Financial adviser outlines plan for possible $90 million Galena Park ISD bond sale, flags rating and SB4 timing

At its June meeting, the Galena Park Independent School District heard a workshop from Brian Grubbs, Managing Director at Samco Capital Markets Incorporated, outlining assumptions for a possible $90,000,000 bond sale this summer and the timing, credit and tax-rate considerations that would shape issuance.

Grubbs told trustees the district’s outstanding taxable debt principal is about $387,000,000 and that the most recent taxable value figure is “over $12,000,000,000.” He said the district’s principal balance as a percentage of taxable value is 3.22%, a metric rating agencies watch when evaluating credit quality. “I’m gonna assume that we’re issuing $90,000,000 this summer,” Grubbs said.

The presenter said Moody’s currently rates Galena Park ISD at Aa1 (double-A, high quality) and that only a small number of Texas school districts have a higher, triple-A rating. He described scheduled rating calls and said the district expects certified values and ratings in June and July before marketing bonds; Samco expects to enter the market the week of July 7 and to close the sale in early August, with a tentative closing date of Aug. 6 so the district can receive a construction-fund deposit.

Grubbs identified two items that reduced the district’s taxable value assumptions: a recent legislative change increasing the homestead exemption (from $100,000 to $140,000, as he described it) and increased homeowner value protests that the appraisal district must resolve. To be conservative, he said Samco modeled cash flows using an $11,000,000,000 taxable-value assumption even though a prior-year value exceeded $12 billion.

On tax-rate effects, Grubbs showed the district’s tax-rate history and said the I&S (Interest & Sinking) portion of the rate was projected at the May 2024 bond election to rise 12 cents overall (about 4 cents per year beginning in 2024–25) to cover issuance of the remaining authorized bonds. He said the district historically has used an I&S fund balance to smooth tax-rate impacts in weaker-value years.

Grubbs also flagged a timing requirement in Senate Bill 4. “The language in the bill says that we need to have the bond sold and closed with a small payment by 8/31/2025 for them to be held harmless,” he said, explaining that the district needs to capture the additional hold-harmless money tied to 2025 losses. A board member asked for clarification of the exact deadline during the discussion.

Grubbs noted the district has a permanent school fund guarantee on hand and described current national and Texas school-bond market interest-rate context; he said Texas 25-year sales are still pricing in a range consistent with earlier assumptions. The presentation was delivered as a workshop; no formal board vote to authorize a sale appears in the public record provided.