Advisers tell trustees bond capacity depends on certified values; a 6¢ example raises concerns about timing and recapture

Municipal advisers from PFM and Nickel Hayden walked trustees through debt‑capacity modeling and how state policy changes affect the district's borrowing power.

Blake Roberts of PFM said the firm modeled a range — roughly $525 million to $685 million — depending on certified property values and how bond issuances are phased. "We came up with about a 6p increase in the debt service tax rate needed to support this bond if it were to move forward," Roberts told the board, emphasizing that the estimates are sensitive to certified values and interest rates.

Advisers explained that recent legislative changes that expanded homestead exemptions and modified hold‑harmless provisions compressed districts' taxable bases compared with earlier assumptions, and that recapture reduces a district's net take on some local tax increases. Roberts told trustees the district currently carries a strong credit profile (AA+/AA) and qualifies for programs that can produce favorable interest rates, but added that larger new authorizations without revenue growth could put pressure on ratings.

Trustees pressed advisers on how additional debt could affect the district's rating and borrowing costs. Roberts said there is a measurable cost to a downgrade but cautioned against deferring necessary capital because construction inflation generally increases later costs. "If you had the capital needs to borrow, I think inflation is always going to happen on the construction side," he said.

Advisers recommended the board consider how to phase authorizations, the timing of sales, and the potential effect of issuing in multiple years to smooth debt‑service impacts.