April 22, 2026 Work Session

001at 6:00. >> So, I'm going to go ahead and call to order the Gladstone session for April 22nd, 2026 at 6 p.m. >> and we're going to start out with our board operating. We're just going to review these. Um, we don't work sessions. We don't make decisions. So, we're not going to be making any decisions, but we are going to just review what the board agreements are. um we have some new people on board since the board agreements were agreed upon and uh when we have the rental district so it just was a good time and I thought it was time to revisit these and um have just a you know bit of discussion about them we want to change or add delete again we're not making any decisions they're just suggestions and then when

002we have our our uh retreat this we will delve more deeply into these and then refine them for for next school year. So, um any anything so far that um if you had a chance to look over them before the meeting or not? Might be nice to read them out loud. >> Okay. >> I don't know if you care about that, but >> I always do that alone. >> Um we just go around the room maybe and uh so I'll start out with the purpose to enhance the teamwork among team me among members of the board. We commit ourselves individually and collectively to the following board uh operating agreements. So the board roles and responsibilities. Nicole, do you want to be sure? Number one. >> Uh, number one, focus on governance, policym, strategic planning, eg

003district goals, long range plan, capital bond, strategic plan, and evaluation of the superintendent. Uphold the legal compliance and confidentiality requirements on all matters arising from board meetings and executive sessions. >> Recognize the role of the chair to speak for and about the board to press and public groups. Recognize the role of the chair to convene meetings. Execute documents as appropriate and develop the agenda with the vice chair and superintendent. >> Perform an annual self-evaluation to receive feedback on the board's effectiveness with the district and community. Build a professional understanding of board rules or develop further as a functioning group. >> Participate annually in establishing goals and objectives for themselves in the district. Act as ambassadors to the schools, the community and the district. Notify the superintendent and school administration before visiting a school and the

004role of a school board member. >> And then how we operate, make decisions. >> Sure. Make decisions as a whole board only at properly called. >> Support decisions of the majority. Once a decision is made, members will support the decision of the majority in public and in the community. Refrain from revisiting the topic unless new information impacts the decision and needs the full board's consideration. >> Avoid surprises to other board members or the superintendent. Use the pro uh use the process to place items on the agenda. >> Communicate directly with the superintendent when information is needed or a question arises. Specific questions concerning information contained in the board packet may be addressed to the person writing the >> All right. how we communicate. Number one, the chair responds to group emails sent to the board.

005Be mindful that you represent the board in public and that no individual board member has the authority to speak for the board with the exception of the chair for number three above. >> Board members will communicate with other um with one another should an issue or problem develop between them. The chair or designate will intervene and mediate if needed. Communicate directly with the superintendent when information is needed or a question arises. >> Direct public complaints to the district complaint process and policy, remembering that the board is the last stop, not the first stop. >> And then board expectations of the superintendent. Number one, work toward becoming a team with board members. >> Respect and acknowledge the board's role in setting policy and overseeing the performance of the superintendent. work with the board to establish a

006clear vision for the school district and prepare goals annually. >> If a board member needs more information about agenda item, the superintendent or appropriate designate will make themselves available prior to the meeting. >> Arrange a meeting with a board member and another staff member as needed >> in a timely fashion. Inform the board of all critical information and data, including the latest in educational research and important happenings within the district across the state and federally. And lastly, listen closely and provide follow-up information to board members on concerns and issues they have referred to the superintendent to close the communication. And Dr. Gray has um has said that she'd kind of like to add superintendent expectations of the board also. So that's something that we can work on following the summer. any any comments or suggestions

007or anything at this point? >> Yeah, we're going to revisit this at the summer retreat. >> Yeah. Yeah, this was just to kind of resurface it. Uh we just thought it was timely to resurface it and I have a couple suggestions of some things to potentially add. Um and I can mention those now or we can just talk about those during the the retreat. I think for me I I do too as well but I think the retreat would be a good time to so that we have more time for in-depth discussion and then can >> Yeah. Yeah. I think that's a good idea. >> Okay. >> I think that's a good idea. >> So we'll do that. This was just to just like I said resurface this document um that it did exist does

008exist and and we do need to it it needs to guide our work. So, >> all right. >> I particularly like on how we communicate number five uh because it says the direct public complaints to the district complaint process and policy remembering the board is the last stop and not the first stop. So, I really appreciate that because um definitely we want to route public complaints through our public complaints >> process through policy KL. >> It's really important that we follow that um because it's orderly >> and then it follows a certain process and then the board would be the last step, not the first step. So, you're in the grocery store and somebody sees you. I know what happens. You know, >> I get it. But then you listen politely and then pass along

009the issues to the superintendent so I can do some investigating and I really appreciate that a lot. It's very very helpful to me. Problems can be resolved that way. You know when when people the general public might make a a complaint like they have to the board that's not that's not how problems are solved. they they're solved through um through a process. >> All right, we'll have further discussion on that. And next up is the bond levy rate analysis and we have our guest here. Welcome. >> Yes, thanks for having us. >> Thank you. Uh thank you for having us here. I appreciate it. Um I feel like um u we're flyers here. Uh you guys definitely have some deep knowledge of what we've been talking about. I promise we won't talk to birds tonight.

010>> I feel at this point we should have punched something. >> Yeah. Right. Your full presentation is pretty. >> Exactly. >> Well, I have admittedly. >> So yes, thank you. Um appreciate that managing introductions. David Williams with Piper Sand and joining me. >> Hi, I'm Elena Ba. I was on the call with you guys last week or so, but my first time being here. So, nice to meet you all. >> And I think this is your first we're meeting postmaternity. >> It is. >> There you go. There you go. The uh the eighth old at home nursing and ear infection. So, we're >> very appreciative of over here. first year infection. >> Yeah. Yeah. >> Um let's see. I was getting a little bit of PTSD uh hearing call policy KL mentioned there. Um when

011I was at Beaver in the school district, one of my jobs was managing the KL complaint process once it got to the superintendent and board level. So um okay, let's talk bonds instead. Uh okay. So what we've got uh for you tonight is um a lot of slides here. Uh want to reset the stage, do a little bit of bonds 101 on the front um just to remind us all of the the sort of variables and the ports here um for the vast audience watching on the live stream or pulling up the recording later can be helpful. Um and then we have quite a number of scenarios to walk through which um you know remembering from the previous conversations as we move forward in time the good news of course is coming to the terminal

012phase of your existing geos um it kind of opens the door if you will to an infinite set of possibilities um and hopefully the ones we're presenting give you kind of some bookends to oper operate inside as you finalize um what conversation you want to have with voters. So I assume this will click down on the button. That's right. Okay. So let let's uh remind ourselves what is a general obligation bond. Um of course this is just our fancy fancy public finance way of talking about debt, right? Bonds are just the debt that the district incurs. They operate much like you would think a mortgage would operate generally, you know, duration and interest rate and all that kind of thing. Um, however, they do function slightly differently in that they are a um, the way

013you would be doing them, they are a public security. So, they are a tradable security that individual investors will purchase and trade uh, on the open marketplace, not on NASDAQ or S&P or anything like that. It operates in a private public marketplace. onetoone uh transactions amongst uh individual purchasers, right? Um the the functional pieces of course as we talk about a couple of pieces there the magic in go bonds are you are issuing them with sort of the highest credit quality available. Not that you are the highest rated public entity but public entities in general um are generally high rated. you are relatively high rated. It's not, you know, um size is a function of rating. So the larger the jurisdiction generally the better the rating. So the state has a a fantastic rating and

014you're going to be below that. You do get the state rating applied to your geo bonds which is also very helpful. Um but a geo bond in itself. So you can issue multiple types of debt, but a geo bond is the highest quality debt you can issue because it comes with the golden ticket. And the golden ticket is your ability to levy enough taxes to pay the debt service, right? The voters essentially give you cart launch. Go ahead and levy on us and we'll pay whatever it takes to pay the debt service. So think about it from the investor perspective that's buying your debt, right? They're taking on the risk. It's really low risk that you're going to default on this thing because you have the backing of voters saying to it, right? So that

015that's really what we're talking. The other piece on geo bonds that's critical from an investor perspective is that the interest earned on again remember think about this from the investor who's buying your debt right uh you're going to pay them an interest payment every 6 months and a principal payment annually right well the interest payment is income geo bonds are tax-free so that income to that investor they pay no federal or state income taxes on that earnings state income taxes only if they're an Oregon uh resident Oregon taxpayer federal income taxes regardless of their residency right so the geo bonds have this sort of special ingredient there think you know high netw worth individual living oh I don't know lake asgo or the west hills or something like that maybe they're retired you're going to

016agree to pay them 5% interest every six months and in exchange they don't pay any income tax on it right it's great great deal for the investor So, so that's the other sort of magic bonds. Okay. Uh, geob bonds of course they are not limited by measure five and measure 50. Um, those those measures matter and and we do talk about that a little bit. I know we've talked about it before, but they're not they're they're unlimited. Uh, and they can technically be approved by voters at any of four ballot dates throughout the year. However, how many of you remember the last time we had a March or September ballot? You probably don't. Nobody uses those election dates anymore for the big reason that the May and November elections, the double majority does not apply

017to the ballot. Right? So, this is the old requirement that you had to get both a 50% turnout and a 50% yes on the same ballot. In fact, many districts would often get 50% yes, but fail to get the 50% turnout. So, we changed that in the early um modified that statute. So, May and November doesn't apply. The other reason is May and November, you're sharing the cost of the election with other people. When you put something on the ballot, even when you schoolboard members run, the school district has to pay for that that portion of that ballot. And if you were on a March ballot all by yourself, the district is on the tech to pay for that entire election cost to the election division. So just funny works though that are helpful to

