NEW ISSUE RATING: Moody's Aa2
BOOK-ENTRY ONLY
In the opinion of Bond Counsel, under existing law, assuming compliance with certain covenants described herein, (i)
interest on the Bonds is excluded from gross income for federal income tax purposes, (ii) interest on the Bonds is exempt from
State of Arkansas income tax and (iii) the Bonds are exempt from property taxes in the State of Arkansas.
OFFICIAL STATEMENT
$117,630,000 Fayetteville School District No. 1 of
Washington County, Arkansas Construction Bonds
Dated: July 11, 2024
Due: February 1
The Bonds are limited, general obligations of Fayetteville School District No. 1 of Washington County, Arkansas.
Interest on the Bonds is payable on February 1 and August 1, commencing February 1, 2025, and the Bonds mature (on February 1
of each year), bear interest and are priced as follows:
$57,390,000 SERIAL BONDS
Maturity
Amount
Rate
(%)
Price or
Yield (%)
Maturity
Amount
Rate
(%)
Price or
Yield (%)
2026
$ 225,000
5.000
3.500
2035
$3,795,000
5.000
3.380*
2027
235,000
5.000
3.400
2036
4,830,000
5.000
3.400*
2028
250,000
5.000
3.350
2037
5,070,000
5.000
3.450*
2029
260,000
5.000
3.350
2038
5,325,000
5.000
3.550*
2030
385,000
5.000
3.350*
2039
5,585,000
4.000
4.000
2031
3,115,000
5.000
3.350*
2040
5,810,000
4.000
4.100
2032
3,275,000
3.500
3.700
2041
6,045,000
4.000
4.150
2033
3,390,000
3.500
3.800
2042
6,285,000
4.000
4.200
2034
3,510,000
3.500
3.850
$27,760,000 4.000% TERM BONDS due February 1, 2046; Yield: 4.300%
$32,480,000 4.000% TERM BONDS due February 1, 2050; Yield: 4.400%
The Bonds of each maturity will be initially issued as a single registered Bond registered in the name of Cede & Co., the
nominee of The Depository Trust Company ("DTC"), New York, New York. The Bonds will be available for purchase in book-
entry form only, in denominations of $5,000 or any integral multiple thereof. Except in limited circumstances described herein,
purchasers of the Bonds will not receive physical delivery of Bonds. Payments of principal of and interest on the Bonds will be
made by U.S. Bank Trust Company, National Association, as the Trustee, directly to Cede & Co., as nominee for DTC, as registered
owner of the Bonds, to be subsequently disbursed to DTC Participants and thereafter to the Beneficial Owners of the Bonds, all as
further described herein. The Bonds are subject to optional redemption on and after August 1, 2029.
This cover page contains certain information for quick reference only. It is not a summary of this issue. Investors must
read the entire Official Statement to obtain information essential to the making of an informed decision.
The Bonds are offered, subject to prior sale, when, as and if issued and accepted by the Underwriter named below, subject
to the approval of legality by Bond Counsel and certain other conditions.
BofA Securities, Inc.
Official Statement dated: June 11, 2024
_______________
* Priced to first optional redemption date, August 1, 2029.
No dealer, broker, salesman or other person has been authorized by the District or the Underwriter to
give any information or to make any representations other than 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 any of the foregoing. This Official Statement does not constitute an offer to sell or a
solicitation of an offer to buy nor shall there be any offer, solicitation or sale of the Bonds by or to any
person in any jurisdiction in which it is unlawful to make such offer, solicitation or sale. Neither the
delivery of this Official Statement nor the sale of any of the Bonds implies that there has been no
change in the matters described herein since the date hereof or that the information herein is correct as
of any time subsequent to its date.
