1. Welcome to Royal ISD’s Community Meeting January 11, 2015

2. Agenda Purpose Needs Assessment Overview Review Findings –Capacity of current facilities –Energy Efficiency of District –Technology Needs –Security Needs –Campus/Facility Needs Financing of Projects

3. Why are we here? Good stewardship of all public dollars is at the forefront of community discourse Facilities operation is typically the second highest use of school district dollars, behind salaries –Review the findings of the facilities needs assessment conducted by Royal ISD staff. –Discuss the funding of projects –Question & Answer

4. Facilities Needs Assessment Over the last year and a half, district personnel have conducted both formal and informal assessments of the district facilities. Assessment includes: –Capacity of current facilities for future facilities –Current facility needs –Safety and security Assessment included physical walks of facilities by central office administrators, campus administrators, maintenance personnel, and outside consultants, as well as teacher surveys, parent surveys, and student surveys.

5. Facilities Needs Assessment Findings were then prioritized & ranked by at the General Administrators’ Meeting. Members include: As needs were identified, the estimated costs of the projects were calculated by contacting vendors who provide the services needed. ‒ Sr. Maintenance ‒ Director of HR ‒ Campus Principals ‒ Athletic Director ‒ Business Director ‒ Transportation Director ‒ Chief of Police ‒ Special Education Director ‒ CTE Director ‒ Asst. Supt. of Curriculum ‒ Deputy Superintendent ‒ Technology Director

6. Findings – Capacity of Current Facilities District has capacity with its current facilities to meet classroom needs of students for the foreseeable future. Good News  There is not currently a need for a any new buildings Campus Current Enrollment Capacity Royal ECC374600 Royal Elem.8031,200* STEM162400 Royal JH358500 Royal HS5361,000 * Capacity of RES is somewhat misleading. Though capacity of RES is 1,200, an elementary of that size is not ideal. Research says elementary schools should have 400 – 600 students. However, this does not change the fact that RES has capacity for more students.

7. Findings – Energy Usage In conjunction with the Texas Association of School Boards (TASB), the district conducted a energy efficiency audit. Findings were startling: –Analysis indicated that the district annually spends $175K more utilities than similar districts. –Savings can be found at all campuses –Savings can be found mainly through changes to the HVAC control system, both equipment and controls. In addition, the District spent approximately $330K in repairs to the HVAC system in FY 2014.

8. Findings – Energy Usage

9. TASB initially estimated that the district could save 18% (or $175K) annually on its utility bills if the district took the following steps: –Retro-commissioned its HVAC system (making sure the equipment is working properly as designed) –Replaced specific equipment that was either not working or working inefficiently –Installed an energy management control system in buildings that do not currently have the a control system and fix problems in the current system. TASB also suggested changes in the lighting system but it was deemed to not to be cost effective by administration.

10. Findings – Technology Needs The district also found there is a need for greater technology infrastructure. The district has a long-term goal of increasing the use of technology by moving to a one-to-one technology at the secondary level and by increasing the availability of technology at RES and the ECC. In order to achieve this goal, the district must increase: –The overall bandwidth available to students and staff –The number of wireless access points at campuses –The number of switches to allow access to the wireless system

11. Findings – Safety and Security Safety and security of students is a top priority of the district. As such, the needs assessment determined there is an increased need for –Security cameras within the district –Security doors at the Elementary school, the STEM Academy, the Junior High, and High School

12. Findings – Campus Needs Royal Early Childhood Center –HVAC System –Technology –Security Cameras –Additional Playground Equipment

13. Findings – Campus Needs Royal Elementary School –HVAC System –Technology –Security Cameras/Doors –Additional Playground Equipment –Marquee

14. Findings – Campus Needs Royal STEM Academy –HVAC System –Playground Equipment –Marquee –Interior Ceiling Tiles

15. Findings – Campus Needs Royal Junior High –HVAC System –Technology –Security Cameras/Doors –Marquee –Interior Doors

16. Findings – Campus Needs Royal High School –HVAC System –Technology –Security Cameras/Doors

17. Findings – Campus Needs Stadium –Track –Bleachers –Lighting –Concession Stand –Restrooms

18. Findings – Campus Needs Track

19. Findings – Campus Needs Bleachers/Lighting

20. Project List & Estimated Cost LocationDescriptionEstimated Cost District-wideHVAC$2,014,453 District-wideSecurity Cameras$225,443 District-wide Technology Infrastructure $336,000 ECCPlayground$50,548 RESPlayground$42,782 RESMarquee$19,537 RESSecurity Door System$15,000 RJHInterior Doors$41,925 RJHMarquee$17,968 STEMCeiling Tiles$13,250 STEMPlayground$101,572 STEMMarquee$27,213 STEMSecurity Doors$4,000 RHSStadium$1,584,000 Total =$4,493,691

21. Project List & Estimated Cost The GAM has ranked* the projects in the following order: 1.Security Cameras/Doors 2.STEM Playground 3.Concession Stand/Restrooms at Stadium 4.ECC Playground 5.RES Playground 6.Marquees 7.Stadium track/bleachers/lights 8.RJH Interior Doors * NOTE: HVAC system and technology upgrades were deemed as non- negotiable items on the list. Savings from the HVAC repairs are required for partial payback of the financing & Technology Upgrades are necessary for future technology growth in the district.