018know. So if you're on a November ballot, for instance, very crowded ballot, there are lots of people sharing the cost of that ballot, right? So, it's going to be a much smaller um hit team to you. Um, school districts also have a statutory limit on the amount of debt they can borrow. The amount of geo debt, it is 7.95% of your real market value in the jurisdiction for Gladstone. That's just over $180 billion. that will be a pretty phenomenal levy rate that I'm guessing um >> yeah because of your past history but certainly in spite of your past history you're definitely not passing say a $15 a th000 levy rate um for that um and lastly when you go on the ballot your ballot title is required to have three items and then it will

019have a fourth so the ballot title is required to have a not to exceed amount so how much up to do you want to borrow 180 million right can't borrow more like 40 million or something maximum borrowing a permitted use of those proceeds so what are you going to do with the money think about this is like your contract with the voters right how how are we going to spend it and then the maximum duration of that debt 10ear debt 20-year debt etc right now you're also going to put in your ballot title because it has been considered best practice in fact for a little while. Secretary of State required it. I don't believe they require it anymore, but everybody still does it because everybody asks an estimated levy rate. But it is an estimated

020levy rate um that you are not bound to. That is not a a limit. The voters don't approve a levy rate. They approve a borrowing amount, a duration, and a use of proceeds. That's what they approve on the ballot. Okay? We'll talk a little bit about why that matters. What can you use your geo bonds for? Well, uh the shorthand is anything with useful life of more than one year, right? So, a capital expenditure. Um the constitution says the useful life of more than one year. There are a couple other things. The constitution says you cannot use it for routine maintenance. These are these are wildly undefined terms. So, your mileage may vary on what's routine and what's not routine. Um, so generally you look at sort of these buckets of uses, right? Land purchasing,

021remodeling, building, um, etc. But again, anything with a use of useful life of more than one year, as long as you describe it in your ballot, right? So if you say in your ballot title, hey, we're going to build a new elementary school, pass a bond, that's great. You decide we're buying Chromebooks for the high school, that's a no-go, right? You can buy Chromebooks for the high school if you've put that in your ballot. Right? So that thing >> uh the other thing um that is a little weedy on this is you cannot basically out borrow the life of the thing you want to do. Right? So this is I'm not going to take out a 50-year debt for a car I'm purchasing or 20-year debt for Chromebooks. They're not they're not going to live

022that long and I don't want to keep paying debt. So the way it is written for bond land because let's say you did a $50 million bond. There's going to be a lot of things in there. There's not one item. It is the weighted average life of the projects cannot has to exceed the weighted average life of the bonds. So generally 20-year bonds are going to have a weighted average life of say 11 or 12 years. And then your project load that you're using that money for has to have a weighted life that exceeds the bonds. The reason it works on a weighted is remember when we talk about bonds, your bonds are sliced up in one-year increments. So let's say you have a bond package that has a a a building we're either building

023brand new or doing really significant remodel work on. And then we've got um a bunch of HVAC work that we're doing. And then we also want to do some well these are three really distinct lifespans on these projects. The building itself maybe a hundredyear lifespan. Let's call it 50. HVAC maybe that's got like a 20 year or 25 year lifespan. Chromebooks if they're in the middle school one year maybe like let's call them a threeyear lifespan. Right? So but I've taken out 20ear debt. Well first of all your building is going to have a it's going to be the most expensive thing. So, it's on a weighted average, it's going to blow through that, right? But in bond land, the way to sort of conceptually think about it is the maturities that you're paying back

024in the first couple of years, that's the money you're using for the Chromebooks, whereas the maturities you're paying back later are the funds used for the building. Obviously, it's not done in an accounting way. you don't account for that but that's just the way bond land has settled on how do we define you know the appropriate use of debt for capital purchases from that perspective >> can I ask that question >> yes >> who determines that >> so um >> if we're saying okay here's the things we're going to go for >> that's great that's great it's generally not done as like a significant math problem um it it is in the bond process there are a couple of players there's us sort of your underliners, your financial institut. And then the other really key

025one is your bond counsel, your bond attorneys. And this is a specialty attorney. It's not just your district, whoever you use for legal counsel, Milan Nash or whatever. This is actually bond counsel, right? And bond counsel um one of the key functions they do is they basically certify that your bonds are legal. Okay? >> Right? And as a part of that process, they'll meet with the district and be like, "Okay, tell us about your projects." They have a there are other things um related to the IRS certif certification to make them tax exempt bonds like you have to have a reasonable expectation of spending the money in three uh in 3 years or 85% of it in 3 years. And so they go through a process where then they will give assurance that the bonds

026meet all these legal requirements. Again, generally, if you've got a building in there, that kind of like makes it easy. It's all going to be fine. And also, school districts don't generally take out, say, 50-year debt. Um, some do 30-year, but that's even not as commonplace. 20-year and below is common place. So, if you throw a building in there and that's more than 50% of the of the bond work, you know, you're going to be covered for just about any other expense you want to do with there. So that that's why it's it's a bit art rather than science when it comes to that. Yeah, but that's bond counsel. I got to turn that. Great question. Okay, so bond basics, right? So that gets us through sort of what these are, what they exist. There

027is, as I even hinted at with spendown, there's a whole bunch of nitty-gritty details involved in determining bonds. Um, but that kind of sets the lay of the land. Okay. So, let's talk a little bit about the financials of the district and not your budget. I see budget folks, not your budget, um but sort of the the foundation that helps to determine how much you can borrow and what the levy rate would be. Okay? And it helps explain some of the moving parts in here and then we'll go through the the samples. So, the first thing we always got to do is we got to ground ourselves in um interest rates um which are not great right now. Uh thankfully you're not selling debt today. Um we we did have a a district doing a

028little bit of refunding work today and you know just unfortunately not great rates coming in. Um there might be something geopolitical that's causing the markets to panic in really weird and unmeasurable ways. And you can see so on this chart you see two lines right you see a essentially black line and blue line. Um the black line is the taxable 20-year Treasury. So if you were to just go buy Treasury bonds, Treasury bonds are taxable. You're going to you're going to pay um taxes on the on the interest you earn on that as an investor, right? So 10-year Treasury, see that fluctuates. And then the blue line is the tax is a an index of tax exempt bonds for aa rated entity. You're not AAA rated, but it's just good example, right? And you can

029see they mostly follow each other through time. They do uh sort of converge and diverge at points. We are at a little bit of a divergence right now where the gap between taxable and tax attempt is a a little on the wide side. Um uh don't know if that means tax exempt will come down or taxables or or excuse me taxables will come down or tax exempts will go up, but it's you know worth noting. And while interest rates are a little bit high right now, they're not um historically high like in the early 90s um and late 90s, right? Where more borrow your your tax exempt borrowing was in the 8 9% range. If you were borrowing today, you'd probably be borrowing, you know, at say the four and four and a half% for

030for this type of thing. Um not say your mortgage, which is at 7%. So interest rates key function in the cost. Okay. The other key ingredient we need to know is your uh value base. So these are geob bonds. The voters are going to approve a tax to levy. We got to know what's the base we're levying that tax on. And that's your value base. And I apologize these numbers are very tiny. Um but we'll take a look at that. So you have real market value and you have assessed value, right? You can kind of for our purposes ignore real market value. It matters for your maximum indebtedness, your 7.95% that you can borrow, but it is high enough. I mean it is very high to the point, you know, in separation from assessed value

031that it it is a meaningless number for your purposes. Um your capital's big. there's no issues there. So the what we look at is the column that is total assessed value. It's kind of right in the middle. Net assessed value matters for other reasons but not for bonds. So the total assessed value number in the middle you can see the latest year at the top one just about just under $1.2 billion in total value. So that's the value of all taxable property in Gladstone school district. Right? So it take out um you know government buildings etc that are non-t taxable. It's all taxable property. You can see that's about 50% of value that tracks with most of the metro area, right? The other piece we want to look at is the very last column, the

032total AV growth because this matters as well. So, as your assessed value growth goes up um based on how we project, you're building a bigger base on which to um levy the tax and therefore um have greater amount of indebtedness. you're at you're you're exceeding the the sort of constitutional 3% by a relatively decent margin throughout. Obviously 3.4% this last year. Pretty solid three. Um now if you remember I said the voters don't approve a levy rate. You don't fix a levy rate in time and that is because these numbers are unpredictable because these numbers change yearover-year. But when you sell your debt you will have a fixed debt service structure. The day you sell debt, I know exactly what you'll pay 10 years or 20 years from now, depending on how long your debt

033is, right? I know it the day I sell it. That's not going to change. These are not variable rate debt. There's no there's nothing that will change. But I mean, borrowing, refunding, that refinancing them later, but they don't change. However, that base, that assessed value base will change year-over-year, fluctuate, ideally always goes up. There could be years when it goes down. I don't see any negatives on your table here, but I do see some sub 3% numbers. So, you know, again, hard to predict. So, the levy rate will fluctuate every single year based on that. And generally, the way we operate at Piper and the way we build out debt service models is we use a relatively conservative and we would say looking at your history, we would build out a debt service model and

