Leander Independent School District

Transcription

AMENDED AND RESTATED PRELIMINARY OFFICIAL STATEMENT DATED JANUARY 5, 2016
This Preliminary Official Statement and the information contained herein are subject to completion or amendment. Under no circumstances will this Preliminary Official Statement constitute an offer to sell or
the solicitation of an offer to buy nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities
laws of any such jurisdiction.
NEW ISSUE: BOOK-ENTRY-ONLY
Enhanced/Unenhanced S&P Ratings: "AAA"/"AA-"
(See "THE BONDS - Security", "RATINGS" and "THE
PERMANENT SCHOOL FUND GUARANTEE PROGRAM")
In the opinion of Bond Counsel, interest on the Bonds will be excludable from gross income for federal income tax purposes under statutes, regulations,
published rulings and court decisions existing on the date thereof and will not be included in the alternative minimum taxable income of individuals, subject
to the matters described under "Tax Matters" herein. See "Tax Matters" herein for a discussion of Bond Counsel's opinion, including the alternative
minimum tax consequences for corporations.
LEANDER INDEPENDENT SCHOOL DISTRICT
(Williamson and Travis Counties, Texas)
$79,582,191.90*
UNLIMITED TAX REFUNDING BONDS
SERIES 2016
Dated Date: Date of Delivery
Due: as shown on page ii
The Leander Independent School District (the "District") is issuing its Unlimited Tax Refunding Bonds, Series 2016 (the "Bonds") in part as Current
Interest Bonds ("CIBs") and in part as Premium Capital Appreciation Bonds ("CABs"), as shown on page ii hereof, and the Bonds are being issued
pursuant to the Constitution and general laws of the State of Texas, particularly Chapters 1207 and 1371, Texas Government Code, as amended, (the
"Acts"), and an order adopted by the Board of Trustees (the "Bond Order") on October 15, 2015. As permitted by the Acts, the Board has, in the Bond
Order, delegated to certain District officials the authority to establish final terms and effectuate the sale of the Bonds, which terms will be set forth in a
pricing certificate (the "Pricing Certificate") relating to the Bonds that will be executed by the District’s authorized pricing officer (the "Pricing Officer") on
the date of sale of the Bonds. The Bonds are payable as to principal and interest from the proceeds of an ad valorem tax levied annually, without legal
limit as to rate or amount, against all taxable property located within the District (See "THE BONDS – Security"). The District has received conditional
approval from the Texas Education Agency for the Bonds to be guaranteed under the State of Texas Permanent School Fund Guarantee Program
(hereinafter defined), which guarantee will automatically become effective when the Attorney General of Texas approves the Bonds. (See "THE BONDS
– Permanent School Fund Guarantee" and "THE PERMANENT SCHOOL FUND GUARANTEE PROGRAM").
Interest on the CIBs will accrue from the Dated Date shown above and will be payable on February 15 and August 15 of each year, commencing August
15, 2016 until stated maturity or prior redemption. Interest on the CABs will accrete from the date they are initially delivered to the initial purchasers
thereof named below (the "Underwriters"), will compound semiannually on each February 16 and August 16, commencing February 16, 2016, and will
be payable only upon stated maturity or prior redemption. The CIBs will be issued in fully registered form in principal denominations of $5,000 or any
integral multiple thereof within a stated maturity, and CABs will be issued as fully registered bonds in denominations of $5,000 of Maturity Value, defined
herein, or any integral multiple thereof. Principal of the CIBs, and Accreted Values (defined herein) or Maturity Values (defined herein) of the CABs, will
be payable by the Paying Agent/Registrar, which initially is U.S. Bank National Association, Houston, Texas (the "Paying Agent/Registrar"), upon
presentation and surrender of the Bonds for payment; provided, however, that so long as Cede & Co. (or other DTC nominee) is the registered owner
of the Bonds, all payments will be made as described under "BOOK-ENTRY-ONLY SYSTEM" herein. Interest on the CIBs is payable by check dated
as of the interest payment date and mailed by the Paying Agent/Registrar to the registered owners as shown on the records of the Paying Agent/Registrar
on the close of business on the last business day of the month next preceding each interest payment date (the "Record Date").
The District intends to utilize the Book-Entry-Only System of The Depository Trust Company ("DTC"). Such Book-Entry-Only System will affect the
method and timing of payment and the method of transfer of the Bonds. (See "BOOK-ENTRY-ONLY SYSTEM").
Proceeds from the sale of the Bonds will be used to (1) refund certain of the District’s currently outstanding unlimited tax debt as described in Schedule
I, attached hereto (the "Refunded Bonds"), for debt service savings and (2) pay costs of issuance of the Bonds. (See "THE BONDS – Authorization and
Purpose", "THE BONDS – Refunded Bonds" and "SCHEDULE I – Schedule of Refunded Bonds").
The CIBs maturing on and after August 15, 2026 are subject to redemption at the option of the District, in whole or in part, on August 15, 2025 or any
date thereafter, at a price equal to the principal amount thereof, plus accrued interest to the date of redemption. The CABs maturing on or after August
16, 2026 are subject to redemption at the option of the District, in whole or in part, in Maturity Values of $5,000 or any integral multiple thereof, on August
16, 2025 or on any date thereafter, at the redemption price equal to the Accreted Value as of the date of redemption (such Accreted Value as defined
herein under the caption "THE BONDS – General Description" and to be calculated as of any redemption date in accordance with such definition). (See
"THE BONDS – Redemption Provisions.")
The Bonds are offered when, as and if issued, and accepted by the Underwriters, subject to the approval of legality by the Attorney General of the
State of Texas and Andrews Kurth LLP, Austin, Texas, Bond Counsel. Certain legal matters will be passed upon for the District by McCall, Parkhurst
& Horton L.L.P., Austin, Texas, disclosure counsel to the District. Certain legal matters will be passed upon for the Underwriters by Norton Rose
Fulbright US LLP, Austin, Texas, counsel to the Underwriters. The Bonds are expected to be available for delivery on or about February 4, 2016.
William Blair
Citigroup
________________________
* Preliminary, subject to change.
Estrada Hinojosa & Company, Inc.
Raymond James
MATURITY SCHEDULE*
CUSIP Base Number: 521841
$79,582,191.90
UNLIMITED TAX REFUNDING BONDS, SERIES 2016
$57,305,000.00 Current Interest Bonds(1)
Maturity Date
Principal
8/15(2)
Amount
2016
$1,320,000.00
****
******
2018
7,950,000.00
2019
1,050,000.00
2020
1,935,000.00
2021
1,990,000.00
2022
2,015,000.00
2023
2,100,000.00
2024
2,180,000.00
2025
2,210,000.00
2026
2,295,000.00
2027
2,410,000.00
2028
2,530,000.00
2029
2,585,000.00
2030
2,715,000.00
2031
2,850,000.00
2032
2,990,000.00
2033
3,145,000.00
2034
3,300,000.00
2035
1,430,000.00
2036
1,505,000.00
2037
1,575,000.00
2038
1,655,000.00
2039
1,740,000.00
2040
1,830,000.00
Interest
Rate
Initial
Yield
CUSIP
Suffix(3)
(Interest to accrue from initial delivery)
$22,277,191.90 Premium Capital Appreciation Bonds
Maturity Date
8/16 (2)
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
Principal
Amount
$ 488,608.05
962,806.00
560,147.30
360,291.80
252,876.80
4,083,885.80
3,753,360.10
3,549,730.80
3,117,970.20
2,740,433.85
2,407,081.20
Initial
Yield
Maturity
Value
$ 3,255,000.00
9,745,000.00
8,615,000.00
8,420,000.00
8,980,000.00
14,020,000.00
14,665,000.00
15,785,000.00
15,780,000.00
15,785,000.00
15,780,000.00
Initial Offering
Price per $5,000
In Maturity Value
CUSIP
Suffix (3)
(Interest to accrete from date of initial delivery)
________________________
(1)
(2)
(3)
A portion of the Current Interest Bonds may be issued as Stepped Coupon Bonds bearing interest at a rate that resets periodically.
Subject to redemption prior to stated maturity at the times and prices specified herein. See "THE BONDS-Redemption Provisions."
CUSIP numbers have been assigned to this issue by the CUSIP Service Bureau and are included solely for the convenience of the purchasers of the Bonds. CUSIP is a registered
trademark of the American Bankers Association. CUSIP data herein is provided by CUSIP Global Services, managed by Standard & Poor’s Financial Services LLC on behalf of
The American Bankers Association. This data is not intended to create a database and does not serve in any way as a substitute for the CUSIP Services. None of the Underwriters,
the District nor the Financial Advisor is responsible for the selection or correctness of the CUSIP numbers set forth herein.
ii
P.O. Box 218
Leander, Texas 78646-0218
DISTRICT OFFICIALS, STAFF AND CONSULTANTS
ELECTED OFFICIALS
Date First
Elected
Term Expires
Place
Will Streit, President
May – 2008
Nov – 2018
7
Pamela Waggoner, Vice President
May – 2002
Nov – 2016
3
Owner – Insurance Agency
Grace S. Barber-Jordan, M.Ed, Secretary
May – 2001
Nov – 2016
4
Psychotherapist
Name
Occupation
IBM, Product Manager
Trish Bode, Member
May – 2015
Nov – 2018
1
Corporate Communications
Russell Bundy, Member
May – 2007
Nov – 2016
5
Retired Police Officer Austin Community College
Don Hisle, Member
May – 1996
Nov – 2018
2
Retired IBM – Self
Employed
Aaron Johnson, Member
May – 2011
Nov - 2018
6
Regional Manager – Oracle
ADMINISTRATIVE STAFF
Name
Position
Bret Champion, Ed.D.
Superintendent of Schools
Malinda Golden, Ph.D.
Deputy Superintendent
Matt Smith
Asst. Superintendent for Instructional Services
Karie Lynn McSpadden
Veronica Sopher
Asst. Superintendent for Human Resources
Asst. Superintendent for Community and Governmental
Relations
Lucas Janda
Chief Financial Officer
CONSULTANTS AND ADVISORS
Bond Counsel ......................................................................................................................................Andrews Kurth LLP, Austin, Texas
Disclosure Counsel...................................................................................................... McCall, Parkhurst & Horton L.L.P., Austin, Texas
Financial Advisor ........................................................................................................ Public Financial Management, Inc., Austin, Texas
Property Appraised by ..................................................................................................Williamson and Travis Central Appraisal Districts
For Additional Information Please Contact:
Lucas Janda
204 W. South Street
Leander, Texas 78646
(512) 570-0400
John E. Crumrine
Senior Managing Consultant
Public Financial Management, Inc.
221 W. 6th Street, Suite 1900
Austin, Texas 78701
(512) 614-5325
iii
USE OF INFORMATION IN OFFICIAL STATEMENT
For purposes of compliance with Rule 15c2-12 of the United States Securities and Exchange Commission, this document constitutes an “official statement” of the District with respect to the Bonds that has
been “deemed final” by the District as of its date except for the omission of no more than the information permitted by Rule 15c2-12.
No dealer, broker, salesman or other person has been authorized to give any information, or to make any representations other than those contained in this Official Statement, and, if given or made, such
other information or representations must not be relied upon as having been authorized by the District or the Underwriters.
This Official Statement is not to be used in connection with an offer to sell or the solicitation of an offer to buy in any state in which such offer or solicitation is not authorized or in which the person making
such offer or solicitation is not qualified to do so or to any person to whom it is unlawful to make such offer or solicitation.
The Underwriters have provided the following sentence for inclusion in this Official Statement. The Underwriters have reviewed the information in this Official Statement in accordance with, and as part of,
their respective responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriters do not guarantee the accuracy or completeness
of such information.
Certain information set forth herein has been obtained from the District, the Texas Education Agency (the "TEA"), and other sources which are believed to be reliable but is not guaranteed as to accuracy
or completeness, and is not to be construed as a representation by the Underwriters. Any information and expressions of opinion herein contained are subject to change without notice, and neither the
delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the District, the TEA or other matters
described herein since the date hereof. See "THE PERMANENT SCHOOL FUND GUARANTEE PROGRAM – PSF CONTINUING DISCLOSURE UNDERTAKING" AND "CONTINUING DISCLOSURE OF
INFORMATION" for a description of the undertakings of the TEA and the District, respectively, to provide certain information on a continuing basis.
This official statement contains "forward-looking" statements within the meaning of section 21E of the Securities Exchange Act of 1934, as amended. Such statements may involve known and unknown
risks uncertainties and other factors which may cause the actual results, performance and achievements to be different from the future results, performance and achievements expressed or implied by such
forward-looking statements. Investors are cautioned that the actual results could differ materially from those set forth in the forward-looking statements.
IN CONNECTION WITH THE OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE THE MARKET PRICE OF THE ISSUE AT A LEVEL ABOVE
THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
This Official Statement includes descriptions and summaries of certain events, matters and documents. Such descriptions and summaries do not purport to be complete and all such descriptions, summaries
and references thereto are qualified in their entirety by reference to this Official Statement in its entirety and to each such document, copies of which may be obtained from the District. Any statements made
in this Official Statement or the appendices hereto involving matters of opinion or estimates, whether or not so expressly stated, are set forth as such and not as representations of fact, and no representation
is made that any of such opinions or estimates will be realized.
THE BONDS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, IN RELIANCE UPON EXEMPTIONS CONTAINED IN SUCH ACT. ANY REGISTRATION OR
QUALIFICATION OF THE BONDS IN ACCORDANCE WITH APPLICABLE PROVISIONS OF SECURITIES LAW OF THE STATES IN WHICH THE BONDS HAVE BEEN OR MAY BE REGISTERED OR
QUALIFIED AND THE EXEMPTION FROM REGISTRATION OR QUALIFICATION IN OTHER STATES CANNOT BE REGARDED AS A RECOMMENDATION THEREOF. THE BONDS HAVE NOT BEEN
RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE
ACCURACY OR DETERMINED THE ADEQUACY OF THIS OFFICIAL STATEMENT. ANY REPRESENTATION TO THE CONTRARY MAY BE A CRIMINAL OFFENSE.
TABLE OF CONTENTS
USE OF INFORMATION IN OFFICIAL STATEMENT .............................................................. iv
SELECTED DATA FROM THE OFFICIAL STATEMENT ......................................................... v
INTRODUCTORY STATEMENT................................................................................................ 1
THE BONDS .............................................................................................................................. 1
REGISTERED OWNERS’ REMEDIES ...................................................................................... 5
BOOK-ENTRY-ONLY SYSTEM ................................................................................................ 5
REGISTRATION, TRANSFER AND EXCHANGE ..................................................................... 7
AD VALOREM TAX PROCEDURES ......................................................................................... 8
THE PROPERTY TAX CODE AS APPLIED TO THE DISTRICT ............................................. 11
STATE AND LOCAL FUNDING OF SCHOOL DISTRICTS IN TEXAS ................................... 12
CURRENT PUBLIC SCHOOL FINANCE SYSTEM................................................................. 14
TAX RATE LIMITATIONS ....................................................................................................... 18
DEBT LIMITATIONS................................................................................................................ 19
EMPLOYEES RETIREMENT PLAN ........................................................................................ 19
RATINGS ................................................................................................................................. 19
LEGAL MATTERS .................................................................................................................. 19
TAX MATTERS ....................................................................................................................... 20
REGISTRATION AND QUALIFICATION OF BONDS FOR SALE ......................................... 22
LEGAL INVESTMENTS AND ELIGIBILITY TO SECURE PUBLIC FUNDS IN TEXAS ......... 22
INVESTMENT AUTHORITY AND PRACTICES OF THE DISTRICT ...................................... 22
THE PERMANENT SCHOOL FUND GUARANTEE PROGRAM............................................ 24
VERIFICATION OF MATHEMATICAL CALCULATIONS....................................................... 37
FINANCIAL ADVISOR ............................................................................................................ 37
AUTHENTICITY OF FINANCIAL INFORMATION .................................................................. 38
USE OF AUDITED FINANCIAL STATEMENTS ..................................................................... 38
LITIGATION ............................................................................................................................ 38
CONTINUING DISCLOSURE OF INFORMATION.................................................................. 38
UNDERWRITING..................................................................................................................... 39
FORWARD - LOOKING STATEMENTS ................................................................................. 39
CONCLUDING STATEMENT .................................................................................................. 40
Schedule of Refunded Bonds………………..……………………………….…………………..……….……………………………………………………...Schedule I
Schedule of Accreted Values for the CABs………………………………………………………………………………………………………………...……Schedule II
Financial Information of the District................................................................................................................................................................................Appendix A
Additional Information Regarding Leander Independent School District and Williamson and Travis Counties, Texas .................................................Appendix B
Form of Legal Opinion of Bond Counsel........................................................................................................................................................................Appendix C
District Comprehensive Annual Financial Report for the Year Ended August 31, 2014................................................................................................Appendix D
The cover page hereof, the section entitled "Selected Data from the Official Statement," this Table of Contents, the Schedules, and the Appendices attached
hereto are part of this Official Statement.
iv
SELECTED DATA FROM THE OFFICIAL STATEMENT
The selected data below is subject in all respects to the more complete information and definitions contained or incorporated in this
Official Statement. The offering of the Bonds to potential investors is made only by means of this entire Official Statement. No
person is authorized to detach this page from this Official Statement or to otherwise use it without the entire Official Statement.
The Issuer
Leander Independent School District (the "District") is a political subdivision located in
Williamson and Travis Counties, Texas. The District is governed by a seven member Board of
Trustees (the "Board"). Policy-making and supervisory functions are the responsibility of, and
are vested in, the Board. The Board delegates administrative responsibilities to the
Superintendent of Schools who is the chief administrative officer of the District. Support
services are supplied by consultants and advisors.
The Bonds
The Bonds are being issued in the aggregate principal amount of $79,582,191.90* pursuant to the
Constitution and general laws of the State of Texas, particularly Chapters 1207 and 1371, Texas
Government Code, as amended (the "Acts"), and an order adopted by the Board (the "Bond
Order") on October 15, 2015. As permitted by the Acts, the Board has, in the Bond Order,
delegated to certain District officials the authority to establish final terms and effectuate the sale of
the Bonds, which terms will be set forth in a pricing certificate (the "Pricing Certificate") relating to
the Bonds that will be executed by the District’s authorized pricing officer (the "Pricing Officer") on
the date of sale of the Bonds. The Bonds are being issued in part as Current Interest Bonds
("CIBs") and in part as Premium Capital Appreciation Bonds ("CABs"). Proceeds from the sale of
the Bonds will be used to (1) refund certain of the District’s currently outstanding unlimited tax debt
as described in Schedule I, attached hereto (the "Refunded Bonds"), for debt service savings and
(2) pay costs of issuance of the Bonds. (See "THE BONDS" – Authorization and Purpose", "THE
BONDS – Refunded Bonds" and "SCHEDULE I – Schedule of Refunded Bonds").
Paying
Agent/Registrar
The initial Paying Agent/Registrar is U.S. Bank National Association, Houston, Texas. The
District intends to use the Book-Entry-Only System of The Depository Trust Company. (See
"BOOK-ENTRY-ONLY SYSTEM.)
Security
The Bonds constitute direct obligations of the District, payable as to the principal and interest
from ad valorem taxes levied annually against all taxable property located within the District,
without legal limitation as to rate or amount. (See "THE BONDS - Security"). The Bonds are
expected to be guaranteed by the corpus of the Permanent School Fund of the State of Texas.
(See "THE BONDS – Security"; see also "THE BONDS - The Permanent School Fund
Guarantee Program" and "THE PERMANENT SCHOOL FUND GUARANTEE PROGRAM").
Redemption
The CIB’s maturing on and after August 15, 2026 are subject to redemption at the option of the
District, in whole or in part, on August 15, 2025 or any date thereafter, at a price equal to the
principal amount thereof, plus accrued interest to the date of redemption. The CABs maturing on
or after August 16, 2026 are subject to redemption at the option of the District, in whole or in part,
in Maturity Values of $5,000 or any integral multiple thereof, on August 16, 2025 or on any date
thereafter, at the redemption price equal to the "Accreted Value" as of the date of redemption (such
"Accreted Value" as defined herein under the caption "THE BONDS – General Description" and to
be calculated as of any redemption date in accordance with such definition). (See "THE BONDS
- Redemption Provisions").
Tax Exemption
In the opinion of Bond Counsel for the District, interest on the Bonds is excludable from gross
income for federal income tax purposes under statutes, regulations, published rulings and court
decisions existing on the date thereof and not included in the alternative minimum taxable
income of individuals, subject to the matters described under "TAX MATTERS" herein. See
"TAX MATTERS" herein for a discussion of Bond Counsel's opinion including the alternative
minimum tax consequences for corporations.
Payment Record
The District has never defaulted on the payment of its general obligation tax-supported debt.
Legal Opinion
The issuance of the Bonds is subject to the approving opinion of the Texas Attorney General,
and the approval of certain legal matters by Andrews Kurth LLP, Austin, Texas, Bond Counsel.
Delivery
On or about February 4, 2016.
________________________
v
[THIS PAGE INTENTIONALLY LEFT BLANK]
OFFICIAL STATEMENT
RELATING TO
(Williamson and Travis Counties, Texas)
$79,582,191.90*
UNLIMITED TAX REFUNDING BONDS
SERIES 2016
INTRODUCTORY STATEMENT
This Official Statement, including the Schedule I, Schedule II and Appendices A, B and D, has been prepared by the Leander
Independent School District, a political subdivision of the State of Texas located in Williamson and Travis Counties (the "District"),
in connection with the offering by the District of its Unlimited Tax Refunding Bonds, Series 2016 (the "Bonds") identified on page
ii hereof.
All financial and other information presented in this Official Statement has been provided by the District from its records, except
for information expressly attributed to other sources. The presentation of information, including tables of receipts from taxes
and other sources, is intended to show recent historic information, and is not intended to indicate future or continuing trends in
the financial position or other affairs of the District. No representation is made that past experience, as is shown by that financial
and other information, will necessarily continue or be repeated in the future.
This Official Statement speaks only as of its date, and the information contained herein is subject to change. A copy of the Final
Official Statement and the Escrow Agreement (defined herein) pertaining to the Bonds will be filed with the Municipal Securities
Rulemaking Board through its Electronic Municipal Market Access ("EMMA") system. See "CONTINUING DISCLOSURE OF
INFORMATION" for a description of the District’s undertaking to provide certain information on a continuing basis.
THE BONDS
Authorization and Purpose
The Bonds are being issued, pursuant to the Constitution and general laws of the State of Texas, including, particularly Chapters
1207 and 1371, Texas Government Code, as amended (the "Acts"), and an order adopted by the Board (the "Bond Order") on
October 15, 2015. As permitted by the Acts, the Board has, in the Bond Order, delegated to certain District officials the authority
to establish final terms and effectuate the sale of the Bonds, which terms will be set forth in a pricing certificate (the "Pricing
Certificate") relating to the Bonds that will be executed by the District's authorized pricing officer (the "Pricing Officer") on the
date of sale of the Bonds. (The Bond Order and the Pricing Certificate are jointly referred to as the "Order.") Proceeds from the
sale of the Bonds will be used to (1) refund certain of the District’s currently outstanding unlimited tax debt as described in
Schedule I, attached hereto (the "Refunded Bonds"), for debt service savings and (2) pay costs of issuance of the Bonds.
General Description
The Bonds are dated the date of delivery (the "Dated Date"). The Bonds are issued as bonds on which interest is paid on a periodic
(semiannual) basis (the "Current Interest Bonds" or "CIBs") and bonds on which interest will accrete and be paid only at stated
maturity or prior redemption (the "Capital Appreciation Bonds" or "CABs"). The CIBs will accrue interest from the Dated Date.
The CABs will accrete interest from the Dated Date to their stated maturity or prior redemption, but interest and principal will be
paid only at stated maturity or prior redemption (such amount calculated to stated maturity is referred to herein as the "Maturity
Value"). The CIBs will mature on the dates and in the principal amounts set forth on page ii of this Official Statement. The CABs
will mature on the dates and in the Maturity Values set forth on page ii, and will accrete interest at the initial offering yield shown
on page ii resulting from the initial offering price to the public. Interest on the CIBs is payable initially on August 15, 2016, and
on each February 15 and August 15 thereafter until stated maturity or prior redemption. Interest on the CABs will compound on
each February 16 and August 16, commencing February 16, 2016, until stated maturity or prior redemption. The accreted value
of each CAB is the sum of the principal of, interest accreted on and the initial premium, if any, on such CAB per $5,000 Maturity
Value as of each February 16 and August 16 computed on the basis of the initial offering price to the public as adjusted by
semiannual compounding at the initial offering yield set forth on page ii of this Official Statement (the "Accreted Value"). A table
of Accreted Values based on such initial offering price is set forth herein under Schedule II. Such Accreted Value table is
provided for informational purposes only and may not reflect prices for the CABs in the secondary market.
The Bonds will be issued only as fully registered bonds. The Bonds will be issued in principal amounts or Maturity Values of
$5,000 or any integral multiple thereof within a maturity.
________________________
1
Amounts due at maturity or prior redemption of the Bonds will be payable only upon presentation of such Bonds at the designated
corporate trust office of the Paying Agent/Registrar at maturity or prior redemption.
Redemption Provisions
The CIBs maturing on and after August 15, 2026 are subject to redemption at the option of the District, in whole or in part, on
August 15, 2025 or any date thereafter, at a price equal to the principal amount thereof, plus accrued interest to the date of
redemption.
The CABs maturing on or after August 16, 2026 are subject to redemption at the option of the District, in whole or in part, in
Maturity Values of $5,000 or any integral multiple thereof, on August 16, 2025 or on any date thereafter, at the redemption price
equal to the "Accreted Value" as of the date of redemption (such "Accreted Value" as defined herein under the caption "THE
BONDS – General Description" and to be calculated as of any redemption date in accordance with such definition).
If less than all of the Bonds within a stated maturity are to be redeemed, the District shall determine the principal amount or
Maturity Value, as applicable, and maturities to be redeemed and shall direct the Paying Agent/Registrar to select by lot or other
customary method that results in a random selection, the Bonds or portions thereof, to be redeemed.
At least 30 days prior to the date fixed for any redemption of the Bonds or portions thereof prior to maturity, the District shall
cause a notice of such redemption to be sent by United States mail, first-class postage prepaid, to the registered owner of each
Bond or a portion thereof to be redeemed at its address as it appears on the registration books of the Paying Agent/Registrar
on the day such notice of redemption is mailed. ANY NOTICE SO MAILED SHALL BE CONCLUSIVELY PRESUMED TO HAVE
BEEN DULY GIVEN, WHETHER OR NOT THE REGISTERED OWNER RECEIVES SUCH NOTICE. NOTICE HAVING BEEN
SO GIVEN, THE BONDS CALLED FOR REDEMPTION SHALL BECOME DUE AND PAYABLE ON THE SPECIFIED
REDEMPTION DATE, AND NOTWITHSTANDING THAT ANY BOND OR PORTION THEREOF HAS NOT BEEN
SURRENDERED FOR PAYMENT, INTEREST ON SUCH BOND OR PORTION THEREOF SHALL CEASE TO ACCRUE OR
ACCRETE. By the date fixed for any such redemption, due provision shall be made with the Paying Agent/Registrar for the
payment of the required redemption price for the Bonds or portions thereof which are to be so redeemed. If such notice of
redemption is given and if due provision for such payment is made, all as provided above, the Bonds or portions thereof which
are to be redeemed thereby automatically shall be treated as redeemed prior to their scheduled maturities, and they shall not
bear interest after the date fixed for redemption, and they shall not be regarded as being outstanding except for the right of the
registered owner to receive the redemption price from the Paying Agent/Registrar out of the funds provided such payment.
With respect to any optional redemption of the Bonds, unless certain prerequisites to such redemption required by the Order
have been met and money sufficient to pay the redemption price of the Bonds to be redeemed has been received by the Paying
Agent/Registrar prior to the giving of such notice of redemption, such notice will state that said redemption may, at the option of
the District, be conditional upon the satisfaction of such prerequisites and receipt of such money by the Paying Agent/Registrar
on or prior to the date fixed for such redemption or upon any prerequisite set forth in such notice of redemption. If a conditional
notice of redemption is given and such prerequisites to the redemption are not fulfilled, such notice will be of no force and effect,
the District will not redeem such Bonds, and the Paying Agent/Registrar will give notice in the manner in which the notice of
redemption was given, to the effect that the Bonds have not been redeemed.
All notices of redemption shall (i) specify the date of redemption for the Bonds, (ii) identify the Bonds to be redeemed and, in the
case of a portion of the principal amount or Maturity Value to be redeemed, the principal amount or Maturity Value thereof to be
redeemed, (iii) state the redemption price, (iv) specify that payment of the redemption price for the Bonds, or the principal amount
or Maturity Value thereof to be redeemed, shall be made at the designated corporate trust office of the Paying Agent/Registrar
only upon presentation and surrender thereof by the registered owner. If a Bond is subject by its terms to redemption and has
been called for redemption and notice of redemption thereof has been duly given or waived as provided in the Order, such Bond
(or the principal amount or Maturity Value, as appropriate, thereof to be redeemed) so called for redemption shall become due
and payable, and on the redemption date designated in such notice, interest on said Bonds (or the principal amount or Maturity
Value, as appropriate, thereof to be redeemed) so called for redemption shall become due and payable, and on the redemption
date designated in such notice, interest on said Bonds (or principal amount or Maturity Value thereof to be redeemed) called for
redemption shall cease to accrue or accrete, as applicable, and such Bonds shall no longer be deemed to be outstanding.
The Paying Agent/Registrar and the District, so long as a Book-Entry-Only System is used for the Bonds, will send any notice
of redemption, notice of proposed amendment to the Order or other notices with respect to the Bonds only to DTC. Any failure
by DTC to advise any DTC participant, or of any DTC participant or indirect participant to notify the beneficial owner, shall not
affect the validity of the redemption of the Bonds called for redemption or any other action premised on any such notice.
Redemption of portions of the Bonds by the District will reduce the outstanding principal amount or Maturity Value of such Bonds
held by DTC. In such event, DTC may implement, through its Book-Entry-Only System, a redemption of such Bonds held for the
account of DTC participants in accordance with its rules or other agreements with DTC participants and then DTC participants
and indirect participants may implement a redemption of such Bonds from the beneficial owners. Any such selection of Bonds
to be redeemed will not be governed by the Order and will not be conducted by the District or the Paying Agent/Registrar. Neither
the District nor the Paying Agent/Registrar will have any responsibility to DTC participants, indirect participants or the persons
for whom DTC participants act as nominees, with respect to the payments on the Bonds or the providing of notice to DTC
participants, indirect participants, or beneficial owners of the selection of portions of the Bonds for redemption. See "BOOKENTRY-ONLY SYSTEM" herein.
2
Security
The Bonds are direct obligations of the District and are payable as to both principal and interest from ad valorem taxes to be
levied on all taxable property within the District, without legal limitation as to rate or amount. (See "STATE AND LOCAL
FUNDING OF SCHOOL DISTRICTS IN TEXAS"). The Bonds are expected to be guaranteed by the corpus of the Permanent
School Fund of the State of Texas. (See "THE PERMANENT SCHOOL FUND GUARANTEE PROGRAM").
Yield on Premium Capital Appreciation Bonds
The approximate yield of the CABs as set forth page ii of this Official Statement is based upon the initial offering price therefor
set forth on page ii of this Official Statement. Such offering price includes the principal amount of such CABs plus premium
equal to the amount by which such offering price exceeds the principal amount of such CABs. Because of such premium, the
approximate offering yield on the CABs is lower than the interest rates thereon. The yield on the CABs to a particular purchaser
may differ depending upon the price paid by that purchaser. For various reasons, securities that do not pay interest periodically,
such as the CABs, have traditionally experienced greater price fluctuations in the secondary market than securities that pay
interest on a periodic basis.
Permanent School Fund Guarantee
In connection with the sale of the Bonds, the District received conditional approval from the Commissioner of Education for
guarantee of the Bonds under the Guarantee Program for School District Bonds (Chapter 45, Subchapter C, of the Texas
Education Code). As discussed under the heading "THE PERMANENT SCHOOL FUND GUARANTEE PROGRAM" herein, the
Bonds are expected to be guaranteed by the corpus of the Permanent School Fund of the State of Texas. In the event of default
in payment by the District, registered owners will receive all payments due from the Permanent School Fund.
Legality
The Bonds are offered when, as and if issued, subject to the approval of legality by the Attorney General of the State of Texas
and Andrews Kurth LLP, Austin, Texas, Bond Counsel to the District. The legal opinions will be printed on or attached to The
Bonds. Certain legal matters will be passed upon by McCall, Parkhurst & Horton LLP, Austin, Texas, disclosure counsel to the
District. Certain legal matters will be passed upon for the Underwriters by Norton Rose Fulbright US LLP, Austin, Texas, counsel
to the Underwriters. (See "LEGAL MATTERS").
Payment Record
The District has never defaulted on the payment of its general obligation tax-supported debt.
Refunded Bonds
The principal and interest due on the Refunded Bonds are to be paid on each interest payment date and the redemption date of
the Refunded Bonds from funds to be deposited pursuant to an Escrow Agreement (the "Escrow Agreement") between the
District and U.S. Bank National Association, Houston, Texas (the "Escrow Agent"). The Order provides that from the proceeds
of the sale of the Bonds received from the Underwriters and other available District funds, if any are necessary, the District will
deposit with the Escrow Agent the amount that, when invested, will be sufficient to pay all amounts coming due on the Refunded
Bonds to their applicable redemption date and to accomplish the discharge and final payment of the Refunded Bonds on their
applicable redemption date. Such funds will be held by the Escrow Agent in a special escrow account (the "Escrow Fund") and
used to purchase direct obligations of the United States of America or obligations of an agency or instrumentality of the United
States of America, including obligations that are unconditionally guaranteed or insured by the agency or instrumentality and that,
on the date of the purchase thereof, are rated as to investment quality by a nationally recognized investment rating firm not less
than AAA or its equivalent (the "Escrow Securities"). Under the Escrow Agreement, the Escrow Fund is irrevocably pledged to
the payment of the principal of and interest on the Refunded Bonds.
Grant Thornton LLP, a nationally recognized accounting firm, will issue its report (the "Report") verifying at the time of delivery
of the Bonds to the Underwriters thereof the mathematical accuracy of the schedules that demonstrate the Escrow Securities
will mature and pay interest in such amounts which, together with uninvested funds, if any, in the Escrow Fund, will be sufficient
to pay, when due, the principal of and interest on the Refunded Bonds. Such maturing principal of and interest on the Escrow
Securities will not be available to pay the Bonds.
By the deposit of the Escrow Securities and cash, if necessary, with the Escrow Agent pursuant to the Escrow Agreement, the
District will have effected the defeasance of all of the Refunded Bonds in accordance with State law and in reliance upon the
Report. As a result of such defeasance, the Refunded Bonds will be outstanding only for the purpose of receiving payments
from the Escrow Securities and any cash held for such purpose by the Escrow Agent and such Refunded Bonds will not be
deemed as being outstanding obligations of the District payable from taxes nor for the purpose of applying any limitation on the
issuance of debt, and the District will have no further responsibility with respect to amounts available in the Escrow Fund for the
payment of the Refunded Bonds from time to time, including any insufficiency therein caused by the failure to receive pay when
due on the Escrow Securities. Upon defeasance of the Refunded Bonds, the payment of the Refunded Bonds will no longer be
guaranteed by the Permanent School Fund of Texas. See "Schedule I - Schedule of Refunded Bonds" herein.
3
Sources and Uses of Funds
The proceeds from the sale of the Bonds, as well as lawfully available District funds, will be applied approximately as follows:
Sources
Par Amount
Original Issue Premium
District Contribution
Total Sources of Funds
Uses
Deposit to Escrow Fund
Costs of Issuance
Underwriters’ Discount
Deposit to Interest and Sinking Fund
Total Uses of Funds
Amendments
The District may amend the Order without the consent of or notice to any registered owners in any manner not detrimental to
the interests of the registered owners, including the curing of any ambiguity, inconsistency or formal defect or omission therein.
In addition, the District may, with the written consent of the registered owners of a majority in aggregate principal amount or
Maturity Value of the Bonds then outstanding and affected thereby, amend, add to or rescind any of the provisions of the Order;
except that, without the consent of the registered owners of all of the Bonds affected, no such amendment, addition or rescission
may (1) make any change in the maturity of any of the outstanding Bonds; (2) reduce the rate of interest borne by any of the
outstanding Bonds; (3) reduce the amount of the principal amount or Maturity Value on or redemption price of any outstanding
Bonds; (4) modify the terms of payment of the Accreted Value on outstanding Bonds or impose any condition with respect to
such payment; or (5) change the minimum percentage of the principal amount or Maturity Value of the Bonds necessary for
consent to such amendment.
Defeasance of Bonds
The Order provides for the defeasance of the Bonds when the payment of the principal of and premium, if any, on such Bonds,
plus interest thereon to the due date thereof (whether such due date be by reason of maturity, redemption, or otherwise), is
provided by irrevocably depositing with a paying agent (or other financial institution permitted by applicable state law), in trust
(1) money sufficient to make such payment and/or (2) Defeasance Securities, that mature as to principal and interest in such
amounts and at such times to insure the availability, without reinvestment, of sufficient money to make such payment, and all
necessary and proper fees, compensation and expenses of the paying agent for the Bonds, and thereafter the District will have
no further responsibility with respect to amounts available to such paying agent (or other financial institution permitted by
applicable law) for the payment of such defeased bonds, including any insufficiency therein caused by the failure of such paying
agent (or other financial institution permitted by applicable law) to receive payment when due on the Defeasance Securities.
The District has additionally reserved the right, subject to satisfying the requirements of (1) and (2) above, to substitute other
Defeasance Securities originally deposited, to reinvest the uninvested moneys on deposit for such defeasance and to withdraw
for the benefit of the District moneys in excess of the amount required for such defeasance. The Order provides that "Defeasance
Securities" means any of the securities and obligations now or hereafter authorized by State law that are eligible to discharge
obligations such as the Bonds. Current State law permits defeasance with the following types of securities: (a) direct, noncallable
obligations of the United States of America, including obligations that are unconditionally guaranteed by the United States of
America, (b) noncallable obligations of an agency or instrumentality of the United States of America, including obligations that
are unconditionally guaranteed or insured by the agency or instrumentality and that, on the date of the purchase thereof, are
rated as to investment quality by a nationally recognized investment rating firm not less than AAA or its equivalent, and (c)
noncallable obligations of a state or an agency or a county, municipality, or other political subdivision of a state that on the date
the District purchases such securities have been refunded and are rated as to investment quality by a nationally recognized
investment rating firm not less than AAA or its equivalent. There is no assurance that the current law will not be changed in a
manner which would permit investments other than those described above to be made with amounts deposited to defease the
Bonds. Because the Order does not contractually limit such investments, registered owners will be deemed to have consented
to defeasance with such other investments, notwithstanding the fact that such investments may not be of the same investment
quality as those currently permitted under State law. There is no assurance that the ratings for obligations of the United States
of America used for defeasance purposes or the ratings for any other Defeasance Security will be maintained at any particular
rating category.
Upon such deposit as described above, such Bonds shall no longer be regarded to be outstanding or unpaid. After firm banking
and financial arrangements for the discharge and final payment or redemption of Bonds have been made as described above,
all rights of the District to initiate proceedings to call such Bonds for redemption or take any other action amending the terms of
such Bonds are extinguished; provided, however, that the right to call such Bonds for redemption is not extinguished if the
4
District: (i) in the proceedings providing for the firm banking and financial arrangements, expressly reserves the right to call such
Bonds for redemption; (ii) gives notice of the reservation of that right to the owners of the respective Bonds immediately following
the making of the firm banking and financial arrangements; and (iii) directs that notice of the reservation be included in any
redemption notices that it authorizes. Furthermore, the Permanent School Fund Guarantee will terminate with respect to the
Bonds defeased in the manner provided above.
REGISTERED OWNERS’ REMEDIES
The Order does not establish specific events of default with respect to the Bonds. Under Texas law, there is no right to the
acceleration of maturity of the Bonds upon the failure of the District to observe any covenant under the Order. Such registered
owner’s only practical remedy, if a default occurs, is a mandamus or mandatory injunction proceeding to compel the District to levy,
assess and collect an annual ad valorem tax sufficient to pay principal of and interest on the Bonds as it becomes due. The
enforcement of any such remedy may be difficult and time consuming and a registered owner could be required to enforce such
remedy on a periodic basis.
On June 30, 2006, the Texas Supreme Court ruled in Tooke v. City of Mexia, 197 S.W.3rd 325 (Tex. 2006) ("Tooke") that a waiver
of sovereign immunity must be provided for by statute in "clear and unambiguous" language. In so ruling, the Court declared that
statutory language such as "sue and be sued", in and of itself, did not constitute a clear and unambiguous waiver of sovereign
immunity. In Tooke, the Court noted the enactment in 2005 of sections 271.151-.160, Texas Local Government Code (the "Local
Government Immunity Waiver Act"), which, according to the Court, waives "immunity from suit for contract claims against most local
governmental entities in certain circumstances." The Local Government Immunity Waiver Act covers school districts and relates to
contracts entered into by school districts for providing goods or services to school districts. The District is not aware of any Texas
court construing the Local Government Immunity Waiver Act in the context of whether contractual undertakings of local governments
that relate to their borrowing powers are contracts covered by the Act. Neither the remedy of mandamus nor any other type of
injunctive relief was at issue in Tooke, and it is unclear whether Tooke will be construed to have any effect with respect to the
exercise of mandamus, as such remedy has been interpreted by Texas courts. In general, Texas courts have held that a writ of
mandamus may be issued to require public officials to perform ministerial acts that clearly pertain to their duties. Texas courts have
held that a ministerial act is defined as a legal duty that is prescribed and defined with a precision and certainty that leaves nothing
to the exercise of discretion or judgment, though mandamus is not available to enforce purely contractual duties. However,
mandamus may be used to require a public officer to perform legally-imposed ministerial duties necessary for the performance of
a valid contract to which the State or a political subdivision of the State is a party (including the payment of monies due under a
contract).
The Order does not provide for the appointment of a trustee to represent the interest of the bondholders upon any failure of the
District to perform in accordance with the terms of the Order, or upon any other condition. The opinion of Bond Counsel will note
that the rights of bondholders are subject to the applicable provisions of the federal bankruptcy laws and any other similar laws
affecting the rights of creditors of political subdivisions generally, and may be limited by general principles of equity which permit
the exercise of judicial discretion.
See "THE PERMANENT SCHOOL FUND GUARANTEE PROGRAM" herein for a description of the procedures to be followed
for payment of the Bonds by the Permanent School Fund in the event the District fails to make a payment on the Bonds when
due.
BOOK-ENTRY-ONLY SYSTEM
This section describes how ownership of the Bonds is to be transferred and how the principal amount or Maturity Value of the
Bonds, as applicable, are to be paid to and credited by DTC while the Bonds are registered in its nominee name. The information
in this section concerning DTC and the Book Entry Only System has been provided by DTC for use in disclosure documents
such as this Official Statement. The Underwriters and the District believe the source of such information to be reliable, but take
no responsibility for the accuracy or completeness thereof.
The District and the Underwriters cannot and do not give any assurance that (1) DTC will distribute payments of debt service on
the Bonds, or redemption or other notices, to DTC Participants, (2) DTC Participants or others will distribute debt service
payments paid to DTC or its nominee (as the registered owner of the Bonds), or redemption or other notices, to the Beneficial
Owners (defined herein), or that they will do so on a timely basis, or (3) DTC will serve and act in the manner described in this
Official Statement. The current rules applicable to DTC are on file with the Securities and Exchange Commission, and the
current procedures of DTC to be followed in dealing with DTC Participants are on file with DTC.
DTC will act as securities depository for the Bonds. The Bonds will be issued as fully-registered Bonds registered in the name
of Cede & Co. (DTC’s partnership nominee) or such other name as may be requested by an authorized representative of DTC.
One fully-registered Bond certificate will be issued for each maturity of the Bonds, each in the aggregate principal amount of
such maturity, and will be deposited with DTC.
DTC, the world’s largest securities depository, is a limited-purpose trust company organized under the New York Banking Law,
a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the
provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million
5
issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100
countries) that DTC’s participants ("Direct Participants") deposit with DTC. DTC also facilitates the post-trade settlement among
Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry
transfers and pledges between Direct Participants’ accounts. This eliminates the need for physical movement of securities
certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing
corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation
("DTCC"). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing
Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to
the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust
companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either
directly or indirectly ("Indirect Participants"). DTC has a Standard & Poor’s rating of AA+. The DTC Rules applicable to its
Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at
www.dtcc.com.
Purchases of Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the
Bonds on DTC’s records. The ownership interest of each actual purchaser of each Bond ("Beneficial Owner") is in turn to be
recorded on the Direct and Indirect Participants’ records. Beneficial Owners will not receive written confirmation from DTC of
their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction,
as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered
into the transaction. Transfers of ownership interests in the Bonds are to be accomplished by entries made on the books of
Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing
their ownership interests in Bonds, except in the event that use of the book-entry system for the Bonds is discontinued.
To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC are registered in the name of DTC’s
partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit
of Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in
beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC’s records reflect only the identity
of the Direct Participants to whose accounts such Bonds are credited, which may or may not be the Beneficial Owners. The
Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants,
and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject
to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Bonds may wish to take
certain steps to augment the transmission to them of notices of significant events with respect to the Bonds, such as redemptions,
tenders, defaults, and proposed amendments to the Bond documents. For example, Beneficial Owners of Bonds may wish to
ascertain that the nominee holding the Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners.
In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of
notices be provided directly to them.
Redemption notices shall be sent to DTC. If less than all of the Bonds within a maturity are being redeemed, DTC’s practice is
to determine by lot the amount of the interest of each Direct Participant in such maturity to be redeemed.
Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Bonds unless authorized by a
Direct Participant in accordance with DTC’s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the
District as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those
Direct Participants to whose accounts Bonds are credited on the record date (identified in a listing attached to the Omnibus
Proxy).
All payments on the Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized
representative of DTC. DTC’s practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding
detail information from the District or the Paying Agent/Registrar, on payable date in accordance with their respective holdings
shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and
customary practices, as is the case with Bonds held for the accounts of customers in bearer form or registered in "street name,"
and will be the responsibility of such Participant and not of DTC, the Paying Agent/Registrar, or the District, subject to any
statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and
dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the
responsibility of the District or the Paying Agent/Registrar, disbursement of such payments to Direct Participants will be the
responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and
Indirect Participants.
DTC may discontinue providing its services as depository with respect to the Bonds at any time by giving reasonable notice to
the District or the Paying Agent/Registrar. Under such circumstances, in the event that a successor depository is not obtained,
Bond certificates are required to be printed and delivered.
The District may decide to discontinue use of the system of book-entry-only transfers through DTC (or a successor securities
depository). In that event, Bond certificates will be printed and delivered to DTC.
6
Effect of Termination of Book-Entry-Only System
In the event that the Book-Entry-Only System is discontinued, printed certificates will be issued to the holders and the Bonds
will be subject to transfer, exchange and registration provisions as set forth in the Order and summarized under
"REGISTRATION, TRANSFER AND EXCHANGE" below.
Use of Certain Terms in Other Sections of this Official Statement
In reading this Official Statement it should be understood that while the Bonds are in the Book-Entry-Only System, references
in other sections of this Official Statement to registered owners should be read to include the person for which the Direct or
Indirect Participant acquires an interest in the Bonds, but (i) all rights of ownership must be exercised through DTC and the
Book-Entry-Only System, and (ii) except as described above, notices that are to be given to registered owners under the Order
will be given only to DTC.
REGISTRATION, TRANSFER AND EXCHANGE
Paying Agent/Registrar
The initial Paying Agent/Registrar is U.S. Bank National Association, Houston, Texas. The Bonds are being issued in fully
registered form in integral multiples of $5,000 of principal amount or Maturity Value.
Successor Paying Agent/Registrar
Provision is made in the Order for replacing the Paying Agent/Registrar. If the District replaces the Paying Agent/Registrar, such
Paying Agent/Registrar shall, promptly upon the appointment of a successor, deliver the Paying Agent/Registrar’s records to the
successor Paying Agent/Registrar, and the successor Paying Agent/Registrar shall act in the same capacity as the previous
Paying Agent/Registrar. Any successor Paying Agent/Registrar selected by the District shall be a commercial bank, a trust
company organized under the laws of the State of Texas or other entity duly qualified and legally authorized to serve and perform
the duties of the Paying Agent/Registrar for the Bonds.
Future Registration
In the event the Book-Entry-Only System is discontinued, the Bonds will be printed and delivered to the beneficial owners therof,
and thereafter, may be transferred, registered and assigned on the registration books only upon presentation and surrender of
the Bonds to the Paying Agent/Registrar, and such registration and transfer shall be without expense or service charge to the
registered owner, except for any tax or other governmental charges required to be paid with respect to such registration and
transfer. A Bond may be assigned by the execution of an assignment form on the Bonds or by other instrument of transfer and
assignment acceptable to the Paying Agent/Registrar. A new Bond or Bonds will be delivered by the Paying Agent/Registrar in
lieu of the Bond being transferred or exchanged at the designated corporate office of the Paying Agent/Registrar, or sent by
United States registered mail to the new registered owner at the registered owner’s request, risk and expense. To the extent
possible, new Bonds issued in an exchange or transfer of Bonds will be delivered to the registered owner or assignee of the
Owner in not more than three (3) business days after the receipt of the Bonds to be canceled in the exchange or transfer and
the written instrument of transfer or request for exchange duly executed by the registered owner or his duly authorized agent, in
form satisfactory to the Paying Agent/Registrar. New Bonds registered and delivered in an exchange or transfer shall be in
authorized denominations and for a like aggregate amount as the Bond or Bonds surrendered for exchange or transfer.
Limitation on Transfer of Bonds
Neither the District nor the Paying Agent/Registrar shall be required to issue, transfer, or exchange (i) with respect to any CIB,
during the period commencing with the close of business on any Record Date and ending with the opening of business on the
next following principal or interest payment date, or (ii) with respect to any Bond or any portion thereof called for redemption
prior to stated maturity, within 45 days prior to its redemption date; provided, however, such limitation on transferability shall not
be applicable to an exchange by the Registered Owner of the uncalled balance of a Bond.
Replacement Bonds
If any Bond is mutilated, destroyed, stolen or lost, a new Bond in the same principal amount or Maturity Value, as applicable, as
the Bond so mutilated, destroyed, stolen or lost will be issued. In the case of a mutilated Bond, such new Bond will be delivered
only upon surrender and cancellation of such mutilated Bond. In the case of any Bond issued in lieu of and substitution for a
Bond which has been destroyed, stolen or lost, such new Bond will be delivered only (a) upon filing with the District and the
Paying Agent/Registrar a certificate to the effect that such Bond has been destroyed, stolen or lost and proof of the ownership
thereof, and (b) upon furnishing the District and the Paying Agent/Registrar with indemnity satisfactory to them. The person
requesting the authentication and delivery of a new Bond must pay such expenses as the Paying Agent/Registrar may incur in
connection therewith.
7
AD VALOREM TAX PROCEDURES
Property Tax Code and County-Wide Appraisal District
Title I of the Texas Tax Code (the "Property Tax Code") provides for county-wide appraisal and equalization of taxable property
values and establishes in each county of the State an appraisal district and an appraisal review board responsible for appraising
property for all taxable units within the county. The Williamson and Travis Central Appraisal Districts (each an "Appraisal
District") are responsible for appraising property within the District, generally, as of January 1 of each year. The appraisal values
set by the Appraisal District are subject to review and change by the Appraisal Review Board (the "Appraisal Review Board"),
of the applicable county which is appointed by the applicable Appraisal District. Such appraisal rolls, as approved by the
Appraisal Review Board, are used by the District in establishing its tax roll and tax rate.
Property Subject To Taxation By The District
Except for certain exemptions provided by Texas law, all real and certain tangible personal property with a tax situs in the District
is subject to taxation by the District. Principal categories of exempt property (including certain exemptions which are subject to
local option by the Board of Trustees) include property owned by the State of Texas or its political subdivisions if the property is
used for public purposes; property exempt from ad valorem taxation by federal law; certain improvements to real property and
certain tangible personal property located in designated reinvestment zones on which the District has agreed to abate ad valorem
taxes; certain household goods, family supplies and personal effects; farm products owned by the producers; certain property
of a nonprofit corporation used in scientific research and educational activities benefiting a college or university; and designated
historic sites. Other principal categories of exempt property include tangible personal property not held or used for production of
income; solar and windpowered energy devices; real or personal property that is used wholly or partly as a facility, device or
method for the control of air, water or land pollution; most individually owned automobiles; $10,000 exemption to residential
homesteads of disabled persons or persons ages 65 or over; an exemption from $5,000 to a maximum of $12,000 for real or
personal property of disabled veterans or the surviving spouse or children of a deceased veteran who died while on active duty
in the armed forces; with veterans who are 100% disabled (being a disabled veteran who receives from the United States
Department of Veterans Affairs or its successor 100% disability compensation due to a service-connected disability and a rating
of 100% disabled or of individual unemployability) entitled to an exemption from taxation of the total appraised value of the
veteran’s residential homestead; provided further, and subject to certain conditions, the surviving spouse of a deceased veteran
who had received a disability rating of 100% is entitled to receive a residential homestead exemption equal to the exemption
received by the deceased spouse until such surviving spouse remarries; a partially disabled veteran is entitled to an exemption
from ad valorem taxation of a percentage of the market value of the disabled veteran's residence homestead that is equal to the
percentage of disability of the disabled veteran if the residence homestead was donated to the disabled veteran by a charitable
organization at no cost to the disabled veteran; provided further, and subject to certain conditions, the surviving spouse of a
partially disabled veteran who had received a residence homestead from a charitable organization at no cost to the disable
veteran, is entitled to receive a residential homestead exemption equal to the exemption received by the deceased spouse until
such surviving spouse remarries; $25,000 in market value for all residential homesteads (See "CURRENT SCHOOL FINANCE
SYSTEM – 2015 Legislation" herein); and certain classes of intangible property. Furthermore, subject to certain conditions, the
Texas Constitution provides that the surviving spouse of a 100 percent disabled veteran will qualify for the ad valorem tax
exemption on the same or subsequently qualified homestead for the same portion of the market value to which the disabled
veteran's exemption would have applied, as if the exemption was in effect on the date the disabled veteran died. In addition,
except for increases attributable to certain improvements, the District is prohibited by State law from increasing the total ad
valorem tax of the residence homestead of persons who are 65 years of age or older and persons who are "disabled" above the
amount of tax imposed in the year such residence qualified for an exemption based on age or disability of the owner. The freeze
on ad valorem taxes on the homesteads of persons who are 65 years of age or older and persons who are disabled is also
transferable to a different residence homestead. Also, a surviving spouse of a taxpayer who is 65 years of age or older and
qualifies for the freeze on ad valorem taxes based on such person’s age is entitled to the same exemption so long as the property
is the homestead of the surviving spouse and the spouse is at least 55 years of age at the time of the death of the individual’s
spouse. A "disabled" person is one who is "under a disability for purposes of payment of disability insurance benefits under the