TABLE OF CONTENTS
INTRODUCTION TO THE OFFICIAL STATEMENT 1
BONDS BEING OFFERED 2
Book-Entry Only System 2
Generally 4
Authority 4
Purpose 5
Sources and Uses of Funds 5
Security and Source of Payment 6
Developments 6
Redemption 6
Redemption of Prior Tax Bonds 7
Additional Parity Bonds 8
Priority Among Successive Bond Issues 8
DESCRIPTION OF THE SCHOOL DISTRICT 8
Area 8
Governmental Organization 8
Executive Officials 8
Services Provided 8
School Buildings 9
School Enrollment and Population 9
Accreditation 9
Assessed Valuation 10
Financial Institution Deposits 10
Major Employers 10
Employees 10
DEBT STRUCTURE 10
Outstanding Indebtedness 10
Parity Debt 11
Debt Ratio 11
Computation of Dollar Amount of Debt
Service Tax Levied 11
Debt Service Schedule and Coverage 12
Pledge of State Aid 13
Uniform Rate of Tax 13
Defaults 13
Infectious Disease Outbreak 13
THE RESOLUTION 13
Bond Fund 13
Deposit of Sale Proceeds 13
Investments 14
Trustee 14
Modification of Terms of Bonds 14
Defeasance 14
Defaults and Remedies 15
FINANCIAL INFORMATION 16
Sources and Uses of Funds 16
Collection of Taxes 17
Overlapping Ad Valorem Taxes 17
Assessment of Property and Collection of
Property Taxes 17
Constitutional Amendment Affecting
Personal Property Taxes 19
Constitutional Amendment Nos. 59 and 79 19
Major Taxpayers 21
LEGAL MATTERS 21
Litigation Over State Funding for Schools 21
Legal Proceedings 21
Legal Opinion 22
Tax Exemption - Opinion of Bond Counsel 22
Tax Exemption - Original Issue Premium 23
Tax Exemption - Original Issue Discount 23
Non-Litigation Certificate 23
Official Statement Certificate 23
CONTINUING DISCLOSURE CERTIFICATE 24
CONTINUING DISCLOSURE PAST COMPLIANCE 27
MISCELLANEOUS 28
Bond Rating 28
Underwriting 28
Interest of Certain Persons 28
INTRODUCTION TO THE OFFICIAL STATEMENT
This introduction to the Official Statement is only a brief description and is subject in all respects
to the more complete information contained in the Official Statement. The offering of the Bonds to
potential investors is made only by means of the entire Official Statement, including the cover page.
Purpose of Official Statement. This Official Statement is provided to furnish certain information in
connection with the issuance by Fayetteville School District No. 1 of Washington County, Arkansas
(the "District"), of its Construction Bonds, dated July 11, 2024, in the aggregate principal amount of
$117,630,000 (the "Bonds").
Book-Entry Only System. The Bonds will be initially issued in book-entry form and purchasers of
Bonds will not receive certificates representing their interests in the Bonds purchased. See BONDS
BEING OFFERED, Book-Entry Only System. The Bonds will contain such other terms and
provisions as described herein. See BONDS BEING OFFERED, Generally.
The District. The District is a school district duly established and existing under the Constitution and
laws of the State of Arkansas for the purpose of providing public school education for persons residing
within the geographic boundaries of the District. See DESCRIPTION OF THE SCHOOL
DISTRICT.
Security and Source of Payment. The Bonds will be limited, general obligations of the District. No
specific tax has been voted for payment of these Bonds, but the Bonds are secured by a pledge of surplus
revenues (being revenues in excess of the amounts necessary to insure the payment when due of
principal of, interest on and trustee’s and paying agent’s fees in connection with the bonds for which
voted), derived from debt service taxes heretofore or hereafter voted for payment of other bond issues
of the District (subject to prior pledges of such surplus revenues). See BONDS BEING OFFERED,
Security and Source of Payment.
Litigation Over State Funding for Schools. In an Order issued November 9, 1994, the Honorable
Annabelle C. Imber held that the existing state funding system for public education violated the equal
protection provision of the Arkansas Constitution and violated Article 14, § 1 of the Arkansas
Constitution by "failing to provide a general, suitable and efficient system of free public education."
Lake View School Dist. No. 25 of Phillips County, Arkansas v. Jim Guy Tucker, Case No. 92-5318
(1994). After years of litigation and legislation, the Arkansas Supreme Court concluded (on
May 31, 2007) that the system of public school financing was now in constitutional compliance.
