1f2jxs1ilndm3thja21sm9yf-wpengine.netdna-ssl.com · 2020-07-28 · OFFICIAL STATEMENT DATED July...

OFFICIAL STATEMENT DATED July 21, 2020

In the opinion of Bond Counsel (defined herein), assuming continuing compliance by the District (defined herein) after the Delivery Date (defined herein) of the Bonds (defined herein) with certain covenants contained in the Order (defined herein) and subject to the matters set forth under “TAX MATTERS” herein, interest on the Bonds for federal income tax purposes under existing statutes, regulations, published rulings, and court decisions will be excludable from the gross income of the owners thereof pursuant to section 103 of the Internal Revenue Code of 1986, as amended, to the date of initial delivery of the Bonds. See “TAX MATTERS” herein.

$43,730,000 SAN ANTONIO INDEPENDENT SCHOOL DISTRICT

(A political subdivision of the State of Texas located in Bexar County, Texas) UNLIMITED TAX SCHOOL BUILDING BONDS,

SERIES 2020A

Dated Date: August 1, 2020 (interest to accrue from Delivery Date) Due: August 15, as shown herein The $43,730,000 San Antonio Independent School District Unlimited Tax School Building Bonds, Series 2020A (the “Bonds") are being issued by the San Antonio Independent School District (the “Issuer” or the “District”) pursuant to the Constitution and general laws of the State of Texas, including Sections 45.001 and 45.003(b)(1), Texas Education Code, as amended, Chapter 1371, Texas Government Code, as amended (the “Financing Act”), a bond election held in the District on November 8, 2016, and an order (the "Bond Order") adopted by the Board of Trustees (the “Board”) of the District on May 18, 2020. (See "THE BONDS - Authority for Issuance" herein.) In the Bond Order, and as authorized by the Financing Act, the Board authorized certain District representatives to execute an approval certificate (the “Approval Certificate”) establishing the terms of sale of the Bonds and finalizing certain characteristics thereof related to final pricing (the Bond Order and the Approval Certificate are collectively referred to herein as the “Order”). The Approval Certificate was executed by an authorized District representative on July 21, 2020. (See "THE BONDS - Authority for Issuance" herein.)

The Bonds are direct obligations payable from an annual ad valorem tax levied, without legal limitation as to rate or amount, on all taxable property located within the District. (See "THE BONDS - Security for Payment" herein.) The District has received conditional approval from the Texas Education Agency for the Bonds to be guaranteed under the State of Texas Permanent School Fund Guarantee Program (hereinafter defined), which guarantee will automatically become effective when the Attorney General of Texas approves the Bonds. (See “THE PERMANENT SCHOOL FUND GUARANTEE PROGRAM” herein. See also "STATE AND LOCAL FUNDING OF SCHOOL DISTRICTS IN TEXAS" and “CURRENT PUBLIC SCHOOL FINANCE SYSTEM” for a discussion of recent developments in Texas law affecting the financing of school districts in Texas.)

Interest on the Bonds will accrue from the Delivery Date and will be payable on February 15 and August 15 of each year, commencing on February 15, 2021, until stated maturity or prior redemption and will be calculated on the basis of a 360-day year of twelve 30-day months. The definitive Bonds will be issued in book-entry form only and when issued will be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York ("DTC"). DTC will act as securities depository (the "Securities Depository"). Book-entry interests in the Bonds will be made available for purchase in the principal amount of $5,000 or any integral multiple thereof.

Purchasers of the Bonds ("Beneficial Owners") will not receive physical delivery of certificates representing their interest in the Bonds purchased. So long as DTC or its nominee is the registered owner of the Bonds, the principal of, premium, if any, and interest on the Bonds will be payable by the Paying Agent/Registrar, initially Zions Bancorporation, National Association, dba Amegy Bank, Houston, Texas to the Securities Depository, which will in turn remit such principal and interest to its participants, which will in turn remit such principal and interest to the Beneficial Owners of the Bonds. (See "BOOK-ENTRY-ONLY SYSTEM" herein.)

Proceeds from the sale of the Bonds will be used for the purposes of (i) constructing, renovating, and equipping school buildings in the District and the purchase of necessary sites for school buildings, and (ii) paying the costs of issuance of the Bonds (see “SOURCES AND USES OF FUNDS" herein).

CUSIP PREFIX: 796269

SEE FOLLOWING PAGE FOR STATED MATURITIES, PRINCIPAL AMOUNTS, INTEREST RATES,

INITIAL YIELDS, REDEMPTION PROVISIONS AND CUSIP NUMBERS FOR THE BONDS

The Bonds are offered for delivery when, as and if issued and received by the initial purchasers thereof named below (the “Underwriters”) and subject to the approving opinion of the Attorney General of the State of Texas and the approval of certain legal matters by Escamilla & Poneck, LLP, San Antonio,

Texas, Bond Counsel. Certain matters will be passed upon for the Underwriters by Locke Lord LLP, Austin, Texas and Kassahn & Ortiz, P.C., San Antonio, Texas as Co-Counsel to the Underwriters. It is expected that the Bonds will be available for delivery through the services of DTC on or about August 20, 2020 (the “Delivery Date”).

CITIGROUP ESTRADA HINOJOSA RAYMOND JAMES

NEW ISSUE - BOOK-ENTRY-ONLY Enhanced/Unenhanced Ratings: Fitch: “AAA”/“AA” Moody’s: “Aaa”/“Aa2” PSF Guaranteed (See “OTHER PERTINENT INFORMATION - Ratings” and “THE PERMANENT SCHOOL FUND GUARANTEE PROGRAM” herein.)

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(A political subdivision of the State of Texas located in Bexar County, Texas) UNLIMITED TAX SCHOOL BUILDING BONDS, SERIES 2020A

STATED MATURITY SCHEDULE

CUSIP No. Prefix 796269(1)

$28,140,000 SERIAL BONDS

Stated Maturity Principal Amount ($) Interest Rate (%) Initial Yield (%) CUSIP No. Suffix(1)

8/15/2021 11,240,000 5.00% 0.210% D47

8/15/2022 565,000 5.00% 0.250% D54

8/15/2023 595,000 5.00% 0.280% D62

8/15/2024 625,000 5.00% 0.350% D70

8/15/2025 655,000 5.00% 0.450% D88

8/15/2026 690,000 5.00% 0.580% D96

8/15/2027 725,000 5.00% 0.690% E20

8/15/2028 760,000 5.00% 0.770% E38

8/15/2029 795,000 5.00% 0.850% E46

8/15/2030 835,000 5.00% 0.930%(2) E53

8/15/2031 880,000 5.00% 0.990%(2) E61

8/15/2032 925,000 4.00% 1.160%(2) E79

8/15/2033 960,000 4.00% 1.250%(2) E87

8/15/2034 1,000,000 4.00% 1.290%(2) E95

8/15/2035 1,040,000 4.00% 1.340%(2) F29

8/15/2036 1,080,000 4.00% 1.390%(2) F37

8/15/2037 1,125,000 4.00% 1.430%(2) F45

8/15/2038 1,165,000 4.00% 1.470%(2) F52

8/15/2039 1,215,000 4.00% 1.510%(2) F60

8/15/2040 1,265,000 4.00% 1.540%(2) F78

$15,590,000 TERM BONDS

$7,110,000,000 4.000% Term Bond due August 15, 2045 and priced to yield 1.690%(2) - CUSIP No. Suffix F86(1)

$8,480,000,000 3.000% Term Bond due August 15, 2050 and priced to yield 2.020%(2) - CUSIP No. Suffix F94(1)

(Interest to accrue from the Delivery Date)

The District reserves the right to redeem the Bonds maturing on or after August 15, 2030 in whole or in part, in principal amounts of $5,000 or any integral multiple thereof, on August 15, 2029 or any date thereafter at the redemption price of par plus accrued interest to the date of redemption. (See “THE BONDS – Redemption Provisions of the Bonds – Optional Redemption” herein.) In the event the Underwriters elect to aggregate two or more consecutive maturities as a term bond, such Bonds will be subject to mandatory sinking fund redemption. (See "THE BONDS - Redemption Provisions of the Bonds - Mandatory Sinking Fund Redemption" herein.) _____________________________ (1)CUSIP is a registered trademark of the American Bankers Association. CUSIP data herein is provided by CUSIP Global Services, managed by S&P Global Market Intelligence on behalf of The American Bankers Association. CUSIP numbers have been assigned to this issue by the CUSIP Service Bureau and are included solely for the convenience of the owners of the Bonds. This data is not intended to create a database and does not serve in any way as a substitute for the CUSIP Services. None of the Underwriters, the District nor the Financial Advisor are responsible for the selection or correctness of the CUSIP numbers set forth herein. (2)Yield calculated based on the assumption that the Bonds denoted and sold at a premium will be redeemed on August 15, 2029, the first optional call date for the Bonds, at a redemption price of par plus accrued interest to the redemption date.

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ELECTED OFFICIALS

Name Years Served Term Expires (May) Occupation

Ms. Patti Radle President

9 2023 Volunteer Director

Mr. Arthur V. Valdez Vice President

7 2021 Aircraft Systems Engineer

Ms. Debra Guerrero Secretary

8 2021 Multifamily Residential Developer

Mr. Steve Lecholop Board Member

7 2021 Attorney

Ms. Alicia Perry Board Member

1

2023 Non-Profit Co-Founder

Ms. Christina Martinez Board Member

3 2023 Vice President of External Relations

Mr. Ed Garza Board Member

10

2021 Urban Planning and Development Consultant

ADMINISTRATION

Name Position Length of Service (years)

Mr. Pedro Martinez Superintendent 5

Ms. Patricia Salzman Chief Academic Officer 2

Mr. Larry A. Garza Associate Superintendent, Financial Services & Business Operations/ Chief Financial Officer

33

Ms. Toni Thompson Associate Superintendent, Human Resources 39

Mr. Willie T. Burroughs Chief Operations Officer 3

Mr. Mohammed A. Choudhury Chief Innovation Officer 3

Ms. Tiffany Grant Chief of Staff 10

Dr. Kenneth Thompson Chief Technology Officer 1

Mr. Kamal ElHabr Associate Superintendent, Facilities Services 24

Mr. Sean Mullen Director, Cash and Treasury Management 3

Ms. Dorothy Carreon Director, Planning and Budget 9

Bond Counsel .......................................................................................................................................... Escamilla & Poneck, LLP San Antonio, Texas

Certified Public Accountants .......................................................................................................... Garza/Gonzalez & Associates San Antonio, Texas

Financial Advisor ............................................................................................................................................................. Frost Bank San Antonio, Texas

For Additional Information Please Contact:

Mr. Larry A. Garza

Associate Superintendent Financial Services & Business Operations/

Chief Financial Officer San Antonio Independent School District

141 Lavaca Street San Antonio, Texas 78210

Phone: (210) 554-8590 Facsimile: (210) 228-3104

[email protected]

Mr. Sean Mullen Director of Cash and Treasury Management San Antonio Independent School District

141 Lavaca Street San Antonio, Texas 78210

Phone: (210) 554-8590 Facsimile: (210) 228-3104

[email protected]

Mr. Randy Moshier Senior Vice President

Frost Bank 111 West Houston Street, T-8

San Antonio, Texas 78205 Phone: (210) 220-4590

Facsimile: (210) 220-4111 [email protected]

mailto:[email protected]




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USE OF INFORMATION IN THE OFFICIAL STATEMENT

This Official Statement, which includes the cover page and the Appendices hereto, does not constitute an offer to sell or the solicitation of an offer to buy in any jurisdiction to any person to whom it is unlawful to make such offer, solicitation or sale. No dealer, broker, salesman, or other person has been authorized to give any information, or to make any representation other than those contained in this Official Statement, and, if given or made, such other information or representations must not be relied upon as having been authorized by the Issuer or the Underwriters. This Official Statement is not to be used in connection with an offer to sell or the solicitation of an offer to buy in any jurisdiction in which such offer or solicitation is not authorized or in which person making such offer or solicitation is not qualified to do so or to any person to whom it is unlawful to make such offer or solicitation. Any information or expression of opinion herein contained are subject to change without notice, and neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create an implication that there has been no change in the affairs of the Issuer or other matters described herein since the date hereof. THE BONDS ARE EXEMPT FROM REGISTRATION WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION AND CONSEQUENTLY HAVE NOT BEEN REGISTERED THEREWITH. THE REGISTRATION, QUALIFICATION, OR EXEMPTION OF THE BONDS IN ACCORDANCE WITH APPLICABLE SECURITIES LAW PROVISIONS OF THE JURISDICTIONS IN WHICH THESE BONDS HAVE BEEN REGISTERED, QUALIFIED, OR EXEMPTED SHOULD NOT BE REGARDED AS A RECOMMENDATION THEREOF. IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE OBLIGATIONS AT A LEVEL ABOVE THAT WHICH MIGHT PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. The agreements of the District and others related to the Bonds are contained solely in the contracts described herein. Neither this Official Statement nor any other statement made in connection with the offer or sale of the Bonds is to be construed as constituting an agreement with the purchaser of the Bonds. INVESTORS SHOULD READ THE ENTIRE OFFICAL STATEMENT, INCLUDING ALL APPENDICES ATTACHED HERETO, TO OBTAIN INFORMATION ESSENTIAL TO MAKING AN INFORMED INVESTMENT DECISION. Neither the District, the Financial Advisor, nor the Underwriters make any representation or warranty with respect to the information contained in this Official Statement regarding The Depository Trust Company, New York, New York (“DTC”) or its Book-Entry-Only System or the affairs of the Texas Education Agency (“TEA”) described under “THE PERMANENT SCHOOL FUND GUARANTEE PROGRAM,” as such information has been provided by DTC and TEA, respectively. THIS OFFICIAL STATEMENT CONTAINS "FORWARD-LOOKING" STATEMENTS WITHIN THE MEANING OF SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. SUCH STATEMENTS MAY INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS WHICH MAY CAUSE THE ACTUAL RESULTS, PERFORMANCE AND ACHIEVEMENTS TO BE DIFFERENT FROM THE FUTURE RESULTS, PERFORMANCE AND ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. INVESTORS ARE CAUTIONED THAT THE ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE SET FORTH IN THE FORWARD-LOOKING STATEMENTS.

NEITHER THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THE BONDS OR PASSED UPON THE ADEQUACY OR ACCURACY OF THIS OFFICIAL STATEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

The Underwriters have provided the following sentence for inclusion in this Official Statement. The Underwriters have reviewed the information in this Official Statement in accordance with their responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriters do not guarantee the accuracy or completeness of such information.

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TABLE OF CONTENTS

STATED MATURITY SCHEDULE ...................................................................................................................................................i

ELECTED OFFICIALS AND ADMINISTRATION ............................................................................................................................ii

USE OF INFORMATION IN THE OFFICIAL STATEMENT ............................................................................................................iii

SELECTED DATA FROM THE OFFICIAL STATEMENT ...............................................................................................................v

INTRODUCTORY STATEMENT .....................................................................................................................................................1

INFECTIOUS DISEASE OUTBREAK – COVID-19 ........................................................................................................................1

THE BONDS.....................................................................................................................................................................................2

SOURCES AND USES OF FUNDS ................................................................................................................................................5

REGISTERED OWNERS’ REMEDIES ...........................................................................................................................................6

REGISTRATION, TRANSFER AND EXCHANGE ..........................................................................................................................6

BOOK-ENTRY-ONLY SYSTEM ......................................................................................................................................................9

THE PERMANENT SCHOOL FUND GUARANTEE PROGRAM ...................................................................................................11

STATE AND LOCAL FUNDING OF SCHOOL DISTRICT IN TEXAS ............................................................................................27

CURRENT PUBLIC SCHOOL FINANCE SYSTEM ........................................................................................................................28

CURRENT DISTRICT FINANCIAL CONDITION AND INITIATIVES .............................................................................................32

EMPLOYEE RETIREMENT PLAN AND OTHER POST-EMPLOYMENT BENEFITS ..................................................................32

INVESTMENT POLICIES ................................................................................................................................................................33

AD VALOREM TAX PROCEDURES ...............................................................................................................................................35

THE PROPERTY TAX CODE AS APPLIED TO THE DISTRICT ...................................................................................................38

TAX RATE LIMITATIONS ................................................................................................................................................................38

I&S TAX LIMITATIONS ....................................................................................................................................................................39

TAX MATTERS ................................................................................................................................................................................40

CONTINUING DISCLOSURE OF INFORMATION .........................................................................................................................41

EFFECT OF SEQUESTRATION AND IRS OPERATIONS DURING COVID-19 ..........................................................................43

LEGAL MATTERS............................................................................................................................................................................44

OTHER PERTINENT INFORMATION ............................................................................................................................................45

APPENDICIES

Financial Information for the San Antonio Independent School District ..........................................................................................A General Information Regarding the San Antonio Independent School District, the City of San Antonio and Bexar County, Texas ........................................................................................................................B Form of Opinion of Bond Counsel ....................................................................................................................................................C Excerpts from the District’s Audited Financial Statements for the Year ending June 30, 2019 ......................................................D

The cover page, subsequent pages hereof, the appendices attached hereto, and any addenda, supplement or amendment hereto,

are part of this Official Statement.

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SELECTED DATA FROM THE OFFICIAL STATEMENT The selected data is subject in all respects to the more complete information and definitions contained or incorporated in this Official Statement. The offering of the Bonds to potential investors is made only by means of this entire Official Statement. No person is authorized to detach this page from this Official Statement or to otherwise use it without the entire Official Statement.

The Issuer The San Antonio Independent School District (the “District” or the “Issuer”) is a political subdivision of the State of Texas (the “State” or “Texas”), located in central Bexar County, Texas. The District includes most of the City of San Antonio's (the “City”) downtown and metropolitan areas inside Loop 410 and I-35. The City's Census July 1, 2020 population was 1,532,233. Industries include finance, retail and wholesale distribution, manufacturing, and medicine. Located inside the District are five shopping malls, two breweries, the Riverwalk, and Brooks City Base. The District’s 2020 estimated population is 330,268. The Issuer was created under State statute and is governed by an elected seven-member Board of Trustees (the "Board") of which each member serves a staggered four-year term, with elections being held in May of every odd numbered year. (See “APPENDIX B - General Information Regarding the San Antonio Independent School District, the City of San Antonio, Texas and Bexar County, Texas” herein.)

The Bonds The Bonds are being issued by the District pursuant to the Constitution and the general laws of the State of Texas, including Sections 45.0001 and 45.003(b)(1), Texas Education Code, as amended, Chapter 1371, Texas Government Code, as amended, (the “Financing Act”), a bond election held in the District on November 8, 2016, and an order (the "Bond Order") adopted by the Board of the District on May 18, 2020. In the Bond Order, and as authorized by the Financing Act, the Board authorized certain District representatives to execute an approval certificate (the “Approval Certificate”), establishing the terms of sale of the Bonds and finalizing certain characteristics thereof related to final pricing (the Bond Order and the Approval Certificate are collectively referred to herein as the “Order”). The Approval Certificate was executed by an authorized District representative on July 21, 2020. (See "THE BONDS - Authority for Issuance" herein.) Interest on the Bonds will accrue from the Delivery Date, with such interest payable on February 15 and August 15 in each year, commencing February 15, 2021, until stated maturity or prior redemption. (See “THE BONDS – General Description” herein.)

Paying Agent/Registrar The initial Paying Agent/Registrar is Zions Bancorporation, National Association, dba Amegy

Bank, Houston, Texas.

Security The Bonds are direct obligations of the Issuer and are payable from an annual ad valorem tax levied, without legal limitation as to rate or amount, on all taxable property located within the District. The Issuer has received conditional approval for the payment of the principal of, premium, if any, and interest on the Bonds from the Texas Education Agency for the Bonds to be guaranteed under the State of Texas Permanent School Fund Guarantee Program (hereinafter defined), which guarantee automatically becomes effective when the Attorney General of Texas approves the Bonds. (See "THE BONDS - Security for Payment" and “THE BONDS – Permanent School Fund Guarantee” herein.) See also "STATE AND LOCAL FUNDING OF SCHOOL DISTRICTS IN TEXAS" and "CURRENT PUBLIC SCHOOL FINANCE SYSTEM" for a discussion of recent developments in Texas law affecting the financing of school districts in Texas.

Redemption Provisions of the Bonds

The Issuer reserves the right to redeem the Bonds maturing on or after August 15, 2030 in whole or in part, in principal amounts of $5,000 or any integral multiple thereof, on August 15, 2029, or any date thereafter, at the redemption price of par plus accrued interest to the date of redemption. (See "THE BONDS - Redemption Provisions of the Bonds – Optional Redemption" herein.) In the event the Underwriters elect to aggregate two or more consecutive maturities as a term bond, such Bonds will be subject to mandatory sinking fund redemption prior to stated maturity. (See "THE BONDS - Redemption Provisions of the Bonds - Mandatory Sinking Fund Redemption" herein.)

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Tax Matters In the opinion of Escamilla & Poneck, LLP, San Antonio, Texas, Bond Counsel, interest on the Bonds will be excludable from gross income for federal income tax purposes under statutes, regulations, published rulings and court decisions existing on the date thereof, subject to the matters described under "TAX MATTERS" herein. (See "TAX MATTERS" and “APPENDIX C - Form of Opinion of Bond Counsel" herein.)

Use of Bond Proceeds Proceeds from the sale of the Bonds will be used for the purposes of (i) constructing, renovating, and equipping school buildings in the District and the purchase of necessary sites for school buildings, and (ii) paying the costs of issuance of the Bonds (see “SOURCES AND USES OF FUNDS" herein.)

Ratings Fitch Ratings, Inc. (“Fitch”) and Moody’s Investors Service, Inc. (“Moody’s”), have rated the Bonds “AAA” and “Aaa”, respectively, based on the payment of the Bonds being guaranteed by the State of Texas Permanent School Fund. The unenhanced, underlying ratings of the District’s unlimited ad valorem tax-supported bonds, which includes the Bonds, is “AA” and “Aa2”, by Fitch and Moody’s, respectively. (See “THE PERMANENT SCHOOL FUND GUARANTEE PROGRAM” and "OTHER PERTINENT INFORMATION – Ratings" herein.)

Book-Entry-Only System The definitive Bonds will be initially registered and delivered only to Cede & Co., the nominee of The Depository Trust Company, New York, New York (“DTC”) pursuant to the Book-Entry-Only System described herein. Beneficial ownership of the Bonds may be acquired in denominations of $5,000 principal amount with respect to the Bonds or integral multiples thereof. No physical delivery of the Bonds will be made to the Beneficial Owners thereof. The principal of, and interest on the Bonds will be payable by the Paying Agent/Registrar to Cede & Co., which will make distribution of the amounts so paid to the participating members of DTC for subsequent payment to the Beneficial Owners of the Bonds. (See “BOOK-ENTRY-ONLY SYSTEM” herein.)

Payment Record The District has never defaulted on the payment of its ad valorem tax supported

indebtedness. Future Bond Issues The District currently anticipates issuing unlimited tax refunding bonds to refund

approximately $60,000,000 of its currently outstanding indebtedness for debt service savings in the Fall of 2020. Additionally, the District’s Board established a Blue Ribbon Task Force comprised of District residents to inform and advise the Board on facility needs and a potential bond election to be held in November 2020.

Delivery Date When issued, anticipated on or about August 20, 2020. Legality Delivery of the Bonds is subject to the approval by the Attorney General of the State of Texas

and the rendering of an opinion as to legality by Escamilla & Poneck, LLP, San Antonio, Texas, Bond Counsel.

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OFFICIAL STATEMENT relating to


(A political subdivision of the State of Texas located in Bexar County, Texas) UNLIMITED TAX SCHOOL BUILDING BONDS, SERIES 2020A

INTRODUCTORY STATEMENT

This Official Statement provides certain information in connection with the issuance by the San Antonio Independent School District (the"District" or "Issuer") of its $43,730,000 Unlimited Tax School Building Bonds, Series 2020A (the "Bonds") identified on page i hereof.

The Issuer is a body corporate and a political subdivision of the State of Texas (the “State” or “Texas”) duly organized and existing under the laws of the State. The Bonds are issued by the District pursuant to the Constitution and the general laws of the State, including Sections 45.001 and 45.003(b)(1), Texas Education Code, as amended, Chapter 1371, Texas Government Code, as amended (the “Financing Act”), a bond election held in the District on November 8, 2016, and an order (the "Bond Order") adopted by the Board of Trustees (the “Board”) of the District on May 18, 2020. In the Bond Order and as authorized by the Financing Act, the Board authorized certain District representatives to execute an approval certificate (the “Approval Certificate”) establishing the terms of sale of the Bonds and finalizing certain characteristics thereof related to final pricing (the Bond Order and the Approval Certificate are collectively referred to herein as the “Order”). The Approval Certificate was executed by an authorized District representative on July 21, 2020.

Unless otherwise indicated, capitalized terms used in this Official Statement have the same meanings assigned to such terms in the Order. Included in this Official Statement are descriptions of the Bonds and certain information about the Issuer and its finances. ALL DESCRIPTIONS OF DOCUMENTS CONTAINED HEREIN ARE SUMMARIES ONLY AND ARE QUALIFIED IN THEIR ENTIRETY BY REFERENCE TO EACH SUCH DOCUMENT. Copies of such documents may be obtained from the Issuer or the Financial Advisor (defined below), by electronic mail or upon payment of reasonable mailing, handling, and delivery charges.

This Official Statement speaks only as to its date, and the information contained herein is subject to change. A copy of the Official Statement will be deposited with the Municipal Securities Rulemaking Board through its Electronic Municipal Market Access (“EMMA”)system. See "CONTINUING DISCLOSURE OF INFORMATION" for a description of the District’s undertaking to provide certain information on a continuing basis.

Future Bond Issues

The District currently anticipates issuing unlimited tax refunding bonds to refund approximately $60,000,000 of its currently outstanding indebtedness for debt service savings in the fall of 2020. Additionally, the District’s Board established a Blue Ribbon Task Force comprised of District residents to inform and advise the Board on facility needs and a potential bond election to be held in November 2020.

Infectious Disease Outbreak – COVID-19

The outbreak of COVID-19, a respiratory disease caused by a new strain of coronavirus, has been characterized as a pandemic (the "Pandemic") by the World Health Organization and is currently affecting many parts of the world, including the United States and Texas.On January 31, 2020, the Secretary of the United States Health and Human Services Department declared a public health emergency for the United States and on March 13, 2020, the President of the United States declared the outbreak of COVID-19 in the United States a national emergency. Subsequently, the President’s Coronavirus Guidelines for America and the United States Centers for Disease Control and Prevention called upon Americans to take actions to slow the spread of COVID-19 in the United States.

On March 13, 2020, the Governor of Texas (the "Governor") declared a state of disaster for all counties in the State in response to the Pandemic. Pursuant to Chapter 418 of the Texas Government Code, the Governor has broad authority to respond to disasters, including suspending any regulatory statute prescribing the procedures for conducting State business or any order or rule of a State agency (including the Texas Education Agency (the “TEA”)) that would in any way prevent, hinder, or delay necessary action in coping with the disaster, and issuing executive orders that have the force and effect of law. These include, for example, the issuance of Executive Order GA-18, which among other things, closed public and private schools throughout the State to in-person classroom attendance through the end of the 2019-2020 school year. Subsequent executive orders were enacted and aimed at gradually lifting restrictions that were aimed to slow the spread of the Pandemic. However, recent spikes in the number of COVID-19 cases in the State have resulted in the Governor tightening certain restrictions on activities and pausing future phases of reopening. TEA has released guidelines and suggestions for Texas school districts to follow for the 2020-2021 school year in order to receive attendance-based funding and instruct students during the current COVID-19 pandemic. School opening and instruction methodology being implemented by the District will be subject to attendance based on (ADA) funding within guidelines outlined by TEA.

On July 7, 2020, TEA issued public planning health guidance to support school systems in planning for the 2020-2021 school year,addressing on campus and virtual instruction, administrative and extracurricular activities, and school visits. On July 21, 2020, TEA updated instructional and operational guidance. Within the guidance, TEA instructs schools to provide parental and public notices of the school district’s plan to follow in order to mitigate COVID-19 within their facilities and confirms the attendance requirements for promotion (which may be completed by virtual education). The guidance further details screening mechanisms, identification of symptoms, and

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procedures for confirmed, suspected, and exposed cases. Certain actions, such as notification to health department officials and closure of high-traffic areas, will be required in the instance of confirmed cases. Schools are highly encouraged to engage in mitigation practices promoting health and hygiene consistent with CDC guidelines (including social distancing, facial coverings, frequent disinfecting of all areas, limiting visitations, etc.) to avoid unnecessary exposure to others to prevent the spread of COVID-19.

The District continues to monitor the spread of COVID-19 and is working with local, State, and national agencies to address the potential impact of the Pandemic upon the District. While the potential impact of the Pandemic on the District cannot be quantified at this time, the continued outbreak of COVID-19 could have an adverse effect on the District’s operations and financial condition. The Pandemic has negatively affected travel, commerce, and financial markets globally, and is widely expected to continue negatively affecting economic growth and financial markets worldwide. These negative impacts may reduce or negatively affect property values within the District. See “AD VALOREM PROPERTY TAXATION.” The Bonds are secured by an unlimited ad valorem tax, and a reduction in property values may require an increase in the ad valorem tax rate required to pay the Bonds as well as the District’s share of operations and maintenance expenses payable from ad valorem taxes. Additionally, State funding of District operations and maintenance in future fiscal years could be adversely impacted by the negative effects on economic growth and financial markets resulting from the Pandemic as well as ongoing disruptions in the global oil markets. See “CURRENT PUBLIC SCHOOL FINANCE SYSTEM”. For a discussion of the impact of the Pandemic on the PSF, see “THE PERMANENT SCHOOL FUND GUARANTEE PROGRAM – Infectious Disease Outbreak”. The financial and operating data contained herein are the latest available, but are as of dates and for periods prior to the economic impact of the Pandemic and measures instituted to slow it. Accordingly, they are not indicative of the economic impact of the Pandemic on the District’s financial condition or its ratings (see “Ratings” herein). In addition to the information about the impact of the COVID-19 Pandemic on the District and the Permanent School Fund Guarantee Program provided in the Official Statement, the District and/or TEA may provide additional filings with the MSRB through EMMA prior to the termination of the offering of the Bonds under this Official Statement. Investors are directed to EMMA for any such disclosure filings, if and when made.The statements made in any such filings are incorporated herein by reference as of the respective dates specified in such filings, if made between the date of this Official Statement and 25 days after the Delivery Date (identified below).

THE BONDS

General Description

The Bonds will be dated August 1, 2020 (the “Dated Date”). Interest on the Bonds will accrue from the Delivery Date anticipated to be August 20, 2020, with such interest payable on February 15 and August 15 of each year, commencing February 15, 2021, until stated maturity or prior redemption and will be calculated on the basis of a 360-day year of twelve 30-day months. The Bonds will mature on the dates, in the principal amounts, and will bear interest at the rates set forth on page i of this Official Statement. The Bonds will be issued only as fully registered bonds. The Bonds will be issued in principal denominations of $5,000 principal or any integral multiple thereof within a stated maturity. Principal of, and interest on the Bonds are payable in the manner described herein under “BOOK-ENTRY-ONLY SYSTEM”. In the event the Book-Entry-Only System is discontinued, the interest on the Bonds will be payable to the registered owner as shown on the security register (the “Security Register”) maintained by Zions Bancorporation, National Association, dba Amegy Bank, Houston, Texas, as the initial Paying Agent/Registrar, as of the last business day of the month next preceding such interest payment date, by check, mailed first-class, postage prepaid, to the address of such person on the security register or by such other method acceptable to the Paying Agent/Registrar requested by and at the risk and expense of the registered owner. In the event the Book-Entry-Only System is discontinued, principal of the Bonds will be payable at stated maturity upon presentation and surrender thereof at the corporate trust office of the Paying Agent/Registrar. If the date for the payment of the principal of or interest, as applicable, on the Bonds will be a Saturday, Sunday, a legal holiday or a day when banking institutions in the city where the Paying Agent/Registrar is located are authorized by law or executive order to close, then the date for such payment will be the next succeeding day which is not a Saturday, Sunday, legal holiday or a day on which banking institutions are authorized to close, and payment on such date will have the same force and effect as if made on the original date payment was due. Authority for Issuance

The Bonds are issued and the tax levied for their payment pursuant to authority conferred by the Constitution and the general laws of the State of Texas, including Sections 45.001 and 45.003(b)(1) of the Texas Education Code, as amended, Chapter 1371 Texas Government Code, as amended (the “Financing Act”), a bond election held in the District on November 8, 2016, and the Bond Order adopted by the Board of the District on May 18, 2020. In the Bond Order, and as authorized by the Financing Act, the Board authorized certain District representatives to execute the Approval Certificate establishing the terms of sale of the Bonds and finalizing certain characteristics thereof related to final pricing. The Approval Certificate was executed by an authorized District representative on July 21, 2020.

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Security for Payment

The Bonds are payable from an annual ad valorem tax levied, without legal limitation as to rate or amount, on all taxable property located within the District. The Issuer has received conditional approval from the Texas Education Agency for the Bonds to be guaranteed under the State of Texas Permanent School Fund Guarantee Program (hereinafter defined) which guarantee automatically becomes effective when the Attorney General of Texas approves the Bonds. (See “THE PERMANENT SCHOOL FUND GUARANTEE PROGRAM” and “CURRENT PUBLIC SCHOOL FINANCE SYSTEM” herein.) See also "STATE AND LOCAL FUNDING OF SCHOOL DISTRICTS IN TEXAS" for a discussion of recent developments in State law affecting the financing of school districts in the State. Permanent School Fund Guarantee

In connection with the sale of the Bonds, the District has received conditional approval from the Texas Education Agency for a guarantee of the Bonds under the Texas Permanent School Fund Guarantee Program (Chapter 45, Subchapter C, of the Texas Education Code). Subject to meeting certain conditions discussed herein under the heading “THE PERMANENT SCHOOL FUND GUARANTEE PROGRAM,” payment of the principal of and interest on the Bonds will be absolutely and unconditionally guaranteed by the corpus of the Texas Permanent School Fund. In the event of default in payment of interest on or principal of the Bonds by the District, registered owners will receive all payments due from the corpus of the Texas Permanent School Fund. Defeasance of the Bonds will cancel the Texas Permanent School Fund Guarantee with respect thereto.

Redemption Provisions of the Bonds Optional Redemption

The Issuer reserves the right to redeem the Bonds maturing on or after August 15, 2030, in whole or in part, in principal amounts of $5,000 or any integral multiple thereof, on August 15, 2029, or any date thereafter, at the redemption price of par plus accrued interest to the date of redemption. Mandatory Sinking Fund Redemption The Bonds maturing on August 15, in the years 2045 and 2050 (the “Term Bonds”) are also subject to mandatory sinking fund redemption prior to stated maturity in part by lot, at a price equal to the principal amount thereof plus accrued interest to the date of redemption, in the respective years and principal amounts shown below:

$7,110,000 Term Bond Maturing on August 15, 2045

Mandatory Redemption Dates Principal Amounts August 15, 2041 $1,315,000 August 15, 2042 1,365,000 August 15, 2043 1,420,000 August 15, 2044 1,475,000 August 15, 2045 (Maturity) 1,535,000

$8,480,000 Term Bond Maturing on August 15, 2050

Mandatory Redemption Dates Principal Amounts August 15, 2046 $1,595,000 August 15, 2047 1,645,000 August 15, 2048 1,695,000 August 15, 2049 1,745,000 August 15, 2050 (Maturity) 1,800,000 The principal amount of a Term Bond required to be redeemed pursuant to the operation of the mandatory sinking fund redemption provisions shall be reduced, at the option of the District, by the principal amount of any Term Bond of such stated maturity which, at least 50 days prior to the mandatory sinking fund redemption date, (1) shall have been defeased or acquired by the District and delivered to the Paying Agent/Registrar for cancellation, (2) shall have been purchased and canceled by the Paying Agent/Registrar at the request of the District with money in the Interest and Sinking Fund, or (3) shall have been redeemed pursuant to the optional redemption provisions, if any, set forth above and not theretofore credited against a mandatory sinking fund redemption requirement. If less than all of the Bonds of any maturity are to be redeemed, the District shall determine the amounts of each maturity or maturities to be redeemed and shall direct the Paying Agent/Registrar (or DTC while the Bonds are in Book-Entry-Only form) to select by lot the Bonds, or portions thereof, within such maturity or maturities to be redeemed. If a Bond (or any portion of the principal sum thereof) shall have been called for redemption and notice of such redemption shall have been given, such Bond (or the principal amount thereof to be redeemed) shall become due and payable on such redemption date and interest thereon shall cease to accrue from and after the redemption date, provided funds for the payment of the redemption price and accrued interest thereon are held by the Paying Agent/Registrar on the redemption date.

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Notice of Redemption

Not less than thirty (30) days prior, but not more than sixty (60) days prior, to an optional redemption date for the Bonds, a notice of redemption shall be sent by United States mail, first class postage prepaid, in the name of the District and at the District's expense, by the Paying Agent/Registrar to each registered owner of a Bond to be redeemed in whole or in part at the address of the registered owner appearing on the Security Register at the close of business on the business day next preceding the date of mailing such notice. In the Order, the District reserves the right, in the case of optional redemption, to give notice of its election or direction to redeem the Bonds conditional upon the occurrence of subsequent events. Such notice may state (1) that the redemption is conditioned upon the deposit of moneys, in an amount equal to the amount necessary to effect the redemption, with the Paying Agent/Registrar no later than the redemption date, or (2) that the District retains the right to rescind such notice at any time prior to the scheduled redemption date if the District delivers a certificate of an authorized representative to the Paying Agent/Registrar instructing the Paying Agent/Registrar to rescind the redemption notice, and such notice and optional redemption shall be of no effect if such moneys are not so deposited or if the notice is so rescinded. The Paying Agent/Registrar shall give notice in the manner in which the notice of redemption was given, of any such rescission of a conditional notice of redemption to the affected owners of Bonds. Any Bonds subject to conditional redemption and such redemption has been rescinded shall remain outstanding, and the rescission of such redemption shall not constitute an event of default. Further, in the case of a conditional redemption, the failure of the District to make moneys and/or authorized securities available in part or in whole on or before the redemption date shall not constitute an event of default. ANY NOTICE SO MAILED WILL BE CONCLUSIVELY PRESUMED TO HAVE BEEN DULY GIVEN, WHETHER OR NOT THE REGISTERED OWNER RECEIVES SUCH NOTICE. NOTICE HAVING BEEN SO GIVEN, THE BONDS CALLED FOR REDEMPTION WILL BECOME DUE AND PAYABLE ON THE SPECIFIED REDEMPTION DATE, AND NOTWITHSTANDING THAT ANY BOND OR PORTION THEREOF HAS NOT BEEN SURRENDERED FOR PAYMENT, INTEREST ON SUCH BOND OR PORTION THEREOF WILL CEASE TO ACCRUE. All notices of redemption must (i) specify the date of redemption for the Bonds, (ii) identify the Bonds to be redeemed and, in the case of a portion of the principal amount to be redeemed, the principal amount thereof to be redeemed, (iii) state the redemption price, (iv) state that the Bonds, or the portion of the principal amount thereof to be redeemed, shall become due and payable on the redemption date specified, and the interest thereon, or on the portion of the principal amount thereof to be redeemed, shall cease to accrue from and after the redemption date, and (v) specify that payment of the redemption price for the Bonds, or the principal amount thereof to be redeemed, shall be made at the designated corporate trust office of the Paying Agent/Registrar only upon presentation and surrender thereof by the registered owner. Redemption through The Depository Trust Company

The Paying Agent/Registrar and the District, so long as a Book-Entry-Only System is used for the Bonds, will send any notice of redemption with regard to the Bonds, notice of proposed amendment to the Order, or other notices with respect to the Bonds only to DTC (defined herein). Any failure by DTC to advise any DTC Participant, or of any DTC Participant or Indirect Participant to notify the Beneficial Owner, will not affect the validity of the redemption of the Bonds called for redemption or any other action premised on any such notice. Redemption of portions of the Bond by the District will reduce the outstanding principal amount of such Bonds held by DTC. In such event, DTC may implement, through its Book-Entry-Only System, a redemption of such Bonds held for the account of DTC Participants in accordance with its rules or other agreements with DTC Participants and then DTC Participants and Indirect Participants may implement a redemption of such Bonds from the Beneficial Owners. Any such selection of Bonds to be redeemed will not be governed by the Order and will not be conducted by the District or the Paying Agent/Registrar. Neither the District nor the Paying Agent/Registrar will have any responsibility to DTC Participants, Indirect Participants, or the persons for whom DTC Participants act as nominees, with respect to the payments on the Bonds or the providing of notice to DTC Participants, Indirect Participants, or Beneficial Owners of the selection of portions of the Bonds for redemption (See "BOOK-ENTRY-ONLY SYSTEM" herein). Purpose

Proceeds from the sale of Bonds will be used for the purposes of (i) constructing, renovating, and equipping school buildings in the District and the purchase of necessary sites for school buildings, and (ii) paying the costs of issuance of the Bonds. Legality

The Bonds are offered when, as and if issued, subject to the approval of legality by the Attorney General of the State of Texas and the approval of certain legal matters by Escamilla & Poneck, LLP, San Antonio, Texas, Bond Counsel. (See “LEGAL MATTERS” herein and “APPENDIX C – Form of Opinion of Bond Counsel” herein.) Payment Record

The Issuer has never defaulted on the payment of its ad valorem tax supported indebtedness.

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Amendments

The District may amend the Order without the consent of or notice to any registered owner in any manner not detrimental to the interests of the registered owners, including the curing of any ambiguity, inconsistency, or formal defect or omission therein. In addition, the District may, with the written consent of the holders of a majority in aggregate principal amount of the Bonds then outstanding, amend, add to, or rescind any of the provisions of the Order; except that, without the consent of the registered owners of all of the Bonds outstanding, no such amendment, addition or rescission may (1) extend the time or times of payment of the principal of and interest on the Bonds, reduce the principal amount thereof, the redemption price therefor, or the rate of interest thereon, or in any other way modify the terms of payment of the principal of or interest on the Bonds, (2) give any preference to any Bond over any other Bond, or (3) reduce the aggregate principal amount of the Bonds required to be held by registered owners for consent to any such amendment, addition, or rescission.

SOURCES AND USES OF FUNDS

The proceeds from the sale of the Bonds will be applied approximately as follows: Sources:

Principal Amount of the Bonds $43,730,000.00

Reoffering Premium 6,643,479.15

Total Sources of Funds $50,373,479.15

:

Deposit to Construction Fund $50,000,000.00

Issuance Expenses and Underwriters’ Discount 373,276.89

Contingency 202.26

Total Uses of Funds $50,373,479.15


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REGISTERED OWNERS’ REMEDIES

If the District defaults in the payment of principal or interest, or redemption price on the Bonds when due, or if it fails to make payments into any fund or funds created in the Order, or defaults in the observation or performance of any other covenants, conditions, or obligations set forth in the Order, and the State fails to honor the Permanent School Fund Guarantee as hereinafter discussed, the registered owners may seek a writ of mandamus to compel District officials to carry out their legally imposed duties with respect to the Bonds, if there is no other available remedy at law to compel performance of the Bonds or Order and the District’s obligations are not uncertain or disputed. The issuance of a writ of mandamus is controlled by equitable principles, and rests with the discretion of the court, but may not be arbitrarily refused. There is no acceleration of maturity of the Bonds in the event of default and, consequently, the remedy of mandamus may have to be relied upon from year to year. The Order does not provide for the appointment of a trustee to represent the interest of the Registered Owners upon any failure of the District to perform in accordance with the terms of the Order, or upon any other condition and accordingly all legal actions to enforce such remedies would have to be undertaken at the initiative of, and be financed by, the registered owners. On June 30, 2006, the Texas Supreme Court ruled in Tooke v. City of Mexia, 197 S.W.3d 325 (Tex. 2006), that a waiver of sovereign immunity in a contractual dispute must be provided for by statute in “clear and unambiguous” language. Chapter 1371, as amended, Texas Government Code (“Chapter 1371”), which pertains to the issuance of public securities by issuers such as the D istrict, permits the District to waive sovereign immunity in the proceedings authorizing the issuance of the Bonds. Notwithstanding its reliance upon the provisions of Chapter 1371 in connection with the issuance of the Bonds (as further described under the caption “THE BONDS – Authority for Issuance”), the District has not waived the defense of sovereign immunity with respect thereto. Because it is unclear whether the Texas Legislature has effectively waived the District’s sovereign immunity from a suit for money damages outside of Chapter 1371, Registered Owners may not be able to bring such a suit against the District for breach of the Bonds or Order covenants. Even if a judgment against the District could be obtained, it could not be enforced by direct levy and execution against the District’s property. Further, the registered owners cannot themselves foreclose on property within the District or sell property within the District to enforce the tax lien on taxable property to pay the principal of and interest on the Bonds. Furthermore, the District is eligible to seek relief from its creditors under Chapter 9 of the United States Bankruptcy Code (“Chapter 9”). Although Chapter 9 provides for the recognition of a security interest represented by a specifically pledged source of revenues, the pledge of ad valorem taxes in support of a general obligation of a bankrupt entity is not specifically recognized as a security interest under Chapter 9. Chapter 9 also includes an automatic stay provision that would prohibit, without Bankruptcy Court approval, the prosecution of any other legal action by creditors or Registered Owners of an entity which has sought protection under Chapter 9. Therefore, should the District avail itself of Chapter 9 protection from creditors, the ability to enforce would be subject to the approval of the Bankruptcy Court (which could require that the action be heard in Bankruptcy Court instead of other federal or state court); and the Bankruptcy Code provides for broad discretionary powers of a Bankruptcy Court in administering any proceeding brought before it (see “THE PERMANENT SCHOOL FUND GUARANTEE PROGRAM” herein for a description of the procedures to be followed for payment of the Bonds by the Permanent School Fund in the event the District fails to make a payment on the Bonds when due). The opinion of Bond Counsel will note that all opinions relative to the enforceability of the Bonds are qualified with respect to the customary rights of debtors relative to their creditors and general principles of equity that permit the exercise of judicial discretion.

REGISTRATION, TRANSFER AND EXCHANGE

Paying Agent/Registrar

The initial Paying Agent/Registrar is Zions Bancorporation, National Association, dba Amegy Bank, Houston, Texas (the "Paying Agent/Registrar"). The Bonds are being issued in fully registered form in integral multiples of $5,000 of principal amount. If the Bonds are no longer held in the Book-Entry-Only System, interest on the Bonds will be payable semiannually by the Paying Agent/Registrar by check mailed on each interest payment date by the Paying Agent/Registrar to the registered owner at the last known address as it appears on the Paying Agent/Registrar's books on the Record Date (hereinafter defined).

If the Bonds are no longer held in the Book-Entry-Only System, principal of the Bonds will be payable at stated maturity upon presentation and surrender thereof at the corporate trust office of the Paying Agent/Registrar. So long as Cede & Co. is the registered owner of the Bonds, payments of principal of, interest on, as applicable, on the Bonds will be made as described in "BOOK-ENTRY-ONLY SYSTEM."

Successor Paying Agent/Registrar

Provision is made in the Order for replacing the Paying Agent/Registrar. If the District replaces the Paying Agent/Registrar, such Paying Agent/Registrar shall, promptly upon the appointment of a successor, deliver the Paying Agent/Registrar’s records to the successor paying agent/registrar, and the successor paying agent/registrar shall act in the same capacity as the previous Paying Agent/Registrar.Any successor paying agent/registrar selected by the District shall be a commercial bank; a trust company organized under the laws of the State; or other entity duly qualified and legally authorized to serve and perform the duties of the Paying Agent/Registrar for the Bonds.


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Future Registration

In the event the Book-Entry-Only System is discontinued, the Bonds may be transferred, registered and assigned on the registration books only upon presentation and surrender of the Bonds to the Paying Agent/Registrar, and such registration and transfer shall be without expense or service charge to the registered owner, except for any tax or other governmental charges required to be paid with respect to such registration and transfer. A Bond may be assigned by the execution of an assignment form on such Bond or by such other instrument of transfer and assignment acceptable to the Paying Agent/Registrar. A new Bond or Bonds will be delivered by the Paying Agent/Registrar in lieu of the Bond being transferred or exchanged at the principal corporate office of the Paying Agent/Registrar, or sent by United States registered mail to the new registered owner at the registered owner's request, risk and expense. To the extent possible, new Bonds issued in an exchange or transfer of Bonds will be delivered to the registered owner or assignee of the registered owner in not more than three (3) business days after the receipt of the Bonds to be canceled in the exchange or transfer and the written instrument of transfer or request for exchange duly executed by the registered owner or his duly authorized agent, in form satisfactory to the Paying Agent/Registrar. New Bonds registered and delivered in an exchange or transfer shall be in authorized denominations and for a like aggregate principal amount, as applicable, as the Bond or Bonds surrendered for exchange or transfer. Record Date For Interest Payment

The record date ("Record Date") for determining the party to whom the interest on any Bond is payable on any interest payment date means the close of business on the last business day of the preceding month. In the event of a non-payment of interest on a scheduled payment date, and for 30 days thereafter, a new record date for such interest payment (a "Special Record Date") will be established by the Paying Agent/Registrar, if and when funds for the payment of such interest have been received from the District. Notice of the Special Record Date and of the scheduled payment date of the past due interest (the "Special Payment Date" which shall be 15 days after the Special Record Date) shall be sent at least five business days prior to the Special Record Date by United States mail, first class, postage prepaid, to the address of each owner of a Bond appearing on the books of the Paying Agent/Registrar at the close of business on the last day next preceding the date of mailing of such notice. Limitation on Transfer of Bonds

Neither the District nor the Paying Agent/Registrar will be required to issue, transfer, or exchange any Bonds during a (i) period beginning at the close of business on any Record Date and ending with the next interest payment date or, (ii) with respect to any Bond called for redemption, within 30 days of the date fixed for redemption, provided, however, such limitation of transfer will not be applicable to an exchange by the registered owner of the uncalled balance of a Bond called for redemption in part. Replacement Bonds

If any Bond is mutilated, destroyed, stolen or lost, a new Bond in the same principal amount, as the Bond so mutilated, destroyed, stolen or lost will be issued. In the case of a mutilated Bond, such new Bond will be delivered only upon surrender and cancellation of such mutilated Bond. In the case of any Bond issued in lieu of and substitution for a Bond which has been destroyed, stolen or lost, such new Bond will be delivered only (a) upon filing with the District and the Paying Agent/Registrar a certificate to the effect that such Bond has been destroyed, stolen or lost and proof of the ownership thereof, and (b) upon furnishing the District and the Paying Agent/Registrar with indemnity satisfactory to them. The person requesting the authentication and delivery of a new Bond must pay such expenses as the Paying Agent/Registrar may incur in connection therewith. Defeasance of Bonds

The Order provides for the defeasance of the Bonds when the payment of the principal of and premium, if any, on the Bonds, plus interest thereon to the due date thereof (whether such due date be by reason of maturity, redemption, or otherwise), is provided by irrevocably depositing with a paying agent, in trust (1) money sufficient to make such payment, (2) Governmental Obligations (defined below), that mature as to principal and interest in such amounts and at such times to insure the availability, without reinvestment, of sufficient money to make such payment, and all necessary and proper fees, compensation and expenses of the paying agent for the Bonds, or (3) a combination of money and Governmental Obligations together so certified sufficient to make such payment; provided, however, that the sufficiency of deposits shall be certified by an independent public accounting firm, the District’s Financial Advisor, or another qualified third party in connection with a defeasance of the Bonds. The District has additionally reserved the right in the Order, subject to satisfying the requirements of (1) and (2) above, to substitute other Governmental Obligations for the Governmental Obligations originally deposited, to reinvest the uninvested money on deposit for such defeasance and to withdraw for the benefit of the District money in excess of the amount required for such defeasance.

The Order provides that “Governmental Obligations” means (a) direct, noncallable obligations of the United States of America, including obligations that are unconditionally guaranteed by the United States of America, (b) noncallable obligations of an agency or instrumentality of the United States of America, including obligations that are unconditionally guaranteed or insured by the agency or instrumentality and that, on the date the governing body of the District authorizes the defeasance, are rated as to investment quality by a nationally recognized investment rating firm not less than “AAA” or its equivalent, (c) noncallable obligations of a state or an agency or a county, municipality, or other political subdivision of a state that have been refunded and that on the date the governing body of the District adopts or approves the proceedings authorizing the financial arrangements, are rated as to investment quality by a nationally recognized investment rating firm not less than “AAA” or its equivalent, or (d) any additional securities and obligations hereafter authorized by Texas law as eligible for use to accomplish the discharge of obligations such as the Bonds. There is no assurance that the ratings for United States Treasury securities acquired to defease any Bonds, or those for any other Governmental Obligations, will be maintained at any particular rating category. Further, there is no assurance that current State law will not be amended in a manner that expands or contracts the list of

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permissible defeasance securities (such list consisting of those securities identified in clauses (a) through (c) above), or any rating requirement thereon, that may be purchased with defeasance proceeds relating to the Bonds (“Defeasance Proceeds”), though the District has reserved the right to utilize any additional securities for such purpose in the event the aforementioned list is expanded. Because the Order does not contractually limit such permissible defeasance securities and expressly recognizes the ability of the District to use lawfully available Defeasance Proceeds to defease all or any portion of the Bonds, registered owners of Bonds are deemed to have consented to the use of Defeasance Proceeds to purchase such other defeasance securities, notwithstanding the fact that such defeasance securities may not be of the same investment quality as those currently identified under State law as permissible defeasance securities.

Upon such deposit as described above, such Bonds will no longer be regarded to be outstanding obligations for purposes of applying any limitation on indebtedness or for purposes of taxation. After firm banking and financial arrangements for the discharge and final payment of the Bonds have been made as described above, all rights of the District to initiate proceedings to call the Bonds for redemption or take any other action amending the terms of the Bonds are extinguished; provided, however, that, the District’s right to redeem Bonds defeased to stated maturity is not extinguished if the District has reserved the option, to be exercised at the time of the defeasance of the Bonds, to call for redemption, at an earlier date, those Bonds which have been defeased to their stated maturity date, if the District: (i) in the proceedings providing for the firm banking and financial arrangements, expressly reserves the right to call the Bonds for redemption; (ii) gives notice of the reservation of that right to the owners of the Bonds immediately following the making of the firm banking and financial arrangements; and (iii) directs that notice of the reservation be included in any redemption notices that it authorizes.

Defeasance will cancel the Permanent School Fund Guarantee with respect to those defeased Bonds.


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BOOK-ENTRY-ONLY SYSTEM

This section describes how ownership of the Bonds is to be transferred and how the principal of and interest on the Bonds are to be paid to and credited by The Depository Trust Company, New York, New York ("DTC") while the Bonds are registered in its nominee name.The information in this section concerning DTC and the Book-Entry-Only System has been provided by DTC for use in disclosure documents such as this Official Statement. The District, the Financial Advisor, and the Underwriters believe the source of such information to be reliable, but take no responsibility for the accuracy or completeness thereof. The District and the Underwriters cannot and do not give any assurance that (1) DTC will distribute payments of debt service on the Bonds, or notices to DTC Participants, (2) DTC Participants or others will distribute debt service payments paid to DTC or its nominee (as the registered owner of the Bonds), or notices to the Beneficial Owners, or that they will do so on a timely basis, or (3) DTC will serve and act in the manner described in this Official Statement. The current rules applicable to DTC are on file with the United States Securities and Exchange Commission, and the current procedures of DTC to be followed in dealing with DTC Participants are on file with DTC. DTC will act as securities depository for the Bonds. The Bonds will be issued as fully registered securities registered in the name of Cede & Co. (DTC’s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully registered certificate will be issued for the Bonds, in the aggregate principal amount of such issue, and will be deposited with DTC. DTC, the world’s largest depository, is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity, corporate and municipal debt issues, and money market instruments from over 100 countries that DTC’s participants ("Direct Participants") deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants’ accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC is the holding company for DTC, National Securities Clearing Corporation, and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). DTC has a S&P Global Ratings’ rating of “AA+”. The DTC Rules applicable to its Participants are on file with the United States Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com. Purchases of Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Bonds on DTC’s records. The ownership interest of each actual purchaser of each Bond ("Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants’ records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive physical certificates representing their ownership interests in Bonds, except in the event that use of the book-entry system for the Bonds is discontinued. To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC are registered in the name of DTC’s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC’s records reflect only the identity of the Direct Participants to whose accounts such Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Bonds, such as redemptions, tenders, defaults, and proposed amendments to the Bond documents. For example, Beneficial Owners of Bonds may wish to ascertain that the nominee holding the Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them. Redemption notices shall be sent to DTC. If less than all of the Bonds within an issue are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Bonds unless authorized by a Direct Participant in accordance with DTC’s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the District as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those Direct Participants to whose accounts Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy).

http://www.dtcc.com/

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Payments on the Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detail information from the District or the Paying Agent/Registrar, on payable date in accordance with their respective holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name", and will be the responsibility of such Participant and not of DTC nor its nominee, the Paying Agent/Registrar, or the District, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the District or the Paying Agent/Registrar, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. DTC may discontinue providing its services as depository with respect to the Bonds at any time by giving reasonable notice to the District or Paying Agent/Registrar. Under such circumstances, in the event that a successor depository is not obtained, physical certificates for each maturity of the Bonds are required to be printed and delivered. The District may decide to discontinue use of the system of book-entry transfers through DTC (or a successor securities depository). In that event, physical certificates for each maturity of the Bonds will be printed and delivered. So long as Cede & Co. is the registered owner of the Bonds, the District will have no obligation or responsibility to the DTC Participants or Indirect Participants, or the persons for which they act as nominees, with respect to payment to or providing of notice to such Participants, or the persons for which they act as nominees. Effect of Termination of Book-Entry-Only System

In the event that the Book-Entry-Only System is discontinued by DTC or the use of the Book-Entry-Only System is discontinued by the District, the following provisions will be applicable to the Bonds. The Bonds may be exchanged for an equal aggregate principal amount of the Bonds in authorized denominations and of the same maturity upon surrender thereof at the principal office for payment of the Paying Agent/Registrar. The transfer of any Bond may be registered on the registration books relating to the Bonds maintained by the Paying Agent/Registrar for such purpose only upon the surrender of such Bond to the Paying Agent/Registrar with a duly executed assignment in form satisfactory to the Paying Agent/Registrar. For every exchange or transfer of registration of Bonds, the Paying Agent/Registrar and the District may make a charge sufficient to reimburse them for any tax or other governmental charge required to be paid with respect to such exchange or registration of transfer. The District will pay the fee, if any, charged by the Paying Agent/Registrar for the transfer or exchange. The Paying Agent/Registrar will not be required to transfer or exchange any Bond after its selection for redemption. The District and the Paying Agent/Registrar may treat the person in whose name an Obligation is registered as the absolute owner thereof for all purposes, whether such Bond is overdue or not, including for the purpose of receiving payment of, or on account of, the principal of, and interest on, such Bond.

Use of Certain Terms in Other Sections of this Official Statement

In reading this Official Statement it should be understood that while the Bonds are in the Book-Entry-Only System, references in other sections of this Official Statement to registered owners should be read to include the person for which the Participant acquires an interest in the Bonds, but (i) all rights of ownership must be exercised through DTC and the Book-Entry-Only System, and (ii) except as described above, payment or notices that are to be given to registered owners under the Order will be given only to DTC.

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THE PERMANENT SCHOOL FUND GUARANTEE PROGRAM

The information below concerning the State Permanent School Fund and the Guarantee Program (defined below) has been provided by the Texas Education Agency (the “TEA”) and is not guaranteed as to accuracy or completeness by, and is not construed as a representation by the District, the Financial Advisor, or the Underwriters. This disclosure statement provides information relating to the program (the “Guarantee Program”) administered by the Texas Education Agency (the “TEA”) with respect to the Texas Permanent School Fund guarantee of tax-supported bonds issued by Texas school districts and the guarantee of revenue bonds issued by or for the benefit of Texas charter districts. The Guarantee Program was authorized by an amendment to the Texas Constitution in 1983 and by Subchapter C of Chapter 45 of the Texas Education Code, as amended (the “Act”). While the Guarantee Program applies to bonds issued by or for both school districts and charter districts, as described below, the Act and the program rules for the two types of districts have some distinctions. For convenience of description and reference, those aspects of the Guarantee Program that are applicable to school district bonds and to charter district bonds are referred to herein as the “School District Bond Guarantee Program” and the “Charter District Bond Guarantee Program,” respectively. Some of the information contained in this Section may include projections or other forward-looking statements regarding future events or the future financial performance of the Texas Permanent School Fund (the “PSF” or the “Fund”). Actual results may differ materially from those contained in any such projections or forward-looking statements.

History and Purpose

The PSF was created with a $2,000,000 appropriation by the Texas Legislature (the “Legislature”) in 1854 expressly for the benefit of the public schools of Texas. The Constitution of 1876 stipulated that certain lands and all proceeds from the sale of these lands should also constitute the PSF. Additional acts later gave more public domain land and rights to the PSF. In 1953, the U.S. Congress passed the Submerged Lands Act that relinquished to coastal states all rights of the U.S. navigable waters within state boundaries. If the state, by law, had set a larger boundary prior to or at the time of admission to the Union, or if the boundary had been approved by Congress, then the larger boundary applied. After three years of litigation (1957-1960), the U. S. Supreme Court on May 31, 1960, affirmed Texas’ historic three marine leagues (10.35 miles) seaward boundary. Texas proved its submerged lands property rights to three leagues into the Gulf of Mexico by citing historic laws and treaties dating back to 1836. All lands lying within that limit belong to the PSF. The proceeds from the sale and the mineral-related rental of these lands, including bonuses, delay rentals and royalty payments, become the corpus of the Fund. Prior to the approval by the voters of the State of an amendment to the constitutional provision under which the Fund is established and administered, which occurred on September 13, 2003 (the “Total Return Constitutional Amendment”), and which is further described below, the PSF had as its main sources of revenues capital gains from securities transactions and royalties from the sale of oil and natural gas. The Total Return Constitutional Amendment provides that interest and dividends produced by Fund investments will be additional revenue to the PSF. The State School Land Board (“SLB”) maintains the land endowment of the Fund on behalf of the Fund and is generally authorized to manage the investments of the capital gains, royalties and other investment income relating to the land endowment. The SLB is a five member board, the membership of which consists of the Commissioner of the Texas General Land Office (the “Land Commissioner”) and four citizen members appointed by the Governor. (See “2019 Texas Legislative Session” for a description of legislation that changed the composition of the SLB). As of August 31, 2019, the General Land Office (the “GLO”) managed approximately 26% of the PSF, as reflected in the fund balance of the PSF at that date. The Texas Constitution describes the PSF as “permanent.” Prior to the approval by Texas voters of the Total Return Constitut ional Amendment, only the income produced by the PSF was to be used to complement taxes in financing public education. On November 8, 1983, the voters of the State approved a constitutional amendment that provides for the guarantee by the PSF of bonds issued by school districts. On approval by the State Commissioner of Education (the “Commissioner”), bonds properly issued by a school district are fully guaranteed by the corpus of the PSF. See “The School District Bond Guarantee Program.” In 2011, legislation was enacted that established the Charter District Bond Guarantee Program as a new component of the Guarantee Program. That legislation authorized the use of the PSF to guarantee revenue bonds issued by or for the benefit of certain open-enrollment charter schools that are designated as “charter districts” by the Commissioner. On approval by the Commissioner, bonds properly issued by a charter district participating in the Program are fully guaranteed by the corpus of the PSF. As described below, the implementation of the Charter District Bond Guarantee Program was deferred pending receipt of guidance from the Internal Revenue Service (the “IRS”) which was received in September 2013, and the establishment of regulations to govern the program, which regulations became effective on March 3, 2014. See “The Charter District Bond Guarantee Program.” State law also permits charter schools to be chartered and operated by school districts and other political subdivisions, but bond financing of facilities for school district-operated charter schools is subject to the School District Bond Guarantee Program, not the Charter District Bond Guarantee Program. While the School District Bond Guarantee Program and the Charter District Bond Guarantee Program relate to different types of bonds issued for different types of Texas public schools, and have different program regulations and requirements, a bond guaranteed under either part of the Guarantee Program has the same effect with respect to the guarantee obligation of the Fund thereto, and all guaranteed bonds are aggregated for purposes of determining the capacity of the Guarantee Program (see “Capacity Limits for the Guarantee Program”). The Charter District Bond Guarantee Program as enacted by State law has not been reviewed by any court, nor has the Texas Attorney General been requested to issue an opinion, with respect to its constitutional validity.

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The sole purpose of the PSF is to assist in the funding of public education for present and future generations. Prior to the adoption of the Total Return Constitutional Amendment, all interest and dividends produced by Fund investments flowed into the Available School Fund (the “ASF”), where they are distributed to local school districts and open-enrollment charter schools based on average daily attendance.Any net gains from investments of the Fund accrue to the corpus of the PSF. Prior to the approval by the voters of the State of the Total Return Constitutional Amendment, costs of administering the PSF were allocated to the ASF. With the approval of the Total Return Constitutional Amendment, the administrative costs of the Fund have shifted from the ASF to the PSF. In fiscal year 2019, distributions to the ASF amounted to an estimated $306 per student and the total amount distributed to the ASF was $1,535.8 million.

Audited financial information for the PSF is provided annually through the PSF Comprehensive Annual Financial Report (the “Annual Report”), which is filed with the Municipal Securities Rulemaking Board (“MSRB”). The Annual Report includes the Message of the Executive Administrator of the Fund (the “Message”) and the Management’s Discussion and Analysis (“MD&A”). The Annual Report for the year ended August 31, 2019, as filed with the MSRB in accordance with the PSF undertaking and agreement made in accordance with Rule 15c2-12 (“Rule 15c2-12”) of the federal Securities and Exchange Commission (the “SEC”), as described below, is hereby incorporated by reference into this disclosure. Information included herein for the year ended August 31, 2019 is derived from the audited financial statements of the PSF, which are included in the Annual Report as it is filed and posted. Reference is made to the Annual Report for the complete Message and MD&A for the year ended August 31, 2019 and for a description of the financial results of the PSF for the year ended August 31, 2019, the most recent year for which audited financial information regarding the Fund is available. The 2019 Annual Report speaks only as of its date and the TEA has not obligated itself to update the 2019 Annual Report or any other Annual Report. The TEA posts each Annual Report, which includes statistical data regarding the Fund as of the close of each fiscal year, the most recent disclosure for the Guarantee Program, the Statement of Investment Objectives, Policies and Guidelines of the Texas Permanent School Fund, which is codified at 19 Texas Administrative Code, Chapter 33 (the “Investment Policy”), monthly updates with respect to the capacity of the Guarantee Program (collectively, the “Web Site Materials”) on the TEA web site athttp://tea.texas.gov/Finance_and_Grants/Permanent_School_Fund/ and with the MSRB at www.emma.msrb.org. Such monthly updates regarding the Guarantee Program are also incorporated herein and made a part hereof for all purposes. In addition to the Web Site Materials, the Fund is required to make quarterly filings with the SEC under Section 13(f) of the Securities Exchange Act of 1934. Such filings, which consist of a list of the Fund’s holdings of securities specified in Section 13(f), including exchange-traded (e.g., NYSE) or NASDAQ-quoted stocks, equity options and warrants, shares of closed-end investment companies and certain convertible debt securities, is available from the SEC at www.sec.gov/edgar.shtml. A list of the Fund’s equity and fixed income holdings as of August 31 of each year is posted to the TEA web site and filed with the MSRB. Such list excludes holdings in the Fund’s securities lending program. Such list, as filed, is incorporated herein and made a part hereof for all purposes. 2019 Texas Legislative Session

During the 86th Regular Session of the Texas Legislature, which concluded on May 27, 2019 (the “86th Session”), various bills were enacted that relate to the PSF. Among such enacted legislation are bills that relate to the composition of the SLB and its relationship to the SBOE with respect to the management of the PSF. Legislation was approved that will change the composition of the SLB to a five member board from a three member board. Under that bill, the Land Commissioner will continue to head the SLB, but the remaining four members will be appointed by the Governor, and of those four members, two are required to be selected from a list of nominees to be submitted to the Governor by the SBOE. That legislation also requires an annual joint meeting of the SLB and the SBOE for the purpose of discussing the allocation of the assets of the PSF and the investment of money in the PSF. Other enacted legislation requires the SLB and the SBOE to provide quarterly financial reports to each other and creates a “permanent school fund liquid account” in the PSF for the purpose of receiving funds transferred from the SLB on a quarterly basis that are not then invested by the SLB or needed within the forthcoming quarter for investment by the SBOE. Such funds shall be invested in liquid assets in the same manner that the PSF is managed until such time as the funds are required for investment by the SLB. That legislation also requires the Texas Education Agency, in consultation with the GLO, to conduct a study regarding distributions to the ASF from the PSF. In addition, a joint resolution was approved that proposed a constitutional amendment to the Texas Constitution to increase the permissible amount of distributions to the ASF from revenue derived during a year from PSF land or other properties from $300 million to $600 million annually by one or more entities. That constitutional change was approved by State voters at a referendum on November 5, 2019. See “2011 and 2019 Constitutional Amendments.” Other legislation enacted during the 86th Session provides for the winding up of the affairs of an open-enrollment charter school that ceases operations, including as a result of the revocation or other termination of its charter. In particular, among other provisions, the legislation addresses the disposition of real and personal property of a discontinued charter school and provides under certain circumstances for reimbursement to be made to the State, if the disposed property was acquired with State funds; authorizes the Commissioner to adopt a rule to govern related party transactions by charter schools; and creates a “charter school liquidation fund” for the management of any reclaimed State funds, including, in addition to other potential uses, for the use of deposit of such reclaimed funds to the Charter District Reserve Fund. No assessment has been made by the TEA or PSF staff as to the potential financial impact of any legislation enacted during the 86th Session, including the increase in the permissible amount that may be transferred from the PSF to the ASF, as approved by State voters at the November 5, 2019 referendum.

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The Total Return Constitutional Amendment

The Total Return Constitutional Amendment approved a fundamental change in the way that distributions are made to the ASF from the PSF. The Total Return Constitutional Amendment requires that PSF distributions to the ASF be determined using a total-return-based formula instead of the current-income-based formula, which was used from 1964 to the end of the 2003 fiscal year. The Total Return Constitutional Amendment provides that the total amount distributed from the Fund to the ASF: (1) in each year of a State fiscal biennium must be an amount that is not more than 6% of the average of the market value of the Fund, excluding real property (the “Distribution Rate”), on the last day of each of the sixteen State fiscal quarters preceding the Regular Session of the Legislature that begins before that State fiscal biennium (the “Distribution Measurement Period”), in accordance with the rate adopted by: (a) a vote of two-thirds of the total membership of the State Board of Education (“SBOE”), taken before the Regular Session of the Legislature convenes or (b) the Legislature by general law or appropriation, if the SBOE does not adopt a rate as provided by clause (a); and (2) over the ten-year period consisting of the current State fiscal year and the nine preceding state fiscal years may not exceed the total return on all investment assets of the Fund over the same ten-year period (the “Ten Year Total Return”). In April 2009, the Attorney General issued a legal opinion, Op. Tex. Att’y Gen. No. GA-0707 (2009) (“GA-0707”), at the request of the Chairman of the SBOE with regard to certain matters pertaining to the Distribution Rate and the determination of the Ten Year Total Return. In GA-0707 the Attorney General opined, among other advice, that (i) the Ten Year Total Return should be calculated on an annual basis, (ii) a contingency plan adopted by the SBOE, to permit monthly transfers equal in aggregate to the annual Distribution Rate to be halted and subsequently made up if such transfers temporarily exceed the Ten Year Total Return, is not prohibited by State law, provided that such contingency plan applies only within a fiscal year time basis, not on a biennium basis, and (iii) that the amount distributed from the Fund in a fiscal year may not exceed 6% of the average of the market value of the Fund or the Ten Year Total Return. In accordance with GA-0707, in the event that the Ten Year Total Return is exceeded during a fiscal year, transfers to the ASF will be halted. However, if the Ten Year Total Return subsequently increases during that biennium, transfers may be resumed, if the SBOE has provided for that contingency, and made in full during the remaining period of the biennium, subject to the limit of 6% in any one fiscal year. Any shortfall in the transfer that results from such events from one biennium may not be paid over to the ASF in a subsequent biennium as the SBOE would make a separate payout determination for that subsequent biennium. In determining the Distribution Rate, the SBOE has adopted the goal of maximizing the amount distributed from the Fund in a manner designed to preserve “intergenerational equity.” Intergenerational equity is the maintenance of purchasing power to ensure that endowment spending keeps pace with inflation, with the ultimate goal being to ensure that current and future generations are given equal levels of purchasing power in real terms. In making this determination, the SBOE takes into account various considerations, and relies upon its staff and external investment consultant, which undertake analysis for long-term projection periods that includes certain assumptions. Among the assumptions used in the analysis are a projected rate of growth of the average daily scholastic attendance State-wide, the projected contributions and expenses of the Fund, projected returns in the capital markets and a projected inflation rate. See “2011 and 2019 Constitutional Amendments” below for a discussion of the historic and current Distribution Rates, and a description of amendments made to the Texas Constitution on November 8, 2011 and November 5, 2019 that may affect Distribution Rate decisions. Since the enactment of a prior amendment to the Texas Constitution in 1964, the investment of the Fund has been managed with the dual objectives of producing current income for transfer to the ASF and growing the Fund for the benefit of future generations. As a result of this prior constitutional framework, prior to the adoption of the 2004 asset allocation policy the investment of the Fund historically included a significant amount of fixed income investments and dividend-yielding equity investments, to produce income for transfer to the ASF. With respect to the management of the Fund’s financial assets portfolio, the single most significant change made to date as a result of the Total Return Constitutional Amendment has been new asset allocation policies adopted from time to time by the SBOE. The SBOE generally reviews the asset allocations during its summer meeting in even numbered years. The first asset allocation policy adopted by the SBOE following the Total Return Constitutional Amendment was in February 2004, and the policy was reviewed and modified or reaffirmed in the summers of each even-numbered year, most recently in 2018. The Fund’s investment policy provides for minimum and maximum ranges among the components of each of the asset classifications: equities, fixed income and alternative asset investments.The 2004 asset allocation policy decreased the fixed income target from 45% to 25% of Fund investment assets and increased the allocation for equities from 55% to 75% of investment assets. Subsequent asset allocation policies have continued to diversify Fund assets, and have added an alternative asset allocation to the fixed income and equity allocations. The alternative asset allocation category includes real estate, real return, absolute return and private equity components. Alternative asset classes diversify the SBOE-managed assets and are not as correlated to traditional asset classes, which is intended to increase investment returns over the long run while reducing risk and return volatility of the portfolio. The most recent asset allocation, from 2016, which was reviewed and reaffirmed in June 2018, is as follows: (i) an equity allocation of 35% (consisting of U.S. large cap equities targeted at 13%, international large cap equities at 14%, emerging market equities at 3%, and U.S. small/mid cap equities at 5%), (ii) a fixed income allocation of 19% (consisting of a 12% allocation for core bonds and a 7% allocation for emerging market debt in local currency), and (iii) an alternative asset allocation of 46% (consisting of a private equity allocation of 13%, a real estate allocation of 10%, an absolute return allocation of 10%, a risk parity allocation of 7% and a real return allocation of 6%). The 2016 asset allocation decreased U.S. large cap equities and international equities by 3% and 2%, respectively, and increased the allocations for private equity and real estate by 3% and 2%, respectively. In accordance with legislation enacted during the 86th Session and effective September 1, 2019, the PSF has established an investment account for purposes of investing cash received from the GLO to be invested in liquid assets and managed by the SBOE in the same manner it manages the PSF. That cash has previously been included in the PSF valuation, but was held and invested by the State Comptroller. For a variety of reasons, each change in asset allocation for the Fund, including the 2016 modifications, have been implemented in phases, and that approach is likely to be carried forward when and if the asset allocation policy is again modified. At August 31, 2019, the Fund’s financial assets portfolio was invested as follows: 34.91% in public market equity investments; 13.35% in fixed income

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investments; 10.58% in absolute return assets; 11.31% in private equity assets; 8.71% in real estate assets; 7.46% in risk parity assets; 6.16% in real return assets; 7.03% in emerging market debt; and 0.49% in unallocated cash.

Following on previous decisions to create strategic relationships with investment managers in certain asset classes, in September 2015 and January 2016, the SBOE approved the implementation of direct investment programs in private equity and absolute return assets, respectively, which has continued to reduce administrative costs with respect to those portfolios. The Attorney General has advised the SBOE in Op. Tex. Att’y Gen. No. GA-0998 (2013) (“GA-0998”), that the PSF is not subject to requirements of certain State competitive bidding laws with respect to the selection of investments. In GA-0998, the Attorney General also advised that the SBOE generally must use competitive bidding for the selection of investment managers and other third party providers of investment services, such as record keeping and insurance, but excluding certain professional services, such as accounting services, as State law prohibits the use of competitive bidding for specified professional services. GA-0998 provides guidance to the SBOE in connection with the direct management of alternative investments through investment vehicles to be created by the SBOE, in lieu of contracting with external managers for such services, as has been the recent practice of the PSF. The PSF staff and the Fund’s investment advisor are tasked with advising the SBOE with respect to the implementation of the Fund's asset allocation policy, including the timing and manner of the selection of any external managers and other consultants. In accordance with the Texas Constitution, the SBOE views the PSF as a perpetual institution, and the Fund is managed as an endowment fund with a long-term investment horizon. Under the total-return investment objective, the Investment Policy provides that the PSF shall be managed consistently with respect to the following: generating income for the benefit of the public free schools of Texas, the real growth of the corpus of the PSF, protecting capital, and balancing the needs of present and future generations of Texas school children. As described above, the Total Return Constitutional Amendment restricts the annual pay-out from the Fund to the total-return on all investment assets of the Fund over a rolling ten-year period. State law provides that each transfer of funds from the PSF to the ASF is made monthly, with each transfer to be in the amount of one-twelfth of the annual distribution. The heavier weighting of equity securities and alternative assets relative to fixed income investments has resulted in greater volatility of the value of the Fund. Given the greater weighting in the overall portfolio of passively managed investments, it is expected that the Fund will reflect the general performance returns of the markets in which the Fund is invested. The asset allocation of the Fund’s financial assets portfolio is subject to change by the SBOE from time to time based upon a number of factors, including recommendations to the SBOE made by internal investment staff and external consultants, changes made by the SBOE without regard to such recommendations and directives of the Legislature. Fund performance may also be affected by factors other than asset allocation, including, without limitation, the general performance of the securities markets in the United States and abroad; political and investment considerations including those relating to socially responsible investing; economic impacts relating to domestic and international climate change; development of hostilities in and among nations; cybersecurity issues that affect the securities markets, changes in international trade policies, economic activity and investments, in general, application of the prudent person investment standard, which may eliminate certain investment opportunities for the Fund; management fees paid to external managers and embedded management fees for some fund investments; and limitations on the number and compensation of internal and external investment staff, which is subject to legislative oversight. The Guarantee Program could also be impacted by changes in State or federal law or the implementation of new accounting standards. Management and Administration of the Fund

The Texas Constitution and applicable statutes delegate to the SBOE the authority and responsibility for investment of the PSF’s financial assets. In investing the Fund, the SBOE is charged with exercising the judgment and care under the circumstances then prevailing which persons of ordinary prudence, discretion and intelligence exercise in the management of their own affairs, not in regard to speculation, but in regard to the permanent disposition of their funds, considering the probable income therefrom as well as the probable safety of their capital. The SBOE has adopted a “Statement of Investment Objectives, Policies, and Guidelines of the Texas Permanent School Fund,” which is codified in the Texas Administrative Code beginning at 19 TAC section 33.1. The Total Return Constitutional Amendment provides that expenses of managing the PSF are to be paid “by appropriation” from the PSF.In January 2005, at the request of the SBOE, the Attorney General issued a legal opinion, Op. Tex. Att’y Gen. No. GA-0293 (2005), that the Total Return Constitutional Amendment requires that SBOE expenditures for managing or administering PSF investments, including payments to external investment managers, be paid from appropriations made by the Legislature, but that the Total Return Constitutional Amendment does not require the SBOE to pay from such appropriated PSF funds the indirect management costs deducted from the assets of a mutual fund or other investment company in which PSF funds have been invested. Texas law assigns control of the Fund’s land and mineral rights to the SLB. Administrative duties related to the land and mineral rights reside with the GLO, which is under the guidance of the Commissioner of the GLO. In 2007, the Legislature established the real estate special fund account of the PSF (the “Real Estate Account”) consisting of proceeds and revenue from land, mineral or royalty interest, real estate investment, or other interest, including revenue received from those sources, that is set apart to the PSF under the Texas Constitution and laws, together with the mineral estate in riverbeds, channels, and the tidelands, including islands. The investment of the Real Estate Account is subject to the sole and exclusive management and control of the SLB and the Land Commissioner, who is also the head of the GLO. The 2007 legislation presented constitutional questions regarding the respective roles of the SBOE and the SLB relating to the disposition of proceeds of real estate transactions to the ASF, among other questions. Amounts in the investment portfolio of the PSF are taken into account by the SBOE for purposes of determining the Distribution Rate. An amendment to the Texas Constitution was approved by State voters on November 8, 2011, which permits the SLB to make transfers directly to the ASF, see “2011 and 2019 Constitutional Amendments” below.