Federal Old Age, Survivors and Disability Insurance." Pursuant to a constitutional amendment approved by the voters on May
12, 2007, legislation was enacted to reduce the school property tax limitation imposed by the freeze on taxes paid on residence
homesteads of persons 65 years of age or over or of disabled persons to correspond to reductions in local school district tax
rates from the 2005 tax year to the 2006 tax year and from the 2006 tax year to the 2007 tax year (see "CURRENT PUBLIC
SCHOOL FINANCE SYSTEM – General" herein). The school property tax limitation provided by the constitutional amendment
and enabling legislation apply to the 2007 and subsequent tax years.
A city may create, and a county may participate in, a tax increment financing district ("TIF") within the city or county with defined
boundaries and establish a base value of taxable property in the TIF at the time of its creation. Overlapping taxing units, including
school districts, may agree with the city to contribute all or part of future ad valorem taxes levied and collected against the
"incremental value" taxable value in excess of the base value) of taxable real property in the TIF to pay or finance the costs of
certain public improvements in the TIF, and such taxes levied and collected for and on behalf of the TIF are not available for
general use by such contributing taxing units. Effective September 1, 2001, school districts may not enter into tax abatement
agreements under the general statute that permits cities and counties to initiate tax abatement agreements. In addition, credit
will not be given by the Commissioner of Education in determining a district’s property value wealth per student for (1) the
appraised value, in excess of the "frozen" value, of property that is located in a TIF created after May 31, 1999 (except in certain
limited circumstances where the municipality creating the tax increment financing zone gave notice prior to May 31, 1999 to all
other taxing units that levy ad valorem taxes in the TIF of its intention to create the TIF and the TIF was created and had its final
8
project and financing plan approved by the municipality prior to August 31, 1999), or (2) for the loss of value of abated property
under any abatement agreement entered into after May 31, 1993. Notwithstanding the foregoing, in 2001 the Legislature enacted
legislation known as the Texas Economic Development Act, which provides incentives for school districts to grant limitations on
appraised property values and provide ad valorem tax credits to certain corporations and limited liability companies to encourage
economic development within the district. Generally, during the last eight years of the ten-year term of a tax limitation agreement,
the school district may only levy and collect ad valorem taxes for maintenance and operation purposes on the agreed-to limited
appraised property value. The taxpayer is entitled to a tax credit from the school district for the amount of taxes imposed during
the first two years of the tax limitation agreement on the appraised value of the property above the agreed-to limited value.
Additional State funding is provided to a school district for each year of such tax limitation in the amount of the tax credit provided
to the taxpayer. During the first two years of a tax limitation agreement, the school district may not adopt a tax rate that exceeds
the district’s rollback tax rate (see "Public Hearing and Rollback Tax Rate").
Article VIII, Section 1-j of the Texas Constitution provides for an exemption from ad valorem taxation for "freeport property,"
which is defined as goods detained in the state for 175 days or less for the purpose of assembly, storage, manufacturing,
processing or fabrication. Taxing units that took action prior to April 1, 1990 may continue to tax freeport property and decisions
to continue to tax freeport property may be reversed in the future. However, decisions to exempt freeport property are not subject
to reversal. Article VIII, Section 1-n of the Texas Constitution provides for the exemption from taxation of "goods-in-transit."
"Goods-in-transit" is defined by a provision of the Tax Code, which is effective for tax years 2008 and thereafter, as personal
property acquired or imported into Texas and transported to another location in the State or outside of the State within 175 days
of the date the property was acquired or imported into Texas. The exemption excludes oil, natural gas, petroleum products,
aircraft and special inventory, including motor vehicle, vessel and out-board motor, heavy equipment and manufactured housing
inventory. The Tax Code provision permits local governmental entities, on a local option basis, to take official action by January
1 of the year preceding a tax year, after holding a public hearing, to tax "goods-in-transit" during the following tax year. A taxpayer
may only receive either the freeport exemption or the "goods-in-transit" exemption for items of personal property. See "THE
PROPERTY CODE AS APPLIED TO THE DISTRICT" for a schedule of exemptions allowed by the District.
Valuation of Property For Taxation
Generally, property in the District must be appraised by each Appraisal District at market value as of January 1 of each year. In
determining the market value of property, different methods of appraisal may be used, including the cost method of appraisal,
the income method of appraisal, the market data comparison method of appraisal, and the method considered most appropriate
by the chief appraiser is to be used. Once an appraisal roll is prepared and finally approved by the applicable Appraisal Review
Board, it is used by the District in establishing its tax rolls and tax rate. Assessments under the Property Tax Code are based on
one hundred percent (100%) of market value, except as described below, and no assessment ratio can be applied.
State law requires the appraised value of a residence homestead to be based solely on the property’s value as a residence
homestead, regardless of whether residential use is considered to be the highest and best use of the property. State law further
limits the appraised value of a residence homestead for a tax year to an amount not to exceed the lesser of (1) the property’s
market value in the most recent tax year in which the market value was determined by the Appraisal District or (2) the sum of
(a) 10% of the property’s appraised value for the preceding tax year, (b) the appraised value of the property for the preceding
tax year plus (c) the market value of all new improvements to the property.
The Property Tax Code permits land designated for agricultural use, open space or timberland to be appraised at its value based
on the land’s capacity to produce agricultural or timber products rather than at its fair market value. Landowners wishing to avail
themselves of the agricultural use designation must apply for the designation, and the appraiser is required by the Property Tax
Code to act on each claimant’s right to the designation individually. If a claimant receives the designation and later loses it by
changing the use of the property or selling it to an unqualified owner, the District can collect taxes for previous years based on
the new value, including three years for agricultural use and five years for agricultural open-space land and timberland prior to
the loss of the designation.
The Property Tax Code requires the Appraisal District to implement a plan for periodic reappraisal of property to update appraisal
values. The plan must provide for appraisal of all real property in the Appraisal District at least once every three years. The
District, at its expense, has the right to obtain from the Appraisal District a current estimate of appraised values within the District
or an estimate of any new property or improvements within the District. While such current estimate of appraisal values may
serve to indicate the rate and extent of growth of taxable values within the District, it cannot be used for establishing a tax rate
within the District until such time as the Appraisal District chooses to formally include such values on its appraisal roll.
Residential Homestead Exemption
The Texas Constitution permits the exemption of certain percentages of the market value of residential homesteads from ad
valorem taxation. The Texas Constitution authorizes the governing body of each political subdivision in the state to exempt up
to twenty percent (20%) of the market value of all residential homesteads from ad valorem taxation, and permits an additional
optional homestead exemption for taxpayers 65 years of age or older and disabled persons.
District and Taxpayer Remedies
Under certain circumstances, taxpayers and taxing units, including the District, may appeal orders of the Appraisal Review Board
by filing a petition for review in district court within 45 days after notice is received that a final order has been entered. In such
9
event, the property value in question may be determined by the court, or by a jury, if requested by any party, or through binding
arbitration, if requested by the taxpayer. Additionally, taxing units may bring suit against the Appraisal District to compel
compliance with the Property Tax Code.
Public Hearing and Rollback Tax Rate
In setting its annual tax rate, the governing body of a school district generally cannot adopt a tax rate exceeding the district’s
"rollback tax rate" without approval by a majority of the voters voting at an election approving the higher rate. The tax rate
consists of two components: (1) a rate for funding of maintenance and operation expenditures and (2) a rate for debt service.
The rollback tax rate for a school district is the lesser of (A) the sum of (1) the product of the district’s "State Compression
Percentage" for that year multiplied by $1.50, (2) the rate of $0.04, (3) any rate increase above the rollback tax rate in prior years
that were approved by voters, and (4) the district’s current debt rate, or (B) the sum of (1) the district’s effective maintenance
and operations tax rate, (2) the product of the district’s State Compression Percentage for that year multiplied by $0.06; and (3)
the district’s current debt rate (see "CURRENT PUBLIC SCHOOL FINANCE SYSTEM – Local Funding for School Districts" for
a description of the "State Compression Percentage"). If for the preceding tax year a district adopted an M&O tax rate that was
less than its effective M&O tax rate for that preceding tax year, the district’s rollback tax for the current year is calculated as if
the district had adopted an M&O tax rate for the preceding tax year equal to its effective M&O tax rate for that preceding tax
year.
The "effective maintenance and operations tax rate" for a school district is the tax rate that, applied to the current tax values,
would provide local maintenance and operating funds, when added to State funds to be distributed to the district pursuant to
Chapter 42 of the Texas Education Code for the school year beginning in the current tax year, in the same amount as would
have been available to the district in the preceding year if the funding elements of wealth equalization and State funding for the
current year had been in effect for the preceding year.
Section 26.05 of the Property Tax Code provides that the governing body of a taxing unit is required to adopt the annual tax rate
for the unit before the later of September 30 or the 60th day after the date the certified appraisal roll is received by the taxing
unit, and a failure to adopt a tax rate by such required date will result in the tax rate for the taxing unit for the tax year to be the
lower of the effective tax rate calculated for that tax year or the tax rate adopted by the taxing unit for the preceding tax year.
Before adopting its annual tax rate, a public meeting must be held for the purpose of adopting a budget for the succeeding year.
A notice of public meeting to discuss budget and proposed tax rate must be published in the time, format and manner prescribed
in Section 44.004 of the Texas Education Code. Section 44.004(e) of the Texas Education Code provides that a person who
owns taxable property in a school district is entitled to an injunction restraining the collection of taxes by the district if the district
has not complied with such notice requirements or the language and format requirements of such notice as set forth in Section
44.004(b), (c) and (d) and if such failure to comply was not in good faith. Section 44.004(e) further provides the action to enjoin
the collection of taxes must be filed before the date the district delivers substantially all of its tax bills. A district may adopt its
budget after adopting a tax rate for the tax year in which the fiscal year covered by the budget begins if the district elects to
adopt its tax rate before receiving the certified appraisal roll. A district that adopts a tax rate before adopting its budget must hold
a public hearing on the proposed tax rate followed by another public hearing on the proposed budget rather than holding a single
hearing on the two items.
Levy and Collection Of Taxes
The District is responsible for the collection of its taxes, unless it elects to transfer such functions to another governmental entity.
Before the later of September 30 or the 60th day after the date that the certified appraisal role is received by the District, the rate
of taxation must be set by the Board of Trustees of the District based upon the valuation of property within the District as of the
preceding January 1 and the amount required to be raised for debt service, maintenance purpose and authorized contractual
obligations. Taxes are due October 1, or when billed, whichever comes later, and become delinquent after January 31 of the
following year. A delinquent tax incurs a penalty from six percent (6%) to twelve percent (12%) of the amount of the tax,
depending on the time of payment, and accrues interest at the rate of one percent (1%) per month. If the tax is not paid by the
following July 1, an additional penalty of up to twenty percent (20%) may under certain circumstances be imposed by the District.
The Property Tax Code also makes provision for the split payment of taxes, discounts for early payment and the postponement
of the delinquency date of taxes under certain circumstances.
District’s Rights In The Event Of Tax Delinquencies
Taxes levied by the District are a personal obligation of the owner of the property. The District has no lien for unpaid taxes on
personal property but does have a lien for unpaid taxes upon real property, which lien is discharged upon payment. On January
1 of each year, such tax lien attaches to property to secure the payment of all taxes, penalties, and interest ultimately imposed
for the year on the property. The District’s tax lien is on a parity with the tax liens of other such taxing units. A tax lien on real
property takes priority over the claims of most creditors and other holders of liens on the property encumbered by the tax lien,
whether or not the debt or lien existed before the attachment of the tax lien. The automatic stay in bankruptcy will prevent the
automatic attachment of tax liens with respect to post-petition tax years unless relief is sought and granted by the bankruptcy
judge. Personal property, under certain circumstances, is subject to seizure and sale for the payment of delinquent taxes,
penalty, and interest.
Except with respect to taxpayers who are 65 years of age or older, at any time after taxes on property become delinquent, the
District may file suit to foreclose the lien securing payment of the tax, to enforce personal liability for the tax, or both. In filing a
10
suit to foreclose a tax lien on real property, the District must join other taxing units that have claims for delinquent taxes against
all or part of the same property. Collection of delinquent taxes may be adversely affected by the amount of taxes owed to other
taxing units, by the effects of market conditions on the foreclosure sale price, by taxpayer redemption rights, or by bankruptcy
proceedings which restrict the collection of taxpayer debts. Federal bankruptcy law provides that an automatic stay of
actions by creditors and other entities, including governmental units, goes into effect with the filing of any petition in
bankruptcy. The automatic stay prevents governmental units from foreclosing on property and prevents liens for postpetition taxes from attaching to property and obtaining secured creditor status unless, in either case, an order lifting
the stay is obtained from the bankruptcy court. In many cases post-petition taxes are paid as an administrative expense
of the estate in bankruptcy or by order of the bankruptcy court.
THE PROPERTY TAX CODE AS APPLIED TO THE DISTRICT
The respective Appraisal District has the responsibility for appraising property in the District as well as other taxing units in
Williamson or Travis County. Each Appraisal District is governed by a board of five directors appointed by voters of the governing
bodies of various Williamson or Travis County political subdivisions, respectively.
Split payments are not permitted. Discounts are not permitted.
The District has not granted any tax abatements nor currently participates in any tax abatement agreements or any tax limitation
agreements.
The District has taken action to continue taxing "goods-in-transit."
The District does not participate in any tax increment financing zones.
The District grants a State mandated $25,000 general residence homestead exemption.
The District grants a $10,000 residence homestead exemption for persons 65 years of age or older.
The District grants a $10,000 residence homestead exemption for the disabled.
The District grants a State mandated residence homestead exemption for disabled veterans. The District has not granted a local
option, additional exemption for disabled veterans above the amount of the State-mandated exemption.
The District has not granted any part of the local option, additional exemption of up to 20% of the market value of residence
homesteads.
The District does not tax non-business personal property.
Ad valorem taxes are not levied by the District against the exempt value of residence homesteads for the payment of debt.
The District does grant the "Freeport" exemption. The amount exempted is $28,695,096 (values taken from the most recent
Appraisal District supplements).
Property within the District is assessed as of January 1 of each year; taxes become due October 1 of the same year and become
delinquent on February 1 of the following year.
Charges for penalties and interest on the unpaid balance of delinquent taxes are as follows:
Cumulative
Date
February
March
April
May
June
July
Penalty
Interest
6%
7
8
9
10
32(a)
1%
2
3
4
5
6
(b)
Cumulative
Total
7%
9
11
13
15
38
__________________
(a) Includes additional penalty of 20% assessed after July 1 in order to defray attorney collection expenses.
(b) Interest continues to accrue after July 1 at the rate of 1% per month until paid.
11
STATE AND LOCAL FUNDING OF SCHOOL DISTRICTS IN TEXAS
Litigation Relating to the Texas Public School Finance System
On April 9, 2001, four property wealthy districts filed suit in the 250th District Court of Travis County, Texas (the “District Court”)
against the Texas Education Agency, the Texas State Board of Education, the Texas Commissioner of Education (the
“Commissioner”) and the Texas Comptroller of Public Accounts in a case styled West Orange-Cove Consolidated Independent
School District, et al. v. Neeley, et al. The plaintiffs alleged that the $1.50 maximum maintenance and operations (“M&O”) tax
rate had become in effect a state property tax, in violation of Article VIII, Section 1-e of the Texas Constitution, because it
precluded them and other school districts from having meaningful discretion to tax at a lower rate. Forty school districts
intervened alleging that the Texas public school finance system (the “Finance System”) was inefficient, inadequate, and
unsuitable, in violation of Article VII, Section 1 of the Texas Constitution, because the State of Texas (the “State”) did not provide
adequate funding. As described below, this case has twice reached the Texas Supreme Court (the “Supreme Court”), which
rendered decisions in the case on May 29, 2003 (“West Orange-Cove I”) and November 22, 2005 (“West Orange-Cove II”).
After the remand by the Supreme Court back to the District Court in West Orange-Cove I, 285 other school districts were added
as plaintiffs or intervenors. The plaintiffs joined the intervenors in their Article VII, Section 1 claims that the Finance System was
inadequate and unsuitable, but not in their claims that the Finance System was inefficient.
On November 30, 2004, the final judgment of the District Court was released in connection with its reconsideration of the issues
remanded to it by the Supreme Court in West Orange-Cove I. In that case, the District Court rendered judgment for the plaintiffs
on all of their claims and for the intervenors on all but one of their claims, finding that (1) the Finance System was unconstitutional
in that the Finance System violated Article VIII, Section 1-e of the Texas Constitution because the statutory limit of $1.50 per
$100.00 of taxable assessed valuation on property taxes levied by school districts for maintenance and operation purposes had
become both a floor and a ceiling, denying school districts meaningful discretion in setting their tax rates; (2) the constitutional
mandate of adequacy set forth in Article VII, Section 1 of the Texas Constitution exceeded the maximum amount of funding
available under the funding formulas administered by the State; and (3) the Finance System was financially inefficient,
inadequate, and unsuitable in that it failed to provide sufficient access to revenue to provide for a general diffusion of knowledge
as required by Article VII, Section 1, of the Texas Constitution.
In West Orange-Cove II, the Supreme Court’s holding was twofold: (1) that the local M&O tax had become a state property tax
in violation of Article VIII, Section 1-e of the Texas Constitution and (2) the deficiencies in the Finance System did not amount
to a violation of Article VII, Section 1 of the Texas Constitution. In reaching its first holding, the Supreme Court relied on
evidence presented in the District Court to conclude that school districts did not have meaningful discretion in levying the M&O
tax. In reaching its second holding, the Supreme Court, using a test of arbitrariness determined that: the public education
system was “adequate,” since it is capable of accomplishing a general diffusion of knowledge; the Finance System was not
“inefficient,” because school districts have substantially equal access to similar revenues per pupil at similar levels of tax effort,
and efficiency does not preclude supplementation of revenues with local funds by school districts; and the Finance System does
not violate the constitutional requirement of “suitability,” since the Finance System was suitable for adequately and efficiently
providing a public education.
In reversing the District Court’s holding that the Finance System was unconstitutional under Article VII, Section 1 of the Texas
Constitution, the Supreme Court stated:
Although the districts have offered evidence of deficiencies in the public school finance system, we conclude that those
deficiencies do not amount to a violation of Article VII, Section 1. We remain convinced, however, as we were sixteen years
ago, that defects in the structure of the public school finance system expose the system to constitutional challenge. Pouring
more money into the system may forestall those challenges, but only for a time. They will repeat until the system is overhauled.
In response to the intervenor districts’ contention that the Finance System was constitutionally inefficient, the West Orange-Cove
II decision states that the Texas Constitution does not prevent the Finance System from being structured in a manner that results
in gaps between the amount of funding per student that is available to the richest districts as compared to the poorest district,
but reiterated its statements in Edgewood Independent School District v. Meno, 917 S.W.2d 717 (Tex. 1995) (“Edgewood IV”)
that such funding variances may not be unreasonable. The Supreme Court further stated that “[t]he standards of Article VII,
Section 1 - adequacy, efficiency, and suitability - do not dictate a particular structure that a system of free public schools must
have.” The Supreme Court also noted that “[e]fficiency requires only substantially equal access to revenue for facilities
necessary for an adequate system,” and the Supreme Court agreed with arguments put forth by the State that the plaintiffs had
failed to present sufficient evidence to prove that there was an inability to provide for a “general diffusion of knowledge” without
additional facilities.
Funding Changes in Response to West Orange-Cove II
In response to the decision in West Orange-Cove II, the Texas Legislature (the “Legislature”) enacted House Bill 1 (“HB 1”),
which made substantive changes in the way the Finance System is funded, as well as other legislation which, among other
things, established a special fund in the State treasury to be used to collect new tax revenues that are dedicated under certain
conditions for appropriation by the Legislature to reduce M&O tax rates, broadened the State business franchise tax, modified
the procedures for assessing the State motor vehicle sales and use tax and increased the State tax on tobacco products (HB 1
and other described legislation are collectively referred to herein as the “Reform Legislation”). The Reform Legislation generally
became effective at the beginning of the 2006-07 fiscal year of each district.
12
Possible Effects of Litigation and Changes in Law on District Bonds
The Reform Legislation and the changes made by the State Legislature to the Reform Legislation since its enactment did not
alter the provisions of Chapter 45, Texas Education Code, that authorize districts to secure their bonds by pledging the receipts
of an unlimited ad valorem debt service tax as security for payment of such bonds (including the Bonds). Reference is made, in
particular, to the information under the heading “THE BONDS – Security” herein.
In the future, the Legislature could enact additional changes to the Finance System which could benefit or be a detriment to a
school district depending upon a variety of factors, including the financial strategies that the district has implemented in light of
past State funding systems. Among other possibilities, a district’s boundaries could be redrawn, taxing powers restricted, State
funding reallocated, or local ad valorem taxes replaced with State funding subject to biennial appropriation. In Edgewood IV,
the Supreme Court stated that any future determination of unconstitutionality “would not, however, affect the district’s authority
to levy the taxes necessary to retire previously issued bonds, but would instead require the Legislature to cure the system’s
unconstitutionality in a way that is consistent with the Contract Clauses of the U.S. and Texas Constitutions” (collectively, the
“Contract Clauses”). Consistent with the Contract Clauses, in the exercise of its police powers, the State may make such
modifications in the terms and conditions of contractual covenants related to the payment of the Bonds as are reasonable and
necessary for the attainment of important public purposes.
Although, as a matter of law, the Bonds, upon issuance and delivery, will be entitled to the protections afforded previously
existing contractual obligations under the Contract Clauses, the District can make no representations or predictions concerning
the effect of future legislation or litigation, or how such legislation or future court orders may affect the District’s financial condition,
revenues or operations. While the disposition of any possible future litigation or the enactment of future legislation to address
school funding in Texas could substantially adversely affect the financial condition, revenues or operations of the District, as
noted herein, the District does not anticipate that the security for payment of the Bonds, specifically, the District’s obligation to
levy an unlimited debt service tax and the Permanent School Fund guarantee of the Bonds would be adversely affected by any
such litigation or legislation. See “CURRENT PUBLIC SCHOOL FINANCE SYSTEM.”
Current Litigation Related to the Texas Public School Finance System
As described below, during 2011 and 2012, several lawsuits were filed in district courts of Travis County, Texas, which alleged
that the Finance System, as modified by legislation enacted by the Legislature since the decision in West Orange Cove II, and
in particular, as modified by Senate Bill 1 in 2011, has resulted in a funding system that violates principles established in West
Orange Cove I and West Orange Cove II, and prior decisions of the Supreme Court relating to the constitutionality of the Finance
System, and several provisions of the Texas Constitution. In general, each suit presented the legal perspectives and arguments
of the different coalitions of school districts represented, but as a general matter, each group challenged the adequacy of funding
provided by the Legislature for the Finance System, and the plaintiffs in each suit sought to have an injunction issued to the
State and its officials to prevent the distribution of any funds under the current Finance System until a constitutional system is
created and sought a declaration that changes in funding for the Finance System since the enactment of HB 1 have effectively
converted the local M&O tax into a State property tax in violation of the Texas Constitution. The defendants in the suits include
State officials and the State Board of Education (the “State Defendants”). The first suit was filed on October 10, 2011, styled
The Texas Taxpayer & Student Fairness Coalition, et al. vs. Robert Scott, Commissioner of Education et al. A second suit was
filed on December 9, 2011, styled Calhoun County Independent School District, et al. v Robert Scott, Commissioner of
Education, et al. A third suit was filed on December 13, 2011, styled Edgewood Independent School District, et al. v. Robert
Scott, Commissioner of Education, et al. A fourth suit was filed on December 23, 2011, styled Fort Bend Independent School
District, et al. v. Robert Scott, Commissioner of Education, et al. (the “Fort Bend Suit”). The State Defendants filed an answer
with respect to each of the first four suits filed, denying the plaintiffs’ allegations, and all of such suits were assigned to the District
Court. On February 24, 2012 a plea of intervention to the Fort Bend Suit was filed by seven parents and a group named “Texans
for Real Efficiency and Equity in Education.” The intervenors asserted that the Finance System is qualitatively inefficient, and
that the Finance System is unconstitutional, in part based on arguments made by other plaintiffs. A fifth suit was filed on June
26, 2012 by individuals and the Texas Charter School Association, styled Flores, et al. v. Robert Scott, Commissioner of
Education, et al. (the “Charter School Suit”). The petition for the Charter School Suit agreed with the arguments of the school
districts in the first four suits filed that the Finance System is unconstitutional and also sought to have an injunction issued against
the State Defendants in the same manner as the first four suits. The Charter School Suit added additional grounds that relate to
the circumstances of charter schools as a basis for holding the Finance System unconstitutional, including that charter schools
receive no funding for facilities and that the statutory cap on charter schools is unconstitutionally arbitrary. The State Defendants
also filed a general denial in the Charter School Suit.
All five suits were consolidated by the District Court, and the trial commenced on October 22, 2012. On February 4, 2013, the
District Court rendered a preliminary ruling (the substance of which was ultimately included in a final judgment rendered by the
District Court on August 28, 2014, as further described below), but withheld rendering a final judgment until the conclusion of
the 83rd Regular Session of the Texas Legislature. The 83rd Regular Session of the Texas Legislature concluded on May 27,
2013, and on June 19, 2013, a hearing was held by the District Court at which the parties to the suits were directed to provide
supplemental evidence to the District Court pertaining to new funding provided by the Legislature for the Finance System during
the 83rd Regular Session. A trial to consider this evidence began on January 21, 2014 and concluded on February 7, 2014.
On August 28, 2014, the District Court rendered its final ruling, finding the current Finance System unconstitutional for the
following reasons: (i) the Finance System effectively imposes a Statewide property tax in violation of the Texas Constitution
13
because school districts lack “meaningful discretion” in the levy, assessment and disbursement of property taxes; (ii) the Finance
System is structured, operated and funded in such a manner that prevents it from providing “a constitutionally adequate
education for all Texas schoolchildren”; (iii) the Finance System “is constitutionally inadequate because it cannot accomplish,
and has not accomplished, a general diffusion of knowledge for all students due to insufficient funding”; and (iv) the Finance
System “is financially inefficient because all Texas students do not have substantially equal access to the educational funds
necessary to accomplish a general diffusion of knowledge.”
In the final ruling, the District Court enjoined the State from (i) enforcing Chapters 41 and 42 and Section 12.106 of the Education
Code and (ii) distributing any money under the current Finance System until the constitutional violations are remedied. However,
the District Court stayed the injunction until July 1, 2015, to give the 84th Texas Legislature, which convened on January 13,
2015, an opportunity to cure the constitutional deficiencies in the Finance System. The injunction does not and will not impair
the District's ability to levy, assess and collect ad valorem taxes, at the full rate and in the full amount authorized by law,
necessary to make payments on the Bonds and, to the extent the District is entitled to receive State funding assistance for the
payment of the Bonds under the current Finance System, the District will continue to be entitled to receive such State funding
assistance. In addition, in response to arguments on behalf of the State's charter schools, the District Court held in its final ruling
that it is within the discretion of the Legislature, and not unconstitutional, to fund charter schools differently from other public
schools.
The State Defendants/Appellants filed a Notice of Direct Appeal to the Supreme Court on September 26, 2014. Notices of
Cross-Direct Appeal were subsequently filed by four other parties. On January 6, 2015, the State Defendants/Appellants filed
a Statement of Jurisdiction and Motion for Briefing Schedule requesting the Supreme Court note probable jurisdiction over the
appeal and order the filing of appellate briefs in accordance with a proposed briefing schedule.
The Supreme Court noted probable jurisdiction on January 23, 2015 and set the following briefing schedule: Appellants’ briefs
were due (and were submitted on) April 13, 2015, Appellees’ briefs were due (and were submitted on) July 2, 2015, and replies
were due and submitted on August 11, 2015. It should be noted that the briefing schedule extends beyond the stayed injunction.
Though pursuant to its terms, the District Court stayed its injunction until July 1, 2015, the Appellants’ have taken the position
that this stay has been automatically extended pending a final ruling by the Texas Supreme Court. See Neeley v. W. OrangeCove Consol. Indep. Sch. District, 176 S.W.3d 746, 754 & n.19 (Tex. 2005) (noting the district court’s injunction was stayed by
the State’s notice of appeal and citing as authority Tex. Civ. Prac. & Rem Code 6.01, which exempts the State from filing a
supersedeas bond). Oral arguments before the Texas Supreme Court were held on September 1, 2015. The Texas Supreme
Court has not provided a timeline for rendering its opinion.
The District can make no representations or predictions concerning the effect this litigation or the current ruling by the District
Court, and any appeals, including the future ruling of the Texas Supreme Court, may have on the District’s financial condition,
revenues or operations. See “STATE AND LOCAL FUNDING OF SCHOOL DISTRICTS IN TEXAS – Possible Effects of
Litigation and Changes in Law on District Bonds.”
2013 Legislative Session
The 83rd Texas Legislature concluded its regular session on May 27, 2013. During the session, the Legislature adopted a
biennial budget that “restored” $3.2 billion of the $4 billion that was cut from basic state aid for the Finance System during the
82nd Texas Legislature and some $100 million of the $1.3 billion cut from grant programs during the 82nd Texas Legislature.
The revenues that were added back to the Finance System do not take into account growing student enrollments in the State.
The Legislature did not materially change the Finance System during the session.
2015 Legislative Session
See "CURRENT PUBLIC SCHOOL FINANCE SYSTEM – 2015 Legislation" herein for a description of legislative changes made
during the 84th Texas Legislature that resulted in an increase in the minimum amount of residential homestead exemption for
school districts.
CURRENT PUBLIC SCHOOL FINANCE SYSTEM
Overview
The following description of the Finance System is a summary of the Reform Legislation and the changes made by the State
Legislature to the Reform Legislation since its enactment, including modifications made during subsequent legislative sessions.
For a more complete description of school finance and fiscal management in the State, reference is made to Vernon’s Texas
Codes Annotated, Education Code, Chapters 41 through 46, as amended.
Funding for school districts in the State is provided primarily from State and local sources. State funding for all school districts
is provided through a set of funding formulas comprising the “Foundation School Program,” as well as two facilities funding
programs. Generally, the Finance System is designed to promote wealth equalization among school districts by balancing State
and local sources of funds available to school districts. In particular, because districts with relatively high levels of property
wealth per student can raise more local funding, such districts receive less State aid, and in some cases, are required to disburse
local funds to equalize their overall funding relative to other school districts. Conversely, because districts with relatively low
levels of property wealth per student have limited access to local funding, the Finance System is designed to provide more State
funding to such districts. Thus, as a school district’s property wealth per student increases, State funding to the school district
14
is reduced. As a school district’s property wealth per student declines, the Finance System is designed to increase that district’s
State funding. The Finance System provides a similar equalization system for facilities funding wherein districts with the same
tax rate for debt service raise the same amount of combined State and local funding. Facilities funding for debt incurred in prior
years is expected to continue in future years; however, State funding for new school facilities has not been consistently
appropriated by the Texas Legislature, as further described below.
Local funding is derived from collections of ad valorem taxes levied on property located within each district’s boundaries. School
districts are authorized to levy two types of property taxes: a limited M&O tax to pay current expenses and an unlimited interest
and sinking fund (“I&S”) tax to pay debt service on bonds. Generally, under current law, M&O tax rates are subject to a statutory
maximum rate of $1.17 per $100 of taxable value for most school districts. (Although a few districts can exceed the $1.17 limit
as a result of authorization approved in the 1960s.) Current law also requires school districts to demonstrate their ability to pay
debt service on outstanding indebtedness through the levy of an ad valorem tax at a rate of not to exceed $0.50 per $100 of
taxable property at the time bonds are issued. Once bonds are issued, however, districts may levy a tax to pay debt service on
such bonds unlimited as to rate or amount (see “TAX RATE LIMITATIONS” herein). As noted above, because property values
vary widely among school districts, the amount of local funding generated by the same tax rate is also subject to wide variation
among school districts.
The Reform Legislation, which generally became effective at the beginning of the 2006–07 fiscal year, made substantive
changes to the Finance System, which are summarized below. While each school district’s funding entitlement was calculated
based on the same formulas that were used prior to the 2006–07 fiscal year, the Reform Legislation made changes to local
district funding by reducing each district’s 2005 M&O tax rate by one-third over two years through the introduction of the “State
Compression Percentage,” with M&O tax levies declining by approximately 11% in fiscal year 2006–07 and approximately
another 22% in fiscal year 2007–08. (Prior to the Reform Legislation, the maximum M&O tax rate for most school districts was
$1.50 per $100 of taxable assessed valuation. Because most school districts levied an M&O rate of $1.50 in 2005, the application
of the Reform Legislation compression formula reduced the majority of school districts’ M&O tax rates to $1.00). Subject to local
referenda, a district may increase its local M&O tax rate from $1.04 up to the statutory limit, which is $1.17 for most districts.
Local Funding for School Districts
The primary source of local funding for school districts is collections from ad valorem taxes levied against taxable property
located in each school district. As noted above, prior to the Reform Legislation, the maximum M&O tax rate for most school
districts was generally limited to $1.50 per $100 of taxable value, and the majority of school districts were levying an M&O tax
rate of $1.50 per $100 of taxable value at the time the Reform Legislation was enacted. The Reform Legislation required each
school district to “compress” its tax rate by an amount equal to the “State Compression Percentage.” For fiscal years 2007–08
through 2015–16, the State Compression Percentage has been set at 66.67%, effectively setting the maximum compressed
M&O tax rate for most school districts at $1.00 per $100 of taxable value. The State Compression Percentage is set by legislative
appropriation for each State fiscal biennium or, in the absence of legislative appropriation, by the Commissioner. School districts
are permitted, however, to generate additional local funds by raising their M&O tax rate by up to $0.04 above the compressed
tax rate without voter approval (for most districts, up to $1.04 per $100 of taxable value). In addition, if the voters approve a tax
rate increase through a local referendum, districts may, in general, increase their M&O tax rate up to a maximum M&O tax rate
of $1.17 per $100 of taxable value and receive State equalization funds for such taxing effort (see “AD VALOREM TAX
PROCEDURES – Public Hearing and Rollback Tax Rate” herein). Elections authorizing the levy of M&O taxes held in certain
school districts under older laws, however, may subject M&O tax rates in such districts to other limitations (see “TAX RATE
LIMITATIONS” herein).
State Funding for School Districts
State funding for school districts is provided through the Foundation School Program, which provides each school district with a
minimum level of funding (a “Basic Allotment”) for each student in average daily attendance (“ADA”). The Basic Allotment is
calculated for each school district using various weights and adjustments based on the number of students in average daily
attendance and also varies depending on each district’s compressed tax rate. This Basic Allotment formula determines most of
the allotments making up a district’s basic level of funding, referred to as “Tier One” of the Foundation School Program. The
basic level of funding is then “enriched” with additional funds known as “Tier Two” of the Foundation School Program. Tier Two
provides a guaranteed level of funding for each cent of local tax effort that exceeds the compressed tax rate (for most districts,
M&O tax rates above $1.00 per $100 of taxable value). The Finance System also provides an Existing Debt Allotment (“EDA”)
to subsidize debt service on eligible outstanding school district bonds and an Instructional Facilities Allotment (“IFA”) to subsidize
debt service on newly issued bonds. IFA primarily addresses the debt service needs of property-poor school districts. A New
Instructional Facilities Allotment (“NIFA”) also is available to help pay operational expenses associated with the opening of a
new instructional facility; however, NIFA awards were not funded by the Legislature for either the 2012–13 or the 2014-15 State
fiscal biennium. In 2015, the 84th Texas Legislature did appropriate funds in the amount of $1,445,100,000 for the 2016-17
State fiscal biennium for an increase in the Basic Allotment, EDA, IFA, and NIFA support, as further described below.
Tier One and Tier Two allotments represent the State’s share of the cost of M&O expenses of school districts, with local M&O
taxes representing the district’s local share. EDA and IFA allotments supplement a school district’s local I&S taxes levied for
debt service on eligible bonds issued to construct, acquire and improve facilities. Tier One and Tier Two allotments and existing
EDA and IFA allotments are generally required to be funded each year by the Texas Legislature. Since future-year IFA awards
were not funded by the Texas Legislature for the 2014–15 fiscal biennium or the 2015-16 school year and debt service assistance
on school district bonds that are not yet eligible for EDA is not available, debt service on new bonds issued by districts to
15
construct, acquire and improve facilities must be funded solely from local I&S taxes. For the 2016-17 school year, the Texas
Legislature has appropriated $55.5 million for IFA allotments.
Tier One allotments are intended to provide all districts a basic level of education necessary to meet applicable legal standards.
Tier Two allotments are intended to guarantee each school district that is not subject to the wealth transfer provisions described
below an opportunity to supplement that basic program at a level of its own choice; however, Tier Two allotments may not be
used for the payment of debt service or capital outlay.
As described above, the cost of the basic program is based on an allotment per student known as the “Basic Allotment”. For
fiscal years 2015-16 and 2016-17, the Basic Allotment is $5,140 for each student in average daily attendance. The Basic
Allotment is then adjusted for all districts by several different weights to account for inherent differences between school districts.
These weights consist of (i) a cost adjustment factor intended to address varying economic conditions that affect teacher hiring
known as the “cost of education index”, (ii) district-size adjustments for small and mid-size districts and (iii) an adjustment for
the sparsity of the district’s student population. The cost of education index and district-size adjustments applied to the Basic
Allotment, create what is referred to as the “Adjusted Allotment”. The Adjusted Allotment is used to compute a “regular program
allotment,” as well as various other allotments associated with educating students with other specified educational needs.
Tier Two supplements the basic funding of Tier One and provides two levels of enrichment with different guaranteed yields (i.e.,
guaranteed levels of funding by the State) depending on the district’s local tax effort. The first six cents of tax effort that exceeds
the compressed tax rate (for most districts, M&O tax rates ranging from $1.01 to $1.06 per $100 of taxable value) will, for most
districts, generate a guaranteed yield of $74.28 and $77.53 per cent per weighted student in average daily attendance (“WADA”)
for the fiscal year 2015-16 and fiscal year 2016-17, respectively. The second level of Tier Two is generated by tax effort that
exceeds the district’s compressed tax rate plus six cents (for most districts eligible for this level of funding, M&O tax rates ranging
from $1.06 to $1.17 per $100 of taxable value) and has a guaranteed yield per cent per WADA of $31.95 for fiscal years 201516 and 2016-17. Property-wealthy school districts that have an M&O tax rate that exceeds the district’s compressed tax rate
plus six cents are subject to recapture above this tax rate level at the equivalent wealth per student of $319,500 (see “Wealth
Transfer Provisions” below).
Because districts with compressed rates of less than $1.00 have not been receiving the full Basic Allotment, the 84th Texas
Legislature amended the Foundation School Program to enable some districts (known as “fractionally funded districts”) to
increase their Tier 1 participation by moving the district’s local tax effort that would be equalized under Tier 2 at $31.95 per penny
to the Tier 1 Basic Allotment. The compressed tax rate of a school district that adopted a 2005 M&O Tax Rate below the
maximum $1.50 tax rate for the 2005 tax year can now include the portion of a district’s current M&O tax rate in excess of the
first six cents above the district's compressed tax rate until the district's compressed tax rate is equal to the state maximum
compressed tax rate of $1.00, thereby eliminating the penalty against the Basic Allotment. For these districts, each one cent of
M&O tax levy above the district’s compressed tax rate plus six cents, will have a guaranteed yield based on Tier One funding
instead of the $31.95 Tier Two yield for the fiscal year 2015-16 and fiscal year 2016-17. These conversions are optional for
each applicable district in the 2015-16 and 2016-17 fiscal years and are automatic beginning in the 2017-18 fiscal year.
In addition to the operations funding components of the Foundation School Program discussed above, the Foundation School
Program provides a facilities funding component consisting of the Instructional Facilities Allotment (IFA) program and the Existing
Debt Allotment (EDA) program. These programs assist school districts in funding facilities by, generally, equalizing a district’s
I&S tax effort. The IFA guarantees each awarded school district a specified amount per student (the “IFA Guaranteed Yield”) in
State and local funds for each cent of tax effort to pay the principal of and interest on eligible bonds issued to construct, acquire,
renovate or improve instructional facilities. The guaranteed yield per cent of local tax effort per student in ADA has been $35
since this program first began in 1997. To receive an IFA award, a school district must apply to the Commissioner in accordance
with rules adopted by the Commissioner before issuing the bonds to be paid with IFA state assistance. The total amount of debt
service assistance over a biennium for which a district may be awarded is limited to the lesser of (1) the actual debt service
payments made by the district in the biennium in which the bonds are issued; or (2) the greater of (a) $100,000 or (b) $250
multiplied by the number of students in ADA. The IFA is also available for lease-purchase agreements and refunding bonds
meeting certain prescribed conditions. Once a district receives an IFA award for bonds, it is entitled to continue receiving State
assistance for such bonds without reapplying to the Commissioner. The guaranteed level of State and local funds per student
per cent of local tax effort applicable to the bonds may not be reduced below the level provided for the year in which the bonds
were issued. For the fiscal years 2011-12 through 2015-16, no funds were appropriated for new IFA awards by the Texas
Legislature, although all prior awards were funded throughout such periods. The 84th Texas Legislature appropriated funds in
the amount of $55,500,000 for new IFA awards to be made during the 2016-17 fiscal year only.
State financial assistance is provided for certain existing eligible debt issued by school districts through the EDA program. The
EDA guaranteed yield (the “EDA Yield”) is the same as the IFA Guaranteed Yield ($35 per cent of local tax effort per student in
ADA), subject to adjustment as described below. For bonds that became eligible for EDA funding after August 31, 2001, and
prior to August 31, 2005, EDA assistance was less than $35 in revenue per student for each cent of debt service tax, as a result
of certain administrative delegations granted to the Commissioner under State law. The portion of a district’s local debt service
rate that qualifies for EDA assistance is limited to the first 29 cents of debt service tax (or a greater amount for any year provided
by appropriation by the Texas Legislature). In general, a district’s bonds are eligible for EDA assistance if (i) the district made
payments on the bonds during the final fiscal year of the preceding State fiscal biennium or (ii) the district levied taxes to pay
the principal of and interest on the bonds for that fiscal year. Each biennium, access to EDA funding is determined by the debt
service taxes collected in the final year of the preceding biennium. A district may not receive EDA funding for the principal and
interest on a series of otherwise eligible bonds for which the district receives IFA funding.
16
A district may also qualify for a NIFA allotment, which provides assistance to districts for operational expenses associated with
opening new instructional facilities. For the 2012-13 and 2014-15 State fiscal biennia, no funds were appropriated by the Texas
Legislature for new NIFA allotments. The 84th Texas Legislature did appropriate funds in the amount of $23,750,000 for each
of the 2015-16 and 2016-17 fiscal years for NIFA allotments.
2006 Legislation
Since the enactment of the Reform Legislation in 2006, most school districts in the State have operated with a “target” funding
level per student (“Target Revenue”) that is based upon the “hold harmless” principles embodied in the Reform Legislation. This
system of Target Revenue was superimposed on the Foundation School Program and made existing funding formulas
substantially less important for most school districts. As noted above, the Reform Legislation was intended to lower M&O tax
rates in order to give school districts “meaningful discretion” in setting their M&O tax rates, while holding school districts harmless
by providing them with the same level of overall funding they received prior to the enactment of the Reform Legislation. Under
the Target Revenue system, each school district is generally entitled to receive the same amount of revenue per student as it
did in either the 2005–2006 or 2006–07 fiscal year (under existing laws prior to the enactment of the Reform Legislation), as
long as the district adopted an M&O tax rate that was at least equal to its compressed rate. The reduction in local M&O taxes
resulting from the mandatory compression of M&O tax rates under the Reform Legislation, by itself, would have significantly
reduced the amount of local revenue available to fund the Finance System. To make up for this shortfall, the Reform Legislation
authorized Additional State Aid for Tax Reduction (“ASATR”) for each school district in an amount equal to the difference between
the amount that each district would receive under the Foundation School Program and the amount of each district’s Target
Revenue funding level. However, in subsequent legislative sessions, the Texas Legislature has gradually reduced the reliance
on ASATR by increasing the funding formulas. This phase-out of ASATR began with actions adopted by the 83rd Texas
Legislature. Beginning with the 2017-18 school year, the statutes authorizing ASATR are repealed.
2015 Legislation
As a general matter, the 84th Texas Legislature, which concluded on June 1, 2015, did not enact substantive changes to the
Finance System. However, Senate Joint Resolution 1 was passed during the session, which proposed a constitutional
amendment increasing the mandatory homestead exemption for school districts from $15,000 to $25,000, and requiring that the
tax limitation for taxpayers who are age 65 and older or disabled be reduced to reflect the additional exemption. The proposed
constitutional amendment was approved by the voters at a statewide election held on November 3, 2015, and is effective for the
tax year beginning January 1, 2015. Legislation was also passed by the 84th Texas Legislature that includes provisions allowing
for additional State aid to hold school districts harmless during the State’s 2016-2017 Biennium for tax revenue losses resulting
from the increased homestead exemption. Any hold harmless funding for future biennia must be approved in a subsequent
legislative session, and the District can make no representation that that will occur. The 2016-2017 hold harmless legislation
also prohibits a school district from reducing the amount of, or repealing, an optional homestead exemption that was in place for
the 2014 tax year (fiscal year 2015) through the period ending December 31, 2019. An optional homestead exemption reduces
both the tax revenue and State Aid received by a school district.
Wealth Transfer Provisions
Some districts have sufficient property wealth per student in WADA (“wealth per student”) to generate their statutory level of
funding through collections of local property taxes alone. Districts whose wealth per student generates local property tax
collections in excess of their statutory level of funding are referred to as “Chapter 41” districts because they are subject to the
wealth equalization provisions contained in Chapter 41 of the Texas Education Code. Chapter 41 districts may receive State
funds for certain competitive grants and a few programs that remain outside the Foundation School Program, as well as receiving
ASATR until their overall funding meets or exceeds their Target Revenue level of funding. Otherwise, Chapter 41 districts are
not eligible to receive State funding. Furthermore, Chapter 41 districts must exercise certain options in order to reduce their
wealth level to equalized wealth levels of funding, as determined by formulas set forth in the Reform Legislation. For most
Chapter 41 districts, this equalization process entails paying the portion of the district’s local taxes collected in excess of the
equalized wealth levels of funding to the State (for redistribution to other school districts) or directly to other school districts with
a wealth per student that does not generate local funds sufficient to meet the statutory level of funding, a process known as
“recapture”.
The equalized wealth levels that subject Chapter 41 districts to wealth equalization measures for fiscal year 2015–16 are set at
(i) $514,000 per student in WADA with respect to that portion of a district’s M&O tax effort that does not exceed its compressed
tax rate (for most districts, the first $1.00 per $100 of taxable value) and (ii) $319,500 per WADA with respect to that portion of
a district’s M&O tax effort that is beyond its compressed rate plus $.06 (for most districts, M&O taxes levied above $1.06 per
$100 in taxable value). M&O taxes levied above $1.00 but below $1.07 per $100 of taxable value are not subject to the wealth
equalization provisions of Chapter 41. Chapter 41 districts with a wealth per student above the lower equalized wealth level but
below the higher equalized wealth level must equalize their wealth only with respect to the portion of their M&O tax rate, if any,
in excess of $1.06 per $100 of taxable value. Chapter 41 districts may be entitled to receive ASATR from the State in excess
of their recapture liability of $514,000 for the 2015-16 and 2016-17 school years, and certain of such districts may use their
ASATR funds to offset their recapture liability.
Under Chapter 41, a district has five options to reduce its wealth per student so that it does not exceed the equalized wealth
levels: (1) a district may consolidate by agreement with one or more districts to form a consolidated district; all property and debt
17
of the consolidating districts vest in the consolidated district; (2) a district may detach property from its territory for annexation
by a property-poor district; (3) a district may purchase attendance credits from the State; (4) a district may contract to educate
nonresident students from a property-poor district by sending money directly to one or more property-poor districts; or (5) a
district may consolidate by agreement with one or more districts to form a consolidated taxing district solely to levy and distribute
either M&O taxes or both M&O taxes and I&S taxes. A Chapter 41 district may also exercise any combination of these remedies.
Options (3), (4) and (5) require prior approval by the Chapter 41 district’s voters; certain Chapter 41 districts may apply ASATR
funds to offset recapture and to achieve the statutory wealth equalization requirements, as described above, without approval
from voters.
A district may not adopt a tax rate until its effective wealth per student is at or below the equalized wealth level. If a district fails
to exercise a permitted option, the Commissioner must reduce the district’s property wealth per student to the equalized wealth
level by detaching certain types of property from the district and annexing the property to a property-poor district or, if necessary,
consolidate the district with a property-poor district. Provisions governing detachment and annexation of taxable property by the
Commissioner do not provide for assumption of any of the transferring district’s existing debt. The Commissioner has not been
required to detach property in the absence of a district failing to select another wealth-equalization option.
The School Finance System as Applied to the District
The District’s wealth per student for the 2015-16 school year is more than the equalized wealth value. Accordingly, the District
has been required to exercise one of the permitted wealth equalization options. As a district with wealth per student in excess
of the equalized wealth value, the District has reduced its wealth per student by sending payments directly to the state to
purchase weighted average daily attendance credits (Option 3) under Chapter 41, Texas Education Code, for the purpose of
achieving property wealth equalization.
TAX RATE LIMITATIONS
A school district is authorized to levy maintenance and operation taxes ("M&O Tax") subject to approval of a proposition
submitted to district voters under Section 45.003(d) of the Texas Education Code, as amended. The maximum M&O Tax rate
that may be levied by a district cannot exceed the voted maximum rate or the maximum rate described in the next succeeding
paragraph. The maximum voted M&O Tax rate for the District is $1.50 per $100 of assessed valuation as approved by the voters
at an election held on April 9, 1994 under Chapter 45, Texas Education Code.
The maximum M&O tax rate per $100 of assessed valuation that may be adopted by the District may not exceed the lesser of
(A) $1.50 and (B) the sum of (1) the rate of $0.17, and (2) the product of the "State Compression Percentage" multiplied by
$1.50. The State Compression Percentage has been set, and will remain, at 66.67% for fiscal years 2007–08 through 2015–16.
The State Compression Percentage is set by legislative appropriation for each State fiscal biennium or, in the absence of
legislative appropriation, by the Commissioner. For a more detailed description of the State Compression Percentage, see
"CURRENT PUBLIC SCHOOL FINANCE SYSTEM – Local Funding for School Districts." Furthermore, a school district cannot
annually increase its tax rate in excess of the district’s "rollback tax rate" without submitting such tax rate to a referendum election
and a majority of the voters voting at such election approving the adopted rate. See "AD VALOREM TAX PROCEDURES –
Public Hearing and Rollback Tax Rate."
A school district is also authorized to issue bonds and levy taxes for payment of bonds subject to voter approval of a proposition
submitted to the voters under Section 45.003(b)(1), Texas Education Code, as amended, which authorizes a tax unlimited as to
rate or amount for the support school district bonded indebtedness (see "THE BONDS – Security").
Chapter 45 of the Texas Education Code, as amended, requires a district to demonstrate to the Texas Attorney General that it
has the prospective ability to pay debt service on a proposed issue of bonds, together with debt service on other outstanding
"new debt" of the district, from a tax levied at a rate of $0.50 per $100 of assessed valuation before bonds may be issued. In
demonstrating the ability to pay debt service at a rate of $0.50, a district may take into account State allotments to the district
which effectively reduces the district’s local share of debt service. Once the prospective ability to pay such tax has been shown
and the bonds are issued, a district may levy an unlimited tax to pay debt service. Taxes levied to pay debt service on bonds
approved by district voters at an election held on or before April 1, 1991 and issued before September 1, 1992 (or debt issued
to refund such bonds) are not subject to the foregoing threshold tax rate test. In addition, taxes levied to pay refunding bonds
issued pursuant to Chapter 1207, Texas Government Code, are not subject to the $0.50 tax rate test; however, taxes levied to
pay debt service on such bonds are included in the calculation of the $0.50 tax rate test as applied to subsequent issues of "new
debt." The Bonds are issued as refunding bonds and are not subject to the $0.50 threshold tax rate test; however, taxes levied
to pay debt service on the Bonds are included in the calculation of the $0.50 tax rate test as applied to subsequent issues of
"new debt." Under current law, a district may demonstrate its ability to comply with the $0.50 threshold tax rate test by applying
the $0.50 tax rate to an amount equal to 90% of projected future taxable value of property in the district, as certified by a
registered professional appraiser, anticipated for the earlier of the tax year five years after the current tax year or the tax year in
which the final payment for the bonds is due. However, if a district uses projected future taxable values to meet the $0.50
threshold tax rate test and subsequently imposes a tax at a rate greater than $0.50 per $100 of valuation to pay for bonds subject
to the test, then for subsequent bond issues, the Attorney General must find that the district has the projected ability to pay
principal and interest on the proposed bonds and all previously issued bonds subject to the $0.50 threshold tax rate test from a
tax rate of $0.45 per $100 of valuation. To satisfy this threshold test, the District has used State assistance (other than EDA or
IFA allotment funding) and, with respect to certain prior bonds, projected property values. (See "DEBT LIMITATIONS.")
18
DEBT LIMITATIONS
A district must demonstrate to the Attorney General of the State of Texas in connection with his required approval of the district’s
bonds its ability to pay all "new debt" (bonds authorized by an election after April 1, 1991 and/or issued after September 1, 1992)
with a debt service tax not to exceed $0.50 per $100 assessed valuation. The Attorney General will take into account state
equalization payments in satisfying such requirement and, if compliance with such requirement is contingent on receiving state
assistance, a district may not adopt a tax rate for a year for purposes of paying the principal of and interest on the bonds unless
the district credits to the interest and sinking fund of the bond the amount of state assistance received or to be received in that