034we did for all this at a 3% growth rate. So we're going to assume going forward your assessed value is going to grow 3% a year going forward. Now if it grows at more than 3% then the levy rate will decline. If it grows at less than 3% the levy rate would increase. Right? Just so we sort of understand the the reason all of this exists is of course you need to provide assurance to the investor that you have authority to levy the debt service needed to pay that fixed debt service amount. Um, let's say, heaven forbid, a natural disaster happened that destroyed 50% of the property in the district. You would have the ability to simply double your levy rate on the remaining. It's not ideal. This would mean massive tragedy obviously and maybe

035the legislature would help you out in some way or whatever. But the point is from an investor perspective, you would have the ability to still collect enough revenue to pay your fixed debt service amount, right? That's the whole point. That's why you don't approve levy rates. Okay? I would uh just want to so >> one of the things that we heard and I could be misinterpreting what we heard but people felt like we had not been honest with them in our 2006 bond because the rates changed on them because not understanding that their their rate would change based on the assessed value. And when I'm looking at this chart, I'm seeing high variability and ups and downs from that 2006 >> when when we voted on it, >> right? You see 3 4 3 7

0364 5 >> 32 1 4. Yeah. No, it's all over the >> It was and and remember it's like 2008 in that. You know what I mean? And so >> look over at the real market value numbers and you see some negatives there, right? That's what's driving. So, so, so when people have historically complained, it's like ignoring >> like you didn't you weren't honest. Well, what happened was they were given the estimate and then it changed. >> Is that what maybe is that what I'm interpreting what you guys heard too when people said the amount we had to pay increased? >> Yeah. Okay. >> Right. I don't Yes. I I would agree that many community members don't understand >> Yeah. uh that it's based on the county coming in on a yearly basis and assessing

037the >> fairy and real economic. >> But the good news is that really since I mean it's really le it has really leveled out. We're seeing much more stable numbers since 2020 and there was the one dip from 2021 to 2022 and again just not but not the big dips. You said look from the negatives. We're not on the real market. Yeah, we're not seeing I mean some variability but not seeing it like we did back in. >> Now, of course, the problem with our property tax system is you see these like 10% in 22 and 15% in 23, but if you track over to the AV growth, you see 375. You're not able to capture that, right? That's the sort of flaw, if you will. I mean, not to skip ahead and of course

038like um the the ability to get facts versus um fiction through to general populace is difficult. Your ballot title back then, bring you to our information, your ballot title back then estimated a $466 levy rate. $4.66. None of these bars are above $4.66. So you've never actually exceeded the levy rate that was estimated >> quite the >> I mean it's always hard to remember like as a voter I'm not going to remember that later. All I know is that I'm being taxed. >> This is this is this goes up too because now my the my value of my home went up so now I'm paying. >> Yeah. Would you I mean would it was worth like messaging this and like that I wouldn't have guessed that. >> Right. And and and and to be clear,

039um your your homework tonight if you are owners is to go home and pull up your property tax bill. What you won't see on your property tax bill. Can anybody tell me what you don't see on your property tax bill? That's really cool. >> That's a really wide question. I feel like >> well something >> that's a loaded question. I know I know the rate. >> You know it's yellow. Well, it it is your mortgage bank. You don't see a rate. That's right. You do not see a rate on your >> You see the total >> it's more than last year. >> So correct. So this is this is correct. So depending on the valuation of that individual property um they will see that go up year overyear. Generally as I said generally the way

040we build our scenarios is assuming a 3% growth rate for the overall. Now, an individual property that is unmodified year-over-year will by definition in this climate grow at 3%. >> Yeah. >> So, their their property tax bill will go up 3% year-over-year. >> So, if someone is tracking the portion that goes to the school district, if they see it hopped up, 50und bucks from one year to the next, it may have nothing to do with anything other than their their assessed value going up a little bit. >> That's right. That's right. I mean, there there are like now if somebody like uh did a major modification to their property and then got a lovely letter from the assessor that said, "Hey, we're reassessing and adding value to your home." Well, guess what? Now their property

041tax bill is going to jump off. And >> so so the difficulty of messaging it to to community members who were like, you know, 20 years ago this the previous bond passed. You know, my my rate or my uh what I paid was X and then it went up and then what did you guys do? is like >> what they don't understand is we didn't get extra money from that. It was it was already calculated in the fund. >> Correct. Correct. It's by design and it's standard across the state. I mean there are other ways for instance I should say all of our >> what's part of that because I'll we'll show you I'll show you what that looks like um when we get to some scenarios. >> That that is a good that is

042a good point. That bond that passed was an increase of $240 over what it over the previous bond. So yeah, it was high. >> So that will be noticed I think on the >> I mean >> even though people know that it gets a stark. >> Yeah. >> To be fair, you have the highest bond rate in the state >> in Gladston school district all of 197 school district. This is >> what do you mean? your your $4 and whatever >> is the highest levies >> 2006 one. >> Yes. >> Yeah. >> The one that's currently still on >> your existing bonded indebtedness on this table. This table is the highest of any school district in the state. Right. So, um kudos. Your community obviously really saw value in what you wanted to do in

04306. And you could see at the beginning of this chart, you see where that jumps up. That's the $2 and plus that Elena is referring to. Okay, we we jump up. We pass a bond and then we got to see it through. That's 20 years of indebtedness that you got to pay off or the work you want to do. Gladstone uh you all know the the benefits and charm of being a small district in an urban setting. Um uh but not having really significant commercial or industrial enterprise being a mostly residential community, landlocked and not high growth, fine growth but not high growth really constrains constrains your property tax base, right? So your levy rate is almost always going to be higher than other similar districts because of that. Right? Um this was uh Dr.

044Gray and I were talking a couple of weeks ago and you know I was mentioning her experiences at Park Rose and Lincoln County School District where by contrast they had a significant amount of property value cut per student if you put break it down to a per student level because obviously your cost the amount you need to borrow is more or less driven by your student population right if if you if you were students you'd need fewer buildings or smaller buildings or whatever you have the student load you have which dictates a capital footprint that you have, right? So per student. So generally, if you want to think about it, your ability to raise indebtedness funds off of that per student base as it relates to that per student base is really going to be

045defined by the property value in the community per student, not the value that that student has, their house, but just break it on a roughly per student basis, right? And you think about Lincoln County, significant significant second home properties, right? Uh you know, all of that out on the coast, right? Small school population, right? Park Rose, the airport, right? Huge. Plus all the industrial services that support the private enterprise out there. All taxable property, right? So significant even though Park is probably smaller population than Gladstone. No, but it's a little smaller. >> Really? >> We're uh Parkros is double >> is it? I mean, okay, there you go. >> Doesn't grow. It's drunk, but it's double >> roughly commercial industrial tax base. >> Yeah. Yeah. No comparison. >> Yeah. So, >> no. That's the dynamic

046that you labor against, but it also gives you the community and the small school setting that obviously a lot in your community really prioritize, right? So, there, you know, just know that, right? Okay. So, we talked about value. Um, we've talked about that. Let's talk about the other thing we always look at is what's your existing debt burden to see if we have to work around home. Uh, hooray. Uh, your last uh refunded portions of the 26 are coming mature 61527 final payment will be paid and that will that $4 and whatever will come off the books. Fantastic news. Fantastic news for you. Fantastic news for the community. uh you do have a little small full faith and credit um that we did for I believe that was for transportation facility um that you know

047is fine that's not part of your god we just in full completeness and then obviously >> my only mention of pension your pension bonds which have been rockstar bonds for the 2003s okay despite the >> the despite theite >> terminal phase that it presents >> okay flight >> we're not going to talk about Okay, we're not going to talk about that. >> So, this is your geo in table form in in chart form. Um the despite the the community impression, I think it has been remarkably stable. You have this little dip there in sort of 21 to 24. I suspect there might have been some minor underleving or usage of existing debt service funds to buy down the rate a little bit is what was happening there. Uh that's not a reflection of your value

048growth in the community. I don't think so. But the rest of it is generally a good example of what you would see in actuality when it comes to geo bond levies. Just this slow floating of the levy rate up and down as you try to sort of catch up or follow whatever value growth is happening in the community, right? the functionally, just so you know what happens. Functionally, when you all adopt your budget in your budget adoption as part of your budget resolution, you you adopt levying your permanent rate tax and then you adopt uh you levy the debt service fund amount that you need for the year. Right? So, you levy to the assessor a fixed dollar amount. The assessor then goes out and does the math on I'm going to spread this across

049all the properties in the community. What is everybody's program of share? Right? And that that all happens at the assessor level the tax collector but >> okay so that's all the basis that leads us to let's talk about some scenarios. >> Can I can I ask I'm so stuck on the like how why kind of the why is Gladstone so much there's no other district that has so little commercial to where we're the highest all the time. >> No. Well, remember in 2006 it was the thing >> we we passed the bond that basically established GCCF >> and did significant for high school. >> Okay. >> So like it's like a high spike >> back in 2006. >> Gotcha. Okay. >> We just voted it for that one time. >> Well, I just I keep

050but I always hear about how Gladstone has such high taxes and I'm always trying to figure out like >> why. So this >> and I I can understand the reason but I also >> the other thing I thought of so you're talking geo bonds but there's others districts that also got these >> operating >> so this tablet >> bond local on slide 27 >> is kind of all the districts in the region right um county clackamus county uh Washington County. No, not Washington. Well, it looks at me. >> Oh, no. There's walking county. >> So, this is track all the way slide 27. >> So, >> despite your what in 26 $428 mill rate for your bond, there are actually three districts that have a total tax cut from above, right? All three of those

