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LIVE OAK PUBLIC FINANCE, LLC

Independent Registered Municipal Advisors

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Spearman

Independent School District

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Refunding, Redemption & Bond Capacity Discussion

Presentation Date: February 6, 2025

2024 Live Oak Public Finance, LLC. | All Rights Reserved

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�Texas School Finance System

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How do Taxable Values Work?

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I&S

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Bond Payments

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Homes

Utilities

Manufacturing

Agriculture

Minerals

Commercial Property

The District’s values are determined by the local appraisal districts, and this drives the tax rate calculation. This then determines your tax bill.

If property values decrease, the tax rate may need to increase

If property values increase, the tax rate may decrease

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Values

Values

Tax Rate

Tax Rate

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State Mandated Over 65 Homestead Tax Exemption

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Over 65

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  • Homeowners age 65 & older who have filed for and received the Over 65 exemption will not see an increase over their frozen dollar amount, unless improvements or additions are made to the residence.
  • To have your school taxes frozen, you must file a homestead application with the appraisal district and be granted the Over-65 exemption.
  • The Over 65 Homestead Tax Exemption grants a $10,000 tax exemption to Homestead values in addition to the $100,000 General Homestead Exemption.
  • Limits Over 65 Homestead property taxes to a tax dollar ceiling depending on when the homeowner applied for the Over 65 exemption.
  • BALLOT LANGUAGE: Since 2019, state law requires all bond propositions for any school district to have the phrase “THIS IS A PROPERTY TAX INCREASE” on all ballot language for bond propositions. Homeowners age 65 & older who have filed for and received the Over 65 exemption will NOT see an increase over their frozen dollar amount.
  • Check your most recent Notice of Assessed Value Change to see if you will be impacted.

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School Funding in Texas

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M&O

Maintenance

Salaries

Electric Bill

Materials

M&O Financings

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I&S

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Bond Payments

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  • Maintenance & Operations
  • State determines how much the District is entitled to
  • Tax rate set annually by the State
  • Interest & Sinking
  • Tax Rate set annually by the Board
  • Adjusted according to debt payments / District’s payment plan

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Maintenance & Operations Details

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  • The State establishes how much state funding school districts are entitled to receive.
  • Formulas used consider both student and district characteristics including the number and type of students enrolled, district size and geographic factors, and local taxable property values and tax rates.
  • Generally, once entitlements are established, the formulas are used to determine how much a district can generate locally (local share) through property taxes before making up the difference with state funds (state share).

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�Propositions and Tax Impact

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Proposition A – Athletic Facilities

Overview & Summary

Capacity Funding Statistics(1)(2)(3)

  • Renovation of track from the base layer up
  • Six (6) foot concrete walkway around track
  • Removal of chain link fence and addition of four (4) two-pipe fence around track

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  1. Assumes certified 2024 assessed valuation for Hansford, Ochiltree, and Hutchinson CAD.
  2. Does not include penalties or interest. Calculated using a collection factor of 97.00%

(3) Assumes current market rates + 0.30% for Series 2025, PSF Insurance and an A rating; Preliminary / Subject to change.

(4) Assumes 4.75% Par for Series 2025, Non-PSF, Tax Exempt and an A rating; Preliminary / Subject to change.

(5) The average homestead market value is $122,146 sourced from Spearman ISD’s 2024 Notice of Public Meeting to Discuss Budget and Proposed Tax Rate. Assumes $100,000 homestead exemption.

Statistics

Project Deposit

I&S Tax Increase

ULTSBB 2025 - Prop A

$1,200,000

$0.0120

Impact on $122,146 Homestead(5)

$2.66/year

$0.22/month

Tax Impact to Homeowner

Prop A – Athletic Facilities

$1,200,000

Home

Market

Value(3)

State Mandated Homestead Exemption

Taxable

Value

Tax Rate

Increase

Annual $

Increase

Monthly $

Increase

$100,000

-$100,000

$0

$0.0120

$0.00

$0.00

$122,146

-$100,000

$22,146

$0.0120

$2.66

$0.22

$150,000

-$100,000

$50,000

$0.0120

$6.00

$0.50

$200,000

-$100,000

$100,000

$0.0120

$12.00

$1.00

$250,000

-$100,000

$150,000

$0.0120

$18.00

$1.50

$300,000

-$100,000

$200,000

$0.0120

$24.00

$2.00

2024 Live Oak Public Finance, LLC. | All Rights Reserved

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Proposition B – General Purpose Education

