001I call this special meeting of the Carolton Farmers Branch ISD Board of Trustees to order at 6 o'clock PM on June 12th, 2025. As a district, we dedicate all efforts and resources to our goal of high expectations for all. The board uses this goal and to guide all deliberations, decisions, and actions. You will get to see all deliberations, decisions, and actions of the board in open session with the exception of a few items which may be discussed discussed in close session which are not on our agenda tonight. For the record, board members present are Kim Brady, Marjorie Barnes, Carolyn Beneditz, Paul Gilmore, Randy Shackman, and myself, Cassandra Hatfield. We constitute a quorum and may conduct business on behalf of the district. Our next item is audience for guests. Persons who wish to speak during audience
002for guests must have electronally electronically submitted an online form by 1:00 today. Um and we do not have any requests to uh speak to the board this evening. Our next agenda item is item number three. um which is consideration and approval of an order authorizing the issuance of Carolton Farmers Branch Independent School District um unlimited tax school building andor refunding bonds in one or more series as designated by purpose and series. Loving of continuing direct annual vad Laurium tax for the payment of one or more series of bonds prescribing the form terms conditions and resolving other matters indecent incident sorry incident and related to the issuance sales and delivery of one or more series of bonds including the approval and distribution of one or more official statements pertaining thereto authorizing the execution of one or
003more paying agents register agreements and purchasing contracts for each pertaining to a of bonds, complying with the letter of representations on the file with the depository trust company, delegating the authority of certain members of the board of trustees and district staff to approve and execute certain documents relating to the sale of each series of bonds and providing an effective date. Um, at this time I'll hand it over to Miss Settle and Dr. Eldridge. Um, tonight I want to talk a little bit about uh bond elections, bond issuances, and bond projects. Uh, you know, bond elections are similar to a home mortgage. It's a contract to repay borrowed money with interest over time. Bonds are sold by school districts to comp uh competing lenders to raise funds to pay for the costs of construction, renovations, and
004equipment. All school districts in Texas utilize bonds to finance renovations and new facilities. Mod funds can be used for new buildings, additions, renovations, or existing facilities, land acquisition, technology infrastructure, and equipment for new or existing buildings. But bonds cannot be used for salaries, operating costs like utility bills, supplies, building maintenance, fuel, and insurance. And so we're very well verssed in the um in in bond elections because we were uh so gratefully um authorized by voters in May of 2023 um for 716 uh and some change u million dollars. And you know we just want to talk a little bit about how we got here today. Uh in July of 2023, the district made a strategic financing decision to take advantage of additional state aid uh from a homestead exemption uh in the 88th legislative session
005when the exemption increased $60,000. Uh and so we put that money to work right away. uh we the oversight committee was convened, master planning began, we saw Wilpert presentations, we had construction starting and then in February of this year, the 89th legislature began and we were still busy here in CFB ISD. Um the district made a very tough uh consolidation decision in March and uh and all along we're putting those that original $400 million issuance at work when summer uh 2025 construction kickoff meetings happened in April. But then al along comes May 2025 when Senate Bill 4 comes out of committee uh the House committee uh for passage and it increases the state aid for homestead exemption once more. this time from a $100,000 homestead exemption to $140,000. Um, but it has some clarifying language
006that we didn't have to think about uh the last time uh we were considering this financing. Um, this time uh and there's the nice uh life of a bill. Uh but I wanted to point out one thing about the the life of this bill is that uh when we were modeling the whatif scenarios in our board work study, we used 140,000 assuming that this is where uh the the bill was going to to head when we modeled what a a sample property tax bill would look like uh in in our in our projections. Um, but since our board of work study, this bill went really quickly to the governor and was signed into law on June 1st, just days before our last meeting. The language in this order has one clarifying point that I want
007to um draw to your attention, and that the debt has to be issued before September 1st, 2025. That's different than the last time uh the legislature did this when it only had to be authorized. So, it does uh put a little pressure on the bond markets this year for any authorized um bond elections from this past May and any uh elections prior. Uh so, we're going to go over a little bit uh more about what's going on as far as the legal framework and I'm going to invite uh Miss Melissa Lial from Canon Harden Montoya to talk about the language of the order. Good evening, uh, President Hatfield, trustees, Dr. Eldridge. Thank you for having me this evening. Um, I know you just heard a very long, uh, agenda description. I am here to give
008you hopefully the abbreviated version of the related order. Um, what you have in front of you tonight with regard to this item is our plan of finance order. Um this deals with the remaining authorization from the 2023 bond election. As Miss Settle just mentioned um the the finance order is written as a parameters order. It is it can it is made up of two different component components. uh we have and and that is intentional to offer the board and the district uh some flexibility in managing your issuances. So, first and foremost, we're talking about the new money. Um, and it is a delegated sale which allows um the board, the district and to authorize staff to effectuate the sale of the bonds through handling all the paperwork when you all are ready and in time
