For the schools planned in years  2021 through 2025, how and when will the attendance zones be determined?
The attendance boundary modification (ABM) process takes place approximately one year prior to the opening of a campus.

What are Building Component Replacements?
Building component replacements include Floors, Exterior Lighting, Interior Lighting, Chillers, Building Management Cooling Systems, Boilers, Roofs, Skylights, Windows, Fire Alarms, P/A Systems, Emergency Generators, Kitchen Equipment, Track Surfaces, Athletic Field Lighting and Gym Bleachers, to name a few. The component replacements list included in the Bond 2021 proposal was developed from a much more comprehensive list that Katy ISD's Maintenance and Operations department maintains for all campuses and facilities. The components in the proposed Bond 2021 Building Components list represent our campuses and facilities' most critical replacement needs for the next three years.

What are Building Component Life Cycles?
All building components have recommended life cycles, or life spans.  Manufactures, builders and contractor associations, as well as surveyors, measure, test and determine the life cycles of different building components.  Extending a building component's life cycle beyond its intended lifespan often leads to extended life cycle costs associated with correcting distresses needed to maintain components' minimal functional quality. Replacing building components at their lifecycle end lowers total maintenance and repair costs over time.

How are future growth and enrollment trends for Katy ISD campuses determined?
The district has worked with Population and Survey Analysts (PASA) for more than two and a half decades. The organization’s enrollment projections have been 99% accurate throughout this time period. 

What is design capacity?
 Design capacity is the maximum number of students that would be able to occupy all regular classrooms and common areas (i.e. library, cafeteria, gyms, computer labs, fieldhouse, etc.) simultaneously on a campus. A high school's maximum design capacity is 3,000 students.  Design capacity for an elementary school is 1,030; junior high is 1,400; high school is 3,000.   Some older schools have smaller design capacities.

What is functional capacity?
Functional capacity is based on current classroom and common area utilization. For example, a classroom designed for 25 students that is repurposed for a special education classroom may only hold a class of 15 students due to the materials and/or equipment used in that classroom. This scenario applies to libraries, cafeterias, gyms, computer labs, and fieldhouses as well. Currently, design capacity is used in standard reports, but does not reflect the functional use of a building. Functional capacity is 10% less than design capacity which allows for the best functional use of a campus while ensuring a positive learning environment, as this is what is best for students. 

What is the methodology for determining functional capacity?
Our equation is: "3,000 students X 10% = 2,700 students."  This is functional capacity.
 
What do high school enrollment projections look like in the District’s most populated campuses if a bond is not passed in 2021?

2021    2025    2030
Katy High School (capacity 3,000)

2,903

4,100

4,813

Paetow High School (capacity 3,000)

3,235

5,423

8,566

What do junior high enrollment projections look like in the District’s most populated campuses if a bond is not passed in 2021?

2021  2025  2030

Katy Junior High (capacity 1,231)            1,110, 1,318, 1,511

Stockdick Junior High (capacity 1,400)   1,031, 1,807, 2,573

Haskett Junior High (capacity 1,400)          904, 1,599, 2,767

Haskett Junior High  (HJH) will open in the fall of 2021.  
HJH will provide enrollment relief to Katy Junior High and Stockdick Junior High.

What do elementary school enrollment projections look like in the District’s most populated campuses if a bond is not passed in 2021?

2021    2025    2030

Bethke Elementary (capacity 1,030)           1,080, 1,733, 1,960
Bryant Elementary (capacity 1,030)            1,426, 2,620, 3,383
Leonard Elementary (capacity 1,030)         1,182, 1,690, 1,864
McElwain Elementary (capacity 1,030)       1,043, 2,742, 6,409

What is the average time to construct a new high school, junior high or elementary school?
The average Katy ISD high school takes 3 years to build, a junior high 2 years and an elementary — 1 year.

If growth predictions are spot on and Katy ISD manages money well, why are schools opened at above 100% capacity?
In general, new schools are not opened at 100% capacity, but high growth areas do rapidly exceed capacity prior to the opening of a new adjacent school constructed to provide relief.

Are the newer schools over capacity?
Newly constructed schools in high growth areas soon exceed design capacity. Portables are utilized as a planning tool to enable the school enrollment to grow and to support the construction of an adjacent school.

Currently, when a campus or space is repurposed, capacity for students is reduced (which results in the need for more schools). What are the benefits of repurposing?
This provides space for programs that allow campuses to allocate space for district programs.

School designs appear to be based on space per child. The philosophy seems to have changed to a functional basis driven by the matriculation of programs. Should this not be used as a basis for justification of overcapacity and growth?
Programs vary year to year. School utilization is monitored to determine if portables are projected to be required for a long term, whereby an addition may be considered as part of the Long Range Facility Plan (LRFP). Campus programs do impact the capacity and is one of the components that contribute to the need for additional classrooms.

*When designing schools, the District is required to follow TEA guidelines. TEA guidelines are represented in square feet per student.

What are geo-coded students?
The process of assigning information to geographic coordinates. For students, the geographic data includes a street address. Geo-coded students are tagged to their residence (street address).

Is it possible to apply the programmed space of the new prototype schools to older schools to determine a standardized functional capacity for each school?
No. Functional capacity varies from school to school based upon a variety of factors including: grade grouping, special programs, etc.