Overview & Summary

Capacity Funding Statistics(1)(2)(3)

  • Transportation Update
    • 53 passenger activity bus
    • 14 passenger activity vans
    • Staff vehicles
  • Tennis court resurfacing
  • GBE/SJH Roofing
  1. Assumes certified 2024 assessed valuation for Hansford, Ochiltree, and Hutchinson CAD.
  2. Does not include penalties or interest. Calculated using a collection factor of 97.00%

(3) Assumes current market rates + 0.30% for Series 2025, PSF Insurance and an A rating; Preliminary / Subject to change.

(4) Assumes 4.75% Par for Series 2025, Non-PSF, Tax Exempt and an A rating; Preliminary / Subject to change.

(5) The average homestead market value is $122,146 sourced from Spearman ISD’s 2024 Notice of Public Meeting to Discuss Budget and Proposed Tax Rate. Assumes $100,000 homestead exemption.

Statistics

Project Deposit

I&S Tax Increase

ULTSBB 2025 - Prop B

$3,275,000

$0.0315

Impact on $122,146 Homestead(5)

$6.98/year

$0.58/month

Tax Impact to Homeowner

Prop B - Education

$3,275,000

Home

Market

Value(3)

State Mandated Homestead Exemption

Taxable

Value

Tax Rate

Increase

Annual $

Increase

Monthly $

Increase

$100,000

-$100,000

$0

$0.0315

$0.00

$0.00

$122,146

-$100,000

$22,146

$0.0315

$6.98

$0.58

$150,000

-$100,000

$50,000

$0.0315

$15.75

$1.31

$200,000

-$100,000

$100,000

$0.0315

$31.50

$2.63

$250,000

-$100,000

$150,000

$0.0315

$47.25

$3.94

$300,000

-$100,000

$200,000

$0.0315

$63.00

$5.25

2024 Live Oak Public Finance, LLC. | All Rights Reserved

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Proposition C – M&O Financing

  • This would allow SISD to refinance existing debt which is paid from the operating budget to a bond.
  • Estimated savings from the operating budget: $5,093,369
  • Savings could be used for needs such as: auditorium lighting, HVAC replacements, salaries, utilities, etc.
  1. Assumes certified 2024 assessed valuation for Hansford, Ochiltree, and Hutchinson CAD.
  2. Does not include penalties or interest. Calculated using a collection factor of 97.00%

(3) Assumes current market rates + 0.30% for Series 2025, PSF Insurance and an A rating; Preliminary / Subject to change.

(4) Assumes 4.75% Par for Series 2025, Non-PSF, Tax Exempt and an A rating; Preliminary / Subject to change.

(5) The average homestead market value is $122,146 sourced from Spearman ISD’s 2024 Notice of Public Meeting to Discuss Budget and Proposed Tax Rate. Assumes $100,000 homestead exemption.

Statistics

Project Deposit

I&S Tax Increase

ULTSBB 2025 - Prop C

Refunding M&O

$0.1390

Impact on $122,146 Homestead(5)

$30.78/year

$2.57/month

Tax Impact to Homeowner

Prop C – M&O Financing

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Home

Market

Value(3)

State Mandated Homestead Exemption

Taxable

Value

Tax Rate

Increase

Annual $

Increase

Monthly $

Increase

$100,000

-$100,000

$0

$0.1390

$0.00

$0.00

$122,146

-$100,000

$22,146

$0.1390

$30.78

$2.57

$150,000

-$100,000

$50,000

$0.1390

$69.50

$5.79

$200,000

-$100,000

$100,000

$0.1390

$139.00

$11.58

$250,000

-$100,000

$150,000

$0.1390

$208.50

$17.38

$300,000

-$100,000

$200,000

$0.1390

$278.00

$23.17

Overview & Summary

Capacity Funding Statistics(1)(2)(3)

2024 Live Oak Public Finance, LLC. | All Rights Reserved

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Refunding M&O Debt With I&S Refunding Bonds