009and in accordance with the timeline that I know Mr. Honey will talk about in a little bit. The or the parameters for the new money include a maximum interest rate of 6% and a maximum maturity of two thou up through 2055. Um I'm going to go to the next the second component of the order deals with the refunding of bonds. That is the process for taking out or retiring bonds that are now callable. And the order provides parameters around when that can be done. And that that is listed um on your on your screen at 2% net net present value savings. So these two things are both included in the order before you. We assume that it we assumed when drafting it would cover the entire uh 300 million for the new money and that
010refunding would occur as uh your financial advisor when it was ready to happen. um as far as the market goes. Couple of other points. The order is effective for a year um up through the 2026 year and you can issue bonds up through then uh with a little bit of leeway at the end of that period for closing if you issue before the expiration of that. Those are really the main points. I know we've talked a little bit about Senate Senate Bill 4 and the timing considerations. Um, as you all may know, we are required to have all bonds uh approved by the attorney general's office. That is also a timing constraint when we when we are considering how many school districts will be issuing um this summer in light of the pressure from Senate
011Bill 4 and the September 1 deadline. With that, I believe it's our financial advisors. Unless anybody has any questions. I guess I should have offered that or if you want to wait. Members, we can pause. Any questions at this point? Miss Benvites. Thank you. I wanted to ask about the authorization ends May 22nd, 2026. Yes, that it it's it would be 365 days from today when it's approved. So, that's probably that date is a little bit off, but it would be a full year if we pass. The order is effective for an entire year. Okay. Yes. Thank you. Just to clarify, that's the order on the refunding. That's Or is it both? The entire order. The entire order. Okay. Thank you. All right. Good evening. Uh we have some updated numbers for you. I think
012you all have seen some of this, but we've kind of tweaked it a little and summarized it a little. Uh but uh at the board's direction, we went back this week and my partner Austin did the bulk of the work. Uh but we recast some numbers and looked at really three scenarios here. Uh scenario one is issue the full remaining authorization this summer, which was what was presented last week. And then scenario two would be uh issue just shy of 185 million now and issue the balance a year from now, next summer. And then scenario three is if the board issued no bonds this summer and then waited and issued the full remaining authorization next summer. We've got all our assumptions here. I won't go through these again. These are pretty much the same as
013last week. The only difference is the timing of the sales and then also in our new analysis. We went back and estimated what the the taxable value loss would be uh with the homestead exemption increase. pulled that out and then built in projected uh we call it a sahi the hold harmless funding from the state for each scenario. So we got a lot of numbers here on this slide. This is kind of the summary of each of those scenarios working left to right. We got all the projected debt service numbers, the maturity dates. All of these would still maintain the 20 cent INS tax rate. But if we if you focus your eye to the middle of the page, m middle to the bottom, the the last two rows there in yellow, uh we show
014versus scenario one, scenario two, which would you know be issuing a portion that the actual debt payments on that series of bonds or the the remaining authorization would be about 17 million higher in scenario two. And then the loss of state aid would be about 8.6 million. Again, you lose about by holding back 40% of the bonds, you lose about 40% of the funding. So, it's sort of a a prata calculation. And then in scenario three, additional debt services is pretty similar, 16.5 million, but the loss of funding goes up dramatically to about 25.2 million uh of foregone state aid by not issuing anything and and meeting the deadlines that have already been discussed. I won't go through the points at the bottom because I think we we've talked about those. Just wanted to get
015back to the board on we you asked last week could we still meet this all these deadlines if we waited a week and we've looked at our timetable when we can uh with the board's approval tonight. We would we would start work in the morning applying for credit ratings, setting calls uh to have credit rating meetings, assembling an underwriting team and a financing team, and hopefully be in a position to still sell the bonds mid July and close August 7th uh in advance of the district's debt service payment date, which is August 15th. So, we went back and just kind of took a a very quick look at each scenario just to kind of the highlights or uh any negatives from each scenario. So, in scenario one, I'll just hit these bullet points again. It
016maximizes state aid. It produces the lowest total debt service to the district total overall payments. It carries the lowest amount of interest rate risk. And when I talk about interest rate risk, I mean time. We would have to wait until we lock in the interest rates. So, we're locking those in now. and we think it's an advantageous market. And then lastly, um again, this scenario would allow us to complete the 2023 bond program uh as scheduled and under budget. And we actually went back and looked today and what our preliminary plan, our total debt service numbers were when we we presented in July of 2023 and based on where we sold the first series then and where we project to sell this series today, we were about 47 a little over 47 million under budget.