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The SBOE contracts with its securities custodial agent to measure the performance of the total return of the Fund’s financial assets. A consultant is typically retained for the purpose of providing consultation with respect to strategic asset allocation decisions and to assist the SBOE in selecting external fund management advisors. The SBOE also contracts with financial institutions for custodial and securities lending services. Like other State agencies and instrumentalities that manage large investment portfolios, the PSF has implemented an incentive compensation plan that may provide additional compensation for investment personnel, depending upon the criteria relating to the investment performance of the Fund. As noted above, the Texas Constitution and applicable statutes make the SBOE responsible for investment of the PSF’s financial assets.By law, the Commissioner is appointed by the Governor, with Senate confirmation, and assists the SBOE, but the Commissioner can neither be hired nor dismissed by the SBOE. The Executive Administrator of the Fund is also hired by and reports to the Commissioner.Moreover, although the Fund’s Executive Administrator and his staff implement the decisions of and provide information to the School Finance/PSF Committee of the SBOE and the full SBOE, the SBOE can neither select nor dismiss the Executive Administrator. TEA’s General Counsel provides legal advice to the Executive Administrator and to the SBOE. The SBOE has also engaged outside counsel to advise it as to its duties over the Fund, including specific actions regarding the investment of the PSF to ensure compliance with fiduciary standards, and to provide transactional advice in connection with the investment of Fund assets in non-traditional investments. Capacity Limits for the Guarantee Program

The capacity of the Fund to guarantee bonds under the Guarantee Program is limited in two ways: by State law (the “State Capacity Limit”) and by regulations and a notice issued by the IRS (the “IRS Limit”). Prior to May 20, 2003, the State Capacity Limit was equal to two times the lower of cost or fair market value of the Fund’s assets, exclusive of real estate. During the 78th Regular Session of the Legislature in 2003, legislation was enacted that increased the State Capacity Limit by 25%, to two and one half times the lower of cost or fair market value of the Fund’s assets as estimated by the SBOE and certified by the State Auditor, and eliminated the rea l estate exclusion from the calculation. Prior to the issuance of the IRS Notice (defined below), the capacity of the program under the IRS Limit was limited to two and one-half times the lower of cost or fair market value of the Fund’s assets adjusted by a factor that excluded additions to the Fund made since May 14, 1989. During the 2007 Texas Legislature, Senate Bill 389 (“SB 389”) was enacted providing for additional increases in the capacity of the Guarantee Program, and specifically providing that the SBOE may by rule increase the capacity of the Guarantee Program from two and one-half times the cost value of the PSF to an amount not to exceed five times the cost value of the PSF, provided that the increased limit does not violate federal law and regulations and does not prevent bonds guaranteed by the Guarantee Program from receiving the highest available credit rating, as determined by the SBOE. SB 389 further provides that the SBOE shall at least annually consider whether to change the capacity of the Guarantee Program. From 2005 through 2009, the Guarantee Program twice reached capacity under the IRS Limit, and in each instance the Guarantee Program was closed to new bond guarantee applications until relief was obtained from the IRS. The most recent closure of the Guarantee Program commenced in March 2009 and the Guarantee Program reopened in February 2010 on the basis of receipt of the IRS Notice. On December 16, 2009, the IRS published Notice 2010-5 (the “IRS Notice”) stating that the IRS will issue proposed regulations amending the existing regulations to raise the IRS limit to 500% of the total cost of the assets held by the PSF as of December 16, 2009. In accordance with the IRS Notice, the amount of any new bonds to be guaranteed by the PSF, together with the then outstanding amount of bonds previously guaranteed by the PSF, must not exceed the IRS limit on the sale date of the new bonds to be guaranteed. The IRS Notice further provides that the IRS Notice may be relied upon for bonds sold on or after December 16, 2009, and before the effective date of future regulations or other public administrative guidance affecting funds like the PSF. On September 16, 2013, the IRS published proposed regulations (the “Proposed IRS Regulations”) that, among other things, would enact the IRS Notice. The preamble to the Proposed IRS Regulations provides that issuers may elect to apply the Proposed IRS Regulations, in whole or in part, to bonds sold on or after September 16, 2013, and before the date that final regulations become effective. On July 18, 2016, the IRS issued final regulations enacting the IRS Notice (the “Final IRS Regulations”). The Final IRS Regulations are effective for bonds sold on or after October 17, 2016. The IRS Notice, the Proposed IRS Regulations and the Final IRS Regulations establish a static capacity for the Guarantee Program based upon the cost value of Fund assets on December 16, 2009 multiplied by five. On December 16, 2009, the cost value of the Guarantee Program was $23,463,730,608 (estimated and unaudited), thereby producing an IRS Limit of approximately $117.3 billion. The State Capacity Limit is determined on the basis of the cost value of the Fund from time to time multiplied by the capacity multiplier determined annually by the SBOE, but not to exceed a multiplier of five. The capacity of the Guarantee Program will be limited to the lower of the State Capacity Limit or the IRS Limit. On May 21, 2010, the SBOE modified the regulations that govern the School District Bond Guarantee Program (the “SDBGP Rules”), and increased the State Law Capac ity to an amount equal to three times the cost value of the PSF. Such modified regulations, including the revised capacity rule, became effective on July 1, 2010. The SDBGP Rules provide that the Commissioner may reduce the multiplier to maintain the AAA credit rat ing of the Guarantee Program, but provide that any changes to the multiplier made by the Commissioner are to be ratified or rejected by the SBOE at the next meeting following the change. See “Valuation of the PSF and Guaranteed Bonds,” below. At its September 2015 meeting, the SBOE voted to modify the SDBGP Rules and the CDBGP Rules to increase the State Law Capacity from 3 times the cost value multiplier to 3.25 times. At that meeting, the SBOE also approved a new 5% capacity reserve for the Charter District Bond Guarantee Program. The change to the State Law Capacity became effective on February 1, 2016. At its November 2016 meeting, the SBOE again voted to increase the State Law Capacity and, in accordance with applicable requirements for the modification of SDBGP and CDBGP Rules, a second and final vote to approve the increase in the State Law Capacity occurred on February 3, 2017.As a result, the State Law Capacity increased from 3.25 times the cost value multiplier to 3.50 times effective March 1, 2017. The State Law Capacity increased from $118,511,255,268 on August 31, 2018 to $123,509,204,770 on August 31, 2019 (but at such date the IRS Limit was lower, $117,318,653,038, so it is the currently effective capacity limit for the Fund).

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Since July 1991, when the SBOE amended the Guarantee Program Rules to broaden the range of bonds that are eligible for guarantee under the Guarantee Program to encompass most Texas school district bonds, the principal amount of bonds guaranteed under the Guarantee Program has increased sharply. In addition, in recent years a number of factors have caused an increase in the amount of bonds issued by school districts in the State. See the table “Permanent School Fund Guaranteed Bonds” below. Effective September 1,2009, the Act provides that the SBOE may annually establish a percentage of the cost value of the Fund to be reserved from use in guaranteeing bonds. The capacity of the Guarantee Program in excess of any reserved portion is referred to herein as the “Capacity Reserve.” The SDBGP Rules provide for a minimum Capacity Reserve for the overall Guarantee Program of no less than 5%, and provide that the amount of the Capacity Reserve may be increased by a majority vote of the SBOE. The CDBGP Rules provide for an additional 5% reserve of CDBGP capacity. The Commissioner is authorized to change the Capacity Reserve, which decision must be ratified or rejected by the SBOE at its next meeting following any change made by the Commissioner. The current Capacity Reserve is noted in the monthly updates with respect to the capacity of the Guarantee Program on the TEA web site at http://tea.texas.gov/Finance_and_Grants/Permanent_School_Fund/, which are also filed with the MSRB. Based upon historical performance of the Fund, the legal restrictions relating to the amount of bonds that may be guaranteed has generally resulted in a lower ratio of guaranteed bonds to available assets as compared to many other types of credit enhancements that may be available for Texas school district bonds and charter district bonds. However, the ratio of Fund assets to guaranteed bonds and the growth of the Fund in general could be adversely affected by a number of factors, including changes in the value of the Fund due to changes in securities markets, investment objectives of the Fund, an increase in bond issues by school districts in the State or legal restrictions on the Fund, changes in State laws that implement funding decisions for school districts and charter districts, which could adversely affect the credit quality of those districts, the implementation of the Charter District Bond Guarantee Program, or an increase in the calculation base of the Fund for purposes of making transfers to the ASF. It is anticipated that the issuance of the IRS Notice and the Proposed IRS Regulations will likely result in a substantial increase in the amount of bonds guaranteed under the Guarantee Program.The implementation of the Charter School Bond Guarantee Program is also expected to increase the amount of guaranteed bonds. The Act requires that the Commissioner prepare, and the SBOE approve, an annual report on the status of the Guarantee Program (the Annual Report). The State Auditor audits the financial statements of the PSF, which are separate from other State financial statements. The School District Bond Guarantee Program

The School District Bond Guarantee Program requires an application be made by a school district to the Commissioner for a guarantee of its bonds. If the conditions for the School District Bond Guarantee Program are satisfied, the guarantee becomes effective upon approval of the bonds by the Attorney General and remains in effect until the guaranteed bonds are paid or defeased, by a refunding or otherwise. In the event of default, holders of guaranteed school district bonds will receive all payments due from the corpus of the PSF. Following a determination that a school district will be or is unable to pay maturing or matured principal or interest on any guaranteed bond, the Act requires the school district to notify the Commissioner not later than the fifth day before the stated maturity date of such bond or interest payment. Immediately following receipt of such notice, the Commissioner must cause to be transferred from the appropriate account in the PSF to the Paying Agent/Registrar an amount necessary to pay the maturing or matured principal and interest. Upon receipt of funds for payment of such principal or interest, the Paying Agent/Registrar must pay the amount due and forward the canceled bond or evidence of payment of the interest to the State Comptroller of Public Accounts (the “Comptroller”). The Commissioner will instruct the Comptroller to withhold the amount paid, plus interest, from the first State money payable to the school district. The amount withheld pursuant to this funding “intercept” feature will be deposited to the credit of the PSF. The Comptroller must hold such canceled bond or evidence of payment of the interest on behalf of the PSF. Following full reimbursement of such payment by the school district to the PSF with interest, the Comptroller will cancel the bond or evidence of payment of the interest and forward it to the school district. The Act permits the Commissioner to order a school district to set a tax rate sufficient to reimburse the PSF for any payments made with respect to guaranteed bonds, and also sufficient to pay future payments on guaranteed bonds, and provides certain enforcement mechanisms to the Commissioner, including the appointment of a board of managers or annexation of a defaulting school district to another school district. If a school district fails to pay principal or interest on a bond as it is stated to mature, other amounts not due and payable are not accelerated and do not become due and payable by virtue of the district’s default. The School District Bond Guarantee Program does not apply to the payment of principal and interest upon redemption of bonds, except upon mandatory sinking fund redemption, and does not apply to the obligation, if any, of a school district to pay a redemption premium on its guaranteed bonds. The guarantee applies to all matured interest on guaranteed school district bonds, whether the bonds were issued with a fixed or variable interest rate and whether the interest rate changes as a result of an interest reset provision or other bond order provision requiring an interest rate change. The guarantee does not extend to any obligation of a school district under any agreement with a third party relating to guaranteed bonds that is defined or described in State law as a “bond enhancement agreement” or a “credit agreement,” unless the right to payment o f such third party is directly as a result of such third party being a bondholder. In the event that two or more payments are made from the PSF on behalf of a district, the Commissioner shall request the Attorney General to institute legal action to compel the district and its officers, agents and employees to comply with the duties required of them by law in respect to the payment of guaranteed bonds.

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Generally, the SDBGP Rules limit guarantees to certain types of notes and bonds, including, with respect to refunding bonds issued by school districts, a requirement that the bonds produce debt service savings, and that bonds issued for capital facilities of school districts must have been voted as unlimited tax debt of the issuing district. The Guarantee Program Rules include certain accreditation criteria for districts applying for a guarantee of their bonds, and limit guarantees to districts that have less than the amount of annual debt service per average daily attendance that represents the 90th percentile of annual debt service per average daily attendance for all school districts, but such limitation will not apply to school districts that have enrollment growth of at least 25% over the previous five school years. The SDBGP Rules are codified in the Texas Administrative Code at 19 TAC section 33.65, and are available at http://ritter.tea.state.tx.us/rules/tac/chapter033/ch033a.html#33.65. The Charter District Bond Guarantee Program

The Charter District Bond Guarantee Program became effective March 3, 2014. The SBOE published final regulations in the Texas Register that provide for the administration of the Charter District Bond Guarantee Program (the “CDBGP Rules”). The CDBGP Rules are codified at 19 TAC section 33.67, and are available at http://ritter.tea.state.tx.us/rules/tac/chapter033/ch033a.html#33.67. The Charter District Bond Guarantee Program has been authorized through the enactment of amendments to the Act, which provide that a charter holder may make application to the Commissioner for designation as a “charter district” and for a guarantee by the PSF under the Act of bonds issued on behalf of a charter district by a non-profit corporation. If the conditions for the Charter District Bond Guarantee Program are satisfied, the guarantee becomes effective upon approval of the bonds by the Attorney General and remains in effect until the guaranteed bonds are paid or defeased, by a refunding or otherwise. As of March 20, 2020 (the most recent date for which data is available), the percentage of students enrolled in open-enrollment charter schools (excluding charter schools authorized by school districts) to the total State scholastic census was approximately 6.15%. At March 24, 2020, there were 183 active open-enrollment charter schools in the State and there were 790 charter school campuses operating under such charters (though as of such date, four of such campuses are not currently serving students for various reasons). Section 12.101, Texas Education Code, as amended by the Legislature in 2013, limits the number of charters that the Commissioner may grant to 215 charters as of the end of fiscal year 2014, with the number increasing in each fiscal year thereafter through 2019 to a total number of 305 charters. While legislation limits the number of charters that may be granted, it does not limit the number of campuses that may operate under a particular charter. For information regarding the capacity of the Guarantee Program, see “Capacity Limits for the Guarantee Program.” The Act provides that the Commissioner may not approve the guarantee of refunding or refinanced bonds under the Charter District Bond Guarantee Program in a total amount that exceeds one-half of the total amount available for the guarantee of charter district bonds under the Charter District Bond Guarantee Program. In accordance with the Act, the Commissioner may not approve charter district bonds for guarantee if such guarantees will result in lower bond ratings for public school district bonds that are guaranteed under the School District Bond Guarantee Program. To be eligible for a guarantee, the Act provides that a charter district's bonds must be approved by the Attorney General, have an unenhanced investment grade rating from a nationally recognized investment rating firm, and satisfy a limited investigation conducted by the TEA. The Charter District Bond Guarantee Program does not apply to the payment of principal and interest upon redemption of bonds, except upon mandatory sinking fund redemption, and does not apply to the obligation, if any, of a charter district to pay a redemption premium on its guaranteed bonds. The guarantee applies to all matured interest on guaranteed charter district bonds, whether the bonds were issued with a fixed or variable interest rate and whether the interest rate changes as a result of an interest reset provision or other bond resolution provision requiring an interest rate change. The guarantee does not extend to any obligation of a charter district under any agreement with a third party relating to guaranteed bonds that is defined or described in State law as a “bond enhancement agreement” or a “credit agreement,” unless the right to payment of such third party is directly as a result of such third party being a bondholder. The Act provides that immediately following receipt of notice that a charter district will be or is unable to pay maturing or matured principal or interest on a guaranteed bond, the Commissioner is required to instruct the Comptroller to transfer from the Charter District Reserve Fund to the district's paying agent an amount necessary to pay the maturing or matured principal or interest. If money in the Charter District Reserve Fund is insufficient to pay the amount due on a bond for which a notice of default has been received, the Commissioner is required to instruct the Comptroller to transfer from the PSF to the district's paying agent the amount necessary to pay the balance of the unpaid maturing or matured principal or interest. If a total of two or more payments are made under the Charter District Bond Guarantee Program on charter district bonds and the Commissioner determines that the charter district is acting in bad faith under the program, the Commissioner may request the Attorney General to institute appropriate legal action to compel the charter district and its officers, agents, and employees to comply with the duties required of them by law in regard to the guaranteed bonds. As is the case with the School District Bond Guarantee Program, the Act provides a funding “intercept” feature that obligates the Commissioner to instruct the Comptroller to withhold the amount paid with respect to the Charter District Bond Guarantee Program, plus interest, from the first State money payable to a charter district that fails to make a guaranteed payment on its bonds. The amount withheld will be deposited, first, to the credit of the PSF, and then to restore any amount drawn from the Charter District Reserve Fund as a result of the non-payment. The CDBGP Rules provide that the PSF may be used to guarantee bonds issued for the acquisition, construction, repair, or renovation of an educational facility for an open-enrollment charter holder and equipping real property of an open-enrollment charter school and/or to refinance promissory notes executed by an open-enrollment charter school, each in an amount in excess of $500,000 the proceeds of which loans were used for a purpose described above (so-called new money bonds) or for refinancing bonds previously issued for the charter school that were approved by the attorney general (so-called refunding bonds). Refunding bonds may not be guaranteed under the Charter District Bond Guarantee Program if they do not result in a present value savings to the charter holder.

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The CDBGP Rules provide that an open-enrollment charter holder applying for charter district designation and a guarantee of its bonds under the Charter District Bond Guarantee Program satisfy various provisions of the regulations, including the following: It must (i) have operated at least one open-enrollment charter school with enrolled students in the State for at least three years; (ii) agree that the bonded indebtedness for which the guarantee is sought will be undertaken as an obligation of all entities under common control of the open-enrollment charter holder, and that all such entities will be liable for the obligation if the open-enrollment charter holder defaults on the bonded indebtedness, provided, however, that an entity that does not operate a charter school in Texas is subject to this provision only to the extent it has received state funds from the open-enrollment charter holder; (iii) have had completed for the past three years an audit for each such year that included unqualified or unmodified audit opinions; and (iv) have received an investment grade credit rating within the last year. Upon receipt of an application for guarantee under the Charter District Bond Guarantee Program, the Commissioner is required to conduct an investigation into the financial status of the applicant charter district and of the accreditation status of all open-enrollment charter schools operated under the charter, within the scope set forth in the CDBGP Rules. Such financial investigation must establish that an applying charter district has a historical debt service coverage ratio, based on annual debt service, of at least 1.1 for the most recently completed fiscal year, and a projected debt service coverage ratio, based on projected revenues and expenses and maximum annual debt service, of at least 1.2. The failure of an open-enrollment charter holder to comply with the Act or the applicable regulations, including by making any material misrepresentations in the charter holder's application for charter district designation or guarantee under the Charter District Bond Guarantee Program, constitutes a material violation of the open-enrollment charter holder's charter. From time to time, TEA has limited new guarantees under the Charter District Bond Guarantee Program to conform to capacity limits specified by the Act. Legislation enacted during the Legislature’s 2017 regular session modified the manner of calculating the capacity of the Charter District Bond Guarantee Program (the “CDBGP Capacity”), which further increased the amount of the CDBGP Capacity, beginning with State fiscal year 2018, but that provision of the law does not increase overall Program capacity, it merely allocates capacity between the School District Bond Guarantee Program and the Charter District Bond Guarantee Program. See “Capacity Limits for the Guarantee Program” and “2017 Legislative Changes to the Charter District Bond Guarantee Program.” Other factors that could increase the CDBGP Capacity include Fund investment performance, future increases in the Guarantee Program multiplier, changes in State law that govern the calculation of the CDBGP Capacity, as described below, growth in the relative percentage of students enrolled in open-enrollment charter schools to the total State scholastic census, legislative and administrative changes in funding for charter districts, changes in level of school district or charter district participation in the Program, or a combination of such circumstances. 2017 Legislative Changes to the Charter District Bond Guarantee Program

The CDBGP Capacity is established by the Act. During the 85th Texas Legislature, which concluded on May 29, 2017, Senate Bill 1480 (“SB 1480”) was enacted. The complete text of SB 1480 can be found at http://www.capitol.state.tx.us/tlodocs/85R/billtext/pdf/SB01480F.pdf#navpanes=0. SB 1480 modified how the CDBGP Capacity wil l be established under the Act effective as of September 1, 2017, and made other substantive changes to the Act that affects the Charter District Bond Guarantee Program. Prior to the enactment of SB 1480, the CDBGP Capacity was calculated as the State Capacity Limit less the amount of outstanding bond guarantees under the Guarantee Program multiplied by the percentage of charter district scholastic population relative to the total public school scholastic population. As of August 31, 2019, the amount of outstanding bond guarantees represented 71.94% of the IRS Limit (which is currently the applicable capacity limit) for the Guarantee Program (based on unaudited data). SB 1480 amended the CDBGP Capacity calculation so that the State Capacity Limit is multiplied by the percentage of charter district scholastic population relative to the total public school scholastic population prior to the subtraction of the outstanding bond guarantees, thereby potentially substantially increasing the CDBGP Capacity. However, certain provisions of SB 1480, described below, and other additional factors described herein, could result in less than the maximum amount of the potential increase provided by SB 1480 being implemented by the SBOE or otherwise used by charter districts. Still other factors used in determining the CDBGP Capacity, such as the percentage of the charter district scholastic population to the overall public school scholastic population, could, in and of itself, increase the CDBGP Capacity, as that percentage has grown from 3.53% in September, 2012 to 5.85% in February 2019. TEA is unable to predict how the ratio of charter district students to the total State scholastic population will change over time. SB 1480 provides that the implementation of the new method of calculating the CDBGP Capacity will begin with the State fiscal year that commences September 1, 2021 (the State’s fiscal year 2022). However, for the intervening four fiscal years, beginning with fiscal year 2018, SB 1480 provides that the SBOE may establish a CDBGP Capacity that increases the amount of charter district bonds that may be guaranteed by up to a cumulative 20% in each fiscal year (for a total maximum increase of 80% in fiscal year 2021) as compared to the capacity figure calculated under the Act as of January 1, 2017. However, SB 1480 provides that in making its annual determination of the magnitude of an increase for any year, the SBOE may establish a lower (or no) increase if the SBOE determines that an increase in the CDBGP Capacity would likely result in a negative impact on the bond ratings for the Bond Guarantee Program (see “Ratings of Bonds Guaranteed Under the Guarantee Program”) or if one or more charter districts default on payment of principal or interest on a guaranteed bond, resulting in a negative impact on the bond ratings of the Bond Guarantee Program. The provisions of SB 1480 that provide for discretionary, incremental increases in the CDBGP expire September 1, 2022. If the SBOE makes a determination for any year based upon the potential ratings impact on the Bond Guarantee Program and modifies the increase that would otherwise be implemented under SB 1480 for that year, the SBOE may also make appropriate adjustments to the schedule for subsequent years to reflect the modification, provided that the CDBGP Capacity for any year may not exceed the limit provided in the schedule set forth in SB 1480. As a result of SB 1480, the amount of charter district bonds eligible for guarantee in fiscal years 2018, 2019 and 2020 increased by the full 20% increase permitted by SB 1480, which increased the relative capacity of the Charter District Bond Guarantee Program to the School District Bond Guarantee Program for those fiscal years.

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Taking into account the enactment of SB 1480 and the increase in the CDBGP Capacity effected thereby, at the Winter 2018 meeting the SBOE determined not to implement a previously approved multiplier increase to 3.75 times market value, opting to increase the multiplier to 3.50 times effective in late March 2018. In addition to modifying the manner of determining the CDBGP Capacity, SB 1480 provides that the Commissioner, in making a determination as to whether to approve a guarantee for a charter district, may consider any additional reasonable factor that the Commissioner determines to be necessary to protect the Bond Guarantee Program or minimize risk to the PSF, including: (1) whether the charter district had an average daily attendance of more than 75 percent of its student capacity for each of the preceding three school years, or for each school year of operation if the charter district has not been in operation for the preceding three school years; (2) the performance of the charter district under certain performance criteria set forth in Education Code Sections 39.053 and 39.054; and (3) any other indicator of performance that could affect the charter district's financial performance. Also, SB 1480 provides that the Commissioner's investigation of a charter district application for guarantee may include an evaluation of whether the charter district bond security documents provide a security interest in real property pledged as collateral for the bond and the repayment obligation under the proposed guarantee. The Commissioner may decline to approve the application if the Commissioner determines that sufficient security is not provided. The Act and the CDBGP Rules previously required the Commissioner to make an investigation of the accreditation status and certain financial criteria for a charter district applying for a bond guarantee, which remain in place. Since the initial authorization of the Charter District Bond Guarantee Program, the Act has established a bond guarantee reserve fund in the State treasury (the “Charter District Reserve Fund”). Formerly, the Act provided that each charter district that has a bond guaranteed must annually remit to the Commissioner, for deposit in the Charter District Reserve Fund, an amount equal to 10 percent of the savings to the charter district that is a result of the lower interest rate on its bonds due to the guarantee by the PSF. SB 1480 modified the Act insofar as it pertains to the Charter District Reserve Fund. Effective September 1, 2017, the Act provides that a charter district that has a bond guaranteed must remit to the Commissioner, for deposit in the Charter District Reserve Fund, an amount equal to 20 percent of the savings to the charter district that is a result of the lower interest rate on the bond due to the guarantee by the PSF. The amount due shall be paid on receipt by the charter district of the bond proceeds. However, the deposit requirement will not apply if the balance of the Charter District Reserve Fund is at least equal to three percent (3.00%) of the total amount of outstanding guaranteed bonds issued by charter districts. As of February 29, 2020, the Charter District Reserve Fund contained $35,183,564, which represented approximately 1.49% of the guaranteed charter district bonds. SB 1480 also authorized the SBOE to manage the Charter District Reserve Fund in the same manner as it manages the PSF. Previously, the Charter District Reserve Fund was held by the Comptroller, but effective April 1,2018, the management of the Reserve Fund was transferred to the PSF division of TEA, where it will be held and invested as a non-commingled fund under the administration of the PSF staff. Charter District Risk Factors

Open-enrollment charter schools in the State may not charge tuition and, unlike school districts, charter districts have no taxing power.Funding for charter district operations is largely from amounts appropriated by the Legislature. The amount of such State payments a charter district receives is based on a variety of factors, including the enrollment at the schools operated by a charter district. The overall amount of education aid provided by the State for charter schools in any year is also subject to appropriation by the Legislature. The Legislature may base its decisions about appropriations for charter schools on many factors, including the State's economic performance.Further, because some public officials, their constituents, commentators and others have viewed charter schools as controversial, political factors may also come to bear on charter school funding, and such factors are subject to change. Other than credit support for charter district bonds that is provided to qualifying charter districts by the Charter District Bond Guarantee Program, State funding for charter district facilities construction is limited to a program established by the Legislature in 2017, which provides $60 million per year for eligible charter districts with an acceptable performance rating for a variety of funding purposes, including for lease or purchase payments for instructional facilities. Since State funding for charter facilities is so limited, charter schools generally issue revenue bonds to fund facility construction and acquisition, or fund facilities from cash flows of the school. Some charter districts have issued non-guaranteed debt in addition to debt guaranteed under the Charter District Bond Guarantee Program, and such non-guaranteed debt is likely to be secured by a deed of trust covering all or part of the charter district’s facilities. In March 2017, the TEA began requiring charter districts to provide the TEA with a lien against charter district property as a condition to receiving a guarantee under the Charter District Bond Guarantee Program. However, charter district bonds issued and guaranteed under the Charter District Bond Guarantee Program prior to the implementation of the new requirement did not have the benefit of a security interest in real property, although other existing debts of such charter districts that are not guaranteed under the Charter District Bond Guarantee Program may be secured by real property that could be foreclosed on in the event of a bond default. The maintenance of a State-granted charter is dependent upon on-going compliance with State law and TEA regulations, and TEA monitors compliance with applicable standards. TEA has a broad range of enforcement and remedial actions that it can take as corrective measures, and such actions may include the loss of the State charter, the appointment of a new board of directors to govern a charter district, the assignment of operations to another charter operator, or, as a last resort, the dissolution of an open-enrollment charter school. As described above, the Act includes a funding “intercept” function that applies to both the School District Bond Guarantee Program and the Charter District Bond Guarantee Program. However, school districts are viewed as the “educator of last resort” for students residing in the geographical territory of the district, which makes it unlikely that State funding for those school districts would be discontinued, although the TEA can require the dissolution and merger into another school district if necessary to ensure sound education and financial management of a school district. That is not the case with a charter district, however, and open-enrollment charter schools in the State have been dissolved by TEA from time to time. If a charter district that has bonds outstanding that are guaranteed by the Charter District Bond Guarantee Program should be dissolved, debt service on guaranteed bonds of the district would continue to be paid to bondholders in accordance with the Charter District Bond Guarantee Program, but there would be no funding available for reimbursement of the PSF

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by the Comptroller for such payments. As described under “The Charter District Bond Guarantee Program,” the Act establishes a Charter District Reserve Fund, which could in the future be a significant reimbursement resource for the PSF.

Infectious Disease Outbreak

A respiratory disease named “2019 novel coronavirus” (“COVID-19”) has recently spread to many parts of the world, including Texas and elsewhere in the U.S. On March 13, 2020, the U.S. president declared a national emergency and the Governor of Texas (the “Governor”) declared COVID-19 as a statewide public health disaster (the “COVID-19 Declarations”). Subsequent actions by the Governor imposed temporary restrictions on certain businesses and ordered all schools in the State to temporarily close. This situation is rapidly developing; for additional information on these events in the State, reference is made to the website of the Governor, https://gov.texas.gov/, and, with respect to public school events, the website of TEA, https://tea.texas.gov/texas-schools/safe-and-healthy-schools/coronavirus-covid-19-support-and-guidance.

Potential Impact of COVID-19 in the State and Investment Markets

The anticipated continued spread of COVID-19, and measures taken to prevent or reduce its spread, will likely adversely impact State,national and global economic activities and, accordingly, materially adversely impact the financial condition and performance of the State.The continued spread of COVID-19, and measures taken to prevent or reduce its spread, may also adversely affect the tax bases of school districts in the State, including districts that have bonds that are guaranteed under the Guarantee Program.

As noted herein, the PSF investments are in diversified investment portfolios and it is expected that the Fund will reflect the general performance returns of the markets in which it is invested. Stock values, crude oil prices and other investment categories in the U.S. and globally in which the Fund is invested or which provide income to the Fund, have seen significant volatility attributed to COVID-19 concerns, which could adversely affect the Fund's values.

TEA Continuity of Operations

Since 2007, Texas Labor Code Section 412.054 has required each State agency to develop and submit to the State Office of Risk Management an agency-level continuity of operations plan to keep the agency operational in case of disruptions to production, finance, administration or other essential operations. Such plans may be implemented during the occurrence or imminent threat of events such as extreme weather, natural disasters and infectious disease outbreaks. TEA has adopted a continuity of operations plan, which provides for, among other measures and conditions, steps to be taken to ensure performance of its essential missions and functions under such threats and conditions in the event of a pandemic event. TEA annually conducts risk assessments and risk impact analysis that include stress testing and availability analysis of system resources, including systems that enable TEA employees to work remotely, as is occurring as a result of the COVID-19 declarations. As noted above, under “The School District Bond Guarantee Program,” the Guarantee Program is in significant part an intercept program whereby State funding for school districts and charter districts reimburse the Fund for any guarantee payment from the Fund for a non-performing district. In addition to the continuity of operations plan provisions noted above, the Fund maintains cash positions in its portfolios that are intended to provide liquidity to the Fund for payments under the Guarantee Program pending reimbursement of the Fund by the Comptroller. Fund management is of the view that its liquidity position,which changes from time to time in light of then current circumstances, is sufficient for payment of claims made on the Guarantee Program.

Impact of COVID-19 on School Districts and Charter Districts

TEA cannot predict whether any school or charter district may experience short- or longer-term cash flow emergencies as a direct or indirect effect of COVID-19 that would require a payment from the PSF to be made to a paying agent for a guaranteed bond. Most school district bonds in the State are issued as fixed rate debt, with semiannual payments in February and August. Taxes levied by school districts for payment of bonds are generally collected by the end of January in each year. Consequently, PSF management is of the view that scheduled bond payments for school districts for the 2020 calendar year are unlikely to be affected by COVID-19. TEA has issued guidance to school districts and charter districts regarding, among other matters, the closure of schools, and TEA has established waivers for payment to school districts and charter districts, as such payments are in large part based on school attendance. Those waivers are intended to provide continued funding during the period of closure, although certain of the waivers require schools to provide on-line or at home curriculum in order to benefit from waivers. Reference is made to "Charter School Risk Factors," herein for a description of unique circumstances that pertain to the funding of charter districts.

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Ratings of Bonds Guaranteed Under the Guarantee Program

Moody’s Investors Service, S&P Global Ratings and Fitch Ratings rate bonds guaranteed by the PSF “Aaa,” “AAA” and “AAA,” respectively. Not all districts apply for multiple ratings on their bonds, however. See “OTHER PERTINENT INFORMATION - Ratings” herein. Valuation of the PSF and Guaranteed Bonds

Permanent School Fund Valuations

Fiscal Year Ended 8/31

Book Value(1)

Market Value(1)

2015 $29,081,052,900 $36,196,265,273

2016 30,128,037,903 37,279,799,335

2017 31,870,581,428 41,438,672,573

2018 33,860,358,647 44,074,197,940

2019(2) 35,288,344,219 46,464,447,981

________ (1) SLB managed assets are included in the market value and book value of the Fund. In determining the market value of the PSF from time to time during a fiscal year, the TEA uses current, unaudited values for TEA managed investment portfolios and cash held by the SLB. With respect to SLB managed assets shown in the table above, market values of land and mineral interests, internally managed real estate, investments in externally managed real estate funds and cash are based upon information reported to the PSF by the SLB.The SLB reports that information to the PSF on a quarterly basis. The valuation of such assets at any point in time is dependent upon a variety of factors, including economic conditions in the State and nation in general, and the values of these assets, and, in particular, the valuation of mineral holdings administered by the SLB, can be volatile and subject to material changes from period to period. (2) At August 31, 2019, mineral assets, sovereign and other lands and internally managed discretionary real estate, external discretionary real estate investments, domestic equities, and cash managed by the SLB had book values of approximately $13.4 million, $216.7 million, $3,640.2 million, $7.5 million, and $4,457.3 million, respectively, and market values of approximately $3,198.2 million, $619.7 million, $3,927.6 million, $1.3 million, and $4,457.3 million, respectively. At February 29, 2020, the PSF had a book value of $35,908,691,818 and a market value of $46,992,040,588. February 29, 2020 values are based on unaudited data, which is subject to adjustment.

Permanent School Fund Guaranteed Bonds

At 8/31 Principal Amount(1)

2015 $63,955,449,047 2016 68,303,328,445 2017 74,266,090,023 2018 79,080,901,069 2019 84,397,900,203(2)

________ (1) Represents original principal amount; does not reflect any subsequent accretions in value for compound interest bonds (zero coupon securities). The amount shown excludes bonds that have been refunded and released from the Guarantee Program. The TEA does not maintain records of the accreted value of capital appreciation bonds that are guaranteed under the Guarantee Program. (2) As of August 31, 2019 (the most recent date for which such data is available), the TEA expected that the principal and interest to be paid by school districts and charter districts over the remaining life of the bonds guaranteed by the Guarantee Program was $133,188,149,265, of which $48,790,249,062 represents interest to be paid. As shown in the table above, at August 31, 2019, there were $84,397,900,203 in principal amount of bonds guaranteed under the Guarantee Program, and using the IRS Limit at that date of $117,318,653,038 (the IRS Limit is currently the lower of the two federal and State capacity limits of Program capacity), 97.22% of Program capacity was available to the School District Bond Guarantee Program and 2.78% was available to the Charter District Bond Guarantee Program.

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Permanent School Fund Guaranteed Bonds by Category(1)

School District Bonds Charter District Bonds Totals

Fiscal Year

Ended 8/31

No. of Issues

Principal Amount

No. of Issues

Principal Amount

No. of Issues

Principal Amount

2015 3,089 $63,197,514,047 28 $ 757,935,000 3,117 $63,955,449,047

2016 3,244 67,342,303,445 35 961,025,000 3,279 68,303,328,445

2017 3,253 72,884,480,023 40 1,381,610,000 3,293 74,266,090,023

2018 3,249 77,647,966,069 44 1,432,935,000 3,293 79,080,901,069 2019(2) 3,297 82,537,755,203 49 1,860,145,000 3,346 84,397,900,203

________ (1) Represents original principal amount; does not reflect any subsequent accretions in value for compound interest bonds (zero coupon securities). The amount shown excludes bonds that have been refunded and released from the Guarantee Program. (2) At February 29, 2020 (based on unaudited data, which is subject to adjustment), there were $87,684,853,251 of bonds guaranteed under the Guarantee Program, representing 3,361 school district issues, aggregating $85,321,228,251 in principal amount and 54 charter district issues, aggregating $2,363,625,000 in principal amount. At February 29, 2020, the capacity allocation of the Charter District Bond Guarantee Program was $4,551,091,422 (based on unaudited data, which is subject to adjustment). Discussion and Analysis Pertaining to Fiscal Year Ended August 31, 2019

The following discussion is derived from the Annual Report for the year ended August 31, 2019, including the Message of the Executive Administrator of the Fund and the Management’s Discussion and Analysis contained therein. Reference is made to the Annual Report, as filed with the MSRB, for the complete Message and MD&A. Investment assets managed by the fifteen member SBOE are referred to throughout this MD&A as the PSF(SBOE) assets. As of August 31, 2019, the Fund’s land, mineral rights and certain real assets are managed by the three-member SLB and these assets are referred to throughout as the PSF(SLB) assets. The current PSF asset allocation policy includes an allocation for real estate investments, and as such investments are made, and become a part of the PSF investment portfolio, those investments will be managed by the SBOE and not the SLB. At the end of fiscal 2019, the Fund balance was $46.5 billion, an increase of $2.4 billion from the prior year. This increase is primarily due to overall increases in value of all asset classes in which the Fund has invested and restatements of fund balance. During the year, the SBOE continued implementing the long-term strategic asset allocation, diversifying the PSF(SBOE) to strengthen the Fund. The asset allocation is projected to increase returns over the long run while reducing risk and portfolio return volatility. The PSF(SBOE) annual rates of return for the one-year, five-year, and ten-year periods ending August 31, 2019, net of fees, were 4.17%, 5.25% and 8.18%, respectively (total return takes into consideration the change in the market value of the Fund during the year as well as the interest and dividend income generated by the Fund’s investments). In addition, the SLB continued its shift into externally managed real asset investment funds, and the one-year, five-year, and ten-year annualized total returns for the PSF(SLB) externally managed real assets, net of fees and including cash, were 5.84%, 6.13%, and 6.41%, respectively. The market value of the Fund’s assets is directly impacted by the performance of the various financial markets in which the assets are invested. The most important factors affecting investment performance are the asset allocation decisions made by the SBOE and SLB.The current SBOE long term asset allocation policy allows for diversification of the PSF(SBOE) portfolio into alternative asset classes whose returns are not as positively correlated as traditional asset classes. The implementation of the long term asset allocation will occur over several fiscal years and is expected to provide incremental total return at reduced risk. As of August 31, 2019, the PSF(SBOE) portion of the Fund had diversified into emerging market and large cap international equities, absolute return funds, real estate, private equity, risk parity, real return Treasury Inflation-Protected Securities, real return commodities, and emerging market debt. As of August 31, 2019, the SBOE has approved and the Fund made capital commitments to externally managed real estate investment funds in a total amount of $5.1 billion and capital commitments to private equity limited partnerships for a total of $6.3 billion. Unfunded commitments at August 31, 2019, totaled $1.9 billion in real estate investments and $2.3 billion in private equity investments. The PSF(SLB) portfolio is generally characterized by three broad categories: (1) discretionary real assets investments, (2) sovereign and other lands, and (3) mineral interests. Discretionary real assets investments consist of externally managed real estate, infrastructure, and energy/minerals investment funds; internally managed direct real estate investments, and cash. Sovereign and other lands consist primarily of the lands set aside to the PSF when it was created. Mineral interests consist of all of the minerals that are associated with PSF lands. The investment focus of PSF(SLB) discretionary real assets investments has shifted from internally managed direct real estate investments to externally managed real assets investment funds. The PSF(SLB) makes investments in certain limited partnerships that legally commit it to possible future capital contributions. At August 31, 2019, the remaining commitments totaled approximately $2.5 billion.

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The PSF(SBOE)’s investment in domestic large cap, domestic small/mid cap, international large cap, and emerging market equity securities experienced returns, net of fees, of 3.14%, -8.99%, -2.93%, and -4.15%, respectively, during the fiscal year ended August 31, 2019. The PSF(SBOE)’s investment in domestic fixed income securities produced a return of 10.54% during the fiscal year and absolute return investments yielded a return of 2.28%. The PSF(SBOE) real estate and private equity investments returned 7.22% and 11.93%, respectively. Risk parity assets produced a return of 10.89%, while real return assets yielded 0.71%. Emerging market debt produced a return of 10.40%. Combined, all PSF(SBOE) asset classes produced an investment return, net of fees, of 4.17% for the fiscal year ended August 31, 2019, out-performing the benchmark index of 3.76% by approximately 41 basis points. All PSF(SLB) externally managed investments (including cash) returned 6.41% net of fees for the fiscal year ending August 31, 2019. For fiscal year 2019, total revenues, inclusive of unrealized gains and losses and net of security lending rebates and fees, totaled $3.7 billion, a decrease of $0.3 billion from fiscal year 2018 earnings of $4.0 billion. This decrease reflects the performance of the securities markets in which the Fund was invested in fiscal year 2019. In fiscal year 2019, revenues earned by the Fund included lease payments, bonuses and royalty income received from oil, gas and mineral leases; lease payments from commercial real estate; surface lease and easement revenues; revenues from the resale of natural and liquid gas supplies; dividends, interest, and securities lending revenues; the net change in the fair value of the investment portfolio; and, other miscellaneous fees and income. Expenditures are paid from the Fund before distributions are made under the total return formula. Such expenditures include the costs incurred by the SLB to manage the land endowment, as well as operational costs of the Fund, including external management fees paid from appropriated funds. Total operating expenditures, net of security lending rebates and fees, decreased 10.0% for the fiscal year ending August 31, 2019. This decrease is primarily attributable to a decrease in PSF(SLB) quantities of purchased gas for resale in the State Energy Management Program, which is administered by the SLB as part of the Fund. The Fund supports the public school system in the State by distributing a predetermined percentage of its asset value to the ASF. For fiscal years 2018 and 2019, the distribution from the SBOE to the ASF totaled $1.2 billion and $1.2 billion, respectively. Distributions from the SLB to the ASF for fiscal years 2018 and 2019 totaled $0 and $300 million, respectively. At the end of the 2019 fiscal year, PSF assets guaranteed $84.4 billion in bonds issued by 863 local school districts and charter districts, the latter of which entered into the Program during the 2014 fiscal year. Since its inception in 1983, the Fund has guaranteed 7,443 school district and charter district bond issues totaling $186.2 billion in principal amount. During the 2019 fiscal year, the number of outstanding issues guaranteed under the Guarantee Program totaled 3,346. The dollar amount of guaranteed school and charter bond issues outstanding increased by $5.3 billion or 6.7%. The State Capacity Limit increased by $5.0 billion, or 4.2%, during fiscal year 2019 due to continued growth in the cost basis of the Fund used to calculate that Program capacity limit. The effective capacity of the Program did not increase during fiscal year 2019 as the IRS Limit was reached during the prior fiscal year, and it is the lower of the two State and federal capacity limits for the Program. 2011 and 2019 Constitutional Amendments

On November 8, 2011, a referendum was held in the State as a result of legislation enacted that year that proposed amendments to various sections of the Texas Constitution pertaining to the PSF. At that referendum, voters of State approved non-substantive changes to the Texas Constitution to clarify references to the Fund, and, in addition, approved amendments that effected an increase to the base amount used in calculating the Distribution Rate from the Fund to the ASF, and authorized the SLB to make direct transfers to the ASF, as described below. The amendments approved at the referendum included an increase to the base used to calculate the Distribution Rate by adding to the calculation base certain discretionary real assets and cash in the Fund that is managed by entities other than the SBOE (at present, by the SLB). The value of those assets were already included in the value of the Fund for purposes of the Guarantee Program, but prior to the amendment had not been included in the calculation base for purposes of making transfers from the Fund to the ASF. While the amendment provided for an increase in the base for the calculation of approximately $2 billion, no new resources were provided for deposit to the Fund. As described under “The Total Return Constitutional Amendment” the SBOE is prevented from approving a Distribution Rate or making a pay out from the Fund if the amount distributed would exceed 6% of the average of the market value of the Fund, excluding real property in the Fund, but including discretionary real asset investments on the last day of each of the sixteen State fiscal quarters preceding the Regular Session of the Legislature that begins before that State fiscal biennium or if such pay out would exceed the Ten Year Total Return. If there are no reductions in the percentage established biennially by the SBOE to be the Distribution Rate, the impact of the increase in the base against which the Distribution Rate is applied will be an increase in the distributions from the PSF to the ASF. As a result, going forward, it may be necessary for the SBOE to reduce the Distribution Rate in order to preserve the corpus of the Fund in accordance with its management objective of preserving intergenerational equity. The Distribution Rates for the Fund were set at 3.5%, 2.5%, 4.2%, 3.3%, 3.5% and 3.7% for each of two year periods 2008-2009, 2010-2011, 2012-2013, 2014-2015, 2016-2017 and 2018-2019, respectively. In November 2018, the SBOE approved a $2.2 billion distribution to the ASF for State fiscal biennium 2020-2021, to be made in equal monthly increments of $92.2 million, which represents a 2.981% Distribution Rate for the biennium and a per student distribution of $220.97, based on 2018 preliminary student average daily attendance of 5,004,998. In making the 2020-2021 biennium distribution decision, the SBOE took into account a commitment of the SLB to transfer $10 million to the PSF in fiscal year 2020 and $45 million in fiscal year 2021.

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Changes in the Distribution Rate for each biennial period has been based on a number of financial and political reasons, as well as commitments made by the SLB in some years to transfer certain sums to the ASF. The new calculation base described above has been used to determine all payments to the ASF from the Fund beginning with the 2012-13 biennium. The broader base for the Distribution Rate calculation could increase transfers from the PSF to the ASF, although the effect of the broader calculation base has been somewhat offset since the 2014-2015 biennium by the establishment by the SBOE of somewhat lower Distribution Rates than for the 2012-2013 biennium. In addition, the changes made by the amendment that increased the calculation base that could affect the corpus of the Fund include the decisions that are made by the SLB or others that are, or may in the future be, authorized to make transfers of funds from the PSF to the ASF. The constitutional amendments approved on November 8, 2011 also provided authority to the GLO or any other entity (other than the SBOE) that has responsibility for the management of land or other properties of the PSF to determine whether to transfer an amount each year to the ASF from the revenue derived during the current year from such land or properties. Prior to November 2019, the amount authorized to be transferred to the ASF from the GLO was limited to $300 million per year. On November 5, 2019, a constitutional amendment was approved by State voters that increased the maximum transfer to the ASF to $600 million each year from the revenue derived during that year from the PSF from each of the GLO, the SBOE or any other entity that may have the responsibility to manage such properties (at present there are no such other entities). Any amount transferred to the ASF pursuant to this constitutional provision is excluded from the 6% Distribution Rate limitation applicable to SBOE transfers. The exercise of the increased authorization for such transfers is subject to the discretion of the GLO and the SBOE, and such transfers could be taken into account by the SBOE for purposes of its distributions to the ASF that are made pursuant to the Total Return Constitutional Amendment. However, future legal and/or financial analysis may be needed before the impact on the Fund of the constitutional change effected in November 2019 can be determined. Other Events and Disclosures

The State Investment Ethics Code governs the ethics and disclosure requirements for financial advisors and other service providers who advise certain State governmental entities, including the PSF. In accordance with the provisions of the State Investment Ethics Code, the SBOE periodically modifies its code of ethics, which occurred most recently in April 2018. The SBOE code of ethics includes prohibitions on sharing confidential information, avoiding conflict of interests and requiring disclosure filings with respect to contributions made or received in connection with the operation or management of the Fund. The code of ethics applies to members of the SBOE as well as to persons who are responsible by contract or by virtue of being a TEA PSF staff member for managing, investing, executing brokerage transactions, providing consultant services, or acting as a custodian of the PSF, and persons who provide investment and management advice to a member of the SBOE, with or without compensation under certain circumstances. The code of ethics is codified in the Texas Administrative Code at 19 TAC sections 33.5 et seq., and is available on the TEA web site at http://ritter.tea.state.tx.us/rules/tac/chapter033/ch033a.html#33.5. In addition, the GLO has established processes and controls over its administration of real estate transactions and is subject to provisions of the Texas Natural Resources Code and its own internal procedures in administering real estate transactions for assets it manages for the Fund. In the 2011 legislative session, the Legislature approved an increase of 31 positions in the full-time equivalent employees for the administration of the Fund, which was funded as part of an $18 million appropriation for each year of the 2012-13 biennium, in addition to the operational appropriation of $11 million for each year of the biennium. The TEA has begun increasing the PSF administrative staff in accordance with the 2011 legislative appropriation, and the TEA received an appropriation of $30.2 million for the administration of the PSF for fiscal years 2016 and 2017, respectively, and $30.4 million for each of the fiscal years 2018 and 2019.

As of August 31, 2019, certain lawsuits were pending against the State and/or the GLO, which challenge the Fund’s title to certain real property and/or past or future mineral income from that property, and other litigation arising in the normal course of the investment activities of the PSF. Reference is made to the Annual Report, when filed, for a description of such lawsuits that are pending, which may represent contingent liabilities of the Fund. PSF Continuing Disclosure Undertaking

The SBOE has adopted an investment policy rule (the “TEA Rule”) pertaining to the PSF and the Guarantee Program. The TEA Rule is codified in Section I of the TEA Investment Procedure Manual, which relates to the Guarantee Program and is posted to the TEA web site at http://tea.texas.gov/Finance_and_Grants/Texas_Permanent_School_Fund/Texas_Permanent_School_Fund_Disclosure_Statement_-_Bond_Guarantee_Program/. The most recent amendment to the TEA Rule was adopted by the SBOE on February 1, 2019, and is summarized below. Through the adoption of the TEA Rule and its commitment to guarantee bonds, the SBOE has made the following agreement for the benefit of the issuers, holders and beneficial owners of guaranteed bonds. The TEA (or its successor with respect to the management of the Guarantee Program) is required to observe the agreement for so long as it remains an “obligated person,” within the meaning of Rule 15c2-12, with respect to guaranteed bonds. Nothing in the TEA Rule obligates the TEA to make any filings or disclosures with respect to guaranteed bonds, as the obligations of the TEA under the TEA Rule pertain solely to the Guarantee Program.The issuer or an “obligated person” of the guaranteed bonds has assumed the applicable obligation under Rule 15c2-12 to make all disclosures and filings relating directly to guaranteed bonds, and the TEA takes no responsibility with respect to such undertakings. Under the TEA agreement, the TEA will be obligated to provide annually certain updated financial information and operating data, and timely notice of specified material events, to the MSRB.

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The MSRB has established the Electronic Municipal Market Access (“EMMA”) system, and the TEA is required to file its continuing disclosure information using the EMMA system. Investors may access continuing disclosure information filed with the MSRB at www.emma.msrb.org, and the continuing disclosure filings of the TEA with respect to the PSF can be found at https://emma.msrb.org/IssueView/Details/ER355077 or by searching for “Texas Permanent School Fund Bond Guarantee Program” on EMMA. Annual Reports

The TEA will annually provide certain updated financial information and operating data to the MSRB. The information to be updated includes all quantitative financial information and operating data with respect to the Guarantee Program and the PSF of the general type included in this Official Statement under the heading “THE PERMANENT SCHOOL FUND GUARANTEE PROGRAM.” The information also includes the Annual Report. The TEA will update and provide this information within six months after the end of each fiscal year. The TEA may provide updated information in full text or may incorporate by reference certain other publicly-available documents, as permitted by Rule 15c2-12. The updated information includes audited financial statements of, or relating to, the State or the PSF, when and if such audits are commissioned and available. Financial statements of the State will be prepared in accordance with generally accepted accounting principles as applied to state governments, as such principles may be changed from time to time, or such other accounting principles as the State Auditor is required to employ from time to time pursuant to State law or regulation. The financial statements of the Fund were prepared to conform to U.S. Generally Accepted Accounting Principles as established by the Governmental Accounting Standards Board. The Fund is reported by the State of Texas as a permanent fund and accounted for on a current financial resources measurement focus and the modified accrual basis of accounting. Measurement focus refers to the definition of the resource flows measured. Under the modified accrual basis of accounting, all revenues reported are recognized based on the criteria of availability and measurability. Assets are defined as available if they are in the form of cash or can be converted into cash within 60 days to be usable for payment of current liabilities. Amounts are defined as measurable if they can be estimated or otherwise determined. Expenditures are recognized when the related fund liability is incurred. The State’s current fiscal year end is August 31. Accordingly, the TEA must provide updated information by the last day of February in each year, unless the State changes its fiscal year. If the State changes its fiscal year, the TEA will notify the MSRB of the change. Event Notices

The TEA will also provide timely notices of certain events to the MSRB. Such notices will be provided not more than ten business days after the occurrence of the event. The TEA will provide notice of any of the following events with respect to the Guarantee Program: (1) principal and interest payment delinquencies; (2) non-payment related defaults, if such event is material within the meaning of the federal securities laws; (3) unscheduled draws on debt service reserves reflecting financial difficulties; (4) unscheduled draws on credit enhancements reflecting financial difficulties; (5) substitution of credit or liquidity providers, or their failure to perform; (6) adverse tax opinions, the issuance by the IRS of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB), or other material notices or determinations with respect to the tax-exempt status of the Guarantee Program, or other material events affecting the tax status of the Guarantee Program; (7) modifications to rights of holders of bonds guaranteed by the Guarantee Program, if such event is material within the meaning of the federal securities laws; (8) bond calls, if such event is material within the meaning of the federal securities laws, and tender offers; (9) defeasances; (10) release, substitution, or sale of property securing repayment of bonds guaranteed by the Guarantee Program, if such event is material within the meaning of the federal securities laws; (11) rating changes; (12) bankruptcy, insolvency, receivership, or similar event of the Guarantee Program (which is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent, or similar officer for the Guarantee Program in a proceeding under the United States Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the Guarantee Program, or if such jurisdiction has been assumed by leaving the existing governing body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement, or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the Guarantee Program); (13) the consummation of a merger, consolidation, or acquisition involving the Guarantee Program or the sale of all or substantially all of its assets, other than in the ordinary course of business, the entry into of a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; (14) the appointment of a successor or additional trustee with respect to the Guarantee Program or the change of name of a trustee, if such event is material within the meaning of the federal securities laws; (15) the incurrence of a financial obligation of the Guarantee Program, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a financial obligation of the Program, any of which affect security holders, if material; and (16) default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a financial obligation of the Guarantee Program, any of which reflect financial difficulties. (Neither the Act nor any other law, regulation or instrument pertaining to the Guarantee Program make any provision with respect to the Guarantee Program for bond calls, debt service reserves, credit enhancement, liquidity enhancement, early redemption or the appointment of a trustee with respect to the Guarantee Program.) In addition, the TEA will provide timely notice of any failure by the TEA to provide information, data, or financial statements in accordance with its agreement described above under “Annual Reports.” Availability of Information

The TEA has agreed to provide the foregoing information only to the MSRB and to transmit such information electronically to the MSRB in such format and accompanied by such identifying information as prescribed by the MSRB. The information is available from the MSRB to the public without charge at www.emma.msrb.org.

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Limitations and Amendments

The TEA has agreed to update information and to provide notices of material events only as described above. The TEA has not agreed to provide other information that may be relevant or material to a complete presentation of its financial results of operations, condition, or prospects or agreed to update any information that is provided, except as described above. The TEA makes no representation or warranty concerning such information or concerning its usefulness to a decision to invest in or sell Bonds at any future date. The TEA disclaims any contractual or tort liability for damages resulting in whole or in part from any breach of its continuing disclosure agreement or from any statement made pursuant to its agreement, although holders of Bonds may seek a writ of mandamus to compel the TEA to comply with its agreement. The continuing disclosure agreement of the TEA is made only with respect to the PSF and the Guarantee Program. The issuer of guaranteed bonds or an obligated person with respect to guaranteed bonds may make a continuing disclosure undertaking in accordance with Rule 15c2-12 with respect to its obligations arising under Rule 15c2-12 pertaining to financial and operating data concerning such entity and notices of material events relating to such guaranteed bonds. A description of such undertaking, if any, is included elsewhere in the Official Statement. This continuing disclosure agreement may be amended by the TEA from time to time to adapt to changed circumstances that arise from a change in legal requirements, a change in law, or a change in the identity, nature, status, or type of operations of the TEA, but only if (1) the provisions, as so amended, would have permitted an underwriter to purchase or sell guaranteed bonds in the primary offering of such bonds in compliance with Rule 15c2-12, taking into account any amendments or interpretations of Rule 15c2-12 since such offering as well as such changed circumstances and (2) either (a) the holders of a majority in aggregate principal amount of the outstanding bonds guaranteed by the Guarantee Program consent to such amendment or (b) a person that is unaffiliated with the TEA (such as nationally recognized bond counsel) determines that such amendment will not materially impair the interest of the holders and beneficial owners of the bonds guaranteed by the Guarantee Program. The TEA may also amend or repeal the provisions of its continuing disclosure agreement if the SEC amends or repeals the applicable provision of Rule 15c2-12 or a court of final jurisdiction enters judgment that such provisions of the Rule are invalid, but only if and to the extent that the provisions of this sentence would not prevent an underwriter from lawfully purchasing or selling bonds guaranteed by the Guarantee Program in the primary offering of such bonds. Compliance with Prior Undertakings

During the last five years, the TEA has not failed to substantially comply with its previous continuing disclosure agreements in accordance with Rule 15c2-12. SEC Exemptive Relief

On February 9, 1996, the TEA received a letter from the Chief Counsel of the SEC that pertains to the availability of the “small issuer exemption” set forth in paragraph (d)(2) of Rule 15c2-12. The letter provides that Texas school districts which offer municipal securities that are guaranteed under the Guarantee Program may undertake to comply with the provisions of paragraph (d)(2) of Rule 15c2-12 if their offerings otherwise qualify for such exemption, notwithstanding the guarantee of the school district securities under the Guarantee Program. Among other requirements established by Rule 15c2-12, a school district offering may qualify for the small issuer exemption if, upon issuance of the proposed series of securities, the school district will have no more than $10 million of outstanding municipal securities.

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STATE AND LOCAL FUNDING OF SCHOOL DISTRICTS IN TEXAS Litigation Relating to the Texas Public School Finance System

On seven occasions in the last thirty years, the Texas Supreme Court (the “Court”) has issued decisions assessing the constitutionality of the Texas public school finance system (the “Finance System”). The litigation has primarily focused on whether the Finance System, as amended by the Texas Legislature (the “Legislature”) from time to time (i) met the requirements of article VII, section 1 of the Texas Constitution, which requires the Legislature to “establish and make suitable provision for the support and maintenance of an efficient system of public free schools,” or (ii) imposed a statewide ad valorem tax in violation of article VIII, section 1-e of the Texas Constitution because the statutory limit on property taxes levied by school districts for maintenance and operation purposes had allegedly denied school districts meaningful discretion in setting their tax rates. In response to the Court’s previous decisions, the Legislature enacted multiple laws that made substantive changes in the way the Finance System is funded in efforts to address the prior decisions declaring the Finance System unconstitutional. On May 13, 2016, the Court issued its opinion in the most recent school finance litigation, Morath v. The Texas Taxpayer & Student Fairness Coal, et al., 409 S.W.3d 826 (Tex. 2016) (“Morath”). The plaintiffs and intervenors in the case had alleged that the Finance System, as modified by the Legislature in part in response to prior decisions of the Court, violated article VII, section 1 and article VIII, section 1-e of the Texas Constitution. In its opinion, the Court held that “[d]espite the imperfections of the current school funding regime, it meets minimum constitutional requirements.” The Court also noted that:

Lawmakers decide if laws pass, and judges decide if those laws pass muster. But our lenient standard of review in this policy-laden area counsels modesty. The judicial role is not to second-guess whether our system is optimal, but whether it is constitutional. Our Byzantine school funding "system" is undeniably imperfect, with immense room for improvement. But it satisfies minimum constitutional requirements.

Possible Effects of Changes in Law on District Bonds

The Court’s decision in Morath upheld the constitutionality of the Finance System but noted that the Finance System was “undeniably imperfect.” While not compelled by the Morath decision to reform the Finance System, the Legislature could enact future changes to the Finance System. Any such changes could benefit or be a detriment to the District. If the Legislature enacts future changes to, or fails adequately to fund the Finance System, or if changes in circumstances otherwise provide grounds for a challenge, the Finance System could be challenged again in the future. In its 1995 opinion in Edgewood Independent School District v. Meno, 917 S.W.2d 717 (Tex. 1995), the Court stated that any future determination of unconstitutionality “would not, however, affect the district’s authority to levy the taxes necessary to retire previously issued bonds, but would instead require the Legislature to cure the system’s unconstitutionality in a way that is consistent with the Contract Clauses of the U.S. and Texas Constitutions” (collectively, the “Contract Clauses”), which prohibit the enactment of laws that impair prior obligations of contracts. Although, as a matter of law, the Bonds, upon issuance and delivery, will be entitled to the protections afforded previously existing contractual obligations under the Contract Clauses, the District can make no representations or predictions concerning the effect of future legislation, or any litigation that may be associated with such legislation, on the District’s financial condition, revenues or operations.While the enactment of future legislation to address school funding in Texas could adversely affect the financial condition, revenues or operations of the District, the District does not anticipate that the security for payment of the Bonds, specifically, the District’s obligation to levy an unlimited debt service tax and any Permanent School Fund guarantee of the Bonds would be adversely affected by any such legislation. See “CURRENT PUBLIC SCHOOL FINANCE SYSTEM.”


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CURRENT PUBLIC SCHOOL FINANCE SYSTEM

During the 2019 Legislative Session, the State Legislature made numerous changes to the current public school finance system, the levy and collection of ad valorem taxes, and the calculation of defined tax rates, including particularly those contained in House Bill 3 (“HB 3”) and Senate Bill 2 (“SB 2”). In some instances, the provisions of HB 3 and SB 2 will require further interpretation in connection with their implementation in order to resolve ambiguities contained in the bills. The District is still in the process of (a) analyzing the provisions of HB 3 and SB 2, and (b) monitoring the on-going guidance provided by TEA. The information contained herein under the captions “CURRENT PUBLIC SCHOOL FINANCE SYSTEM” and “TAX RATE LIMITATIONS” is subject to change, and only reflects the District’s understanding of HB 3 and SB 2 based on information available to the District as of the date of this Official Statement. Prospective investors are encouraged to review HB 3, SB 2, and the Property Tax Code (as defined herein) for definitive requirements for the levy and collection of ad valorem taxes, the calculation of the defined tax rates, and the administration of the current public school finance system.

Overview

The following language constitutes only a summary of the Finance System as it is currently structured. For a more complete description of school finance and fiscal management in the State, reference is made to Chapters 43 through 49 of the Texas Education Code, as amended.

Local funding is derived from collections of ad valorem taxes levied on property located within each district’s boundaries. School districts are authorized to levy two types of property taxes: a limited maintenance and operations (“M&O”) tax to pay current expenses and an unlimited interest and sinking fund (“I&S”) tax to pay debt service on bonds. School districts may not levy surplus M&O taxes for the purpose of paying debt service on bonds. A district is authorized to levy their M&O tax at a constitutionally-mandated and voter-approved rate of up to $1.50 per $100 of taxable value in the district. Current law also requires school districts to demonstrate their ability to pay debt service on outstanding bonded indebtedness through the levy of an I&S tax at a rate not to exceed $0.50 per $100 of taxable value at the time bonds are issued. Once bonds are issued, however, districts may levy a tax sufficient to pay debt service on such bonds unlimited as to rate or amount. Because property values vary widely among school districts, the amount of local funding generated among school districts for the same tax rate is also subject to wide variation, however, the public school finance funding formulas are designed to generally equalize local funding generated by a school district’s M&O tax rate.

Prior to the 2019 Legislative Session, a school district’s maximum M&O tax rate for a given tax year was determined by multiplying that school district’s 2005 M&O tax rate levy by an amount equal a compression percentage set by legislative appropriation or, in the absence of legislative appropriation, by the Commissioner of Education (the “Commissioner”). This compression percentage was historically set at 66.67%, effectively setting the maximum compressed M&O tax rate for most school districts at $1.00 per $100 of taxable value, since most school districts in the State had a voted maximum M&O tax rate of $1.50 per $100 of taxable value (though certain school districts located in Harris County had special M&O tax rate authorizations allowing a higher M&O tax rate). School districts were permitted,however, to generate additional local funds by raising their M&O tax rate up to $0.04 above the compressed tax rate or, with voter-approval at a valid election in the school district, up to $0.17 above the compressed tax rate (for most school districts, this equated to an M&O tax rate between $1.04 and $1.17 per $100 of taxable value). School districts received additional State funds in proportion to such taxing effort.

Local Funding for School Districts

During the 2019 Legislative Session, the State Legislature made several significant changes to the funding methodology for school districts (the “2019 Legislation”). The 2019 Legislation orders a school district’s M&O tax rate into two distinct parts: the “Tier One Tax Rate”, which is the local M&O tax rate required for a school district to receive any part of the basic level of State funding (referred to herein as “Tier One”) under the Foundation School Program, as further described below, and the “Enrichment Tax Rate”, which is any local M&O tax effort in excess of its Tier One Tax Rate. The 2019 Legislation amended formulas for the State Compression Percentage and Maximum Compressed Tax Rate (each as described below) to compress M&O tax rates in response to year-over-year increases in property values across the State and within a school district, respectively. The discussion in this subcaption “Local Funding For School Districts” is generally intended to describe funding provisions applicable to all school districts; however, there are distinctions in the funding formulas for school districts that generate local M&O tax revenues in excess of the school districts’ funding entitlements, as further discussed under the subcaption “CURRENT PUBLIC SCHOOL FINANCE SYSTEM – Local Revenue Level In Excess of Entitlement” herein.

State Compression Percentage. The “State Compression Percentage” for the State fiscal year ending in 2020 (the 2019-2020 school

year) is a statutorily-defined percentage of the rate of $1.00 per $100 at which a school district must levy its Tier One Tax Rate to receive the full amount of the Tier One funding to which a school district is entitled. For the State fiscal year ending in 2020, the State Compression Percentage is set at 93% per $100 of taxable value. Beginning in the State fiscal year ending in 2021, the State Compression Percentage is the lesser of three alternative calculations: (1) 93% or a lower percentage set by appropriation for a school year; (2) a percentage determined by formula if the estimated total taxable property value of the State (as submitted annually to the State Legislature by the State Comptroller) has increased by at least 2.5% over the prior year; and (3) the prior year State Compression Percentage. For any year, the maximum State Compression Percentage is 93%.

Maximum Compressed Tax Rate. Pursuant to the 2019 Legislation, beginning with the State fiscal year ending in 2021 (the 2020-2021

school year) the Maximum Compressed Tax Rate (the “MCR”) is the tax rate per $100 of valuation of taxable property at which a school district must levy its Tier One Tax Rate to receive the full amount of the Tier One funding to which the school district is entitled. The MCR

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is equal to the lesser of three alternative calculations: (1) the school district’s prior year MCR; (2) a percentage determined by formula if the school district experienced a year-over-year increase in property value of at least 2.5%; or (3) the product of the State Compression Percentage for the current year multiplied by $1.00. However, each year the TEA shall evaluate the MCR for each school district in the State, and for any given year, if a school district’s MCR is calculated to be less than 90% of any other school district’s MCR for the current year, then the school district’s MCR is instead equal to the school district’s prior year MCR, until TEA determines that the difference between the school district’s MCR and any other school district’s MCR is not more than 10%. These compression formulas are intended to more closely equalize local generation of Tier One funding among districts with disparate tax bases and generally reduce the Tier One Tax Rates of school districts as property values increase.

Tier One Tax Rate. For the 2019-2020 school year, the Tier One Tax Rate is the State Compression Percentage multiplied by (i) $1.00,

or (ii) for a school district that levied an M&O tax rate for the 2018-2019 school year that was less than $1.00 per $100 of taxable value, the total number of cents levied by the school district for the 2018-2019 school year for M&O purposes; effectively setting the Tier One Tax Rate for the State fiscal year ending in 2020 for most school districts at $0.93. Beginning in the 2020-2021 school year, a school district’s Tier One Tax Rate is defined as a school district’s M&O tax rate levied that does not exceed the school district’s MCR.

Enrichment Tax Rate. The Enrichment Tax Rate is the number of cents a school district levies for M&O in excess of the Tier One Tax

Rate, up to an additional $0.17. The Enrichment Tax Rate is divided into two components: (i) “Golden Pennies” which are the first $0.08 of tax effort in excess of a school district’s Tier One Tax Rate; and (ii) “Copper Pennies” which are the next $0.09 in excess of a school district’s Tier One Tax Rate plus Golden Pennies.

School districts may levy an Enrichment Tax Rate at a level of their choice, subject to the limitations described under “TAX RATE LIMITATIONS – Public Hearing and Voter-Approval Tax Rate”; however to levy any of the Enrichment Tax Rate in a given year, a school district must levy a Tier One Tax Rate equal to $0.93 for the 2019-2020 school year, or equal to the school district’s MCR for the 2020-2021 and subsequent years. Additionally, a school district’s levy of Copper Pennies is subject to compression if the guaranteed yield (i.e., the guaranteed level of local tax revenue and State aid generated for each cent of tax effort) of Copper Pennies is increased from one year to the next (see “CURRENT PUBLIC SCHOOL FINANCE SYSTEM – State Funding for School Districts – Tier Two”).

State Funding for School Districts

State funding for school districts is provided through the two-tiered Foundation School Program, which guarantees certain levels of funding for school districts in the State. School districts are entitled to a legislatively appropriated guaranteed yield on their Tier One Tax Rate and Enrichment Tax Rate. When a school district’s Tier One Tax Rate and Enrichment Tax Rate generate tax revenues at a level below the respective entitlement, the State will provide “Tier One” funding or “Tier Two” funding, respectively, to fund the difference between the school district’s entitlements and the calculated M&O revenues generated by the school district’s respective M&O tax rates. The first level of funding, Tier One, is the basic level of funding guaranteed to all school districts based on a school district’s Tier One Tax Rate. Tier One funding may then be “enriched” with Tier Two funding. Tier Two provides a guaranteed entitlement for each cent of a school district’s Enrichment Tax Rate, allowing a school district increase or decrease its Enrichment Tax Rate to supplement Tier One funding at a level of the school district’s own choice. While Tier One funding may be used for the payment of debt service (except for school districts subject to the recapture provisions of Chapter 49 of the Texas Education Code, as discussed herein), and in some instances is required to be used for that purpose (see “TAX RATE LIMITATIONS – I&S Tax Rate Limitations”), Tier Two funding may not be used for the payment of debt service or capital outlay.

The current public school finance system also provides an Existing Debt Allotment (“EDA”) to subsidize debt service on eligib le outstanding school district bonds, an Instructional Facilities Allotment (“IFA”) to subsidize debt service on newly issued bonds, and a New Instructional Facilities Allotment (“NIFA”) to subsidize operational expenses associated with the opening of a new instructional facility.IFA primarily addresses the debt service needs of property-poor school districts. For the 2020-2021 State fiscal biennium, the State Legislature appropriated funds in the amount of $1,323,444,300 for the EDA, IFA, and NIFA.

Tier One and Tier Two allotments represent the State’s share of the cost of M&O expenses of school districts, with local M&O taxes representing the school district’s local share. EDA and IFA allotments supplement a school district’s local I&S taxes levied for debt service on eligible bonds issued to construct, acquire and improve facilities, provided that a school district qualifies for such funding and that the State Legislature makes sufficient appropriations to fund the allotments for a State fiscal biennium. Tier One and Tier Two allotments and existing EDA and IFA allotments are generally required to be funded each year by the State Legislature.

Tier One. Tier One funding is the basic level of funding guaranteed to a school district, consisting of a State-appropriated baseline level of funding (the “Basic Allotment”) for each student in “Average Daily Attendance” (being generally calculated as the sum of s tudent attendance for each State-mandated day of instruction divided by the number of State-mandated days of instruction, defined herein as “ADA”). The Basic Allotment is revised downward if a school district’s Tier One Tax Rate is less than the State-determined threshold.The Basic Allotment is supplemented by additional State funds, allotted based upon the unique school district characteristics and demographics of students in ADA, to make up most of a school district’s Tier One entitlement under the Foundation School Program.

For the 2019-2020 State fiscal year, the Basic Allotment for school districts with a Tier One Tax Rate equal to $0.93, is $6,160 for each student in ADA and is revised downward for school districts with a Tier One Tax Rate lower than $0.93. For the State fiscal year ending in 2021 and subsequent State fiscal years, the Basic Allotment for a school district with a Tier One Tax Rate equal to the school district’s MCR, is $6,160 (or a greater amount as may be provided by appropriation) for each student in ADA and is revised downward for a school district with a Tier One Tax Rate lower than the school district’s MCR. The Basic Allotment is then supplemented for all school districts

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by various weights to account for differences among school districts and their student populations. Such additional allotments include, but are not limited to, increased funds for students in ADA who: (i) attend a qualified special education program, (ii) are diagnosed with dyslexia or a related disorder, (iii) are economically disadvantaged, or (iv) have limited English language proficiency. Additional allotments to mitigate differences among school districts include, but are not limited to: (i) a transportation allotment for mileage associated with transporting students who reside two miles or more from their home campus, (ii) a fast growth allotment (for school districts in the top 25% of enrollment growth relative to other school districts), and (iii) a college, career and military readiness allotment to further Texas’ goal of increasing the number of students who attain a post-secondary education or workforce credential, and (iv) a teacher incentive allotment to increase teacher compensation retention in disadvantaged or rural school districts. A school district’s total Tier One funding, divided by $6,160, is a school district’s measure of students in “Weighted Average Daily Attendance” (“WADA”), which serves to calculate Tier Two funding.

Tier Two. Tier Two supplements Tier One funding and provides two levels of enrichment with different guaranteed yields (i.e., Golden

Pennies and Copper Pennies) depending on the school district’s Enrichment Tax Rate. Golden Pennies generate a guaranteed yield equal to the greater of (i) the local revenue per student in WADA per cent of tax effort available to a school district at the ninety-sixth (96th) percentile of wealth per student in WADA, or (ii) the Basic Allotment (or a greater amount as may be provided by appropriation) multiplied by 0.016. For the 2020-2021 State fiscal biennium, school districts are guaranteed a yield of $98.56 per student in WADA for each Golden Penny levied. Copper Pennies generate a guaranteed yield per student in WADA equal to the school district’s Basic Allotment (or a greater amount as may be provided by appropriation) multiplied by 0.008. For the 2020-2021 State fiscal biennium, school districts are guaranteed a yield of $49.28 per student in WADA for each Copper Penny levied. For any school year in which the guaranteed yield of Copper Pennies per student in WADA exceeds the guaranteed yield of Copper Pennies per student in WADA for the preceding school year, a school district is required to reduce its Copper Pennies levied so as to generate no more revenue per student in WADA than was available to the school district for the preceding year. Accordingly, the increase in the guaranteed yield from $31.95 per Copper Penny per student in WADA for the 2018-2019 school year to $49.28 per Copper Penny per student in WADA for the 2019-2020 school year requires school districts to compress their levy of Copper Pennies by a factor of 0.64834. As such, school districts that levied an Enrichment Tax Rate of $0.17 in school year 2018-2019 must reduce their Enrichment Tax Rate to approximately $0.138 per $100 taxable value for the 2019-2020 school year.

Existing Debt Allotment, Instruction Facilities Allotment, and New Instructional Facilities Allotment. The Foundation School Program also includes facilities funding components consisting of the IFA and the EDA, subject to legislative appropriation each State fiscal biennium.To the extent funded for a biennium, these programs assist school districts in funding facilities by, generally, equalizing a school district’s I&S tax effort. The IFA guarantees each awarded school district a specified amount per student (the “IFA Yield”) in State and local funds for each cent of I&S tax levied to pay the principal of and interest on eligible bonds issued to construct, acquire, renovate or improve instructional facilities. The IFA Yield has been $35 since this program first began in 1997. New awards of IFA are only available if appropriated funds are allocated for such purpose by the State Legislature. To receive an IFA award, in years where new IFA awards are available, a school district must apply to the Commissioner in accordance with rules adopted by the TEA before issuing the bonds to be paid with IFA State assistance. The total amount of debt service assistance over a biennium for which a school district may be awarded is limited to the lesser of (1) the actual debt service payments made by the school district in the biennium in which the bonds are issued; or (2) the greater of (a) $100,000 or (b) $250 multiplied by the number of students in ADA. The IFA is also available for lease-purchase agreements and refunding bonds meeting certain prescribed conditions. Once a school district receives an IFA award for bonds, it is entitled to continue receiving State assistance for such bonds without reapplying to the Commissioner. The guaranteed level of State and local funds per student per cent of local tax effort applicable to the bonds may not be reduced below the level provided for the year in which the bonds were issued. For the 2020-2021 State fiscal biennium, the State Legislature did not appropriate any funds for new IFA awards; however, awards previously granted in years the State Legislature did appropriate funds for new IFA awards will continue to be funded.

State financial assistance is provided for certain existing eligible debt issued by school districts through the EDA program. The EDA guaranteed yield (the “EDA Yield”) is the lesser of (i) $40 per student in ADA or a greater amount for any year provided by appropriation; or (ii) the amount that would result in a total additional EDA of $60 million more than the EDA to which school districts would have been entitled to if the EDA Yield were $35. The portion of a school district’s local debt service rate that qualifies for EDA assistance is limited to the first $0.29 of its I&S tax rate (or a greater amount for any year provided by appropriation by the State Legislature). In general, a school district’s bonds are eligible for EDA assistance if (i) the school district made payments on the bonds during the final fiscal year of the preceding State fiscal biennium, or (ii) the school district levied taxes to pay the principal of and interest on the bonds for that fiscal year. Each biennium, access to EDA funding is determined by the debt service taxes collected in the final year of the preceding biennium.A school district may not receive EDA funding for the principal and interest on a series of otherwise eligible bonds for which the school district receives IFA funding.

Since future-year IFA awards were not funded by the State Legislature for the 2020-2021 State fiscal biennium and debt service assistance on school district bonds that are not yet eligible for EDA is not available, debt service payments during the 2020-2021 State fiscal biennium on new bonds issued by school districts in the 2020-2021 State fiscal biennium to construct, acquire and improve facilities must be funded solely from local I&S taxes.

A school district may also qualify for a NIFA allotment, which provides assistance to school districts for operational expenses associated with opening new instructional facilities. In the 2019 Legislative Session, the State Legislature appropriated funds in the amount of $100,000,000 for each fiscal year of the 2020-2021 State fiscal biennium for NIFA allotments.

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Tax Rate and Funding Equity. The Commissioner may adjust a school district’s funding entitlement if the funding formulas used to determine the school district’s entitlement result in an unanticipated loss or gain for a school district. Any such adjustment requires preliminary approval from the Legislative Budget Board and the office of the Governor, and such adjustments may only be made through the 2020-2021 school year.

Additionally, the Commissioner may proportionally reduce the amount of funding a school district receives under the Foundation School Program and the ADA calculation if the school district operates on a calendar that provides less than the State-mandated minimum instruction time in a school year. The Commissioner may also adjust a school district’s ADA as it relates to State funding where disaster, flood, extreme weather or other calamity has a significant effect on a school district’s attendance.

Furthermore, “property-wealthy” school districts that received additional State funds under the public school finance system prior to the enactment of the 2019 Legislation are entitled to an equalized wealth transition grant on an annual basis through the 2023-2024 school year in an amount equal to the amount of additional revenue such school district would have received under former Texas Education Code Sections 41.002(e) through (g), as those sections existed on January 1, 2019. This grant is phased out through the 2023-2024 school year as follows: (1) 20% reduction for the 2020-2021 school year, (2) 40% reduction for the 2021-2022 school year, (3) 60% reduction for the 2022-2023 school year, and (4) 80% reduction for the 2023-2024 school year.

Local Revenue Level in Excess of Entitlement

A school district that has sufficient property wealth per student in ADA to generate local revenues on the school district’s Tier One Tax Rate and Copper Pennies in excess of the school district’s respective funding entitlements (a “Chapter 49 school district”), is subject to the local revenue reduction provisions contained in Chapter 49 of Texas Education Code, as amended (“Chapter 49”). Additionally, in years in which the amount of State funds appropriated specifically excludes the amount necessary to provide the guaranteed yield for Golden Pennies, local revenues generated on a school district’s Golden Pennies in excess of the school district’s respective funding entitlement are subject to the local revenue reduction provisions of Chapter 49. To reduce local revenue, Chapter 49 school districts are generally subject to a process known as “recapture”, which requires a Chapter 49 school district to exercise certain options to remit local M&O tax revenues collected in excess of the Chapter 49 school district’s funding entitlements to the State (for redistribution to other school districts) or otherwise expending the respective M&O tax revenues for the benefit of students in school districts that are not Chapter 49 school districts, as described in the subcaption “Options for Local Revenue Levels in Excess of Entitlement”. Chapter 49 school districts receive their allocable share of funds distributed from the constitutionally-prescribed Available School Fund, but are generally not eligible to receive State aid under the Foundation School Program, although they may continue to receive State funds for certain competitive grants and certain programs that remain outside the Foundation School Program.

Whereas prior to the 2019 Legislation, the recapture process had been based on the proportion of a school district’s assessed property value per student in ADA, recapture is now measured by the “local revenue level” (being the M&O tax revenues generated in a school district) in excess of the entitlements appropriated by the State Legislature each fiscal biennium. Therefore, school districts are now guaranteed that recapture will not reduce revenue below their statutory entitlement. The changes to the wealth transfer provisions are expected to reduce the cumulative amount of recapture payments paid by school districts by approximately $3.6 billion during the 2020-2021 State fiscal biennium.

Options for Local Revenue Levels in Excess of Entitlement. Under Chapter 49, a school district has six options to reduce local revenues to a level that does not exceed the school district’s respective entitlements: (1) a school district may consolidate by agreement with one or more school districts to form a consolidated school district; all property and debt of the consolidating school districts vest in the consolidated school district; (2) a school district may detach property from its territory for annexation by a property-poor school district; (3) a school district may purchase attendance credits from the State; (4) a school district may contract to educate nonresident students from a property-poor school district by sending money directly to one or more property-poor school districts; (5) a school district may execute an agreement to provide students of one or more other school districts with career and technology education through a program designated as an area program for career and technology education; or (6) a school district may consolidate by agreement with one or more school districts to form a consolidated taxing school district solely to levy and distribute either M&O taxes or both M&O taxes and I&S taxes. A Chapter 49 school district may also exercise any combination of these remedies. Options (3), (4) and (6) require prior approval by the Chapter 49 school district’s voters.

Furthermore, a school district may not adopt a tax rate until its effective local revenue level is at or below the level that would produce its guaranteed entitlement under the Foundation School Program. If a school district fails to exercise a permitted option, the Commissioner must reduce the school district’s local revenue level to the level that would produce the school district’s guaranteed entitlement, by detaching certain types of property from the school district and annexing the property to a property-poor school district or, if necessary, consolidate the school district with a property-poor school district. Provisions governing detachment and annexation of taxable property by the Commissioner do not provide for assumption of any of the transferring school district’s existing debt.

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CURRENT DISTRICT FINANCIAL CONDITION AND INITIATIVES

The District continues to focus on initiatives and programs to engage students and families, and reverse the enrollment declines experienced in the past few years. While the presence of charter schools within the District’s attendance boundaries has been a factor in enrollment declines, the District expects to see charter growth shift to other areas of Bexar County, outside of District boundaries. The District has implemented innovative programming and opened several choice school models to attract and retain families and increase academic achievement. For the most recent completed school year, the District improved to earn a “B” Accountability rating issued by TEA. The District’s new opportunities have increased the percent of students enrolled who live outside of District boundaries to 6% in 2020. This percentage increased over the prior year with the opening of two new campuses during the 2019-20 school year –Young Women’s Leadership Academy Primary at Page, and CAST Med High School. For 2020-21, the District will open Rodriguez Montessori, the District’s 2nd Montessori school, featuring a dual-language pathway. Additionally, the District has made targeted investments in the expansion of fine arts, athletics, dual-language programming, career exploration, and dual-credit opportunities. The District is continuing to build on the implementation of a strategic and comprehensive marketing plan launched in 2019, focusing on a more in-depth enrollment and recruitment plan. With numerous schools and programs that are new to the District, the District intends to adequately invest in marketing resources in order to ensure that this information is readily available to families across the city. Last year, the District launched a dedicated Office of Access and Enrollment to assist families with exploring the many educational options available and navigating the registration process, including applying to the District’s choice schools. Additionally, this office tracks and reports student registration data throughout the year for review and action by the executive team. For the 2020-21 school year, student enrollment is projected to increase slightly, and the District has adopted a balanced budget. The 85th Texas Legislature signed Senate Bill 1882 into effect to encourage school districts to develop and implement strategic partnerships with Charter Management Operators (CMO’s) to enhance the instructional opportunities and improve student outcomes. The District was one of the first school districts to embrace this new opportunity, and over the subsequent two school years, received TEA approval to operate 22 schools under eight charter partnerships. The District is experiencing growth within these campuses and is poised to realize the full benefits of the partnership, including enriched funding and the expansion of instructional offerings at these campuses. The 86th Texas Legislature effectuated numerous changes to the Finance System with the passage of HB3, effective as of the 2019-20 school year. HB3 significantly increased school funding, increased teacher-pay, and included a reduction to local property tax rates through mandated tax compression funded by the State (see “CURRENT PUBLIC SCHOOL FINANCE SYSTEM”). Additionally, newly funded or redesigned programs such as dual-language and state compensatory provided expanded funding for such programs. The District has been successful in selling various tracts of properties in order to finance other initiatives. The District has sold the Child Nutrition warehouse, the Austin Street Operations buildings, and the Central Office building over the past two years. The proceeds for these three sales are being utilized to build a new central office building. This initiative will bring together nearly all central office support functions which currently are housed in numerous buildings located throughout the District.

EMPLOYEE RETIREMENT PLAN AND OTHER POST-EMPLOYMENT BENEFITS

The District’s employees participate in a retirement plan with the State of Texas (the “Plan”). The Plan is administered by the Teacher Retirement System of Texas (“TRS”). The TRS is a cost-sharing, multiple-employer defined benefit pension plan. See “Note L – Defined Benefit Pension Plan” in the audited financial statement excerpts of the District for the year ended June 30, 2019 as set forth in APPENDIX D hereto. The District contributes to the Texas Public School Retired Employees Group Insurance Program (“TRSCare”), a cost-sharing multiple-employer defined benefit postemployment health care plan administered by the Teacher Retirement System of Texas. TRS-Care Retired Plan provides health care coverage for certain persons (and their dependents) who retired under the Teacher Retirement System of Texas. See “Note M - Defined Other Post-Employment Benefit Plans” in the audited financial statement excerpts of the District for the year ended June 30, 2019 as set forth in APPENDIX D hereto.

