1. Wells Nelson & Associates
Funding Your Project…
Wells Nelson & Associates

2. M&O vs. I&S Borrow on the M&O side Borrow on the I&S side Timeline
Outline
M&O vs. I&S
Borrow on the M&O side
Borrow on the I&S side
Timeline

3. M&O vs. I&S - Two Tax Rates = Overall Tax Rate
Maintenance & Operations (M&O)
Interest & Sinking (I&S)
A district will levy an M&O tax rate like $1.04
Maximum tax rate is $1.17
Purpose: The taxes received by the district on the M&O side are to help for the maintenance and operations of a district like teachers’ salaries or transportation.
A district may levy an I&S tax rate but does not have to
Maximum tax rate is $. 50
Purpose: The taxes received by the district on the I&S side are used to pay debt service like a gym or cafeteria.

4. If you wanted to borrow on the M&O side vs. I&S side
Maintenance & Operations (M&O)
Interest & Sinking (I&S)
Does not require bond
election
Work within your M&O
budget
Issue debt through
multiple vehicles (i.e.
Main.Tax Note, Time
Warrant)
Prove up pay ability
per the Att’y General
Requires a Bond
Election
GO Bonds can garner
lower interest rates
Can use up to 50
cents
Districts can receive
AAA backing of PSF;
lowering issuance
costs

5. If you borrow on the M&O side…
Maintenance Tax Note
Time Warrant
Purpose
Maintenance, repair, rehabilitation, purchase of equipment
New construction*, repairs, renovations or the purchase of building and equipment
Limitations ($$$)
Based on AG Debt Test
$1,000,000
Max Maturity
Not > than 20 YRS
Not > 15 YRS
Voter Approval NO
AG Approval
YES

6. If you borrow on the I&S side…
General Obligation Bonds
Can be used for NEW construction
Can issue debt for up to 40 years
Can be used to refinance M&O debt (i.e.
refinance a Maintenance Tax Note)
Must have AG Approval
Question: What is the biggest difference if you borrow on the I&S side rather than M&O side?
Answer: Passing a bond election on the I&S side can garner LOWER INTEREST RATES than most M&O debt vehicle financings.

7. Holding a bond election…
Assemble
Financing Team
Involve Citizens
To Develop and Recommend Bond
Package
Prepare/Review
Facility Master Plan
Call
Bond
Election
Publish Notice
of Election
Hold Informational
Meetings To Explain the Plan
Mail/Distribute
Voter Education
Material
30 Days
Feb. 27, 2015
Note:
April May 5, 2015
Early Voting
May 9, 2015

8. Tax Rate Impact on 15mm, 20mm, & 25mm Bond Election
Taxable
FYE
Assessed
May 2015 Bond Election
31-Aug
Value
$15 Million
Tax Rate
$20 Million
$25 Million
2015
485,000,000
2016
859,700
0.177
1,143,000
0.236
1,431,200
0.295
2017
858,900
1,143,700
1,428,300
0.294
2018
857,700
1,143,800
1,429,700
2019
861,000
0.178
1,143,300
1,430,300
2020
858,800
1,147,100
0.237
1,430,100
2021
861,100
1,145,200
1,429,100
2022
857,900
1,142,700
1,432,200
2023
859,200
1,144,500
1,429,400
2024
859,900
1,145,500
1,430,700
2025
860,000
1,145,700
1,431,000
2026
859,500
1,145,100
2027
858,400
1,428,600
2028
856,700
1,146,400
1,430,800
2029
859,300
1,143,200
1,431,800
2030
856,200
1,144,100
1,431,600
2031
857,400
1,144,000
1,430,200
2032
857,800
1,142,900
1,432,500
2033
1,433,400
0.296
2034
1,147,300
1,432,900
2035
859,100
1,142,800
2036
856,100
1,432,600
2037
857,200
2038
857,300
1,146,800
2039
856,400
1,432,700
2040
859,400
1,146,000
2041
861,200
1,143,500
2042
856,900
1,431,900
2043
856,500
1,143,900
1,431,100
2044
859,800
1,146,600
1,433,200
2045
856,800
1,147,500
1,433,100
$25,749,800
$34,347,800
$42,936,600

9. Tax Rate Impact on 15mm, 20mm, & 25mm Bond Election
$15mm bond election: How much does that increase taxes of on a $100K house (taxed at $85K)?
100K - 15K (HS) = $85K
85K/100 = 850
850 x .17 = $144.50/yr. or $12.04/mo
$20mm bond election: How much does that increase taxes of on a $100K house (taxed at $85K)?
100K - 15K (HS) = $85K
85K/100 = 850
850 x .23 = $195.50/yr. or $16.29/mo
$25mm bond election: How much does that increase taxes of on a $100K house (taxed at $85K)?
100K - 15K (HS) = $85K
85K/100 = 850
850 x .29 = $246.50/yr. or $20.54/mo

10. Contact Information
Michael De Leon
Wells Nelson & Associates, L.L.C.
17480 Dallas Parkway, Suite 240
Dallas, TX 75287
Phone:
Mobile:
Website:
Steve Perry
Wells Nelson & Associates, L.L.C.
17480 Dallas Parkway, Suite 240
Dallas, TX 75287
Phone:
Mobile:
Website:

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