M&O

MTN, Series 2021 �&�LTRB, Series 2021

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I&S

ULTRB, Series 2025

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Bond Election

Issue I&S Refunding Bond

Debt Transfers from M&O to I&S

2024 Live Oak Public Finance, LLC. | All Rights Reserved

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All Props

Overview & Summary

Capacity Funding Statistics(1)(2)(3)

  1. Assumes certified 2024 assessed valuation for Hansford, Ochiltree, and Hutchinson CAD.
  2. Does not include penalties or interest. Calculated using a collection factor of 97.00%

(3) Assumes current market rates + 0.30% for Series 2025, PSF Insurance and an A rating; Preliminary / Subject to change.

(4) Assumes 4.75% Par for Series 2025, Non-PSF, Tax Exempt and an A rating; Preliminary / Subject to change.

(5) The average homestead market value is $122,146 sourced from Spearman ISD’s 2024 Notice of Public Meeting to Discuss Budget and Proposed Tax Rate. Assumes $100,000 homestead exemption.

Statistics

Project Deposit

I&S Tax Increase

ULTSBB 2025 - Prop A (Athletics)

$1,200,000

$0.0120

ULTSBB 2025 - Prop B (Education)

$3,275,000

$0.0315

ULTRB Ser 2025 – Prop C (M&O)

Refunding

M&O

$0.1390

Impact on $122,146 Homestead(5)

$40.42/year

$3.37/month

Tax Impact to Homeowner

Props A, B, & C

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Home Market Value(3)

State Mandated Homestead Exemption

Taxable Value

Tax Rate Increase

Annual $ Increase

Monthly $ Increase

$100,000

-$100,000

$0

$0.1825

$0.00

$0.00

$122,146

-$100,000

$22,146

$0.1825

$40.42

$3.37

$150,000

-$100,000

$50,000

$0.1825

$91.25

$7.60

$200,000

-$100,000

$100,000

$0.1825

$182.50

$15.21

$250,000

-$100,000

$150,000

$0.1825

$273.75

$22.81

$300,000

-$100,000

$200,000

$0.1825

$365.00

$30.42

2024 Live Oak Public Finance, LLC. | All Rights Reserved

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Bond Capacity Summary

Props

Project

Deposit

I&S Tax Impact

Per Prop

Annual

Impact

Monthly Impact

Prop A - Athletics

$1,200,000

+ $0.0120

$2.66

$0.22

Prop B - Education

$3,275,000

+ $0.0315

$6.98

$0.58

Prop C – M&O Financing

NA

+ $0.1390

$30.78

$2.57

Props A, B, & C

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+ $0.1825

$40.42

$3.37

  1. Assumes current market rates + 0.30% for ULTSBB, Series 2025, PSF Insurance and an A rating; Preliminary / Subject to change.
  2. Assumes 4.75% Par for Current ULTRB, Series 2025, Non-PSF, Tax Exempt and an A rating; Preliminary / Subject to change.

2024 Live Oak Public Finance, LLC. | All Rights Reserved

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DISCLAIMER

Per MSRB Rule G-17 and the SEC Municipal Advisor Rule, Live Oak Public Finance, LLC (“the Firm”), is not recommending an action to you as the municipal entity or obligated person. The information provided is not intended to be and should not be construed as “advice” within the meaning of Section 15B of the Securities Exchange Act of 1934. This information is being provided for discussion purposes, and you should discuss any information and material contained in this communication with any and all internal or external advisors and experts that you deem appropriate before acting on this information or material.

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Unless otherwise agreed, the Firm is not acting as a municipal advisor to you and does not owe a fiduciary duty pursuant to Section 15B of the Exchange Act to you with respect to the information and material contained in this communication. The accompanying information was obtained from sources which the Firm believes to be reliable but does not guarantee its accuracy and completeness.

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The material has been prepared solely for informational purposes and is not a solicitation of an offer to buy or sell any security or instrument or to participate in any trading strategy. Historical data is not an indication of future results. The opinions expressed are our own unless otherwise stated.

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Additional information is available upon request.

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2024 Live Oak Public Finance, LLC. | All Rights Reserved

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www.liveoakpf.com

(512) 726-5547

info@liveoakpf.com

2024 Live Oak Public Finance, LLC. | All Rights Reserved

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