FAQ's added April 28
Can you explain the repayment plan for the bonds, specifically those used for purchasing computers and other technology that has a short lifespan?
As with prior District bond programs, the 2016 Bond Program is designed to repay short-term assets, including computers, over the life of the asset. The 2016 Bond Program will be structured to make annual principal payments and more than $25 million of bonds will be repaid in the first 5-years and more than $55 million of bonds will be repaid in the first 10-years.
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In addition, GCISD finances short-term assets with bonds as it is more cost effective for taxpayers. Pursuant to the current State funding system, GCISD is subject to “recapture” on its M&O funds. For each dollar of M&O taxes in the current school year, 19 cents is “recaptured” by the State and only 81 cents is available to the District. In contrast, the District’s I&S tax dollars are not subject to “recapture” and the District retains every I&S dollar. As such, all capital projects financed with M&O funds would cost taxpayers approximately 23% more than than funding with bonds.
What is GCISD’s total bond debt at this time and has the district done anything to try to reduce interest costs to taxpayers?
GCISD’s total amount of debt outstanding was $555.7 million as of August 31, 2015. The outstanding principal amount was $326.8 million and the interest amount was $228.7 million. The District repays principal on an annual basis and its outstanding bonds are scheduled to be fully repaid in 20 years (i.e. year 2036). As part of the annual budget process, GCISD considers the prepayment of existing bonds. Since year 2008, GCISD has prepaid $13.33 million of bonds prior to scheduled maturity, eliminating the associated interest costs to taxpayers by $12,139,858.
In addition, GCISD has actively managed its debt position and over the past five years, GCISD has refinanced a portion of its existing bonds and reduced its bond payments by $42,048,399.
What would the outstanding bond principal total should voters approve the bond election?
The proposed 2016 bond program would increase the District’s principal amount of bonds by $248.975 million, to approximately $575.795 million.
How does GCISD come up with its tax rate?
Each year Grapevine-Colleyville ISD’s Board of Trustees is required to set two separate tax rates. The Maintenance & Operations (“M&O”) tax rate is used for the “day-to-day” operational expenses of a school district including teacher salaries, educational programs, supplies, etc. and is currently $1.04. It is important to note that the District’s M&O tax rate was capped by the State in 2007. The District uses bond proceeds to address capital needs because the M&O tax rate cannot be increased and 87% of these funds are used for payroll.
The Interest & Sinking Fund (“I&S”) tax rate is used for annual debt service requirements of bonds approved by voters and is currently $0.2801. The District’s total tax rate (M&O and I&S) is currently $1.3201.
Should the 2016 Bond Program win approval by voters, the District’s maximum projected total tax rate (M&O and I&S) will equal approximately $1.4482, which is 25.18 cents less than the total tax rate of $1.70 in tax year 2005.
Why isn’t the bond package broken up into individual items to be voted on rather than as a singular all or nothing package?
The members of the Facility Innovation Readiness Team (FIRST) committee recommended placing only one proposition on the ballot as a result of the committee’s support for all of the programs and facility renovations included within the bond proposal.
What would be the amount of bond debt per student in GCISD if the 2016 bond package wins passage?
Based on the actual enrollment figures from the October 2015 Public Education Information Management System (PEIMS) snapshot date of 13,822, the principal debt per student is $41,657. This is a snapshot of time, as the enrollment and outstanding debt figures change annually and the amount per student would also change.
It is important to note that the debt is paid over 25 years. For example, based on 25 years of estimated enrollment of 13,822 each year, the debt would be spread among 345,550 students over the life of the bonds. This would bring the debt amount per student to $1,666.
Are band uniforms included in this bond?
New uniforms for both marching and concert are included in the proposed bond package for both high school band programs. The new materials available will allow for improved design and fit of these uniforms to address the specific concerns that have been raised. The uniforms would be financed through short-term bonds, not 25 year bonds.
FAQ's added April 26
If the district sells bonds, what is the term of the debt?
