Alvin ISD Bond Election FAQs

Alvin ISD Bond Election FAQs BOND OVERVIEW What is a school district bond election? School districts hold bond elections to seek approval from voters to sell bonds for the purpose of generating revenue. Bond revenue can only be used for new construction, renovations to existing facilities, land acquisition, equipment, technology, and other approved items associated with providing school district facilities. Can the revenue from selling bonds be spent on personnel or other district operational costs? No. State law does not allow revenue from bond sales to be spent on personnel or operating costs such as utility bills, supplies, fuel, or other costs associated with daily operations of the District. Is it true that if the bond issue should fail, the state will provide funding for new campuses? No. When a school district bond issue is passed, the State may provide support to the School District that will lessen the tax burden. When a bond issue does not pass, the State does not provide any additional funding or support for the construction of the project. If the bond issue passes, Alvin ISD will seek state funding and support associated with a successful bond issue for projects included in the bond issue. ALVIN ISD BOND DETAILS When & where will the Alvin ISD bond election be held? Who can vote in a school bond election? The bond election will be held on November 3, 2015, and registered voters who reside in Alvin ISD may vote in the election. The voter registration deadline for the November 3 Alvin ISD Bond is October 5, 2015. Early voting will be available between October 19 30. The following list of polling places and hours of operation are being provided for the convenience of voters: Registered voters that are eligible to vote in the Alvin ISD Bond Election can select any early voting location or election day polling place. List of locations: http://www.alvinisd.net/bond2015

If the bond being proposed is approved by the voters in November, what is the best estimate for construction time and schedule for the opening of facilities? Bid opening for construction projects would likely begin in mid- 2016 as design work progresses. The timetable for construction will depend in large part on the availability of land, materials, and an adequate construction work force. Typically, the completion of an elementary takes about two years, while a new junior high takes approximately two- and- a- half years. How will the $245M be used? The funds will be used to complete the following 13 projects identified by the Citizens Advisory Committee: New Elementary #17 New Elementary #18 Replacement of Alvin Elementary School New Elementary #20 Land for Elementary #21 New Junior High #7 Design for Junior High #8 New Career and Technical Education Center (Phase 2 of 2) Alvin High School Auditorium Upgrades Memorial Stadium Upgrades Land for High School #4 Central District Stadium Satellite Transportation Facility Will local contractors be allowed to participate in the renovations or construction of new schools proposed in the bond? Certainly. The School District will follow state law and local policy in seeking and accepting bids and proposals for professional services related to all areas of the bond projects. Which new campus locations have been shared? Pending approval of the 2015 Alvin ISD Bond, Elementary #17 would be located at the corner of Broadway and Half Moon Bay Drive while Junior High #7 would be located at the corner of Kingsley and Broadway. The District receives a demographic update two times per year. These updates report on the velocity of student enrollment growth as well as available campus capacities. This information allows district officials to select campus locations that provide relief to areas of the district with the most significant overcrowding. What if no bond monies become available? Alvin ISD will likely gain more than 5,088 students over the next 5 years. Many of our schools are already at, near, or over their designed capacity. Without new schools to accommodate additional students, the use of temporary modular classrooms, repurposing areas of each campus to serve as classrooms, and

possible class size waivers are common solutions. Temporary classrooms are costly to purchase and make ready for students (over $70,000 each classroom). To fund the purchase of temporary classrooms, budget dollars have to be redirected from other school budget needs. The additional student population will cause a significant strain on the core campus facilities, such as restrooms and cafeteria facilities. What factors into the costs attributed to each project identified in the November 2015 Alvin ISD Bond Election? As the CAC conducts their study, they ask for the prices of various projects for their discussion. The costs that are shared with the committee are estimates that are typically needed to open the campus or the facility. The support services team monitors the construction market closely to evaluate the current rates, trending inflation costs driven by resurgence of the economy, as well as the costs of recently bid school district projects in our area. All construction projects are not completed immediately and therefore cost projections must include a factor for inflation in the construction industry, which has recently seen fluctuation from 5-10%. These projection figures are the costs shared with the community. It s potential that some costs will be higher and some may be lower; however, the goal of Alvin ISD is to secure the facility and related costs and equipment at the lowest price possible. Savings from previous bond elections enabled the Alvin ISD Board to contribute 12.6 million from previously approved bond funds towards the current projects. CITIZENS ADVISORY COMMITTEE Did the School District seek community input before identifying the bond projects being requested? Yes. A Citizens Advisory Committee, comprised of citizens from throughout the School District, worked for five months before making project recommendations to the Alvin ISD Board of Trustees. In previous years, the CAC process consisted of individuals that either were asked to serve or personally requested to be on the committee. During the 2015 CAC process, Alvin ISD held a public information meeting at Manvel High School. The entire community was notified in multiple ways including advertisements in the local papers. All community members interested in participating were invited to serve as a member. In addition, all CAC meetings were opened to the public. Community members that attended were able to provide thoughts, feedback, and ask questions throughout the process. Materials and meeting notes from each CAC meeting are still provided on the Alvin ISD website: http://www.alvinisd.net/cac