017Uh so I did want to point that out as this was a plan that was put in place at that time. Flip into scenario two. Um again this is selling a portion now. Uh and from the top again we would lose about 8.6 million in state aid by by not selling the full authorization. Total debt service would be 17 million higher than scenario one. And again this carries a little bit higher interest rate risk and that we would only be locking in the rates uh on a portion of the debt. Lastly, in scenario three, uh we would lose the full amount projected amount of hold harmless funding, which is a little over 25 million at this point. Uh debt service is 16.5 million higher. And then again, this carries the highest amount of interest rate
018risk and meaning that we would wait a full year to lock in any of the interest rates on any of the authorization. So that's a summary of the numbers. I'm happy to take any questions. Board members, any questions on this portion of the presentation? Mr. Shackman, just so that I understand here, the total projected debt service estimate that you put together in S uh um two and three would be added to the Asahi loss. Yes, sir. Okay. So, I want to make sure that those two were being added in there. Yes, sir. And then just one other question I had. Um I know we talked about defecence last time and so I know you said you weren't going to go over it, but it's now my favorite word when we pay off debt early. I
019said it right this time. Um and when we pay off debt early, that's really important to our voters because we're they're shrinking the lifetime of that bond. And so I do think it's important to note that um the defecence in the scenario three. Can you walk me through that a little bit please? Yeah. So again, we have to make certain assumptions in each one of these scenarios and we assumed in scenario three, you know, if you all didn't issue any debt um that you would want to keep the tax rate where it is. So we've assumed another defeasence in that scenario. I think it's roughly 17 million is what on top of the nine plus million that we're already doing this year. So that's kind of the the number of 25 million roughly you see
020there. Um, I did want to point out there's still some clarification on how defecences and redemptions are going to work in the new state funding model uh from SB4. So, we would need to work through that and any impact uh to the district on that. Okay. Thank you very much. So, I'd like to talk a little bit about our bond projects and their progress. Um, this is a little bit of a step by step in in how uh bond dollars work within the district. Uh, from bond issuance, uh, that's when we have money in the bank, uh, so to speak. Uh that's when we start procuring our um vendors, getting the architects and the right contractors aligned. Um and it and I like to kind of draw a line in the sand when it comes
021to how Mr. Blackburn and I work. When we get to guaranteed maximum price because once um Mr. Blackburn presents guaranteed maximum price contracts to the board to enter into, we really should have those funds available. And that's important. And I use that word as an allocated uh portion of the budget because um he's going to do his thing and I need to be able to pay the bills and that's and and any kind of um you know deficit there of being able to do that impedes how fast and how um well he does his job. So uh he's great and I like to make sure he keeps being great. Uh so we like to make sure that the funds are in the bank whenever he's ready to enter into the um uh guaranteed m maximum
022price contracts. So that's why when we have a bond project payment schedule and and it's aligned with the projects and when they are kicked off um so essentially once the train leaves the station we need to have all the diesel on board and that's as much of the metaphor as I'm going to take that. Um but in uh July of 2023, as I referenced before, we did issue the $400 million and according to the project plan, um those dollars will run out about midyear next year, next in 2026. Um but if you and those are the blue lines on this graph. So if you'll see uh we'll be well into new facilities construction in our project plan. Uh all of our existing facilities that train has also left the station. So we are already in
023in construction there. Uh so according to the original project plan uh and I I know it's been mentioned before but when when you issue bonds you have to certify that you have a reasonable expectation to spend it in three years. That's what this project plan is. So, we have reasonably expended and allocated our our uh project budgets um on time and we are ready as originally planned to issue um in July of 2025. Um the risk that we um might consider uh should we delay this is how far into that new construction we go. Um so it's kind of like a runway. we don't want to take off unless we know that that that that money is going to be in the bank. I hope that helps a little bit in the clarity. Um and
024so every uh bond project you see here has a um a liftoff of green. That means those projects have begun and started spending on time. Uh and so uh you know typically you see uh bond projects like this by campus, but I'm going to invite Mr. Blackburn here to review again uh just a little bit about why we packaged the building uh the different bond uh projects the way they are. This is great. Good evening, President Hatfield, Dr. Eldridge, uh esteemed members of the board. Um just to review, um in the year in the 2023 election cycle, there were two bond u votes that passed in North Texas. the first between the two of them in that year when we passed our bond, there was a total of about $17 billion worth of work just