The district will issue bonds to be paid in 25 years. The district also takes advantage of paying off debt when the bond terms allow. In August 2015, the district paid off the Series 2005-A bonds before maturity in the amount of $1.8 million, which saved $888,000 in interest costs. In addition to paying debt off early, the district has taken advantage of favorable market conditions to refinance debt while keeping the same maturity terms. Most recently, the district refinanced the Series 2006 bonds and lowered the interest rate from 4.5% to 2.55%, saving taxpayers $14,647,747 in interest costs. Over the last five years, the district has saved $42,048,399 through refinancing transactions.
Does the district issue 25-year debt to pay for short-term assets such as technology devices, equipment, and vehicles?
No, the debt is structured so that bonds sold to purchase these types of short-term assets would be repaid in an amount of time that fits with the expected life and use of the asset.
FAQ's added April 14
When will the tax rate go into effect, and if a resident turns 65 during the year this year, does that mean they are exempt from any increase?
If the district sells bonds prior to the adoption of the tax rate in September, the new increased rate will be in effect for the 2016 tax year.
If a taxpayer had an over-65 exemption in place by December 31, 2015, there will be no impact from the increased rate. However, if a taxpayer turns 65 on or after January 1, 2016, they will not be exempt from the impact of the increased rate. Their "tax freeze" will be based on the 2016 values and the new increased debt service tax rate.
FAQ's added April 4
Are there any authorized but unissued bonds remaining from previous bond elections? If so, how much is left and what is planned for those bonds?
GCISD does not have any bonds that have not been issued from previous bond elections.
Who is responsible for determining what type of bonds, Current Interest Bonds (CIBs) or Capital Interest Bonds (CABs), will be issued, what amounts, and when they are to be issued?
The district and its financial planners are responsible for recommending the type of bonds to be sold. The current financing plan, for the 2016 Bond proposal, is to issue CIBs only. Ultimately, the GCISD Board of Trustees is responsible for approving the sale of bonds, including the type of bonds sold.
If this bond initiative is passed, how much of the $249 million will be issued as Refunding Bonds to pay for bonds issued from previously approved bond elections?
None of the $249 million will be issued as Refunding Bonds.
The district will be issuing Refunding Bonds (this is refinancing of existing bonds) in April 2016 to refund the Series 2006 bonds, thereby lowering the interest rate while maintaining the same maturity date. The estimated savings are $12.8 million.
FAQ's added march 28
Why does the proposed bond program not include an expansion for Heritage Middle School? We see a lot of growth near the school. What is the plan to handle growth by another option such as redistricting middle school lines?
The FIRST members received and reviewed the demographer’s enrollment forecast for each GCISD school. The data for Heritage Middle School shows enrollment as follows:
2013/14: 891 students
2014/15: 922 students
2015/16: 924 students (we currently have 919 students)
2016/17: 950 students
2017/18: 910 students
2018/19: 909 students
2019/20: 877 students
The forecast is potentially for enrollment at HMS to peak next school year and then begin to decrease. The explanation given is that elementary classes moving into middle school are smaller than in previous years and the group with the highest middle school enrollment will be moving into high school and out of middle school. The only middle school forecast to grow is Grapevine Middle School.
Based on this information, the FIRST members opted to expand the cafeteria for HMS because it is one of the smaller cafeteria spaces compared to the other GCISD middle schools.
There are no plans to change any attendance zones in GCISD.
If the bond election is approved, how can the community purchase bonds to fund the future of GCISD?
A community member would need to contact their broker or one of the underwriters to purchase bonds. Prior to the bond sale, the district will ask the underwriters to place an advertisement in the local paper announcing the bond sale and listing underwriter contact information. The district will also post this information on its website.
What is meant by the term “genius bar” under Library Upgrades?
Libraries are becoming hubs for helping students find answers and maximize usage of their resources. The genius bar is a new way of thinking about the circulation desk. One-sided circulation desks of the past were designed for a time when a library’s main use was as a place to check out books. The new model of libraries as learning commons areas calls for libraries to be a place where patrons gather around a table or bar and participate in sharing expertise.
In elementary settings, the genius bar could be a new focal furniture area manned by student leaders and/or librarians. It could be a place where students come to learn a specific library tool and/or a place where they come to collaborate on a school issue or topic.
At the secondary level, the concept could be expanded on the elementary design to include student to student support, specialized classes on using tools, and/or other learning opportunities.
