DEBT SERVICE FUNDS. Debt Management Policy and Guidelines

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1 DEBT SERVICE FUNDS Debt service funds are used to account for all financial resources that are restricted, committed, or assigned to expend for principal and interest, and related fees. For, the total Debt Service budget is $ million, representing approximately 8.4% of the District s total budget. While adhering to its debt management policy and guidelines described in the section below, and with the goal of providing cash relief to the capital outlay program to allow for maintaining the District s assets during a period of depressed property values, the District successfully restructured its Certificates of Participation (COPs) debt. The restructuring in FY achieved a three year phased savings of $137.4 million ($27.6 million in FY , $50 million in FY , and $59.8 million in FY ). In addition in FY , the district refunded $ million of Series 2003D, 2004A, and 2005A COPs achieving $11.4 million (6.28%) in net present value savings and providing cash flow relief in the first five years totaling $26 million. The restructuring in FY achieved a cash flow savings of $36.3 million in, $13.3 million in FY , and $23.2 million in FY , with a true interest cost of 4.189% and a total present value dissavings of $10.2 million. Debt Management Policy and Guidelines The District s debt management policy, formally adopted in School Board Policy 6145, provides guidelines for issuing debt and managing the debt portfolio in order to ensure the long-term financial strength of the Board. Debt is issued to fund the District s Capital Program, including the construction of new school buildings, renovations, equipment, buses, and information technology systems. Debt may also be issued to fund working capital reserves for operations, as needed, and for large scale investments or funding needs of the Board, as appropriate. The guiding principles and objectives of the Board s debt policies are the following: Provide the lowest cost of funds. Maximize proceeds to fund capital projects by integrating the capital planning and debt financing functions. Reduce risks by establishing and monitoring risk management strategies such as liability matching and use of derivative products to hedge interest rate exposure. Maintain the confidence of the rating agencies, bond insurers, and investor markets. Comply with all State and Federal requirements regarding the sale of debt and the investment and expenditure of proceeds. Maintain the integrity and transparency of the underwriter selection process and all other outside providers in the debt management process. Monitor the development and market acceptance of new municipal market products to evaluate suitability to the Board s needs. The District s debt policies and portfolio are periodically reviewed by the Treasury Advisory Committee, a panel of financial professionals who act in an independent and advisory role and provide the Board with expert advice on prudent investment management, debt management, risk management, and optimum treasury management techniques and systems. 5-1

2 SUMMARY OF DEBT SERVICE FUNDS Master SBE ARRA COP Equipment Fund Fund Fund Lease Revenues State $ 13,818,668 $ $ $ Local Property Taxes Other Interest 2,000 1,000 Total Revenues $ 13,818,668 $ $ 2,000 $ 1,000 Transfers From Capital Funds 2,038, ,273,064 22,598,035 Transfer From General Fund 2,687,361 Fund Balance Prior Year 1,870,582 4,258, ,353 Total Revenues & Other Sources $ 15,689,250 $ 2,038,060 $ 174,533,679 $ 25,501,749 Appropriations Principal $ 11,360,000 $ $ 43,042,018 $ 22,558,920 Interest 2,458,668 2,038, ,231,046 2,726,476 Total Appropriations $ 13,818,668 $ 2,038,060 $ 170,273,064 $ 25,285,396 Fund Balance End of Year Restricted 1,870,582 4,260, ,353 Total Appropriations & Reserves $ 15,689,250 $ 2,038,060 $ 174,533,679 $ 25,501,749 Debt Service Projected Revenue Tentative Budget REVENUE Tentative Budget Fund Balance $ 84,399,281 State Revenue 13,818,668 Local Property Taxes 58,851,953 Local Interest 1,573,045 Transfers in 200,336,809 TOTAL $ 358,979, Transfers in 55.8% Revenue Local Interest 0.4% Fund Balance 23.5% State Revenue 3.9% Local Property Taxes 16.4%

