine accuracy and impact on the election results.

• Meet with opponents and discuss ways to work together in the future.


School Bond Case Study(by Holt, Wendt, and Smith – 2006)

• 2 failed bonds in late 1990s became 2 bonds passing in 2002 and 2003

• Data collected after bonds failed

• “Why did bonds fail?” theme:– No trust in divided board– Poor leadership– No answers to questions– Lack of Trust


School Bond Case Study

• Data collected after bonds passed

• “Keys to bonds passing” theme:– 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


Questions?• Rudy Segura, McCall, Parkhurst & Horton L.L.P.

(512) 590-1950 [email protected]• Jeff Clemmons, TASB:

(800) 580-8272 extension [email protected]

• Trent Toon, First Public, Sub of TASB (800)558-8875 [email protected]• Kara Winebright, First Public, Sub of TASB

(800)558-8875 [email protected]

mailto:[email protected]



Holding an effective bond election

Education

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