Since new schools will be needed, will there be an emphasis on making each school different, requiring new blueprints and costs, or will layouts be duplicated to save expense?
New prototype designs are being considered. The new prototype is then proposed to be utilized for future schools in a refined, repeated manner, gaining constructive input from the previous school occupants. 

How does each school determine how they pursue money for certain projects?
Each campus completes a Long Range Facility Plan (LRFP) questionnaire. In addition to dialogue and analysis with department leaders, review is undertaken by technical personnel both inside and outside of the District. Campuses have two resources for projects. They can request funds through Maintenance & Operations or have a project considered via a bond.

Why doesn't Katy ISD design the schools to accommodate all known programs?
When design commences, we design with the needed programs for that particular school in mind, but it would be expensive to provide space for all programs that might not even be placed at that school. 

How have the sizes of traditional classrooms changed over time for a given number of students per room?
The Texas Education Agency (TEA) determines the class size requirement. For grades 4 and under, the 22:1 ratio has been the standard for a while. They have changed over time. However, we do not have a historical report that we can provide.

From a facility standpoint, how does Katy ISD currently quantify and determine what wants are vs. real needs?
In addition to dialogue and analysis with department and campus leaders, analysis is undertaken in conjunction with technical personnel, both inside and outside of the District.

Many of the campuses have portables. Is the use of portables a sign of poor planning?
Judicious use of temporary buildings is part of Katy ISD's overall facility plan strategy and will continue to be as long as the District is growing rapidly. Placing temporary buildings on an interim basis allows the District to assess growth carefully before constructing new campuses and to open new buildings with enrollments that are large enough to make them cost-effective to operate.

Does Katy ISD get bids from architects, which would ensure the lowest cost and best value for design services?
State law prohibits school districts from soliciting competitive bids for professional services of any licensed or registered certified public accountant, architect, landscape architect, land surveyor, physician, optometrist, professional engineer, state-certified or state-licensed real estate appraiser, or registered nurse. Contracts for these professional services are extended on the basis of demonstrated competence and qualifications to perform the services and for a fair and reasonable price. When the district contracts for architectural, engineering, or land-surveying services, it first selects the most highly qualified provider on the basis of demonstrated competence and qualifications; and then negotiates a contract with that provider at a fair and reasonable price. If a satisfactory contract cannot be negotiated with the most highly qualified provider, it formally ends negotiations with that provider and selects the next most highly qualified provider at a fair and reasonable price.

Does Katy ISD use competitive bids for construction projects?  How are contractors and subcontractors selected and vetted? Are they bonded and insured? Does the district require any credentials?
Katy ISD typically utilizes competitive sealed proposals to select general contractors. Other contracting methods, construction manager at-risk and job order contracts are also used by the district based upon the requirements of the project.

Competitive sealed procedures do not allow pre-qualifying potential offers, but may include contractor qualifications as a portion of the selection criteria for selecting the firm that offers the best value to the district. Katy ISD generally requests that the contractors complete and submit an AIA G305, Contractor's Qualification Statement, along with their proposal. This includes a copy of the contractor's financial statement, in addition to a list of proposed key project personnel and major subcontractors, and a Felony Conviction Notification and Affidavit of Non-Collusion forms.

All construction work is bid out in accordance with the Texas government. The method is selected based upon the nature of the project for example a new school vs. a renovation.

The District typically utilizes two methods, either competitive sealed proposal, aka, CSP or construction manager at risk, aka as CM at risk or CMAR. CSP is used when the construction documents are fully complete. CM at Risk is used when you want to involve the contractor early with the design team to address project complexities such as phased work in a renovation project.

The TEA provides an outline for selection criteria in choosing a contractor. ​
 
What is Katy ISD doing that is over and above the legislative requirements for schools and how does this impact cost?
TEA provides guidelines for core spaces such as classrooms, library, physical education (gyms only), and special education. It is then up to the district to provide for an educational program in line with the District's education philosophy.

Why doesn't Katy ISD go with a standard school design that will hold down cost by providing a basic building?
Most of Katy ISD elementary, junior high and high schools are modified/refined repeats with reduced fees (savings for Katy ISD) for the architectural designs. The projects are repeats, but each has unique site conditions that must have new civil designs and each require construction administration services by architect and consultants. Other minor changes and code changes are also reviewed prior to finalizing the construction documents.

The modified repeat designs also typically cost less in dollars per square foot.

What is the difference between a maintenance expense and an operating expense?
Capital expenditure are the cost of purchasing and/or constructing assets that have a useful life that extends one year or longer. Bond proceeds are used to fund capital expenditures such as the construction, acquisition and equipping of facilities; the purchase of land and buses; and bond issuance costs. Operational expenditures are daily operating costs such as payroll, services and supplies to operate the District. 

