Annual Report of Local Debt Information. Fiscal Year Ended August 31, 2018

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1 Annual Report of Local Debt Information Fiscal Year Ended August 31, 2018 Pursuant to Local Government Code, Section This report was posted on the District s website on February 27, 2019.

2 Overview of Certain Financial/Bond Ratings Overview: Troup Independent School District (the District ) has been assigned the following independent financial/bond ratings that indicate the relative strength of the District s financial and debt management: School Financial Integrity Rating System of Texas ( FIRST ): Pursuant to Subchapter D, Chapter 39 of the Texas Education Code, the State annually deploys a financial accountability rating system to distinguish the level of a school district s financial performance based upon certain uniform criteria. Based on data for year 2016/17, the District was assigned a 2017/18 FIRST Rating of Superior and the District s score was 100 out of a possible 100 points. Credit Ratings: The District also maintains independent ratings from certain nationally recognized credit rating agencies, such as Moody s Investors Service, that evaluate the District s financial strength and its ability to pay its existing bonds. Moody s Investors Service: Assigns a A1 credit rating to the District, defined as Judged to be upper-medium grade and are subject to low credit risk. 1

3 Overview of State Funding System State Funding System Where Do the District s Revenues Come From: Troup ISD is legally required to operate pursuant to the requirements of the Texas Education Code. In particular, the Texas Education Code determines the District s ability to generate local tax revenues for maintenance & operation purposes and for the repayment of voter-approved bonds. In this regard, the District annually sets two (2) separate tax rates that are levied upon its certified taxable value that is independently determined by the Cherokee County Appraisal District and Smith County Appraisal District: Maintenance & Operations ( M&O ) Tax Rate: To provide funds for the day to day operational expenses of the District, including instructional programs, teacher salaries, instructional supplies, security, student transportation, extracurricular activities, utilities, facility infrastructure/maintenance, etc. The District s annual funds for maintenance & operation purposes primarily consist of a combination of State funding and local M&O taxes. In general, the dollar amount of each component is determined by the District s Equalized Wealth per Student (i.e. taxable value / weighted average daily attendance) as set by the State. For year 2017/18, the District s sources for M&O revenues are summarized to the right. M&O Revenue by Source Year 2017/18 State (56.1%) Federal (1.4%) Local (42.5%) On August 26, 2017, voters approved a tax ratification election to increase the District s M&O tax rate to $1.17. Prior to such ratification, the District was limited to a $1.04 tax rate for maintenance and operations. Source: District s Audited Financial Statements and District records. 2

4 Overview of State Funding System Interest & Sinking Fund ( I&S ) Tax Rate: To provide funds to pay the principal and interest on bonds approved by a majority of voters for capital improvements. The following summarizes the District s bond programs approved by voters over the last 15 years: District s Historical Bond Elections Approved By Voters Election Date Purpose Election Amount Dollar Amount Of Bonds Remaining To Be Issued September 10, 2005 School Building $5,700,000 $0 Total Dollar Amount Of Authorized But Unissued Bonds - As of August 31, 2018: $0 Source: Texas Bond Review Board and District records. 3

5 Historical Student Enrollment 1,600 1,400 Over the last 5 years, the number of students within the District has decreased by 43 students. 1,200 1,124 1,105 1,080 1,098 1,085 1,081 Student Enrollment 1, / / / / / /18 Source: Texas Education Agency - PEIMS and District records. 4

6 Historical Tax Rates $1.75 $1.50 Over the last 5 years, the District s total tax rate has increased by 11.2 cents primarily as a result of voters approving a Tax Ratification Election. Property Tax Rate Per $100 Valuation $1.25 $1.00 $0.75 $0.50 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $0.25 $ / / / / / /18 Maintenance & Operations Tax Rate Interest & Sinking Fund Tax Rate Source: District s Audited Financial Statements and District records. 5

7 Total Property Taxes For Maintenance and Operations and Voter-Approved Bonds Year 2017/18 $4,000 $3,500 $3,355 $3,000 Annual Property Taxes $2,500 $2,000 $1,500 $2,135 $1,000 $915 $500 $0 $100,000 Appraised Home Value $200,000 Appraised Home Value $300,000 Appraised Home Value Note: Taxes are net of the $25,000 State-mandated residential homestead exemption. 6

8 Summary of Property Tax Cost Per School Day For Various Appraised Home Values Year 2017/18 $20.00 $18.00 $18.64 In year 2017/18, a homeowner with a $100,000 Appraised Home Value and 1 or no children attending Troup ISD paid approximately $5.08 of school property taxes for each school day. Cost Per School Day $16.00 $14.00 $12.00 $10.00 $8.00 $6.00 $4.00 $2.00 $5.08 $11.86 A homeowner with a $100,000 Appraised Home Value and 2 children attending Troup ISD paid approximately $2.54 of school property taxes per child for each school day. This includes the cost of instructional programs, teacher salaries, instructional supplies, security, student transportation, extracurricular activities, facilities infrastructure/maintenance and bond payments. $2.54 $5.93 $9.32 $1.69 $3.95 $6.21 $1.27 $2.97 $4.66 $ Child 2 Children 3 Children 4 Children $100,000 Appraised Home Value $200,000 Appraised Home Value $300,000 Appraised Home Value Note: Taxes are net of the $25,000 State-mandated residential homestead exemption. Assumes a 180 school day year. 7

