November 7, 2017 $18,000,000 Capital Improvements Bond. Public Information Forum

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1 LONDON INDEPENDENT S CHOOL D ISTRICT November 7, 2017 $18,000,000 Capital Improvements Bond Public Information Forum Austin Corpus Christi Dallas Fort Worth Houston Permian Basin Rio Grande Valley San Antonio

2 WELCOME! Introductions District Presentation Architect Presentation Opportunities for Questions and Comments 1

3 DISTRICT S BOND ELECTION HISTORY Recent LISD Bond History Election Date Amount Authorized For / Against 11/05/2013 $9,750, / /12/2007 $7,000, / 80 11/07/2006 $8,000, / /15/2004 $4,000,000 Unknown 2

4 WHY? 1, LISD Enrollment Trends ADA

5 TAX RATE HISTORY Recent LISD Tax Rates $ $ $ $ $ $ $ M&O Tax Rate I&S Tax Rate 4 Source: Municipal Advisory Council of Texas.

6 Area Districts Tax Rates (as of 2015) Districts Bonded Indebtedness & Tax Rate Information (as of 2015) District Bonds Outstanding M&O Tax Rate I&S Tax Rate Total Tax Rate Banquete 11,195, Bishop 21,425, Brooks County 34,065, Calallen 42,990, Corpus Christi 284,910, Flour Bluff 50,845, London 18,466, Sinton 28,016, Skidmore-Tynan 11,259, Taft 29,690, Tuloso-Midway 47,268, West Oso 25,422,

7 PROPERTY VALUATION TREND LISD Values (2008-present) $400,000,000 $350,000,000 $300,000,000 $250,000,000 $200,000,000 $150,000, ,990, ,728, ,816, ,431, ,300, ,092, ,060, ,098, ,407, ,379,477 $100,000,000 $50,000,000 $0 6 Source: Nueces County Appraisal District and London ISD Annual Financial Report.

8 FACILITIES PLANNING COMMITTEE FACILITIES PLANNING COMMITTEE The London ISD Facilities Planning Committee is charged with developing a longrange facilities plan that recommends and prioritizes building projects based on student and community needs with an understanding of district resources." 7

9 COMMITTEE RECOMMENDATIONS 1. New Elementary School Option Student Capacity Option Student Capacity w/ room to expand All common areas shall be built to accommodate 600 student campus (cafeteria/cafatorium, Kitchen-450 meals, library, computer labs, etc.) May have to spilt elementary between two campuses (Pre-K thru 2 nd, 3 rd thru 4 th ) 2. Competition Gym Regulation court Bleacher sections on both sides of court 3. Upgrade Band/Choir Hall Add/update acoustic barrier Add storage area for uniforms and instruments 4. Land Acquisition Future campus site HS or Elementary

10 TAX IMPACT MATRIX BASED ON A $18 MILLION BOND PROGRAM Term Assumed Interest Rate Average Annual Payment I&S Tax Rate Impact * % $741,155 $ Impact to Homeowner Home Value ** Annual Monthly Daily $250,000 $ $35.63 $1.19 $450,000 $ $67.29 $2.24 $650,000 $1, $98.96 $3.30 Footnotes: (*) Calculated assuming values of $470,194,066 at a 98% tax collection rate. (**) Net taxable value is $75,000 due to $25,000 Homestead Exemption. Homeowners with the Over-65 Homestead Exemption will not be impacted by a new bond program. 9

11 PLAN FOR THE ISSUANCE OF THE BONDS IN TWO ANNUAL INSTALLMENTS Overall I&S Tax Rate Impact = 4 Overall Monthly Impact to Average Home ($450,000*) = $ Tax Impact: Year 1: Series 2018 $9,000,000 Year 2: Series 2019 $9,000,000 Monthly Impact to Average Home 2 $ Tax Impact: 2 $7.08 Total: 4 $14.17 Homeowners with the Over-65 Homestead Exemption will not be impacted by a new bond program. 10 (*) Assumes the $25,000 annual homestead exemption.

12 VOTER COMMUNICATION FROM THE DISTRICT Issue up to $18,000,000 in Bonds Assumes an additional property value to the current tax base in an amount of $275 million (Wind Farm). Overall I&S Tax Rate Impact of 4 (increased incrementally over 2 years or 2 increase per year) 11

13 BONDING CAPACITY WITH MAXIMUM VALUE 12

14 WHO PAYS FOR THE BOND? London ISD 2016 Net Taxable Assessed Valuation Farm / Ranch / Open-Space Land, 17.64% Commercial / Oil & Gas, 7.28% Residential, 75.08% For the $18,000,000 bond issue, residential taxpayers will pay approximately 75.08% or $13,514,

15 NOVEMBER 7, 2017 BOND ELECTION SCHEDULE OF EVENTS Task Date Last Day to Call Bond Election August 21, 2017 Last Day to Register to Vote October 10, 2017 First Day of Early Voting October 23, 2017 Last Day of Early Voting November 3, 2017 Election Day November 7,

16 FREQUENTLY ASKED QUESTIONS How many transfer students are in LISD? Why doesn t LISD charge tuition to non-resident students? What is Chapter 41? Are we a Robin Hood district? 15 Member FINRA & SIPC 2011 First Southwest Company

17 LISD ENROLLMENT AS OF 10/30/17 Grade (Sections) Total In-District Transfer Avg. % Transfer LISD EMP. PK (2) K(4) st(4) nd(4) rd(4) th(4) th th th th th th th th Member FINRA & SIPC 2011 First Southwest Company

18 CHAPTER 41 OPTIONS 17 Member FINRA & SIPC 2011 First Southwest Company

19 SPECIAL ELECTION FROM OCTOBER 11, 2005 In 2005, London ISD voters approved to purchase attendance credits (if the wealth level requires) and educate non-resident students. (transfers) Member FINRA & SIPC 2011 First Southwest Company

20 SPECIAL ELECTION RESULTS FROM OCTOBER 11, 2005 Member FINRA & SIPC 2011 First Southwest Company

21 20 Member FINRA & SIPC 2011 First Southwest Company

22 IMPLICATIONS OF CHARGING TUITION If the district charged tuition to transfer students, the wealth per WADA would be $393,179 which is over the $319,500 threshold and would subsequently force recapture.(sending money back to TEA) However, the district adheres to Proposition 2 from the 2005 election and educates non-resident students tuition free, which makes the district s wealth per WADA $246,799. An election to reverse the 2005 election is the only way to change the policy.

23 CURRENT AND FUTURE FUNDING SCENARIOS Funding Scenarios *Recapture starts at $319,500 wealth per WADA Scenario #1 Current WADA 1360 Current Values 352,000,000/1360= $258,823 wealth per WADA Scenario #2 (Remove Current WADA funding level) =985 WADA Current Values 352,000,000/985= $357,360 wealth per WADA Scenario #3 Potential Future Values after ,000,000/1360= $459,558 Scenario #4 Potential Future Values after 2018 (Remove Current funding level) =985 WADA 625,000,000/985= $634,517