3 SUMMARY OF DEBT SERVICE FUNDS Qualified Zone General Total Academy Obligation Debt Bonds Bonds Service Revenues State $ $ $ 13,818,668 Local Property Taxes 58,851,953 58,851,953 Other Interest 1,522,045 48,000 1,573,045 Total Revenues $ 1,522,045 $ 58,899,953 $ 74,243,666 Transfers From Capital Funds 2,740, ,649,448 Transfer From General Fund 2,687,361 Fund Balance Prior Year 43,211,909 34,842,822 84,399,281 Total Revenues & Other Sources $ 47,474,243 $ 93,742,775 $ 358,979,756 Appropriations Principal $ 24,508,401 $ 40,640,000 $ 142,109,339 Interest 36,720 16,648, ,139,174 Total Appropriations $ 24,545,121 $ 57,288,204 $ 293,248,513 Fund Balance End of Year Restricted 22,929,122 36,454,571 65,731,243 Total Appropriations & Reserves $ 47,474,243 $ 93,742,775 $ 358,979,756 Debt Service Appropriations Tentative Budget APPROPRIATIONS Tentative Budget SBE Bonds $ 13,818,668 ARRA 2,038,060 COPs 170,273,064 MEL/MTL 25,285,396 QZABs 24,545,121 GOB 57,288,204 Fund Balance 65,731,243 TOTAL $ 358,979,756 GOB 16.0% Appropriations SBE Bonds ARRA 3.9% 0.6% Fund Balance 18.3% QZABs 6.8% MEL/MTL 7.0% COPs 47.4% Abbreviations SBE State Board of Education MEL/MTL Master Equipment/Technology Lease ARRA American Recovery and Reinvestment Act COP Certificates of Participation QSCBs/BABs Qualified School Construction Bonds/Build America Bonds GOB General Obligation Bonds 5-3

4 REVENUE SUMMARY OF DEBT SERVICE FUNDS FIVE YEAR HISTORY FY Actual FY Actual FY Actual FY Projected Estimated Revenue Increase/ (Decrease) State Sources CO&DS Withheld for SBE Bonds $ 13,463,482 $ 13,509,947 $ 13,551,576 $ 13,815,008 $ 13,818,668 $ 3,660 SBE/COBI Bond Interest 7,849 1, Total State $ 13,471,331 $ 13,511,902 $ 13,551,576 $ 13,815,008 $ 13,818,668 $ 3,660 Local Sources District School Tax $ 64,200,564 $ 71,682,407 $ 45,474,237 $ 45,987,551 $ 58,851,953 $ 12,864,402 Interest Revenue 1,615,599 1,642,856 1,869,536 2,076,888 1,573,045 (503,843) Net Increase/Decrease in Fair Value of Investments 2,561 2,094 (3,490) Total Local 65,818,724 73,327,357 47,340,283 48,064,439 60,424,998 12,360,559 Other Financing Sources Proceeds of Refunding Bonds/COPs $ 1,710,000 $ 278,155,000 $ 725,000 $ 255,175,000 $ - $ (255,175,000) Premium on Refunding Bonds/COPs 167,363 8,478, ,763 19,772,248 - (19,772,248) Payments to Refunded Bond Escrow Agent (1,861,836) (284,293,783) (833,608) (272,795,909) - 272,795,909 Transfers in 221,249, ,655, ,684, ,244, ,336,809 18,092,778 Total Other Financing Sources 221,264, ,995, ,686, ,395, ,336,809 15,941,439 Beginning Fund Balance 76,467,737 81,329,813 93,321,966 79,703,910 84,399,281 4,695,371 TOTAL REVENUE, TRANSFERS, & FUND BALANCE $ 377,022,757 $ 383,164,871 $ 340,900,645 $ 325,978,727 $ 358,979,756 $ 33,001,029 EXPENDITURES FY Actual FY Actual FY Actual FY Projected Tentative Appropriations Increase/ (Decrease) Redemption of Principal $ 143,948,927 $ 151,602,945 $ 153,353,016 $ 132,764,818 $ 147,681,605 $ 14,916,787 Interest 151,718, ,939, ,833, ,663, ,566,908 38,903,619 Dues, Fees, & Other 25,044 3,300,248 10,048 2,151,339 - (2,151,339) Total Expenditures 295,692, ,842, ,196, ,579, ,248,513 51,669,067 Ending Fund Balance 81,329,813 93,321,966 79,703,910 84,399,281 65,731,243 (18,668,038) TOTAL EXPENDITURES, TRANSFERS & FUND BALANCE $ 377,022,757 $ 383,164,871 $ 340,900,645 $ 325,978,727 $ 358,979,756 $ 33,001,