In June 2012, the Government Accounting Standards Board (“GASB”) issued Statement No. 68 Accounting and Financial Reporting for Pensions, which was later amended by Statement No. 71 Pension Transition for Contributions Made Subsequent to the Measurement Date, to improve accounting and financial reporting by state and local governments related to pensions. GASB Statement No. 68 requires

reporting entities, such as the District, to recognize their proportionate share of the net pension liability and operating statement activity related to changes in collective pension liability. Reporting entities, such as the District, that contribute to the TRS pension plan will report a liability on the face of their government-wide financial statements. Such reporting began with the District’s fiscal year ending June 30, 2015. See “Changes in Net Position” in APPENDIX A herein. GASB Statement No. 68 applies only to pension benefits and does not apply to OPB or TRS-Care related liabilities. At the conclusion of the 2018-19 fiscal year, the District had a net pension liability of $155,303,847. See “Note J – Prior Period Adjustment” in the audited financial statement excerpts of the District for the year ended June 30, 2019 as set forth in APPENDIX D hereto for information related to the District’s adoption of Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions and the related prior period adjustment.

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INVESTMENT POLICIES Investments

The District invests its investable funds in investments authorized by Texas law in accordance with investment policies approved by the Board. Both State law and the District’s investment policies are subject to change. Investment Authority and Investment Practices of the District

Under Texas law, the District is authorized to invest in (1) obligations of the United States or its agencies and instrumentalities, including letters of credit; (2) direct obligations of the State or its agencies and instrumentalities; (3) collateralized mortgage obligations directly issued by a federal agency or instrumentality of the United States, the underlying security for which is guaranteed by an agency or instrumentality of the United States; (4) other obligations, the principal and interest of which is guaranteed or insured by or backed by the full faith and credit of, the State of Texas or the United States or their respective agencies and instrumentalities, including obligations that are fully guaranteed or insured by the Federal Deposit Insurance Corporation or by the explicit full faith and credit of the United States; (5) obligations of states, agencies, counties, cities, and other political subdivisions of any state rated as to investment quality by a nationally recognized investment rating firm not less than “A” or its equivalent; (6) bonds issued, assumed or guaranteed by the State of Israel; (7) interest-bearing banking deposits that are guaranteed or insured by the Federal Deposit Insurance Corporation or the National Credit Union Share Insurance Fund or their respective successors; (8) certificates of deposit (i) meeting the requirements of the Texas Public Funds Investment Act (Chapter 2256, Texas Government Code) that are issued by or through an institution that either has its main office or a branch in Texas, and are guaranteed or insured by the Federal Deposit Insurance Corporation or the National Credit Union Share Insurance Fund, or are secured as to principal by obligations described in clauses (1) through (7) or in any other manner and amount provided by law for District deposits or; (ii) where the funds are invested by the District through (I) a broker that has its main office or a branch office in the State and is selected from a list adopted by the District as required by law or (II) a depository institution that has its main office or a branch office in the State that is selected by the District; (iii) the broker or the depository institution selected by the District arranges for the deposit of the funds in certificates of deposit in one or more federally insured depository institutions, wherever located, for the account of the District; (iv) the full amount of the principal and accrued interest of each of the certificates of deposit is insured by the United States or an instrumentality of the United States; and (v) the District appoints the depository institution selected under (ii) above, an entity as described by Section 2257.041(d) of the Texas Government Code, or a clearing broker-dealer registered with the Securities and Exchange Commission and operating pursuant to Securities and Exchange Commission Rule 15c3-3 (17 C.F.R. Section 240.15c3-3) as custodian for the District with respect to the certificates of deposit issued for the account of the District; (9) fully collateralized repurchase agreements that have a defined termination date, are secured by a combination of cash and obligations described in clause (1) require the securities being purchased by the District or cash held by the District to be pledged to the District, held in the District’s name, and deposited at the time the investment is made with the District or with a third party selected and approved by the District, and are placed through a primary government securities dealer, as defined by the Federal Reserve, or a financial institution doing business in the State; (10) securities lending programs if (i) the securities loaned under the program are 100% collateralized, a loan made under the program allows for termination at any time and a loan made under the program is either secured by (a) obligations that are described in clauses (1) through (7) above, (b) irrevocable letters of credit issued by a state or national bank that is continuously rated by a nationally recognized investment rating firm at not less than “A” or its equivalent or (c) cash invested in obligations described in clauses (1) through (7) above, clauses (12) through (14) below, or an authorized investment pool; (ii) securities held as col lateral under a loan are pledged to the District, held in the District’s name and deposited at the time the investment is made with the District or a third party designated by the District; (iii) a loan made under the program is placed through either a primary government securities dealer or a financial institution doing business in the State; (iv) a loan made under the program allows for termination at any time; (v) a loan made under the program is either secured by (a) obligations that are described in clauses (1) through (7) above, (b) irrevocable letters of credit issued by a state or national bank that is continuously rated by a nationally recognized investment rating firm at not less than “A” or its equivalent, or (c) cash invested in obligations described in clauses (1) through (8) above; and (vi) the agreement to lend securities has a term of one year or less; (11) certain bankers’ acceptances with the remaining term of 270 days or less, if the short-term obligations of the accepting bank or its parent are rated at least “A-1” or “P-1” or the equivalent by at least one nationally recognized credit rating agency; (12) commercial paper with a stated maturity of 365 days or less that is rated at least “A-1” or “P-1” or the equivalent by either (a) two nationally recognized credit rating agencies or (b) one nationally recognized credit rating agency if the paper is fully secured by an irrevocable letter of credit issued by a U.S. or state bank; (13) no-load money market funds registered with and regulated by the SEC that provide the District with a prospectus and other information required by SEC Rule 2a-7; and (14) no-load mutual funds registered with the SEC that have an average weighted maturity of less than two years and either (i) have a duration of one year or more and are invested exclusively in obligations described in this paragraph or (ii) have a duration of less than one year and an investment portfolio limited to investment grade securities, excluding asset-backed securities. In addition, bond proceeds may be invested in guaranteed investment contracts that have a defined termination date and are secured by obligations, including letters of credit, of the United States or its agencies and instrumentalities in an amount at least equal to the amount of bond proceeds invested under such contract, other than the prohibited obligations described in the next succeeding paragraph.


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The District may invest in such obligations directly or through government investment pools that invest solely in such obligations provided that the pools are rated no lower than “AAA” or “AAA-m” or an equivalent by at least one nationally recognized rating service. The District may also contract with an investment management firm registered under the Investment Advisers Act of 1940 (15 U.S.C. Section 80b-1 et seq.) or with the State Securities Board to provide for the investment and management of its public funds or other funds under its control for a term up to two years, but the District retains ultimate responsibility as fiduciary of its assets. In order to renew or extend such a contract, the District must do so by order, ordinance, or resolution. The District is specifically prohibited from investing in: (1) obligations whose payment represents the coupon payments on the outstanding principal balance of the underlying mortgage-backed security collateral and pays no principal; (2) obligations whose payment represents the principal stream of cash flow from the underlying mortgage-backed security and bears no interest; (3) collateralized mortgage obligations that have a stated final maturity of greater than 10 years and (4) collateralized mortgage obligations the interest rate of which is determined by an index that adjusts opposite to the changes in a market index.

Governmental bodies in the State are authorized to implement securities lending programs if (i) the securities loaned under the program are collateralized, a loan made under the program allows for termination at any time and a loan made under the program is either secured by (a) obligations that are described in clauses (1) through (6) of the first paragraph under this subcaption, (b) irrevocable letters of credit issued by a state or national bank that is continuously rated by a nationally recognized investment rating firm not less than “A” or its equivalent, or (c) cash invested in obligations that are described in clauses (1) through (6) and (10) through (12) of the first paragraph under this subcaption, or an authorized investment pool; (ii) securities held as collateral under a loan are pledged to the governmental body, held in the name of the governmental body and deposited at the time the investment is made with the Agency or a third party designated by the Agency; (iii) a loan made under the program is placed through either a primary government securities dealer or a financial institution doing business in the State; and (iv) the agreement to lend securities has a term of one year or less.

Under Texas law, the District is required to invest its funds under written investment policies that primarily emphasize safety of principal and liquidity; that address investment diversification, yield, maturity, and the quality and capability of investment management; and that include a list of authorized investments for District funds, the maximum allowable stated maturity of any individual investment and the maximum average dollar-weighted maturity allowed for pooled fund groups. All District funds must be invested consistent with a formally adopted "Investment Strategy Statement" that specifically addresses each fund's investment. Each Investment Strategy Statement will describe its objectives concerning: (1) suitability of investment type, (2) preservation and safety of principal, (3) liquidity, (4) marketability of each investment, (5) diversification of the portfolio, and (6) yield.

As a school district that qualifies as an “issuer” under Chapter 1371, the District is also authorized to purchase, sell, and invest its funds in corporate bonds. State law defines “corporate bonds” as senior secured debt obligations issued by a domestic business entity and rated not lower than “AA-” or the equivalent by a nationally recognized investment rating firm. The term does not include a bond that is convertible into stocks or shares in the entity issuing the bond (or an affiliate or subsidy thereof) or any unsecured debt. Corporate bonds must finally mature not later than 3 years from their date of purchase by the school district. A school district may not (1) invest more than 15% of its monthly average fund balance (excluding bond proceeds, reserves, and other funds held for the payment of debt service) in corporate bonds; or (2) invest more than 25% of the funds invested in corporate bonds in any one domestic business entity (including subsidiaries and affiliates thereof). Corporate bonds held by a school district must be sold if they are at any time downgraded below “AA-” (or the equivalent thereof) or, with respect to a corporate bond rated “AA-” (or the equivalent thereof), such corporate bond is placed on negative credit watch. Corporate bonds are not an eligible investment for a public funds investment pool. To invest in corporate bonds, an eligible school district must first (i) amend its investment policy to authorize corporate bonds as an eligible investment, (ii) adopt procedures for monitoring rating changes in corporate bonds and liquidating an investment in corporate bonds, and (iii) identify funds eligible to be invested in corporate bonds. As of the date of this Official Statement, the District has not taken the steps necessary to allow for investing in corporate bonds or made investments in that type of instrument.

Under Texas law, the District's investments must be made "with judgment and care, under prevailing circumstances, that a person of prudence, discretion, and intelligence would exercise in the management of the person's own affairs, not for speculation, but for investment considering the probable safety of capital and the probable income to be derived." At least quarterly the District's investment officers must submit an investment report to the Board detailing: (1) the investment position of the District, (2) that all investment officers jointly prepared and signed the report, (3) the beginning market value, and any additions and changes to market value and the ending value of each pooled fund group, (4) the book value and market value of each separately listed asset at the beginning and end of the reporting period, (5) the maturity date of each separately invested asset, (6) the account or fund or pooled fund group for which each individual investment was acquired, and (7) the compliance of the investment portfolio as it relates to: (a) adopted investment strategies and (b) Texas law. No person may invest District funds without express written authority from the Board.

Under Texas law, the District is additionally required to: (1) annually review its adopted policies and strategies, (2) adopt a rule, order, ordinance or resolution stating that it has reviewed its investment policy and investment strategies and records any changes made to either its investment policy or investment strategy in the respective rule, order, ordinance or resolution, (3) require any investment officers with personal business relationships or family relationships with firms seeking to sell securities to the District to disclose the relationship and file a statement with the Texas Ethics Commission and the District, (4) require the qualified representative of a business organization offering to engage in an investment transaction with the District to: (a) receive and review the District's investment policy, (b) acknowledge that reasonable controls and procedures have been implemented to preclude investment conducted by the District and the business organization that are not authorized by the District’s investment policy (except to the extent that this authorization is dependent on an analysis of the makeup of the District’s entire portfolio or requires an interpretation of subjective investment standards), and (c) deliver a written statement in a form acceptable to the District and the business organization attesting to these requirements, (5) in conjunction with its annual financial audit, perform a compliance audit of the management controls on investments and adherence to the District's investment policy, (6) restrict reverse repurchase agreements to not more than 90 days and restrict the investment of reverse repurchase agreement funds to no greater than the term of the reverse repurchase agreement, (7) restrict the investment in non-money market mutual funds in the aggregate to no more than 15% of the District's monthly average fund balance, excluding bond proceeds and reserves

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and other funds held for debt service, (8) require local government investment pools to conform to the new disclosure, rating, net asset value, yield calculation, and advisory board requirements (9) provide specific investment training for the Treasurer, the chief financial officer (if not the Treasurer) and the investment officer, and (10) at least annually review, revise, and adopt a list of qualified brokers that are authorized to engage in investment transactions with the District. As used herein, “business organization” means a public funds investment pool or an investment management firm under contract with the District to invest or manage the District’s investment portfolio that has accepted authority granted by the District under control to exercise investment discretion in regard to the District ’s funds.

AD VALOREM TAX PROCEDURES The following is a summary of certain provisions of State law as it relates to ad valorem taxation and is not intended to be complete.Prospective investors are encouraged to review Title I of the Texas Tax Code, as amended (the “Property Tax Code”), for identification of property subject to ad valorem taxation, property exempt or which may be exempted from ad valorem taxation if claimed, the appraisal of property for ad valorem tax purposes, and the procedures and limitations applicable to the levy and collection of ad valorem taxes.

Valuation of Taxable Property

The Property Tax Code provides for countywide appraisal and equalization of taxable property values and establishes in each county of the State an appraisal district and an appraisal review board (the “Appraisal Review Board”) responsible for appraising property for all taxing units within the county. The appraisal of property within the District is the responsibility of the Bexar Appraisal District (the “Appraisal District”). Except as generally described below, the Appraisal District is required to appraise all property within the Appraisal District on the basis of 100% of its market value and is prohibited from applying any assessment ratios. In determining market value of property, the Appraisal District is required to consider the cost method of appraisal, the income method of appraisal and the market data comparison method of appraisal, and use the method the chief appraiser of the Appraisal District considers most appropriate. The Property Tax Code requires appraisal districts to reappraise all property in its jurisdiction at least once every three (3) years. A taxing unit may require annual review at its own expense, and is entitled to challenge the determination of appraised value of property within the taxing unit by petition filed with the Appraisal Review Board.

State law requires the appraised value of an owner’s principal residence (“homestead” or “homesteads”) to be based solely on the property’s value as a homestead, regardless of whether residential use is considered to be the highest and best use of the property.State law further limits the appraised value of a homestead to the lesser of (1) the market value of the property or (2) 110% of the appraised value of the property for the preceding tax year plus the market value of all new improvements to the property.

State law provides that eligible owners of both agricultural land and open-space land, including open-space land devoted to farm or ranch purposes or open-space land devoted to timber production, may elect to have such property appraised for property taxation on the basis of its productive capacity. The same land may not be qualified as both agricultural and open-space land.

The appraisal values set by the Appraisal District are subject to review and change by the Appraisal Review Board. The appraisal rolls, as approved by the Appraisal Review Board, are used by taxing units, such as the District, in establishing their tax rolls and tax rates (see “TAX INFORMATION – District and Taxpayer Remedies”).

State Mandated Homestead Exemptions

State law grants, with respect to each school district in the State, (1) a $25,000 exemption of the appraised value of all homesteads, (2) a $10,000 exemption of the appraised value of the homesteads of persons sixty-five (65) years of age or older and the disabled, and (3) various exemptions for disabled veterans and their families, surviving spouses of members of the armed services killed in action and surviving spouses of first responders killed or fatally wounded in the line of duty.

Local Option Homestead Exemptions

The governing body of a taxing unit, including a city, county, school district, or special district, at its option may grant: (1) an exemption of up to 20% of the appraised value of all homesteads (but not less than $5,000) and (2) an additional exemption of at least $3,000 of the appraised value of the homesteads of persons sixty-five (65) years of age or older and the disabled. Each taxing unit decides if it will offer the local option homestead exemptions and at what percentage or dollar amount, as applicable. The governing body of a school district may not repeal or reduce the amount of the local option homestead exemption described in (1), above, that was in place for the 2014 tax year (fiscal year 2015) for a period ending December 31, 2019. The exemption described in (2), above, may also be created, increased, decreased or repealed at an election called by the governing body of a taxing unit upon presentment of a petition for such creation, increase, decrease, or repeal of at least 20% of the number of qualified voters who voted in the preceding election of the taxing unit.

State Mandated Freeze on School District Taxes

Except for increases attributable to certain improvements, a school district is prohibited from increasing the total ad valorem tax on the homestead of persons sixty-five (65) years of age or older or of disabled persons above the amount of tax imposed in the year such homestead qualified for such exemption. This freeze is transferable to a different homestead if a qualifying taxpayer moves and, under certain circumstances, is also transferable to the surviving spouse of persons sixty-five (65) years of age or older, but not the disabled.

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Personal Property

Tangible personal property (furniture, machinery, supplies, inventories, etc.) used in the “production of income” is taxed based on the property’s market value. Taxable personal property includes income-producing equipment and inventory. Intangibles such as goodwill, accounts receivable, and proprietary processes are not taxable. Tangible personal property not held or used for production of income, such as household goods, automobiles or light trucks, and boats, is exempt from ad valorem taxation unless the governing body of a taxing unit elects to tax such property.

Freeport and Goods-in-Transit Exemptions

Certain goods that are acquired in or imported into the State to be forwarded outside the State, and are detained in the State for 175 days or less for the purpose of assembly, storage, manufacturing, processing or fabrication (“Freeport Property”) are exempt from ad valorem taxation unless a taxing unit took official action to tax Freeport Property before April 1, 1990 and has not subsequently taken official action to exempt Freeport Property. Decisions to continue taxing Freeport Property may be reversed in the future; decisions to exempt Freeport Property are not subject to reversal.

Certain goods, that are acquired in or imported into the State to be forwarded to another location within or without the State, stored in a location that is not owned by the owner of the goods and are transported to another location within or without the State within 175 days (“Goods-in-Transit”), are generally exempt from ad valorem taxation; however, the Property Tax Code permits a taxing unit, on a local option basis, to tax Goods-in-Transit if the taxing unit takes official action, after conducting a public hearing, before January 1 of the first tax year in which the taxing unit proposes to tax Goods-in-Transit. Goods-in-Transit and Freeport Property do not include oil, natural gas or petroleum products, and Goods-in-Transit does not include aircraft or special inventories such as manufactured housing inventory, or a dealer’s motor vehicle, boat, or heavy equipment inventory.

A taxpayer may receive only one of the Goods-in-Transit or Freeport Property exemptions for items of personal property.

Other Exempt Property

Other major categories of exempt property include property owned by the State or its political subdivisions if used for public purposes, property exempt by federal law, property used for pollution control, farm products owned by producers, property of nonprofit corporations used for scientific research or educational activities benefitting a college or university, designated historic sites, solar and wind-powered energy devices, and certain classes of intangible personal property.

Temporary Exemption for Qualified Property Damaged by a Disaster

The Property Tax Code entitles the owner of certain qualified (i) tangible personal property used for the production of income, (ii) improvements to real property, and (iii) manufactured homes located in an area declared by the governor to be a disaster area following a disaster and is at least 15 percent damaged by the disaster, as determined by the chief appraiser, to an exemption from taxation of a portion of the appraised value of the property. The amount of the exemption ranges from 15 percent to 100 percent based upon the damage assessment rating assigned by the chief appraiser. Except in situations where the territory is declared a disaster on or after the date the taxing unit adopts a tax rate for the year in which the disaster declaration is issued, the governing body of the taxing unit is not required to take any action in order for the taxpayer to be eligible for the exemption. If a taxpayer qualifies for the exemption after the beginning of the tax year, the amount of the exemption is prorated based on the number of days left in the tax year following the day on which the governor declares the area to be a disaster area. For more information on the exemption, reference is made to Section 11.35 of the Property Tax Code. Section 11.35 of the Property Tax Code was enacted during the 2019 legislative session, and there is no judicial precedent for how the statute will be applied. Texas Attorney General Opinion KP-0299, issued on April 13, 2020, concluded a court would likely find the Texas Legislature intended to limit the temporary tax exemption to apply to property physically harmed as a result of a declared disaster.

Tax Increment Reinvestment Zones

A city or county, by petition of the landowners or by action of its governing body, may create one or more tax increment reinvestment zones (“TIRZ”) within its boundaries. At the time of the creation of the TIRZ, a “base value” for the real property in the TIRZ is established and the difference between any increase in the assessed valuation of taxable real property in the TIRZ in excess of the base value is known as the “tax increment”. During the existence of the TIRZ, all or a portion of the taxes levied against the tax increment by a city or county, and all other overlapping taxing units that elected to participate, are restricted to paying only planned project and financing costs within the TIRZ and are not available for the payment of other obligations of such taxing units.

Until September 1, 1999, school districts were able to reduce the value of taxable property reported to the State to reflect any taxable value lost due to TIRZ participation by the school district. The ability of the school district to deduct the taxable value of the tax increment that it contributed prevented the school district from being negatively affected in terms of state school funding. However, due to a change in law, local M&O tax rate revenue contributed to a TIRZ created on or after May 31, 1999 will count toward a school district’s Tier One entitlement (reducing Tier One State funds for eligible school districts) and will not be considered in calculating any school district’s Tier Two entitlement (see “CURRENT PUBLIC SCHOOL FINANCE SYSTEM – State Funding for School Districts”).

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Tax Limitation Agreements

The Texas Economic Development Act (Chapter 313, Texas Tax Code, as amended), allows school districts to grant limitations on appraised property values to certain corporations and limited liability companies to encourage economic development within the school district. Generally, during the last eight (8) years of the ten-year term of a tax limitation agreement, a school district may only levy and collect M&O taxes on the agreed-to limited appraised property value. For the purposes of calculating its Tier One and Tier Two entitlements, the portion of a school district’s property that is not fully taxable is excluded from the school district’s taxable property values.Therefore, a school district will not be subject to a reduction in Tier One or Tier Two State funds as a result of lost M&O tax revenues due to entering into a tax limitation agreement (see “CURRENT PUBLIC SCHOOL FINANCE SYSTEM – State Funding for School Districts”).

For a discussion of how the various exemptions described above are applied by the District, see “THE PROPERTY TAX CODE AS APPLIED TO THE DISTRICT” herein.

District and Taxpayer Remedies

Under certain circumstances, taxpayers and taxing units, including the District, may appeal the determinations of the Appraisal District by timely initiating a protest with the Appraisal Review Board. Additionally, taxing units such as the District may bring suit against the Appraisal District to compel compliance with the Property Tax Code.

Beginning in the 2020 tax year, owners of certain property with a taxable value in excess of the current year “minimum eligibility amount”,as determined by the State Comptroller, and situated in a county with a population of one million or more, may protest the determinations of an appraisal district directly to a three-member special panel of the appraisal review board, appointed by the chairman of the appraisal review board, consisting of highly qualified professionals in the field of property tax appraisal. The minimum eligibility amount is set at $50 million for the 2020 tax year, and is adjusted annually by the State Comptroller to reflect the inflation rate.

The Property Tax Code sets forth notice and hearing procedures for certain tax rate increases by the District and provides for taxpayer referenda that could result in the repeal of certain tax increases (see “TAX RATE LIMITATIONS – Public Hearing and Voter-Approval Tax Rate”). The Property Tax Code also establishes a procedure for providing notice to property owners of reappraisals reflecting increased property value, appraisals which are higher than renditions, and appraisals of property not previously on an appraisal roll.

Levy and Collection of Taxes

The District is responsible for the collection of its taxes, unless it elects to transfer such functions to another governmental entity.Taxes are due October 1, or when billed, whichever comes later, and become delinquent after January 31 of the following year. A delinquent tax incurs a penalty of six percent (6%) of the amount of the tax for the first calendar month it is delinquent, plus one percent (1%) for each additional month or portion of a month the tax remains unpaid prior to July 1 of the year in which it becomes delinquent. If the tax is not paid by July 1 of the year in which it becomes delinquent, the tax incurs a total penalty of twelve percent (12%) regardless of the number of months the tax has been delinquent and incurs an additional penalty of up to twenty percent (20%) of the delinquent tax, penalty and interest collected, if imposed by the District. The delinquent tax also accrues interest at a rate of one percent (1%) for each month or portion of a month it remains unpaid. The Property Tax Code also makes provision for the split payment of taxes, discounts for payment and the postponement of the delinquency date of taxes for certain taxpayers. Furthermore, the District may provide, on a local option basis, for the split payment, partial payment, and discounts for early payment of taxes under certain circumstances. The Property Tax Code permits taxpayers owning homes or certain businesses located in a disaster area and damaged as a direct result of the declared disaster to pay taxes imposed in the year following the disaster in four equal installments without penalty or interest, commencing on February 1 and ending on August 1. See “AD VALOREM TAX PROCEDURES – Temporary Exemption for Qualified Property Damaged by a Disaster” for further information related to a discussion of the applicability of this section of the Property Tax Code.

District’s Rights in the Event of Tax Delinquencies

Taxes levied by the District are a personal obligation of the owner of the property. On January 1 of each year, a tax lien attaches to property to secure the payment of all state and local taxes, penalties, and interest ultimately imposed for the year on the property. The lien exists in favor of each taxing unit, including the District, having power to tax the property. The District’s tax lien is on a parity with tax liens of such other taxing units. A tax lien on real property takes priority over the claim of most creditors and other holders of liens on the property encumbered by the tax lien, whether or not the debt or lien existed before the attachment of the tax lien; however, whether a lien of the United States is on a parity with or takes priority over a tax lien of the District is determined by applicable federal law. Personal property, under certain circumstances, is subject to seizure and sale for the payment of delinquent taxes, penalty, and interest.

At any time after taxes on property become delinquent, the District may file suit to foreclose the lien securing payment of the tax, to enforce personal liability for the tax, or both. In filing a suit to foreclose a tax lien on real property, the District must join other taxing units that have claims for delinquent taxes against all or part of the same property.

Collection of delinquent taxes may be adversely affected by the amount of taxes owed to other taxing units, adverse market conditions, taxpayer redemption rights, or bankruptcy proceedings which restrain the collection of a taxpayer’s debt.

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Federal bankruptcy law provides that an automatic stay of actions by creditors and other entities, including governmental units, goes into effect with the filing of any petition in bankruptcy. The automatic stay prevents governmental units from foreclosing on property and prevents liens for post‐petition taxes from attaching to property and obtaining secured creditor status unless, in either case, an order

lifting the stay is obtained from the bankruptcy court. In many cases, post‐petition taxes are paid as an administrative expense of the

estate in bankruptcy or by order of the bankruptcy court.

THE PROPERTY TAX CODE AS APPLIED TO THE DISTRICT

The Appraisal District has the responsibility for appraising property in the District as well as other taxing units in Bexar County, Texas. The Appraisal District is governed by a board of six directors appointed by members of the governing bodies of various political subdivisions within Bexar County. The District does not tax personal property not used in the production of income, such as personal automobiles. The District does collect up to an additional 20% penalty to defray attorney costs in the collection of delinquent taxes over and above the penalty automatically assessed under the Tax Code. The District does not collect its own taxes; the District’s taxes are collected by the Bexar County Tax Collector (the “Tax Assessor/Collector”). The District does allow split payments of taxes but does not give discounts for early payment of taxes. The District does not participate in a tax increment financing zone. The District does not grant any tax abatements. The District does not tax freeport goods as provided by Texas Tax Code Section 11.251. The District taxes goods-in-transit as provided by Texas Tax Code Section 11.253. The District grants a State mandated $25,000 general residence homestead exemption. The District grants a State mandated additional $10,000 residence homestead exemption for persons 65 years of age or older or the disabled. The District grants an additional State mandated residence homestead exemption for disabled veterans ranging from $5,000 to $12,000. The District grants an optional residence homestead exemption of 0.01% (minimum $5,000).

TAX RATE LIMITATIONS

M&O Tax Rate Limitations

The District is authorized to levy an M&O tax rate pursuant to the approval of the voters of the District at an election held on January 27, 1968 in accordance with the provisions of Chapter 2784e-1, Texas Revised Civil Statutes, as amended.

The 2019 Legislation established the following maximum M&O tax rate per $100 of taxable value that may be adopted by school districts, such as the District, for the 2019 and subsequent tax years:

For the 2019 tax year, the maximum M&O tax rate per $100 of taxable value that may be adopted by a school district is the sum of $0.17 and the product of the State Compression Percentage multiplied by $1.00. For the 2019 tax year, the state compression percentage has been set at 93%.

For the 2020 and subsequent tax years, the maximum M&O tax rate per $100 of taxable value that may be adopted by a school district is the sum of $0.17 and the school district’s MCR. A school district’s MCR is, generally, inversely proportional to the change in taxable property values both within the school district and the State, and is subject to recalculation annually. For any year, the highest possible MCR for a school district is $0.93 (see “TAX RATE LIMITATIONS – Public Hearing and Voter-Approval Tax Rate” and “CURRENT PUBLIC SCHOOL FINANCE SYSTEM – Local Funding for School Districts” herein).

Furthermore, a school district cannot annually increase its tax rate in excess of the school district’s Voter-Approval Tax Rate without submitting such tax rate to an election and a majority of the voters voting at such election approving the adopted rate (see “TAX RATE LIMITATIONS – Public Hearing and Voter-Approval Tax Rate” herein).

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I&S TAX RATE LIMITATIONS

A school district is also authorized to issue bonds and levy taxes for payment of bonds subject to voter approval of one or more propositions submitted to the voters under Section 45.003(b)(1), Texas Education Code, as amended, which provides a tax unlimited as to rate or amount for the support of school district bonded indebtedness (see “THE BONDS –Security for Payment).

Section 45.0031 of the Texas Education Code, as amended, requires a school district to demonstrate to the Texas Attorney General that it has the prospective ability to pay its maximum annual debt service on a proposed issue of bonds and all previously issued bonds, other than bonds approved by voters of a school district at an election held on or before April 1, 1991 and issued before September 1, 1992 (or debt issued to refund such bonds, collectively, “exempt bonds”), from a tax levied at a rate of $0.50 per $100 of assessed valuation before bonds may be issued (the “50-cent Test”). In demonstrating the ability to pay debt service at a rate of $0.50, a school district may take into account EDA and IFA allotments to the school district, which effectively reduces the school district’s local share of debt service, and may also take into account Tier One funds allotted to the school district. If a school district exercises this option, it may not adopt an I&S tax until it has credited to the school district’s I&S fund an amount equal to all State allotments provided solely for payment of debt service and any Tier One funds needed to demonstrate compliance with the threshold tax rate test and which is received or to be received in that year. Additionally, a school district may demonstrate its ability to comply with the 50-cent Test by applying the $0.50 tax rate to an amount equal to 90% of projected future taxable value of property in the school district, as certified by a registered professional appraiser, anticipated for the earlier of the tax year five (5) years after the current tax year or the tax year in which the final payment for the bonds is due. However, if a school district uses projected future taxable values to meet the 50-cent Test and subsequently imposes a tax at a rate greater than $0.50 per $100 of valuation to pay for bonds subject to the test, then for subsequent bond issues, the Texas Attorney General must find that the school district has the projected ability to pay principal and interest on the proposed bonds and all previously issued bonds subject to the 50-cent Test from a tax rate of $0.45 per $100 of valuation. Once the prospective ability to pay such tax has been shown and the bonds are issued, a school district may levy an unlimited tax to pay debt service. Refunding bonds are not subject to the 50-cent Test; however, taxes levied to pay debt service on such bonds (other than bonds issued to refund exempt bonds) are included in maximum annual debt service for calculation of the 50-cent Test when applied to subsequent bond issues that are subject to the 50-cent Test. The Bonds are issued for school building purposes pursuant to Chapter 45, Texas Education Code, as amended, as new debt, and the issuance is subject to the 50-cent Test. The District has not used projected property values or State assistance (other than EDA or IFA allotment funding) to satisfy this threshold test.

Public Hearing and Voter-Approval Tax Rate

A school district’s total tax rate is the combination of the M&O tax rate and the I&S tax rate. Generally, the highest rate at which a school district may levy taxes for any given year without holding an election to approve the tax rate is the “Voter-Approval Tax Rate”, as described below.

For the 2019 tax year, a school district is required to adopt its annual tax rate before the later of September 30 or the sixtieth (60th) day after the date the certified appraisal roll is received by the taxing unit, and a failure to adopt a tax rate by such required date will result in the tax rate for the taxing unit being the lower of the “effective tax rate” calculated for that tax year or the tax rate adopted by the taxing unit for the preceding tax year. “Effective tax rate” means the rate that will produce the prior year’s total tax levy from the current year’s total taxable values, adjusted such that lost values are not included in the calculation of the prior year’s taxable values and new values are not included in the current year’s taxable values.

For the 2019 tax year, the Voter-Approval Tax Rate for a school district is the sum of (i) the State Compression Percentage, multiplied by $1.00; (ii) the greater of (a) the school district’s M&O tax rate for the 2018 tax year, less the sum of (1) $1.00, and (2) any amount by which the school district is required to reduce its Enrichment Tax Rate for the 2019 tax year, or (b) $0.04; and (iii) the school district’s I&S tax rate. For the 2019 tax year, a school district’s M&O tax rate may not exceed the rate equal to the sum of (i) $0.17 and (ii) the product of the State Compression Percentage multiplied by $1.00.

For the 2019 tax year, a school district with a Voter-Approval Tax Rate equal to or greater than $0.97 (excluding the school district’s current I&S tax rate) may not adopt tax rate for the 2019 tax year that exceeds the school district’s Voter-Approval Tax Rate.

Beginning with the 2020 tax year, a school district is required to adopt its annual tax rate before the later of September 30 or the sixtieth (60th) day after the date the certified appraisal roll is received by the taxing unit, except that a tax rate that exceeds the Voter-Approval Tax Rate must be adopted not later than the seventy-first (71st) day before the next occurring November uniform election date. A school district’s failure to adopt a tax rate equal to or less than the Voter-Approval Tax Rate by September 30 or the sixtieth (60th) day after receipt of the certified appraisal roll, will result in the tax rate for such school district for the tax year to be the lower of the “no-new-revenue tax rate” calculated for that tax year or the tax rate adopted by the school district for the preceding tax year. A school district’s failure to adopt a tax rate in excess of the Voter-Approval Tax Rate on or prior to the seventy-first (71st) day before the next occurring November uniform election date, will result in the school district adopting a tax rate equal to or less than its Voter-Approval Tax Rate by the later of September 30 or the sixtieth (60th) day after receipt of the certified appraisal roll. “No-new-revenue tax rate” means the rate that will produce the prior year’s total tax levy from the current year’s total taxable values, adjusted such that lost values are not included in the calculation of the prior year’s taxable values and new values are not included in the current year’s taxable values.

For the 2020 and subsequent tax years, the Voter-Approval Tax Rate for a school district is the sum of (i) the school district’s MCR; (ii) the greater of (a) the school district’s Enrichment Tax Rate for the preceding year, less any amount by which the school district is required to reduce its current year Enrichment Tax Rate pursuant to Section 48.202(f), Education Code, as amended, or (b) the rate of $0.05 per $100 of taxable value; and (iii) the school district’s current I&S tax rate. However, for only the 2020 tax year, if the governing body of the

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school district does not adopt by unanimous vote an M&O tax rate at least equal to the sum of the school district’s MCR plus $0.05, then $0.04 is substituted for $0.05 in the calculation for such school district’s Voter-Approval Tax Rate for the 2020 tax year. For the 2020 tax year, and subsequent years, a school district’s M&O tax rate may not exceed the rate equal to the sum of (i) $0.17 and (ii) the school district’s MCR (see “CURRENT PUBLIC SCHOOL FINANCE SYSTEM” herein, for more information regarding the State Compression Percentage, MCR, and the Enrichment Tax Rate).

Beginning with the 2020 tax year, the governing body of a school district generally cannot adopt a tax rate exceeding the school district's Voter-Approval Tax Rate without approval by a majority of the voters approving the higher rate at an election to be held on the next uniform election date. Further, subject to certain exceptions for areas declared disaster areas, State law requires the board of trustees of a school district to conduct an efficiency audit before seeking voter approval to adopt a tax rate exceeding the Voter-Approval Tax Rate and sets certain parameters for conducting and disclosing the results of such efficiency audit. An election is not required for a tax increase to address increased expenditures resulting from certain natural disasters in the year following the year in which such disaster occurs; however, the amount by which the increased tax rate exceeds the school district’s Voter-Approval Tax Rate for such year may not be considered by the school district in the calculation of its subsequent Voter-Approval Tax Rate.

The calculation of the Voter-Approval Tax Rate does not limit or impact the District’s ability to set an I&S tax rate in each year sufficient to pay debt service on all of the District’s tax-supported debt obligations, including the Bonds.

Before adopting its annual tax rate, a public meeting must be held for the purpose of adopting a budget for the succeeding year. A notice of public meeting to discuss the school district’s budget and proposed tax rate must be published in the time, format and manner prescribed in Section 44.004 of the Texas Education Code. Section 44.004(e) of the Texas Education Code provides that a person who owns taxable property in a school district is entitled to an injunction restraining the collection of taxes by the school district if the school district has not complied with such notice requirements or the language and format requirements of such notice as set forth in Section 44.004(b), (c), (c-1), (c-2), and (d), and, if applicable, subsection (i), and if such failure to comply was not in good faith.Section 44.004(e) further provides the action to enjoin the collection of taxes must be filed before the date the school district delivers substantially all of its tax bills. A school district that elects to adopt a tax rate before the adoption of a budget for the fiscal year that begins in the current tax year may adopt a tax rate for the current tax year before receipt of the certified appraisal roll, so long as the chief appraiser of the appraisal district in which the school district participates has certified to the assessor for the school district an estimate of the taxable value of property in the school district. If a school district adopts its tax rate prior to the adoption of its budget, both the no-new-revenue tax rate and the Voter-Approval Tax Rate of the school district shall be calculated based on the school district’s certified estimate of taxable value. A school district that adopts a tax rate before adopting its budget must hold a public hearing on the proposed tax rate followed by another public hearing on the proposed budget rather than holding a single hearing on the two items.

Beginning with the 2020 tax year, a school district must annually calculate and prominently post on its internet website, and submit to the county tax assessor-collector for each county in which all or part of the school district is located its Voter-Approval Tax Rate in accordance with forms prescribed by the State Comptroller.

TAX MATTERS

The delivery of the Bonds is subject to the opinion of Escamilla & Poneck, LLP, San Antonio, Texas (“Bond Counsel”) to the effect that interest on the Bonds for federal income tax purposes (1) is excludable from the gross income, as defined in section 61 of the Internal Revenue Code of 1986, as amended to the date hereof (the “Code”), of the owners thereof pursuant to section 103 of the Code and existing regulations, published rulings, and court decisions, and (2) will not be included in computing the alternative minimum taxable income of individuals. The statute, regulations, rulings, and court decisions on which such opinion is based are subject to change. A form of Bond Counsel’s opinion appears in APPENDIX C hereto. In rendering the foregoing opinions, Bond Counsel will rely upon the representations and certifications of the District pertaining to the use, expenditure and investment of the proceeds of the Bonds and will assume continuing compliance with the provisions of the Order by the District subsequent to the issuance of the Bonds. The Order contains covenants by the District with respect to, among other matters, the use of the proceeds of the Bonds and the facilities financed or refinanced therewith by persons other than state or local governmental units, the manner in which the proceeds of the Bonds are to be invested and the reporting of certain information to the United States Treasury.Failure to comply with any of these covenants may cause interest on the Bonds to be includable in the gross income of the owner thereof for federal income taxes from the date of the issuance of the Bonds. Bond Counsel has not been retained by the District to monitor such post-issuance compliance. Except as described above, Bond Counsel will express no other opinion with respect to any other federal, state or local tax consequences under present law, or proposed legislation, resulting from the receipt or accrual of interest on, or the acquisition or disposition of, the Bonds.Bond Counsel’s opinion is not a guarantee of a result, but represents its legal judgment based upon its review of existing statutes, regulations, published rulings and court decisions and the representations and covenants of the District described above. No ruling has been sought from the Internal Revenue Service (the “IRS”) with respect to the matters addressed in the opinion of Bond Counsel, and Bond Counsel’s opinion is not binding on the IRS. The IRS has an ongoing program of auditing the tax-exempt status of the interest on municipal obligations.If an audit of the Bonds is commenced, under current procedures the IRS is likely to treat the District as the “taxpayer,” and the owners of the Bonds would have no right to participate in the audit process. In responding to or defending an audit of the tax-exempt status of the interest on the Bonds, the District may have different or conflicting interests from the owners of the Bonds. Public awareness of any future audit of the Bonds could adversely affect the value and liquidity of the Bonds during the pendency of the audit, regardless of its ultimate outcome.

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Tax Changes

Existing law may change to reduce or eliminate the benefit to bondholders of the exclusion of interest on the Bonds from gross income for federal income tax purposes. Any proposed legislation or administrative action, whether or not taken, could also affect the value and marketability of the Bonds. Prospective purchasers of the Bonds should consult with their own tax advisors with respect to any proposed or future changes in tax law. Ancillary Tax Consequences

Prospective purchasers of the Bonds should be aware that the ownership of tax-exempt obligations such as the Bonds may result in collateral federal tax consequences to, among others, financial institutions, property and casualty insurance companies, life insurance companies, certain foreign corporations doing business in the United States, S corporations with subchapter C earnings and profits, owners of an interest in a FASIT, individual recipients of Social Security or Railroad Retirement benefits, individuals otherwise qualifying for the earned income tax credit and taxpayers who may be deemed to have incurred or continued indebtedness to purchase or carry, or who have paid or incurred certain expenses allocable to, tax-exempt obligations. Pursuant to Public Law No. 115-97 (i.e., the Tax Cuts and Jobs Act), for tax years beginning after December 31, 2017, the corporate alternative minimum tax is repealed. Prospective purchasers should consult their own tax advisors as to the applicability of these consequences to their particular circumstances. Tax Accounting Treatment of Discount Bonds

The initial public offering price to be paid for certain Bonds may be less than the amount payable on such Bonds at maturity (the “Discount Bonds”). An amount equal to the difference between the initial public offering price of a Discount Bond (assuming that a substantial amount of the Discount Bonds of that maturity are sold to the public at such price) and the amount payable at maturity constitutes original issue discount to the initial purchaser of such Discount Bonds. A portion of such original issue discount, allocable to the holding period of a Discount Bond by the initial purchaser, will be treated as interest for federal income tax purposes, excludable from gross income on the same terms and conditions as those for other interest on the Bonds. Such interest is considered to be accrued actuarially in accordance with the constant interest method over the life of a Discount Bond, taking into account the semiannual compounding of accrued interest, at the yield to maturity on such Discount Bond and generally will be allocated to an initial purchaser in a different amount from the amount of the payment denominated as interest actually received by the initial purchaser during his taxable year. However, such accrued interest may be required to be taken into account in determining the amount of the branch profits tax applicable to certain foreign corporations doing business in the United States, even though there will not be a corresponding cash payment. In addition, the accrual of such interest may result in certain other collateral federal income tax, consequences to, among others, financial institutions, property and casualty insurance companies, life insurance companies, S corporations with subchapter C earnings and profits, owners of an interest in a FASIT, individual recipients of Social Security or Railroad Retirement benefits, individuals otherwise qualifying for the earned income tax credit, and taxpayers who may be deemed to have incurred or continued indebtedness to purchase or carry, or who have paid or incurred certain expenses allocable to, tax-exempt obligations. In the event of the sale or other taxable disposition of a Discount Bond prior to maturity, the amount realized by such owner in excess of the basis of such Discount Bond in the hands of such owner (adjusted upward by the portion of the original issue discount allocable to the period for which such Discount Bond was held) is includable in gross income. Owners of Discount Bonds should consult with their own tax advisors with respect to the determination for federal income tax purposes of accrued interest upon disposition of Discount Bonds and with respect to the state and local tax consequences of owning Discount Bonds. It is possible that, under applicable provisions governing determination of state and local income taxes, accrued interest on the Discount Bonds may be deemed to be received in the year of accrual even though there will not be a corresponding cash payment. Tax Accounting Treatment of Premium Bonds

The initial public offering price to be paid for certain Bonds may be greater than the stated redemption price on such Bonds at maturity (the “Premium Bonds”). An amount equal to the difference between the initial public offering price of a Premium Bond (assuming that a substantial amount of the Premium Bonds of that maturity are sold to the public at such price) and its stated redemption price at maturity constitutes premium to the initial purchaser of such Premium Bonds. The basis for federal income tax purposes of a Premium Bond in the hands of such initial purchaser must be reduced each year by the amortizable bond premium, although no federal income tax deduction is allowed as a result of such reduction in basis for amortizable bond premium with respect to the Premium Bonds. Such reduction in basis will increase the amount of any gain (or decrease the amount of any loss) to be recognized for federal income tax purposes upon a sale or other taxable disposition of a Premium Bond. The amount of premium which is amortizable each year by an initial purchaser is determined by using such purchaser’s yield to maturity. Purchasers of the Premium Bonds should consult with their own tax advisors with respect to the determination of amortizable bond premium on Premium Bonds for federal income tax purposes and with respect to the state and local tax consequences of owning and disposing of Premium Bonds.

CONTINUING DISCLOSURE OF INFORMATION

In the Order, the District has made the following agreement for the benefit of the holders and Beneficial Owners of the Bonds. The District is required to observe the agreement for so long as it remains obligated to advance funds to pay the Bonds. Under the agreement, the District will be obligated to provide certain updated financial information and operating data annually and timely notice of specified events to the MSRB through its EMMA system, where it will be available to the general public, free of charge at www.emma.msrb.com.

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Annual Reports

The District will file certain updated financial information and operating data with the MSRB. The information to be updated includes all quantitative financial information and operating data with respect to the District of the general type included in APPENDIX A (Tables 1-13) exclusive of the table “Estimated Overlapping Debt” and in APPENDIX D. Additionally, tables which provide neither quantitative financial information nor operating data for the District, including, but not limited to “Authorized but Unissued Bonds” will not be included in the District’s annual filings. The District will update and provide this information within six months after the end of each Fiscal Year ending in or after 2020. The financial information and operating data to be provided may be set forth in full in one or more documents or may be included by specific reference to any document available to the public on the MSRB’s EMMA Internet website or filed with the United States Securities and Exchange Commission (the “SEC”); as permitted by SEC Rule 15c2-12 (the “Rule”). The updated information will include audited financial statements, if the District commissions an audit and it is completed by the required time. If audited financial statements are not available by the required time, the District will provide unaudited financial information by the required time and audited financial statements when and if such audited financial statements become available. Any such financial statements will be prepared in accordance with the accounting principles described in APPENDIX D or such other accounting principles as the District may be required to employ from time to time pursuant to State law or regulation.

The District’s current fiscal year end is June 30. Accordingly, it must provide updated information by the last day of December in each year following the end of its fiscal year, unless the District changes its fiscal year. If the District changes its fiscal year, it will notify the MSRB of the change. Notice of Certain Events

The District will file with the MSRB notice of any of the following events with respect to the Bonds in a timely manner (and not more than 10 business days after occurrence of the event): (1) principal and interest payment delinquencies; (2) non-payment related defaults, if material; (3) unscheduled draws on debt service reserves reflecting financial difficulties; (4) unscheduled draws on credit enhancements reflecting financial difficulties; (5) substitution of credit or liquidity providers, or their failure to perform; (6) adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB), or other material notices or determinations with respect to the federal income tax status of the Bonds, or other material events affecting the tax status of the Bonds; (7) modifications to rights of holders of the Bonds, if material; (8) Bond calls, if material, and tender offers; (9) defeasances; (10) release, substitution, or sale of property securing repayment of the Bonds, if material; (11) rating changes; (12) bankruptcy, insolvency, receivership, or similar event of the District, which shall occur as described below; (13) the consummation of a merger, consolidation, or acquisition involving the District or the sale of all or substantially all of its assets, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; (14) appointment of a successor or additional paying agent/registrar or the change of name of a paying agent/registrar, if material. Neither the Bonds nor the Order makes any provision for debt service reserves, credit enhancement (except for the guarantee of the Texas Permanent School Fund), or liquidity enhancement; (15) incurrence of a Financial Obligation of the District, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a Financial Obligation of the District, any of which affect security holders, if material; and (16) default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a Financial Obligation of the District, any of which reflect financial difficulties. In addition, the District will provide timely notice of any failure by the District to provide information, data, or financial statements in accordance with its agreement described above under “Annual Reports”. The District will provide each notice described in this paragraph to the MSRB. For these purposes, (A) any event described in clause (12) of the immediately preceding paragraph is considered to occur when any of the following occur; the appointment of a receiver, fiscal agent, or similar officer for the District in a proceeding under the United States Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the District, or if such jurisdiction has been assumed by leaving the existing governing body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement, or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the District, and (B) the District intends the words used in clauses (15) and (16) of the immediately preceding paragraph and in the definition of Financial Obligation to have the meanings ascribed to them in SEC Release No. 34-83885, dated August 20, 2018.

Availability of Information

Effective July 1, 2009 (the “EMMA Effective Date”), the SEC implemented amendments to the Rule which approved the establishment by the MSRB of EMMA, which is now the sole successor to the national municipal securities information repositories with respect to filings made in connection with undertakings made under the Rule. Commencing with the EMMA Effective Date, all information and documentation filing required to be made by the District in accordance with its undertaking made for the Bonds will be made with the MSRB in electronic format in accordance with MSRB guidelines. Access to such filings will be provided, without charge to the general public, by the MSRB. With respect to debt of the District issued prior to the EMMA Effective Date, the District remains obligated to make annual required filings, as well as notices of certain events, under its continuing disclosure obligations relating to those debt obligations (which includes a continuing obligation to make such filings with the Texas state information depository (the “SID”)). Prior to the EMMA Effective Date, the Municipal Advisory Council of Texas (the “MAC”) had been designated by the State and approved by the SEC staff as a qualified SID. Subsequent to the EMMA Effective Date, the MAC entered into a Subscription Agreement with the MSRB pursuant to which the MSRB

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makes available to the MAC, in electronic format, all Texas-issuer continuing disclosure documents and related information posted to EMMA’s website simultaneously with such posting. Until the District receives notice of a change in this contractual agreement between the MAC and EMMA or of a failure of either party to perform as specified thereunder, the District has determined, in reliance on guidance from the MAC, that making its continuing disclosure filings solely with the MSRB will satisfy its obligations to make filings with the SID pursuant to its continuing disclosure agreements entered into prior to the EMMA Effective Date. Limitations and Amendments

The District has agreed to update information and to provide notices of specified events only as described above. The District has not agreed to provide other information that may be relevant or material to a complete presentation of its financial results of operations, condition, or prospects or agreed to update any information that is provided, except as described above. The District makes no representation or warranty concerning such information or concerning its usefulness to a decision to invest in or sell Bonds at any future date. The District disclaims any contractual or tort liability for damages resulting in whole or in part from any breach of its continuing disclosure agreement or from any statement made pursuant to its agreement, although holders of Bonds may seek a writ of mandamus to compel the District to comply with its agreement. The District may amend its continuing disclosure agreement from time to time to adapt to changed circumstances that arise from a change in legal requirements, a change in law, or a change in the identity, nature, status, or type of operations of the District, if (i) the agreement, as amended, would have permitted an Underwriter to purchase or sell Bonds in the offering described herein in compliance with the Rule, taking into account any amendments or interpretations of the Rule to the date of such amendment, as well as such changed circumstances, and (ii) either (a) the holders of a majority in aggregate principal amount of the outstanding Bonds consent to the amendment or (b) any person unaffiliated with the District (such as nationally recognized bond counsel) determines that the amendment will not materially impair the interests of the registered owners of the Bonds. The District may also amend or repeal the provisions of this continuing disclosure agreement if the SEC amends or repeals the applicable provisions of the Rule or a court of final jurisdiction enters judgment that such provisions of the Rule are invalid, but only if and to the extent that the provisions of this sentence would not prevent an Underwriter from lawfully purchasing or selling Bonds in the primary offering of the Bonds. If the District so amends the agreement, it has agreed to include with the next financial information and operating data provided in accordance with its agreement described above under “Annual Reports” an explanation, in narrative form, of the reasons for the amendment and of the impact of any change in the type of financial information and operating data so provided. Compliance with Prior Undertakings

During the last five years, the District has, on a continuing basis, complied in all material respects with all continuing disclosure agreements made by it in accordance with the Rule.

EFFECT OF SEQUESTRATION AND IRS OPERATIONS DURING COVID-19

The District has determined that the reduced amount of refundable tax credit payments to be received from the United States Treasury in relation to its outstanding obligations designated as “build America bonds” and “qualified bonds” under the Code as a result of the automatic reductions in federal spending effective March 1, 2013 pursuant to the Budget Control Act of 2011 (commonly referred to as “Sequestration”) and any delay in payment of the refundable tax credit payment by the United States Treasury due to the operational status of the IRS and its stated limited ability to process paper returns due to the COVID-19 outbreak will not have a material impact on the financial condition of the District or its ability to pay regularly scheduled debt service on its outstanding obligations when and in the amounts due and owing. Under current law, Sequestration is scheduled to continue through September 2027. The current reduction in debt subsidy payment received by the District from the U.S. Treasury as a result of Sequestration is 5.9% (being the most recently announced rate of sequester and effective as of October 1, 2019.)


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LEGAL MATTERS Legal Opinions

The Issuer will furnish the Underwriters with a complete transcript of proceedings incident to the authorization and issuance of the Bonds, including the unqualified approving legal opinion of the Attorney General of the State of Texas to the effect that the Initial Bond is a valid and legally binding obligation of the Issuer, and based upon examination of such transcript of proceedings, the legal opinion of Bond Counsel, to like effect and to the effect that the interest on the Bonds will be excludable from gross income for federal income tax purposes under Section 103(a) of the Code, subject to the matters described under "TAX MATTERS" herein. Though it represents the Financial Advisor and the Underwriters from time to time in matters unrelated to the issuance of the Bonds, Bond Counsel was engaged by, and only represents, the District in connection with the issuance of the Bonds. In their capacity as Bond Counsel, Escamilla & Poneck, LLP, San Antonio, Texas, has reviewed the information under the captions and subcaptions "THE BONDS" (except for the subcaptions “Permanent School Fund Guarantee”, “Redemption Through the Depository Trust Company,” and "Payment Record" as to which no opinion is expressed), "REGISTRATION, TRANSFER AND EXCHANGE", "STATE AND LOCAL FUNDING OF SCHOOL DISTRICTS IN TEXAS", "CURRENT PUBLIC SCHOOL FINANCE SYSTEM", “TAX RATE LIMITATIONS”, "TAX MATTERS", "OTHER PERTINENT INFORMATION - Registration and Qualification of Bonds for Sale", "LEGAL MATTERS - Legal Investments and Eligibility to Secure Public Funds in Texas", “LEGAL MATTERS – Legal Opinions” (except for the second paragraph thereof, as to which no opinion is expressed), and “CONTINUING DISCLOSURE OF INFORMATION” (except the information under the subcaption "Compliance with Prior Undertakings" as to which no opinion is expressed) in the Official Statement and such firm is of the opinion that the information relating to the Bonds and the legal issues contained under such captions and subcaptions is an accurate and fair description of the laws and legal issues addressed therein and, with respect to the Bonds, such information conforms to the Order. The customary closing papers, including a certificate of the District to the effect that no litigation of any nature has been filed or is then pending to restrain the issuance and delivery of the Bonds or which would affect the provision made for their payment or security, or in any manner questioning the validity of the Bonds will also be furnished. The legal fees to be paid Bond Counsel for services rendered in connection with the issuance of Bonds are contingent on the sale and delivery of the Bonds. The legal opinion of Bond Counsel will accompany the Bonds deposited with DTC or will be printed on the definitive Bonds in the event of the discontinuance of the Book-Entry-Only System.

Certain legal matters will be passed upon for the Underwriters by Locke Lord LLP, Austin, Texas and Kassahn & Ortiz, P.C., San Antonio, Texas, as Co-Counsel to the Underwriters. Although they each represent the Financial Advisor from time to time in matters unrelated to the issuance of the Bonds, Co-Counsel to the Underwriters were engaged by, and only represent, the Underwriters in connection with the issuance of the Bonds. The various legal opinions to be delivered concurrently with the delivery of the Bonds express the professional judgment of the attorneys rendering the opinions as to the legal issues explicitly addressed therein. In rendering a legal opinion, the attorney does not become an insurer or guarantor of the expression of professional judgment, of the transaction opined upon, or of the future performance of the parties to the transaction. Nor does the rendering of an opinion guarantee the outcome of any legal dispute that may arise out of the transaction.

Litigation

On the date of delivery of the Bonds to the Underwriters, the District will execute and deliver to the Underwriters a certificate to the effect that, except as disclosed herein, no litigation of any nature has been filed or is pending, as of that date, to restrain or enjoin the issuance or delivery of the Bonds or which would affect the provisions made for their payment or security or in any manner question the validity of the Bonds. In the opinion of various officials of the Issuer, other than as described herein there is no litigation or other proceeding pending against or, to their knowledge, threatened against the Issuer in any court, agency, or administrative body (either state or federal) wherein an adverse decision would materially adversely affect the financial condition or operations of the Issuer. Legal Investments and Eligibility to Secure Public Funds in Texas

Section 1201.041 of the Public Securities Procedures Act (Chapter 1201, Texas Government Code) provides that the Bonds are negotiable instruments governed by Chapter 8, Texas Business and Commerce Code, and are legal and authorized investments for insurance companies, fiduciaries, and trustees, and for the sinking funds of municipalities or other political subdivisions or public agencies of the State. With respect to investment in the Bonds by municipalities or other political subdivisions or public agencies of the State, the Public Funds Investment Act, Chapter 2256, Texas Government Code, requires that the Bonds be assigned a rating of at least "A" or its equivalent as to investment quality by a national rating agency. (See "OTHER PERTINENT INFORMATION - Ratings" herein.) In addition, various provisions of the Texas Finance Code provide that, subject to a prudent investor standard, the Bonds are legal investments for state banks, savings banks, trust companies with at least $1 million of capital, and savings and loan associations. The Bonds are eligible to secure deposits of any public funds of the State, its agencies, and its political subdivisions, and are legal security for those deposits to the extent of their market value. The District has made no investigation of other laws, rules, regulations or investment criteria which might apply to such institutions or entities or which might limit the suitability of the Bonds for any of the foregoing purposes or limit the authority of such institutions or entities to purchase or invest in the Bonds for such purposes. The District has made no review of laws in other states to determine whether the Bonds are legal investments for various institutions in those states.

45

OTHER PERTINENT INFORMATION Registration and Qualification of Bonds for Sale

The sale of the Bonds has not been registered under the Securities Act of 1933, as amended, in reliance upon exemptions provided in such Act; the Bonds have not been qualified under the Securities Act of Texas in reliance upon exemptions contained therein; nor have the Bonds been qualified under the securities acts of any other jurisdiction. The Issuer assumes no responsibility for qualification of the Bonds under the securities laws of any jurisdiction in which they may be sold, assigned, pledged, hypothecated or otherwise transferred.This disclaimer of responsibility for qualification for sale or other disposition of the Bonds shall not be construed as an interpretation of any kind with regard to the availability of any exemption from securities registration or qualification provisions.

It is the obligation of the Underwriters to register or qualify the sale of the Bonds under the securities laws of any jurisdiction which so requires. The District agrees to cooperate, at the Underwriters’ written request and sole expense, in registering or qualifying the Bonds or in obtaining an exemption from registration or qualification in any state where such action is necessary; provided, however, that the District shall not be required to qualify as a foreign corporation or to execute a general or special consent to service of process in any jurisdiction. Ratings

Fitch Ratings, Inc. (“Fitch”) and Moody’s Investors Service, Inc. (“Moody’s”) have rated the Bonds “AAA” and “Aaa”, respectively, based on the payment of the Bonds being guaranteed by the State of Texas Permanent School Fund. (See “THE PERMANENT SCHOOL FUND PROGRAM” herein.) The unenhanced, underlying ratings of the District’s unlimited ad valorem tax-supported bonds, which includes the Bonds, is “AA” and “Aa2”, by Fitch and Moody’s, respectively. The ratings of the Bonds by Moody’s and Fitch reflect only the view of such company at the time the ratings are given, and the District makes no representations as to the appropriateness of the ratings. There is no assurance that the ratings will continue for any given period of time, or that the ratings will not be revised downward or withdrawn entirely by Fitch and Moody’s, if, in the respective judgment of said company, circumstances so warrant. Any such downward revision or withdrawal of the rating may have an adverse effect on the market price of the Bonds. Authenticity of Financial Information

The financial data and other information contained herein have been obtained from the Issuer's records, audited financial statements and other sources which are believed to be reliable. All of the summaries of the statutes, documents and Order contained in this Official Statement are made subject to all of the provisions of such statutes, documents and Order. These summaries do not purport to be complete statements of such provisions and reference is made to such documents for further information. All information contained in this Official Statement is subject, in all respects, to the complete body of information contained in the original sources thereof and no guaranty, warranty or other representation is made concerning the accuracy or completeness of the information herein. In particular, no opinion or representation is rendered as to whether any projection will approximate actual results, and all opinions, estimates and assumptions, whether or not expressly identified as such, should not be considered statements of fact. Information from External Sources

References to web site addresses presented herein are for informational purposes only and may be in the form of a hyperlink solely for the reader’s convenience. Unless specified otherwise, such web sites and the information or links contained therein are not incorporated into, and are not part of, this Official Statement for purposes of, and as that term is defined in, SEC Rule 15c2-12. Financial Advisor

Frost Bank is employed as the Financial Advisor to the Issuer in connection with the issuance of the Bonds. In this capacity, the Financial Advisor has compiled certain data relating to the Bonds and has drafted this Official Statement. The Financial Advisor has not independently verified any of the data contained herein or conducted a detailed investigation of the affairs of the Issuer to determine the accuracy or completeness of this Official Statement. Because of its limited participation, the Financial Advisor assumes no responsibility for the accuracy or completeness of any of the information contained herein. The fees for the Financial Advisor are contingent upon the issuance, sale and delivery of the Bonds. The Financial Advisor has provided the following sentence for inclusion in this Official Statement. The Financial Advisor has reviewed the information in this Official Statement in accordance with, and as part of, its responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Financial Advisor does not guarantee the accuracy or completeness of such information. Forward Looking Statements

The statements contained in this Official Statement, and in any other information provided by the Issuer, that are not purely historical, are forward-looking statements, including statements regarding the Issuer’s expectations, hopes, intentions, or strategies regarding the future.Readers should not place undue reliance on forward-looking statements. All forward-looking statements included in this Official Statement are based on information available to the Issuer on the date hereof, and the Issuer assumes no obligation to update any such forward-looking statements. It is important to note that the Issuer’s actual results could differ materially from those in such forward-looking statements.

46

The forward-looking statements herein are necessarily based on various assumptions and estimates and are inherently subject to various risks and uncertainties, including risks and uncertainties relating to the possible invalidity of the underlying assumptions and estimates and possible changes or developments in social, economic, business, industry, market, legal and regulatory circumstances and conditions and actions taken or omitted to be taken by third parties, including customers, suppliers, business partners and competitors, and legislative, judicial and other governmental authorities and officials. Assumptions related to the foregoing involve judgments with respect to, among other things, future economic, competitive, and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the control of the Issuer. Any of such assumptions could be inaccurate and, therefore, there can be no assurance that the forward-looking statements included in this Official Statement would prove to be accurate. Underwriting

The Underwriters and their respective affiliates are full service financial institutions engaged in various activities, which may include securities trading, commercial and investment banking, financial advisory, investment management, principal investment, hedging, financing and brokerage activities. Certain of the Underwriters and their respective affiliates have, from time to time, performed, and may in the future perform, various investment banking services for the District for which they received or will receive customary fees and expenses. In the ordinary course of their various business activities, the Underwriters and their respective affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (which may include bank loans and/or credit default swaps) for their own account and for the accounts of their customers and may at any time hold long and short positions in such securities and instruments. Such investment and securities activities may involve securities and instruments of the District.

The Underwriters will be performing underwriting services in connection with the Bonds and have agreed, subject to certain conditions, to purchase the Bonds from the District at the prices indicated on page i hereof, less an underwriting discount of $208,276.89 and no accrued interest. The Underwriters’ obligation is subject to certain conditions precedent, and is obligated to purchase all of the Bonds if any Bonds are purchased. The Bonds may be offered and sold to certain dealers and others at prices lower than the public offering prices, and such public prices may be changed from time to time by the Underwriters. The Underwriters have provided the following sentence for inclusion in this Official Statement. The Underwriters have reviewed the information in this Official Statement in accordance with their responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriters do not guarantee the accuracy or completeness of such information. Citigroup Global Markets Inc., an underwriter of the Bonds, has entered into a retail distribution agreement with Fidelity Capital Markets, a division of National Financial Services LLC (together with its affiliates, “Fidelity”). Under this distribution agreement, Citigroup Global Markets Inc. may distribute municipal securities to retail investors at the original issue price through Fidelity. As part of this arrangement, Citigroup Global Markets Inc. will compensate Fidelity for its selling efforts. Authorization of the Official Statement

The Order authorizing the Bonds authorized an Authorized representative to approve, and an Authorized representative approved in the Approval Certificate, the form and content of this Official Statement and any addenda, supplement or amendment thereto and authorized its execution by an Authorized representative for further use in the reoffering of the Bonds by the Underwriters in accordance with the provisions of the United States Securities and Exchange Commission’s rule codified at 17 C.F.R. §240.15c2-12, as amended. SAN ANTONIO INDEPENDENT SCHOOL DISTRICT

/s/ Mr. Larry A. Garza Authorized Representative

APPENDIX A

Financial Information for the San Antonio Independent School District

2019/20 Market Valuation Established by Bexar County Tax Assessor-Collector(1) $26,733,961,725

(excluding exempt property)Less Exemptions/Reductions at 100% Market Value:

State Homestead Exemption $1,147,608,600Local Homestead Exemption 219,456,493State Over-65 Exemption 225,622,962Surviving Spouse Exemption 2,799,022State Disabled Exemption 23,491,703Total Veteran Exemption 19,093,108Veteran Surviving Spouse Exemption 3,389,674Veteran Exemption 104,683,604Productivity Loss 14,704,712Prorated Exemption 2,769,203,914HB 366 53,591Freeport Exemption 159,513,514Pollution Control 4,194,566Leased Vehicles 45,211,320Personal Use Vehicles 181,830Homestead Cap 916,527,272 $5,655,735,885

2019/20 Net Taxable Assessed Valuation $21,078,225,840

Freeze Taxable 1,816,738,277

2019/20 Freeze Adjusted Taxable Assessed Valuation $19,261,487,563

2020/2021 Preliminary Net Taxable Assessed Valuation(2) $23,089,479,440

Debt Payable from Ad Valorem Taxes as of May 31, 2020

General Obligation Debt Outstanding:

Unlimited Tax DebtUnlimited Tax Refunding Bonds, Series 2006 $319,988Unlimited Tax School Building Bonds Taxable, Series 2010B (Direct Subsidy - Build America Bonds) 4,205,000Unlimited Tax Refunding Bonds, Series 2011 58,925,000Unlimited Tax Qualified School Construction Bonds Taxable, Series 2011 (Direct Subsidy) 32,355,000Variable Rate Unlimited Tax Refunding Bonds, Series 2014A 40,545,000Variable Rate Unlimited Tax Refunding Bonds, Series 2014B 40,040,000Unlimited Tax School Building and Refunding Bonds, Series 2015 237,570,000Unlimited Tax School Building and Refunding Bonds, Series 2016 120,025,000Unlimited Tax School Building Bonds, Series 2018 176,670,000Unlimited Tax School Building and Refunding Bonds, Series 2019 294,820,000The Bonds 43,730,000

Total Unlimited Tax Debt $1,049,204,988

Total General Obligation Debt $1,049,204,988

Less: Instructional Facilities Allotment/Existing Debt Allotment(1) 0

Net Debt Payable from General Obligation Debt $1,049,204,988

General Obligation Interest and Sinking Fund Balance as of June 30, 2019 $92,077,264

2019/20 Net Taxable Assessed Valuation $21,078,225,840

Ratio of Total General Obligation Debt to 2019/20 Net Taxable Assessed Valuation 4.98%

Ratio of Net General Obligation Debt to 2019/20 Net Taxable Assessed Valuation 4.98%

Area of District: 75 Square Miles

2020 Population 330,268

Per Capita 2020 Net Assessed Valuation: $63,821.58

Per Capita 2020 General Obligation Debt: $3,176.83

______________________________(1) The District no longer receives Instructional Facilities Allotments or Existing Debt Allotments.

VALUATION, EXEMPTIONS AND TAX SUPPORTED DEBT

FINANCIAL INFORMATION OF THE ISSUER

__________________________Note: The above figures were taken from the Bexar County Tax Assessor-Collector's Office which is compiled during the initial phase of the tax year and aresubject to change. (1) Certification as of July 19, 2019.(2) Certification as of June 12, 2020.The preliminary valuation is subject to change during the ensuing year due to settlement of contested valuations.

TABLE 1

A-1

TAXABLE ASSESSED VALUATION BY CATEGORY

2020 2019 2018

% of % ofCategory Total Total

Real, Residential, Single-Family $10,715,368,158 44.80% $9,669,025,888 43.65% $8,525,501,619 41.58%

Real, Residential, Multi-Family 2,132,011,397 8.91% 1,876,181,584 8.47% 1,677,239,664 8.18%

Real, Vacant Lots/Tracts 382,249,975 1.60% 353,944,478 1.60% 336,619,429 1.64%

Qualified Open-Space Land 14,885,962 0.06% 14,974,929 0.07% 11,225,646 0.05%

Improvements on Qualified Open Space 3,620 0.00% 18,710 0.00% 17,461 0.00%

Rural Land (Non Qualified Open Space) 18,559,301 0.08% 20,972,664 0.09% 20,138,453 0.10%

Real, Commercial 7,700,268,561 32.19% 7,240,334,006 32.68% 6,868,887,358 33.50%

Real, Industrial and Manufacturing 419,325,203 1.75% 400,970,214 1.81% 449,388,550 2.19%

Oil & Gas 24,917 0.00% 8,854 0.00% 26,947 0.00%

Real and Tangible Personal, Utilities 234,414,601 0.98% 246,568,725 1.11% 243,615,019 1.19%

Tangible Personal, Commercial 1,868,678,293 7.81% 1,818,360,777 8.21% 1,774,925,377 8.66%

Tangible Personal, Industrial & Manufacturing 376,641,534 1.57% 458,428,032 2.07% 518,460,933 2.53%

Mobile Homes 5,978,240 0.02% 6,786,878 0.03% 4,665,230 0.02%

Residential Inventory 22,869,398 0.10% 14,871,454 0.07% 43,639,269 0.21%

Special Inventory Tax 28,031,910 0.12% 30,782,040 0.14% 31,742,710 0.15%

Total Appraised Value Before Exemptions $23,919,311,070 100.00% $22,152,229,233 100.00% $20,506,093,665 100.00%

Less: Total Exemptions/Reductions 2,841,085,230 2,672,682,736 2,453,868,805

Adjustments(1) 0 89,527,446 150,413,613

Net Taxable Assessed Value $21,078,225,840 (2) $19,390,019,051 $17,901,811,247

2017 2016

% of % ofCategory Amount Total Amount Total

Real, Residential, Single-Family $7,662,569,290 40.61% $6,709,365,700 39.81%

Real, Residential, Multi-Family 1,440,243,787 7.63% 1,189,791,042 7.06%

Real, Vacant Lots/Tracts 272,795,123 1.45% 229,330,067 1.36%

Rural Land (Non Qualified Open Space) 30,472,578 0.16% 26,774,352 0.16%

Real, Commercial & Industrial 6,900,338,644 36.57% 6,143,401,418 36.45%

Real and Tangible Personal, Utilities 237,038,475 1.26% 232,635,327 1.38%

Tangible Personal, Commercial 2,253,267,775 11.94% 2,227,427,645 13.22%

Tangible Personal, Industrial and Manufacturing 3,904,000 0.02% 3,973,440 0.02%

Other 68,471,820 0.36% 92,569,393 0.55%

Total Appraised Value Before Exemptions $18,869,101,492 100.00% $16,855,268,384 100.00%

Less: Total Exemptions/Reductions 2,276,348,033 2,058,057,437

Taxable Assessed Value $16,592,753,459 $14,797,210,947

NOTE: Valuations shown have been adjusted from prior years to reflect certified taxable Grand Total assessed values reported by the Bexar Appraisal District to the State Comptroller of PublicAccounts. Certified values are subject to change throughout the year as contested values are resolved and the Appraisal District updates records.(1) Adjustments reflect the difference between the Net Taxable assed values reported by the Bexar Appraisal District and the Assessed/Appraised Value for School Tax Purposes reported in theDistrict's Comprehensive Annual Financial Reports.(2) Certification as of July 19, 2019.

Amount

TABLE 2

Amount

Taxable Appraised Value for Fiscal Year Ended June 30,

Taxable Appraised Value for Fiscal Year Ended June 30,

Amount

A-2

VALUATION AND TAX SUPPORTED DEBT HISTORY

2015 2016 337,249 14,797,210,947 43,876 537,824,677 (3) 3.63% (3) 1,595 (3)

2016 2017 340,391 16,592,753,459 48,746 663,469,069 (4) 4.00% (4) 1,949 (4)

2017 2018 330,268 17,901,811,247 54,204 729,429,988 (5) 4.07% (5) 2,209 (5)

2018 2019 310,289 19,390,019,351 62,490 1,018,634,988 5.25% 3,2832019 2020 310,289 21,078,225,840 67,931 1,049,204,988 4.98% 3,381

TAX RATE, LEVY AND COLLECTION HISTORY

TaxRate Tax Levy

2015 2016 1.38260$ 1.04000 0.34260 195,642,182 94.49% 98.52%

2016 2017 1.51260 1.17000 (1) 0.34260 239,416,841 94.24% 97.63%

2017 2018 1.53260 1.17000 0.36260 258,742,038 93.52% 97.61%

2018 2019 1.56260 1.17000 0.39260 285,195,198 93.07% 97.71%

2019 2020 1.53095 1.06835 (2) 0.46260 301,522,753 (3) 92.90% (4) 92.90% (4)

% Total Collections

Net TaxableAssessed

Valuation(2)Net Tax Supported Debt Outstanding

Ratio of Net Tax Supported Debt to Taxable

Assessed Valuation

(1) The levy of a $1.17 tax rate for maintenance and operations was approved by the voters in the District at a tax ratification election held on November 8, 2016.(2) For the 2019 tax year, school districts will be required to reduce the tier one tax rate as defined under Section 45.0032, Education Code as well as any tax ratecompression required to be applied to the enrichment tax rate under Section 48.202(f), Education Code. (3) Figure provided by the District.(4) Unaudited as of July 21, 2020.


TABLE 4

TaxYear

FiscalYear

EndedLocal

Maintenance

______________________________(1) Source: District’s Comprehensive Annual Financial Report for the Years Ended 2015 through 2019. Fiscal Year Ended 2020 population held constant for purposes ofillustration and Fiscal Year Ended 2019 population provided by the District. (2) Source: District Comprehensive Annual Financial Reports for years ending 2015 through 2018, and the Appraisal District's Certified Totals for Tax Year 2019 (applicable toDistrict Fiscal year end June 30, 2020), subject to change during the ensuing year.(3) Excludes $165,600,311 or 23.542% of the currently outstanding unlimited tax bonds which are supported by the Texas Education Agency’s Instructional Facilities Allotmentprogram (“IFA”) as provided by Chapter 46, as amended, Texas Education Code (“Chapter 46”) and the Texas Education Agency’s Existing Debt Allotment program (“EDA”),as provided by Chapter 46, as amended, Texas Education Code.(4) Excludes $102,110,918 or 13.34% of the currently outstanding unlimited tax bonds which are supported by the Texas Education Agency’s Instructional Facilities Allotmentprogram (“IFA”) as provided by Chapter 46, as amended, Texas Education Code (“Chapter 46”) and the Texas Education Agency’s Existing Debt Allotment program (“EDA”),as provided by Chapter 46, as amended, Texas Education Code.(5) Assumes that the District will no longer receive Instructional Facilities Allotments or Existing Debt Allotments after 2017-2018 School Year.

Interestand

SinkingFund

Net Taxable Assessed

Valuation Per Capita

TABLE 3

FiscalYear

Ended

Net Tax Supported Debt

Per CapitaTax Year

Estimated

Population(1)

% CurrentCollections

A-3

TOP TEN TAXPAYERS

Name of Taxpayer Nature of Property

H.E.B. Grocery Company LP Grocery Stores $285,970,781 1.48%

Marriott Hotel Prop II LP Hotel 194,510,000 1.01%

Hotel Investments LP Hotel 181,000,000 0.94%

VHS San Antonio Partners LP Hospital 176,420,800 0.92%

New Rivercenter Mall II LP Retail 164,050,850 0.85%

Southwestern Bell Telephone Utility 129,511,161 0.67%

H.E. San Antonio I LLC Real Estate 113,000,000 0.59%

Methodist Healthcare System Hospital 103,958,033 0.54%

Palacio Del Rio Inc. Hotel 93,300,000 0.48%

HMH Rivers Inc. Hotel 88,000,000 0.46%

$1,529,721,625 7.94%

TAX ADEQUACY

Principal and Interest Requirements for the Period Ended August 31, 2020

Less: Estimated State Aid(1)

Less: Transfer from Interest and Sinking Fund

Net General Obligation Debt Service Requirements(2)

$0.4626 Interest and Sinking Fund Tax Rate @ 98.00% Collections(3)


(1,004,262)

$87,321,568

$87,321,568.64

(1) The District no longer receives Instructional Facilities Allotments or Existing Debt Allotments after the 2017-2018 School Year. (2) These figures do not account for the Series 2011 Qualified School Construction Bonds (the "QSCB") interest subsidy. Expected decreases infederal subsidies as a result of sequestration are expected through 2027. The District anticipates utilizing a transfer from the I&S fund balance in

order to maintain the existing $0.4626 Interest and Sinking Fund tax rate. (3) Based on 2019/20 Freeze Adjusted Taxable Assessed Valuation of $19,261,487,563.

TABLE 5

2019/20Taxable Assessed

Valuation

% ofTotal Taxable

Assessed Valuation

$89,698,373

(1,372,543)

____________________

Source: The Bexar Appraisal District.

TABLE 6

A-4

ESTIMATED OVERLAPPING DEBT(As of May 30, 2020)

2019Tax Rate Net Debt

Authorized But Unissued Debt

Alamo Community College $160,621,975,039 $0.1492 $437,330,000 13.38% $58,514,754 $277,000,000

Balcones Heights, City of 284,783,522 0.5830 134,000 50.98% 68,313 0

Bexar County 157,121,193,018 0.2774 1,860,590,000 13.38% 248,946,942 61,265,887

Bexar County Hospital District 162,546,439,764 0.2762 840,300,000 13.38% 112,432,140 0

Olmos Park, City of 709,629,512 0.4244 1,350,000 6.01% 81,135 0

San Antonio, City of 111,648,203,173 0.5583 2,041,830,000 18.45% 376,717,635 335,010,000

$796,760,919

San Antonio Independent School District $1,049,204,988 * 100.00% 1,049,204,988 0 **

$1,845,965,907

Ratio of Direct and Overlapping Debt to the 2019 Assessed Valuation 8.76%$5,589

The following table indicates the indebtedness, defined as outstanding bonds payable from ad valorem taxes, of governmental entitiesoverlapping the District and the estimated percentages and amounts of such indebtedness attributable to property within the District.Expenditures of the various taxing bodies overlapping the territory of the Issuer are paid out of ad valorem taxes levied by these taxing bodies onproperties overlapping the Issuer. These political taxing bodies are independent of the Issuer and may incur borrowings to finance theirexpenditures.

The following statements of direct and estimated overlapping ad valorem bonds were developed from information contained in the "TexasMunicipal Reports" published by the Municipal Advisory Council of Texas. Except for the amounts relating to the Issuer, the Issuer has notindependently verified the accuracy or completeness of such information, and no person should rely upon such information as being accurate orcomplete.

Furthermore, certain of the entities below may have authorized or issued additional bonds since the date stated below, and suchentities may have programs requiring the authorization and/or issuance of substantial amounts of additional bonds, the amount of which cannotbe determined.

Taxing Body

2019Net Taxable

Assessed Valuation%

Overlapping


TABLE 7

Amount Overlapping

Total Gross Overlapping Debt

Total Direct and Overlapping Debt

Per Capita Direct and Overlapping Debt

____________________Source: Texas Municipal Reports published by the Municipal Advisory Council of Texas, the Issuer's Annual Financial Report dated June 30, 2019 and the Bexar AppraisalDistrict.*The District no longer receives Instructional Facilities Allotments or Existing Debt Allotments after the 2017-2018 School Year. **After the issuance of the Bonds

A-5

Tax Supported Debt Service Requirements

Principal Total Principal Total

2020 $43,730,000 $45,968,373 $89,698,373 $89,698,373

2021 40,410,000 44,253,505 84,663,505 $11,240,000 $1,822,383 $13,062,383 97,725,888

2022 42,280,000 42,411,430 84,691,430 565,000 1,286,050 1,851,050 86,542,480

2023 44,280,000 40,461,680 84,741,680 595,000 1,257,800 1,852,800 86,594,480

2024 46,380,000 38,409,930 84,789,930 625,000 1,228,050 1,853,050 86,642,980 21.93%

2025 43,919,988 40,361,817 84,281,805 655,000 1,196,800 1,851,800 86,133,605

2026 49,585,000 34,638,805 84,223,805 690,000 1,164,050 1,854,050 86,077,855

2027 52,005,000 32,320,055 84,325,055 725,000 1,129,550 1,854,550 86,179,605

2028 42,850,000 30,171,930 73,021,930 760,000 1,093,300 1,853,300 74,875,230

2029 41,025,000 25,949,725 66,974,725 795,000 1,055,300 1,850,300 68,825,025 44.14%

2030 29,435,000 23,938,063 53,373,063 835,000 1,015,550 1,850,550 55,223,613

2031 30,885,000 22,477,838 53,362,838 880,000 973,800 1,853,800 55,216,638

2032 25,430,000 20,929,463 46,359,463 925,000 929,800 1,854,800 48,214,263

2033 26,670,000 19,696,150 46,366,150 960,000 892,800 1,852,800 48,218,950

2034 27,785,000 18,570,806 46,355,806 1,000,000 854,400 1,854,400 48,210,206 57.94%

2035 28,970,000 17,393,019 46,363,019 1,040,000 814,400 1,854,400 48,217,419

2036 30,190,000 16,164,531 46,354,531 1,080,000 772,800 1,852,800 48,207,331

2037 31,515,000 14,845,400 46,360,400 1,125,000 729,600 1,854,600 48,215,000

2038 32,890,000 13,462,650 46,352,650 1,165,000 684,600 1,849,600 48,202,250

2039 34,200,000 12,160,900 46,360,900 1,215,000 638,000 1,853,000 48,213,900 73.51%

2040 35,515,000 10,843,100 46,358,100 1,265,000 589,400 1,854,400 48,212,500

2041 28,755,000 9,321,350 38,076,350 1,315,000 538,800 1,853,800 39,930,150

2042 30,005,000 8,065,000 38,070,000 1,365,000 486,200 1,851,200 39,921,200

2043 31,320,000 6,753,350 38,073,350 1,420,000 431,600 1,851,600 39,924,950

2044 32,675,000 5,383,650 38,058,650 1,475,000 374,800 1,849,800 39,908,450 89.25%

2045 28,625,000 3,953,850 32,578,850 1,535,000 315,800 1,850,800 34,429,650

2046 24,040,000 2,909,950 26,949,950 1,595,000 254,400 1,849,400 28,799,350

2047 19,775,000 1,936,850 21,711,850 1,645,000 206,550 1,851,550 23,563,400

2048 20,575,000 1,132,000 21,707,000 1,695,000 157,200 1,852,200 23,559,200

2049 9,755,000 292,650 10,047,650 1,745,000 106,350 1,851,350 11,899,000 99.83%

2050 0 0 0 1,800,000 54,000 1,854,000 1,854,000

$1,005,474,988 $605,177,820 $1,610,652,808 $43,730,000 $23,054,133 $66,784,133 $1,677,436,940

Outstanding Debt (2)

InterestTotal Debt

Service

________________________________(1) The District’s fiscal year end is June 30, however for purposes of tax rate levy the table show above is for the period ending August 31.(2) Considers as an off-set to debt service the refundable tax credit to be received from the United States Department of the Treasury by the District as a result of itsdesignation and election to treat certain issues of its outstanding unlimited ad valorem tax supported debt as “Build America Bonds” and/or “Qualified School ConstructionBonds” and “Qualified Bonds” under the Code, which offset takes into account, for purposes of illustration and planning, the effect of Sequestration (defined herein) at a perannum rate of 5.9%. See "Effect of Sequestration and IRS Operations During Covid-19" in the Offical Statement.