year. The Bonds are issued as "refunding" bonds pursuant Chapter 1207, as amended, Texas Government Code and are,
therefore, not subject to the $0.50 threshold tax rate test. (See "TAX RATE LIMITATIONS.")
EMPLOYEES RETIREMENT PLAN
The District’s employees participate in a retirement plan with the State of Texas; the Plan is administered by the Teacher
Retirement System of Texas. The District has no pension fund expenditures or liabilities. See "APPENDIX D – District
Comprehensive Annual Financial Report for the Year Ended August 31, 2014, Note 12 – School District Retiree Health Plan."
Formal collective bargaining agreements relating directly to wages and other conditions of employment are prohibited by State
law, as are strikes by teachers. There are various local, state and national organized employee groups who engage in efforts
to better terms and conditions of employment of school employees. Some districts have adopted a policy to consult with
employer groups with respect to certain terms and conditions of employment. Some examples of these groups are the Texas
State Teachers Association, the Texas Classroom Teachers Association, the Association of Texas Professional Educators and
the National Education Association.
For the year ended August 31, 2015, the District adopted new accounting guidance, Governmental Accounting Standards Board
("GASB") Statement No. 68, Accounting and Financial Reporting for Pensions – An Amendment of GASB Statement No. 27 and
GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date – an Amendment of
GASB Statement No. 68, resulting in a restatement of the District's net position as of August 31, 2014. In accordance with the
adoption of GASB Statements No. 68 and No. 71, the District, for the then-current fiscal year, must record its proportionate share
of the net pension liability related to its contributions to the TRS cost-sharing pension plan at the beginning of the measurement
period ending August 31, 2014. In addition, the District must record a deferred outflow of resources for its contributions to TRS
from the beginning of the measurement period through August 31, 2014. The effect of this change in accounting principle will be
further described in the District's Comprehensive Annual Financial Report for the period ending August 31, 2015.
Self-Insurance
The District self-insures for various risks, including employee health care and worker’s compensation. For additional information,
see "APPENDIX D – District Comprehensive Annual Financial Report for the Year Ended August 31, 2014" including "Note 12
– School District Retiree Health Plan" and "Note 17 Self-Insurance Fund."
RATINGS
Standard & Poor’s Ratings Service, a Standard & Poor’s Financial Services LLC business ("S&P"), has assigned municipal
rating of "AAA" to the Bonds based upon the Permanent School Fund Guarantee which has been conditionally received from
the Texas Education Agency. See "THE PERMANENT SCHOOL FUND GUARANTEE PROGRAM." S&P generally rates all
bond issues guaranteed by the Permanent School Fund of the State of Texas "AAA". An explanation of the significance of any
rating may be obtained from the rating agency. The District’s current underlying, unenhanced rating is "AA-" by S&P with a stable
outlook.
The above expected ratings are not a recommendation to buy, sell or hold the Bonds, and such expected ratings may be subject
to revision or withdrawal at any time by the rating agency. Any downward revision or withdrawal of the ratings may have an
adverse effect on the market price of the Bonds.
LEGAL MATTERS
The District will furnish to the Underwriters a complete transcript of proceedings had incident to the authorization and issuance
of the Bonds, including the unqualified approving legal opinion of the Attorney General of the State of Texas to the effect that
the Bonds are valid and legally binding obligations of the District, and based upon examination of such transcript of proceedings,
the approving legal opinion of Bond Counsel with respect to the Bonds being issued in compliance with the provisions of
applicable law and the interest on Bonds being excluded from gross income for purposes of federal income tax. The form of
Bond Counsel's opinion is attached hereto as Appendix C.
The customary closing papers, including a certificate to the effect that no litigation of any nature has been filed or is then pending
to restrain the issuance and delivery of the Bonds, or which would affect the provisions made for their payment or security, or in
any manner questioning the validity of said Bonds will also be furnished. Though it represents the Financial Advisor and the
Underwriters from time to time in matters unrelated to the issuance of the Bonds, Bond Counsel and Disclosure Counsel have
been engaged by and only represent the District in the issuance of the Bonds. Disclosure Counsel also advises the TEA in
19
connection with its disclosure obligations under the federal securities laws, but Disclosure Counsel has not passed upon any
TEA disclosures contained in this Official Statement. Except as noted below, Bond Counsel was not requested to participate,
and did not take part, in the preparation of the Official Statement, and such firm has not assumed any responsibility with respect
thereto or undertaken independently to verify any of the information contained herein except that in its capacity as Bond Counsel,
such firm has reviewed the information appearing under the captions or sub captions "THE BONDS" (except under the sub
captions "Yield on Preimum Capital Appreciation Bonds," "Permanent School Fund Guarantee", "Legality," "Payment Record",
and "Sources and Uses of Funds"), "REGISTRATION, TRANSFER AND EXCHANGE", "STATE AND LOCAL FUNDING OF
SCHOOL DISTRICTS IN TEXAS," "CURRENT PUBLIC SCHOOL FINANCE SYSTEM" (except under the sub caption "The
School Finance System as Applied to the District"), "TAX RATE LIMITATIONS", "LEGAL MATTERS", "TAX
MATTERS","REGISTRATION AND QUALIFICATIONS OF BONDS FOR SALE," "LEGAL INVESTMENTS AND ELIGIBILITY
TO SECURE PUBLIC FUNDS IN TEXAS", and "CONTINUING DISCLOSURE OF INFORMATION" (except under the sub
caption "Compliance with Prior Undertakings") and such firm is of the opinion that the information relating to the Bonds and legal
matters contained under such captions and sub captions is an accurate and fair description of the laws and legal issues
addressed therein and, with respect to the Bonds, such information conforms to the Order. The legal fee to be paid Bond
Counsel for services rendered in connection with the issuance of the Bonds is contingent upon the sale and delivery of the
Bonds. Certain legal matters will be passed upon for the District by McCall, Parkhurst & Horton L.L.P., Austin, Texas, Disclosure
Counsel to the District, whose fee is contingent upon the sale and delivery of the Bonds. Certain legal matters will be passed
upon for the Underwriters by Norton Rose Fulbright US LLP, Austin, Texas, counsel for the Underwriters, whose fee is contingent
upon the sale and delivery of the Bonds.
The various legal opinions to be delivered concurrently with the delivery of the Bonds express the professional judgment of the
attorneys rendering the opinion as to the legal issues explicitly addressed therein. In rendering a legal opinion, the attorney
does not become an insurer or guarantor of that expression of professional judgment, of the transaction opined upon or of the
future performance of the parties to the transaction. Nor does the rendering of an opinion guarantee the outcome of any legal
dispute that may arise out of the transaction.
TAX MATTERS
Tax Exemption
In the opinion of Andrews Kurth LLP, Austin, Texas ("Bond Counsel"), interest on the Bonds is (1) excludable from gross income of
the owners thereof for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986, as amended (the
"Code"), and (2) not includable in the alternative minimum taxable income of individuals, or except as described below, corporations.
The foregoing opinions of Bond Counsel are based on the Code and the regulations, rulings and court decisions thereunder in
existence on the date of issue of the Bonds. Such authorities are subject to change and any such change could prospectively or
retroactively result in the inclusion of the interest on the Bonds in gross income of the owners thereof or change the treatment of
such interest for purposes of computing alternative minimum taxable income.
In rendering its opinions, Bond Counsel has assumed continuing compliance by the District with certain covenants of the Bond
Order and has relied on representations by the District with respect to matters solely within the knowledge of the District, which
Bond Counsel has not independently verified. The covenants and representations relate to, among other things, the use of Bond
proceeds and any facilities financed or refinanced therewith, the source of repayment of the Bonds, the investment of Bond
proceeds and certain other amounts prior to expenditure, and requirements that excess arbitrage earned on the investment of Bond
proceeds and certain other amounts be paid periodically to the United States and that the District file an information report with the
Internal Revenue Service (the "Service"). If the District should fail to comply with the covenants in the Bond Order, or if its
representations relating to the Bonds that are contained in the Bond Order should be determined to be inaccurate or incomplete,
interest on the Bonds could become taxable from the date of delivery of the Bonds, regardless of the date on which the event
causing such taxability occurs.
Interest on the Bonds owned by a corporation (other than an S corporation, a regulated investment company, a real estate
investment trust (REIT), a real estate mortgage investment conduit (REMIC) or a financial asset securitization investment trust
(FASIT)) will be included in such corporation’s adjusted current earnings for purposes of calculating such corporation’s alternative
minimum taxable income. A corporation’s alternative minimum taxable income is the basis on which the alternative minimum tax
imposed by the Code is computed. Except as stated above, Bond Counsel will express no opinion as to any federal, state or local
tax consequences resulting from the ownership of, receipt or accrual of interest on or acquisition or disposition of the Bonds.
Bond Counsel’s opinion is not a guarantee of a result, but represents its legal judgment based upon its review of existing statutes,
regulations, published rulings and court decisions and the representations and covenants of the District described above. No ruling
has been sought from the Service with respect to the matters addressed in the opinion of Bond Counsel, and Bond Counsel’s
opinion is not binding on the Service. The Service has an ongoing program of auditing the tax-exempt status of the interest on
municipal obligations. If an audit of the Bonds is commenced, under current procedures the Service is likely to treat the District as
the "taxpayer," and the owners of the Bonds may have no right to participate in the audit process. In responding to or defending an
audit of the tax-exempt status of the interest on the Bonds, the District may have different or conflicting interests from the owners
of the Bonds. Public awareness of any future audit of the Bonds could adversely affect the value and liquidity of the Bonds during
the pendency of the audit, regardless of its ultimate outcome.
Under the Code, taxpayers are required to provide information on their returns regarding the amount of tax-exempt interest, such
as interest on the Bonds, received or accrued during the year.
20
Prospective purchasers of the Bonds should be aware that the ownership of tax-exempt obligations, such as the Bonds, may result
in collateral federal income tax consequences to, among others, financial institutions, life insurance companies, property and
casualty insurance companies, certain foreign corporations doing business in the United States, certain S corporations with
Subchapter C earnings and profits, individual recipients of Social Security or Railroad Retirement benefits, taxpayers who are
deemed to have incurred or continued indebtedness to purchase or carry tax-exempt obligations, taxpayers owning an interest in a
FASIT that holds tax-exempt obligations, and individuals otherwise eligible for the earned income tax credit. Such prospective
purchasers should consult their tax advisors as to the consequences of investing in the Bonds.
Future Tax Legislation
Tax legislation, administrative actions taken by tax authorities, and court decisions may cause interest on the Bonds to be subject,
directly or indirectly, to federal income taxation or state income taxation, or otherwise prevent the beneficial owners of the Bonds
from realizing the full current benefit of the tax status of such interest. For example, future legislation to resolve certain federal
budgetary issues may significantly reduce the benefit of, or otherwise affect, the exclusion from gross income for federal income
tax purposes of interest on all state and local obligations, including the Bonds. In addition, such legislation or actions (whether
currently proposed, proposed in the future or enacted) could affect the market price or marketability of the Bonds. Prospective
purchasers of the Bonds should consult their own tax advisors regarding any pending or proposed federal or state tax legislation,
regulations or litigation, and its impact on their individual situations, as to which Bond Counsel expresses no opinion.
Tax Accounting Treatment of Original Issue Discount Bonds
Some of the Bonds may be offered at an initial offering price which is less than the stated redemption price payable at maturity of
such Bonds. If a substantial amount of any maturity of the Bonds is sold to members of the public (which for this purpose excludes
bond houses, brokers and similar persons or entities acting in the capacity of wholesalers or underwriters) at such initial offering
price, an initial owner who purchases the Bonds of that maturity (the "Discount Bonds") will be considered to have "original issue
discount" for federal income tax purposes equal to the difference between (a) the stated redemption price payable at the maturity
of such Discount Bond and (b) the initial offering price to the public of such Discount Bond. Under existing law, such original issue
discount will be treated for federal income tax purposes as additional interest on a Bond and such initial owner will be entitled to
exclude from gross income for federal income tax purposes that portion of such original issue discount deemed to be earned (as
discussed below) during the period while such Discount Bond continues to be owned by such initial owner. Except as otherwise
provided herein, the discussion regarding interest on the Bonds under the caption "Tax Exemption" generally applies to original
issue discount deemed to be earned on a Discount Bond while held by an owner who has purchased such Bond at the initial offering
price in the initial public offering of the Bonds and that discussion should be considered in connection with this portion of the Official
Statement.
In the event of a redemption, sale, or other taxable disposition of a Discount Bond prior to its stated maturity, however, any amount
realized by such initial owner in excess of the basis of such Discount Bond in the hands of such owner (increased to reflect the
portion of the original issue discount deemed to have been earned while such Discount Bond continues to be held by such initial
owner) will be includable in gross income for federal income tax purposes.
Because original issue discount on a Discount Bond will be treated for federal income tax purposes as interest on a Bond, such
original issue discount must be taken into account for certain federal income tax purposes as it is deemed to be earned even though
there will not be a corresponding cash payment. Corporations that purchase Discount Bonds must take into account original issue
discount as it is deemed to be earned for purposes of determining alternative minimum tax. Other owners of a Discount Bond may
be required to take into account such original issue discount as it is deemed to be earned for purposes of determining certain
collateral federal tax consequences of owning a Discount Bond. See "Tax Exemption" for a discussion regarding the alternative
minimum taxable income consequences for corporations and for a reference to collateral federal tax consequences for certain other
owners.
The characterization of original issue discount as interest is for federal income tax purposes only and does not otherwise affect the
rights or obligations of the owner of a Discount Bond or of the District. The portion of the principal of a Discount Bond representing
original issue discount is payable upon the maturity or earlier redemption of such Bond to the registered owner of the Discount Bond
at that time. Under special tax accounting rules prescribed by existing law, a portion of the original issue discount on each Discount
Bond is deemed to be earned each day. The portion of the original issue discount deemed to be earned each day is determined
under an actuarial method of accrual, using the yield to maturity as the constant interest rate and semi-annual compounding.
The federal income tax consequences of the purchase, ownership, redemption, sale or other disposition of Discount Bonds by an
owner that did not purchase such Bonds in the initial public offering and at the initial offering price may be determined according to
rules which differ from those described above. All prospective purchasers of Discount Bonds should consult their tax advisors with
respect to the determination for federal, state and local income tax purposes of interest and original issue discount accrued upon
redemption, sale or other disposition of such Discount Bonds and with respect to the federal, state, local and foreign tax
consequences of the purchase, ownership, redemption, sale or other disposition of such Discount Bonds.
Tax Accounting Treatment of Original Issue Premium Bonds
Some of the Bonds may be offered at an initial offering price which exceeds the stated redemption price payable at the maturity of
such Bonds. If a substantial amount of any maturity of the Bonds is sold to members of the public (which for this purpose excludes
21
bond houses, brokers and similar persons or entities acting in the capacity of wholesalers or underwriters) at such initial offering
price, each of the Bonds of such maturity ("Premium Bond") will be considered for federal income tax purposes to have "bond
premium" equal to the amount of such excess. The basis for federal income tax purposes of a Premium Bond in the hands of an
initial purchaser who purchases such Premium Bond in the initial offering must be reduced each year and upon the sale or other
taxable disposition of the Premium Bond by the amount of amortizable bond premium. This reduction in basis will increase the
amount of any gain (or decrease the amount of any loss) recognized for federal income tax purposes upon the sale or other taxable
disposition of a Premium Bond by the initial purchaser. Generally, no corresponding deduction is allowed for federal income tax
purposes, for the reduction in basis resulting from amortizable bond premium with respect to a Premium Bond. The amount of bond
premium on a Premium Bond which is amortizable each year (or shorter period in the event of a sale or disposition of a Premium
Bond) is determined under special tax accounting rules which use a constant yield throughout the term of the Premium Bond based
on the initial purchaser’s original basis in such Premium Bond.
The federal income tax consequences of the purchase, ownership, redemption, sale or other disposition by an owner of Premium
Bonds that are not purchased in the initial offering or which are purchased at an amount representing a price other than the
initial offering price for the Premium Bonds of the same maturity may be determined according to rules which differ from those
described above. Moreover, all prospective purchasers of Premium Bonds should consult their tax advisors with respect to the
federal, state, local and foreign tax consequences of the purchase, ownership, redemption, sale or other disposition of Premium
Bonds.
REGISTRATION AND QUALIFICATION OF BONDS FOR SALE
The sale of the Bonds has not been registered under the Federal Securities Act of 1933, as amended, in reliance upon the
exemption provided thereunder by Section 3(a)(2); and the Bonds have not been qualified under the Securities Act of Texas in
reliance upon various exemptions contained therein; nor have the Bonds been qualified under the securities acts of any
jurisdiction. The District assumes no responsibility for qualification of the Bonds under the securities laws of any jurisdiction in
which the Bonds may be sold, assigned, pledged, hypothecated or otherwise transferred. This disclaimer of responsibility for
qualification for sale or other disposition of the Bonds shall not be construed as an interpretation of any kind with regard to the
availability of any exemption from securities registration provisions.
LEGAL INVESTMENTS AND ELIGIBILITY TO SECURE PUBLIC FUNDS IN TEXAS
Section 1201.041 of the Public Security Procedures Act (Chapter 1201, Texas Government Code, as amended) provides that
the Bonds are negotiable instruments, investment securities governed by Chapter 8, Texas Business and Commerce Code, and
are legal and authorized investments for insurance companies, fiduciaries and trustees, and for the sinking funds of
municipalities and other political subdivisions and public agencies of the State of Texas. In addition, various provisions of the
Texas Finance Code provide that, subject to a prudent investor standard, the Bonds are legal investments for state banks,
savings banks, trust companies with at least $1 million of capital and savings and loan associations. In accordance with the
Public Funds Investment Act, Chapter 2256, Texas Government Code, as amended, the Bonds must be rated at least "A" or its
equivalent as to investment quality by a national rating agency in order for most municipalities or other political subdivisions or
public agencies of the State of Texas to invest in the Bonds, except for purchases for interest and sinking funds of such entities.
(See "RATINGS" herein). Moreover, municipalities or other political subdivisions or public agencies of the State of Texas that
have adopted investment policies and guidelines in accordance with the Public Funds Investment Act may have other, more
stringent requirements for purchasing securities, including the Bonds. The Bonds are eligible to secure deposits of any public
funds of the State, its agencies, and its political subdivisions, and are legal security for those deposits to the extent of their
market value.
The District has made no investigation of other laws, rules, regulations or investment criteria which might apply to such
institutions or entities or which might limit the suitability of the Bonds for any of the foregoing purposes or limit the authority of
such institutions or entities to purchase or invest in the Bonds for such purposes. The District has made no review of laws in
other states to determine whether the Bonds are legal investments for various institutions in those states.
INVESTMENT AUTHORITY AND PRACTICES OF THE DISTRICT
Available District funds are invested as authorized by Texas law and in accordance with investment policies approved by the
Board. Both State law and the District’s investment policies are subject to change. Under Texas law, the District is authorized to
invest in (1) obligations of the United States or its agencies and instrumentalities, including letters of credit; (2) direct obligations
of the State of Texas or its agencies and instrumentalities; (3) collateralized mortgage obligations directly issued by a federal
agency or instrumentality of the United States, the underlying security for which is guaranteed by an agency or instrumentality
of the United States; (4) other obligations, the principal and interest of which is guaranteed or insured by or backed by the full
faith and credit of, the State of Texas or the United States or their respective agencies and instrumentalities; including obligations
that are fully guaranteed or insured by the Federal Deposit Insurance Corporation or by the explicit full faith and credit of the
United States, (5) obligations of states, agencies, counties, cities, and other political subdivisions of any state rated as to
investment quality by a nationally recognized investment rating firm not less than "A" or its equivalent; (6) bonds issued, assumed
or guaranteed by the State of Israel; (7) certificates of deposit meeting the requirements of the Texas Public Funds Investment
Act (Chapter 2256, Texas Government Code) (i) that are issued by an institution that has its main office or a branch office in the
State of Texas and are guaranteed or insured by the Federal Deposit Insurance Corporation or the National Credit Union Share
Insurance Fund, or are secured as to principal by obligations described in clauses (1) through (5) and clause (13) or in any other
manner and amount provided by law for District deposits or (ii) that are invested by the District through a depository institution
22
that has its main office or a branch office in the State of Texas and otherwise meet the requirements of the PFIA; (8) fully
collateralized repurchase agreements that have a defined termination date, are fully secured by a combination of cash and
obligations described in clause (1) which are pledged to the District, held in the District’s name, and deposited at the time the
investment is made with the District or with a third party selected and approved by the District and are placed through a primary
government securities dealer, as defined by the Federal Reserve, or a financial institution doing business in the State, (9)
securities lending programs if (i) the securities loaned under the program are 100% collateralized, a loan made under the
program allows for termination at any time and a loan made under the program is either secured by (a) obligations that are
described in clauses (1) through (6) above, (b) irrevocable letters of credit issued by a state or national bank that is continuously
rated by a nationally recognized investment rating firm at not less than "A" or its equivalent or (c) cash invested in obligations
described in clauses (1) through (6) above, clauses (11) through (13) below, or an authorized investment pool; (ii) securities
held as collateral under a loan are pledged to the District, held in the District’s name and deposited at the time the investment is
made with the District or a third party designated by the District; (iii) a loan made under the program is placed through either a
primary government securities dealer or a financial institution doing business in the State of Texas; and (iv) the agreement to
lend securities has a term of one year or less, (10) certain bankers’ acceptances with the remaining term of 270 days or less, if
the short-term obligations of the accepting bank or its parent are rated at least "A-1" or "P-1" or the equivalent by at least one
nationally recognized credit rating agency, (11) commercial paper with a stated maturity of 270 days or less that is rated at least
"A-1" or "P-1" or the equivalent by either (a) two nationally recognized credit rating agencies or (b) one nationally recognized
credit rating agency if the paper is fully secured by an irrevocable letter of credit issued by a U.S. or state bank, (12) no-load
money market mutual funds registered with and regulated by the Securities and Exchange Commission that have a dollar
weighted average stated maturity of 90 days or less and include in their investment objectives the maintenance of a stable net
asset value of $1 for each share, and (13) no-load mutual funds registered with the Securities and Exchange Commission that
have an average weighted maturity of less than two years, invest exclusively in obligations described in this paragraph, and are
continuously rated as to investment quality by at least one nationally recognized investment rating firm of not less than "AAA" or
its equivalent. In addition, bond proceeds may be invested in guaranteed investment contracts that have a defined termination
date and are secured by obligations, including letters of credit, of the United States or its agencies and instrumentalities in an
amount at least equal to the amount of bond proceeds invested under such contract, other than the prohibited obligations
described in the next succeeding paragraph.
The District may invest in such obligations directly or through government investment pools that invest solely in such obligations
provided that the pools are rated no lower than "AAA" or "AAAm" or an equivalent by at least one nationally recognized rating
service. The District may also contract with an investment management firm registered under the Investment Advisers Act of
1940 (15 U.S.C. Section 80b-1 et seq.) or with the State Securities Board to provide for the investment and management of its
public funds or other funds under its control for a term up to two years, but the District retains ultimate responsibility as fiduciary
of its assets. In order to renew or extend such a contract, the District must do so by order, ordinance, or resolution. The District
is specifically prohibited from investing in: (1) obligations whose payment represents the coupon payments on the outstanding
principal balance of the underlying mortgage-backed security collateral and pays no principal; (2) obligations whose payment
represents the principal stream of cash flow from the underlying mortgage-backed security and bears no interest; (3)
collateralized mortgage obligations that have a stated final maturity of greater than 10 years; and (4) collateralized mortgage
obligations the interest rate of which is determined by an index that adjusts opposite to the changes in a market index.
As a school district that qualifies as an "issuer" under Chapter 1371, as amended, Texas Government Code, the District is also
authorized to purchase, sell, and invest its funds in corporate bonds. State law defines "corporate bonds" as senior secured debt
obligations issued by a domestic business entity and rated not lower than "AA-" or the equivalent by a nationally recognized
investment rating firm. The term does not include a bond that is convertible into stocks or shares in the entity issuing the bond
(or an affiliate or subsidy thereof) or any unsecured debt. Corporate bonds must finally mature not later than 3 years from their
date of purchase by the school district. A school district may not (1) invest more than 15% of its monthly average fund balance
(excluding bond proceeds, reserves, and other funds held for the payment of debt service) in corporate bonds; or (2) invest more
than 25% of the funds invested in corporate bonds in any one domestic business entity (including subsidiaries and affiliates
thereof). Corporate bonds held by a school district must be sold if they are at any time downgraded below "AA-" (or the equivalent
thereof) or, with respect to a corporate bond rated "AA-" (or the equivalent thereof), such corporate bond is placed on negative
credit watch. Corporate bonds are not an eligible investment for a public funds investment pool. To invest in corporate bonds,
an eligible school district must first (i) amend its investment policy to authorize corporate bonds as an eligible investment, (ii)
adopt procedures for monitoring rating changes in corporate bonds and liquidating an investment in corporate bonds, and (iii)
identify funds eligible to be invested in corporate bonds. As of the date of this Official Statement, the District has not taken the
steps necessary to allow for investing in corporate bonds and has not made any investments in that type of instrument.
Under Texas law, the District is required to invest its funds under written investment policies that primarily emphasize safety of
principal and liquidity; that address investment diversification, yield, maturity, and the quality and capability of investment
management; and that include a list of authorized investments for District funds, the maximum allowable stated maturity of any
individual investment and the maximum average dollar-weighted maturity allowed for pooled fund groups, methods to monitor
the market price of investments acquired with public funds, a requirement for settlement of all transactions, except investment
pool funds and mutual funds, on a delivery versus payment basis, and procedures to monitor rating changes in investments
acquired with public funds and the liquidation of such investments consistent with the Public Funds Investment Act. As an
integral part of its investment policy, the District is required to adopt a separate written investment strategy for each of the funds
under its control. All District funds must be invested consistent with a formally adopted "Investment Strategy Statement" that
specifically addresses each fund’s investment. Each Investment Strategy Statement will describe its objectives concerning: (1)
suitability of investment type, (2) preservation and safety of principal, (3) liquidity, (4) marketability of each investment, (5)
diversification of the portfolio, and (6) yield.
23
Under Texas law, the District’s investments must be made "with judgment and care, under prevailing circumstances, that a
person of prudence, discretion, and intelligence would exercise in the management of the person’s own affairs, not for
speculation, but for investment considering the probable safety of capital and the probable income to be derived." At least
quarterly the District’s investment officers must submit an investment report to the Board of Trustees detailing: (1) the investment
position of the District, (2) that all investment officers jointly prepared and signed the report, (3) the beginning market value, the
ending market value and the fully accrued interest during the reporting period value and the ending value of each pooled fund
group, (4) the book value and market value of each separately listed asset at the end of the reporting period, (5) the maturity
date of each separately invested asset, (6) the account or fund or pooled fund group for which each individual investment was
acquired, and (7) the compliance of the investment portfolio as it relates to: (a) adopted investment strategies and (b) Texas law.
No person may invest District funds without express written authority from the Board of Trustees.
Under Texas law, the District is additionally required to: (1) annually review its adopted policies and strategies, (2) adopt a rule,
order, ordinance or resolution stating that it has reviewed its investment policy and investment strategies and records any
changes made to either its investment policy or investment strategy in the respective rule, order, ordinance or resolution, (3)
require any investment officers with personal business relationships or relatives with firms seeking to sell securities to the District
to disclose the relationship and file a statement with the Texas Ethics Commission and the Board of Trustees; (4) require the
qualified representative of firms offering to engage in an investment transaction with the District to: (a) receive and review the
District’s investment policy, (b) acknowledge that reasonable controls and procedures have been implemented to preclude
investment transactions conducted between the District and the business organization that are not authorized by the District’s
investment policy (except to the extent that this authorization is dependent on an analysis of the makeup of the District’s entire
portfolio or requires an interpretation of subjective investment standards), and (c) deliver a written statement in a form acceptable
to the District and the business organization attesting to these requirements; (5) perform an annual audit of the management
controls on investments and adherence to the District’s investment policy; (6) provide specific investment training for the Chief
Financial Officer and investment officers; (7) restrict reverse repurchase agreements to not more than 90 days and restrict the
investment of reverse repurchase agreement funds to no greater than the term of the reverse purchase agreement; (8) restrict
the investment in no-load mutual funds in the aggregate to no more than 15% of the District’s monthly average fund balance,
excluding bond proceeds and reserves and other funds held for debt service; (9) require local government investment pools to
conform to the new disclosure, rating, net asset value, yield calculation, and advisory board requirements, and (10) at least
annually review, revise, and adopt a list of qualified brokers that are authorized to engage in investment transactions with the
District.
Current Investments
As of September 30, 2015,(1) the District’s investable funds were invested in the following categories:
% of
Funds
Book Value
Market Value
Description
Invested
Municipal Bonds
21.25%
$ 64,303,452
$ 64,309,252
Agency Notes
8.50%
25,699,395
25,709,162
LOGIC
7.10%
21,499,662
21,499,662
TexPool
0.15%
439,308
439,308
TexSTAR
0.17%
508,562
508,562
Texas Class
8.45%
25,560,758
25,560,758
Wells Fargo Bank, N.A.
10.48%
31,695,908
31,695,908
LoneStar
43.90%
132,838,897
132,838,897
(1) Unaudited.
No funds of the District are invested in derivative securities; i.e., securities whose rate of return is determined by reference to
some other instrument, index, or commodity.
THE PERMANENT SCHOOL FUND GUARANTEE PROGRAM
The information below concerning the state permanent school fund and the guarantee program for school district bonds has
been provided by the Texas Education Agency and is not guaranteed as to accuracy or completeness by, and is not construed
as a representation by the District, the financial advisor, or the underwriters.
The Permanent School Fund Guarantee Program
This disclosure statement provides information relating to the program (the “Guarantee Program”) administered by the Texas
Education Agency (the “TEA”) with respect to the Texas Permanent School Fund guarantee of tax-supported bonds issued by
Texas school districts and the guarantee of revenue bonds issued by or for the benefit of Texas charter districts. The Guarantee
Program was authorized by an amendment to the Texas Constitution in 1983 and by Subchapter C of Chapter 45 of the Texas
Education Code, as amended (the “Act”). While the Guarantee Program applies to bonds issued by or for both school districts
and charter districts, as described below, the Act and the program rules for the two types of districts have some distinctions. For
convenience of description and reference, those aspects of the Guarantee Program that are applicable to school district bonds
and to charter district bonds are referred to herein as the “School District Bond Guarantee Program” and the “Charter District
Bond Guarantee Program,” respectively.
24
Some of the information contained in this Section may include projections or other forward-looking statements regarding future
events or the future financial performance of the Texas Permanent School Fund (the “PSF” or the “Fund”). Actual results may
differ materially from those contained in any such projections or forward-looking statements.
History and Purpose
The PSF was created with a $2,000,000 appropriation by the Texas Legislature (the “Legislature”) in 1854 expressly for the
benefit of the public schools of Texas. The Constitution of 1876 stipulated that certain lands and all proceeds from the sale of
these lands should also constitute the PSF. Additional acts later gave more public domain land and rights to the PSF. In 1953,
the U.S. Congress passed the Submerged Lands Act that relinquished to coastal states all rights of the U.S. navigable waters
within state boundaries. If the state, by law, had set a larger boundary prior to or at the time of admission to the Union, or if the
boundary had been approved by Congress, then the larger boundary applied. After three years of litigation (1957-1960), the U.
S. Supreme Court on May 31, 1960, affirmed Texas’ historic three marine leagues (10.35 miles) seaward boundary. Texas
proved its submerged lands property rights to three leagues into the Gulf of Mexico by citing historic laws and treaties dating
back to 1836. All lands lying within that limit belong to the PSF. The proceeds from the sale and the mineral-related rental of
these lands, including bonuses, delay rentals and royalty payments, become the corpus of the Fund. Prior to the approval by
the voters of the State of an amendment to the constitutional provision under which the Fund is established and administered,
which occurred on September 13, 2003 (the “Total Return Constitutional Amendment”), and which is further described below,
the PSF had as its main sources of revenues capital gains from securities transactions and royalties from the sale of oil and
natural gas. The Total Return Constitutional Amendment provides that interest and dividends produced by Fund investments
will be additional revenue to the PSF. The State School Land Board (“SLB”) maintains the land endowment of the Fund on
behalf of the Fund and is authorized to manage the investments of the capital gains, royalties and other investment income
relating to the land endowment. The SLB is a three member board, the membership of which consists of the Commissioner of
the Texas General Land Office (the “Land Commissioner”) and two citizen members, one appointed by the Governor and one
by the Texas Attorney General (the “Attorney General”).
The Texas Constitution describes the PSF as “permanent” and “perpetual.” Prior to the approval by Total Return Constitutional
Amendment, only the income produced by the PSF was to be used to complement taxes in financing public education.
On November 8, 1983, the voters of the State approved a constitutional amendment that provides for the guarantee by the PSF
of bonds issued by school districts. On approval by the State Commissioner of Education (the “Commissioner”), bonds properly
issued by a school district are fully guaranteed by the corpus of the PSF. See “The School District Bond Guarantee Program.”
In 2011, legislation was enacted that established the Charter District Bond Guarantee Program as a new component of the
Guarantee Program. That legislation authorized the use of the PSF to guarantee revenue bonds issued by or for the benefit of
certain open-enrollment charter schools that are designated as “charter districts” by the Commissioner. On approval by the
Commissioner, bonds properly issued by a charter district participating in the Program are fully guaranteed by the corpus of the
PSF. As described below, the implementation of the Charter District Bond Guarantee Program was deferred pending receipt of
guidance from the Internal Revenue Service (the “IRS”) which was received in September 2013, and the establishment of
regulations to govern the program, which regulations became effective on March 3, 2014. See “The Charter District Bond
Guarantee Program.”
State law also permits charter schools to be chartered and operated by school districts and other political subdivisions, but bond
financing of facilities for school district-operated charter schools is subject to the School District Bond Guarantee Program, not
the Charter District Bond Guarantee Program.
While the School District Bond Guarantee Program and the Charter District Bond Guarantee Program relate to different types
of bonds issued for different types of Texas public schools, and have different program regulations and requirements, a bond
guaranteed under either part of the Guarantee Program has the same effect with respect to the guarantee obligation of the Fund
thereto, and all guaranteed bonds are aggregated for purposes of determining the capacity of the Guarantee Program (see
“Capacity Limits for the Guarantee Program”). The Charter District Bond Guarantee Program as enacted by State law has not
been reviewed by any court, nor has the Texas Attorney General been requested to issue an opinion, with respect to its
constitutional validity.
The sole purpose of the PSF is to assist in the funding of public education for present and future generations. Prior to the
adoption of the Total Return Constitutional Amendment, all interest and dividends produced by Fund investments flowed into
the Available School Fund (the “ASF”), where they are distributed to local school districts and open-enrollment charter schools
based on average daily attendance. Any net gains from investments of the Fund accrue to the corpus of the PSF. Prior to the
approval by the voters of the State of the Total Return Constitutional Amendment, costs of administering the PSF were allocated
to the ASF. With the approval of the Total Return Constitutional Amendment, the administrative costs of the Fund have shifted
from the ASF to the PSF. In fiscal year 2015, distributions to the ASF amounted to $172.75 per student and the total amount
distributed to the ASF was $838.67 million.
Audited financial information for the PSF is provided annually through the PSF Comprehensive Annual Financial Report (the
“Annual Report”), which is filed with the Municipal Securities Rulemaking Board (“MSRB”). The Annual Report includes the
Message of the Executive Administrator of the Fund (the “Message”) and the Management’s Discussion and Analysis (“MD&A”).
The Annual Report for the year ended August 31, 2015, as filed with the MSRB in accordance with the PSF undertaking and
25
agreement made in accordance with Rule 15c2-12 (“Rule 15c2-12”) of the federal Securities and Exchange Commission (the
“SEC”), as described below, is hereby incorporated by reference into this disclosure. Information included herein for the year
ended August 31, 2015 is derived from the audited financial statements of the PSF, which are included in the Annual Report
when it is filed and posted. Reference is made to the Annual Report for the complete Message and MD&A for the year ended
August 31, 2015 and for a description of the financial results of the PSF for the year ended August 31, 2015, the most recent
year for which audited financial information regarding the Fund is available. The 2015 Annual Report speaks only as of its date
and the TEA has not obligated itself to update the 2015 Annual Report or any other Annual Report. The TEA posts each Annual
Report, which includes statistical data regarding the Fund as of the close of each fiscal year, the most recent disclosure for the
Guarantee Program, the Statement of Investment Objectives, Policies and Guidelines of the Texas Permanent School Fund,
which is codified at 19 Texas Administrative Code, Chapter 33 (the “Investment Policy”), monthly updates with respect to the
capacity of the Guarantee Program (collectively, the “Web Site Materials”) on the TEA web site at
http://tea.texas.gov/Finance_and_Grants/Permanent_School_Fund/ and with the MSRB at www.emma.msrb.org. Such monthly
updates regarding the Guarantee Program are also incorporated herein and made a part hereof for all purposes. In addition to
the Web Site Materials, the Fund is required to make quarterly filings with the SEC under Section 13(f) of the Securities Exchange
Act of 1934. Such filings, which consist of a list of the Fund’s holdings of securities specified in Section 13(f), including exchangetraded (e.g., NYSE) or NASDAQ-quoted stocks, equity options and warrants, shares of closed-end investment companies and
certain convertible debt securities, is available from the SEC at www.sec.gov/edgar.shtml. A list of the Fund’s equity and fixed
income holdings as of August 31 of each year is posted to the TEA web site and filed with the MSRB. Such list excludes holdings
in the Fund’s securities lending program. Such list, when filed, is incorporated herein and made a part hereof for all purposes.
The Total Return Constitutional Amendment
The Total Return Constitutional Amendment approved a fundamental change in the way that distributions are made to the ASF
from the PSF. The Total Return Constitutional Amendment requires that PSF distributions to the ASF be determined using a
total-return-based formula instead of the current-income-based formula, which was used from 1964 to the end of the 2003 fiscal
year. The Total Return Constitutional Amendment provides that the total amount distributed from the Fund to the ASF: (1) in
each year of a State fiscal biennium must be an amount that is not more than 6% of the average of the market value of the Fund,
excluding real property (the “Distribution Rate”), on the last day of each of the sixteen State fiscal quarters preceding the Regular
Session of the Legislature that begins before that State fiscal biennium (the “Distribution Measurement Period”), in accordance
with the rate adopted by: (a) a vote of two-thirds of the total membership of the State Board of Education (“SBOE”), taken before
the Regular Session of the Legislature convenes or (b) the Legislature by general law or appropriation, if the SBOE does not
adopt a rate as provided by clause (a); and (2) over the ten-year period consisting of the current State fiscal year and the nine
preceding state fiscal years may not exceed the total return on all investment assets of the Fund over the same ten-year period
(the “Ten Year Total Return”). In April 2009, the Attorney General issued a legal opinion, Op. Tex. Att’y Gen. No. GA-0707
(2009) (“GA-0707”), at the request of the Chairman of the SBOE with regard to certain matters pertaining to the Distribution Rate
and the determination of the Ten Year Total Return. In GA-0707 the Attorney General opined, among other advice, that (i) the
Ten Year Total Return should be calculated on an annual basis, (ii) a contingency plan adopted by the SBOE, to permit monthly
transfers equal in aggregate to the annual Distribution Rate to be halted and subsequently made up if such transfers temporarily
exceed the Ten Year Total Return, is not prohibited by State law, provided that such contingency plan applies only within a fiscal
year time basis, not on a biennium basis, and (iii) that the amount distributed from the Fund in a fiscal year may not exceed 6%
of the average of the market value of the Fund or the Ten Year Total Return. In accordance with GA-0707, in the event that the
Ten Year Total Return is exceeded during a fiscal year, transfers to the ASF will be halted. However, if the Ten Year Total
Return subsequently increases during that biennium, transfers may be resumed, if the SBOE has provided for that contingency,
and made in full during the remaining period of the biennium, subject to the limit of 6% in any one fiscal year. Any shortfall in
the transfer that results from such events from one biennium may not be paid over to the ASF in a subsequent biennium as the
SBOE would make a separate payout determination for that subsequent biennium.
In determining the Distribution Rate, the SBOE has adopted the goal of maximizing the amount distributed from the Fund in a
manner designed to preserve “intergenerational equity.” Intergenerational equity is the maintenance of endowment purchasing
power to ensure that endowment spending keeps pace with inflation, with the ultimate goal being to ensure that current and
future generations are given equal levels of purchasing power. In making this determination, the SBOE takes into account
various considerations, and relies particularly upon its external investment consultant, which undertakes a probability analysis
for long term projection periods that includes certain assumptions. Among the assumptions used in the analysis are a projected
rate of growth of the average daily scholastic attendance State-wide, the projected contributions and expenses of the Fund,
projected returns in the capital markets and a projected inflation rate.
See “2011 Constitutional Amendment” below for a discussion of the historic and current Distribution Rates, and a description of
amendments made to the Texas Constitution on November 8, 2011 that may affect Distribution Rate decisions.
Since the enactment of a prior amendment to the Texas Constitution in 1964, the investment of the Fund has been managed
with the dual objectives of producing current income for transfer to the ASF and growing the Fund for the benefit of future
generations. As a result of this prior constitutional framework, prior to the adoption of the 2004 asset allocation policy the
investment of the Fund historically included a significant amount of fixed income investments and dividend-yielding equity
investments, to produce income for transfer to the ASF.
With respect to the management of the Fund’s financial assets portfolio, the single most significant change made to date as a
result of the Total Return Constitutional Amendment has been new asset allocation policies adopted from time to time by the
SBOE. The SBOE generally reviews the asset allocations during its summer meeting in even numbered years. The first asset
26
allocation policy adopted by the SBOE following the Total Return Constitutional Amendment was in February 2004, and the
policy was reviewed and modified or reaffirmed in the summers of 2006, 2008, 2010, 2012 and 2014. The Fund’s investment
policy provides for minimum and maximum ranges among the components of each of the three general asset classifications:
equities, fixed income and alternative asset investments. The 2004 asset allocation policy decreased the fixed income target
from 45% to 25% of Fund investment assets and increased the allocation for equities from 55% to 75% of investment assets.
Subsequent asset allocation policies have continued to diversify Fund assets, and have added an alternative asset allocation to
the fixed income and equity allocations. The alternative asset allocation category includes real estate, real return, absolute
return and private equity components. Alternative asset classes diversify the SBOE-managed assets and are not as correlated
to traditional asset classes, which is intended to increase investment returns over the long run while reducing risk and return
volatility of the portfolio. The most recent asset allocation, from 2014, consists of (i) an equity allocation of 40% (with large cap
equities targeted at 16%, small/mid cap equities at 5% and emerging and international large cap equities 19%), (ii) a fixed income
allocation of 19% (including a 7% allocation for emerging market debt) and (iii) an alternative asset allocation of 41% (which
includes a private equity allocation of 10% and a real estate allocation of 8%).
For a variety of reasons, each change in asset allocation for the Fund, including the 2014 modifications, have been implemented
in phases, and that approach is likely to be carried forward when and if the asset allocation policy is again modified. At August
31, 2015, the Fund’s financial assets portfolio was invested as follows: 44.96% in public market equity investments; 14.43% in
fixed income investments; 10.80% in absolute return assets; 5.11% in private equity assets; 6.30% in real estate assets; 6.44%
in risk parity assets; 5.55% in real return assets; 6.04% in emerging market debt; and 0.37% in cash.
In July 2012 and April 2013, the SBOE also realigned the management of certain of the investment portfolios within the absolute
return allocation of the alternative investments and its private equity asset class. These alignments in investment portfolios have
created strategic relationships between the external manager and investment staff of the PSF, which has reduced administrative
costs with respect to those portfolios. The Attorney General has advised the SBOE in Op. Tex. Att’y Gen. No. GA-0998 (2013)
(“GA-0998”), that the PSF is not subject to requirements of certain State competitive bidding laws with respect to the selection
of investments. In GA-0998, the Attorney General also advised that the SBOE generally must use competitive bidding for the
selection of investment managers and other third party providers of investment services, such as record keeping and insurance,
but excluding certain professional services, such as accounting services, as State law prohibits the use of competitive bidding
for specified professional services. GA-0998 provides guidance to the SBOE in connection with the direct management of
alternative investments through investment vehicles to be created by the SBOE, in lieu of contracting with external managers
for such services, as has been the recent practice of the PSF. The PSF staff and the Fund’s investment advisor are tasked with
advising the SBOE with respect to the implementation of the Fund's asset allocation policy, including the timing and manner of
the selection of any external managers and other consultants.
In accordance with the Texas Constitution, the SBOE views the PSF as a perpetual institution, and the Fund is managed as an
endowment fund with a long-term investment horizon. Under the total-return investment objective, the Investment Policy
provides that the PSF shall be managed consistently with respect to the following: generating income for the benefit of the public
free schools of Texas, the real growth of the corpus of the PSF, protecting capital, and balancing the needs of present and future
generations of Texas school children. As described above, the Total Return Constitutional Amendment restricts the annual pay
out from the Fund to the total-return on all investment assets of the Fund over a rolling ten-year period. State law provides that
each transfer of funds from the PSF to the ASF is made monthly, with each transfer to be in the amount of one-twelfth of the
annual distribution. The heavier weighting of equity securities relative to fixed income investments has resulted in greater
volatility of the value of the Fund. Given the greater weighting in the overall portfolio of passively managed investments, it is
expected that the Fund will reflect the general performance returns of the markets in which the Fund is invested.
The asset allocation of the Fund’s financial assets portfolio is subject to change by the SBOE from time to time based upon a
number of factors, including recommendations to the SBOE made by internal investment staff and external consultants, changes
made by the SBOE without regard to such recommendations and directives of the Legislature. Fund performance may also be
affected by factors other than asset allocation, including, without limitation, the general performance of the securities markets in
the United States and abroad; political and investment considerations including those relating to socially responsible investing;
application of the prudent person investment standard, which may eliminate certain investment opportunities for the Fund;
management fees paid to external managers and embedded management fees for some fund investments; and limitations on
the number and compensation of internal and external investment staff, which is subject to legislative oversight. The Guarantee
Program could also be impacted by changes in State or federal law or the implementation of new accounting standards.
Management and Administration of the Fund
The Texas Constitution and applicable statutes delegate to the SBOE the authority and responsibility for investment of the PSF’s
financial assets. In investing the Fund, the SBOE is charged with exercising the judgment and care under the circumstances
then prevailing which persons of ordinary prudence, discretion and intelligence exercise in the management of their own affairs,
not in regard to speculation, but in regard to the permanent disposition of their funds, considering the probable income therefrom
as well as the probable safety of their capital. The SBOE has adopted a “Statement of Investment Objectives, Policies, and
Guidelines of the Texas Permanent School Fund,” which is codified in the Texas Administrative Code beginning at 19 TAC
section 33.1.
The Total Return Constitutional Amendment provides that expenses of managing the PSF are to be paid “by appropriation” from
the PSF. In January 2005, at the request of the SBOE, the Attorney General issued a legal opinion, Op. Tex. Att’y Gen. No.
GA-0293 (2005), that the Total Return Constitutional Amendment requires that SBOE expenditures for managing or
27
administering PSF investments, including payments to external investment managers, be paid from appropriations made by the
Legislature, but that the Total Return Constitutional Amendment does not require the SBOE to pay from such appropriated PSF
funds the indirect management costs deducted from the assets of a mutual fund or other investment company in which PSF
funds have been invested.
Texas law assigns control of the Fund’s land and mineral rights to the three-member SLB, which consists of the elected
Commissioner of the General Land Office (“GLO”), an appointee of the Governor, and an appointee of the Attorney General.
Administrative duties related to the land and mineral rights reside with the GLO, which is under the guidance of the Commissioner
of the GLO. In 2007, the Legislature established the real estate special fund account of the PSF (the “Real Estate Account”)
consisting of proceeds and revenue from land, mineral or royalty interest, real estate investment, or other interest, including
revenue received from those sources, that is set apart to the PSF under the Texas Constitution and laws, together with the
mineral estate in riverbeds, channels, and the tidelands, including islands. The investment of the Real Estate Account is subject
to the sole and exclusive management and control of the SLB and the Land Commissioner, who is also the head of the GLO.
The 2007 legislation presented constitutional questions regarding the respective roles of the SBOE and the SLB relating to the
disposition of proceeds of real estate transactions to the ASF, among other questions. Amounts in the investment portfolio of
the PSF are taken into account by the SBOE for purposes of determining the Distribution Rate. An amendment to the Texas
Constitution was approved by State voters on November 8, 2011, which permits the SLB to make transfers directly to the ASF,
see “2011 Constitutional Amendment” below.
The SBOE contracts with its securities custodial agent to measure the performance of the total return of the Fund’s financial
assets. A consultant is typically retained for the purpose of providing consultation with respect to strategic asset allocation
decisions and to assist the SBOE in selecting external fund management advisors. The SBOE also contracts with financial
institutions for custodial and securities lending services. The SBOE has established the Committee of Investment Advisors,
which consists of independent investment experts each appointed by a member of the SBOE to closely advise the respective
SBOE member on investment issues.
As noted above, the Texas Constitution and applicable statutes make the SBOE responsible for investment of the PSF’s financial
assets. By law, the Commissioner is appointed by the Governor, with Senate confirmation, and assists the SBOE, but the
Commissioner can neither be hired nor dismissed by the SBOE. The Executive Administrator of the Fund is also hired by and
reports to the Commissioner. Moreover, although the Fund’s Executive Administrator and his staff implement the decisions of
and provide information to the School Finance/PSF Committee of the SBOE and the full SBOE, the SBOE can neither select
nor dismiss the Executive Administrator. TEA’s General Counsel provides legal advice to the Executive Administrator and to
the SBOE. The SBOE has also engaged outside counsel to advise it as to its duties over the Fund, including specific actions
regarding the investment of the PSF to ensure compliance with fiduciary standards, and to provide transactional advice in
connection with the investment of Fund assets in non-traditional investments.
Capacity Limits for the Guarantee Program
The capacity of the Fund to guarantee bonds under the Guarantee Program is limited in two ways: by State law (the “State
Capacity Limit”) and by regulations and a notice issued by the IRS (the “IRS Limit”). Prior to May 20, 2003, the State Capacity
Limit was equal to two times the lower of cost or fair market value of the Fund’s assets, exclusive of real estate. During the 78th
Regular Session of the Legislature in 2003, legislation was enacted that increased the State Capacity Limit by 25%, to two and
one half times the lower of cost or fair market value of the Fund’s assets as estimated by the SBOE and certified by the State
Auditor, and eliminated the real estate exclusion from the calculation. Prior to the issuance of the IRS Notice (defined below),
the capacity of the program under the IRS Limit was limited to two and one-half times the lower of cost or fair market value of
the Fund’s assets adjusted by a factor that excluded additions to the Fund made since May 14, 1989. During the 2007 Texas
Legislature, Senate Bill 389 (“SB 389”) was enacted providing for additional increases in the capacity of the Guarantee Program,
and specifically providing that the SBOE may by rule increase the capacity of the Guarantee Program from two and one-half
times the cost value of the PSF to an amount not to exceed five times the cost value of the PSF, provided that the increased
limit does not violate federal law and regulations and does not prevent bonds guaranteed by the Guarantee Program from
receiving the highest available credit rating, as determined by the SBOE. SB 389 further provides that the SBOE shall at least
annually consider whether to change the capacity of the Guarantee Program. Since 2005, the Guarantee Program has twice
reached capacity under the IRS Limit, and in each instance the Guarantee Program was closed to new bond guarantee
applications until relief was obtained from the IRS. The most recent closure of the Guarantee Program commenced in March
2009 and the Guarantee Program reopened in February 2010 on the basis of receipt of the IRS Notice.
On December 16, 2009, the IRS published Notice 2010-5 (the “IRS Notice”) stating that the IRS will issue proposed regulations
amending the existing regulations to raise the IRS limit to 500% of the total cost of the assets held by the PSF as of December
16, 2009. In accordance with the IRS Notice, the amount of any new bonds to be guaranteed by the PSF, together with the then
outstanding amount of bonds previously guaranteed by the PSF, must not exceed the IRS limit on the sale date of the new
bonds to be guaranteed. The IRS Notice further provides that the IRS Notice may be relied upon for bonds sold on or after
December 16, 2009, and before the effective date of future regulations or other public administrative guidance affecting funds
like the PSF.
On September 16, 2013, the IRS published proposed regulations (the “Proposed IRS Regulations”) that, among other things,
would enact the IRS Notice. The preamble to the Proposed IRS Regulations provides that issuers may elect to apply the
Proposed IRS Regulations, in whole or in part, to bonds sold on or after September 16, 2013, and before the date that final
regulations become effective.
28
The IRS Notice and the Proposed IRS Regulations establish a static capacity for the Guarantee Program based upon the cost
value of Fund assets on December 16, 2009 multiplied by five. On December 16, 2009, the cost value of the Guarantee Program
was $23,463,730,608 (estimated and unaudited), thereby producing an IRS Limit of approximately $117.3 billion. The State
Capacity Limit is determined on the basis of the cost value of the Fund from time to time multiplied by the capacity multiplier
determined annually by the SBOE, but not to exceed a multiplier of five. The capacity of the Guarantee Program will be limited
to the lower of the State Capacity Limit or the IRS Limit. On May 21, 2010, the SBOE modified the regulations that govern the
School District Bond Guarantee Program (the “SDBGP Rules”), and increased the State Law Capacity to an amount equal to
three times the cost value of the PSF. Such modified regulations, including the revised capacity rule, became effective on July
1, 2010. The SDBGP Rules provide that the Commissioner may reduce the multiplier to maintain the AAA credit rating of the
Guarantee Program, but provide that any changes to the multiplier made by the Commissioner are to be ratified or rejected by