5 STATE BOARD OF EDUCATION (SBE) FUND Capital Outlay Bonds are issued by the State Board of Education on behalf of the District and are referred to as SBE or Capital Outlay Bond Issue (COBI) Bonds. Pursuant to the Florida Constitution, bonds may have up to a thirty year maturity and are secured by a pledge of the District s portion of state revenues from the sale of automobile license plates (referred to as motor vehicle license taxes or tag revenue). Net proceeds from the bond sale are distributed to the District and deposited into Capital Outlay Funds for eligible capital projects. Principal and interest payments, investment of Debt Service Fund resources, and compliance with reserve requirements are administered by the State Board of Education and the State Board of Administration. Since 1995, the state has sold over $176 million of SBE bonds on behalf of M-DCPS, of which $50.3 million remain outstanding. Information for budget and accounting transactions are provided by the state. REVENUES ACTUAL PROJECTED TENTATIVE RESULTS RESULTS BUDGET State Sources CO & DS withheld for SBE Bonds $ 13,551,576 $ 13,815,008 $ 13,818,668 Non Revenue Source Proceeds of Refunding Bonds $ 725,000 $ - $ - Premium on Refunding Bonds 110, Payments to Refunded Bond Escrow Agent (833,608) - - Sub-Total $ 2,155 $ - $ - FUND BALANCE FROM PRIOR YEAR 2,122,718 1,870,582 1,870,582 TOTAL REVENUES & OTHER SOURCES $ 15,676,449 $ 15,685,590 $ 15,689,250 APPROPRIATIONS Bond Principal $ 10,300,000 $ 10,825,000 $ 11,360,000 Interest 3,495,819 2,990,008 2,458,668 Other Debt Service 10, Sub-Total $ 13,805,867 $ 13,815,008 $ 13,818,668 FUND BALANCE - END OF YEAR Restricted 1,870,582 1,870,582 1,870,582 TOTAL APPROPRIATIONS & RESERVES $ 15,676,449 $ 15,685,590 $ 15,689,

6 AMERICAN RECOVERY AND REINVESTMENT ACT (ARRA) ECONOMIC STIMULUS FUNDS On February 17, 2009, the American Recovery and Reinvestment Act of 2009 was enacted to provide a stimulus to the economy. This federal stimulus provided much needed cash relief to the capital program with an infusion of $226 million in Qualified School Construction Bonds (QSCBs) and Build America Bonds (BABs) with near interest-free payments and the ability to defer payments for five years. Debt service payments are estimated at $2 million annually for the first five years, $11.5 million in FY 2016 and $20.3 million annually from FY 2017 through FY QSCBs mature in BABs debt service payments continue from FY 2028 through 2032 at $6.4 million annually. FY FY ACTUAL PROJECTED TENTATIVE RESULTS RESULTS BUDGET REVENUES Local Sources-Interest $ - $ - $ - TRANSFERS From Capital Outlay Funds 2,038,060 2,038,060 2,038,060 Sub-Total $ 2,038,060 $ 2,038,060 $ 2,038,060 FUND BALANCE FROM PRIOR YEAR TOTAL REVENUES & OTHER SOURCES $ 2,038,060 $ 2,038,060 $ 2,038,060 APPROPRIATIONS Bond Principal $ - $ - $ - Interest 2,038,060 2,038,060 2,038,060 Other Debt Service Sub-Total $ 2,038,060 $ 2,038,060 $ 2,038,060 FUND BALANCE - END OF YEAR Restricted TOTAL APPROPRIATIONS & RESERVES $ 2,038,060 $ 2,038,060 $ 2,038,

