Leander Independent School District Bonds and Debt Analysis May 23, - - PowerPoint PPT Presentation

Leander Independent School District

Bonds and Debt Analysis

May 23, 2019

I. What Matters to Rating Agencies? II. We Passed a Bond Election, What is Next? III. Future of Financial Leadership LISD

Topics of Interest

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What Matters to Rating Agencies?

• Continue to outpace the State and

Nation in both ACT and SAT score performance

• Continue to offer IB World Schools
• Continue to have one of the highest

STAAR passing rates in State

• Continue to have one of the highest

graduation rates

Excellent Academic Reputation – A Destination District

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The District’s excellent academic reputation will continue to attract residents and grow enrollment and taxable valuations

18.0 19.0 20.0 21.0 22.0 23.0 24.0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

ACT Score HS Class

LISD State Nation 88.5% 93.3% 95.9% 96.4% 96.7% 97.0% 81.1% 89.8% 92.4% 93.3% 93.3% 95.1%

Class of 2010 Class of 2011 Class of 2012 Class of 2013 Class of 2014 Class of 2015

LISD Eco vs. Non Eco 4 Year Graduation Rates

All Student Group Economically Disadvantaged

Data source: AEIS/ TAPR

Class of 2010 Class of 2011 Class of 2012 Class of 2013 Class of 2014 Class of 2015

All Student Group

88.5%

93.3% 95.9% 96.4% 96.7% 97.0% Economically Disadvantaged

81.1%

89.8% 92.4% 93.3% 93.3% 95.1% Gap 7.4% 3.5% 3.5% 3.1% 3.4% 1.9%

* 4 Year Graduation Rate from TAPR includes Graduates ONLY, Longitudinal Rate without Exclusions

LISD Eco vs. Non Eco Graduation Rates (without exclusion)

• Core finance staff possess a strong understanding of the intricacies of Texas school funding
• Proven ability to effectively manage a growing school district
• Dr. Dan Troxell hired as Superintendent in Aug. 2016 – upon unanimous approval by the Board – to lead

Leander ISD after superintendent Bret Champion departed amicably for an opportunity at Klein ISD

Seasoned Executive Team

5 The District benefits from a veteran and stable financial manager experienced in managing fast-growth school districts; seamless transition has occurred with the District’s Superintendent who is both highly-qualified and experienced

• Dr. Dan Troxell,

Superintendent

• Texas “Superintendent of the Year”

in 2008

• Prior experience in large, fast-

growth Cypress-Fairbanks ISD (enrollment of more than 113,000) as well as in Allen ISD and Round Rock ISD

• Prior to Leander ISD, was

superintendent at Kerrville ISD for the past 14 years Lucas Janda Chief Financial Officer

• CFO of Leander ISD since 2014
• Previously was the CFO at Forney

ISD, a fast-growing district near Dallas, where he was brought in to improve the District’s challenged financial situation

• Also has held CFO position at

Stafford MSD

• Leander ISD is predominantly located in

Williamson County, with the southern portion extending into Travis County

• Ideal location west / northwest of Austin along a

transportation corridor (Hwy 183) – District is positioned for continued development and enrollment gains as the Austin MSA continues to grow

• Offers proximity to Austin, a major employment

center and one of the fastest growing cities in the U.S.

• Median household income of $72,118 for

Williamson County is 137% of the statewide and 135% of the US average1

Favorable Location in Austin MSA - District is Poised for Continued Growth

______________________ 1 US Census Bureau

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District is ideally situated northwest of Austin and available land and highway corridors position the area for continued growth and development

FY 2017 TAV Reaches $20 Billion, Establishing New Peak

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Net taxable assessed value (“TAV”) reached a new milestone in FY 2017, third straight year of double-digit growth and surpassing the $20.0 billion mark