Who recommended the 2015 bond package? The Alvin ISD Citizens Advisory Committee (CAC) recommended this bond package. The CAC consists of 50+ members of our community including business leaders, parents, and elected officials and reflects the geographic diversity of our school district and communities. The committee began meeting in February 2015. The Committee s investigation of district needs was comprehensive, including a thorough demographics analysis, an assessment of all district facilities, and a detailed analysis of projected enrollment growth. The committee s conclusions and recommendations were presented to the Board of Trustees on August 11, 2015. Meeting notes and materials are available for review on the Alvin ISD website. Link: http://www.alvinisd.net/cac What factors drove the Citizens Advisory Committee to recommend a bond election be called by the Board of Trustees? Based on percentage growth, Alvin ISD is one of the fastest growing school districts in the greater Houston area. The latest Templeton Demographics Report is projecting that in the next ten years; Alvin ISD will grow an average of 1,000 new students a year, resulting in approximately 10,000 new students in that time period. A five- year projection indicates that Alvin ISD will grow by approximately 5,088 students by the spring semester of 2018. Aging, existing facilities, and program needs were also studied extensively by the CAC. Are our schools overcrowded at this time? Not all of them, but more than half of the campuses in the coming school year will have exceeded their program capacity. Approximately 1,000 new students are anticipated in the 2015-16 school year. Also, the School District currently has 96 classrooms that are located in temporary buildings. When did the Citizens Advisory Committee (CAC) make their recommendations to the Alvin ISD Board of Trustees? Citizens Advisory Committee members Mr. David Becker, business owner, and Timi Forrest, parent, presented the committee s recommendations to the Alvin ISD Board of Trustees on August 11, 2015. Board Meeting Video ALVIN ISD TAX RATE & FINANCIAL INFO How does the tax rate of Alvin ISD compare to similar school districts in the area? The chart provided below gives the overall tax rate of Alvin ISD as compared to 6 local districts as well as a comparison to 9 Houston area districts that are also considered fast growth. The amounts are rounded to the nearest penny and are based on the latest information available at the time this document was prepared, the 2014-2015 school year.

The graph below shows all districts in the state that have added over 7,500 students, representing at least an increase of 35% or more, since 2004. What is the tax rate history of Alvin ISD? School tax rates are affected by several factors such as state funding and changes in district value. The specific tax rate history for Alvin ISD is as follows:

Alvin ISD passed a bond issue in 2013, yet the tax rate has not gone up as much as anticipated, why? The Interest & Sinking Tax Rate (I&S) can only be used to pay bonded debt. As the property values in the School District increase, the I&S tax rate can be reduced and the District can still generate enough revenue to cover annual bond payments. As a fast growth district, Alvin ISD has a history of communicating the maximum potential tax impact to ensure transparency; however, historically the final rate has been significantly less. Tax Rate Increase 2015 2013 2009 Projected 8.3 cents increase 11.39 cents increase 9.0 cents increase Actual TBD 8.79 cents increase 4.0 cents increase Does the state provide funding for bond construction projects in Alvin ISD? Yes. For many years Alvin ISD has received state funding from the Texas Instructional Facilities Allotment fund (IFA) and the Existing Debt Allotment fund (EDA). The total amount of state assistance for bond repayment has been approximately $7.5 million each year. State funding for construction projects is a year- to- year decision and Alvin ISD cannot guarantee that the amount received by the District will increase if a bond issue passes in 2015. How would the proposed bond impact individual homeowners in Alvin ISD? The maximum tax rate impact of this bond election is projected to be no more than 8.3 cents per $100 of valuation or $6.92 per month on an Alvin ISD taxable home

value of $100,000. There will be no tax impact for seniors 65 years and older who have the appropriate exemption. Does the proposed bond (if approved) affect the tax rate of property owners age 65 and over? Homeowners aged 65 and older are protected from tax increases by a ceiling on their rates. Unless the homeowner makes significant improvements that increases the valuation of the home, the school tax bill is set at the ceiling for the life of the homeowner. Therefore, the 65- or- older homeowner will not see an increase in the school taxes with passage of the bonds. Can Alvin ISD afford the proposed 2015 bond referendum? For many years, Texas imposed a restriction that total outstanding debt for a school district could not exceed 10% of the total assessed property value. This law no longer exists, but 10% is still used as an informal guideline for school districts. Based on bonds issued as a result of prior referenda, Alvin ISD s total debt as a percentage of current total assessed property value is 7.3%. The District bond rating is AAA with the Texas Permanent School Fund Guarantee, which is the highest bond rating available. Can all of the construction projects be accomplished within the $245M budget? Even though the construction industry is experiencing high rates of inflation, consultants and our Building Programs staff are confident that projects can be completed within the budgeted ranges. The proposed projects will be designed with economy in mind, but will still be of a style and quality worthy of community pride. Alvin ISD has a history of providing facility projects on time and under budget. The 2015 Alvin ISD Bond Election is presented to the community for $245M. The total dollar amount for the 13 identified projects is $285M. As the Alvin ISD Board of Trustees discussed the recommendation of the CAC, there was a unified interest in contributing additional funds to reduce the amount of the bond passed to ultimately minimize the impact to tax payers. Following the discussion, the Trustees decided to contribute $12.6M from previously authorized bond funds. In addition, Trustees allocated approximately $28M from maintenance and operations funding sources to again reduce the amount specified in the 2015 Alvin ISD Bond Election. What steps does Alvin ISD take to actively manage previously incurred bond debt? By actively managing the District s debt, the District continues to be conservative with the dollars that are granted through bond elections. The realized and anticipated savings for Alvin ISD taxpayers is constantly under review. A recent example of how the District continues to keep a watchful eye on the debt obligations is evident in this past month s Board Meeting agenda. By refinancing a portion of the

