Bond advisors and consultants say Royse City ISD currently lacks capacity for new bonds

Advisors from Hilltop Securities and Moak Casey told the Royse City ISD board that changed appraisal results and statute-driven exemptions have reduced the district’s bonding capacity and recommended pausing any additional bond issuance.

Jeff Robert of Hilltop Securities recapped earlier assumptions: “If we can get 7.5 percent or better, we can we can issue 35,000,000.” Updated data and appeal-related adjustments, he said, instead produced a negative 2.66% scenario that reduces levy capacity. Robert also noted that prior exemption increases included some hold-harmless provisions but recent legislative changes have not provided full hold-harmless protection for the district.

Leo Lopez of Moak Casey compared the district’s pro forma templates and Moak Casey’s independent models. Lopez pointed to differences in the expected state-facilities aid (district template numbers near $7.9M vs. Moak Casey’s $7.1M–$6.2M ranges) and said the differing assumptions increase the risk that the district would need to use debt-service fund balance to meet near-term obligations. He summarized: “your district does not have capacity to actually, issue any more bonds at this time.”

Both advisors described how the Texas Attorney General will review any proposed sale and will deny issuance that forces a district above the 50¢ test; consultants therefore recommended preserving the district’s existing fund balance and not pursuing an immediate bond sale. Trustees asked clarifying questions about refunding opportunities and the timing of potential future sales if commercial values or interest rates improve.