the SBOE at the next meeting following the change. See “Valuation of the PSF and Guaranteed Bonds,” below.
During fiscal year 2015, PSF staff was tasked with undertaking due diligence with the rating agencies that currently rate the
Bond Guarantee Program (see “Ratings of Bonds Guaranteed Under the Guarantee Program” below) regarding ratings
maintenance for the Fund in anticipation of consideration by the SBOE of an amendment to the SDBGP Rules and CDBGP
Rules (as defined below) to provide for an increase in the multiplier that establishes the State law capacity limitation. At its
September 2015 meeting, the SBOE voted to modify the SDBGP Rules and the CDBGP Rules to increase the State Law
Capacity from 3 times the cost value multiplier to 3.25 times. At that meeting, the SBOE also approved a new 5% capacity
reserve for the Charter District Bond Guarantee Program. As originally approved, the change to the State Law Capacity would
have been effective August 22, 2016. However, at its meeting in November, 2015, the SBOE took action to make the change
to the State Law Capacity effective on February 1, 2016.
Since July 1991, when the SBOE amended the Guarantee Program Rules to broaden the range of bonds that are eligible for
guarantee under the Guarantee Program to encompass most Texas school district bonds, the principal amount of bonds
guaranteed under the Guarantee Program has increased sharply. In addition, in recent years a number of factors have caused
an increase in the amount of bonds issued by school districts in the State. See the table “Permanent School Fund Guaranteed
Bonds” below. Effective September 1, 2009, the Act provides that the SBOE may annually establish a percentage of the cost
value of the Fund to be reserved from use in guaranteeing bonds. The capacity of the Guarantee Program in excess of any
reserved portion is referred to herein as the “Capacity Reserve.” The SDBGP Rules provide for a minimum Capacity Reserve
for the overall Guarantee Program of no less than 5%, and provide that the amount of the Capacity Reserve may be increased
by a majority vote of the SBOE. The CDBGP Rules provide for an additional 5% reserve of CDBGP capacity. The Commissioner
is authorized to change the Capacity Reserve, which decision must be ratified or rejected by the SBOE at its next meeting
following any change made by the Commissioner. The current Capacity Reserve is noted in the monthly updates with respect
to the capacity of the Guarantee Program on the TEA web site at http://tea.texas.gov/Finance_and_Grants/Permanent_School_
Fund/, which are also filed with the MSRB.
Based upon historical performance of the Fund, the legal restrictions relating to the amount of bonds that may be guaranteed
has generally resulted in a lower ratio of guaranteed bonds to available assets as compared to many other types of credit
enhancements that may be available for Texas school district bonds and charter district bonds. However, changes in the value
of the Fund due to changes in securities markets, investment objectives of the Fund, an increase in bond issues by school
districts in the State or legal restrictions on the Fund, the implementation of the Charter District Bond Guarantee Program, or an
increase in the calculation base of the Fund for purposes of making transfers to the ASF, among other factors, could adversely
affect the ratio of Fund assets to guaranteed bonds and the growth of the Fund in general. It is anticipated that the issuance of
the IRS Notice and the Proposed IRS Regulations will likely result in a substantial increase in the amount of bonds guaranteed
under the Guarantee Program. The implementation of the Charter School Bond Guarantee Program is also expected to increase
the amount of guaranteed bonds.
The Act requires that the Commissioner prepare, and the SBOE approve, an annual report on the status of the Guarantee
Program (the Annual Report). The State Auditor audits the financial statements of the PSF, which are separate from other State
Financial statements.
The School District Bond Guarantee Program
The School District Bond Guarantee Program requires an application be made by a school district to the Commissioner for a
guarantee of its bonds. If the conditions for the School District Bond Guarantee Program are satisfied, the guarantee becomes
effective upon approval of the bonds by the Attorney General and remains in effect until the guaranteed bonds are paid or
defeased, by a refunding or otherwise.
In the event of default, holders of guaranteed school district bonds will receive all payments due from the corpus of the PSF.
Following a determination that a school district will be or is unable to pay maturing or matured principal or interest on any
guaranteed bond, the Act requires the school district to notify the Commissioner not later than the fifth day before the stated
maturity date of such bond or interest payment. Immediately following receipt of such notice, the Commissioner must cause to
be transferred from the appropriate account in the PSF to the Paying Agent/Registrar an amount necessary to pay the maturing
or matured principal and interest. Upon receipt of funds for payment of such principal or interest, the Paying Agent/Registrar
must pay the amount due and forward the canceled bond or evidence of payment of the interest to the State Comptroller of
Public Accounts (the “Comptroller”). The Commissioner will instruct the Comptroller to withhold the amount paid, plus interest,
from the first State money payable to the school district. The amount withheld will be deposited to the credit of the PSF. The
29
Comptroller must hold such canceled bond or evidence of payment of the interest on behalf of the PSF. Following full
reimbursement of such payment by the school district to the PSF with interest, the Comptroller will cancel the bond or evidence
of payment of the interest and forward it to the school district. The Act permits the Commissioner to order a school district to set
a tax rate sufficient to reimburse the PSF for any payments made with respect to guaranteed bonds, and also sufficient to pay
future payments on guaranteed bonds, and provides certain enforcement mechanisms to the Commissioner, including the
appointment of a board of managers or annexation of a defaulting school district to another school district.
If a school district fails to pay principal or interest on a bond as it is stated to mature, other amounts not due and payable are not
accelerated and do not become due and payable by virtue of the district’s default. The School District Bond Guarantee Program
does not apply to the payment of principal and interest upon redemption of bonds, except upon mandatory sinking fund
redemption, and does not apply to the obligation, if any, of a school district to pay a redemption premium on its guaranteed
bonds. The guarantee applies to all matured interest on guaranteed school district bonds, whether the bonds were issued with
a fixed or variable interest rate and whether the interest rate changes as a result of an interest reset provision or other bond
order provision requiring an interest rate change. The guarantee does not extend to any obligation of a school district under any
agreement with a third party relating to guaranteed bonds that is defined or described in State law as a "bond enhancement
agreement" or a "credit agreement," unless the right to payment of such third party is directly as a result of such third party being
a bondholder.
In the event that two or more payments are made from the PSF on behalf of a district, the Commissioner shall request the
Attorney General to institute legal action to compel the district and its officers, agents and employees to comply with the duties
required of them by law in respect to the payment of guaranteed bonds.
The SBOE has approved and modified the SDBGP Rules in recent years, most recently in May 2010. Generally, the SDBGP
Rules limit guarantees to certain types of notes and bonds, including, with respect to refunding bonds issued by school districts,
a requirement that the bonds produce debt service savings, and that bonds issued for capital facilities of school districts must
have been voted as unlimited tax debt of the issuing district. The Guarantee Program Rules include certain accreditation criteria
for districts applying for a guarantee of their bonds, and limit guarantees to districts that have less than the amount of annual
debt service per average daily attendance that represents the 90th percentile of annual debt service per average daily
attendance for all school districts, but such limitation will not apply to school districts that have enrollment growth of at least 25%
over the previous five school years. The SDBGP Rules are codified in the Texas Administrative Code at 19 TAC section 33.65,
and are available at http://ritter.tea.state.tx.us/rules/tac/chapter033/ch033a.html#33.65.
Charter District Bond Guarantee Program
The Charter District Bond Guarantee Program became effective March 3, 2014. The SBOE published final regulations in the
Texas Register that provide for the administration of the Charter District Bond Guarantee Program (the “CDBGP Rules”). The
CDBGP Rules are codified at 19 TAC section 33.67, and are available at http://ritter.tea.state.tx.us/rules/tac/chapter033/ch033a.
html#33.67.
The Charter District Bond Guarantee Program has been authorized through the enactment of amendments to the Act, which
provide that a charter holder may make application to the Commissioner for designation as a “charter district” and for a guarantee
by the PSF under the Act of bonds issued on behalf of a charter district by a non-profit corporation. If the conditions for the
Charter District Bond Guarantee Program are satisfied, the guarantee becomes effective upon approval of the bonds by the
Attorney General and remains in effect until the guaranteed bonds are paid or defeased, by a refunding or otherwise.
The capacity of the Charter District Bond Guarantee Program is limited to the amount that equals the result of the percentage
of the number of students enrolled in open-enrollment charter schools in the State compared to the total number of students
enrolled in all public schools in the State multiplied by the available capacity of the Guarantee Program. Available capacity is
defined as the maximum amount under SBOE rules, less Capacity Reserve and minus existing guarantees. The CDBGP Rules
authorize the Commissioner to determine that ratio based on information provided to the TEA by school districts and openenrollment charter schools, and the calculation will be made annually, on or about March 1 of each year. As of May 2015 (the
most recent date for which data is available), the percentage of students enrolled in open-enrollment charter schools (excluding
charter schools authorized by school districts) to the total State scholastic census was approximately 4.36%. As of December,
2015, there were 188 active open-enrollment charter schools in the State, and there were 654 charter school campuses
operating under such charters (though as of such date, 19 of such campuses' operations have not begun serving students for
various reasons). Section 12.101, Texas Education Code, as amended by the Legislature in 2013, provides that the
Commissioner may grant not more than 215 charters through the end of fiscal year 2014, with the number increasing in each
fiscal year thereafter through 2019 to a total number of 305 charters permitted by the statute. While legislation limits the number
of charters that may be granted, it does not limit the number of campuses that may operate under a particular charter. For
information regarding the capacity of the Guarantee Program, see “Capacity Limits for the Guarantee Program.” The Act
provides that the Commissioner may not approve the guarantee of refunding or refinanced bonds under the Charter District
Bond Guarantee Program in a total amount that exceeds one-half of the total amount available for the guarantee of charter
district bonds under the Charter District Bond Guarantee Program.
On February 27, 2015, the Attorney General issued an opinion (Op. Tex. Att'y Gen. No. KP-0005 (2015)) in response to a request
by the Commissioner for clarification of Section 45.0532, Texas Education Code (“Section 45.0532”), which defines how the
capacity of the Charter District Bond Guarantee Program should be calculated. In the opinion, the Attorney General ruled that
the proper method for determining charter district capacity is a limitation on the total amount of charter district bonds that the
30
Commissioner may approve for guarantee in the cumulative amount. The opinion rejected an alternative reading of the statute
that would have imposed a limitation on the total amount of charter district bonds that the Commissioner may approve each
month, but not a cumulative limitation, and which, over time, could produce Charter District Bond Guarantee Program guarantees
potentially exceeding the charter student ratio limitation in Section 45.0532.
In accordance with the Act, the Commissioner may not approve charter district bonds for guarantee if such guarantees will result
in lower bond ratings for public school district bonds that are guaranteed under the School District Bond Guarantee Program.
To be eligible for a guarantee, the Act provides that a charter district's bonds must be approved by the Attorney General, have
an unenhanced investment grade rating from a nationally recognized investment rating firm, and satisfy a limited investigation
conducted by the TEA.
With respect to the Charter District Bond Guarantee Program, the Act establishes a bond guarantee reserve fund in the State
treasury (the “Charter District Reserve Fund”). Each charter district that has a bond guaranteed must annually remit to the
Commissioner, for deposit in the Charter District Reserve Fund, an amount equal to 1/10 of one percent of the principal amount
of guaranteed bonds outstanding. The Commissioner has approved a rule governing the calculation and payment amounts into
the Charter District Reserve Fund.
That rule has been codified at 19 TAC 33.1001, and is available at
http://ritter.tea.state.tx.us/rules/tac/chapter033/ch033aa.html#33.1001.
The Charter District Bond Guarantee Program does not apply to the payment of principal and interest upon redemption of bonds,
except upon mandatory sinking fund redemption, and does not apply to the obligation, if any, of a charter district to pay a
redemption premium on its guaranteed bonds. The guarantee applies to all matured interest on guaranteed charter district
bonds, whether the bonds were issued with a fixed or variable interest rate and whether the interest rate changes as a result of
an interest reset provision or other bond resolution provision requiring an interest rate change. The guarantee does not extend
to any obligation of a charter district under any agreement with a third party relating to guaranteed bonds that is defined or
described in State law as a "bond enhancement agreement" or a "credit agreement," unless the right to payment of such third
party is directly as a result of such third party being a bondholder.
The Act provides that immediately following receipt of notice that a charter district will be or is unable to pay maturing or matured
principal or interest on a guaranteed bond, the Commissioner is required to instruct the Comptroller to transfer from the Charter
District Reserve Fund to the district's paying agent an amount necessary to pay the maturing or matured principal or interest. If
money in the Charter District Reserve Fund is insufficient to pay the amount due on a bond for which a notice of default has
been received, the Commissioner is required to instruct the Comptroller to transfer from the PSF to the district's paying agent
the amount necessary to pay the balance of the unpaid maturing or matured principal or interest. If a total of two or more
payments are made under the Charter District Bond Guarantee Program on charter district bonds and the Commissioner
determines that the charter district is acting in bad faith under the program, the Commissioner may request the Attorney General
to institute appropriate legal action to compel the charter district and its officers, agents, and employees to comply with the duties
required of them by law in regard to the guaranteed bonds. As is the case with the School District Bond Guarantee Program,
the Act obligates the Commissioner to instruct the Comptroller to withhold the amount paid with respect to the Charter District
Bond Guarantee Program, plus interest, from the first State money payable to a charter district that fails to make a guaranteed
payment on its bonds. The amount withheld will be deposited, first, to the credit of the PSF, and then to restore any amount
drawn from the Charter District Reserve Fund as a result of the non-payment.
The CDBGP Rules provide that the PSF may be used to guarantee bonds issued for the acquisition, construction, repair, or
renovation of an educational facility for an open-enrollment charter holder and equipping real property of an open-enrollment
charter school and/or to refinance promissory notes executed by an open-enrollment charter school, each in an amount in excess
of $500,000 the proceeds of which loans were used for a purposes described above (so-called new money bonds) or for
refinancing bonds previously issued for the charter school that were approved by the attorney general (so-called refunding
bonds). Refunding bonds may not be guaranteed under the Charter District Bond Guarantee Program if they do not result in a
present value savings to the charter holder.
The CDBGP Rules provide that an open-enrollment charter holder applying for charter district designation and a guarantee of
its bonds under the Charter District Bond Guarantee Program satisfy various provisions of the regulations, including the following:
It must (i) have operated at least one open-enrollment charter school with enrolled students in the State for at least three years;
(ii) agree that the bonded indebtedness for which the guarantee is sought will be undertaken as an obligation of all entities under
common control of the open-enrollment charter holder, and that all such entities will be liable for the obligation if the openenrollment charter holder defaults on the bonded indebtedness, provided, however, that an entity that does not operate a charter
school in Texas is subject to this provision only to the extent it has received state funds from the open-enrollment charter holder;
(iii) have had completed for the past three years an audit for each such year that included unqualified or unmodified audit
opinions; and (iv) have received an investment grade credit rating within the last year. Upon receipt of an application for
guarantee under the Charter District Bond Guarantee Program, the Commissioner is required to conduct an investigation into
the financial status of the applicant charter district and of the accreditation status of all open-enrollment charter schools operated
under the charter, within the scope set forth in the CDBGP Rules. Such financial investigation must establish that an applying
charter district has a historical debt service coverage ratio, based on annual debt service, of at least 1.1 for the most recently
completed fiscal year, and a projected debt service coverage ratio, based on projected revenues and expenses and maximum
annual debt service, of at least 1.2. The failure of an open-enrollment charter holder to comply with the Act or the applicable
regulations, including by making any material misrepresentations in the charter holder's application for charter district designation
or guarantee under the Charter District Bond Guarantee Program, constitutes a material violation of the open-enrollment charter
holder's charter.
31
Beginning in July 2015, TEA began limiting new guarantees under the Charter District Bond Guarantee Program to conform to
the Act and, subsequently, with CDBGP Rules that require the maintenance of a capacity reserve for the Charter District Bond
Guarantee Program. Since that time, TEA has not approved guarantees under the Charter District Bond Guarantee Program.
New guarantees under the Charter District Bond Guarantee Program will not be approved until new capacity for that Program
becomes available, which could occur as a result of Fund investment performance, the scheduled increase in the Guarantee
Program multiplier, growth in the relative percentage of students enrolled in open-enrollment charter schools to the total State
scholastic census, or a combination of such circumstances.
Ratings of Bonds Guaranteed Under the Guarantee Program
Moody’s Investors Service, Standard & Poor’s Rating Service, a Standard & Poor’s Financial Service LLC business, and Fitch
Ratings rate bonds guaranteed by the PSF “Aaa,” “AAA” and “AAA,” respectively. Not all districts apply for multiple ratings on
their bonds, however. See “Ratings” herein.
Valuation of the PSF and Guaranteed Bonds
Permanent School Fund Valuations
Fiscal
Year
Ended
8/31
2011
$24,789,514,408
$29,900,679,571
2012
25,164,537,463
31,287,393,884
2013
25,599,296,902
33,163,242,374
2014
27,596,692,541
38,445,519,225
2015
29,085,524,714(2)
36,217,270,220(2)
Book Value(1)
Market Value(1)
________
(1)
SLB managed assets are included in the market value and book value of the Fund. In determining the market value of the PSF from time to time during a fiscal
year, the TEA uses current, unaudited values for TEA managed investment portfolios and cash held by the SLB. With respect to SLB managed assets shown in the
table above, market values of land and mineral interests, internally managed real estate, investments in externally managed real estate funds and cash are based
upon information reported to the PSF by the SLB. The SLB reports that information to the PSF on a quarterly basis. The valuation of such assets at any point in
time is dependent upon a variety of factors, including economic conditions in the State and nation in general, and the values of these assets, and, in particular, the
valuation of mineral holdings administered by the SLB, can be volatile and subject to material changes from period to period. At August 31, 2015, land, mineral
assets, internally managed discretionary real estate, external discretionary real estate investments and cash managed by the SLB had book values of approximately
$44.80 million, $13.42 million, $232.88 million, $1.91 billion and $2.60 billion, respectively, and market values of approximately $377.38 million, $2.14 billion, $242.84
million, $1.89 billion and $2.6 billion, respectively.
(2)
At November 30, 2015, the PSF had a book value of $29,010,996,323 and a market value of $36,372,415,414 (November 30, 2015 values are based on unaudited
data).
Permanent School Fund Guaranteed Bonds
At 8/31
Principal Amount(1)
2011
$ 52,653,930,546
2012
53,634,455,141
2013
55,218,889,156
2014
58,364,350,783
2015
63,955,449,047(2)
________
(1)
Represents original principal amount; does not reflect any subsequent accretions in value for compound interest bonds (zero coupon securities). The amount
shown excludes bonds that have been refunded and released from the Guarantee Program. The TEA does not maintain records of the accreted value of capital
appreciation bonds that are guaranteed under the Guarantee Program.
(2)
As of August 31, 2015, the TEA expected that the principal and interest to be paid by school districts over the remaining life of the bonds guaranteed by the
Guarantee Program is $103,722,905,410, of which $39,767,456,363 represents interest to be paid. At August 31, 2015, there were $63,955,449,047 of bonds
guaranteed under the Guarantee Program and the capacity of the Guarantee Program was $87,256,574,142 based on the three times cost value multiplier approved
by the SBOE on May 21, 2010. Such capacity figures include the Reserve Capacity for the Guarantee Program. As a result of the SBOE actions in November 2015
described above, the State Law Capacity will increase effective February 1, 2016 from a cost value multiplier of 3 times to 3.25 times. Based on the cost value of
the Fund at August 31, 2015, had such increase been effective at that date, it would have produced a State Law Capacity of $94,527,955,321.
32
Permanent School Fund Guaranteed Bonds by Category(1)
School District Bonds
At
8/31
2014(2)
2015
Number
of
Issues
2,869
3,089
Principal
Amount
Guaranteed
$58,061,805,783
63,197,514,047
Charter District Bonds
Number
of
Issues
10
28
Principal
Amount
Guaranteed
$302,545,000
757,935,500
Totals
Number
of
Issues
2,879
3,117
Principal
Amount
Guaranteed
$58,364,350,783
63,955,449,047
_______
(1)
Represents original principal amount; does not reflect any subsequent accretions in value for compound interest bonds (zero coupon securities). The amount
shown excludes bonds that have been refunded and released from the Guarantee Program.
(2)
Fiscal 2014 was the first year of operation of the Charter District Bond Guarantee Program. At November 30, 2015 (based upon unaudited data), there were
$64,436,407,282 of bonds guaranteed under the Guarantee Program, representing 3,144 school district issues, aggregating $63,607,587,282 in principal amount
and 29 charter district issues, aggregating $828,820,000 in principal amount. At November 30, 2015, the capacity of the Charter District Bond Guarantee Program
was $795,479,046 (based on unaudited data).
Discussion and Analysis Pertaining to Fiscal Year Ended August 31, 2015
The following discussion is derived from the Annual Report for the year ended August 31, 2015, including the Message of the
Executive Administrator of the Fund and the Management’s Discussion and Analysis contained therein. Reference is made to
the Annual Report, when filed, for the complete Message and MD&A. Investment assets managed by the fifteen member SBOE
are referred to throughout this MD&A as the PSF(SBOE) assets. As of August 31, 2015, the Fund’s land, mineral rights and
certain real assets are managed by the three-member SLB and these assets are referred to throughout as the PSF(SLB) assets.
The current PSF asset allocation policy includes an allocation for real estate investments, and as such investments are made,
and become a part of the PSF investment portfolio, those investments will be managed by the SBOE and not the SLB.
At the end of fiscal 2015, the Fund balance was $33.8 billion, a decrease of $1.1 billion from the prior year, primarily due to
disbursement of $0.8 billion in support of public education. During the year, the SBOE continued implementing the long term
strategic asset allocation, diversifying the PSF(SBOE) with the intent to strengthen the Fund. The asset allocation is projected
to increase returns over the long run while reducing risk and portfolio return volatility. The one year, three year, five year and
ten year annualized total returns for the PSF(SBOE) assets were -3.36%, 7.27%, 8.95% and 5.99% respectively (total return
takes into consideration the change in the market value of the Fund during the year as well as the interest and dividend income
generated by the Fund’s investments). In addition, the SLB continued its shift into externally managed real asset investment
funds and the one year, three year, and five year annualized total returns for the PSF(SLB) real assets, including cash, were
5.79%, 7.69%, and 8.83% respectively.
The market value of the Fund’s assets is directly impacted by the performance of the various financial markets in which the
assets are invested. The most important factors affecting investment performance are the asset allocation decisions made by
the SBOE and SLB. The current SBOE long term asset allocation policy allows for diversification of the PSF(SBOE) portfolio
into alternative asset classes whose returns are not as positively correlated as traditional asset classes. The implementation of
the long term asset allocation will occur over several fiscal years and is expected to provide incremental total return at reduced
risk. As of August 31, 2015, the PSF(SBOE) portion of the Fund had diversified into emerging market large cap international
equities, absolute return funds, real estate, private equity, risk parity, real return Treasury Inflation-Protected Securities, real
return commodities, and emerging market debt. Emerging international equities securities will be strategically added
commensurate with the economic environment and the goals and objectives of the SBOE. As of August 31, 2015, the SBOE
had approved and the PSF(SBOE) made capital commitments to real estate investments in the amount of $2.32 billion and
capital commitments to four private equity limited partnerships in the total amount of $2.35 billion. Unfunded commitments at
August 31, 2015 were $801 million in real estate and $982 million in private equity.
The PSF(SLB) portfolio is generally characterized by three broad categories: (1) discretionary real assets investments, (2)
sovereign and other lands, and (3) mineral interests. Discretionary real assets investments consist of externally managed real
estate, infrastructure, and energy/minerals investment funds; internally managed direct real estate investments, and cash.
Sovereign and other lands consist primarily of the lands set aside to the PSF when it was created. Mineral interests consist of
all of the minerals that are associated with PSF lands. The investment focus of PSF(SLB) discretionary real assets investments
has shifted from internally managed direct real estate investments to externally managed real assets investment funds. The
PSF(SLB) makes investments in certain limited partnerships that legally commit it to possible future capital contributions. At
August 31, 2015, the remaining commitments totaled approximately $1.95 billion.
The PSF(SBOE)’s investment in public equity securities experienced a return of -4.4% during the fiscal year ended August 31,
2015. The PSF(SBOE)’s investment in domestic fixed income securities produced a return of 1.5% during the fiscal year and
absolute return investments yielded a return of 2.6%. The PSF(SBOE) real estate and private equity investments returned
13.0% and 13.0%, respectively. Risk parity assets produced a return of -9.5%, while real return assets yielded -15.3%.
Emerging market debt produced a return of -21.3. The emerging market equity asset class initiated during the year yielded a 15.3% return since inception. Combined, all PSF(SBOE) asset classes produced an investment return of -3.36% for the fiscal
year ended August 31, 2015, overperforming the benchmark index of -3.7% by approximately 35 basis points. All PSF(SLB)
real assets (including cash) returned 5.79% for the fiscal year ending August 31, 2015.
33
For fiscal year 2015, total revenues, inclusive of unrealized gains and losses and net of security lending rebates and fees, totaled
-$144.1 million, a decrease of $5.4 billion from fiscal year 2014 earnings of $5.3 billion. This decrease reflects the performance
of the securities markets in which the Fund was invested in fiscal year 2015. In fiscal year 2015, revenues earned by the Fund
included lease payments, bonuses and royalty income received from oil, gas and mineral leases; lease payments from
commercial real estate; surface lease and easement revenues; revenues from the resale of natural and liquid gas supplies;
dividends, interest, and securities lending revenues; the net change in the fair value of the investment portfolio; and, other
miscellaneous fees and income.
Expenditures are paid from the Fund before distributions are made under the total return formula. Such expenditures include
the costs incurred by the SLB to manage the land endowment, as well as operational costs of the Fund, including external
management fees paid from appropriated funds. Total operating expenditures, net of security lending rebates and fees,
increased 40.1% for the fiscal year ending August 31, 2015. This increase is primarily attributable to the operational costs
related to managing alternative investments due to diversification of the Fund, and from generally lower margins on sales of
purchased gas.
The Fund supports the public school system in the State by distributing a predetermined percentage of its asset value to the
ASF. For fiscal years 2014 and 2015, the distribution from the SBOE to the ASF totaled $838.7 million and $838.7 million,
respectively. There was no contribution to the ASF by the SLB in fiscal year 2015.
At the end of the 2015 fiscal year, PSF assets guaranteed $63.955 billion in bonds issued by 846 local school districts and
charter districts, the latter of which entered into the Program during the 2014 fiscal year. Since its inception in 1983, the Fund
has guaranteed 6,164 school district and charter district bond issues totaling $138.5 billion in principal amount. During the 2015
fiscal year, the number of outstanding issues guaranteed under the Guarantee Program increased by 238, or 8.3%. The dollar
amount of guaranteed school and charter bond issues outstanding increased by $5.6 billion or 9.6%. The guarantee capacity
of the Fund increased by $4.24 billion, or 5.4%, during fiscal year 2015 due to growth in the cost basis of the Fund.
2011 Constitutional Amendment
On November 8, 2011, a referendum was held in the State as a result of legislation enacted that year that proposed amendments
to various sections of the Texas Constitution pertaining to the PSF. At that referendum, voters of State approved non-substantive
changes to the Texas Constitution to clarify references to the Fund, and, in addition, approved amendments that effected an
increase to the base amount used in calculating the Distribution Rate from the Fund to the ASF, and authorized the SLB to make
direct transfers to the ASF, as described below.
The amendments approved at the referendum included an increase to the base used to calculate the Distribution Rate by adding
to the calculation base certain discretionary real assets and cash in the Fund that is managed by entities other than the SBOE
(at present, by the SLB). The value of those assets were already included in the value of the Fund for purposes of the Guarantee
Program, but prior to the amendment had not been included in the calculation base for purposes of making transfers from the
Fund to the ASF. While the amendment provided for an increase in the base for the calculation of approximately $2 billion, no
new resources were provided for deposit to the Fund. As described under “The Total Return Constitutional Amendment” the
SBOE is prevented from approving a Distribution Rate or making a pay out from the Fund if the amount distributed would exceed
6% of the average of the market value of the Fund, excluding real property in the Fund, but including discretionary real asset
investments on the last day of each of the sixteen State fiscal quarters preceding the Regular Session of the Legislature that
begins before that State fiscal biennium or if such pay out would exceed the Ten Year Total Return. The new calculation base
is required to be used to determine all payments to the ASF from the Fund beginning with the 2012-13 biennium.
If there are no reductions in the percentage established biennially by the SBOE to be the Distribution Rate, the impact of the
increase in the base against which the Distribution Rate is applied will be an increase in the distributions from the PSF to the
ASF. As a result, going forward, it may be necessary for the SBOE to reduce the Distribution Rate in order to preserve the
corpus of the Fund in accordance with its management objective of preserving intergenerational equity.
The Distribution Rates for the Fund were set at 3.5%, 2.5%, 4.2%, 3.3% and 3.5% for each of two year periods 2008-2009,
2010-2011, 2012-2013, 2014-2015 and 2016-2017, respectively. In September 2015, in accordance with the 2016-2017
Distribution Rate determination, the SBOE approved the distribution of $1.056 billion to the ASF in fiscal year 2016, which
represents a per student distribution of $217.51, based on 2015 final student average daily attendance of 4,854,882.
Changes in the Distribution Rate for each biennial period has been the result of a number of financial and political reasons, as
well as commitments made by the SLB in some years to transfer certain sums to the ASF. As an illustration of the impact of the
broader base for the Distribution Rate calculation, PSF management calculates that the effect on transfers made by the SBOE
in 2012-13 was an increase in the total return distribution by approximately $73.7 million in each year of that biennium. If the
SBOE were to maintain a Distribution Rate in future years at the level set for 2012-13, as the value of the real asset investments
increase annually, distributions to the ASF would increase in the out years, and the increased amounts distributed from the Fund
would be a loss to either the investment corpus of the PSF managed by SBOE or, should the SLB increase its transfers to the
SBOE to cover this share of the distribution, to the assets managed by the SLB. In addition, the changes made by the
amendment are expected to reduce the compounding interest in the Fund that would be derived if those assets remained in the
corpus of the Fund. Other factors that may affect the corpus of the Fund that are associated with this change include the
decisions that are made by the SLB or others that are, or may in the future be, authorized to make transfers of funds from the
34
PSF to the ASF. While the SBOE has oversight of the Guarantee Program, it will not have the decision-making power with
respect to all transfers to the ASF, as was the case in the past, which could adversely affect the ability of the SBOE to optimally
manage its portion of the PSF assets.
The constitutional amendments approved on November 8, 2011 also provide authority to the GLO or any other entity other than
the SBOE that has responsibility for the management of land or other properties of the Fund to determine whether to transfer an
amount each year from Fund assets to the ASF revenue derived from such land or properties, with the amount transferred limited
to $300 million. Any amount transferred to the ASF by an entity other than the SBOE is excluded from the 6% Distribution Rate
limitation applicable to SBOE transfers.
Other Events and Disclosures
The State Investment Ethics Code governs the ethics and disclosure requirements for financial advisors and other service
providers who advise certain State governmental entities, including the PSF. In accordance with the provisions of the State
Investment Ethics Code, the SBOE periodically modifies its code of ethics, which occurred most recently in May 2010. The
SBOE code of ethics includes prohibitions on sharing confidential information, avoiding conflict of interests and requiring
disclosure filings with respect to contributions made or received in connection with the operation or management of the Fund.
The code of ethics applies to members of the SBOE as well as to persons who are responsible by contract or by virtue of being
a TEA PSF staff member for managing, investing, executing brokerage transactions, providing consultant services, or acting as
a custodian of the PSF, and persons who provide investment and management advice to a member of the SBOE, with or without
compensation under certain circumstances. The code of ethics is codified in the Texas Administrative Code at 19 TAC sections
33.5 et seq., and is available on the TEA web site at http://ritter.tea.state.tx.us/rules/tac/chapter033/ch033a.html#33.5.
Since 2007, TEA has made supplemental appropriation requests to the Legislature for the purpose of funding the implementation
of the 2008 Asset Allocation Policy, but those requests have been denied or partly funded. In the 2011 legislative session, the
Legislature approved an increase of 31 positions in the full-time equivalent employees for the administration of the Fund, which
was funded as part of an $18 million appropriation for each year of the 2012-13 biennium, in addition to the operational
appropriation of $11 million for each year of the biennium. The TEA has begun increasing the PSF administrative staff in
accordance with the 2011 legislative appropriation, and the TEA received an appropriation of $30.0 million and $30.2 million for
the administration of the PSF for fiscal years 2014 and 2015, respectively, and $30.2 million for each of the fiscal years 2016
and 2017.
As of August 31, 2015, certain lawsuits were pending against the State and/or the GLO, which challenge the Fund’s title to
certain real property and/or past or future mineral income from that property, and other litigation arising in the normal course of
the investment activities of the PSF. Reference is made to the Annual Report, when filed, for a description of such lawsuits that
are pending, which may represent contingent liabilities of the Fund.
The SBOE is a named defendant in litigation described in the Official Statement pertaining to the Bonds that has challenged the
constitutionality of the Texas public school finance system, and which, among other relief requested, seeks an injunction to
prohibit the State and its officials from distributing any funds under the current finance system until a constitutional system is
created. The case was filed in State District Court, which has issued a ruling, and that ruling has been appealed to the State
Supreme Court. The TEA does not anticipate that the security for payment of bonds guaranteed under the Guarantee Program
would be adversely affected by such litigation.
PSF Continuing Disclosure Undertaking
The SBOE has adopted an investment policy rule (the “TEA Rule”) pertaining to the PSF and the Guarantee Program. The TEA
Rule is codified in Section I of the TEA Investment Procedure Manual, which relates to the Guarantee Program and is posted to
the TEA website at http://tea.texas.gov/Finance_and_Grants/Texas_Permanent_School_Fund/Texas_Permanent_School_
Fund_Disclosure_Statement_-_Bond_Guarantee_Program/. The most recent amendment to the TEA Rule was adopted by the
SBOE on November 19, 2010, and is summarized below. Through the adoption of the TEA Rule and its commitment to
guarantee bonds, the SBOE has made the following agreement for the benefit of the issuers, holders and beneficial owners of
guaranteed bonds. The TEA (or its successor with respect to the management of the Guarantee Program) is required to observe
the agreement for so long as it remains an “obligated person,” within the meaning of Rule 15c2-12, with respect to guaranteed
bonds. Nothing in the TEA Rule obligates the TEA to make any filings or disclosures with respect to guaranteed bonds, as the
obligations of the TEA under the TEA Rule pertain solely to the Guarantee Program. The issuer or an “obligated person” of the
guaranteed bonds has assumed the applicable obligation under Rule 15c-12 to make all disclosures and filings relating directly
to guaranteed bonds, and the TEA takes no responsibility with respect to such undertakings. Under the TEA agreement, the
TEA will be obligated to provide annually certain updated financial information and operating data, and timely notice of specified
material events, to the MSRB.
The MSRB has established the Electronic Municipal Market Access (“EMMA”) system, and the TEA is required to file its
continuing disclosure information using the EMMA system. Investors may access continuing disclosure information filed with
the MSRB at www.emma.msrb.org, and the continuing disclosure filings of the TEA with respect to the PSF can be found at
http://emma.msrb.org/IssueView/NonCUSIP9IssueDetails.aspx?id=ER355077 or by searching for “Texas Permanent School
Fund Bond Guarantee Program” on EMMA.
35
Annual Reports
The TEA will annually provide certain updated financial information and operating data to the MSRB. The information to be
updated includes all quantitative financial information and operating data with respect to the Guarantee Program and the PSF
of the general type included in this Official Statement under the heading “THE PERMANENT SCHOOL FUND GUARANTEE
PROGRAM.” The information also includes the Annual Report. The TEA will update and provide this information within six
months after the end of each fiscal year.
The TEA may provide updated information in full text or may incorporate by reference certain other publicly-available documents,
as permitted by Rule 15c2-12. The updated information includes audited financial statements of, or relating to, the State or the
PSF, when and if such audits are commissioned and available. Financial statements of the State will be prepared in accordance
with generally accepted accounting principles as applied to state governments, as such principles may be changed from time to
time, or such other accounting principles as the State Auditor is required to employ from time to time pursuant to State law or
regulation. The financial statements of the Fund were prepared to conform to U.S. Generally Accepted Accounting Principles
as established by the Governmental Accounting Standards Board.
The Fund is reported by the State of Texas as a permanent fund and accounted for on a current financial resources measurement
focus and the modified accrual basis of accounting. Measurement focus refers to the definition of the resource flows measured.
Under the modified accrual basis of accounting, all revenues reported are recognized based on the criteria of availability and
measurability. Assets are defined as available if they are in the form of cash or can be converted into cash within 60 days to be
usable for payment of current liabilities. Amounts are defined as measurable if they can be estimated or otherwise determined.
Expenditures are recognized when the related fund liability is incurred.
The State’s current fiscal year end is August 31. Accordingly, the TEA must provide updated information by the last day of
February in each year, unless the State changes its fiscal year. If the State changes its fiscal year, the TEA will notify the MSRB
of the change.
Material Event Notices
The TEA will also provide timely notices of certain events to the MSRB. Such notices will be provided not more than ten business
days after the occurrence of the event. The TEA will provide notice of any of the following events with respect to the Guarantee
Program: (1) principal and interest payment delinquencies; (2) non-payment related defaults, if such event is material within the
meaning of the federal securities laws; (3) unscheduled draws on debt service reserves reflecting financial difficulties; (4)
unscheduled draws on credit enhancements reflecting financial difficulties; (5) substitution of credit or liquidity providers, or their
failure to perform; (6) adverse tax opinions, the issuance by the IRS of proposed or final determinations of taxability, Notices of
Proposed Issue (IRS Form 5701-TEB), or other material notices or determinations with respect to the tax-exempt status of the
Guarantee Program, or other material events affecting the tax status of the Guarantee Program; (7) modifications to rights of
holders of bonds guaranteed by the Guarantee Program, if such event is material within the meaning of the federal securities
laws; (8) bond calls, if such event is material within the meaning of the federal securities laws, and tender offers; (9) defeasances;
(10) release, substitution, or sale of property securing repayment of bonds guaranteed by the Guarantee Program, if such event
is material within the meaning of the federal securities laws; (11) rating changes; (12) bankruptcy, insolvency, receivership, or
similar event of the Guarantee Program (which is considered to occur when any of the following occur: the appointment of a
receiver, fiscal agent, or similar officer for the Guarantee Program in a proceeding under the United States Bankruptcy Code or
in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over
substantially all of the assets or business of the Guarantee Program, or if such jurisdiction has been assumed by leaving the
existing governing body and officials or officers in possession but subject to the supervision and orders of a court or governmental
authority, or the entry of an order confirming a plan of reorganization, arrangement, or liquidation by a court or governmental
authority having supervision or jurisdiction over substantially all of the assets or business of the Guarantee Program); (13) the
consummation of a merger, consolidation, or acquisition involving the Guarantee Program or the sale of all or substantially all of
its assets, other than in the ordinary course of business, the entry into of a definitive agreement to undertake such an action or
the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; and (14) the
appointment of a successor or additional trustee with respect to the Guarantee Program or the change of name of a trustee, if
such event is material within the meaning of the federal securities laws. (Neither the Act nor any other law, regulation or
instrument pertaining to the Guarantee Program make any provision with respect to the Guarantee Program for bond calls, debt
service reserves, credit enhancement, liquidity enhancement, early redemption or the appointment of a trustee with respect to
the Guarantee Program.) In addition, the TEA will provide timely notice of any failure by the TEA to provide information, data,
or financial statements in accordance with its agreement described above under “Annual Reports.”
Availability of Information
The TEA has agreed to provide the foregoing information only to the MSRB and to transmit such information electronically to
the MSRB in such format and accompanied by such identifying information as prescribed by the MSRB. The information is
available from the MSRB to the public without charge at www.emma.msrb.org.
Limitations and Amendments
The TEA has agreed to update information and to provide notices of material events only as described above. The TEA has not
agreed to provide other information that may be relevant or material to a complete presentation of its financial results of
36
operations, condition, or prospects or agreed to update any information that is provided, except as described above. The TEA
makes no representation or warranty concerning such information or concerning its usefulness to a decision to invest in or sell
Bonds at any future date. The TEA disclaims any contractual or tort liability for damages resulting in whole or in part from any
breach of its continuing disclosure agreement or from any statement made pursuant to its agreement, although holders of Bonds
may seek a writ of mandamus to compel the TEA to comply with its agreement.
The continuing disclosure agreement of the TEA is made only with respect to the PSF and the Guarantee Program. The issuer
of guaranteed bonds or an obligated person with respect to guaranteed bonds may make a continuing disclosure undertaking
in accordance with Rule 15c2-12 with respect to its obligations arising under Rule 15c2-12 pertaining to financial and operating
data concerning such entity and notices of material events relating to such guaranteed bonds. A description of such undertaking,
if any, is included elsewhere in the Official Statement.
This continuing disclosure agreement may be amended by the TEA from time to time to adapt to changed circumstances that
arise from a change in legal requirements, a change in law, or a change in the identity, nature, status, or type of operations of
the TEA, but only if (1) the provisions, as so amended, would have permitted an underwriter to purchase or sell guaranteed
bonds in the primary offering of such bonds in compliance with Rule 15c2-12, taking into account any amendments or
interpretations of Rule 15c2-12 since such offering as well as such changed circumstances and (2) either (a) the holders of a
majority in aggregate principal amount of the outstanding bonds guaranteed by the Guarantee Program consent to such
amendment or (b) a person that is unaffiliated with the TEA (such as nationally recognized bond counsel) determines that such
amendment will not materially impair the interest of the holders and beneficial owners of the bonds guaranteed by the Guarantee
Program. The TEA may also amend or repeal the provisions of its continuing disclosure agreement if the SEC amends or
repeals the applicable provision of Rule 15c2-12 or a court of final jurisdiction enters judgment that such provisions of the Rule
are invalid, but only if and to the extent that the provisions of this sentence would not prevent an underwriter from lawfully
purchasing or selling bonds guaranteed by the Guarantee Program in the primary offering of such bonds.
Compliance with Prior Undertakings
During the last five years, the TEA has not failed to substantially comply with its previous continuing disclosure agreements in
accordance with Rule 15c2-12.
SEC Exemptive Relief
On February 9, 1996, the TEA received a letter from the Chief Counsel of the SEC that pertains to the availability of the “small
issuer exemption” set forth in paragraph (d)(2) of Rule 15c2-12. The letter provides that Texas school districts which offer
municipal securities that are guaranteed under the Guarantee Program may undertake to comply with the provisions of
paragraph (d)(2) of Rule 15c2-12 if their offerings otherwise qualify for such exemption, notwithstanding the guarantee of the
school district securities under the Guarantee Program. Among other requirements established by Rule 15c2-12, a school
district offering may qualify for the small issuer exemption if, upon issuance of the proposed series of securities, the school
district will have no more than $10 million of outstanding municipal securities.
VERIFICATION OF MATHEMATICAL CALCULATIONS
Grant Thornton LLP, a firm of independent public accountants, will deliver to the District, on or before the settlement date of the
Bonds, its verification report indicating that it has verified, in accordance with attestation standards established by the American
Institute of Certified Public Accountants, the mathematical accuracy of (a) the mathematical computations of the adequacy of
the cash and the maturing principal of and interest on the Escrow Securities, to pay, when due, the maturing principal of, interest
on and related call premium requirements, if any, of the Refunded Bonds and (b) the mathematical computations of yield used
by Bond Counsel to support its opinion that interest on the Bonds will be excluded from gross income for federal income tax
purposes.
The verification performed by Grant Thornton LLP will be solely based upon data, information and documents provided to Grant
Thornton LLP by Public Financial Management, Inc. on behalf of the District. Grant Thornton LLP has restricted its procedures
to recalculating the computations provided by Public Financial Management, Inc. on behalf of the District and has not evaluated
or examined the assumptions or information used in the computations.
The report will be relied upon by Bond Counsel in rendering its opinion with respect to the exclusion from gross income of interest
on the Bonds and with respect to the defeasance of the Refunded Bonds.
FINANCIAL ADVISOR
Public Financial Management, Inc. is employed as Financial Advisor (the "Financial Advisor") to the District to assist in the
issuance of the Bonds. In this capacity, the Financial Advisor has compiled certain data relating to the Bonds that is contained
in this Official Statement. The Financial Advisor has not independently verified any of the data contained herein or conducted a
detailed investigation of the affairs of the District to determine the accuracy or completeness of this Official Statement. Because
of its limited participation, the Financial Advisor assumes no responsibility for the accuracy or completeness of any of the
information contained herein. The fee of the Financial Advisor for services with respect to the Bonds is contingent upon the
issuance and sale of the Bonds.
37
AUTHENTICITY OF FINANCIAL INFORMATION
The financial data and other information contained herein have been obtained from the District’s records, audited financial
statements and other sources which are believed to be reliable. All of the summaries of the statutes, documents and resolutions
contained in this Official Statement are made subject to all of the provisions of such statutes, documents and resolutions. These
summaries do not purport to be complete statements of such provisions and reference is made to such documents for further
information. Reference is made to original documents in all respects.
References to web site addresses presented herein are for informational purposes only and may be in the form of a hyperlink
solely for the reader’s convenience. Unless specified otherwise, such web sites and the information or links contained therein
are not incorporated into, and are not part of, this Official Statement for purposes of, and as that term is defined in, SEC Rule
15c2-12.
USE OF AUDITED FINANCIAL STATEMENTS
Maxwell Locke & Ritter L.L.P., Austin, Texas, the District’s independent auditor, has not been engaged to perform and has not
performed, since the date of its report included herein, any procedures on the financial statements addressed in that report.
Maxwell Locke & Ritter L.L.P. also has not performed any procedures relating to this Official Statement.
LITIGATION
The District is not a party to any litigation or other proceeding pending or to its knowledge, threatened, in any court, agency or
other administrative body (either state or federal) which, if decided adversely to the District, would have a material adverse effect
on the financial condition or operations of the District.
CONTINUING DISCLOSURE OF INFORMATION
In the Order, the District has made the following agreement for the benefit of the holders and beneficial owners of the Bonds.
The District is required to observe the agreement for so long as it remains obligated to advance funds to pay the Bonds. Under
the agreement, the District will be obligated to provide certain updated financial information and operating data annually, and
timely notice of certain specified events, to the Municipal Securities Rulemaking Board (the "MSRB"). See "THE PERMANENT
SCHOOL FUND GUARANTEE PROGRAM" for a description of the continuing disclosure undertaking to provide certain updated
financial information and operating data annually with respect to the Permanent School Fund and the State of Texas as the case
may be, and to provide timely notice of certain specified events related to the Permanent School Fund guarantee to the MSRB.
Annual Reports
The District will provide certain updated financial information and operating data to the MSRB annually in an electronic format
that is prescribed by the MSRB and available via the Electronic Municipal Market Access System ("EMMA") at
www.emma.msrb.org. The information to be updated includes all quantitative financial information and operating data with
respect to the District of the general type included in this Official Statement on pages A-1 through A-4 in Appendix A, "FINANCIAL
INFORMATION OF THE DISTRICT" and in Appendix D. The District will update and provide this information within six months
after the end of each fiscal year. If audited financial statements are not available when the information is provided, the District
will provide audited financial statements when and if they become available and unaudited financial statements within twelve
(12) months after fiscal year end, unless audited financial statements are sooner provided. Any such financial statements will
be prepared in accordance with the accounting principles described in APPENDIX D or such other accounting principles as the
District may be required to employ from time to time pursuant to state law or regulation. The District may provide updated
information in full text or may incorporate by reference certain other publicly available documents, as permitted by SEC Rule
15c2-12, as amended (the "Rule"). The District’s current fiscal year end is August 31st. Accordingly, it must provide updated
information by the last day of February in each year, unless the District changes its fiscal year. If the District changes its fiscal
year, it will notify the MSRB of the change.
Event Notices
The District will also provide timely notice (not in excess of ten (10) business days after the occurrence of the event) of any of
the following events with respect to the Bonds: (1) principal and interest payment delinquencies; (2) non-payment related
defaults, if material; (3) unscheduled draws on debt service reserves reflecting financial difficulties; (4) unscheduled draws on
credit enhancements reflecting financial difficulties; (5) substitution of credit or liquidity providers, or their failure to perform; (6)
adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of
Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the Bonds, or
other material events affecting the tax status of the Bonds; (7) modifications to right of holder of the Bonds, if material; (8) Bond
calls, if material, and tender offers; (9) defeasances; (10) release, substitution, or sale of property securing repayment of the
Bonds, if material; (11) rating changes; (12) bankruptcy, insolvency, receivership or similar event of the District; (13) the
consummation of a merger, consolidation, or acquisition involving the District or the sale of all or substantially all of the assets
of the District, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or
the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; and (14)
appointment of a successor trustee or change in the name of the trustee, if material. (Neither the Bonds nor the Order make any
provision for debt service reserves, liquidity enhancement or credit enhancement other than the Permanent School Fund
guarantee described herein). As used above, the phrase "bankruptcy, insolvency, receivership or similar event" means the
38
appointment of a receiver, fiscal agent or similar officer for the District in a proceeding under the U.S. Bankruptcy Code or in any
other proceeding under state or federal law in which a court of governmental authority has assumed jurisdiction over substantially
all of the assets or business of the District, or if jurisdiction has been assumed by leaving the Board and officials or officers of
the District in possession but subject to supervision and orders of a court or governmental authority, or the entry of an order
confirming a plan of reorganization, arrangement or liquidation by a court or governmental authority having supervision or
jurisdiction over substantially all of the assets or business of the District. In addition, the District will provide timely notice of any
failure by the District to provide information, data, or financial statements in accordance with its agreement described above
under "Annual Reports". The District will provide each notice in this paragraph to the MSRB.
Availability of Information
All information and documentation filings required to be made by the District will be made with the MSRB in electronic format in
accordance with MSRB guidelines. Access to such filings is provided, without charge to the general public, by the MSRB at
www.emma.msrb.org.
Limitations and Amendments
The District has agreed to update information and to provide notices of certain events only as described above. The District has
not agreed to provide other information that may be relevant or material to a complete presentation of its financial results of
operations, condition, or prospects or agreed to update any information that is provided, except as described above. The District
makes no representation or warranty concerning such information or concerning its usefulness to a decision to invest in or sell
Bonds at any future date. The District disclaims any contractual or tort liability for damages resulting in whole or in part from any
breach of its continuing disclosure agreement or from any statement made pursuant to its agreement, although holders and
beneficial owners of Bonds may seek a writ of mandamus to compel the District to comply with its agreement.
The District may amend its disclosure agreement from time to time to adapt to changed circumstances that arise from a change
in legal requirements, a change in law, or a change in the identity, nature, status, or type of operations of the District, but only if
(1) the provisions, as so amended, would have permitted an underwriter to purchase or sell Bonds in the primary offering of the
Bonds in compliance with the Rule, taking into account any amendments or interpretations of the Rule since such offering as
well as such changed circumstances and (2) either (a) the registered owners of a majority in aggregate principal amount of the
outstanding Bonds consent to such amendment or (b) a person that is unaffiliated with the District (such as nationally recognized
bond counsel) determined that such amendment will not materially impair the interest of the registered owners and beneficial
owners of the Bonds. The District may also amend or repeal the provisions of its continuing disclosure agreement if the SEC
amends or repeals the applicable provision of the Rule or a court of final jurisdiction enters judgment that such provisions of the
Rule are invalid, but only if and to the extent that the provisions of this sentence would not prevent an underwriter from lawfully
purchasing or selling Bonds in the primary offering of the Bonds. If the District amends the agreement, it has agreed to include
with any financial information or operating data next provided in accordance with its agreement described above under "Annual
Reports" an explanation, in narrative form, of the reasons for the amendment and of the impact of any change in the type of
financial information and operating data so provided.
Compliance with Prior Undertakings
The District failed to file in a timely manner a material event notice regarding a rating downgrade on May 18, 2012. The material
event notice has since been filed, as well as a notice of the late filing. The District has implemented procedures to ensure timely
filing of all future information.
UNDERWRITING
The Underwriters have agreed, subject to certain customary conditions, to purchase the Bonds at a price equal to the initial
offering prices to the public, as shown on page ii, less an Underwriters’ Discount of $_____________. The Underwriters’
obligation is subject to certain conditions precedent, and the Underwriters will be obligated to purchase all of the Bonds if any
Bonds are purchased. The Bonds may be offered and sold to certain dealers and others at prices lower than such public offering
prices, and such public prices may be changed, from time to time, by the Underwriters.
The Underwriters have provided the following sentence for inclusion in this Official Statement. The Underwriters have reviewed
the information in this Official Statement in accordance with, and as part of, their respective responsibilities to investors under
the Federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriters do not guarantee
the accuracy or completeness of such information.
Citigroup Global Markets Inc., an underwriter of the Bonds, has entered into a retail distribution agreement with each of TMC
Bonds L.L.C. (“TMC”) and UBS Financial Services Inc. (“UBSFS”). Under these distribution agreements, Citigroup Global
Markets Inc. may distribute municipal securities to retail investors through the financial advisor network of UBSFS and the
electronic primary offering platform of TMC. As part of this arrangement, Citigroup Global Markets Inc. may compensate TMC
(and TMC may compensate its electronic platform member firms) and UBSFS for their selling efforts with respect to the Bonds.
FORWARD LOOKING STATEMENTS
The statements contained in this Official Statement, and in any other information provided by the District, that are not purely
historical, are forward-looking statements, including statements regarding the District’s expectations, hopes, intentions, or
strategies regarding the future. Readers should not place undue reliance on forward-looking statements. All forward looking
39
statements included in this Official Statement are based on information available to the District on the date hereof, and the
District assumes no obligation to update any such forward-looking statements. It is important to note that the District’s actual
results could differ materially from those in such forward-looking statements.