7 CERTIFICATES OF PARTICIPATION (COPs) FUND Certificates of Participation (COPs) represent undivided interests in a dedicated revenue stream (i.e. lease-purchase agreement payments). COPs proceeds are used to construct or purchase facilities or equipment, acquired by the School Board through a lease-purchase agreement with the School Board Foundation, a tax-exempt organization considered part of the reporting entity under generally accepted accounting principles, and created for the specific purpose of selling COPs. Net COPs proceeds are budgeted in a COPs Capital Outlay Fund and debt service payments are budgeted in a COPs Debt Service Fund. Debt payments are funded primarily through a transfer from the Local Optional Millage Levy Capital Outlay Fund. Since 1988, over $3.2 billion in COPs (net of refundings) have been sold to finance the purchase, construction and renovation of facilities, land, appurtenant equipment, motor vehicles, buses, and technology (see pages 6-18 through 6-21). Of the $3.2 billion sold in COPs, over $1.8 billion were sold since 2006 in order to meet the class size constitutional mandate. Approximately $2.6 billion in COPs remain outstanding, with final maturity in 2037 and with total debt service payments of approximately $4.1 billion. Since 2011, the District has provided cash relief to the capital program by successfully restructuring its (COPs) debt. The $276,715 million restructuring in FY achieved a three year phased savings of $137.4 million ($27.6 million in FY , $50 million in FY , and $59.8 million in FY ). Principal and interest obligations were moved from FYs 2011, 2012, and 2013 to mature in FYs 2029 through 2032, resulting in a true interest cost of 4.849%, with a total present value of $9.8 million. The District was able to lower its cost of borrowing by including mandatory puts of 3 years on $77 million and 5 years on $70 million due 2031 and 2032 respectively. In addition in FY , the District refunded $ million of Series 2003D, 2004A, and 2005A COPs achieving a $11.4 million (6.28%) in net present value savings and providing cash flow relief in the first five years totaling $26 million. In FY the $76.39 million restructuring achieved a cash flow savings of $36.3 million in, $13.3 million in FY , and $23.2 million in FY , with a true interest cost of 4.189% and a total present value dissavings of $10.2 million. FY FY ACTUAL PROJECTED TENTATIVE RESULTS RESULTS BUDGET REVENUES Local Sources-Interest $ 19,617 $ - $ 2,000 TRANSFERS From Capital Outlay Funds 146,753, ,934, ,273,064 Sub-Total $ 146,773,578 $ 142,934,288 $ 170,275,064 NON-REVENUE SOURCES Proceeds of Refunding COPs $ - $ 255,175,000 $ - Premium from Refunding COPs - 19,772,248 - Payments to Refunded Bond Escrow Agent - (272,795,909) - FUND BALANCE FROM PRIOR YEAR 4,994,792 4,258,615 4,258,615 TOTAL REVENUES & OTHER SOURCES $ 151,768,370 $ 149,344,242 $ 174,533,679 APPROPRIATIONS Bond Principal $ 59,593,139 $ 52,670,594 $ 43,042,018 Interest 87,916,616 90,263, ,231,046 Other Debt Service - 2,151,339 - Sub-Total $ 147,509,755 $ 145,085,627 $ 170,273,064 FUND BALANCE - END OF YEAR Restricted $ 4,258,615 $ 4,258,615 $ 4,260,615 TOTAL APPROPRIATIONS & RESERVES $ 151,768,370 $ 149,344,242 $ 174,533,

8 MASTER EQUIPMENT/TECHNOLOGY/ERP LEASE AGREEMENT In FY , a Master Equipment/Technology Lease (MEL/MTL) Program was implemented as an alternative form of financing to lower the cost of borrowing for significant equipment acquisitions, school buses, instructional technology updates, and the District s Enterprise Resource Planning (ERP) Project which began successful implementation in FY MEL/MTL program also provided relief to the collateral requirements of the COPs Program. Final lease payments are scheduled to pay out in FY In June of 2013, the School Board approved the expansion of the Master Equipment Lease program to include funding of $63.45 million in digital devices. This expansion supports the District s 21 st century technology vision to transform and modernize classrooms through the provision of digital learning tools and experiences for students while complying with the statutory requirement to align curriculum with digital devices and make the transition to digital instruction by the school year. FY FY ACTUAL PROJECTED TENTATIVE RESULTS RESULTS BUDGET REVENUES Local Interest $ - $ 1,000 $ 1,000 TRANSFERS From Capital Outlay Funds $ 33,671,635 $ 33,671,635 $ 22,598,035 From General Fund - 803,633 2,687,361 Sub-Total $ 33,671,635 $ 34,475,268 $ 25,285,396 FUND BALANCE FROM PRIOR YEAR 214, , ,353 TOTAL REVENUES & OTHER SOURCES $ 33,885,988 $ 34,690,621 $ 25,501,749 APPROPRIATIONS Bond Principal $ 29,314,876 $ 30,754,224 $ 22,558,920 Interest 4,356,759 3,721,044 2,726,476 Sub-Total $ 33,671,635 $ 34,475,268 $ 25,285,396 FUND BALANCE - END OF YEAR Restricted $ 214,353 $ 215,353 $ 216,353 TOTAL APPROPRIATIONS & RESERVES $ 33,885,988 $ 34,690,621 $ 25,501,

