E-SPLOST and Capital Program Update Presentation (5.1.25)

AID 1812313 · View on Simbli

Agenda Item

d. ESPLOST VI Priorities

Summary: Presented by: Mr. Erick Hofstetter, Chief Operating Officer, Division of Operations
E-SPLOST/ CAPITAL IMPROVEMENT UPDATE
             M AY 1 , 2 0 2 5
           B O A R D R E T R E AT
         CONTENT AND TOPICS
1. E-SPLOST PROGRAM AND FORECAST
2. E-SPLOST- METHOD AND PLANNING
3 . A LT E R N AT I V E F U N D I N G ( C O P S )
E-SPLOST PROGRAM AND FORECAST
                         BUDGET & REVENUE – E-SPLOST V
Program entirely budgeted from the beginning; Project budgets could not be
adjusted without affecting entire program
 $700,000,000                                                                                                                                                                                                                                                                                          $700,000,000


 $600,000,000                                                                                                                                                                                                                                                                                          $600,000,000


 $500,000,000                                                                                                                                                                                                                                                                                          $500,000,000


 $400,000,000                                                                                                                                                                                                                                                                                          $400,000,000


 $300,000,000                                                                                                                                                                                                                                                                                          $300,000,000


 $200,000,000                                                                                                                                                                                                                                                                                          $200,000,000


 $100,000,000                                                                                                                                                                                                                                                                                          $100,000,000


          $0                                                                                                                                                                                                                                                                                           $0
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4/28/2025                                                                                                                                                                                                                                                                                                             4
      BUDGET & REVENUE – E-SPLOST VI
     Project budgets only added upon Board approval; future potential
     budget issues no longer require immediate action, allowing time to see
     if forecast is accurate and to determine best course of action

     $700,000,000                                                                                                                                                                                                                                                                                 $700,000,000


     $600,000,000                                                                                                                                                                                                                                                                                 $600,000,000


     $500,000,000                                                                                                                                                                                                                                                                                 $500,000,000


     $400,000,000                                                                                                                                                                                                                                                                                 $400,000,000


     $300,000,000                                                                                                                                                                                                                                                                                 $300,000,000


     $200,000,000                                                                                                                                                                                                                                                                                 $200,000,000


     $100,000,000                                                                                                                                                                                                                                                                                 $100,000,000


              $0                                                                                                                                                                                                                                                                                  $0
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4/28/2025                                                                                                                                                                                                                                                                                                        5
     E-SPLOST VI PROGRAM LEVEL BUDGET APPROACH

 • Revenue forecasts are intentionally low, meaning revenue is likely to
   exceed forecast
 • Immediate action is no longer required when estimated cost exceeds
   forecasted revenue
 • District has greater flexibility to ensure E-SPLOST budgets do not exceed
   revenue:
   1. Delay award of large contracts until sufficient revenue is collected
   2. Reduce scope of upcoming projects to reduce financial commitment
   3. Defer projects to future funding source
   4. Cancel new construction projects
        ▪ Renovation projects can only be deferred, not canceled, unless
             facility is closed
        ▪ All existing new construction projects are already fully
             committed/contracted



4/28/2025                                                                      6
          BUDGET & REVENUE FORECAST – E-SPLOST VI
Project budgets only added upon Board approval; Estimate-At-Completion of projects
floats up and down as appropriate
   ➢Future potential budget issues do not require immediate action, allowing time to see if
    forecast is accurate and to determine best course of action
     $900,000,000                                                                                                                                                                                                                                                                                 $900,000,000

     $800,000,000                                                                                                                                                                                                                                                                                 $800,000,000

     $700,000,000                                                                                                                                                                                                                                                                                 $700,000,000

     $600,000,000                                                                                                                                                                                                                                                                                 $600,000,000

     $500,000,000                                                                                                                                                                                                                                                                                 $500,000,000

     $400,000,000                                                                                                                                                                                                                                                                                 $400,000,000

     $300,000,000                                                                                                                                                                                                                                                                                 $300,000,000

     $200,000,000                                                                                                                                                                                                                                                                                 $200,000,000

     $100,000,000                                                                                                                                                                                                                                                                                 $100,000,000

              $0                                                                                                                                                                                                                                                                                  $0
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4/28/2025                                                                                                                                                                                                                                                                                                        7
E-SPLOST METHOD & PLANNING
           2025-2026
                               WHAT IS E-SPLOST?


Legal Authority
    Constitution of the State of Georgia - Article VIII, Section VI
    GA Code § 48-8-140-144 (2024)


•    1% sales tax on goods sold in the county (1-cent)
•    Used only for school capital improvements
•    Must be approved by voters
•    Five Year referendum collected and distributed in 60-monthly
     distributions




4/28/2025                                                             9
                  WHY E-SPLOST MATTERS

•     Local control of school funding
•     Keeps property taxes stable
•     Primary funding driver to build,
      improve, and equip schools
      without dipping into general funds




    4/28/2025                              10
             WHAT HAPPENS IF IT’S NOT RENEWED?


