Carrollton‑Farmers Branch ISD approves order to issue remaining 2023 bond authorization ahead of Sept. 1 SB 4 deadline

The Carrollton‑Farmers Branch Independent School District Board of Trustees voted 6‑0 June 12 to approve a parameters order authorizing the district to issue its remaining 2023 unlimited‑tax school building and/or refunding bonds.

The action, taken at a special board meeting, authorizes delegated sales and other sale documents for one or more series of bonds, sets sale parameters for new‑money debt and refundings, and delegates execution authority to district staff and designated board members. "The debt has to be issued before 09/01/2025," Carla Settle, district staff, said when explaining the timing consequence of the new state law.

The board's vote follows presentations from the district's bond staff, outside counsel and financial advisers explaining the order and three sale‑timing scenarios. "What you have in front of you tonight with regard to this item is our plan of finance order," Melissa Liao, attorney with the firm Canton, Hardin & Montoya, told trustees while outlining the document's components. Liao said the order is written as a parameters order that includes both a delegated sale authority and refunding parameters.

A district financial adviser presented three scenarios for selling the remaining authorization: (1) issue the full remaining authorization this summer (the district's recommended option), (2) issue about $185 million now and the remainder next summer, or (3) wait and issue the full authorization next summer. The adviser said scenario 1 "maximizes state aid," produces the lowest total debt service and carries the least interest‑rate risk; holding back a portion of the sale would reduce the state's hold‑harmless assistance and increase total debt service.

The adviser summarized projected differences between scenarios: selling a portion now and the rest later (scenario 2) would increase total debt service by about $17 million and reduce state aid by roughly $8.6 million compared with issuing all of the authorization now; waiting a year (scenario 3) would increase debt service by roughly $16.5 million and forego about $25.2 million of projected hold‑harmless state funding, the presentation showed.

The order's draft sets parameters for new money at a maximum interest rate of 6% and a maximum maturity through February 2055; it includes a 2% present‑value savings threshold for refundings. Liao said the order as drafted is effective for one year from approval (the draft shows an expiration date approximately one year from the meeting). She also noted that all bond issues require approval from the Texas attorney general's office and that AG review is a timing constraint.

Board discussion touched on project timing and cash flow. District staff said the district previously issued $400 million in July 2023 and has been spending those bond proceeds on construction and renovations; staff projected those funds and current plans will carry projects into mid‑2026. The district said it has budgeted $131 million for four consolidated replacement campuses but that no final reallocations or construction decisions on consolidation funds have been made.

Trustees asked about defeasances and how changes in the state's funding model under Senate Bill 4 could affect redemption and defeasance strategy. The district noted outstanding questions remain about the interaction of defeasances and the new funding model and said staff would continue to work through those technical issues with advisers.

Board members moved to approve "the agenda item as presented." Trustee Kim Brady made the motion; Trustee Randy Schackman seconded. The board voted 6‑0 in favor; the presiding officer declared the motion carried.

The district said, if the board approved the order, staff would immediately begin steps to sell in mid‑July with a target close in August so the district could meet an August 15 debt service payment date. Staff also described ongoing public information steps: the district is updating its Bond 2023 web pages, posting board and Bond Oversight Committee materials, and sending updates via ParentSquare and social media.

The board's action preserves the district's eligibility to receive the expanded homestead‑exemption hold‑harmless state aid offered under Senate Bill 4 only for debt issued by the statute's September 1, 2025 deadline. The order authorizes the district to proceed with delegated sale steps under the parameters described but does not itself expend bond proceeds; specific contract awards or guaranteed maximum price contracts will be presented to the board before funds are committed to construction contracts.

This article summarizes the discussion, clarifications and the approved motion from the June 12, 2025 special meeting of the Carrollton‑Farmers Branch ISD Board of Trustees.