22. Project List & Estimated Cost The district will continue to seek bids/quotes to find the best price possible. –It is believed that the prices will come down as more quotes are received. Projects that cost more than the district is able to afford will be cut based on the recommended rankings of the GAM. School Board will have final approval for all projects.

23. Financing of Projects The district WILL NOT increase taxes to fund projects A majority of the costs will be paid through savings of utilities and the costs currently being expended due to problems with the mechanical HVAC system. The goal of spending no more money than is currently being expended by the district. Two options to pay for the projects: –Qualified Zone Academy Bonds (QZAB) –Tax Maintenance Note

24. Financing of Projects Two options to pay for the projects: –Qualified Zone Academy Bonds (QZAB) QZAB is a federal program that allows schools to sell bonds at either 0% or 0.25% interest. Schools must apply for and be granted the right to sell these bonds. Companies—typically banks—receive a tax credit for purchasing these bonds in lieu of interest. This is the preferred method. –Tax Maintenance Notes TMN allow districts to sell bonds in exchange for future Maintenance and Operations revenue. Interest rates range from 2.1% to 2.5% based on the length of the bond. The district has used this type of bond previously. –The district paid for the current field house using a TMN.

25. Financing of Projects Repayment Schedule - QZAB QZAB Notes Date $ 3,570,000 $ 4,570,000 8/31/2016 $ 230,000 $ 300,000 8/31/2017 230,000 300,000 8/31/2018 230,000 300,000 8/31/2019 240,000 300,000 8/31/2020 240,000 300,000 8/31/2021 240,000 300,000 8/31/2022 240,000 300,000 8/31/2023 240,000 300,000 8/31/2024 240,000 310,000 8/31/2025 240,000 310,000 8/31/2026 240,000 310,000 8/31/2027 240,000 310,000 8/31/2028 240,000 310,000 8/31/2029 240,000 310,000 8/31/2030 240,000 310,000 Total Cost $ 3,570,000 $ 4,570,000 Est. Int. Rate:0.00% Amortization: 15-years

26. Financing of Projects Repayment Schedule – TMN (10 Year Payback) M-Tax Notes Date $ 2,070,000.00 $ 3,570,000 $ 4,570,000 8/31/2016 $ 231,898 $ 398,110 $ 511,968 8/31/2017 232,581 400,258 513,475 8/31/2018 230,731 398,170 509,393 8/31/2019 231,076 400,925 510,153 8/31/2020 231,325 398,523 510,703 8/31/2021 231,479 400,963 511,043 8/31/2022 231,538 398,245 511,173 8/31/2023 231,501 400,370 511,093 8/31/2024 231,370 397,338 510,803 8/31/2025 231,144 399,148 510,303 8/31/2026 - - - 8/31/2027 - - - 8/31/2028 - - - 8/31/2029 - - - 8/31/2030 - - - Total Cost $ 2,314,642 $ 3,992,048 $ 5,110,103 Est. Int. Rate:2.10% Amortization:10-years

27. Financing of Projects Repayment Schedule – TMN (15 Year Payback) M-Tax Notes Date $ 2,070,000 $ 3,570,000 $ 4,570,000 8/31/2016 $ 167,244 $ 289,375 $ 369,229 8/31/2017 167,904 287,563 370,688 8/31/2018 167,140 287,375 369,000 8/31/2019 166,319 287,063 367,188 8/31/2020 167,678 286,625 370,188 8/31/2021 166,687 286,063 368,000 8/31/2022 167,876 290,313 370,625 8/31/2023 166,715 289,375 368,063 8/31/2024 167,735 288,313 370,313 8/31/2025 166,404 287,125 367,375 8/31/2026 167,253 290,750 369,250 8/31/2027 167,989 289,188 370,875 8/31/2028 166,376 287,500 367,313 8/31/2029 166,942 290,625 368,563 8/31/2030 167,395 288,563 369,563 Total Cost $ 2,507,657 $ 4,325,813 $ 5,536,229 Est. Int. Rate:2.50% Amortization: 15-years

28. Financing of Projects As the repayment schedules show, the QZAB is the best option for repaying the bonds due to the 0% interest. –It is anticipated that QZAB money will be awarded by the first quarter of 2015. The district can expect the money within 60-75 days of the award. –However, once the award is officially been granted, the district can spend money and reimburse itself. It does not have to wait until money is “in-hand” before beginning these projects. The district feels confident that it can spend up to $300,000 per year to repay the note currently, and as growth hits, the payment can be budgeted.