9 QUALIFIED ZONE ACADEMY BONDS (QZABs) In 1997, the Taxpayer Relief Act created the QZAB financial instrument, an interest-free bond that school districts may apply for in order to fund school modernization. Principal on the QZABs is paid by the District, while interest is paid by the U.S. Government in the form of income tax credits to lenders. The terms of the QZABs are thirteen and fifteen years and will be retired through a discounted sinking fund where the annual deposits are invested in a guaranteed investment contract that will yield the additional amount needed to retire the principal at maturity. During the first issue of QZABs in fiscal year 2000, the Florida Department of Education awarded the District the majority of bonding authority allocated to the State of Florida with $24.5 million out of $40 million. Since then, the District has issued an additional $51.8 million in QZABs to fund additional technology, capital and vocational projects. A total of $76.3 million in QZABs remain outstanding and are scheduled to mature in FY The primary sources of funds for required debt service payments are transfers from QZAB interest earnings and the Local Optional Millage Levy Capital Outlay Fund. FY FY ACTUAL PROJECTED TENTATIVE RESULTS RESULTS BUDGET REVENUES Local Sources-Interest $ 1,788,960 $ 2,025,888 $ 1,522,045 TRANSFERS From Capital Outlay Funds 4,221,009 2,796,415 2,740,289 Sub-Total $ 6,009,969 $ 4,822,303 $ 4,262,334 FUND BALANCE FROM PRIOR YEAR 32,453,077 38,426,326 43,211,909 TOTAL REVENUES & OTHER SOURCES $ 38,463,046 $ 43,248,629 $ 47,474,243 APPROPRIATIONS Bond Principal $ - $ - $ 24,508,401 Interest 36,720 36,720 36,720 Sub-Total $ 36,720 $ 36,720 $ 24,545,121 FUND BALANCE - END OF YEAR Restricted $ 38,426,326 $ 43,211,909 $ 22,929,122 TOTAL APPROPRIATIONS & RESERVES $ 38,463,046 $ 43,248,629 $ 47,474,

10 GENERAL OBLIGATION BOND (GOB) FUND On November 6, 2012, Miami-Dade County voters authorized the issuance of $1.2 billion of General Obligation (GO) Bonds for the modernization and construction of public school facilities, including educational technology upgrades. Voters previously authorized the issuance of $980 million of GO Bonds in March of 1988 for school construction, renovations and equipment. Final maturity of the $123 million outstanding in 1988 GO Bonds is in FY The 2012 GO Bonds will be sold strategically pursuant to the District s capital cash flow needs and market conditions. The bonds will bear interest at market rates, mature within thirty years, and will be secured by the full faith, credit and ad valorem taxing power of the District. The GOB Debt Service Fund is used to record principal and interest payments. The ad valorem millage is levied annually in an amount to cover the debt service requirements. Fund balance at the end of each year must be sufficient to make debt service payments due during July and August of the next fiscal year, before tax revenues are collected. The recommended millage rate for fiscal year is.285 mills, which is, as expected,.052 mills higher than FY as a result of voter approval of the 2012 GO Bond. FY FY ACTUAL PROJECTED TENTATIVE RESULTS RESULTS BUDGET REVENUES Local Sources District School Tax $ 45,474,237 $ 45,987,551 $ 58,732,618 Interest Revenue 60,429 50,000 48,000 Net Increase(Decrease) in Fair (2,961) - - Value of Investments Total Revenues $ 45,531,705 $ 46,037,551 $ 58,780,618 FUND BALANCE FROM PRIOR YEAR $ 53,537,026 $ 34,934,034 $ 34,842,822 TOTAL REVENUES & BALANCES $ 99,068,731 $ 80,971,585 $ 93,623,440 APPROPRIATIONS Bond Principal $ 54,145,000 $ 38,515,000 $ 40,640,000 Interest 9,989,697 7,613,763 16,648,204 Sub-Total $ 64,134,697 $ 46,128,763 $ 57,288,204 FUND BALANCE - END OF YEAR Restricted $ 34,934,034 $ 34,842,822 $ 36,335,236 TOTAL APPROPRIATIONS & RESERVES $ 99,068,731 $ 80,971,585 $ 93,623,