At the 1996 general election, a Constitutional Amendment was passed ("Amendment No. 74")
which establishes a statewide 25-mill property tax minimum for maintenance and operation of the
public schools (the "Uniform Rate of Tax"). The Uniform Rate of Tax replaces that portion of local
school district ad valorem taxes available for maintenance and operation. The Uniform Rate of Tax is
to be collected in the same manner as other school property taxes, but the revenues generated from the
Uniform Rate of Tax are remitted to the State Treasurer for distribution to the school districts.
Purpose. The Bonds are being issued to finance capital improvements for the public schools of the
District. See BONDS BEING OFFERED, Purpose.
Redemption. The Bonds are subject to optional redemption on and after August 1, 2029. The Bonds
are also subject to redemption from proceeds of the Bonds not needed for the purposes intended. The
Bonds maturing February 1, 2046 and February 1, 2050 (the "Term Bonds") are subject to mandatory
sinking fund redemption as described herein. The Trustee shall give at least thirty (30) days’ notice of
redemption. If fewer than all of the Bonds are called for redemption, the particular maturities to be
redeemed shall be selected by the District in its discretion. If fewer than all of the Bonds of any maturity
shall be called for redemption, the particular Bonds or portion thereof to be redeemed from such
maturity shall be selected by lot by the Trustee. See BONDS BEING OFFERED, Redemption.
2
Denominations and Registration. The Bonds are issuable only as fully registered bonds, without
coupons, in the denomination of $5,000 or an integral multiple thereof. Interest is payable February 1,
2025, and semiannually thereafter on each August 1 and February 1. Unless the Bonds are in book-
entry form, payment of principal of the Bonds will be made to the owners of the Bonds at the principal
office of U.S. Bank Trust Company, National Association (the "Trustee"). Interest is payable by the
Trustee to the registered owners as of the Record Date (herein defined) for each interest payment date.
A bond may be transferred, in whole or in part (in integral multiples of $5,000), but only upon delivery
of the bond, together with a written instrument of transfer, to the Trustee. See BONDS BEING
OFFERED, Generally and Book-Entry Only System.
Tax Exemption. In the opinion of Bond Counsel, Friday, Eldredge & Clark, LLP, under existing law,
assuming compliance with certain covenants described herein, (i) interest on the Bonds is excluded
from gross income for federal income tax purposes, (ii) interest on the Bonds is not an item of tax
preference for purposes of the federal alternative minimum tax imposed on individuals and
corporations, (iii) with respect to certain corporations, for the taxable years beginning after
December 31, 2022, interest on the Bonds will be taken into account in determining adjusted financial
statement income for the purpose of computing the federal alternative minimum tax, (iv) interest on
the Bonds is exempt from State of Arkansas income tax and (v) the Bonds are exempt from property
taxes in the State of Arkansas. (see LEGAL MATTERS, Tax Exemption).
Municipal Advisor. The District has employed Stephens Inc. as municipal advisor to assist the District
in the sale and issuance of the Bonds ("Municipal Advisor"). See MISCELLANEOUS, Interest of
Certain Persons.
Authority. The Bonds are being issued under the authority of the Constitution and laws of the State of
Arkansas, including particularly Amendments No. 40 and No. 74 to the Arkansas Constitution and
A.C.A. §§ 6-20-1201 et. seq., and a resolution of the Board of Directors of the District (the "Resolution")
and approval by the Commissioner, Division of Elementary and Secondary Education. See BONDS
BEING OFFERED, Authority, and THE RESOLUTION.
Delivery of Bonds. It is expected that the Bonds will be available for delivery on or about July 11, 2024.
This Official Statement speaks only as of its date, and the information contained herein is subject
to change.
BONDS BEING OFFERED
Book-Entry Only System. DTC, or its successor, will act as securities depository for the Bonds. The
Bonds will each 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 Bond certificate for each maturity will be issued in the principal amount of the
maturity and will be deposited with DTC.
DTC 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 securities that its 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
3
subsidiary of The Depository Trust & Closing 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"). The DTC
Rules applicable to its Participants are on file with the 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 (referred to herein as "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 Participants acting on
behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their
ownership interest 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. 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.