FAQ's added march 23
Why does the bond include paying for cheerleader uniforms?
Cheerleading becomes a UIL activity in the 2016-17 school year. GCISD provides basic uniforms and replaces those uniforms on a schedule for other UIL activities such as band and athletics. The FIRST members decided the district should provide a basic uniform that remains school property to be replaced on a predetermined schedule.
FAQ's added march 14
What is the timeline for bond projects?
A timeline of projects will be finalized after a successful election. There were conversations within the FIRST about early projects, but the district does not yet have a schedule for all bond projects.
Security will be a priority, but the most significant security projects are adding controlled entrances to our schools, which could be added when the campuses are also being renovated to achieve cost efficiency during the construction process. Therefore, not all campuses will experience the addition of a controlled entrance at the same time or necessarily at the beginning of the bond program. The schedule will depend more on packaging of projects for each summer and not necessarily based on cost.
What is a Multipurpose Activity Center?
The Multipurpose Activity Centers, proposed by the FIRST, are facilities that will serve all ages of students (K-12) and a variety of programs and events throughout the year. The MACs are intended to be more than athletic training facilities. Some uses of the MACs include summer camps, elementary field day events, assemblies (e.g. Rachel’s Challenge, health and wellness event, etc.), physical education classes, tournaments and training or practice sessions. As you know, the Texas climate includes hot and cold weather conditions, occasional snow/sleet/ice, rain combined with lightning and hail all of which interrupt outdoor activities and training/practice sessions. MACs allow students to participate in activities and train at anytime of the year, and during the day or night.
The bond proposal includes one MAC for each high school site. The proposed MACs have a roughly defined scope that will be further defined during the design process if the bond package is passed. A specific floor plan has not been selected. The costs associated with these facilities are based on recently constructed facilities and associated surface access and parking. Costs in the bond proposal also include professional services for design and engineering. The total cost of each MAC is estimated at $16.4 million. Amenities for these facilities are expected to include:
FAQ'S added March 10
Does the $249.975 bond proposal amount include interest costs?
No, this amount is the estimated cost of the projects proposed for the bond package and does not include the interest cost to borrow funds by selling bonds.
What is the total cost of the bond proposal including interest costs?
The projected cost of the bond proposal, including principal and interest, is $419.8 million with a maximum tax rate increase of 12.81 cents. This is the maximum that would repay the principal and interest based on the conservative assumptions of a 4.5% interest rate and different re-payment structures for short and long term assets. The interest rate could be lower than projected as current bond rates are closer to 3.5%. This would lower the tax rate increase.
The estimated amount also does not include future pre-payment or refunding amounts. This means that any new debt will include call features, which allow the district to pay the debt early, if possible, which will decrease overall interest costs. Any refunding would be for the remaining term and will not extend the term of the debt as with past refunding of district obligations.
If voters approve the bond election in May, the district will work with financial advisors to plan projects with the debt structure in mind. This and interest rates determine how and when the bonds will be sold through a bidding process. The primary goal will be to obtain the lowest borrowing cost on the bonds. The debt structure will depend upon the anticipated cash flow requirements for bond projects and market interest rate conditions at the time of sale. If the district is able to obtain lower interest rates than projected, the total bond proposal cost and the associated tax rate increase will be less.
The interest costs on the 2011 bond program were $33.5 million less than projected due to securing lower interest rates on the final-voter-approved bonds. The tax increase was 23.4% less than originally proposed, which resulted in a smaller tax impact than originally approved by voters.
WHAT IS A BOND?
A debt investment in which an investor loans money to a district for a defined period of time. The funds are used for construction renovations and equipment. A bond is similar to a home mortgage.
WHY DO SCHOOL DISTRICTS SELL BONDS?
Most school districts in Texas use bonds to finance renovations, additions and new facilities. GCISD does not receive any money from the state for the construction of new school buildings or improvements. This bond would allow the district to finance additions, renovations, a new school building and replace equipment without cutting regular budget items like school programs, teachers and staff. Since school buildings serve the community for 50 or more years, it is well reasoned that taxpayers would pay for them over a period of 25 years and not from the district's annual operating budget.
HOW CAN BOND FUNDS BE USED?