051have a local option levy, an operating levy, but it pushes them up. Notable, I mean, Sherwood's bond levy is $3.33, which is high high compared to the statewide, right? And so, if you look down that bond rate column, you can see where where they exist. For Grove at 350, >> Sherwood at 333. So those would be to your point similarly high residential communities relatively smaller student population for their base for their value base. That's why they have to have that higher. Now >> Drew of course just built the largest physically high school in the state of Oregon. So that also might explain their $3.33. But, you know, just just saying, you know, compared to, you know, districts that can just have a much bigger base. I mean, Park Rose down here with a 69 cent

052levy rate, right? Um, obviously big districts, Beaverton 232, Portland Public, they continuously reestablish a $2.50 mil rate for their bonds. >> Yeah. >> So, it does vary. the the column that says permanent rate that is unchangeable. Can do nothing to change that number. That's fixed in time. But just gives you that sense to a little bit to your point is there are actually not a lot of districts that I can think about that are as similarly situated as Gladstone. >> Yes. >> Right. >> They're all a little bit different. I mean, you have to get I really try to think about it and I go to like maybe like an esticada, but then you have this whole rural contingent. The district is different, you know, >> have industries. >> They do. They do cuz it's

053small towns. You might have the mill like there is stuff. >> And then I think about the east mult county districts which are, you know, I think of what is a single high school district that would be similar, but you know, they're all Park Rose, David Douglas, Centennial, and Reynolds. They all have a really different mix of Mulma County dynamics that just don't exist here, >> you know. Whereas you think about Clackmus County, you know, North Clakmas to the north, much bigger district, right? Much bigger footprint, obviously incorporates a ton of more uh industrial and commercial property, >> room for expansion. >> Oregon City, right? You know, Yeah. And these are districts that have expansionary space, so they're also getting growth, >> right? They're getting housing development. you would be solely relying on infill housing

054which is just much lower. It would be like, so I spent seven years at it'd be like if Aloa High School was its own school district. I think would be a much more similar landlocked in a very specific geographic area, right? With not a lot of industrial or local um footprint and middle class to slightly lower middle class properties, right? I think that's kind of the problem mixed up. So I think Yeah. Yeah. I love nerding. stuff. So, thank you for asking. >> I spent a lot of hours uh one night I was looking at similar price ranges to my house in Gladstone and looking at the a similar house in Oregon City, North or Clackmus, Hav Valley, Esdicate I and then like down south where I was trying to find I was trying to

055find something that was comparable and I'm like I trying to wrap my head around why. >> Yeah. Yeah. What is fascinating is property tax bills are public information. You can go to any website and find really I love it. It's fantastic. I I put together these local option levies um presentations and I I think we did one here and um I did one in Cami. I did one in central school district earlier this weekend. I usually go on and I try to pick out, you know, I did it for you guys pick out some properties that are in the district to really show specific examples of how things like measure five and compression and all that works, right? Okay, let's let's get back to to your numbers. Okay, so we've gotten a lot of scenarios

056here. Um, as I said, with the 20 with the the 06s coming off the books, you go to in 2028, if you did nothing, uh, that levy rate would be zero, right? So, the the the taxpayers would pay nothing on the bond, right? Good news for them. Um, the the good news is it is literally a blank slate. So um from the perspective of what options are available to you, they are all available to you, right? You're only limited by um you know your your valuation size and your perceived uh voter tolerance for levy rates, but kind of any configuration. So what we try to do is present bookends to some degree. I don't think there's a low-end bookend here, but bookends so you see how the variables work. Um and and as you finalize

057what package you want, knowing um the tension between par amount, the borrowing amount and the levy rate and the duration. So those are the three big variables you get to control, right? Levy rate, target, borrowing amount, and duration of debt. You don't get to control all three. You get to kind of pick two and the third will get pushed out like the balloon, right? So think of it that way. So that's th those are the targets we want to work with promised. The other thing I would say with these numbers is don't get wedded to the penny or two on the levy rate or the million dollar half a million dollar increment on the par. Those things will shift slightly as we move through time largely driven by interest rate um and or um changes

058to your assessed value increase before we get to finalage. Um, if there's say something that was like, "Oh, that is a really good targeted levy rate, but I really we need another half a million." Great. Let us work that out. Don't get too hung up on that specific detail. Right. Okay. Uh, the lastly, I would say for all of these, um, what we also like to do, um, in the underpromise, overd deliver is we like to put a little cushion on them. So, we run these at current interest rates plus a percent and a half cushion on the top. Right now, the cushion goes away eventually that nobody gets that money. It's gone. But that's another reason why you shouldn't get hung up on the, you know, minutia of the dollar amount or the levy

059rate amount because the cush cushion can fluctuate. as we move forward in time and finalizing like for instance if you are looking at November um when you get ready to write a final ballot title we would probably bring that cushion down to a flat 1% just to we're closing the gap of time between now and when you would actually sell the bonds so we're we're lessening our risk from an interest rate perspective right so FYI so two big buckets of this and um Elena is going to walk us through the first bucket. Uh give myself a break and then I'll walk us through the second bucket. So the first bucket is really looking at you come to us and you say we want this much money to build stuff. So targeted par amounts and let's

060run it at you. >> I'm a very basic question. What does PAR stand for? >> Debt. >> The amount of debt. The amount of debt. Yeah. >> Great question. Is this no as opposed to you don't say >> it's not an African word >> bar is like it's it's the it's the dollar amount of the bar right >> yeah kind of >> I mean come on you're you've been around education you know they got acronyms and and terms >> my wife's in healthare so I'm in >> oh yeah >> good thing we're talking finance for you so here we go so so paranount so the borrowing amount so you you came to us and said here and we ran two different borrowing amounts at two different durations. Okay. Then the other flip side of that

061coin is you say to us actually how much can I borrow off of a couple of different targeted levy rates. So I think the voters will do this or this or this. Tell me how much I can borrow in those scenarios. And so we ran those three different levy rate scenarios all at 20 year duration. and petina. >> Okay, >> other way. >> Okay, so we received two we can ask from you guys in terms of par or debt amount 44 million and 60. And so for the 44 million, we ran two different terms. So a 15-year borrowing and a 20-year borrowing. So you can see kind of how that lever affects the borrow. So if you follow a lot of numbers, I know it's really small on here. So following the blue section of

06244 million down the 15year year column, you can see that um for that 44 million is if you keep going all the way down to where it says combined rate, the estimated levy rate of borrowing 44 million for the district would be $2.90 per thousand. And so that amount would then run for 15 years. And if you want to look to see to the right just a little bit, when you look at the 20-year term, that rate drops to $2.39, the estimated levy rate. So that's kind of how you can see the longer you borrow, the lower that levy rate is going to move. The less time you borrow, higher that's going to move. Now scrolling down you can see that 1.5% David mentioned that's kind of our interest rate cushion and below that is

063the borrowing rate. So for similar kind of leverage between the two that shorter duration while has an estimated higher levy rate ends up with a little lower borrowing cost because you're going to pay less interest over time. >> Is that the 5.16 >> exactly the 5.16 verse the 5.6 to it. So that's kind of how you can see the correlation of the two different terms working together and what kind of that lower levy rate verse higher interest really can do >> 15 yeah fiveyear difference is 15 million savings. >> Yeah. So it does have quite a different, you know, structure on the levy rate, but it does, you know, allow for a lower estimated levy rate per year for your taxpayers rather than a higher burden. Exactly. But they're paying there's a balance you always

064got to find. >> And you know, if um comparing to 30-year mortgage, you end up paying about 130% of right now, at least in the current market, of interest over your borrowing. So these are about 51% and 80%. So that's you know for 15 to 20 years it's pretty kind of standard but it does look I understand it's it's interesting because it's like even beyond the numbers it's also thinking about attrition because so much of this bond and and so much of what we're talking about in capital improvement is like literally just maintenance and rehabilitation of our structure. So it is kind of like >> there's new not just maintenance and rehabilitation. >> Yes. Yes. We're looking ne at this point. So just saying >> yeah as Alina said that the the question of interest

065and and my point of don't get hung up on the dollar specifics the when the cushion comes off on those both of those interest costs will go down. Right? So just keep unless interest rates go up >> but but the it is absolutely appropriate to think about it in that 30-year mortgage concept or rather let's phrase that to think about it in the mortgage concept. >> Yeah. So, your levy rate is your monthly payment. Think of it that way, right? So, if you take your 15-year, you take your 30-year and convert it to a 15-year mortgage, your monthly payment is going to go up quite a bit. You're going to pay a lot more per month, but you are absolutely going to save a lot over life that loan in interest payments, right? Same dynamic

066here. You extend the life, you get a lower monthly payment, the levy rate. Shorten the life, you get a higher monthly payment, you're going to pay less in interest, right? just that that that's how that variable is going to function every time. >> And that true interest cost, the TIC there, that's like your APR, that's your kind of overall cost of borrowing that we like to use. Um it will again go down hopefully by at least a percent and a half as that cushion comes off, potentially a little less. >> We are not here to predict interest rates at all. >> But you'll see that I mean definitely drop much lower as we get closer um to time. And if you kind of zoom back up a little bit, I kind of I didn't want

067to focus on this to begin with, but I do want to mention um if you're looking at November election, you're not selling debt till next March. And that's because the process takes a couple months. So by the time we'd actually pass and then go through all the documentation and then get through the sale, we hit the market in about March. And that's why we have that 1 and a half% cushion on there because it is I mean, you know, a year from now before we'd be selling homes. So that's why that's on there. Um, so 15 years would take you to 2042. 20 years take it to 2047. Um, you'll notice, and I I won't spend too much time on this, there's under our par amount, there's a current interest bonds and deferred interest bonds.