Redemption notices will be sent only to Cede & Co. If fewer than all of the Bonds are being
redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct Participant to
be redeemed.
Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect
to the 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 the Bonds are credited on the record date (identified in a listing attached
to the Omnibus Proxy).
Principal, interest and premium, if any, 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 Trustee, on the 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, the Trustee, or the District, subject to any statutory or regulatory requirements as may be in effect
4
from time to time. Payment of principal, interest and premium, if any, to Cede & Co. (or such other
nominee as may be requested by an authorized representative of DTC) is the responsibility of the
Trustee, disbursement of such payments to Direct Participants will be the responsibility of DTC, and
disbursement of such payments to the Beneficial Owners shall be the responsibility of Direct and
Indirect Participants.
DTC may discontinue providing its services as securities depository with respect to the Bonds
at any time by giving reasonable notice to the District or the Trustee. Under such circumstances, in
the event that a successor securities depository is not obtained, 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, Bonds will be printed and delivered.
The information concerning DTC and DTC’s book-entry system set forth above has been
obtained from DTC. Neither the Underwriter nor the District make any representation or warranty
regarding the accuracy or completeness thereof.
So long as the Bonds are in book-entry only form, Cede & Co., as nominee for DTC, will
be treated as the sole owner of the Bonds for all purposes under the Resolution including receipt
of all principal of and interest on the Bonds, receipt of notices, voting and requesting or directing
the Trustee to take or not to take, or consenting to, certain actions under the Resolution. The
District and the Trustee have no responsibility or obligation to the Participants or the Beneficial
Owners with respect to (a) the accuracy of any records maintained by DTC or any Participant;
(b) the payment by any Participant of any amount due to any Beneficial Owner in respect of the
principal of and interest on the Bonds; (c) the delivery or timeliness of delivery by any Participant
of any notice to any Beneficial Owner which is required or permitted under the terms of the
Resolution to be given to owners of Bonds; or (d) other action taken by DTC or Cede & Co. as
owner of the Bonds.
Generally. The Bonds are issuable in the form and denominations and are in the total principal amount
shown on the cover page, and will be dated, mature and bear interest as set out on the cover page. The
Trustee will maintain books for the registration and transfer of ownership of the Bonds. Interest due on
a bond on each interest payment date will be paid to the person in whose name the bond was registered
at the close of business on the fifteenth day of the month (whether or not a business day) next preceding
the interest payment date (the "Record Date"), irrespective of any transfer of the bond subsequent to the
Record Date and prior to the interest payment date. Payment of interest shall be made by the Trustee to
such registered owner.
A bond may be transferred, in whole or in part (in integral multiples of $5,000), but only upon
delivery of the bond, together with a written instrument of transfer, to the Trustee. The transfer
instrument must be signed by the registered owner or his attorney-in-fact or legal representative and the
signature must be guaranteed by a guarantor acceptable to the Trustee. The transfer instrument shall
state the name, mailing address and social security number or federal employer identification number
of the transferee. Upon such transfer, the Trustee shall enter the transfer of ownership in the registration
books and authenticate and deliver in the name or names of the new registered owner or owners a new
fully registered bond or bonds of authorized denomination of the same maturity and interest rate for the
aggregate principal amount of the bond transferred.
Authority. The Bonds are being issued under the authority of the Constitution and laws of the State of
Arkansas, including particularly Amendments No. 40 and No. 74 to the Arkansas Constitution and Ark.
Code Ann. §§ 6-20-1201 et. seq., a resolution of the Board of Directors of the District (the "Resolution")
and approval by the Commissioner, Division of Elementary and Secondary Education. For a summary
of the Resolution, see THE RESOLUTION.
5
Amendments No. 40 and No. 74 to the Arkansas Constitution require the Board of Directors of
each school district to prepare and make public not less than sixty days in advance of the annual school
election a proposed budget of expenditures for the support of the public schools in the District, together
with a rate of tax levy sufficient to provide the funds therefor. The tax rate is divided into (1)
maintenance and operation millage, (2) current expenditure millage, (3) continuing debt service millage
previously voted for the retirement of existing indebtedness and (4) any additional debt service millage
for proposed new bonded indebtedness. If the proposed rate of tax levy is approved at the school
election it becomes the rate of tax levy to be collected for the District in the next ensuing calendar year
for use in the school fiscal year commencing July 1 of the calendar year in which collected. Debt service
millage, once approved, is a continuing levy until retirement of the indebtedness for which voted.