Enrollment

1. What  is Katy ISD's enrollment?
   Enrollment numbers are fluid and change daily.  Current (2020-21) District enrollment is close to
   85,000 students. This is consistent with the Katy ISD student growth patterns over the past five years.​

Enrollment Projections

The district has worked with Population and Survey Analysts (PASA) for more than two and a half decades. The organization’s enrollment projections have been 99% accurate throughout this time period. PASA demographers project Katy ISD will reach a  nearly 100,000 student enrollment in the next 5 years (2026).  The majority of future growth and development will occur in the northwest quadrant of the district.  ​

1. What schools or areas are multi-family units likely to impact? (response provided by PASA)
   We are currently expecting at least some multi-family development in all four quadrants of the District in the next 10 years. Multi-family development can continue to happen  for years after the first waves of development have impacted an area. There are numerous complexes planned along the major arterials in Katy ISD., including the area south of IH-10 and west of Grand Parkway, along the Westpark Tollway, along Grand Parkway in the south, and scattered throughout the remainder of the District.
2. Do suburban school districts get too big? If so, do they ever split? (response provided by PASA)
   Too big is really impossible to define. There are currently 4 districts in the state of Texas with more than 100,000 students. Katy ranks within the top 7 in terms of total student population in the state of Texas. We've never seen a school district split into pieces. We have seen districts absorbed into other districts and/or several districts consolidated into a larger, single district.  

1. Why are some contracts only assigned one architect?
   Katy ISD has utilized a number of architects over the years. Six architectural firms, for example, were retained for work associated with the 2014 bond Program. Professional services (i.e. architectural) cannot be bid per the Texas Government Code. Firms are selected based upon their qualifications.
2. How was there enough money left over to build two new elementary schools out of the 2010 bond?
   Savings were achieved due to the downturn in the economy in 2011 and very favorable bidding conditions. New schools were released for construction proposals in early 2011 to take advantage of the market conditions.
3. What is the projected average square footage for:
   (To determine the approximate cost for each school to be constructed per 2014 dollars.)
   
   * Elementary?
   * Junior High?
   * High School?
   
   The current projected approximate square footage as design work currently under way is 130,000 sq. ft. for an elementary, 195,000 sq. ft. for a junior high, and 615,000 sq. ft. for a high school.
4. How does future building design change to accommodate changing needs?
   When a design is commenced, whether it be a new design, modified repeat or renovation, we meet with all departments.
5. What is driving the 8-10% construction inflation and what is done with any realized surplus at the end of a project?
   The rapid growth in many sectors of construction within the Houston metroplex has resulted in a rapid increase in the construction market. The market is also attempting to correct for the losses during the economic downturn. Project savings are placed into an account for use as deemed appropriated by the Board.
6. Does the District maintain a Facility Condition Index (FCI) score card for existing portfolio assets?
   The Maintenance and Operations Department maintains an in-depth appreciation of component condition and performance on an ongoing basis. Software programs are utilized to monitor and track component performance and condition.
7. Does the District have a Facility Asset Management Plan?
   Several support departments assume responsibility for aspects of asset management and each have appropriate systems in place to manage assets based upon their area of responsibility.
8. What is the CAPEX and OPEX for portables vs. other options and what percentage of the CAPEX to install those is sunk cost lost when the portable is removed?
   The capital expenditure (total cost) of a portable installation is approximately $92,000. The annual operating expenditure of a portable is approximately $4,500. The sunk cost when a portable is removed is approximately $5,000.
9. Does Katy ISD include contingency costs in project costs for each project?
   Yes. Contingency is included within the project cost.

How are school districts funded?
Texas School districts, like Katy ISD, are funded by two primary revenue sources— local revenue and state revenue.

School District Revenue: Local Property Taxes
Local revenue comes from property taxes paid by residential and commercial taxpayers within the boundaries of a school district. There are two tax rates stated in a property tax bill that make up a total rate. These two rates fund two different portions of a school district's budget.  These rates are the Maintenance and Operation or M&O Tax Rate, and the Interest and Sinking, or I&S Tax Rate. 

The M&O Tax Rate funds the day to day maintenance and operations of the school district.  This is also known as a school district's General Operating Fund. The General Operating Fund is the larger of the two tax rates.  The Interest and Sinking Tax Rate can only be used to pay off debt incurred by issuing voter approved bonds. School districts are required to set the I&S tax rate at the level necessary to make the annual debt payments on all outstanding voter approved bonds.

Katy ISD's M&O Tax Rate is currently just under 100 cents, while the I&S Tax Rate is 39 cents, for a total of 139 cents or $1.39 per $100 of taxable value.

Over the past 16 years the M&O Tax Rate has come down from a high of $1.63 in 2005-2006 to the current $1.00 (or $0.9988) level.  Changes in the M&O tax rate are largely due to changes in school finance laws over this same period of time.   

The Interest and Sinking Tax Rate has been fairly steady for many years. Katy ISD has been able to maintain and sometimes even lower the I&S tax rate due to consistent property tax base growth. The District was in the position to drop the I&S rate by a penny after the 2014 bond authorization.  And, in 2019 and 2020, due, in large part to the passing of House Bill 3, Katy ISD was able to keep the I&S at 39 cents, while dropping the Maintenance and Operations Tax Rate, or the General Operating Fund, by 13 cents. The Interest and Sinking Tax Rate is collected and set aside in its own account and used to pay back bonds.

School District Revenue: State Funding
State revenue represents about 45 percent of Katy ISD's budget, while a very small portion of revenue, 2 percent, comes from the federal government.

How is funding allocated to school districts?
School districts are allocated funds based on the number of students they have. A basic allotment of $6,160 per student is currently calculated for each school district, which is funded by local property taxes, sometimes known as the district's local share, plus state provided revenue sometimes referred to as the state's share. With a larger number of students comes increased expenditures for additional teachers and related staff to serve those students.   