  …Would likely face significant challenges in funding capital
  projects, may need to rely on alternative funding sources;
  more specifically:

  Capital Projects and Infrastructure:     Public and Community Impacts:
  • Projects on hold or canceled           • Decreased community benefits
  • Delayed maintenance                    • Increased public scrutiny
  • Reduced access to technology:
  • Delayed equipment upgrades

  Alternative Funding/Budgetary Impacts:
  • Increased property taxes
  • Reallocation of existing funds
  • Seeking alternative funding



07/08/2019                                                                  11
            STRUCTURE OF THE E-SPLOST PROCESS



     1      • Needs Assessment

     2      • Develop Project List

     3      • Board of Education Approval

     4      • Voter Referendum

     5      • Sales Tax Collection

     6      • Project Implementation

     7      • Oversight and Accountability




4/28/2025                                       12
            DEKALB E-SPLOST RESOLUTION




                                     E-SPLOST VI Concurrent Resolution


    E-SPLOST VII Key Dates:
    • E-SPLOST VII Proposed Voting Date: November 3, 2026
    • E-SPLOST VII Board Resolution Date: June 2026 Board Meeting



4/28/2025                                                                13
                     DeKalb County School District
                             Quick Facts




  $2,792,262,918.01+            $12,792,259.89
                            Average Monthly Collection   Georgia Tax Center
    since January 1, 1999
                            (March 2024 – March 2025)



07/08/2019                                                                    14
            DEKALB E-SPLOST METHODOLOGY

            E-SPLOST VI (Nov 2021)
  …the actual amount of the proceeds to be
  determined by the ratio of DeKalb County
  School District students to Atlanta Independent
  School System students and City of Decatur
  School System students as determined by the
  latest FTE count prior to the referendum
                                 GA Code § 48-8-143 (2024)


   This will be the same method for E-SPLOST VII

    Total         $ 816,235,158.00         100%

    DCSD         $ 742,773,993.78           91%
     APS         $   32,649,406.32           4%
     CSD         $   40,811,757.90           5%


4/28/2025                                                    15
    E-SPLOST VII RESOLUTION PLANNING




4/28/2025                              16
     RESOLUTION TIMELINE
     Tentative
                                                                                                                  2025                                                            2026

                                                                              March   April   May   June   July          August   September   October   November   December   January - June

    DISCOVERY
                                        Enrollment Projections
                                        Population/Housing
     Demographics                       Live-Attend Analysis
                                        GIS Mapping

                                        Design Standards
     Standards                           New and Renovation
                                        Educational Specifications

                                        Review & Validation
     Policy / Practice
                                        Board Level Interaction


    VALIDATION

                                        Validation of Previous Data
     Condition Assessments
                                        On-Site Validation (where required)


                                        On-Site Evaluation
     Adequacy/Suitability Assessments
                                        (All Campuses)


    SYNTHESIS
                                        Summary Level Data Report
     State of the Schools Report        Primary Plannnig Document
                                        Board Engagement

    PLANNING
                                        District Level Work Sessions
     Options Devevlopment               Board Level Interacation
                                        Surveying
                                        District Level Work Sessions
     Recommendations Development        Board Level Interacation
                                        Surveying


    FACILTIES PLAN

                                        5-year priority
     Report                             10-15 year vision
                                        Board Engagement


    SPLOST PLANNING

                                        Guided from Facilities Plan
     Scope / Timeline / Costs           Scheduling / Costing
                                        Board Level Interaction


     Community Engagement               TBD


                                        5-Year SPLOST Program Priorities
     Report
                                        Board Engagement




4/28/2025                                                                                                                                                                                      17
   ALTERNATIVE FUNDING METHOD
C E R T I F I C AT E S O F PA R T I C I PAT I O N F I N A N C I N G
                  CERTIFICATES OF PARTICIPATION (COPS) FINANCING


A particular type of lease-purchase contract financing that school districts sometimes use

•   COPs transactions function much like general-obligation bonds.
•   COPs are sold to investors on the municipal bond market, with each certificate
    representing an undivided interest in the right to receive periodic repayment of
    principal and interest on the amount originally received from the COPs sales.
•   Unlike general obligation bonds, however, school districts retain the authority to
    choose to not renew a COPs transaction beyond the school district’s current fiscal year.
As opposed to other lease-purchase contracts where the lender may be a single party (i.e.,
a bank), the use of COPs may be more advantageous where the amount of money the
county seeks is more than a single bank may be willing to loan via a lease-purchase
contract. As a result — and similar to bonds — COPs may be purchased by multiple
investors, thereby broadening the borrowing market for a particular transaction.




4/28/2025                                                                                 19
            EXAMPLE PROJECTION




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     EXAMPLE DEBT SERVICE SCHEDULE




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QUESTIONS AND COMMENTS
       THANK YOU