The forward-looking statements herein are necessarily based on various assumptions and estimates and are inherently subject
to various risks and uncertainties, including risks and uncertainties relating to the possible invalidity of the underlying
assumptions and estimates and possible changes or developments in social, economic, business, industry, market, legal and
regulatory circumstances and conditions and actions taken or omitted to be taken by third parties, including customers, suppliers,
business partners and competitors, and legislative, judicial and other governmental authorities and officials. Assumptions related
to the foregoing involve judgments with respect to, among other things, future economic, competitive, and market conditions and
future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the control
of the District. Any of such assumptions could be inaccurate and, therefore, there can be no assurances that the forward-looking
statements included in this Official Statement would prove to be accurate.
CONCLUDING STATEMENT
The information set forth herein has been obtained from the District’s records, audited financial statements and other sources
which are considered to be reliable. There is no guarantee that any of the assumptions or estimates contained herein will ever
be realized. All of the summaries of the statutes, documents and the Order contained in this Official Statement are made subject
to all of the provisions of such statutes, documents and the Order. These summaries do not purport to be complete statements
of such provisions and reference is made to such summarized documents for further information. Reference is made to official
documents in all respects.
Pricing Officer
40
SCHEDULE I*
SCHEDULE OF REFUNDED BONDS
Unlimited Tax School Building Bonds, Series 2009
Maturity Date
8/15/2019
8/15/2020
8/15/2021
8/15/2022
8/15/2023
8/15/2024
8/15/2025
8/15/2026
8/15/2027
8/15/2028
8/15/2029
8/15/2030
8/15/2031
8/15/2032
8/15/2033
8/15/2034
Interest Rate
3.750%
4.000%
4.000%
4.125%
4.250%
4.375%
4.500%
4.500%
4.625%
4.625%
4.625%
5.000%
5.000%
5.000%
5.000%
5.000%
Principal Amount
$1,000,000.00
$1,040,000.00
$1,080,000.00
$1,125,000.00
$1,170,000.00
$1,220,000.00
$1,275,000.00
$1,330,000.00
$1,390,000.00
$1,455,000.00
$1,525,000.00
$1,595,000.00**
$1,675,000.00**
$1,755,000.00**
$1,845,000.00**
$1,935,000.00**
Call Date
8/15/2018
8/15/2018
8/15/2018
8/15/2018
8/15/2018
8/15/2018
8/15/2018
8/15/2018
8/15/2018
8/15/2018
8/15/2018
8/15/2018
8/15/2018
8/15/2018
8/15/2018
8/15/2018
** Term Bond maturing August 15, 2034.
Unlimited Tax School Building Bonds, Series 2010
Maturity Date
8/15/2020
8/15/2021
8/15/2022
8/15/2023
8/15/2024
8/15/2025
8/15/2026
8/15/2027
8/15/2028
8/15/2029
8/15/2030
8/15/2031
8/15/2032
8/15/2033
8/15/2034
8/15/2035
8/15/2036
8/15/2037
8/15/2038
8/15/2039
8/15/2040
Interest Rate
3.00%
5.00%
5.00%
5.00%
4.00%
5.00%
4.00%
5.00%
5.00%
4.00%
5.00%
5.00%
5.00%
5.00%
5.00%
5.00%
5.00%
5.00%
5.00%
5.00%
5.00%
Principal Amount**
$ 850,000.00
$ 875,000.00
$ 915,000.00
$ 965,000.00
$1,010,000.00
$1,050,000.00
$1,105,000.00
$1,150,000.00
$1,205,000.00
$1,265,000.00
$1,315,000.00
$1,380,000.00
$1,450,000.00***
$1,525,000.00***
$1,600,000.00***
$1,680,000.00***
$1,765,000.00
$1,850,000.00
$1,945,000.00
$2,040,000.00
$2,145,000.00
** Partial redemption of current interest bonds.
*** Term Bond maturing August 15, 2035.
* Preliminary, subject to change
S-I-1
Call Date
8/15/2019
8/15/2019
8/15/2019
8/15/2019
8/15/2019
8/15/2019
8/15/2019
8/15/2019
8/15/2019
8/15/2019
8/15/2019
8/15/2019
8/15/2019
8/15/2019
8/15/2019
8/15/2019
8/15/2019
8/15/2019
8/15/2019
8/15/2019
8/15/2019
Unlimited Tax Refunding Bonds, Series 2010
Maturity Date
8/15/2020
8/15/2021
8/15/2022
8/15/2023
8/15/2024
Initial Yield
4.030%
4.190%
4.320%
4.460%
4.610%
Principal Amount**
$ 367,662.50
$ 296,776.50
$ 239,592.00
$ 193,395.50
$ 156,110.00
Call Date
8/15/2019
8/15/2019
8/15/2019
8/15/2019
8/15/2019
Accreted
Value @ Call
$ 3,218,948.00
$ 3,083,373.50
$ 2,946,827.50
$ 2,808,104.00
$ 2,667,303.50
** Partial redemption of capital appreciation bond.
Unlimited Tax Refunding Bonds, Series 2010A
Maturity Date
8/15/2021
8/15/2022
8/15/2023
8/15/2024
8/15/2025
8/15/2026
8/15/2027
8/15/2028
8/15/2029
8/15/2030
Initial Yield
4.500%
4.700%
4.880%
5.000%
5.100%
5.190%
5.280%
5.370%
5.450%
5.530%
Principal Amount**
$ 2,110,407.00
$ 1,561,227.30
$ 1,345,744.75
$ 1,335,046.40
$ 2,927,165.40
$ 2,739,331.00
$ 2,638,978.65
$ 2,361,148.80
$ 2,113,731.20
$ 1,891,198.40
** Partial redemption of capital appreciation bond.
S-I-2
Call Date
8/15/2020
8/15/2020
8/15/2020
8/15/2020
8/15/2020
8/15/2020
8/15/2020
8/15/2020
8/15/2020
8/15/2020
Accreted
Value @ Call
$ 6,590,078.30
$ 5,189,682.65
$ 4,746,335.05
$ 4,990,099.20
$11,579,224.05
$11,452,764.75
$11,640,442,45
$10,968,749.60
$10,333,107.75
$ 9,713,258.00
SCHEDULE II
SCHEDULE OF ACCRETED VALUES FOR THE CABS
Unlimited Tax Refunding Bonds, Series 2016
S-II-1
APPENDIX A
ASSESSED VALUATION
2015
Tax Year
2014
Tax Year
Market Valuation (1)...............................………………………………………............................................................... $ 22,433,978,296
Net Taxable Valuation (1)...............................………………………………………........................................................ $ 18,615,795,435
$ 20,070,715,742
$ 16,824,986,410
Exemption//Deduction/Proration Detail (1)
Totally Exempt Property...............................………………………………………........................................................ $
Agriculture Use/Productivity...............................………………………………………...................................................
Residential Homestead (2)...............................………………………………………......................................................
Cap Value Loss...............................………………………………………................................................................... .
Residential Homestead Over-65 and/or Disabled ($10,000)...............................……………………………………….......
Disabled/Deceased Veterans and Survivors (up to $3,000)...............................………………………………………........
Freeport...............................……………………………………….............................................................................. .
Total value lost to partial low income housing exemptions...............................………………………………………........
Solar/Wind...............................………………………………………...........................................................................
Value lost to prorations...............................……………………………………….........................................................
Pollution Control...............................………………………………………...................................................................
Other/Misc................................………………………………………......................................................................... .
Total...............................………………………………………................................................................................... . $
Total
1,630,836,281 $
725,220,673
970,673,098
300,729,030
75,337,220
70,700,616
28,695,096
3,287,513
1,562,024
3,150,297
1,226,899
6,764,114
3,818,182,861 $
Total
1,519,552,612
655,517,061
560,097,188
343,037,009
69,186,668
55,283,655
28,122,658
3,252,019
2,803,321
716,543
663,744
7,496,854
3,245,729,332
(1) Source: Travis and Williamson Central Appraisal Districts Assessment Reports as of August 25, 2015, and July 19, 2015, respectively.
(2) Homestead exemption amount for Tax Year 2015 is $25,000, and for Tax Year 2014 the homestead exemption amount was $15,000. See "AD VALOREM TAX PROCEDURES."
VOTED GENERAL OBLIGATION BOND DEBT
Outstanding Unlimited Tax Bonds (as of 8/31/15)
Current Interest Bonds
Capital Appreciation Bonds (1) (2)
Total
$
$
588,855,000
484,125,342
1,072,980,342
$
81,602,515
$
79,582,192
$
$
586,835,000
484,125,044
1,070,960,044
$
25,657,936
$
1,045,302,108
$
$
$
113,612
94,275
5,294
Less:
Bonds Refunded by the Series 2016 Bonds (1) (3)
Plus:
The Series 2016 Bonds
(3)
Outstanding Unlimited Tax Bonds (Upon Delivery of the Series 2016 Bonds)
Current Interest Bonds
Capital Appreciation Bonds (1) (3) (4)
Total
Less:
Estimated Interest and Sinking Fund (as of 8/31/15)
Net General Obligation Debt
Ratio Net General Obligation Debt to Net Taxable Valuation - 5.62%
2015/16 Population Estimate (5)
2015/16 Enrollment
Area (Square Miles)
197,462
37,087
198.14
Per Capita Actual Valuation
Per Capita Net Valuation
Per Capita Net General Obligation Debt
(1) Capital appreciation bonds are shown at original principal amount as opposed to maturity value.
(2) The maturity value of the outstanding capital appreciation bonds is $2,268,685,000.
(3) Preliminary, subject to change.
(4) Upon delivery of the Bonds the maturity value of the outstanding capital appreciation bonds will be $2,261,095,000.
(5) Source: Municipal Advisory Council of Texas.
PROPERTY TAX RATES AND COLLECTIONS
Net
Tax Rate
Tax Year Taxable Valuation
$
12,857,279,224 (1)
2010
1.4548
2011
1.4998
13,113,379,315 (1)
13,648,356,679 (1)
2012
1.5119
2013
1.5119
14,540,603,259 (1)
2014
1.5119
16,514,702,294 (1)
Five Year Average......................................................
2015
$
18,615,795,435
(5)
$1.5119
% Collections
Current
Total
99.22
100.15
99.22
99.88
99.14
99.81
99.09
99.78
98.73
99.61
99.08
99.85
(In Process of Collection)
F/Y Ended
08/31/11
08/31/12
08/31/13
08/31/14
08/31/15
(2) (3)
(2) (3)
(2) (3)
(2) (3)
(2) (4)
08/31/16
(1) Source: Travis and Williamson Central Appraisal Districts Value as Reported in CPTD School District Report of Property Value.
(2) Excludes Penalty and Interest
(3) Source: LISD Audited information and records.
(4) Unaudited.
(5) Source: Travis and Williamson Central Appraisal Districts Assessment Reports as of Certification.
TAX RATE DISTRIBUTION
Tax Year
Local Maintenance
Interest & Sinking
Total
2015
1.0400
0.4719
1.5119
2014
1.0400
0.4719
1.5119
2013
1.0400
0.4719
1.5119
A-1
2012
1.0400
0.4719
1.5119
2011
1.0400
0.4598
1.4998
2015
PRINCIPAL TAXPAYERS & THEIR ASSESSED VALUATIONS
Name of Taxpayer
Type of Property
G&I VII River Place LP
Bassham Trust
Land/Improvements
Land/Improvements
Land/Improvements
Research & Development
Healthcare
Apartment Complex
Land/Improvements
Land/Improvements
Land/Improvements
Land/Improvements
Inland Western Cedar Park 1890 Ranch LP
Minnesota Mining & Manufacturing
Cedar Park Health System LP
Sir Steiner Ranch Apartments LLC
Tintara Canyon Creek 2013 LP
Austin 2222 Venture I L P
G&I VII Four Points LP
Preserve at Four Points LLC
Assessed Valuation
Total...................................................................................
2014
Name of Taxpayer
Type of Property
Land/Improvements
Land/Improvements
Land/Improvements
Healthcare
Apartment Complex
Land/Improvements
Land/Improvements
Land/Improvements
Apartment Complex
Name of Taxpayer
Type of Property
Land/Improvements
Land/Improvements
Insurance
Healthcare
Land/Improvements
Land/Improvements
Land/Improvements
Real Estate
Commercial
Type of Property
Inland Western Cedar Park
Land/Improvements
Amaravathi LTD & Amaravathi Keerthi LLC
The Bassham Trust
Cedar Park Health System
Metropolitan Life Insurance Company
Fund IX CL Austin LP
Austin 2222 Venture I LP
Suddenlink Communications
Northland Lakeline II LLC
Land/Improvements
Land/Improvements
Healthcare
Insurance
Land/Improvements
Land/Improvements
Communications
Real Estate
0.58%
0.55%
0.53%
0.47%
0.47%
0.47%
0.29%
0.28%
0.23%
0.22%
4.08%
% A.V.
0.64%
0.62%
0.54%
0.54%
0.52%
0.29%
0.29%
0.28%
0.24%
0.23%
4.18%
$95,508,877
87,600,000
81,580,146
79,217,818
75,274,518
63,000,000
36,448,125
36,000,000
34,524,683
28,417,350
$617,571,517
% A.V.
0.70%
0.64%
0.60%
0.58%
0.55%
0.46%
0.27%
0.26%
0.25%
0.21%
4.52%
Name of Taxpayer
Type of Property
The Bassham Trust
3 M Company
1890 Ranch LTD
HL Chapman Pipeline Const. Inc.
HEB Grocery Co.
Land/Improvements
Land/Improvements
Healthcare
Insurance
Land/Improvements
Land/Improvements
Land/Improvements
Land/Improvements
Grocery
Assessed Valuation
Total...................................................................................
$79,831,287
74,011,401
73,901,659
71,397,463
63,863,281
59,656,919
33,615,482
33,000,000
32,500,000
26,283,453
$548,060,945
% A.V.
0.61%
0.56%
0.56%
0.54%
0.49%
0.45%
0.26%
0.25%
0.25%
0.20%
4.18%
Type of Property
Land/Improvements
Healthcare
Land/Improvements
Development
Land/Improvements
Land/Improvements
Land/Improvements
Land/Improvements
Land/Improvements
Total......................................................................................................
A-2
$92,540,000
89,510,688
78,060,240
78,008,961
75,960,377
42,150,000
41,730,000
41,360,000
34,410,000
33,855,497
$607,585,763
Assessed Valuation
Total...................................................................................
Minnesota Mining & Manufacturing Co.
The Bassham Trust
MLIC Asset Holdings LLC
1890 Ranch LTD
1890 Carssow East LTD
HL Chapman Pipeline Const. Inc.
% A.V.
Name of Taxpayer
2010
$95,872,511
91,000,828
87,207,270
77,419,708
77,407,019
76,881,234
47,400,000
46,513,000
37,160,000
36,883,365
$673,744,935
Assessed Valuation
Total...................................................................................
Name of Taxpayer
0.50%
0.41%
0.41%
0.39%
0.29%
0.27%
0.22%
0.22%
3.29%
Inland Western Cedar Park
The Bassham Trust
SVF Vistas LLC
Hart Promesa LLC
2011
92,900,096
77,188,869
76,854,617
72,100,000
53,136,300
50,876,161
41,500,000
41,464,492
$613,097,635
Assessed Valuation
Total...................................................................................
2012
0.66%
0.58%
Bassham Trust
Cedar Park Health System LP
Sir Steiner Ranch Apartments LLC
Tintara Canyon Creek 2013 LP
Austin 2222 Venture I L P
SVF Vistas LLC
Canyon Creek TL3 LLC
2013
% A.V.
$123,550,108
107,077,100
Assessed Valuation
$79,078,744
78,367,059
73,901,659
71,797,183
70,419,952
53,663,266
31,046,223
30,306,553
30,068,966
29,474,561
$548,124,166
% A.V.
0.62%
0.61%
0.57%
0.56%
0.55%
0.42%
0.24%
0.24%
0.23%
0.23%
4.26%
COMBINED GENERAL FUND BALANCE SHEET
2015 (1)
Assets:
Cash and Temporary Investments
Receivables:
Property Taxes
Due from state agencies
Due from federal agencies
Due from other governments
Other Receivables
Due from other funds
Due from Other
Allowance for uncollectible taxes
Accrued Interest
Other Current Assets
Sundry Receivables
Inventories at cost
Prepaid assets
Total Assets
Fiscal Years Ending August 31,
2014 (2)
2013 (2)
2012 (2)
2011 (2)
$ 141,958,201 $ 128,601,350 $ 120,515,485 $ 109,172,661 $
73,768,505
2,392,767
2,641,269
2,471,610
2,466,329
30,459
105,680
76,956
88,569
190,563
228,565
232,693
223,225
1,517,830
592,935
1,208,500
566,971
(448,900)
(486,278)
(478,094)
(483,620)
360,765
356,145
583,168
527,234
392,114
367,064
489,904
372,281
146,166
67,566
56,986
138,224
$ 146,532,023 $ 132,552,896 $ 125,167,788 $ 112,990,636 $
2,377,187
11,859,224
179,065
7,514,380
(476,993)
466,295
55,066
95,742,729
Deferred inflows of resources
Deferred revenue- property taxes
Liabilities and Fund Equity:
Liabilities:
Accounts Payable
Payroll ded. and withhold. payable
Accrued wages payable
Due to other funds
Due to other governments
Accrued Expenses
Loans payable
Deferred revenue
Total Liabilities
Fund Equity:
Reserved Fund Balance
Invested Reserves:
Inventories
Capital Expenditures - Equipment
Prepaid Items
Reserve for Self-funded Insurance
Outstanding Encumbrances
Retirement of Lease Obligation
Other Invested Reserves
Designated Fund Balances:
Land acquisition and hail damage
Equipment/Major Maintenance
Copier
Designated for Construction
Capital Replacement
Approved purchase orders
$
1,943,867 $
2,154,991 $
1,993,516 $
- $
-
6,044,266 $
5,271,023 $ 3,901,999 $ 5,766,561 $
3,665,661
3,126,924
6,052,338
5,002,643
8,721,891
8,364,508
93,089
7,522
89,420
319
223,652
222,210
248,536
233,828
9,142,498
14,688,922
6,832,526
7,660,406
$ 23,739,412 $ 22,772,820 $ 27,650,768 $ 21,197,742 $
4,700,257
9,104,863
598,389
215,633
1,995,458
16,614,600
$
$
- $
- $
- $
- $
-
392,114
138,224
783,416
13,067,375
3,193,770
367,064
146,166
783,416
13,597,371
3,193,770
489,904
67,566
1,443,018
11,248,780
3,193,770
372,281
56,986
1,457,761
9,809,684
3,256,770
466,295
55,066
2,582,290
7,523,200
3,602,058
2,074,142
1,798,662
3,138,105
2,042,944
1,643,064
13,363,234
87,836,469
2,709,952
85,028,684
10,000,000
65,942,361
6,324,874
68,471,594
63,256,156
Other Designated Fund Balance
Subsequent year's budget deficit
Undesignated Fund Balance
Total Fund Equity
$ 120,848,744 $ 107,625,085 $ 95,523,504 $ 91,792,894 $
79,128,129
Total Liabilities & Fund Equity
$ 146,532,023 $ 132,552,896 $ 125,167,788 $ 112,990,636 $
95,742,729
(1) Unaudited
(2) Source: District's Audited Financial Statements, The District anticipates presenting its Comprehensive Annual Financial Report for the Fiscal Year Ended Ausgust 31, 2015 (the "FY2015 Report")
to its Board of Trustees for approval at its January 21, 2016 meeting. As soon as practicable thereafter, the FY2015 Report will be filed with the Municipal Securities Rulemaking Board via the
Electronic Municipal Market Access (EMMA) System.
A-3
COMPARATIVE STATEMENT OF GENERAL FUND REVENUES AND EXPENDITURES
2015 (1)
Revenues:
Local and Intermediate Sources
State Sources
Federal Sources
$
Total Revenues
Expenditures:
Current:
Instruction
Instructional Resources & Media
Curriculum & Instructional Staff Development
Instructional & School Leadership
Guidance & Counseling
`
Social Work Services
Health Services
Student Transportation
Food Services
Co-Curricular/ Extracurricular Activities
General Administration
Facility Maintenance & Operations
Security and Monitoring Services
Data Processing Services
Community Services
Facilities Acquisition and Construction
Intergovernmental:
Contracted Instructional Services Between Schools
Payments to Shared Service Arrangements
Payments Related to Juvenile Justice Alternative Edu Prog
Other Intergovernmental Charges
Total Expenditures
2014 (2)
2013 (2)
2012 (2)
2011 (2)
177,554,102 $
97,052,943
3,140,048
158,651,279 $
99,630,864
2,871,147
146,604,024 $
96,912,365
2,928,510
140,932,002 $
98,316,186
1,268,629
137,705,909
103,715,850
925,567
277,747,093
261,153,290
246,444,899
240,516,817
242,347,326
157,722,058
2,981,224
7,300,379
17,712,128
10,463,768
842,365
2,111,284
8,259,219
348,857
7,515,751
5,288,310
27,633,616
1,217,635
7,028,712
1,868,421
-
149,760,674
2,979,560
6,709,554
16,169,905
10,287,976
928,943
1,897,295
10,049,367
14,001
7,313,858
4,810,206
25,255,584
1,134,991
6,229,171
1,951,938
-
144,212,825
2,976,331
6,797,974
15,892,340
10,122,960
730,002
1,921,873
8,436,382
3,649
7,197,987
4,644,047
25,119,850
1,237,911
6,136,418
1,906,855
63,000
133,014,273
3,238,382
5,384,455
14,918,508
9,527,550
715,047
1,760,178
8,516,249
6,712,870
4,471,566
25,194,899
1,019,152
6,270,460
1,803,302
-
138,906,425
4,197,903
5,641,271
14,555,771
9,817,247
414,698
1,794,890
8,639,760
25,010
6,904,997
4,808,603
22,395,453
1,171,511
7,185,177
1,619,223
-
250,972
232,278
1,615,875
96,165
193,411
1,419,240
108,180
211,272
1,356,932
191,737
222,522
1,311,959
175,932
231,082
1,328,932
260,392,852
247,201,839
239,076,788
224,273,109
229,813,885
Excess (Deficiency) of revenues over (under)
expenditures
17,354,241
13,951,451
7,368,111
16,243,708
12,533,441
Other Resources and (Uses):
Transfers Out
Insurance Proceeds
Payments for Special Programs Settlements
Proceeds from Sale of Property or Capital Assets
(4,005,823)
(136,974)
12,215
(3,890,390)
40,520
(3,682,539)
45,038
(3,604,487)
25,544
(2,419,556)
59,131
Total Other Resources (Uses)
(4,130,582)
(3,849,870)
(3,637,501)
(3,578,943)
(2,360,425)
10,101,581
97,523,504
3,730,610
91,792,894
12,664,765
79,128,129
10,173,016
68,955,113
95,523,504 $
91,792,894 $
79,128,129
Net change in Fund Balances
Beginning Fund Balance
Ending Fund Balance - August 31
13,223,660
107,625,085
$
120,848,745 $
107,625,085 $
(1) Unaudited
(2) Source: District's Audited Financial Statements, The District anticipates presenting its Comprehensive Annual Financial Report for the Fiscal Year Ended Ausgust 31, 2015 (the
"FY2015 Report") to its Board of Trustees for approval at its January 21, 2016 meeting. As soon as practicable thereafter, the FY2015 Report will be filed with the Municipal Securities
Rulemaking Board via the Electronic Municipal Market Access (EMMA) System.
A-4
ESTIMATED OVERLAPPING DEBT STATEMENT
Taxing Body
Austin CCD
$
City of Austin
Avery Ranch Rd Dist #1
Block House MUD
City of Cedar Park
City of Jonestown
City of Leander
Parkside at Mayfield Ranch MUD
Ranch at Cypress Creek MUD #1
River Place MUD
Travis County
Travis County ESD #1
Travis County Healthcare District
Travis County WC&ID #17 (Steiner Ranch)
Vista Oaks MUD
Williamson County
Williamson County MUD #13
Williamson-Travis MUD #1
Total Overlapping Debt (1)
Amount
As Of
245,488,659
1,376,869,994
9,610,000
14,425,000
189,105,000
2,515,000
117,306,000
16,570,000
3,630,000
2,670,000
695,034,987
1,150,000
4,595,000
12,305,000
83,069,973
4,610,000
966,599,942
13,405,000
5,170,000
08/31/15
08/31/15
08/31/15
08/31/15
08/31/15
08/31/15
08/31/15
08/31/15
08/31/15
08/31/15
08/31/15
08/31/15
08/31/15
08/31/15
08/31/15
08/31/15
08/31/15
08/31/15
08/31/15
% Overlap
$ Overlap
11.85% $
2.00%
57.07%
100.00%
91.33%
30.23%
100.00%
100.00%
100.00%
100.00%
5.26%
27.61%
28.48%
5.26%
100.00%
100.00%
22.63%
100.00%
100.00%
$
29,090,406
27,537,400
5,484,427
14,425,000
172,709,597
760,285
117,306,000
16,570,000
3,630,000
2,670,000
36,558,840
317,515
1,308,656
647,243
83,069,973
4,610,000
218,741,567
13,405,000
5,170,000
754,011,909
Leander ISD (2)
$
1,045,302,108
05/01/15
100.00%
Total Direct (Net) and Overlapping Debt............................................................................... $
1,045,302,108
1,799,314,017
Direct and Overlapping Debt to Net Taxable Valuation
Direct and Overlapping Debt to Actual Total Valuation
Per Capita Direct and Overlapping Debt
9.67%
8.02%
$9,112
(1) Source: Municipal Advisory Council of Texas TMR Report
(2) Includes principal amounts of current interest bonds and capital appreciation bonds. Capital appreciation bonds are shown at original principal amount as opposed to
maturity value.
2014 TOTAL TAX RATES OF OVERLAPPING POLITICAL ENTITIES
Austin CCD
City of Austin
Bella Vista MUD
Blockhouse Creek MUD
City of Cedar Park
City of Jonestown
City of Leander
River Place MUD
Travis County
Vista Oaks MUD
Williamson County
Williamson-Travis WC&ID #1-G
Williamson-Travis WC&ID #1-F
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
(1) Source: Municipal Advisory Council of Texas
A-5
0.100500
0.458900
0.097500
0.499000
0.827000
0.479500
0.565600
0.632920
0.950000
0.365000
0.231300
0.416900
0.100000
0.100000
0.117800
0.058500
0.610000
0.441529
0.850000
0.536800
0.900000
0.540000
CAPITAL LEASES
NONE
NOTES PAYABLE
NONE
PUBLIC FACILITY CORPORATION
NONE
A-6
CLASSIFICATION OF ASSESSED VALUATION BY USE CATEGORY
Total Tax Roll for Tax Years - Per Comptroller's Report (1) (2)
2014
2013
2012
2011
2010
$ 13,252,836,502 $ 11,484,214,775 $ 10,787,497,209 $ 10,423,810,798 $ 10,143,475,065
1,090,655,778
938,710,370
797,822,599
703,026,418
665,665,224
470,404,919
431,504,592
419,997,070
435,539,792
515,042,578
791,651,351
776,442,024
796,737,700
807,164,118
848,560,006
141,480,966
113,785,615
69,087,894
65,281,313
65,085,383
1,950,540,859
1,742,228,866
1,631,428,131
1,515,004,668
1,485,959,936
2,633,624
2,633,624
145,445,352
128,911,117
104,116,236
120,534,470
118,094,967
622,236,965
471,989,973
529,757,189
524,006,220
501,219,486
5,821,900
5,794,255
5,955,219
6,175,335
5,877,551
8,795,238
6,659,933
5,887,360
4,832,174
4,466,641
89,884,545
89,826,278
115,349,742
81,543,687
75,181,061
Property Use Category
Single-Family Residential
Multi-Family Residential
Vacant Lots/Tracts
Acreage (Land Only)
Farm and Ranch Improvements
Commercial and Industrial
Non producing minerals
Residential Inventory
Business, Tangible
Other, Tangible
Mobile Homes
Special/Real Inventory
Utilities
Misc.
-
-
-
$ 18,572,387,999 $ 16,192,701,422 $ 15,263,636,349 $ 14,686,918,993 $ 14,428,627,898
Less Exemptions:
Residential Homestead
Disabled/Deceased Veterans
Over-65 and/or disabled
Freeport Loss
Cap Value Loss
Freeze Value Loss
Prorations/Solar/Wind
Value lost to prorations
Total Value lost to partial low income housing
exemptions
Pollution Control
Agriculture Use/Productivity
Total Exemptions
Taxable Assessed Valuation
-
-
Total Assessed Valuation
$
$
(3)
560,097,184 $
55,283,655
69,186,666
28,122,658
343,037,009
338,933,506
2,803,321
716,543
549,511,742 $
44,158,877
64,297,225
14,928,897
65,582,029
264,725,167
1,838,665
982
540,857,252 $
37,661,065
59,315,690
22,395,581
68,652,339
228,427,164
498,722
-
535,305,093 $
17,392,447
53,347,043
15,158,333
68,051,818
222,656,365
134,857
-
520,292,483
26,992,944
48,251,712
76,316,703
213,857,754
1,402,348
-
3,252,019
663,744
655,589,400
3,021,883
628,928
643,403,768
648,445
656,823,412
680,469
660,813,253
837,486
683,397,244
2,057,685,705 $
1,652,098,163 $
1,615,279,670 $
1,573,539,678 $
1,571,348,674
$ 16,514,702,294 $ 14,540,603,259 $ 13,648,356,679 $ 13,113,379,315 $ 12,857,279,224
(1) Source: Travis and Williamson Central Appraisal Districts Value as Reported in CPTD School District Report of Property Value.
(2) CPTD School District Report of Property value for Tax Year 2015 is expected in January of 2016.
(3) Includes Frozen Values
PERCENTAGE TOTAL ASSESSED VALUATION BY CATEGORY
Property Use Category
Single-Family Residential
Multi-Family Residential
Vacant Lots/Tracts
Acreage (Land Only)
Farm and Ranch Improvements
Commercial and Industrial
Non producing minerals
Residential Inventory
Business, Tangible
Other, Tangible
Mobile Homes
Special/Real Inventory
Utilities
Percent of Total Tax Roll for Tax Years
2011
2010
2014
2013
2012
71.36%
5.87%
2.53%
4.26%
0.76%
10.50%
0.01%
0.78%
3.35%
0.00%
0.03%
0.05%
70.92%
5.80%
2.66%
4.80%
0.70%
10.76%
0.02%
0.80%
2.91%
0.00%
0.04%
0.04%
70.67%
5.23%
2.75%
5.22%
0.45%
10.69%
0.00%
0.68%
3.47%
0.00%
0.04%
0.04%
70.97%
4.79%
2.97%
5.50%
0.44%
10.32%
0.00%
0.82%
3.57%
0.00%
0.04%
0.03%
70.30%
4.61%
3.57%
5.88%
0.45%
10.30%
0.00%
0.82%
3.47%
0.00%
0.04%
0.03%
0.48%
0.55%
0.59%
0.61%
0.52%
100.00%
100.00%
99.83%
100.06%
100.00%
Note: Totals may not equal 100% due to rounding
A-7
OUTSTANDING DEBT SERVICE REQUIREMENTS
Fiscal
Year
Ended 8/31
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
TOTAL
Annual
Debt Service
Requirement
$
$
77,265,069
76,857,794
80,080,606
83,294,644
85,053,944
85,881,644
86,540,144
87,672,513
87,563,788
87,413,363
88,204,238
87,326,787
89,132,499
90,878,705
92,764,592
94,193,136
95,639,441
97,112,329
97,948,484
97,671,679
99,217,250
101,319,750
100,458,000
105,648,500
107,878,750
110,147,750
117,768,750
111,185,000
88,000,000
89,490,000
127,010,000
128,920,000
130,860,000
132,830,000
3,319,229,146
Debt Service Requirements of the
Refunding Bonds (1)
Less:
Debt Service of
Refunded Bonds (1) (2)
$
$
2,747,844
2,747,844
10,572,844
3,434,844
7,637,344
14,525,244
13,328,294
13,121,138
13,713,163
19,179,388
19,859,513
21,050,463
21,043,675
21,051,131
21,045,000
4,284,500
4,281,750
4,286,500
4,283,000
2,251,250
2,252,250
2,249,000
2,251,500
2,249,250
2,252,250
235,698,975
Principal
$
$
1,320,000
7,950,000
1,050,000
2,423,608
2,952,806
2,575,147
2,460,292
2,432,877
6,293,886
6,048,360
5,959,731
5,647,970
5,325,434
5,122,081
2,850,000
2,990,000
3,145,000
3,300,000
1,430,000
1,505,000
1,575,000
1,655,000
1,740,000
1,830,000
79,582,192
Interest
$
$
1,235,312
2,288,738
2,288,738
2,050,238
4,785,129
10,742,882
9,987,846
9,912,102
10,495,517
11,679,595
12,566,721
13,775,600
14,081,861
14,410,566
14,609,669
1,101,000
958,500
809,000
651,750
486,750
415,250
340,000
261,250
178,500
91,500
140,204,014
Total
$
2,555,312
2,288,738
10,238,738
3,100,238
7,208,738
13,695,688
12,562,994
12,372,394
12,928,394
17,973,481
18,615,081
19,735,331
19,729,831
19,736,000
19,731,750
3,951,000
3,948,500
3,954,000
3,951,750
1,916,750
1,920,250
1,915,000
1,916,250
1,918,500
1,921,500
219,786,206
$
(1) Preliminary, subject to change.
(2) Shown net of Issuer contribution of $1,289,959.99 representing a transfer from the Interest and Sinking Fund.
TAX ADEQUACY WITH RESPECT TO THE DISTRICT'S OUTSTANDING BONDS
Projected Maximum P & I Requirements for FYE
8/31/2049
less: projected EDA and IFA payments from the State
$
132,830,000
-
District's Net Requirement
$
Based on Projected 2049 Taxable Valuation of ……………………………………………………………$
Tax rate w/ tax collections of
$0.3759
99.00%
$
132,830,000
35,697,391,229
132,830,000
AUTHORIZED BUT UNISSUED BONDS
The District currently has no authorized but unissued bonds.
A-8
Total
Debt Service
Requirement (1)
$
$
77,072,537
76,398,688
79,746,500
82,960,038
84,625,338
85,052,088
85,774,844
86,923,769
86,779,019
86,207,456
86,959,806
86,011,655
87,818,655
89,563,574
91,451,342
93,859,636
95,306,191
96,779,829
97,617,234
97,337,179
98,885,250
100,985,750
100,122,750
105,317,750
107,548,000
110,147,750
117,768,750
111,185,000
88,000,000
89,490,000
127,010,000
128,920,000
130,860,000
132,830,000
3,303,316,377
APPENDIX B
ADDITIONAL INFORMATION REGARDING
Leander lSD is located in Williamson and Travis Counties, Texas, northwest of the City of Austin, and covers an area
of approximately 198 square miles. The District includes parts of the Cities of Austin and Jonestown, and all the Cities
of Cedar Park and Leander. The area's population has rapidly increased due to its proximity to the many job
opportunities in the Cities of Austin, Round Rock, and Georgetown. Bordered on the west by Lake Travis, Leander
ISD has experienced an increase in enrollment each year for more than a decade. (See "Appendix B – Enrollment
Statistics.")
The University of Texas and St. Edwards University campuses are located in the City of Austin, within 30 miles of
the City of Leander. Austin Community College offers associate degree programs as well as certificate programs.
Concordia University relocated from downtown Austin into Leander ISD in 2008.
Leander lSD continues to be one of the fastest growing schools in the Nation. The District received a met
standard rating in the State's Accountability system. The State System rates school districts as met standard
or improvement required. The District has long had one of Central Texas’ most-envied Volunteer Programs, and
our students and schools continue to benefit from the unmatched support of our PTAs. These programs and
other new volunteer opportunities are helping keep Leander ISD's students and schools a step ahead of the
competition.
Water provided by:
Cities of Austin, Leander, Cedar Park & several
municipal utility districts
Electricity provided by:
Pedernales Electric Corporation, Inc., and Austin
Energy
Natural Gas provided by:
Atmos Energy and Texas Gas Service (ONEOK)
Telephone Service provided by:
AT&T and cable providers
Motor Freight carriers provided by:
Central & United Parcel Services
Railroad service:
Passenger
Freight
Capital Metro Light Rail to Downtown Austin
Southern Pacific
Bus service provided by:
Capital Metro and Greyhound
Colleges and Universities:
Austin Community College and Concordia
Lutheran College, Texas State University, The
University of Texas, St. Edwards University and
Concordia University
B-1
ENROLLMENT STATISTICS
Enrollment
Year Ending. 8-31
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015(1)
2016(2)
(1)
(2)
16,746
18,066
19,763
22,170
24,203
26,418
28,331
30,125
32,034
33,179
34,265
35,355
36,123
37,087
PEIMS data
As of November 24, 2015
FACILITIES
School
Campus Size
Grades
Capacity
PK-5
PK-5
PK-5
PK-5
PK-5
PK-5
PK-5
PK-5
PK-5
PK-5
PK-5
PK-5
PK-5
PK-5
PK-5
PK-5
PK-5
PK-5
PK-5
PK-5
PK-5
PK-5
PK-5
PK-5
PK-5
K-12
6-8
6-8
6-8
6-8
6-8
6-8
6-8
6-8
9-12
9-12
9-12
9-12
9-12
9-12
800
800
800
800
800
800
800
800
800
800
800
800
800
800
800
800
800
800
800
800
800
800
650
800
800
N/A
1,200
1,200
1,200
1,200
1,200
1,200
1,200
1,200
2,400
2,400
50
2,400
1,800
2,400
Current
Enrollment
(acres)
Patricia Knowles Elementary
Whitestone Elementary
Ada Mae Faubion Elementary
Block House Creek Elementary
Cypress Elementary
C. C. Mason Elementary
Lois F. Giddens Elementary
Steiner Ranch Elementary
Pauline Nauman Elementary
Bagdad Elementary
Charlotte Ann Cox Elementary
Laura Bush Elementary
Deer Creek Elementary
Parkside Elementary
Pleasant Hill Elementary
Rutledge Elementary
Jim Plain Elementary
William J. Winkley Elementary
River Place Elementary
River Ridge Elementary
Westside Elementary
Ronald Reagan Elementary
Grandview Hills Elementary
Officer Leonard A. Reed Elem. School
Christine Camacho Elementary
County JJAEP & Loll Juvenile Det Cen.
Cedar Park Middle School
Florence M. Stiles Middle School
Leander Middle School
Running Brushy Middle School
Artie Henry Middle School
Canyon Ridge Middle School
Bernice Knox Wiley Middle School
Four Points Middle School
Leander High School
Cedar Park High School
New Hope Alternative High School
Charlie Rouse High School
Lt. Matthew Vandegrift High School
Vista Ridge High School
14.25
14.52
14.99
15.79
14.65
13.35
14.23
14.23
11.65
14.54
15.00
14.79
15.54
15.60
14.05
14.68
13.636
16.00
16.68
22.60
14.80
17.90
40.28
18.11
18.00
N/A
43.00
36.59
23.62
40.00
52.85
31.43
41.29
35.00
90.00
80.50
1.00
100.00
75.00
123.86
B-2
708
730
522
648
753
602
558
629
468
570
686
836
671
936
851
790
649
679
763
784
564
887
461
724
593
14
1,417
1,052
915
1,274
1,306
1,282
963
741
2,175
1,952
39
2,387
2,256
2,252
PORTABLE CLASSROOMS OWNED BY THE DISTRICT
(As of 11/24/2015)
Campus Location
Number of
Classrooms
Will Construction Allow
Removal
4
14
6
4
4
12
12
6
4
12
4
8
4
8
4
4
14
6
4
6
10
4
6
8
8
4
Charlie Rouse High School
Leander High School
Cedar Park High School
New Hope High School
Lt Matthew Vandegrift High School
Cedar Park Middle School
Leander Middle School
Running Brushy Middle School
Artie Henry Middle School
Whitestone Elementary
Ada Mae Faubion Elementary
Block House Creek Elementary
Cypress Elementary
C.C. Mason Elementary
Lois F. Giddens Elementary
Steiner Ranch Elementary
Pauline Naumann Elementary
Bagdad Elementary
Charlotte Ann Cox Elementary
Laura Bush Elementary
Patricia Knowles Elementary
Deer Creek Elementary
Rutledge Elementary
Pleasant Hill Elementary
Ronald Reagan Elementary
Parkside Elementary
No
No
No
No
n/a
No
No
No
No
No
No
No
No
No
No
No
No
No
No
No
No
No
No
No
No
No
District only moves portables when they are needed at other locations to avoid unnecessary
cost and wear and tear.
ADDITIONAL SITES OWNED BY THE DISTRICT
(As of 11/24/2015)
Name/Location of Site
Size
(acres)
Expected
Grade Use
Expected
Student Capacity
Future Elementary Site (Burleson)
Future Elementary Site (Silverado)
Future Middle School/High school (Sarita)
Future Middle School Site (TS-SD-III)
Future Middle School Site (near Reed ES)
Future Elementary Site (Drinkard Site)
Future Middle School Site (Benbrook)
Future Elementary Site (Benbrook)
20.0
21.9
163.6
54.4
50.0
22.4
40.0
37.0
PK-5
PK-5
6-12
6-8
6-8
PK-5
6-8
PK-5
800
800
1,200 + 2,400
1,200
1,200
800
1,200
800
B-3
CONSTRUCTION IN PROGRESS IN THE DISTRICT
Name/Location of Site
Date of
Completion
Grade Use
Expected Student
Capacity
High School #6
August 2016
9-12
2,400
EMPLOYMENT OF THE DISTRICT*
Teachers Librarians, Counselors, Nurses and SPED Licensed
Professionals ................................................................................ 2,814
Administrators and Professionals ............................................ 338
Teacher Aides & Secretaries ........................................................... 755
Auxiliary Employees .................................................................... 892
Total Number of Employees .....................................................4,799
* PEIMS data as of October 30, 2014
PRINCIPAL EMPLOYERS WITHIN THE DISTRICT
Name of Company
Leander ISD
Product
Educational/Governmental Entity
H.E. Butt Grocery
Grocery Store Chain
# of Employees
4,799
980
3M Company
Innovative Technology
950
Wal-Mart
Retail
900
National Oilwell Varco
Manufacturing of Oil Drilling Components
480
Cedar Park Regional Medical Center
Retail
450
City of Cedar Park
Governmental Entity
405
Target
Retail
400
Home Depot
Retail Home Improvement
330
ETS-Lindgren
Innovative Technology
270
B-4
ADDITIONAL INFORMATION REGARDING
WILLIAMSON AND TRAVIS COUNTIES, TEXAS
Williamson County was created and organized in 1848 from Milam County. The economy is diversified by agribusiness,
manufacturing and education. Williamson County's fast growth rate is due in large part to its location immediately north of the
City of Austin ("Austin") coupled with Austin's rapid expansion northward. Austin's city limits cross into Williamson County
making Austin the largest city in Williamson County. Most of the growth has been residential but also large employers, such
as Dell’s international headquarters, have changed Williamson County from just a bedroom community into a more
vibrant community where its citizens can live and work in the same general vicinity. This has transformed Williamson County
over recent years into a dynamic self-sustaining community with less dependency on Austin. Major retail and commercial
developments began appearing from 1999 to present, including the Rivery in the City of Georgetown, and the Premium Outlet
Mall, the IKEA-area retail, the La Frontera mixed-use center in the City of Round Rock. Two news colleges and two new
hospitals have opened within the last five years. Another very significant factor has been the opening of the North Loop 1 toll
road and Texas State Highway 4 5 toll road which have made a major difference regarding the accessibility of Williamson
County to and from Austin. The County seat is Georgetown.
Travis County was created in 1840 from Bastrop County when Austin became the Texas Capital. The economy is diversified
by manufacturing, education, state government, tourism, and research. Travis County is one of America's leading a r e a s f o r
computer related industries. Tourists are attracted to the State Capitol Building, LBJ Library, and the terrain of the "Hill
Country". The county seat is Austin.
EMPLOYMENT STATISTICS
LABOR FORCE ESTIMATES
March 2015
13,087,900
12,583,300
554,600
State of Texas
Total Civilian Labor Force
Total Employment
Total Unemployment
March 2014
12,955,600
12,263,100
692,500
Source: Texas Labor Market Review
UNEMPLOYMENT RATES
Entity
Travis County
Williamson County
State of Texas
United States of America
March 2015
3.2%
3.4%
4.2%
5.6%
Source: Texas Labor Market Review
B-5
March 2014
4.3%
4.6%
5.3%
6.8%
APPENDIX C
111 Congress Avenue, Suite 1700
Austin, Texas 78701
512.320.9200 Phone
512.320.9292 Fax
andrewskurth.com
____________, 2016
WE HAVE ACTED as Bond Counsel for Leander Independent School District (the
“District”) in connection with an issue of bonds (the “Bonds”) described as follows:
LEANDER INDEPENDENT SCHOOL DISTRICT UNLIMITED TAX
REFUNDING BONDS, SERIES 2016, dated _________, 2016, in the aggregate
principal amount of $__________, maturing on ________ in each year from 20__
through and including 20__. The Bonds are issuable in fully registered form only,
in denominations of $5,000 or integral multiples thereof, bear interest, and may be
transferred and exchanged as set out in the Bonds and in the order (the “Order”)
adopted by the Board of Trustees of the District (the “Board”) authorizing their
issuance. (The Bonds include Current Interest Bonds and Capital Appreciation
Bonds, as defined in the Order.)
WE HAVE ACTED as Bond Counsel for the sole purpose of rendering an opinion with
respect to the legality and validity of the Bonds under the Constitution and laws of the State of
Texas and with respect to the exclusion of interest on the Bonds from gross income under federal
income tax law. In such capacity we have examined the Constitution and laws of the State of
Texas; federal income tax law; and a transcript of certain certified proceedings pertaining to the
issuance of the Bonds and the obligations that are being refunded (the “Refunded Bonds”) with
the proceeds of the Bonds, as described in the Order. The transcript contains certified copies of
certain proceedings of the District and U.S. Bank National Association (the “Escrow Agent”); the
report (the “Report”) of Grant Thornton, LLP, which verifies the sufficiency of the deposits made
with the Escrow Agent for the defeasance of the Refunded Bonds and the mathematical accuracy
of certain computations of the yield on the Bonds and the obligations acquired with the proceeds
of the Bonds; certain certifications and representations and other material facts within the
knowledge and control of the District, upon which we rely; and certain other customary
documents and instruments authorizing and relating to the issuance of the Bonds and the firm
banking and financial arrangements for the discharge and final payment of the Refunded Bonds.
We have also examined executed Bonds No. R-1 and CR-1.
WE HAVE NOT BEEN REQUESTED to examine, and have not investigated or verified,
any original proceedings, records, data or other material, but have relied upon the transcript of
certified proceedings. We have not assumed any responsibility with respect to the financial
condition or capabilities of the District or the disclosure thereof in connection with the sale of the
Bonds. Our role in connection with the District’s Official Statement prepared for use in
connection with the sale of the Bonds has been limited as described therein.
Austin
Beijing
Dallas
Dubai
Houston
London
New York
C-1
Research Triangle Park
The Woodlands
Washington, DC
__________, 2016
Page 2
BASED ON SUCH EXAMINATION, it is our opinion as follows:
(1)
The transcript of certified proceedings evidences complete legal authority for the
issuance of the Bonds in full compliance with the Constitution and laws of the
State of Texas presently in effect; the Bonds constitute valid and legally binding
obligations of the District enforceable in accordance with the terms and conditions
thereof, except to the extent that the rights and remedies of the owners of the Bonds
may be limited by laws heretofore or hereafter enacted relating to bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the rights
of creditors of political subdivisions and the exercise of judicial discretion in
appropriate cases; and the Bonds have been authorized and delivered in
accordance with law;
(2)
The Bonds are payable, both as to principal and interest, from the receipts of an
annual ad valorem tax levied, without legal limit as to rate or amount, upon taxable
property located within the District, which taxes have been pledged irrevocably to
pay the principal of and interest on the Bonds; and
(3)
The escrow agreement between the District and the Escrow Agent (the “Escrow
Agreement”) has been duly executed and delivered and constitutes a binding and
enforceable agreement in accordance with its terms; the establishment of the
Escrow Fund pursuant to the Escrow Agreement and the deposit made therein
constitute the making of firm banking and financial arrangements for the discharge
and final payment of the Refunded Bonds; in reliance upon the accuracy of the
calculations contained in the Report, the Refunded Bonds, having been discharged
and paid, are no longer outstanding and the lien on and pledge of ad valorem taxes
and other revenues as set forth in the order authorizing their issuance will be
appropriately and legally defeased; the holders of the Refunded Bonds may obtain
payment of the principal of, redemption premium, if any, and interest in the
Refunded Bonds only out of the funds provided therefor now held in escrow for
that purpose by the Escrow Agent pursuant to the terms of the Escrow Agreement;
and therefore the Refunded Bonds are deemed to be fully paid and no longer
outstanding, except for the purpose of being paid from the funds provided therefor
in such Escrow Agreement.
ALSO BASED ON OUR EXAMINATION AS DESCRIBED ABOVE, it is our further
opinion that, subject to the restrictions hereinafter described, interest on the Bonds is excludable
from gross income of the owners thereof for federal income tax purposes under existing law and
is not subject to the alternative minimum tax on individuals or, except as hereinafter described,
corporations. The opinion set forth in the first sentence of this paragraph is subject to the
condition that the District comply with all requirements of the Internal Revenue Code of 1986, as
amended (the “Code”), that must be satisfied subsequent to the issuance of the Bonds in order
that interest thereon be, or continue to be, excluded from gross income for federal income tax
purposes. The District has covenanted in the Order to comply with each such requirement.
Failure to comply with certain of such requirements may cause the inclusion of interest on the
Bonds in gross income for federal income tax purposes to be retroactive to the date of issuance
of the Bonds. The Code and the existing regulations, rulings and court decisions thereunder, upon
C-2
__________, 2016
Page 3
which the foregoing opinions of Bond Counsel are based, are subject to change, which could
prospectively or retroactively result in the inclusion of the interest on the Bonds in gross income
of the owners thereof for federal income tax purposes. If the District fails to comply with the
foregoing provisions of the Order, interest on the Bonds could become includable in gross income
from the date of original delivery, regardless of the date on which the event causing such
inclusions occurs.
INTEREST ON the Bonds owned by a corporation (other than an S corporation, a
regulated investment company, a real estate investment trust (REIT), a real estate mortgage
investment conduit (REMIC), or a financial asset securitization investment trust (FASIT)) will be
included in such corporation's adjusted current earnings for purposes of calculating such
corporation's alternative minimum taxable income. A corporation's alternative minimum taxable
income is the basis on which the alternative minimum tax imposed by the Code is computed.
Purchasers of Bonds are directed to the discussion entitled “TAX MATTERS” set forth in the
Official Statement.
EXCEPT AS DESCRIBED ABOVE, we express no opinion as to any federal, state or
local tax consequences under present law, or future legislation, resulting from the ownership of,
receipt or accrual of interest on, or the acquisition or disposition of, the Bonds. Prospective
purchasers of the Bonds should be aware that the ownership of tax-exempt obligations, such as
the Bonds, may result in collateral federal income tax consequences to, among others, financial
institutions, life insurance companies, property and casualty insurance companies, certain foreign
corporations doing business in the United States, certain S corporations with Subchapter C
earnings and profits, individual recipients of Social Security or Railroad Retirement benefits,
taxpayers who are deemed to have incurred or continued indebtedness to purchase or carry taxexempt obligations, taxpayers owning an interest in a FASIT that holds tax-exempt obligations
and individuals otherwise qualified for the earned income tax credit. For the foregoing reasons,
prospective purchasers should consult their tax advisors as to the consequences of investing in
the Bonds.
OUR OPINIONS ARE BASED ON EXISTING LAW, which is subject to change. Such
opinions are further based on our knowledge of facts as of the date hereof. We assume no duty
to update or supplement our opinions to reflect any facts or circumstances that may thereafter
come to our attention or to reflect any changes in any law that may thereafter occur or become
effective. Moreover, our opinions are not a guarantee of result and are not binding on the Internal
Revenue Service; rather, such opinions represent our legal judgment based upon our review of
existing law that we deem relevant to such opinions and in reliance upon the representations and
covenants referenced above.
C-3
APPENDIX D
The information contained in this Appendix D consists of excerpts from the District’s Comprehensive Annual Financial Report for the
Fiscal Year Ended August 31, 2014 and is not intended to be a complete statement of the District’s financial condition. Reference is
made to the complete report for further information.
The District anticipates presenting its Comprehensive Annual Financial Report for the Fiscal Year Ended August 31, 2015 (the "FY2015
Report") to its Board of Trustees for approval at its January 21, 2016 meeting. As soon as practicable thereafter, the FY2015 Report will
be filed with the Municipal Securities Rulemaking Board via the Electronic Municipal Market Access (EMMA) System.
Comprehensive Annual Financial Report
For the Fiscal Year Ended August 31, 2014
Issued By
Division of Finance
Lucas Janda
Leander, Texas
Year Ended August 31, 2014
Table of Contents
Page
INTRODUCTORY SECTION
Letter of Transmittal
Principal Officials
Organization Chart
Certificate of Achievement
FINANCIAL SECTION
Independent Auditors’ Report
Management’s Discussion and Analysis
Basic Financial Statements:
Government-wide Financial Statements:
Statement of Net Position
Statement of Activities
Fund Financial Statements:
Balance Sheet - Governmental Funds
Statement of Revenues, Expenditures, and Changes in
Fund Balances - Governmental Funds
Reconciliation of the Statement of Revenues, Expenditures, and Changes
in Fund Balances of Governmental Funds to the Statement of Activities
Statement of Revenues, Expenditures, and Changes in
Fund Balance - Budget and Actual - General Fund
Statement of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual - Major Special Revenue Fund - Food Service
Statement of Net Position - Proprietary Funds
Statement of Revenues, Expenses, and Changes in
Fund Net Position- Proprietary Funds
Statement of Cash Flows - Proprietary Funds
Statement of Fiduciary Net Position - Agency Fund
Notes to Basic Financial Statements
Combining and Individual Fund Statements and Schedules:
Combining Balance Sheet - Nonmajor Governmental Funds
Combining Statement of Revenues, Expenditures and Changes
in Fund Balances - Nonmajor Governmental Funds
Combining Balance Sheet - All Nonmajor Special Revenue Funds
Combining Statement of Revenues, Expenditures and Changes in
Fund Balances - All Nonmajor Special Revenue Funds
Combining Balance Sheet - All Nonmajor Capital Projects Funds
iii-xiii
xiv
xv
xvi-xvii
1-3
4-11
12
13
14
15
16
17
18
19
20
21
22
23-42
43
44
45-47
48-50
51
Table of Contents
Page
Combining and Individual Fund Statements and Schedules (continued):
Combining Statement of Revenues, Expenditures and Changes in
Fund Balances - All Nonmajor Capital Projects Funds
Combining Statement of Net Position - All Internal Service Funds
Combining Statement of Revenues, Expenses and Changes in
Fund Net Position - All Internal Service Funds
Combining Statement of Cash Flows - All Internal Service Funds
Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual - Debt Service Fund
Statement of Changes in Net Position - Agency Fund
Other SchedulesExhibit L-1 - Required Responses to Selected School First Indicators
52
53
54
55
56
57
58
Table
STATISTICAL SECTION
Net Position by Component
Expenses, Program Revenues, and Net Revenue (Expense)
General Revenues and Total Change in Net Position
Fund Balances - Governmental Funds
Governmental Funds Revenue
Governmental Funds Expenditures and Debt Service Ratio
Other Financing Sources and Uses and Net Change in Fund Balances
Assessed and Estimated Actual Value of Taxable Property
Property Tax Rates - Direct and Major Overlapping Governments
Ten Largest Taxpayers
Property Tax Levies and Collections
Schedule of Delinquent Taxes Receivable
Outstanding Debt by Type
Computation of Direct and Overlapping Debt
Demographic Statistics
Full Time Equivalent District Employees by Type
Operating Statistics
Principal Employers
Teacher Base Salaries
School Building Information
Fund Balance and Cash Flow Calculation Worksheet
I
II
III
IV
V
VI
VII
VIII
IX
X
XI
XII
XIII
XIV
XV
XVI
XVII
XVIII
XIX
XX
XXI
Page
59
60
61
62
63
64
65
66
67-68
69-71
72
73
74
75
76
77
78
79
80
81-88
89
INTRODUCTORY SECTION
204 W. South Street
P.O. Box 218
Leander, Texas 78646
(512) 570-0000
Board of Trustees
Pamela Waggoner
President
Aaron Johnson
Vice President
Don Hisle
Secretary
Russell Bundy
Member
Grace S. Barber-Jordan, M.Ed.
Member
Lisa Mallory
Member
Will Streit
Member
Bret A. Champion, Ed.D.
Superintendent
Lucas Janda
January 16, 2015
Ms. Pamela Waggoner, President, and
Members of the Board of Trustees, and Citizens of
P.O. Box 218
Leander, Texas 78646-0218
Dear Ms. Waggoner and Board Members,
The Business and Operations Division is pleased to submit the Comprehensive
Annual Financial Report (“CAFR”) for Leander Independent School District
(the “District” or “LISD”), Leander, Texas, for the fiscal year ended
August 31, 2014.
This report is published to provide the Board of Trustees (the “Board”),
citizens of the District, bondholders, staff, and other interested parties with
detailed information concerning the financial condition and activities of the
District. Responsibility for the accuracy of the data, and the completeness and
fairness of the presentation, including all disclosures, rests with the District.
To the best of our knowledge and belief, the enclosed data is accurate in all
material respects and is reported in a manner designed to present fairly the
financial position and results of operations of the various funds of the District.
All disclosures necessary to enable the reader to gain an understanding of the
District’s financial activities have been included.
The CAFR is comprised of an introductory, financial, and statistical section.
The introductory section includes this transmittal letter, a listing of the
District’s Board members, and an organizational chart of the District. The
financial section includes Management’s Discussion and Analysis (“MD&A”),
basic financial statements and combining and individual fund statements and
schedules, and other supplementary information. Also included in the financial
section is the independent auditors’ report on these financial statements. The
MD&A is a narrative introduction, overview, and analysis to accompany the
basic financial statements. This letter of transmittal is designed to complement
the MD&A and should be read in conjunction with it. The District’s MD&A
can be found immediately following the report of the independent auditor. The
statistical section includes selected financial and demographic information,
generally presented on a multi-year basis relevant to a financial statement
reader.
www.leanderisd.org
iii
The CAFR for the year ended August 31, 2014 is prepared in accordance with generally accepted
accounting principles and in conformance with standards of financial reporting established by the
Governmental Accounting Standards Board (“GASB”), and other professional associations, as
applicable.
PROFILE OF THE GOVERNMENT
The District is an independent reporting entity under the criteria established in section 2100 of the
GASB codification. Policymaking and supervisory functions are the responsibility of, and are vested in,
a seven (7) member elected Board. Based on legislative authority codified in the Texas Education
Code (TEC), the trustees:
1. Have the exclusive power to govern the District
2. Can acquire and hold real and personal property, sue and be sued, and hold all rights
and titles to the school property
3. Have the power to levy and collect taxes, and to issue bonds
4. Can contract for appointed officers, teachers, and other personnel as well as for
goods and services
5. Have the right of eminent domain to acquire real property necessary for the District.
As an independent reporting entity, the District, through its Board, exercises control over all the
activities related to public school education within its boundaries. This report includes all funds that are
controlled by, or dependent upon, the Board.
The District is not included in any other governmental “reporting entity” since the Board is elected by
the public and has decision-making authority.
The purpose and responsibility of the District is to provide a sound and effective educational system,
offering early childhood education, pre-kindergarten, and full day kindergarten through grade twelve,
for approximately 35,000 children enrolled in the public schools within its boundaries, and whereby
each child has access to programs and services that are appropriate to the learner’s needs. In addition to
the regular education program, the District offers comprehensive programs in the areas of gifted and
talented education, vocational education, special programs for individuals with disabilities, English as a
Second Language, Bilingual Education, compensatory education programs, International Baccalaureate,
and Primary Years Programmes, as well as an alternative high school program for drop-out intervention.
A broad range of elective and extracurricular programs is also offered. Finally, support departments of
the District ensure that student needs for transportation, nutrition, guidance, counseling, and facilities
maintenance are addressed.
iv
ECONOMIC CONDITION
The District is located northwest of Austin, in the southwestern portion of Williamson County, with a
portion of its boundaries extending into Travis County to the South. The District covers an area of
approximately 200 square miles and includes the City of Leander, the City of Cedar Park, the City of
Jonestown, and portions of Georgetown, Round Rock, and northwest Austin. The District has
thirty-nine instructional campuses - five high schools, eight middle schools, twenty-four elementary
schools and two alternative learning centers. In August 2014, the District opened its twenty-fourth
elementary school, Officer Leonard A. Reed Elementary. Elementary #25, currently under construction,
will open in the fall of 2015, and the District’s sixth high school, located in Leander, is slated to open in
2016.
The District continues to be one of the fastest growing school Districts in the state. District enrollment
has increased approximately 95.16% over the last ten fiscal years (2004-05 through 2013-14). Based on
the October 2014 demography report prepared for the District by Population and Survey Analysts,
several factors give the District a competitive advantage for development. These factors include having
a low economically disadvantaged population of 18.9%, ranking the District third behind Frisco ISD and
Allen ISD among all large districts in the state with 20,000 plus students. Another factor is the high
passage rate of 83.3% on the State of Texas Assessments of Academic Readiness (STAAR®)
state-mandated test. This ranks the District as 11th among all large districts in the state with 20,000 plus
students, and among the highest scoring in the Austin area. The STAAR program includes annual
assessments for grades 3–8 in reading and mathematics; assessments in writing at grades 4 and 7;
in science at grades 5 and 8; and in social studies at grade 8; and end-of-course (“EOC”) assessments for
English I, English II, Algebra I, biology and U.S history. Additionally, STAAR® EOC assessments for
English III and Algebra II will be administered on a voluntary basis beginning in spring 2016. Other
socioeconomic indicators mentioned in the report include a highly educated population, whereby 49% of
residents have a bachelor’s degree or higher, compared to the Austin metro of 41% and Texas overall of
27.6%, and a more affluent population, with a median household income level of $86,157 compared to
$61,750 in the Austin metro. The report projects enrollment will most likely exceed 41,000 in the next
five to six years (2018/2019).
Aggregate property value in the District has increased approximately 27.47% over the past 5 fiscal
periods and 139.62% over the past 10 fiscal periods. Residents are attracted by the quality of the
educational system, affordability of housing, proximity to Lake Travis (a large recreational area), and
other quality-of-life criteria. The District’s economy is based primarily on its quality residential
neighborhoods. Taxable value as of August 31, 2014 was $16,690,220,895. The top ten taxpayers
represent $653,735,763 of total property value, of which Amaravathi Limited Partnership is the largest
at $92,540,000; the next largest is Inland Western Cedar Park 1890 Ranch LP at $89,510,688.
The largest employment sectors in the District are educational and health care services; professional and
management services; retail trade; and manufacturing. The District benefits by having stable employers
within a commutable distance of district boundaries and the District’s high academic reputation drives
residency. The region boasts diversity among business leaders across industries, from federal and state
governmental entities to its large number of health services and higher educational institutions
(including the University of Texas at Austin with enrollment exceeding 50,000 and over 25,000
employees), tourism, financial services, and a prominent high-tech presence. LISD has several
master-planned communities within its boundaries, which are attractive to home buyers concerned about
sustainability in the midst of economic recession.
v
The 2010 census population for Leander and Cedar Park totaled 26,521 and 48,937, respectively. The
2013 population estimates for these areas are 31,717 for Leander and 61,238 for Cedar Park. The
population of the Austin metro region is over 1.9 million residents, 885,400 of whom reside within
Austin city limits. Williamson County’s population is approximately 471,014. Travis County has a
population of 1,120,954.
According to the Texas Comptroller’s Office, the State realized a 3.7% increase in non-farm
employment between October 2013 and October 2014, as compared to the 2.0% increase experienced
nationally. The Texas economy continues to fare better than those of many other states with an
unemployment rate below the national unemployment rate for 94 consecutive months. As of
October 2014, the national Texas unemployment rate was 5.1%, down from 6.2% in October 2013,
compared to the national rate of 5.8%. Texas surpassed its recession-hit jobs in November 2011, and
by October 2014 added an additional 1,070,300 jobs.
The City of Leander continues to develop a long-range economic development plan to provide
employment and commercial services to serve the continued growing population. The City of Leander
participates in the Austin Chamber of Commerce’s Regional Partners Program which provides the City
of Leander with opportunities to present available sites and facilities to prospective businesses interested
in locating in Leander. The City of Leander has also contracted with the Retail Coach to develop
marketing and outreach materials specifically targeted to attracting new retailers to the City of Leander.
Leander continues to experience rapid growth and record home sales. Single family housing
development is booming throughout the city with many residential communities in the works. The
approval of new subdivisions has resulted in over 1,000 permits for new homes being issued as of
October 2014, setting a new record for the city. Transportation infrastructure has played a key role
in Leander’s growing appeal.
New construction and upgrades include U.S. Highway 183A,
State Highway 45, State Highway 29, RM 1431 and the evolution of Ronald Reagan Boulevard. The
MetroRail line, which links downtown Austin with the Leander Station at U.S. 183 and FM 2243,
provides commuters a more palatable option to navigating the gridlock on MoPac Expressway or I-35.
Capital Metro’s Leander MetroRail station is an integral part of the city’s transit-oriented development
(“TOD”). The TOD is planned to be a pedestrian-oriented, urban downtown destination, with a mix and
integration of residential, commercial and retail uses. The MetroRail train’s popularity has helped spark
approval of the first residential developments, a subdivision and an apartment complex, within the TOD
district. In May 2010, Austin Community College purchased 100 acres in the Leander TOD, and a new
$60 million campus could open by the Fall of 2018, which will help spark further development.
vi
The City of Cedar Park continues its efforts to implement a comprehensive long-term planned growth
strategy. For the second year in a row, the U.S. Census reports that Cedar Park is the fourth
fastest-growing city in the nation. The City of Cedar Park website cites several major retail
development projects completed during the year including a new Costco Wholesale facility, a Wal-Mart
Supercenter, and a Sprouts Farmers Market. The largest Costco Wholesale facility in the Central Texas
region opened in November of 2013 on the northwest corner of RM 1431 and the 183A Tollway. The
153,700 square-foot wholesale club membership retail facility is projected to generate over $130 million
in annual sales, and features bakery, deli, meat, produce, bed and bath, and electronics departments, as
well as a gas station, optometry office, hearing aid center, pharmacy, tire center, and liquor store.
Costco will be the major anchor of the Cedar Park Town Center project, which will have an additional
150,000 square feet of retail space and restaurants. The total capital investment in the development
when completed is estimated to be over $38 million. A new Wal-Mart Supercenter, featuring more than
150,000 square feet of retail space, also opened in the spring of 2014 at the intersection of FM 1431 and
Ronald Reagan Boulevard. This is Walmart’s second store in Cedar Park. The retail giant will employ
more than 300 people and remains one of Cedar Park’s biggest local sales tax generators.
In August 2014, a 27,000 square foot, Sprouts Farmers Market opened on Cypress Creek Road.
Sprouts offers a variety of organic produce, bulk foods, gluten-free groceries, fresh-baked goods and
dairy selections, and plans to hire about 100 full and part-time employees. In July, the H.E.B. grocery
store located at FM 1431 and North Bell, marked its 25th anniversary with a grand reopening to
celebrate its $10 million, 5,200 square foot expansion.
Other developments currently planned or under construction include the Dana Corporation (“Dana”), a
Fortune 500, $7.2 billion global company based in Ohio, which is a supplier of automotive drivetrain,
sealing and thermal-management technologies having a 41,000 square foot R&D facility under
construction in the Scottsdale Crossing industrial park representing more than a $12 million dollar
investment and the addition of more than 80 high-paying engineering and support staff jobs to the local
economy. The center will help Dana fully leverage its strategic relationship with Fallbrook
Technologies, which is headquartered nearby. Dana has an exclusive license from Fallbrook to
engineer and produce continuously variable planetary (“CVP”) technology for use in light vehicle and
certain off-highway transmissions. Tolteq, which manufactures drilling measurement parts and systems
for the gas and oil industries, is completing its site plan for a 25,000 square foot facility to build out the
remainder of its site in Brushy Creek Corporate Park. Tolteq will more than double their current
employment as a result of the expansion. The city of Cedar Park has approved an economic incentive
package for Voltabox, a manufacturer of high-tech lithium ion battery systems for business and
municipal transportation vehicles. Voltabox plans to build a $6 million 22,000 square foot facility in
the Scottsdale Crossing industrial park. Also under consideration for an incentive package is a new
aerospace technology company, Firefly Space Systems (“Firefly”). Firefly, currently based in
California, is in the final stages of designing an orbital launch vehicle for small satellites. A new
headquarters could eventually be home to more than 200 employees.
vii
A long-term capital construction plan was established as a result of a community-wide study and
recommendations. A $559 million bond election passed on November 6, 2007, and provided for new
educational facilities, renovations and additions to existing facilities, two new stadiums, renovations to
the existing stadium, replacement of school buses, replacement/additional classroom technology, and the
acquisition of nine additional school sites. School buildings in the district vary in age, with 24 campuses
or 60%, being built between 2000 and 2014 and the remaining 40% built between 1984 and 1999. As of
August 31, 2014, the remaining authorization from the November 2007 bond sale is $22.8 million.
In February 2014, the District sold bonds totaling $204.7 million to finance the design and construction