TAV % change

0% 10% 20% 30% 40% 50% 60% 70% 80% 2012 2013 2014 2015 2016

Leander ISD – Tax Base Composition

Single-Family Residential Multi-Family Residential Commercial and Industrial

• The District’s tax base is comprised of primarily residential properties; this sector has

demonstrated solid growth over the last decade and development activity remains robust

• Top 10 taxpayers, combined, represent less than 4% of TAV

Enrollment Continues to Climb at a Manageable Rate

• District enrollment grew by 2.25% this year (fiscal 2017) and over the past five years has grown by a

compound annual growth rate (“CAGR”) of 2.56%

• Enrollment growth has slowed from larger growth rates – from 2008-2012 the enrollment CAGR was

5.86%

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The District continues to experience consistent annual growth in enrollment, but the rate of growth has moderated

______________________ Source: Texas Education Agency, PEIMS data; Leander ISD.

0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00% 14.00% 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 Enrollment % Change

Key Drivers Quality of schools/education Relative affordability of housing Location

Favorable Demographics

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The District’s student population and wealth characteristics compare favorably to that of area districts and statewide

• Low economically disadvantaged population of 19%

– 59% in Texas – Leander ISD ranked 3rd in Texas among ISDs with more than 20,000 students

• High STAAR passage rate of 83%

– 71% in Texas – Leander ISD ranked 11th in Texas among ISDs with more than 20,000 students

• Highly educated population - 51% have a bachelor’s degree

– 29% in Texas – 43% in Austin

• High median household income level of $102,782

– Austin metro area is $71,000 http://www.leanderisd.org/users/0001/docs/Demographics/2015/Demog-Pres_2015.pdf

The November 2017 demographer report is on Leander ISD website.

Enrollment Continues to Climb

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The District utilizes a demographer to develop data-based projections for enrollment growth

______________________ Source: Leander ISD 2017 Demographic Report.

• Increase of 138 positions in General Fund Budget (125 campus, 13 non-campus)
• Salary increase of 3.0% off midpoint for all employees
• Maintain 2-cents of the M&O tax rate for major maintenance levy
• Increase for implementation of new student information system
• Start-up funding for Akin Elementary School scheduled for opening in August 2017

2018 Budget Development

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The adopted FY 2018 budget includes changes to staffing levels, payroll, and

• ther expenses meant to ensure fiscal stability and strong academic outcomes

As the table below shows, the District has a proven track record of

• utperforming adopted budget expectations

• The I&S tax rate remains at $0.47 ($0.47187, truncated in table below) per $100 of TAV

– District currently over levying to early retire bonds

• The M&O tax rate remains at $1.04 per $100 of TAV

– District maintains 2-cents of the M&O rate for “major maintenance” – The M&O rate could increase to $1.17 (12.5%) with voter approval; though not currently contemplated by management

Tax Rates Unchanged from Prior Year

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Tax rates have remain unchanged over the last six years, demonstrating the District’s ability to fund operating and debt service requirements

1.04 1.04 1.04 1.04 1.04 1.04 1.04 1.04 1.04 $0.34 $0.38 $0.41 $0.46 $0.47 $0.47 $0.47 $0.47 $0.47

$0.00 $0.20 $0.40 $0.60 $0.80 $1.00 $1.20 $1.40 $1.60 2009 2010 2011 2012 2013 2014 2015 2016 2017

Leander ISD Tax Rate Composition

M&O Tax Rate I&S Tax Rate

Evolving Debt Structure

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• The District can afford all future bond payments at the current tax base, with a 98% collection factor
• Reduced CAB% now and forward looking – important for several reasons
• Enhanced debt capacity to address capital needs

The maturation of the District’s debt structure continues by reducing absolute leverage and growing into the payment structure

$(20,000,000) $- $20,000,000 $40,000,000 $60,000,000 $80,000,000 $100,000,000 $120,000,000 $140,000,000

Evolution of Debt Structure

Original D/S Revised D/S 2015AB_REF Savings 2016_REF Savings 2016A_REF Savings 2016_DEF Savings 2017_DEF Savings