025in the North Texas market just for public schools. And so when we began to think about how we were going to best uh take our work to the market to ask folks to bid on it for us in terms of construction, I was really concerned that we make that work attractive so we would have the best competitive pricing that we could from the firms that we wanted to work with. And so we thought about that a lot and the strategy that we ended up with was uh had I would say at least three main layers. So the first layer is to group a larger renovation project with a smaller a couple of smaller renovation projects in that were nearby in the same permitting uh jurisdiction because and just as an aside if if a contractor
026doesn't want to work on your project but he doesn't want to make you mad he'll give you a price but he'll he'll jack up the price so you won't want to use him. And so that's what we were trying to avoid. We're trying to make it attractive. so they could staff it efficiently and they could be effective in their progress in the work. And so that's the way we arranged it. We tried to provide an anchor project, a couple of satellite projects nearby to make the work attractive. Along with that, we used we thought of the work in uh basically three buckets as you've seen in the earlier slide. The renovation work, the replacement campuses, and safety and security items. So, the reason we wanted to start with the renovation work was because we could
027use the new construction as a carrot. So, if they uh were able to be successful on the renovation work, they're better positioned to be successful on the new replacement projects. So, again, we're trying to incentivize folks to bid on our work that we want to do our work. And so, we were u pretty pleased with the results that we got from that process. Um overall the renovation work is proceeding very well. Um and so we've been we've been thankful for that. And the and the third thing that we do to try and be as efficient and get the best pricing that we can and uh with the best uh results is to bring on the construction manager as early as possible. So, if you remember, shortly after we authorized uh the architects, we within a
028couple of months, we were right back authorizing the construction manager, even though construction wasn't going to start for another several months, almost a year in a lot of cases because of the time it takes to go through the design process and get all the stakeholder input for each of those projects on each of those campuses. So, we've been pretty pleased with that. Um I feel like it's been relative relatively successful and we've been able to stay uh within budget. We haven't had to touch the program contingency except for one of those renovation packages which is uh so far which has been great. Um we have seen some increased uh construction costs for the new replacement campuses but we have been able to increase the budget for those projects because of the interest that we've earned
029on that first bond sale. So, that's been a plus. And then just um to give you an idea of of um where we plan to go from here, as mentioned, we've got $131 million budgeted for the four consolidated campuses. No decisions have been made regarding reallocation of those funds. The plan is to follow a deliberate decision-making process with feedback from stakeholder groups, including a community survey. A design firm is assisting us with option development right now. That option development will include the bond oversight committee and trustees will be updated throughout before a recommendation is presented to the board. And I think now I will hand it back over to Carla. So like I mentioned before, we marry the project planning with when we expect cash flow to walk out the door. and um July 2026
030is kind of where those those um two lines intersect. Uh but at the end of the day, uh the district does recommend scenario one. Uh because of the provision of additional state aid will only be extended to this debt um before uh September 1 of this year. Uh and that means bonds that have been priced and sold money in the bank. and and very simply, the state will only be willing to pay for the effects of their decisions on this kind of debt um before their budget begins. And so, and that would be the the the biggest support for the pos uh our position. Um and with that, uh if you have any other questions, other than that, I have u Miss Oh, yep. I just wanted you to review and Mr. Blackburn uh touched
031on this a bit is when we issue the debt, say the 400,000 back uh last year, what what happens to that money? Uh right, we um strategically invest that into um with interest rates, interest income um as as the best that we can get out in the market. I think today I I asked my staff to pull what we've earned on our on our money so far and it's in excess of $30 million. So what does that do? Um, we've seen that in previous bonds that when we've been strategic about investing our dollars and we have additional interest revenues, we're able to use that money to further invest in um the district based upon the original order. Uh, so for instance, in 2018, you approved um I mean uh for the 2018 bond, you approved
032a list of projects that qualified under the original bond order. And so we put those dollars to work in the district. We'll be able to do that again here. Additional questions or comments? Okay. Um, can you just go back to the slide about the bond project updates because I think um is it this one? Uh, no. The budgets, the one that has the slides about how no decisions have been made regarding reallocation. So, I think it's important to note that on actually on the previous slide, you guys have pulled out the consolidation impact and put it on a separate line item. And so, those funds are now we're moving into a separate line so we can monitor it strategically. Um, and I think that's really important. And to me, this is me personally, this vote