068Those are that mix is also going to change as we take off that cushion, get a little closer. But deferred interest bonds are slightly more expensive tool that are used to achieve a certain desired levy rate structure. So, usually we go for a a leveled levy rate, which is what you're hoping to see, you know, like a well, maybe not $4.39, but over 20 years. Um, in order to kind of maintain that, sometimes you have to use this tool to um get some of those bonds in the in the final years. >> Um, so as we get closer and as the rates change, that mix changes and sometimes it completely goes away, which is why I'm, you know, since we're a ways out, don't want to focus too much on it. But I did want

069to mention it just in when you're working on it to see um how that divide would be between the current issues of auxiliary. So then if we move to the right the 60 million are so this changes things a little bit. Um, in that 15-year scenario, your levy rate would look like an estimated $3.95 per thousand and the 20-year term is an estimated $3.25. Um, with a very similar um comparison in the rates, um, oh, sorry, the interest rates of 5216.6 have the same insurance. Any questions on our amounts? Now, David kind of already explained this, but because you guys have this blank slate, it it's helpful to have a package, a number that you guys like with your project list and then kind of back into that levy rate or back into that term

070depending on what you So, um this is also to mention not including any awesome match that you would receive. This is pretty much that of course won't affect your levy rate or anything else just free advice and I'm trying to get to see anything there. >> These are a little unexciting to look at, but this is what each of those levy rates and that's that level levy rate structure that we'll talk more about. So, I'm keeping that in this particular chart. $250 per thousand. Um, boring little square there to look at. And then but for 15 years and then if you switch the next data you'll see it lowers but extends out to that 20 year and it'll be the same scenario for the 16 where is quite higher that estimated $3.95 and then a

071little longer um $325. Isn't it pretty evenly split about like typically schools go forward in 15 year versus 20 year or I in my time I've seen quite a lot of 20 years I've seen some 30 years and I've seen some 15 years so >> yeah it it really does become this like what is the desired balance point right um I would say 20 is kind of the garden variety but Um, your mileage may vary, right? Um, I I bank school district, um, they needed to build a new high school. Um, and in order to get a levy rate that they felt their community would tolerate, they needed to do 30-year issuance. So, they have a 30-year issuance. It still has a levy rate of I mean, it's in the chart. I think it's over

072three bucks. >> It's 296. They've had a lot of growth. Yeah. So, right out of all three box, >> you're building a new building. That makes sense. >> It does. Now, the the other thing just like your realer would tell you is you um you marry the house and you date the interest rate, right? So, um by definition u particularly given where interest rates are now, but also by definition the way bonds are generally structured um you're these were all the common places, you would have a 10-year call provision. So you could not refinance it until year, but at year 10 you'll be able to refinance it. And because the because bonds are unlike a mortgage, not one interest rate applied across them. Every single year of the bond is actually a different interest rate.

073Right? If you've paid any attention to financial stuff, you might have heard the term yield curve. It's going to be related to the yield curve. Generally normal yield curve, the the longer debt is going to carry a higher interest rate. the short debt, a lower interest rate, right? So, by definition, if I come in 10 years from now and I refinance what is now years 11 through 20 and I convert those into years 1 through 10 functional debt, I move them up the yield curve. So, almost regardless of what happens with interest rates, almost they will you will be able to refinance that and save money on that. So if interest rates are lower, >> they they need they would need to No, they they would need to not they would need to be not

074significantly higher. >> Yeah. >> Right. Because again, so I'm going to convert year 11 through 20 debt, which is carrying a rate into year 1 through 10 debt, which by definition is earlier on the yield curve, >> right? So it's going to be lowered into debt. >> This just kind of functionally how bonds work. you just wouldn't this is not sort of common sort of understanding because again your mortgage carries one interest rate across the entire mortgage >> right that's that's why that's why like you would need to refinance your home you do need a drop in interest rates and you generally need it to be like a certain amount to make up for cost of issuance and all that kind of stuff I mean I refinanced in 2021 so I'm like that this is

075where like I'm not I'm not moving out of my house anytime soon I for >> and I'm empty nesting now. So >> sign check all >> um I'm wondering if the board might like to u we're getting tons of fabulous information. Um I'd like to move move the the presentation forward to the summary of the levy target structuring scenarios. All >> we've got a we've got a a good picture on it from the par. I think I'd like to see it going from the levy rate >> and great questions that help you understand the how these variables work because they will work the same way on levy rate. Right. Right. >> But let's flip the coin. So instead of saying to us, hey, I need 44 million or 60 million. You say to us, we

076think politically because we know our project list is 120 million, right? So I but I know I can't ask for 120 million. So we think politically, let's test a couple of different levy rates. $3, $3.30, and $3.50. And we ran these all at 20-year durations. So much like you saw before, if you shorten the duration, kept the levy rate the same, the borrowing amount would just go down, right? So just so you kind of we we can test those as needed, but that's what that's the functionally what would happen. So at each of those leav rates and and if you flipped back you would see the total interest as a percent of FAR on the very bottom 80% is the same number as the other ones that were 80% cuz right 20 year these are

077all using the same rates and same dynamics. Okay. >> So at you can see what the what the amount raised at each of those various levels. So 55 million, 60 million, and 64 million. So, you know, it's not exactly linear, but pretty dang close. So, as you think about what the increments are, so the 30 cent increment between the low and the middle is about $5 million, right? So, that's that increment, and then you've got 20 cent increment between the next, which is, you know, a tick under $4 million, right? So it kind of gives you that sense that that increment there that 30 cent or probably about a quarter about 25 cents is probably worth almost exactly 5 million bucks >> at the 20 year rate >> at the 20. >> Did you run

078it for 15? >> We did not. Okay. >> Again, easy to do. >> It would obviously just lower the borrowing amount. So this is where we talk about finding the sweet spot where you understand okay what >> do I feel like is a levy rate that can be tolerated >> and then what matches up with a sufficient amount of project work that will provide value to the community. Right. So when when we talked previously there's sort of a minimum amount of work right that below that it's not really worth having the conversation because you're not really doing enough. >> Yeah. Right. So, there's that minimum amount and then there's probably some incremental steps in there because it's not going to be dollar for dollar. >> And I can say the board did that work. They

079went to a community meeting, got the priorities, right? >> The former superintendent did the parsing out of this much, this much, and then a combined amount which was around 60 million. >> Right. >> And so the bottom amount is 32 million because we have to get recent to look back. >> Yeah. That was 19 and 13 million. A bond for anything less than that isn't worth going out for. You're not you're not doing anything to me. But look, to me, for this community, the levy rate is what gets you through the door, not the amount of the bond. The amount of the bond isn't what gets you through the door to a vote. What gets you through the door to the vote is the levy rate. Because people are going to respond to the fact

080that this is sunsetting and it's sunsetting at $4 and change. And if you come back in with a bond that's that much or more, they're not going to vote for it. And they didn't and it failed. So to me, this is just my opinion and and I feel free to give it. There's an amount, you know, yeah, we could use $110 million. Our our assessments list was that much, but that's not going to happen. But this the community was supporting in those meetings around 58 to $60 million in projects and they had them prioritized. And so I I just I want us to make sure that whether we do 15 or 20. 20 is what I'm used to and I don't think it's unusual. um is a is an amount of money that we believe

081the community can tolerate when they're when this bond sunsets July 1st or June 15th or whatever and they can tolerate that and to meet somewhere between $3 and 350. Um, I think that's a sweet spot and I think if we use our uh public affairs company to go out and do the polling on that, which we need to do and we are going to do, I do believe you're going to get your your answer of what this rate ought to be. >> And and like in all three of those scenarios, that's a significant drop of what we've been >> right. So like again, none none of the scenarios that the board is weighing is mashing. It's precipitously strong for a dollar. >> Don't forget this does not include the 10 million in also. >> So

082the community was supporting around 58 to $60 million in your in your community meetings. This 10 million on top of that. So I just feel like that's what we need to think about what's going to get our foot in the door and it isn't going to be coming out of the shoot with $70 million. go to page 13 or slides 256 that I put both and they immediately when I hit print show up on one camera. So that's a good way to kind of look at it. So as we think about this >> duplication of this >> yeah as you think about the 60 million for instance you can take the purple column from the top and you see that at 15 and 20. to your question of running le rates inclined at 15. You

083can see we got 395 and 325 and then the blue in the middle is 60 million and change. It is slightly higher at that 330. So you can see how that lines up with the 20-year term for 60 million 20-year term for 330. Those are obviously very similar for very obvious reasons. The one is about a million dollars more than the other. So 5 cents for a million bucks if you will, right? So you can kind of think about how that moves. Um Dr. Gray is absolutely right. The the awesome match can be on top of it or it can be um uh sort of in it. So if 60 million is the project list, you could also ask the voters for 50 million and use the 60 million to true that up. There are,

084you know, there's obvious >> more than one way to I do I do agree with Dr. Dr. assessment that like I think from the way we articulate you know should we refer one of these scenarios it is talking about that levy rate I think that is an easy way everyone kind of understands how this functionally affects property tax and stuff you know I do think like in the scenarios where we talk about now that I understand that um it does get abstract where like I think like the the really sort of tooling all our efforts around thinking in terms of like our rate was this this is how far we're dropping it that's going to feel powerful to And here's what we're getting for it. >> And we have a list. We know. >> Yeah.