11 DEBT SERVICE AS A PERCENTAGE OF TOTAL TAXABLE ASSESSED VALUE OF PROPERTY Original Total Issue Maturity Interest Original Outstanding Debt Service Remaining Series Date Date Rate(s) Principal Principal Payments * Debt Service State Board of Education (SBE) Bonds: 2004A 07/15/04 01/01/ % 5,115,000 3,570, ,405 4,636, B 07/01/05 01/01/ % 2,735,000 1,540, ,000 1,795, Ref 05/01/05 01/01/ % 89,680,000 33,200,000 11,910,000 36,652, A 05/01/08 01/01/ % 8,425,000 7,075, ,200 10,391, A 08/15/09 01/01/ % 1,355,000 1,200,000 96,663 1,693, Ref 10/14/10 01/01/ % 1,710,000 1,060, ,000 1,248, A 10/14/10 01/01/ % 640, ,000 50, , Ref 10/14/10 01/01/ % 1,440,000 1,310, ,850 1,654, Ref 08/08/12 01/01/ % 725, ,000 77, ,750 SBE subtotal $ 111,825,000 $ 50,260,000 $ 13,818,668 $ 59,802,060 Certificates of Participation (COPs) Lease Purchase Agreements: 2001B 06/19/01 05/01/ % $ 54,650,000 $ 43,500,000 $ 3,600,000 $ 67,062, A 12/13/02 08/01/ % 75,000,000 56,940,000 5,542,000 82,419, B 12/13/02 08/01/ % 75,000,000 56,945,000 5,277,250 82,487, A 03/01/03 08/01/ % 63,633, , , , A 08/12/04 10/01/ % 87,210,000 52,280,000 10,162,463 60,684, A 06/28/05 04/01/ % 56,380,000 4,080,000 2,244,000 4,386, A 03/15/06 11/01/ % 201,080, ,545,000 7,667, ,399, B 04/11/06 11/01/ % 208,150, ,255,000 7,867, ,407, C 05/10/06 10/01/ % 53,665,000 36,460,000 5,018,400 45,187, D 12/21/06 10/01/ % 10,570,000 10,055, ,878 13,540, A 05/10/07 05/01/ % 316,515, ,955,000 14,042, ,659, B 05/24/07 05/01/32 4-5% 101,265,000 89,650,000 5,715, ,175, C 05/24/07 05/01/ % 90,825,000 90,825,000 4,541, ,157, A 06/19/08 08/01/26 5% 233,400, ,425,000 28,033, ,115, B 05/28/08 05/01/ % 538,305, ,985,000 25,960, ,408, C 08/01/08 07/15/ % 57,770,000 57,440,000 2,872,000 90,432, A 02/26/09 02/01/ % 310,055, ,375,000 16,085, ,048, A 03/01/11 05/01/ % 139,055, ,305,000 5,986, ,621, B 03/01/11 05/01/ % 137,660, ,660,000 7,218, ,148, A 5/24/ /30/30 2-4% 149,365, ,365,000 6,616, ,097, B-1 5/24/ /30/21 5% 13,765,000 13,765, ,250 18,591, B-2 5/24/ /30/20 4% 15,655,000 15,655, ,200 18,754, A 5/1/ /01/32 5% 68,230,000 68,230,000 3,411, ,321, B 5/1/ /01/30 5% 8,160,000 8,160, ,000 14,769,500 COPs subtotal $ 3,065,363,000 $ 2,574,022,018 $ 170,273,064 $ 4,146,070,899 * Includes principal and interest payments only for debt outstanding as of June 30,

