2014 Bond Information

Lovejoy ISD

• Annual Independent Financial Audit: LISD received a clean, unqualified audit with no findings

• Texas Education Agency rated Lovejoy ISD as Superior in Financial Integrity

• Credit Rating from Standard & Poor’s of AA- and Moody’s of Aa2 during the period with 300% of student enrollment growth

• Texas Comptroller, Susan Combs, honored the district with the Gold Seal Leadership Circle Award for transparency for the 4th consecutive year

• Texas Comptroller, Susan Combs, recognized Lovejoy with 5-Star rating for combining the lowest relative spending with the highest student achievement

District’s Financial Health

Student Growth in Lovejoy

• Lovejoy ISD meets the state’s criteria as a Fast Growth District

• Student Enrollment has grown by more than 300% in the past 10 years

• The district has built 4 schools to accommodate that growth

• The district will add ~2,000 students in the next 10 years to reach the projected maximum enrollment

2013-142014-15

2015-162016-17

2017-182018-19

2019-202020-21

2021-222022-23

3000

3500

4000

4500

5000

5500

6000

37683949

41534343

45274719

49305133

5361

5612

Projected Enrollment Growth

What is the make up of Lovejoy ISD’s debt portfolio?

• 95.63% of the debt portfolio is made up of Current Interest Bonds (CIBs)

• 4.37% of the portfolio is made up of Capital Appreciation Bonds (CABs)

• The district has a limited utilization of CABs to comply with the state-mandated debt service tax rate of 50 cents. CABs allow the district to preserve adequate capacity to build needed classrooms until the tax base grows

• The debt capacity issue is a challenge for fast growth districts as a result of the state imposed 50 cent debt service tax rate. Taxpayers would be better served if the state allowed fast growth districts to set a debt service tax rate of 51 or 52 cents

4.37% Capital Appreciation Bonds (CABs)

95.63% Current Interest Bonds (CIBs)

District’s Current Debt Structure

Citizen’s CommitteeA citizen’s committee comprised of 80+ LISD residents worked with the district administration to draft a Long Range Facilities Plan. The bond is planned to be used for:

Building additions to LISD campuses, Lovejoy, Hart, and Puster Elementary Schools; Sloan Creek Intermediate, Willow Springs Middle and Lovejoy High School.

Improvements at Hart Elementary School. Completing Phase IV of the Lovejoy High School Updates to Fine Arts and Athletic facilities due to

participation and enrollment growth. Safety and Security Updates. Buses and Technology.

Function of the Citizen’s Committee

• Reviewed all district data to determine the need for additional facilities

• Prioritized the importance of additional facilities

• The facilities audit created a list of projects that totaled ~ $133 Million in projects. The committee whittled this master list down to the recommended $75,750,000 of proposed projects.

Citizen’s Committee Recommendation

• The committee recommended that the district scrap the plan to build a 7th campus and instead add additional classrooms onto existing campuses

• This approach saved the taxpayer $10 million in construction costs and $2 million annually in operating costs

• This recommendation was taken to the board of trustees. This cost savings approach was the driver of “additional classrooms, but no new schools”.

Committee Recommendation

• The committee recommended that the district provide a training pool in the most cost effective manner possible.

• The training pool has a 40-year life and is made up of a steel container with a plastic lining

• The pool is covered by an inflatable bubble (see pictures following)

2014 Bond InformationTWO PROPOSITIONS

PROPOSITION 1 $46,250,000

PROPOSITION 2 $29,500,000

TOTAL $75,750,000

Why is the bond divided into 2 Propositions?

• Prop 1 includes those projects that are projected to be done in the next 5 years

• Prop 2 includes projects for years 6-10• The community now has the choice to either authorize

construction projects for a shorter term or to authorize projects that will take the district to the final build-out number

• If both propositions pass, the district will sell the approved bonds as enrollment and the tax base grows. The bond will likely be sold in 3 separate issues over the next 7-9 years in increments of $20-$25 million

Why does the district need a swimming pool?

• Over the last 8 years, the district has used pools in Allen(only available at noon), Frisco (outdoor), and Plano (shared with John Paul II HS).

• The district can only secure 2 or 3 lanes at these pools which is insufficient for the number of swimmers in the program. The district has limited the number and currently carries 89 swimmers in the program.

What other uses will exist for the pool?

• The pool will be available for PT for special needs students and for rehab for students with injuries

• The district will not build the pool until a lease partner is secured that will pay for operating costs of the pool in exchange for pool use when the district is not using it

• The district will open discussion with local parks and recreation department for additional opportunities for the community.

What impact will the bond proposal have on homeowners?

• If approved, the bond will result in a 2 ½ cent tax increase to the homeowner

• The following chart shows the cost based on home value

No Tax Increase above the frozen level on the Homestead of Taxpayers 65 years of age and older who have applied for and

received the Age 65 Freeze

After StateHome Value

Exemptions$100,000 $85,000 $1.77

Tax Increase$21.25

MonthlyBeforeExemption

350,000

12.19

450,000 435,000 9.06108.75

550,000600,000

11.15146.25585,000133.75

400,000 385,000

500,000 485,000 121.25535,000

96.25

Tax Increase

Home Value Projected

235,000 58.75 4.90

ProjectedAnnual

10.10

200,000 185,000 46.25 3.85250,000

335,000 6.9883.758.02

300,000

150,000 135,000 33.75 2.81

285,000 71.25 5.94

2014 Bond Information

Lovejoy ISD