May 2014 Texas School Bond Elections What are the individual districts needs? New facilities Renovations Technology Central facilities How much tax revenue can the district generate? Depends on district values One penny = $2.4 million for Katy
Debt Management Plan/Capacity Presented by: Christopher J. Smith, Chief Financial Officer May 15, 2014
Debt Management Plan/Capacity Clarifying Points Asset Lives considered in structure of bond sale Visual of Asset Lives Bonds are sold as cash is needed Visual of 2010 - $459 authorization Assumptions Models of Scenarios
Clarifying Points
Debt Management Plan/Capacity Asset Lives considered in structure of bond sale Visual of Asset Lives
Technology 6 New Facilities Retrofits Infrastructure 10 PAC Retrofits Turf Replacement Buses USEFUL LIFE 15 20 Furniture, Fixtures & Equipment (FF&E) Carpet Replacements Component Replacement: Security Upgrades Building Upgrades Light Pole Replacement Cafeteria Flooring 25 Systems (Fire/Alarm) Chillers Lighting Retrofits Comprehensive Renovations Portable Buildings Infrastructure Kitchen Renovations 30 New Facilities Land 5 10 15 20 25 30 BOND REPAYMENT - YEARS
Debt Management Plan/Capacity Bonds are sold as cash is needed Visual of 2010 - $459 authorization
- 10,000,000 20,000,000 30,000,000 40,000,000 50,000,000 60,000,000 70,000,000 80,000,000 90,000,000 100,000,000 110,000,000 120,000,000 130,000,000 140,000,000 150,000,000 160,000,000 170,000,000 180,000,000 190,000,000 200,000,000 210,000,000 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 $459 Million Bond Authorization $200M Sold Dec $150M Sold Jun 2012 $109.7M Sold Jul 2013
Assumptions
Debt Management Plan/Capacity Appraised Values: Tax Year Appraised Value Increase % Change 2017 $ 32,500,000,000 $ 1,000,000,000 3.2% 2016 31,500,000,000 1,500,000,000 5.0% 2015 30,000,000,000 2,000,000,000 7.1% 2014 28,000,000,000 3,800,000,000 15.7% 2013 24,200,000,000 2,116,740,889 9.6% 2012 22,083,259,111 1,355,737,360 6.5% 2011 20,727,521,751 907,596,085 4.6% 2010 19,819,925,666 302,276,787 1.5% 2009 19,517,648,879 844,524,428 4.5% 2008 18,673,124,451 2,501,387,583 15.5% 2007 16,171,736,868 2,168,132,966 15.5% 2006 14,003,603,902 1,315,091,867 10.4% 2005 12,688,512,035 958,453,529 8.2% Historic Average 9.2% Historic Median 8.9%
Debt Management Plan/Capacity Interest Rates: 2015 Sale 5.0% 2016 Sale 5.5% 2017 Sale 6.0% 2018 Sale 6.0%
Debt Management Plan/Capacity Scenarios Based on Useful Lives: < > $600 Million < > $800 Million < > $1 Billion
Models of Scenarios
Scenario One: $600 Million
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048 2049 $600 Million Scenario Tax Rate $0.500 $0.450 $0.400 Capacity $0.350 $0.300 $600 Mill. $0.250 $0.200 $0.150 Existing Debt $0.100 $0.050 $0.000
Scenario Two: $800 Million
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048 2049 $800 Million Scenario Tax Rate $0.500 $0.450 $0.400 $800 Mill. Capacity $0.350 $0.300 $600 Mill. $0.250 $0.200 $0.150 Existing Debt $0.100 $0.050 $0.000
Scenario Three: $1 Billion
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048 2049 $1 Billion Scenario Tax Rate $0.500 $0.450 $0.400 $1 Bill. $800 Mill. Capacity $0.350 $0.300 $600 Mill. $0.250 $0.200 $0.150 Existing Debt $0.100 $0.050 $0.000
Scenario Summary Potential Impact on Tax Rate: Bond Amount Impact on Tax Rate (1) $600 Million No Tax Rate Increase $800 Million Up to 4 Cent Increase $1 Billion Up to 7 Cent Increase (1) Actual tax rates dependent upon various assumptions previously identified
Debt Management Tools Bond Refundings Bond Defeasances Build America Bonds (BABs) Fund Balance
K A T Y I N D E P E N D E N T S C H O O L D I S T R I C T HOW DO WE PAY FOR KISD? OPERATING BUDGET MORTGAGE /DEBT MAINTENANCE & OPERATIONS (M & O) EXAMPLES TEACHER SALARIES ELECTRIC BILLS MINOR REPAIRS BUS GASOLINE INTEREST & SINKING (I & S) EXAMPLES NEW SCHOOLS RENOVATIONS NEW SCHOOL BUSES LAND PURCHASES
K A T Y I N D E P E N D E N T S C H O O L D I S T R I C T Operating Expenditures M & O 2.0% 1.9% 10.0% 2.0% 65.1% Teachers & Teachers Aides 2.0% General Administration 1.9% Technology Support 10.0% Utilities and Facility Maintenance 2.0% Extracurricular and Cocurricular Activities 65.1% 2.0% 5.1% 1.4% 1.2% 6.3% 3.0% 6.3% Campus Administration 3.0% Student Transportation 5.1% Nursing and Counseling 1.4% Library Expenditures 1.2% Security 2.0% Teacher Training and Instructional Supervision
K A T Y I N D E P E N D E N T S C H O O L D I S T R I C T Operating Expenditures Katy ISD State Average M & O 65.1% Teachers & Teachers Aides 2.0% General Administration 1.9% Technology Support 59.7% Teachers & Teachers Aides 3.6% General Administration 1.7% Technology Support 10.0% Utilities and Facility Maintenance 11.6% Utilities and Facility Maintenance 2.0% Extracurricular and Cocurricular Activities 6.3% Campus Administration 3.0% Extracurricular and Cocurricular Activities 6.6% Campus Administration 3.0% Student Transportation 3.4% Student Transportation 5.1% Nursing and Counseling 5.5% Nursing and Counseling 1.4% Library Expenditures 1.2% Security 1.5% Library Expenditures.9% Security 2.0% Teacher Training and Instructional Supervision 2.5% Teacher Training and Instructional Supervision