of elementary #25 and high school #6, for science labs at the high schools, technology projects, and
HVAC improvements. The District has an open-door policy and actively promotes parent and patron
participation in the schools. Setting school attendance zone boundaries continues to be a participative
endeavor between school and community. Active volunteerism continues to be a hallmark of the
LISD community.
In 2012, no state accountability ratings were issued while the Texas Education Agency (“TEA”) worked
with advisory committees to develop a new rating system based on the STAAR® program and a new
distinction designations system. Under the 2013 rating system, districts and campuses were placed in
two categories, “met standard” or “needs improvement”, and are judged on how well they do across four
areas: student achievement; student progress; closing performance gaps between low-achieving
demographics; and post-secondary readiness. The 2013 ratings are a transition from a previous system
in which schools were assigned one of four labels - unacceptable, acceptable, recognized and
exemplary - based on measures including the district’s performance on standardized tests, dropout rates
and financial health. For 2014, ratings include a new postsecondary readiness measure – college-ready
graduates. The 2014 Accountability rating for the District was: Met Standard. The STAAR® program
is replacing the Texas Assessment of Knowledge and Skills (TAKS), which has been the
criterion-referenced assessment program that has been in place since 2003.
The combined budgeted expenditures for the 2013-2014 school year (General Fund, Debt Service, and
Food Service) were $327,506,103. The 2013-2014 General Fund budgeted expenditure per pupil was
$7,801.10. The total tax rate during 2013-2014 was $1.5119 ($1.04 maintenance and operations
(“M&O”), $0.4719 for debt service (“I&S”)).
The Texas School Finance System, established in 1993 as a court-ordered effort to promote equitable
access to educational resources for students of rich and poor districts alike, provides state aid as a
function of property wealth per student as well as average daily attendance. In a special session of the
79th Legislature in May 2006, the legislature passed House bill 1 (“HB1”), which significantly changed
the school finance system. HB1 lowered the cap on school district M&O tax rates from $1.50 to $1.00
over a two-year period (plus up to 4 cents of local enrichment levy). The HB1 system is a
“hold harmless” system designed to ensure that districts maintain funding equivalent to the “old law”
revenue formula (target revenue per student). In essence, schools are frozen at 2005/2006 or 2006/2007
spending levels per pupil (a calculation determines which year the district is frozen - for LISD it is
2006/2007). The only “new” funding in HB1 was specifically targeted at the mandated educator salary
increase ($2,500 approved in the 79th Legislative session). The 80th Legislature, which convened on
January 9, 2007, made no significant changes to the HB1 school funding formula other than the addition
of $23.63 per weighted average daily attendance (“WADA”) to be allocated to educator pay increases.
viii
In spring 2009, the 81st Legislature passed HB 3646 which maintained target revenue formulas, but
added a guaranteed additional $120 per WADA and mandated half of the funding be spent on pay
increases for specifically defined educator positions. The 82nd Legislative session passed Senate Bill 1
(“SB1”) during the special session in June 2011, reducing target revenue by approximately 10% through
the 2012-13 school year, and repealing target revenue as of September 1, 2017. The 2013 legislative
session resulted in no significant modifications to the underlying school finance structure. The basic
allotment was increased for 2013-14 fiscal year to $4,950 from $4,765. With the adoption of SB1,
Texas lawmakers infused additional money into the Foundation School Program, increasing funding to
the District by approximately $4.5 million in 2013-2014. This bill does not restore the $22 million state
funding cuts suffered by the District in 2012-13. The restorations have been implemented as an increase
to target revenue by less than half of one percent and an increase in the basic allotment through
fiscal year 2014-15.
Planning
The Board has invested considerable energy in developing a long-term strategic plan. A number of
initiatives have been enumerated and undertaken to continue the academic challenge afforded our
students. The District has been applying the principles of continuous improvement for over two
decades. This philosophy has equipped the District to meet the academic and financial challenges of a
rapidly-growing district. The District was recently featured in the American Society for Quality’s
annual Pathways to Responsibility publication. In addition, the District is the educational example
highlighted on the W. Edwards Deming website. The District participates in a consortium called the
E3 Alliance (Education Equals Economics) with area businesses, colleges, universities, and several
surrounding districts. The partnership was formed with a focus on aligning education to better equip
students with the 21st century skills needed to compete in today’s global economy. Additionally, a tenyear major maintenance plan is updated annually. The Board has levied between $0.02 and $0.04 each
year towards the major maintenance plan which includes a bus replacement plan, technology
replacement plan, capital equipment replacement, and funds a portion of the District’s self-funded
property and casualty deductible fund.
LISD articulated a Mission and Purpose statement a number of years ago with active involvement of its
community. Despite changes in the Board (through the election process) and significant growth in
numbers of staff, this purpose statement and “Graduate Profile” has stood the test of time and become an
integral part of all operations in the District. Staff is highly aware of the Mission and Purpose, which
permeates decision making in all departments, campuses, and at the District level. The District uses a
systems approach in developing its plans and related budget. Strategic objectives and academic
excellence indicators are used to weigh the relative value of budget items. The budget is developed
collaboratively and based on District-wide planning and strategy.
ix
LISD strives to keep constancy in vision to focus our improvement efforts on a single, clearly defined
target: student success, as articulated by our four challenges as follows:
1. Give students ownership in their learning, with the Seven Student Learning
Behaviors anchoring every classroom.
a) Learning Objective
b) Assessment for Learning
c) Plan for Intervention/Challenge
d) Learning Strategies
e) Student Collaboration and Learner Engagement
f) Data Analysis & Goal Setting
g) Learning Products
2. Close the achievement gap.
3. Ensure students exit our system college and career ready.
4. Focus on the whole student, ensuring that every student is healthy, safe, engaged,
supported, and challenged.
Accounting Systems and Budgetary Control
Chapter 44, Subchapter A, of the Texas Education Code, sets forth budget and fiscal reporting
procedures for independent school districts.
Section 44.002 PREPARATION OF BUDGET. (a) Not later than August 20 of each year, the
Superintendent shall prepare, or cause to be prepared, a budget covering estimated receipts and proposed
expenditures of the General Fund, Debt Service Fund, and Food Service Fund (special revenue) of the
District for the next succeeding fiscal year.
Section 44.007 ACCOUNTING SYSTEM; REPORT. (a) A standard school fiscal accounting system
must be adopted and installed by the Board of Trustees of each independent school district. The
accounting system must conform to generally accepted accounting principles. (b) The accounting
system must meet at least the minimum requirements prescribed by the State Board of Education and
approved by the state auditor. (c) Records must be kept of all expenditures made and all income
received during the fiscal year for which a budget is adopted. A report of the disbursements and receipts
for the preceding fiscal year shall be filed with the agency on or before a date set by the
State Board of Education.
In developing, evaluating, and improving the District’s accounting system, consideration is given to the
adequacy of internal controls. Internal controls are designed to provide management with reasonable,
but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition,
and that transactions are executed in accordance with management’s authorization and recorded properly
to permit the preparation of financial statements in accordance with generally accepted accounting
principles. The concept of reasonable assurance recognizes that the cost of a control should not exceed
the benefits likely to be derived and the evaluation of costs and benefits requires estimates and
judgments by management.
x
All internal control evaluations occur within the above framework. We believe that the District’s
internal controls adequately safeguard assets and provide reasonable assurance of proper recording of
financial transactions.
As a recipient of federal, state, and local grants, the District is also responsible for ensuring that
adequate internal controls are in place to ensure compliance with applicable laws and regulations related
to these grants. Internal control is subject to periodic reviews by management.
As a part of the District’s Single Audit, tests are conducted to determine the adequacy of the internal
controls as related to federal financial assistance programs as well as compliance with applicable laws
and regulations. The results of the District’s Single Audit for the fiscal year ended August 31, 2014,
indicated no instances of material weaknesses in internal control or significant violations of applicable
laws and regulations.
Information related to this Single Audit, including the schedule of expenditures of federal awards,
findings and questioned costs, and the independent auditors’ reports on compliance and internal control
over financial reporting and compliance with requirements applicable to each major federal program and
internal control over compliance are included in a separate report, Compliance and Single Audit Reports
for the Year Ended August 31, 2014.
During the 1999 state legislative session, a law was enacted that permits school districts in the State of
Texas to opt for a fiscal year ending June 30th, rather than August 31st. The District has chosen to not
exercise this option.
The District utilizes a line-item budget of proposed expenditures and the means of financing them. The
emphasis of the budget process is to identify the activities requiring resources and to rank
administratively the activities according to the needs of the entire District. Budgetary control is
maintained at the function level by organizational units through the encumbrance of estimated purchase
amounts and other expenditures prior to the execution of contracts, approval of personnel transactions,
or release of purchase orders to vendors. Purchase commitments, personnel actions, or their obligations,
which would result in an overrun of appropriated funds, are not released until additional appropriations
are made available. Open encumbrances at year end August 31, 2014, were appropriated by the Board
into the 2014-15 budget.
Cash Management and Investments
The District's cash and investment policy is to minimize credit and market risks while maintaining a
competitive yield on its portfolio. As evidenced by the diversity of its investment portfolio, the District
is continuing to take advantage of all investment opportunities available to it. Safety of principal will
continue to be foremost in the District's investment decisions. J.P. Morgan Chase Bank, N.A. was the
official depository of the District, by contract, for the fiscal year ended August 31, 2014. The district
maintains temporary investments in local government investment pools, including: TexPool, Local
Government Investment Cooperative (“LOGIC”), TexStar, and Lone Star. Purchases of U.S. Treasury
and Agency securities and municipal bonds are competitively bid and match maturities to cash flow
projections. The investments purchased as well as investment pools used by the District, are authorized
under the Texas Public Funds Investment Act, Section 2256.016.
xi
Risk Management
The District’s risk management program oversees the purchasing of insurance coverage for property and
casualty policies as well as the claims management process. The workers’ compensation program is
self-funded with appropriate excess loss coverage and includes additional oversight by a third party
administrator. Claims have not exceeded insurance limits for more than ten years.
In 2008-09, the District moved to a self-funded health insurance in an effort to mitigate increasing plan
premiums. Results at year-end remain on target with plan trajectories.
Employees’ Retirement Plan
The District’s employees participate in the Teacher Retirement System of Texas (“TRS”), a public
employee retirement system (“PERS”). It is a cost-sharing multiple-employer defined benefit pension
plan with one exception: all risks and costs are not shared by the District, but are the liability of the State
of Texas. The system covers approximately 1,050 school systems and more than 500,000 members.
Under provisions in State law, plan members are required to contribute 6.4% of their annual covered
salary and the State of Texas contributes an amount equal to 6.8% of the District's covered payroll.
Additionally, TRS eligible employees have .65% of annual salary deducted toward TRS insurance for
the benefit of the retiree’s health insurance program, TRS-Care. The District’s employees’ contributions
to the System for the years ended August 31, 2014, 2013, and 2012 were approximately $12,080,000,
$11,713,000, and $11,251,000, respectively, which were equal to the required contributions for the
years. The total for required contributions made from federal grants, District contribution for
TRS insurance, new member contributions for the first 90 days of employment, retiree surcharges and
insurance, and from the District for salaries above the Texas statutory minimum teacher salary scale for
the year ended August 31, 2014, was approximately $3,789,000.
Independent Audit
Texas Education Code Section 44.008 requires an annual audit of the books of account, financial
records, and transactions of the District by an independent certified public accountant selected by the
Board of Trustees. The District complied with that requirement, and the independent auditors' report has
been included in this report.
AWARDS AND ACKNOWLEDGEMENTS
GFOA Certificate of Achievement for Excellence
The Government Finance Officers’ Association of the United States and Canada (“GFOA”) awarded its
Certificate of Achievement for Excellence in Financial Reporting to the District for its CAFR for the
fiscal year ended August 31, 2013. This was the sixteenth consecutive year that the District has
achieved this prestigious award. In order to be awarded a Certificate of Achievement, a government
must publish an easily readable and efficiently organized CAFR. This report must satisfy both generally
accepted accounting principles and applicable legal requirements.
A Certificate of Achievement is valid for a period of one year only. We believe that our current CAFR
continues to meet the Certificate of Achievement Program’s requirements and we are submitting it to the
GFOA to determine its eligibility for another certificate.
xii
PRINCIPAL OFFICIALS
BOARD OF TRUSTEES
Pamela Waggoner, President
Aaron Johnson, Vice President
Don Hisle, Secretary
Grace S. Barber-Jordan, M.Ed., Trustee
Russell Bundy, Trustee
Lisa Mallory, Trustee
Will Streit, Trustee
ADMINISTRATIVE STAFF
Bret A. Champion, Ed.D. - Superintendent of Schools
Lucas Janda - Chief Financial Officer
Assistant Superintendents
Monta Akin - Instructional Services
Karie Lynn McSpadden - Human Resources
Malinda Golden - School Improvement
Veronica Sopher - Government/Community Relations
xiv
Leander Independent School District 2013-2014 Organizational Chart
Internal Auditor
Board of Trustees
External Auditor
Superintendent
Legal Services
General Counsel
Staff Auditor
Senior Executive Directors of
School Improvement
Senior Executive Director of
Community Relations
Executive Director of Business Services
Campus Principals
Director of Community Services
Director of Compensation & Benefits
Executive Director of Capital Improvements
Executive Director
Student Support Services
Director of Workforce Managemen
Executive Director of Technology Services
Director of Athletics
Assistant Superintendent for
Human Resources
Business and Operations
Executive Director of Staff Development
Executive Director of Human Resources
Executive Director of Elementary Curriculum
Executive Director of Secondary Curriculum
Instructional Services
Director of Fine Arts
Senior Director of Decision Support
Executive Director of K-12 Programs
Director of State Assessment
Director of Advanced Programs
Elementary/Ques
Director of Client Services
Director of Child Nutrition Services
Director of Advanced Programs
Secondary/College Career Ready
Director Curriculum & Innovation
Director of Custodial Services
Director Guidance & Counseling
Director of Project Management
Executive Director of Support Services
Director of Facilities
Director of Special Education
Director of Technical Operations
Director of Transportation
Director of ELL Services
Director of Materials Management
Director of Risk Management
Director of Career & Technology
Education
xv
xvi
Association of School Business Officials International
The Certificate of Excellence in Financial Reporting Award
is presented to
For Its Comprehensive Annual Financial Report (CAFR)
For the Fiscal Year Ended August 31, 2013
The CAFR has been reviewed and met or exceeded
ASBO International’s Certificate of Excellence standards
Terrie S. Simmons, RSBA, CSBO
President
John D. Musso, CAE, RSBA
Executive Director
xvii
FINANCIAL SECTION
MAXWELL LOCKE & RITTER
LLP
Accountants and Consultants
An Affiliate of CPAmerica International
tel (512) 370 3200 fax (512) 370 3250
www.mlrpc.com
Austin: 401 Congress Avenue, Suite 1100
Austin, TX 78701
Round Rock: 303 East Main Street
Round Rock, TX 78664
INDEPENDENT AUDITORS’ REPORT
The Board of Trustees of
Leander Independent School District:
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, each major
fund, and the aggregate remaining fund information of Leander Independent School District
(the “District”), as of and for the year ended August 31, 2014, and the related notes to the financial
statements, which collectively comprise the District’s basic financial statements as listed in the table of
contents.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this includes
the design, implementation, and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to fraud or
error.
Auditors’ Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We
conducted our audit in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards,
issued by the Comptroller General of the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free from
material misstatement.
Affiliated Company
M L & R W E A LT H M A N A G E M E N T
LLC
“A Registered Investment Advisor”
This firm is not a CPA firm
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial statements. The procedures selected depend on the auditors’ judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or
error. In making those risk assessments, the auditor considers internal control relevant to the entity’s
preparation and fair presentation of the financial statements in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of
the entity’s internal control. Accordingly, we express no such opinion. An audit also includes
evaluating the appropriateness of accounting policies used and the reasonableness of significant
accounting estimates made by management, as well as evaluating the overall presentation of the
financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinions.
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities, each major fund, and the aggregate
remaining fund information of the District as of August 31, 2014, and the respective changes in financial
position and, where applicable, cash flows thereof, and the respective budgetary comparison for the
General Fund and the Food Service Major Special Revenue Fund for the year then ended in accordance
with accounting principles generally accepted in the United States of America.
Correction of Error
As described in Note 19 to the financial statements, the District’s government-wide and fund financial
statements as of and for the year ended August 31, 2013 have been restated to correct a certain
misstatement. Our opinions are not modified with respect to this matter.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s
discussion and analysis on pages 4 through 11 be presented to supplement the basic financial statements.
Such information, although not a part of the basic financial statements, is required by the Governmental
Accounting Standards Board, who considers it to be an essential part of financial reporting for placing
the basic financial statements in an appropriate operational, economic, or historical context. We have
applied certain limited procedures to the required supplementary information in accordance with
auditing standards generally accepted in the United States of America, which consisted of inquiries of
management about the methods of preparing the information and comparing the information for
consistency with management’s responses to our inquiries, the basic financial statements, and other
knowledge we obtained during our audit of the basic financial statements. We do not express an opinion
or provide any assurance on the information because the limited procedures do not provide us with
sufficient evidence to express an opinion or provide any assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the District’s basic financial statements. The combining and individual fund
statements and schedules, other schedules, and the introductory and statistical sections are presented for
purposes of additional analysis and are not a required part of the basic financial statements.
The combining and individual fund statements and schedules and other schedules are the responsibility
of management and were derived from and relate directly to the underlying accounting and other records
used to prepare the basic financial statements. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and certain additional procedures,
including comparing and reconciling such information directly to the underlying accounting and other
records used to prepare the basic financial statements or to the basic financial statements themselves,
and other additional procedures in accordance with auditing standards generally accepted in the United
States of America. In our opinion, the combining and individual fund statements and schedules and
other schedules are fairly stated, in all material respects, in relation to the basic financial statements as a
whole.
The introductory and statistical sections have not been subjected to the auditing procedures applied in
the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any
assurance on it.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated
January 16, 2015 on our consideration of the District’s internal control over financial reporting and on
our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements
and other matters. The purpose of that report is to describe the scope of our testing of internal control
over financial reporting and compliance and the results of that testing, and not to provide an opinion on
internal control over financial reporting or on compliance. That report is an integral part of an audit
performed in accordance with Government Auditing Standards in considering the District’s internal
control over financial reporting and compliance.
Austin, Texas
January 16, 2015
MANAGEMENT’S DISCUSSION AND ANALYSIS
The management of the Leander Independent School District (the “District”), Leander, Texas, presents this narrative and
analysis of financial activities for the fiscal year ending August 31, 2014. Readers are encouraged to consider the information
presented here in conjunction with the additional information furnished in our letter of transmittal, which is included in the
introductory section of the Comprehensive Annual Financial Report (CAFR).
FINANCIAL HIGHLIGHTS
x
The liabilities of the District exceeded assets by $203.3 million.
appreciation bonds accretion payable (current and non-current).
x
District net expense of governmental activities exceeded general revenues by $15.4 million, which includes a charge of
accretion payable of $16.2 million.
x
At fiscal year end, the General Fund fund balance was $107.6 million, or 43.5% of fiscal year 13-14 General Fund
expenditures. Of the $107.6 million, the Board of Trustees (the “Board”) has committed $3.2 million for capital
equipment replacement, $13.6 million for major maintenance repairs, and $783.4 thousand for both land acquisition
and roofing repairs related to hail damage. Inventories, prepaid assets, and encumbrances accounted for $2.3 million
of the fund balance, while $2.7 million has been assigned to the subsequent fiscal year’s adopted budget deficit. Thus,
unassigned fund balance was $85.0 million, or 34.4% of fiscal year 13-14 General Fund expenditures.
x
Currently there are $22.8 million in authorized but unissued bonds from the $559 million November 2007 authorization. This amount includes $419.9 million in capital
OVERVIEW OF FINANCIAL STATEMENTS
This discussion and analysis provides the introduction to the District’s basic
Three components comprise the District’s basic financial statements.
These are:
x
Government-wide financial statements
x
Fund financial statements
x
Notes to the financial statements
Other supplementary information is also included.
Government-wide Financial Statements
The Government-wide financial statements provide long and short-term
information about the District’s financial status.
x
The statement of net position presents information on all of the
District’s assets and deferred outflows of resources and liabilities and
deferred inflows of resources, with the difference reported as net
position. Increases/decreases in net position over time may be an
indicator of the District’s financial position.
x
The statement of activities presents information showing how the
District’s net position changed during the most recent fiscal year. All
changes to net position are reported as soon as the event-giving rise
to the change occurs, regardless of when the related cash flow occurs.
Thus, some revenues and expenses reported in this statement will
result in cash flows at a later date.
4
Figure A-1, Required Components of the
District’s Annual Financial Report
Figure A-2. Major Features of the District’s Government-wide and Fund Financial Statements
Type of Statements
Scope
Required financial
statements
Government-wide
Entire District’s government
(except fiduciary funds)
x Statement of net position
x Statement of activities
Governmental Funds
The activities of the District
that are not proprietary or
fiduciary
x Balance sheet
x Statement of revenues,
expenditures & changes
in fund balances
Proprietary Funds
Activities the District operates
similar to private businesses:
self insurance
x Statement of net position
x Statement of revenues,
expenses and changes in
fund net position
x Statement of cash flows
Fiduciary Funds
Instances in which the
District is the trustee or
agent for someone else’s
resources
x Statement of fiduciary net
position
x Statement of changes in
fiduciary net position
Accounting basis and
measurement focus
Accrual accounting and
economic resources focus
Modified accrual accounting
and current financial
resources focus
Type of asset/liability
information
All assets and liabilities, both
financial and capital, shortterm and long-term
Only assets expected to be
used up and liabilities that
come due during the year or
soon thereafter; no capital
assets included
financial and capital, and
short-term and long-term
short-term and long-term; the
Agency’s funds do not
currently contain capital
assets, although they can
All revenues and expenses
during year, regardless of
when cash is received or paid
Revenues for which cash is
received during or soon after
the end of the year;
expenditures when goods or
services have been received
and payment is due during
the year or soon thereafter
when cash is received or paid
when cash is received or
paid
Type of inflow/outflow
information
The Government-wide financial statements outline functions of the District that are principally supported by property taxes and
intergovernmental revenues (“governmental activities”). Major functions are instruction, student support services, operations
and maintenance of plant, student transportation, and non-instructional support services.
These statements are
on pages 12 - 13.
Fund Financial Statements
Fund financial statements focus on individual components of the District’s operations. A fund is defined as a group of related
accounts used to maintain control over resources that have been segregated for specific activities and objectives. The District
uses fund accounting to ensure and demonstrate compliance with financial accounting requirements. The fund financial
statements provide more detailed information for the most significant funds, not the overall District as a whole.
There are three categories of funds: governmental, proprietary, and fiduciary.
Governmental Funds are used to account for essentially the same functions reported as governmental activities in the
government-wide financial statements. However, unlike the government-wide financial statements, governmental fund
financial statements focus on near-term inflows of spendable resources, as well as the balance of spendable resources
available at the end of the fiscal year. Such information may be useful in evaluating the District’s near-term financing
requirements.
Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to
compare the information presented for governmental funds in the fund financial statements with similar information presented
for governmental activities in the government-wide financial statements. By doing so, the reader may better understand the
long-term impact of the District’s near-term financing decisions. Both the governmental funds balance sheet and the
governmental funds statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate
this comparison between governmental funds and governmental activities. These reconciliations are on pages 14 and 16.
The District maintains 35 governmental funds. Information is presented separately in the governmental funds balance sheet
and in the governmental funds statement of revenues, expenditures, and changes in fund balances for the General, Food
Service, Debt Service, and Major Capital Projects Fund – 2014C Fund. Data from the other 31 governmental funds, classified
as non-major, are combined into a single, aggregated presentation. Individual fund data for each of these non-major funds are
provided in the form of combining statements in the financial report.
The basic governmental funds financial statements can be found on pages 14 - 18 of this report.
5
Proprietary Funds provide the same type of information as the government-wide financial statements, but in more detail.
There are two proprietary fund types. Enterprise Funds are used to report the same functions presented as business type
activities in the government-wide financial statements. The District has no enterprise funds. The second type of proprietary
fund is the Internal Service Fund. Internal service funds are an accounting device used to accumulate and allocate costs
internally amongst the various functions. The District uses the Internal Service Fund to report activities of its self-funded
workers’ compensation program; medical insurance program; property and casualty, covering insurance claim deductibles that
fall below the minimum deductible required by the insurance carrier; and to cover repairs on the District’s equipment. The
basic Proprietary Fund financial statements are on pages 19 - 21 of this report.
Fiduciary Funds are used to account for resources held for the benefit of parties outside the District. Fiduciary Funds are not
reflected in the government-wide financial statements because the resources of such funds are not available to support the
operations of the District. The accrual basis of accounting is used for Fiduciary Funds. The District serves as trustee, or
fiduciary, of the funds and is responsible for ensuring that the funds are used for the purpose intended.
The basic fund fiduciary financial statement is on page 22 of this report.
Notes to the Basic Financial Statements
Notes to the Basic Financial Statements provide additional information that is essential to a complete understanding of the
data provided in the government-wide and fund financial statements. The notes to the basic financial statements are located
on pages 23 - 42 of this report.
Other Information
The combining statements referred to earlier in conjunction with non-major governmental funds are presented immediately
following the notes to the basic financial statements. Combining and individual fund statements and schedules are on pages
43 - 57 of this report.
GOVERNMENT-WIDE FINANCIAL ANALYSIS
Net position - The District’s combined net position was negative $180.1 million at August 31, 2014, due to accounting for
capital bonds accretion payable in the amount of $419.9 million. The largest portion of the District’s assets is composed of
buildings and improvements, construction in progress, land, and furniture and equipment. The District uses these assets to
provide services to its students, thus these assets are not available for future spending. Resources needed to repay the debt
undertaken to furnish the assets must be provided from other sources in the form of future I&S tax levies.
Table A-1
The District’s Net Position
(in millions of dollars)
Governmental
Activities
2014
Current and Other Assets
Capital Assets
Non-Current Assets
$
405.7
967.4
1.0
Percentage
Change
2013
$
227.6
945.9
1.0
78.3%
2.3%
0.0%
Total Assets
Deferred Outflows of Resources
1,374.1
23.2
1,174.5
2.5
17.0%
828.0%
Current Liabilities, as restated
Long term Liabilities
90.8
1,486.6
73.2
1,268.5
24.0%
17.2%
Total Liabilities, as restated
1,577.4
1,341.7
17.6%
Net Position
Net investment in capital assets
Restricted
Unrestricted, as restated
Total Net Position, as restated
94.8
25.9
(300.8)
$
(180.1)
6
$
83.2
23.3
(271.2)
13.9%
11.2%
(10.9%)
(164.7)
(9.4%)
Changes in net position - The District’s total revenues and other items were $359.3 million, representing an increase of
$23.3 million or 6.9% addition over last year. Property taxes were approximately 62% of total revenues. Under the State's
funding formula, property wealth per WADA (weighted average daily attendance) determines the funding eligibility of the
District. Property values have increased 139.62% between 2004 and 2014, resulting in an increased reliance on local property
taxes. Approximately 25% of total revenues came from state aid formula grants. The balance of revenue is charges for
services, operating grants and contributions, and investment earnings. The total cost for all programs and services was
$374.7 million. This was an increase of $19.0 million or 5.4% addition from the previous year. The increase was primarily due
to accretion on the capital appreciation bonds. The instructional and student support services were 58.0% of these costs. The
change in net position was a negative $15.4 million.
Governmental activities - The combined property tax rate for the 2013-14 fiscal year was $1.5119 per $100 of assessed
property value and composed of two elements: “M&O” rate (maintenance and operations), used for general operating
expenses, was $1.04 per $100 of assessed property value; the “I&S” component (interest and sinking) is used for current year
debt payments. The I&S rate was $0.4719 per $100 of assessed property value. The District’s property value increased
approximately 9.39% from tax year 2012 to tax year 2013 (based on Comptroller’s Property Tax Division). The total cost of all
governmental activities this year was $374.7 million. The amount taxpayers paid for those activities through their payment of
property taxes was $223.2 million, or 60%.
Percent of District Expenses by Functional Categories
InstructionandRelated
Services
49%
FacilitiesNon
Capitalized
2%
InterestonLongTerm
Debt
18%
SharedServices,
Contracted
InstructionalServices
1%
Instructionaland
SchoolLeadership
4%
StudentSupport
Services
4%
StudentTransportation
Services
3%
NonStudentSupport&
AncillaryServices
3%
FacilitiesMaintenance
&Operations
7%
GeneralAdministration
2%
FoodServices
4%
7
CoCurr/Extracurricular
3%
Table A-2
Changes in the District’s
Net Position
(in millions of dollars)
Total %
Change
Governmental Activities
2014
2013
Revenues
Program Revenues
Charges for Services
$
Operating Grants and Contributions
11.4
12.3%
33.2
12.8
$
30.1
10.3%
223.2
206.4
8.1%
89.1
87.3
2.1%
0.9
0.7
28.6%
359.2
335.9
6.9%
0.1
0.1
0.0%
359.3
336.0
6.9%
5.4%
General Revenues
Property Taxes
State aid - formula
Investment earnings
Total Revenues
Other items
Total Revenues and other items
Expenses
174.1
165.2
Instructional resources and media services
Instruction
3.8
3.8
0.0%
Curriculum and Staff Development
7.5
7.7
-2.6%
2.1
2.0
5.0%
School Leadership
Instructional Leadership
14.7
14.5
1.4%
Guidance, counseling and evaluation services
10.7
10.5
1.9%
0.9
0.7
28.6%
Health Services
2.0
2.0
0.0%
9.5
9.0
5.6%
Food Services
14.2
13.1
8.4%
Extracurricular Activities
11.3
11.1
1.8%
8.8
8.3
6.0%
27.1
27.1
0.0%
Facilities Maintenance and Operations
1.2
1.3
-7.7%
7.4
8.3
-10.8%
Community Services
Long Term Debt
2.1
2.1
0.0%
68.3
65.0
5.1%
204.3%
Facilities Acquisition and Construction
7.0
2.3
Contracted instructional services between schools
0.1
0.1
0.0%
Payments related to Shared Services and JJAEP
0.5
0.2
150.0%
Other Intergovernmental charges
Total Expenses
Change in Net Position
1.4
1.4
0.0%
374.7
355.7
5.3%
(15.4)
(19.7)
Beginning Net Position, as restated
(164.7)
(147.0)
Ending Net Position
(180.1)
(166.7)
Prior Period Adjustment
$
Ending Net Position, as restated
8
(180.1)
(2.0)
$
(164.7)
FINANCIAL ANALYSIS OF THE DISTRICT’S FUNDS
The District uses fund accounting to ensure and demonstrate compliance with financial and legal requirements.
Governmental Funds
The focus of the District’s governmental funds is to provide information on near term inflows, outflows, and balances of
spendable resources. Such information is useful in assessing the District’s financing requirements. In particular, unassigned
fund balance may serve as a useful measure of the District’s net resources available for spending at the end of the fiscal year.
The financial performance of the District as a whole is reflected in its governmental funds. As the District completed this year,
its governmental funds reported a combined fund balance of $354.3 million. Of this amount, approximately $85.0 million,
or 24.0%, of the total amount constitutes unassigned fund balance in the General Fund, which is available for spending at the
District’s discretion. The remaining fund balance is classified as nonspendable, restricted, committed, or assigned, as follows:
x
$1.5 million nonspendable for inventories, prepaid assets, and other assets
x
$23.8 million restricted for debt service
x
$219.5 million restricted for capital projects funds
x
$1.4 million restricted for various federal grants
x
$29.8 thousand restricted for endowed scholarships
x
$3.2 million committed for capital replacement
x
$783.4 thousand committed for land acquisitions and roof repairs related to hail damage
x
$13.6 million committed for major maintenance
x
$778.4 thousand committed for campus activities
x
$16.1 thousand assigned for various state or locally funded grant initiatives
x
$1.8 million assigned to liquidate purchase orders from the prior period
x
$2.7 million assigned to subsequent year adopted budget deficit
The General Fund is the principal operating fund of the District. Overall, the General Fund Balance experienced an increase
of $10.1 million. The bulk of the operational savings transpired in instructional payroll due to attrition and vacant positions.
The District utilizes Debt Service fund balance strategically to manage the interest and sinking (I&S) tax rate during times of
economic uncertainty. The Debt Service fund balance experienced a net increase of $2.8 million from prior year, attributable
to increased property tax valuation, increased delinquent “rollback” collections, and refunding bond sales authorized by the
Board of Trustees to reduce debt payments. The fund continues to remain in healthy condition according to Board policy,
which established a range of 20 to 30 percent of the following year’s debt payment.
The Food Service fund balance increased $106.0 thousand due to increased local revenues from meal sales, sales of a la
carte items, and fewer students qualifying for free lunches under the National School Breakfast/Lunch Programs. The District
continues to allocate the cost of the program’s portion of utilities (estimated at $350,000) to the Food Service fund, which up
until 2010-11 had been historically appropriated in the General Fund. Prior to 2011-12, the District had not increased the price
of a meal in almost ten years. However, changes in federal regulation resulted in a mandated meal price increase of five
cents. In order to ensure continued compliance with the mandate, five-cent increases will be necessary for six consecutive
years (starting in 2011-12). The District’s food service management company was Southwest Foodservice Excellence.
The Capital Projects 2014C fund balance was created during fiscal year 2013 - 14 as a result of proceeds from bond sales for
construction projects.
9
BUDGETARY HIGHLIGHTS
Consistent with its budget development procedures, the Board appropriates funds for expected enrollment estimates. The
District continues to grow at a rapid pace, having increased in enrollment 24.65% from fiscal 2009-10 to 2013-14. Over the
course of the year, the District revised its budget several times. Actual General Fund expenditures were $17.9 million below
final budget amounts. The most significant variances are attributed to staffing, approval of the District’s Major Maintenance
budget, and capital outlay budget. Staffing is budgeted for full employment through the year, so any vacancies or salary
breakage reduces the total salary funds needed. This staffing variance applies to all functional categories which include
employees. The Board approves the annual Major Maintenance budget after the original General Fund budget is approved,
and after recommendations are made concerning the items on the ten-year plan that will be addressed during the current
school year. The annual contribution to the major maintenance reserve is determined at budget adoption in order to sustain
funding for future major maintenance projects. The amount of this amendment was $3.9 million and affected the final facilities
maintenance and operations budget. Facilities maintenance actual expenditures were $6.1 million below final budget
amounts. A large part of this variance is due to Major Maintenance projects that were budgeted, but not completed and
invoiced in the 2013-14 fiscal year. During May and June 2014, the Board also approved $1.8 million in capital outlay
requests impacting the instruction, transportation, and extracurricular functions. Variances in these functions, similar to Major
Maintenance, are due to requests for equipment that were budgeted, but not received and invoiced in the 2013-14 fiscal year.
Increases to enrollment provide additional state aid, and amendments to the General Fund budget are made to provide
additional resources when needed. The State of Texas contributes to the Teachers’ Retirement System account for
employees. This contribution is called “TRS-On Behalf”, and the District does not include “TRS-On Behalf” payments in its
original General Fund budget, amending the budget at year-end to record this book entry. The final General Fund budget
amendment records this as estimated total value after final payrolls. The final General Fund budget amendment for “TRS On
Behalf” totaled over $10.4 million and largely impacts the instructional function of the budget. All other variances between the
General Fund original budget and final amended budget are due to amending the budget to more closely estimate actual
revenues and expenditures.
Schedules showing the original and final budget amounts compared to the District’s actual financial activity for the General
Fund are provided in this report on page 16.
CAPITAL ASSET AND DEBT ADMINISTRATION
Capital Assets
The District’s investment in capital assets, net of accumulated depreciation, for its governmental activities as of August 31,
2014, amounts to $967.4 million, composed of school buildings, athletic facilities, land, and support facilities such as an
administration building, a transportation center, the technology services building, support services building, buses, copiers,
trucks, certain musical instruments, and computers. This amount is an increase of $21.5 million dollars over the prior year,
reflecting the opening of elementary #24, construction in progress of a new elementary school and a new high school, and the
acquisition of furniture and equipment to outfit them. The General Fund purchased buses and trucks, classroom equipment,
and computers as part of a planned replacement cycle. Total depreciation expense for the year was $20.8 million, charged
proportionately to the various functions/programs of the District. This information is detailed on page 34.
The following schedule presents capital asset balances for governmental activities, net of depreciation, as of August 31, 2014:
Land
Buildings and Improvements
Furniture and Equipment
Construction in Progress
$
173,365,885
764,960,643
14,907,861
14,118,992
TOTAL
$
967,353,381
Debt Administration
At year-end, the District had $1.1 billion in long-term debt outstanding. Principal of $38.1 million and interest of $35.0 million is
due within one year. The District maintains AAA rating on its issues, through the Texas Permanent School Fund (PSF)
guaranty. An underlying rating of AA- is maintained by Fitch IBCA and the Standard and Poor’s (S&P) rating agencies.
Currently outstanding net general obligation debt is 8% of assessed valuation.
long-term debt can be found on pages 35 - 37 of this report.
10
Additional information on the District’s
ECONOMIC FACTORS AND NEXT YEAR’S BUDGET AND RATES
The single biggest factor that influenced the development of the 2014-15 budget was the significant increase in property
values. The District has been on Target Revenue Funding, meaning that the District cannot reach the Minimum Target
Revenue through the State’s share of Tier 1, plus local tax collections at the compressed rate. Target revenue is the district’s
guaranteed yield per Weighted Average Daily Attendance (WADA), based primarily on property wealth per student. The
previous year’s property value factors into the subsequent year’s state aid calculations. The property values in the District
increased approximately 15.43% in the 2014 appraisal year as of November 2014. The significant increase in property value
will move the District from Target Revenue Funding to Formula Funding, which allows the district to retain additional tax
collections. The District is projected to return to Target Revenue Funding in 2015-16, unless property values continue to
significantly increase (13% to 14%)
The District planned for an additional 1,231 students in enrollment (prorated for half-time pre-kindergarten enrollment) while
rd
developing its 2014-15 budget. The 83 Legislature adopted Senate Bill 1 (SB1) in 2013-14, which infused additional money
into the Foundation School Program. This bill increased basic allotment through fiscal year 2014-15, but does not restore the
$22 million state funding cuts suffered by Leander ISD in 2012-13. The District continued with its three-year budget plan, due
to the state’s minimal funding restoration to Leander ISD. The second year of the three-year plan includes the Board
authorized use of $6,000,000 to balance the budget. A General Fund budget of $258,536,369 was adopted on August 28,
2014, of which approximately 87% was for personnel costs. The General Fund budget was adopted with revenue of
$2,709,952 under estimated budget.
SB1 contains a (nonbinding) statement of intent that the Legislature will continue to reduce target revenue in future years, and
ultimately would repeal target revenue effective September 1, 2017. Several lawsuits emerged as a result of the funding
reductions implemented during the 2011-13 biennium, claiming the Texas school finance system is unconstitutional. On
February 4th, 2013, the Court ruled that the system is unconstitutional because it is quantitatively inefficient (lacks equity), is
unsuitable and inadequate, and is a de facto state property tax. The Judge reconsidered evidence after legislation was
passed by the 83rd Legislature that impacted schools. On August 28, 2014, in his second ruling, the Judge found that the
Texas school finance system is unconstitutional, and that it fails to provide schools with sufficient funding to meet the state’s
rising educational standards. This ruling has the potential to change the current funding formula. The 84th Legislative
Session is set to begin January 13, 2015.
REQUESTS FOR INFORMATION
This financial report is designed to provide our citizens, taxpayers, investors, and creditors with a general overview of the
District’s finances, and to demonstrate the District’s accountability for the resources it receives. Requests for further
information about this report may be addressed to the Office of the Chief Financial Officer, Leander ISD, P.O. Box 218,
Leander, TX 78646-0218.
11
BASIC FINANCIAL STATEMENTS
August 31, 2014
Governmental
Activities
ASSETS
Current assets:
Cash and temporary investments
Receivables:
Property taxes - delinquent
Accrued interest
Other receivables
Inventories, at cost
Prepaid assets
$
399,555,005
3,839,668
(706,913)
1,141,978
682,471
253,186
745,240
146,166
Total current assets
Noncurrent assets:
Capital assets (net of accumulated depreciation):
Land
Buildings and improvements
Furniture and equipment
Construction in progress
Restricted cash
Other assets
405,656,801
173,365,885
764,960,643
14,907,861
14,118,992
29,826
1,031,740
Total noncurrent assets
968,414,947
Total assets
$
DEFERRED OUTFLOWS OF RESOURCES
Deferred charges on refundings
1,374,071,748
23,185,658
LIABILITIES
Current liabilities:
Accounts payable
Payroll deductions and withholdings payable
Bond interest payable
Bonds payable
Accretion payable
Unearned revenue
$
Total current liabilities
Noncurrent liabilities:
Bonds payable
Accretion payable
22,821,850
3,126,924
5,131,709
1,342,726
38,139,913
10,482,811
222,210
9,520,674
90,788,817
1,077,136,674
409,446,159
Total noncurrent liabilities
1,486,582,833
Total liabilities
1,577,371,650
NET POSITION
Net investment in capital assets
Restricted for:
Debt service
Food service
Summer food service program
State assessment grants
Endowments:
Expendable
Nonexpendable
Unrestricted
94,800,066
23,443,705
2,402,575
66,089
3,646
3,406
26,420
(300,860,151)
Total net position
$
The notes to the financial statements are an integral part of this statement.
12
(180,114,244)
Statement of Activities
Functions/Programs
Governmental activities:
Instruction
Curriculum and staff development
Instructional leadership
School leadership
Guidance, counseling, and evaluation services
Social work services
Health services
Student transportation
Food services
Extracurricular activities
General administration
Facilities maintenance and operations
Security and monitoring services
Data processing services
Community services
Interest on long-term debt
Other debt service
Facilities acquisition and construction
Payments related to shared services arrangements
Payments related to juvenile justice alternative
education programs
Other intergovernmental charges
Total governmental activities
Expenses
$
$
Net (Expense)
Revenue and
Changes in
Net Position
Governmental
Activities
Program Revenues
Operating
Charges for
Grants and
Services
Contributions
174,123,354
3,773,390
7,511,960
2,085,729
14,663,169
10,730,298
930,017
1,967,970
9,476,330
14,169,857
11,271,878
8,755,481
27,174,653
1,244,285
7,450,414
2,128,074
62,024,481
6,321,608
6,959,693
96,165
271,900
651,249
3,284
8,293,723
864,051
777,310
1,214,230
105,023
873,364
-
20,063,795
299,948
1,089,575
143,024
733,491
862,089
34,730
119,227
342,956
5,138,591
2,784,219
229,973
507,845
14,933
195,656
263,221
71,416
271,900
(153,408,310)
(3,473,442)
(6,419,101)
(1,942,705)
(13,929,678)
(9,868,209)
(895,287)
(1,848,743)
(9,133,374)
(737,543)
(7,623,608)
(7,748,198)
(25,452,578)
(1,124,329)
(7,254,758)
(991,489)
(62,024,481)
(6,321,608)
(6,888,277)
(96,165)
-
193,411
1,419,240
-
-
(193,411)
(1,419,240)
374,743,357
12,782,234
33,166,589
(328,794,534)
General revenues:
Property taxes levied for general purposes
Property taxes levied for debt service
State aid-not restricted to specific programs
Investment earnings
Miscellaneous
$
Total general revenues and other items
Change in net position
Net position—beginning, as restated
Net position—ending
13
153,644,540
69,537,069
89,152,470
907,348
114,361
313,355,788
(15,438,746)
(164,675,498)
$
(180,114,244)
Balance Sheet
Governmental Funds
August 31, 2014
Major Special
Revenue FundFood Service
General
ASSETS
Receivables:
Property taxes - delinquent
Due from other funds
Accrued interest
Other receivables
Inventories, at cost
Prepaid assets
Restricted cash
Other assets
Total assets
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES, AND FUND BALANCES
Liabilities:
Accounts payable
Payroll deductions and withholdings payable
Accrued interest
Due to other funds
Unearned revenue
$
2,641,269
(486,278)
105,680
592,935
356,145
228,565
367,064
146,166
-
1,856,849
96,882
3,800
626
378,176
1,031,740
23,711,192
1,198,399
(220,635)
9,763
325
88,337
-
Nonmajor
Governmental
Funds
Total
Governmental
Funds
176,618,697
56,242,689
200,711
-
929,653
37,278
23,995
29,826
-
387,030,777
3,839,668
(706,913)
1,141,978
597,060
682,471
253,186
745,240
146,166
29,826
1,031,740
$
132,552,896
3,368,073
24,787,381
176,819,408
57,263,441
394,791,199
$
5,271,023
3,126,924
5,002,643
7,522
222,210
9,142,498
440,325
124,012
22,985
378,176
950
9,856
-
10,388,408
-
2,683,949
5,054
573,750
-
18,784,655
3,126,924
5,131,709
9,856
604,257
222,210
9,520,674
22,772,820
965,498
10,806
10,388,408
3,262,753
37,400,285
2,154,991
-
977,764
-
-
3,132,755
367,064
146,166
-
1,031,740
-
-
-
367,064
146,166
1,031,740
-
1,370,835
-
23,798,811
-
166,431,000
-
53,106,614
66,089
3,646
29,826
23,798,811
219,537,614
1,370,835
66,089
3,646
29,826
3,193,770
783,416
13,597,371
-
-
-
-
548,617
229,798
3,193,770
783,416
13,597,371
548,617
229,798
1,798,662
2,709,952
85,028,684
-
-
-
6,636
9,462
-
6,636
9,462
1,798,662
2,709,952
85,028,684
107,625,085
2,402,575
23,798,811
166,431,000
54,000,688
354,258,159
132,552,896
3,368,073
24,787,381
176,819,408
57,263,441
Total liabilities
Deferred inflows of resources Deferred revenue - property taxes
Fund balances:
Nonspendable:
Inventories
Prepaid assets
Other assets
Restricted for:
Debt service
Authorized construction
Food service
Summer food service program
State assessment grants
Endowments
Committed to:
Capital replacement
Land acquisition and hail damage
Major maintenance
Campus activities
Donations
Assigned to:
Advanced placement initiative
State funded programs
Approved purchase orders
Subsequent year's budget deficit
Unassigned
Total fund balances
Total liabilities, deferred inflows of resources
and fund balances
128,601,350
Major Capital
Projects Fund2014C Fund
Debt
Service
$
Amounts reported for governmental activities in the
statement of net position are different because:
Capital assets used in governmental activities are not financial
resources and, therefore, are not reported in the funds.
Other long-term assets are not available to pay for current-period
expenditures and, therefore, are deferred in the funds.
The assets and liabilities of the internal service fund are
included in governmental activities in the statement
of net position.
The following liabilities and deferred outflows of resources are not due and payable
in the current period and ,therefore, are not reported in the funds:
Bonds payable, including premiums
Less: Deferred charges on refundings
Accretion payable
Bond interest payable
Net position of governmental activities
14
967,353,381
3,132,755
8,494,230
(1,115,276,587)
23,185,658
(419,928,970)
(1,332,870)
$
(180,114,244)
Statement of Revenues, Expenditures, and Changes in Fund Balances
Governmental Funds
Major Special
Revenue FundFood Service
General
REVENUES
Local and intermediate sources
State program revenues
Federal program revenues
Total revenues
$
EXPENDITURES
Current:
Instruction
Instructional resources and
media services
School leadership
Guidance, counseling, and
evaluation services
Health services
Food services
Community services
Debt service:
Principal on long-term debt
Other debt service expenditures
Intergovernmental:
Contracted instructional services
between schools
Payments related to shared
services arrangements
Payments related to juvenile justice
alternative education programs
Total expenditures
Excess (deficiency) of revenues
over (under) expenditures
Debt
Service
Major Capital
Projects Fund2014C Fund
Nonmajor
Governmental
Funds
Total
Governmental
Funds
158,651,279
99,630,864
2,871,147
261,153,290
8,409,248
291,514
4,786,220
13,486,982
69,576,315
69,576,315
154,542
154,542
4,370,777
3,535,292
6,769,538
14,675,607
241,162,161
103,457,670
14,426,905
359,046,736
149,760,674
-
-
-
13,346,178
163,106,852
2,979,560
6,709,554
1,990,191
14,179,714
-
-
-
173,547
802,406
49,563
45,943
3,153,107
7,511,960
2,039,754
14,225,657
10,287,976
928,943
1,897,295
10,049,367
14,001
7,313,858
4,810,206
25,255,584
1,134,991
6,229,171
1,951,938
13,380,990
-
-
-
389,212
1,074
23,068
35,370
56,042
2,474,125
2,492
3,331
8,564
635,995
176,136
10,677,188
930,017
1,920,363
10,084,737
13,451,033
9,787,983
4,812,698
25,258,915
1,143,555
6,865,166
2,128,074
-
-
24,538,593
38,089,194
4,252,427
-
1,817,738
21,258,542
251,443
23,693,234
24,538,593
38,089,194
6,321,608
44,951,776
96,165
-
-
-
-
96,165
-
-
-
-
271,900
271,900
193,411
1,419,240
247,201,839
13,380,990
66,880,214
23,076,280
42,439,623
193,411
1,419,240
392,978,946
13,951,451
105,992
2,696,101
(22,921,738)
(27,764,016)
(33,932,210)
4,565
333,715,970
136,691,244
(470,298,784)
112,995
187,518,738
1,834,000
189,352,738
17,140,859
1,770,584
18,911,443
(3,890,390)
204,664,162
333,715,970
140,295,828
(470,298,784)
40,520
204,527,306
OTHER FINANCING
SOURCES (USES)
Transfers out
Proceeds from sale of bonds
Proceeds from refunding bonds
Premium on sale of bonds
Payments to refunded bond escrow agent
Proceeds from sale of property
Total other financing sources (uses)
(3,890,390)
40,520
(3,849,870)
Net change in fund balances
Fund balances--beginning, as restated
10,101,581
97,523,504
105,992
2,296,583
2,809,096
20,989,715
166,431,000
-
(8,852,573)
62,853,261
170,595,096
183,663,063
107,625,085
2,402,575
23,798,811
166,431,000
54,000,688
354,258,159
Fund balances--ending
$
-
15
Reconciliation of the Statement of Revenues,
Expenditures, and Changes in Fund Balances
of Governmental Funds to the Statement of Activities
Net change in fund balances-total governmental funds
$
170,595,096
Amounts reported for governmental activities in the statement of activities are
different because:
Governmental funds report capital outlays as expenditures.
However, in the statement of activities, the cost of those assets is allocated
over their estimated useful lives as depreciation expense.
Capital outlay, exclusive of non-capitalized items
Depreciation expense
Disposal of capital assets
42,325,049
(20,849,507)
(6,207)
Revenues in the statement of activities that do not provide current financial
resources are not reported as revenues in the funds.
Change in deferred revenue - property taxes
257,875
Bond proceeds provide current financial resources to governmental funds, but
issuing debt increases long-term liabilities in the statement of net position.
Repayment of bond principal is an expenditure in the governmental funds,
but the repayment reduces long-term liabilities in the statement of net position.
Bond proceeds, including premiums
Repayment of bond principal
(678,675,960)
24,538,593
470,298,784
Some expenses reported in the statement of activities do not require the use
of current financial resources and, therefore, are not reported as
expenditures in governmental funds.
Change in accretion payable
Accretion payable included in:
Bond premiums
Change in bond interest payable
Amortization of bond premiums and discounts
Amortization of deferred charges on refundings
(40,005,541)
128,485,163
(104,638,819)
(370,252)
2,793,947
(10,199,785)
The internal service fund is used by management to charge the costs of
insurance to individual funds. The net revenue of the internal
service fund is reported with governmental activities.
Change in net position of governmental activities
16
12,818
$
(15,438,746)
General Fund
Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual
Budgeted Amounts
Original
Final
REVENUES
Actual
Amounts
Variance with
Final Budget
$ 149,083,766
86,879,631
1,436,000
158,904,166
99,946,513
2,913,741
158,651,279
99,630,864
2,871,147
(252,887)
(315,649)
(42,594)
237,399,397
261,764,420
261,153,290
(611,130)
149,778,970
2,877,270
6,806,374
1,883,418
14,043,286
10,155,407
787,564
1,955,574
9,527,127
7,297,412
4,985,456
25,224,214
1,362,893
7,306,113
1,672,964
156,915,807
3,078,957
7,271,564
2,084,795
14,423,360
10,519,903
977,660
2,010,169
10,581,028
16,000
7,503,180
5,158,320
31,312,634
1,462,447
7,789,307
2,169,177
149,760,674
2,979,560
6,709,554
1,990,191
14,179,714
10,287,976
928,943
1,897,295
10,049,367
14,001
7,313,858
4,810,206
25,255,584
1,134,991
6,229,171
1,951,938
7,155,133
99,397
562,010
94,604
243,646
231,927
48,717
112,874
531,661
1,999
189,322
348,114
6,057,050
327,456
1,560,136
217,239
-
125,000
96,165
28,835
330,625
1,404,730
205,625
1,419,240
193,411
1,419,240
12,214
-
247,399,397
265,024,173
247,201,839
17,822,334
(3,259,753)
13,951,451
17,211,204
Total revenues
EXPENDITURES
Current:
Instruction
School leadership
Health services
Food services
Community services
Intergovernmental:
Payments related to juvenile justice alternative
education programs
Total expenditures
(10,000,000)
OTHER FINANCING SOURCES (USES)
Proceeds from sale of property
Transfers out
15,000
-
30,000
(3,890,390)
40,520
(3,890,390)
10,520
-
Total other financing sources (uses)
15,000
(3,860,390)
(3,849,870)
10,520
(9,985,000)
97,523,504
(7,120,143)
97,523,504
10,101,581
97,523,504
17,221,724
-
87,538,504
90,403,361
107,625,085
17,221,724
Net change in fund balance
Fund balance--beginning, as restated
Fund balance--ending
$
17
Major Special Revenue Fund - Food Service
Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual
Budgeted Amounts
Original
Final
REVENUES
$
Total revenues
EXPENDITURES
CurrentFood services
Fund balance--ending
$
Variance with
Final Budget
8,425,387
77,000
5,105,142
8,244,387
307,800
5,116,923
8,409,248
291,514
4,786,220
164,861
(16,286)
(330,703)
13,607,529
13,669,110
13,486,982
(182,128)
13,253,974
14,502,255
13,380,990
1,121,265
105,992
939,137
353,555
Fund balance--beginning
Actual
Amounts
(833,145)
2,296,583
2,296,583
2,296,583
-
2,650,138
1,463,438
2,402,575
939,137
18
Proprietary Funds
August 31, 2014
Governmental
ActivitiesInternal
Service Funds
ASSETS
Current assets:
Due from other fund
$
Total assets
12,524,228
7,197
12,531,425
LIABILITIES
Current liabilitiesAccounts payable
4,037,195
Total liabilities
4,037,195
NET POSITION
Unrestricted
8,494,230
Total net position
$
19
8,494,230
Statement of Revenues, Expenses, and Changes in Fund Net Position
Proprietary Funds
Governmental
ActivitiesInternal
Service Funds
Operating revenues:
Charges for services
Insurance recovery
$
Total operating revenues
19,273,852
14,707
19,288,559
Operating expenses:
Instruction
Health services
Food services
10,592
120,720
57,606
200
4,775
22,975,214
7,295
Total operating expenses
23,176,402
Operating loss
(3,887,843)
Nonoperating revenuesInterest income
10,271
Total nonoperating revenues
10,271
Loss before transfers
(3,877,572)
Transfers in
3,890,390
Total net position--beginning
12,818
8,481,412
Total net position--ending
$
20
8,494,230
Statement of Cash Flows
Proprietary Funds
Governmental
ActivitiesInternal
Service Funds
CASH FLOWS FROM OPERATING ACTIVITIES:
Receipts from interfund services provided
Receipts from insurance recovery
Payments to suppliers
$
Net cash used in operating activities
19,471,418
14,707
(22,985,975)
(3,499,850)
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIESTransfer from other fund
3,890,390
CASH FLOWS FROM INVESTING ACTIVITIESInterest received
10,271
Net increase in cash and cash equivalents
400,811
Cash and cash equivalents--beginning of the year
12,123,417
Cash and cash equivalents--end of the year
Reconciliation of operating loss to net cash
used in operating activities:
Operating loss
Adjustments to reconcile operating loss to net cash
used in operating activities:
Change in assets and liabilities:
Decrease in due from other fund
Decrease in other receivables
Increase in accounts payable
Net cash used in operating activities
$
12,524,228
$
(3,887,843)
81,771
115,795
190,427
$
21
(3,499,850)
Statement of Fiduciary Net Position
Agency Fund
August 31, 2014
ASSETS
$
897,753
Total assets
$
897,753
LIABILITIES
Due to student groups
$
897,753
$
897,753
Total liabilities
22
NOTES TO THE
BASIC FINANCIAL STATEMENTS
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED AUGUST 31, 2014
1.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Financial Reporting Entity
This report includes those activities, organizations and functions which are related to the Leander
Independent School District (the “District”) and which are controlled by or dependent upon the
District’s governing body, the Board of Trustees (the “Board”). The Board, a seven member
group, is the level of government which has governance responsibilities over all activities related
to public elementary and secondary school education within the jurisdiction of the District. Since
the District receives funding from local, state and federal government sources, it must comply with
the requirements of the entities providing those funds. However, the District is not included in any
other governmental “reporting entity” as defined by Statement No. 14 of the Governmental
Accounting Standards Board (“GASB”), since Board members are elected by the public and have
decision making authority. There are no component units included within the reporting entity.
The accounting policies of the District comply with the rules prescribed by the Texas Education
Agency’s (“TEA”) Financial Accountability System Resource Guide. These accounting policies
conform to generally accepted accounting principles applicable to state and local governments.
Government-wide and Fund Financial Statements
The government-wide financial statements (i.e. the statement of net position and the statement of
activities) report information on all of the nonfiduciary activities of the District. The effect of
interfund activity has been removed from these statements; however, interfund services provided
and used are not eliminated in the process of consolidation. Governmental activities, which are
supported by taxes and intergovernmental revenues, are reported separately from business-type
activities, which rely to a significant extent on fees and charges for support. The District has no
business-type activities.
The statement of activities demonstrates the degree to which the direct expenses of a given
function are offset by program revenues. Direct expenses are those that are clearly identifiable
with a specific function. Program revenues include 1) charges to customers or applicants who