bonds that were sold in 2007, we are anticipating a savings over $1.5M. Over the past 3 years, the active management of debt policy has allow the Alvin ISD taxpayers to receive a reduction in tax obligations of approximately $32M over the next 25 years, which works to keep the realized tax rate under the anticipated tax rate in a bond election. The last 3 bond sales have resulted in interest rates of 0.65% for a 1- year rate, a reduction of original interest rate of 4.529% to 3.05% for remaining 22 years, and new debt rates of 3.510%. In the past two bond elections, $.02 of the annual savings from tax projections to actual tax impact is a direct result of active management of the District s debt. Additionally, the District has utilized available federal and state dollars. For example, on bonds that were sold in 2010, Alvin ISD taxpayers will have benefited from $9M in federal subsidy payments over the life of the bonds. Additionally, Alvin ISD receives approximately $8M each year from state funding sources, representing approximately one- quarter of the annual debt payment. Each time Alvin ISD taxpayers vote yes for bonds, we work diligently to balance the payment structure to maximize the least amount of overall interest with the obligation for current year tax needs. Alvin ISD has the ability to sell the authorized bonds for a 40- year period. However, the management practice is to sell the debt for not longer than 25 years, depending on the useful life of the items. If the District s practice was to utilize 40 years to pay back the debt that the taxpayers have authorized, the overall cost of debt would be substantially more, and the maximization of additional state dollars would be less annually. CENTRAL DISTRICT STADIUM What factors did the Citizens Advisory Committee consider when they recommended two athletic facility projects in the November 2015 Alvin ISD Bond? Alvin ISD Memorial Stadium, which is located on the Alvin High School grounds, was constructed in 1945 and received an increase to its capacity in 1967. Memorial Stadium has a total capacity of 7,400 with a home side capacity of 5,200, and a visitor s side capacity of 2,200. The stadium has served as the Alvin ISD District Stadium since Manvel High School opened in 2005. Traditionally, district stadiums have similar seating capacities on both the home and visitor sides. It is common for school districts with multiple high schools to have a centrally located district stadium, ideally situated with major thoroughfare roadway access, to minimize traffic flow through neighborhoods. The Citizens Advisory Committee evaluated a few factors as they considered the projects. As Alvin ISD continues to grow, maximum student enrollment is projected between 48,000 55,000 students. This will result in a 5 to 6 high school district. Accommodating all Alvin ISD high schools at one stadium will be challenging.

Additionally, Alvin Memorial Stadium is situated in a residential area, which limits the availability to expand both seating and parking. Families attending an Alvin ISD high school, other than AHS, are typically unfamiliar with access routes. This lack of space and parking has previously caused families to be turned away when Alvin High School and Manvel High School have played one another in the past, and this experience is expected to continue due to the vast growth within the District. Ultimately, the fact that Alvin Memorial Stadium is located on the eastern side of the District makes it difficult for the current facility to serve as the only long- term district solution for Alvin ISD. As the committee evaluated the District s long range plan, it was identified that placing an athletic facility in a central location would serve as an amenity for all Alvin ISD schools, both current campuses as well as those that will be constructed in the future. Both the current Memorial Stadium and the central stadium, identified in the November 2015 Bond, would be available to all Alvin ISD campuses. For example, Alvin High School would continue to play many of their home games at Memorial Stadium; however, if they were playing a big game, with a large anticipated crowd or if they were playing another Alvin ISD team, Alvin High School could consider playing their home game at the larger facility. What is the seating capacity of the central district stadium included in the Bond? The CAC evaluated stadiums with capacities ranging from 8-12,000. In evaluating similar districts in the area, it appears districts of comparable size typically have a stadium with capacity between 10,000 and 12,000. The committee determined that a facility with a planned capacity of 10,000, with the ability to increase to 12,000 in the future, would best suit the needs of the communities at this time. Which student programs and groups would have access to use this facility? The central stadium would serve numerous athletic programs, including football, soccer, and cheerleading. Additional student programs such as marching band and drill team will have access to utilize the facility for both UIL events and various contests. The facility would also serve as a location for district and community functions. Limited meeting space that could be utilized for student programs, professional learning of Alvin ISD staff, and provide limited availability for community partners would also be included. What if I want more information? You can call the Alvin ISD administrative offices at any time for more information, or go online at http://www.alvinisd.net/bond2015. In addition, for your convenience, you can also call our district Communications Department at 281-245- 2463. Presentations providing more information on the bond package are being made throughout the District. If you have any questions, click Let s Talk!