033is not about starting construction or committing to specific projects for that. This vote is about preserving the district's eligibility for additional state funding and um that could save their that not could that will save our taxpayers millions of dollars. And so, um, I just want to say that I think it's just even more incumbent on us to continue to engage with our legislators because the change that they made from the last legislative to this legislative session has put us in a position where we're having to process very differently and very quickly. Um, and so they need to know the impact of that. So, I personally plan to call some of our representatives and I would encourage my colleagues to call your representatives that you are connected with because they need to know the position that
034they're putting us in. And then if you go to the next slide, um I appreciate the intentionality of administration and it is critically important that we hold true to this that we are going to have a process with feedback from stakeholder groups including a community survey. we are going to involve the bond oversight committee because if this passes it also has different implications. Um and so I just wanted to go back and and hit that hard. And for any community members that are watching all of this is happening in Austin that is causing us to be in a position where we have we don't have a choice. We can't pause. We can't wait. We got to make a decision and that decision is going to have very large implications um either way. So that's from
035me personally. Um and with that are there any other comments? Miss Benvites, thank you. Uh, regarding the bond project spending, do we have completion dates? I know we have one, two, three with a lot of green. Do we have any information on it? Yes. Uh this is our project plan and as as everything that I've seen on the pay apps, everything is being because I watch as money goes out and um our very excellent construction team has to certify that that percent completion is correct. Everything is running on this schedule. Uh you want to say anymore? No, you got it. Miss Barnes, I know you've probably repeated this a million times, but in terms of the consolidation impact money that is kind of being set aside and decided on a later date, what can it
036be spent on? What can bond money or from the 2023 bond, what are the constraints of what a school district can spend that on? Well, it's confined to how the original bond election order was written. So it is constrained in 2023 versus um a little differently than it was in 2018. So the the statutes changed between those two elections where we couldn't use it on athletic facilities because we didn't have a separate proposition for the 2023. Um but we do have the same latitude that any of our other bond projects um that that scope of work has already been established. It would be anything that's similar to that. Uh but we have to stay away from athletic facilities, uh natitoriums, what am I missing? Fine arts. We we can't uh build a performing arts center
037with our $130 million. All right. Thank you very much. Additional questions or comments? All right. Um so with that, this item is marked for possible action. Do I have a motion regarding this item? Miss Brady, I make the motion to approve the agenda item as presented. All right. I have a motion to approve the agenda item as presented. Is there a second? I have a second for Mr. Shackman. Is there any discussion? Talk to your legislators. Yes. Just from my understanding, that's the whole amount. Correct. Correct. So, it's as presented, which is the whole amount. Yes. Great clarification. So it's as presented which the order is for the entire um 316 million. Any additional discussion? All right. Well, all in favor raise your hand. All opposed by a vote of six in favor, zero opposed.
038The motion carries. Thank you very much. Um that is the agenda of our agenda tonight and we are adjourned at 6:30. What? Sorry. Oh, sorry Karen. Do you have something else to add? I apologize. We just wanted to make sure that the community knows how to stay informed throughout this process. So, um the bond 2023 website um is being revamped. The information Oh, the There we go. The information that um was on this and currently still is on it is the information that was presented before the vote. Um, and so we are starting to add we're we're providing bond updates um after you receive a bond update during a board meeting. Those updates are sent to all staff and all families via parent square. They're also posted on here. They're also posted on social media
039and they're posted on our main website. We also made sure to um update this page to have a link to the bond oversight committee uh website which has um lived under about us. And if you go to district committees, you'll find the bond oversight committee website. And so on here, you do have a calendar. Um you've got oops, you've got more information. I'm sorry, I don't know how to work this. Um you've got some information on the bond oversight committee, including um purpose, responsibilities, membership. You'll just click on this plus box, you'll see all of that. There's also a record of meetings where you can see meeting minutes and presentations for the meetings that the bond oversight committee is holding. So, we wanted our bond 2023 website to just kind of be a holding place
040for all information. So, we'll work with Mr. Blackburn's team um with Miss Settle's team in order to make sure that we update the information on here. So, we just wanted the community to be aware that this website can be easily found. If you look up here, this little bond icon is on every web page. If you go to the main website, um it's kind of loading here. This little bond icon is always at the top. We also added it here as a featured box. And then anytime we have a news post, you will see it here. So, um we just wanted the community to be aware of how to get to that bond 2023 website. Thank you very much for that helpful information. Um, I know the community will appreciate the transparency and the rebuild
041to make sure it's all up to date. So, thank you very much. And with that, um, the time is 6:34 and we are adjourned.