Period Ending

8/31(1)

Percent of Principal RetiredInterest

The Bonds

TABLE 8

A-6

Tax Supported Debt Service Requirements, Fiscal Year Ending August 31, 2020(1) $89,698,373

Interest and Sinking Fund, as of June 30, 2019 $92,077,264

Estimated State Aid -

$0.4626 Interest and Sinking Fund Tax Rate @ 98.60% Collections (2)(3) 87,321,568 179,398,832

Estimated Balance as of June 30, 2020 $89,700,459

DateAuthorized

AmountAuthorized

AmountPreviously

Issued

Amount of New Money Bonds

Being Issued

Premium Allocated to

Voted Authorization

UnissuedBalance

11/8/2016 $450,000,000 $400,000,000 $43,730,000 $6,270,000 $0

Year Ending June 30

The District entered into leases for copiers in 2016 from Ricoh USA, Inc. ("Ricoh") and high production copiers in 2017 from Dahill Office TechnologyCorporation ("Dahill"). The Ricoh lease has a five year initial lease with the option to renew for up to two additional one year periods at an annual cost of$839,160. The Dahill lease has a three year initial lease with the option to renew for up to two additional one year periods at an annual cost of $359,306.

INTEREST AND SINKING FUND BUDGET PROJECTION TABLE 9

OTHER OBLIGATIONS TABLE 11

____________________

(1) The District’s fiscal year end is June 30. Debt service requirements are presented on a period ending August 31 basis to conform to the District’s manner of setting their tax rate. Excludes debt service to be paid by the Build America Bonds direct subsidy, which takes into account the effects of Sequestration.(2) The District assumes it will not receive this State aid going forward.(3) Based on 2019/20 Freeze Adjusted Taxable Assessed Valuation of $19,261,487,563.

1,831,526

2022

2023

AUTHORIZED BUT UNISSUED BONDS TABLE 10

On October 1, 2017, the District entered into a lease arrangement with Brooks Development Authority for building facilities and related grounds, for thepurposes of the District establishing a medical career-themed high school at Brooks City Base. The lease is for a term of 20 years with a purchaseoption beginning after five years.

School Building

Purpose

2021

After August 31, 2019, the District entered into an agreement to lease technology equipment in the amount of $1,542,432 over four (4) years from DellComputer. The annual payment is $409,286 and is paid from general funds.

Amounts

Total

The annual lease payment requirements are as follows:

1,874,540

2,051,408

2020

$ 7,632,014

Under these agreements, the District has recorded expenditures of $1,649,282.

1,874,540

A-7

2019 2018 2017 2016 2015Program Revenues:

$4,452,635 $3,280,378 $3,041,973 $3,457,916 $2,858,414 196,112,354 177,278,223 172,369,510 198,000,881 179,194,504

General Revenues:0 0 0 0 174,965,706

210,140,620 194,440,532 183,872,029 146,137,445 070,521,815 60,259,497 53,842,255 48,140,060 0

200,189,533 138,314,536 258,842,440 266,540,791 264,568,31212,447,996 1,608,272 -1,592,279 5,169,963 575,392

954,918 29,790,031 9,107,519 2,072,787 2,964,3980 0 2,852,855 0 0

Total Revenues $694,819,871 $604,971,469 $682,336,302 $669,519,843 $625,126,726

Expenditures:$343,627,242 $249,073,072 $317,144,166 $333,292,774 $304,624,281

7,091,910 5,082,666 7,269,784 7,345,823 6,744,06235,814,721 24,932,749 26,623,808 19,439,521 17,787,93015,971,213 10,520,898 14,661,225 15,477,034 13,754,06840,716,545 27,523,765 36,712,854 34,032,647 31,817,26226,057,064 18,466,738 22,361,135 20,538,112 20,296,7455,437,186 4,625,897 5,631,551 5,756,793 6,125,699

10,666,858 7,165,877 9,710,785 9,373,587 8,883,34313,588,005 10,600,575 13,041,346 12,150,180 11,813,96044,462,402 36,926,737 43,536,259 43,749,368 43,370,93913,938,568 10,217,208 12,691,289 11,842,204 11,726,67619,088,109 13,677,953 17,268,099 15,381,107 14,790,12064,090,654 55,988,721 64,042,929 63,169,846 55,692,8687,538,054 4,720,866 6,593,169 6,383,008 6,295,032

11,517,390 9,197,918 12,473,758 10,432,011 14,132,6558,591,919 7,815,440 7,704,263 7,061,243 6,700,290

32,870,504 25,954,386 28,726,464 26,153,873 29,010,398412,605 627,680 584,740 776,161 912,547 46,597 93,736 8,151 4,076 4,076

1,300,425 1,280,824 1,074,277 987,411 961,645 $702,827,971 $524,493,706 $647,860,052 $643,346,779 $605,444,596

($8,008,100) $80,477,763 $34,476,250 $26,173,064 $19,682,130 Beginning Net Position 161,220,610 440,435,515 405,959,265 379,786,201 449,350,726

0 (1) (359,692,668) (2) 0 0 (89,246,655) (3)

$153,212,510 $161,220,610 $440,435,515 $405,959,265 $379,786,201

CHANGES IN NET POSITION TABLE 12

Fiscal Year Ended

Charges for Services Operating Grants & Contribution

Property TaxesProperty Taxes, Levied for General PurposesProperty Taxes, Levied for Debt ServiceGrants and Contributions Not RestrictedInvestment EarningsOther (Miscellaneous & Local)Extraordinary Item-Resource

InstructionInstruction Resources & Media ServicesCurriculum & Instructional Staff DevelopmentInstructional LeadershipSchool LeadershipGuidance, Counseling & Evaluation ServicesSocial Work ServicesHealth ServicesStudent (Pupil) TransportationFood ServicesExtracurricular ActivitiesGeneral AdministrationFacilities Maintenance and OperationsSecurity and Monitoring ServicesData Processing ServicesCommunity ServicesDebt ServicesShared Services ArrangementsPayments to Juvenile Justice Alt. Ed. Programs

Other Intergovernmental Charges Total Expenditures

Increase (Decrease) in Net Position Expenditures

Prior Period AdjustmentEnding Net Position

(3) During fiscal year 2015, the District adopted GASB Statement No. 68 for Accounting and Reporting Pensions. With GASB Statement No. 68, the District must assume itsproportionate share of the Net Pension Liability of the Teacher Retirement System of Texas. Adoption of GASB Statement No. 68 required a prior period adjustment of($89,246,655) to report the effect of GASB Statement No. 68 retroactively.

_________________________Source: Issuer's Annual Financial Reports.(1) The District’s total revenues for its governmental activities are $694,819,871, a 15% increase of $89,848,402 from the prior year. The largest increase was in Grants andContributions not Restricted of $61,874,997, or 45%, from the prior year primarily due to more state and federal funding. Property tax revenues increased $25,962,406 from theprior year primarily due to the increase in the I&S tax rate of $0.03 from 2018 and an increase in property values.

The expenses for governmental activities totaled $702,827,971, a 34% increase of $178,334,265 from the prior year. The majority of the increase is inInstruction and MediaServices, Instructional and School Leadership, Student Support Services, and Facilities Maintenance, Security and Data Processing Services. The prior year, the non-employercontributing entities (NECE) expense was negative due to changes in benefits within the TRS-care plan. The accrual for the District’s proportionate share of that expense was anegative on-behalf revenue and negative on-behalf expense.

As shown on the District’s Statement of Activities, net position of the District’s governmental activities decreased by a net of $8,008,100 for the fiscal year ended June 30, 2019.

As the District completed the year ended June 30, 2018, its governmental funds (as presented in the Balance Sheet) reported a combined fund balance of $247,550,734. Includedin this year’s $2,126,702 total decrease in fund balance is an increase of $87,373 in the District’s General Fund and an increase of $785,935 in the Debt Service Fund offset by$3,792,010 decrease in the Capital Projects Fund and Other Funds.(2) The decrease is due to the implementation of GASB 75, which required a restatement in the amount of ($359,692,668) to reflect the beginning balance of the Net OPEB Liabilityand related accounts.

A-8

2019 2018 2017 2016 2015Revenues:

$216,924,590 $199,586,005 $187,867,888 $150,225,405 $135,864,521 225,663,690 253,821,452 275,674,725 285,252,654 282,285,183

16,668,645 12,889,716 13,534,827 12,188,287 11,388,144 Total Revenues $459,256,925 $466,297,173 $477,077,440 $447,666,346 $429,537,848

Expenditures:$263,067,287 $278,760,212 $258,285,364 $258,820,558 $245,107,518

5,721,667 5,779,422 6,329,734 6,649,755 6,275,68512,030,609 13,539,419 9,305,904 5,695,322 5,556,579

7,834,435 8,559,018 7,609,255 8,122,633 6,724,811School Leadership 32,709,229 34,882,172 34,045,622 28,564,583 27,545,408

15,021,647 15,306,861 15,979,612 15,005,006 15,128,416Social Work Services 2,714,378 3,205,855 3,812,609 3,692,538 2,858,465

8,694,684 9,083,458 8,510,298 8,050,657 7,703,28811,100,401 12,133,898 10,746,156 11,434,902 9,823,762

Food Services 274,497 273,750 144,738 216,873 224,73112,000,441 11,569,779 11,499,189 10,830,635 11,030,60016,495,172 15,443,625 15,846,680 14,205,243 13,977,63948,981,858 52,401,112 52,094,107 48,279,712 46,258,494

Security and Monitoring Services 6,579,074 6,078,397 5,936,753 5,947,971 5,964,234Data Processing Services 9,468,168 9,660,302 11,044,647 10,672,441 12,308,433Community Services 4,330,168 4,409,014 1,676,047 1,400,650 1,482,918Debt Service-Bond Issuance Cost & Fees 0 0 0 23,500 18,000Facilities Acquisition and Construction 163,315 3,876,908 2,156,661 737,590 607,945Payments to Fiscal Agent/Member Dist.-SSA 0 0 0 0 0

46,597 93,736 8,151 4,076 4,0761,300,425 1,280,824 1,074,277 987,411 961,645

$458,534,052 $486,337,762 $456,105,804 $439,342,056 $419,562,647

$722,873 ($20,040,589) $20,971,636 $8,324,290 $9,975,201

Other Resources and (Uses) $22,713 $0 $0 $0 ($8,580,376)

0 31,893,236 3,994,896 70,025 0

Transfers In 0 0 0 648 0

Transfers Out (Use) (30,545) (10,973,274) (401,934) (4,162,701) 0

($7,832) $20,919,962 $3,592,962 ($4,092,028) ($8,580,376)

$715,041 $879,373 $24,564,598 $4,232,262 $1,394,825

98,657,180 97,777,807 73,213,209 68,980,947 67,586,122

$99,372,221 $98,657,180 $97,777,807 $73,213,209 $68,980,947

Fair ValueGovernment Overnight Fund $78,344,349 TexPool 65,595,715Money Market Mutual Funds - Money Market Portfolio Fund 31,499,872Texas Term 42,467,568TexStar 209,080,493

Total: $426,987,997

GENERAL FUND REVENUE AND EXPENDITURE HISTORY TABLE 12A

Fiscal Year Ended

Local and Intermediate SourcesState Program RevenuesFederal Program Revenues

InstructionInstruction Resources & Media ServicesCurriculum & Instructional Staff DevelopmentInstructional Leadership

Guidance, Counseling & Evaluation Services

Health ServicesStudent (Pupil) Transportation

Extracurricular ActivitiesGeneral AdministrationFacilities Maintenance and Operations

Payments to Juvenile Justice Alternative Education ProgramOther Intergovernmental ChargesTotal Expenditures

Excess (Deficiency) of Revenues Over (Under) Expenditures

Sale of Real and Personal Property

Total Other Financing Sources (Uses)

Net Change in Fund Balances

Beginning Fund Balance - July 11

_____________________Source: District's Quarterly Investment Report.

Ending Fund Balance - June 30(1)

_________________________Source: Issuer's Annual Financial Reports.(1) The District estimates the General Fund balance at the end of the current fiscal year will be $99,872,221.

CURRENT INVESTMENTS TABLE 13

As of March 31, 2020, the District has the following investments.

Description

A-9

APPENDIX B

General Information Regarding the San Antonio Independent School District, the City of San Antonio, Texas and Bexar County, Texas

B-1

GENERAL INFORMATION REGARDING THE SAN ANTONIO INDEPENDENT SCHOOL DISTRICT, THE CITY OF SAN ANTONIO AND BEXAR COUNTY, TEXAS

The District: The San Antonio Independent School District (the “District”) includes most of the City of San Antonio's (the “City”) downtown and metropolitan areas inside Loop 410 and I-35. The District is in Bexar County. Industries include finance, retail and wholesale distribution,manufacturing, and medicine. Located inside the District are five shopping malls, two breweries, the Riverwalk, and Brooks City Base. The Schools and Enrollment:

Historical Enrollment for the District

School Year Enrollment

2015-16 53,063

2016-17 52,486

2017-18 50,641

2018-19 48,661

2019-20 48,495

2020-21 48,547(1)

School Facilities ________________ (1)Projected.

Educational status of the teachers is as follows:

Doctorate’s degree 11

Master’s degree 1,074

Bachelor’s degree 2,038

Average year of classroom experience per teacher 10.4 Personnel distribution is as follows:

Central Administration 58

Campus Administration 224

Teachers 3,148

Professional Support Staff (Counselors, Librarians, Nurses, Social Workers, Etc.) 1,225

Education Aides 780

Auxiliary Staff (Secretaries, Aides, Clerks, Bus Drivers, Food Service, Maintenance, Etc.) 2,016

TOTAL 7,451 For the 2018-2019 school year, the annual salary for a beginning teacher is $52,400, and ranges to $59,500 for a teacher joining SAISD with 25 or more years of teaching experience.

School Number of Schools

High School 14

Middle or Junior High 10

Elementary 32

Early Childhood Education Centers 5

Academies 27

Alternative Campuses 5

B-2

THE CITY OF SAN ANTONIO AND BEXAR COUNTY, TEXAS The City of San Antonio The City of San Antonio, Texas (the “City”) is the county seat of Bexar County, located at the intersection of Interstate Highways 10 and 35. Population in the City has increased making it the second largest city in Texas and the seventh largest in the United States. Trade, government, and education and health services represent the largest employment sectors in the San Antonio Metropolitan Statistical Area (“MSA”). Finance (including insurance), healthcare and bioscience, tourism, and the military represent the largest industries in San Antonio. The Alamo, the Riverwalk, the Tower of Americas, Fiesta Texas, SeaWorld of Texas, the San Antonio Zoo, La Villita, Brackenridge Park, the Alamodome, and the Institute of Texan Cultures make the City a very popular destination. Bexar County County Characteristics: Bexar County was created in 1836. The south central Texas county is the major component of the San Antonio Metropolitan Statistical Area and is traversed by InterstateHighways 10 and 35, four U.S. Highways, and two State Highways.

County Seat: San Antonio 2019 population estimate: 2,003,554 Economic Base: Mineral: Sand, limestone and gravel. Industry: Tourism, military bases, medical/biomedical research & services, government and education center. Agricultural: Nursery crops, horses, hay, grain sorghum, corn and beef cattle. Oil & Gas 2018: The county ranks 132 out of all the counties in Texas for oil production. Oil Production: Year Description Volume %Change from Previous Year) 2017 Oil 74,078 BBL -42.22 2018 Oil 222,878 BBL 200.87 Casinghead: Year Description Volume %Change from Previous Year) (Texas Railroad 2017 Casinghead 22 MCF -99.96 Commission) 2018 Casinghead 356,330 MCF 1,619,581.82 Retail Sales & Effective Buying Income: Year 2018 2017 2016 Retail Sales $30.2B $28.7B $28.1B Effective Buying Income (EBI) $46.4B $43.3B $40.7B County Median Household Income $49,168 $46,558 $45,381 State Median Household Income $61,175 $57,227 $55,352 % of Households with EBI below $25K 22.2% 24.8% 12.0% % of Households with EBI above $25K 68.5% 66.2% 65.8% Employment Data: 2019 2018 2017 Employed Earnings Employed Earnings Employed Earnings 1st Quarter: 864,613 $11.5B 855,595 $11.2B 848,200 $10.8B 2nd Quarter: 873,857 $11.2B 866,389 $10.6B 853,681 $10.1B 3rd Quarter: N/A N/A 866,569 $10.5B 852,605 $10.0B 4th Quarter: N/A N/A 876,826 $11.6B 862,793 $11.0B Major Colleges/Universities: University of the Incarnate Word of San Antonio, University of Texas at San Antonio, Trinity University,

The University of Texas Health Science Center at San Antonio, Texas A&M University - San Antonio, St.Mary's University, Our Lady of the Lake University, Alamo Community College District

Year Total Fall Enrollment 2018 8 119,806 2017 8 119,431

_____________ Sources: Texas Municipal Reports, published by the Municipal Advisory Council of Texas and Demographics USA County Edition. Any data on population, value added by manufacturing or production of minerals or agricultural products are from US Census or other official sources.

B-3

Labor Force Statistics for Bexar County

Labor Force Statistics May 2020 April 2020 May 2019 Monthly Change Year Ago Change

% Unemployment (U.S.) 13.3 14.7 3.6 -1.4 +12.7

% Unemployment (Texas) 13.0 13.5 3.4 -0.5 +12.6

% Unemployment (Bexar County) 13.1 13.9 2.6 -0.8 +12.3 _________________ Source: Texas Labor Market Review.

Labor Force Statistics 2019 2018 2017 2016 2015

% Unemployment (U.S.) 3.9 3.9 4.4 4.9 5.3

% Unemployment (Texas) 3.5 3.9 4.3 4.6 4.4

% Unemployment (Bexar County) 3.1 3.3 3.5 3.7 3.8 _________________ Source: Texas Labor Market Review.

Employment & Wages by Industry 2019 2018 2017 2016 2015 2014 2015 2014 2013 Natural Resources and Mining 6,810 5,814 4,705 4,706 5,107 5,575 5,107 5,575 5,176 Construction 40,072 38,575 38,167 38,932 38,479 33,897 38,479 33,897 33,957 Manufacturing 36,150 36,551 35,049 34,886 34,040 33,977 34,040 33,977 34,500 Trade, Transportation & Utilities 140,766 140,413 140,835 144,579 142,448 130,343 142,448 130,343 132,202 Information 18,723 18,912 18,803 19,252 20,092 19,459 20,092 19,459 19,844 Financial Activities 77,241 76,883 77,223 77,035 74,534 68,944 74,534 68,944 68,665 Professional & Business Services 119,850 116,635 114,185 116,456 110,786 103,681 110,786 103,681 104,206 Education & Health Services 142,857 139,665 138,857 138,064 133,825 121,284 133,825 121,284 121,029 Leisure & Hospitality 115,001 111,584 110,145 110,207 107,377 99,966 107,377 99,966 100,240 Other Services 24,597 24,310 24,237 24,125 23,745 22,319 23,745 22,319 22,291 Unclassified 274 864 496 356 211 150 211 150 204 Federal Government 35,005 34,334 34,778 34,886 34,010 33,737 34,010 33,737 33,981 State Government 16,799 16,788 17,379 17,448 18,430 17,244 18,430 17,244 17,114 Local Government 91,904 91,934 93,361 92,763 91,577 87,458 91,577 87,458 87,767 Total Employment 868,468 855,594 848,220 853,695 834,661 778,033 834,660 778,033 781,176 Total Wages $11,626,035,085 $10,221,910,252 $10,839,479,403 $10,608,835,575 $10,560,876,107 $9,276,495,458 $8,957,652,744

_____________ Source: Texas Quarterly Census of Employment & Wages.

(The reminder of this page intentionally left blank.)

APPENDIX C

Form of Opinion of Bond Counsel

ESCAMILLA & PONECK, LLP ATTORNEYS AND COUNSELORS Phone (210) 225-0001 · FAX (210) 225-0041 · escami l lapon eck.com

700 North St. Mary’s Street, Suite 850 · San Antonio, Texas 78205 Austin Dallas El Paso Fort Worth Houston Mission San Antonio · Louisiana · Mexico City

E&P [Delivery Date]

$__________________ SAN ANTONIO INDEPENDENT SCHOOL DISTRICT

(A political subdivision of the State of Texas located in Bexar County) UNLIMITED TAX SCHOOL BUILDING BONDS, SERIES 2020

WE HAVE ACTED as Bond Counsel for the SAN ANTONIO INDEPENDENT SCHOOL DISTRICT (the "District") in connection with issuance of the captioned bonds (the "Bonds") for the purpose of rendering an opinion with respect to the legality and validity of the Bonds under the Constitution and laws of the State of Texas and with respect to the exclusion of interest on the Bonds from gross income for federal income tax purposes. In rendering the opinion herein, we have relied upon a transcript of certain certified proceedings pertaining to the issuance of the Bonds as described in the District's order authorizing the Bonds (the "Order"). The transcript contains certified copies of certain proceedings of the District and certain certifications and representations, other material facts within the knowledge and control of the District, an opinion of the Attorney General of Texas to the effect that the initial Bond is a valid and binding obligation of the District, all upon which we rely; and certain other customary documents and instruments authorizing and relating to the issuance of the Bonds.

THE BONDS are being issued to provide funds to be used for the purpose of (i) the construction, renovation and equipment of school buildings in the District and the purchase of necessary sites therefor, and (ii) paying for the issuance costs associated with the Bonds.

BASED ON SUCH EXAMINATION, our opinion is as follows:

The transcript of certified proceedings evidences complete legal authority for the issuance of the Bonds in full compliance with the Constitution and laws of the State of Texas presently in effect; and constitute valid and legally binding obligations of the District in accordance with the terms and conditions thereof, except to the extent that the rights and remedies of the owners of the Bonds may be limited by laws heretofore or hereafter enacted relating to bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the rights of creditors of political subdivisions and the exercise of judicial discretion in appropriate cases.

The Bonds are payable, both as to principal and interest, from the receipts of an annual ad valorem tax levied, without legal limits as to rate or amount, upon taxable property located within the District, except to the extent the enforceability thereof may be affected by bankruptcy, insolvency, reorganization, moratorium, or other similar laws affecting creditors' rights or the exercise of judicial discretion in accordance with general principles of equity, which taxes have been pledged irrevocably to pay the principal of and the interest on the Bonds.

San Antonio Independent School District Unlimited Tax School Building Bonds, Series 2020 Page 2

Pursuant to section 103 of the Internal Revenue Code of 1986, as amended to the date hereof (the "Code"), and existing regulations, published rulings, and court decisions thereunder, in assuming continuing compliance after the date hereof by the District with the provisions of the Order relating to sections 141 through 150 of the Code, interest on the Bonds will be excludable from the gross income, as defined in section 61 of the Code, of the owners thereof for federal income tax purposes, and such interest will not be included in computing the alternative minimum taxable income of the owners thereof.

WE EXPRESS NO FURTHER OPINION with respect to any federal, state, or local tax consequences under present law or any proposed legislation resulting from the receipt or accrual of interest on, or the acquisition or disposition of, the Bonds. Ownership of tax-exempt obligations such as the Bonds may result in collateral federal tax consequences to, among others, financial institutions, life insurance companies, property and casualty insurance companies, certain foreign corporations doing business in the United States, "S" corporations with subchapter "C" earnings and profits, owners of an interest in a financial asset securitization investment trust, individual recipients of Social Security or Railroad Retirement benefits, individuals otherwise qualifying for the earning income credit, and taxpayers who may be deemed to have incurred or continued indebtedness to purchase or carry, or have paid or incurred certain expenses allocable to, tax-exempt obligations.

WE HAVE NOT BEEN REQUESTED to examine, and have not investigated or verified, any original proceedings, records, data or other material, but have relied upon the transcript of certified proceedings. We have not assumed any responsibility with respect to the financial condition or capabilities of the District or the disclosure thereof in connection with the sale of the Bonds. Our role in connection with the District's Official Statement prepared for use in connection with the sale of the Bonds has been limited as described therein.

OUR OPINION IS BASED on existing law, which is subject to change. Such opinion is further based on our knowledge of facts as of the date hereof. We assume no duty to update or supplement our opinion to reflect any facts or circumstances that may thereafter come to our attention or to reflect any changes in any law that may thereafter occur or become effective. Moreover, our opinion is not a guarantee of result and is not binding on the Internal Revenue Service; rather, such opinion represents our legal judgment based upon our review of existing law that we deem relevant to such opinion and in reliance upon the representations and covenants referenced above.

THE INTERNAL REVENUE SERVICE HAS AN ONGOING AUDIT PROGRAM to determine compliance with rules relating to whether interest on state or local obligations is excludable from gross income for federal income tax purposes. No assurance can be given regarding whether or not the Service will commence an audit of the Bonds. If such an audit is commenced, under current procedures, the Service would treat the District as the taxpayer, and Owners of the Bonds would have no right to participate in the audit process. We observe that the District has covenanted not to take any action, or omit to take any action within its control, that, if

San Antonio Independent School District Unlimited Tax School Building Bonds, Series 2020 Page 3

taken or omitted, respectively, may result in the treatment of interest on the Bonds as includable in gross income for federal income tax purposes.

THIS LEGAL OPINION expresses the professional judgment of this firm as to the legal issues explicitly addressed therein. In rendering a legal opinion, we do not become an insurer or guarantor of that expression of professional judgment, of the transaction opined upon, or of the future performance of the parties to the transaction. Nor does the rendering of our opinion guarantee the outcome of any legal dispute that may arise out of the transaction.

Respectfully,

APPENDIX D Excerpts (Table of Contents, Independent Auditor's Report, General Financial Statements and Notes to the Financial Statements), from the San Antonio Independent School District, Texas Audited Financial Statements for the fiscal year ended June 30, 2019, and is not intended to be a complete statement of the Issuer's financial condition. Reference is made to the complete Annual Financial Report for further information.

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y S

ecti

on

This

Pag

e Le

ft In

tent

iona

lly B

lank

SA

N A

NTO

NIO

IND

EPEN

DEN

T SC

HO

OL

DIS

TRIC

T Sa

n A

nton

io, T

exas

CO

MPR

EHEN

SIV

E A

NN

UA

L FI

NA

NC

IAL

REP

OR

T

FOR

TH

E Y

EAR

EN

DED

JUN

E 30

, 201

9

TAB

LE O

F C

ON

TEN

TS

PAG

E N

O.

EXH

IBIT

IN

TR

OD

UC

TO

RY

SE

CT

ION

Tabl

e of

Con

tent

s ....

......

......

......

......

......

......

......

......

......

......

......

......

......

......

......

......

......

......

..i –

v

Lette

r of T

rans

mitt

al...

......

......

......

......

......

......

......

......

......

......

......

......

......

......

......

......

......

.....

vi –

xxi

C

ertif

icat

e of

Ach

ieve

men

t for

Exc

elle

nce

in F

inan

cial

Rep

ortin

g (G

FOA

) ....

......

......

......

..xx

ii C

ertif

icat

e fr

om th

e A

ssoc

iatio

n of

Sch

ool B

usin

ess O

ffic

ials

(ASB

O) ..

......

......

......

......

.....

xxiii

A

dmin

istra

tive

Org

aniz

atio

nal C

hart

......

......

......

......

......

......

......

......

......

......

......

......

......

......

xx

iv

Mis

sion

Sta

tem

ent ..

......

......

......

......

......

......

......

......

......

......

......

......

......

......

......

......

......

......

...xx

v

List

of P

rinci

pal O

ffic

ials

......

......

......

......

......

......

......

......

......

......

......

......

......

......

......

......

......

xxvi

–xv

ii C

ertif

icat

e of

Boa

rd ...

......

......

......

......

......

......

......

......

......

......

......

......

......

......

......

......

......

......

xxvi

ii

FIN

AN

CIA

L S

EC

TIO

N

Inde

pend

ent A

udito

r’s R

epor

t .....

......

......

......

......

......

......

......

......

......

......

......

......

......

......

......

1-3

Man

agem

ent’s

Dis

cuss

ion

and

Ana

lysi

s ....

......

......

......

......

......

......

......

......

......

......

......

......

...

4-16

Bas

ic F

inan

cial

Sta

tem

ents

Gov

ernm

ent–

Wid

e F

inan

cial

Sta

tem

ents

Stat

emen

t of N

et P

ositi

on ..

......

......

......

......

......

......

......

......

......

......

......

......

......

......

......

.....

17

A-1

Stat

emen

t of A

ctiv

ities

......

......

......

......

......

......

......

......

......

......

......

......

......

......

......

......

......

18

B-1

Gov

ernm

enta

l Fun

ds F

inan

cial

Sta

tem

ents

Bal

ance

She

et –

Gov

ernm

enta

l Fun

ds ...

......

......

......

......

......

......

......

......

......

......

......

......

...19

-20

C-1

Rec

onci

liatio

n of

the

Gov

ernm

enta

l Fun

ds B

alan

ce S

heet

to

the

Stat

emen

t of N

et P

ositi

on ..

......

......

......

......

......

......

......

......

......

......

......

......

......

..

21-2

2C

-2

Stat

emen

t of R

even

ues,

Expe

nditu

res,

and

Cha

nges

in F

und

Bal

ance

s –

Gov

ernm

enta

l Fun

ds ...

......

......

......

......

......

......

......

......

......

......

......

......

......

......

......

......

.

23-2

4C

-3

Rec

onci

liatio

n of

the

Gov

ernm

enta

l Fun

ds S

tate

men

t of R

even

ues,

Expe

nditu

res,

and

Cha

nges

in F

und

Bal

ance

s to

the

Stat

emen

t of A

ctiv

ities

......

......

......

......

......

......

.25

-26

C-4

Stat

emen

t of F

und

Net

Pos

ition

– P

ropr

ieta

ry F

unds

.....

......

......

......

......

......

......

......

......

.. 27

D

-1St

atem

ent o

f Rev

enue

s, Ex

pens

es, a

nd C

hang

es in

Fun

d N

et P

ositi

on –

Pro

prie

tary

Fu

nds…

……

……

……

……

……

……

……

……

……

……

……

……

……

……

……

……

28

D

-2

Stat

emen

t of C

ash

Flow

s – P

ropr

ieta

ry F

unds

......

......

......

......

......

......

......

......

......

......

......

29

D-3

Stat

emen

t of F

iduc

iary

Ass

ets a

nd L

iabi

litie

s – F

iduc

iary

Fun

ds ...

......

......

......

......

......

....

30

E-1

Not

es to

the

Fina

ncia

l Sta

tem

ents

......

......

......

......

......

......

......

......

......

......

......

......

......

......

.

31-8

4

(Con

tinue

d)

i

SAN

AN

TON

IO IN

DEP

END

ENT

SCH

OO

L D

ISTR

ICT

San

Ant

onio

, Tex

as

CO

MPR

EHEN

SIV

E A

NN

UA

L FI

NA

NC

IAL

REP

OR

T

FOR

TH

E Y

EAR

EN

DED

JUN

E 30

, 201

9

TAB

LE O

F C

ON

TEN

TS

PAG

E N

O.

EXH

IBIT

FI

NA

NC

IAL

SE

CT

ION

Req

uire

d Su

pple

men

tary

Info

rmat

ion

Sc

hedu

le o

f Rev

enue

s, Ex

pend

iture

s, an

d C

hang

es in

Fun

d B

alan

ce -

Bud

get a

nd A

ctua

l – G

ener

al F

und

......

......

......

......

......

......

......

......

......

......

......

......

......

85

G-1

Sche

dule

of t

he D

istri

ct’s

Pro

porti

onat

e Sh

are

of th

e N

et P

ensi

on L

iabi

lity

Teac

her R

etire

men

t Sys

tem

....

......

......

......

......

......

......

......

......

......

......

......

......

......

......

.86

G

-2

Sche

dule

of t

he D

istri

ct’s

Pen

sion

Con

tribu

tions

Tea

cher

Ret

irem

ent S

yste

m .

......

......

.87

G

-3

Sche

dule

of t

he D

istri

ct’s

Pro

porti

onat

e Sh

are

of th

e N

et O

PEB

Lia

bilit

y Te

ache

r Ret

irem

ent S

yste

m ..

......

......

......

......

......

......

......

......

......

......

......

......

......

......

....

88

G4

Sch

edul

e of

the

Dis

trict

OPE

B C

ontri

butio

ns T

each

er R

etire

men

t Sys

tem

.....

......

......

...89

G

5

Oth

er S

uppl

emen

tary

Info

rmat

ion

N

onm

ajor

Gov

ernm

enta

l Fun

ds (S

peci

al R

even

ue F

unds

)

Spec

ial R

even

ue F

unds

Des

crip

tions

.....

......

......

......

......

......

......

......

......

......

......

......

......

..90

-94

Com

bini

ng B

alan

ce S

heet

.....

......

......

......

......

......

......

......

......

......

......

......

......

......

......

......

.95

-100

H-1

Com

bini

ng S

tate

men

t of R

even

ues,

Expe

nditu

res a

nd

Cha

nges

in F

und

Bal

ance

s ....

......

......

......

......

......

......

......

......

......

......

......

......

......

......

....

101-

106

H-2

Prop

riet

ary

Fun

ds

Inte

rnal

Ser

vice

Fun

ds D

escr

iptio

ns ...

......

......

......

......

......

......

......

......

......

......

......

......

......

107

Com

bini

ng S

tate

men

t of F

und

Net

Pos

ition

– In

tern

al S

ervi

ce F

unds

......

......

......

......

.....

108

H-3

Com

bini

ng S

tate

men

t of R

even

ues,

Expe

nses

, and

Cha

nges

in

Fund

Net

Pos

ition

– In

tern

al S

ervi

ce F

unds

......

......

......

......

......

......

......

......

......

......

......

109

H-4

Com

bini

ng S

tate

men

t of C

ash

Flow

s– In

tern

al S

ervi

ce F

unds

......

......

......

......

......

......

....

110

H-5

Fid

ucia

ry F

unds

Age

ncy

Fund

Des

crip

tion .

......

......

......

......

......

......

......

......

......

......

......

......

......

......

......

......

111

Stat

emen

t of C

hang

es in

Ass

ets a

nd L

iabi

litie

s - A

genc

y Fu

nd ..

......

......

......

......

......

......

112

H-9

In-D

istr

ict C

hart

er S

choo

ls Sc

hedu

les

Cha

rter

Sch

ool P

rogr

am S

tart

Up

Gra

nt C

ampu

ses

Bud

get a

nd A

ctua

l – G

ener

al F

und

Adv

ance

d Le

arni

ng A

cade

my

......

......

......

......

......

...11

3

Bud

get a

nd A

ctua

l – G

ener

al F

und

CA

ST T

ech

Hig

h Sc

hool

......

......

......

......

......

......

.....

114

(

Con

tinue

d)

ii

SAN

AN

TON

IO IN

DEP

END

ENT

SCH

OO

L D

ISTR

ICT

San

Ant

onio

, Tex

as

C

OM

PREH

ENSI

VE

AN

NU

AL

FIN

AN

CIA

L R

EPO

RT

FO

R T

HE

YEA

R E

ND

ED JU

NE

30, 2

019

TA

BLE

OF

CO

NTE

NTS

PA

GE

NO

.

EXH

IBIT

Bud

get a

nd A

ctua

l – G

ener

al F

und

Irvin

g D

ual L

angu

age

Aca

dem

y ...

......

......

......

......

......

. 11

5 B

udge

t and

Act

ual –

Gen

eral

Fun

d La

mar

Ele

men

tary

Sch

ool ..

......

......

......

......

......

......

......

11

6 B

udge

t and

Act

ual –

Gen

eral

Fun

d O

gden

Aca

dem

y ....

......

......

......

......

......

......

......

......

......

. 11

7 B

udge

t and

Act

ual –

Gen

eral

Fun

d Tw

ain

Dua

l Lan

guag

e A

cade

my .

......

......

......

......

......

...

118

Bud

get a

nd A

ctua

l – G

ener

al F

und

Stee

l Mon

tess

ori A

cade

my

......

......

......

......

......

......

......

11

9 B

udge

t and

Act

ual –

Gen

eral

Fun

d St

ewar

t Ele

men

tary

Sch

ool ..

......

......

......

......

......

......

....

120

Perf

orm

ance

Con

tract

Met

rics a

nd R

esul

ts...

......

......

......

......

......

......

......

......

......

......

......

......

12

1 St

atis

tical

and

Stu

dent

Dem

ogra

phic

s – A

dvan

ced

Lear

ning

Aca

dem

y ....

......

......

......

......

...

122

Stat

istic

al a

nd S

tude

nt D

emog

raph

ics –

CA

ST T

ech

Hig

ht S

choo

l ....

......

......

......

......

......

...

123

Stat

istic

al a

nd S

tude

nt D

emog

raph

ics –

Irvi

ng D

ual L

angu

age

Aca

dem

y ....

......

......

......

.....

12

4 St

atis

tical

and

Stu

dent

Dem

ogra

phic

s – L

amar

Ele

men

tary

Sch

ool..

......

......

......

......

......

.....

12

5 St

atis

tical

and

Stu

dent

Dem

ogra

phic

s – O

gden

Aca

dem

y ...

......

......

......

......

......

......

......

......

12

6 St

atis

tical

and

Stu

dent

Dem

ogra

phic

s – T

wai

n D

ual L

angu

age

Aca

dem

y ...

......

......

......

.....

12

7 St

atis

tical

and

Stu

dent

Dem

ogra

phic

s – S

teel

e M

onte

ssor

i Aca

dem

y ...

......

......

......

......

......

12

8 St

atis

tical

and

Stu

dent

Dem

ogra

phic

s – S

tew

art E

lem

enta

ry S

choo

l .....

......

......

......

......

......

12

9 R

equi

red

TE

A S

ched

ules

Sc

hedu

le o

f Del

inqu

ent T

axes

Rec

eiva

ble .

......

......

......

......

......

......

......

......

......

......

......

......

130-

131

J-

1

Sche

dule

of R

even

ues,

Expe

nditu

res,

and

Cha

nges

in F

und

Bal

ance

–

Bud

get a

nd A

ctua

l – C

hild

Nut

ritio

n Pr

ogra

m ...

......

......

......

......

......

......

......

......

......

......

....

132

J-4

Sche

dule

of R

even

ues,

Expe

nditu

res,

and

Cha

nges

in F

und

Bal

ance

–

Bud

get a

nd A

ctua

l – D

ebt S

ervi

ce F

und

......

......

......

......

......

......

......

......

......

......

......

......

....

13

3

J-5

(Con

tinue

d)

iii

SAN

AN

TON

IO IN

DEP

END

ENT

SCH

OO

L D

ISTR

ICT

San

Ant

onio

, Tex

as

CO

MPR

EHEN

SIV

E A

NN

UA

L FI

NA

NC

IAL

REP

OR

T

FOR

TH

E Y

EAR

EN

DED

JUN

E 30

, 201

9

TAB

LE O

F C

ON

TEN

TS

PAG

E N

O.

EXH

IBIT

STA

TIS

TIC

AL

SE

CT

ION

S

tatis

tical

Sec

tion

Ove

rvie

w...

......

......

......

......

......

......

......

......

......

......

......

......

......

......

.....

134

Gov

ernm

ent-W

ide

Info

rmat

ion

N

et P

ositi

on b

y C

ompo

nent

– L

ast T

en Y

ears

......

......

......

......

......

......

......

......

......

......

..

13

5

Gov

ernm

enta

l Act

iviti

es E

xpen

ses &

Pro

gram

Rev

enue

s – L

ast T

en Y

ears

......

......

....

136-

137

G

ener

al R

even

ues a

nd C

hang

es in

Net

Pos

ition

- La

st Te

n Y

ears

......

......

......

......

......

..13

8-13

9

Fun

d In

form

atio

n

Fun

d B

alan

ces –

Gov

ernm

enta

l Fun

ds –

Las

t Ten

Yea

rs ..

......

......

......

......

......

......

......

.14

0-14

3

Gov

ernm

enta

l Fun

d R

even

ues b

y So

urce

- La

st Te

n Y

ears

......

......

......

......

......

......

......

144-

145

G

over

nmen

tal F

und

Expe

nditu

res b

y Fu

nctio

n - L

ast T

en Y

ears

......

......

......

......

......

...14

6-14

7

G

over

nmen

tal F

unds

Oth

er S

ourc

es, U

ses a

nd C

hang

es in

Fun

d B

alan

ces –

Last

Ten

Yea

rs ...

......

......

......

......

......

......

......

......

......

......

......

......

......

......

......

......

......

...14

8-14

9

G

over

nmen

tal F

und

Expe

nditu

res b

y Fu

nctio

n Pe

r Ave

rage

Dai

ly A

ttend

ance

–

La

st T

en Y

ears

......

......

......

......

......

......

......

......

......

......

......

......

......

......

......

......

......

......

150-

151

Rev

enue

Cap

acity

Info

rmat

ion

A

sses

sed

and

Estim

ated

Act

ual V

alue

of P

rope

rty –

Las

t Ten

Yea

rs ...

......

......

......

......

.15

2

Prop

erty

Tax

Lev

ies a

nd C

olle

ctio

ns -

Last

Ten

Yea

rs ...

......

......

......

......

......

......

......

.....

153

A

lloca

tion

of P

rope

rty T

ax R

ates

and

Lev

ies –

Las

t Ten

Yea

rs ..

......

......

......

......

......

....

154

Pr

oper

ty T

ax R

ates

– D

irect

and

Ove

rlapp

ing

Gov

ernm

ents

(Per

$10

0 A

sses

sed

Val

uatio

n) –

Las

t Ten

Yea

rs...

......

......

......

......

......

......

......

......

......

......

......

.....

155

Prin

cipa

l Pro

perty

Tax

paye

rs –

Cur

rent

Yea

r and

Nin

e Y

ears

Prio

r ....

......

......

......

......

. 156-

157

D

ebt C

apac

ity In

form

atio

n

O

utst

andi

ng D

ebt b

y Ty

pe –

Las

t Ten

Yea

rs ...

......

......

......

......

......

......

......

......

......

......

..15

8-15

9

Dire

ct a

nd O

verla

ppin

g D

ebt –

Gen

eral

Obl

igat

ion

Bon

ds ...

......

......

......

......

......

......

......

1

60

C

ompu

tatio

n of

Leg

al D

ebt M

argi

n - L

ast T

en Y

ears

......

......

......

......

......

......

......

......

.....

161

-162

(C

ontin

ued)

iv

SAN

AN

TON

IO IN

DEP

END

ENT

SCH

OO

L D

ISTR

ICT

San

Ant

onio

, Tex

as

C

OM

PREH

ENSI

VE

AN

NU

AL

FIN

AN

CIA

L R

EPO

RT

FO

R T

HE

YEA

R E

ND

ED JU

NE

30, 2

019

TA

BLE

OF

CO

NTE

NTS

PAG

E N

O.

EX

HIB

IT

ST

AT

IST

ICA

L S

EC

TIO

N

R

atio

of N

et G

ener

al O

blig

atio

n B

onde

d D

ebt t

o Es

timat

ed A

ctua

l Val

ue

And

Per

Ave

rage

Dai

ly M

embe

rshi

p –

Last

Ten

Yea

rs ..

......

......

......

......

......

......

......

....

16

3

Rat

io o

f Ann

ual D

ebt S

ervi

ce fo

r Gen

eral

Bon

ded

Deb

t to

Tota

l Gen

eral

Fun

d Ex

pend

iture

s – L

ast T

en Y

ears

......

......

......

......

......

......

......

......

......

......

......

......

......

......

..

164

D

emo

gra

ph

ic a

nd

Eco

no

mic

In

form

ati

on

D

emog

raph

ic a

nd E

cono

mic

Sta

tistic

s – L

ast T

en Y

ears

.....

......

......

......

......

......

......

......

. .

165

Pr

inci

pal E

mpl

oyer

s – C

urre

nt Y

ear a

nd E

ight

Yea

rs P

rior ..

......

......

......

......

......

......

......

.. 16

6-16

7 O

pera

tin

g I

nfo

rma

tio

n

W

ork

Forc

e C

ompo

sitio

n by

Em

ploy

ee C

lass

ifica

tion

– La

st T

en Y

ears

......

......

......

......

. 168-

169

Sc

hedu

le o

f Tea

cher

Info

rmat

ion

– La

st Te

n Y

ears

......

......

......

......

......

......

......

......

......

....

170

Sc

hedu

le o

f Stu

dent

Atte

ndan

ce a

nd M

embe

rshi

p –

Last

Ten

Yea

rs ..

......

......

......

......

.... .

17

1

Ope

ratin

g St

atis

tics –

Las

t Ten

Yea

rs ...

......

......

......

......

......

......

......

......

......

......

......

......

....

172

Sc

hedu

le o

f Stu

dent

Info

rmat

ion

– La

st T

en Y

ears

.....

......

......

......

......

......

......

......

......

.... .

17

3

Sche

dule

of S

choo

l Bui

ldin

gs –

Las

t Ten

Yea

rs ...

......

......

......

......

......

......

......

......

......

..... .

174-

175

Mis

cella

neou

s Sta

tistic

s ....

......

......

......

......

......

......

......

......

......

......

......

......

......

......

......

......

.... .

17

6

FE

DE

RA

L A

WA

RD

S S

EC

TIO

N

Inde

pend

ent A

udito

r’s R

epor

t on

Inte

rnal

Con

trol O

ver F

inan

cial

Rep

ortin

g an

d O

n C

ompl

ianc

e an

d O

ther

Mat

ters

Bas

ed o

n an

Aud

it of

Fin

anci

al S

tate

men

ts Pe

rfor

med

in

Acc

orda

nce

with

Gov

ernm

ent A

uditi

ng S

tand

ards

......

......

......

......

......

......

......

......

......

.....

177-

178

Inde

pend

ent A

udito

r’s R

epor

t on

Com

plia

nce

for E

ach

Maj

or F

eder

al P

rogr

am a

nd o

n In

tern

al C

ontro

l Ove

r Com

plia

nce

Req

uire

d by

the

Uni

form

Gui

danc

e……

……

……

…

179-

181

Sche

dule

of F

indi

ngs a

nd Q

uest

ione

d C

osts

.....

......

......

......

......

......

......

......

......

......

......

......

. 182-

183

Sum

mar

y Sc

hedu

le o

f Prio

r Aud

it Fi

ndin

gs ...

......

......

......

......

......

......

......

......

......

......

......

.... .

18

4

Sc

hedu

le o

f Exp

endi

ture

s of F

eder

al A

war

ds ..

......

......

......

......

......

......

......

......

......

......

......

.. . 18

5-18

8

K-1

N

otes

to S

ched

ule

of E

xpen

ditu

res o

f Fed

eral

Aw

ards

......

......

......

......

......

......

......

......

......

.. . 18

9-19

1

v

San

Ant

onio

Inde

pend

ent S

choo

l Dis

tric

t 14

1 L

avac

a St

reet

• Sa

n A

nton

io, T

exas

782

10-1

095

T

elep

hone

(210

) 554

-859

0

F

inan

cial

Ser

vice

s and

Bus

ines

s Ope

ratio

ns

Nov

embe

r 18,

201

9 M

embe

rs o

f the

Boa

rd o

f Tru

stee

s, C

itize

ns a

nd P

atro

ns

San

Ant

onio

Inde

pend

ent S

choo

l Dis

trict

14

1 La

vaca

Stre

et

San

Ant

onio

, Tex

as 7

8210

-109

5 D

ear B

oard

Mem

bers

, Citi

zens

and

Pat

rons

: W

e are

ple

ased

to p

rese

nt th

e Dis

trict

’s C

ompr

ehen

sive

Ann

ual F

inan

cial

Rep

ort (

CA

FR) f

or th

e fis

cal

year

end

ed Ju

ne 3

0, 2

019

whi

ch is

stru

ctur

ed to

pro

vide

bot

h fin

anci

al a

nd n

on-f

inan

cial

info

rmat

ion

for

Dis

trict

acc

ount

abili

ty a

nd p

ublic

tran

spar

ency

. The

Dis

trict

’s C

AFR

is p

repa

red

in a

ccor

danc

e w

ith g

ener

ally

acc

epte

d ac

coun

ting

prin

cipl

es (G

AA

P) w

hich

are

app

licab

le to

gov

ernm

enta

l ent

ities

th

roug

hout

the

Uni

ted

Stat

es. T

he r

epor

t co

nfor

ms

to a

ll cu

rren

t, re

leva

nt p

rono

unce

men

ts o

f th

e G

over

nmen

tal A

ccou

ntin

g St

anda

rd B

oard

(GA

SB).

Th

is r

epor

t com

plie

s w

ith S

tate

law

that

req

uire

s Te

xas

publ

ic s

choo

l Dis

trict

s pu

blis

h, w

ithin

one

hu

ndre

d fif

ty d

ays

of th

e cl

ose

of e

ach

fisca

l yea

r, a

com

plet

e se

t of f

inan

cial

sta

tem

ents

whi

ch a

re

audi

ted

in a

ccor

danc

e w

ith g

ener

ally

acc

epte

d au

ditin

g st

anda

rds b

y a

firm

of l

icen

sed

certi

fied

publ

ic

acco

unta

nts.

G

AA

P re

quire

s th

at m

anag

emen

t pr

ovid

e a

narr

ativ

e in

trodu

ctio

n, o

verv

iew

, an

d an

alys

is t

o ac

com

pany

the

bas

ic f

inan

cial

sta

tem

ents

in

the

form

of

Man

agem

ent’s

Dis

cuss

ion

and

Ana

lysi

s (M

D&

A).

Thi

s le

tter

of t

rans

mitt

al i

s de

sign

ed t

o co

mpl

emen

t M

D&

A a

nd s

houl

d be

rea

d in

co

njun

ctio

n w

ith it

. Th

e D

istri

ct’s

MD

&A

can

be

foun

d im

med

iate

ly f

ollo

win

g th

e re

port

of th

e in

depe

nden

t aud

itors

. Th

is C

AFR

con

sist

s of

man

agem

ent’s

rep

rese

ntat

ions

con

cern

ing

the

finan

ces

of t

he D

istri

ct.

Con

sequ

ently

, m

anag

emen

t as

sum

es f

ull

resp

onsi

bilit

y fo

r th

e co

mpl

eten

ess

and

relia

bilit

y of

all

info

rmat

ion

pres

ente

d in

this

repo

rt. T

o pr

ovid

e a

reas

onab

le b

asis

for m

akin

g th

ese

repr

esen

tatio

ns,

man

agem

ent

of t

he D

istri

ct h

as e

stab

lishe

d a

com

preh

ensi

ve i

nter

nal

cont

rol

fram

ewor

k th

at i

s de

sign

ed b

oth

to p

rote

ct th

e go

vern

men

t’s a

sset

s fro

m lo

ss, t

heft,

or m

isus

e an

d to

com

pile

suff

icie

nt

relia

ble

info

rmat

ion

for

the

prep

arat

ion

of t

he D

istri

ct’s

fin

anci

al s

tate

men

ts i

n co

nfor

mity

with

G

AA

P. B

ecau

se t

he c

ost

of i

nter

nal

cont

rols

sho

uld

not

outw

eigh

the

ir be

nefit

s, th

e D

istri

ct’s

co

mpr

ehen

sive

fra

mew

ork

of in

tern

al c

ontro

l has

bee

n de

sign

ed to

pro

vide

rea

sona

ble

rath

er th

an

abso

lute

ass

uran

ce th

at fi

nanc

ial s

tate

men

ts w

ill b

e fr

ee fr

om m

ater

ial m

isst

atem

ent.

BO

AR

D O

F E

DU

CA

TIO

N

PA

TT

I RA

DL

E

Pres

iden

t A

RT

HU

R V

. VA

LD

EZ

V

ice

Pres

iden

t D

EB

RA

A. G

UE

RR

ER

O

Secr

etar

y E

D G

AR

ZA

M

embe

r ST

EV

E L

EC

HO

LO

P M

embe

r C

HR

IST

INA

MA

RT

INE

Z

Mem

ber

AL

ICIA

PE

RR

Y

Mem

ber

PE

DR

O M

AR

TIN

EZ

Su

peri

nten

dent

vi

As

man

agem

ent,

we

asse

rt th

at,

to t

he b

est

of o

ur k

now

ledg

e an

d be

lief,

this

fin

anci

al r

epor

t is

co

mpl

ete

and

relia

ble

in a

ll m

ater

ial r

espe

cts.

The

Dis

trict

’s f

inan

cial

sta

tem

ents

hav

e be

en a

udite

d by

Gar

za/G

onza

lez

and

Ass

ocia

tes,

a fir

m o

f lic

ense

d ce

rtifie

d pu

blic

acc

ount

ants

. The

goa

l of

the

inde

pend

ent a

udit

was

to p

rovi

de r

easo

nabl

e as

sura

nce

that

the

finan

cial

stat

emen

ts o

f the

Dis

trict

for t

he fi

scal

yea

r end

ed Ju

ne 3

0, 2

019,

are

free

of

mat

eria

l m

isst

atem

ent.

The

inde

pend

ent

audi

t in

volv

ed e

xam

inin

g, o

n a

test

bas

is,

evid

ence

su

ppor

ting

the a

mou

nts a

nd d

iscl

osur

es in

the f

inan

cial

stat

emen

ts; a

sses

sing

the a

ccou

ntin

g pr

inci

ples

us

ed a

nd s

igni

fican

t est

imat

es m

ade

by m

anag

emen

t; an

d ev

alua

ting

the

over

all f

inan

cial

sta

tem

ent

pres

enta

tion.

The

inde

pend

ent a

udito

r co

nclu

ded,

bas

ed u

pon

the

audi

t, th

at th

ere

was

a r

easo

nabl

e ba

sis

for r

ende

ring

an u

nmod

ified

opi

nion

that

the

Dis

trict

’s fi

nanc

ial s

tate

men

ts fo

r the

fisc

al y

ear

ende

d Ju

ne 3

0, 2

019,

are

fairl

y pr

esen

ted

in c

onfo

rmity

with

GA

AP.

The

inde

pend

ent a

udito

r’s r

epor

t is

pre

sent

ed a

s the

firs

t com

pone

nt o

f the

fina

ncia

l sec

tion

of th

is re

port.

The

stan

dard

s gov

erni

ng S

ingl

e A

udit

enga

gem

ents

requ

ire th

e in

depe

nden

t aud

itor t

o re

port

not o

nly

on t

he f

air

pres

enta

tion

of t

he f

inan

cial

sta

tem

ents

, but

als

o on

the

aud

ited

gove

rnm

ent’s

int

erna

l co

ntro

ls a

nd c

ompl

ianc

e w

ith le

gal r

equi

rem

ents

, with

spec

ial e

mph

asis

on

inte

rnal

con

trols

and

lega

l re

quire

men

ts in

volv

ing

the

adm

inis

tratio

n of

fede

ral a

war

ds. I

nfor

mat

ion

rela

ted

to th

is s

ingl

e au

dit,

incl

udin

g a

sche

dule

of

expe

nditu

res

of f

eder

al a

war

ds,

the

inde

pend

ent

audi

tors

’ re

ports

on

the

inte

rnal

con

trols

and

com

plia

nce

with

app

licab

le la

ws a

nd re

gula

tions

, and

a sc

hedu

le o

f fin

ding

s and

qu

estio

ned

cost

s is i

nclu

ded

in th

e Fe

dera

l Aw

ards

Sec

tion

of th

is re

port.

DIS

TR

ICT

Pro

file

- Our

Ori

gins

W

hile

San

Ant

onio

pub

lic s

choo

ls w

ere

esta

blis

hed

by th

e C

ity C

ounc

il in

185

4, it

was

not

unt

il M

ay 2

, 18

99 th

at th

e sc

hool

sys

tem

bec

ame

an in

depe

nden

t D

istri

ct w

ith t

he f

orm

atio

n of

its

ow

n B

oard

of

Trus

tees

. The

Dis

trict

rec

eive

d its

firs

t cha

rter

from

th

e st

ate

of T

exas

in 1

903.

The

Dis

trict

ran

ks th

ird

larg

est

in s

tude

nt p

opul

atio

n am

ong

the

19 B

exar

C

ount

y-ar

ea s

choo

l dis

trict

s and

is th

e 19

th la

rges

t of

the

1,05

7 Te

xas

publ

ic s

choo

l dis

trict

s. Th

e D

istri

ct

enco

mpa

sses

79

squa

re m

iles

with

a to

tal p

opul

atio

n of

306

,943

(201

0 U

.S. C

ensu

s). M

ost o

f the

Dis

trict

is

with

in S

an A

nton

io, b

ut a

lso

serv

es p

arts

of

the

citie

s of

Olm

os P

ark

and

Bal

cone

s H

eigh

ts a

nd a

sm

all

unin

corp

orat

ed a

rea

of e

ast

Bex

ar C

ount

y.

Whi

le S

an A

nton

io is

com

mon

ly k

now

n as

“th

e he

art

of T

exas

” du

e to

its u

niqu

e ge

ogra

phic

al p

ositi

on o

ne

coul

d sa

y th

at o

ur D

istri

ct i

s “t

he h

eart

of S

an

Ant

onio

”. N

otic

e th

e m

ap o

n th

e rig

ht s

how

s ou

r Dis

trict

’s b

ound

arie

s en

com

pass

es v

ery

little

are

a in

com

paris

on t

o th

e Sa

n A

nton

io M

etro

polit

an a

rea

whi

ch c

ompr

ises

nin

e su

rrou

ndin

g sc

hool

di

stric

ts.

vii

Ou

r P

lace i

n A

lam

o C

ity H

isto

ry

Fo

r ove

r a c

entu

ry th

e D

istri

ct h

as s

et h

igh

stan

dard

s fo

r all

and

has

prov

ided

a

soun

d ed

ucat

iona

l fo

unda

tion

for

gene

ratio

ns o

f st

uden

ts. T

his

esta

blis

hed

foun

datio

n al

low

s st

uden

ts to

reac

h th

eir f

ulle

st p

oten

tial a

nd b

ecom

e so

me

of

San

Ant

onio

’s m

ost n

otab

le c

itize

ns. T

he tr

ue c

ulm

inat

ion

of

our c

omm

itmen

t is p

rove

n by

gra

duat

es w

ho h

ave

cont

inue

d on

to b

ecom

e a

Nob

el L

aure

ate;

an

astro

naut

; a U

S Se

cret

ary

of H

UD

; a U

S C

ongr

essm

an; a

form

er m

ayor

of S

an A

nton

io;

Pres

iden

t of

th

e B

osto

n U

nive

rsity

; pu

blic

se

rvan

ts;

accl

aim

ed a

thle

tes;

and

, nat

iona

l new

s cor

resp

onde

nts.

S

an

An

ton

io’s

Profi

le

In 2

018,

San

Ant

onio

cel

ebra

ted

it’s t

ricen

tenn

ial a

nniv

ersa

ry. I

t’s a

ccla

imed

for b

eing

the

“the

hea

rt of

sou

th T

exas

”, th

e 7th

larg

est m

unic

ipal

ity in

the

Uni

ted

Stat

es a

nd th

e 2nd

mos

t pop

ulou

s in

the

stat

e of

Tex

as. I

ts u

niqu

e ge

ogra

phic

al lo

catio

n m

akes

San

Ant

onio

acc

essi

ble

for b

oth

com

mer

ce

and

cultu

re to

eas

t and

wes

t coa

sts

and

from

Can

ada

to S

outh

Am

eric

a. It

enc

ompa

sses

467

mile

s ge

ogra

phic

ally

with

in B

exar

Cou

nty

and

curr

ently

has

a p

opul

atio

n of

ove

r 1.7

1 m

illio

n re

side

nts.

Acc

ordi

ng to

a re

port

from

the

US

Cen

sus

Bur

eau,

San

Ant

onio

’s p

opul

atio

n ha

s gr

own

from

1.3

3 m

illio

n pe

ople

in 2

010

to 1

.53

mill

ion

in 2

018.

It is

like

ly to

bec

ome

the

natio

n’s

6th la

rges

t city

by

2021

sinc

e pe

ople

are

mov

ing

here

for t

heir

wor

k, th

e ci

ty’s

div

ersi

ty a

nd o

ther

am

eniti

es su

ch a

s the

m

ild w

inte

rs.

Lo

ca

l E

co

no

my

San

Ant

onio

has

seen

som

e of

the

stro

nges

t eco

nom

ic g

row

th in

the

coun

try o

ver t

he la

st d

ecad

e. T

he

larg

est

empl

oym

ent

sect

ors

in S

an A

nton

io a

re g

over

nmen

t, se

rvic

es a

nd m

anuf

actu

ring.

The

go

vern

men

t sec

tion

is s

trong

mai

nly

due

to m

ilita

ry b

ases

(ai

r fo

rce

and

arm

y) in

the

area

whi

ch

prov

ide

empl

oym

ent t

o ap

prox

imat

ely

74,5

00 m

ilita

ry a

nd c

ivili

an p

erso

nnel

. Ser

vice

s is

the

fast

est

grow

ing

sect

or o

f the

eco

nom

y be

caus

e of

incr

ease

d de

man

d fo

r hea

lthca

re a

nd b

iom

edic

al re

sear

ch,

finan

cial

ser

vice

s an

d th

e to

uris

m in

dust

ry w

hich

has

an

estim

ated

$4

billi

on im

pact

on

the

city

’s

econ

omy.

Rep

orts

fro

m S

an A

nton

io E

cono

mic

Dev

elop

men

t Fou

ndat

ion

(SA

DEF

) st

ate

that

the

man

ufac

turin

g in

dust

ry in

our

city

is d

iver

se a

nd ra

nks

the

four

th la

rges

t man

ufac

turin

g m

arke

t in

Texa

s.

viii

Maj

or m

anuf

actu

ring

com

pani

es in

and

aro

und

San

Ant

onio

incl

ude

Cat

erpi

llar,

Frito

-Lay

, H-E

-B,

San

Ant

onio

Sho

emak

ers,

Tyso

n Fo

ods,

and

Toyo

ta M

anuf

actu

ring.

Stro

ng jo

b gr

owth

has

cont

inue

d in

to 2

019,

whi

ch h

elps

driv

e th

e ci

ty’s

dyn

amic

and

div

erse

eco

nom

y.

SA20

20’s

Edu

catio

n in

itiat

ive

is d

edic

ated

to in

crea

sing

edu

catio

n at

tain

men

t at a

ll le

vels

of s

tudy

, w

hich

will

allo

w S

an A

nton

io’s

wor

kfor

ce to

kee

p ex

pand

ing

and

help

its

mem

bers

dev

elop

ski

lls

rele

vant

to re

loca

ting

com

pani

es a

nd lo

cal i

ndus

tries

. All

the

abov

e in

dust

ries c

reat

ed m

ore

jobs

and

br

ough

t em

ploy

ees

with

thei

r fa

mili

es to

San

Ant

onio

whi

ch is

vita

l for

hou

sing

con

stru

ctio

n an

d sa

les a

nd fo

r the

city

’s o

vera

ll gr

owin

g ec

onom

y.

Boa

rd o

f Tru

stee

s Th

e D

istri

ct i

s go

vern

ed b

y a

seve

n-m

embe

r B

oard

of

Trus

tees

(B

oard

) co

mpr

ised

of

Dis

trict

re

side

nts,

with

eac

h tru

stee

rep

rese

ntin

g on

e of

the

seve

n si

ngle

-mem

ber

dist

ricts

and

ele

cted

by

vote

rs o

f tha

t dis

trict

. A

list

with

a p

hoto

of t

he c

urre

nt B

oard

mem

bers

as

of J

une

30th

is in

clud

ed

on p

age

xxvi

. The

Boa

rd i

s re

spon

sibl

e fo

r m

anag

ing

and

gove

rnin

g th

e sc

hool

s of

the

Dis

trict

, in

clud

ing

adop

ting

goal

s an

d ob

ject

ives

for

the

Dis

trict

, ado

ptin

g an

ann

ual

budg

et, l

evyi

ng a

nd

colle

ctin

g D

istri

ct t

axes

, hiri

ng s

choo

l pe

rson

nel

as r

ecom

men

ded

by t

he s

uper

inte

nden

t, se

tting

sa

lary

sch

edul

es, a

dopt

ing

Dis

trict

pol

icie

s, an

d re

porti

ng to

the

publ

ic o

n th

e D

istri

ct’s

pro

gres

s. Th

roug

h th

e B

oard

’s le

ader

ship

and

und

er th

e di

rect

ion

of th

e Su

perin

tend

ent o

f Sch

ools

the

Dis

trict

ca

rries

out

its

resp

onsi

bilit

y to

bui

ld, o

pera

te a

nd m

aint

ain

scho

ol fa

cilit

ies;

dev

elop

, mai

ntai

n an

d im

prov

e edu

catio

nal p

rogr

ams a

nd co

urse

s of s

tudy

, inc

ludi

ng ca

reer

/tech

nica

l edu

catio

nal p

rogr

ams;

pr

ovid

e pro

gram

s for

Eng

lish

lang

uage

lear

ners

and

spec

ial n

eed

stud

ents

; pro

vide

safe

tran

spor

tatio

n to

and

from

scho

ols,

and

utili

ze th

e ch

ild n

utrit

ion

prog

ram

s to

feed

our

stud

ents

in a

way

that

hel

ps

scho

ols t

o im

prov

e st

uden

t aca

dem

ic p

erfo

rman

ce, a

ttend

ance

, and

beh

avio

r.

Prov

idin

g C

hoic

es

The D

istri

ct re

cogn

izes

that

educ

atio

n is

not

a “o

ne si

ze fi

ts al

l” p

acka

ge an

d is

com

mitt

ed to

offe

ring

choi

ces t

o st

uden

ts to

dev

elop

thei

r min

ds an

d be

com

e int

elle

ctua

l exp

lore

rs.

Var

ied

lear

ning

choi

ces

for S

AIS

D st

uden

ts in

clud

e:

•R

ede s

igne

d ea

rly c

hild

hood

edu

catio

n pr

ogra

ms

•M

agne

t Pro

gram

s at m

iddl

e an

d hi

gh sc

hool

leve

ls•

Adv

ance

d Pl

acem

ent C

ours

es•

Expa

nsio

n of

Dua

l Cre

dit o

ppor

tuni

ties

•In

tern

atio

nal B

acca

laur

eate

fram

ewor

k at

ele

men

tary

, mid

dle

and

high

scho

ol le

vels

•In

-Dis

trict

Cha

rter s

choo

ls w

ith in

nova

tive

curri

culu

ms

•Ea

rly C

olle

ge H

igh

Scho

ols

•A

cade

mie

s offe

ring

non-

tradi

tiona

l gra

de c

onfig

urat

ions

such

as P

re-K

to e

ight

h gr

ade

•A

cade

mie

s offe

ring

sing

le g

ende

r cam

puse

s•

Dua

l Lan

guag

e pr

ogra

ms i

nclu

ding

two

com

plet

ely

dual

lang

uage

-imm

erse

d ca

mpu

ses

ix

Off

erin

g th

ese

choi

ces

repr

esen

ts t

he D

istri

ct’s

con

tinui

ng e

ffor

t to

red

efin

ing

exce

llenc

e, s

o al

l st

uden

t gra

duat

es a

re p

repa

red

for s

ucce

ss in

col

lege

and

car

eer.

Enr

ollm

ent a

nd D

emog

raph

ics

The

Dis

trict

con

tinue

d to

see

shr

inki

ng e

nrol

lmen

t thr

ough

sch

ool y

ear 2

018-

2019

beg

inni

ng fr

om

2009

-201

0, a

s illu

stra

ted

in th

e gr

aph

belo

w. T

he e

nrol

lmen

t dec

reas

e is

a tr

end

note

d in

oth

er in

ner-

city

dis

trict

s, w

here

subu

rban

dev

elop

men

t dra

ws f

amili

es o

ut to

war

ds th

e city

lim

its an

d co

mpe

titiv

e ch

arte

r sc

hool

s. Th

e D

istri

ct’s

act

ual

enro

llmen

t de

crea

sed

by 1

,344

or

2.7%

fro

m t

he 2

018-

19

proj

ectio

n. T

he c

hang

e ov

er th

e te

n-ye

ar p

erio

d is

a d

ecre

ase

of 1

1.5%

. How

ever

, due

to n

ew D

istri

ct

initi

ativ

es a

trend

reve

rsal

in en

rollm

ent i

s exp

ecte

d. B

y th

e yea

r 202

3, S

AIS

D en

rollm

ent i

s pro

ject

ed

to in

crea

se to

49,

121.

The

Dis

trict

con

tinue

s to

exp

lore

var

ious

mea

ns o

f inc

reas

ing

daily

atte

ndan

ce –

one

of t

he fa

ctor

s th

at d

rive

stat

e fu

ndin

g –

to m

itiga

te th

e im

pact

cau

sed

by e

nrol

lmen

t dec

line.

The

Dis

trict

is, a

lso,

in

the m

idst

of a

cade

mic

tran

sfor

mat

ion

to at

tract

and

bet

ter p

repa

re al

l stu

dent

s for

succ

ess i

n co

llege

an

d ca

reer

. SA

ISD

and

the

com

mun

ity h

ave

dete

rmin

ed re

nova

tions

of i

ts a

ging

infr

astru

ctur

es, i

n or

der

to p

rovi

de f

acili

ties

mor

e eq

uita

ble

with

wha

t is

offe

red

in n

eigh

borin

g sc

hool

dis

trict

s, w

ill

cont

inue

thro

ugh

a $4

50 m

illio

n bo

nd re

fere

ndum

alo

ng w

ith a

Tax

Rat

ifica

tion

Elec

tion

ratif

ied

by

vote

rs in

Nov

embe

r 201

6.

As

illus

trate

d in

the

gra

ph o

n th

e fo

llow

ing

page

, th

e D

istri

ct’s

PEI

MS

2018

-19

dem

ogra

phic

s co

mpa

red

with

the

sta

tes

indi

cate

s a

near

ly 2

to

1 ra

tio o

f ec

onom

ical

ly d

isad

vant

aged

stu

dent

s. R

esea

rch

has

show

n th

at e

cono

mic

ally

dis

adva

ntag

ed c

hild

ren

face

mor

e ch

alle

nges

com

pare

d to

th

ose

from

mid

dle-

clas

s fam

ilies

.

Act

ual E

nrol

lmen

t Ver

sus P

roje

ctio

ns *

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52,0

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53,0

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54,0

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56,0

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2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

*20

21*

2022

*20

23*

Sour

ce:

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Oct

ober

PEI

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e O

ffice

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ccou

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earc

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luat

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ent A

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t

Stud

ent A

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vem

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ol P

rogr

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sing

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ally

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dvan

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nHi

span

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OVER

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ORM

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ENT

ACHI

EVEM

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SCHO

OL P

ROGR

ESS

CLOS

ING

THE

GAPS

Perfo

rman

ce C

ompa

rison

by S

choo

l Yea

r

2018

2019

C

B

D

CC

B

CC

Fo

r a s

econ

d ye

ar in

a ro

w, a

SA

ISD

teac

her w

as n

amed

a to

p te

ache

r in

Bex

ar C

ount

y. T

his

year

’s te

ache

r was

a b

iling

ual p

re-k

inde

rgar

ten

teac

her w

ho re

ceiv

ed T

rinity

’s U

nive

rsity

Priz

e fo

r exc

elle

nce

in te

achi

ng.

Fo

ur h

igh

scho

ol j

unio

rs w

ere

sele

cted

to

parti

cipa

te i

n th

e V

oelc

ker

Bio

med

ical

Res

earc

h A

cade

my.

The

se V

oelc

ker s

chol

ars,

with

the

men

tors

hip

of b

iom

edic

al s

cien

tists

, will

eng

age

in h

ands

-on,

bio

med

ical

rese

arch

trai

ning

for t

wo

sum

mer

s at

the

Uni

vers

ity o

f Tex

as H

ealth

Sc

ienc

e in

San

Ant

onio

.

Th

ree

SAIS

D se

nior

s, ch

osen

am

ong

3% n

atio

nally

as Q

uest

Brid

ge sc

hola

rs, a

re h

eade

d to

the

natio

n’s

top

univ

ersi

ties.

Que

stB

ridge

mat

ches

low

-inco

me

yout

h w

ith to

p-tie

r co

llege

s an

d pr

ovid

es fo

ur-y

ear s

chol

arsh

ips f

or e

ach

scho

lar.

Dis

tric

t In

itia

tives

As

the

19th

larg

est s

choo

l Dis

trict

in th

e St

ate

of T

exas

, the

Dis

trict

is d

ilige

ntly

pla

nnin

g fo

r th

e fu

ture

. St

uden

t en

rollm

ent

driv

es t

he D

istri

ct’s

pla

nnin

g pr

oces

s al

ong

with

Adm

inis

tratio

n’s

com

mitm

ent

to p

rovi

ding

the

bes

t ed

ucat

ion

avai

labl

e to

our

stu

dent

s. T

he D

istri

ct’s

stra

tegi

c pl

anni

ng i

s an

ong

oing

pro

cess

and

is

guid

ed b

y th

e SA

ISD

Blu

eprin

t fo

r Ex

celle

nce

sinc

e its

im

plem

enta

tion

in s

choo

l ye

ar 2

015-

2016

. It

is e

xplo

ring

stra

tegi

es t

hat

focu

s on

ins

truct

iona

l cr

eativ

ity a

nd p

rodu

ctiv

ity, w

hile

red

ucin

g no

n-in

stru

ctio

nal e

xpen

ditu

res

thro

ugh

effic

ienc

ies

and

inno

vatio

ns, a

s w

ell a

s re

stru

ctur

ing

prog

ram

s no

t pro

duci

ng d

esire

d ou

tcom

es. T

he D

istri

ct in

tend

s to

con

tinue

to fo

cus o

n in

stru

ctio

nal o

utco

mes

and

cre

atin

g op

portu

nitie

s for

our

stud

ents

. D

urin

g th

e 20

18-1

9 sc

hool

yea

r, SA

ISD

impl

emen

ted

or e

xpan

ded

man

y m

ajor

initi

ativ

es in

supp

ort

of th

e D

istri

ct’s

5-Y

ear P

lan,

such

as:

SB18

82 w

as a

key

pie

ce o

f ne

w T

exas

Edu

catio

n le

gisl

atio

n th

at in

cent

iviz

es P

ublic

Sch

ool

Dis

trict

s to

partn

er w

ith e

xter

nal c

harte

r, hi

gher

edu

catio

n, o

r non

-pro

fit p

artn

ers t

o op

erat

e an

in

tern

al c

harte

r sch

ool.

San

Ant

onio

ISD

was

one

of a

smal

l num

ber o

f Tex

as IS

Ds t

o em

brac

e th

is o

ppor

tuni

ty fo

r 201

8-19

, and

was

app

rove

d by

TEA

for f

our p

artn

ersh

ips:

o

Rel

ay L

ab S

choo

ls –

Ope

ratin

g O

gden

Aca

dem

y an

d St

orm

Ele

men

tary

oD

emoc

racy

Pre

p Sc

hool

s – O

pera

ting

Stew

art E

lem

enta

ryo

CA

ST N

etw

ork

– O

pera

ting

CA

ST T

ech

Hig

h Sc

hool

Te

xans

Can

Aca

dem

ies –

Ope

ratin

g at

Hig

hlan

ds H

igh

Scho

ol. T

he n

ew c

harte

r off

ers a

seco

nd

chan

ce to

any

stud

ent t

hat h

as st

rugg

led

in a

tradi

tiona

l hig

h sc

hool

setti

ng b

y re

mov

ing

barr

iers

th

at k

eep

them

from

atta

inin

g th

eir e

duca

tion.

O

pene

d W

ashi

ngto

n Irv

ing

Dua

l La

ngua

ge A

cade

my,

pr

ovid

ing

Dua

l Eng

lish

and

Span

ish

imm

ersi

on fo

r the

en

tire

stud

ent b

ody.

The

aca

dem

y w

as d

evel

oped

with

in

put f

rom

nat

iona

l and

loca

l exp

erts

in th

e fie

ld o

f dua

l la

ngua

ge e

duca

tion.

C

ontin

ued

the

expa

nsio

n of

the

Inte

rnat

iona

l Bac

cala

urea

te P

rogr

am w

hich

has

a

long

his

tory

at B

urba

nk H

igh

Scho

ol to

oth

er sc

hool

s and

oth

er g

rade

leve

ls.

This

rigo

rous

pro

gram

aim

s “t

o de

velo

p in

quiri

ng, k

now

ledg

eabl

e an

d ca

ring

youn

g pe

ople

who

hel

p cr

eate

a b

ette

r an

d m

ore

peac

eful

wor

ld t

hrou

gh

inte

rcul

tura

l und

erst

andi

ng a

nd re

spec

t.” C

urre

ntly

, SA

ISD

has

five

“IB

Wor

ld

Scho

ols”

and

four

scho

ols t

hat a

re “

IB C

andi

date

Sch

ools

”.

xiii

•Th

e ro

le o

f “M

aste

r Te

ache

r” w

as in

trodu

ced

in 2

017-

18, a

nd w

ith th

is, e

xten

sive

rec

ruiti

ngef

forts

wer

e la

unch

ed in

tern

ally

and

ext

erna

lly to

attr

act h

ighl

y sk

illed

teac

hers

with

a tr

ack

reco

rd o

f hig

h st

uden

t ach

ieve

men

t. In

201

8-19

, the

goa

l was

to in

crea

se th

e M

aste

r Tea

cher

coun

t to

over

400

.•

Con

tinue

d pa

rtner

ship

with

Our

Lad

y of

the

Lake

Uni

vers

ity, T

exas

A&

M a

t San

Ant

onio

, and

the

Uni

vers

ity o

f Te

xas

at S

an A

nton

io t

o of

fer

adva

nced

deg

ree

prog

ram

s fo

r te

ache

rs t

oel

evat

e lite

racy

inst

ruct

ion

and

incr

ease

the

num

ber o

f tea

cher

s cre

dent

iale

d to

teac

h du

al-c

redi

tan

d A

dvan

ced

Plac

emen

t cou

rses

.

•In

crea

sed

the

num

ber o

f “A

cade

my”

sch

ools

(PK

-8th

gra

de le

vels

) to

21 b

y id

entif

ying

8 n

ewel

emen

tary

scho

ols t

hat w

ill a

dd 7

th g

rade

to th

eir s

choo

ls n

ext y

ear.

Stud

ies s

how

that

stud

ents

bene

fit b

oth

soci

ally

and

aca

dem

ical

ly b

y st

ayin

g lo

nger

in th

e el

emen

tary

scho

ol e

nviro

nmen

t.•

Due

to

a bu

dget

sho

rtfal

l, th

ere

was

no

gene

ral

pay

incr

ease

for

the

201

8-19

sch

ool

year

.H

owev

er, t

he D

istri

ct d

id in

crea

se th

e m

inim

um h

ourly

rate

for n

on-e

xem

pt, p

erm

anen

t, fu

ll-tim

e em

ploy

ees i

ncre

ased

from

$12

.00

to $

13.0

0 to

$13

.25

star

ting

Janu

ary

1, 2

019

of th

e 201

8-19

con

tract

yea

r.•

To sh

ow a

ppre

ciat

ion

for e

mpl

oyee

s’ c

ontin

ued

com

mitm

ent t

o w

ork

with

SA

ISD

for 1

5 ye

ars

or m

ore,

the

Boa

rd a

ppro

ved

as p

art o

f th

e 20

18-1

9 bu

dget

, a c

ontin

uatio

n of

the

long

evity

stip

end

of $

500

for e

mpl

oyee

s mee

ting

the

stat

ed c

riter

ia.

•Im

plem

enta

tion

of 1

3 ne

w p

ropa

ne b

uses

with

new

saf

ety

mea

sure

s an

d ne

w w

ays

to s

ave

the

Dis

trict

mon

ey si

nce

the

cost

of p

ropa

ne fu

el is

che

aper

than

die

sel.

The

new

flee

t did

not

cos

tth

e Dis

trict

any

mon

ey si

nce i

t was

awar

ded

a gra

nt fr

om th

e Env

ironm

enta

l Pro

tect

ion

Age

ncy.

Com

mun

ities

Com

ing

Tog

ethe

r Th

e D

istri

ct b

elie

ves

in w

orki

ng w

ith it

s co

mm

unity

sin

ce th

e su

cces

s of

our

stu

dent

s pl

ays

an im

porta

nt p

art i

n th

e su

cces

s of

our

city

. Th

e fo

llow

ing

are

just

a fe

w o

f the

par

tner

ship

s cu

rren

tly in

pla

ce.

•Th

e D

istri

ct, i

n pa

rtner

ship

with

the

Cul

inar

y In

stitu

te o

f Am

eric

a (C

IA),

cont

inue

s to

prov

ide

a m

odel

indu

stry

cur

ricul

um a

t all

SAIS

D c

ulin

ary

prog

ram

s. Th

e pa

rtner

ship

s in

clud

e pl

ans

for a

dditi

onal

teac

her f

ello

wsh

ips

for t

rain

ing

at C

IA w

ith th

e go

al o

f ext

endi

ng th

e co

llege

-tra

nsfe

r cre

dit o

ppor

tuni

ty to

four

mor

e SA

ISD

hig

h sc

hool

s.•

In p

artn

ersh

ip w

ith a

fiv

e-ye

ar g

rant

fro

m V

aler

o En

ergy

, the

Dis

trict

con

tinue

s to

pre

pare

mor

e st

uden

ts t

o su

ccee

d in

col

lege

and

fut

ure

care

ers.

Tran

sfor

min

g a

supp

ort

syst

em b

yad

ding

mor

e H

igh

Scho

ol c

ouns

elor

s, gi

ving

a n

umbe

r of h

igh

scho

ol ju

nior

s an

opp

ortu

nity

to g

o on

col

lege

tou

rs a

nd t

hen

supp

ortin

g gr

adua

tes

once

the

y’re

in

colle

ge i

s m

akin

g a

diff

eren

ce in

the

choi

ces s

tude

nts a

re m

akin

g ab

out t

heir

futu

re.

•Th

e D

istri

ct in

col

labo

ratio

n w

ith B

oys a

nd G

irls C

lubs

of S

an A

nton

io; G

reat

er S

an A

nton

ioA

ll St

ars;

You

ng W

omen

Chr

istia

n A

ssoc

iatio

n (Y

WC

A);

and

City

of

San

Ant

onio

Dep

artm

ent o

f Com

mun

ity In

itiat

ives

con

tinue

to o

ffer

an

Afte

r-Sc

hool

Cha

lleng

e Pr

ogra

m.

Stud

ents

who

par

ticip

ate

in t

he p

rogr

am r

ecei

ve h

omew

ork

and

acad

emic

ass

ista

nce,

with

emph

asis

in m

ath

and

scie

nce,

and

have

opp

ortu

nitie

s to

enha

nce s

ocia

l aw

aren

ess a

nd p

hysi

cal

skill

s th

roug

h iP

lay!

act

iviti

es.

Als

o, c

hild

ren

who

par

ticip

ate

in t

he A

fter-

Scho

ol C

are

prog

ram

s are

bei

ng se

rved

a sn

ack

and

supp

er a

s par

t of t

he C

hild

Nut

ritio

n Se

rvic

es e

nhan

ced

oper

atio

ns.

xiv

The

mis

sion

of

the

San

Ant

onio

Fou

ndat

ion

for

Exce

llenc

e in

Edu

catio

n (F

ound

atio

n) i

s to

sup

port

San

Ant

onio

ISD

to

beco

me

one

of t

he n

atio

n’s

lead

ing

urba

n sc

hool

Dis

trict

s th

roug

h ed

ucat

iona

l exc

elle

nce

and

inno

vatio

ns.

It se

rves

as

a ca

taly

st f

or t

he D

istri

ct b

y su

ppor

ting

prog

ram

s th

at a

im t

o in

crea

se s

tude

nt

achi

evem

ent,

reco

gniz

e st

aff

and

teac

her

exce

llenc

e, c

eleb

rate

suc

cess

acr

oss

the

Dis

trict

, an

d st

reng

then

bus

ines

s and

com

mun

ity p

artn

ersh

ips.