9 Composition of Total Assessed Valuation Year 2017/18 For year 2017/18, Single-Family Residential properties comprised 17.5% of the District s total assessed valuation and other property categories comprised 82.5%. Business, Commercial, Industrial, Utilities, Other (14.3%) Single-Family Residential (17.5%) Multi-Family Residential (0.4%) Oil, Gas & Minerals (18.4%) Vacant Lots, Acreage, Farm & Ranch Improvements (49.4%) Source: Texas Comptroller of Public Accounts - Property Tax Assistance Division. 8

10 Unlimited Tax Debt Service By Series Existing Bonds Approved By Voters $600,000 $500,000 Annual Bond Payments $400,000 $300,000 $200,000 $100,000 $0 2018/ / / / / / / / / / / / / / / / / /36 Unlimited Tax Refunding Bonds, Series 2010 Unlimited Tax Refunding Bonds, Series 2013 Note: Debt service payments reflect payments from September 1 through August 31. Source: District s Audited Financial Statements and District records As of August 31,

11 Unlimited Tax Debt Service By Principal and Interest Existing Bonds Approved By Voters $600,000 $500,000 As of August 31, 2018 Principal $ 6,305,000 + Interest 2,055,383 = Total $ 8,360,383 Annual Bond Payments $400,000 $300,000 $200,000 $100,000 $0 2018/ / / / / / / / / / / / / / / / / /36 Principal Interest Note: Debt service payments reflect payments from September 1 through August 31. Source: District s Audited Financial Statements and District records As of August 31,

12 Savings from District s Recent Bond Refunding Programs to Lower Interest Costs Troup ISD has implemented 2 bond refunding programs to reduce the cost of voter-approved bonds Which have generated $985,429 of savings for District taxpayers in recent years. Summary of Interest Cost Savings Bond Refunding Programs Issue Series Refunded Principal Amount Refunded Total Savings Unlimited Tax Refunding Bonds, Series $ 2,085,000 $ 230,464 Unlimited Tax Refunding Bonds, Series ,170, ,965 Totals --- $ 7,255,000 $ 985,429 Source: District records. 11

13 Summary of Unlimited Tax Debt Outstanding By Series As of Fiscal Year Ended August 31, 2018 The following debt obligations are payable from ad valorem taxes (i.e. I&S taxes) levied annually against all taxable property located within the District, without legal limit as to rate or amount. No. Issue Description Purpose 1 Unlimited Tax Refunding Bonds, Refunding at a lower Series 2010 interest rate, etc. Original Principal Amount Outstanding Principal Total Outstanding Debt Service Outstanding Principal Per Capita Outstanding Debt Service Per Capita Final Maturity Date Total Proceeds Received Spent Proceeds Unspent Proceeds $2,085, $1,395, $1,712, $ $ /15/2028 $2,176, $2,176, $ Unlimited Tax Refunding Bonds, Series 2013 Refunding at a lower interest rate, etc. $5,170, $4,910, $6,647, $1, $1, /15/2036 $5,768, $5,768, $0.00 Source: District s Audited Financial Statements, 2010 U.S. Census (Interpolated) and District records. Per capita figures are based upon an estimated population of 4,

14 Tax-Supported Debt Obligations At Fiscal Year End and As a Percentage of Taxable Assessed Valuation $15.0 Mil 3.00% Bond Principal Outstanding At Fiscal Year End $12.5 Mil $10.0 Mil $7.5 Mil $5.0 Mil $2.5 Mil 2.44% 2.37% $7,215,000 $7,020, % 1.97% 1.89% 1.76% $6,750,000 $6,595,000 $6,445,000 $6,305, % 2.00% 1.50% 1.00% 0.50% Bond Principal Per Taxable Assessed Valuation $0 2012/ / / / / /18 M&O-Supported Debt I&S-Supported Debt 0.00% Note: The District has no outstanding debt payable from M&O taxes. Source: District s Audited Financial Statements, Texas Comptroller of Public Accounts - Property Tax Assistance Division and District records. 13

15 Contact Information Main Office Contact Information: Physical Address: Mailing Address: 201 North Carolina Street P.O. Box 578 Troup, Texas Troup, Texas Phone: (903) Fax: (903) For additional information regarding this report, please contact: Ms. Lisa White Executive Director of Business Services Phone: (903)