GCISD receives no State funding for facilities or capital improvements. The Texas Legislature has chosen to fund facilities and capital improvements through local taxpayers. Accordingly, below we provide pertinent facts about GCISD bond programs, the financial management of the district related to voter approved bonds and the district’s transparency on these subjects.

Summary Statement of Facts

Each of the following statements is explained and supported with facts in more detail below.

GCISD was transparent with voters about the district’s debt prior to the 2016 Bond Election. The District’s financial statements include such information and are always available online for taxpayer review.

GCISD has effectively managed its debt and routinely works to reduce the cost of voter approved bonds. While the State of Texas has not provided any funding to GCISD taxpayers for facilities and capital improvements, the District has refunded and refinanced bonds to lower the overall cost to the community.

GCISD is recognized for its superior financial management. According to Moody’s Investor Service, a renowned and independent national credit rating reporting agency, GCISD has a Aa1 Rating, which is the second to the highest rating possible. In September 2019, the District received a credit rating upgrade from Standard & Poor’s (S&P), an independent national credit rating reporting agency, from AA to AA+. This is the highest S&P rating given to Texas school districts.

GCISD employed a uniquely transparent and open process that was lengthy, deliberative and interactive to determine the 2016 bond initiative. More than 50 community stakeholders were involved, many of whom made critical and substantive recommendations that were incorporated into the final bond initiative. The District video recorded those meetings and placed them on a website dedicated to the process and of continually providing information to taxpayers. Information was always available to all taxpayers during the seven-month process.

GCISD was transparent with voters about the proposed tax rate associated with the 2016 Bond program. Using the District’s website and in many public meetings specific to the bond initiative, the District informed voters that the estimated cost would be $0.1281 (12.81 cents). As a result of efficient financial management, the actual cost is $0.0766 (7.66 cents).

GCISD was prudent in setting the repayment structure of the bond initiative. Initial principal payments ensure items are paid before their useful life ends. For example, GCISD structured bonds, associated with short-term assets like technology, to be fully paid in five years and school buses in seven years. (A school bus lasts 12-15 years and longer.) Bonds associated with long-term renovations and new construction is structured to be fully paid in 25 years or less.

Comprehensive Supporting Elements

Transparent Communication About Debt Prior to 2016 Bond Election
GCISD was transparent in communicating its debt level prior to the 2016 bond election, as noted in the Frequently Asked Questions that were on the 2016 Bond website and continue to be on the bond website.

Additionally, GCISD always posts all financial statements on the GCISD website under Financial Services. For example, prior to the 2016 bond election, the 2015 financial statement also showed the District’s outstanding bond principal and interest.

The District has maintained transparent communication related to GCISD’s Bond initiatives since 2011 to keep the community and voters well informed with regard to previous voter approved bond programs.

Outstanding Financial Management to Reduce the Cost of Bonds
As a part of the annual budget process, GCISD always considers the prepayment of existing bonds to reduce the future interest cost of the bonds. Over the last 14 years, GCISD has exercised efficient financial management through the prepayment and refinancing of bonds resulting in a savings of $91.9 million in interest cost. Most recently, in February 2020, GCISD prepaid $13.62 million in bonds, which saved $9.8 million in future interest costs. Additional bonds will become eligible for refunding in the near future.

GCISD’s Superior Financial Management Indicated by Its Credit Rating from Nationally Recognized Agencies
The District maintains independent ratings from nationally recognized credit rating agencies such as Moody’s Investors Service and S&P Global Ratings, that evaluate the District’s financial strength and its ability to pay its existing bonds.

The highest credit rating obtainable from Moody’s Investors Services is Aaa. GCISD has the second highest rating possible; that of Aa1. That rating is earned through a variety of indicators and clearly points to GCISD’s strong financial health as determined by an independent national evaluation. The District received a credit rating upgrade in July 2017, after the passage of the 2016 Bond Program.

In September 2019, the District received a credit rating upgrade from AA to AA+ from the Standard & Poor’s (S&P) Global Rating Agency. The upgrade from AA to AA+ reflects S&P’s view of the District’s very strong income indicators and tax base growth, as well as the expectation that the District will maintain its very strong financial position. S&P does not award AAA, the highest rating possible, to school districts. By receiving the rating of AA+, GCISD has received the highest rating currently offered to a Texas school district. GCISD is one of 21 districts in the State of Texas to hold this high credit rating.