It is

a g

oal o

f the

Fou

ndat

ion

to in

vest

in th

e gr

eat

idea

s of

edu

cato

rs a

nd r

eplic

ate

the

prog

ram

s th

at d

emon

stra

te s

ucce

ss. J

ust i

n 20

18-1

9 al

one,

the

Foun

datio

n in

vest

ed a

ppro

xim

atel

y $3

.5 m

illio

n in

SA

ISD

thr

ough

edu

cato

r’s

gran

ts,

stra

tegi

c in

itiat

ives

and

sch

ools

of i

nnov

atio

ns w

ith e

mph

asis

on

STEM

, fin

e ar

ts, a

nd e

nric

hmen

t act

iviti

es.

It al

so in

clud

ed fu

ndin

g fo

r 470

stud

ents

on

colle

ge to

urs a

nd 1

50 sc

hola

rshi

ps fo

r hig

her e

duca

tion

for

seni

ors

in t

he D

istri

ct.

As

a w

ay o

f ge

tting

the

co

mm

unity

tog

ethe

r an

d en

cour

agin

g su

ppor

t fo

r ou

r st

uden

ts,

the

Foun

datio

n co

nduc

ted

a lu

ggag

e dr

ive

to

pres

ent t

o ea

ch S

AIS

D g

radu

ate

to s

ucce

ed w

ith c

olle

ge

boun

d pl

ans.

Teac

her g

rant

win

ners

repr

esen

ted

educ

ator

s of

all

grad

e le

vels

, giv

ing

over

for

ty-s

even

thou

sand

s of

st

uden

ts th

e op

portu

nity

to b

enef

it fr

om p

roje

cts

in th

eir

scho

ols.

One

oth

er e

xciti

ng n

ote,

is

that

The

Gre

ehey

Fa

mily

Fou

ndat

ion,

thro

ugh

the

SAIS

D F

ound

atio

n, h

as

com

mitt

ed $

1.5

mill

ion

over

the

nex

t th

ree

year

s in

su

ppor

t of e

xpan

ding

dua

l cre

dit o

ffer

ings

.

Ren

ovati

ng a

nd

Bu

ild

ing a

Bet

ter

SA

ISD

Fir

st o

f T

hre

e C

on

secu

tive

Bon

d P

rog

ram

s

Bac

k in

to e

arly

201

0, f

ollo

win

g an

ext

ensi

ve s

tudy

of

the

cond

ition

al o

f al

l SA

ISD

fac

ilitie

s, a

com

mun

ity-b

ased

com

mitt

ee d

evel

oped

a l

ong-

rang

e m

aste

r pl

an t

hat

wou

ld i

nvol

ve t

hree

co

nsec

utiv

e bo

nd p

rogr

ams

to u

pdat

e an

d br

ing

all s

choo

ls u

p to

sta

ndar

ds.

Bon

d 20

10 f

or $

515

mill

ion

was

the

first

bon

d. A

tota

l of 6

8 sc

hool

faci

litie

s ben

efite

d fr

om B

ond

2010

, with

22

of th

ose

scho

ols r

ecei

ving

maj

or re

nova

tions

. Th

e D

istri

ct is

pro

ud o

f its

achi

evem

ent i

n de

liver

ing

on-ti

me,

on

-bud

get r

esul

ts fo

r Bon

d 20

10 p

roje

cts.

This

dyn

amic

met

amor

phos

is w

ill se

rve

stud

ents

, sta

ff a

nd

the

com

mun

ity fo

r yea

rs to

com

e.

Sec

on

d o

f T

hre

e C

on

secu

tive

Bo

nd

Pro

gra

ms

Muc

h w

as a

ccom

plis

hed

thro

ugh

Bon

d 20

10, h

owev

er, t

here

wer

e st

ill m

any

mor

e fa

cilit

ies

that

did

not

hav

e th

e pr

oper

wor

king

and

lear

ning

con

ditio

ns fo

r st

aff

and

stud

ents

. On

Nov

embe

r 8,

201

6, th

e vo

ters

of

the

Dis

trict

pas

sed

two

sepa

rate

bal

lot p

ropo

sitio

ns. O

f the

two

prop

ositi

ons,

the

first

that

pas

sed

was

a

$450

mill

ion

bond

aut

horiz

atio

n. T

his i

s ref

erre

d to

as B

ond

2016

whi

ch in

clud

ed

fund

ing

for s

even

hig

h sc

hool

s, fo

ur m

iddl

e sc

hool

s and

two

elem

enta

ry sc

hool

s rec

eivi

ng e

xten

sive

re

nova

tions

to

incl

ude

clas

sroo

m s

pace

s, sc

ienc

e la

bs,

and

maj

or i

nfra

stru

ctur

e im

prov

emen

ts

(hea

ting

and

cool

ing

syst

ems,

elec

trica

l stru

ctur

es, p

lum

bing

and

stru

ctur

al e

lem

ents

.)

xv

All

Bon

d 20

16 p

roje

cts

are

in c

onst

ruct

ion

phas

e w

ith m

ajor

cla

ssro

om a

reas

to b

e oc

cupi

ed in

the

2020

-202

1 sc

hool

yea

r. R

enov

atio

n of

five

sch

ools

are

read

y fo

r the

sta

rt of

the

2019

-202

0 sc

hool

ye

ar. C

onst

ruct

ion

of th

e ne

w tr

ansp

orta

tion

cent

er fe

atur

ing

prop

ane

stor

age

and

disp

ensi

ng is

fully

op

erat

iona

l.

The

seco

nd o

f the

two

prop

ositi

ons

that

vot

ers

pass

ed w

as th

e Ta

x R

atifi

catio

n El

ectio

n (T

RE)

to

incr

ease

the

Dis

trict

’s M

aint

enan

ce &

Ope

ratio

ns (M

&O

) tax

rate

by

13 c

ents

. The

incr

ease

in th

e M

&O

tax

rate

will

brin

g in

an

estim

ated

$32

.1 m

illio

n in

add

ition

al a

nnua

l ope

ratin

g re

venu

e, w

hich

w

ill s

uppo

rt in

crea

sed

acad

emic

off

erin

gs f

or s

tude

nts,

enha

nced

tec

hnol

ogy

for

clas

sroo

ms

thus

cr

eatin

g 21

st C

entu

ry c

lass

room

s, an

d up

grad

es to

the

lear

ning

env

ironm

ent t

hat a

re n

ot p

art o

f the

20

16 B

ond.

Deb

t M

an

agem

ent

Progra

m

.

On

June

26,

201

8, th

e D

istric

t wen

t out

in th

e m

arke

t to

conv

ert i

ts $4

5.71

M V

aria

ble

Rat

e U

nlim

ited

Ref

undi

ng B

onds

Ser

ies 2

014B

to a

fixe

d ra

te st

ruct

ure.

The

se b

onds

wer

e or

igin

ally

sold

to re

fund

th

e re

mai

ning

por

tion

of th

e D

istri

ct’s

out

stan

ding

Tax

-Exe

mpt

Com

mer

cial

Pap

er n

otes

from

Bon

d 20

10. T

he t

rue

inte

rest

cos

t of

the

bon

d sa

le w

as 3

.95%

with

an

aver

age

annu

al d

ebt

serv

ice

of

$2,8

41,1

21. O

n th

e sa

me

day,

Jun

e 26

, 201

8, th

e D

istri

ct s

ucce

ssfu

lly p

riced

the

first

issu

ance

of

Bon

d 20

16 fo

r $20

0 m

illio

n. T

he d

eal w

as st

ruct

ured

as a

30-

year

issu

ance

with

a 7

-yea

r cal

l opt

ion

to re

tain

incr

ease

d op

tiona

lity

and

flexi

bilit

y. O

rder

s in

aggr

egat

e re

ache

d ov

er $

825

mill

ion,

or 4

.6

times

the

par a

mou

nt.

As a

resu

lt of

the

stron

g or

der b

ook,

spre

ads w

ere

tight

ened

on

man

y of

the

indi

vidu

al m

atur

ities

and

al

low

ed th

e ov

eral

l cos

t of t

he tr

ansa

ctio

n to

dec

reas

e by

2 b

asis

poi

nts f

rom

the

prel

imin

ary

pric

ing

scal

e w

hich

redu

ced

the

expe

cted

deb

t ser

vice

for t

he is

sue

by o

ver $

715,

000.

The

all-

in T

IC (t

rue

inte

rest

cos

t) fo

r the

tran

sact

ion

is 4

.05%

.

Dis

trict

staf

f and

its F

inan

cial

Adv

isor

s and

Bon

d C

ouns

el w

ere

in g

ood

com

pany

with

stu

dent

s fr

om

Bra

cken

ridge

, B

urba

nk,

and

You

ng

Wom

en’s

Le

ader

ship

A

cade

my

who

go

t to

pa

rtici

pate

in th

e tw

o bo

nd p

ricin

gs. T

his

give

s st

uden

ts, o

n th

e da

y of

pric

ing,

the

oppo

rtuni

ty to

in

tera

ct

with

ba

nker

s, fin

anci

al

advi

sors

, at

torn

eys,

Dis

trict

st

aff,

and

Boa

rd

Trus

tees

al

low

s th

em to

lear

n ab

out t

he v

ario

us ro

les

and

care

ers

in th

e fin

anci

al i

ndus

try, p

rovi

des

insi

ght o

n ho

w th

eir

scho

ols’

pro

ject

s ar

e fu

nded

, and

ill

ustra

tes t

he im

porta

nce

of te

amw

ork.

The

Dis

trict

’s c

omm

itmen

t to

bein

g “S

tude

nt C

ente

red”

has

be

en f

eatu

red

in p

ublic

atio

ns s

uch

as T

he B

ond

Buye

r an

d ha

s ga

rner

ed tr

emen

dous

sup

port

and

inte

rest

from

the

com

mun

ity.

On

May

13,

201

9, th

e SA

ISD

Boa

rd o

f Tru

stee

s app

rove

d tw

o (2

) Par

amet

ers O

rder

s to

auth

oriz

e th

e is

suan

ce o

f up

to

$250

mill

ion

from

the

rem

aini

ng B

ond

2016

aut

horiz

atio

n an

d to

ref

und

the

outs

tand

ing

bala

nce

of th

e Se

ries

2010

B B

uild

Am

eric

a B

onds

for

an

estim

ated

$7

mill

ion

in N

et

xvi

Pres

ent V

alue

(NPV

) sav

ings

. The

Par

amet

ers O

rder

s aut

horiz

es th

e D

istri

ct to

ent

er th

e bo

nd m

arke

t at

any

time u

ntil

May

13,

202

0, in

one

or m

ore s

erie

s of b

onds

at o

ne o

r mor

e tim

es su

bjec

t to

mee

ting

or e

xcee

ding

the

esta

blis

hed

para

met

ers.

R

eade

rs w

ill fi

nd m

ore

info

rmat

ion

on th

e D

istri

ct’s

deb

t by

refe

rrin

g to

pag

e 11

in M

anag

emen

t’s

Dis

cuss

ion

and

Ana

lysi

s.

Imp

act

of

Inte

rest

Ra

tes

Afte

r a s

even

(7) y

ear p

erio

d of

kee

ping

the

fede

ral f

unds

rate

targ

et a

t 0-0

.25%

, the

Fed

eral

Ope

n M

arke

t C

omm

ittee

(F

OM

C)

bega

n to

gr

adua

lly i

ncre

ase

rate

s in

Dec

embe

r 20

15

in a

n ef

fort

to s

low

eco

nom

ic a

ctiv

ity a

nd

redu

ce in

flatio

nary

pre

ssur

e. S

ince

then

, the

FO

MC

has

inc

reas

ed r

ates

nin

e (9

) tim

es,

whi

ch p

ut t

he f

eder

al f

unds

rat

e ta

rget

at

2.25

-2.5

% b

y th

e en

d of

201

8. A

fter

rate

s re

mai

ned

unch

ange

d in

the

firs

t qu

arte

r (c

alen

dar)

of 2

019,

the F

OM

C an

d Eu

rope

an

Cen

tral B

ank

(EC

B) m

ade

stat

emen

ts th

at it

di

d no

t ant

icip

ate

any

furth

er r

ate

incr

ease

s in

201

9 w

hich

con

tradi

cted

the

con

sens

us

from

late

last

yea

r. Th

ese

stat

emen

ts, a

long

w

ith

the

ongo

ing

tarif

f di

scus

sion

w

ith

Chi

na a

nd n

ewly

impo

sed

tarif

fs o

n M

exic

o,

has

caus

ed a

dow

nwar

d tre

nd in

the

inte

rest

rate

env

ironm

ent.

Ther

e ha

s al

so b

een

the

intro

duct

ion

of th

e id

ea th

at th

e FO

MC

may

dec

reas

e ra

tes

whi

ch h

elpe

d pu

sh p

arts

of t

he y

ield

cur

ve to

inve

rt.

By

the

end

of J

une

2019

, the

fede

ral f

unds

rate

targ

et re

mai

ned

unch

ange

d fr

om it

s D

ecem

ber 2

018

posi

tion

of 2

.25-

2.50

%.

As s

tate

d in

thei

r Jun

e 19

, 201

9 Pr

ess R

elea

se, t

he F

OM

C “

cont

inue

s to

view

sust

aine

d ex

pans

ion

of

econ

omic

act

ivity

…bu

t un

certa

intie

s ab

out

this

out

look

hav

e in

crea

sed”

. Th

e C

omm

ittee

will

co

ntin

ue to

mon

itor i

nfor

mat

ion

surr

ound

ing

the e

cono

mic

out

look

and

will

act a

ccor

ding

ly to

sust

ain

the

expa

nsio

n. W

hile

low

er ra

tes d

o ne

gativ

ely

affe

ct th

e D

istri

ct’s

inve

stm

ent r

etur

ns, i

t is b

enef

icia

l fo

r iss

uing

deb

t as t

he D

istri

ct fi

naliz

es it

s pla

ns to

util

ize

the

rem

aini

ng B

ond

2016

aut

horiz

atio

n.

Bu

dgeta

ry C

on

trols

The

annu

al b

udge

t se

rves

as

the

foun

datio

n fo

r th

e D

istri

ct’s

fin

anci

al

plan

ning

an

d co

ntro

l. Th

e D

istri

ct’s

20

18-2

019

repo

rting

per

iod

bega

n Ju

ly 1

, 201

8 an

d en

ded

June

30,

201

9.

The p

repa

ratio

n of

the b

udge

t now

com

men

ces i

n O

ctob

er u

nder

th

e di

rect

ion

of t

he S

uper

inte

nden

t of

Sch

ools

. Th

e B

oard

re

view

s th

e bu

dget

du

ring

wor

ksho

ps

cond

ucte

d be

twee

n Fe

brua

ry a

nd J

une.

Rec

omm

enda

tions

fro

m s

choo

ls,

pare

nts,

empl

oyee

gr

oups

, an

d st

akeh

olde

rs

of

the

Dis

trict

ar

e co

nsid

ered

dur

ing

the

budg

et p

roce

ss. T

he f

inal

am

ende

d 20

18-2

019

budg

et w

as a

ppro

ved

by th

e

xvii

Boa

rd o

f Tru

stee

s on

June

18,

201

9. T

he D

istri

ct m

aint

ains

bud

geta

ry c

ontro

ls to

ens

ure

com

plia

nce

with

lega

l pro

visi

ons e

mbo

died

in th

e an

nual

app

ropr

iate

d bu

dget

appr

oved

by

the B

oard

of T

rust

ees.

The l

evel

of b

udge

tary

cont

rol (

the l

evel

at w

hich

expe

nditu

res c

anno

t leg

ally

exce

ed th

e app

ropr

iate

d am

ount

) is e

stab

lishe

d by

maj

or fu

nctio

nal c

ateg

ory.

Lon

g-T

erm

Fin

an

cia

l P

lan

nin

g

The D

istri

ct h

as m

aint

aine

d a h

ealth

y fu

nd b

alan

ce to

ensu

re th

at re

sour

ces a

re av

aila

ble w

hen

need

ed

to m

eet u

nexp

ecte

d re

venu

e sh

ortfa

lls a

nd fu

nd o

ne-ti

me

expe

nditu

res

that

may

exc

eed

the

annu

al

budg

eted

reve

nue.

Legis

lati

ve C

ha

nges

The

Texa

s Le

gisl

atur

e m

eets

in re

gula

r ses

sion

in o

dd-n

umbe

red

year

s. D

urin

g th

ese

sess

ions

, the

Le

gisl

atur

e ap

prov

es th

e st

ate

budg

et, w

hich

incl

udes

fund

ing

for l

ocal

pub

lic s

choo

l dis

trict

s. T

he

85th

Leg

isla

tive

Sess

ion

conv

ened

in J

anua

ry 2

017,

and

als

o in

clud

ed a

spe

cial

ses

sion

cal

led

by

Gov

erno

r A

bbot

t. Th

e bu

dget

was

app

rove

d on

Sat

urda

y, M

ay 2

7, 2

017,

and

inc

lude

d m

any

educ

atio

n bi

lls e

ffec

tive

for t

he sc

hool

yea

rs 2

017-

18 a

nd 2

018-

19.

Acc

ordi

ng to

a L

egis

lativ

e Su

mm

ary

publ

ishe

d by

Moa

k, C

asey

& A

ssoc

iate

s on

June

15,

201

7, th

e m

ajor

Sta

te F

undi

ng it

ems w

ith a

n im

pact

to sc

hool

Dis

trict

s inc

lude

d th

e fo

llow

ing:

Ther

e w

as a

n in

crea

se to

the

“Aus

tin Y

ield

” co

mpo

nent

of

the

Foun

datio

n Sc

hool

Pro

gram

(F

SP)

fund

ing,

incr

easi

ng th

e fa

ctor

fro

m $

77.5

3 to

$99

.41

for

2017

-18

and

to $

106.

28 f

or

2018

-19.

Thi

s cha

nge

mea

nt a

yie

ld o

f mor

e th

an $

18 m

illio

n to

SA

ISD

ove

r the

two

year

s of

the

bien

nium

. The

cha

nge

to th

e “A

ustin

Yie

ld”

cost

the

Stat

e $1

.5 b

illio

n fo

r the

bie

nniu

m.

Th

ere

was

no

incr

ease

to th

e B

asic

Allo

tmen

t dur

ing

this

legi

slat

ive

sess

ion,

so

it re

mai

ned

at

$5,1

40 fo

r bot

h ye

ars o

f the

bie

nniu

m.

Th

e St

ate

also

fund

ed e

xpec

ted

stud

ent e

nrol

lmen

t gro

wth

at a

pro

ject

ed c

ost o

f $2.

7 bi

llion

for

the

bien

nium

.

HB

4 w

as p

asse

d du

ring

the

2015

-17

bien

nium

to p

rovi

de g

rant

fun

ding

of u

p to

$1,

500

per

elig

ible

4-y

ear-

old

stud

ent f

or a

hig

h-qu

ality

Pre

-Kin

derg

arte

n pr

ogra

m.

Unf

ortu

nate

ly, t

here

w

as n

o fu

ndin

g al

loca

ted

to c

ontin

ue th

is p

rogr

am, w

hich

SA

ISD

did

take

par

t in.

The

pro

gram

w

as r

estru

ctur

ed t

o ut

ilize

exi

stin

g Pr

e-K

fun

ding

and

ens

ures

tha

t di

stric

ts r

ecei

ving

thi

s fu

ndin

g al

loca

te a

min

imum

of 1

5% to

war

d m

eetin

g th

e re

quire

men

ts o

f a “

Hig

h Q

ualit

y Pr

e-K

inde

rgar

ten”

pro

gram

.

This

bie

nniu

m,

ther

e w

as n

o ne

w r

ound

of

fund

ing

adde

d fo

r th

e In

stru

ctio

nal

Faci

litie

s A

llotm

ent.

SB

1882

was

a k

ey p

iece

of

new

Tex

as E

duca

tion

legi

slat

ion

for

2018

-201

9 th

at p

rovi

des

ince

ntiv

es fo

r pub

lic sc

hool

dis

trict

s to

ente

r int

o pa

rtner

ship

s with

exte

rnal

char

ters

, ins

titut

ions

of

hig

her

educ

atio

n, o

r no

n-pr

ofit

partn

ers

to o

pera

te a

s an

ope

n en

rollm

ent i

nter

nal c

harte

r sc

hool

.

In Ja

nuar

y of

201

9, th

e 86th

Tex

as L

egis

latu

re co

nven

ed to

cont

inue

wor

k on

its t

wo

high

est p

riorit

ies:

pu

blic

sch

ool f

undi

ng a

nd p

rope

rty ta

x re

form

. Als

o, c

onsi

dere

d fo

r the

202

0-20

21 b

ienn

ium

wer

e te

ache

r rai

ses,

scho

ol sa

fety

, ren

ewab

le e

nerg

y an

d so

man

y m

ore

issu

es.

xviii

Local

Fu

nd

ing

Fo

r 20

18-1

9 (T

ax Y

ear

2018

), lo

cal p

rope

rty v

alue

s in

the

Dis

trict

incr

ease

d ap

prox

imat

ely

5.7%

ov

er th

e pr

ior y

ear,

prov

idin

g w

elco

me

help

to th

e fin

anci

ng o

f the

con

stru

ctio

n pr

ogra

m. T

he D

ebt

Serv

ice

(Int

eres

t & S

inki

ng F

und)

tax

rate

rem

aine

d w

ell b

elow

the

tax

rate

that

was

pro

ject

ed fo

r the

vo

ters

at t

he ti

me

of th

e B

ond

2010

ele

ctio

n. T

he D

istri

ct’s

tota

l tax

rate

for f

isca

l yea

r 201

8-20

19

incr

ease

d th

ree

cent

s, du

e to

the

Nov

embe

r 201

6 au

thor

izat

ion

of a

$45

0 m

illio

n bo

nd in

itiat

ive

in

supp

ort o

f re

nova

tions

for

13

scho

ols.

The

tota

l ta

x ra

te f

or 2

018-

19 w

as $

1.56

26, c

ompr

ised

of

$1.1

700

for M

aint

enan

ce &

Ope

ratio

ns a

nd $

0.39

26 fo

r Deb

t Ser

vice

(Int

eres

t & S

inki

ng F

und)

.

Sta

te F

un

din

g

Acc

ordi

ng to

the

Texa

s Ed

ucat

ion

Age

ncy,

“th

e Fo

unda

tion

Scho

ol P

rogr

am (F

SP) i

s th

e pr

ogra

m

that

est

ablis

hes

how

muc

h st

ate

fund

ing

scho

ol d

istri

cts

and

char

ter s

choo

ls a

re e

ntitl

ed to

rece

ive.

Fo

rmul

as a

re s

et i

n st

atut

e (C

hapt

ers

41, 4

2 an

d 46

), an

d th

ey c

onsi

der

both

stu

dent

and

dis

trict

ch

arac

teris

tics,

incl

udin

g th

e nu

mbe

r an

d ty

pe o

f st

uden

ts e

nrol

led,

dis

trict

siz

e an

d ge

ogra

phic

fa

ctor

s, an

d lo

cal t

axab

le p

rope

rty v

alue

s and

tax

rate

s. G

ener

ally

, onc

e en

title

men

ts a

re e

stab

lishe

d,

the

form

ulas

det

erm

ine

how

muc

h a

dist

rict

can

gene

rate

loc

ally

thr

ough

pro

perty

tax

es b

efor

e m

akin

g up

the

diff

eren

ce w

ith st

ate

fund

s.”

For t

he y

ear e

ndin

g Ju

ne 3

0, 2

019,

Sta

te fu

ndin

g re

pres

ente

d ab

out 4

9% o

f the

tota

l Gen

eral

Fun

d re

venu

e. A

s no

ted

abov

e, t

he 8

5th l

egis

lativ

e se

ssio

n di

d pr

ovid

e ad

ditio

nal

fund

ing

for

scho

ol

Dis

trict

s by

incr

easi

ng th

e “A

ustin

Yie

ld”

com

pone

nt o

f the

Fou

ndat

ion

Scho

ol P

rogr

am.

Fed

eral

Fu

nd

ing

San

Ant

onio

ISD

was

im

pact

ed b

y m

ultip

le y

ears

of

man

date

d Fe

dera

l se

ques

tratio

n of

fun

ds,

prim

arily

impa

ctin

g Fe

dera

l ent

itlem

ents

suc

h as

Titl

e I,

II a

nd II

I, as

wel

l as

IDEA

-B fu

ndin

g fo

r Sp

ecia

l Edu

catio

n. C

erta

in fe

dera

l gra

nts

such

as

Hea

d St

art a

nd A

fter

Scho

ol C

halle

nge

Prog

ram

w

ere

also

red

uced

as

a re

sult

of f

eder

al s

eque

stra

tion.

Whi

le t

he D

istri

ct d

id n

ot e

xper

ienc

e se

ques

tratio

n fo

r th

e 20

18-1

9 sc

hool

yea

r, it

is u

nlik

ely

that

SA

ISD

will

be

rest

ored

to

pre-

sequ

estra

tion

leve

ls. F

ortu

nate

ly, t

he D

istri

ct is

the b

enef

icia

ry o

f sev

eral

Fed

eral

gra

nts s

uch

as H

ead

Star

t, G

ear-

Up,

and

mos

t rec

ently

the

Teac

her I

ncen

tive

Fund

.

Ch

ild

Nu

trit

ion

Fu

nd

ing

The

Chi

ld N

utrit

ion

Prog

ram

con

tinue

d to

pro

vide

ser

vice

s to

eac

h ca

mpu

s an

d en

hanc

e its

op

erat

ions

. As a

resu

lt of

the a

dmin

istra

tive t

eam

’s co

ntin

ued

effo

rt to

stre

amlin

e ope

ratio

ns, i

ncre

ase

mea

l par

ticip

atio

n, c

ut c

osts

and

incr

ease

reve

nue,

the

prog

ram

was

abl

e to

bui

ld it

s fun

d ba

lanc

e to

$1

2.1M

for

201

8-20

19.

The

cons

tant

mon

itorin

g of

the

Chi

ld N

utrit

ion

reve

nues

and

exp

ense

s en

able

d th

e D

istri

ct to

mai

ntai

n pr

ofita

bilit

y w

hen

labo

r an

d fo

od e

xpen

ses

incr

ease

d; a

s w

ell a

s, al

low

ing

inve

stm

ents

for

equ

ipm

ent f

or c

ampu

s ne

eds

and

culin

ary

train

ing

for

its 5

53 c

ooks

and

m

anag

ers.

To e

nsur

e th

at e

ach

child

rece

ived

a h

ealth

y br

eakf

ast a

nd lu

nch

rem

aine

d th

e D

istri

ct’s

top

prio

rity.

Th

e C

hild

Nut

ritio

n Pr

ogra

m c

ontin

ued

the

Com

mun

ity E

ligib

ility

Pro

visi

on (C

EP) d

urin

g th

e 20

18-

2019

scho

ol y

ear.

xix

CEP

allo

wed

all

stud

ents

to e

at b

reak

fast

and

lunc

h fr

ee o

f cha

rge

rega

rdle

ss o

f stu

dent

elig

ibili

ty.

Ano

ther

mea

ns th

at D

istri

ct h

elpe

d ke

ep it

s st

uden

ts fe

d w

as w

ith th

e im

plem

enta

tion

of in

-sch

ool

pant

ries

and

shar

e ta

bles

. Thi

s w

as p

ossi

ble

thro

ugh

the

Stud

ent

Fairn

ess

in F

eedi

ng A

ct w

hich

al

low

ed sc

hool

s to

crea

te fo

od p

antie

s fro

m ca

fete

ria fo

od th

at w

ould

oth

erw

ise b

e tos

sed

in th

e tra

sh.

The

Dis

trict

is re

imbu

rsed

bas

ed o

n th

e nu

mbe

r of b

reak

fast

s, lu

nche

s, af

ter-

scho

ol a

nd H

ead

Star

t af

tern

oon

snac

ks s

erve

d, a

nd th

e af

ters

choo

l sup

per m

eal.

For 2

018-

2019

, all

cam

puse

s pa

rtici

pate

d in

CEP

whi

ch m

eant

that

all

brea

kfas

t and

lunc

h m

eals

ser

ved

for a

ll ca

mpu

ses

wer

e cl

aim

ed a

t the

fr

ee r

ate.

Thi

s ye

ar S

AIS

D’s

bre

akfa

st p

artic

ipat

ion

was

84%

ver

sus

41%

the

Nat

iona

l A

vera

ge.

Acc

ordi

ng to

the

Food

Res

earc

h an

d A

ctio

n C

ente

r (FR

AC

), SA

ISD

was

rate

d se

cond

in th

e na

tion

as a

top

perf

orm

ing

scho

ol d

istri

ct b

y se

rvin

g br

eakf

ast w

hich

is c

onsi

dere

d th

e “m

ost i

mpo

rtant

mea

l of

the

day

.” L

unch

par

ticip

atio

n w

as 8

7% v

ersu

s 68

% t

he N

atio

nal

Ave

rage

. Th

e fe

dera

l re

imbu

rsem

ent r

ates

incr

ease

d fr

om 2

017-

2018

to th

e 20

18-2

019

scho

ol y

ear

by 3

.31%

for

lunc

h,

2.80

% f

or b

reak

fast

, an

d 3.

10%

for

sup

per.

Chi

ld N

utrit

ion

Prog

ram

bal

ance

s an

d re

sults

of

oper

atio

ns a

re re

porte

d in

Exh

ibits

H-1

and

H-2

, res

pect

ivel

y. A

n ov

ervi

ew o

f the

Dis

trict

fund

s as

of

June

30,

201

9 is

foun

d in

Man

agem

ent’s

Dis

cuss

ion

and

Ana

lysi

s on

page

14.

R

eti

rem

en

t B

en

efi

ts

The

Dis

trict

par

ticip

ates

in th

e So

cial

Sec

urity

/Med

icar

e pr

ogra

m a

nd c

ontin

ues t

o m

atch

the

7.65

%

curr

ently

req

uire

d of

em

ploy

ees.

This

is a

n ad

ded

bene

fit to

Dis

trict

em

ploy

ees,

who

can

col

lect

be

nefit

s fr

om S

ocia

l Sec

urity

in a

dditi

on to

the

Teac

her

Ret

irem

ent S

yste

m o

f Te

xas

(TR

S) w

hen

they

are

elig

ible

to

retir

e. T

he D

istri

ct’s

con

tribu

tions

to

Soci

al S

ecur

ity/M

edic

are

tota

led

$28.

1 m

illio

n fo

r 201

8-20

19.

O

ther E

mp

loyee B

en

efi

ts

A m

inim

um m

onth

ly c

ontri

butio

n of

$42

8.83

for “

empl

oyee

onl

y” h

ealth

, den

tal,

and

life

insu

ranc

e co

vera

ge is

pai

d fo

r by

the

Dis

trict

as p

art o

f the

ben

efits

pac

kage

for e

ligib

le e

mpl

oyee

s. Th

e pl

ans

are:

H

ealth

Insu

ranc

e (c

hoic

e of

3 p

lans

)

Den

tal I

nsur

ance

Life

Insu

ranc

e $

25,0

00

Fin

an

cia

l A

ward

s an

d R

ecogn

itio

n

Thro

ugho

ut th

e yea

rs, t

he D

istri

ct h

as d

emon

stra

ted

to th

e sch

ool B

oard

, com

mun

ity an

d th

e fin

anci

al

mar

ketp

lace

its

com

mitm

ent

to e

ffec

tivel

y an

d pr

uden

tly m

anag

e fu

nds

by e

arni

ng c

ovet

ed

reco

gniti

on fo

r bud

getin

g, fi

nanc

ial r

epor

ting

and

perf

orm

ance

from

nat

iona

l and

stat

e le

vel.

Cer

tifi

cate

of

Ach

ievem

ent

for

Ex

cell

ence

in F

ina

nci

al

Rep

ort

ing

The

Gov

ernm

ent F

inan

ce O

ffic

ers

Ass

ocia

tion

(GFO

A)

of th

e U

nite

d St

ates

and

Can

ada

awar

ded

a C

ertif

icat

e of

Ach

ieve

men

t for

Exc

elle

nce

in F

inan

cial

Rep

ortin

g to

San

Ant

onio

IS

D fo

r its

Com

preh

ensi

ve A

nnua

l Fin

anci

al R

epor

t (C

AFR

) for

the

fisca

l yea

r end

ed J

une

30, 2

018.

In o

rder

to b

e aw

arde

d a

Cer

tific

ate

of A

chie

vem

ent,

a go

vern

men

t mus

t pub

lish

an e

asily

read

able

and

eff

icie

ntly

org

aniz

ed C

AFR

. Thi

s re

port

mus

t sat

isfy

bot

h ge

nera

lly

acce

pted

acc

ount

ing

prin

cipl

es a

nd a

pplic

able

lega

l req

uire

men

ts.

.

xx

GO

VER

NM

ENT

FIN

AN

CE

O

FFIC

ERS

ASS

OC

IAT

ION

(GFO

A) A

WA

RD

The

GFO

A a

war

ded

a C

ertifi

cate

of

Ach

ieve

men

t fo

r Ex

celle

nce

in F

inan

cial

Rep

ortin

g to

San

A

nton

io IS

D (

SAIS

D)

for

its

Com

preh

ensi

ve A

nnua

l Fin

anci

al

Rep

ort

(CA

FR)

for

the

fisca

l Ye

ar e

nded

June

30,

201

8. T

he

cert

ifica

te o

f Ach

ieve

men

t fo

r Ex

celle

nce

in F

inan

cial

Rep

ortin

g is

a p

rest

igio

us, n

atio

nal a

war

d,

whi

ch r

ecog

nize

s co

nfor

man

ce

with

the

hig

hest

sta

ndar

ds fo

r pr

epar

atio

n of

sta

te a

nd lo

cal

gove

rnm

ent

CA

FRs.

In o

rder

to

rece

ive

a C

ertifi

cate

of

Ach

ieve

men

t in

Fin

anci

al

Rep

ortin

g, a

gove

rnm

enta

l un

it m

ust

publ

ish

a C

AFR

w

hose

con

tent

s co

nfor

m t

o pr

ogra

m s

tand

ards

of c

reat

ivity

, pr

esen

tatio

ns, u

nder

stan

dabi

lity,

and

read

er a

ppea

l. In

add

ition

, th

is r

epor

t m

ust

satis

fy b

oth

gene

rally

acc

epte

d ac

coun

ting

prin

cipl

es (

GA

AP)

and

app

licab

le

lega

l req

uire

men

ts. S

AIS

D

has

rece

ived

the

Cer

tifica

te

of A

chie

vem

ent

in F

inan

cial

R

epor

ting

for

thir

ty-o

ne (

31)

cons

ecut

ive

year

s.

Aw

ards

for

Exce

llenc

e in

Fin

anci

al R

epor

ting

June

30,

201

8

Gov

ernm

ent F

inan

ce O

ffice

rs A

ssoc

iatio

n

Cer

tifica

te o

f A

chie

vem

ent

for E

xcel

lenc

ein

Fin

anci

alR

epor

ting

Pres

ente

d to

San

Anto

nio

Inde

pend

ent S

choo

l Di

stri

ct, T

exas

For i

ts C

ompr

ehen

sive

Ann

ual

Fina

ncia

l Rep

ort

for t

he F

isca

l Yea

r End

ed

Exec

utiv

e D

irect

or/C

EO

xxii

ASS

OC

IAT

ION

O

F SC

HO

OL

BUSI

NES

S O

FFIC

IALS

IN

TER

NAT

ION

AL

(A

SBO

) AW

AR

D

The

ASB

O a

war

ded

a C

ertifi

cate

of E

xcel

lenc

e in

Fi

nanc

ial R

epor

ting

to S

an

Ant

onio

Inde

pend

ent

Scho

ol

Dis

tric

t (S

AIS

D),

for

the

thir

ty-

nint

h (3

9) c

onse

cutiv

e ye

ar,

for

its C

AFR

for

the

fisca

l ye

ar e

nded

June

30,

201

8. T

his

natio

nally

rec

ogni

zed

prog

ram

w

as e

stab

lishe

d by

ASB

O t

o en

cour

age

scho

ol b

usin

ess

offic

ials

to

achi

eve

a hi

gh

stan

dard

of fi

nanc

ial r

epor

ting.

The

aw

ard

is t

he h

ighe

st

reco

gniti

on fo

r sc

hool

fina

ncia

l di

visi

on o

pera

tions

offe

red

by

ASB

O, a

nd it

is o

nly

conf

erre

d up

on s

choo

l sys

tem

s th

at h

ave

met

or

exce

eded

the

sta

ndar

ds

of t

he p

rogr

am.

Part

icip

atio

n in

the

Cer

tifica

te

of E

xcel

lenc

e in

Fin

anci

al

Rep

ortin

g pr

ogra

m v

alid

ates

SA

ISD

’s co

mm

itmen

t to

fis

cal a

nd fi

nanc

ial i

nteg

rity

an

d en

hanc

es t

he c

redi

bilit

y of

SA

ISD

ope

ratio

ns w

ith

the

scho

ol b

oard

and

the

co

mm

unity

. The

pro

gram

re

view

s th

e ac

coun

ting

prac

tices

and

rep

ortin

g pr

oced

ures

use

d by

SA

ISD

in

its C

AFR

bas

ed u

pon

spec

ific

stan

dard

s es

tabl

ishe

d by

the

G

over

nmen

tal A

ccou

ntin

g St

anda

rds

Boar

d (G

ASB

).

for

its C

ompr

ehen

sive A

nnua

l Fin

anci

al R

epor

t (C

AFR

)fo

r th

e Fi

scal

Yea

r En

ded

June

30,

201

8.

xxiii

Superintendent's Cabinet

* Denotes members of the Executive Leadership Team

Dr. Courtney GoberAsst. Superintendent

InternationalBaccalaureate Schools

Dr. Olivia Hernandez Asst. Superintendent

Bilingual,ESL & Migrant

Dr. Joanelda De León Asst. Superintendent

Elementary

Angélica Romero Asst. Superintendent

Elementary

Dr. Judith SolisAsst. Superintendent

All Levels

Theresa Urrabazo

Executive Director, Accountability,

Research, Evaluation & Testing

* Elizabeth H. NawrockiJones

Sr. Executive Director

Special Education

Toni Thompson

Associate Superintendent

Human Resources

KamalElHabr Associate

Superintendent Construction

Services

Larry GarzaAssociate

Superintendent Financial Services

Business Operations & Food Services

TiffanyGrantChief of Staff S

L

SuFin

BBusi&

ExeA

Rese

Pedro MartinezSuperintendent

*

*

Dr.Pauline Dow Deputy

Superintendent Of Schools

*

Leslie Price Chief Communications

Officer

Willie T. Burroughs

Chief OperationsOfficer

*

*Daniel Girard

Asst. SuperintendentAll Levels

Dr. Kenneth Thompson

Chief Technology Officer

*

Mohammed A. Choudhury

Chief Innovation Officer

Lourdes Martinez Chief Internal

Auditor

Dr.Matthew WeberDeputy Superintendent

Talent Management

Jose Curiel Chief of Police

*

Nathan Graf Senior Executive

DirectorTransportation

JennyArredondo Senior Executive

DirectorChild Nutrition

Services

*

Michael SanchezSenior Executive

DirectorFacility Services

ElsaPennell Family & Community Engagement Director

AshleighDennisExecutive Director,

Recruitment & Talent

Management

Victoria BustosExecutive Director

Academic & Student Support

Services

Johnny VahalikSr. Executive

Director, College Career & Military

Readiness

Patricia SalzmannAssistant

SuperintendentTeaching &

Organizational Learning

Escamilla & Poneck General Counsel

Elizabeth OzunaExecutive Director

Advanced Academics & Post-Secondary Access

Board of Trustees

*

xxiv

Mis

sion

Sta

tem

ent

To tr

ansf

orm

SA

ISD

into

a n

atio

nal m

odel

ur

ban

scho

ol d

istr

ict w

here

eve

ry c

hild

gr

adua

tes

and

is e

duca

ted

so th

at h

e or

she

is

pre

pare

d to

be

a co

ntrib

utin

g m

embe

r of

the

com

mun

ity.

Dec

lara

ción

de

Mis

ión

Tran

sfor

mar

a S

AIS

D e

n un

dis

trito

esc

olar

ur

bano

de

mod

elo

naci

onal

don

de c

ada

estu

dian

te s

e gr

adÚa

y e

s ed

ucad

o pa

ra

que

él o

ella

est

é pr

epar

ado

para

ser

un

mie

mbr

o ac

tivo

del l

a co

mun

idad

.

SA

N A

NT

ON

IO I

ND

EP

EN

DE

NT

SC

HO

OL

DIS

TR

ICT

xxv

Pre

side

ntPa

tti R

adle

(Dist

rict 5

)

Vic

e P

resi

dent

Art

hur

V. V

alde

z(D

istric

t 4)

Secr

etar

yD

ebra

Gue

rrer

o(D

istric

t 3)

Tru

stee

Ed

Gar

za(D

istric

t 7)

Tru

stee

Stev

e L

echo

lop

(Dist

rict 1

)

Tru

stee

Chr

istin

a M

artin

ez(D

istric

t 6)

Tru

stee

Alic

ia M

. Per

ry(D

istric

t 2)

SA

N A

NT

ON

IO I

ND

EP

EN

DE

NT

SC

HO

OL

DIS

TR

ICT

BO

AR

D O

F T

RU

ST

EE

S

xxvi

Ped

ro M

arti

nez

Supe

rinten

dent

Dr.

Mat

thew

Web

er*

Dep

uty

Supe

rinte

nden

tTa

lent M

anag

emen

t

Kam

al E

lHab

rAs

soci

ate

Supe

rinte

nden

t Co

nstru

ctio

n Se

rvice

s

Dr.

Cour

tney

Gob

erAs

st. S

uper

inte

nden

t In

t'l Ba

ccala

urea

te Sc

hool

s

The

resa

Urr

abaz

o*E

xecu

tive

Dire

ctor

Acc

ount

abili

ty, R

esea

rch,

Eva

luat

ion

& T

estin

g

Dr.

Judi

th S

olis

Asst

. Sup

erin

tend

ent

All L

evels

Dan

iel G

irard

Asst

. Sup

erin

tend

ent

Hig

h Sc

hool

s

John

ny V

ahal

ikSr

. Exe

cutiv

e Dire

ctor

Care

er &

Tec

hnol

ogy E

d.

Vic

toria

Bus

tos

Exe

cutiv

e D

irect

or

Stud

ent S

uppo

rt Se

rvice

s

Dr.

Paul

ine

Dow

*D

eput

y Su

perin

tend

ent o

f Sc

hool

s

Larr

y A.

Gar

za*

Asso

ciat

e Su

perin

tend

ent

Fina

ncial

Ser

vice

s, Bu

sines

s Ope

ratio

ns

Dr.

Kenn

eth

Thom

pson

*Ch

ief T

echn

olog

y O

ffice

r

Pat

ricia

Sal

zman

nCh

ief A

cade

mic

Offi

cer

Tiff

any

Gra

nt*

Chi

ef o

f St

aff

Oliv

ia H

erna

ndez

Asst

. Sup

erin

tend

ent

Bilin

gual,

ESL

and

Mig

rant

Ashl

eigh

Den

nis

Exec

utive

Dire

ctor

Recr

uitm

ent a

nd T

alent

M

anag

emen

t

Nat

han

Gra

ffSr

. Exe

cutiv

e D

irect

orTr

ansp

orta

tion

Jose

Cur

iel

Chi

ef o

f Po

lice

Moh

amm

ed C

houd

hury

*C

hief

Inn

ovat

ion

Offi

cer

Toni

Tho

mps

on*

Asso

ciat

e Su

perin

tend

ent

Hum

an R

esou

rces

Lesl

ie P

rice*

Exe

cutiv

e D

irect

orCh

ief C

omm

unica

tions

Offi

cer

Will

ie B

urro

ughs

*Ch

ief O

pera

tions

Offi

cer

Ange

lica

Rom

ero

Asst

. Sup

erin

tend

ent

Elem

enta

ry S

choo

ls

Joan

elda

DeL

eon

Asst

. Sup

erin

tend

ent

Elem

entar

y Sch

ools

Eliz

abet

h H

. Naw

rock

i Jon

es

Sr.

Exec

utiv

e D

irect

or

Spe

cial

Edu

catio

n

Mic

hael

San

chez

Sr. E

xecu

tive

Dire

ctor

Fa

cility

Ser

vice

s

SUP

ER

INT

EN

DE

NT

’S C

AB

INE

T

*Den

otes

mem

ber o

f th

e Ex

ecut

ive L

eade

rshi

p Te

am

Jenn

y Ar

redo

ndo

Sr. E

xecu

tive

Dire

ctor

Ch

ild N

utrit

ion

Elsa

Pen

nell

Dire

ctor

Fa

mily

& C

omm

unity

En

gage

men

t

xxvi

i

EVER

Y C

HIL

DM

AT

TER

S

Fin

anci

al S

ecti

on

This

Pag

e Le

ft In

tent

iona

lly B

lank

Gar

za/G

onza

lez

& A

ssoc

iate

s

CE

RTIF

IED

PU

BLI

C A

CC

OU

NTA

NTS

IND

EPEN

DEN

T A

UD

ITO

R’S

REP

OR

T

Boa

rd o

f Sch

ool T

rust

ees

San

Ant

onio

Inde

pend

ent S

choo

l Dis

trict

Sa

n A

nton

io, T

exas

We h

ave a

udite

d th

e acc

ompa

nyin

g fin

anci

al st

atem

ents

of t

he g

over

nmen

tal a

ctiv

ities

, eac

h m

ajor

fu

nd,

and

the

aggr

egat

e re

mai

ning

fun

d in

form

atio

n of

the

San

Ant

onio

Ind

epen

dent

Sch

ool

Dis

trict

(th

e D

istri

ct)

as o

f an

d fo

r th

e ye

ar e

nded

Jun

e 30

, 201

9, a

nd th

e re

late

d no

tes

to th

e fin

anci

al st

atem

ents

, whi

ch c

olle

ctiv

ely

com

pris

e th

e D

istri

ct’s

bas

ic fi

nanc

ial s

tate

men

ts a

s lis

ted

in th

e ta

ble

of c

onte

nts.

Man

agem

ent’

s R

esp

on

sib

ilit

y f

or

the

Fin

an

cial

Sta

tem

ents

Man

agem

ent i

s re

spon

sibl

e fo

r the

pre

para

tion

and

fair

pres

enta

tion

of th

ese

finan

cial

stat

emen

ts

in a

ccor

danc

e w

ith a

ccou

ntin

g pr

inci

ples

gen

eral

ly a

ccep

ted

in th

e U

nite

d St

ates

of A

mer

ica;

this

in

clud

es t

he d

esig

n, i

mpl

emen

tatio

n, a

nd m

aint

enan

ce o

f in

tern

al c

ontro

l re

leva

nt t

o th

e pr

epar

atio

n an

d fa

ir pr

esen

tatio

n of

fina

ncia

l sta

tem

ents

that

are

free

from

mat

eria

l mis

stat

emen

t, w

heth

er d

ue to

frau

d or

erro

r.

Au

dit

or’

s R

esp

on

sib

ilit

y

Our

res

pons

ibili

ty is

to e

xpre

ss o

pini

ons

on th

ese

finan

cial

sta

tem

ents

bas

ed o

n ou

r au

dit.

We

cond

ucte

d ou

r aud

it in

acc

orda

nce

with

aud

iting

stan

dard

s gen

eral

ly a

ccep

ted

in th

e U

nite

d St

ates

of

Am

eric

a an

d th

e st

anda

rds

appl

icab

le to

fin

anci

al a

udits

con

tain

ed in

Gov

ernm

ent

Aud

itin

g St

anda

rds,

issu

ed b

y th

e C

ompt

rolle

r Gen

eral

of t

he U

nite

d St

ates

. Th

ose

stan

dard

s re

quire

that

w

e pl

an a

nd p

erfo

rm t

he a

udit

to o

btai

n re

ason

able

ass

uran

ce a

bout

whe

ther

the

fin

anci

al

stat

emen

ts a

re fr

ee fr

om m

ater

ial m

isst

atem

ent.

An

audi

t in

volv

es p

erfo

rmin

g pr

oced

ures

to

obta

in a

udit

evid

ence

abo

ut t

he a

mou

nts

and

disc

losu

res i

n th

e fin

anci

al st

atem

ents

. Th

e pro

cedu

res s

elec

ted

depe

nd o

n th

e aud

itor’s

judg

men

t, in

clud

ing

the

asse

ssm

ent o

f the

risk

s of m

ater

ial m

isst

atem

ent o

f the

fina

ncia

l sta

tem

ents

, whe

ther

du

e to

fra

ud o

r er

ror.

In

mak

ing

thos

e ris

k as

sess

men

ts, t

he a

udito

r co

nsid

ers

inte

rnal

con

trol

rele

vant

to th

e D

istri

ct’s

pre

para

tion

and

fair

pres

enta

tion

of th

e fin

anci

al s

tate

men

ts in

ord

er to

de

sign

aud

it pr

oced

ures

tha

t ar

e ap

prop

riate

in

the

circ

umst

ance

s, bu

t no

t fo

r th

e pu

rpos

e of

ex

pres

sing

an

opin

ion

on t

he e

ffec

tiven

ess

of t

he D

istri

ct’s

int

erna

l co

ntro

l. A

ccor

ding

ly, w

e ex

pres

s no

suc

h op

inio

n.

An

audi

t als

o in

clud

es e

valu

atin

g th

e ap

prop

riate

ness

of

acco

untin

g po

licie

s use

d an

d th

e re

ason

able

ness

of s

igni

fican

t acc

ount

ing

estim

ates

mad

e by

man

agem

ent,

as

wel

l as e

valu

atin

g th

e ov

eral

l pre

sent

atio

n of

the

finan

cial

stat

emen

ts.

207

Ar d

en G

rove

San

Ant

onio

, TX

782

1521

0/22

7-13

89Fa

x 22

7-07

16

1

We b

elie

ve th

at th

e aud

it ev

iden

ce w

e hav

e obt

aine

d is

suffi

cien

t and

appr

opria

te to

pro

vide

a ba

sis

for o

ur a

udit

opin

ions

.

Opi

nion

s

In o

ur o

pini

on, t

he fi

nanc

ial s

tate

men

ts re

ferr

ed to

abo

ve p

rese

nt fa

irly,

in a

ll m

ater

ial r

espe

cts,

the r

espe

ctiv

e fin

anci

al p

ositi

on o

f the

gov

ernm

enta

l act

iviti

es, e

ach

maj

or fu

nd, a

nd th

e agg

rega

te

rem

aini

ng f

und

info

rmat

ion

of th

e D

istri

ct, a

s of

Jun

e 30

, 201

9, a

nd th

e re

spec

tive

chan

ges

in

finan

cial

pos

ition

and

, whe

re a

pplic

able

, cas

h flo

ws t

here

of fo

r the

yea

r the

n en

ded

in a

ccor

danc

e w

ith a

ccou

ntin

g pr

inci

ples

gen

eral

ly a

ccep

ted

in th

e U

nite

d St

ates

of A

mer

ica.

Oth

er M

atte

rs

Req

uire

d Su

pple

men

tary

Inf

orm

atio

n

Acc

ount

ing

prin

cipl

es g

ener

ally

acc

epte

d in

the

Uni

ted

Stat

es o

f A

mer

ica

requ

ire t

hat

the

man

agem

ent’s

dis

cuss

ion

and

anal

ysis

, bud

geta

ry c

ompa

rison

info

rmat

ion

for t

he g

ener

al f

und,

an

d th

e Te

ache

r R

etire

men

t Sy

stem

pen

sion

and

OPE

B i

nfor

mat

ion,

as

liste

d in

the

tab

le o

f co

nten

ts, b

e pr

esen

ted

to s

uppl

emen

t the

bas

ic fi

nanc

ial s

tate

men

ts.

Such

info

rmat

ion,

alth

ough

no

t a p

art o

f the

bas

ic fi

nanc

ial s

tate

men

ts, i

s req

uire

d by

the

Gov

ernm

enta

l Acc

ount

ing

Stan

dard

s B

oard

, who

con

side

rs it

to b

e an

ess

entia

l par

t of f

inan

cial

repo

rting

for p

laci

ng th

e ba

sic

finan

cial

st

atem

ents

in a

n ap

prop

riate

ope

ratio

nal,

econ

omic

, or h

isto

rical

con

text

. W

e ha

ve a

pplie

d ce

rtain

lim

ited

proc

edur

es t

o th

e re

quire

d su

pple

men

tary

inf

orm

atio

n in

acc

orda

nce

with

aud

iting

st

anda

rds

gene

rally

acc

epte

d in

the

Uni

ted

Stat

es o

f A

mer

ica,

whi

ch c

onsi

sted

of

inqu

iries

of

man

agem

ent a

bout

the

met

hods

of p

repa

ring

the

info

rmat

ion

and

com

parin

g th

e in

form

atio

n fo

r co

nsis

tenc

y w

ith m

anag

emen

t’s r

espo

nses

to

our

inqu

iries

, the

bas

ic f

inan

cial

sta

tem

ents

, and

ot

her k

now

ledg

e we o

btai

ned

durin

g ou

r aud

it of

the b

asic

fina

ncia

l sta

tem

ents

. W

e do

not e

xpre

ss

an o

pini

on o

r pr

ovid

e an

y as

sura

nce

on th

e in

form

atio

n be

caus

e th

e lim

ited

proc

edur

es d

o no

t pr

ovid

e us

with

suffi

cien

t evi

denc

e to

exp

ress

an

opin

ion

or p

rovi

de a

ny a

ssur

ance

.

Oth

er I

nfor

mat

ion

Our

aud

it w

as c

ondu

cted

for

the

purp

ose

of f

orm

ing

opin

ions

on

the

finan

cial

sta

tem

ents

that

co

llect

ivel

y co

mpr

ise

the

Dis

trict

’s b

asic

fin

anci

al s

tate

men

ts.

The

intro

duct

ory

sect

ion,

oth

er

supp

lem

enta

ry i

nfor

mat

ion,

in-

dist

rict

char

ter

scho

ols

sche

dule

s, re

quire

d Te

xas

Educ

atio

n A

genc

y (T

EA) s

ched

ules

, and

the

stat

istic

al se

ctio

n, as

list

ed in

the t

able

of c

onte

nts,

are p

rese

nted

fo

r pur

pose

s of

add

ition

al a

naly

sis

and

are

not a

requ

ired

part

of th

e ba

sic

finan

cial

sta

tem

ents

. Th

e sc

hedu

le o

f exp

endi

ture

s of f

eder

al a

war

ds is

pre

sent

ed fo

r pur

pose

s of a

dditi

onal

ana

lysi

s as

requ

ired

by T

itle

2 U

.S.

Cod

e of

F

eder

al

Reg

ulat

ions

Par

t 20

0, U

nifo

rm

Adm

inis

trat

ive

Req

uire

men

ts,

Cos

t P

rinc

iple

s, a

nd A

udit

Req

uire

men

ts f

or F

eder

al A

war

ds,

and

is a

lso

not a

re

quire

d pa

rt of

the

basi

c fin

anci

al st

atem

ents

.

2

The

othe

r su

pple

men

tary

inf

orm

atio

n, i

n-di

stric

t ch

arte

r sc

hool

s sc

hedu

les,

requ

ired

TEA

sc

hedu

les,

and

the s

ched

ule o

f exp

endi

ture

s of f

eder

al aw

ards

are t

he re

spon

sibi

lity

of m

anag

emen

t an

d w

ere

deriv

ed fr

om a

nd re

late

dire

ctly

to th

e un

derly

ing

acco

untin

g an

d ot

her r

ecor

ds u

sed

to

prep

are

the

basi

c fin

anci

al s

tate

men

ts.

Suc

h in

form

atio

n ha

s be

en s

ubje

cted

to

the

audi

ting

proc

edur

es a

pplie

d in

the

audi

t of t

he b

asic

fina

ncia

l sta

tem

ents

and

cer

tain

add

ition

al p

roce

dure

s, in

clud

ing

com

parin

g an

d re

conc

iling

suc

h in

form

atio

n di

rect

ly to

the

unde

rlyin

g ac

coun

ting

and

othe

r re

cord

s us

ed to

pre

pare

the

basi

c fin

anci

al s

tate

men

ts o

r to

the

basi

c fin

anci

al s

tate

men

ts

them

selv

es,

and

othe

r ad

ditio

nal

proc

edur

es i

n ac

cord

ance

with

aud

iting

sta

ndar

ds g

ener

ally

ac

cept

ed in

the

Uni

ted

Stat

es o

f Am

eric

a. I

n ou

r opi

nion

, thi

s in

form

atio

n is

fairl

y st

ated

, in

all

mat

eria

l res

pect

s, in

rela

tion

to th

e ba

sic

finan

cial

stat

emen

ts a

s a w

hole

.

The i

ntro

duct

ory

and

stat

istic

al se

ctio

ns h

ave n

ot b

een

subj

ecte

d to

the a

uditi

ng p

roce

dure

s app

lied

in th

e au

dit o

f the

bas

ic fi

nanc

ial s

tate

men

ts a

nd, a

ccor

ding

ly, w

e do

not

exp

ress

an

opin

ion

or

prov

ide

any

assu

ranc

e on

them

.

Oth

er R

epor

ting

Req

uire

d by

Gov

ernm

ent A

uditi

ng S

tand

ards

In a

ccor

danc

e w

ith G

over

nmen

t A

udit

ing

Stan

dard

s, w

e ha

ve a

lso

issu

ed o

ur r

epor

t da

ted

Nov

embe

r 11,

201

9, o

n ou

r con

side

ratio

n of

the

Dis

trict

’s in

tern

al c

ontro

l ove

r fin

anci

al re

porti

ng

and

on o

ur te

sts o

f its

com

plia

nce

with

cer

tain

pro

visi

ons o

f law

s, re

gula

tions

, con

tract

s, an

d gr

ant

agre

emen

ts a

nd o

ther

mat

ters

. Th

e pu

rpos

e of

that

repo

rt is

sol

ely

to d

escr

ibe

the

scop

e of

our

te

stin

g of

inte

rnal

con

trol o

ver f

inan

cial

repo

rting

and

com

plia

nce

and

the

resu

lts o

f tha

t tes

ting,

an

d no

t to

prov

ide

an o

pini

on o

n th

e ef

fect

iven

ess

of th

e D

istri

ct’s

inte

rnal

con

trol o

ver f

inan

cial

re

porti

ng o

r on

com

plia

nce.

Tha

t rep

ort i

s an

inte

gral

par

t of a

n au

dit p

erfo

rmed

in a

ccor

danc

e w

ith G

over

nmen

t A

udit

ing

Stan

dard

s in

con

side

ring

the

Dis

trict

’s in

tern

al c

ontro

l ove

r fin

anci

al

repo

rting

and

com

plia

nce.

Nov

embe

r 11,

201

9

3

SAN

AN

TO

NIO

IND

EPE

ND

EN

T S

CH

OO

L D

IST

RIC

T

MA

NA

GE

ME

NT

’S D

ISC

USS

ION

AN

D A

NA

LY

SIS

4

As m

anag

emen

t of t

he S

an A

nton

io In

depe

nden

t Sch

ool D

istri

ct (D

istri

ct),

we a

re p

rovi

ding

read

ers

of th

e Dis

trict

’s fi

nanc

ial s

tate

men

ts th

is n

arra

tive

over

view

and

anal

ysis

of t

he D

istri

ct’s

fina

ncia

l ac

tiviti

es fo

r the

yea

r end

ed Ju

ne 3

0, 2

019.

Ple

ase r

ead

it in

conj

unct

ion

with

the t

rans

mitt

al le

tter,

whi

ch b

egin

s on

page

-v-,

and

the

Dis

trict

’s fi

nanc

ial s

tate

men

ts, w

hich

follo

w th

is se

ctio

n.

FIN

AN

CI A

L H

IGH

LIG

HT

S

•Th

e Dis

trict

’s to

tal c

ombi

ned

net p

ositi

on as

refle

cted

in th

e gov

ernm

ent-w

ide S

tate

men

tof

Net

Pos

ition

was

$15

3,21

2,51

0 at

June

30,

201

9. T

he am

ount

was

neg

ativ

ely

impa

cted

by G

over

nmen

tal A

ccou

ntin

g St

anda

rds B

oard

(GA

SB) S

tate

men

t No.

68,

Acc

ount

ing

and

Fina

ncia

l Rep

ortin

g fo

r Pen

sion

s and

GA

SB S

tate

men

t No.

75,

Acc

ount

ing

and

Fina

ncia

lR

epor

ting

for P

oste

mpl

oym

ent B

enef

its O

ther

Tha

n Pe

nsio

ns w

here

the

com

bine

d ef

fect

decr

ease

d ne

t pos

ition

by

a ne

t am

ount

of $

13,1

08,9

45 fo

r the

cur

rent

yea

r.

•Th

e Dis

trict

’s S

tate

men

t of A

ctiv

ities

refle

cts a

dec

reas

e in

net p

ositi

on fo

r Gov

ernm

enta

lA

ctiv

ities

in

the

amou

nt o

f $8

,008

,100

for

cur

rent

yea

r ac

tivity

. Th

is i

s a

resu

lt of

expe

nses

bei

ng l

ess

than

the

$69

4,81

9,87

1 ge

nera

ted

in t

axes

, st

ate

aid,

inv

estm

ent

earn

ings

, and

cer

tain

pro

gram

rev

enue

s re

porte

d as

cha

rges

for

serv

ices

and

ope

ratin

ggr

ants

and

con

tribu

tions

.

•Th

e Gen

eral

Fun

d re

porte

d a f

und

bala

nce i

n th

e gov

ernm

enta

l fun

ds fi

nanc

ial s

tate

men

tsth

is y

ear

of $

99,3

72,2

21.

App

roxi

mat

ely

89%

of

this

tot

al a

mou

nt, $

88,8

46,7

77, i

sav

aila

ble

for s

pend

ing

at th

e D

istri

ct’s

dis

cret

ion

(una

ssig

ned

fund

bal

ance

).

•A

s sho

wn

on th

e Sta

tem

ent o

f Act

iviti

es, p

rope

rty ta

x re

venu

es in

crea

sed

$25,

962,

406,

or

10%

, fro

m th

e prio

r yea

r due

to a

$1,4

88,2

07,8

04 in

crea

se in

pro

perty

val

ues.

The

201

8-19

tax

rate

is $

1.56

26 p

er $

100

asse

ssed

val

uatio

n.

OV

ER

VI E

W O

F T

HE

FIN

AN

CIA

L S

TA

TE

ME

NT

S

This

ann

ual r

epor

t con

sist

s of

a s

erie

s of

fin

anci

al s

tate

men

ts.

The

gove

rnm

ent-w

ide

finan

cial

st

atem

ents

incl

ude

the

Stat

emen

t of N

et P

ositi

on a

nd th

e St

atem

ent o

f Act

iviti

es.

Thes

e pr

ovid

e in

form

atio

n ab

out t

he a

ctiv

ities

of

the

Dis

trict

as

a w

hole

and

pre

sent

a lo

ng-te

rm v

iew

of

the

Dis

trict

’s p

rope

rty a

nd o

blig

atio

ns a

nd o

ther

fin

anci

al m

atte

rs.

They

ref

lect

the

flo

w o

f to

tal

econ

omic

reso

urce

s in

a m

anne

r sim

ilar t

o th

e fin

anci

al re

ports

of a

bus

ines

s ent

erpr

ise.

Fund

fina

ncia

l sta

tem

ents

repo

rt th

e Dis

trict

’s o

pera

tions

in m

ore d

etai

l tha

n th

e gov

ernm

ent-w

ide

stat

emen

ts b

y pr

ovid

ing

info

rmat

ion

abou

t the

Dis

trict

’s m

ost s

igni

fican

t fun

ds. T

he g

over

nmen

tal

fund

s sta

tem

ents

show

how

gen

eral

gov

ernm

ent s

ervi

ces w

ere f

inan

ced

in th

e sho

rt te

rm as

wel

l as

wha

t res

ourc

es re

mai

n fo

r fut

ure s

pend

ing.

The

y re

flect

the f

low

of c

urre

nt fi

nanc

ial r

esou

rces

, and

SAN

AN

TO

NIO

IND

EPE

ND

EN

T S

CH

OO

L D

IST

RIC

T

MA

NA

GE

ME

NT

’S D

ISC

USS

ION

AN

D A

NA

LY

SIS

5

supp

ly th

e ba

sis

for t

ax le

vies

and

the

appr

opria

tions

bud

get.

The

pro

prie

tary

fund

s st

atem

ents

re

flect

the

activ

ity r

elat

ed to

ser

vice

s pr

ovid

ed t

o pa

rties

with

in th

e D

istri

ct, f

or th

e D

istri

ct’s

w

orke

rs co

mpe

nsat

ion,

med

ical

and

dent

al in

sura

nce p

rogr

ams.

The

rem

aini

ng st

atem

ents,

fidu

ciar

y st

atem

ents

, pro

vide

fin

anci

al in

form

atio

n ab

out a

ctiv

ities

for

whi

ch th

e D

istri

ct a

cts

sole

ly a

s a

trust

ee o

r ag

ent f

or th

e be

nefit

of

thos

e ou

tsid

e of

the

gove

rnm

ent.

The

not

es to

the

finan

cial

st

atem

ents

pro

vide

nar

rativ

e ex

plan

atio

ns o

r ad

ditio

nal

data

nee

ded

for

full

disc

losu

re o

f th

e go

vern

men

t-wid

e st

atem

ents

or t

he fu

nd fi

nanc

ial s

tate

men

ts.

The

com

bini

ng s

tate

men

ts fo

r non

-maj

or g

over

nmen

tal f

unds

and

the

com

bini

ng s

tate

men

ts fo

r in

tern

al se

rvic

e fun

ds co

ntai

n ad

ditio

nal i

nfor

mat

ion

abou

t the

Dist

rict’s

indi

vidu

al S

peci

al R

even

ue

and

Perm

anen

t Fun

ds an

d In

tern

al S

ervi

ce F

unds

, res

pect

ivel

y. T

he S

tate

men

t of C

hang

es in

Ass

ets

and

Liab

ilitie

s fo

r the

age

ncy

fund

is a

lso

incl

uded

. Th

ese

com

bini

ng s

tate

men

ts a

re a

dditi

onal

su

pple

men

tary

info

rmat

ion

and

not r

equi

red

by T

exas

Edu

catio

n A

genc

y (T

EA).

The

sec

tions

la

bele

d R

equi

red

TEA

Sch

edul

es a

nd F

eder

al A

war

ds S

ectio

n co

ntai

n da

ta u

sed

by m

onito

ring

or

regu

lato

ry a

genc

ies

for a

ssur

ance

that

the

Dis

trict

is a

ccou

ntin

g an

d re

porti

ng fu

nds

prov

ided

in

com

plia

nce

with

the

term

s of t

he g

rant

s.

Figu

r e A

-1 s

how

s ho

w th

e re

quire

d pa

rts o

f th

is a

nnua

l rep

ort a

re a

rran

ged

and

rela

ted

to o

ne

anot

her.

SAN

AN

TO

NIO

IND

EPE

ND

EN

T S

CH

OO

L D

IST

RIC

T

MA

NA

GE

ME

NT

’S D

ISC

USS

ION

AN

D A

NA

LY

SIS

6

Intr

oduc

tory

Sect

ion

Man

agem

ent's

Dis

cuss

ion

and

Anal

ysis

Gove

rnm

ent-

wid

e Fi

nanc

ial S

tate

men

tsFu

nd F

inan

cial

Sta

tem

ents

Not

es to

Fin

anci

al S

tate

men

tsFi

nanc

ial

Requ

ired

Supp

lem

enta

ry In

form

atio

nSe

ctio

n

Info

rmat

ion

on In

divi

dual

Fun

ds a

nd O

ther

Supp

lem

enta

ry In

form

atio

n no

t

requ

ired

by G

AAP

CAFR

Tren

d da

ta a

nd n

on-f

inan

cial

dat

aSt

atist

ical

Sect

ion

Fede

ral

Awar

ds

Sect

ion

Com

pone

nts o

f the

Dis

tric

t's C

ompr

ehen

sive

Ann

ual F

inan

cial

Rep

ort (

CAFR

)

Requ

ired

Supp

lem

enta

ry

Fig

ure

A-1

Gene

ral I

nfor

mat

ion

on th

e Di

stric

t's

Stru

ctur

e, S

ervi

ces,

and

Env

ironm

ent

Basi

c Fin

acia

l

Stat

emen

ts a

nd

Info

rmat

ion

Rep

ortin

g th

e D

istr

ict a

s a W

hole

The

Stat

emen

t of N

et P

ositi

on a

nd th

e St

atem

ent o

f Act

iviti

es

The p

rimar

y ob

ject

ive o

f the

anal

ysis

is to

show

whe

ther

the D

istri

ct is

bet

ter o

r wor

se o

ff as

a re

sult

of th

e ye

ar’s

act

iviti

es.

The

Stat

emen

t of

Net

Pos

ition

incl

udes

all

of th

e D

istri

ct’s

ass

ets

and

liabi

litie

s, w

hile

the S

tate

men

t of A

ctiv

ities

incl

udes

all t

he re

venu

es an

d ex

pens

es g

ener

ated

by

the

Dis

trict

’s o

pera

tions

dur

ing

the y

ear.

The

se st

atem

ents

appl

y th

e acc

rual

bas

is of

acco

untin

g us

ed b

y m

ost p

rivat

e se

ctor

com

pani

es.

All

of th

e cu

rren

t yea

r’s r

even

ues a

nd e

xpen

ses a

re ta

ken

into

acc

ount

rega

rdle

ss o

f whe

n ca

sh is

re

ceiv

ed o

r pai

d. T

he D

istri

ct’s

reve

nues

are

div

ided

into

one

of t

he fo

llow

ing

two

cate

gorie

s: (1

) th

ose

prov

ided

by

outs

ide

parti

es w

ho sh

are

the

cost

s of s

ome

prog

ram

s, su

ch a

s tui

tion

rece

ived

fro

m st

uden

ts fr

om o

utsi

de th

e Dis

trict

and

gran

ts p

rovi

ded

by th

e U.S

. Dep

artm

ent o

f Edu

catio

n to

as

sist

child

ren

with

dis

abili

ties o

r chi

ldre

n fro

m d

isad

vant

aged

bac

kgro

unds

(pro

gram

reve

nues

), or

(2

)gen

eral

reve

nues

pro

vide

d by

the t

axpa

yers

or b

y TE

A in

equa

lizat

ion

fund

ing

proc

esse

s (ge

nera

lre

venu

es).

All

asse

ts o

f the

Dis

trict

are r

epor

ted

whe

ther

they

serv

e the

curr

ent y

ear o

r fut

ure y

ears

.Li

abili

ties a

re c

onsi

dere

d re

gard

less

of w

heth

er th

ey m

ust b

e pa

id in

the

curre

nt o

r fut

ure

year

s.

SAN

AN

TO

NIO

IND

EPE

ND

EN

T S

CH

OO

L D

IST

RIC

T

MA

NA

GE

ME

NT

’S D

ISC

USS

ION

AN

D A

NA

LY

SIS

7

Thes

e tw

o st

atem

ents

repo

rt th

e Dis

trict

’s n

et p

ositi

on an

d th

e cha

nge i

n ne

t pos

ition

. The

Dist

rict’s

ne

t pos

ition

(the

diff

eren

ce b

etw

een

asse

ts p

lus d

efer

red

outfl

ows o

f res

ourc

es a

nd li

abili

ties p

lus

defe

rred

inflo

ws o

f res

ourc

es) p

rovi

des o

ne m

easu

re o

f the

Dis

trict

’s fi

nanc

ial h

ealth

. Ove

r tim

e,

incr

ease

s or d

ecre

ases

in th

e Dis

trict

’s n

et p

ositi

on ar

e an

indi

cato

r of w

heth

er it

s fin

anci

al h

ealth

is

impr

ovin

g or

det

erio

ratin

g. T

o fu

lly as

sess

the o

vera

ll he

alth

of t

he D

istri

ct, h

owev

er, n

onfin

anci

al

fact

ors s

houl

d be

cons

ider

ed as

wel

l; su

ch as

, cha

nges

in th

e Dis

trict

’s av

erag

e dai

ly at

tend

ance

, its

pr

oper

ty ta

x ba

se, a

nd th

e co

nditi

on o

f the

Dis

trict

’s fa

cilit

ies.

The D

istri

ct’s

gov

ernm

ent-w

ide n

et p

ositi

on h

as sl

ight

ly w

orse

ned

as ev

iden

ced

by th

e dec

reas

e in

gove

rnm

ent-w

ide n

et p

ositi

on. T

he w

eigh

ted

aver

age d

aily

atte

ndan

ce (W

AD

A) c

ontin

ues t

o de

clin

e an

d is

one

cau

se o

f the

dec

reas

e in

net

pos

ition

. D

ue to

this

dec

line

in a

ttend

ance

, the

Dis

trict

co

ntin

ues

to a

sses

s fa

cilit

ies

and

staf

fing

allo

catio

ns to

ens

ure

that

the

stude

nts’

nee

ds a

re b

est

serv

ed.

Whi

le th

e D

istri

ct’s

pro

perty

tax

base

has

enj

oyed

gro

wth

for m

ost r

ecen

t yea

rs, t

he st

ate

fund

ing

met

hodo

logy

min

imiz

es th

e be

nefit

of

incr

ease

s in

taxa

ble

prop

erty

. Fo

unda

tion

Scho

ol P

rogr

am

stat

e fun

ding

, whi

ch is

the D

istri

ct’s

larg

est p

ortio

n of

stat

e fun

ding

, is b

ased

on

prop

erty

val

ues,

so

as v

alue

s in

crea

se, t

he s

tate

fun

ding

dec

reas

es.

The

Inst

ruct

iona

l Fac

ilitie

s A

llotm

ent a

nd th

e El

igib

le D

ebt A

llotm

ent a

lso

decr

ease

with

incr

ease

s in

prop

erty

val

ues.

The

Dis

trict

’s g

over

nmen

tal

activ

ities

are

pre

sent

ed i

n th

e St

atem

ent

of N

et P

ositi

on a

nd t

he

Stat

emen

t of A

ctiv

ities

. A

ll of

the D

istri

ct’s

bas

ic se

rvic

es ar

e rep

orte

d as

gov

ernm

enta

l act

iviti

es;

incl

udin

g,

inst

ruct

ion,

co

unse

ling,

co

-cur

ricul

ar

activ

ities

, fo

od

serv

ices

, tra

nspo

rtatio

n,

mai

nten

ance

, com

mun

ity se

rvic

es, a

nd g

ener

al ad

min

istra

tion.

Pro

perty

taxe

s, tu

ition

, fee

s, an

d sta

te

and

fede

ral g

rant

s fin

ance

thes

e ac

tiviti

es.

Rep

ortin

g th

e D

istr

ict’s

Fun

ds

Fun

d Fi

nanc

ial S

tate

men

ts

The

fund

fin

anci

al s

tate

men

ts p

rovi

de d

etai

led

info

rmat

ion

abou

t the

Dis

trict

’s f

unds

- n

ot th

e D

istri

ct as

a w

hole

. Law

s and

cont

ract

s req

uire

the D

istri

ct to

esta

blis

h fu

nds t

o ac

coun

t for

var

ious

gr

ants

rece

ived

. Th

e D

istri

ct’s

adm

inis

tratio

n es

tabl

ishe

s man

y ot

her f

unds

to h

elp

it co

ntro

l and

m

anag

e m

oney

for p

artic

ular

pur

pose

s (lik

e ca

mpu

s act

iviti

es).

•G

ove r

nmen

tal F

unds

– T

he D

istri

ct re

ports

mos

t of i

ts b

asic

serv

ices

in g

over

nmen

tal f

unds

.Th

ese

fund

s us

e m

odifi

ed a

ccru

al a

ccou

ntin

g (a

met

hod

that

mea

sure

s th

e re

ceip

t an

ddi

sbur

sem

ent o

f cas

h an

d al

l oth

er fi

nanc

ial a

sset

s tha

t can

be r

eadi

ly co

nver

ted

to ca

sh) a

ndth

ey r

epor

t ba

lanc

es t

hat

are

avai

labl

e fo

r fu

ture

spe

ndin

g.

The

gove

rnm

enta

l fu

ndst

atem

ents

pro

vide

a d

etai

led

shor

t-ter

m v

iew

of t

he D

istri

ct’s

fina

ncia

l con

ditio

n, g

ener

alop

erat

ions

, an

d th

e ba

sic

serv

ices

it

prov

ides

. W

e de

scrib

e th

e di

ffere

nces

bet

wee

ngo

vern

men

tal a

ctiv

ities

(re

porte

d in

the

Stat

emen

t of

Net

Pos

ition

and

the

Stat

emen

t of

Act

iviti

es)

and

gove

rnm

enta

l fu

nds

in r

econ

cilia

tion

sche

dule

s fo

llow

ing

each

of

the

gove

rnm

enta

l fun

d fin

anci

al st

atem

ents

. The

gov

ernm

enta

l fun

d ac

tiviti

es an

d ba

lanc

es ar

ere

porte

d in

Exh

ibits

C-1

and

C-3

.

SAN

AN

TO

NIO

IND

EPE

ND

EN

T S

CH

OO

L D

IST

RIC

T

MA

NA

GE

ME

NT

’S D

ISC

USS

ION

AN

D A

NA

LY

SIS

8

•Pr

opri

etar

y Fu

nds

– Th

ese

fund

s re

port

activ

ities

whe

re t

he D

istri

ct c

harg

es u

sers

for

serv

ices

. Th

ere

are

two

type

s of

pro

prie

tary

fund

s, en

terp

rise

and

inte

rnal

ser

vice

fund

s.Th

e D

istri

ct d

oes

not h

ave

any

ente

rpris

e fu

nds

but h

as th

ree

inte

rnal

ser

vice

fun

ds to

acco

unt f

or it

s w

orke

rs c

ompe

nsat

ion,

med

ical

insu

ranc

e an

d de

ntal

insu

ranc

e pr

ogra

ms.

The D

istri

ct’s

com

bine

d ac

tiviti

es fo

r its

inte

rnal

serv

ice f

unds

are r

epor

ted

in E

xhib

its D

-1,

D-2

, and

D-3

. The

se ac

tiviti

es ar

e als

o re

porte

d in

divi

dual

ly fo

r eac

h in

tern

al se

rvic

e fun

d in

Exhi

bits

H-3

, H-4

, and

H-5

.

The

Dis

tric

t as T

rust

ee

Rep

ortin

g th

e D

istri

ct’s

Fid

ucia

ry R

espo

nsib

ilitie

s

The

Dis

trict

is th

e tru

stee

, or f

iduc

iary

, for

mon

ey ra

ised

by

stud

ent a

ctiv

ities

. Mon

ey ra

ised

by

stud

ent a

ctiv

ities

is re

cord

ed in

the D

istri

ct’s

agen

cy fu

nds.

All

of th

e Dis

trict

’s fi

duci

ary

activ

ities

ar

e re

porte

d in

Exh

ibit

E-1,

Sta

tem

ent

of F

iduc

iary

Ass

ets

and

Liab

ilitie

s. W

e ex

clud

e th

ese

reso

urce

s fro

m th

e Dis

trict

’s o

ther

fina

ncia

l sta

tem

ents

bec

ause

the D

istri

ct ca

nnot

use

the r

esou

rces

to

sup

port

its o

pera

tions

. Th

e D

istri

ct is

onl

y re

spon

sibl

e fo

r ens

urin

g th

at th

e as

sets

repo

rted

in

thes

e fu

nds a

re u

sed

for t

heir

inte

nded

pur

pose

s.

GO

VE

RN

ME

NT

-WID

E F

INA

NC

IAL

AN

AL

YSI

S

As

note

d ea

rlier

, net

pos

ition

ser

ves

as a

use

ful i

ndic

ator

of t

he D

istri

ct’s

fina

ncia

l hea

lth.

The

Dis

trict

’s as

sets

and

defe

rred

out

flow

s exc

eede

d lia

bilit

ies a

nd d

efer

red

inflo

ws b

y $1

53,2

12,5

10 as

of

June

30,

201

9.

SAN

AN

TO

NIO

IND

EPE

ND

EN

T S

CH

OO

L D

IST

RIC

T

MA

NA

GE

ME

NT

’S D

ISC

USS

ION

AN

D A

NA

LY

SIS

9

The D

istri

ct’s

net

pos

ition

is co

mpr

ised

of t

he fo

llow

ing

elem

ents

as il

lustr

ated

in T

able

1 an

d Fi

gure

A

-2.

Tab

le 1

Sa

n A

nton

io In

depe

nden

t Sch

ool D

istr

ict

Net

Pos

ition

Gov

ernm

enta

l A

ctiv

ities

20

19

Gov

ernm

enta

l A

ctiv

ities

20

18

Cur

rent

and

Oth

er A

sset

s $

4

89,1

65,7

71

$

343,

351,

184

Cap

ital A

sset

s, N

et

1,0

86,1

77,3

62

1,05

4,74

4,34

4

Tot

al A

sset

s

1,

575,

343,

133

1,

398,

095,

528

Def

erre

d O

utflo

ws o

f Res

ourc

es

117,

804,

851

26,0

44,0

73

Long

Ter

m L

iabi

litie

s 1,

355,

444,

586

1,

082,

480,

306

Oth

er L

iabi

litie

s 90

,827

,520

74

,555

,246

Tot

al L

iabi

litie

s 1,

446,

272,

106

1,15

7,03

5,55

2

Def

erre

d In

flow

s of R

esou

rces

93

,663

,368

10

5,88

3,43

9

Net

Pos

ition

: N

et In

vest

men

t in

Cap

ital A

sset

s 34

9,55

4,75

2 30

0,65

5,24

2 R

estri

cted

85

,834

,606

85

,599

,829

U

nres

trict

ed

(282

,176

,848

) (2

25,0

34,4

61)

T

otal

Net

Pos

ition

$

15

3,21

2,51

0 $

1

61,2

20,6

10

At a

ppro

xim

atel

y 22

8% o

f tot

al n

et p

ositi

on, N

et In

vest

men

t in

Cap

ital A

sset

s is t

he la

rges

t por

tion

of th

e Dis

trict

’s n

et p

ositi

on. T

his i

s the

Dis

trict

’s in

vest

men

t in

capi

tal a

sset

s (e.

g., l

and,

bui

ldin

gs,

furn

iture

, eq

uipm

ent

and

vehi

cles

), ne

t of

acc

umul

ated

de

prec

iatio

n an

d of

any

rela

ted

outs

tand

ing

debt

us

ed

to

acqu

ire

thos

e as

sets

.

The

Dis

trict

use

s the

se ca

pita

l ass

ets

to

prov

ide

serv

ices

to

its

st

uden

t po

pula

tion

and

its

empl

oyee

s.

Con

sequ

ently

, th

ese

asse

ts a

re n

ot a

vaila

ble

for f

utur

e sp

endi

ng.

Alth

ough

th

e D

istri

ct’s

inve

stm

ent i

n its

ca

pita

l ass

ets i

s rep

orte

d ne

t of

SAN

AN

TO

NIO

IND

EPE

ND

EN

T S

CH

OO

L D

IST

RIC

T

MA

NA

GE

ME

NT

’S D

ISC

USS

ION

AN

D A

NA

LY

SIS

10

rela

ted

debt

, it s

houl

d be

not

ed th

at th

e re

sour

ces n

eede

d to

repa

y th

is d

ebt m

ust b

e pr

ovid

ed fr

om

othe

r sou

rces

, sin

ce th

e ca

pita

l ass

ets t

hem

selv

es c

anno

t be

used

to li

quid

ate

thes

e lia

bilit

ies.

Rest

rict

ed n

et p

ositi

on m

akes

up

56%

of t

otal

net

pos

ition

. It r

epre

sent

s bal

ance

s for

whi

ch ex

tern

al

cons

train

ts h

ave

been

pla

ced

and

incl

udes

bal

ance

s fo

r deb

t ser

vice

, cap

ital p

roje

cts,

gran

ts, a

nd

cam

pus a

ctiv

ities

.

Unr

estr

icte

d ne

t pos

ition

is th

e po

rtion

of

net p

ositi

on th

at c

an b

e us

ed to

fin

ance

day

-to-d

ay

oper

atio

ns w

ithou

t con

stra

ints

est

ablis

hed

by d

ebt c

oven

ants

, ena

blin

g le

gisl

atio

n, o

r oth

er le

gal

requ

irem

ents

and

repr

esen

ts a

bout

-184

% o

f tot

al n

et p

ositi

on.