085And we've and we've made repeated efforts to maximize this time that we're going out that like we have awesome grant. We have all this planning. We have community engagement. >> Tons of planning. >> What we're going to try and deliver >> and a very good assessment of the things that we own and how they're falling apart. I mean, you have to be honest about that when you're talking to people. This is a desperate situation. This isn't this is no joke. what's happening, you know, to lo in an electrical panel in the middle of the week that that lights your water and we don't have hot water. I mean, we're lucky we had extra parts that they could dust off and find a dude old enough in the neighborhood to come and grab that and stick

086that in there. So, so I'm not kidding. I mean, this is last week. So, I >> mean, I don't think that people realize that that's the hard part. and we're gonna tell them because that's what our public affairs company, they create the materials that we're going to show people the facts. The district shows just the facts. The pack can talk emotionally, but we're just going to talk facts. This is a fact. You want to take a tour, go with Ivan and Charlie, and they'll go climb ladders with you and you can see for yourself. >> Honestly, it's terrifying. Honestly, >> it's terrifying. that it is there's there's spots that you think there's a crypted I totally I know >> I just don't like heights >> is sorry I'm sorry >> my brain is stuck on

087like I totally understand 20 is typical and I asked that for to understand that and curious as if because I think we're going to I agree I understand we have to hit a right levy rate and levy rates fluctuate. And so to say to the voters, well, we're only going to go out for this lending rate is is a little misleading, right? Cuz it they don't even see the rate on their tax bill. >> No, they don't. >> And it's going to change. Anyway, >> that word estimated at the beginning. >> It's a target. >> We have projects and things that have to get done. And so I think we have to prioritize what is the need we have to do. So how much is that going to cost, which we've done like Dr. Ray

088said, we've done that work. Um, I think going around the needing 60 million based on what the feedback we got makes sense. I'm curious about not this is where I'm like landing. I'm curious about if we borrowed 50 at 15 years because we get the 10 million and match it so we get to 60. would we be somewhere in between the levy rate of three and three and a half or somewhere around there? >> At 50 million years, >> my guess um is at 50 million you'd be like three and a quarter. >> That's when we start three and a half potentially. >> I was guessing for 15 year >> for a 15 year duration. 15 years, 50 million, >> what could our levy rate be? And >> because I think anything close to four

089is too high. >> Yeah. >> Can't go there. >> 3.99, right? >> And it failed. >> Yeah. I think three and a half is feels like a sweet spot to me. Absolutely. >> Um, personally, like >> I'd rather be closer to three to be honest, but really I I truly worry about and I also worry about >> if we go out for a 20 year, >> there's just so much uh discussion around interest, right? And just from the community, right? Not understanding. Anyway, I just um >> you would pay less interest on a 15-year, right? So, >> yeah. But if you did three, then that only gets us 40 million, >> right? No, I I understand. I know. I know it's not enough. You know, it's like nice sounding, but you can also go between

09015 and 20 years. Doesn't have to be a five. So, potentially, you could pick a rate. >> Mhm. >> Yeah. These variables are infinite. >> See what could get you to 50 and see how many years that would be. >> That's That's nice to know. I'm sorry. I didn't know that before. the legendary standard is people are doing it at a 5year increments but they are >> we would be so glad to have >> yeah but you know they're working on selling selling that to say we're picking the a year that's >> really trying to fit the community's needs we don't want to borrow >> yeah I mean so like managing expectations a little bit a couple of things that I would note is um other than one experience in scapos The notion of interest

091expense has never come up in campaigns. I'm not saying lump. I'm just saying it came up as capoose in 23. >> It did in Malo. It did in Malala River as well. And >> they were 30 here. >> They were 30 years. >> But the the voters I think ended up in the polling I think with regular affairs deciding that they felt it was more important for them to have a lower. >> That's what people love. That's what you're saying, right? Well, I don't know if it's advisable because I'm not in in that, but you could put it to their community. >> I mean, if you think about it and the district's always going to have some sort of bond levy, rate, then it doesn't really change for the property owners. It does change for

092us. And you know your point about not out borrowing the life of our projects that has been something I worried about too because um that you know will the things that we do last long enough for a 20-year bond and that we won't need capital projects before 20 years is up and yet we don't have the >> capacity to add on to it. I'm guessing you will need >> capital projects before the 20 years are up and that will be a continuous challenge. Right? So you look at um our neighbors further to the north in Portland and they they are the exaggerated example. Their debt service and their levy rate structure is built um as a staircase, right? And so they're constantly layering new issuances in that staircase. They're an anomaly. They have an enormous

093amount of capacity. They just passed $1.8 billion >> and they haven't actually sold any of that one yet, but like or they sold 100 million this year, right? But like that that is built so that they can return to the voters every four years and now every shifted it, right, to do that and other districts of size that have that capacity are able to do that. We're talking less than a dozen districts that have that ability because they have a property tax base big enough that can accommodate a STEM structure. You like it is not an anomaly to your tax base. You are like most school districts figuring out, okay, I have to leverage 20 years of time. >> Yeah. >> And knowing that that's going to present a challenge. Now, a couple of things

094to add to this conversation. Um, refunding debt. Re, that's our fancy word for refinancing. Apologies. Refinancing debt is an opportunity to create an ability to go back to the voters to create a step. So, if you did 20-year debt and you had growth and interest rates did drop, you come in and you refinance that back 10 years and maybe you buy yourself 50 cents on your levy rate or something like that to be able to come in and layer in some additional debt. That has been a practice in other areas that we see as a potential. Um, that is largely going to be driven by interest rates and that kind of thing. It's not something you can plan on. Right. Um the the other this is a little bit of a tanger that we talk

095about duration and Elena makes a very good point. If there is for instance a if 80% of total interest feels too high you know we can play with term 16 17 18 years where you know the same dynamic will happen. Every year you shorten it you will either raise your levy rate or lower your borrowing. that it it's just, you know, again, it's the noturn. >> It's the balloon. I push one side, it's going to pop out the other. It's totally fine. And when I say there really are infinite possibilities, I really mean there are infinite possibilities. So, as you go forward in time, if you're thinking about November, you obviously have, okay, we've got a July deadline to adopt a ballet title. That it's not a ton of time, but that's that's the thing.

096So, as you move forward over the next few months and begin to put together your package of what is the borrowing amount and what are your priorities for levy rate and interest expense, we can then begin to refine that scenario. So, I wouldn't want to leave here today and say we'll produce you 10 more scenarios. I think you all have a pretty good grasp of where that balloon is going to get pushed out. And so focus on the priorities that you think will be the conversation with the community is generally my advice. So what are you getting for the community and what is the levy rate tolerance? Those are probably the two biggest pieces the community is going to focus on and care about, right? And we'll we will obviously our goal at the end

097of the day is to get you the lowest possible interest expense, right? You know, so that's again, as I pointed out, if we drop the cushion off of this, your interest expense as a percent of part will go down because by definition, I would have a lower interest rate. So, you know, think good thoughts about ongoing interest rate environment and hopefully it comes down. Sadly, that means um a recession um usually drives down interest rates, but helps your cost borrowing and whatever at the end of the day, this has happened on more more occasions than not. Let's say you went forward and you decided the best scenario was 20 years at 60 million and 3 and a quarter, right? You were you were adopting the board resolution today column, right? We get to next March,

098interest rates have fallen, things are great. We begin to run scenarios and we say, "Hey, guess what? We can carve a year off of this thing. So, we're not going to issue 20 years. We're going to issue 19 years instead." Yeah. >> Right. that at the end of the day the actual issuance will be different definitionally than what is on paper, right? Because we will deal with market conditions as they exist at that time. >> So, so is the way to think of it is that like when we refer for the bond, we're referring for par and then everything else between then and then should the voters, you know, pass the bond, >> you know, we can fudge the numbers as it is appropriate for the market conditions >> except that we have to You

099have to put an estimated in the ballot >> in the ballot. >> Sure. But like >> I think I get where you're going >> in the window between >> the ballot title is sort of maximums, right? So So let's think about this in a couple ways. So it is because I think it it does help uh couch it. So you're asking the voters 60 million maximum 60 million maximum 20 years and here's what I do with with it and I'm estimating a three and a quarter levy rate. So what happens? You pass that. What happens if in January of next year before we sell interest rates spike? Yeah. Right. You would have choices to you could still sell it 60 million 20 years, no problem. And now the levy rate is $3.50. You can do

100that. You are legally well within your rights. But you might say to yourself, gosh, that doesn't keep faith with the voters. So instead, how about we only sell 40 million of it? >> Yeah. >> And do it at 3 and a quarter. Let's structure $325 to get us to 40 million. Maybe it's not the full 20 years or maybe we build some step in there somehow. You retain 20 million of authorization and you could come in and issue that, right? These are the risk parameters. So you're absolutely right to think about the balance idle is the the not to exceed numbers correct except for the levy rate which is an estimate. >> Yep. And the exercise you will go through we we like to say is you want to be intellectually honest with that levy

101rate >> and and presumably it's like if we pass the bond we'll have a the formation of a bond committee. So anything >> and an oversight >> an oversight. >> So anything that happens would be transparency for for the community. But again it's that thing of like living volatile times. Who knows what interest rates going to be. even, you know, the moment we pass in November, it is kind of like, you know, >> it's it's not unheard of. We we do have districts who have issued less than they were authorized um by surprise. So, districts issue less than they're authorized often because they're doing a multiple sale idea or something like that. Um and they retain their authoriz exaggeration, Portland public, right? Um they their voters authorized in 2020 their voters authorized you know whatever