12 DEBT SERVICE AS A PERCENTAGE OF TOTAL TAXABLE ASSESSED VALUE OF PROPERTY (continued) Original Total Issue Maturity Interest Original Outstanding Debt Service Remaining Series Date Date Rate(s) Principal Principal Payments * Debt Service Qualified School Construction Bonds (QSCBs) & Build America Bonds (BABs): 2009B 11/30/09 12/15/26 N/A $ 104,000,000 $ 104,000,000 $ - $ 104,000, A 06/15/10 06/15/ % 96,290,000 96,290, , ,279, B 06/15/10 06/15/ % 27,990,000 27,990,000 1,253,119 49,413,383 QSCB/BABs subtotal $ 228,280,000 $ 228,280,000 $ 2,038,060 $ 260,692,550 Master Equipment Lease (MEL/MTL) Agreements: ERP 06/01/ % $ 85,400,000 $ 37,421,661 $ 13,952,949 $ 39,912,099 Buses 1/15/ % 23,799,699 23,447,894 2,687,361 26,069,977 Buses 03/03/ % 24,387,033 8,245,859 2,923,693 8,771,078 HVAC 03/03/ % 21,986,770 7,434,365 2,635,982 7,907,947 Buses 03/01/ % 25,278,699 11,321,397 3,085,411 12,341,642 MEL/MTL subtot $ 180,852,201 $ 87,871,176 $ 25,285,396 $ 95,002,743 Qualified Zone Academy Bonds (QZABs): /21/00 12/21/13 N/A $ 24,508,401 $ 24,508,401 $ 24,508,401 $ 24,508, /01/01 06/01/15 N/A 15,000,000 15,000,000-15,000, /18/03 12/18/18 N/A 9,743,635 9,743,635-9,743, /15/06 12/15/22 N/A 2,599,392 2,599,392-2,599, /09/10 11/09/30 N/A 24,480,000 24,480,000 36,720 24,480,000 QZABs subtotal $ 76,331,428 $ 76,331,428 $ 24,545,121 $ 76,331,428 General Obligation Bonds (GOB): /24/94 08/01/ % $ 99,030,000 $ 22,365,000 $ 11,736,000 $ 23,497, /15/97 02/15/17 5.0% 86,785,000 40,305,000 11,290,250 45,479, /15/98 08/01/ % 154,580,000 60,675,000 23,186,016 65,464,528 GOBs subtotal $ 340,395,000 $ 123,345,000 $ 46,212,266 $ 134,441,653 Total $ 4,003,046,629 $ 3,140,109,621 $ 282,172,575 $ 4,772,341,333 Debt Service as a Percent of Total Assessed Value 0.131% 2.22% Total Taxable Assessed Value $ 215,102,167,528 * Includes principal and interest payments only for debt outstanding as of June 30,

13 FUTURE DEBT SERVICE REQUIREMENTS For Debt Outstanding as of June 30, 2013 (000's) Note: Debt service obligations differ from those listed in the Executive Summary because of changes in variable interest rates and restructuring of debt. Year Ended June 30: SBE ARRA- QSCBs/ BABs COPs MEL/MTL QZABs GOB TOTAL 2014 $ 13,819 $ 2,038 $ 170,273 $ 25,285 $24,508 $ 46,212 $ 282, ,836 2, ,049 24,637 15,000 46, , ,847 11, ,783 23,988-30, , ,762 20, ,544 5,773-11, , ,000 20, ,900 2, , FORWARD 13, ,631 3,177,522 12,633 36,823-3,445,147 Total $ 59,802 $260,692 $4,146,071 $ 95,003 $76,331 $ 134,442 $4,772,341 Total Payments Future Debt Service Payments Total All Financial Instruments Financing Instrument Total Payments QZABs 2% MEL/MTL 2% GOB 3% SBE 1% QSCBs/ BABs 5% SBE $ 59,802 QSCBs/BABs 260,692 COPs 4,146,071 MEL/MTL 95,003 QZABs 76,331 GOB 134,442 Total $ 4,772,341 COPs 87% 5-13

14 FUTURE DEBT SERVICE REQUIREMENTS For Debt Outstanding as of June 30, 2013 Millions Annual Debt Service by Debt Type SBE State Board of Education Fiscal Year QSCBs/BABs Qualified School Construction Bonds / Build America Bonds COPs Certificates of Participation MEL/MTL Master Equipment/Technology Lease QZABs Qualified Zone Academy Bonds GOB General Obligation Bonds 5-14