If local property values increase, the state share of the basic allotment of $6,160 will be less However, if property values decrease, the state share of the $6,160 will be higher.  The less wealthy a school district's property tax base is the more state funds the school district will receive.  Conversely, if a community can raise more money locally through taxes, the district receives less state funds. Districts with property wealth that generates more than $6,160 per student are required to send excess local tax revenue to the state where it will be redistributed to less wealthy school districts. This is often summarized in school finance in one word – "Robinhood."

2020-21 Budget (GOF/M&O)

Eighty-eight percent (88%) of Katy ISD's M&O budget is currently salary and benefits for teachers, nurses, counselors, maintenance crews, bus drivers and other supporting faculty.  The second most significant expense supported by Katy ISD's budget is utilities. Utilities for a district the size of Katy ISD are about $20 million dollars per year.

Software and teacher supplies also represent significant parts of the budget.

The vast majority of what we do as a school district is in the classroom, that is represented by the blue expenditure bar.  67 percent of what we do is put into instruction, and 90 percent of our expenditures are spent on students for instructional purposes and support, counseling, co-curricular activities, transportation, and other personnel support.

Schools Bonds
Katy ISD uses bonds to fund the capital needs of the district.  Capital needs may include new schools, renovations, or updated technology and safety and security.

The district's bond cycle is based on a Long-Range Facilities Plan that accounts for the life cycles of aging building components, technology and safety needs, as well as projected enrollment growth and community feedback.

Over the past 25 years, taxpayer's approval has funded growth by building new schools and addressing aging facility needs through eight Katy ISD bond referendums.

Every 3 to 4 years, based on the District's Long-Range Facilities Plan and demographic data, the school board may consider the formation of a Community Bond Advisory Committee to review capital needs and determine whether a district's bond is warranted. The Committee hears from various internal administrators, as well as external experts, to get a comprehensive overview of the District's needs. Based on their independent review of the Long-Range Facilities Plan, demographic data and capital needs, if the Committee agrees a bond is needed, they will recommend a bond package and election, for the school board to consider and approve.

What is a bond election?
When a school board calls for a bond election, they are asking their local voters to decide if they agree to authorize the district to issue bonds for the identified capital needs.

When a community's taxpayers approve a schools bond, by election, the school district then uses the Interest and Sinking tax rate to repay the debt to investors. In some communities they must raise the interest and sinking tax rate to pay the debt to the investors. In Katy ISD's case, because of the managed growth and many years of successful fiscal management in our bond program, we have not had to raise that tax rate to make required bonded debt payments.
 
What Does Katy ISD Buy with Bond Funds?

Once a community has approved a bond program, the district then goes through a bid process that, ultimately, puts contracts in place to begin construction on the various projects.  Now, it is time to start paying those contracts, so the District sells bonds. Bonds are sold as cash is needed to fund projects such as the construction of new schools or the purchase of new technologies.

Cash from bond sales is used to pay contracted vendor payments every month. Bonds are sold to meet cash requirements for vendor payments. To minimize the amount of interest paid on the District's bond sales, Katy ISD sells bonds as needed, in incremental amounts, rather than selling the entire authorization amount all at once.    

The District's consistent and projected tax base growth has allowed Katy ISD to maintain a steady Interest & Sinking tax rate despite the need to sell more bonds due to student growth.

Unlike a homeowner, a school district does not pay for one project/asset with a 30-year mortgage that has equal level payments every year. When we sell bonds, we are likely funding multiple projects with the funds received, so we structure the repayment of the bonds to match the useful lives of those different projects.  For example, the useful life cycles of technologies and even building components like rooftops are shorter than the life cycle of a brand new building; therefore, we make certain that we repay the principal amounts associated with those shorter life projects prior to the end of their useful lives. While a bond sale may have a 30-year term, the annual payments are structured to match the useful lives of the projects being financed with that bond sale.

What is the bond market?
There are many different types of bonds. The most common types of bonds are US Treasury bonds, corporate bonds and municipal bonds.  School districts utilize municipal bonds. From an investor's perspective, a major benefit of municipal bonds is that interest earnings are typically tax exempt, meaning the investor does not have to pay federal income taxes on the interest they receive from owning these tax-exempt bonds. 

There are many uses of public debt funded by bonds. In 2019, the most recent data available, across the country, 24% of all the bonds that were issued were for education purposes, while 28% were for general purposes.

What is a bond?
A bond is a contract between an Issuer, like Katy ISD, and investors, where the Issuer promises to repay money borrowed from the investors over time at a negotiated, agreed-upon tax-exempt interest rate. 

How does Katy ISD repay its debt?
Bonds are secured by a pledge of the issuer's full faith and credit and taxing power. Full faith and credit implies that all sources of revenue, unless specifically excluded, will be available to pay back the debt service on the bonds. And in Katy ISD's case, our 39 cent Interest and Sinking tax rate has been, and is projected to continue to be sufficient to make the payments on our existing bond debt and projected future bond debt.

Uses for Bond Proceeds: Two Types
Texas school districts issue bonds for two purposes: 1) to pay for the construction, renovation, acquisition and/or equipping of school buildings; and 2) to refinance a portion of the District's outstanding debt in order to achieve a present value savings to the District and its taxpayers.  A refunding bond issue is like refinancing a home mortgage to take advantage of lower interest rates. Whenever Katy ISD is presented with an opportunity to refund its bonds, and the bonds are at a position to be refunded, we refund those at a lower interest rate to save interest, which also creates capacity for future new borrowings, which is important in a fast growth district. The goal is always to save money for Katy ISD taxpayers, but also to ensure capacity for the future, should the District need to issue additional bonds to build more schools or renovate campuses.
 