purchase, use, or directly benefit from goods, services, or privileges provided by a given function
and 2) grants and contributions that are restricted to meeting the operational or capital
requirements of a particular function. Taxes and other items not properly included among program
revenues are reported instead as general revenues.
Separate financial statements are provided for governmental funds, proprietary funds, and
fiduciary funds, even though the latter are excluded from the government-wide financial
statements. Major individual governmental funds are reported as separate columns in the fund
23
Measurement Focus, Basis of Accounting, and Financial Statement Presentation
The government-wide financial statements are reported using the economic resources
measurement focus and the accrual basis of accounting, as are the proprietary and fiduciary fund
financial statements. Revenues are recorded when earned and expenses are recorded when a
liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized
as revenues in the year for which they are levied. Grants and similar items are recognized as
revenue as soon as all eligibility requirements imposed by the provider have been met. Amounts
reported as program revenues include 1) charges to customers or applicants for goods, services, or
privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions.
Internally dedicated resources are reported as general revenues rather than as program revenues.
Likewise, general revenues include all taxes. As a general rule, the effect of interfund activity has
been eliminated from the government-wide financial statements.
Governmental fund financial statements are reported using the current financial resources
measurement focus and the modified accrual basis of accounting. Revenues are recognized as
soon as they are both measurable and available. Revenues are considered to be available when
they are collectible within the current period or soon enough thereafter to pay liabilities of the
current period. For this purpose, the government considers revenues to be available if they are
collected within sixty days of the end of the current fiscal period. Expenditures generally are
recorded when a liability is incurred, as under accrual accounting. However, debt service
expenditures are recorded only when payment is due.
Major revenue sources considered susceptible to accrual include state and federal program
revenues and interest income. No accrual for property taxes collected within sixty days of year
end has been made as such amounts are deemed immaterial; delinquent property taxes at year end
are reported as deferred inflows of resources.
The District reports the following major governmental funds:
The General Fund includes financial resources used for general operations. It is a
budgeted fund, and any unassigned fund balances are considered resources available for
current operations.
The Food Service Fund is a major special revenue fund. It is a budgeted fund and is
used to account for programs using federal reimbursement revenues originating from the
United States Department of Agriculture.
The Debt Service Fund includes debt service taxes and other revenues collected to retire
bond principal and to pay interest due. It is a budgeted fund.
The 2014C Fund is a major capital projects fund that includes the proceeds from sales of
bonds and other revenues for the construction of a high school and an elementary
school, for high school science labs, for a satellite transportation facility, for HVAC
renovations at one high school, two middle schools, and two elementary campuses, for
road infrastructure, campus security, elementary furnishings, and to pay the cost of
issuance of the bonds.
24
Additionally, the District reports the following fund types:
Special Revenue Funds are governmental funds which include resources restricted,
committed, or assigned for specific purposes by a grantor/donor or the Board. Federally
financed programs where unused balances are returned to the grantor at the close of
specified project periods are accounted for in these funds. The District uses project
accounting to maintain integrity for the various sources of funds.
The Capital Projects Funds include the proceeds from sales of bonds and other revenues
to be used for authorized construction and other capital asset acquisitions.
The Permanent Fund is a governmental fund and is used to account for resources that
are legally restricted to the extent that only earnings, and not principal, may be used to
pay scholarships.
The Internal Service Funds are proprietary funds and are used to account for the
District’s workers compensation self-insurance fund, property and casualty deductibles,
health self-insurance fund, and repairs fund.
The Agency Fund is a fiduciary fund and is used to account for student activity accounts
(student council, National Honor Society, chess club). This fund has no equity, assets
are equal to liabilities, and it does not include revenues and expenses for general
operations of the District.
Proprietary funds distinguish operating revenues and expenses from nonoperating items.
Operating revenues and expenses generally result from providing services and producing and
delivering goods in connection with a proprietary fund’s principal ongoing operations. The
principal operating revenues of the District’s internal service funds are interfund charges for
workers compensation and health insurance. Operating expenses include administrative expenses.
All revenues and expenses not meeting this definition are reported as nonoperating revenues and
expenses.
When both restricted and unrestricted resources are available for use, it is the District’s policy to
use restricted resources first, then unrestricted resources as they are needed.
Budgetary Information
Budgets are prepared annually for the General Fund, Debt Service Fund, and Food Service Fund
on the modified accrual basis, which is consistent with generally accepted accounting principles.
A formal budget is prepared by August 20 and is adopted by the Board at a public meeting after
ten days’ public notice of the meeting has been given. The legal level of control for budgeted
expenditures is the function level within the budgeted funds. Amendments to the budget are
required prior to expending amounts greater than the budgeted amounts at the function level.
Budgets are controlled at the departmental or campus level, the same level at which responsibility
for operations is assigned. The budget was amended by the Board as needed throughout the year.
Encumbrances for goods or purchased services are documented by purchase orders or contracts.
Under Texas law, appropriations lapse at August 31, and encumbrances outstanding at that time
are to be either canceled or provided for in the subsequent year’s budget. Encumbrances
outstanding of $1,798,662 at August 31, 2014 were provided for in the subsequent year’s budget
and are included in assigned fund balance in the General Fund at year-end.
25
Assets, Deferred Outflows of Resources, Liabilities, Deferred Inflows of Resources, and Net
Assets or Equity
Investments - Temporary investments throughout the year consisted of investments in external
investment pools and municipal bonds. The District is entitled to invest any and all of its funds in
certificates of deposit, direct debt securities of the United States of America or the State of Texas,
certain Federal agency securities and other types of municipal bonds, fully collateralized
repurchase agreements, commercial paper and local government investment pools. The District’s
investment policies and types of investments are governed by Section 2256 of the Government
Code (“Public Funds Investment Act”). The District’s management believes that it complied with
the requirements of the Public Funds Investment Act and the District’s investment policies. The
District accrues interest on temporary investments based on the terms and effective interest rates of
the specific investments. The District’s investments at August 31, 2014 were valued at fair value.
Capital Assets - Capital assets, which include land, buildings and improvements, construction in
progress, and furniture and equipment, are reported in the governmental activities column in the
government-wide financial statements. The District has no infrastructure assets. Capital assets are
defined by the District as assets with an initial, individual cost of at least $5,000. Such assets are
recorded at historical cost if purchased or estimated fair value at the date of donation, if donated.
The costs of normal maintenance and repairs that do not add to the value of the assets or materially
extend assets’ lives are not capitalized. Capital assets (other than land and construction in
progress) are depreciated using the straight line method over the following estimated useful lives:
buildings and improvements - 15 to 50 years, furniture and equipment - 5 to 15 years.
Inventories - Inventories in the General Fund consist of expendable supplies held for consumption.
Inventories are charged to expenditures when consumed. Supply inventory is recorded at cost
using the FIFO method.
Federal food commodities inventory is stated at fair value and at year-end is recorded as unearned
revenue. Revenue is recognized at fair value when commodities are distributed to the schools.
Prepaid and Other Assets - Certain payments to vendors reflect costs applicable to future
accounting periods and are recorded as prepaid or other assets in both the government-wide and
fund financial statements depending on whether the costs will be applicable in the subsequent
fiscal year or beyond. Prepaid and other assets are charged to expenditures when consumed.
Ad Valorem Property Taxes - Delinquent taxes are prorated between maintenance and debt service
based on rates adopted for the year of the levy. Allowances for uncollectibles within the General
and Debt Service Funds are based upon historical experience in collecting property taxes.
Uncollectible personal property taxes are periodically reviewed and written off, but the District is
prohibited from writing off real property taxes without specific statutory authority from the Texas
Legislature.
Accumulated Sick Leave Liability - The State of Texas (the “State”) has created a minimum sick
leave program consisting of five days of sick leave per year with no limit on accumulation and
transferability among districts for every person regularly employed in Texas public schools. Each
district’s local board is required to establish a sick leave plan. Local school districts may provide
additional sick leave beyond the State minimum. The District’s policy is not to provide
reimbursement upon termination of employment with the District. Accordingly, no liability for
accrued compensated absences has been established by the District.
26
Arbitrage - The Federal Tax Reform Act of 1986 requires issuers of tax-exempt debt to make
payments to the United States Treasury of investment income received at yields that exceed the
issuer’s tax-exempt borrowing rates. The U.S. Treasury requires payment for each issue every five
years. The estimated liability is updated annually for any tax-exempt issuances or changes in
yields until such time payment of the calculated liability is due. At August 31, 2014, the District
had no liability for arbitrage.
Fund Equity - The District complies with GASB Statement No. 54, Fund Balance Reporting and
Governmental Fund Type Definitions, which establishes fund balance classifications that comprise
a hierarchy based primarily on the extent to which a government is bound to observe constraints
imposed upon the use of the resources reported in governmental funds. See Note 9 for additional
information on those fund balance classifications.
Statement of Cash Flows - For purposes of the statement of cash flows, the District considers all
liquid investments (including external investment pools) with original maturities of 90 days or less
to be cash equivalents.
Deferred Outflows and Inflows of Resources - The District complies with GASB Statement
No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources,
and Net Position, which provides guidance for reporting the financial statement elements of
deferred outflows of resources, which represent the consumption of the District’s net position that
is applicable to a future reporting period, and deferred inflows of resources, which represent the
District’s acquisition of net position applicable to a future reporting period.
The District complies with GASB Statement No. 65, Items Previously Reported as Assets and
Liabilities, which establishes accounting and financial reporting standards that reclassify, as
deferred outflows of resources or deferred inflows of resources, certain items that were previously
reported as assets and liabilities and recognizes, as outflows of resources or inflows of resources,
certain items that were previously reported as assets and liabilities. See Note 7 for additional
information on deferred outflows of resources.
Recently Issued Accounting Pronouncements
In June 2012, the GASB issued GASB Statement No. 68, Accounting and Financial Reporting for
Pensions - an Amendment of GASB Statement No. 27, effective for fiscal years beginning after
June 15, 2014. The objective of GASB Statement No. 68 is to improve accounting and financial
reporting for pensions that are provided to the employees of state and local governmental
employers through pension plans that are administered through certain trusts. GASB Statement
No. 68 establishes standards for measuring and recognizing liabilities, deferred outflows of
resources and deferred inflows of resources, and expense/expenditures. GASB Statement No. 68
also identifies the methods and assumptions that should be used to project benefit payments,
discount projected benefit payments to their actuarial present value, and attribute that present value
to periods of employee service. In addition, GASB Statement No. 68 addresses the recognition
and disclosure requirements for employers with liabilities (payables) to a defined benefit pension
plan and for employers whose employees are provided with defined contribution pensions.
Management is still evaluating the effects that the full implementation of GASB Statement No. 68
will have on its financial statements for the year ended August 31, 2015.
27
In November 2013, the GASB issued GASB Statement No. 71, Pension Transition for
Contributions Made Subsequent to the Measurement Date - an Amendment of GASB Statement
No. 68, effective for fiscal years beginning after June 15, 2014. The objective of GASB Statement
No. 71 is to address an issue regarding application of the transition provisions of GASB Statement
No. 68 related to amounts associated with contributions made by a state or local government
employer or nonemployer contributing entity to a defined benefit pension plan after the
measurement date of the government’s beginning net pension liability. GASB Statement No. 71
requires that, at the time of transition to GASB Statement No. 68, a government recognize
beginning deferred outflows of resources for its pension contributions, if any, made subsequent to
the measurement date of the beginning net pension liability. Management is still evaluating the
effects that the full implementation of GASB Statement No. 71 will have on its financial
statements for the year ended August 31, 2015.
2.
DEPOSITS, SECURITIES AND INVESTMENTS
The District’s funds are required to be deposited and invested under the terms of a depository
contract pursuant to the School Depository Act. The depository bank deposits for safekeeping and
trust with the District’s agent approved pledged securities in an amount sufficient to protect
District funds on a day-to-day basis during the period of the contract. The pledge of approved
securities is waived only to the extent of the dollar amount of Federal Deposit Insurance
Corporation (“FDIC”) insurance. Therefore, the District is not exposed to custodial credit risk.
Under the depository contract, the District, at its own discretion, may invest funds in time deposits
and certificates of deposit provided by the depository bank at interest rates approximating United
States Treasury Bill rates.
At August 31, 2014, the carrying amount of the District’s deposits was $38,264,469, and the bank
balance was $37,812,852. The District’s deposits with financial institutions at August 31, 2014
and during the year ended August 31, 2014 were entirely covered by FDIC insurance or by
pledged collateral held by the District’s agent bank in the District’s name. The deposits were
collateralized in accordance with Texas law and the TEA maintains copies of all safekeeping
receipts in the name of the District.
In addition, the following is disclosed regarding coverage of combined balances on the date of
highest deposit:
a) Name of depository bank: JP Morgan Chase and Wells Fargo
b) Amount of bond and/or security pledged as of the date of the highest combined
balance on deposit was $99,249,421.
c) Largest cash, savings and time deposit combined account balance amounted to
$85,514,194 and occurred during the month of November 2013.
d) Total amount of FDIC coverage at the time of highest combined balance was
$500,000.
Statutes authorize the District to invest in obligations of the U.S. Treasury or the State of Texas,
certain U.S. agencies, certificates of deposit, money market savings accounts, certain municipal
securities, repurchase agreements, common trust funds and other investments specifically allowed
by Chapter 2256 Public Funds Investment Act and Chapter 2257 Collateral for Public Funds of the
Government Code.
28
Investments held at August 31, 2014 consisted of the following:
Type
Local Governmental
Investment Pools:
TexPool
TexStar
LOGIC
Lone Star
FHLMC
Municipal Bonds
Total
Fair Value
$
439,069
508,229
15,599,354
151,253,049
10,000,000
184,388,588
Weighted
Average
Maturity
(Days)
Standard &
Poor’s Rating
1
1
1
1
717
217
AAAm
AAAm
AAAm
AAAm
AA+
A/SP-1+
$ 362,188,289
The District had investments in four external local government investment pools at August 31,
2014. The Texas Local Governmental Investment Pool (“TexPool”), Texas Short-Term Asset
Reserve (“TexStar”), Lone Star Investment Pool (“Lone Star”), and Local Government Investment
Cooperative (“LOGIC”). Although TexPool, TexStar, Lone Star, and LOGIC are not registered
with the SEC as investment companies, they operate in a manner consistent with the SEC’s
Rule 2a7 of the Investment Company Act of 1940. These investments are stated at fair value
which is the same as the value of the pool shares.
TexPool is overseen by the Texas State Comptroller of Public Accounts, who is the sole officer,
director and shareholder of the Texas Treasury Safekeeping Trust Company which is authorized to
operate TexPool. TexPool also has an advisory board to advise on TexPool’s investment policy;
this board is made up equally of participants and nonparticipants who do not have a business
relationship with TexPool. Federated Investors manage daily operations of TexPool under a
contract with the Comptroller and is the investment manager for the pool. TexPool’s investment
policy stipulates that it must invest in accordance with the Public Funds Investment Act.
TexStar is administered by First Southwest Company and JPMorgan Chase. TexStar is overseen
by a five member governing board made up of three participants and one of each of the program’s
professional administrators. The responsibility of the board includes the ability to influence
operations, designation of management and accountability for fiscal matters. In addition, TexStar
has a Participant Advisory Board which provides input and feedback on the operations and
direction of the program and Standard and Poor’s reviews the pool on a weekly basis to ensure the
pool’s compliance with its rating requirements. TexStar’s investment policy stipulates that it must
invest in accordance with the Public Funds Investment Act.
LOGIC is administered by First Southwest Asset Management, Inc. and JPMorgan Chase. LOGIC
is overseen by a six member governing board. The pool received a rating of AAA by Fitch IBCA
and the investment program is tailored to the investment needs of local governments within the
State of Texas. The pool is in full compliance with the Texas Public Funds Investment Act.
29
Lone Star is administered by the Texas Association of School Boards, Inc. and First Public, LLC.
Lone Star is overseen by an eleven member governing board, all of whom are participants in the
Lone Star pool. The board meets quarterly to review operations, make any revisions to the
investment policy, review financial activity and approve contractor agreements. Lone Star also
has an advisory board consisting of participants and nonparticipants. RBC Dain Rauscher, Inc. is
an independent consultant for Lone Star that reviews daily operations, analyzes all investment
transactions for compliance with the Public Funds Investment Act, and performs monitoring
activities. The Bank of New York provides custody and valuation services for Lone Star.
American Beacon Advisors and Standish Mellon provide other investment management services.
Lone Star’s investment policy stipulates that it must invest in accordance with the Public Funds
Investment Act.
The District invests excess funds in municipal bonds and mortgage backed securities which are
registered with the SEC.
Credit Risk
State law and the District’s investment policy restrict time and demand deposits to those fully
collateralized or FDIC insured from eligible depositories (banks and savings banks) doing business
in Texas. By policy, certificates of deposit are limited to maturities under one (1) year and are
further collateralized to 102% with pledged securities (with 110% margin on mortgage backed
securities) with all collateral held by an independent custodian. The bank is contractually liable
for monitoring and maintaining the collateral margins.
State law and the District’s investment policy limits repurchase agreements to Texas banks and
primary dealers. State law and the investment policy require a defined termination date, an
industry standard, written master repurchase agreement, independent safekeeping of collateral, and
a 102% margin on collateral. Fully collateralized flex repurchase agreements are restricted by
policy to the use in bond funds and are restricted to a maximum maturity of two (2) years.
Commercial paper is restricted by State law and the District’s investment policy to 270 days and
must be rated A1/P1 by two nationally recognized rating agencies (“NRSRO”) or one NRSRO and
a letter of credit from a U.S. bank.
Bankers’ acceptances are restricted by State law and the District’s investment policy to a maturity
of 270 days with full liquidation at maturity. The security must be eligible for borrowing at the
Federal Reserve Bank and be rated not less than A1/P1 by two NRSROs or one NRSRO and a
letter of credit from a U.S. bank.
The State law (2256.015) and the District’s investment policy restrict guaranteed investment
contracts (“GIC”) to bond fund proceeds and require that it have a defined termination date not
longer than five years and full collateralization equal to the amount of the GIC. Collateral must be
held by an independent third party institution. The District’s Board must specifically authorize
each GIC and the GIC must be competitively bid.
Constant dollar, local government investment pools, as defined by State law (2256.016) and
approved by the District’s investment policy are authorized. By State law all local government
pools are rated AAA or equivalent by at least one NRSRO.
As of August 31, 2014, the District’s investments consisted of the following: funds invested in
local government investment pools represented 46%, municipal bonds represented 51%, and other
securities represented 3%.
30
Concentration of Credit Risk
The District’s adopted investment policy requires diversification on all authorized investment
types which are monitored on at least a monthly basis. Concentration of credit risk is the risk of
loss attributable to the magnitude of investments in a single issuer. Information regarding
investments in any one issuer that represents five percent or more of the District’s total
investments must be disclosed under GASB Statement No. 40, excluding investments issued or
explicitly guaranteed by the U.S. government. At August 31, 2014, the District’s investments
which require disclosure were as follows:
Issuer
Fair Value
Percentage of
Portfolio
Municipal Bonds - Nassau County, NY GO-BAN
Municipal Bonds - Wichita, KS GO-BAN
$ 21,980,677
20,014,257
6%
6%
Interest Rate Risk
In order to limit interest and market rate risk from changes in interest rates, the District’s adopted
investment policy sets a maximum maturity of one (1) year although the Board may authorize
longer investments within State law limitations. The District’s investment policy establishes a
maximum weighted average maturity of 180 days. Obligations of, or guaranteed by, governmental
entities may have maturities that extend beyond one year, but not over two years, for investments
of bond proceeds.
As of August 31, 2014, the portfolio contained no holding with a stated maturity beyond one year
that was not guaranteed by or an obligation of a governmental entity and no structured notes or
other structures presenting any interest rate risk.
Custodial Credit Risk
To control custody risk, State law requires collateral for all time and demand deposits and
repurchase agreements with securities transferred only on a delivery versus payment basis and held
by an independent party approved by the District and held in the District’s name. The custodian is
required to provide original safekeeping receipts and monthly reporting of positions and position
descriptions including market value. Repurchase agreements and deposits must be collateralized
to 102% (with 110% on mortgaged-backed securities) and transactions are required to be executed
under a written agreement.
As of August 31, 2014, the portfolio contained no certificates of deposit.
3.
APPRAISAL DISTRICT
The Texas Legislature in 1979 adopted a comprehensive Property Tax Code (the “Code”) which
established a county-wide appraisal district and an appraisal review board in each county in the
State. The Williamson County Central Appraisal District (the “Appraisal District”) is responsible
for the recording and appraisal of all property in the District. Under the Code, the Board sets the
tax rates on property and the County Tax Assessor/Collector provides tax collection services. The
Appraisal District is required under the Code to assess property at 100% of its appraised value.
Further, real property must be reappraised at least every three years. Under certain circumstances,
taxpayers and taxing units, including the District, may challenge orders of the Appraisal Review
Board through various appeals and, if necessary, legal action.
31
Property taxes are levied as of October 1 in conformity with Subtitle E, Texas Property Tax Code.
Taxes are due on receipt of the tax bill and are delinquent if not paid before February 1 of the year
following the year in which imposed. On January 1 of each year, a tax lien attaches to property to
secure the payment of all taxes, and penalties and interest that are ultimately imposed. The
assessed value at January 1, 2013, upon which the October 2013 levy was based, was
$14,007,122,131. The District levied taxes based on a combined tax rate of $1.5119 per $100 of
assessed valuation for local maintenance (general governmental services) and debt service.
In May 1993, the Texas Legislature passed Senate Bill 7. Senate Bill 7 significantly changed
certain aspects of the school finance system relative to accountability, teacher appraisal, career
ladder, funding allotments, district local share, distribution of Foundation School Funds, tax
limitations and rollback tax provisions. Funding equalization for school districts is a major
component of the bill. Districts with wealth per student in excess of $319,500 are required to take
action to bring their wealth down to the equalized State level. Each year, the TEA notifies school
districts in which property wealth per Weighted Average Daily Attendance (“WADA”) meets or
exceeds $319,500. However, the final determination of whether a school district will be required
to make recapture payments is based on the district’s tax effort and the extent to which the
district’s wealth per WADA exceeds the first equalized wealth level of $495,000. The District was
above the equalized wealth level for the 2013-2014 fiscal year.
4.
DUE FROM OTHER GOVERNMENTS
The District participates in a variety of federal and state programs from which it receives grants to
partially or fully fund certain activities. The District also receives entitlements from the State
through the School Foundation and Per Capita Programs. In addition, the District has entered
interlocal agreements with local governments in which the District is to be reimbursed for certain
costs. These amounts are reported in the basic financial statements as Due from Other
Governments and are summarized below as of August 31, 2014.
General Fund
Food Service
Fund
Debt Service
Fund
Nonmajor
Governmental
Funds
Federal and state grants
Local agreements
$
84,027
21,653
96,882
-
9,763
929,653
-
Total
$
105,680
96,882
9,763
929,653
32
5.
INTERFUND RECEIVABLES, PAYABLES AND TRANSFERS
During the course of operations, numerous transactions occur between individual funds for goods
provided or services rendered. These receivables and payables are lending/borrowing
arrangements classified as “due from other funds” or “due to other funds.” The composition of
interfund balances as of August 31, 2014, is as follows:
Receivable Fund
General Fund
Payable Fund
Nonmajor Governmental Funds
Food Service Fund
Amount
$
Total General Fund
569,950
22,985
592,935
Food Service Fund
Debt Service Fund
General Fund
325
Proprietary Funds
General Fund
7,197
Total
3,800
$
604,257
Payables to the General Fund, Food Service Fund, Nonmajor Governmental Funds and Proprietary
Funds consist of accounts payable and payroll transfers. Payables to the Debt Service Fund consist
of tax revenue collections. During the year, the General Fund transferred $3,890,390 to the
Proprietary Funds to supplement operations.
33
6.
CAPITAL ASSETS
Capital asset activity for the year ended August 31, 2014 was as follows:
Beginning
Balance
Capital assets, not
being depreciated:
Land
Construction in progress
Total capital assets,
not being depreciated
Capital assets, being
depreciated:
Buildings and
improvements
Total capital assets
being depreciated
Less accumulated
depreciation for:
Buildings and
improvements
Total accumulated
depreciation
Total capital assets, being
depreciated, net
Governmental activities
capital assets, net
Ending
Balance
Increases
Decreases
$ 171,474,050
24,141,119
1,891,835
11,589,476
(21,611,603)
173,365,885
14,118,992
195,615,169
13,481,311
(21,611,603)
187,484,877
882,513,012
35,587,179
46,343,922
4,111,419
(516,709)
928,856,934
39,181,889
918,100,191
50,455,341
(516,709)
968,038,823
(146,110,446)
(21,720,868)
(17,785,845)
(3,063,662)
510,502
(163,896,291)
(24,274,028)
(167,831,314)
(20,849,507)
510,502
(188,170,319)
750,268,877
29,605,834
(6,207)
779,868,504
$ 945,884,046
43,087,145
(21,617,810)
967,353,381
Depreciation expense was charged to functions/programs of the District as follows:
Instruction
School leadership
Health services
Food services
$ 12,515,875
620,283
45,975
437,512
53,110
47,607
975,765
718,624
1,503,033
70,186
2,333,102
100,730
1,143,067
284,638
Total depreciation expense - governmental activities
$ 20,849,507
34
7.
DEFERRED OUTFLOWS OF RESOURCES
The following is a summary of changes in deferred outflows of resources for the year ended
August 31, 2014:
Beginning
Balance
Deferred charges on
refundings
8.
$
2,466,724
Additions
Retirements
Ending
Balance
30,918,719
(10,199,785)
23,185,658
LONG-TERM DEBT
The following is a summary of changes in long-term debt for the year ended August 31, 2014:
Balance
8-31-13
Additions
General obligation bonds
Premiums on bonds
Issuance discount on bonds
Total debt payable principal
Accretion on capital
appreciation bonds
$ 909,219,994
17,984,128
(44,546)
538,380,132
11,810,665
-
(359,279,839) 1,088,320,287
(2,838,493)
26,956,300
44,546
-
927,159,576
550,190,797
(362,073,786) 1,115,276,587
379,923,429
160,500,767
(120,495,226)
Total debt payable
$1,307,083,005
710,691,564
(482,569,012) 1,535,205,557
35
Retirements
Balance
8-31-14
419,928,970
Bonded debt consisted of the following at August 31, 2014:
General Obligation Bonds:
Series
Date of
Issue
Amounts of
Original Issue
2001
8-15-01 $
2003
5-1-03
2005
4-21-05
2006
7-27-06
2007
6-21-07
2008
5-29-08
2009
7-16-09
2010
4-20-10
2010
4-20-10
2010A 12-16-10
2011
8-2-11
2012A 6-18-12
2013A 10-15-13
2013B 10-15-13
2014A 2-20-14
2014B 2-20-14
2014C 2-20-14
2014D 8-28-14
Total
Matures
Through
65,590,000
75,234,391
107,951,836
151,579,916
116,679,552
276,122,094
27,575,000
20,741,435
66,950,000
52,632,358
48,960,000
25,943,262
158,946,117
45,379,854
16,295,000
850,000
187,519,162
129,389,999
2015
2022
2034
2018
2042
2041
2034
2024
2040
2030
2021
2034
2034
2024
2019
2017
2049
2043
Interest
Rate
Outstanding
at 8-31-14
4.50 - 6.00 $
6,000,000
2.50 - 5.17
2,989,388
3.50 - 5.55
50,599,207
4.13 - 5.25
5,440,000
4.00 - 5.05
16,764,681
3.50 - 6.00
253,957,094
2.00 - 5.00
24,985,000
0.50 - 4.60
10,362,268
2.00 - 5.00
62,595,000
1.68 - 5.53
45,194,629
2.00 - 4.00
45,900,000
3.35 - 4.34
25,943,262
3.72 - 4.46
158,364,867
3.41 - 3.59
45,170,730
2.00 - 5.00
16,295,000
2.00 - 5.00
850,000
4.74 - 5.58
187,519,162
0.30 - 4.89
129,389,999
$1,574,339,976
$1,088,320,287
Due Within
One Year
$
6,000,000
8,845,000
575,000
16,002
5,105,000
705,000
2,860,451
1,390,000
3,161,939
200,000
1,892,439
42,550
4,655,000
265,000
2,426,532
$ 38,139,913
For the general obligation bonds, the District has pledged as collateral the proceeds of a
continuing, direct annual tax levied against taxable property within the District without limitation
as to rate. The Texas Education Code generally limits issuance of additional ad valorem tax bonds
if the tax rate needed to pay aggregate principal and interest amounts of the District’s tax bond
indebtedness exceeds $0.50 per $100 of assessed valuation of taxable property within the District.
The District currently has a debt service tax rate of $0.4719.
The annual principal installments for each of the outstanding issues vary each year. As of
August 31, 2014, the debt service requirements of bonded indebtedness to maturity are as follows:
General Obligation
Year Ended August 31,
2015
2016
2017
2018
2019
2020 - 2024
2025 - 2029
2030 - 2034
2035 - 2039
2040 - 2044
2045 - 2049
TOTAL
Principal
Interest
38,139,913
40,643,433
42,809,802
36,448,512
34,274,177
166,992,906
194,569,863
212,847,732
121,126,853
102,555,408
97,911,688
34,989,537
37,643,335
35,215,942
45,531,803
51,033,667
275,329,826
256,523,756
265,034,520
412,070,148
444,873,089
511,198,312
73,129,450
78,286,768
78,025,744
81,980,315
85,307,844
442,322,732
451,093,619
477,882,252
533,197,001
547,428,497
609,110,000
$ 1,088,320,287
2,369,443,935
3,457,764,222
$
36
Total
On October 15, 2013, the District issued $158,946,117 of Unlimited Tax Refunding Bonds, Series
2013A and $45,379,854 of Unlimited Tax Refunding Bonds, Series 2013B to advance refund
$204,541,298 of previously issued District bonds in order to lower its overall debt service
requirements. The net proceeds of $257,590,970 (after payment of $2,453,153 in underwriting
fees, insurance, and other issuance costs) were used for the following: $256,493,166 was
deposited with an escrow agent to provide the debt service payment on the portion of bonds
advance refunded and $1,097,804 was deposited in the Debt Service Fund for future interest and
principal payments. As a result, $204,541,298 of bond principal is considered defeased and the
liability for these bonds was removed from the basic financial statements. The reacquisition price
exceeded the net carrying amount of the old debt by $10,663,186. The amount is netted against
the new debt and amortized over the remaining life of the refunded debt which is shorter than the
life of the new debt issued. The advance refunding resulted in an economic gain of $16,131,354.
On February 20, 2014, the District issued $16,295,000 of Unlimited Tax School Building Bonds,
Series 2014A, $850,000 of Unlimited Tax School Building Bonds, Series 2014B, and
$187,519,162 of Unlimited Tax School Building Bonds, Series 2014C, for technology needs of the
District, buses, the construction of school buildings, and for the costs of issuance. The net
proceeds of $206,209,420 (after payment of $2,069,181 in underwriting fees, insurance, and other
issuance costs) were used for the following: $206,195,000 was invested by the District to fund
future technology and bus purchases and fund future construction and $14,420 was deposited in
the Debt Service Fund for future interest and principal payments.
On August 28, 2014, the District issued $129,389,999 of Unlimited Tax Refunding Bonds, Series
2014D, to advance refund $130,199,948 of previously issued District bonds in order to lower its
overall debt service requirements. The net proceeds of $213,806,748 (after payment of $1,873,593
in underwriting fees, insurance, and other issuance costs and payment to the bank of $4,220,000
related to the refunded bonds) were used for the following: $213,805,618 was deposited with an
escrow agent to provide the debt service payment on the portion of bonds advance refunded and
$1,130 was deposited in the Debt Service Fund for future interest and principal payments. As a
result, $130,199,948 of bond principal is considered defeased and the liability for these bonds was
removed from the basic financial statements. The reacquisition price exceeded the net carrying
amount of the old debt by $20,255,533. The amount is netted against the new debt and amortized
over the remaining life of the refunded debt which is shorter than the life of the new debt issued.
The advance refunding resulted in an economic gain of $27,515,001.
The outstanding 2003, 2010, 2010A, 2012A, 2014C, and 2014D Series Bonds include Capital
Appreciation Bonds while the 2005, 2007, 2008, 2009, 2013A, and 2013B Series Bonds include
both Serial Bonds and Capital Appreciation Bonds. The interest shown above, with respect to the
Capital Appreciation Bonds, includes the interest to be paid on bonds maturing in the respective
years and does not include accrued interest on bonds not maturing in those years.
In the current and prior years, the District defeased outstanding general obligation bonds through
issuance of refunding bonds by placing the proceeds of the new bonds in irrevocable trust to
provide for the future debt service payments on the refunded bonds. Accordingly, the trust
account assets and defeased bonds are not included in the District’s financial statements. At
August 31, 2014, outstanding bonds of $175,632,577 are considered defeased.
As of August 31, 2014, $22,801,220 of general obligation bonds authorized by voters of the
District had not been issued.
37
9.
FUND BALANCES
The District complies with GASB Statement No. 54, Fund Balance Reporting and Governmental
Fund Type Definitions, which establishes fund balance classifications that comprise a hierarchy
based primarily on the extent to which a government is bound to observe constraints imposed upon
the use of the resources reported in governmental funds. Those fund balance classifications are
described below.
Nonspendable - Amounts that cannot be spent because they are either not in a spendable form or
are legally or contractually required to be maintained intact.
Restricted - Amounts that can be spent only for specific purposes because of constraints imposed
by external providers, or imposed by constitutional provisions or enabling legislation.
Committed - Amounts that can only be used for specific purposes pursuant to approval by formal
action by the Board.
Assigned - For the General Fund, amounts that are appropriated by the Board or Board designee
that are to be used for specific purposes. For all other governmental funds, any remaining positive
amounts not previously classified as nonspendable, restricted or committed.
Unassigned - Amounts that are available for any purpose; these amounts can be reported only in
the District’s General Fund.
The detail of the fund balances are included in the Governmental Funds Balance Sheet on page 14.
Fund balance of the District may be committed for a specific purpose by formal action of the
Board, the District’s highest level of decision-making authority. Commitments may be
established, modified, or rescinded only through a resolution approved by the Board. The Board
has delegated the authority to assign fund balance for a specific purpose to the Superintendent or
the Assistant Superintendent for Business and Operations.
In circumstances where an expenditure is to be made for a purpose for which amounts are
available in multiple fund balance classifications, the order in which resources will be expended is
as follows: restricted fund balance, committed fund balance, assigned fund balance, and lastly,
unassigned fund balance.
38
10. PENSION PLAN OBLIGATIONS
The District’s employees participate in the Teacher Retirement System of Texas (“The System”),
a public employee retirement system (“PERS”). It is a cost-sharing multiple employer defined
benefit pension plan with one exception: all risks and costs are not shared by the District, but are
the liability of the State. The System provides service retirement and disability retirement benefits,
and death benefits to plan members and beneficiaries. The System operates under the authority of
provisions contained primarily in Texas Government Code, Title 8, Public Retirement Systems,
Subtitle C, Teacher Retirement System of Texas, which is subject to amendment by the Texas
Legislature. During the years ended August 31, 2014, 2013, and 2012, contributions of
approximately $10,183,000, $9,180,000, and $9,207,000, respectively were made by the State.
These contributions made by the State on behalf of the District have been reflected in the
accompanying basic financial statements as both revenue and expenditures. The System’s annual
financial report and other required disclosures are available by writing the Teacher Retirement
System of Texas, 1000 Red River, Austin, Texas 78701-2698 or by calling (800) 233-8778,
extension 6456.
Under provisions in State law, plan members are required to contribute 6.4% of their annual
covered salary and the State contributes an amount equal to 6.8% of the District’s covered payroll.
The District’s employees’ contributions to the System for the years ended August 31, 2014, 2013,
and 2012 were approximately $12,080,000, $11,713,000, and $11,251,000, respectively, which
were equal to the required contributions for the years. Other contributions made from federal
grants, District contribution for TRS insurance, new member contribution for the first 90 days of
employment, retiree surcharge and insurance, and from the District for salaries above the statutory
minimum for the year ended August 31, 2014 were approximately $3,789,000, which was equal to
the required contributions for the year.
11. ON-BEHALF PAYMENTS
The District recognizes as revenues and expenditures retiree drug subsidy reimbursements under
the provisions of Medicare Part D made by the federal government to the System on behalf of the
District. For the year ended August 31, 2014, reimbursements of $511,816 were received by the
System and allocated to the District.
12. SCHOOL DISTRICT RETIREE HEALTH PLAN
Plan Description - The District contributes to the Texas Public School Retired Employees Group
Insurance Program (“TRS-Care”), a cost-sharing multiple-employer defined benefit
postemployment health care plan administered by the System. The statutory authority for the
program is Texas Insurance Code, Chapter 1575. Section 1575.02 grants the TRS Board of
Trustees the authority to establish and amend basic and optional group insurance coverage for
participants. The System issues a publicly available financial report that includes financial
statements and required supplementary information for TRS-Care. That report may be obtained by
visiting the TRS Web site at www.trs.state.tx.us under the TRS Publications heading, by calling
the TRS Communications Department at 1-800-223-8778, or by writing to the Communications
Department of the System at 1000 Red River Street, Austin, Texas 78701.
39
Funding Policy - Contribution requirements are not actuarially determined but are legally
established each biennium by the Texas Legislature. Texas Insurance Code, Sections 1575.202,
203, and 204 establish state, active employee and public school contributions, respectively.
Funding for free basic coverage is provided by the program based upon public school district
payroll. Per Texas Insurance Code, Chapter 1575, the public school contribution may not be less
than 0.25% or greater than 0.75% of the salary of each active employee of the public school.
Funding for optional coverage is provided by those participants selecting the optional coverage.
Contribution rates and amounts are shown in the table below for fiscal years 2012-2014.
Contribution Rates:
Active Member
13.
Year
Rate
2014
2013
2012
.65%
.65%
.65%
Amount
$
1,226,858
1,192,623
1,142,715
State
Rate
1.0%
0.5%
1.0%
School District
Amount
$
Rate
54,016
25,607
50,602
.55%
.55%
.55%
Amount
$
1,038,110
1,009,151
966,906
DEFERRED COMPENSATION PLAN
The District offers its employees a deferred compensation plan established in accordance with
Internal Revenue Code Section 457. Assets and income of the District’s plan are held in annuity
contracts with an independent trustee for the exclusive benefit of participants and their
beneficiaries. Accordingly, the plan’s assets and liabilities are not recorded in the District’s basic
14.
RISK MANAGEMENT
The District’s risk management program includes coverages through third party insurance
providers for property, automobile liability, school professional liability, crime, workers’
compensation and other miscellaneous bonds. During the year ended August 31, 2014, there were
no significant reductions in insurance coverage from coverage in the prior year. Losses in excess
of the various deductible levels are covered through traditional indemnity coverage for buildings
and contents, and vehicle liability with various insurance firms. Settled claims have not exceeded
insurance limits for the past three years.
15. UNEARNED REVENUE
At August 31, 2014, unearned revenue in governmental funds consisted of the following:
General
Fund
Food
Service Fund
Total
State grants
Food service inventory
Other
$
8,974,790
167,708
378,176
-
8,974,790
378,176
167,708
Total
$
9,142,498
378,176
9,520,674
40
16. REVENUES FROM LOCAL AND INTERMEDIATE SOURCES
For the year ended August 31, 2014, revenues from local and intermediate sources in
governmental funds consisted of the following:
General
Fund
Food
Service
Fund
Debt
Service
Fund
Major
Capital
Other
Projects Governmental
Fund
Funds
Total
Property taxes
$ 152,762,423
- 69,174,661
Food sales
- 8,293,723
Investment
income
509,415
1,662
135,646 154,542
Penalties, interest,
and other tax
related income
720,642
266,008
Tuition and fees
from patrons
1,629,636
Co-curricular
student activities
987,837
Other
2,041,326
113,863
Total
4,370,777 241,162,161
$ 158,651,279 8,409,248 69,576,315 154,542
-
221,937,084
8,293,723
106,083
907,348
-
986,650
89
1,629,725
3,037,973
1,226,632
4,025,810
3,381,821
17. SELF-INSURANCE FUND
The District has a self-insurance workers’ compensation plan administered by Alexis Risk
Management Services. The District established an Internal Service Fund to account for and
finance this uninsured risk of loss. The District purchases excess risk insurance for workers’
compensation claims in excess of $200,000 per occurrence, up to $1,000,000 per individual, and
commercial insurance for all other risks of loss. The claim liability below, which is included in
accounts payable in the proprietary funds statement of net position, is an estimate of potential loss
exposure on workers’ compensation claims at year end which includes incurred but not reported
(“IBNR”) claims and claims reported but not paid.
A reconciliation of the estimated claim liability is as follows:
Beginning
Liability
Year Ended 8/31
2013
2014
Estimated
Current Year
Claims
$
$
810,000
982,000
473,000
514,000
41
Claim
Payments
(301,000)
(340,000)
Ending
Liability
982,000
1,156,000
18. COMMITMENTS AND CONTINGENCIES
As of August 31, 2014, the District is committed under construction contracts with a remaining
balance of approximately $125,153,642. The District also participates in a number of federal
financial assistance programs. Although the District’s grant programs have been audited in
accordance with the provisions of the Single Audit Act Amendments of 1996 through August 31,
2014, these programs are subject to financial and compliance audits. The amounts, if any, of
expenditures which may be disallowed by the granting agencies can not be determined at this time,
although the District expects such amounts, if any, to be immaterial.
19.
RESTATEMENT OF GOVERNMENTAL FUND BALANCES AND NET POSITION
At August 31, 2013, the District had understated fund balance in the General Fund and net position
due to a $2,000,000 accrual recorded in a prior year to account for a potential procedural change in
payroll. As this change will not be made fund balance in the General Fund and net position at
August 31, 2013, as previously reported, has been restated as follows:
Beginning fund balance, General Fund - August 31, 2013
Effect of accrual reversal
$
95,523,504
2,000,000
Beginning fund balance, General Fund - August 31, 2013, as restated
$
97,523,504
Net position - August 31, 2013
Effect of fund balance adjustment for the General Fund
$ (166,675,498)
2,000,000
Net position - August 31, 2013, as restated
$ (164,675,498)
20. SUBSEQUENT EVENT
In October 2014, the District issued $22,800,000 of Unlimited Tax School Building Bonds, Series
2014E, for the construction of a new elementary school.
42
COMBINING AND INDIVIDUAL
FUND STATEMENTS AND SCHEDULES
NONMAJOR GOVERNMENTAL FUNDS
SPECIAL REVENUE FUNDS
These funds are used to account for the proceeds of specific revenue sources that are legally restricted to
expenditures for specified purposes. The Special Revenue Funds account for all designated purpose
monies received in the form of federal, state, or local grants. These grants, referred to as projects, are
awarded to the District for the purpose of accomplishing specified educational tasks; therefore, revenues
and expenditures are recorded by project or similar group of projects related by funding, to accomplish
the purpose of accounting for each grant. Special Revenue Funds maintained by the District include the
following:
Title I Grants to Local Educational Agencies - This fund is used to account for funds allocated to
provide opportunities for children served to acquire the knowledge and skills contained in the
challenging State content standards and to meet the challenging State performance standards
developed for all children.
Adult Education - Basic Grants to States - This fund is used to account for funds granted to
provide or support programs for adult education and literacy services to adults who are beyond
compulsory school age attendance, and do not have a high school diploma, or lack sufficient
mastery of basic educational skills to function effectively in society, or are unable to speak, read or
write the English language, and are not enrolled in school.
Temporary Assistance for Needy Families - This fund is used to account for funds granted to
design and operate programs to help needy families achieve self-sufficiency by reducing the
dependency of needy parents by promoting job preparation, work, and marriage.
Special Education Grants to States - This fund is used to account for funds to operate educational
programs for handicapped children.
Special Education Preschool Grants - This fund is used to account for funds for preschool
handicapped children.
Summer Food Service Program for Children - This fund is used to account for funds received from
the Texas Department of Agriculture that are awarded for meals provided to the community based
on the average number of daily participants.
Career and Technical Education - Basic Grants to States - This fund is used to account for funds
provided for vocational education programs not funded by the Foundation School Program Act.
Improving Teacher Quality State Grants - This fund is used to account for funds granted to school
districts to increase student academic achievement through improving teacher and principal quality
and increasing the number of highly qualified teachers in classrooms and highly qualified
principals and assistant principals in schools.
English Language Acquisition State Grants - This fund is used to account for funds granted to
improve the education of limited English proficient children by assisting the children to learn
English and meet challenging State academic content and student academic achievement
standards.
Grants for State Assessments and Related Activities - This fund is used to account for funds for
summer school programs for LEP students only if a bilingual program is part of the standard
curriculum.
WIA Dislocated Worker Formula Grants - This fund is used to account for funds granted to
reemploy dislocated workers, improve the quality of the workforce, and enhance the productivity
and competitiveness of the nation’s economy by providing workforce investment activities that
increase the employment, retention, and earnings of participants, and increase occupational skill
attainment by the participants.
Visually Impaired - This fund is used to account for State supplemental visually impaired monies.
Advanced Placement Initiative - This fund is used to account for funds awarded to school districts
under the Texas Advance Placement Award Incentive Program.
Instructional Materials Allotment - This fund is used to account for funds awarded to school
districts for the purchase of instructional materials, technological equipment, and
technology-related services.
Apprenticeship Training Program - This fund is used to account for State funds granted to provide
on-the-job-training, preparatory instruction, supplementary instruction or related instruction in a
trade that has been certified as an apprenticible occupation by the Bureau of Apprenticeship
Training of the United States Department of Labor.
State Funded - This fund is used to account for funds that are received from the State that are not
listed elsewhere.
Campus Activity - This fund is used to account for transactions related to a principal’s activity
fund if the monies generated are not subject to recall by the Board in the General Fund.
Scholarship - This fund is used to account for scholarships established to assist individual students
in furthering the student’s higher education.
RaiseUp Texas - This fund is used to account for funds granted to build college and career
readiness in all students through the transformation of teaching and learning in eight middle
schools across the Central Texas region and help implement the Strategic Instruction
Model/Content Literacy Continuum from the University of Kansas-Center for Research on
Learning as the basis for whole-school reform.
St. David’s Foundation Grant - This fund is used to account for grant funds to help support the
mental health services for the District’s students and their families.
Donation - This fund is used to account for donations made by individuals or businesses for use by
the District for specific purposes.
CAPITAL PROJECTS FUNDS
These funds are used to account for projects financed by the proceeds from bond issues, or for capital
projects otherwise mandated to be accounted for in this fund. Capital Projects Funds maintained by the
District include the following:
2002 Fund - To account for the construction and equipping of school buildings, to refund certain
of the District’s Unlimited Tax School Building and Refunding Bonds, Series 1992, and to pay the
costs of issuance of the bonds.
2006 Fund - To account for the construction and equipping of school buildings, to purchase land
and to refund certain of the District’s Unlimited Tax School Building and Refunding Bonds,
Series 1994, and to pay the costs of issuance of the bonds.
2007 Fund - To account for the construction and equipping of school buildings, to purchase land
Series 1993 and 1997, and to pay the costs of issuance of the bonds.
2008 Funds - To account for the construction and equipping of school buildings, to purchase land
Series 1997, and to pay the costs of issuance of the bonds.
2009 Fund - To account for the purchase of land for future elementary schools and one middle
school, for the design of two elementary schools and one high school, for road infrastructure and
technology investments, and to pay the costs of issuance of the bonds.
2010 Fund - To account for the construction of one elementary and one middle school, for the
design of one elementary school, one middle school and one high school, for HVAC renovation at
an elementary campus, to refund certain of the District’s Unlimited Tax School Building and
Refunding Bonds, Series 1993, 1994, 1998 and 2000, and to pay the costs of issuance of the bonds.
2014A Fund - To account for replacement of technology equipment, including computers,
projectors, servers, storage/SAN, data center switching and WiFi, and to pay the costs of issuance
of the bonds.
2014B Fund - To account for the purchase of buses and to pay the costs of issuance of the bonds.
Combining Balance Sheet
August 31, 2014
Special
Revenue
Funds
ASSETS
Receivables:
Accrued interest
Other receivables
Restricted cash
Total assets
LIABILITIES AND
FUND BALANCES
Liabilities:
Accounts payable
Due to other funds
$
Total
Nonmajor
Permanent Governmental
Fund
Funds
1,239,923
55,002,766
-
56,242,689
929,653
23,025
26,420
37,278
970
-
3,406
929,653
37,278
23,995
29,826
$
2,219,021
55,041,014
3,406
57,263,441
$
750,477
4,385
573,491
1,933,472
669
259
-
2,683,949
5,054
573,750
1,328,353
1,934,400
-
3,262,753
96,155
778,415
16,098
53,106,614
-
3,406
-
53,206,175
778,415
16,098
890,668
53,106,614
3,406
54,000,688
2,219,021
55,041,014
3,406
57,263,441
Total liabilities
Fund balances:
Restricted
Committed
Assigned
Total fund balances
Total liabilities and fund balances
Capital
Projects
Funds
$
43
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
Capital
Projects
Funds
Special
Revenue
Funds
REVENUES
$
Total revenues
EXPENDITURES
Current:
Instruction
School leadership
Health services
Food services
Community services
Total expenditures
Total
Nonmajor
Permanent Governmental
Fund
Funds
4,218,248
3,509,947
6,769,538
152,153
25,345
-
376
-
4,370,777
3,535,292
6,769,538
14,497,733
177,498
376
14,675,607
9,911,982
173,547
802,406
49,563
45,943
389,212
1,074
23,068
35,370
56,042
2,474,125
2,492
3,331
8,564
4,524
175,136
271,900
3,434,196
631,471
251,443
23,693,234
-
1,000
-
13,346,178
173,547
802,406
49,563
45,943
389,212
1,074
23,068
35,370
56,042
2,474,125
2,492
3,331
8,564
635,995
176,136
251,443
23,693,234
271,900
14,428,279
28,010,344
1,000
42,439,623
69,454
(27,832,846)
(624)
(27,764,016)
OTHER FINANCING SOURCES
Total other financing sources
-
69,454
(8,921,403)
821,214
62,028,017
4,030
62,853,261
890,668
53,106,614
3,406
54,000,688
Fund balances--beginning
Fund balances--ending
$
44
17,140,859
1,770,584
18,911,443
(624)
17,140,859
1,770,584
18,911,443
(8,852,573)
All Nonmajor Special Revenue Funds
Title I
Grants to
Local
Educational
Agencies
Adult
Education Basic
Grants to
States
Temporary
Assistance
for Needy
Families
Special
Education_
Grants to
States
Special
Education _
Preschool
Grants
Summer
Food
Service
Program
for
Children
Assets:
Cash and temporary investments $
Receivables:
Other receivables
Restricted cash
-
-
-
-
-
66,089
198,631
-
3,919
-
-
374,123
-
4,209
-
-
$
198,631
3,919
-
374,123
4,209
66,089
$
74,359
124,272
598
3,321
-
5,271
2,343
366,509
4,209
-
198,631
3,919
-
374,123
4,209
-
-
-
-
-
-
66,089
-
-
-
-
-
-
66,089
198,631
3,919
-
374,123
4,209
66,089
Total assets
Liabilities and fund balances:
Liabilities:
Accounts payable
Due to other funds
Total liabilities
Fund balances:
Restricted
Committed
Assigned
Total fund balances
Total liabilities and fund balances $
45
Career and
Technical
Education Basic
Grants to
States
Improving
Teacher
Quality
State
Grants
Grants for
State
Assessments
and
Related
Activities
English
Language
Acquisition
State
Grants
WIA
Dislocated
Worker
Formula
Grants
Advanced
Placement
Initiative
Visually
Impaired
-
-
-
3,646
-
-
6,636
41,391
-
17,894
-
14,719
-
-
-
-
-
41,391
17,894
14,719
3,646
-
-
6,636
17,052
24,339
668
17,226
759
217
13,743
-
-
-
-
41,391
17,894
14,719
-
-
-
-
-
-
-
3,646
-
-
-
6,636
-
-
-
3,646
-
-
6,636
41,391
17,894
14,719
3,646
-
-
6,636
(continued)
4
All Nonmajor Special Revenue Funds (continued)
August 31, 2014
Instructional Apprenticeship
Materials
Training
Allotment
Program
State
Funded
Campus
Activity
Scholarship
St. David's
Foundation
Grant
RaiseUp
Texas
Donation
TOTALS
Assets:
Receivables:
Other receivables
Restricted cash
299,184
-
9,462
582,923
-
-
-
271,983
1,239,923
258,695
-
-
-
800
-
26,420
16,072
-
-
22,225
-
929,653
23,025
26,420
$
557,879
-
9,462
583,723
26,420
16,072
-
294,208
2,219,021
$
557,879
-
-
-
35,106
-
-
16,072
-
58,785
1,825
3,800
750,477
4,385
573,491
557,879
-
-
35,106
-
16,072
-
64,410
1,328,353
-
-
9,462
548,617
-
26,420
-
-
-
229,798
-
96,155
778,415
16,098
-
-
9,462
548,617
26,420
-
-
229,798
890,668
557,879
-
9,462
583,723
26,420
16,072
-
294,208
2,219,021
Total assets
Liabilities:
Accounts payable
Due to other funds
Total liabilities
Fund balances:
Restricted
Committed
Assigned
Total fund balances
Total liabilities and fund balances $
47
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
All Nonmajor Special Revenue Funds
Revenues:
$
Total revenues
Expenditures:
Current:
Instruction
School leadership
Health services
Food services
Community services
Total expenditures
Fund balances - beginning
Fund balances - ending
$
Summer
Food
Service
Program
for
Children
Adult
Education Basic
Grants to
States
Temporary
Assistance
for Needy
Families
Special
Education_
Grants to
States
Special
Education _
Preschool
Grants
1,283,289
88,226
31,680
4,565,498
49,953
498
60,857
1,283,289
88,226
31,680
4,565,498
49,953
61,355
1,051,397
81,085
407
150,400
-
52,002
36,224
-
31,680
-
3,679,137
208,602
9,276
369,277
10,887
16,419
271,900
35,718
6,675
7,560
-
56,042
-
1,283,289
88,226
31,680
4,565,498
49,953
56,042
-
-
-
-
-
5,313
-
-
-
-
-
60,776
-
-
-
-
-
66,089
Title I
Grant to
Local
Educational
Agencies
48
Career and
Technical
Education Basic
Grants to
States
Improving
Teacher
Quality
State
Grants
Grants for
State
Assessments
and
Related
Activities
English
Language
Acquisition
State
Grants
WIA
Dislocated
Worker
Formula
Grants
Advanced
Placement
Initiative
Visually
Impaired
201,252
249,722
189,259
7,791
42,011
13,682
-
36,275
-
201,252
249,722
189,259
7,791
42,011
13,682
36,275
158,149
43,103
-
246,543
3,179
-
101,355
76,260
1,286
7,848
1,642
868
-
5,099
-
42,011
-
11,837
1,845
-
6,000
41,546
2,302
6,272
-
201,252
249,722
189,259
5,099
42,011
13,682
56,120
-
-
-
2,692
-
-
(19,845)
-
-
-
954
-
-
26,481
-
-
-
3,646
-
-
6,636
(continued)
4
Combining Statement of Revenues, Expenditures and Changes in Fund Balances
All Nonmajor Special Revenue Funds (continued)
Revenues:
$
Total revenues
Expenditures:
Current:
Instruction
School leadership
Health services
Food services
Community services
Total expenditures
$
Instructional
Materials
Allotment
Apprenticeship
Training
Program
State
Funded
3,335,218
-
88,741
-
36,031
-
997,100
-
6
-
37,201
-
-
3,183,443
-
4,218,248
3,509,947
6,769,538
3,335,218
88,741
36,031
997,100
6
37,201
-
3,183,443
14,497,733
3,443,119
295
-
88,741
-
555
35,370
759
-
456,675
140,712
70,353
475
27,769
493
962
192,465
2,481
6,341
2,900
-
200
-
35,788
1,413
-
1,074
-
713,274
32,280
26,826
11,495
11,882
1,526
2,280,901
555
850
2,223
4,524
1,170
-
9,911,982
173,547
802,406
49,563
45,943
389,212
1,074
23,068
35,370
56,042
2,474,125
2,492
3,331
8,564
4,524
175,136
271,900
3,443,414
88,741
36,684
901,626
200
37,201
1,074
3,087,506
14,428,279
(653)
Campus
Activity
(194)
Donation
TOTALS
(108,196)
-
-
(1,074)
95,937
69,454
108,196
-
10,115
453,143
26,614
-
1,074
133,861
821,214
-
-
9,462
548,617
26,420
-
-
229,798
890,668
50
95,474
Scholarship
St. David's
Foundation
Grant
RaiseUp
Texas
All Nonmajor Capital Projects Funds
August 31, 2014
2006
Fund
2007
Fund
28,563
1,096,674
3,042,862
872,549
16,181,668
11,307,288
5,020,454
-
970
-
-
4,064
-
15,450
-
$
28,563
1,097,644
3,042,862
872,549
16,185,732
$
27,418
-
243,590
-
202,741
-
48,867
-
27,418
243,590
202,741
48,867
1,145
854,054
2,840,121
823,682
15,707,017
11,285,370
4,971,152
890,551
15,733,522
53,106,614
1,145
854,054
2,840,121
823,682
15,707,017
11,285,370
4,971,152
890,551
15,733,522
53,106,614
28,563
1,097,644
3,042,862
872,549
16,185,732
11,322,738
5,032,526
890,551
16,567,849
55,041,014
2002
Fund
Assets:
Receivables:
Accrued interest
Other receivables
Total assets
Liabilities:
Accounts payable
Due to other funds
Total liabilities
Fund balancesRestricted
Total fund balances
Total liabilities and fund balances
$
2008
Fund
2008
Fund
51
2009
Fund
2010
Fund
2014A
Fund
2014B
Fund
TOTALS
890,551
16,562,157
55,002,766
12,072
-
-
5,692
-
37,278
970
11,322,738
5,032,526
890,551
16,567,849
55,041,014
478,467
248
37,368
-
60,694
669
11
-
834,327
-
1,933,472
669
259
478,715
37,368
61,374
-
834,327
1,934,400
Combining Statement of Revenues, Expenditures and Changes in Fund Balances
All Nonmajor Capital Projects Funds
2002
Fund
Revenues:
$
Total revenues
Expenditures:
Instruction
Total expenditures
Deficiency of revenues
under expenditures
Other Financing Sources:
Total other financing sources
$
2007
Fund
2008
Fund
2008
Fund
2009
Fund
2010
Fund
2014A
Fund
2014B
Fund
TOTALS
29
-
47,391
-
10,034
-
966
-
40,923
25,345
25,592
-
14,872
-
551
-
11,795
-
152,153
25,345
29
47,391
10,034
966
66,268
25,592
14,872
551
11,795
177,498
551,374
4,454,088
140,128
3,109,164
219,936
471,843
271,407
9,122,793
1,405,112
605,782
5,359,001
43,954
-
2,029,084
207,489
19,189
3,434,196
631,471
251,443
23,693,234
551,374
4,454,088
3,249,292
691,779
9,394,200
2,010,894
5,359,001
43,954
2,255,762
28,010,344
(551,345)
(4,406,697)
(3,239,258)
(690,813)
(9,327,932)
(1,985,302)
(5,344,129)
(43,403)
(2,243,967)
(27,832,846)
849,988
83,966
933,954
16,290,871
1,686,618
17,977,489
17,140,859
1,770,584
18,911,443
-
2006
Fund
-
-
(690,813)
-
-
-
(551,345)
(4,406,697)
(3,239,258)
(9,327,932)
(1,985,302)
(5,344,129)
890,551
15,733,522
552,490
5,260,751
6,079,379
1,514,495
25,034,949
13,270,672
10,315,281
-
-
62,028,017
1,145
854,054
2,840,121
823,682
15,707,017
11,285,370
4,971,152
890,551
15,733,522
53,106,614
52
(8,921,403)
Combining Statement of Net Position - All Internal Service Funds
August 31, 2014
Workers’
Compensation
AssetsCurrent assets:
Due from other fund
Property and
Casualty
Health
Repairs
Total
5,063,246
7,197
1,252,271
-
6,125,096
-
83,615
-
5,070,443
1,252,271
6,125,096
83,615
12,531,425
LiabilitiesCurrent liabilitiesAccounts payable
1,175,520
-
2,861,675
-
4,037,195
Total liabilities
1,175,520
-
2,861,675
-
4,037,195
3,894,923
1,252,271
3,263,421
83,615
8,494,230
3,894,923
1,252,271
3,263,421
83,615
Total assets
Net positionUnrestricted
Total net position
$
53
$
$
12,524,228
7,197
8,494,230
Combining Statement of Revenues, Expenses, and Changes in
Fund Net Position - All Internal Service Funds
Workers’
Property and
Casualty
Compensation
Operating revenues:
Insurance recovery
$
Total operating revenues
Operating expenses:
Instruction
Health services
Food services
Total operating expenses
Operating income (loss)
Total nonoperating revenues
17,840,744
-
25,850
-
19,273,852
14,707
1,407,258
14,707
17,840,744
25,850
19,288,559
120,720
1,107,998
-
57,606
200
4,775
51,132
7,295
21,816,084
-
10,592
-
10,592
120,720
57,606
200
4,775
22,975,214
7,295
1,228,718
121,008
21,816,084
10,592
23,176,402
(106,301)
(3,975,340)
15,258
(3,887,843)
4,228
-
6,043
-
10,271
4,228
-
6,043
-
10,271
-
Transfers in
Total
14,707
182,768
Income (loss) before transfers
Repairs
1,407,258
-
178,540
Nonoperating revenuesInterest income
Health
(106,301)