Maintenance and operation millage is voted for one year only, except that if the overall rate of tax levy
is disapproved in the school election the millage rate for maintenance and operation remains at the rate
last approved.
The issuance of bonds by a school district is subject to the approval of the Commissioner,
Division of Elementary and Secondary Education, governing body of the Arkansas State Department
of Education. The bonds must be offered for public sale, and the offering is subject to the approval of
the Commissioner, Division of Elementary and Secondary Education. The State Board of Education
has approved the issuance of these Bonds and the Commissioner, Division of Elementary and
Secondary Education has approved the offering of the Bonds for sale. The sale and issuance of the
Bonds have been, or will be, authorized by resolution of the Board of Directors of the District, the
governing body of the District.
School district bonds may be issued for the purposes of acquiring sites for, building and
equipping new school buildings, making additions and repairs to and equipping existing school
buildings, purchasing and refurbishing school buses and for the purpose of refunding outstanding
indebtedness.
Arkansas law authorizes the State Board of Education to set a maximum rate of interest for
school bonds (the "Maximum Lawful Rate"). Bonds may be sold at a discount, but in no event shall
the District be required to pay more than the Maximum Lawful Rate of interest on the amount received.
Purpose. The Bonds are being issued to finance a Project described as follows: constructing, renovating
and equipping new and existing facilities. The expected completion date of the Project is July 11, 2027.
Sources and Uses of Funds. The estimated sources and uses of funds for the Project are as follows:
Sources
Proceeds from Sale of Bonds
$115,324,379.25
Estimated Investments Earnings*
8,625,000.00
Total
$123,949,379.25
Uses
Constructing and Equipping Project
$123,625,000.00
Bond Issuance Costs
324,379.25
Total
$123,949,379.25
*Assuming an interest rate of 2.50% per annum.
For a description of how the Bond proceeds are to be invested pending use, the provisions
governing those investments, and the conditions that must be satisfied before the proceeds may be
applied to their intended use, see THE RESOLUTION, Investments.
6
Security and Source of Payment. The Bonds will be limited, general obligations of the District. No
specific tax has been voted for payment of these Bonds, but the Bonds are secured by a pledge of surplus
revenues (being revenues in excess of the amounts necessary to insure the payment when due of
principal of, interest on and trustee’s and paying agent’s fees in connection with the bonds for which
voted) derived from debt service taxes heretofore or hereafter voted for payment of other bond issues
of the District (subject to prior pledges of such surplus revenues) that may legally be used for the purpose
of paying the principal of and interest on the Bonds.
See DEBT STRUCTURE, Outstanding Indebtedness, for a description of other debt and debt
service taxes pledged.
In addition to the pledged revenues, the District will also covenant to use for payment of
principal of and interest on the Bonds, as and to the extent necessary, all other revenues of the District
that may legally be used for the purpose. The District may not legally pay debt service from revenues
derived from the tax voted for maintenance and operation of schools.
Any surplus of the pledged revenues over and above the amount necessary to insure the payment
as due of principal of, interest on and trustee fees in connection with the Bonds of this issue will be
released from the pledge in favor of the Bonds and may be used for other school purposes.
The Bonds are not secured by any lien on or security interest in any physical properties of the
District.
Developments. Various elected officials, public interest groups and individuals have indicated publicly
that they consider ad valorem property taxation reform to be of significant public interest. At the 2000
general election, the electors of the State voted in favor of a new constitutional amendment
("Amendment No. 79") which does the following:
1. Limits the amount of assessment increases following reappraisal;
2. Limits assessment increases for people who are disabled or who are 65 years of age;
3. Provides for an annual state credit against ad valorem property tax on a homestead;
4. Equalizes real and personal millage rates;
5. Provides that reassessment must occur at least once every five years; and
6. Provides that rollback adjustments under Amendment No. 59 shall be determined after
the adjustments are made to assessed value under Amendment No. 79.