Who participates in a bond issue/bond Sale?
Katy ISD's auditor annually audits the District's financial books and issues an opinion indicating that our financial records are properly reported and presented so that investors feel confident about the financial condition of the district. Others involved in a bond sale include our Municipal Advisors, Texas Attorney General, the District's bond counsel, and Rating Agencies.

Katy ISD's Municipal Advisor- Hilltop Securities
Katy ISD's municipal advisor is Hilltop securities. They advise us on all matters associated with a bond sale. Their role is to protect the welfare of the district/issuer in financing. They review proposed bond structure terms, interest rates, and so forth, as well as provide historical knowledge of transactions. They know what is going on in the market and how institutions may be able to better structure transactions to get the best pricing available.  In short, they formulate a financial plan, they evaluate our financing structure and they identify financial opportunities for us that are in the best interest of the District – allowing us to continue to successfully manage our debt portfolio.

Katy ISD's Bond Counsel
Orrick is Katy ISD's bond counsel.  Bond counsel makes sure that the District's bonds are issued while legally protecting both the district and the investor. Counsel is retained to give a legal opinion on the assured compliance.  They prepare, review and advise the district on all necessary bond documents and ultimately ensure that the bond issue is approved by the State Attorney General of Texas.

Rating Agencies
Rating agencies rate the debt of public and private entities. Rating agencies provide the primary analysis of our ability to pay back the funds that Katy ISD borrows. Rating agencies provide a rating to the district, like when someone goes to the bank for a loan and that bank verifies their credit rating.  The highest credit quality for a personal credit score is above 800.  That would be comparable to an Aaa/AAA bond rating.  Moody's ratings include Aaa, Aa1, Aa2, and Aa3; while Standard & Poor's ratings include AAA, AA+, AA, AA1 and A1. Katy ISD is rated Aa1 with Moody's, and AA+ with Standard and Poor's. Katy ISD's rating is considered very strong, and, while we do not currently have the highest possible rating, we are one of only 31 districts out of over 1,000 in the state that has a Moody's rating of Aa1 or better.  Also, it is important to understand that Katy ISD's biggest rating challenge is our continuous need to issue new bonds to keep up with our fast growth, which is a challenge for all Texas fast growth districts.  Also, like most school districts in Texas, Katy ISD's bonds are backed by the AAA rated Permanent School Fund. The combination of Katy ISD's strong stand-alone ratings plus the AAA Permanent School Fund Guarantee rating ensures that we will obtain the lowest, most competitive interest rates available when we sell bonds.

Katy ISD's Auditors
Katy ISD's auditors are WhitleyPenn.  They provide an audit of our financial statements; they authenticate that the district's current financial condition and our historic performance are correctly presented in our audit and test the effectiveness of the District's internal control systems.

Bond Pricing
When Katy ISD is in the position to go to market for a bond sale, the district forms a financing team. The financing team is led by the district's municipal advisor. Together, we will establish a structure for the financing. We prepare a Preliminary Official Statement to provide to the rating agencies and investors, and we work with potential buyers of our bonds, prior to the sale. We pre-price in an effort to get as many orders as possible for Katy ISD bonds.  The bonds are finalized on the pricing date, and close roughly a month later which is when Katy ISD receives the bond proceeds and bond projects.

Types of School Bonds Investors There are different types of investors that buy school bonds.  They include retail investors, mutual funds that serve as a strong portion of retail investors' portfolios, investment advisors, banks, and insurance companies. 12. 

What happens if the bond is delayed and is not passed in 2021?
The District would be subject to upward inflationary pressure, interest rate risks, and a majority of campuses will be exposed to Districtwide rezoning that could result in overcrowding.   However, rezoning the District now would not eliminate the existing and future growth, nor the overcrowding many of our schools are experiencing.  The District is only 74.1% built out. Rezoning the District now would only result in another Districtwide rezoning 3-4 years from now.  This would be followed by an additional Districtwide rezoning three to four years after that.  Demographers project Katy ISD will reach a 100,000 student enrollment in the next seven years.  The majority of future growth and development will occur in the northwest quadrant of the District.  We do not believe it is in the best interest of our students and families to move Districtwide attendance boundaries every three to four years.  It takes away from our neighborhood schools concept and would result in a majority of our schools exceeding maximum design capacity.

 What is the historical and anticipated taxable values for the district?
In the past 10 years, from the 2010-2011 fiscal year to the current 2020-2021 fiscal year, the District’s tax base has experienced an average increase of 8.6% per year.  In the past five fiscal years, the average increase was 6.5%, even with the impact of Hurricane Harvey.  Conservative estimated taxable value growth used in this bond proposal range from 1% to 3% per year through the 2027-2028 fiscal year.  Values are held constant for the 2028-2029 year and beyond. 

Explain tax rate vs. tax increase due to the increase of property values, especially new families.
The amount of taxes levied by Katy ISD are calculated by multiplying the tax rate set by the District by the taxable value of the property within the District. The taxable values are set by the county appraisal districts. Property values will increase as new businesses move in and new homes are built for incoming families. These increased values will generate more tax revenue, even if the tax rate remains unchanged.