Bond funds can be used to pay for new buildings, additions and renovations to existing facilities, land acquisition, technology infrastructure and equipment for new or existing buildings and large-ticket items such as school buses. Bonds cannot be used for salaries or operating costs such as payroll, utilities, supplies, building maintenance, fuel and insurance.
WHAT IS A BOND ELECTION?
School districts are required by state law to ask voters for permission to sell bonds to investors in order to raise capital dollars to renovate existing buildings or build a new school. Essentially, it’s permission to take out a loan to build and renovate and pay that loan back over an extended period of time, much like a family takes out a mortgage loan for their home or home renovation. A school board calls a bond election so voters can decide whether or not they want to pay for proposed facility projects.
EXACTLY HOW MUCH IS THE DISTRICT ASKING FOR IN THIS BOND ELECTION?
The Board of Trustees called a bond election in the amount of $248.975 million to be brought before voters on May 7, 2016.
HOW WAS THE BOND PACKAGE DEVELOPED?
In July 2015, GCISD formed a Facility Innovation and Readiness Stakeholder Team (FIRST) to study and prioritize ways to create the best possible learning environment for GCISD students. This facility planning team comprised of parents, community constituents, and campus and district staff met for over 7 months to consider the district’s financial position and strategic plan as it relates to programs for students, facilities, infrastructure, technology, security, etc. This process was open and transparent. Meetings were videoed and posted to the website and notes summarizing the meetings also were placed on the website. FIRST members studied over 3,000 line items of proposed projects and worked to prioritize only the ones they deemed most important into a final recommendation that was presented to the Board of Trustees for consideration.
HOW DOES THIS BOND AFFECT MY SCHOOL?
For a bond breakdown by campus, refer to the Projects page and click on the link to your campus.
HOW IS THE DISTRICT’S TAX RATE CONFIGURED?
A school district’s tax rate is comprised of two components: the Maintenance & Operations tax (M&O) and the Interest & Sinking tax (I&S). The M&O rate is used to operate the school district, including salaries, utilities, furniture, supplies, food, gas, etc. The I&S rate is used to pay off school construction bonds. Bond sales only affect the I&S rate.
HOW WILL THE PROPOSED BOND ELECTION AFFECT MY TAXES?
If the bond election passes, the projected tax impact is an additional 12.81 cents, resulting in a total tax rate of $1.4482. This represents a monthly increase of approximately $29.44 a month for an average home value of $275,739.
HOW DO I CALCULATE MY PERSONAL TAX IMPACT FOR THE BOND PACKAGE?
You can use the tax calculator on the Tax Information page to calculate your personal tax impact.
WHAT IF I AM OVER 65 YEARS OLD? WILL MY TAXES GO UP IF THE BOND IS SUCCESSFUL?
If you have applied for and received the Age 65 Freeze on your homestead, by law, your school taxes cannot be raised above their frozen level, unless new improvements are made, such as additions or renovations that increase the value of the home.
WHAT IF I AM OVER 65 YEARS OLD AND RECEIVE THE “SENIOR CITIZEN EXEMPTION” AND MY HOME VALUE GOES UP, WILL MY TAXES INCREASE?
The appraised value can change and the tax rate will change, but the amount of school taxes on your homestead cannot increase. Normal repairs, maintenance and the economic impact of the market cannot increase the amount of taxes you will pay once a tax ceiling is in place on that homestead. Therefore, if this bond election is successful, it will not have an impact on the tax bill for homesteads that are receiving the senior citizen exemption, unless you make significant improvements to your home.
WHO IS ELIGIBLE TO VOTE IN THIS ELECTION?
Any registered voter that resides within the school district boundaries.
CAN I STILL REGISTER TO VOTE IN THE ELECTION?
The deadline for voter registration is April 7. If you are not registered to vote by this deadline, then you are not eligible to vote in this election. You can pick up a registration card from your local post office or you can register online.
AFTER I HAVE REGISTERED, WHEN WILL I RECEIVE MY VOTER REGISTRATION CERTIFICATE?
You should receive a Voter Registration Certificate within 30 days. On Election Day, please bring your certificate to your local polling place if you have it. However, all that is required is a valid form of photo ID.