Cap

ital A

sset

s

The

Dis

trict

’s in

vest

men

t in

capi

tal a

sset

s fo

r its

gov

ernm

enta

l act

iviti

es, a

s of

Jun

e 30

, 201

9,

amou

nts t

o $1

,086

,177

,362

(net

of a

ccum

ulat

ed d

epre

ciat

ion)

as il

lust

rate

d in

Tab

le 2

. The

Dis

trict

in

vest

s in

a b

road

ran

ge o

f ca

pita

l as

sets

, in

clud

ing

inst

ruct

iona

l fa

cilit

ies

and

equi

pmen

t, tra

nspo

rtatio

n fa

cilit

ies

and

equi

pmen

t, at

hlet

ic f

acili

ties,

and

adm

inis

trativ

e an

d m

aint

enan

ce

build

ings

and

equ

ipm

ent.

This

yea

r’s

tota

l cap

ital o

utla

y w

as $

66,9

60,3

09 a

nd o

f th

is a

mou

nt, $

52,3

14,0

08 o

r 78

% w

as

incu

rred

in th

e ca

pita

l pro

ject

s fun

d fo

r the

on-

goin

g co

nstru

ctio

n, im

prov

emen

t and

exp

ansi

on o

f D

istri

ct b

uild

ings

. Th

e D

istri

ct’s

fis

cal y

ear

2019

cap

ital b

udge

t con

tinue

s to

dec

line

as m

ore

proj

ects

nea

r com

plet

ion.

Ref

er to

Not

e E in

sect

ion

III o

f the

Not

es to

the F

inan

cial

Sta

tem

ents

for

mor

e de

taile

d in

form

atio

n on

cap

ital a

sset

s.

Tab

le 2

Sa

n A

nton

io In

depe

nden

t Sch

ool D

istr

ict

Cap

ital A

sset

s (n

et o

f dep

reci

atio

n)

Gov

ernm

enta

l A

ctiv

ities

20

19

Gov

ernm

enta

l A

ctiv

ities

20

18

Land

$

62

,511

,642

$

61,

487,

766

Bui

ldin

gs a

nd Im

prov

emen

ts

951,

620,

311

902,

803,

162

Furn

iture

, Equ

ipm

ent,

& V

ehic

les

19,3

05,3

48

19,5

20,4

19

Con

stru

ctio

n in

Pro

gres

s 52

,740

,061

70,9

32,9

97

To

tal

$

1,0

86,1

77,3

62

$

1

,054

,744

,344

SAN

AN

TO

NIO

IND

EPE

ND

EN

T S

CH

OO

L D

IST

RIC

T

MA

NA

GE

ME

NT

’S D

ISC

USS

ION

AN

D A

NA

LY

SIS

11

Deb

t

At J

une

30, 2

019,

the

Dis

trict

had

$87

2,98

9,98

8 in

bon

ds o

utst

andi

ng (t

he “

Bon

ds”)

. B

y vi

rtue

of

the

Perm

anen

t Sch

ool F

und,

the

Bon

ds a

re ra

ted

“AA

A”

by F

itch

Rat

ings

(“Fi

tch”

) and

“A

aa”

by

Moo

dy’s

Inve

stor

s Ser

vice

, Inc

. (“M

oody

’s).

The

Bon

ds o

f the

Dis

trict

are r

ated

“AA

” by

Fitc

h an

d “A

a2”

by M

oody

’s w

ithou

t reg

ard

to c

redi

t enh

ance

men

t.

Oth

er D

istri

ct lo

ng-te

rm o

blig

atio

ns in

clud

e w

orke

rs’ c

ompe

nsat

ion

and

the

Acc

umul

ated

Lea

ve

Ince

ntiv

e Pl

an (

ALI

P).

Mor

e de

taile

d in

form

atio

n ab

out

the

Dis

trict

’s l

ong-

term

lia

bilit

ies

is pr

esen

ted

in N

otes

H th

roug

h K

of s

ectio

n III

in th

e N

otes

to th

e Fi

nanc

ial S

tate

men

ts.

The

Dis

trict

has

ado

pted

Gov

ernm

enta

l Acc

ount

ing

Stan

dard

s B

oard

(GA

SB) S

tate

men

t No.

68,

A

ccou

ntin

g an

d Fi

nanc

ial R

epor

ting

for P

ensi

ons.

GA

SB S

tate

men

t No.

68

requ

ires s

choo

l dist

ricts

to r

epor

t the

ir po

rtion

of

the

unfu

nded

(lia

bilit

y) o

r ov

erfu

nded

(as

set)

pens

ion

of th

e Te

ache

r R

etire

men

t Sys

tem

of T

exas

pen

sion

pla

n. T

he D

istri

ct h

as p

artic

ipat

ed in

the T

each

er R

etire

men

t Sy

stem

of T

exas

pen

sion

pla

n fo

r yea

rs. W

ith th

e im

plem

enta

tion

of G

ASB

Sta

tem

ent N

o. 6

8, th

e co

sts a

nd o

blig

atio

ns o

f the

stat

e (o

n-be

half

cont

ribut

ions

) and

the

Dis

trict

rela

ted

to th

e Te

ache

r R

etire

men

t Sys

tem

of T

exas

pen

sion

pla

n ar

e in

tend

ed to

be

mor

e tra

nspa

rent

.

The

Dis

trict

has

ado

pted

Gov

ernm

enta

l Acc

ount

ing

Stan

dard

s B

oard

(GA

SB) S

tate

men

t No.

75,

A

ccou

ntin

g an

d Fi

nanc

ial R

epor

ting

for P

oste

mpl

oym

ent B

enef

its O

ther

Tha

n Pe

nsio

ns (O

PEB

).

GA

SB S

tate

men

t No.

75

requ

ires s

choo

l dis

trict

s to

repo

rt th

eir p

ortio

n of

the u

nfun

ded

(liab

ility

) or

over

fund

ed (

asse

t) of

the

Tea

cher

Ret

irem

ent

Syst

em o

f Te

xas

OPE

B p

lan.

Th

e D

istri

ct h

as

parti

cipa

ted

in t

he T

each

er R

etire

men

t Sy

stem

of

Texa

s O

PEB

pla

n fo

r ye

ars.

With

the

im

plem

enta

tion

of G

ASB

Sta

tem

ent N

o. 7

5, th

e co

sts a

nd o

blig

atio

ns o

f the

stat

e an

d th

e D

istri

ct

rela

ted

to th

e Tea

cher

Ret

irem

ent S

yste

m o

f Tex

as O

PEB

pla

n ar

e int

ende

d to

be m

ore t

rans

pare

nt.

Cha

nges

in N

et P

ositi

on

The D

istri

ct’s

reve

nue s

ourc

es fo

r fis

cal y

ear 2

019

and

fisca

l yea

r 201

8 ar

e illu

strat

ed in

Fig

ure A

-3.

Pro

perty

Tax

es m

ade

up th

e la

rges

t por

tion

of th

e re

venu

e, f

ollo

wed

by

Ope

ratin

g G

rant

s an

d C

ontri

butio

ns n

ot R

estri

cted

, the

n fo

llow

ed b

y G

rant

s and

Con

tribu

tions

. Th

e lar

gest

incr

ease

was

in

Gra

nts a

nd co

ntrib

utio

ns n

ot re

stric

ted

of $

61,8

74,9

97 fo

llow

ed b

y an

incr

ease

of $

25,9

62,4

06 in

ta

xes,

offs

et b

y a d

ecre

ase i

n M

isce

llane

ous a

nd L

ocal

of $

28,8

35,1

13 si

nce t

he p

rior y

ear i

nclu

ded

gain

on

sale

of r

eal e

stat

e w

hen

selli

ng c

entra

l offi

ce lo

catio

ns.

SAN

AN

TO

NIO

IND

EPE

ND

EN

T S

CH

OO

L D

IST

RIC

T

MA

NA

GE

ME

NT

’S D

ISC

USS

ION

AN

D A

NA

LY

SIS

12

Fi

gure

A-3

D

istr

ict S

ourc

es o

f Rev

enue

Tab

le 3

Sa

n A

nton

io In

depe

nden

t Sch

ool D

istr

ict

Cha

nge

in N

et P

ositi

on

Gov

ernm

enta

l Act

iviti

es

2019

G

over

nmen

tal A

ctiv

ities

20

18

Rev

enue

s: Pr

ogra

m re

venu

es:

C

harg

es fo

r ser

vice

s $

4

,452

,635

$

3

,280

,378

Ope

ratin

g gr

ants

and

con

tribu

tions

196

,112

,354

17

7,27

8,22

3 G

ener

al re

venu

es:

M

aint

enan

ce a

nd o

pera

tions

taxe

s 2

10,1

40,6

20

194,

440,

532

D

ebt s

ervi

ce ta

xes

70

,521

,815

60

,259

,497

Gra

nts a

nd c

ontri

butio

ns n

ot re

stric

ted

200

,189

,533

13

8,31

4,53

6

In

vest

men

t Ear

ning

s 12

,447

,996

1,

608,

272

O

ther

(Mis

cella

neou

s & L

ocal

) 9

54,9

18

29,7

90,0

31

Tota

l rev

enue

s $

6

94,8

19,8

71

$

604

,971

,469

(Con

tinue

d)

SAN

AN

TO

NIO

IND

EPE

ND

EN

T S

CH

OO

L D

IST

RIC

T

M

AN

AG

EM

EN

T’S

DIS

CU

SSIO

N A

ND

AN

AL

YSI

S

13

G

over

nmen

tal A

ctiv

ities

20

19

Gov

ernm

enta

l Act

iviti

es

2018

Ex

pens

es:

In

stru

ctio

n an

d m

edia

serv

ices

$

3

50,7

19,1

52

$

254,

155,

738

C

urric

ulum

and

inst

ruct

iona

l sta

ff d

evel

opm

ent

35,8

14,7

21

24,9

32,7

49

In

stru

ctio

nal a

nd sc

hool

lead

ersh

ip

56,6

87,7

58

38,0

44,6

63

St

uden

t sup

port

serv

ices

55

,749

,113

40

,859

,087

Food

serv

ices

44

,462

,402

36

,926

,737

Extra

curr

icul

ar a

ctiv

ities

13

,938

,568

10

,217

,208

Gen

eral

adm

inis

tratio

n 19

,088

,109

13

,677

,953

Faci

litie

s mai

nten

ance

, sec

urity

, and

dat

a pr

oces

sing

serv

ices

83

,146

,098

69

,907

,505

Com

mun

ity se

rvic

es

8,59

1,91

9 7,

815,

440

D

ebt s

ervi

ces

32,8

70,5

04

25,9

54,3

86

SS

A, J

JAEP

, and

pro

perty

tax

appr

aisa

l ser

vice

s 1,

759,

627

2,00

2,24

0

To

tal e

xpen

ses

702,

827,

971

524,

493,

706

Incr

ease

in N

et P

ositi

on

(8,0

08,1

00)

80,4

77,7

63

Beg

inni

ng N

et P

ositi

on

161,

220,

610

440,

435,

515

Prio

r Per

iod

Adj

ustm

ent

-

(359

,692

,668

)

Endi

ng N

et P

ositi

on

$

153,

212,

510

$

161,

220,

610

The

Dis

trict

’s to

tal r

even

ues

for i

ts g

over

nmen

tal a

ctiv

ities

are

$69

4,81

9,87

1, a

15%

incr

ease

of

$89,

848,

402

from

the

prio

r ye

ar.

The

lar

gest

inc

reas

e w

as i

n G

rant

s an

d C

ontri

butio

ns n

ot

Res

trict

ed o

f $6

1,87

4,99

7, o

r 45

% f

rom

the

prio

r ye

ar p

rimar

ily d

ue to

mor

e st

ate

and

fede

ral

fund

ing.

Pro

perty

tax

reve

nues

incr

ease

d $2

5,96

2,40

6 fro

m th

e pr

ior

year

prim

arily

due

to th

e in

crea

se in

the

I&S

tax

rate

of $

0.03

from

201

8 an

d an

incr

ease

in p

rope

rty v

alue

s.

The

expe

nses

for g

over

nmen

tal a

ctiv

ities

tota

led

$702

,827

,971

, a 3

4% in

crea

se o

f $17

8,33

4,26

5 fro

m th

e prio

r yea

r. T

he m

ajor

ity o

f the

incr

ease

is in

Inst

ruct

ion

and

Med

ia S

ervi

ces,

Inst

ruct

iona

l an

d Sc

hool

Lea

ders

hip,

Stu

dent

Sup

port

Ser

vice

s, an

d Fa

cilit

ies M

aint

enan

ce, S

ecur

ity a

nd D

ata

Proc

essi

ng S

ervi

ces.

In th

e prio

r yea

r, th

e non

-em

ploy

er co

ntrib

utin

g en

titie

s (N

ECE)

expe

nse w

as

nega

tive

due

to c

hang

es i

n be

nefit

s w

ithin

the

TR

S-ca

re p

lan.

Th

e ac

crua

l fo

r th

e D

istri

ct’s

pr

opor

tiona

te s

hare

of

that

exp

ense

was

a n

egat

ive

on-b

ehal

f re

venu

e an

d ne

gativ

e on

-beh

alf

expe

nse.

A

s sh

own

on th

e D

istri

ct’s

Sta

tem

ent o

f A

ctiv

ities

, net

pos

ition

of

the

Dis

trict

’s g

over

nmen

tal

activ

ities

dec

reas

ed b

y a

net o

f $8,

008,

100

for t

he fi

scal

yea

r end

ed Ju

ne 3

0, 2

019

(Tab

le 3

).

SAN

AN

TO

NIO

IND

EPE

ND

EN

T S

CH

OO

L D

IST

RIC

T

MA

NA

GE

ME

NT

’S D

ISC

USS

ION

AN

D A

NA

LY

SIS

14

TH

E D

IST

RIC

T’S

FU

ND

S

As t

he D

istri

ct co

mpl

eted

the y

ear e

nded

June

30,

201

9, it

s gov

ernm

enta

l fun

ds (a

s pre

sent

ed in

the

Bal

ance

She

et)

repo

rted

a co

mbi

ned

fund

bal

ance

of

$383

,738

,455

. I

nclu

ded

in t

his

year

’s

$136

,187

,721

tota

l inc

reas

e in

fund

bal

ance

is a

n in

crea

se o

f $71

5,04

1 in

the

Dis

trict

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chan

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an th

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w c

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ned

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trict

ed fo

r Oth

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ses

3890

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nres

trict

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00

Tota

l Net

Pos

ition

3000

153,

212,

510

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Th

e no

tes t

o th

e fin

anci

al st

atem

ents

are

an

inte

gral

par

t of t

his s

tate

men

t.

17

EXH

IBIT

B-1

SAN

AN

TON

IO IN

DEP

END

ENT

SCH

OO

L D

ISTR

ICT

STA

TEM

ENT

OF

ACT

IVIT

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FOR

THE

YEA

R EN

DED

JUN

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Reve

nue

and

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ges i

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et

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ram

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enue

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rol

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13

46

Ope

ratin

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and

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Char

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orSe

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pens

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vern

men

tal

Act

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es

Prim

ary

Gov.

Pri

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over

nm

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L A

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S:88

3,83

8 34

3,62

7,24

2 63

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(2

79,3

42,1

87)

Inst

ruct

ion

$$

$$

11-

7,09

1,91

0 1,

108,

972

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38)

Inst

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l Res

ourc

es a

nd M

edia

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vice

s12

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20

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539)

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21-

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tion

Serv

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Serv

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3295

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14

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332,

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Tran

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3,60

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636,

374

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vice

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364,

494

13,9

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326

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5329

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t Ser

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Paym

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196,

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Gen

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70,5

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DT

200,

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Gran

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161,

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610

153,

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The

note

s to

the

finan

cial

sta

tem

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are

an

inte

gral

par

t of t

his

stat

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t.

18

SAN

AN

TON

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DEP

END

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SCH

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BALA

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SH

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65,7

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176,

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Cash

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1110

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1230

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1900

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1000

152,

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Payr

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With

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2150

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2160

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2170

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Due

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2180

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Une

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2000

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DEF

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2601

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3450

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4 To

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4000

Th

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to th

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anci

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tate

men

ts a

re a

n in

tegr

al p

art o

f thi

s st

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19

EXH

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C-1

Oth

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sGo

vern

men

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Tot

al

35,5

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53

347,

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654

$$

- 31

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340,

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214,

636

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- 28

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273

$$

5,71

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2 29

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$

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3,45

9,98

5 6,

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3 63

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3,73

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41,4

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10

100,

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108,

154

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65,4

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20

EXH

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SAN

AN

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END

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SCH

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RECO

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FUN

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SH

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STA

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OF

NET

PO

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ON

JUN

E 30

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9

383,

738,

455

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tal F

und

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nces

- G

over

nmen

tal F

unds

10,6

87,8

38

The

Dist

rict u

ses i

nter

nal s

ervi

ce fu

nds t

o ch

arge

the

costs

of c

erta

in a

ctiv

ities

, suc

h as

self-

insu

ranc

e an

d pr

intin

g, to

app

ropr

iate

func

tions

in o

ther

fund

s. T

he a

sset

s and

liab

ilitie

s of t

he

inte

rnal

serv

ice

fund

s are

incl

uded

in g

over

nmen

tal a

ctiv

ities

in th

e sta

tem

ent o

f net

pos

ition

. Th

e ne

t effe

ct o

f thi

s con

solid

atio

n is

to in

crea

se n

et p

ositi

on.

(119

,504

,448

)Ca

pita

l ass

ets u

sed

in g

over

nmen

tal a

ctiv

ities

are

not

fina

ncia

l res

ourc

es a

nd th

eref

ore

are

not

repo

rted

in g

over

nmen

tal f

unds

. A

t the

beg

inni

ng o

f the

yea

r, th

e co

st of

thes

e as

sets

was

$1

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,721

,073

and

the

accu

mul

ated

dep

reci

atio

n w

as ($

448,

976,

729)

. In

add

ition

, lon

g-te

rm

liabi

litie

s, in

clud

ing

bond

s pay

able

, are

not

due

and

pay

able

in th

e cu

rrent

per

iod,

and

, the

refo

re

are

not r

epor

ted

as li

abili

ties i

n th

e fu

nds.

At t

he b

egin

ning

of t

he y

ear,

bond

s pay

able

and

ac

cret

ed in

tere

st ba

lanc

e w

as ($

737,

307,

786)

, ter

min

atio

n be

nefit

s pay

able

was

($7,

769,

245)

, an

d in

tere

st pa

yabl

e w

as ($

12,8

37,7

25).

The

com

bine

d ba

lanc

e of

pre

miu

ms a

nd d

efer

red

char

ge

on re

fund

ing

for t

hese

issu

ance

s, at

the

begi

nnin

g of

the

year

, was

($39

,168

,921

). In

add

ition

, th

e be

ginn

ing

bala

nce

for c

ompe

nsat

ed a

bsen

ces c

lass

ified

as a

shor

t-ter

m li

abili

ty w

as

($69

,970

). A

t the

beg

inni

ng o

f the

yea

r, th

e D

istric

t's p

ropo

rtion

ate

shar

e of

the

net p

ensio

n lia

bilit

y w

as ($

86,0

94,6

23),

and

the

rela

ted

defe

rred

outfl

ows a

nd in

flow

s of r

esou

rces

wer

e $1

6,81

8,68

3 an

d ($

20,1

70,3

36),

resp

ectiv

ely.

At t

he b

egin

ning

of t

he y

ear,

the

Dist

rict's

pr

opor

tiona

te sh

are

of th

e O

PEB

liabi

lity

was

($20

4,90

7,28

2), a

nd th

e re

late

d de

ferre

d ou

tflow

s an

d in

flow

s of r

esou

rces

wer

e $2

,971

,516

and

($85

,713

,103

), re

spec

tivel

y. T

he n

et e

ffect

of

reco

gniz

ing

the

gove

rnm

enta

l-wid

e be

ginn

ing

bala

nces

is to

(dec

reas

e) n

et p

ositi

on.

(94,

074,

416)

Tra

nsac

tions

rela

ted

to c

urre

nt y

ear c

apita

l out

lays

, lon

g-te

rm d

ebt a

nd c

ompe

nsat

ed a

bsen

ces

are

nece

ssar

y to

con

vert

from

the

mod

ified

acc

rual

bas

is of

acc

ount

ing

to th

e ac

crua

l bas

is of

ac

coun

ting,

as f

ollo

ws:

A

cqui

sitio

n of

cap

ital a

sset

s was

$66

,960

,309

D

ispos

ition

of c

apita

l ass

ets w

as ($

2,54

3,11

6) a

nd th

e re

late

d ac

cum

ulat

edde

prec

iatio

n w

as $

1,03

4,89

5

Paym

ents

mad

e on

bon

d pr

inci

pal w

ere

$35,

870,

000

A

ccre

tion

on c

apita

l app

reci

atio

n bo

nds w

as ($

131,

175)

Is

suan

ce o

f ref

undi

ng b

onds

was

($40

,850

,000

) with

ass

ocia

ted

prem

ium

s of (

$5,1

59,5

46)

and

resu

lted

in a

def

erre

d ch

arge

on

refu

ndin

g of

$88

0,09

8

Issu

ance

of r

egul

ar b

onds

was

($17

8,97

5,00

0) w

ith a

ssoc

iate

d pr

emiu

ms o

f($

22,3

93,3

61)

Th

e bo

nd re

fund

ing

trans

actio

ns re

sulte

d in

the

paym

ent o

f bon

ds o

utsta

ndin

g of

$45,

710,

000

and

the

writ

e-of

f of u

nam

ortiz

ed p

rem

ium

of $

1,17

9,64

5

Curre

nt y

ear a

mor

tizat

ion

of b

ond

prem

ium

s was

$8,

076,

157

and

the

amor

tizat

ion

ofde

ferre

d ch

arge

on

refu

ndin

g bo

nds w

as ($

384,

350)

Ch

ange

in in

tere

st pa

yabl

e w

as a

($3,

156,

263)

incr

ease

; com

pens

ated

abs

ence

s was

a($

127,

421)

incr

ease

; and

term

inat

ions

ben

efits

was

a ($

65,2

88) i

ncre

ase

The

net e

ffect

is to

(dec

reas

e) n

et p

ositi

on.

(7,8

61,7

35)

Incl

uded

in th

e ite

ms r

elat

ed to

deb

t is t

he re

cogn

ition

of t

he in

crea

se in

the

Dist

rict's

pr

opor

tiona

te sh

are

of th

e ne

t pen

sion

liabi

lity

requ

ired

by G

ASB

68

in th

e am

ount

of

($69

,209

,224

), a

decr

ease

in d

efer

red

reso

urce

s inf

low

rela

ted

to T

RS in

the

amou

nt o

f $6

,287

,809

, and

an

incr

ease

in d

efer

red

reso

urce

out

flow

rela

ted

to T

RS in

the

amou

nt o

f $5

5,05

9,68

0. T

he n

et e

ffect

is to

(dec

reas

e) n

et p

ositi

on.

The

note

s to

the

finan

cial

stat

emen

ts ar

e an

inte

gral

par

t of t

his s

tate

men

t. 21

EXH

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C-2

SAN

AN

TON

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DEP

END

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SCH

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ISTR

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RECO

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SH

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TO T

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STA

TEM

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OF

NET

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ON

JUN

E 30

, 201

9

(5,2

47,2

10)

Incl

uded

in th

e ite

ms r

elat

ed to

deb

t is t

he re

cogn

ition

of t

he in

crea

se in

the

Dist

rict's

pr

opor

tiona

te sh

are

of th

e O

PEB

liabi

lity

requ

ired

by G

ASB

75

in th

e am

ount

of (

$47,

384,

821)

, a

decr

ease

in d

efer

red

reso

urce

s inf

low

rela

ted

to T

RS O

PEB

in th

e am

ount

of $

5,93

2,26

2, a

nd

an in

crea

se in

def

erre

d re

sour

ce o

utflo

w re

late

d to

TRS

OPE

B in

the

amou

nt o

f $36

,205

,349

. Th

e ne

t effe

ct is

to (d

ecre

ase)

net

pos

ition

.

(34,

019,

070)

Dep

reci

atio

n is

not r

ecog

nize

d as

an

expe

nse

in g

over

nmen

tal f

unds

sinc

e it

does

not

requ

ire th

e us

e of

cur

rent

fina

ncia

l res

ourc

es. T

he n

et e

ffect

of t

he c

urre

nt y

ear's

dep

reci

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n is

to

(dec

reas

e) n

et p

ositi

on.

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93,0

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Var

ious

oth

er re

clas

sific

atio

ns a

nd e

limin

atio

ns a

re n

eces

sary

to c

onve

rt fro

m th

e m

odifi

ed

accr

ual b

asis

of a

ccou

ntin

g to

acc

rual

bas

is of

acc

ount

ing,

as f

ollo

ws:

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gniz

e un

avai

labl

e re

venu

e fro

m c

urre

nt y

ear l

evy

in th

e am

ount

of $

7,86

9,18

2 an

d fro

m p

rior y

ear l

evie

s in

the

amou

nt o

f $11

,623

,914

. The

net

effe

ct is

to in

crea

se n

et p

ositi

on.

153,

212,

510

$N

et P

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on o

f Gov

ernm

enta

l Act

iviti

es

The

note

s to

the

finan

cial

stat

emen

ts ar

e an

inte

gral

par

t of t

his s

tate

men

t. 22

SAN

AN

TON

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DEP

END

ENT

SCH

OO

L D

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STA

TEM

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OF

REVE

NU

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BA

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Proj

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216,

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Inst

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7080

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EXH

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C-4

SAN

AN

TON

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DEP

END

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SCH

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STA

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OF

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AN

D C

HA

NG

ES IN

FU

ND

BA

LAN

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TO T

HE

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OF

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FOR

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YEA

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DED

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, 201

9

136,

187,

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tal N

et C

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Fun

d Ba

lanc

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Gov

ernm

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(1,3

36,4

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The

Dist

rict u

ses i

nter

nal s

ervi

ce fu

nds t

o ac

coun

t for

the

reve

nues

and

exp

ense

s to

the

wor

kers

co

mpe

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ion

and

med

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and

den

tal i

nsur

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fund

s. Th

e op

erat

ing

inco

me

of in

tern

al se

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nds i

s rep

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d w

ith g

over

nmen

tal a

ctiv

ities

. The

net

effe

ct o

f thi

s con

solid

atio

n is

to (d

ecre

ase)

ne

t pos

ition

.

(94,

074,

416)

Tran

sact

ions

rela

ted

to c

urre

nt y

ear c

apita

l out

lays

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g-te

rm d

ebt a

nd c

ompe

nsat

ed a

bsen

ces a

re

nece

ssar

y to

con

vert

from

the

mod

ified

acc

rual

bas

is of

acc

ount

ing

to th

e ac

crua

l bas

is of

ac

coun

ting,

as f

ollo

ws:

A

cqui

sitio

n of

cap

ital a

sset

s was

$66

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ispos

ition

of c

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as ($

2,54

3,11

6) a

nd th

e re

late

d ac

cum

ulat

edde

prec

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n w

as $

1,03

4,89

5

Paym

ents

mad

e on

bon

d pr

inci

pal w

ere

$35,

870,

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A

ccre

tion

on c

apita

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n bo

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as ($

131,

175)

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suan

ce o

f ref

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ng b

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was

($40

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) with

ass

ocia

ted

prem

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s of (

$5,1

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ndre

sulte

d in

a d

efer

red

char

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n re

fund

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of $

880,

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f reg

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bon

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as ($

178,

975,

000)

with

ass

ocia

ted

prem

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s of

($22

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bond

refu

ndin

g tra

nsac

tions

resu

lted

in th

e pa

ymen

t of b

onds

out

stand

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of $

45,7

10,0

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d th

e w

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off o

f una

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179,

645

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rrent

yea

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ortiz

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bon

d pr

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ms w

as $

8,07

6,15

7 an

d th

e am

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n of

def

erre

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arge

on

refu

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as ($

384,

350)

Ch

ange

in in

tere

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e w

as a

($3,

156,

263)

incr

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; com

pens

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abs

ence

s was

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127,

421)

incr

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term

inat

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ben

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was

a ($

65,2

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ncre

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The

net e

ffect

is a

(dec

reas

e) to

the

chan

ge in

net

pos

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(34,

019,

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Dep

reci

atio

n is

not r

ecog

nize

d as

an

expe

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in g

over

nmen

tal f

unds

sinc

e it

does

not

requ

ire th

e us

e of

cur

rent

fina

ncia

l res

ourc

es.

The

net e

ffect

of t

he c

urre

nt y

ear's

dep

reci

atio

n is

to (d

ecre

ase)

net

po

sitio

n.

(1,6

56,9

49)

Var

ious

oth

er re

clas

sific

atio

ns a

nd e

limin

atio

ns a

re n

eces

sary

to c

onve

rt fro

m th

em

odifi

ed a

ccru

al b

asis

of a

ccou

ntin

g to

acc

rual

bas

is of

acc

ount

ing,

as f

ollo

ws:

Re

mov

e ta

x co

llect

ions

from

prio

r yea

r lev

ies i

n th

e am

ount

of (

$955

,783

)

Reco

gniz

e un

avai

labl

e re

venu

e fro

m c

urre

nt y

ear l

evy

in th

e am

ount

of $

7,86

9,18

2

Reco

gniz

e le

ss ta

x re

venu

e in

the

amou

nt o

f ($4

,334

,997

) for

the

diffe

renc

ebe

twee

n w

hat w

as e

stim

ated

in th

e pr

ior y

ear a

nd c

olle

cted

in th

e cu

rrent

yea

r

Rem

ove

SHA

RS re

venu

e fro

m p

rior y

ear i

n th

e am

ount

of (

$4,2

35,3

51)

The

net e

ffect

is to

a (d

ecre

ase)

to th

e ch

ange

in n

et p

ositi

on.

(7,8

61,7

35)

Var

ious

adj

ustm

ents

wer

e ne

cess

ary

for G

ASB

68

purp

oses

as f

ollo

ws:

Co

ntrib

utio

ns m

ade

afte

r the

mea

sure

men

t dat

e of

Aug

ust 3

1, 2

018

in th

e am

ount

of $

7,87

4,40

3w

ere

deex

pend

ed, a

nd re

cord

ed a

s def

erre

d re

sour

ce o

utflo

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Co

ntrib

utio

ns a

nd a

djus

tmen

ts m

ade

befo

re th

e m

easu

rem

ent d

ate

of A

ugus

t 31,

201

8 in

the

amou

nt o

f $1,

810,

751

wer

e al

so d

eexp

ende

d

The

net e

ffect

to d

efer

red

reso

urce

out

flow

s and

inflo

ws w

as $

61,1

67,3

55in

clud

ing

amou

nts a

mor

tized

in th

e cu

rrent

mea

sure

men

t per

iod

Th

e di

stric

t's p

ropo

rtion

ate

shar

e of

pen

sion

expe

nse

was

($78

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)Th

e ne

t effe

ct is

a (d

ecre

ase)

to th

e ch

ange

in n

et p

ositi

on.

The

note

s to

the

finan

cial

stat

emen

ts ar

e an

inte

gral

par

t of t

his s

tate

men

t. 25

EXH

IBIT

C-4

SAN

AN

TON

IO IN

DEP

END

ENT

SCH

OO

L D

ISTR

ICT

RECO

NCI

LIA

TIO

N O

F TH

E G

OV

ERN

MEN

TAL

FUN

DS

STA

TEM

ENT

OF

REV

ENU

ES, E

XPE

ND

ITU

RES,

AN

D C

HA

NG

ES IN

FU

ND

BA

LAN

CES

TO T

HE

STA

TEM

ENT

OF

ACT

IVIT

IES

FOR

THE

YEA

R EN

DED

JUN

E 30

, 201

9

(5,2

47,2

10)

Var

ious

adj

ustm

ents

wer

e ne

cess

ary

for G

ASB

75

purp

oses

as f

ollo

ws:

Co

ntrib

utio

ns m

ade

afte

r the

mea

sure

men

t dat

e of

Aug

ust 3

1, 2

018

in th

e am

ount

of $

2,84

8,77

4w

ere

deex

pend

ed, a

nd re

cord

ed a

s def

erre

d re

sour

ce o

utflo

ws

Co

ntrib

utio

ns a

nd a

djus

tmen

ts m

ade

befo

re th

e m

easu

rem

ent d

ate

of A

ugus

t 31,

201

8 in

the

amou

nt o

f $54

6,28

5 w

ere

also

dee

xpen

ded

Th

e ne

t effe

ct o

f def

erre

d re

sour

ce o

utflo

ws a

nd in

flow

s inc

ludi

ng a

mou

nts

amor

tized

in th

e cu

rrent

mea

sure

men

t per

iod

was

($42

,228

,278

)

The

distr

ict's

pro

porti

onat

e sh

are

of O

PEB

expe

nse

was

$50

,868

,934

and

am

ount

s rec

ogni

zed

from

oth

er so

urce

s was

$1,

613

The

net e

ffect

is a

(dec

reas

e) to

the

chan

ge in

net

pos

ition

.

(8,0

08,1

00)

$ C

hang

e in

Net

Pos

ition

of G

over

nmen

tal A

ctiv

ities

The

note

s to

the

finan

cial

stat

emen

ts ar

e an

inte

gral

par

t of t

his s

tate

men

t. 26

EXH

IBIT

D-1

SAN

AN

TON

IO IN

DEP

END

ENT

SCH

OO

L D

ISTR

ICT

STA

TEM

ENT

OF

NET

PO

SITI

ON

PRO

PRIE

TARY

FU

ND

SJU

NE

30, 2

019

Tot

alIn

tern

alSe

rvic

e Fu

nds

Gov

ernm

enta

l A

ctiv

itie

s -

ASS

ETS

Cur

rent

Ass

ets:

14,9

58,5

44

Cas

h an

d C

ash

Equi

vale

nts

$25

1,00

0 D

ue fr

om O

ther

Fun

ds1,

697,

268

Oth

er R

ecei

vabl

es50

0,00

0 O

ther

Cur

rent

Ass

ets

Tot

al A

sset

s17

,406

,812

LIA

BIL

ITIE

SC

urre

nt L

iabi

litie

s:43

5,34

9 A

ccou

nts

Paya

ble

5,40

1,75

8 Sh

ort T

erm

Cla

ims

Paya

ble

271,

625

Due

to O

ther

Fun

ds6,

108,

732

Tot

al C

urre

nt L

iabi

litie

s

Non

curr

ent L

iabi

litie

s:61

0,24

2 C

laim

s Pa

yabl

e - D

ue in

Mor

e th

an O

ne Y

ear

610,

242

Tot

al N

oncu

rren

t Lia

bilit

ies

Tot

al L

iabi

litie

s6,

718,

974

NET

PO

SIT

ION

10,6

87,8

38

Unr

estr

icte

d N

et P

ositi

on

Tot

al N

et P

ositi

on10

,687

,838

$

The

not

es to

the

finan

cial

sta

tem

ents

are

an

inte

gral

par

t of t

his

stat

emen

t.

27

EXH

IBIT

D-2

SAN

AN

TON

IO IN

DEP

END

ENT

SCH

OO

L D

ISTR

ICT

STA

TEM

ENT

OF

REVE

NU

ES, E

XPE

NSE

S, A

ND

CH

AN

GES

IN F

UN

D N

ET P

OSI

TIO

NPR

OPR

IETA

RY F

UN

DS

FOR

THE

YEA

R EN

DED

JUN

E 30

, 201

9

Tot

alIn

tern

alSe

rvic

e Fu

nds

Gov

ernm

enta

l A

ctiv

itie

s -

OPE

RATI

NG

REVE

NU

ES:

52,8

69,0

61

Loca

l and

Inte

rmed

iate

Sou

rces

$

Tota

l Ope

ratin

g Re

venu

es52

,869

,061

OPE

RATI

NG

EXPE

NSE

S:45

0,00

6 Pa

yrol

l Cos

ts6,

072,

883

Prof

essi

onal

and

Con

tract

ed S

ervi

ces

2,84

3 Su

pplie

s an

d M

ater

ials

47,6

79,7

70

Oth

er O

pera

ting

Cost

s

Tota

l Ope

ratin

g Ex

pens

es54

,205

,502

Inco

me

(Los

s) B

efor

e Tr

ansf

ers

(1,3

36,4

41)

251,

000

Tran

sfer

In(2

51,0

00)

Tran

sfer

s O

ut

Chan

ge in

Net

Pos

ition

Tota

l Net

Pos

ition

-Ju

ly 1

(Beg

inni

ng)

Tota

l Net

Pos

ition

-Ju

ne 3

0 (E

ndin

g)

(1,3

36,4

41)

12,0

24,2

79

$10

,687

,838

The

note

s to

the

finan

cial

sta

tem

ents

are

an

inte

gral

par

t of t

his

stat

emen

t.

28

EXH

IBIT

D-3

SAN

AN

TON

IO IN

DEP

END

ENT

SCH

OO

L D

ISTR

ICT

STA

TEM

ENT

OF

CASH

FLO

WS

FOR

THE

YEA

R EN

DED

JUN

E 30

, 201

9PR

OPR

IETA

RY F

UN

DS

Tot

alIn

tern

alSe

rvic

e Fu

nds

Gov

ernm

enta

l A

ctiv

itie

s -

Cash

Flo

ws

from

Ope

ratin

g A

ctiv

ities

:52

,869

,061

Ca

sh R

ecei

ved

from

Use

r Cha

rges

$(4

50,0

06)

Cash

Pay

men

ts to

Em

ploy

ees

for S

ervi

ces

(56,

282,

500)

Cash

Pay

men

ts fo

r Ins

uran

ce C

laim

s

(3,8

63,4

45)

Net

Cas

h U

sed

for O

pera

ting

Act

iviti

esCa

sh F

low

s fro

m N

on-C

apita

l Fin

anci

ng A

ctiv

ities

:25

1,00

0 Tr

ansf

er In

from

Den

tal F

und

(251

,000

)Tr

ansf

er O

ut to

Med

ical

Fun

d

-

N

et C

ash

Prov

ided

by

Non

-Cap

ital

Fina

ncin

g A

ctiv

ities

Net

Dec

reas

e in

Cas

h an

d Ca

sh E

quiv

alen

ts(3

,863

,445

)Ca

sh a

nd C

ash

Equi

vale

nts

at B

egin

ning

of Y

ear

18,8

21,9

89

Cash

and

Cas

h Eq

uiva

lent

s at

End

of Y

ear

14,9

58,5

44

$

Ope

ratin

g In

com

e (L

oss)

:$

Reco

ncili

atio

n of

Ope

ratin

g In

com

e (L

oss)

to N

et C

ash

Use

d fo

r Ope

ratin

g A

ctiv

ities

:(1

,336

,441

)

Ass

ets

and

Liab

ilitie

s:Ef

fect

of I

ncre

ases

and

Dec

reas

es in

Cur

rent

(1,6

67,8

27)

Incr

ease

in R

ecei

vabl

es50

1,23

4 D

ecre

ase

in D

ue fr

om O

ther

Fun

ds33

8,12

9 In

crea

se in

Acc

ount

s Pa

yabl

e(4

79,3

75)

Dec

reas

e in

Due

to O

ther

Fun

ds(1

,219

,165

)D

ecre

ase

in C

laim

s Pa

yabl

eN

et C

ash

Use

d fo

r Ope

ratin

gA

ctiv

ities

(3,8

63,4

45)

$

The

note

s to

the

finan

cial

sta

tem

ents

are

an

inte

gral

par

t of t

his

stat

emen

t.

29

EXH

IBIT

E-1

SAN

AN

TON

IO IN

DEP

END

ENT

SCH

OO

L D

ISTR

ICT

STA

TEM

ENT

OF

FID

UCI

ARY

ASS

ETS

AN

D L

IABI

LITI

ESFI

DU

CIA

RY F

UN

DS

JUN

E 30

, 201

9

Age

ncy

Fund

s

ASS

ETS

2,68

2,58

0 Ca

sh a

nd C

ash

Equi

vale

nts

$

Tota

l Ass

ets

2,68

2,58

0 $

LIA

BILI

TIES

2,68

2,58

0 D

ue to

Stu

dent

Gro

ups

$

Tota

l Lia

bilit

ies

2,68

2,58

0 $

The

note

s to

the

finan

cial

sta

tem

ents

are

an

inte

gral

par

t of t

his

stat

emen

t.

30

SAN

AN

TON

IO IN

DEP

END

ENT

SCH

OO

L D

ISTR

ICT

San

Ant

onio

, Tex

as

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATE

MEN

TS

For T

he Y

ear E

nded

June

30,

201

9

SUM

MA

RY

OF

SIG

NIF

ICA

NT

AC

CO

UN

TIN

G P

OL

ICIE

S

The

San

Ant

onio

Inde

pend

ent S

choo

l Dis

trict

(the

“D

istri

ct”)

is a

pub

lic e

duca

tiona

l age

ncy

with

a

seve

n m

embe

r B

oard

of

Trus

tees

(th

e “B

oard

”) e

lect

ed b

y re

gist

ered

vot

ers

of th

e D

istri

ct.

The

Dis

trict

pre

pare

s its

bas

ic f

inan

cial

sta

tem

ents

in c

onfo

rmity

with

gen

eral

ly a

ccep

ted

acco

untin

g pr

inci

ples

pro

mul

gate

d by

the

Gov

ernm

enta

l A

ccou

ntin

g St

anda

rds

Boa

rd (

GA

SB)

and

othe

r au

thor

itativ

e so

urce

s; a

nd, i

t com

plie

s w

ith th

e re

quire

men

ts o

f th

e ap

prop

riate

ver

sion

of

Texa

s Ed

ucat

ion

Age

ncy’

s Fin

anci

al A

ccou

ntab

ility

Sys

tem

Res

ourc

e G

uide

(the

“R

esou

rce

Gui

de”)

, and

th

e re

quire

men

ts o

f con

tract

s and

gra

nts o

f age

ncie

s fro

m w

hich

it re

ceiv

es fu

nds.

A.

REP

OR

TIN

G E

NTI

TY

The

Boa

rd o

f Tru

stee

s (th

e “B

oard

”) is

ele

cted

by

the

publ

ic a

nd it

has

the

auth

ority

to m

ake

deci

sion

s, ap

prov

e/di

sapp

rove

th

e ap

poin

tmen

t of

ad

min

istra

tors

an

d m

anag

ers,

and

sign

ifica

ntly

inf

luen

ce o

pera

tions

. T

he B

oard

als

o ha

s pr

imar

y ac

coun

tabi

lity

for

fisca

lm

atte

rs.

Ther

efor

e, th

e D

istri

ct is

a f

inan

cial

rep

ortin

g en

tity

as d

efin

ed b

y th

e G

ASB

in it

sSt

atem

ent N

o. 1

4, “

The

Fina

ncia

l Rep

ortin

g En

tity”

, and

it is

not

incl

uded

as

part

of a

ny o

ther

gove

rnm

enta

l rep

ortin

g en

tity.

Ble

nded

Com

pone

nt U

nits

. D

urin

g fis

cal y

ear

1996

, the

Dis

trict

app

rove

d th

e fo

rmat

ion

ofth

e SA

ISD

Pub

lic F

acili

ties

Cor

pora

tion

(PFC

). T

he P

FC i

s or

gani

zed

excl

usiv

ely

for

the

purp

oses

of b

enef

iting

and

acc

ompl

ishi

ng p

ublic

pur

pose

s of

the

Dis

trict

and

act

ing

on b

ehal

fof

the

Dis

trict

. Th

e PF

C m

ay b

e us

ed to

ass

ist i

n th

e fin

anci

ng, a

ccou

ntin

g, o

r ref

inan

cing

of

oblig

atio

ns o

f th

e D

istri

ct, a

nd in

pro

vidi

ng “

publ

ic f

acili

ties”

to p

urch

ase

oblig

atio

ns o

f th

eD

istri

ct, a

nd to

incu

r ob

ligat

ions

issu

ed o

r in

curre

d in

acc

orda

nce

with

exi

stin

g la

w.

Dur

ing

fisca

l ye

ar 2

019,

the

“B

oard

” ap

prov

ed t

he f

orm

atio

n of

the

SA

ISD

His

toric

Pre

serv

atio

nC

orpo

ratio

n (H

PC),

a Te

xas

nonp

rofit

cor

pora

tion,

org

aniz

ed e

xclu

sive

ly f

or t

he p

urpo

se o

ffa

cilit

atin

g re

habi

litat

ion

proj

ects

of

the

Dis

trict

’s c

ertif

ied

hist

oric

stru

ctur

es.

The

HPC

will

incu

r the

cos

ts re

late

d to

the

reha

bilit

atio

n pr

ojec

ts a

nd in

tend

s to

qual

ify fo

r and

rece

ive

Texa

shi

stor

ic t

ax c

redi

ts p

ursu

ant

to T

exas

Tax

Cod

e C

hapt

er 1

71,

Subc

hapt

er S

. Th

e bl

ende

dco

mpo

nent

uni

ts, a

lthou

gh le

gally

sep

arat

e en

titie

s, ar

e, in

sub

stan

ce, p

art o

f the

gov

ernm

ent’s

oper

atio

ns, a

nd t

here

fore

, at

June

30,

201

9, t

he D

istri

ct h

as r

efle

cted

the

PFC

and

HPC

as

blen

ded

com

pone

nt u

nits

. Th

e PF

C is

incl

uded

in th

e D

ebt S

ervi

ce F

und

tota

l and

the

HPC

isin

clud

ed a

s a sp

ecia

l rev

enue

fund

. The

refo

re, s

epar

ate

finan

cial

stat

emen

ts a

re n

ot is

sued

.

B.

GO

VER

NM

ENT-

WID

E A

ND

FU

ND

FIN

AN

CIA

L ST

ATE

MEN

TS

The

Stat

emen

t of

Net

Pos

ition

and

the

Stat

emen

t of

Act

iviti

es a

re g

over

nmen

t-wid

e fin

anci

alst

atem

ents

. Th

ese

stat

emen

ts re

port

info

rmat

ion

on a

ll of

the

Dis

trict

’s n

onfid

ucia

ry a

ctiv

ities

with

the

int

erfu

nd a

ctiv

ities

rem

oved

. G

over

nmen

t ac

tiviti

es i

nclu

de p

rogr

ams

supp

orte

d

31

SAN

AN

TON

IO IN

DEP

END

ENT

SCH

OO

L D

ISTR

ICT

San

Ant

onio

, Tex

as

N

OTE

S TO

TH

E FI

NA

NC

IAL

STA

TEM

ENTS

For T

he Y

ear E

nded

June

30,

201

9

prim

arily

by

prop

erty

tax

es,

stat

e fo

unda

tion

fund

s, gr

ants

and

oth

er i

nter

gove

rnm

enta

l re

venu

es.

Th

e ne

t po

sitio

n of

the

Dis

trict

is

segr

egat

ed i

nto

thre

e di

ffere

nt c

ateg

orie

s, to

inc

lude

: n

et

inve

stm

ent i

n ca

pita

l ass

ets,

rest

ricte

d ne

t pos

ition

, and

unr

estri

cted

net

pos

ition

. Th

e St

atem

ent o

f A

ctiv

ities

rep

orts

pro

gram

rev

enue

s an

d ge

nera

l rev

enue

s se

para

tely

. Th

e pr

ogra

m r

even

ues

sect

ion

of t

he s

tate

men

t de

mon

stra

tes

how

oth

er p

eopl

e or

ent

ities

tha

t pa

rtici

pate

in

prog

ram

s th

e D

istri

ct o

pera

tes

have

sha

red

in t

he p

aym

ent

of t

he d

irect

cos

ts.

The

“Cha

rges

for

Ser

vice

s” c

olum

n in

clud

es p

aym

ents

mad

e by

par

ties

that

pur

chas

e, u

se, o

r di

rect

ly b

enef

it fro

m g

oods

or s

ervi

ces

prov

ided

by

a gi

ven

func

tion

of th

e D

istri

ct.

Exam

ples

in

clud

e tu

ition

pai

d fo

r va

rious

act

iviti

es, s

choo

l lun

ch c

harg

es, e

tc.

The

“Ope

ratin

g G

rant

s an

d C

ontri

butio

ns”

colu

mn

incl

udes

am

ount

s pa

id b

y or

gani

zatio

ns o

utsi

de th

e D

istri

ct to

hel

p m

eet t

he o

pera

tiona

l req

uire

men

ts o

f a g

iven

func

tion.

An

exam

ple

incl

udes

gra

nts

unde

r the

El

emen

tary

and

Sec

onda

ry E

duca

tion

Act

. I

f a

reve

nue

is n

ot a

pro

gram

rev

enue

, it

is a

ge

nera

l rev

enue

and

use

d to

supp

ort a

ll of

the

Dis

trict

’s fu

nctio

ns (i

.e.,

prop

erty

taxe

s).

In

terfu

nd a

ctiv

ities

rep

orte

d in

clud

e lo

ans

and

trans

fers

bet

wee

n go

vern

men

tal

fund

s. T

he

loan

s ap

pear

as

due

to/ d

ue fr

om o

ther

fund

s on

the

Gov

ernm

enta

l Fun

ds B

alan

ce S

heet

. Th

e tra

nsfe

rs a

ppea

r as

othe

r fin

anci

ng s

ourc

es a

nd u

ses

on th

e G

over

nmen

tal F

unds

Sta

tem

ent o

f R

even

ues,

Expe

nditu

res,

and

Cha

nges

in F

und

Bala

nces

. A

ll in

terfu

nd tr

ansa

ctio

ns b

etw

een

gove

rnm

enta

l fun

ds a

re e

limin

ated

in th

e go

vern

men

t-wid

e st

atem

ents

.

Th

e fu

nd f

inan

cial

sta

tem

ents

rep

ort

on t

he f

inan

cial

con

ditio

n an

d re

sults

of

oper

atio

ns f

or

thre

e fu

nd c

ateg

orie

s –

gove

rnm

enta

l, pr

oprie

tary

, and

fid

ucia

ry.

Sinc

e th

e re

sour

ces

in th

e fid

ucia

ry fu

nds c

anno

t be

used

for D

istri

ct o

pera

tions

, the

y ar

e no

t inc

lude

d in

the

gove

rnm

ent-

wid

e fin

anci

al s

tate

men

ts.

The

Dis

trict

con

side

rs s

ome

gove

rnm

enta

l fun

ds m

ajor

and

repo

rts

thei

r fin

anci

al c

ondi

tion

and

resu

lts o

f op

erat

ions

in

a se

para

te c

olum

n in

the

gov

ernm

enta

l fu

nds f

inan

cial

stat

emen

ts.

Pr

oprie

tary

fun

ds d

istin

guis

h op

erat

ing

reve

nues

and

exp

ense

s fro

m n

on-o

pera

ting

item

s. O

pera

ting

reve

nues

and

exp

ense

s re

sult

from

pro

vidi

ng s

ervi

ces

in c

onne

ctio

n w

ith a

pr

oprie

tary

fun

d’s

prin

cipa

l on

goin

g op

erat

ions

. A

ll ot

her

reve

nues

and

exp

ense

s ar

e no

n-op

erat

ing.

C.

MEA

SUR

EMEN

T FO

CU

S, B

ASI

S O

F A

CC

OU

NTI

NG

, AN

D F

INA

NC

IAL

STA

TEM

ENT

PRES

ENTA

TIO

N

Th

e go

vern

men

t-wid

e fin

anci

al s

tate

men

ts u

se th

e ec

onom

ic re

sour

ces

mea

sure

men

t foc

us a

nd

the

accr

ual

basi

s of

acc

ount

ing,

as

do t

he p

ropr

ieta

ry f

und

finan

cial

sta

tem

ents

; th

e A

genc

y fu

nd is

cus

todi

al in

nat

ure

(ass

ets

equa

l lia

bilit

ies)

and

doe

s no

t inv

olve

the

mea

sure

men

t of

32

SAN

AN

TON

IO IN

DEP

END

ENT

SCH

OO

L D

ISTR

ICT

San

Ant

onio

, Tex

as

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATE

MEN

TS

For T

he Y

ear E

nded

June

30,

201

9

resu

lts o

f ope

ratio

ns.

With

the

econ

omic

reso

urce

s mea

sure

men

t foc

us, a

ll as

sets

and

liab

ilitie

s (w

heth

er c

urre

nt o

r no

ncur

rent

) as

soci

ated

with

the

oper

atio

ns o

f th

ese

fund

s ar

e in

clud

ed in

th

e St

atem

ent o

f Net

Pos

ition

. W

ith th

e ac

crua

l bas

is o

f acc

ount

ing,

reve

nue

is re

cogn

ized

in

the

acco

untin

g pe

riod

in w

hich

it is

ear

ned

and

beco

mes

mea

sura

ble

and

expe

nses

in th

e pe

riod

in w

hich

they

are

incu

rred

and

bec

ome

mea

sura

ble.

Pro

perty

taxe

s ar

e re

cogn

ized

as

reve

nues

in

the

year

for

whi

ch th

ey a

re le

vied

. G

rant

s an

d si

mila

r ite

ms

are

reco

gniz

ed a

s re

venu

e as

so

on a

s al

l el

igib

ility

req

uire

men

ts i

mpo

sed

by t

he p

rovi

der

have

bee

n m

et.

The

tot

al n

et

posi

tion

for

thes

e fu

nds

are

segr

egat

ed i

nto

net

inve

stm

ent

in c

apita

l as

sets

, re

stric

ted

net

posi

tion,

and

unr

estri

cted

net

pos

ition

.

Gov

ernm

enta

l fun

d fin

anci

al s

tate

men

ts u

se th

e cu

rrent

fina

ncia

l res

ourc

es m

easu

rem

ent f

ocus

an

d th

e m

odifi

ed a

ccru

al b

asis

of

acco

untin

g.

With

thi

s m

easu

rem

ent

focu

s, cu

rrent

ass

ets,

defe

rred

out

flow

of

reso

urce

s, cu

rrent

lia

bilit

ies,

defe

rred

inf

low

of

reso

urce

s, an

d fu

nd

bala

nces

are

inc

lude

d on

the

bal

ance

she

et. O

pera

ting

stat

emen

ts o

f th

ese

fund

s pr

esen

t ne

t in

crea

ses

and

decr

ease

s in

cur

rent

ass

ets

(i.e.

, re

venu

es a

nd o

ther

fin

anci

ng s

ourc

es a

nd

expe

nditu

res a

nd o

ther

fina

ncin

g us

es).

The

mod

ified

acc

rual

bas

is o

f ac

coun

ting

reco

gniz

es r

even

ues

as s

oon

as t

hey

are

both

m

easu

rabl

e an

d av

aila

ble.

R

even

ues

are

cons

ider

ed to

be

avai

labl

e w

hen

they

are

col

lect

ible

w

ithin

the

curre

nt p

erio

d or

soo

n en

ough

ther

eafte

r to

pay

liabi

litie

s of

the

curre

nt p

erio

d. F

or

this

pur

pose

, the

Dis

trict

con

side

rs re

venu

es to

be

avai

labl

e if

they

are

col

lect

ed w

ithin

60

days

of

the

end

of th

e cu

rren

t fis

cal p

erio

d. E

xpen

ditu

res

gene

rally

are

reco

rded

whe

n a

liabi

lity

is

incu

rred,

if

mea

sura

ble,

as

unde

r th

e ac

crua

l ba

sis

of a

ccou

ntin

g.

How

ever

, de

bt s

ervi

ce

expe

nditu

res,

as w

ell a

s ex

pend

iture

s re

late

d to

cla

ims

and

judg

men

ts ar

e re

cord

ed o

nly

whe

n pa

ymen

t is

due.

Th

e D

istri

ct a

ccru

es a

ccum

ulat

ed u

npai

d va

catio

n le

ave

whe

n ea

rned

by

the

empl

oyee

. A

liab

ility

for t

his a

mou

nt is

repo

rted

in th

e go

vern

men

t-wid

e fin

anci

al st

atem

ents

.

Rev

enue

s fro

m lo

cal s

ourc

es c

onsi

st p

rimar

ily o

f pr

oper

ty ta

xes.

Pro

perty

tax

reve

nues

and

re

venu

es r

ecei

ved

from

the

sta

te a

re r

ecog

nize

d un

der

the

susc

eptib

le-to

-acc

rual

con

cept

. M

isce

llane

ous

reve

nues

are

rec

orde

d as

rev

enue

whe

n re

ceiv

ed i

n ca

sh b

ecau

se t

hey

are

gene

rally

not

mea

sura

ble

until

act

ually

rece

ived

. In

vest

men

t ear

ning

s ar

e re

cord

ed a

s ea

rned

, si

nce

they

are

bot

h m

easu

rabl

e an

d av

aila

ble.

Gra

nt fu

nds

are

cons

ider

ed to

be

earn

ed to

the

exte

nt o

f exp

endi

ture

s m

ade

unde

r the

pro

visi

ons

of th

e gr

ant.

Acc

ordi

ngly

, whe

n su

ch fu

nds

are

rece

ived

, the

y ar

e re

cord

ed a

s un

earn

ed re

venu

es u

ntil

rela

ted

and

auth

oriz

ed e

xpen

ditu

res

have

bee

n m

ade.

If b

alan

ces h

ave

not b

een

expe

nded

by

the

end

of th

e pr

ojec

t per

iod,

gra

ntor

s so

met

imes

requ

ire th

e D

istri

ct to

refu

nd a

ll or

par

t of t

he u

nuse

d am

ount

.

The

Dis

trict

repo

rts th

e fo

llow

ing

maj

or g

over

nmen

tal f

unds

:

Gen

eral

Fun

d –

The

Gen

eral

Fun

d is

the

Dis

trict

’s p

rimar

y op

erat

ing

fund

. It

acco

unts

for a

ll fin

anci

al re

sour

ces

exce

pt th

ose

requ

ired

to b

e ac

coun

ted

for i

n an

othe

r fun

d. I

t is

a bu

dget

ed

33

SAN

AN

TON

IO IN

DEP

END

ENT

SCH

OO

L D

ISTR

ICT

San

Ant

onio

, Tex

as

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATE

MEN

TS

For T

he Y

ear E

nded

June

30,

201

9

fund

, and

any

fund

bal

ance

s ar

e co

nsid

ered

reso

urce

s av

aila

ble

for c

urre

nt o

pera

tions

. G

ener

al

Fund

prim

ary

reve

nue

sour

ces i

nclu

de p

rope

rty ta

xes a

nd st

ate

fund

ing.

Deb

t Ser

vice

Fun

d –

The

Dis

trict

acc

ount

s fo

r res

ourc

es a

ccum

ulat

ed a

nd p

aym

ents

mad

e fo

r pr

inci

pal

and

inte

rest

on

long

-term

gen

eral

obl

igat

ion

debt

of

gove

rnm

enta

l fu

nds

in a

Deb

t Se

rvic

e Fu

nd.

The

Deb

t Ser

vice

Fun

d is

a b

udge

ted

fund

who

se p

rimar

y re

venu

e so

urce

is

loca

l pr

oper

ty t

axes

lev

ied

spec

ifica

lly f

or d

ebt

serv

ice.

Th

e fu

nd b

alan

ce o

f th

is f

und

repr

esen

ts a

mou

nts

that

will

be

used

for

ret

irem

ent

of b

onds

and

pay

men

t of

int

eres

t in

the

fu

ture

.

Cap

ital

Proj

ects

Fun

d –

This

fun

d ac

coun

ts f

or p

roce

eds

from

sal

es o

f bo

nds

and

othe

r re

venu

es to

be

used

for a

utho

rized

con

stru

ctio

n pr

ojec

ts.

This

fund

is g

ener

ally

bud

gete

d on

a

proj

ect b

asis

.

Add

ition

ally

, the

Dis

trict

repo

rts th

e fo

llow

ing

fund

type

s:

Gov

ernm

enta

l Fun

ds:

Spec

ial R

even

ue F

unds

– T

he D

istri

ct a

ccou

nts

for r

esou

rces

rest

ricte

d to

, or c

omm

itted

for,

spec

ific

purp

oses

by

the

Dis

trict

or

a gr

anto

r in

a S

peci

al R

even

ue F

und.

M

ost

fede

ral

finan

cial

ass

ista

nce,

incl

udin

g th

e C

hild

Nut

ritio

n Pr

ogra

m, a

nd s

ome

stat

e fin

anci

al a

ssis

tanc

e is

acc

ount

ed f

or i

n a

Spec

ial

Rev

enue

Fun

d.

Som

etim

es u

nuse

d gr

ant

bala

nces

mus

t be

re

turn

ed to

gra

ntor

s at t

he c

lose

of s

peci

fied

proj

ect p

erio

ds.

Perm

anen

t Fun

d –

The

Dis

trict

use

s a P

erm

anen

t Fun

d to

acc

ount

for r

esou

rces

rece

ived

with

ex

plic

it do

nor

requ

irem

ents

tha

t th

e or

igin

al d

onat

ion

mus

t re

mai

n in

tact

and

onl

y ea

rnin

gs

from

the

dona

tion

may

be

used

for t

he p

urpo

se d

icta

ted

by th

e do

nor.

Prop

rieta

ry F

unds

:

Inte

rnal

Ser

vice

Fun

ds –

The

Dis

trict

use

s an

Inte

rnal

Ser

vice

Fun

d to

acc

ount

for r

even

ues

and

expe

nses

rela

ted

to th

e w

orke

rs c

ompe

nsat

ion,

med

ical

insu

ranc

e, a

nd d

enta

l ins

uran

ce.

Fidu

ciar

y Fu

nds:

Age

ncy

Fund

s –

The

Dist

rict a

ccou

nts

for r

esou

rces

hel

d fo

r oth

ers

in a

cus

todi

al c

apac

ity in

A

genc

y Fu

nds.

The

Dis

trict

acc

ount

s for

the

Stud

ent A

ctiv

ity F

und

as a

n A

genc

y Fu

nd.

34

SAN

AN

TON

IO IN

DEP

END

ENT

SCH

OO

L D

ISTR

ICT

San

Ant

onio

, Tex

as

N

OTE

S TO

TH

E FI

NA

NC

IAL

STA

TEM

ENTS

For T

he Y

ear E

nded

June

30,

201

9

D.

OTH

ER A

CC

OU

NTI

NG

PO

LIC

IES

1.

C

ash

and

Cas

h Eq

uiva

lent

s

The

Dis

trict

’s c

ash

and

cash

equ

ival

ents

are

con

side

red

to b

e ca

sh o

n ha

nd,

dem

and

depo

sits

, and

sho

rt-te

rm in

vest

men

ts w

ith o

rigin

al m

atur

ities

of t

hree

mon

ths

or le

ss fr

om

date

of a

cqui

sitio

n. I

nves

tmen

ts a

re re

porte

d at

fair

valu

e.

Th

e fu

nds

of th

e D

istri

ct m

ust b

e de

posi

ted

and

inve

sted

und

er th

e te

rms

of a

dep

osito

ry

cont

ract

, con

tent

s of

whi

ch a

re s

et o

ut i

n th

e D

epos

itory

Con

tract

Law

. Th

e de

posi

tory

ba

nk m

ust

pled

ge e

ligib

le s

ecur

ities

as

colla

tera

l fo

r th

e D

istri

ct’s

dep

osits

plu

s ac

crue

d in

tere

st le

ss F

DIC

insu

ranc

e of

the

Dis

trict

. In

acc

orda

nce

with

the

Publ

ic F

unds

Col

late

ral

Act

and

the

Tex

as E

duca

tion

Cod

e, t

he c

olla

tera

l m

argi

n co

vera

ge i

s at

102

% (

110%

if

pled

ging

elig

ible

dec

linin

g pr

inci

pal s

ecur

ities

).

For t

he p

urpo

ses

of th

e St

atem

ent o

f Cas

h Fl

ows

for t

he In

tern

al S

ervi

ce F

unds

, fun

ds h

eld

in t

he D

istri

ct’s

dep

osito

ry a

ccou

nts

and

in l

ocal

Gov

ernm

ent

Pool

s ar

e co

nsid

ered

cas

h an

d ca

sh e

quiv

alen

ts.

2.

R

ecei

vabl

es a

nd P

ayab

les

In

terfu

nd a

ctiv

ities

that

repr

esen

t len

ding

/bor

row

ing

arra

ngem

ents

whi

ch a

re o

utst

andi

ng a

t th

e en

d of

the

fisca

l yea

r are

refe

rred

to a

s “du

e to

/ due

from

oth

er fu

nds”

. Pr

oper

ty ta

xes a

re le

vied

by

Oct

ober

1 o

n th

e as

sess

ed v

alue

list

ed a

s of t

he p

rior J

anua

ry 1

fo

r all

real

and

bus

ines

s per

sona

l pro

perty

loca

ted

in th

e D

istric

t in

conf

orm

ity w

ith S

ubtit

le

E, T

exas

Pro

perty

Cod

e. T

axes

are

due

upo

n re

ceip

t of t

he ta

x bi

ll an

d ar

e de

linqu

ent i

f not

pa

id b

efor

e Fe

brua

ry 1

of t

he y

ear f

ollo

win

g th

e ye

ar in

whi

ch im

pose

d. O

n Ja

nuar

y 31

of

each

yea

r, a

tax

lien

atta

ches

to

prop

erty

to

secu

re p

aym

ent

of a

ll ta

xes,

pena

lties

, an

d in

tere

st u

ltim

atel

y im

pose

d.

Th

e ap

prai

sal a

nd r

ecor

ding

of

all p

rope

rty w

ithin

the

Dis

trict

is th

e re

spon

sibi

lity

of th

e B

exar

App

rais

al D

istri

ct (

BA

D).

The

BA

D i

s an

ind

epen

dent

gov

ernm

enta

l un

it w

ith a

bo

ard

of d

irect

ors

appo

inte

d by

the

taxi

ng ju

risdi

ctio

ns w

ithin

the

coun

ty a

nd fu

nded

from

as

sess

men

ts a

gain

st th

ose

taxi

ng ju

risdi

ctio

ns.

BA

D is

requ

ired

by la

w to

ass

ess

prop

erty

at

100

% o

f its

app

rais

ed v

alue

. R

eal p

rope

rty m

ust b

e re

appr

aise

d at

leas

t eve

ry tw

o ye

ars.

U

nder

cer

tain

circ

umst

ance

s, ta

xpay

ers

and

taxi

ng u

nits

, in

clud

ing

the

Dis

trict

, m

ay

chal

leng

e or

ders

of t

he B

AD

Rev

iew

Boa

rd th

roug

h va

rious

app

eals

and

, if n

eces

sary

, leg

al

actio

n.

35

SAN

AN

TON

IO IN

DEP

END

ENT

SCH

OO

L D

ISTR

ICT

San

Ant

onio

, Tex

as

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATE

MEN

TS

For T

he Y

ear E

nded

June

30,

201

9

Tax

colle

ctio

ns a

re p

rora

ted

betw

een

the

Gen

eral

Fun

d an

d D

ebt S

ervi

ce F

und

base

d on

the

tax

rate

app

rove

d by

the

Boa

rd.

For t

he p

erio

d en

ded

June

30,

201

9, th

e G

ener

al a

nd D

ebt

Serv

ice

fund

rate

s wer

e $1

.17

and

$.39

26, r

espe

ctiv

ely,

per

$10

0 of

ass

esse

d va

lue.

Del

inqu

ent t

axes

are

pro

rate

d be

twee

n m

aint

enan

ce a

nd d

ebt s

ervi

ce b

ased

on

rate

s ado

pted

fo

r th

e ye

ar o

f th

e le

vy.

Allo

wan

ces

for

unco

llect

ible

tax

rece

ivab

les

with

in th

e G

ener

al

and

Deb

t Se

rvic

e Fu

nds

are

base

d on

his

toric

al e

xper

ienc

e in

col

lect

ing

prop

erty

tax

es.

Unc

olle

ctib

le p

erso

nal

prop

erty

tax

es a

re p

erio

dica

lly r

evie

wed

and

writ

ten

off,

but

the

Dis

trict

is

proh

ibite

d fro

m w

ritin

g of

f re

al p

rope

rty t

axes

with

out

spec

ific

stat

utor

y au

thor

ity fr

om th

e Te

xas

Legi

slat

ure.

The

pro

perty

tax

rece

ivab

le a

llow

ance

is e

qual

to 1

pe

rcen

t of o

utst

andi

ng p

rope

rty ta

xes a

t Jun

e 30

, 201

9.

3.In

vent

orie

s

The

Dis

trict

rep

orts

inve

ntor

ies

of s

uppl

ies

on th

e ba

lanc

e sh

eet a

t wei

ghte

d av

erag

e co

stan

d th

ey i

nclu

de c

onsu

mab

le,

cust

odia

l, m

aint

enan

ce,

trans

porta

tion,

ins

truct

iona

l an

dof

fice

supp

lies,

and

athl

etic

ite

ms.

Inv

ento

ries

of g

over

nmen

tal

fund

s ar

e re

cord

ed a

sex

pend

iture

s w

hen

they

are

con

sum

ed r

athe

r th

an w

hen

purc

hase

d.

Inve

ntor

ies

of f

ood

com

mod

ities

are

rec

orde

d at

mar

ket v

alue

s su

pplie

d by

the

Texa

s D

epar

tmen

t of

Hum

anSe

rvic

es

and

reco

rded

as

in

vent

ory

and

unea

rned

re

venu

e w

hen

rece

ived

in

th

ego

vern

men

tal

fund

s. W

hen

requ

isiti

oned

, in

vent

ory

and

unea

rned

rev

enue

are

rel

ieve

d,ex

pend

iture

s are

cha

rged

, and

reve

nue

is re

cogn

ized

for a

n eq

ual a

mou

nt.

4.Pr

epay

men

ts

Cer

tain

pay

men

ts t

o ve

ndor

s/em

ploy

ees

refle

ct c

osts

app

licab

le t

o fu

ture

acc

ount

ing

perio

ds a

nd a

re r

ecor

ded

as p

repa

ymen

ts i

n bo

th g

over

nmen

t-wid

e an

d fu

nd f

inan

cial

stat

emen

ts.

The

amou

nt re

porte

d as

pre

paym

ent a

t Jun

e 30

, 201

9 w

ill b

e re

lieve

d us

ing

the

cons

umpt

ion

met

hod.

5.C

apita

l Ass

ets

Cap

ital

asse

ts,

whi

ch i

nclu

de l

and,

bui

ldin

gs a

nd i

mpr

ovem

ents

, fu

rnitu

re,

equi

pmen

t,ve

hicl

es, a

nd c

onst

ruct

ion

in p

rogr

ess

are

repo

rted

in th

e go

vern

men

tal a

ctiv

ities

col

umn

inth

e go

vern

men

t-wid

e fin

anci

al s

tate

men

ts.

Cap

ital

asse

ts a

re d

efin

ed b

y th

e D

istri

ct a

sas

sets

with

an

initi

al,

indi

vidu

al c

ost

of $

5,00

0 or

mor

e an

d an

est

imat

ed u

sefu

l lif

e in

exce

ss o

f one

yea

r for

dep

reci

atio

n pu

rpos

es.

Such

ass

ets

are

reco

rded

at h

isto

rical

cos

t or

estim

ated

his

toric

al c

ost i

f pur

chas

ed o

r con

stru

cted

or a

t acq

uisi

tion

valu

e w

hen

rece

ived

thro

ugh

a se

rvic

e co

nces

sion

arra

ngem

ent.

Don

ated

cap

ital

asse

ts a

re r

ecor

ded

atac

quis

ition

val

ue a

t the

dat

e of

don

atio

n. 36

SAN

AN

TON

IO IN

DEP

END

ENT

SCH

OO

L D

ISTR

ICT

San

Ant

onio

, Tex

as

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATE

MEN

TS

For T

he Y

ear E

nded

June

30,

201

9

The

cost

s of

nor

mal

mai

nten

ance

and

rep

airs

that

do

not a

dd to

the

valu

e of

the

asse

t or

mat

eria

lly e

xten

d as

set l

ives

are

not

cap

italiz

ed.

Whe

n as

sets

are

ret

ired

or o

ther

wis

e di

spos

ed o

f, th

e re

late

d co

sts

or o

ther

rec

orde

d am

ount

s are

rem

oved

.

Bui

ldin

gs,

furn

iture

, eq

uipm

ent

and

vehi

cles

of

the

Dis

trict

are

dep

reci

ated

usi

ng t

he

stra

ight

line

met

hod

over

the

follo

win

g es

timat

ed u

sefu

l liv

es:

Ass

et C

lass

Estim

ated

U

sefu

l Li

fe

Bui

ldin

gs a

nd Im

prov

emen

ts

40

Porta

ble

Bui

ldin

gs

20

Furn

iture

and

Equ

ipm

ent

10

All

Veh

icle

s 10

A

udio

Vis

ual E

quip

men

t 10

Pr

intin

g, D

uplic

atin

g &

Cop

ying

Equ

ipm

ent

5

Dat

a Pr

oces

sing

Equ

ipm

ent

3

6.C

ompe

nsat

ed A

bsen

ces

Vac

atio

n L

eave

– F

ull-t

ime

empl

oyee

s of

the

Dist

rict a

ccum

ulat

e va

catio

n le

ave

bene

fits

in v

aryi

ng a

mou

nts.

Em

ploy

ees

who

acc

umul

ate

vaca

tion

leav

e be

nefit

s ar

e re

quire

d to

take

thei

r va

catio

n be

nefit

s by

Oct

ober

31s

t of

the

subs

eque

nt y

ear.

The

vac

atio

n le

ave

bala

nce

is re

flect

ed a

s a

curre

nt li

abili

ty in

the

Stat

emen

t of N

et P

ositi

on s

ince

em

ploy

ees

mus

t use

the

accu

mul

ated

leav

e in

the

follo

win

g fis

cal y

ear.

Stat

e L

eave

– U

nder

cur

rent

stat

e la

w, D

istri

ct e

mpl

oyee

s ear

n up

to fi

ve d

ays o

f lea

ve p

erye

ar a

t the

rat

e of

one

-hal

f w

orkd

ay f

or e

very

18

days

of

empl

oym

ent,

with

no

limit

onac

cum

ulat

ion.

St

ate

leav

e ba

lanc

es r

oll o

ver

year

afte

r ye

ar a

nd D

istri

ct e

mpl

oyee

s m

aytra

nsfe

r unu

sed

leav

e ba

lanc

es to

ano

ther

Tex

as sc

hool

dis

trict

.

Loc

al L

eave

– A

ll D

istric

t em

ploy

ees

earn

pai

d lo

cal l

eave

of

5-7

days

per

sch

ool y

ear,

depe

ndin

g on

the

num

ber

of d

ays

wor

ked.

Lo

cal

leav

e ac

cum

ulat

es w

ithou

t lim

it an

dba

lanc

es ro

ll ov

er fr

om y

ear t

o ye

ar.

Acc

umul

ated

stat

e an

d lo

cal l

eave

bal

ance

s are

not

pai

d up

on te

rmin

atio

n fro

m th

e D

istri

ct,

exce

pt t

hose

pai

d un

der

the

Acc

umul

ated

Lea

ve I

ncen

tive

Plan

(A

LIP)

. T

he p

lan

isav

aila

ble

to e

mpl

oyee

s mee

ting

certa

in e

ligib

ility

requ

irem

ents

.

37

SAN

AN

TON

IO IN

DEP

END

ENT

SCH

OO

L D

ISTR

ICT

San

Ant

onio

, Tex

as

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATE

MEN

TS

For T

he Y

ear E

nded

June

30,

201

9

7.Lo

ng-te

rm O

blig

atio

ns

In

the

gove

rnm

ent-w

ide

finan

cial

st

atem

ents

, lo

ng-te

rm

debt

an

d ot

her

long

-term

oblig

atio

ns a

re r

epor

ted

as li

abili

ties

in th

e St

atem

ent o

f N

et P

ositi

on.

It is

the

Dis

trict

’spo

licy

to re

cord

bon

d pr

emiu

ms a

nd d

isco

unts

as d

efer

red

cost

s and

am

ortiz

e th

em o

ver t

helif

e of

the

bond

s us

ing

the

effe

ctiv

e in

tere

st m

etho

d if

mat

eria

l or

stra

ight

line

whe

n no

tm

ater

ial.

Los

s on

ref

unde

d de

bt is

am

ortiz

ed o

ver

the

term

of

the

rela

ted

bond

usi

ng th

est

raig

ht li

ne m

etho

d.

The

bala

nce

of th

e lo

ss o

n re

fund

ed d

ebt i

s re

porte

d as

a d

efer

red

outfl

ow o

f res

ourc

es.

Bon

ds p

ayab

le a

re re

porte

d ne

t of t

he a

pplic

able

bon

d pr

emiu

ms a

nddi

scou

nts.

In th

e fu

nd f

inan

cial

sta

tem

ents

, gov

ernm

enta

l fu

nd ty

pes

reco

gniz

e bo

nd p

rem

ium

s an

ddi

scou

nts,

as w

ell a

s bo

nd is

suan

ce c

osts

, dur

ing

the

curr

ent p

erio

d.

The

face

am

ount

of

debt

issu

ed is

repo

rted

as o

ther

fina

ncin

g so

urce

s. P

rem

ium

s rec

eive

d on

deb

t iss

uanc

es a

rere

porte

d as

oth

er fi

nanc

ing

sour

ces

whi

le d

isco

unts

on

debt

issu

ance

s ar

e re

porte

d as

oth

erfin

anci

ng u

ses,

if an

y.

Issu

ance

cos

ts, w

heth

er o

r no

t with

held

fro

m th

e ac

tual

pro

ceed

sre

ceiv

ed, a

re re

porte

d as

deb

t ser

vice

exp

endi

ture

s.

8.Fu

nd B

alan

ce

In th

e fu

nd f

inan

cial

sta

tem

ents

, the

Dis

trict

use

s th

e fo

llow

ing

crite

ria w

hen

clas

sify

ing

fund

bal

ance

am

ount

s:

Non

spen

dabl

e –

amou

nts

not

in s

pend

able

for

m o

r th

at a

re l

egal

ly o

r co

ntra

ctua

llyea

rmar

ked

for a

spec

ific

use.

Exa

mpl

es in

clud

e in

vent

orie

s and

end

owm

ent p

rinci

pal.

Res

trict

ed –

am

ount

s th

at h

ave

been

leg

ally

sep

arat

ed f

or a

spe

cific

pur

pose

by

law

or

exte

rnal

fund

ing

sour

ce.

Exam

ples

incl

ude

gran

ts, c

apita

l acq

uisi

tions

, and

long

-term

deb

t.

Com

mitt

ed –

am

ount

s th

at c

an o

nly

be s

et a

side

for

a s

peci

fic p

urpo

se b

y th

e D

istri

ct’s

high

est l

evel

of d

ecis

ion-

mak

ing

auth

ority

, the

Boa

rd, t

hrou

gh fo

rmal

act

ion

by a

dopt

ing

are

solu

tion.

Thi

s B

oard

act

ion

to c

omm

it fu

nds

mus

t occ

ur p

rior t

o fis

cal y

ear e

nd a

nd c

anon

ly b

e m

odifi

ed o

r re

mov

ed t

hrou

gh B

oard

res

olut

ion.

Ex

ampl

es i

nclu

de c

apita

lex

pend

iture

s, se

lf in

sura

nce,

and

cam

pus a

ctiv

ity fu

nds.

Ass

igne

d –

amou

nts

that

do

not r

equi

re B

oard

app

rova

l but

are

inte

nded

to b

e us

ed f

or a

spec

ific

purp

ose.

As

esta

blis

hed

by th

e D

istri

ct’s

fund

bal

ance

pol

icy,

the

Supe

rinte

nden

tor

Ass

ocia

te S

uper

inte

nden

t, Fi

nanc

e Se

rvic

es a

nd B

usin

ess

Ope

ratio

ns i

s au

thor

ized

to

assi

gn a

mou

nts

for

a sp

ecifi

c pu

rpos

e.

Thes

e am

ount

s do

not

mee

t th

e cr

iteria

to

becl

assi

fied

as re

stric

ted

or c

omm

itted

.

38

SAN

AN

TON

IO IN

DEP

END

ENT

SCH

OO

L D

ISTR

ICT

San

Ant

onio

, Tex

as

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATE

MEN

TS

For T

he Y

ear E

nded

June

30,

201

9

Una

ssig

ned

– re

sidu

al a

mou

nt i

n th

e G

ener

al F

und

that

is

avai

labl

e to

fin

ance

ope

ratin

g ex

pend

iture

s. I

n ot

her

fund

s, th

is c

lass

ifica

tion

is u

sed

only

to

repo

rt a

defic

it ba

lanc

e re

sulti

ng fr

om o

ver-s

pend

ing

for s

peci

fic p

urpo

ses

for w

hich

am

ount

s ha

d be

en re

stric

ted,

co

mm

itted

, or

ass

igne

d, a

s ap

plic

able

. T

he D

istri

ct’s

pol

icy

is t

o m

aint

ain

a m

inim

um

thre

shol

d of

10%

of

the

prio

r ye

ar’s

exp

endi

ture

s in

una

ssig

ned

fund

bal

ance

for

the

G

ener

al F

und.

Th

e D

istri

ct’s

una

ssig

ned

fund

bal

ance

am

ount

at

June

30,

201

9 is

$8

8,84

6,77

7 w

hich

exc

eeds

the

requ

ired

min

imum

am

ount

of $

48,6

33,7

76.

9.Sp

endi

ng O

rder

Fund

bal

ance

am

ount

s th

at a

re r

estri

cted

, com

mitt

ed, o

r as

sign

ed a

re c

onsi

dere

d to

hav

ebe

en s

pent

whe

n an

exp

endi

ture

is in

curr

ed f

or th

e re

spec

tive

purp

ose.

If

an

expe

nditu

rein

curre

d m

eets

the

crite

ria f

or m

ore

than

one

fun

d ba

lanc

e ca

tego

ry, t

he D

istri

ct r

elie

ves

fund

bal

ance

in th

e fo

llow

ing

orde

r: re

stric

ted,

com

mitt

ed, a

ssig

ned,

and

then

una

ssig

ned.

10.

Dat

a C

ontro

l Cod

es

The

data

con

trol

code

s re

fer

to t

he a

ccou

nt c

ode

stru

ctur

e pr

escr

ibed

by

TEA

in

the

Res

ourc

e G

uide

. S

choo

l di

stric

ts ar

e re

quire

d to

dis

play

the

se c

odes

in

the

finan

cial

stat

emen

ts fi

led

with

TEA

in o

rder

to e

nsur

e ac

cura

cy in

bui

ldin

g a

stat

ewid

e da

ta b

ase

for

polic

y de

velo

pmen

t and

fund

ing

plan

s.

11.

Res

trict

ed/U

nres

trict

ed R

esou

rces

Und

er th

e te

rms

of g

rant

agr

eem

ents

, the

Dis

trict

fund

s ce

rtain

pro

gram

s by

a c

ombi

natio

nof

spec

ific

cost

-reim

burs

emen

t gra

nts a

nd g

ener

al re

venu

es.

Thus

, whe

n pr

ogra

m e

xpen

ses

are

incu

rred

, the

re a

re b

oth

rest

ricte

d an

d un

rest

ricte

d re

sour

ces

avai

labl

e to

fin

ance

the

prog

ram

. I

t is

the

Dis

trict

’s p

olic

y to

firs

t ap

ply

cost

-reim

burs

emen

t gr

ant

(rest

ricte

d)re

sour

ces t

o su

ch p

rogr

ams a

nd th

en g

ener

al re

venu

es.

12.

Estim

ates

The

prep

arat

ion

of fi

nanc

ial s

tate

men

ts in

con

form

ity w

ith G

AA

P re

quire

s m

anag

emen

t to

mak

e es

timat

es a

nd a

ssum

ptio

ns t

hat

affe

ct c

erta

in r

epor

t am

ount

s an

d di

sclo

sure

s.A

ccor

ding

ly, a

ctua

l res

ults

cou

ld d

iffer

from

thos

e es

timat

es.

13.

Indi

rect

Exp

ense

s

Scho

ol d

istri

cts

are

requ

ired

to re

port

all e

xpen

ses

by fu

nctio

n. A

ll ge

nera

l adm

inis

tratio

nan

d ot

her

inte

rgov

ernm

enta

l ex

pens

es r

epor

ted

in f

unct

ions

41

and

99, r

espe

ctiv

ely,

and

39

SAN

AN

TON

IO IN

DEP

END

ENT

SCH

OO

L D

ISTR

ICT

San

Ant

onio

, Tex

as

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATE

MEN

TS

For T

he Y

ear E

nded

June

30,

201

9

som

e da

ta p

roce

ssin

g se

rvic

e ex

pens

es re

porte

d in

func

tion

53 re

pres

ent i

ndire

ct e

xpen

ses

of o

ther

func

tions

.

14.