How does multi-family growth impact taxes?
Multi-family apartment complexes impact tax collections and other revenues in several ways. The value of the facility itself will generate local tax revenue, and the students within the multi-family facility will generate state funding. The property tax generated per student may be more or less than that generated by a single family residential home dependent upon the value of the multi-family facility and the number of students housed within the facility.

If the District over estimates future costs and there are funds leftover from the bond, where does the extra money go?
Funds available from project savings have historically been repurposed for other bond order authorized spending. Project savings have occurred in past authorizations due primarily to favorable pricing on construction projects. This created the opportunity to utilize these funds to construct projects including additional schools, property purchases, infrastructure, etc.

What is a general obligation debt?
The specific definition from the Municipal Securities Rulemaking Board (MSRB) is: GENERAL OBLIGATION BOND OR GO BOND Typically refers to a bond issued by a state or local government that is payable from general funds of the issuer, although the precise source and priority of payment for general obligation bonds may vary considerably from issuer to issuer depending on applicable state or local law. Most general obligation bonds are said to entail the full faith and credit (and in many cases the taxing power) of the issuer, depending on applicable state or local law. General obligation bonds issued by local units of government often are payable from (and in some cases solely from) the issuer's ad valorem taxes, while general obligation bonds issued by states often are payable from appropriations made by the state legislature.

Is a strong credit rating combined with Texas guarantee important to consider for obtaining a bond?
Strong credit ratings are important with regard to selling our bonds in a marketplace where they compete for investor dollars. Similar to a personal credit rating, strong credit ratings help the District because bonds we issue are more attractive to investors which results in lower borrowing costs. 

With new property growth coming into the District, have we taken into account the tax revenue dollars we will receive?
Yes, an assumption has been made that taxable property values will increase year over year. 

Is there a recommended target percentage for a reserve account balance or rule of thumb metric?
Rating agencies generally expect a district to have a Maintenance and Operating fund balance of at least 90 days of expenses. Thirty days or less would be considered a worst practice by the rating agencies. Texas Education Agency (TEA) recommends that districts have at least 75 days of cash in reserves.

What was the percent change in tax base for residential vs. commercial/industry over the past 3 years?
The percentage change for Real Residential, Single-Family from 2017 to 2020 is 11.89%. The percentage change for Real, Commercial and Industrial from 2017 to 2020 is 17.83%. Forecasts are dependent on future assessed values from county appraisal districts - Harris, Fort Bend and Waller. 

 What is Katy ISD's total bond indebtedness as of August 31, 2020?

Issue

Series Description

Interest
Rate

Matures

Debt
Outstanding

 $ 68,910,000

2010-A Unlimited Tax Refunding Bonds

2.00-5.00

2022

 $       2,265,000

   41,470,000

2010-C Unlimited Tax School Building Bonds

4.00-5.00

2021

          3,000,000

  147,680,000

2012-A Unlimited Tax School Building & Refunding Bonds

4.00-5.00

2023

        19,375,000

  103,000,000

2013 Unlimited Tax School Building Bonds

2.00-5.00

2026

        13,085,000

  133,970,000

2014-A Unlimited Tax Refunding Bonds

1.00-5.00

2036

      115,885,000

   18,150,000

2014-B Limited Tax Refunding Bonds

3.00-5.00

2028

        13,120,000

  155,310,000

2015-A Unlimited Tax School Building Bonds

2.00-5.00

2045

      134,450,000

   52,955,000

2015-B Unlimited Tax Refunding Bonds

4.00-5.00

2037

        52,955,000

  115,000,000

2015-C Variable Rate Unlimited Tax Refunding Bonds

4.47-4.80

2036

      107,950,000

  245,095,000

2016-A Unlimited Tax School Building Bonds

4.00-5.00

2046

      229,405,000

   23,515,000

2016-B Unlimited Tax Refunding Bonds

3.00-5.00

2038

        23,065,000

   11,510,000

2016-C Limited Tax Refunding Bonds

5.00

2024

          2,080,000

  152,315,000

2016-D Unlimited Tax Refunding Bonds

3.00-5.00

2032

      130,775,000

  261,640,000

2017 Unlimited Tax School Building Bonds

4.00-5.00

2047

      243,225,000

  186,225,000

2018 Unlimited Tax School Building Bonds

3.00-5.00

2048

      174,225,000

  190,695,000

2019 Unlimited Tax School Building Bonds

4.00-5.00

2049

      181,790,000

  169,169,942

2019-A Unlimited Tax Refunding Bonds

1.705-4.00

2043

      166,791,959

  135,490,000

2019-B Unlimited Tax Refunding Bonds

4.00-5.00

2041

      134,025,000

  141,240,000

2020 Unlimited Tax School Building Bonds

3.00-5.00

2045

      141,240,000

Total Bonded Debt

    1,888,706,959

What is the total dollar value the bond proposal could reach without increasing the tax rate?
Until the projects to be included in the proposal are determined, this value is unknown. In addition, several variables must be estimated once the projects are determined. The District strives to ensure that estimates of variables are realistic and conservative. The major variables include:
Taxable Assessed Value (TAV) - The District’s current taxable assessed value is approximately $45 billion and we have projected increases of:
2% for 2021-2022 

3% for 2022-2023 and 2023-2024

2% for 2024-2025 and 2025-2026

1% for 2026-2027 and 2027-2028

Interest Rates - The District has benefitted from the low interest rate environment in recent years and has been able to issue bonds at very low rates. In fact, interest rates that affect municipal bonds are currently at an all-time low.  Current estimates would be that the District could issue bonds at a rate of 2.32% in 2020. The District is modeling current interest rates plus 100 basis points over the next four years.