102a billion dollars and they just authoriz authorized another billiona they actually still have remaining unissued debt so authorized they've not sold it they're not paying any money like almost $2 billion in authorization from their voters right it's all part of their grand design of their their plan right uh excuse me Lake Asiggo. So Lakego passed in November, right? Uh 190ish million 220 something in that range. Actually know Lake Asiggo, right? I didn't pay that close to that. Um they are getting ready to sell half of that and that's by design. It's also deals with cash flow and how long how quickly you can spend it, that kind of stuff. And so that structure exists. There are also plenty of times um I'm trying to think of when I'm blanking on it. I don't think it

103was Westland. There was another district like maybe four years ago that went to market and that condition existed. It had to have been pandemic. >> Gosh, time is >> interest rates spiked and they would have ex well exceeded the levy rate that they told voters about and so they simply held on to they said okay let's issue less do what we can with it and then come back in a couple years later when hopefully growth has dropped things down. interface are better. I can refi whatever and now I can layer in that additional million dollars or 10 million or 20 million or whatever it is, right? So yes, ballot title is the not to exceed parameters, right? >> Also, I I just want to say awesome is not in our pocket. I have to reapply

104and I don't I don't have that 10 million. So I mean he said we weren't going to get that but have to reapply. Well, that's not really. >> Yes. >> Your Yeah, your grant doesn't just roll over to the next election. Now, I do believe you guys are um fairly well situated. No, >> I think we're something. But but and we plan on having our applic Well, >> you were going to be in no quantity before you were back on the bat. >> Yeah, for sure. >> Absolutely. And and I think, you know, had you maybe sold it in May, you would have, >> but you didn't. And so, now we're a year out. >> I mean, if you've done May, you definitely would have because So, I'm just saying I think everybody, >> but

105things have changed and we have to reapply. >> And I I think we'll get it. But, um, I just want to say it out loud, a bird in the hand. You know, we're through in the bush. So, just want to make sure they know that. So, I mean, eventually what will need to happen is we have to make a decision. And so, um, at some point, um, the board has to vote to, uh, decide that they're going off for a referendum. And, um, then in June, we have to, you know, determine what the, um, what the actual bond language is. So, we're we're running up against a deadline now. So, and we've decision I think we've talked and talked and talked and at some point we'll just have to somebody say I vote that we,

106you know, and we just go from there. People will have their different points of view, but at some point we have to decide. >> I just want to get through the door with the community in a proper way. And I know you didn't mean this, Charlie, at all, and I'm certain of it, but if we ever use like a word fudge or >> Oh, yes. >> Not fudge. I know. I mean that I just want to say it out my mouth. >> Well, I I like >> to to be very clear like like the question that I had was about like the bond once it's referred to the ballot. >> We're we have to think of it in terms of like what the voters are voting on market conditions change so that our projected >>

107um yes levy rate >> you know the market changes that that's no accurate. We can >> uh we can but you know once you've made a a ballot you know you have to stick to that and that's why I guess you use the word estimated because there isn't any way that you're going to know because we have to list the levy rate >> and um >> I just know we want to learn from our uh experience from last May and see what we can do and uh nothing is going to probably last more than 20 years to really be working on their capital projects, finance. Also, when you have new items, they don't break and you don't have to have as much money stuff because you already got new stuff. And that allows us a

108chance to start saving money again since we use so much of our capital projects dollars to backfill our our um kind of very shortfall budget. So, when you have new things, it's just a matter of keeping it nice and maintaining it. Mhm. >> And we're going to look for products that last the longest and we'll do the best we can, but we can't survive if we don't do something. >> So, we're not going to get any HVAC systems from like subsurf like like on eBay. >> Amazon's got >> Okay, just go with the red, white, and blue. We'll be fine. So, I wonder, you know, I think maybe David and and we've probably seen as as much as probably we can take in at this time. I'm wondering um such a great presentation. Y'all are

109great. You know, >> you script this right out your mouth. >> I don't know how you do it, but we're glad you do. I mean, yeah, I hear I was like, "Oh, there's that presentation that I remember last time when I found the people I lost and I still every time like learn something new." >> Well, we do it all the time. You guys don't. So, I appreciate it. >> I've learned a whole bunch of new stuff. >> Oh, yeah. Like a 10 year refinance. I I didn't realize 10 years. >> Me neither. >> So, I was like, "Oh, I'm coming here." you could actually did that. >> And some districts have actually paid their districts um money and the bond finished and they gave money back to the community. That is a really popular

110move. >> I'm just saying it really builds trust in the community um when that happens. It's it maybe not all the time but it has happened. >> That's the key thing is the I think my perspective the trust because whatever happened before and whatever perspective >> can't do much about that. It's been wildfires and that sense of spread and >> the investment of that trust. >> Yeah. And I think what Charlie said, Andrew, having the bond oversight committee, back in the day, we didn't have those. We ran a bond, we ran a bond, and everybody hoped it turned out, but that's not the way it is today. We have very good uh operational uh functioning of that committee. >> Um there is nothing like it. So we have a a much better mechanism. >> Yeah,

111it's a mechanism. Exactly. It's a good lever against the naysayers. But you know, this is full on transparent. >> Join the committee. >> That's what I always say. Got something to say? Be part of the solution. Get on get on the bond oversight committee. >> It's a great place to be. >> I'd like some of those picky voices on there, too. I think you know some of those >> Yeah. And it's okay. Well, it's our job to answer the question >> 100%. >> Anything else for our wonderful team was really have to get back to your child. >> Yeah. >> Oh my goodness. That's not easy. >> Not at this age. But I do remember there was a time where you get to like if if you're not home by bedtime late like bedtime a

112little bit a little bit older >> like bedtime 7 7:30 so could we make it let's keep going a little >> I'll take it to 9:00 well thank Thank you all very much. >> Thank you for having us >> so much. You were so speedy in your work. I I just I can't get over >> Well, we're here. >> Thanks. So, >> all right. Uh, next is our public affairs over. >> Yes. So, I'm going to go ahead and give a very brief overview of right public affairs. Um they are uh kind of the go-to uh public affairs corporation to on pass their uh reputation uh precedes them. They have letter after letter of recommendation and they are the creme de creme. So um I uh have signed a contract with them. We are very

113lucky that um he's friends with Nicole, not not but you know she uh knows him and so he gave us a shot. It was um as he explained to me they have a lot of irons fire right now uh particularly for the May election which is why Jeremy Wright is not here tonight. uh he will be with you in a couple of weeks when the votes are over in May. That next week he will be in person meeting with us for a rather lengthy meeting. Um that is going to be whiteboards and pages and lots of conversations about our community. So, you know, get ready for that one. That's going to be >> work session. >> I believe it should be a work session. I mean it certainly should um >> is that when we

114would that's that'll be following fully or >> so that is not going to be follow following because he needs to get what he needs to get >> right and then we're going to >> exactly order to that he isn't going to do as much with pack um the pack is going to have a pretty burden but he's going to do a lot with the district and I want to tell you what he's going to do. So, this is the list and this information is for anyone. If anyone on the board would like to see the full contract, you are welcome to it. I have no qualms about giving you you that. The total cost for the contract is $80,000. um that exact same amount as he charged Lincoln County School District uh last year in

115which they passed a $70 million bond with a 3:1 yes rate. Um and uh I know that because my very good friend is the superintendent there. So um she quite enjoyed working with this company and had a lot of reasons why and they were would be reasons I would have appreciated. I feel lucky. I feel lucky, I must say, that um we were able to snag this company because they have a a huge bond passage rate. Um a little bit more about the money uh in case you're concerned. Um we put aside $60,000, bless you, for the 2526 school year for pre-bond work. And we haven't spent have not spent that money. >> So, we have that set aside. We have $168,000 set aside for 2627 for pre-bond work which would include this. His work

116is mostly in our next year which is where that money would come from. Probably 20,000 might come out of this year because he is going to start working with us. They write the bond language. They talk to the bond council. They are like David's group. They're they're the ones they're the ones that you go to. And all these guys know each other. David knows Jeremy as well. So, here's what we get. We get a monthly consulting fee, a proprietary custom monthby-month bond task checklist, keeping the client on track with all things bond communication utilizing the schedule laid out in our plan, which is what we're going to be creating with him at the work at the work session. Management of print collateral development, collateral plan, and cost to be agreed upon separately. management of television

117and digital development and placement attending either in person or remotely regularly scheduled meetings with the bomb team. >> May I ask the as far as the ads go and then um are we paying for those or do we pay for those ads or just part of the fee that the ads are? So let me take a look at that and see this is the management of the television and digital development and placement for the actual ad. I think that is a separate cost. Um I think there's a lot we can do ourselves. So >> yes the district can't >> the district can't you know some obvious reasons. Uh, but that's a very good question and I'll I'll be asking that as well. >> Interestingly, it sounds like it's development not production. >> I think it's

118development not production is what it seems like to me. Um, uh, availability for regular calls and consultation, a board training and senior staff training on how to talk about the bond. So, he'll do training for the board and for people like me. helping the district manage issues or problems should they arise with the community or media. Managing the safe harbor designation process with the secretary of state, something we had a a difficult time with on the first one and made lots of mistakes and development of talking points, how to make your pitch. So, this is what these folks do. Uh there is a bond explainer video. It includes the development of a 2 to three minute animated bond explainer video that can be broken up into 30 secondond pieces and that's part of the price