Arb

itrag

e Pa

yabl

e

The

Tax

Ref

orm

Act

of 1

986

enac

ted

sect

ion

148(

f) on

the

Inte

rnal

Rev

enue

Cod

e, re

latin

gto

arb

itrag

e re

bate

requ

irem

ents

, whi

ch g

ener

ally

pro

vide

s th

at in

ord

er fo

r int

eres

t on

any

issu

e of

obl

igat

ion

to b

e ex

clud

ed f

rom

gro

ss i

ncom

e (i.

e. t

ax e

xem

pt),

the

issu

er m

ust

reba

te to

the

Uni

ted

Stat

es th

e ex

cess

of t

he a

mou

nt e

arne

d on

inve

stm

ents

acq

uire

d fro

mbo

nd p

roce

eds

over

the

am

ount

whi

ch w

ould

hav

e be

en e

arne

d if

such

inv

estm

ents

had

been

inve

sted

at a

yie

ld e

qual

to th

e yi

eld

on th

e iss

ue.

This

am

ount

is d

eter

min

ed b

ased

on

curre

nt in

vest

men

t yie

lds

and

is s

ubje

ct to

cha

nge

prio

r to

the

due

date

of t

he re

bate

. Th

edu

e da

te o

f the

reba

te is

five

yea

rs fr

om th

e da

te o

f iss

ue.

The

Dis

trict

reco

rds t

he li

abili

ty,

whi

ch is

cur

rent

ly p

ayab

le, i

n th

e C

apita

l Pro

ject

s Fu

nd.

Ther

e w

as n

o ar

bitra

ge p

ayab

le a

tJu

ne 3

0, 2

019.

15.

Def

erre

d O

utflo

ws a

nd In

flow

s of R

esou

rces

Def

erre

d O

utflo

ws

of R

esou

rces

are

repo

rted

betw

een

the

asse

ts a

nd li

abili

ties

sect

ions

on

the

gove

rnm

ent-w

ide

Stat

emen

t of N

et P

ositi

on th

at re

pres

ent a

futu

re c

onsu

mpt

ion

of n

etpo

sitio

n.

The

Dis

trict

rep

orts

the

defe

rred

cha

rge

for

refu

ndin

g in

this

cat

egor

y, w

hich

isth

e di

ffere

nce

betw

een

the

carr

ying

val

ue o

f ref

unde

d de

bt a

nd it

s re

acqu

isiti

on p

rice.

The

unam

ortiz

ed b

alan

ce a

s of

Jun

e 30

, 20

19 i

s $6

,749

,623

. T

he D

istri

ct a

lso

repo

rts$1

11,0

55,2

28 o

f pe

nsio

n an

d O

PEB

cos

ts t

o be

am

ortiz

ed i

n fu

ture

per

iods

. T

he t

otal

defe

rred

out

flow

s in

the

gove

rnm

ent-w

ide

finan

cial

sta

tem

ents

is $

117,

804,

851

at J

une

30,

2019

to b

e re

cogn

ized

in fu

ture

per

iods

.

Def

erre

d In

flow

s of

Res

ourc

es a

re r

epor

ted

betw

een

the

liabi

litie

s an

d fu

nd b

alan

ces

sect

ions

on

the

gove

rnm

enta

l fu

nds

Bal

ance

She

et.

Def

erre

d In

flow

s of

Res

ourc

esre

pres

ent

an a

cqui

sitio

n of

net

pos

ition

tha

t ap

plie

s to

a f

utur

e pe

riod

and

will

not

be

reco

gniz

ed u

ntil

then

. Th

e D

istri

ct r

epor

ts u

nava

ilabl

e re

venu

e fo

r pr

oper

ty ta

xes

in th

isca

tego

ry w

hich

is $

19,4

93,0

95 a

t Jun

e 30

, 201

9. T

his

rela

tes

to u

ncol

lect

ed p

rope

rty ta

xes

less

the

amou

nt fo

r dou

btfu

l acc

ount

s.

The

defe

rred

inflo

ws

of re

sour

ces

repo

rted

in th

e go

vern

men

t-wid

e fin

anci

al s

tate

men

ts is

$93,

663,

368

at J

une

30, 2

019

and

is c

ompr

ised

of c

hang

es in

resu

lts a

nd a

ssum

ptio

ns fr

ompe

nsio

n an

d O

PEB

act

ivity

that

will

be

amor

tized

in su

bseq

uent

yea

rs.

40

SAN

AN

TON

IO IN

DEP

END

ENT

SCH

OO

L D

ISTR

ICT

San

Ant

onio

, Tex

as

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATE

MEN

TS

For T

he Y

ear E

nded

June

30,

201

9

16.

Inve

stm

ents

At

June

30,

201

9, t

he D

istri

ct’s

cur

rent

inv

estm

ents

are

com

pris

ed o

f lo

cal

gove

rnm

ent

inve

stm

ent p

ools

and

mon

ey m

arke

t fun

ds.

The

inve

stm

ent p

ools

and

mon

ey m

arke

t fun

dsar

e re

porte

d as

cas

h an

d ca

sh e

quiv

alen

ts.

The

Dis

trict

’s in

vest

men

ts in

pub

lic fu

nds i

nves

tmen

t poo

ls in

clud

e th

ose

with

Tex

as L

ocal

Gov

ernm

ent

Inve

stm

ent

Pool

(T

exPo

ol),

Texa

s Sh

ort

Term

A

sset

R

eser

ve

Fund

(Tex

STA

R),

Texa

s Ter

m L

ocal

Gov

ernm

ent I

nves

tmen

t Fun

d (T

exas

Ter

m),

and

Lone

Sta

rIn

vest

men

t Po

ol

(Lon

e St

ar).

Th

e po

ols

wer

e cr

eate

d pu

rsua

nt

to

the

Inte

rloca

lC

oope

ratio

n A

ct,

Cha

pter

791

, of

the

Tex

as G

over

nmen

t C

ode

and

are

subj

ect

to t

hepr

ovis

ions

of

the

Publ

ic F

unds

Inv

estm

ent

Act

, Cha

pter

225

6, o

f th

e Te

xas

Gov

ernm

ent

Cod

e. T

he p

ools

ope

rate

in a

man

ner c

onsi

sten

t with

the

SEC

’s R

ule

2a7

of th

e In

vest

men

tC

ompa

ny A

ct o

f 194

0. T

he p

ools

use

am

ortiz

ed c

ost r

athe

r tha

n fa

ir m

arke

t val

ue to

repo

rtne

t pos

ition

to c

ompu

te s

hare

pric

es.

Acc

ordi

ngly

, the

fair

valu

e of

the

Dis

trict

’s p

ositi

onin

the

se p

ools

is

the

sam

e as

the

val

ue o

f th

e po

ol s

hare

s. P

artic

ipat

ion

in t

he p

ools

is

volu

ntar

y.

The

Texa

s C

ompt

rolle

r of

Pub

lic A

ccou

nts

is th

e so

le o

ffice

r, di

rect

or a

nd s

hare

hold

er o

fth

e Te

xas

Trea

sury

Saf

ekee

ping

Tru

st c

ompa

ny, w

hich

is a

utho

rized

to o

pera

te T

exPo

ol.

Adm

inis

trativ

e an

d in

vest

men

t ser

vice

s are

pro

vide

d by

Fed

erat

ed In

vest

ors,

Inc.

, act

ing

onbe

half

of t

he T

exas

Tre

asur

y Sa

feke

epin

g Tr

ust

Com

pany

. I

n ad

ditio

n, t

he T

exPo

olA

dvis

ory

Boa

rd a

dvis

es o

n Te

xPoo

l’s I

nves

tmen

t Po

licy.

Th

is A

dvis

ory

Boa

rd i

sco

mpo

sed

equa

lly o

f par

ticip

ants

in T

exPo

ol a

nd o

ther

per

sons

who

do

not h

ave

a bu

sine

ssre

latio

nshi

p w

ith T

exPo

ol, a

nd w

ho a

re q

ualif

ied

to a

dvis

e Te

xPoo

l. F

inan

cial

info

rmat

ion

for T

exPo

ol c

an b

e ac

cess

ed o

n th

e in

tern

et (h

ttp://

ww

w.te

xpoo

l.com

).

TexS

TAR

is g

over

ned

by a

boa

rd o

f dire

ctor

s. J

.P. M

orga

n In

vest

men

t Man

agem

ent,

Inc.

acts

as

the

inve

stm

ent

man

ager

and

Firs

tSou

thw

est

prov

ides

par

ticip

ant

and

mar

ketin

gse

rvic

es.

Fi

nanc

ial

info

rmat

ion

for

TexS

TAR

ca

n be

ac

cess

ed

on

the

inte

rnet

(http

://w

ww

.texs

tar.o

rg).

Texa

sTER

M w

as c

reat

ed in

200

0 to

allo

w T

exas

loca

l gov

ernm

ents

and

sch

ool d

istri

cts

topo

ol t

heir

fund

s fo

r in

vest

men

t. T

exas

TER

M i

s di

rect

ed b

y an

Adv

isor

y B

oard

of

expe

rienc

ed lo

cal g

over

nmen

t offi

cial

s, fin

ance

dire

ctor

s an

d tre

asur

ers

and

is m

anag

ed b

ya

team

of i

ndus

try le

ader

s tha

t are

focu

sed

on p

rovi

ding

pro

fess

iona

l inv

estm

ent s

ervi

ces t

oin

vest

ors.

Fin

anci

al in

form

atio

n ca

n be

obt

aine

d on

the

inte

rnet

(http

://w

ww

.texa

ster

m.n

et)

or b

y ca

lling

1-8

66-8

39-3

76.

Lone

Sta

r is

adm

inis

tere

d an

d di

strib

uted

by

the

Texa

s A

ssoc

iatio

n of

Sch

ool

Boa

rds’

who

lly o

wne

d su

bsid

iary

, Firs

t Pub

lic.

Firs

t Pub

lic is

a r

egis

tere

d br

oker

-dea

ler

with

the

41

SAN

AN

TON

IO IN

DEP

END

ENT

SCH

OO

L D

ISTR

ICT

San

Ant

onio

, Tex

as

N

OTE

S TO

TH

E FI

NA

NC

IAL

STA

TEM

ENTS

For T

he Y

ear E

nded

June

30,

201

9

SEC

, th

e Fi

nanc

ial

Indu

stry

R

egul

ator

y A

utho

rity,

an

d th

e M

unic

ipal

Se

curit

ies

Rul

emak

ing

Boa

rd.

Lone

Sta

r is g

over

ned

by a

n el

even

-mem

ber B

oard

of T

rust

ees (

Boa

rd)

mad

e up

of

activ

e pa

rtici

pant

s in

the

pool

. Th

e B

oard

has

the

resp

onsi

bilit

y of

ado

ptin

g an

d m

onito

ring

com

plia

nce

with

the

inv

estm

ent

polic

y, a

ppoi

ntin

g in

vest

men

t of

ficer

s, ov

erse

eing

the

sel

ectio

n of

an

inve

stm

ent

advi

sor,

cust

odia

n, i

nves

tmen

t co

nsul

tant

, ad

min

istra

tor,

and

othe

r se

rvic

e pr

ovid

ers.

The

Boa

rd is

als

o re

spon

sibl

e fo

r m

onito

ring

the

perfo

rman

ce o

f the

poo

l. F

inan

cial

info

rmat

ion

for t

he p

ool c

an b

e ob

tain

ed b

y w

ritin

g to

Firs

t Pu

blic

at

1200

7 R

esea

rch

Blv

d.,

Aus

tin,

Texa

s 78

759

or b

y ca

lling

1-8

00-5

58-

8875

.

The

Dis

trict

is in

vest

ed in

J.P

. Mor

gan

U.S

. Gov

ernm

ent M

oney

Mar

ket F

und

(OG

VX

X)

man

aged

by

J.P. M

orga

n In

vest

men

t Man

agem

ent I

nc. (

the

“Fun

d”).

The

Fun

d is

a m

oney

m

arke

t mut

ual f

und,

regu

late

d pr

imar

ily u

nder

SEC

’s R

ule

2a7

of th

e In

vest

men

t Com

pany

A

ct o

f 194

0 (th

e “A

CT”

). T

he F

und

atte

mpt

s to

sta

biliz

e th

e ne

t ass

et v

alue

(“N

AV

”) o

f th

eir

shar

es a

t $1.

00 b

y va

luin

g th

e po

rtfol

io s

ecur

ities

usi

ng th

e am

ortiz

ed c

ost m

etho

d;

how

ever

, the

re is

no

guar

ante

e th

at th

e N

AV

will

rem

ain

at $

1.00

a s

hare

. Th

e Fu

nd is

as

sign

ed a

cus

ip n

umbe

r an

d a

NA

SDA

Q s

ymbo

l and

can

be

purc

hase

d an

d re

deem

ed o

n th

e N

ew Y

ork

Stoc

k Ex

chan

ge.

The

fund

s do

not c

harg

e a

front

-end

sale

s cha

rge.

Th

e D

istri

ct r

epor

ts c

erta

in i

nves

tmen

ts a

t am

ortiz

ed c

ost

cons

iste

nt w

ith G

ASB

31

Acco

untin

g fo

r C

erta

in I

nves

tmen

ts a

nd E

xter

nal

Inve

stm

ent

Pool

s an

d G

ASB

72,

Fai

r Va

lue

Mea

sure

men

t and

App

licat

ion.

Th

e ob

ject

ives

of G

ASB

72

are

to im

prov

e fin

anci

al re

porti

ng b

y cl

arify

ing

the

defin

ition

of

fair

valu

e fo

r fin

anci

al re

porti

ng p

urpo

ses,

esta

blis

hing

gen

eral

prin

cipl

es fo

r mea

surin

g fa

ir va

lue,

pro

vidi

ng a

dditi

onal

fair

valu

e ap

plic

atio

n gu

idan

ce, a

nd e

nhan

cing

dis

clos

ures

ar

ound

fair

valu

e m

easu

rem

ents

.

17.

Pens

ions

Th

e fid

ucia

ry n

et p

ositi

on o

f th

e Te

ache

r R

etire

men

t Sy

stem

of

Texa

s (T

RS)

has

bee

n de

term

ined

usi

ng th

e flo

w o

f eco

nom

ic re

sour

ces

mea

sure

men

t foc

us a

nd fu

ll ac

crua

l bas

is

of a

ccou

ntin

g. T

his

accr

ual b

asis

was

als

o us

ed fo

r pur

pose

s of

mea

surin

g th

e ne

t pen

sion

lia

bilit

y, d

efer

red

outfl

ows

of r

esou

rces

and

def

erre

d in

flow

s of

res

ourc

es r

elat

ed t

o pe

nsio

ns,

pens

ion

expe

nse,

an

d in

form

atio

n ab

out

asse

ts,

liabi

litie

s, an

d ad

ditio

ns

to/d

educ

tion

from

TR

S’s

fiduc

iary

net

pos

ition

. B

enef

it pa

ymen

ts (

incl

udin

g re

fund

s of

em

ploy

ee c

ontri

butio

ns)

are

reco

gniz

ed w

hen

due

and

paya

ble

in a

ccor

danc

e w

ith t

he

bene

fit te

rms.

Inve

stm

ents

are

repo

rted

at fa

ir va

lue.

42

SAN

AN

TON

IO IN

DEP

END

ENT

SCH

OO

L D

ISTR

ICT

San

Ant

onio

, Tex

as

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATE

MEN

TS

For T

he Y

ear E

nded

June

30,

201

9

18.

Oth

er P

ost E

mpl

oym

ent B

enef

its

The

fiduc

iary

net

pos

ition

of

the

Teac

her

Ret

irem

ent

Syst

em o

f Te

xas

(TR

S) T

RS

Car

ePl

an h

as b

een

dete

rmin

ed u

sing

the

flow

of

econ

omic

res

ourc

es m

easu

rem

ent f

ocus

and

full

accr

ual b

asis

of a

ccou

ntin

g in

acc

orda

nce

with

GA

SB 7

5 an

d is

the

sam

e ba

sis u

sed

byth

e Pl

an. T

his i

nclu

des f

or p

urpo

ses o

f mea

surin

g th

e ne

t OPE

B li

abili

ty, d

efer

red

outfl

ows

of r

esou

rces

and

def

erre

d in

flow

of

reso

urce

s re

late

d to

oth

er p

ost-e

mpl

oym

ent b

enef

its,

OPE

B e

xpen

se, a

nd in

form

atio

n ab

out a

sset

s, lia

bilit

ies

and

addi

tions

to/d

educ

tions

fro

mTR

S C

are’

s fid

ucia

ry n

et p

ositi

on.

Ben

efit

paym

ents

are

reco

gniz

ed w

hen

due

and

paya

ble

in a

ccor

danc

e w

ith th

e be

nefit

term

s. T

here

are

no

inve

stm

ents

as

this

is a

pay

-as-

you-

gopl

an a

nd a

ll ca

sh is

hel

d in

a c

ash

acco

unt.

I.ST

EW

AR

DSH

IP, C

OM

PLIA

NC

E, A

ND

AC

CO

UN

TA

BIL

ITY

A.

BU

DG

ETA

RY

INFO

RM

ATI

ON

The

Boa

rd a

dopt

s an

“ap

prop

riate

d bu

dget

” on

a b

asis

con

sist

ent

with

gen

eral

ly a

ccep

ted

acco

untin

g pr

inci

ples

for

the

Gen

eral

Fun

d, D

ebt S

ervi

ce F

und

and

Chi

ld N

utrit

ion

Prog

ram

Fund

(whi

ch is

repo

rted

with

the

Spec

ial R

even

ue F

unds

). T

he D

istri

ct is

requ

ired

to p

rese

ntth

e or

igin

al a

nd th

e fin

al a

men

ded

budg

ets

for

reve

nues

and

exp

endi

ture

s co

mpa

red

to a

ctua

lre

venu

es a

nd e

xpen

ditu

res

for t

hese

thre

e fu

nds.

The

Gen

eral

Fun

d B

udge

t rep

ort i

s pr

esen

ted

in E

xhib

it G

-1 a

nd th

e C

hild

Nut

ritio

n Pr

ogra

m F

und

Bud

get a

nd D

ebt S

ervi

ce F

und

Bud

get

repo

rts a

re p

rese

nted

in E

xhib

its J-

4 an

d J-

5, re

spec

tivel

y.

The

follo

win

g pr

oced

ures

are

follo

wed

in e

stab

lishi

ng th

e bu

dget

ary

data

refle

cted

in th

e fu

ndfin

anci

al st

atem

ents

:

Prio

r to

Jun

e 20

th, t

he D

istri

ct p

repa

red

a bu

dget

bas

ed o

n th

e bu

dget

ing

conc

epts

for

the

subs

eque

nt f

isca

l ye

ar.

The

ope

ratin

g bu

dget

inc

lude

d pr

opos

ed e

xpen

ditu

res

and

the

mea

ns o

f fin

anci

ng th

em.

Afte

r se

vera

l bud

get w

orks

hops

with

the

Boa

rd, a

mee

ting

was

cal

led

for

the

purp

ose

of

adop

ting

the

prop

osed

bud

get.

At

leas

t te

n da

ys, b

ut n

ot m

ore

than

30

days

, of

publ

ic

notic

e of

the

mee

ting

is re

quire

d.

A s

umm

ary

of t

he p

ropo

sed

budg

et w

as p

oste

d on

the

Dis

trict

’s w

ebsi

te.

The

bud

get

sum

mar

y in

clud

ed a

com

paris

on t

o th

e pr

evio

us y

ear’s

act

ual

spen

ding

and

inf

orm

atio

n re

latin

g to

per

-stu

dent

and

agg

rega

te s

pend

ing

on in

stru

ctio

n, in

stru

ctio

nal s

uppo

rt, c

entra

l ad

min

istra

tion,

dis

trict

ope

ratio

ns, d

ebt s

ervi

ce, a

nd a

ny o

ther

cat

egor

y de

sign

ated

by

the

com

mis

sion

er.

43

SAN

AN

TON

IO IN

DEP

END

ENT

SCH

OO

L D

ISTR

ICT

San

Ant

onio

, Tex

as

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATE

MEN

TS

For T

he Y

ear E

nded

June

30,

201

9

No

late

r tha

n Ju

ne 3

0th, t

he B

oard

ado

pted

the

budg

et fo

r the

Gen

eral

Fun

d, D

ebt S

ervi

ce

Fund

and

Chi

ld N

utrit

ion

Prog

ram

Fun

d.

The

adop

ted

budg

et w

as p

oste

d on

the

Dis

trict

’s w

ebsi

te,

whe

re i

t w

ill b

e pr

omin

ently

di

spla

yed

until

the

third

ann

iver

sary

of t

he d

ate

the

budg

et w

as a

dopt

ed.

Afte

r th

e bu

dget

for

the

abov

e lis

ted

fund

s w

as a

ppro

ved,

any

am

endm

ent t

hat c

ause

d an

in

crea

se o

r de

crea

se in

a f

und

or f

unct

iona

l spe

ndin

g ca

tego

ry, o

r to

tal

reve

nue

or o

ther

re

sour

ces

obje

ct c

ateg

ory,

requ

ired

Boa

rd a

ppro

val.

The

se a

men

dmen

ts w

ere

pres

ente

d to

th

e B

oard

at

its r

egul

ar m

onth

ly m

eetin

g an

d w

ere

refle

cted

in

the

offic

ial

min

utes

. B

ecau

se

the

Dis

trict

ha

s a

polic

y of

ca

refu

l bu

dget

ary

cont

rol,

seve

ral

budg

etar

y am

endm

ents

wer

e ne

cess

ary

thro

ugho

ut th

e ye

ar.

Expe

nditu

re b

udge

ts a

re c

ontro

lled

at t

he e

xpen

ditu

re f

unct

iona

l an

d ob

ject

lev

el b

y th

e ap

prop

riate

bud

get m

anag

er (p

rinci

pals

, dep

artm

ent d

irect

or o

r are

a ad

min

istra

tor).

Bud

get

man

ager

s m

ay a

utho

rize

trans

fers

with

in f

unct

iona

l and

org

aniz

atio

nal c

ateg

orie

s th

at d

o no

t affe

ct th

e to

tal f

unct

iona

l and

org

aniz

atio

nal a

ppro

pria

tions

.

Encu

mbr

ance

acc

ount

ing,

und

er w

hich

pur

chas

e or

ders

, con

tract

s an

d ot

her

com

mitm

ents

ar

e re

cord

ed in

ord

er to

res

erve

that

por

tion

of th

e ap

plic

able

app

ropr

iatio

n, is

use

d in

all

gove

rnm

enta

l fun

ds.

Encu

mbr

ance

s ou

tsta

ndin

g at

yea

r-end

do

not c

onst

itute

exp

endi

ture

s or

lia

bilit

ies.

Enc

umbr

ance

s fo

r sp

ecifi

c pu

rpos

es f

or w

hich

am

ount

s ha

ve n

ot b

een

prev

ious

ly r

estri

cted

or

com

mitt

ed w

ere

incl

uded

with

in a

ssig

ned

fund

bal

ance

. S

ince

ap

prop

riatio

ns la

pse

at th

e en

d of

eac

h ye

ar, o

utst

andi

ng e

ncum

bran

ces

are

appr

opria

tely

pr

ovid

ed fo

r in

the

subs

eque

nt fi

scal

yea

r’s b

udge

t to

prov

ide

for t

he li

quid

atio

n of

the

prio

r co

mm

itmen

ts.

Out

stan

ding

enc

umbr

ance

s at

Jun

e 30

, 201

9 th

at w

ere

prov

ided

for

in th

e 20

19-2

020

budg

et w

ere

repo

rted

as fo

llow

s:

oTh

e G

ener

al F

und

had

$82,

135

in o

utst

andi

ng e

ncum

bran

ces,

all

of w

hich

was

repo

rted

as a

ssig

ned

fund

bal

ance

.o

The

Cap

ital P

roje

cts F

und

had

$512

,142

in o

utst

andi

ng e

ncum

bran

ces,

all o

f whi

chw

as r

epor

ted

as r

estri

cted

fun

d ba

lanc

e.

Thes

e en

cum

bran

ces

repr

esen

t th

eun

expe

nded

por

tion

of m

aint

enan

ce c

ontra

cts.

oTh

e O

ther

Fun

ds h

ad $

403,

979

in o

utst

andi

ng e

ncum

bran

ces,

all

of w

hich

was

repo

rted

as re

stric

ted

fund

bal

ance

.

44

SAN

AN

TON

IO IN

DEP

END

ENT

SCH

OO

L D

ISTR

ICT

San

Ant

onio

, Tex

as

N

OTE

S TO

TH

E FI

NA

NC

IAL

STA

TEM

ENTS

For T

he Y

ear E

nded

June

30,

201

9

III.

DE

TA

ILE

D N

OT

ES O

N A

LL

FU

ND

S

A.

DEP

OSI

TS A

ND

INV

ESTM

ENTS

Dep

osits

and

inve

stm

ents

are

com

pris

ed o

f the

follo

win

g:

Gov

ernm

enta

l Fun

ds

G

ener

al

Deb

t C

apita

l O

ther

Prop

rieta

ry

Gra

nd

Fu

nd

Serv

ice

Proj

ects

Fund

s To

tal

Fund

s To

tal

Cas

h an

d C

ash

Equi

vale

nts:

Dem

and

Acc

ount

s $

(54,

293,

143)

$

-

$

10,

443,

205

$ 3

5,51

5,79

3

$

(

8,33

4,14

5)

$ 1

2,15

4,45

8

$

3,8

20,3

13

Cas

h on

Han

d

-

-

-

780

78

0

-

780

Inve

stm

ent P

ools

102,

756,

598

55

,404

,059

16

6,45

6,69

4

4

,180

32

4,62

1,53

1

2,80

4,08

6

327,

425,

617

Mon

ey M

arke

t Fun

ds

20,7

05,3

56

1

0,35

7,73

6

12

,396

-

31,0

75,4

88

-

31

,075

,488

Tota

l $

69

,168

,811

$

65,7

61,7

95

$ 1

76,9

12,2

95

$ 3

5,52

0,75

3

$

3

47,3

63,6

54

$ 1

4,95

8,54

4

$ 36

2,32

2,19

8

A

genc

y Fu

nds

St

uden

t Act

ivity

Fun

ds

Cas

h an

d C

ash

Equi

vale

nts:

Dem

and

Acc

ount

s

$

(188

,589

)

Cas

h on

Han

d 12

5

TexP

ool

2,87

1,04

4

To

tal

$

2,6

82,5

80

At

June

30,

201

9, t

he c

arry

ing

amou

nt o

f th

e D

istri

ct’s

dep

osits

(ca

sh a

nd i

nter

est-b

earin

g sa

ving

s ac

coun

ts),

incl

udin

g ag

ency

fun

ds,

was

$3,

631,

724

and

the

bank

bal

ance

was

$7

,331

,723

. To

con

trol

cust

ody

risk,

in

acco

rdan

ce w

ith t

he D

istri

ct’s

pol

icy,

the

Dis

trict

’s

cash

dep

osits

at J

une

30, 2

019,

and

dur

ing

the

year

end

ed J

une

30, 2

019,

are

cov

ered

by

FDIC

in

sura

nce

or b

y pl

edge

d co

llate

ral h

eld

by th

e D

istri

ct’s

age

nt b

ank

in th

e D

istri

ct’s

nam

e.

Follo

win

g is

add

ition

al in

form

atio

n re

gard

ing

cove

rage

of

com

bine

d ba

lanc

es o

n th

e da

te o

f th

e hi

ghes

t dep

osit:

1.

N

ame

of B

ank:

Fro

st B

ank

2.

The

high

est c

ombi

ned

bala

nces

of c

ash

and

inte

rest

-bea

ring

savi

ngs

acco

unts

am

ount

ed to

$1

0,87

0,69

8 an

d oc

curre

d du

ring

the

mon

th o

f Dec

embe

r 201

8.

45

SAN

AN

TON

IO IN

DEP

END

ENT

SCH

OO

L D

ISTR

ICT

San

Ant

onio

, Tex

as

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATE

MEN

TS

For T

he Y

ear E

nded

June

30,

201

9

3.To

tal a

mou

nt o

f ple

dged

col

late

ral a

nd F

DIC

cov

erag

e at

the

time

of th

e hi

ghes

t com

bine

dba

lanc

e w

as $

15,4

28,5

48.

The

Pub

lic F

unds

Inv

estm

ent

Act

– G

over

nmen

t C

ode

Cha

pter

225

6 co

ntai

ns s

peci

fic

prov

isio

ns i

n th

e ar

eas

of i

nves

tmen

t pr

actic

es,

man

agem

ent

repo

rts a

nd e

stab

lishm

ent

of

appr

opria

te p

olic

ies.

Am

ong

othe

r th

ings

, it

requ

ires

the

Dis

trict

to

adop

t, im

plem

ent,

and

publ

iciz

e an

inve

stm

ent p

olic

y.

That

pol

icy

mus

t add

ress

the

follo

win

g ar

eas:

(1

) sa

fety

of

prin

cipa

l and

liqu

idity

, (2)

por

tfolio

div

ersi

ficat

ion,

(3)

allo

wab

le in

vest

men

ts, (

4) a

ccep

tabl

e ris

k le

vels

, (5)

exp

ecte

d ra

tes

of r

etur

n, (

6) m

axim

um a

llow

able

sta

ted

mat

urity

of

portf

olio

in

vest

men

ts,

(7)

max

imum

ave

rage

dol

lar-

wei

ghte

d m

atur

ity a

llow

ed b

ased

on

the

stat

ed

mat

urity

dat

e fo

r th

e po

rtfol

io,

(8)

inve

stm

ent

staf

f qu

ality

and

cap

abili

ties,

(9)

and

bid

solic

itatio

n pr

efer

ence

s fo

r ce

rtific

ates

of

depo

sit.

Sta

tute

s au

thor

ize

the

Dis

trict

to in

vest

in

(1)

oblig

atio

ns o

f th

e U

.S.

Trea

sury

, ce

rtain

U.S

. ag

enci

es,

and

the

Stat

e of

Tex

as;

(2)

certi

ficat

es o

f dep

osit,

(3) c

erta

in m

unic

ipal

sec

uriti

es, (

4) m

oney

mar

ket s

avin

gs a

ccou

nts,

(5)

repu

rcha

se a

gree

men

ts, (

6) b

anke

rs a

ccep

tanc

es, (

7) M

utua

l Fun

ds, (

8) I

nves

tmen

t poo

ls, (

9)gu

aran

teed

inv

estm

ent

cont

ract

s, (1

0) a

nd c

omm

on t

rust

fun

ds.

The

Act

als

o re

quire

s th

eD

istri

ct to

hav

e in

depe

nden

t aud

itors

per

form

test

pro

cedu

res r

elat

ed to

inve

stm

ent p

ract

ices

as

prov

ided

by

the

Act

. Th

e D

istri

ct b

elie

ves i

t is i

n su

bsta

ntia

l com

plia

nce

with

the

requ

irem

ents

of th

e A

ct a

nd w

ith lo

cal p

olic

ies.

As o

f Jun

e 30

, 201

9, th

e D

istri

ct, i

nclu

ding

age

ncy

fund

s, ha

d th

e fo

llow

ing

inve

stm

ents

:

Inve

stm

ent

Fair

Wei

ghte

d A

vera

ge

Val

ue

Mat

urity

(Day

s)

Rat

ings

Lo

ne S

tar I

nves

tmen

t Poo

l $

60,

431,

789

1 S&

P A

AA

Te

xPoo

l 67

,554

,628

1

S&P

AA

Am

Te

xSta

r 35

,853

,573

1

S&P

AA

Am

Te

xas T

erm

16

6,45

6,67

1 1

S&P

AA

Am

M

oney

Mar

ket M

utua

l Fun

ds

Mon

ey M

arke

t Por

tfolio

Fun

d

31,

075,

488

1 N

ot R

ated

To

tal

$ 36

1,37

2,14

9

Inte

rest

Rat

e R

isk

– A

s a

mea

ns o

f lim

iting

its

expo

sure

to

fair

valu

e lo

sses

aris

ing

from

ris

ing

inte

rest

rat

es, t

he D

istri

ct’s

inv

estm

ent

polic

y lim

its m

atur

ities

of

inve

stm

ents

to

two

year

s fro

m th

e da

te o

f pur

chas

e.

Cre

dit R

isk

– In

acc

orda

nce

with

the

Dis

trict

’s in

vest

men

t pol

icy,

inve

stm

ents

in in

vest

men

t po

ols

mus

t be

rate

d at

leas

t AA

A to

AA

A-m

or e

quiv

alen

t, an

d in

vest

men

ts in

obl

igat

ions

of

the

U.S

. gov

ernm

ent o

r its

age

ncie

s mus

t be

rate

d at

leas

t A o

r equ

ival

ent.

46

SAN

AN

TON

IO IN

DEP

END

ENT

SCH

OO

L D

ISTR

ICT

San

Ant

onio

, Tex

as

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATE

MEN

TS

For T

he Y

ear E

nded

June

30,

201

9

GA

SB 7

2 es

tabl

ishe

s ge

nera

l prin

cipl

es fo

r mea

surin

g fa

ir va

lue

and

stan

dard

s of

acc

ount

ing

and

finan

cial

repo

rting

for a

sset

s and

liab

ilitie

s mea

sure

d at

fair

valu

e. A

s def

ined

in G

ASB

72

para

grap

h 5,

fair

val

ue is

the

pric

e th

at w

ould

be

rece

ived

to s

ell a

n as

set o

r pai

d to

tran

sfer

a

liabi

lity

in a

n or

derly

tran

sact

ion

betw

een

mar

ket p

artic

ipan

ts a

s of t

he m

easu

rem

ent d

ate.

The

ob

ject

ive

of a

fair

valu

e is

to e

stim

ate

the

exit

pric

e of

ass

ets a

nd li

abili

ties.

GA

SB 7

2 pa

ragr

aph

18 s

tate

s th

at a

gov

ernm

ent

entit

y sh

ould

use

val

uatio

n te

chni

ques

co

nsis

tent

with

one

or m

ore

of th

e fo

llow

ing

appr

oach

es to

mea

surin

g fa

ir va

lue:

•M

arke

t app

roac

h –

uses

pric

es a

nd o

ther

rele

vant

dat

a de

rived

fro

m m

arke

t tra

nsac

tions

for i

dent

ical

or s

imila

r ass

ets,

liabi

litie

s, or

a g

roup

of a

sset

s and

liab

ilitie

s.

•C

ost

appr

oach

– r

efle

cts

the

amou

nt t

hat

wou

ld b

e re

quire

d cu

rren

tly t

o re

plac

e th

epr

esen

t ser

vice

cap

acity

of a

n as

set.

•In

com

e ap

proa

ch –

con

verts

fut

ure

amou

nts

to a

sin

gle

disc

ount

ed a

mou

nt.

The

fai

rva

lue

mea

sure

men

t w

ould

als

o re

flect

any

cur

rent

mar

ket

expe

ctat

ions

for

fut

ure

amou

nts.

As

outli

ned

in G

ASB

72,

inp

uts

refe

r br

oadl

y to

the

ass

umpt

ions

, or

par

amet

ers,

that

any

m

arke

t par

ticip

ant m

ight

use

whe

n pr

icin

g an

ass

et o

r lia

bilit

y, in

clud

ing

assu

mpt

ions

abo

ut

risk.

Inp

uts m

ay b

e ob

serv

able

or u

nobs

erva

ble.

Whe

n ap

plyi

ng v

alua

tion

tech

niqu

e(s)

one

of

the

thre

e in

puts

bel

ow c

an b

e us

ed to

bes

t rep

rese

nt fa

ir va

lue:

•Le

vel 1

– M

ost r

elia

ble

such

as

quot

ed p

rices

(una

djus

ted)

in a

ctiv

e m

arke

ts fo

r ide

ntic

alas

sets

or l

iabi

litie

s.

•Le

vel 2

– R

elia

ble

such

as q

uote

d pr

ices

for s

imila

r ass

ets f

or li

abili

ties,

quot

ed p

rices

for

iden

tical

or

sim

ilar

asse

ts o

r lia

bilit

ies

in m

arke

ts t

hat

are

not

activ

e, o

r ot

her

obse

rvab

les.

•Le

vel 3

– L

east

Rel

iabl

e su

ch a

s uno

bser

vabl

e in

puts

.

47

SAN

AN

TON

IO IN

DEP

END

ENT

SCH

OO

L D

ISTR

ICT

San

Ant

onio

, Tex

as

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATE

MEN

TS

For T

he Y

ear E

nded

June

30,

201

9

The

tabl

e be

low

illu

stra

tes t

he fa

ir va

lue

of th

e D

istri

ct’s

inve

stm

ents

at J

une

30, 2

019:

Investm

en

ts M

easu

red

at

Fair

Valu

e

($ in

millio

ns)

Fair

Val

ue M

easu

rem

ents

Usin

g Q

uote

d Pr

ices

in

Act

ive

Mar

kets

for

Iden

tical

A

sset

s

Sign

ifica

nt

Oth

er

Obs

erva

ble

Inpu

ts

Sign

ifica

nt

Uno

bser

vabl

e In

puts

6/

30/2

019

(Lev

el 1

) (L

evel

2)

(Lev

el 3

) In

vest

men

ts b

y fa

ir v

alue

leve

l

M

oney

Mar

ket F

unds

$

31

$

3

1 $

-

$

-

Tota

l Cas

h Eq

uiva

lent

s &

Inve

stmen

ts R

epor

ted

@

FMV

$

31

$

3

1 $

-

$

-

In a

dditi

on,

the

Dis

trict

has

fun

ds h

eld

in 2

a7 l

ike

exte

rnal

inv

estm

ent

pool

s va

lued

at

amor

tized

cos

t, in

the

amou

nt o

f $33

0,29

6,66

1 w

hich

incl

udes

$2,

871,

044

repo

rted

in A

genc

y Fu

nds.

48

SAN

AN

TON

IO IN

DEP

END

ENT

SCH

OO

L D

ISTR

ICT

San

Ant

onio

, Tex

as

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATE

MEN

TS

For T

he Y

ear E

nded

June

30,

201

9

B.

REC

EIV

AB

LES

Rec

eiva

bles

as

of J

une

30, 2

019,

for

the

Dis

trict

’s i

ndiv

idua

l m

ajor

fun

ds a

nd o

ther

fun

ds,

incl

udin

g th

e ap

plic

able

allo

wan

ces f

or u

ncol

lect

ible

acc

ount

s, ar

e as

follo

ws:

Thes

e am

ount

s are

exp

ecte

d to

be

colle

cted

with

in o

ne y

ear.

Del

inqu

ent p

rope

rty ta

xes m

ay b

e co

llect

ed o

ver s

ever

al y

ears

.

Maj

or F

unds

Deb

t O

ther

Tota

l

Gen

eral

Se

rvic

e G

over

nmen

tal

Fund

Fu

nd

Fund

s

Prop

erty

Tax

es -

Del

inqu

ent

$

24,

109,

692

$

7,40

8,11

8 $

-

$

31,5

17,8

10

Rec

eiva

bles

from

Oth

er G

over

nmen

ts 38

,699

,179

-

25,5

77,3

6464

,276

,543

Oth

er R

ecei

vabl

es

159,

294

-1,

472,

721

1,63

2,01

5

Gro

ss R

ecei

vabl

es

$

62,

968,

165

$

7,40

8,11

8 $

27,

050,

085

$ 9

7,42

6,36

8

Less

: A

llow

ance

for U

ncol

lect

ible

Tax

es

(241

,097

) (7

4,08

1)

-(3

15,1

78)

$

62,

727,

068

$

7,33

4,03

7 $

27,

050,

085

$ 9

7,11

1,19

0 To

tal R

ecei

vabl

es (N

et)

49

SAN

AN

TON

IO IN

DEP

END

ENT

SCH

OO

L D

ISTR

ICT

San

Ant

onio

, Tex

as

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATE

MEN

TS

For T

he Y

ear E

nded

June

30,

201

9

The

amou

nts

refle

cted

as

Rec

eiva

bles

fro

m O

ther

Gov

ernm

ents

abo

ve a

re c

ompr

ised

of

the

follo

win

g:

Rec

eiva

bles

for t

he M

edic

al In

sura

nce

Fund

tota

l $1,

697,

268

from

Exp

ress

Scr

ipts

Reb

ate

Prog

ram

in 1

st an

d 2nd

qua

rter.

C.

UN

EAR

NED

REV

ENU

E A

ND

DEF

ERR

ED IN

FLO

WS

Une

arne

d R

even

ues

Gov

ernm

enta

l fun

ds re

port

unea

rned

reve

nue

in c

onne

ctio

n w

ith re

ceiv

able

s fo

r rev

enue

s th

atar

e no

t con

side

red

to b

e av

aila

ble

to li

quid

ate

liabi

litie

s in

the

curre

nt p

erio

d.

Gov

ernm

enta

lfu

nds

also

sho

w u

near

ned

reve

nue

in c

onne

ctio

n w

ith r

esou

rces

that

hav

e be

en r

ecei

ved,

but

not y

et e

arne

d.

Maj

or F

unds

Gen

eral

Fu

nd

Oth

er

Gov

ernm

enta

l Fu

nds

Tota

l

Due

from

Sta

te A

genc

ies

$

37,6

75,5

28

$

3

78,8

41

$

38,

054,

369

Due

from

Fed

eral

Age

ncie

s 1,

021,

651

23,9

25,5

13

24,

947,

164

Due

from

Oth

er

Gov

ernm

ent A

genc

ies

2,0

00

1,27

3,01

0 1,

275,

010

Tota

l Due

from

Oth

er

Gov

ernm

ents

$

38

,699

,179

$

25,

577,

364

$

64,

276,

543

50

SAN

AN

TON

IO IN

DEP

END

ENT

SCH

OO

L D

ISTR

ICT

San

Ant

onio

, Tex

as

N

OTE

S TO

TH

E FI

NA

NC

IAL

STA

TEM

ENTS

For T

he Y

ear E

nded

June

30,

201

9

At J

une

30, 2

019,

une

arne

d re

venu

e re

porte

d in

the

gove

rnm

enta

l fun

ds w

as a

s fol

low

s:

The

Fede

ral F

ood

Com

mod

ities

am

ount

of $

415,

905

alon

g w

ith th

e A

dvan

ce F

undi

ng a

mou

nt

of $

3,31

7,62

8 to

tal $

3,73

3,53

3 an

d ar

e re

porte

d as

une

arne

d re

venu

e in

the

gove

rnm

ent-w

ide

Stat

emen

t of

Net

Pos

ition

. T

his

treat

men

t of

Fed

eral

Foo

d C

omm

oditi

es h

as t

he e

ffec

t of

re

duci

ng N

on S

pend

able

Fun

d ba

lanc

e of

inv

ento

ries

for

othe

r go

vern

men

tal

fund

s by

$4

15,9

05.

Def

erre

d In

flow

s A

s of

Jun

e 30

, 201

9, th

e un

avai

labl

e re

venu

e re

porte

d as

def

erre

d in

flow

s of

reso

urce

s in

the

gove

rnm

enta

l fun

ds w

ere

as fo

llow

s:

M

ajor

Fun

ds

G

ener

al

Fund

Deb

t Se

rvic

e Fu

nd

Tota

l U

nava

ilabl

e R

even

ue –

Pro

perty

Tax

es

$

15,0

85,6

93

$

4,4

07,4

02

$ 1

9,49

3,09

5 Th

e un

avai

labl

e re

venu

e of

$19

,493

,095

on

the

bala

nce

shee

t fo

r M

ajor

Fun

ds r

elat

es t

o un

colle

cted

pro

perty

tax

es,

less

the

allo

wan

ce f

or d

oubt

ful

acco

unts

. T

hese

are

sho

wn

as

defe

rred

inflo

ws o

f res

ourc

es o

n Ex

hibi

t C-1

per

GA

SB S

tate

men

t No.

65.

Maj

or F

und

Oth

er G

over

nmen

tal

D

ebt

Gen

eral

Ser

vice

Fu

nd

Fund

Fu

nds

Tota

l

Fede

ral F

ood

Com

mod

ities

$

-

$

-

$

4

15,9

05

$

41

5,90

5 A

dvan

ce F

undi

ng

2

0,55

0 2,

656,

826

640

,252

3,

317,

628

T

otal

$

2

0,55

0 $

2

,656

,826

$

1

,056

,157

$ 3

,733

,533

51

SAN

AN

TON

IO IN

DEP

END

ENT

SCH

OO

L D

ISTR

ICT

San

Ant

onio

, Tex

as

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATE

MEN

TS

For T

he Y

ear E

nded

June

30,

201

9

D.

DU

E TO

/ D

UE

FRO

M O

THER

FU

ND

S A

ND

TR

AN

SFER

S IN

/ O

UT

The

com

posi

tion

of a

mou

nts d

ue to

/from

oth

er fu

nds a

s of J

une

30, 2

019

is a

s fol

low

s:

Rec

eiva

ble

Paya

ble

Gen

eral

Fun

d:

Deb

t Ser

vice

Fun

d $

-$

1

,031

,465

O

ther

Fun

ds

19,6

27,8

13

- In

tern

al S

ervi

ce F

und

20,6

25

- To

tal G

ener

al F

und

19,6

48,4

38

1,03

1,46

5

Deb

t Ser

vice

Fun

d:

Gen

eral

Fun

d 1,

031,

465

-

Cap

ital P

roje

cts F

und:

O

ther

Fun

ds

9,00

7,51

5 1,

639,

896

Oth

er F

unds

:

G

ener

al F

und

19,

627,

813

Cap

ital P

roje

cts F

und

1,63

9,89

6 9,

007,

515

Tota

l Gov

ernm

enta

l Fun

ds

31,3

27,3

14

31,3

06,6

89

Inte

rnal

Ser

vice

Fun

ds:

Gen

eral

Fun

d -

20,6

25In

tern

al S

ervi

ce F

und

251,

000

251,

000

Tota

l Int

erna

l Ser

vice

Fun

ds

251,

000

271,

625

Tota

l Int

erfu

nd R

ecei

vabl

es a

nd P

ayab

les

$

3

1,57

8,31

4 $

3

1,57

8,31

4

Rec

eiva

bles

in

the

Gen

eral

Fun

d re

pres

ent

amou

nts

prov

ided

to

Spec

ial

Rev

enue

Fun

ds

pend

ing

reim

burs

emen

t fro

m g

rant

ors.

The

amou

nt d

ue t

o th

e D

ebt

Serv

ice

fund

are

fro

m

prop

erty

tax

col

lect

ions

to

be r

eim

burs

ed b

y th

e G

ener

al F

und.

The

am

ount

due

to

Cap

ital

Proj

ect F

unds

is fo

r the

His

toric

al P

rese

rvat

ion

Cor

pora

tion

to c

over

the

amou

nt s

pent

for t

he

fisca

l yea

r in

Oth

er F

unds

. Th

e am

ount

due

from

the

Inte

rnal

Ser

vice

Fun

d is

for J

une

med

ical

pa

yrol

l de

duct

ions

to

be r

eim

burs

ed t

o th

e G

ener

al F

und.

B

orro

win

g be

twee

n th

e In

tern

al

Serv

ice

Fund

s ar

e fo

r su

ppor

ting

cash

nee

ds.

Thes

e in

terfu

nd b

alan

ces

are

expe

cted

to

be

repa

id w

ithin

one

yea

r fro

m th

e da

te o

f the

fina

ncia

l sta

tem

ents

.

52

-

SAN

AN

TON

IO IN

DEP

END

ENT

SCH

OO

L D

ISTR

ICT

San

Ant

onio

, Tex

as

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATE

MEN

TS

For T

he Y

ear E

nded

June

30,

201

9

Tran

sfer

s dur

ing

the

year

end

ed Ju

ne 3

0, 2

019

wer

e as

follo

ws:

The

trans

fer

from

the

Gen

eral

Fun

d to

Oth

er G

over

nmen

tal

Fund

s w

as f

or s

ubsi

dizi

ng t

he

Chi

ld N

utrit

ion

Prog

ram

for m

eals

ser

ved

to s

tude

nts

that

mee

t the

“re

duce

d” p

aym

ent s

tatu

s. Th

e tra

nsfe

r fr

om th

e Ca

pita

l Pro

ject

s Fu

nd to

Oth

er G

over

nmen

tal F

unds

is f

or th

e ro

ofin

g cl

aim

rec

eive

d in

the

prio

r fis

cal

year

. T

he D

enta

l In

sura

nce

Fund

rep

aid

the

Med

ical

In

sura

nce

Fund

$25

1,00

0. I

t is e

xpec

ted

that

the

Den

tal I

nsur

ance

Fun

d w

ill b

e ab

le to

tran

sfer

re

mai

ning

bal

ance

in th

e fu

ture

.

Tran

sfer

s In

Tran

sfer

s Out

G

over

nmen

tal F

unds

:

Gen

eral

Fun

d:

O

ther

Gov

ernm

enta

l Fun

ds

$

-

$ 3

0,54

5 To

tal G

ener

al F

und

-30

,545

Cap

ital P

roje

cts F

und:

Oth

er G

over

nmen

tal F

unds

-

2,11

4,92

7To

tal C

apita

l Pro

ject

s Fun

d -

2,11

4,92

7

Oth

er G

over

nmen

tal F

unds

:

Gen

eral

Fun

d

30,

545

-

C

apita

l Pro

ject

s Fun

d 2,

114,

927

- T

otal

Oth

er G

over

nmen

tal F

unds

2

,145

,472

-

Tot

al G

over

nmen

tal F

unds

2,1

45,4

72

2,14

5,47

2

Inte

rnal

Ser

vice

Fun

ds:

In

tern

al S

ervi

ce F

und

25

1,00

0

251

,000

To

tal T

rans

fers

$

2,39

6,47

2 $

2,39

6,47

2

53

SAN

AN

TON

IO IN

DEP

END

ENT

SCH

OO

L D

ISTR

ICT

San

Ant

onio

, Tex

as

N

OTE

S TO

TH

E FI

NA

NC

IAL

STA

TEM

ENTS

For T

he Y

ear E

nded

June

30,

201

9

E.

CA

PITA

L A

SSET

S

Cap

ital a

sset

act

ivity

for

the

gove

rnm

enta

l act

iviti

es fo

r the

yea

r en

ded

June

30,

201

9 w

as a

s fo

llow

s:

Bal

ance

Bal

ance

Ju

ly 1

,

June

30,

2018

In

crea

ses

Dec

reas

es

Tran

sfer

s 20

19

Cap

ital A

sset

s, N

ot B

eing

Dep

reci

ated

:

Land

$

6

1,48

7,76

6 $

1,

023,

876

$

- $

-

$

62,

511,

642

Con

stru

ctio

n in

pro

gres

s 70

,932

,997

61

,749

,996

-

(79,

942,

932)

52

,740

,061

To

tal C

apita

l Ass

ets,

Not

Bei

ng

Dep

reci

ated

13

2,42

0,76

3 62

,773

,872

-

(79,

942,

932)

11

5,25

1,70

3

C

apita

l Ass

ets,

Bei

ng D

epre

ciat

ed:

B

uild

ings

& Im

prov

emen

ts

1,32

0,46

3,15

8 -

- 79

,942

,932

1,

400,

406,

090

Furn

iture

, Equ

ipm

ent,

& V

ehic

les

50,8

37,1

52

4,18

6,43

7 (2

,543

,116

) -

52

,480

,473

To

tal C

apita

l Ass

ets,

Bei

ng

Dep

reci

ated

1,

371,

300,

310

4,18

6,43

7 (2

,543

,116

) 79

,942

,932

1,

452,

886,

563

Less

Acc

umul

ated

Dep

reci

atio

n fo

r:

B

uild

ings

& Im

prov

emen

ts

(417

,659

,996

) (3

1,12

5,78

3)

- -

(448

,785

,779

)

Fur

nitu

re, E

quip

men

t, &

Veh

icle

s (3

1,31

6,73

3)

(2,8

93,2

87)

1,03

4,89

5 -

(33,

175,

125)

To

tal A

ccum

ulat

ed D

epre

ciat

ion

(448

,976

,729

) (3

4,01

9,07

0)

1,03

4,89

5 -

(481

,960

,904

)

To

tal C

apita

l Ass

ets,

B

eing

Dep

reci

ated

, Net

92

2,32

3,58

1 (2

9,83

2,63

3)

(1,5

08,2

21)

79,9

42,9

32

970,

925,

659

Tota

l Gov

ernm

enta

l Act

iviti

es

C

apita

l Ass

ets,

Net

$

1

,054

,744

,344

$

32,9

41,2

39

$

(1,5

08,2

21)

$

-

$

1,0

86,1

77,3

62

The

Dis

trict

had

non

mon

etar

y tra

nsac

tions

for

the

cons

truct

ion

of C

AST

Hig

h Sc

hool

whe

re

dona

tions

from

sev

eral

cor

pora

tions

wer

e m

ade

to b

uild

this

sch

ool.

The

se tr

ansa

ctio

ns w

ere

reco

rded

at

fair

mar

ket

valu

e in

the

am

ount

of

$850

,000

thr

ough

Jun

e 30

, 20

19.

The

se

trans

actio

ns a

re p

art o

f the

Cap

ital A

sset

s re

flect

ed in

the

gove

rnm

ent-w

ide

Stat

emen

t of

Net

Po

sitio

n.

The

dona

ted

reve

nue

is r

efle

cted

in

the

Mis

cella

neou

s Lo

cal

and

Inte

rmed

iate

R

even

ue in

the

gove

rnm

ent-w

ide

Stat

emen

t of A

ctiv

ities

.

54

SAN

AN

TON

IO IN

DEP

END

ENT

SCH

OO

L D

ISTR

ICT

San

Ant

onio

, Tex

as

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATE

MEN

TS

For T

he Y

ear E

nded

June

30,

201

9

Dep

reci

atio

n ex

pens

e of

the

gov

ernm

enta

l ac

tiviti

es w

as c

harg

ed t

o fu

nctio

ns/

prog

ram

s as

fo

llow

s:

Inst

ruct

ion

$18,

203,

836

Inst

ruct

iona

l Res

ourc

es a

nd M

edia

Ser

vice

s

39

1,49

0 C

urric

ulum

and

Inst

ruct

iona

l Sta

ff D

evel

opm

ent

819,

349

Inst

ruct

iona

l Lea

ders

hip

5

37,0

73

Scho

ol L

eade

rshi

p

2,22

7,67

5 G

uida

nce,

Cou

nsel

ing,

and

Eva

luat

ion

Serv

ices

1,

025,

010

Soci

al W

ork

Serv

ices

18

4,86

5 H

ealth

Ser

vice

s

594

,294

St

uden

t (Pu

pil)

Tran

spor

tatio

n

1,6

80,1

49

Food

Ser

vice

s

25

0,16

6 Ex

tracu

rric

ular

Act

iviti

es

95

3,07

8 G

ener

al A

dmin

istra

tion

1,14

4,68

8 Fa

cilit

ies M

aint

enan

ce a

nd O

pera

tions

3,9

28,1

47

Secu

rity

and

Mon

itorin

g Se

rvic

es

533,

618

Dat

a Pr

oces

sing

Ser

vice

s

1,

250,

724

Com

mun

ity S

ervi

ces

2

94,9

08

Tota

l Gov

ernm

enta

l Act

iviti

es

$34,

019,

070

Con

stru

ctio

n C

omm

itmen

ts

An

enc u

mbr

ance

sys

tem

of

acco

untin

g is

mai

ntai

ned

to a

ccou

nt f

or c

omm

itmen

ts f

rom

ap

prov

ed p

urch

ase

orde

rs, w

ork

orde

rs, a

nd c

ontra

cts.

Cap

ital

Proj

ects

Fun

d en

cum

bran

ces

repr

esen

t si

gnifi

cant

con

stru

ctio

n co

mm

itmen

ts.

The

end-

of-y

ear

cont

ract

com

mitm

ents

for

th

e D

istri

ct w

ere

$193

,337

,655

.

F.LO

NG

TER

M IN

VES

TMEN

T

The

Dis

trict

’s o

ngoi

ng d

ebt

man

agem

ent

prog

ram

inc

lude

s th

e Si

nkin

g Fu

nd R

epur

chas

eA

gree

men

t da

ted

Oct

ober

17,

201

1 (A

gree

men

t) w

ith D

euts

che

Ban

k Se

curit

ies

Inc.

Th

eA

gree

men

t is

in

conn

ectio

n w

ith t

he A

ugus

t 15

, 20

28 b

ulle

t m

atur

ity p

aym

ent

of t

he$6

1,11

5,00

0 U

nlim

ited

Tax

Qua

lifie

d Sc

hool

Con

stru

ctio

n B

onds

, Ser

ies

2011

(Q

SCB

). O

nA

ugus

t 15,

201

3 (In

itial

Pur

chas

e D

ate)

, the

Dis

trict

dep

osite

d $2

,851

,342

, with

equ

al a

nnua

lpu

rcha

ses

sche

dule

d th

roug

h A

ugus

t 15

, 202

8 (F

inal

Rep

urch

ase

Dat

e). T

he d

epos

its i

n th

esi

nkin

g fu

nd a

re fo

r the

pur

chas

e of

obl

igat

ions

of t

he U

nite

d St

ates

of A

mer

ica

or it

s age

ncie

s

55

SAN

AN

TON

IO IN

DEP

END

ENT

SCH

OO

L D

ISTR

ICT

San

Ant

onio

, Tex

as

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATE

MEN

TS

For T

he Y

ear E

nded

June

30,

201

9

and

inst

rum

enta

litie

s. E

ach

depo

sit

will

ear

n in

tere

st a

t 2.

80%

per

ann

u m, c

alcu

late

d on

a

30/3

60 d

ay c

ount

bas

is a

nd s

hall

begi

n ac

crui

ng f

rom

the

Initi

al P

urch

ase

Dat

e an

d be

fix

ed

thro

ugh

the

Fina

l Rep

urch

ase

Dat

e. O

n th

e Fi

nal R

epur

chas

e D

ate,

the

sink

ing

fund

will

hav

e a

bala

nce

of $

61,1

10,0

00 a

vaila

ble

to p

ay t

he p

rinci

pal

on t

he Q

SCB

bul

let

mat

urity

. Th

e ba

lanc

e w

ill c

onsi

st o

f th

e $4

8,47

2,82

0 in

tota

l ann

ual p

urch

ases

and

$12

,637

,180

in in

tere

st

earn

ings

.

The

sink

ing

fund

dep

osits

, al

ong

with

the

int

eres

t ea

rnin

gs a

nd c

hang

es i

n fa

ir va

lue,

are

re

cord

ed i

n th

e D

ebt

Serv

ice

Fund

and

in

the

Stat

emen

t of

Net

Pos

ition

as

a lo

ng t

erm

in

vest

men

t in

the

amou

nt $

25,0

14,1

95 a

s of

Jun

e 30

, 201

9. T

he D

istri

ct re

porte

d an

incr

ease

in

the

fair

valu

e of

$2,

749,

782

for t

he y

ear e

nded

June

30,

201

9.

For

long

ter

m i

nves

tmen

ts, t

he D

istri

ct a

pplie

s sp

ecifi

c id

entif

icat

ion

for

purp

oses

of

cred

it ris

k. T

he D

istri

ct’s

inve

stmen

t pol

icy

does

not

add

ress

con

cent

ratio

n of

cre

dit r

isk

as re

late

d to

th

e lo

ng t

erm

inv

estm

ent.

The

Rep

urch

ase

Agr

eem

ent

is n

ot r

ated

sin

ce i

t is

a p

erm

itted

in

vest

men

t for

the

Sink

ing

Fund

for

the

Serie

s 20

11 Q

SCB

bon

ds u

nder

the

bond

doc

umen

ts

and

appl

icab

le la

w.

The

mar

gin

perc

enta

ge o

f the

pur

chas

ed s

ecur

ities

is m

onito

red

daily

and

m

ust n

ot b

e le

ss th

an 1

00%

for

cas

h or

105

% f

or O

blig

atio

ns o

f th

e U

.S. o

r its

age

ncie

s an

d in

stru

men

talit

ies..

In a

ccor

danc

e w

ith G

ASB

72,

the

inpu

ts u

sed

for t

he fa

ir va

lue

dete

rmin

atio

n w

ere

clas

sifie

d as

Lev

el 2

(Si

gnifi

cant

Oth

er O

bser

vabl

e In

puts

). T

he D

istri

ct a

pplie

d pr

icin

g m

odel

s th

at

inco

rpor

ate

the

cont

ract

ual

term

s of

the

agr

eem

ent,

the

depo

sit

sche

dule

, elig

ible

sec

uriti

es,

impl

ied

on-m

arke

t rat

e on

the

trade

dat

e an

d an

y up

fron

t pay

men

ts m

ade.

G.

DU

E TO

OTH

ER G

OV

ERN

MEN

TS

The

amou

nt re

flect

ed a

s due

to o

ther

gov

ernm

ents

is c

ompr

ised

of t

he fo

llow

ing:

Gen

eral

O

ther

G

over

nmen

tal

Fund

Fu

nds

Tota

l D

ue to

:

Tex

as E

duca

tion

Age

ncy

T

exas

Sta

te C

ompt

rolle

r

$

58

,081

371

$

- 3

$

58

,081

374

T

exas

Wor

kfor

ce C

omm

issio

n

4,77

2 -

4,77

2

Tot

al

$

63,

224

$

3 $

6

3,22

7

56

SAN

AN

TON

IO IN

DEP

END

ENT

SCH

OO

L D

ISTR

ICT

San

Ant

onio

, Tex

as

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATE

MEN

TS

For T

he Y

ear E

nded

June

30,

201

9

H.

CO

MPE

NSA

TED

AB

SEN

CES

Vac

atio

n Pa

yabl

e –

The

bala

nce

for t

he a

ccum

ulat

ed v

acat

ion

leav

e at

the

end

of th

e ye

ar is

refle

cted

in

the

gove

rnm

ent-w

ide

Stat

emen

t of

Net

Pos

ition

as

a cu

rrent

lia

bilit

y si

nce

it is

requ

ired

to b

e us

ed w

ithin

the

nex

t ye

ar o

r th

e em

ploy

ee f

orgo

es t

he d

ays

earn

ed a

ndac

cum

ulat

ed.

Follo

win

g is

the

chan

ge in

com

pens

ated

abs

ence

s:

Bal

ance

- Ju

ly 1

, 201

8 $

6

9,97

0

Plus

: A

dditi

ons

776,

839

Less

: Pa

ymen

ts (6

49,4

18)

Bal

ance

- Ju

ne 3

0, 2

019

$

197

,391

The

Dis

trict

use

s th

e G

ener

al F

und

and/

or t

he a

pplic

able

Spe

cial

Rev

enue

Fun

d ba

sed

on

empl

oyee

ass

ignm

ent t

o liq

uida

te c

ompe

nsat

ed a

bsen

ces t

hrou

gh th

e pa

yrol

l pro

cess

.

I.LO

NG

TER

M D

EBT

Gen

eral

O

blig

atio

n Bo

nds

– Th

e D

istri

ct

issu

ed

gene

ral

oblig

atio

n bo

nds

for

the

gove

rnm

enta

l act

iviti

es to

pro

vide

fun

ds f

or th

e ac

quis

ition

and

con

stru

ctio

n of

maj

or c

apita

lfa

cilit

ies.

Gen

eral

obl

igat

ion

bond

s are

dire

ct o

blig

atio

ns a

nd p

ledg

e th

e fu

ll fa

ith a

nd c

redi

t of

the

Dis

trict

. C

urre

nt p

rinci

pal

and

inte

rest

req

uire

men

ts a

re p

ayab

le s

olel

y fro

m f

utur

ere

venu

es o

f the

Deb

t Ser

vice

Fun

d w

hich

con

sist

prin

cipa

lly o

f pro

perty

taxe

s co

llect

ed b

y th

eD

istri

ct, i

nter

est e

arni

ngs,

and

stat

e fu

nds.

Cer

tain

out

stan

ding

bon

ds m

ay b

e re

deem

ed a

t the

irpa

r val

ue p

rior t

o th

eir n

orm

al m

atur

ity d

ates

in a

ccor

danc

e w

ith th

e te

rms

of th

e re

late

d bo

ndin

dent

ures

.

The

Dis

trict

rec

eive

s a

dire

ct s

ubsi

dy f

or t

he U

nlim

ited

Tax

Scho

ol B

uild

ing

Bon

ds, S

erie

s20

10B

, w

hich

is

refle

cted

as

fede

ral

reve

nue

in t

he D

ebt

Serv

ice

Fund

in

the

amou

nt o

f$2

,574

,380

for t

he y

ear e

nded

June

30,

201

9. T

he D

istri

ct a

lso

rece

ives

a d

irect

subs

idy

for t

heU

nlim

ited

Tax

Qua

lifie

d Sc

hool

Con

stru

ctio

n B

onds

, Ser

ies 2

011,

whi

ch is

refle

cted

as f

eder

alre

venu

e in

the

Stra

tegi

c In

itiat

ives

Fun

d in

the

amou

nt o

f $2,

291,

578

for t

he y

ear e

nded

Jun

e30

, 201

9.

On

Jul y

25,

201

8, th

e D

istri

ct is

sued

$17

8,97

5,00

0 in

Unl

imite

d Ta

x Sc

hool

Bui

ldin

g B

onds

,Se

ries

2018

(Se

ries

2018

) bo

nd w

ith p

rem

ium

of

$22,

393,

361.

Th

ese

bond

s w

ere

issu

edpu

rsua

nt to

an

Ord

er o

f th

e B

oard

of

Trus

tees

ado

pted

on

Apr

il 16

, 201

8.

The

Serie

s 20

18bo

nds

in th

e am

ount

of

$178

,975

,000

wer

e so

ld a

s fo

llow

s:

$96,

075,

000

Seria

l Bon

ds w

ere

57

SAN

AN

TON

IO IN

DEP

END

ENT

SCH

OO

L D

ISTR

ICT

San

Ant

onio

, Tex

as

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATE

MEN

TS

For T

he Y

ear E

nded

June

30,

201

9

sold

due

on

Aug

ust 1

5, 2

039

with

an

inte

rest

rat

e st

artin

g at

4%

then

goi

ng to

5%

in 2

022.

$3

2,41

0,00

0 Te

rm B

onds

wer

e so

ld d

ue o

n A

ugus

t 15

, 20

43 w

ith a

n in

tere

st r

ate

of 5

%.

$50,

490,

000

Term

Bon

ds w

ere

sold

due

on

Aug

ust 1

5, 2

048

with

an

inte

rest

rate

of 5

%.

The

Dis

trict

rese

rves

the

right

to re

deem

the

Bon

ds m

atur

ing

on o

r afte

r Aug

ust 1

5, 2

026

in w

hole

or

in p

art,

in p

rinci

pal a

mou

nts

of $

5,00

0 or

any

inte

gral

mul

tiple

ther

eof,

on A

ugus

t 15,

202

5 or

any

dat

e th

erea

fter

at t

he r

edem

ptio

n pr

ice

of p

ar p

lus

accr

ued

inte

rest

to

the

date

of

rede

mpt

ion.

The

Ter

m B

onds

mat

urin

g on

Aug

ust 1

5, in

eac

h of

the

year

s 20

43 a

nd 2

048

are

also

sub

ject

to m

anda

tory

sin

king

fund

rede

mpt

ion

prio

r to

the

state

d m

atur

ity.

Inte

rest

on

the

Bon

ds w

ill a

ccru

e fro

m th

e cl

osin

g da

te o

f Jul

y 25

, 201

8 an

d w

ill b

e pa

yabl

e on

eac

h Fe

brua

ry

15 a

nd A

ugus

t 15

of e

ach

year

, com

men

cing

on

Febr

uary

15,

201

9. T

he p

roce

eds w

ill b

e us

ed

on 1

3 sc

hool

s (s

even

hig

h sc

hool

s, fo

ur m

iddl

e sc

hool

s, an

d tw

o el

emen

tary

sch

ools

), re

nova

tions

to

incl

ude

clas

sroo

m s

pace

s, sp

orts

fac

ilitie

s up

grad

es,

scie

nce

labs

, up

grad

e re

stro

oms

and

fenc

ing

for c

erta

in s

choo

ls a

nd m

ajor

infra

stru

ctur

e im

prov

emen

ts (h

eatin

g an

d co

olin

g sy

stem

s, el

ectri

cal s

truct

ures

, plu

mbi

ng a

nd st

ruct

ural

ele

men

ts).

Ref

undi

ng B

onds

– O

n A

ugus

t 1, 2

018,

the

Dis

trict

refu

nded

the

$48,

880,

000

Var

iabl

e R

ate

Unl

imite

d Ta

x R

efun

ding

Bon

ds,

Serie

s 20

14B

(Se

ries

2014

B)

bond

s w

ith p

rem

ium

of

$5,1

59,5

46.

The

Bon

ds w

ere

in t

he i

nitia

l ra

te p

erio

d, b

earin

g in

tere

st a

t an

ini

tial

rate

, ex

pirin

g on

Jul

y 31

, 201

8. T

he B

onds

wer

e ou

tsta

ndin

g in

the

aggr

egat

e pr

inci

pal a

mou

nt o

f $4

6,56

0,00

0.

On

Aug

ust

1, 2

018,

$85

0,00

0 in

prin

cipa

l am

ount

was

red

eem

ed,

and

the

rem

aini

ng $

45,7

10,0

00 w

as s

ubje

ct to

man

dato

ry te

nder

with

out r

ight

of r

eten

tion.

Ten

dere

d B

onds

in

the

prin

cipa

l am

ount

of

$4,8

60,0

00 w

ere

retir

ed b

y th

e D

istri

ct u

sing

pro

ceed

s de

rived

fro

m th

e re

mar

ketin

g an

d th

e ba

lanc

e of

$40

,850

,000

was

con

verte

d to

a F

ixed

Rat

e Pe

riod,

rem

arke

ted

to n

ew h

olde

rs a

nd re

mai

n ou

tsta

ndin

g su

bseq

uent

to th

is re

mar

ketin

g an

d co

nver

sion

unt

il th

e ea

rlier

of s

tate

d m

atur

ity o

r prio

r red

empt

ion.

The

Dis

trict

redu

ced

its d

ebt

serv

ice

paym

ents

by

$4,8

60,0

00 o

ver

the

next

15

year

s. T

he tr

ansa

ctio

n di

d no

t res

ult i

n an

ec

onom

ic g

ain

or lo

ss. T

here

are

$26

,430

,000

Ser

ial B

onds

with

a 4

% f

ixed

rat

e un

til 2

019

then

a 5

% f

ixed

rat

e fr

om 2

020

to 2

038,

and

ther

e ar

e $1

4,42

0,00

0 Te

rm B

onds

with

a 5

%

fixed

rate

unt

il 20

44.

The

Dis

trict

rese

rves

the

right

to re

deem

the

Bon

ds m

atur

ing

on o

r afte

r A

ugus

t 1, 2

026

in w

hole

or

in p

art,

in p

rinci

pal a

mou

nts

of $

5,00

0 or

any

inte

gral

mul

tiple

th

ereo

f, on

Aug

ust 1

, 202

5 or

any

dat

e th

erea

fter

at th

e re

dem

ptio

n pr

ice

of p

ar p

lus

accr

ued

inte

rest

to th

e da

te o

f red

empt

ion.

The

Ter

m B

onds

mat

urin

g on

Aug

ust 1

, 204

4 ar

e su

bjec

t to

man

dato

ry s

inki

ng f

und

rede

mpt

ion

prio

r to

the

sta

ted

mat

urity

. In

tere

st o

n th

e B

onds

will

ac

crue

fro

m th

e cl

osin

g da

te o

f A

ugus

t 1, 2

018

and

will

be

paya

ble

on e

ach

Febr

uary

1 a

nd

Aug

ust 1

of e

ach

year

, com

men

cing

on

Febr

uary

1, 2

019.

58

SAN

AN

TON

IO IN

DEP

END

ENT

SCH

OO

L D

ISTR

ICT

San

Ant

onio

, Tex

as

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATE

MEN

TS

For T

he Y

ear E

nded

June

30,

201

9

The

follo

win

g is

a su

mm

ary

of c

hang

es in

bon

ds p

ayab

le fo

r the

yea

r end

ed Ju

ne 3

0, 2

019:

Am

ount

s A

mou

nts

Inte

rest

Am

ount

s O

utsta

ndin

g O

utsta

ndin

g R

ate

Ran

ge o

f O

rigin

al

June

30,

Is

sued

/ Ju

ne 3

0,

Due

With

in

Des

crip

tion

Paya

ble

Mat

urity

Is

sue

2018

R

efun

ding

R

etire

d 20

19

One

Yea

r

Prem

ium

Cap

ital

App

reci

atio

n B

onds

20

25

3

19,9

88

3

19,9

88

-

- 3

19,9

88

-

Unl

imite

d Ta

x Sc

h. B

ldg

2.23

5-

Bon

ds, S

erie

s 201

0B

6.39

7%

2014

-204

0

151

,450

,000

136

,290

,000

-

3,98

5,00

0

132

,305

,000

4

,090

,000

Unl

imite

d Ta

x Re

fund

ing

2.0-

B

onds

, Ser

ies 2

011

5.0%

20

14-2

029

99,

085,

000

6

6,36

0,00

0

-7,

435,

000

58

,925

,000

-

Unl

imite

d Ta

x Q

ualif

ied

Scho

ol C

onstr

uctio

n B

onds

, Ser

ies 2

011

4.00

6%

2014

-202

8 6

1,11

5,00

0

61,

115,

000

- -

61

,115

,000

-

Unl

imite

d Ta

x Re

fund

ing

Bon

ds S

erie

s 201

4A

4.0-

5.

0%

2018

-204

4 4

2,19

5,00

0

42

,195

,000

-

805,

000

41

,390

,000

8

45,0

00

Var

iabl

e Ra

te U

nlim

ited

Tax

Refu

ndin

g Bo

nds

1.15

- Se

ries 2

014B

7.

0%

2018

-204

4 4

8,88

0,00

0

46,

560,

000

-

46,5

60,0

00 -

-

Unl

imite

d Ta

x Re

fund

ing

Bon

ds S

erie

s 201

4B

4.0

-

5.0%

20

18-2

044

40,8

50,0

00

- 40

,850

,000

-

40,8

50,0

00

810

,000

Unl

imite

d Ta

x Sc

h. B

ldg

and

Ref

undi

ng B

onds

, 1.

25-

Serie

s 201

5 5.

0%

2016

-204

5

307

,290

,000

258

,910

,000

-

21,3

40,0

00

237

,570

,000

23,

940,

000

Unl

imite

d Ta

x Sc

h. B

ldg

and

Ref

undi

ng B

onds

, 2.

0-

Serie

s 201

6 5.

0%

2017

-204

6

123,

740,

000

122

,995

,000

-

1,45

5,00

0

121

,540

,000

1

,515

,000

Unl

imite

d Ta

x Sc

h. B

ldg

Bon

ds, S

erie

s 201

8 4.

0-

5.0%

20

18-2

048

1

78,9

75,0

00

- 17

8,97

5,00

0 -

178,

975,

000

2,3

05,0

00

$ 1

,053

,899

,988

$

734

,744

,988

$

219

,825

,000

$

81,

580,

000

$

872

,989

,988

$

35,

505,

000

Bal

ance

B

alan

ce

June

30,

Ju

ne 3

0,

Due

with

in

2018

A

dditi

on

Ret

ired

2019

O

ne Y

ear

Acc

retio

n on

Cap

ital

App

reci

atio

n B

onds

* $

2

,562

,798

$

131,

175

$

- $

2

,693

,973

$

-

*Thi

s rep

rese

nts a

ccre

tion

of in

tere

st o

n a

cum

ulat

ive

basi

s.

59

SAN

AN

TON

IO IN

DEP

END

ENT

SCH

OO

L D

ISTR

ICT

San

Ant

onio

, Tex

as

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATE

MEN

TS

For T

he Y

ear E

nded

June

30,

201

9

The

Dis

trict

has

nev

er d

efau

lted

on a

ny p

rinci

pal o

r int

eres

t pay

men

ts.

Ther

e ar

e a

num

ber o

f lim

itatio

ns a

nd re

stric

tions

con

tain

ed in

the

gene

ral o

blig

atio

n bo

nd in

dent

ures

. Th

e D

istri

ct is

in

com

plia

nce

with

all

sign

ifica

nt li

mita

tions

and

rest

rictio

ns a

t Jun

e 30

, 201

9.

The

annu

al d

ebt s

ervi

ce re

quire

men

ts to

mat

urity

for b

onds

pay

able

are

as f

ollo

ws:

Yea

r End

ing

Tota

l Ju

ne 3

0 Pr

inci

pal

Inte

rest

Req

uire

men

ts 20

20

$

33,

505,

000

$

42,

282,

578

$

75,

787,

578

2021

3

4,10

0,00

0 40

,646

,960

7

4,74

6,96

0 20

22

3

5,75

0,00

0 3

8,98

5,67

0

7

4,73

5,67

0 20

23

37,

480,

000

37,

218,

723

74,

698,

723

2024

3

9,35

0,00

0

3

5,37

2,40

7

7

4,72

2,40

7 20

25-2

029

2

36,6

29,9

88

1

47,2

23,7

34

3

83,8

53,7

22

2030

-203

4

131

,635

,000

94,

319,

839

2

25,9

54,8

39

2035

-203

9 12

3,65

0,00

0

6

4,33

3,51

3 1

87,9

83,5

13

2040

-204

4 12

5,09

0,00

0

3

1,92

0,69

3

157

,010

,693

20

45-2

049

75,

800,

000

7,

784,

625

83,

584,

625

Tota

l $

872

,989

,988

$

540

,088

,742

$

1,41

3,07

8,73

0

J.O

THER

LO

NG

-TER

M L

IAB

ILIT

IES

(1)

Wor

kers

’ Com

pens

atio

n

Und

er t

his

prog

ram

, the

Dis

trict

pro

vide

s co

vera

ge u

p to

a m

axim

um o

f $6

00,0

00 p

ercl

aim

and

pur

chas

es c

omm

erci

al in

sura

nce

for c

laim

s in

exc

ess

of th

is c

over

age.

The

rew

ere

no s

ettle

men

ts e

xcee

ding

insu

ranc

e co

vera

ge fo

r eac

h of

the

past

thre

e fis

cal y

ears

.Th

e to

tal

clai

ms

liabi

lity

of $

2,37

2,00

0 is

bas

ed o

n th

e re

quire

men

ts o

f G

over

nmen

tal

Acc

ount

ing

Stan

dard

s B

oard

(GA

SB) S

tate

men

t No.

10

as a

men

ded

by G

ASB

Sta

tem

ent

No.

30,

whi

ch r

equi

res

that

a li

abili

ty f

or c

laim

s be

rep

orte

d if

info

rmat

ion

is a

vaila

ble

prio

r to

the

iss

uanc

e of

the

fin

anci

al s

tate

men

ts a

nd t

he a

mou

nt o

f th

e lo

ss c

an b

ere

ason

ably

est

imat

ed.

The

Dis

trict

rec

ords

the

lia

bilit

y fo

r cl

aim

s in

curre

d bu

t no

tre

porte

d w

hich

is e

stim

ated

usi

ng h

isto

rical

dat

a.

The

curre

nt p

ortio

n of

the

clai

ms l

iabi

lity

in th

e am

ount

of $

1,76

1,75

8 is

refle

cted

as

part

of c

urre

nt l

iabi

litie

s an

d th

e re

mai

ning

por

tion

of $

610,

242

is r

epor

ted

as p

art

ofno

ncur

rent

liab

ilitie

s in

the

Prop

rieta

ry F

unds

Sta

tem

ent o

f Net

Pos

ition

.

60

SAN

AN

TON

IO IN

DEP

END

ENT

SCH

OO

L D

ISTR

ICT

San

Ant

onio

, Tex

as

N

OTE

S TO

TH

E FI

NA

NC

IAL

STA

TEM

ENTS

For T

he Y

ear E

nded

June

30,

201

9

The

Dis

trict

is r

equi

red

to m

aint

ain

a de

posi

t suf

ficie

nt to

cov

er 2

.5 m

onth

s of

cla

ims

with

the

curre

nt a

dmin

istra

tor o

f the

pro

gram

, whi

ch a

mou

nted

to $

500,

000

at J

une

30,

2019

. T

he d

epos

it is

inc

lude

d as

par

t of

the

Oth

er C

urre

nt A

sset

s ba

lanc

e in

the

Pr

oprie

tary

Fun

ds S

tate

men

t of N

et P

ositi

on.

Cha

nges

in th

e cl

aim

s lia

bilit

y am

ount

for f

isca

l yea

rs 2

018

to 2

019

wer

e as

follo

ws:

Perio

d

Beg

inni

ng o

f Fi

scal

Yea

r/ Pe

riod

Liab

ility

Cur

rent

Yea

r/ Pe

riod

Cla

ims

and

chan

ges i

n Es

timat

es

Cla

im

Paym

ents

Bal

ance

at

Fisc

al Y

ear/

Perio

d En

d

Y

ear

Ende

d Ju

ne 3

0, 2

018

$

3,

271,

000

$

1,1

41,6

13

$ (

1,51

0,61

3)

$ 2

,902

,000

Y

ear

Ende

d Ju

ne 3

0, 2

019

2

,902

,000

1

,454

,887

(1,9

84,8

87)

2

,372

,000

(2)

Acc

umul

ated

Lea

ve In

cent

ive

Plan

(ALI

P)

Fu

ll-tim

e em

ploy

ees

are

elig

ible

to p

artic

ipat

e in

the

ALI

P af

ter t

en y

ears

of c

onse

cutiv

e em

ploy

men

t with

the

Dis

trict

and

afte

r mee

ting

the

requ

irem

ents

of t

he p

lan.

Und

er th

is

plan

, the

Dis

trict

pay

s ALI

P-el

igib

le e

mpl

oyee

s the

val

ue o

f the

bal

ance

of t

heir

stat

e an

d lo

cal l

eave

by

cont

ribut

ing

it to

a 4

03(b

) ac

coun

t upo

n se

para

tion

from

the

Dis

trict

. In

ac

cord

ance

with

the

plan

, exe

mpt

em

ploy

ees

and

non-

exem

pt e

mpl

oyee

s ac

crue

$88

and

$5

0, r

espe

ctiv

ely,

per

day

of

thei

r st

ate

and

loca

l le

ave

bala

nces

. T

he D

istri

ct’s

go

vern

ing

body

has

the

excl

usiv

e rig

ht to

cha

nge,

sus

pend

, or t

erm

inat

e th

is p

rogr

am a

t an

y tim

e an

d fo

r any

reas

on b

ased

on

the

need

s of

the

Dis

trict

. Th

e ba

lanc

e of

sta

te a

nd

loca

l le

ave

as o

f Ju

ne 3

0, 2

019

for

empl

oyee

s w

ith t

en o

r m

ore

year

s of

ser

vice

is

$7,8

34,5

33.

Of

this

am

ount

, $7

,065

,761

is

refle

cted

as

a no

ncur

rent

lia

bilit

y an

d $7

68,7

72 is

refle

cted

as

a cu

rren

t lia

bilit

y in

the

Stat

emen

t of N

et P

ositi

on.

The

Dis

trict

us

es th

e G

ener

al F

und

to li

quid

ate

the

ALI

P lia

bilit

y w

hen

empl

oyee

s se

para

te fr

om th

e D

istri

ct.

(3

) A

rbitr

age

Paya

ble

Th

e Fe

dera

l Ta

x R

efor

m A

ct o

f 19

86 r

equi

res

issu

ers

of t

ax-e

xem

pt d

ebt

to m

ake

paym

ents

to

the

Uni

ted

Stat

es T

reas

ury

for

inve

stm

ent

inco

me

rece

ived

at

yiel

ds t

hat

exce

ed th

e is

suer

’s ta

x ex

empt

bor

row

ing

rate

s. T

he T

reas

ury

requ

ires

paym

ent f

or e

ach

issu

e ev

ery

five

year

s. T

he li

abili

ty is

not

reco

rded

unt

il pa

ymen

t is

actu

ally

mad

e or

the

liabi

lity

has

beco

me

due

and

paya

ble.

The

Dis

trict

doe

s no

t hav

e an

arb

itrag

e lia

bilit

y as

of

June

30,

201

9.

61

SAN

AN

TON

IO IN

DEP

END

ENT

SCH

OO

L D

ISTR

ICT

San

Ant

onio

, Tex

as

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATE

MEN

TS

For T

he Y

ear E

nded

June

30,

201

9

K.