15 ESTIMATED LEGAL DEBT MARGIN ON BONDED DEBT AS OF JUNE 30, 2013 ($ Millions) The Florida State Board of Education Administrative Rule 6A (2) establishes a parameter on bonded indebtedness for school districts. Limits are computed as ten percent of the assessed value of taxable property for the most current year. The District can bond approximately $21.37 billion with voter approval. Funds may be used for schools listed in the advertised project list. The District s most recent General Obligation Bonds were issued in 1987 and will be retired in Limit of bonded indebtedness: 10% of the net assessed value of taxable property in 2013 (approximately $215,102.17) $ 21, Gross bonded debt * $ Less amounts available in Debt Service Funds** (32.55) Total amount applicable to debt limit Legal debt margin on bonded debt $ 21, * Includes outstanding bonds issued by the District and bonds issued by the state on behalf of the District and repaid from the District s share of Florida Motor Vehicle License taxes. ** Includes estimated cash on hand available on June 30,

16 DISTRICT BOND AND NOTE RATINGS The District s significant fiscal improvement over the last four years, its strong management team, its strategic response to financial challenges caused by reduced state funding and property tax growth restrictions, and its ability to fund capital improvements through the recent voter-approved General Obligation Bonds have been positively recognized by the rating agencies and is reflected in the rating designations below. Short Term Notes Long Term -General Obligation Bonds Long Term -Certificates of Participation Rating Agency Moody's MIG1 Aa3, Stable Outlook A1, Stable Outlook Standard and Poor's A+, Stable Outlook A, Stable Outlook Moody s Investor Service: Ratings for Long-Term Municipal Debt Aaa Best quality; carry the smallest degree of investment risk. Aa High quality; margins of protection not quite as large as the Aaa bonds. A Upper medium grade; security adequate but could be susceptible to impairment. Baa Medium grade; neither highly protected nor poorly secured lack outstanding investment characteristics and sensitive to changes in economic circumstances. Ba Speculative; protection is very moderate. B Not desirable investment; sensitive to day-to-day economic circumstances. Caa Poor standing; may be in default but with a workout plan. Ca Highly speculative; may be in default with nominal workout plan. C Hopelessly in default. Ratings further classified by 1, 2, or 3 modifier with 1 being high and 3 being low. Moody s Investor Service: Ratings for Short-Term Municipal Debt MIG 1 MIG 2 MIG 3 MIG 4 This designation denotes best quality. There is present strong protection by established cash flows, superior liquidity support or demonstrated broad-based access to the market for refinancing. This designation denotes high quality. Margins of protection are ample although not so large as in the preceding group. This designation denotes favorable quality. All security elements are accounted for but lacking the undeniable strength of the preceding grades. Liquidity and cash flow protection may be narrow and market access for refinancing is likely to be less well established. This designation denotes adequate quality. Protection commonly regarded as required of an investment security is present and although not distinctly or predominantly speculative, there is specific risk. 5-16

17 DISTRICT BOND AND NOTE RATINGS (continued) Standard & Poor's: Ratings for Long-Term Municipal Debt AAA Highest rating; extremely strong security. AA Very strong security; differs from AAA in only a small degree. A Strong capacity but more susceptible to adverse economic effects than two above categories. BBB Adequate capacity but adverse economic conditions more likely to weaken capacity. BB Lowest degree of speculation; risk exposure. B Speculative; risk exposure. CCC Speculative; major risk exposure. CC Highest degree of speculation; major risk exposure. C No interest is being paid. D Bonds in default with interest and/or repayment of principal in arrears. Those issues determined to possess overwhelming safety characteristics will be given a plus (+) designation. Standard & Poor's: Ratings for Municipal Notes SP-1 SP-2 SP-3 Very strong or strong capacity to pay principle and interest. Those issues determined to possess overwhelming safety characteristics will be given a plus (+) designation. Satisfactory capacity to pay principal and interest Speculative capacity to pay principal and interest. + or - are used with a rating symbol to indicate the relative position of a credit within the rating category. 5-17