Useful Lives of Assets Financed - The District structures the bond repayment schedule to match the useful lives of assets being financed. Assets with shorter lives, for example technology with a five-year useful life, will have equivalent principal payments in the first five years of the bond repayment schedule. This compressed repayment schedule puts added pressure on the tax rate. Assets with longer lives, for example a new campus facility with a fifty-year useful life, will have principal payments spread over the 30-year life of the bonds. Actual lives will be determined by the projects included in the authorization.

Cash Flows - Once specific projects are identified; the District will be able to prepare a cash flow indicating when cash will be needed to fund each project. At that time bond sales will be made to provide cash annually based on identified needs. The District sells bonds dependent upon cash needs approximately once per fiscal year. Therefore, bonds would probably be sold annually in increments required to cover cash flow needs anticipated over the next 12-month period. The complete authorization would be issued in approximately 3-4 years depending on the number of projects and size of the authorization.

Fund Balance - The District can decide to utilize the debt service fund balance to manage the debt service tax rate. 

Interest Earnings - The District invests its construction funds (bond proceeds) and debt service funds. Interest earned on these funds is deposited into the debt service fund to help manage the tax rate. 

How do bond sales effect tax rates and what happens if interest rates rise in the future?
Bond sales are structured to cover cash needs for a twelve-month period and to repay principal at a rate to match the useful lives of the assets included in the sale. The larger the cash need, the larger the sale and the interest expense incurred. Likewise, if interest rates rise, interest expense will also increase. Either of these will increase pressure on the tax rate. Current projections incorporate interest rates increasing.

What is the actual growth in taxes/household?
The tax rate remained stable from 2007-08 to 2014-15. In 2015-16 the District was able to lower the tax rate by $0.01 (1 cent). The District was able to lower the tax rate another $0.128 (12.8 cents) over the last two years. Actual growth or increase in a household's school taxes would have resulted from increased property values. Property values are not determined by the school district, but are determined by the county appraisal districts in which the property is located. Katy ISD is located in Waller, Fort Bend and Harris counties. 

 What is the District's current total outstanding debt?
As of August 31, 2020, the District's outstanding principal is $1,888,706,959 and estimated associated interest is $1,095,003,240. *Does not include estimated refunding's (to lower interest expense) or calls (to lower principal amounts) currently under review. 

Why are there multiple propositions in schools bonds?
Texas legislation requires school districts to have separate propositions for bonds that will fund construction or improvements for athletic facilities with 1,000 or more seats, natatoriums, performing arts facilities, recreational facilities, teacher housing, or technology improvements.

I have been told that the ballot for the Katy ISD bond will indicate a tax increase, is this accurate?
There will be no change to the Katy ISD school tax rate for a 2021 Bond.  The rapid growth of the Katy ISD community has expanded our overall tax base, which increases revenue and eliminates​ the need for any type of tax rate increase.  However, recent changes to state law now require all  bond ballots to include the language “THIS IS A PROPERTY TAX INCREASE,” even when the district is not changing the tax rate.

Can non-citizens vote on a Katy ISD bond?
No. Only registered voters residing in the District are allowed to vote in a bond election.

Can bond elections be held during general elections?
Bond elections can be held on the second Saturday in May or the first Tuesday in November.

How many bond referendums are allowed on the same ballot?
There is no numerical limit to the number of propositions that can be placed on the ballot.

How much discretion does the Board of Trustees have with bond funds beyond what it was allocated for?
The District estimates the cost of each project named in the proposition. If for any reason a project named in the proposition comes in under budget, the District will work with Bond counsel (attorneys) to ensure that the funds are used in a manner that is consistent with the Bond proposition.

Regarding election guidelines, what can Bond Committee members do to make clear they are acting as individuals, not on behalf of the Committee?
The Committee members’ work is not advocacy -- it is fact-finding and input sharing. During their meetings, in any publications they produce, or any other activities they take on as a Committee or in their respective roles as Committee members, they should not advocate for or against a proposition. However, on their own time separate and apart from the Committee, they are free to express opinions as long as they do not represent themselves as speaking on behalf of the District or the Bond Committee.

What is a natatorium?
A natatorium is a practice and competition swimming pool area located on Katy ISD high schools.

Why are natatoriums listed on a separate propositions?
Texas legislation requires school districts to have separate propositions for bonds that will fund construction or improvements for Technology, Natatoriums, Athletic Facilities and Performing Arts Facilities. 
 
Do all Katy ISD high schools have a natatorium?
All Katy ISD high schools have a natatorium that is located on the campus.  High school swimming pools are used for both practice and competitions.  

Why must Technology be listed on a separate proposition?
Texas legislation requires school districts to have separate propositions for bonds that will fund construction or improvements for Technology, Natatoriums, Athletic Facilities and Performing Arts Facilities.  