CH

AN

GES

IN L

ON

G-T

ERM

LIA

BIL

ITIE

S

Cha

nges

in

long

-term

lia

bilit

ies

for

the

gove

rnm

enta

l ac

tiviti

es f

or t

he y

ear

ende

d Ju

ne 3

0,20

19 w

ere

as fo

llow

s:

Am

ount

O

utst

andi

ng

July

1, 2

018

Add

ition

s D

elet

ions

Am

ount

O

utst

andi

ng

June

30,

201

9 D

ue W

ithin

One

Y

ear

Bon

ds P

ayab

le

$

734

,744

,988

$

219,

825,

000

$ (8

1,58

0,00

0)

$

872

,989

,988

$

3

3,50

5,00

0

Acc

retio

n on

C

apita

l A

ppre

ciat

ion

Bon

ds

2,56

2,79

8 13

1,17

5

- 2,

693,

973

-

Una

mor

tized

Bon

d Pr

emiu

m

45,4

22,7

95

27,5

52,9

07

(9,2

55,8

02)

63,7

19,9

00

7,51

1,51

7

Wor

kers

’ C

ompe

nsat

ion

* 2

,902

,000

1,

454,

887

(1,

984,

887)

2

,372

,000

1,

761,

758

ALI

P 7,

769,

245

2,05

4,80

0 (1

,989

,512

) 7,

834,

533

768,

772

Net

Pen

sion

Li

abili

ty**

86

,094

,623

78

,714

,244

(9

,505

,020

) 15

5,30

3,84

7

-

Net

OPE

B

Liab

ility

**

204,

907,

282

50,8

70,5

47

(3,4

85,7

26)

252,

292,

103

-

Tota

l $

1,08

4,40

3,73

1 $

380

,603

,560

$

(1

07,8

00,9

47)

$

1,

357,

206,

344

$

43,

547,

047

*Th

e $1

,761

,758

whi

ch is

the

curr

ent p

ortio

n of

the

clai

ms l

iabi

lity,

is re

flect

ed in

the

clai

ms p

ayab

le c

urre

nt li

abili

ty a

ccou

ntin

the

Stat

emen

t of t

he N

et P

ositi

on a

nd n

ot a

s par

t of t

he a

mou

nt d

ue w

ithin

one

yea

r for

the

nonc

urre

nt li

abili

ties.

**Th

e D

istri

ct u

tiliz

es th

e Fu

nd b

ased

on

empl

oyee

ass

ignm

ent t

o liq

uida

te th

e Pe

nsio

n an

d O

PEB

liab

ility

thro

ugh

empl

oyer

con

tribu

tions

in th

e pa

yrol

l pro

cess

.

L.D

EFIN

ED B

ENEF

IT P

ENSI

ON

PLA

N

Plan

Des

crip

tion.

The

Dis

trict

par

ticip

ates

in a

cos

t-sha

ring

mul

tiple

em

ploy

er d

efin

ed b

enef

itpe

nsio

n th

at h

as a

spe

cial

fun

ding

situ

atio

n. T

he p

lan

is a

dmin

iste

red

by t

he T

each

erR

etire

men

t Sy

stem

of

Texa

s (T

RS)

. It

is a

def

ined

ben

efit

pens

ion

plan

est

ablis

hed

and

adm

inis

tere

d in

acc

orda

nce

with

the

Tex

as C

onst

itutio

n, A

rticl

e X

VI,

Sect

ion

67 a

nd T

exas

Gov

ernm

ent C

ode,

Titl

e 8,

Sub

title

C. T

he p

ensi

on tr

ust f

und

is a

qual

ified

pen

sion

trus

t und

erSe

ctio

n 40

1(a)

of

the

Inte

rnal

Rev

enue

Cod

e. T

he T

exas

Leg

isla

ture

est

ablis

hes

bene

fits

and

62

SAN

AN

TON

IO IN

DEP

END

ENT

SCH

OO

L D

ISTR

ICT

San

Ant

onio

, Tex

as

N

OTE

S TO

TH

E FI

NA

NC

IAL

STA

TEM

ENTS

For T

he Y

ear E

nded

June

30,

201

9

cont

ribut

ion

rate

s w

ithin

the

gui

delin

es o

f th

e Te

xas

Con

stitu

tion.

The

pen

sion

's B

oard

of

Trus

tees

doe

s not

hav

e th

e au

thor

ity to

est

ablis

h or

am

end

bene

fit te

rms.

A

ll em

ploy

ees

of p

ublic

, sta

te-s

uppo

rted

educ

atio

nal i

nstit

utio

ns in

Tex

as w

ho a

re e

mpl

oyed

fo

r on

e ha

lf or

mor

e of

the

stan

dard

wor

k lo

ad a

nd w

ho a

re n

ot e

xem

pted

fro

m m

embe

rshi

p un

der T

exas

Gov

ernm

ent C

ode,

Titl

e 8,

Sec

tion

822.

002

are

cove

red

by th

e sy

stem

. Pe

nsio

n Pl

an F

iduc

iary

Net

Pos

ition

. D

etai

led

info

rmat

ion

abou

t th

e Te

ache

r R

etire

men

t Sy

stem

's fid

ucia

ry n

et p

ositi

on i

s av

aila

ble

in a

sep

arat

ely-

issu

ed C

ompr

ehen

sive

Ann

ual

Fina

ncia

l R

epor

t th

at i

nclu

des

finan

cial

sta

tem

ents

and

req

uire

d su

pple

men

tary

inf

orm

atio

n.

That

re

port

may

be

ob

tain

ed

on

the

Inte

rnet

at

: ht

tp://

ww

w.tr

s.sta

te.tx

.us/

abou

t/doc

umen

ts/c

afr.p

df#C

AFR

; by

writ

ing

to T

RS

at 1

000

Red

R

iver

Stre

et, A

ustin

, TX

, 787

01-2

698;

or b

y ca

lling

(512

) 542

-659

2. T

he in

form

atio

n pr

ovid

ed

in th

e N

otes

to th

e Fi

nanc

ial S

tate

men

ts in

the

2018

Com

preh

ensi

ve A

nnua

l Fin

anci

al R

epor

t fo

r TR

S pr

ovid

es th

e fo

llow

ing

info

rmat

ion

rega

rdin

g th

e Pe

nsio

n Pl

an fi

duci

ary

net p

ositi

on

as o

f Aug

ust 3

1, 2

018.

N

et P

ensi

on L

iabi

lity

To

tal

Tota

l Pen

sion

Lia

bilit

y

$209

,611

,328

,793

Le

ss: P

lan

Fidu

ciar

y N

et P

ositi

on

(1

54,5

68,9

01,8

33)

Net

Pen

sion

Lia

bilit

y

$

55,

042,

426,

960

Net

Pos

ition

as p

erce

ntag

e of

Tot

al P

ensi

on L

iabi

lity

73.7

4%

B

enef

its P

rovi

ded.

TR

S pr

ovid

es s

ervi

ce a

nd d

isab

ility

ret

irem

ent,

as w

ell

as d

eath

and

su

rviv

or b

enef

its, t

o el

igib

le e

mpl

oyee

s (an

d th

eir b

enef

icia

ries)

of p

ublic

and

hig

her e

duca

tion

in T

exas

. The

pen

sion

form

ula

is c

alcu

late

d us

ing

2.3

perc

ent (

mul

tiplie

r) tim

es th

e av

erag

e of

th

e fiv

e hi

ghes

t ann

ual c

redi

tabl

e sa

larie

s tim

es y

ears

of c

redi

ted

serv

ice

to a

rrive

at t

he a

nnua

l st

anda

rd a

nnui

ty e

xcep

t for

mem

bers

who

are

gra

ndfa

ther

ed, t

he th

ree

high

est a

nnua

l sal

arie

s ar

e us

ed. T

he n

orm

al s

ervi

ce re

tirem

ent i

s at

age

65

with

5 y

ears

of c

redi

ted

serv

ice

or w

hen

the

sum

of

the

mem

ber's

age

and

yea

rs o

f cr

edite

d se

rvic

e eq

uals

80

or m

ore

year

s. Ea

rly

retir

emen

t is

at a

ge 5

5 w

ith 5

yea

rs o

f ser

vice

cre

dit o

r ear

lier t

han

55 w

ith 3

0 ye

ars

of s

ervi

ce

cred

it. T

here

are

add

ition

al p

rovi

sion

s fo

r ear

ly re

tirem

ent i

f the

sum

of t

he m

embe

r's a

ge a

nd

year

s of

ser

vice

cre

dit t

otal

at l

east

80,

but

the

mem

ber i

s le

ss th

an a

ge 6

0 or

62

depe

ndin

g on

da

te o

f em

ploy

men

t, or

if th

e m

embe

r was

gra

ndfa

ther

ed in

und

er a

pre

viou

s rul

e. T

here

are

no

auto

mat

ic p

ost-e

mpl

oym

ent

bene

fit c

hang

es;

incl

udin

g au

tom

atic

CO

LAs.

Ad

hoc

post

-em

ploy

men

t ben

efit

chan

ges,

incl

udin

g ad

hoc

CO

LAs c

an b

e gr

ante

d by

the

Texa

s Leg

isla

ture

as

not

ed in

the

Plan

des

crip

tion

abov

e.

63

SAN

AN

TON

IO IN

DEP

END

ENT

SCH

OO

L D

ISTR

ICT

San

Ant

onio

, Tex

as

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATE

MEN

TS

For T

he Y

ear E

nded

June

30,

201

9

Con

trib

utio

ns. C

ontri

butio

n re

quire

men

ts a

re e

stab

lishe

d or

am

ende

d pu

rsua

nt to

Arti

cle

16,

sect

ion

67 o

f the

Tex

as C

onst

itutio

n w

hich

requ

ires t

he T

exas

legi

slat

ure

to e

stab

lish

a m

embe

r co

ntrib

utio

n ra

te o

f no

t le

ss t

han

6% o

f th

e m

embe

r's a

nnua

l co

mpe

nsat

ion

and

a st

ate

cont

ribut

ion

rate

of

not

less

tha

n 6%

and

not

mor

e th

an 1

0% o

f th

e ag

greg

ate

annu

al

com

pens

atio

n pa

id to

mem

bers

of t

he s

yste

m d

urin

g th

e fis

cal y

ear.

Texa

s G

over

nmen

t Cod

e se

ctio

n 82

1.00

6 pr

ohib

its b

enef

it im

prov

emen

ts, i

f as

a re

sult

of th

e pa

rticu

lar a

ctio

n, th

e tim

e re

quire

d to

am

ortiz

e TR

S' u

nfun

ded

actu

aria

l lia

bilit

ies

wou

ld b

e in

crea

sed

to a

per

iod

that

ex

ceed

s 31

yea

rs, o

r, if

the

amor

tizat

ion

perio

d al

read

y ex

ceed

s 31

yea

rs, t

he p

erio

d w

ould

be

incr

ease

d by

such

act

ion.

Empl

oyee

con

tribu

tion

rate

s ar

e se

t in

stat

e st

atut

e, T

exas

Gov

ernm

ent C

ode

825.

402.

Sen

ate

Bill

145

8 of

the

83rd

Tex

as L

egis

latu

re a

men

ded

Texa

s Gov

ernm

ent C

ode

825.

402

for m

embe

r co

ntrib

utio

ns a

nd e

stab

lishe

d em

ploy

ee c

ontri

butio

n ra

tes

for f

isca

l yea

rs 2

014

thru

201

7. T

he

84th

Te

xas

Legi

slat

ure,

G

ener

al

App

ropr

iatio

ns

Act

(G

AA

) es

tabl

ishe

d th

e em

ploy

er

cont

ribut

ion

rate

s for

fisc

al y

ears

201

8 an

d 20

19.

Cont

ribut

ion

Rate

s 20

18

2019

M

embe

r 7.

7%

7.7%

N

on-E

mpl

oyer

Con

trib

utin

g En

tity

(Sta

te)

6.8%

6.

8%

Empl

oyer

s 6.

8%

6.8%

2019

Em

ploy

er C

ontr

ibut

ions

$

9,29

2,40

1 20

19 M

embe

r Con

trib

utio

ns

$

28,

128,

334

2018

NEC

E O

n-Be

half

Cont

ribut

ions

$

1

5,74

5,06

0

Con

tribu

tors

to th

e pl

an in

clud

e m

embe

rs, e

mpl

oyer

s an

d th

e St

ate

of T

exas

as

the

only

non

-em

ploy

er c

ontri

butin

g en

tity.

The

Sta

te c

ontri

bute

s to

the

plan

in a

ccor

danc

e w

ith st

ate

stat

utes

an

d th

e G

ener

al A

ppro

pria

tions

Act

(GA

A).

As t

he n

on-e

mpl

oyer

con

tribu

ting

entit

y fo

r pub

lic e

duca

tion,

the

Stat

e of

Tex

as c

ontri

bute

s to

the

retir

emen

t sy

stem

an

amou

nt e

qual

to

the

curre

nt e

mpl

oyer

con

tribu

tion

rate

tim

es t

he

aggr

egat

e an

nual

com

pens

atio

n of

all

parti

cipa

ting

mem

bers

of

the

pens

ion

trust

fun

d du

ring

that

fis

cal

year

red

uced

by

the

amou

nts

desc

ribed

bel

ow w

hich

are

pai

d by

the

em

ploy

ers.

Empl

oyer

s in

clud

ing

publ

ic s

choo

ls a

re r

equi

red

to p

ay th

e em

ploy

er c

ontri

butio

n ra

te in

the

follo

win

g in

stan

ces:

64

SAN

AN

TON

IO IN

DEP

END

ENT

SCH

OO

L D

ISTR

ICT

San

Ant

onio

, Tex

as

N

OTE

S TO

TH

E FI

NA

NC

IAL

STA

TEM

ENTS

For T

he Y

ear E

nded

June

30,

201

9

• O

n th

e po

rtion

of t

he m

embe

r's s

alar

y th

at e

xcee

ds th

e st

atut

ory

min

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for m

embe

rs

en

title

d to

the

stat

utor

y m

inim

um u

nder

Sec

tion

21.4

02 o

f the

Tex

as E

duca

tion

Cod

e.

•

Dur

ing

a ne

w m

embe

r's fi

rst 9

0 da

ys o

f em

ploy

men

t.

• W

hen

any

part

or a

ll of

an

empl

oyee

's sa

lary

is

paid

by

fede

ral

fund

ing

sour

ce o

r a

priv

atel

y sp

onso

red

sour

ce.

In

add

ition

to th

e em

ploy

er c

ontri

butio

ns li

sted

abo

ve, t

here

are

two

addi

tiona

l sur

char

ges

an

empl

oyer

is su

bjec

t to.

• W

hen

empl

oyin

g a

retir

ee o

f the

Tea

cher

Ret

irem

ent S

yste

m th

e em

ploy

er sh

all p

ay b

oth

the

mem

ber

cont

ribut

ion

and

the

stat

e co

ntrib

utio

n as

an

empl

oym

ent

afte

r re

tirem

ent

surc

harg

e.

•

Whe

n a

scho

ol d

istri

ct d

oes

not

cont

ribut

e to

the

Fed

eral

Old

-Age

, Su

rviv

ors

and

Dis

abili

ty In

sura

nce

(OA

SDI)

Prog

ram

for c

erta

in e

mpl

oyee

s, th

ey m

ust c

ontri

bute

1.5

%

of t

he s

tate

con

tribu

tion

rate

for

cer

tain

ins

truct

iona

l or

adm

inis

trativ

e em

ploy

ees;

and

10

0% o

f the

stat

e co

ntrib

utio

n ra

te fo

r all

othe

r em

ploy

ees.

A

ctua

rial

Ass

umpt

ions

. The

tota

l pen

sion

liab

ility

in th

e A

ugus

t 31,

201

8 ac

tuar

ial v

alua

tion

was

det

erm

ined

usi

ng th

e fo

llow

ing

actu

aria

l ass

umpt

ions

: A

ugus

t 31,

201

7 ro

lled

forw

ard

to

Val

uatio

n D

ate

Aug

ust 3

1, 2

018

Act

uaria

l Cos

t Met

hod

In

divi

dual

Ent

ry A

ge N

orm

al

Ass

et V

alua

tion

Met

hod

Mar

ket V

alue

Si

ngle

Dis

coun

t Rat

e

6.

907%

Lo

ng-te

rm e

xpec

ted

Inve

stm

ent R

ate

of R

etur

n

7.25

%

Mun

icip

al B

ond

Rat

e as

of A

ugus

t 201

8

3.69

%

Infla

tion

2.

3%

Sala

ry In

crea

ses i

nclu

ding

infla

tion

3.

05%

to 9

.05%

B

enef

it C

hang

es d

urin

g th

e ye

ar

Non

e A

d ho

c po

st-e

mpl

oym

ent b

enef

it ch

ange

s

N

one

Th

e ac

tuar

ial m

etho

ds a

nd a

ssum

ptio

ns a

re p

rimar

ily b

ased

on

a st

udy

of a

ctua

l exp

erie

nce

for

the

thre

e ye

ar p

erio

d en

ding

Aug

ust 3

1, 2

017

and

adop

ted

on Ju

ly 2

018.

65

SAN

AN

TON

IO IN

DEP

END

ENT

SCH

OO

L D

ISTR

ICT

San

Ant

onio

, Tex

as

N

OTE

S TO

TH

E FI

NA

NC

IAL

STA

TEM

ENTS

For T

he Y

ear E

nded

June

30,

201

9

Dis

coun

t Rat

e. T

he d

isco

unt r

ate

used

to m

easu

re th

e to

tal p

ensi

on li

abili

ty w

as 6

.907

%. T

he

sing

le d

isco

unt r

ate

was

bas

ed o

n th

e ex

pect

ed r

ate

of r

etur

n on

pen

sion

pla

n in

vest

men

ts o

f 7.

25%

and

a m

unic

ipal

bon

d ra

te o

f 3.6

9%. T

he p

roje

ctio

n of

cas

h flo

ws u

sed

to d

eter

min

e th

e di

scou

nt r

ate

assu

med

tha

t co

ntrib

utio

ns f

rom

pla

n m

embe

rs a

nd t

hose

of

the

cont

ribut

ing

empl

oyer

s an

d th

e no

n-em

ploy

er c

ontri

butin

g en

tity

are

mad

e at

the

stat

utor

ily re

quire

d ra

tes.

Bas

ed o

n th

ose

assu

mpt

ions

, th

e pl

an's

fiduc

iary

net

pos

ition

was

suf

ficie

nt t

o fin

ance

the

be

nefit

pay

men

ts u

ntil

the

year

206

9. A

s a

resu

lt, t

he l

ong-

term

exp

ecte

d ra

te o

f re

turn

on

pens

ion

plan

inv

estm

ents

was

app

lied

to a

ll be

nefit

pay

men

ts a

fter

that

dat

e. T

he l

ong-

term

ex

pect

ed r

ate

of r

etur

n on

pen

sion

pla

n in

vest

men

ts w

as d

eter

min

ed u

sing

a b

uild

ing-

bloc

k m

etho

d in

whi

ch b

est e

stim

ates

rang

es o

f exp

ecte

d fu

ture

real

rate

s of

retu

rn (e

xpec

ted

retu

rns,

net o

f pen

sion

pla

n in

vest

men

t exp

ense

and

infla

tion)

are

dev

elop

ed fo

r eac

h m

ajor

ass

et c

lass

. Th

ese

rang

es a

re c

ombi

ned

to p

rodu

ce th

e lo

ng-te

rm e

xpec

ted

rate

of r

etur

n by

wei

ghtin

g th

e ex

pect

ed f

utur

e re

al r

ates

of

retu

rn b

y th

e ta

rget

ass

et a

lloca

tion

perc

enta

ge a

nd b

y ad

ding

ex

pect

ed in

flatio

n. B

est e

stim

ates

of

arith

met

ic r

eal r

ates

of

retu

rn f

or e

ach

maj

or a

sset

cla

ss

incl

uded

in th

e TR

S’s t

arge

t ass

et a

lloca

tion

as o

f Aug

ust 3

1, 2

018

are

sum

mar

ized

bel

ow:

66

SAN

AN

TON

IO IN

DEP

END

ENT

SCH

OO

L D

ISTR

ICT

San

Ant

onio

, Tex

as

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATE

MEN

TS

For T

he Y

ear E

nded

June

30,

201

9

Ass

et C

lass

Ta

rget

A

lloca

tion*

Long

-Ter

m

Expe

cted

G

eom

etric

R

eal R

ate

of

Ret

urn*

*

Expe

cted

C

ontri

butio

n to

Lo

ng-T

erm

Po

rtfol

io

Ret

urns

Glo

bal E

quity

U

.S.

18.0

0%

5.70

%

1.04

%

Non

-U.S

. Dev

elop

ed

13.0

0%

6.90

%

0.90

%

Emer

ging

Mar

kets

9.00

%

8.95

%

0.80

%

Dire

ctio

nal H

edge

Fun

ds

4.00

%

3.53

%

0.14

%

Priv

ate

Equi

ty

13.0

0%

10.1

8%

1.32

%

Stab

le V

alue

U

.S. T

reas

urie

s 11

.00%

1.

11%

0.

12%

Abs

olut

e Re

turn

0.

00%

0.

00%

0.

00%

Hed

ge F

unds

(Sta

ble

Val

ue)

4.00

%

3.09

%

0.12

%

Cas

h 1.

00%

-0

.30%

0.

00%

Rea

l Ret

urn

Glo

bal I

nfla

tion

Link

ed B

onds

3.

00%

0.

70%

0.

02%

Rea

l Ass

ets

14.0

0%

5.21

%

0.73

%

Ener

gy a

nd N

atur

al R

esou

rces

5.

00%

7.

48%

0.

37%

Com

mod

ities

0.

00%

0.

00%

0.

00%

Ris

k Pa

rity

R

isk P

arity

5.

00%

3.

70%

0.

18%

Infla

tion

Expe

ctat

ions

2.

30%

Vol

atili

ty D

rag

***

-0.7

9%

Tot

al

100.

00%

7.

25%

*Ta

rget

allo

catio

ns a

re b

ased

on

FY 2

016

polic

y m

odel

.**

Cap

ital m

arke

t ass

umpt

ions

com

e fr

om A

ON

Hew

itt (2

017

Q4)

***T

he v

olat

ility

dra

g re

sulti

ng fr

om th

e co

nver

sion

betw

een

arith

met

ic a

nd g

eom

etric

mea

n re

turn

s.

67

SAN

AN

TON

IO IN

DEP

END

ENT

SCH

OO

L D

ISTR

ICT

San

Ant

onio

, Tex

as

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATE

MEN

TS

For T

he Y

ear E

nded

June

30,

201

9

Dis

coun

t R

ate

Sens

itivi

ty A

naly

sis.

The

fol

low

ing

sche

dule

sho

ws

the

impa

ct o

f th

e N

et

Pens

ion

Liab

ility

if th

e di

scou

nted

rate

use

d w

as 1

% le

ss th

an a

nd 1

% g

reat

er th

an th

e di

scou

nt

rate

that

was

use

d (6

.907

%) i

n m

easu

ring

the

2018

Net

Pen

sion

Lia

bilit

y:

1% D

ecre

ase

in D

isco

unt

Rat

e (5

.907

%)

Dis

coun

t R

ate

(6.9

07%

)

1% In

crea

se

in D

isco

unt

Rat

e (7

.907

%)

Prop

ortio

nate

sha

re o

f th

e ne

t pe

nsio

n lia

bilit

y:

$ 23

4,39

0,74

5 $

155,

303,

847

$ 9

1,27

8,31

2

Pens

ion

Lia

bilit

ies,

Pens

ion

Exp

ense

, and

Def

erre

d ou

tflow

s of

Res

ourc

es a

nd D

efer

red

Inflo

ws o

f Res

ourc

es R

elat

ed to

Pen

sion

s.

At J

une

30, 2

019,

the

Dis

trict

repo

rts a

liab

ility

of

$15

5,30

3,84

7 fo

r its

pro

porti

onat

e sh

are

of t

he T

RS’

s ne

t pe

nsio

n lia

bilit

y. T

his

liabi

lity

refle

cts a

redu

ctio

n fo

r Sta

te p

ensi

on su

ppor

t pro

vide

d to

the

Dis

trict

. T

he a

mou

nt re

cogn

ized

by

the

Dis

trict

as

its p

ropo

rtion

ate

shar

e of

the

net p

ensi

on li

abili

ty, t

he re

late

d St

ate

supp

ort,

and

the

tota

l por

tion

of th

e ne

t pen

sion

liab

ility

that

was

ass

ocia

ted

with

the

Dis

trict

wer

e as

fo

llow

s:

Dis

trict

’s p

ropo

rtion

ate

shar

e of

the

colle

ctiv

e ne

t pen

sion

liab

ility

$

155

,303

,847

St

ate’

s pro

porti

onat

e sh

are

that

is a

ssoc

iate

d w

ith th

e D

istri

ct

25

7,42

0,97

0 To

tal

$ 41

2,72

4,81

7

The

net p

ensi

on li

abili

ty w

as m

easu

red

as o

f Aug

ust 3

1, 2

017

and

rolle

d fo

rwar

d to

Aug

ust 3

1,

2018

and

the

tota

l pen

sion

liab

ility

use

d to

cal

cula

te th

e ne

t pen

sion

liab

ility

was

det

erm

ined

by

an

actu

aria

l val

uatio

n as

of

Aug

ust 3

1, 2

017

and

rolle

d fo

rwar

d to

Aug

ust 3

1, 2

018.

The

em

ploy

er’s

por

tion

of th

e ne

t pen

sion

liab

ility

was

bas

ed o

n th

e em

ploy

er’s

con

tribu

tions

to

the

pens

ion

plan

rel

ativ

e to

the

con

tribu

tions

of

all

empl

oyer

s to

the

pla

n fo

r th

e pe

riod

of

Sept

embe

r 1, 2

017

thro

ugh

Aug

ust 3

1, 2

018.

At

Aug

ust

31,

2018

the

Dis

trict

’s p

ropo

rtion

of

the

colle

ctiv

e ne

t pe

nsio

n lia

bilit

y w

as

0.28

2152

9778

% w

hich

was

an

incr

ease

of 0

.012

8936

632%

from

its p

ropo

rtion

mea

sure

d as

of

Aug

ust 3

1, 2

017.

Cha

nges

Sin

ce th

e Pr

ior

Act

uari

al V

alua

tion.

The

follo

win

g w

ere

chan

ges

to th

e ac

tuar

ial

assu

mpt

ions

or

othe

r in

puts

that

affe

cted

mea

sure

men

t of

the

tota

l pen

sion

liab

ility

sin

ce th

e pr

ior m

easu

rem

ent p

erio

d.

•Th

e To

tal P

ensi

on L

iabi

lity

as o

f Aug

ust 3

1, 2

018

was

dev

elop

ed u

sing

a ro

ll-fo

rwar

dm

etho

d fro

m th

e A

ugus

t 31,

201

7 va

luat

ion.

•D

emog

raph

ic a

ssum

ptio

ns i

nclu

ding

pos

t-ret

irem

ent

mor

talit

y, t

erm

inat

ion

rate

s, an

dra

tes

of re

tirem

ent w

ere

upda

ted

base

d on

the

expe

rienc

e st

udy

perfo

rmed

for T

RS

for

68

SAN

AN

TON

IO IN

DEP

END

ENT

SCH

OO

L D

ISTR

ICT

San

Ant

onio

, Tex

as

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATE

MEN

TS

For T

he Y

ear E

nded

June

30,

201

9

the

perio

d en

ding

Aug

ust 3

1, 2

017.

•

Econ

omic

ass

umpt

ions

incl

udin

g ra

te o

f sal

ary

incr

ease

for i

ndiv

idua

l par

ticip

ants

was

upda

ted

base

d on

the

sam

e ex

perie

nce

stud

y.•

The

disc

ount

rate

cha

nged

from

8.0

per

cent

as

of A

ugus

t 31,

201

7 to

6.9

07 p

erce

nt a

sof

Aug

ust 3

1, 2

018

•Th

e lo

ng-te

rm a

ssum

ed ra

te o

f ret

urn

chan

ged

from

8.0

per

cent

to 7

.25

perc

ent.

•Th

e ch

ange

in lo

ng-te

rm ra

te o

f ret

urn

com

bine

d w

ith th

e ch

ange

in th

e sin

gle

disc

ount

rate

was

the

prim

ary

reas

on fo

r the

incr

ease

in th

e N

et P

ensi

on L

iabi

lity.

Ther

e w

ere

no c

hang

es o

f ben

efit

term

s tha

t affe

cted

mea

sure

men

t of t

he to

tal p

ensi

on li

abili

ty

durin

g th

e m

easu

rem

ent p

erio

d.

For

the

year

end

ed J

une

30, 2

019,

the

Dis

trict

rec

ogni

zed

pens

ion

expe

nse

of $

41,2

13,9

53.

The

Dis

trict

als

o re

cogn

ized

rev

enue

of

$25,

477,

815

for

supp

ort

prov

ided

by

the

Stat

e.

At

June

30,

201

9 th

e D

istri

ct r

epor

ted

its p

ropo

rtion

ate

shar

e of

the

TRS’

s de

ferr

ed o

utflo

ws

of

reso

urce

s and

def

erre

d in

flow

s of r

esou

rces

rela

ted

to p

ensi

on fr

om th

e fo

llow

ing

sour

ces:

Def

erre

d D

efer

red

Out

flow

s of

Inflo

ws o

f R

esou

rces

R

esou

rces

D

iffer

ence

bet

wee

n ex

pect

ed a

nd a

ctua

l eco

nom

ic

expe

rienc

es

$

96

8,03

7 $

3

,810

,543

C

hang

es in

act

uaria

l ass

umpt

ions

5

5,99

4,51

7

1

,749

,830

D

iffer

ence

s bet

wee

n pr

ojec

ted

and

actu

al in

vest

men

t ea

rnin

gs

-2,

946,

780

Cha

nges

in p

ropo

rtion

and

diff

eren

ces b

etw

een

the

empl

oyer

’s

cont

ribut

ions

and

the

prop

ortio

nate

shar

e of

co

ntrib

utio

ns

7,04

1,40

6

5,3

75,3

74

T

otal

as o

f Aug

ust 3

1, 2

018

mea

sure

men

t dat

e $

64

,003

,960

$

13,

882,

527

69

SAN

AN

TON

IO IN

DEP

END

ENT

SCH

OO

L D

ISTR

ICT

San

Ant

onio

, Tex

as

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATE

MEN

TS

For T

he Y

ear E

nded

June

30,

201

9

The

net

amou

nts

of t

he D

istri

ct’s

bal

ance

s of

def

erre

d ou

tflow

s an

d in

flow

s of

res

ourc

es

rela

ted

to p

ensi

ons w

ill b

e re

cogn

ized

in p

ensi

on e

xpen

se a

s fol

low

s:

Yea

r End

ed

June

30,

Pe

nsio

n Ex

pens

e A

mou

nt

2020

$

1

2,12

2,64

5 20

21

5,9

21,4

39

2022

4

,641

,828

20

23

10,3

83,5

98

2024

10,4

70,9

49

Ther

eafte

r

6,5

80,9

74

T

otal

$

5

0,12

1,43

3

At J

une

30, 2

019,

the

Dis

trict

repo

rted

its p

ropo

rtion

ate

shar

e of

the

TRS’

s de

ferr

ed o

utflo

ws

of re

sour

ces a

nd d

efer

red

inflo

ws r

elat

ed to

pen

sion

s fro

m th

e fo

llow

ing

sour

ces:

Def

erre

d O

utflo

ws o

f R

esou

rces

Def

erre

d In

flow

s of

Res

ourc

es

Tota

l net

am

ount

s per

Aug

ust 3

1, 2

018

mea

sure

men

t dat

e $

64,

003,

960

$ 13

,882

,527

C

ontri

butio

ns p

aid

to T

RS

subs

eque

nt to

the

mea

sure

men

t da

te

7

,874

,403

- To

tal

$ 71

,878

,363

$

13,8

82,5

27

M.D

EFIN

ED O

THER

PO

ST-E

MPL

OY

MEN

T B

ENEF

IT P

LAN

S

Plan

Des

crip

tion.

The

Dis

trict

par

ticip

ates

in T

exas

Pub

lic S

choo

l Ret

ired

Empl

oyee

s G

roup

Insu

ranc

e Pr

ogra

m (

TRS-

Car

e).

It is

a m

ultip

le-e

mpl

oyer

, cos

t-sha

ring

defin

ed O

ther

Pos

t-Em

ploy

men

t B

enef

it (O

PEB

) pl

an t

hat

has

a sp

ecia

l fu

ndin

g si

tuat

ion.

Th

e pl

an i

sad

min

iste

red

thro

ugh

a tru

st b

y th

e Te

ache

r R

etire

men

t Sy

stem

of

Texa

s (T

RS)

Boa

rd o

fTr

uste

es.

It is

est

ablis

hed

and

adm

inis

tere

d in

acc

orda

nce

with

the

Tex

as I

nsur

ance

Cod

e,C

hapt

er 1

575.

OPE

B P

lan

Fid

ucia

ry N

et P

ositi

on. D

etai

l in

form

atio

n ab

out

the

TRS-

Car

e’s

fiduc

iary

net

posi

tion

is a

vaila

ble

in a

sep

arat

ely-

issu

ed T

RS

Com

preh

ensi

ve A

nnua

l Fin

anci

al R

epor

t tha

tin

clud

es f

inan

cial

sta

tem

ents

and

req

uire

d su

pple

men

tary

inf

orm

atio

n. T

hat

repo

rt m

ay b

eob

tain

ed o

n th

e In

tern

et a

t: ht

tp://

ww

w.tr

s.sta

te.tx

.us/

abou

t/doc

umen

ts/c

afr.p

df#C

AFR

; by

70

SAN

AN

TON

IO IN

DEP

END

ENT

SCH

OO

L D

ISTR

ICT

San

Ant

onio

, Tex

as

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATE

MEN

TS

For T

he Y

ear E

nded

June

30,

201

9

writ

ing

to T

RS a

t 100

0 R

ed R

iver

Stre

et, A

ustin

, TX

, 787

01-2

698;

or

by c

allin

g (5

12)

542-

6592

.

Com

pone

nts

of t

he n

et O

PEB

lia

bilit

y of

the

TR

S-C

are

plan

as

of A

ugus

t 31

, 201

8 ar

e as

fo

llow

s:

Net

OPE

B L

iabi

lity

Tota

l To

tal O

PEB

Lia

bilit

y

$ 5

0,72

9,49

0,10

3 Le

ss: p

lan

fiduc

iary

net

pos

ition

7

98,5

74,6

33

Net

OPE

B li

abili

ty$

49,

930,

915,

470

Net

pos

ition

as a

per

cent

age

of to

tal O

PEB

liab

ility

1

.57%

Ben

efits

Pro

vide

d. T

RS-

Car

e pr

ovid

es a

bas

ic h

ealth

insu

ranc

e co

vera

ge (

TRS-

Car

e 1)

, at n

o co

st to

all

retir

ees

from

pub

lic s

choo

ls, c

harte

r sch

ools

, reg

iona

l edu

catio

n se

rvic

e ce

nter

s an

d ot

her

educ

atio

nal

dist

ricts

who

are

mem

bers

of

the

TRS

pens

ion

plan

. O

ptio

nal

depe

nden

t co

vera

ge is

ava

ilabl

e fo

r an

addi

tiona

l fee

.

Elig

ible

non

-Med

icar

e re

tiree

s an

d th

eir

depe

nden

ts m

ay p

ay p

rem

ium

s to

par

ticip

ate

in t

he

high

-ded

uctib

le h

ealth

pla

ns.

Elig

ible

Med

icar

e re

tiree

s an

d th

eir

depe

nden

ts m

ay p

ay

prem

ium

s to

par

ticip

ate

in t

he M

edic

are

Adv

anta

ge h

ealth

pla

ns.

To q

ualif

y fo

r TR

S-C

are

cove

rage

, a r

etire

e m

ust h

ave

at le

ast 1

0 ye

ars

of s

ervi

ce c

redi

t in

the

TRS

pens

ion

syste

m.

The

Boa

rd o

f Tru

stee

s is

gra

nted

the

auth

ority

to e

stab

lish

basi

c an

d op

tiona

l gro

up in

sura

nce

cove

rage

for p

artic

ipan

ts a

s w

ell a

s to

am

end

bene

fit te

rms

as n

eede

d un

der C

hapt

er 1

575.

052.

Th

ere

are

no a

utom

atic

pos

t-em

ploy

men

t ben

efit

chan

ges,

incl

udin

g au

tom

atic

CO

LAs.

The

prem

ium

rat

es f

or t

he o

ptio

nal

heal

th i

nsur

ance

are

bas

ed o

n ye

ars

of s

ervi

ce o

f th

e m

embe

r. T

he sc

hedu

le b

elow

show

s the

mon

thly

rate

s for

a re

tiree

with

and

with

out M

edic

are

cove

rage

.

TRS-

Care

Mon

thly

Pre

miu

m R

ates

Ef

fect

ive

Jan.

1, 2

018

– De

c. 3

1, 2

018

Med

icar

e

Non

-Med

icar

e Re

tiree

or S

urvi

ving

Spo

use

$

13

5 $

2

00

Re

tiree

and

Spo

use

52

9

689

Re

tiree

or S

urvi

ving

Spo

use

and

Child

ren

46

8 4

08

Retir

ee a

nd F

amily

1,02

0

999

71

SAN

AN

TON

IO IN

DEP

END

ENT

SCH

OO

L D

ISTR

ICT

San

Ant

onio

, Tex

as

N

OTE

S TO

TH

E FI

NA

NC

IAL

STA

TEM

ENTS

For T

he Y

ear E

nded

June

30,

201

9

Con

trib

utio

ns. C

ontri

butio

n R

ates

for t

he T

RS-

Car

e pl

an a

re e

stab

lishe

d in

sta

te s

tatu

te b

y th

e Te

xas

Legi

slat

ure,

and

ther

e is

no

cont

inui

ng o

blig

atio

n to

pro

vide

ben

efits

bey

ond

each

fisc

al

year

. Th

e TR

S-C

are

plan

is c

urre

ntly

fund

ed o

n a

pay-

as-y

ou-g

o ba

sis a

nd is

subj

ect t

o ch

ange

ba

sed

on

avai

labl

e fu

ndin

g.

Fu

ndin

g fo

r TR

S-C

are

is

prov

ided

by

re

tiree

pr

emiu

m

cont

ribut

ions

and

con

tribu

tions

from

the

stat

e, a

ctiv

e m

embe

rs, a

nd sc

hool

dis

trict

s bas

ed u

pon

publ

ic s

choo

l dis

trict

pay

roll.

The

TR

S B

oard

of t

rust

ees

does

not

hav

e th

e au

thor

ity to

set

or

amen

d co

ntrib

utio

n ra

tes.

Texa

s In

sura

nce

Cod

e, s

ectio

n 15

75.2

02 e

stab

lishe

s th

e st

ate’

s co

ntrib

utio

n ra

te w

hich

is

1.25

% o

f the

mem

ber’s

sala

ry.

Sect

ion

1575

.203

est

ablis

hes t

he a

ctiv

e m

embe

r’s ra

te w

hich

is

.65%

of

pay.

Se

ctio

n 15

75.2

04 e

stab

lishe

s an

em

ploy

er c

ontri

butio

n ra

te o

f no

t le

ss t

han

0.25

% a

nd n

ot m

ore

than

0.7

5% o

f th

e an

nual

com

pens

atio

n of

eac

h ac

tive

mem

ber

of t

he

publ

ic.

The

actu

al e

mpl

oyer

con

tribu

tion

rate

is p

resc

ribed

by

the

Legi

slat

ure

in th

e G

ener

al

App

ropr

iatio

ns A

ct w

hich

is 0

.75%

of

each

act

ive

mem

ber’

s pa

y fo

r fis

cal y

ear

2018

. Th

e ac

tual

em

ploy

er c

ontri

butio

n ra

te is

pre

scrib

ed b

y th

e Le

gisl

atur

e in

the

Gen

eral

App

ropr

iatio

n A

ct.

The

follo

win

g ta

ble

show

s con

tribu

tions

to th

e TR

S-C

are

plan

by

type

of c

ontri

buto

r.

Co

ntrib

utio

n Ra

tes

20

18

2019

M

embe

r

0.

65%

0.

65%

N

on-E

mpl

oyer

Con

trib

utin

g En

tity

(Sta

te)

1.

25%

1.

25%

Em

ploy

ers

0.75

%

0.75

%

Fede

ral/P

rivat

e Fu

ndin

g Re

mitt

ed b

y Em

ploy

ers

1.2

5%

1.25

%

20

19 E

mpl

oyer

Con

trib

utio

ns

$

3,

403,

544

20

19 M

embe

r Con

trib

utio

ns

$

2,

373,

582

20

18 N

ECE

On-

Beha

lf Co

ntrib

utio

ns

$

4,

029,

531

In a

dditi

on to

the

empl

oyer

con

tribu

tions

list

ed a

bove

, the

re is

an

addi

tiona

l sur

char

ge a

ll TR

S em

ploy

ers

are

subj

ect t

o (re

gard

less

of w

heth

er o

r not

they

par

ticip

ate

in th

e TR

S-C

are

OPE

B

prog

ram

). W

hen

empl

oyer

s hi

re a

TR

S re

tiree

, th

ey a

re r

equi

red

to p

ay t

o TR

S-C

are,

a

mon

thly

surc

harg

e of

$53

5 pe

r ret

iree.

W

hen

Sena

te B

ill 1

, 85

th L

egisl

atur

e, R

egul

ar S

essi

on,

TRS-

Car

e re

ceiv

ed s

uppl

emen

tal

appr

opria

tions

from

the

Stat

e of

Tex

as a

s the

Non

-Em

ploy

er C

ontri

butin

g En

tity

in th

e am

ount

of

$18

2.6

mill

ion

in f

isca

l ye

ar 2

018.

H

ouse

Bill

30

of t

he 8

5th L

egis

latu

re p

rovi

ded

an

72

SAN

AN

TON

IO IN

DEP

END

ENT

SCH

OO

L D

ISTR

ICT

San

Ant

onio

, Tex

as

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATE

MEN

TS

For T

he Y

ear E

nded

June

30,

201

9

addi

tiona

l $21

2 m

illio

n in

a o

ne-ti

me

supp

lem

enta

l fun

ding

for

the

FY 2

018-

2019

bie

nniu

m.

One

-tim

e su

pple

men

tal c

ontri

butio

ns d

urin

g fis

cal 2

018

tota

led

$394

.6 m

illio

n.

Act

uari

al A

ssum

ptio

ns. T

he to

tal O

PEB

liab

ility

in th

e A

ugus

t 31,

201

7 ac

tuar

ial v

alua

tion

was

rol

led

forw

ard

to A

ugus

t 31

, 20

18.

The

act

uaria

l va

luat

ion

was

det

erm

ined

usi

ng t

he

follo

win

g ac

tuar

ial a

ssum

ptio

ns:

The

follo

win

g as

sum

ptio

ns a

nd o

ther

inpu

ts u

sed

for m

embe

rs o

f TR

S-C

are

are

iden

tical

to th

e as

sum

ptio

ns u

sed

in t

he A

ugus

t 31

, 20

17 T

RS

pens

ion

actu

aria

l va

luat

ion

that

was

rol

led

forw

ard

to A

ugus

t 31,

201

8:

R

ates

of M

orta

lity

G

ener

al In

flatio

n R

ates

of R

etire

men

t W

age

Infla

tion

R

ates

of T

erm

inat

ion

Expe

cted

Pay

roll

Gro

wth

R

ates

of D

isab

ility

Inci

denc

e

Add

ition

al A

ctua

rial

Met

hods

and

Ass

umpt

ions

:

V

alua

tion

Dat

e A

ugus

t 31,

201

7 R

olle

d fo

rwar

d to

A

ugus

t 31,

201

8

Act

uaria

l Cos

t Met

hod

Indi

vidu

al E

ntry

Age

Nor

mal

Ass

et V

alua

tion

Met

hod

M

arke

t Val

ue

In

flatio

n 2.

3%

Si

ngle

Dis

coun

t Rat

e

3.69

%

A

ging

Fac

tors

Pro

ject

ed

Bas

ed o

n Pl

an S

peci

fic E

xper

ienc

e

Expe

nses

Th

ird P

arty

adm

inis

trativ

e ex

pens

es r

elat

ed

to t

he d

eliv

ery

of h

ealth

car

e be

nefit

s ar

e in

clud

ed in

the

age

adju

sted

cla

ims c

ost.

Pa

yrol

l Gro

wth

Rat

e 2.

5%

Sa

lary

Incr

ease

s*

3.

05%

- 9.

05%

Hea

lthca

re T

rend

Rat

es

4.5%

to 1

2.0%

Elec

tion

Rat

es

N

orm

al R

etire

men

t: 70

% p

artic

ipat

ion

prio

r to

age

65

and

75%

par

ticip

atio

n af

ter a

ge 6

5

Ad

hoc

post

-em

ploy

men

t ben

efit

chan

ges

N

one

*Inc

lude

s Inf

latio

n of

2.3

%

Oth

er I

nfor

mat

ion:

The

re w

as a

sig

nific

ant p

lan

chan

ge a

dopt

ed in

fisc

al y

ear e

ndin

g A

ugus

t 31

, 201

7. E

ffec

tive

Janu

ary

1, 2

018,

onl

y on

e he

alth

pla

n op

tion

will

be

offe

red

and

all r

etire

es

will

be

requ

ired

to c

ontri

bute

mon

thly

pre

miu

ms

for c

over

age.

Ass

umpt

ion

chan

ges

mad

e fo

r th

e A

ugus

t 31,

201

7 va

luat

ion

incl

ude

a ch

ange

to th

e as

sum

ptio

n re

gard

ing

the

phas

e-ou

t of

73

SAN

AN

TON

IO IN

DEP

END

ENT

SCH

OO

L D

ISTR

ICT

San

Ant

onio

, Tex

as

N

OTE

S TO

TH

E FI

NA

NC

IAL

STA

TEM

ENTS

For T

he Y

ear E

nded

June

30,

201

9

the

Med

icat

e Pa

rt D

sub

sidi

es a

nd a

cha

nge

to th

e di

scou

nt ra

te fr

om 2

.98%

as

of A

ugus

t 31,

20

16 to

3.4

2% a

s of A

ugus

t 31,

201

7.

Dis

coun

t Rat

e. A

sin

gle

disc

ount

rate

of 3

.69%

was

use

d to

mea

sure

the

tota

l OPE

B lia

bilit

y.

Ther

e w

as a

n in

crea

se o

f .27

per

cent

in th

e di

scou

nt ra

te s

ince

the

prev

ious

yea

r. Th

e D

isco

unt

Rat

e ca

n be

foun

d in

the

2018

TR

S C

AFR

on

page

71.

Bec

ause

the

plan

is e

ssen

tially

a “

pay-

as-y

ou-g

o” p

lan,

the

sing

le d

isco

unt r

ate

is e

qual

to th

e pr

evai

ling

mun

icip

al b

ond

rate

. Th

e pr

ojec

tion

of c

ash

flow

s us

ed to

det

erm

ine

the

disc

ount

rat

e as

sum

ed th

at c

ontri

butio

ns f

rom

ac

tive

mem

bers

and

tho

se o

f th

e co

ntrib

utin

g em

ploy

ers

and

the

non-

empl

oyer

con

tribu

ting

entit

y ar

e m

ade

at th

e st

atut

orily

requ

ired

rate

s. B

ased

on

thos

e as

sum

ptio

ns, t

he O

PEB

pla

n’s

fiduc

iary

net

pos

ition

was

pro

ject

ed t

o no

t be

abl

e to

mak

e al

l fu

ture

ben

efit

paym

ents

of

curr

ently

pla

n m

embe

rs.

The

refo

re,

the

mun

icip

al b

ond

rate

was

app

lied

to a

ll pe

riods

of

proj

ecte

d be

nefit

pay

men

ts to

det

erm

ine

the

tota

l OPE

B li

abili

ty.

D

isco

un

t R

ate

S

ensi

tiv

ity

A

na

lysi

s. T

he f

ollo

win

g sc

hedu

le s

how

s th

e im

pact

of

the

net

OPE

B li

abili

ty if

the

disc

ount

ed r

ate

used

was

1%

less

than

and

1%

gre

ater

than

the

disc

ount

ra

te th

at w

as u

sed

(3.6

9%) i

n m

easu

ring

the

net O

PEB

liab

ility

:

1% D

ecre

ase

in

Dis

coun

t R

ate

(2.6

9%)

Dis

coun

t R

ate

(3.6

9%)

1% In

crea

se

in D

isco

unt

Rat

e (4

.69%

) Pr

opor

tiona

te s

hare

of

the

net

OPE

B lia

bilit

y:

$ 30

0,31

4,28

4 $

252,

292,

103

$ 2

14,3

03,4

62

Hea

lth

care

Co

st T

ren

d R

ate

s S

ensi

tiv

ity

An

aly

sis.

The

fol

low

ing

pres

ents

the

net

OPE

B lia

bilit

y of

the

plan

usi

ng th

e as

sum

ed h

ealth

care

cos

t tre

nd ra

te, a

s w

ell a

s w

hat t

he n

et O

PEB

liabi

lity

wou

ld b

e if

it w

ere

calc

ulat

ed u

sing

a tr

end

rate

that

is o

ne-p

erce

ntag

e po

int l

ower

or

one

perc

enta

ge p

oint

hig

her t

han

the

assu

med

hea

lthca

re c

ost t

rend

rate

of 8

.5%

is u

sed.

1% D

ecre

ase

Cur

rent

H

ealth

care

Cos

t Tr

end

Rat

e

1% In

crea

se

Prop

ortio

nate

sha

re o

f th

e ne

t O

PEB

liabi

lity:

$

209,

532,

700

$ 25

2,29

2,10

3 $

308

,607

,160

C

ha

ng

es S

ince

th

e P

rio

r A

ctu

ari

al

Va

lua

tio

n.

The

fol

low

ing

wer

e ch

ange

s to

the

actu

aria

l as

sum

ptio

ns o

r ot

her

inpu

ts t

hat

affe

cted

mea

sure

men

t of

the

Tot

al O

PEB

lia

bilit

y si

nce

the

prio

r mea

sure

men

t per

iod:

The

se c

an b

e fo

und

in th

e TR

S C

AFR

on p

age

71.

A

djus

tmen

ts w

ere

mad

e fo

r ret

irees

that

wer

e kn

own

to h

ave

disc

ontin

ued

thei

r he

alth

ca

re c

over

age

in fi

scal

yea

r 201

8. T

his c

hang

e in

crea

sed

the

Tota

l OPE

B L

iabi

lity.

74

SAN

AN

TON

IO IN

DEP

END

ENT

SCH

OO

L D

ISTR

ICT

San

Ant

onio

, Tex

as

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATE

MEN

TS

For T

he Y

ear E

nded

June

30,

201

9

Th

e he

alth

car

e tre

nd ra

te a

ssum

ptio

n w

as u

pdat

ed to

refle

ct th

e an

ticip

ated

retu

rn o

f the

H

ealth

Insu

rer F

ee (H

IF) i

n 20

20.

This

cha

nge

incr

ease

d th

e To

tal O

PEB

Lia

bilit

y.

D

emog

raph

ic a

nd e

cono

mic

ass

umpt

ions

wer

e up

date

d ba

sed

on th

e ex

perie

nce

stud

y pe

rfor

med

for T

RS

for t

he p

erio

d en

ding

Aug

ust 3

1, 2

017.

Thi

s ch

ange

d in

crea

sed

the

Tota

l OPE

B L

iabi

lity.

Th

e di

scou

nt ra

te w

as c

hang

ed fr

om 3

.42

perc

ent a

s of

Aug

ust 3

1, 2

017

to 3

.69

perc

ent

as o

f Aug

ust 3

1, 2

018.

Thi

s cha

nge

low

ered

the

Tota

l OPE

B L

iabi

lity

$2.3

bill

ion.

Cha

nge

of B

enef

it Te

rms

Sinc

e th

e Pr

ior

Mea

sure

men

t Dat

e-Pl

ease

see

the

2018

TR

S C

AFR

, pag

e 68

, sec

tion

B. f

or a

list

of

chan

ges

mad

e ef

fect

ive

Sept

embe

r 1,

201

7 by

th

e 85

th T

exas

Leg

isla

ture

.

OP

EB

L

iab

ilit

ies,

O

PE

B E

xp

ense

, an

d D

eferr

ed O

utf

low

s o

f R

esou

rces

an

d D

efer

red

Infl

ow

s of

Res

ou

rces

Rel

ate

d t

o O

PE

B

At J

une

30, 2

019,

the

Dis

trict

repo

rted

a lia

bilit

y of

$25

2,29

2,10

3 fo

r its

pro

porti

onat

e sh

are

of

the

TRS’

s ne

t O

PEB

lia

bilit

y. T

his

liabi

lity

refle

cts

a re

duct

ion

for

Stat

e O

PEB

sup

port

prov

ided

to th

e D

istri

ct.

The

amou

nt re

cogn

ized

by

the

Dis

trict

as i

ts p

ropo

rtion

ate

shar

e of

the

net O

PEB

liab

ility

, the

rela

ted

Stat

e su

ppor

t, an

d th

e to

tal p

ortio

n of

the

net O

PEB

liab

ility

that

w

as a

ssoc

iate

d w

ith th

e D

istri

ct w

ere

as fo

llow

s:

Dis

trict

’s p

ropo

rtion

ate

shar

e of

the

colle

ctiv

e ne

t OPE

B li

abili

ty

$

252,

292,

103

Stat

e’s p

ropo

rtion

ate

shar

e th

at is

ass

ocia

ted

with

the

Dis

trict

29

2,06

8,18

7 To

tal

$ 54

4,36

0,29

0

The

net O

PEB

liab

ility

was

mea

sure

d as

of A

ugus

t 31,

201

7 an

d ro

lled

forw

ard

to A

ugus

t 31,

20

18 a

nd th

e to

tal O

PEB

liab

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use

d to

cal

cula

te th

e ne

t OPE

B li

abili

ty w

as d

eter

min

ed b

y an

ac

tuar

ial v

alua

tion

as o

f tha

t dat

e. T

he e

mpl

oyer

’s p

ortio

n of

the

net O

PEB

liab

ility

was

bas

ed

on th

e em

ploy

er’s

con

tribu

tions

to th

e O

PEB

plan

rela

tive

to th

e co

ntrib

utio

ns o

f all

empl

oyer

s to

the

plan

for t

he p

erio

d of

Sep

tem

ber 1

, 201

7 th

roug

h A

ugus

t 31,

201

8.

At

Aug

ust

31,

2018

the

Dis

trict

’s p

ropo

rtion

of

the

colle

ctiv

e ne

t O

PEB

lia

bilit

y w

as

0.50

5282

3493

% c

ompa

red

to th

e 0.

4712

001%

as

of A

ugus

t 31,

201

7.

This

is a

n in

crea

se o

f 0.

0340

8216

91%

.

For

the

year

end

ed J

une

30, 2

019,

the

Dis

trict

rec

ogni

zed

OPE

B e

xpen

se o

f $1

8,71

9,67

1 an

d re

venu

e of

$10

,623

,687

for s

uppo

rt pr

ovid

ed b

y th

e St

ate.

At J

une

30, 2

019

the

Dis

trict

repo

rted

its p

ropo

rtion

ate

shar

e of

the

TRS’

s de

ferr

ed o

utflo

ws

of

reso

urce

s and

def

erre

d in

flow

s of r

esou

rces

rela

ted

to O

PEB

from

the

follo

win

g so

urce

s:

75

SAN

AN

TON

IO IN

DEP

END

ENT

SCH

OO

L D

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ICT

San

Ant

onio

, Tex

as

N

OTE

S TO

TH

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NA

NC

IAL

STA

TEM

ENTS

For T

he Y

ear E

nded

June

30,

201

9

Def

erre

d

D

efer

red

O

utflo

ws o

f In

flow

s of

R

esou

rces

R

esou

rces

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eren

ce b

etw

een

expe

cted

and

act

ual e

xper

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es

$

1

3,38

8,20

4

$

3,9

81,5

40

Cha

nges

in a

ctua

rial a

ssum

ptio

ns

4,2

10,0

72

75,

799,

301

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diff

eren

ces b

etw

een

proj

ecte

d an

d ac

tual

inve

stm

ent

earn

ings

4

4,12

3

-

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hang

es in

pro

porti

on a

nd d

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ence

s bet

wee

n th

e em

ploy

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ntrib

utio

ns a

nd th

e pr

opor

tiona

te sh

are

of

cont

ribut

ions

18,6

85,6

92

-

Tot

al a

s of A

ugus

t 31,

201

8 m

easu

rem

ent d

ate

$

3

6,32

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1

$ 7

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1

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e ne

t am

ount

s of t

he D

istri

ct’s

bal

ance

s of d

efer

red

outfl

ows a

nd in

flow

s of r

esou

rces

rela

ted

to O

PEB

will

be

reco

gniz

ed in

OPE

B e

xpen

se a

s fol

low

s:

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r End

ed

June

30,

O

PEB

Exp

ense

A

mou

nt

2020

$

(7,

605,

136)

2021

(7,

605,

136)

2022

(7,6

05,1

36)

20

23

(7,6

13,4

81)

20

24

(7

,618

,253

)

Ther

eafte

r

(5

,405

,608

)

T

otal

$

(43,

452,

750)

At J

une

30, 2

019,

the

Dis

trict

repo

rted

its p

ropo

rtion

ate

shar

e of

the

TRS’

s def

erre

d ou

tflow

s of

reso

urce

s and

def

erre

d in

flow

s rel

ated

to O

PEB

from

the

follo

win

g so

urce

s:

D

efer

red

Out

flow

s of

Res

ourc

es

Def

erre

d In

flow

s of

Res

ourc

es

Tota

l net

am

ount

s per

Aug

ust 3

1, 2

018

mea

sure

men

t dat

e $

36,3

28,0

91

$ 79

,780

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C

ontri

butio

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aid

to T

RS

subs

eque

nt to

the

mea

sure

men

t da

te

2

,848

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- To

tal

$ 39

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$

79,7

80,8

41

76

SAN

AN

TON

IO IN

DEP

END

ENT

SCH

OO

L D

ISTR

ICT

San

Ant

onio

, Tex

as

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATE

MEN

TS

For T

he Y

ear E

nded

June

30,

201

9

IV.

OT

HE

R I

NF

OR

MA

TIO

N

A.

FUN

D B

AL A

NC

E

At J

une

30, 2

019,

fund

bal

ance

is c

ompr

ised

of t

he fo

llow

ing:

Ma j

or F

unds

Gen

eral

Fun

d D

ebt S

ervi

ce

Cap

ital

Proj

ects

Oth

er F

unds

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l

No

nsp

en

da

ble

:

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ntor

ies

$

857

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$

-

$-

$

798

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$

1

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wm

ent P

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108,

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108,

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ric

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ral o

r Sta

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249,

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2,23

1,17

2

-

-

- 2,

231,

172

Def

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d Te

chno

logy

-

-

-

-

-

Sc

hool

Bus

& V

ehic

le F

leet

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e pla

cem

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-

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5,0

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pus A

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56

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pens

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n In

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8,

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8

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77

SAN

AN

TON

IO IN

DEP

END

ENT

SCH

OO

L D

ISTR

ICT

San

Ant

onio

, Tex

as

N

OTE

S TO

TH

E FI

NA

NC

IAL

STA

TEM

ENTS

For T

he Y

ear E

nded

June

30,

201

9

Def

erre

d Fa

cilit

y M

aint

enan

ce

-

-

-

3

,655

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3,65

5,90

4

Land

or B

uild

ing

Purc

hase

-

- -

5,4

56,4

70

5

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e &

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ndan

ce

-

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5

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00

500

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ral G

rant

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ind

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tinge

ncy

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0,00

0

1

,000

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Ass

ign

ed

:

Misc

ella

neou

s Ass

igne

d Fu

nd B

alan

ce

-

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216

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2

16,6

95

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i gne

d fo

r Cen

tral O

ffice

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stru

ctio

n

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10,

500,

000

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A

ssig

ned

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afet

y &

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dent

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chno

logy

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twar

e.

-

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1,4

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87

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ass

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88

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9,74

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7

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l $

99

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9

2,07

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$

168,

352,

110

$

23,

936,

860

$

38

3,73

8,45

5

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HEA

LTH

AN

D D

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L IN

SUR

AN

CE

H

EA

LT

H –

The

Dis

trict

’s e

mpl

oyee

hea

lth b

enef

its, i

nclu

ding

med

ical

and

pha

rmac

y, b

ecam

e pa

rtial

ly s

elf-

fund

ed s

tarti

ng N

ovem

ber

1, 2

016.

In

ord

er to

pro

tect

our

sel

f-fu

nded

med

ical

an

d ph

arm

acy

bene

fit p

lan

asse

ts, t

he D

istri

ct h

as in

pla

ce a

sto

p lo

ss re

insu

ranc

e po

licy

with

Su

n Li

fe F

inan

cial

. Th

is p

olic

y pr

otec

ts t

he D

istri

ct f

rom

cat

astro

phic

cla

ims

incu

rred

and

pa

id fo

r the

pla

n ye

ar th

at e

xcee

d $5

00,0

00 p

er c

over

ed p

erso

n up

to a

$1,

000,

000

aggr

egat

e lim

it. T

he p

olic

y in

clud

es a

min

imum

ann

ual a

ggre

gate

ded

uctib

le o

f $54

,982

,951

. Su

n Li

fe

Fina

ncia

l has

an

A.M

. Bes

t fin

anci

al s

treng

th ra

ting

of A

+ an

d a

long

-term

issu

er c

redi

t rat

ing

of a

a-.

Dur

ing

the

year

end

ed J

une

30, 2

019,

em

ploy

ees

of th

e D

istri

ct w

ere

cove

red

by o

ne o

f thr

ee

heal

th in

sura

nce

plan

s at

thei

r opt

ion.

The

Dis

trict

con

tribu

ted

betw

een

$411

.00

and

$434

.00

for

cale

ndar

yea

r 20

18 a

nd $

434.

15 a

nd $

510.

29 f

or c

alen

dar

year

201

9 pe

r m

onth

, pe

r em

ploy

ee, f

or m

edic

al c

over

age.

Em

ploy

ees,

at th

eir

optio

n, a

utho

rized

pay

roll

with

hold

ings

to

pay

pre

miu

ms f

or d

epen

dent

s.

The

prov

isio

n fo

r un

paid

sel

f-fu

nded

med

ical

los

ses

at J

une

30,

2019

, in

the

am

ount

of

$3,4

61,0

00 is

rep

orte

d in

cur

rent

liab

ilitie

s as

par

t of

clai

ms

paya

ble

in th

e Pr

oprie

tary

Fun

ds

Stat

emen

ts o

f N

et P

ositi

on,

as i

t is

bas

ed u

pon

actu

al p

rior

clai

ms

cost

exp

erie

nce

and

proj

ecte

d tim

e la

gs (l

ess

than

60

days

) in

settl

ing

such

cla

ims

and

actu

al c

laim

s pa

id a

fter y

ear

end.

All

cost

s inc

urre

d ar

e ac

coun

ted

for a

s exp

endi

ture

s in

the

oper

atin

g fu

nds a

ffec

ted.

78

SAN

AN

TON

IO IN

DEP

END

ENT

SCH

OO

L D

ISTR

ICT

San

Ant

onio

, Tex

as

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATE

MEN

TS

For T

he Y

ear E

nded

June

30,

201

9

DE

NT

AL

– D

urin

g th

e ye

ar e

nded

Jun

e 30

, 201

9, th

e D

istri

ct c

ontri

bute

d $1

7.43

for c

alen

dar

year

201

8 an

d be

twee

n $1

6.77

and

$23

.65

for c

alen

dar y

ear 2

019

per m

onth

, per

em

ploy

ee, f

or

dent

al c

over

age.

All

bene

fits

wer

e pa

id b

y a

third

par

ty a

dmin

istra

tor a

ctin

g on

beh

alf o

f the

D

istri

ct.

The

Plan

was

aut

horiz

ed b

y Se

ctio

n 21

.922

, Tex

as E

duca

tion

Cod

e an

d A

rticl

e 3.

51-

2, T

exas

Insu

ranc

e C

ode,

and

was

doc

umen

ted

by c

ontra

ctua

l agr

eem

ent.

The

“Pla

n Su

perv

isor

Agr

eem

ent”

bet

wee

n th

e D

istri

ct a

nd t

he t

hird

par

ty a

dmin

istra

tor

is au

tom

atic

ally

ren

ewed

for

a o

ne-y

ear

perio

d, u

nles

s te

rmin

ated

as

prov

ided

in

the

Stan

dard

Te

rms a

nd C

ondi

tions

of t

he A

gree

men

t.

The

prov

isio

n fo

r unp

aid

self-

fund

ed d

enta

l los

ses a

t Jun

e 30

, 201

9, in

the

amou

nt o

f $17

9,00

0 is

repo

rted

in c

urre

nt li

abili

ties a

s par

t of c

laim

s pay

able

in th

e Pr

oprie

tary

Fun

ds S

tate

men

ts o

f N

et P

ositi

on, a

s it

is b

ased

upo

n ac

tual

prio

r cl

aim

s co

st e

xper

ienc

e an

d av

erag

e tim

e la

gs

(his

toric

ally

, les

s th

an 6

0 da

ys)

in s

ettli

ng s

uch

clai

ms

and

actu

al c

laim

s pa

id a

fter

year

end

. A

ll co

sts i

ncur

red

are

acco

unte

d fo

r as e

xpen

ditu

res i

n th

e op

erat

ing

fund

s aff

ecte

d.

C.

RIS

K M

AN

AG

EMEN

T

The

Dis

trict

is

expo

sed

to v

ario

us r

isks

of

loss

rel

ated

to

torts

; th

eft

of,

dam

age

to a

ndde

stru

ctio

n of

ass

ets;

err

ors

and

omis

sion

s; in

jurie

s to

em

ploy

ees;

and

, nat

ural

dis

aste

rs.

The

Dis

trict

par

ticip

ates

in

the

Texa

s Po

litic

al S

ubdi

visi

ons

Join

t Se

lf-In

sura

nce

Fund

s (S

IF),

apu

blic

ent

ity r

isk

pool

cur

rent

ly o

pera

ting

as a

com

mon

ris

k m

anag

emen

t an

d in

sura

nce

prog

ram

for p

ublic

ent

ities

. Th

e D

istri

ct is

insu

red

with

the

SIF

for a

uto

liabi

lity

and

phys

ical

dam

age

cove

rage

. Th

e SI

F is

pro

vide

d so

that

mem

bers

will

hav

e no

join

t or s

ever

al li

abili

ties

othe

r tha

n th

eir r

equi

red

cont

ribut

ion.

The

Dis

trict

ope

rate

s a li

mite

d m

anag

emen

t pro

gram

for

wor

kers

com

pens

atio

n. P

rem

ium

s ar

e pa

id b

y al

l oth

er fu

nds

and

are

avai

labl

e to

pay

cla

ims,

clai

m re

serv

e, a

nd a

dmin

istra

tive

cost

s of t

he p

rogr

am.

Ther

e w

ere

no si

gnifi

cant

redu

ctio

ns in

cove

rage

in th

e pa

st fi

scal

yea

r, an

d se

ttlem

ents

did

not

exc

eed

insu

ranc

e co

vera

ge fo

r eac

h of

the

past

thre

e fis

cal y

ears

.

79

SAN

AN

TON

IO IN

DEP

END

ENT

SCH

OO

L D

ISTR

ICT

San

Ant

onio

, Tex

as

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATE

MEN

TS

For T

he Y

ear E

nded

June

30,

201

9

D.

REV

ENU

ES F

RO

M L

OC

AL

AN

D IN

TER

MED

IATE

SO

UR

CES

Maj

or F

unds

Oth

er

Gov

ernm

enta

l Fu

nds

Gen

eral

Fun

d D

ebt S

ervi

ce

Fund

C

apita

l Pro

ject

s Fu

nd

Tota

l Pr

oper

ty T

axes

$

2

07,8

21,7

09

$

69,

601,

277

$ -

$-

$ 2

77,4

22,9

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vest

men

t Inc

ome

3,08

4,62

0 5,

158,

929

3,99

9,27

120

5,17

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In

sura

nce

Rec

over

y 29

,450

-

- 3,

597

33,0

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Pena

lties

, Int

eres

t and

O

ther

Tax

Rel

ated

Inco

me

2,55

3,73

1 75

2,92

0 -

- 3,

306,

651

Food

Ser

vice

Act

ivity

-

- -

1,11

6,37

3 1,

116,

373

Tuiti

on

411,

792

- -

- 41

1,79

2 R

ent

297,

644

- -

- 29

7,64

4 Sa

n A

nton

io E

duca

tion

Foun

datio

n G

rant

11

9,97

0 -

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119,

970

Ver

izon

Gra

nt

106,

486

- -

- 10

6,48

6 A

thle

tic A

ctiv

ity

342,

173

- -

- 34

2,17

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ampu

s Act

ivity

-

- -

854,

458

854,

458

Co-

curr

icul

ar S

tude

nt

19,5

00

- -

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A

fter S

choo

l Cha

lleng

e Pr

ogra

m

-

- -

1,44

5,24

5 1,

445,

245

Val

ero

Gra

nt

- -

- 1,

284,

473

1,28

4,47

3 C

ity E

duca

tion

Partn

ers

- -

- 1,

580,

440

1,58

0,44

0 Sh

ared

Ser

vice

s -

- -

60,2

56

60,2

56

Oth

er

2,13

7,51

5 -

- 2,

264,

650

4,4

02,1

65

T

otal

$

2

16,9

24,5

90

$

75,

513,

126

$

3,

999,

271

$

8,8

14,6

68

$ 3

05,2

51,6

55

Dur

ing

the

year

end

ed J

une

30,

2019

, re

venu

es f

rom

loc

al a

nd i

nter

med

iate

sou

rces

in

the

Prop

rieta

ry F

und

Type

s con

sist

ed o

f the

follo

win

g:

Inte

rnal

Ser

vice

Fun

d

Inte

rest

Ear

ned

$70

,641

Cha

rges

for S

ervi

ces

52,7

98,4

20

T

otal

$52

,869

,061

80

SAN

AN

TON

IO IN

DEP

END

ENT

SCH

OO

L D

ISTR

ICT

San

Ant

onio

, Tex

as

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATE

MEN

TS

For T

he Y

ear E

nded

June

30,

201

9

E.G

ENER

AL

FUN

D F

EDER

AL

SOU

RC

E R

EVEN

UES

Incl

uded

in th

e G

ener

al F

und

reve

nues

are

the

follo

win

g fu

nded

by

the

fede

ral g

over

nmen

t:

Prog

ram

or S

ourc

e C

FDA

A

mou

nt

Num

ber

Impa

ct A

id

84.0

41

$

95

,839

A

rmy

JRO

TC

N/A

65

7,59

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hool

Hea

lth a

nd R

elat

ed S

ervi

ces (

SHA

RS)

N

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13,1

57,2

45

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mer

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ool L

EP

84.3

69

26,2

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lthy

Fut/U

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0,70

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dire

ct C

osts

Adu

lt Ed

ucat

ion

and

Fam

ily L

itera

cy

84.0

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40,9

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84.0

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5,54

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itle

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84

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tle I,

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mpr

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rogr

am

84.0

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22,0

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ula

84.0

27

127,

958

Car

l D. P

erki

ns, T

itle

I, Pa

rt C

84.0

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resc

hool

84

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12

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C

hang

e fo

r Goo

d 84

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22

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M

cKin

ney

Hom

eles

s Chi

ldre

n G

rant

84

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achi

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mer

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tory

84

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84

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84

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84

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mpo

rary

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nce

for N

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93

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84

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84

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84

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S 84

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Ti

tle IV

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t A

84.4

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37,5

22

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ol R

edes

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84.0

10

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sfor

mat

ion

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nnin

g 84

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10

0,65

1 En

glish

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racy

& C

ivic

s Edu

catio

n 84

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1,

430

Fost

er Y

outh

Dro

pout

Pre

vent

ion

& R

ecov

ery

93.5

58

6,05

7 P-

Tech

& IC

IA P

lann

ing

17.2

58

1,11

6 Sc

hool

Tra

nsfo

rmat

ion-

Lam

ar &

Bow

den

84.0

10

12,7

49

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ol T

rans

form

atio

n-Y

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& Y

WLA

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ary

84.0

10

8,46

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hool

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nsfo

rmat

ion-

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cade

my

84.3

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hool

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nfor

mat

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MS

84.3

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4,74

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T V

isua

l Arts

& L

eade

rshi

p Pr

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m84

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21

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$

16,

668,

645

81

SAN

AN

TON

IO IN

DEP

END

ENT

SCH

OO

L D

ISTR

ICT

San

Ant

onio

, Tex

as

N

OTE

S TO

TH

E FI

NA

NC

IAL

STA

TEM

ENTS

For T

he Y

ear E

nded

June

30,

201

9

Indi

rect

cos

t re

venu

es w

ere

dete

rmin

ed b

y ap

plyi

ng a

ppro

ved

indi

rect

cos

t ra

tes

to a

ctua

l ex

pend

iture

s of f

eder

ally

fund

ed g

rant

pro

gram

s.

F.

O

N B

EHA

LF S

TATE

CO

NTR

IBU

TIO

NS

M

edic

are

Part

D –

The

Med

icar

e Pr

escr

iptio

n D

rug,

Impr

ovem

ent,

and

Mod

erni

zatio

n A

ct o

f 20

03,

whi

ch w

as e

ffect

ive

Janu

ary

1, 2

006,

est

ablis

hed

pres

crip

tion

drug

cov

erag

e fo

r M

edic

are

bene

ficia

ries

know

n as

Med

icar

e Pa

rt D

. O

ne o

f the

pro

visi

ons

of M

edic

are

Part

D

allo

ws f

or th

e Te

xas P

ublic

Ret

ired

Empl

oyee

Gro

up In

sura

nce

Prog

ram

(TR

S-C

are)

to re

ceiv

e re

tiree

dru

g su

bsid

y pa

ymen

ts fr

om th

e fe

dera

l gov

ernm

ent t

o of

fset

cer

tain

pre

scrip

tion

drug

ex

pend

iture

s for

elig

ible

TR

S-C

are

parti

cipa

nts.

Con

tribu

tions

mad

e by

the

fede

ral g

over

nmen

t on

beh

alf

of t

he D

istri

ct a

re r

ecor

ded

in t

he f

inan

cial

sta

tem

ents

as

both

rev

enue

s an

d ex

pend

iture

s. T

hese

pay

men

ts to

tale

d $1

,097

,784

; $1,

105,

860;

and

$1,

454,

318

for f

isca

l yea

rs

2017

, 201

8, a

nd 2

019

resp

ectiv

ely.

G.

OPE

RA

TIN

G L

EASE

S Th

e D

istri

ct e

nter

ed in

to le

ases

for

cop

iers

in 2

016

from

Ric

oh U

SA, I

nc. (

Ric

oh)

and

high

pr

oduc

tion

copi

ers

in 2

017

from

Dah

ill O

ffice

Tec

hnol

ogy

Cor

pora

tion

(Dah

ill).

The

Ric

oh

leas

e ha

s a

five

year

initi

al le

ase

with

the

optio

n to

ren

ew f

or u

p to

two

addi

tiona

l one

yea

r pe

riods

at a

n an

nual

cos

t of $

839,

160.

The

Dah

ill le

ase

has

a th

ree

year

initi

al le

ase

with

the

optio

n to

rene

w fo

r up

to tw

o ad

ditio

nal o

ne y

ear p

erio

ds a

t an

annu

al c

ost o

f $20

6,84

7.

The

Dis

trict

ent

ered

into

a le

ase

with

Bro

oks

Dev

elop

men

t Aut

horit

y fo

r a b

uild

ing

loca

ted

at

2601

Lou

is B

auer

in S

an A

nton

io, T

exas

on

Oct

ober

1, 2

017.

It i

s th

e lo

catio

n of

CA

ST M

ed

Tech

whi

ch is

a H

ealth

care

Car

eer M

agne

t Hig

h Sc

hool

with

77,

648

squa

re fe

et o

n 11

.19

acre

s of

land

with

sur

roun

ding

gro

unds

and

par

king

are

as.

The

initi

al le

ase

is u

ntil

Sept

embe

r 30

, 20

37 w

ith a

n op

tion

to t

erm

inat

e an

y tim

e pr

ior

to O

ctob

er 1

, 202

2, e

ither

Lan

dlor

d or

the

D

istri

ct m

ay te

rmin

ate

the

leas

e w

ith 3

0 da

ys’

prio

r w

ritte

n no

tice

to th

e ot

her

party

for

the

follo

win

g re

ason

s:

(i)

The

Dis

trict

has

not

est

ablis

hed

a H

ealth

care

Car

eers

Mag

net

Hig

h Sc

hool

on

the

Prem

ises

with

enr

ollm

ent

star

ting

Fall

2018

or

is n

ot w

orki

ng d

ilige

ntly

on

achi

evin

g th

at g

oal i

n La

ndlo

rd’s

reas

onab

le o

pini

on; o

r (ii)

The

Dis

trict

has

not

bee

n ab

le to

su

stai

n en

rollm

ent i

n th

e H

ealth

care

Car

eers

Mag

net H

igh

Scho

ol a

nd h

as s

topp

ed ta

king

in

stud

ents

for

the

Perm

itted

Use

. Th

e D

istri

ct w

ill h

ave

two

optio

ns to

ext

end

the

term

of

the

leas

e fo

r the

Pre

mis

es fo

r fiv

e ye

ars e

ach.

The

re is

a p

urch

ase

optio

n an

y tim

e af

ter O

ctob

er 1

, 20

22, t

he D

istri

ct m

ay p

urch

ase

the

Prem

ises

for

a p

urch

ase

pric

e eq

ual

to t

he F

air

Mar

ket

Val

ue o

f the

Pre

mis

es b

ased

on

a cu

rrent

app

rais

al o

btai

ned

by L

andl

ord

with

a c

redi

t for

the

Dis

trict

’s In

vest

men

t in

the

Prem

ises

mad

e ov

er th

e te

rm o

f the

Lea

se, b

ut in

no

even

t will

the

purc

hase

pric

e of

the

Prem

ises

be

less

than

$7,

850,

000.

82

SAN

AN

TON

IO IN

DEP

END

ENT

SCH

OO

L D

ISTR

ICT

San

Ant

onio

, Tex

as

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATE

MEN

TS

For T

he Y

ear E

nded

June

30,

201

9

The

annu

al le

ase

paym

ent r

equi

rem

ents

are

as f

ollo

ws:

Year

End

ing

June

30

Am

ount

s20

201,

594,

729

$

2021

1,72

2,08

1

20

221,

854,

732

2023

1,79

6,67

0

20

241,

014,

694

Tota

l7,

982,

906

$

Und

er th

ese

agre

emen

ts, t

he D

istri

ct h

as re

cord

ed e

xpen

ditu

res o

f $1,

296,

007.

H.

CO

MM

ITM

ENTS

AN

D C

ON

TIN

GEN

CIE

S

Gra

nts

– Th

e D

istri

ct p

artic

ipat

es i

n nu

mer

ous

stat

e an

d fe

dera

l gr

ant

prog

ram

s th

at a

rego

vern

ed b

y th

e ru

les

and

regu

latio

ns o

f the

gra

ntor

age

ncie

s. C

osts

cha

rged

to th

e re

spec

tive

gran

t pro

gram

s ar

e su

bjec

t to

audi

t and

adj

ustm

ent b

y th

e gr

anto

r ag

enci

es. I

f th

e D

istri

ct is

foun

d to

be

out o

f com

plia

nce

with

any

rule

s or

reg

ulat

ions

gov

erni

ng th

e gr

ants

, the

gra

ntor

may

eith

er d

eny

requ

ests

for

rei

mbu

rsem

ent

or m

ay r

equi

re t

hat

gran

t pr

ocee

ds r

ecei

ved

bere

turn

ed.

In th

e op

inio

n of

the

Dis

trict

, the

re a

re n

o si

gnifi

cant

con

tinge

nt li

abili

ties r

elat

ing

toco

mpl

ianc

e w

ith t

he r

ules

and

reg

ulat

ions

gov

erni

ng t

he r

espe

ctiv

e gr

ants

; th

eref

ore,

no

prov

isio

n ha

s bee

n re

cord

ed in

the

acco

mpa

nyin

g fin

anci

al st

atem

ents

for s

uch

cont

inge

ncie

s.

Con

tinge

ncie

s –

The

Dis

trict

is a

par

ty to

var

ious

lega

l act

ions

, non

e of

whi

ch is

bel

ieve

d by

man

agem

ent t

o ha

ve a

mat

eria

l eff

ect o

n th

e fin

anci

al c

ondi

tion

of th

e D

istri

ct.

Acc

ordi

ngly

,no

pro

visi

on f

or lo

sses

has

bee

n re

cord

ed in

the

acco

mpa

nyin

g fin

anci

al s

tate

men

ts f

or s

uch

cont

inge

ncie

s.

Con

stru

ctio

n C

ontr

acts

–

O

blig

atio

ns u

nder

the

cur

rent

con

stru

ctio

n co

ntra

cts

will

be

liqui

date

d in

subs

eque

nt re

porti

ng p

erio

ds.

I.EN

DO

WM

ENTS

The

Dis

trict

has

a d

onor

-rest

ricte

d en

dow

men

t, th

e Ja

mes

Sla

yden

End

owm

ent,

whi

ch w

ascr

eate

d to

pay

a p

rize

to th

e w

inne

r of t

he b

est e

ssay

on

wor

ld p

eace

by

a se

nior

stu

dent

at t

heD

istri

ct.

83

SAN

AN

TON

IO IN

DEP

END

ENT

SCH

OO

L D

ISTR

ICT

San

Ant

onio

, Tex

as

N

OTE

S TO

TH

E FI

NA

NC

IAL

STA

TEM

ENTS

For T

he Y

ear E

nded

June

30,

201

9

The

Dis

trict

aut

horiz

es t

he s

pend

ing

of e

ndow

men

t in

vest

men

t in

com

e ac

cord

ing

to t

he

dire

ctiv

es g

iven

by

the

dono

rs.

The

net a

ppre

ciat

ion

on in

vest

men

ts o

f the

end

owm

ent t

hat i

s av

aila

ble

for

spen

ding

tota

ls $

3,18

4 as

of

June

30,

201

9 an

d is

rep

orte

d as

Oth

er R

estri

cted

Fu

nd B

alan

ce o

n th

e B

alan

ce S

heet

and

as

Res

trict

ed fo

r Oth

er P

urpo

ses

on th

e St

atem

ent o

f N

et P

ositi

on.

J.

SUB

SEQ

UEN

T EV

ENTS

In

Jul

y 20

19, t

he D

istri

ct s

old

$294

,820

,000

Unl

imite

d Ta

x Sc

hool

Bui

ldin

g an

d R

efun

ding

B

onds

, Ser

ies

2019

(Se

ries

2019

) is

sued

with

a p

rem

ium

of

$36,

483,

483.

Th

ese

bond

s w

ere

issu

ed p

ursu

ant t

o an

Ord

er o

f the

Boa

rd o

f Tru

stee

s ad

opte

d on

May

13th

, 201

9. T

he S

erie

s 20

19 b

onds

in th

e am

ount

of $

294,

820,

000

wer

e so

ld a

s fo

llow

s: $

248,

810,

000

Seria

l Bon

ds

wer

e so

ld w

ith m

atur

ities

on

Aug

ust 1

5 fo

r th

e ye

ars

2020

to 2

044.

The

inte

rest

rat

es o

f th

e Se

rial B

onds

var

y fro

m a

5%

rate

for y

ears

202

0 to

203

2, 4

% fo

r yea

rs 2

033

to 2

037

and

2040

to

204

4, a

nd 3

% fo

r yea

rs 2

038

and

2039

. $4

6,01

0,00

0 Te

rm B

onds

wer

e so

ld w

ith m

atur

ities

on

Aug

ust 1

5 fo

r yea

rs 2

045

to 2

049

and

have

a 3

% in

tere

st ra

te.

Inte

rest

on

the

bond

s ac

crue

fro

m th

e cl

osin

g da

te o

f Aug

ust 2

0, 2

019

and

are

paya

ble

on e

ach

Febr

uary

15

and

Aug

ust 1

5 th

erea

fter,

com

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