District Compares Favorably to Other Highly-Rated Fast-Growth Districts

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Across many credit metrics, the District stacks up well against many peer districts in terms of fund balances, tax base wealth, size, and debt metrics

Leander ISD Frisco ISD Mansfield ISD Allen ISD Denton ISD S&P Rating AA- AA+ AA AA AA Net Taxable Value 20,887,474,581 $ 30,608,821,261 $ 10,711,144,951 $ 9,529,464,946 $ 14,998,271,972 $ Population 197,405 200,000 138,051 94,583 182,225 Per Capita Taxable Assessed Value 105,810 $ 153,044 $ 77,588 $ 100,752 $ 82,306 $ Direct debt 1,032,727,743 $ 1,888,295,843 $ 787,170,000 $ 614,205,275 $ 879,287,256 $ Accreted interest on CABs (as of 8/31/15; as listed in CAFRs) 485,206,930 $ 45,241,616 $

• $

5,776,213 $ 46,909,286 $ Total direct debt (includes CAB accretion) 1,517,934,673 $ 1,933,537,459 $ 787,170,000 $ 619,981,488 $ 926,196,542 $ Overlapping Debt 752,701,270 $ 510,835,005 $ 199,209,384 $ 142,348,693 $ 940,060,117 $ Total Debt (includes CAB accretion) 2,270,635,943 $ 2,444,372,464 $ 986,379,384 $ 762,330,181 $ 1,866,256,659 $ Direct Debt Per Capita 7,689 $ 9,668 $ 5,702 $ 6,555 $ 5,083 $ Overall Debt Per Capita 11,502 $ 12,222 $ 7,145 $ 8,060 $ 10,241 $ Net Debt to Market Value 7.3% 6.3% 7.3% 6.5% 6.2% Overall Debt to Taxable Value 10.9% 8.0% 9.2% 8.0% 12.4% Amortization rate - principal retired by 2026 27.8% 27.1% 37.3% 46.6% 25.1% I&S Tax Rate 0.4719 $ 0.4200 $ 0.4700 $ 0.4700 $ 0.5000 $ Total Fund Balance (FY2015) 120,848,744 $ 92,479,106 $ 84,249,338 $ 78,196,027 $ 81,795,330 $ General Fund Expenditures (FY2015) 260,392,852 $ 378,675,389 $ 263,151,874 $ 155,214,781 $ 212,211,345 $ Fund Balance as % General Fund Expenditures (FY2014) 46.4% 24.4% 32.0% 50.4% 38.5% Authorized but Unissued

• $

335,000,000 $

• $
• $
• $

Source: 2016A POS 6/1/16 OS M AC rpt 5/3/16 M AC rpt 4/18/16 OS 4/1/16

We Passed a Bond Election, What is Next?

• Issued $83 million through conventional bonds for ES #27, technology, buses, and other assets

– Debt life matches asset life – Interest (prior to future refinancing) is $50,096,882 – Sold bonds June 2018

• Issued $64.4 million through a commercial paper program (similar to a line of credit)

– Finance land acquisitions – Interest only accrues on amount borrowed – Nominal carrying costs to have access to CP – No draws on the CP as of May 23, 2019 – Access to CP started in July 2018

Tax Rate to Remain Unchanged

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Efficient repayment of bonds, using the latest tools to align with a just-in-time borrowing structure

• Issued $99.42 million through conventional bonds for MS #9, technology, buses, and other assets

– Debt life matches asset life – Final maturity is 2041 – 86.5% of principal paid off by 2031 – Interest (prior to future refinancing) is $37,700,167 – Sold bonds May 2019

Tax Rate to Remain Unchanged

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Efficient repayment of bonds, using the latest tools to align with a just-in-time borrowing structure

$83 million Bond Sale Funds Projects Beginning in Summer 2018

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Other Bond Projects

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$99.42 million Bond Sale Funds Projects Beginning in Summer 2019

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Future of Financial Leadership LISD

Thank you for Serving on this Committee!