What is a Campus Retrofit?
A campus retrofit involves upgrading old campus technology. Equipment older than 5, 6 or 7 years is replaced during a retrofit.  As part of a retrofit, classrooms receive a teacher laptop and a monitor, interactive panels for instruction, and the campus' standard ratio of devices to students in the classroom is increased to 50%.* Other areas of the campus such as the library, computer labs, offices, and the cafeteria receive new desktop computers. In addition, campuses receive document cameras, updated projectors for labs, and other necessary peripheral equipment including ID badge printers, Raptor printer/scanners, handheld scanners and some replacement printers. 
 *Early committee discussions considered a desktop for each classroom, though the committee's final recommendation was to increase the campus' standard ratio of devices to students by 50% of a​ school's enrollment to expand access to instructional resources in the classroom.

When are retrofits completed?
All retrofit installations are done after school hours with no interruption to the instructional day.  Training is coordinated with the Instructional Technology department so teachers, staff and students can take advantage of new technology soon after implementation.

How are devices used in Katy ISD classrooms?
Our teachers leverage classroom technology to teach foundational to complex concepts. Instructional laptops are used by our teachers to be mobile and flexible within and outside the classroom, as well as to support collaboration with their colleagues in online workspaces that support them in creating and designing lessons and activities.  Our teachers also use instructional laptops to grade students work by giving audio and video feedback as well as typing out responses to students. This is how grading  most often occurs in modern classrooms. SMART Boards or Interactive Panels, are used each day to teach.  Interactive panels allow students to actively participate in lesson delivery with a variety of ways to respond.  SmartBoard and interactive panels engage students with tools such as widgets that allow students to respond to actions and questions, and dynamic math tools to show changes to the formula when the graph, slope, or angle changes.
 
Texas Education Agency and Online STAAR testing
The Texas Education Agency is transitioning to online testing.  Students will need devices in order to take the state online tests.  The benefit is that these same devices will also be used in our classrooms each day for active learning. 

Encyclopedias, informational databases, video content, electronic books, and textbooks are all accessible via a computer device.  Without classroom devices, students would not have the devices to access these needed online resources. Our students not only need exposure to these technologies, but require technologies to create and be active learners.
 
What is Technology Infrastructure?
Infrastructure includes network switches, WiFi, servers, storage, cybersecurity systems and some Fiber Optic cabling.

What do infrastructure systems provide?
Infrastructure systems provide connectivity for everything from physical security such as access control, security cameras, burglar alarms, to building automation like air conditioning and lighting controls. These systems all rely on technological infrastructure.

But most importantly, the infrastructure supports the unparalleled learning in Katy ISD by providing reliable access to online resources such as Canvas, textbooks, and other research materials.  As the use of technology increases in our everyday lives, it has also increased in education.  Currently, Texas requires some students to take online assessments and in the near future will require all students to take online assessments.  The infrastructure will be critical in connecting all the devices necessary to accommodate the online testing.

What about Cybersecurity infrastructure?
Cybersecurity infrastructure such as Firewalls, micro segmentation, Denial of Service prevention, and immutable backups protect against the ever increasing threats such as ransomware. Additionally, the current pandemic highlights the need for resilient, secure, remote access infrastructure to accommodate the Katy virtual instruction and online learning.  The objective is to provide access to the learning environment from anywhere at any time.

Katy ISD's current Technology Standard is a 30% ratio of devices to students per campus. The new retrofit standard increases to a 50% ratio of devices to students.

What is the "Connected Teacher Learner Instructional Program?"
The Connected Learner Teacher Instructional Program is a professional development initiative that allows a teacher to check out a laptop for long-term instructional use.
 
What happens to the old devices, i.e. can they be sold in a used market?
Katy ISD technology that has reached its end of life cycle, or is non-repairable, is recycled by an outside recycling center. The center provides the District with an inventory report that includes a description of the asset, its tag number, serial number as well as a certificate of erasure. Katy ISD is reimbursed with a profit share for any equipment that is refurbished or recycled for parts.

What are Building Component Replacements?
Building component replacements include Floors, Exterior Lighting, Interior Lighting, Chillers, Building Management Cooling Systems, Boilers, Roofs, Skylights, Windows, Fire Alarms, P/A Systems, Emergency Generators, Kitchen Equipment, Track Surfaces, Athletic Field Lighting and Gym Bleachers, to name a few. 

Why must component replacements for athletic facilities be listed on a separate proposition?
Texas legislation requires school districts to have separate propositions for bonds that will fund construction or improvements for Technology, Natatoriums, Athletic Facilities and Performing Arts Facilities. 

What types of item are considered athletic building component replacements?
Roofing Replacements, Track Re-surfacings, Field Lighting Replacements, and Gym Bleacher Replacements are considered to be athletic building component replacements.  Roof replacements are critical to preventing water leakage and structural damage on Katy ISD campuses. Track surfaces are replaced when they have reached their life cycle. Gym bleachers are replaced when frames show significant wear and tear, and require extensive maintenance each year to remain operational. New bleachers would meet current code requirements, as well as incorporate Americans with Disabilities Act compliant seating.

What is the "stadium" reference in Proposition D?
The District's 40-year-old Rhodes Stadium field house and concession areas would receive roof repair as part of Prop D.  The cost for the roof repair is $435,000. There are no other stadium related items included in Prop D.  The other athletic facility component replacements in Prop D pertain to junior high and high school track and field repairs ($2,500,000),  outdoor lighting replacements on campus baseball, softball and football fields and tennis courts ($6,665,000), and school gym bleacher replacements ($1,660,000).  An itemized list of Prop D projects.