119that is not separate. >> Also second language version >> and and that bond explainer that's for the community. >> That's for the community. >> That's not okay. >> Yeah. He makes a really good distinction between what the district can do and what the community can do. management of the bond language. Uh, right. Public affairs will work with district staff, legal counsel, and other consultants to craft the ballot caption question, 175word summary, 500word explanatory statement based on polling and the WPA knowledge of of best practices in format and messaging. So, we're not going to have to make it up. We'll have a professional to do that. and work with our bond council where and we're using the same bond. >> And this includes the polling. >> This includes the polling because I told him no deal

120without the polling >> and I knew my Elise paid >> $80,000 and it included the polling. So no way was I paying more, >> right? >> And he did that. um includes domain uh reservation, purchase, design, launch, and one year of hosting a standalone bond specific website. So, they're going to create a website for us for the bond and it stays up for at least which I think is great. The polling is included and so the price is 79,500. And then that bond site I'm assuming falls under strict management I guess like that's not the pack's efforts >> pack efforts are completely separate and and they just have to be and he didn't have the capacity to take us on and do that too. So the pack is going to work very hard but it's

121going to be different work than the district. So we that's why we wisely put aside $168,000 plus $60,000 for the district to put outformational information and and make a video like we can make our own video. Um I've already got ideas about that. So, um I know in Park Rose when we made a video and you could see the the downstairs in the middle school when the rain came and we had buckets in the in the hallway and kids were getting rained on, it really was a an eyeopener for our for our district. And that middle school was built in the 60s and we built um a $ 48 million middle school with our bond dollars, state-of-the-art. Um but we had to show the public what the actual truth was about what was going on

122with our building because it's esoteric to them. They don't know. >> And we didn't have um a company like this for the last one. Is that true? We did um I think a little bit different process. I think that that group um mostly worked with the superintendent and some other folks here on the team. I know that us as board members I personally I mean he didn't really have a lot of you know didn't really interface with them too much. So I think I'm pretty sure that that um Jeremy Wright will spend more time with us and it'll be more transparent be you know at meetings so that you know the community can get more involved. remember the timing is quite different than a couple of months to do that. Um, we've got six months

123and I don't want to wait like I want to get this moving and he's got all this memorized, you know, like it's this date, that date, this word, and this guy and >> and I feel like that's the difference. I think the board tried to do the best they could, >> but um, you know, these guys are probably twice as much, but I want to pass the bond. >> Yeah. >> So, I'd rather put a little in in the front and we've got it. So, >> let's do it. So, any questions regarding right public affairs? Look them up online if you have a moment. I'm happy to share the contract. There's a lot of information in the contract. Some of it is his own advertising boilerplate, I would say. Look at me. Look at me.

124This is what I've done. But, uh, I think it's impressive. I think it makes all the difference in the world. >> Success rate is over 90%. He's worked with biggest districts in the state. Honestly, it's great. >> Been a win once for us. >> Exactly. >> Like no one's related to him, right? >> Nothing. >> No, I only mentioned Nicole cuz it's funny to me. Okay. >> That you know they're squash players or something. Why don't you play something? I don't I don't >> game that I don't know what what you know and and that's not the truth. I mean that that's the truth but I mean that's not why he you know >> talked to me for a long time and my friend myise who is took over for me when I left Lincoln

125County and um she was very delighted with the work that he did and I I called her in particular because they passed their bond very well and that's a tough neighborhood. It's it's a county. >> And so when she recommended him to me, I had never heard of him before. It was just tangential known at all. >> There's no connection whatsoever. >> We would never do better. So, the last thing I know I have before we uh go to executive session, we just need a fivem minute executive session on property is I'm going to pass out something to you that um was uh largely created by me. Um and also um I had a few factual things checked because remember how new I am to you. I just want to make sure that my knowledge

126is correct. Uh I I personally would like to be able to set aside the idea of selling um Gladstone Center for Children and Families for a while. Um particularly during my tenure, it's not something I can I can handle in my capacity. Um not that it isn't something you don't want to study. I'm not I'm I'm not in charge of you. But I'm just saying from my point of view, I wanted to put something out to the board, to all the board members, not just Andrew who's brought this up and and we've listened, but to any board member and any community member. I'd like to put this on our website, frankly, to explain what the GCCF really is because it's more than just a building. And so I'm actually going to beg your indulgence and

127I'm going to read this to you because a lot went into writing this and I want to read it to you. Um, the Gladstone Center for Children and Families, GCCF, stands as a model of what strong sustained community partnerships can achieve. This multi-use facility reflects deep collaboration between the Gladstone School District as well as county and state partners, all working together to support children and families in a comprehensive and coordinated way. The GCCF serves children and families in Gladstone as well as all children and families from anywhere in Clackamus County. So all their services is for any kids in Clackamus County. Serving children from birth to age six, the center operates as a small learning community designed to meet the developmental needs of young learners during their most critical years. What makes this facility particularly

128impactful is its wraparound services approach. Families can access a wide range of supports under one roof, including relief, child care, early learning programs, medical care, and even dental services. This integrated model removes barriers for families and ensures that children receive consistent and holistic care. Since its opening in 2008, the Gladstone Center for Children and Families has been a beacon for the state of Oregon, demonstrating how effective partnerships can elevate outcomes for children and families. Many children from outside of Gladstone have been PK-12 career students due to the excellent reputation of the GCCF and its well-known positive outcomes for children and their earliest education. It continues to serve as an example of innovation and collaboration in public education with community services. The Gladstone Center for Children and Families brings into the district grant dollars through these

129partnerships that assist the district to fund its programs and services. And one example is our health share grant uh brings in money to help us run the center itself. The district also receives modest leasing revenues for spaces utilized by our partners, which by the way, in October, we're going to be reviewing all of those leases. and uh probably needing to increase them. Community members and board members who have not yet visited the facility are strongly encouraged to do so. Scores can be arranged by contacting principal Sarah Duncan, who can provide firsthand insight into the cent's programs and impact. One impressive program at the center is our partnership with teaching preschool partners, an inquirybased sensory learning experience first developed at the Portland Children's Museum, also known as Opal School and widely accepted as one of the

130best hands-on learning programs in Oregon. So the trajectory for a child from relief nursery to head start to preschool to kindergarten to first grade is a beautiful story of growing up in Gladstone. Children then stay through graduation enjoying all the premier educational opportunities we provide. At this time all district schools are viable, actively used and serving their intended purposes. They are not surplus properties, nor as I would say, on the menu. Should the board choose in the future to formally assess the value and use of district facilities by a qualified third party, it is recommended that all schools undergo a consistent evaluation process based on guidelines established by the board and then have conversations and discussions regarding those results. Any decision regarding district properties should be made only after such comprehensive assessments are completed. This

131work could be thoughtfully undertaken in collaboration with the incoming superintendent during the 2728 time uh time frame. I would ask the board to seriously consider the ramifications of selling the property that its constituents voted for in the 2006 bond only 20 years ago. So you're barely in the process of paying off this project and then selling it might have a definite ramification. Constituents especially going into another bond they could say and then you sell them or I don't really know what people could say but I just think it's a consideration. Um there is no school district I know of myself that has um maybe the girl boil center is the only one I can think of and I believe >> bottled it off of >> Oh certainly this event >> and the Yes, exactly Stacy.

132And then the work we did in Park Rose with our program, we couldn't do it like Gladstone did, but we tried. And so I feel like it really is a beacon to people. Um, and if you're looking at this as valuating your assets in the in the district, do all of your assets and figure out what all of them are worth and then have a conversation about what you want to do about it. But at this time, we need to focus, I need to focus on this bond, and I just want to be able to do that. Um, plus the myriad of things we're doing with our staff, um, because of our lack of align systems, and we have a tremendous amount of work to do next year. So, personally, I I have always loved

133the center. It's the one thing that drew me to Gladstone years ago. And I just um love that you can take a child from a relief nursery to head start to preschool to kindergarten to first grade and they get this marvelous experience. Maybe some of your children have gone through that program and it's a gateway for our inner district transfers. Um we're 30% inner district transfer district. So 30% of our kids don't come from Gladstone. They come here for Gladstone. >> It's a magnet for enrollment. And we can't afford to lose our enrollment. It's already going down. And my opinion is if we could really work on our high school career technical education programs and kind of get those back up to snuff. it would be another draw for people to want to stay here

134and maybe get some enrollment back, which I would love to get um for you. It'd be my prayer for you just to get your enrollment up. I hope this makes sense and um I would like to post it on our website. This is from me. It's my opinion and um so I offer this to you. >> Thank you, D. >> Thank you. Uh now I think our chair might uh >> so I'm going to go ahead and uh and adjourn our meeting and move us into executive question. We will not be returning to our regular meetings. Is there something I need to read out here? I throw mine away along the way. >> I hope while we're doing this, I hope I'm giving you enough information every Friday. >> Yes. >> Very detailed. >> Okay.

135>> I don't want to go too detailed. >> Well, I don't want you to do extra I mean more than you have to. >> I enjoy it. Nice reflections for sure. No, I really appreciated it. >> Good. Okay. The Gladstone school board will now meet in executive session for the purpose of real property transactions. The executive session is held pursuant to RS192.6602E which allows the board to conduct deliberations with persons designated to negotiate real property transactions. Don't need to read the news media part because we don't have anyone here. So, I'm going to adjourn at 7:52.