The annual state credit began for taxes due in calendar year 2001. The tax reduction is reflected
on the tax bill sent to the property owner by the county collector. The taxing units within the county
are entitled to reimbursement of the reduction. See DEBT STRUCTURE, Computation of Dollar
Amount of Debt Service Tax Levied.
Redemption. The Bonds are subject to extraordinary, optional and mandatory sinking fund redemption
prior to maturity, as follows:
(1) Extraordinary Redemption. The Bonds must be redeemed from proceeds of the Bonds
not needed for the purposes intended, on any interest payment date, in whole or in part, at a price equal
to the principal amount being redeemed plus accrued interest to the redemption date, in inverse order of
maturity (and by lot within a maturity in such manner as the Trustee may determine).
7
(2) Optional Redemption. The Bonds are subject to redemption prior to maturity, at the
option of the District, in whole, or in part, at any time on or after August 1, 2029, at a redemption price
equal to 100% of the principal amount redeemed plus accrued interest to the redemption date. If fewer
than all of the Bonds are called for redemption, the particular maturities to be redeemed shall be
selected by the District in its discretion. If fewer than all of the of any maturity shall be called for
redemption, the particular Bonds or portion thereof to be redeemed from such maturity shall be selected
by lot by the Trustee.
(3) Mandatory Sinking Fund Redemption. To the extent not previously redeemed, the
Bonds maturing on February 1, 2046 and February 1, 2050, are subject to mandatory sinking fund
redemption in such manner as the Trustee may determine, on the dates and in the amounts set forth
below, at a redemption price equal to the principal amount thereof plus accrued interest to date of
redemption:
Bonds Maturing February 1, 2046
Year
Amount
February 1, 2043
$6,535,000
February 1, 2044
6,800,000
February 1, 2045
7,075,000
February 1, 2046 (maturity)
7,350,000
Bonds Maturing February 1, 2050
Year
Amount
February 1, 2047
$7,650,000
February 1, 2048
7,955,000
February 1, 2049
8,270,000
February 1, 2050 (maturity)
8,605,000
The District shall be entitled to reduce any mandatory sinking fund redemption obligation in
any year with respect to the Term Bonds of any maturity by the principal amount of any such Term
Bond previously redeemed or acquired by the District and surrendered to the Trustee.
Notice of early redemption identifying the bonds or portions thereof (which must be $5,000 or
an integral multiple thereof) to be redeemed and the date fixed for redemption shall be sent by the
Trustee by mail or by other standard means, including electronic or facsimile communications, not less
than 30 nor more than 60 days prior to the redemption date, to all registered owners of bonds to be
redeemed. Failure to send an appropriate notice or any such notice to one or more registered owners
of bonds to be redeemed shall not affect the validity of the proceedings for redemption of other bonds
as to which notice of redemption is duly given and in proper and timely fashion. All such bonds or
portions thereof thus called for redemption shall cease to bear interest on and after the date fixed for
redemption, provided funds for redemption are on deposit with the Trustee at that time.
Notwithstanding the above, so long as the Bonds are issued in book-entry only form, if fewer
than all the Bonds of an issue are called for redemption, the particular Bonds to be redeemed will be
selected pursuant to the procedures established by DTC. So long as the Bonds are issued in book-entry
only form, notice of redemption will be given only to Cede & Co., as nominee for DTC. The Trustee
will not give any notice of redemption to the Beneficial Owners of the Bonds.
Redemption of Prior Tax Bonds. The District will covenant that it will not, so long as any of these
Bonds remain outstanding, redeem, prior to their maturity, any bonds of another issue for the payment
of which a specific debt service tax was voted prior to issuance of these Bonds (all such bonds being
hereafter referred to as "Prior Tax Bonds") unless, after such redemption, a continuing annual tax of
not less than the same number of mills and of not less than the same duration as was pledged to the
redeemed bonds remains pledged to these Bonds or other bonds of the District.
8
Additional Parity Bonds. No additional bonds may be issued on a parity of security with these Bonds.