One of the indicators creditors use to determine credit rating is the evaluation of debt to property value ratio (Debt/Property Values). Currently, the State average of debt to property value ratio is 3.75%, while GCISD’s current ratio is lower at 2.79%.

Even after the issuance of the 2016 authorized bond, the current GCISD debt service ratio of outstanding principal to property values is 2.79%, which is below the current average of non-fast growth area school districts of 3.66%.

The chart below illustrates how GCISD currently compares to other non-fast growth DFW school districts. Again, GCISD is below both the State average ratio and the ratio of DFW area non-fast growth school districts:

Image of compared outstanding bond principals as a percent of taxable value

Clear Communication to Voters About the Proposed Tax Rate Associated with the May 2016 Bond Election
Prior to the election, the GCISD interest and sinking tax rate was $0.2801. As part of presentations to the community on the proposed May 2016 bond election, the district projected a tax rate increase of $0.1281 that when added to the then existing rate of $0.2801 would result in a projected rate of $0.4082.

The District has sold all of the bonds authorized by voters. Through efficient financial management, the actual tax rate increase was $0.0766. Therefore, the property tax rate needed to generate the revenue required to service this bond debt issue is $0.3567. The bonds were sold at a lower interest rate than original projections and as a result interest costs will be $85.8 million lower than communicated to voters.

Tax Rate comparison of school districts in the DFW area; GCISD ranks No. 49 in total tax rate

Even with the passage of the 2016 bond election, GCISD still ranks 40th out of 69 of North Texas school districts in relation to the interest and sinking tax rate as shown above. Additionally, the District used increasing property values to pay down debt while implementing the new bond program at a much lower cost.

To see how the district compared to other districts in relation to the total tax rate, please refer to the chart below:

Tax Rate comparison of school districts in the DFW area; GCISD ranks No. 49 in total tax rate

Community Involvement in the 2016 Bond Initiative & Transparent Process Made Available to all Taxpayers
When contemplating the prospective need for an additional bond issue to provide funding for capital improvements and GCISD facility upgrades, in July 2015, the Facility Innovation and Readiness Stakeholder Team (“FIRST”) was formed. When developing membership of FIRST, the district sought recommendations from the business community through the Chambers of Commerce, civic organizations, school principals and an invitation for any interested community member to submit an application. The district received eight applications from interested community members and four served on FIRST.

In addition to the 34 community members, 25 staff members, many of whom are also GCISD taxpayers and parents, were invited to serve on FIRST. These 59 committee members then engaged in an exhaustive, comprehensive seven-month assessment and analysis of prospective capital improvements, new construction and facility upgrade needs and costs. During this time, FIRST members received feedback through Let’s Talk, an online feedback system, and personal conversations with community members.

On February 8, 2016, after seven months of open and transparent public meetings, FIRST concluded its deliberations and presented its recommended bond package to GCISD Trustees. The initial recommended bond proposal totaled $257.9 million. After the Board of Trustees deliberated on the proposed package, they asked members of FIRST and the Administration to refine the package so as to bring down the overall amount to under $250 million without compromising the priorities of the FIRST, FIRST was successful in meeting the goal and ultimately, on February 18, 2016, GCISD Trustees approved to call a $248.975 million bond election.

Finally, FIRST was transparent in the process and its consideration of potential projects and the GCISD Board of Trustees was transparent with regard to publicly disclosing the prospective cost of the 2016 Bond Initiative.

Financial Standing on Voter Approved Bonds After the 2016 Bond Election
Currently, the District has an outstanding principal of $435.4 million and $228.1 million in interest. These amounts include the $248.975 authorized by voters in May 2016.

Repayment of Bonds
GCISD has structured bonds to be fully paid in 25 years or less. Unlike mortgages, the district is paying a large portion of the principal upfront, which reduces interest costs.

GCISD has also structured bonds to repay technology and equipment within the estimated useful life of the assets. In other words, the district is not paying on bonds for 25 years for an item that has a useful life of five to seven years.

GCISD Annual Report of Local Debt Information: Click here to review the document.

GCISD Debt Payment Schedule: Click here to review document.