(3,969,297)
50,000
3,840,390
-
3,890,390
15,258
12,818
182,768
Total net position-beginning
3,712,155
1,308,572
3,392,328
68,357
8,481,412
3,894,923
1,252,271
3,263,421
83,615
8,494,230
$
54
(128,907)
(3,877,572)
Total net position-ending
(56,301)
15,258
Combining Statement of Cash Flows - All Internal Service Funds
Workers’
Property and
Compensation
Casualty
CASH FLOWS FROM OPERATING ACTIVITIES:
Receipts from interfund services provided
Receipts from insurance recovery
Payments to suppliers
$
1,489,029
(1,046,224)
Net cash provided by (used in) operating activities
CASH FLOWS FROM INVESTING ACTIVITIESInterest received
Net increase (decrease) in cash and cash equivalents
Reconciliation of operating income (loss) to net cash provided by
(used in) operating activities:
Operating income (loss)
Adjustments to reconcile operating income (loss) to net cash
provided by (used in) operating activities:
Change in assets and liabilities:
Decrease in due from other fund
Decrease in other receivables
Increase (Decrease) in accounts payable
Net cash provided by (used in) operating activities
Total
17,956,539
(21,793,708)
25,850
(10,592)
19,471,418
14,707
(22,985,975)
(120,744)
(3,837,169)
15,258
(3,499,850)
-
50,000
3,840,390
-
3,890,390
4,228
-
6,043
-
10,271
9,264
15,258
400,811
4,616,213
447,033
1,323,015
6,115,832
68,357
12,123,417
$
5,063,246
1,252,271
6,125,096
83,615
12,524,228
$
178,540
(106,301)
(3,975,340)
15,258
(3,887,843)
81,771
182,494
(14,443)
442,805
(120,744)
Cash and cash equivalents-beginning of the year
Cash and cash equivalents-end of the year
Repairs
14,707
(135,451)
442,805
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIESTransfer from other fund
Health
$
55
(70,744)
115,795
22,376
(3,837,169)
15,258
81,771
115,795
190,427
(3,499,850)
Debt Service Fund
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual
Budgeted Amounts
Original
REVENUES
$
Total revenues
EXPENDITURES
Debt service expenditures
Excess of revenues
over expenditures
Final
Actual
Variance with
Amounts
Final Budget
66,852,732
69,697,961
69,576,315
(121,646)
66,852,732
69,697,961
69,576,315
(121,646)
66,852,732
66,971,541
66,880,214
91,327
-
2,726,420
2,696,101
(30,319)
OTHER FINANCING SOURCES (USES)
Proceeds from refunding bonds
-
470,412,474
(470,299,166)
4,565
333,715,970
136,691,244
(470,298,784)
(470,407,909)
333,715,970
136,691,244
382
Total other financing sources, net
-
113,308
112,995
(313)
Net change in fund balance
-
2,839,728
2,809,096
(30,632)
20,989,715
20,989,715
20,989,715
20,989,715
23,829,443
23,798,811
Fund balance - beginning
Fund balance - ending
$
56
(30,632)
Statement of Changes in Assets and Liabilities - Agency Fund
Balance
August 31,
2013
Additions
Deletions
Balance
August 31,
2014
Student Activity Fund
Current assetsCash and temporary investments $
Total assets
Current liabilitiesDue to student groups
Total liabilities
$
915,700
3,029,423
(3,047,370)
897,753
915,700
3,029,423
(3,047,370)
897,753
915,700
3,029,423
(3,047,370)
897,753
915,700
3,029,423
(3,047,370)
897,753
57
EXHIBIT L-1 - REQUIRED RESPONSES TO SELECTED
SCHOOL FIRST INDICATORS
As of August 31, 2014
Data
Control
Codes
SF2
SF4
SF5
SF9
SF10
Responses
Were there any disclosures in the Annual Financial Report and/or other
sources of information concerning default on bonded indebtedness
obligations?
No
Did the district receive a clean audit? - Was there an unmodified opinion
in the Annual Financial Report?
Yes
Did the Annual Financial Report disclose any instances of material
weaknesses in internal controls?
No
Was there any disclosure in the Annual Financial Report of material
noncompliance?
No
Total accumulated accretion on capital appreciation bonds included in
government-wide financial statements at fiscal year-end:
58
$ 419,928,970
STATISTICAL SECTION
STATISTICAL SECTION
This part of Leander Independent School District’s comprehensive annual financial report presents
detailed information as a context for understanding what the information in the financial statements,
notes disclosures, and required supplementary information says about the District’s overall financial
health.
Contents
Page
Financial Trends
These schedules contain trend information to help the reader understand how the District’s
financial performance and well-being have changed over time.
59-63
Revenue Capacity
These schedules contain trend information to help the reader assess the factors affecting the
District’s ability to generate its property taxes.
64-73
Debt Capacity
These schedules contain trend information to help the reader assess the affordability of the
District’s current levels of outstanding debt and the District’s ability to issue additional
debt in the future.
74-75
Demographic and Economic Information
These schedules offer demographic and economic indicators to help the reader understand
the environment within which the District’s financial activities take place and to help make
comparisons over time and with other governments.
76-79
Operating Information
These schedules contain information about the District’s operations and resources to help
the reader understand how the District’s financial information relates to the services the
District provides and the activities it performs.
80-89
STATISTICAL TABLES
The statistical tables reflect social and economic data, financial trends, and the fiscal
capacity of the District. These tables reflect a financial history of the District.
FINANCIAL TRENDS
Table I
Net Position by Component
Last Ten Fiscal Years
Fiscal
Restricted
Restricted
Restricted
Year
Restricted
Restricted
for
for
for
Ended Net Investment
for
for
Expendable Non-Expendable Other Federal
8-31 in Capital Assets Debt Service Child Nutrition Endowments Endowments
Programs
2005
$
53,799,480
8,661,547
1,180,744
18,421
7,363
2006
$
59,692,821
10,882,356
2,062,557
21,390
8,936
2007
$
85,042,709
12,604,926
2,943,725
11,523
31,229
2008
$
83,509,569
36,265,231
3,362,987
5,239
30,814
2009
$
79,640,670
25,282,354
3,554,979
3,095
27,452
2010
$
84,884,696
17,843,112
3,780,036
3,181
27,401
2011
$
95,778,234
14,831,258
3,568,064
3,544
26,842
57,957
2012
$
87,660,600
17,645,819
2,358,342
3,505
26,576
77,980
2013
$
83,219,211
20,908,461
2,296,583
4,030
26,614
61,730
2014
$
94,800,066
23,443,705
2,402,575
3,406
26,420
69,735
Source: Statement of Net Position
Note 1
Negative Total Net Position includes accretion of interest on Capital Appreciation Bonds.
59
Unrestricted
(65,168,570)
(72,325,449)
(97,049,827)
(140,156,774)
(177,283,738)
(208,228,415)
(238,046,413)
(254,737,444)
(273,192,127)
(300,860,151)
Total
Net
Position
(1,501,015)
342,611
3,584,285
(16,982,934)
(68,775,188)
(101,689,989)
(123,780,514)
(146,964,622)
(166,675,498)
(180,114,244)
Table II
Expenses, Program Revenues, and Net Revenue (Expense)
Expenses
Instruction
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
$ 174,123,354
165,195,224
157,896,605
161,987,784
154,725,940
149,951,538
131,560,648
112,215,287
94,240,695
80,528,871
3,773,390
3,744,247
3,966,222
4,880,786
6,016,288
5,542,114
5,020,010
4,380,102
3,217,284
2,842,369
7,511,960
7,727,835
6,154,478
8,226,478
9,071,655
8,046,269
6,619,753
5,985,992
5,143,404
4,629,772
2,085,729
1,955,334
1,778,202
1,991,863
1,938,874
1,903,213
1,770,414
1,362,788
1,395,513
1,205,815
14,663,169
14,508,650
13,855,626
13,457,133
12,803,981
12,118,329
10,959,278
9,503,285
8,295,349
7,316,975
10,730,298
10,454,955
9,871,671
10,581,857
10,535,915
9,886,921
8,680,201
7,164,085
5,940,059
5,430,204
930,017
730,002
715,047
414,698
471,680
409,897
353,568
225,720
206,405
209,157
Health services
1,967,970
1,992,816
1,815,497
1,847,174
1,863,894
1,670,355
1,332,043
1,113,381
913,946
908,924
9,476,330
9,005,065
8,818,669
8,555,690
8,296,935
7,579,396
7,362,206
6,174,246
6,103,433
6,429,915
Food services
14,169,857
13,128,966
14,743,366
13,782,076
12,178,202
11,118,845
10,097,739
8,406,654
8,047,792
7,311,401
11,271,878
11,141,290
10,292,962
10,337,421
8,433,061
6,851,648
5,844,387
5,257,134
4,555,498
4,197,390
8,755,481
8,330,525
7,414,667
8,437,942
10,739,976
4,070,465
3,939,841
5,158,611
3,558,215
4,018,054
27,174,653
27,112,070
27,525,860
29,872,544
26,936,305
25,711,301
21,824,594
20,058,542
18,487,552
17,009,866
1,244,285
1,347,849
1,128,152
1,280,285
1,150,034
1,068,408
963,638
751,577
583,275
467,573
7,450,414
8,271,581
8,583,779
9,046,005
8,524,907
9,939,706
8,614,906
4,887,554
2,939,265
2,774,734
School leadership
Community services
2,128,074
2,070,567
1,964,126
1,908,623
2,017,852
1,685,733
1,404,922
1,216,178
1,086,171
982,399
62,024,481
64,936,733
71,913,866
64,711,102
63,706,901
62,647,659
48,803,640
39,264,198
27,289,762
33,152,971
Other debt service
6,321,608
4,425
4,675
4,556
5,403
4,099
4,689
6,085
4,123
4,030
6,959,693
2,342,717
4,284,611
3,356,098
7,218,073
9,649,105
9,695,189
2,541,140
4,994,103
1,167,933
96,165
108,180
191,737
175,932
236,526
122,915
271,900
1,612,651
211,272
1,356,932
222,522
1,311,959
231,082
1,328,932
236,751
1,330,485
248,714
1,241,949
194,268
1,123,514
175,316
-
107,996
-
140,221
-
374,743,357
355,677,235
354,454,299
356,416,061
348,439,638
331,468,579
286,169,448
235,847,875
197,109,840
180,728,574
651,249
564,224
1,224,764
1,283,885
1,291,339
1,101,979
988,754
591,320
523,000
614,436
3,284
2,725
5,125
1,700
5,571
-
-
-
-
-
-
-
-
-
-
-
11,829
8,187
10,908
22,158
Total primary government expenses
-
-
-
-
Program Revenues
Instruction
Food services
8,293,723
2,358
519
3,481
41,874
2,144
57,482
7,725,687
7,910,675
7,418,642
7,186,510
6,646,181
6,037,711
5,785,139
4,475,527
-
627,068
411,254
326,021
333,865
579,136
479,832
275,320
349,006
777,310
529,289
675,341
541,415
936,692
426,776
227,520
265,210
196,748
372,006
1,117,510
1,095,744
690,865
677,819
488,392
578,646
725,173
507,929
394,844
105,023
127,571
Community services
Operating grants and contributions
873,364
33,166,589
770,644
30,141,588
671,946
33,587,244
636,073
41,863,571
429,929
35,400,402
335,118
23,085,421
299,352
22,263,256
578,979
18,900,902
479,921
18,078,508
206,526
16,035,803
Total primary government program revenues
45,948,823
41,525,222
45,615,277
53,507,839
46,643,707
33,035,450
31,383,433
27,443,491
25,914,955
22,470,676
(302,908,222)
(301,795,931)
(298,433,129)
(254,786,015)
(208,404,384)
(171,194,885)
(158,257,898)
921,957
-
1,214,230
864,051
5,114
7,344,600
-
-
-
-
-
-
-
370
Net Expense
Total primary government net expense
$ (328,794,534) $ (314,152,013) $ (308,839,022)
Source: Statement of Activities
60
Table III
General Revenues and Total Change in Net Position
Fiscal Year
2014
Net (Expense) Revenue
Total primary government net expenses
$
2013
2012
2011
2010
2009
2008
(328,794,534)
(314,152,013)
(308,839,022)
(302,908,222)
(301,795,931)
(298,433,129)
(254,786,015)
223,181,609
89,152,470
907,348
114,361
-
206,371,624
87,262,175
764,915
42,423
-
196,216,713
88,519,416
918,745
40
-
186,375,914
93,196,361
892,069
(63,138)
185,336,260
77,698,282
1,244,769
151,709
-
173,502,823
67,255,436
5,835,780
46,836
-
150,502,006
69,523,389
14,275,687
45,982
(128,268)
2007
2006
2005
(208,404,384)
(171,194,885)
(158,257,898)
151,567,930
43,340,160
15,903,301
834,667
-
138,984,631
22,945,144
10,264,689
105,512
(153,464)
124,832,818
20,369,845
4,906,338
66,430
-
General Revenues and
Other Changes in Net Position
Taxes
State aid - not restricted to specific programs
Investment earnings
Miscellaneous
Gain (loss) on sale of capital assets
Special Items:
Extraordinary item - insurance proceeds
Other
-
Total primary government
Change in Net Position
Total primary government
$
-
-
416,491
4,450,110
-
-
-
313,355,788
294,441,137
285,654,914
280,817,697
268,881,130
246,640,875
234,218,796
(15,438,746)
(19,710,876)
(23,184,108)
(22,090,525)
(32,914,801)
(51,792,254)
(20,567,219)
Source: Statement of Activities
61
-
-
211,646,058
172,146,512
3,241,674
951,627
150,175,431
(8,082,411)
Table IV
Fund Balances, Governmental Funds
2014
Fiscal Year
2010
2009
2013
2012
367,064
146,166
783,416
13,597,371
3,193,770
1,798,662
2,709,952
85,028,684
489,904
67,566
1,443,018
11,248,780
3,193,770
3,138,105
10,000,000
65,942,361
372,281
56,986
1,457,761
9,809,684
3,256,770
2,042,944
6,324,874
68,471,594
466,295
55,066
2,582,290
7,523,200
3,602,058
1,643,064
63,256,156
380,234
62,688
4,450,410
7,471,552
1,659,356
2,954,990
2,551,962
49,423,921
428,139
300
6,634,677
1,846,582
3,100,382
2,292,585
46,414,053
380,533
300
5,577,495
1,356,422
4,261,397
1,776,935
50,532,369
404,795
1,060,563
4,105,683
934,183
4,928,667
2,996,642
48,835,196
366,343
1,060,563
2,273,207
643,693
3,500,000
1,948,592
41,959,810
299,155
1,060,563
1,916,974
469,531
3,500,000
1,753,864
36,568,906
Total General Fund
107,625,085
95,523,504
91,792,894
79,128,129
68,955,113
60,716,718
63,885,451
63,265,729
51,752,208
45,568,993
All Other Government Funds:
Nonspendable - inventories
Nonspendable - prepaid assets
Nonspendable - other assets
Restricted for debt service
Restricted for authorized construction
Restricted for food service
Restricted for other nonmajor special revenue funds
Restricted for endowments
Committed to other nonmajor special revenue funds
Assigned to other nonmajor special revenue funds
1,031,740
23,798,811
219,537,614
1,370,835
69,735
29,826
778,415
16,098
413,627
1,031,740
20,989,715
62,028,017
851,216
61,730
30,644
587,004
145,866
1,031,740
17,836,270
70,990,638
1,326,602
77,980
30,081
634,012
150,756
45,074
202,453
15,117,334
100,568,852
3,320,537
57,957
30,386
491,969
239,043
46,897
129,070
18,105,520
157,351,317
3,604,069
30,582
655,996
12,609
24,615,320
181,696,351
3,542,370
30,547
1,278,677
53,719
35,563,184
344,237,183
3,309,268
36,053
2,413,460
105,555
12,112,689
228,665,535
2,838,170
42,752
1,228,011
40,470
10,882,356
234,167,698
2,022,087
30,326
155,891
36,068
8,661,547
145,058,925
1,144,676
25,784
137,541
Total all other governmental funds
246,633,074
86,139,559
92,078,079
120,073,605
179,923,451
211,175,874
385,612,867
244,992,712
247,298,828
155,064,541
354,258,159
181,663,063
183,870,973
199,201,734
248,878,564
271,892,592
449,498,318
308,258,441
299,051,036
200,633,534
General Fund:
Nonspendable - inventories
Nonspendable - prepaid assets
Committed to land acquisition and hail damage
Committed to major maintenance
Committed to copier
Committed to capital replacement
Assigned to approved purchase orders
Assigned to subsequent year's budget deficit
Unassigned
Total all fund balances
$
$
2011
Source: Balance Sheet
Note 1: Fund balance classifications were modified in 2011 to align with the categories contained in GASB Statement No. 54.
62
2008
2007
2006
2005
Table V
Governmental Funds Revenue
2014
Fiscal Year
2010
2009
2013
2012
2011
221,937,084
907,348
8,293,723
10,024,006
206,270,249
764,915
7,344,600
8,536,238
196,108,562
918,745
7,725,687
8,259,329
186,654,647
1,762,379
7,910,675
6,443,532
185,294,767
1,604,388
7,418,642
6,347,899
173,764,250
6,500,171
7,186,510
4,043,984
150,435,277
16,144,650
6,646,181
3,530,967
152,008,408
16,220,877
6,037,711
3,275,482
138,984,631
10,544,595
5,785,139
2,586,843
124,832,818
5,338,095
4,475,527
2,246,864
Total Local Sources
241,162,161
222,916,002
213,012,323
202,771,233
200,665,696
191,494,915
176,757,075
177,542,478
157,901,208
136,893,304
State Sources:
State aid
Food service
State grants and other
89,152,470
291,514
14,013,686
87,262,175
365,176
11,468,980
88,519,416
220,870
12,568,293
93,196,361
300,783
13,352,945
77,698,282
280,037
11,228,278
69,080,529
240,753
10,082,391
69,523,389
223,522
11,310,739
44,961,272
178,968
7,788,014
20,862,318
158,374
8,047,404
18,719,123
148,615
7,443,893
Total State Sources
103,457,670
99,096,331
101,308,579
106,850,089
89,206,597
79,403,673
81,057,650
52,928,254
29,068,096
26,311,631
9,640,685
4,786,220
9,386,401
4,490,477
12,055,969
4,785,170
20,026,824
4,602,769
16,967,343
4,127,894
5,586,417
3,452,748
4,786,514
3,062,529
6,669,477
2,530,136
7,753,787
2,441,819
6,337,286
2,262,747
14,426,905
13,876,878
16,841,139
24,629,593
21,095,237
9,039,165
7,849,043
9,199,613
10,195,606
8,600,033
$ 359,046,736
335,889,211
331,162,041
334,250,915
310,967,530
279,937,753
265,663,768
239,670,345
197,164,910
171,804,968
Local Sources:
Taxes
Interest and other income
Food service sales
Other revenue
Federal Sources:
Federal grants
Food services
Total Federal Sources
Total Revenues
$
Source: Statement of Revenues, Expenditures, and Changes in Fund Balances
63
2008
2007
2006
2005
REVENUE CAPACITY
Table VI
Governmental Funds Expenditures and Debt Service Ratio
2014
Current:
Instruction
School leadership
Guidance, counseling, and evaluation
services
Health services
Food services
Community services
Debt Service:
Principal on long-term debt
Other debt service
Facilities and acquisition
Intergovernmental :
Contracted instructional services
between schools
Payments related to shared
services arrangements
Total primary government expenditures
2013
2012
2011
Fiscal Year
2010
2009
2008
2007
2006
2005
$163,106,852
153,447,936
147,946,435
151,265,673
145,010,264
141,258,709
125,040,135
106,172,623
89,822,271
75,598,445
3,153,107
7,511,960
3,125,787
7,727,835
3,380,795
6,154,478
4,301,480
8,226,478
5,500,139
9,071,655
5,095,603
8,046,269
4,679,270
6,614,429
4,067,316
5,978,092
2,934,452
5,135,504
2,582,485
4,621,872
2,039,754
14,225,657
1,909,359
14,072,789
1,732,101
13,430,027
1,946,117
13,034,879
1,893,743
12,457,563
1,863,134
11,803,799
1,735,636
10,736,982
1,328,391
9,293,550
1,361,403
8,103,525
1,171,421
7,136,449
10,677,188
10,401,969
9,822,914
10,533,576
10,492,614
9,850,140
8,650,921
7,136,284
5,915,321
5,407,926
930,017
1,920,363
730,002
1,945,360
715,047
1,769,984
414,698
1,802,199
471,680
1,823,032
409,897
1,635,006
353,568
1,305,429
225,720
1,088,948
206,405
892,633
209,157
889,673
10,084,737
13,451,033
8,436,382
12,401,379
8,516,249
14,059,330
10,850,342
13,098,233
8,109,016
11,613,499
9,307,367
10,738,092
9,030,999
9,699,459
6,011,192
8,023,708
5,556,744
7,682,623
5,812,621
6,967,297
9,787,983
4,812,698
9,751,279
4,651,947
8,960,708
4,477,164
8,963,874
4,809,882
7,720,260
5,108,516
6,168,591
4,947,851
5,340,911
4,989,976
4,757,891
5,811,073
4,084,494
4,502,254
3,753,619
4,274,134
25,258,915
25,184,090
25,358,582
27,883,654
25,094,677
24,175,202
20,794,747
19,067,712
17,479,917
15,801,781
1,143,555
6,865,166
2,128,074
1,247,476
6,928,601
2,070,567
1,029,104
7,439,021
1,964,126
1,182,843
8,481,234
1,908,623
1,061,581
7,800,046
2,017,852
996,206
12,807,109
1,685,733
903,839
12,798,150
1,404,922
650,210
4,909,439
1,216,178
539,949
2,769,857
1,086,171
429,434
2,611,167
982,399
24,538,593
21,495,021
22,676,100
28,308,103
31,395,623
25,268,872
17,770,663
12,868,118
8,385,000
7,595,000
38,089,194
6,321,608
44,951,776
39,964,912
4,425
7,286,896
34,856,682
950,327
26,946,818
27,229,120
1,645,921
54,868,288
25,070,864
1,440,941
91,167,039
29,356,313
362,381
178,547,935
18,131,423
2,644,239
152,668,735
17,497,882
1,702,265
118,631,980
15,223,959
2,265,221
59,567,590
14,505,165
1,910,556
30,181,742
96,165
108,180
191,737
175,932
236,526
122,915
271,900
1,612,651
211,272
1,356,932
222,522
1,311,959
231,082
1,328,932
236,751
1,330,485
248,714
1,241,949
194,268
1,123,514
175,316
-
107,996
-
140,221
-
$392,978,946
$334,460,396
$343,912,210
$382,491,163
$406,124,366
$485,937,787
416,612,215
336,613,888
243,623,289
192,582,564
17.86%
18.77%
18.12%
17.08%
17.66%
17.64%
13.49%
13.84%
12.56%
13.53%
-
-
-
-
Debt service as a percentage of
noncapital expenditures
64
Table VII
Other Financing Sources and Uses and Net Change in Fund Balances
2014
Other Financing Sources (Uses):
Face amount of bonds
Premium on bonds
Premium on capital appreciation bonds
Payment to refunded bond escrow agent
Capital leases
Transfers in
Transfers out
Sale of capital assets
Total other financing sources and uses
Special Items:
Extraordinary item - insurance proceeds
Other
2013
$ (33,932,210)
538,380,132
140,295,828
(470,298,784)
(3,890,390)
40,520
$ 204,527,306
2011
Fiscal Year
2010
2009
2008
2007
2006
2005
1,428,815
(12,750,169)
(48,240,248)
(95,156,836)
(206,000,034)
(150,948,447)
(96,943,543)
(46,458,379)
(20,777,596)
776
(3,682,539)
45,038
25,943,262
60,776,276
(85,722,819)
1,632
(3,604,487)
25,544
101,592,358
60,998,410
(162,083,416)
(2,419,556)
59,131
87,691,435
46,779,856
(62,987,419)
954,742
(4,844,692)
98,776
27,575,000
361,898
2,500,000
(2,089,158)
46,567
276,122,094
29,061,358
(11,072,418)
(2,000,000)
77,291
116,679,552
31,327,509
(40,785,881)
(1,100,000)
29,768
151,579,916
2,656,437
(9,160,255)
(220,000)
19,783
107,951,837
8,148,101
(31,158,411)
(246,500)
13,631
(3,636,725)
(2,580,592)
(1,853,073)
67,692,698
28,394,307
292,188,325
106,150,948
144,875,881
84,708,658
$ 170,595,096
2012
-
-
-
(2,207,910)
(15,330,761)
416,491
(49,676,830)
65
4,450,110
(23,014,028)
(177,605,727)
141,239,878
9,207,405
98,417,502
63,931,062
Table VIII
Assessed and Estimated Actual Value of Taxable Property
Ratio of
Total
Fiscal
Year
Assessed
Real Property
Personal Property
Total
Total
to Total
Ended
Assessed
Estimated
Assessed
Estimated
Exemptions
Assessed
Estimated
Tax
Estimated
8-31
Value
Actual Value
Value
Actual Value
Real Property
Value
Actual Value
Rate
Actual Value
2005
6,210,118,852
8,260,191,614
342,656,511
342,656,511
2,050,072,762
6,552,775,363
8,602,848,125
1.7900
76%
2006
7,077,190,794
9,186,544,251
376,525,574
376,525,574
2,109,353,457
7,453,716,368
9,563,069,825
1.7500
78%
2007
8,190,567,531
10,673,930,525
424,255,004
424,255,004
2,483,362,994
8,614,822,535
11,098,185,529
1.6438
78%
2008
10,354,683,261
12,465,522,130
425,838,656
425,838,656
2,110,838,869
10,780,521,917
12,891,360,786
1.3334
84%
2009
11,665,548,081
12,525,277,464
522,530,700
522,530,700
859,729,383
12,188,078,781
13,047,808,164
1.3792
93%
2010
12,005,768,361
12,732,759,415
542,199,553
542,199,553
726,991,054
12,547,967,914
13,274,958,968
1.4223
95%
2011
11,764,559,852
12,695,165,154
466,854,028
466,854,028
930,605,302
13,071,136,978
13,162,019,182
1.4548
99%
2012
11,659,213,624
12,588,200,912
508,917,540
508,917,540
928,987,288
13,336,035,680
13,097,118,452
1.4998
102%
2013
12,125,296,930
13,104,628,552
522,852,763
522,852,763
979,331,622
13,876,783,843
13,627,481,315
1.5119
102%
2014
13,529,337,903
14,045,719,875
477,784,228
477,784,228
1,025,793,551
14,007,122,131
14,523,504,103
1.5119
96%
Source: Texas Municipal Report
Texas Comptroller of Public Accounts-Property Tax Assistance Division
66
Table IX
Property Tax Rates - Direct and Major Overlapping Governments
Fiscal
Year
Ended
8-31
M&O
I&S
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
1.4610
1.4490
1.3248
1.0058
1.0400
1.0400
1.0400
1.0400
1.0400
1.0400
0.3290
0.3010
0.3190
0.3276
0.3392
0.3823
0.4148
0.4598
0.4719
0.4719
School District
Total
City of
Austin
BHC
MUD
City of
Cedar Park
City of
Leander
1.7900
1.7500
1.6438
1.3334
1.3792
1.4223
1.4548
1.4998
1.5119
1.5119
0.44300
0.44300
0.41260
0.40340
0.40120
0.42090
0.45710
0.48110
0.50290
0.50270
0.82000
0.82000
0.86240
0.85990
0.84600
0.84600
0.84600
0.86600
0.86600
0.86600
0.48807
0.51807
0.51807
0.50807
0.48900
0.48900
0.49350
0.49350
0.49350
0.49250
0.55663
0.54829
0.59829
0.60759
0.60259
0.60042
0.65042
0.67042
0.67042
0.66792
Note:
Rates are per $100 of assessed valuation.
** NW Austin MUD #1 dissolved for tax year 2010
Source:
Travis County Tax Assessor Collector
Williamson County Tax Office
67
Travis
County
Travis
County
WC&ID
#17
Wm.
County
0.48720
0.49930
0.44990
0.42160
0.41220
0.42150
0.46580
0.48550
0.50010
0.49460
0.06000
0.06000
0.05915
0.61500
0.54940
0.52490
0.52480
0.52000
0.49260
0.44980
0.47885
0.46616
0.46749
0.45910
0.43943
0.46000
0.46000
0.45769
0.44903
0.44903
Wm.
County
MUD #9
Wmson/
Travis
County
MUD #1
Travis
County
ESD
#1
River
Place
MUD
NW
Austin
MUD #1
0.81260
0.81260
0.81260
0.75080
0.74000
0.74000
0.74000
0.74000
0.74000
0.73000
0.79650
0.78420
0.73420
0.71700
0.72250
0.71400
0.66400
0.66200
0.65700
0.61500
0.09890
0.10000
0.10000
0.10000
0.10000
0.10000
0.10000
0.10000
0.10000
0.10000
0.50000
0.45000
0.40000
0.35000
0.35000
0.33500
0.33500
0.33500
0.33500
0.33500
0.26000
0.30000
0.29000
0.27500
0.25250
0.24270
**
**
**
**
6
Table X
Ten Largest Taxpayers
August 31, 2014
Name
Rank
Type of Business
Amaravathi Limited Partnership
1 Land/Improvements
2 Real Estate
The Bassham Trust
3 Land/Improvements
MLIC Asset Holdings LLC
4 Land/Improvements
Minnesota Mining and Manufacturing Co
5 Research & Development
Cedar Park Health Systems
6 Healthcare
Austin 2222 Venture ILP
7 Land/Improvements
Fund IX CL Austin
8 Land/Improvements
SVF Vistas LLC
9 Land/Improvements
Hart Promesa LLC
10 Apartment Complex
SuddenLink Communications
- Utility
1890 Ranch LTD
- Land/Improvements
H.L. Chapman Pipeline Const. Inc.
- Land/Improvements
H. E. Butt Inc.
- Grocery
1890 Carssow East Ltd.
- Land/Improvements
The Bassham Trust - Verandah at Grandview Hills - Land/Improvements
The Bassham Trust - Sonterra Apartments
- Land/Improvements
Taylor Woodrow Communities
- Land/Improvements
River Place Pointe LP
- Life Insurance
LNR Grandview Limited Ptrnsh
- Real Estate
Gunbarrell LLC
- Apartment Complex
Twin Creeks Vistas LP
- Land/Improvements
Western Rim Investors 2000-3 LP
- Real Estate
Jefferson at Four Points LP
- Apartment Complex
Western Rim Investors 2000-2 LP
- Real Estate
Ameritron Properties Incorp
- Commercial
Northland Lakeline LP
- Real Estate
Metropolitan Tower Realty Co. INC
- Real Estate
2013
Assessed
Valuation
$92,540,000
89,510,688
88,300,000
78,060,240
78,008,961
75,960,377
41,730,000
41,360,000
34,410,000
33,855,497
$653,735,763
Source: Travis County Tax Office
Williamson County Tax Office
69
Percentage
of 2013
Total Assessed
Valuation
Rank
0.63%
0.60%
0.60%
0.53%
0.53%
0.51%
0.28%
0.28%
0.23%
0.23%
4.42%
2
1
3
6
5
4
8
7
10
9
-
2012
Assessed
Valuation
87,600,000
95,508,877
81,580,146
63,000,000
75,274,518
79,217,818
36,000,000
36,448,125
28,700,000
34,524,683
$617,854,167
Percentage
of 2012
Total Assessed
Valuation
0.63%
0.69%
0.59%
0.45%
0.54%
0.57%
0.26%
0.26%
0.21%
0.25%
4.45%
Rank
1
2
5
3
4
9
8
6
7
10
-
2011
Assessed
Valuation
79,831,287
74,011,401
63,863,281
73,901,659
71,397,463
32,000,000
32,500,000
59,656,919
33,615,482
26,283,453
$547,060,945
Percentage
of 2011
Total Assessed
Valuation
Rank
0.60%
0.55%
0.48%
0.55%
0.54%
0.24%
0.24%
0.45%
0.25%
0.20%
4.10%
1
4
5
3
2
8
9
6
10
7
-
2010
Assessed
Valuation
79,078,744
71,797,183
70,419,952
73,901,659
78,367,059
30,306,553
30,068,966
53,663,266
29,474,561
31,046,223
$548,124,166
Percentage
of 2010
Total Assessed
Valuation
Rank
0.60%
0.55%
0.54%
0.57%
0.60%
0.23%
0.23%
0.41%
0.23%
0.24%
-
1
2
4
3
10
9
5
6
7
8
-
4.20%
2009
Assessed
Valuation
109,691,508
95,060,284
73,901,659
80,040,039
33,085,754
34,155,640
54,558,604
40,661,471
36,749,497
34,716,298
$592,620,754
Percentage
of 2009
Total Assessed
Valuation
Rank
0.87%
0.76%
0.59%
0.64%
0.26%
0.27%
0.43%
0.32%
0.29%
0.28%
-
2
4
3
8
7
10
9
6
1
5
-
4.71%
2008
Assessed
Valuation
103,203,592
73,871,091
86,979,442
37,534,519
39,579,632
30,778,600
34,749,227
41,626,555
119,896,294
48,358,339
$616,577,291
Percentage
of 2008
Total Assessed
Valuation
0.85%
0.61%
0.71%
0.31%
0.32%
0.25%
0.29%
0.34%
0.98%
0.40%
5.06%
Rank
2
3
7
5
10
8
1
4
6
9
-
2007
Assessed
Valuation
112,516,528
73,644,886
39,500,000
44,204,323
31,343,520
34,626,024
$116,042,949
47,461,400
40,788,110
33,143,746
$573,271,486
Percentage
of 2007
Total Assessed
Valuation
Rank
1.10%
0.72%
0.38%
0.43%
0.31%
0.34%
1.13%
0.46%
0.40%
0.32%
5.59%
(continued)
2
7
10
1
4
6
3
5
8
9
-
2006
Assessed
Valuation
Percentage
of 2006
Total Assessed
Valuation
Rank
71,431,153
38,160,581
29,373,433
$103,209,842
44,616,198
40,763,800
58,251,544
41,591,898
30,817,783
30,253,371
-
0.86%
0.46%
0.35%
1.25%
0.54%
0.49%
0.70%
0.50%
0.37%
0.36%
-
2
6
10
1
4
3
5
8
7
9
-
$488,469,603
5.88%
2005
Assessed
Valuation
69,440,635
37,350,778
25,269,161
$102,939,712
45,676,805
53,448,303
40,656,876
28,872,134
29,865,393
25,769,938
$459,289,735
Percentage
of 2005
Total Assessed
Valuation
Rank
0.93%
0.50%
0.34%
1.38%
0.61%
0.72%
0.55%
0.39%
0.40%
0.34%
-
1
7
4
3
5
2
6
9
8
10
6.16%
2004
Assessed
Valuation
66,250,300
30,649,576
36,285,741
$37,257,153
35,758,872
45,508,240
33,288,245
24,101,500
24,102,748
22,286,024
$355,488,399
Percentage
of 2004
Total Assessed
Valuation
1.01%
0.47%
0.55%
0.57%
0.55%
0.69%
0.51%
0.37%
0.37%
0.34%
5.43%
Table XI
Property Tax Levies and Collections
Fiscal
Year
(1)
Ended
8-31
Total
Tax Levy
Current Tax
Collections
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
123,584,320
137,022,207
149,985,112
147,031,050
172,854,291
184,376,375
185,133,449
195,093,726
205,513,248
222,408,317
121,797,952
134,593,378
148,267,191
145,456,623
170,703,883
182,389,634
183,682,527
193,579,654
204,738,906
220,382,632
Total
Collections
as Percent Outstanding
Percent
of Levy Delinquent Tax
Collected
Collections
98.55%
98.23%
98.85%
98.93%
98.76%
98.92%
99.22%
99.22%
99.62%
99.09%
1,725,575
2,365,043
1,644,768
1,478,349
2,013,757
1,797,969
1,204,080
1,184,220
300,562
-
(1) Total tax levy, net of adjustments.
Source: Levy: Texas Municipal Report
Collections: Leander ISD - ITCCS
Delinquent: Travis and Willamson County Tax Offices
72
Total Taxes
Collected
of Current
Tax Levy
123,523,527
136,958,421
149,911,959
146,934,972
172,717,640
184,187,603
184,886,607
194,763,874
205,039,468
220,382,632
99.95%
99.95%
99.95%
99.93%
99.92%
99.90%
99.87%
99.83%
99.77%
99.09%
Delinquent
Taxes
60,793
63,786
73,153
96,078
136,651
188,772
246,842
329,852
473,780
2,025,685
Outstanding
Delinquent
Taxes as
Percent of
Tax Levy
0.05%
0.05%
0.05%
0.07%
0.08%
0.10%
0.13%
0.17%
0.23%
0.91%
Table XII
Schedule of Delinquent Taxes Receivable
Last Ten
Years Ended
August 31
2005 and prior
2006
2007
2008
2009
2010
2011
2012
2013
2014
Tax Rates
Assessed/
Appraised
Value for School
Beginning
Balance
Current
Year’s
Maintenance
Total
Debt Service
Total
Entire
Year’s
Ending
Balance
Maintenance Debt Service
Tax Purposes
8/31/2013
Total Levy
Collections
Collections
Adjustment
8/31/2014
219,988,143
12,601
4,986
9,955
11,318
35,274
37,378
67,365
59,141
844,809
151,679,596
2,937
1,036
2,397
3,686
11,506
13,742
26,868
26,145
383,308
68,703,036
(35,665)
(50)
(740)
(1,439)
13,166
(18,038)
(8,040)
(72,161)
(72,945)
2,420,174
205,069
63,786
73,153
96,078
136,651
188,772
246,842
329,852
473,780
2,025,685
219,988,143
152,762,423
69,174,661
2,224,262
3,839,668
1.46100
1.44900
1.32480
1.00580
1.04000
1.04000
1.04000
1.04000
1.04000
1.04000
0.3291
0.3010
0.3190
0.3276
0.3392
0.3823
0.4148
0.4598
0.4719
0.4719
5,983,007,496
7,453,716,368
8,614,822,535
10,780,521,917
12,188,078,781
12,547,967,914
13,071,136,978
13,336,035,680
13,876,783,843
14,007,122,131
Totals
Source:
256,272
69,858
86,245
112,521
170,265
257,930
349,115
487,299
1,774,842
$ 3,564,347
Texas Municipal Report
Travis and Williamson County Tax Offices
73
DEBT CAPACITY
Table XIII
Outstanding Debt by Type
Fiscal
Year
Ended
8-31
2006
2007
2008
2009
2010
2011
2012
2013
2014
General
Obligation
Bonds
$ 749,142,030
869,580,124
1,175,523,351
1,211,553,630
1,289,894,717
1,280,878,934
1,288,423,426
1,307,083,005
1,535,205,557
Amounts Available
for Retirement
of Bonds
*
*
*
*
*
*
*
*
*
$
10,882,356
12,112,689
35,563,184
24,615,320
18,105,520
15,117,334
17,836,270
20,989,715
23,798,811
Net Bonded
Debt
Personal
Income
Population
$ 738,259,674
857,467,435
1,139,960,167
1,186,938,310
1,271,789,197
1,265,761,600
1,270,587,156
1,286,093,290
1,511,406,746
$ 2,487,508,188
2,109,291,483
2,389,272,072
2,910,490,891
2,898,551,925
3,224,993,744
3,432,329,600
3,610,856,865
4,122,385,485
84,612
90,564
99,427
101,563
99,045
102,956
107,200
111,615
120,845
Ratio of (net) general bonded debt to estimated actual value of property: 11%
Note: Prior years Personal Income was not available.
* General Obligation Bonds amount includes accretion on capital appreciation bonds.
Source: Population and Personal Income - City of Leander and City of Cedar Park
74
Percentage
of Personal
Income
30.12%
41.23%
49.20%
41.63%
44.50%
39.72%
37.54%
36.20%
37.24%
Per
Capita
$ 8,854
9,602
11,823
11,929
13,023
12,441
12,019
11,711
12,704
Table XIV
Computation of Direct and Overlapping Debt
August 31, 2014
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
Gross Debt
Outstanding
Percent
Share
Outstanding
As of
Overlapping
of Debt
$82,713,659
08/31/14
11.84%
$
9,793,297
$1,310,669,994
08/31/14
2.00%
26,213,400
$10,510,000
08/31/14
57.07%
5,998,057
$5,535,000
08/31/14
100.00%
5,535,000
15,360,000
08/31/14
100.00%
15,360,000
166,835,000
08/31/14
91.33%
152,370,406
1,160,000
08/31/14
30.23%
350,668
99,281,000
08/31/14
100.00%
99,281,000
11,735,000
08/31/14
100.00%
11,735,000
4,515,000
08/31/14
100.00%
4,515,000
3,795,000
08/31/14
100.00%
3,795,000
660,879,987
08/31/14
5.38%
35,555,343
1,325,000
08/31/14
27.61%
365,833
4,980,000
08/31/14
28.48%
1,418,304
13,240,000
08/31/14
5.38%
712,312
85,788,395
08/31/14
100.00%
85,788,395
5,190,000
08/31/14
100.00%
5,190,000
849,554,942
08/31/14
22.26%
189,110,930
10,205,000
08/31/14
100.00%
10,205,000
15,490,000
08/31/14
100.00%
15,490,000
4,175,000
08/31/14
100.00%
4,175,000
5,950,000
08/31/14
100.00%
5,950,000
Taxing Body
Austin CCD
City of Austin
Bella Vista MUD
Blockhouse Creek MUD
City of Cedar Park
City of Jonestown
City of Leander
River Place MUD
Travis County
Vista Oaks MUD
Williamson County
Williamson-Travis WC&ID #1-G
Williamson-Travis Cos WC
Total net overlapping debt
3,368,887,977
Leander ISD
Total Direct and Overlapping Debt
(12.00% of Taxable Assessed
Valuation - $14,707 per capita)
1,088,320,287
$ 4,457,208,264
688,907,943
08/31/14
100.00%
1,088,320,287
$ 1,777,228,230
NOTE: Percentage of overlapping debt is calculated by the Municipal Advisory Council of Texas based on
the assessed values received from the county appraisal districts and using the shared values between the
other taxing body and Leander ISD and dividing it by the other taxing bodies' assessed value.
Source: Municipal Advisory Council of Texas
75
DEMOGRAPHIC AND
ECONOMIC INFORMATION
Table XV
Demographic Statistics
Last Ten Years
Austin/San Marcos Metropolitan Statistical Area
Fiscal Estimated
Year
School
Ended
District
31-Aug Population
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
80,791
84,612
90,564
99,427
101,563
99,045
102,956
107,200
111,615
120,845
Personal
Income
Per Capita
Personal
Income
(A)
Labor
Force
NA
$1,913,267,697
$2,109,291,483
$2,389,272,072
$2,910,490,891
$2,898,551,925
$3,224,993,744
$3,432,329,600
$3,610,856,865
$4,122,385,485
NA
$22,612
$23,291
$24,030
$28,657
$29,265
$31,324
$32,018
$32,351
$34,113
792,392
822,386
843,854
858,696
883,791
905,901
912,773
952,918
979,829
1,019,696
(A)
(A)
(A)
(A)
Percent
Employment Unemployment Unemployed Manufacturing Construction
755,719
788,365
813,414
826,818
830,755
840,812
848,243
893,694
927,370
972,993
(A)
36,673
34,021
30,440
32,712
53,036
65,089
64,530
59,224
52,459
46,703
(A) Source: Texas Workforce Commission
76
4.6%
4.1%
3.6%
3.8%
6.0%
7.2%
7.1%
6.2%
5.4%
4.5%
57,417
56,950
59,833
57,958
54,492
46,983
47,908
51,175
51,133
52,950
39,017
41,975
47,425
50,017
45,625
39,450
38,600
41,117
44,158
46,283
(A)
(A)
(A)
Trades
Government
Other
117,550
123,433
130,217
137,742
137,408
131,225
136,717
139,908
149,650
157,642
146,792
153,525
156,500
159,125
165,875
168,792
157,425
168,008
167,850
170,400
394,943
412,482
419,439
421,976
427,355
454,362
467,593
493,486
514,579
545,718
Table XVI
Full Time Equivalent District Employees by Type
Instruction
Instructional Resources and Media Services
Curriculum and Staff Development
Instructional Leadership
School Leadership
Guidance, Counseling, and Evaluation Services
Health Services
Food Services
Extracurricular Activities
Facilities Maintenance and Operations
Community Services
Facilities and Acquisition
Total
2014
2013
2012
2011
2010
2009
2008
2007
2006
3,024.28
42.75
85.41
26.50
266.75
160.20
11.00
44.00
188.33
237.12
22.00
63.00
336.25
7.00
55.25
34.00
5.50
4,609.34
3,126.32
42.00
86.41
25.50
268.00
155.20
11.00
43.00
175.36
227.59
20.00
61.50
338.25
6.00
54.75
34.00
6.00
4,680.88
3,032.66
46.00
70.00
22.50
263.75
147.00
8.00
40.00
162.84
207.58
19.00
55.00
304.00
5.00
69.50
35.00
6.00
4,493.83
2,715.77
70.00
90.83
28.00
252.50
156.50
7.00
40.00
160.90
297.00
19.00
63.00
318.25
4.00
61.15
34.00
6.00
4,323.90
2,641.78
72.00
94.00
28.00
245.00
155.00
7.00
41.00
156.90
213.96
19.00
63.00
322.00
3.00
62.00
37.00
8.00
4,168.64
2,436.70
83.00
86.00
27.00
227.00
150.00
7.00
37.00
142.40
142.26
16.00
63.50
278.00
3.00
42.00
35.00
8.00
3,783.86
2,135.78
72.25
74.25
22.20
223.50
142.54
6.00
30.00
109.00
84.00
44.37
62.15
271.50
3.00
39.50
28.00
5.85
3,353.89
2,056.05
70.25
60.00
18.20
189.25
121.50
4.00
30.00
152.30
148.40
8.65
59.55
242.00
3.00
28.00
26.00
2.85
1,781.12
53.25
54.00
19.20
184.75
106.20
1.00
30.00
145.10
151.33
8.65
56.55
236.00
2.00
25.00
23.00
2.85
3,220.00
2,880.00
Source: Leander ISD Human Resources Department
Note 1: Data not available prior to August 31, 2006
77
Table XVII
Operating Statistics
Fiscal
General
Percentage
Year
Governmental Average
Average
Pupilof Students
Ended Expenditures/
Daily
Daily
Per Pupil
Peak
Percent Teaching Teacher Free or Reduced
31-Aug
Attendance Membership Expenditure Enrollment Change
Staff
Ratio
Meals
Expenses
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
Source:
122,840,499
140,294,090
166,416,539
195,457,942
214,659,293
221,638,785
229,813,885
224,273,109
239,076,788
247,201,839
18,922
20,901
23,111
25,132
26,954
28,788
30,495
31,693
32,619
33,747
19,762
21,847
24,433
26,443
28,364
30,321
32,034
33,179
34,265
35,355
6,216
6,422
6,811
7,543
7,568
7,310
7,174
6,759
6,977
6,992
20,022
22,170
24,458
26,538
28,410
30,400
32,090
33,268
34,275
35,370
9.87%
10.73%
10.32%
8.50%
7.05%
7.00%
5.56%
3.67%
3.03%
3.19%
ADA - Texas Education Agency (TEA) Summary of Finance
ADM - TEA Texas Academic Performance Report (formerly AEIS Report)
Peak Enrollment - Leander ISD PEIMS
Teaching Staff - TEA Staff FTE & Salary Report
Free/Reduced - TEA AEIS Report
78
NA
1,778
1,911
1,877
2,011
2,086
2,206
2,159
2,231
2,301
NA
12:1
13:1
14:1
14:1
14:1
14:1
15:1
15:1
15:1
NA
18.83
17.15
17.20
19.10
22.60
22.50
22.00
21.90
18.90
Table XVIII
Principal Employers
August 31, 2014
2014
Name
Leander ISD
H.E. Butt Grocery
3M Company
Wal-Mart
National Oilwell Varco
Cedar Park Regional Medical Center
City of Cedar Park
Target
Home Depot
ETS-Lindgren
Total Employment
Rank
1
Number
of
Employees
4,243
Percentage
of Total
Employment
8.46%
2
3
4
5
6
7
8
9
10
980
950
900
480
450
405
400
330
270
1.95%
1.89%
1.79%
0.96%
0.90%
0.81%
0.80%
0.66%
0.54%
50,176
Source: City of Leander, City of Cedar Park, and Leander ISD Business and Operations
79
OPERATING INFORMATION
Table XIX
Teacher Base Salaries
Fiscal
Year
Ended
8-31
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
Minimum
Salary
Maximum
Salary
34,200
35,050
38,600
40,200
41,200
42,000
42,500
42,000
42,500
42,750
51,810
54,311
58,388
60,325
60,602
61,427
62,975
62,975
63,935
63,935
Source: Leander ISD Human Resources Department,
Texas Education Agency PEIMS Division
80
Statewide
Average
Salary
41,009
42,651
44,897
46,178
47,158
47,975
48,497
48,314
48,784
48,974
Table XX
Fiscal Year
School
Elementary
Whitestone
Square Feet
Portables
Capacity
Enrollment
Faubion
Square Feet
Portables
Capacity
Enrollment
Block House Creek
Square Feet
Portables
Capacity
Enrollment
Cypress Creek
Square Feet
Portables
Capacity
Enrollment
Mason
Square Feet
Portables
Capacity
Enrollment
Giddens
Square Feet
Portables
Capacity
Enrollment
Steiner Ranch
Square Feet
Portables
Capacity
Enrollment
Naumann
Square Feet
Portables
Capacity
Enrollment
Bagdad
Square Feet
Portables
Capacity
Enrollment
Cox
Square Feet
Portables
Capacity
Enrollment
Year
Built
1991
2014
2013
2012
2011
77,315
9,216
800
833
77,315
9,216
800
797
77,315
9,216
800
787
77,315
6,144
800
776
73,397
3,072
800
580
73,397
3,072
800
581
73,397
3,072
800
571
73,397
3,072
800
602
82,479
7,680
800
653
82,479
7,680
800
692
82,479
7,680
800
686
82,479
7,680
800
734
83,122
6,144
800
758
83,122
6,144
800
749
83,122
6,144
800
767
83,122
6,144
800
819
89,000
6,144
800
638
89,000
6,144
800
657
89,000
6,144
800
687
89,000
6,144
800
713
91,000
3,072
800
532
91,000
3,072
800
546
91,000
3,072
800
570
91,000
3,072
800
572
92,000
3,072
800
674
92,000
3,072
800
723
92,000
3,072
800
727
92,000
3,072
800
753
95,000
10,752
800
736
95,000
10,752
800
757
95,000
10,752
800
812
95,000
10,752
800
756
95,000
4,608
800
596
95,000
4,608
800
596
95,000
4,608
800
584
95,000
4,608
800
557
95,298
12,288
800
776
95,298
12,288
800
782
95,298
12,288
800
811
95,298
12,288
800
711
1993
1987
1988
1994
1996
1996
1998
1999
2001
81
Table XX
Fiscal Year
2010
2009
2008
2007
2006
2005
77,315
6,144
800
776
77,315
6,144
800
784
77,315
1,536
800
622
77,315
1,536
800
561
77,315
1,536
800
511
77,315
3,072
800
478
73,397
3,072
800
599
73,397
3,072
800
606
73,397
3,072
800
645
73,397
3,072
800
646
73,397
1,536
800
649
73,397
3,072
800
624
82,479
7,680
800
764
82,479
7,680
800
763
82,479
7,680
800
823
82,479
6,144
800
805
82,479
4,608
800
838
82,479
4,608
800
817
83,122
6,144
800
841
83,122
6,144
800
804
83,122
6,144
800
708
83,122
6,144
800
667
83,122
6,144
800
582
83,122
9,216
800
532
89,000
6,144
800
691
89,000
6,144
800
683
89,000
6,144
800
671
89,000
6,144
800
654
89,000
3,072
800
644
89,000
3,072
800
642
91,000
3,072
800
562
91,000
3,072
800
559
91,000
3,072
800
636
91,000
3,072
800
654
91,000
800
653
91,000
800
585
92,000
3,072
800
759
92,000
3,072
800
839
92,000
3,072
800
794
92,000
6,144
800
933
92,000
1,536
800
908
92,000
800
806
95,000
10,752
800
716
95,000
10,752
800
758
95,000
10,752
800
987
95,000
9,216
800
876
95,000
9,216
800
859
95,000
10,752
800
961
95,000
4,608
800
582
95,000
4,608
800
598
95,000
4,608
800
689
95,000
7,680
800
679
95,000
7,680
800
815
95,000
4,608
800
749
95,298
12,288
800
683
95,298
12,288
800
1,002
95,298
6,144
800
933
95,298
3,072
800
819
95,298
800
730
95,298
3,072
800
910
8
Table XX
Bush
Square Feet
Portables
Capacity
Enrollment
Knowles
Square Feet
Portables
Capacity
Enrollment
Deer Creek
Square Feet
Portables
Capacity
Enrollment
Pleasant Hill
Square Feet
Portables
Capacity
Enrollment
Rutledge
Square Feet
Portables
Capacity
Enrollment
Plain
Square Feet
Portables
Capacity
Enrollment
Winkley
Square Feet
Portables
Capacity
Enrollment
Riverplace
Square Feet
Portables
Capacity
Enrollment
Grandview Hills
Square Feet
Portables
Capacity
Enrollment
Parkside
Square Feet
Portables
Capacity
Enrollment
Westside
Square Feet
Portables
Capacity
Enrollment
Ronald Reagan
Square Feet
Portables
Capacity
Enrollment
2002
97,643
9,216
800
816
97,643
9,216
800
841
97,643
9,216
800
896
97,643
9,216
800
862
96,670
7,680
800
700
96,670
7,680
800
679
96,670
7,680
800
639
96,670
7,680
800
624
98,075
7,680
800
759
98,075
7,680
800
765
98,075
7,680
800
748
98,075
7,680
800
778
98,075
6,144
800
741
98,075
6,144
800
733
98,075
6,144
800
730
98,075
6,144
800
721
100,472
9,216
800
757
100,472
9,216
800
717
100,472
9,216
800
731
100,472
9,216
800
729
108,414
800
812
108,414
800
772
108,414
800
787
108,414
800
784
108,414
800
838
108,414
800
783
108,414
800
730
108,414
800
807
108,414
800
794
108,414
800
783
108,414
800
785
108,414
800
670
119,160
800
499
119,160
800
519
119,160
800
510
119,160
800
561
111,585
800
826
111,585
800
732
111,585
800
663
111,585
800
682
112,270
800
767
112,270
800
736
112,270
800
725
112,270
800
721
112,270
6,144
800
962
112,270
6,144
800
899
112,270
6,144
800
820
112,270
800
862
2003
2004
2004
2005
2006
2006
2007
2008
2009
2009
2010
8
Table XX
97,643
9,216
800
820
97,643
9,216
800
1,034
97,643
4,608
800
862
97,643
12,288
800
1,134
97,643
4,608
800
989
97,643
800
765
96,670
7,680
800
635
96,670
7,680
800
660
96,670
7,680
800
751
96,670
7,680
800
720
96,670
7,680
800
931
96,670
6,144
800
795
98,075
7,680
800
810
98,075
7,680
800
812
98,075
10,752
800
1,021
98,075
10,752
800
974
98,075
800
899
98,075
800
691
98,075
6,144
800
679
98,075
6,144
800
650
98,075
9,216
800
1,009
98,075
7,680
800
969
98,075
6,144
800
987
98,075
800
800
100,472
9,216
800
661
100,472
9,216
800
971
100,472
3,072
800
824
100,472
800
649
100,472
800
419
NA
NA
NA
NA
108,414
800
712
108,414
800
608
108,414
800
508
108,414
800
386
NA
NA
NA
NA
NA
NA
NA
NA
108,414
800
800
108,414
800
699
108,414
800
579
108,414
800
503
NA
NA
NA
NA
NA
NA
NA
NA
108,414
800
672
108,414
800
664
108,414
800
557
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
119,160
800
510
119,160
800
359
7,680
800
251
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
111,585
800
630
111,585
800
535
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
112,270
800
712
112,270
800
599
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
112,270
800
818
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
8
Table XX
River Ridge
Square Feet
Portables
Capacity
Enrollment
Middle
Cedar Park
Square Feet
Portables
Capacity
Enrollment
Leander
Square Feet
Portables
Capacity
Enrollment
Running Brushy
Square Feet
Portables
Capacity
Enrollment
Henry
Square Feet
Portables
Capacity
Enrollment
Canyon Ridge
Square Feet
Portables
Capacity
Enrollment
Wiley
Square Feet
Portables
Capacity
Enrollment
Four Points
Square Feet
Portables
Capacity
Enrollment
Stiles
Square Feet
Portables
Capacity
Enrollment
High
Leander
Square Feet
Portables
Capacity
Enrollment
Cedar Park
Square Feet
Portables
Capacity
Enrollment
2010
110,840
3,072
800
956
110,840
3,072
800
875
110,840
800
793
110,840
800
680
175,245
9,216
1,200
1,385
175,245
9,216
1,200
1,394
175,245
9,216
1,200
1,343
175,245
9,216
1,200
1,314
155,000
9,216
1,200
844
155,000
9,216
1,200
871
155,000
9,216
1,200
808
155,000
7,680
1,200
808
158,625
4,608
1,200
1,274
158,625
4,608
1,200
1,261
158,625
4,608
1,200
1,237
158,625
4,608
1,200
1,131
164,444
3,072
1,200
1,301
164,444
3,072
1,200
1,308
164,444
3,072
1,200
1,518
164,444
3,072
1,200
1,388
171,452
1,200
1,218
171,452
1,200
1,095
171,452
1,200
972
171,452
1,200
884
176,564
1,200
985
176,564
1,200
958
176,564
1,200
1,278
176,564
1,200
1,229
178,849
1,200
641
178,849
1,200
635
178,849
1,200
615
178,849
1,200
555
177,370
1,200
842
177,370
1,200
666
NA
NA
NA
NA
NA
NA
NA
NA
360,957
10,752
2,400
1,990
360,957
10,752
2,400
1,928
360,957
10,752
2,400
1,926
360,957
10,752
2,400
2,043
374,785
4,608
2,400
1,840
374,785
4,608
2,400
1,778
374,785
4,608
2,400
1,792
374,785
4,608
2,400
1,937
1995
1996
2000
2003
2004
2006
2011
2012
1984
1998
8
Table XX
110,840
800
522
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
175,245
9,216
1,200
1,272
175,245
9,216
1,200
1,269
158,498
15,360
1,200
1,247
158,498
16,896
1,200
1,225
158,498
15,360
1,200
1,147
158,498
12,288
1,200
1,046
155,000
7,680
1,200
754
155,000
7,680
1,200
743
155,000
9,216
1,200
663
155,000
7,680
1,200
636
155,000
6,144
1,200
772
155,000
7,680
1,200
792
158,625
4,608
1,200
1,126
158,625
4,608
1,200
1,121
158,625
4,608
1,200
1,105
158,625
4,608
1,200
1,076
158,625
3,072
1,200
1,060
158,625
3,072
1,200
1,040
164,444
3,072
1,200
1,290
164,444
3,072
1,200
1,260
164,444
1,200
1,135
164,444
1,200
976
164,444
1,200
1,200
164,444
1,200
1,069
171,452
1,200
1,194
171,452
1,200
1,061
171,452
1,200
893
171,452
1,200
783
171,452
1,200
628
171,452
1,200
532
176,564
1,200
1,074
176,564
1,200
825
176,564
1,200
723
176,564
1,200
607
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
360,957
10,752
2,400
2,198
360,957
10,752
2,400
2,348
346,020
10,752
2,400
2,266
346,020
10,752
2,400
2,083
346,020
10,752
2,400
1,994
346,020
10,752
2,400
2,004
374,785
4,608
2,400
2,021
374,785
4,608
2,400
2,395
366,721
4,608
2,400
2,310
366,721
4,608
2,400
2,117
366,721
4,608
2,400
2,125
366,721
4,608
2,400
2,106
8
Table XX
Vista Ridge
Square Feet
Portables
Capacity
Enrollment
Rouse
Square Feet
Portables
Capacity
Enrollment
Vandergrift
Square Feet
Portables
Capacity
Enrollment
New Hope
Square Feet
Capacity
Enrollment
LEO
Square Feet
Capacity
Enrollment
South PAC
Square Feet
Capacity
North PAC
Square Feet
Capacity
Other
Administration
Square Feet
Plant Services
Square Feet
Transportation
Square Feet
Technology Center
Square Feet
Other Administration
Square Feet
Portables
Regional Stadium
Capacity
Monroe Stadium
Capacity
Bible Stadium
Capacity
2003
427,106
2,400
1,978
427,106
2,400
1,869
427,106
2,400
1,776
427,106
2,400
1,862
437,194
2,400
2,126
437,194
2,400
2,047
437,194
2,400
1,843
437,194
2,400
1,296
397,183
397,183
3,014
3,014
1,800
1,800
1,875
1,691
* Housed in middle school #7 during 09-10
397,183
3,014
1,800
1,455
397,183
1,800
975
2008
2010*
Portables
3,072
50
43
3,072
50
46
3,072
50
41
3,072
50
27
47,637
308
NA
47,637
308
NA
47,637
308
NA
47,637
308
NA
33,994
800
33,994
800
33,994
800
33,994
800
46,000
800
46,000
800
46,000
800
46,000
800
23,365
23,365
23,365
23,365
30,000
30,000
30,000
30,000
23,000
23,000
23,000
23,000
27,553
27,553
27,553
27,553
6,312
12,288
6,312
12,288
6,312
12,288
6,312
12,288
10,212
10,212
10,212
10,212
7,500
7,500
7,500
7,500
10,212
10,212
10,212
10,212
2010
2009
2009
Source: Leander ISD Construction Department
8
Table XX
427,106
2,400
1,960
415,249
2,400
2,007
407,102
2,400
2,167
407,102
2,400
2,045
407,102
2,400
1,442
407,102
2,400
970
437,194
2,400
832
437,194
2,400
371
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
178,849
1,200
559
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
3,072
50
29
3,072
50
39
3,072
50
44
3,072
50
56
3,072
50
44
3,072
50
35
47,637
308
NA
47,637
308
NA
47,637
308
NA
47,637
308
NA
47,637
308
NA
47,637
308
NA
33,994
800
33,994
800
33,994
800
33,994
800
33,994
800
33,994
800
46,000
800
46,000
800
46,000
800
46,000
800
46,000
800
46,000
800
23,365
23,365
23,365
23,365
23,365
23,365
30,000
30,000
30,000
30,000
30,000
30,000
23,000
23,000
23,000
23,000
23,000
23,000
27,553
27,553
27,553
15,463
15,463
15,463
6,312
12,288
6,312
12,288
6,312
12,288
6,312
12,288
6,312
12,288
6,312
NA
NA
NA
NA
NA
NA
NA
7,500
NA
NA
NA
NA
NA
10,212
NA
NA
NA
NA
NA
8
Table XXI
Fund Balance and Cash Flow Calculation Worksheet
General Fund as of August 31, 2014
Exhibit J-3
(Unaudited)
Data Control
Code
Explanation
Amount
Total General Fund Balance 8/31/14 (Exhibit C-1 object 3000
for the General Fund Only)
$ 107,625,085
Total Nonspendable & Restricted Fund Balance (from Exhibit
C-1 - total of object 3400s for the General Fund only)
$
513,230
Total Committed & Assigned Fund Balance (from Exhibit
C-1 - total of object 3500s for the General Fund only)
$
22,083,171
Estimated amount needed to cover fall cash flow deficits in
General Fund (net of borrowed funds and funds representing
deferred revenues)
$
3,823,102
Estimate of two month's average cash disbursements during
the regular school session (9/1/14-5/31/15)
$
40,409,650
Estimate of delayed payments from state sources (58XX)
including August payment delays
$
46,388
Estimate of underpayment from state sources equal to variance
between Legislative Payment Estimate (LPE) and District
Planning Estimate (DPE) or District's calculated earned state
aid amount
$
-
8
Estimate of delayed payments from federal sources (59XX)
$
-
9
Estimate of expenditures to be reimbursed to General Fund from
Capital Projects Fund (uses of General Fund cash after
bond referendum and prior to issuance of bonds)
$
-
10
Adjustment to meet Board Policy
$
20,204,825
11
Optimum Fund Balance and Cash Flow
(2 + 3 + 4 + 5 + 6 + 7 + 8 + 9 + 10)
$
87,080,366
Excess/(Deficit) Unassigned General Fund
Fund Balance (1 -11)
$
20,544,719
1
2
3
4
5
6
7
12
Note: This schedule is included to satisfy Texas Education Agency reporting requirements.
Explanation of need for and/or projected use of net positive
The Board intends that funds shall be available for emergency needs of the District and shall provide
funds to be used for such purposes and such opportunities as shall arise, which will benefit the District.
89
LEANDER INDEPENDENT
SCHOOL DISTRICT
Compliance and Single Audit Reports
for the Year Ended August 31, 2014
TABLE OF CONTENTS
Page
Independent Auditors’ Report on Internal Control Over Financial Reporting
and on Compliance and Other Matters Based on an Audit of Financial
Statements Performed in Accordance with Government Auditing Standards
1-2
Independent Auditors’ Report on Compliance for Each Major Federal Program
and Report on Internal Control Over Compliance and Report on the
Schedule of Expenditures of Federal Awards Required by
OMB Circular A-133
3-5
Schedule of Expenditures of Federal Awards
6-7
Notes to the Schedule of Expenditures of Federal Awards
Schedule of Findings and Questioned Costs
8
9-10
LLP
tel (512) 370 3200 fax (512) 370 3250
www.mlrpc.com
Austin, TX 78701
INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL
OVER FINANCIAL REPORTING AND ON COMPLIANCE AND
OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL
STATEMENTS PERFORMED IN ACCORDANCE WITH
GOVERNMENT AUDITING STANDARDS
We have audited, in accordance with the auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards
issued by the Comptroller General of the United States, the financial statements of the governmental
activities, each major fund, and the aggregate remaining fund information of Leander Independent
School District (the “District”), as of and for the year ended August 31, 2014, and the related notes to
the financial statements, which collectively comprise the District’s basic financial statements, and have
issued our report thereon dated January 16, 2015.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the District’s internal
control over financial reporting (internal control) to determine the audit procedures that are appropriate
in the circumstances for the purpose of expressing our opinions on the financial statements, but not for
the purpose of expressing an opinion on the effectiveness of the District’s internal control. Accordingly,
we do not express an opinion on the effectiveness of the District’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent, or
detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a
combination of deficiencies, in internal control, such that there is a reasonable possibility that a material
misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a
timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal
control that is less severe than a material weakness, yet important enough to merit attention by those
charged with governance.
Affiliated Company
LLC
Our consideration of internal control was for the limited purpose described in the first paragraph of this
section and was not designed to identify all deficiencies in internal control that might be material
weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any
deficiencies in internal control that we consider to be material weaknesses. However, material
weaknesses may exist that have not been identified.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the District’s financial statements are free of
material misstatement, we performed tests of its compliance with certain provisions of laws, regulations,
contracts, and grant agreements, noncompliance with which could have a direct and material effect on
the determination of financial statement amounts. However, providing an opinion on compliance with
those provisions was not an objective of our audit, and accordingly, we do not express such an opinion.
The results of our tests disclosed no instances of noncompliance or other matters that are required to be
reported under Government Auditing Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and
compliance and the results of that testing, and not to provide an opinion on the effectiveness of the
entity’s internal control or on compliance. This report is an integral part of an audit performed in
accordance with Government Auditing Standards in considering the entity’s internal control and
compliance. Accordingly, this communication is not suitable for any other purpose.
Austin, Texas
January 16, 2015
LLP
tel (512) 370 3200 fax (512) 370 3250
www.mlrpc.com
Austin, TX 78701
INDEPENDENT AUDITORS’ REPORT ON COMPLIANCE FOR
EACH MAJOR FEDERAL PROGRAM AND REPORT ON
INTERNAL CONTROL OVER COMPLIANCE AND REPORT ON THE
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS REQUIRED
BY OMB CIRCULAR A-133
Report on Compliance for Each Major Federal Program
We have audited Leander Independent School District’s (the “District”) compliance with the types of
compliance requirements described in the OMB Circular A-133 Compliance Supplement that could have
a direct and material effect on the District’s major federal programs for the year ended August 31, 2014.
The District’s major federal programs are identified in the summary of auditors’ results section of the
accompanying schedule of findings and questioned costs.
Management’s Responsibility
Management is responsible for compliance with the requirements of laws, regulations, contracts, and
grants applicable to its federal programs.
Auditors’ Responsibility
Our responsibility is to express an opinion on compliance for each of the District’s major federal
programs based on our audit of the types of compliance requirements referred to above. We conducted
our audit of compliance in accordance with auditing standards generally accepted in the United States of
America; the standards applicable to financial audits contained in Government Auditing Standards,
issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of States,
Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require
that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with
the types of compliance requirements referred to above that could have a direct and material effect on a
major federal programs occurred. An audit includes examining, on a test basis, evidence about the
District’s compliance with those requirements and performing such other procedures as we considered
necessary in the circumstances.
Affiliated Company
LLC
We believe that our audit provides a reasonable basis for our opinion on compliance for each major
federal program. However, our audit does not provide a legal determination of the District’s
compliance.
Opinion on Each Major Federal Program
In our opinion, the District complied, in all material respects, with the types of compliance requirements
referred to above that could have a direct and material effect on each of its major federal programs for
the year ended August 31, 2014.
Report on Internal Control Over Compliance
Management of the District is responsible for establishing and maintaining effective internal control
over compliance with the types of compliance requirements referred to above. In planning and
performing our audit of compliance, we considered the District’s internal control over compliance with
the types of requirements that could have a direct and material effect on each major federal program to
determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing
an opinion on compliance for each major federal program and to test and report on internal control over
compliance in accordance with OMB Circular A-133, but not for the purpose of expressing an opinion
on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on
the effectiveness of the District’s internal control over compliance.
A deficiency in internal control over compliance exists when the design or operation of a control over
compliance does not allow management or employees, in the normal course of performing their assigned
functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a
federal program on a timely basis. A material weakness in internal control over compliance is a
deficiency, or combination of deficiencies, in internal control over compliance, such that there is a
reasonable possibility that material noncompliance with a type of compliance requirement of a federal
program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in
internal control over compliance is a deficiency, or a combination of deficiencies, in internal control
over compliance with a type of compliance requirement of a federal program that is less severe than a
material weakness in internal control over compliance, yet important enough to merit attention by those
charged with governance.
Our consideration of internal control over compliance was for the limited purpose described in the first
paragraph of this section and was not designed to identify all deficiencies in internal control over
compliance that might be material weaknesses or significant deficiencies. We did not identify any
deficiencies in internal control over compliance that we consider to be material weaknesses. However,
material weaknesses may exist that have not been identified.
The purpose of this report on internal control over compliance is solely to describe the scope of our
testing of internal control over compliance and the results of that testing based on the requirements of
OMB Circular A-133. Accordingly, this report is not suitable for any other purpose.
Report on Schedule of Expenditures of Federal Awards Required by OMB Circular A-133
We have audited the financial statements of the governmental activities, each major fund, and the
aggregate remaining fund information of the District as of and for the year ended August 31, 2014, and
the related notes to the financial statements, which collectively comprise the District’s basic financial
statements. We issued our report thereon dated January 16, 2015, which contained unmodified opinions
on those financial statements. Our audit was conducted for the purpose of forming opinions on the
financial statements that collectively comprise the basic financial statements. The accompanying
schedule of expenditures of federal awards is presented for purposes of additional analysis as required
by OMB Circular A-133 and is not a required part of the basic financial statements. Such information is
the responsibility of management and was derived from and relates directly to the underlying accounting
and other records used to prepare the basic financial statements. The information has been subjected to
the auditing procedures applied in the audit of the financial statements and certain additional procedures,
including comparing and reconciling such information directly to the underlying accounting and other
records used to prepare the basic financial statements or to the basic financial statements themselves,
and other additional procedures in accordance with auditing standards generally accepted in the United
States of America. In our opinion, the schedule of expenditures of federal awards is fairly stated in all
material respects in relation to the basic financial statements as a whole.
Austin, Texas
January 16, 2015
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
Project
Number
14610101246913
144100087110508
146600012469136600
146610012469136610
14420006246913
14694501246913
14671001246913
69551302
Federal Grantor/
Pass-Through Grantor/
Program Title
Federal
CFDA
Number
U.S. DEPARTMENT OF EDUCATION
Passed Through Texas Education Agency:
Title I Grants to Local Educational Agencies
Adult Education - Basic Grants to States
Special Education_Grants to States
Special Education_Preschool Grants
Career and Technical Education - Basic Grants to States
Improving Teacher Quality State Grants
English Language Acquisition State Grants
Grants for State Assessments and Related Activities
84.010A
84.002A
84.027A
84.173A
84.048A
84.367A
84.365A
84.369A
TOTAL DEPARTMENT OF EDUCATION
71301401
71401401
U.S. DEPARTMENT OF AGRICULTURE
Passed Through Texas Education Agency:
National School Lunch Program
School Breakfast Program
$
1,283,289
88,226
4,565,498
49,953
201,252
249,722
189,259
5,099
6,632,298
10.555
10.553
3,277,696
678,137
Passed Through Texas Department of AgricultureSummer Food Service Program for Children
10.559
60,857
Passed Through the Texas Department of
Human ServicesNon-Cash Assistance - Food Distribution Program
10.555
830,387
TOTAL DEPARTMENT OF AGRICULTURE
(1)
Expenditures
U.S. DEPARTMENT OF INTERIOR
Passed Through Travis County Tax AssessorNational Wildlife Refuge Fund
TOTAL DEPARTMENT OF INTERIOR
4,847,077
15.659
57,740
57,740
(1) - Federal funds received in lieu of taxes
The accompanying notes are an integral part of this schedule.
(continued)
6
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS (continued)
Project
Number
1514ATP000
Federal Grantor/
Pass-Through Grantor/
Program Title
Federal
CFDA
Number
U.S. DEPARTMENT OF LABOR
Passed Through Texas Workforce CommissionWIA Dislocated Worker Formula Grants
Expenditures
17.278
42,011
TOTAL DEPARTMENT OF LABOR
DE-EE0002564
1514ATP000
42,011
U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES
Passed Through Texas Health and Human Services CommissionMedical Assistance Program
Passed Through Texas Workforce CommissionTemporary Assistance for Needy Families
93.778
45,002
93.558
31,680
TOTAL DEPARTMENT OF HEALTH AND HUMAN SERVICES
TOTAL EXPENDITURES OF FEDERAL AWARDS
The accompanying notes are an integral part of this schedule.
7
76,682
$
11,655,808
NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
1.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
General - The accompanying schedule of expenditures of federal awards presents all federal
expenditures of the Leander Independent School District (the “District”).
Basis of Accounting - The expenditures on the accompanying schedule of expenditures of federal
awards are presented using the modified accrual basis of accounting, with the exception of the
National School Lunch Program, School Breakfast Program, Summer Food Service Program for
Children, and the Food Distribution Program. Under the modified accrual basis of accounting,
revenues are recognized in the accounting period in which they become available and measurable,
and expenditures in the accounting period in which the fund liability is incurred, if measurable.
Expenditures in the National School Lunch Program, School Breakfast Program, Summer Food
Service Program for Children, and the Food Distribution Program are not specifically attributable
to this revenue source and are shown on the accompanying schedule of expenditures of federal
awards in an amount equal to revenue for balancing purposes only.
Relationship to Basic Financial Statements - Expenditures of federal awards are reported in the
District’s basic financial statements in the General and Special Revenue Funds.
Relationship to Federal Financial Reports - Amounts reported in the accompanying schedule of
expenditures of federal awards agree with the amounts reported in the related federal financial
reports in all significant respects.
Valuation of Non-cash Programs - Federal food commodities inventory is stated at fair value and
is recorded as unearned revenue at August 31, 2014. Revenue is recognized at fair value when
commodities are distributed to the schools.
8
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
SECTION I - SUMMARY OF AUDITORS’ RESULTS
FINANCIAL STATEMENTS
Type of auditors’ report issued:
unmodified
Internal control over financial reporting:
y
Material weakness(es) identified?
yes
6 no
y
Significant deficiency(ies) identified that are
not considered to be material weaknesses?
yes
6 none reported
Noncompliance material to financial statements noted?
yes
6 no
FEDERAL AWARDS
Internal control over major federal programs:
y
Material weakness(es) identified?
yes
6 no
y
Significant deficiency(ies) identified that are
not considered to be material weaknesses?
yes
6 none reported
Type of auditors’ report issued on compliance for major federal programs:
unmodified
Special Education Cluster
unmodified
Any audit findings disclosed that are required to be
reported in accordance with section 510(a) of Circular A-133?
yes
Identification of major federal programs:
CFDA Number(s)
84.010A
Name of Federal Program or Cluster
Special Education Cluster:
84.027A
Special Education_Grants to States
84.173A
Special Education_Preschool Grants
9
6 no
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
Dollar threshold used to distinguish between type A and
type B programs:
$349,674
Auditee qualified as low-risk auditee?
6 yes
no
SECTION II - FINANCIAL STATEMENT FINDINGS
No findings or questioned costs required to be reported in accordance with Government Auditing
Standards for the years ended August 31, 2014 and 2013.
SECTION III - FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
No findings or questioned costs required to be reported in accordance with Section 510(a) of OMB
Circular A-133 for the years ended August 31, 2014 and 2013.
10
LEANDER INDEPENDENT SCHOOL DISTRICT (Williamson and Travis Counties, Texas) • UNLIMITED TAX REFUNDING BONDS, SERIES 2016

Leander Independent School District

Transcription

Similar documents

confidential great lengths price for hair

Welcome to the RCCAQ`s 39th Annual Convention

Do liry o:`i fHn rssuE A$tD sAtE 0F COVUtitliiNT rcIiDs

THE TEXAS HEAD START DIRECTORS` ROUNDTABLE

RADICALES LIBRES

Wednesday, Dec. 12, 11 am to 1 pm Texins Activity Center

Peptide Structure-1 - UCLA Chemistry and Biochemistry

(Harrisburg Area Community College Project), Series of 2016 Sta

College Prep 8/23/2013 - IDEA Public Schools / Homepage

Corporate bonds a good bet amid global volatility in equities