Priority Among Successive Bond Issues. Other additional bonds may be issued by the District from
time to time in accordance with law for the purpose of financing additional capital improvements. If
the District, prior to issuance of these Bonds, has reserved the right to issue additional bonds on a parity
of security with previously issued bonds, such additional bonds will have a prior claim and pledge over
these Bonds as to all revenues pledged to such additional bonds. See DEBT STRUCTURE, Parity
Debt, for a description of any authorized and unissued parity debt. Otherwise, any additional bonds
shall be subordinate to these Bonds and the pledge of revenues to these Bonds.
DESCRIPTION OF THE SCHOOL DISTRICT
Area. The area of the District is approximately 118 square miles, all located in Washington County.
The incorporated municipalities located, in whole or in part, within the boundaries of the District are
the Cities of Fayetteville, Farmington, Goshen, Elkins, Johnson, and Tontitown.
Governmental Organization. The governing body of the District is a Board of Directors, elected for
staggered terms at the annual school election. The term of each Director ends at an annual school
election, but the Director continues to serve until a successor has been elected and qualified. The present
members of the Board of Directors of the District are as follows:
Name
Term Expires
Ivone Hudson
2025
Justin Eichmann
2025
Tracey Pomeroy
2025
Nika Waitsman
2026
Katrina Osborne
2027
Keaton Smith
2028
Tim Hudson
2029
At the first regular meeting following the annual school election, the Board of Directors elects
one of their number President, one of their number Vice President, and also elects a Secretary who may,
but need not be, a member of the Board. These officers serve terms of one year. The current officers
are: President, Nika Waitsman, Vice President, Tim Hudson, and Secretary, Tracey Pomeroy.
The Board of Directors has authority to do all things necessary for the conduct of an efficient
public school system in the District.
Executive Officials. All employees of the District are employed by the Board of Directors. The chief
executive employee is the Superintendent of Schools. The present Superintendent is Dr. John Mulford,
who has been employed by contract for a term ending June 30, 2027.
Services Provided. The District operates a public school system, consisting of pre-kindergarten,
kindergarten and grades 1 through 12, for the purpose of educating the children residing within the
District. The principal funding sources for the District are: (1) funds received from the State of
Arkansas, (2) ad valorem taxes on the real and tangible personal property located within the boundaries
of the District (see BONDS BEING OFFERED, Developments), and (3) funds received from the
United States of America.
There have been no recent major changes or interruptions in the educational services provided
by the District.
9
School Buildings. The school buildings presently operated by the District are as follows:
Name of School
Grades
Housed
Year in Which
Construction
Or Most Recent
Renovation Completed
Present
Condition
(Good, Fair
or Poor)
Owl Creek Elementary
Pre K-6
2006
Good
Asbell Elementary
K-4
1986
Good
Butterfield Trail Elementary
K-4
2008
Good
Happy Hollow Elementary
K-4
2011
Good
Leverett Elementary
K-4
1986
Good
Root Elementary
K-4
2007
Good
Washington Elementary
K-4
2000
Good
Holcomb Elementary
K-4
1995
Good
Vandergriff Elementary
K-4
1995
Good
McNair Middle School
5-6
2000
Good
Holt Middle School
5-6
2000
Good
Ramey Junior High
7-8
1991
Good
Woodland Junior High
7-8
1991
Good
High School Campus
9-12
2013
Good
School Enrollment and Population. The average daily membership (enrollment) of the District and
estimated population of the District for each of the last five years is as follows:
Fiscal Year
Ending June 30
Average Daily
Membership
Estimated
Population
2019
10,487
41,948
2020
10,151
40,604
2021
10,349
41,396
2022
10,357
41,428
2023
10,164
40,656
Accreditation. In accordance with the requirements of The Quality Education Act of 2003
(Subchapter 2 of Chapter 15, Title 6, Ark. Code Ann.), the State Board of Education adopted standards
that all public elementary and secondary schools in the State must meet to be accredited. The Act
provides that any school not meeting these standards will be eliminated, and that any school district
operating one or more of such schools is to be dissolved and its territory annexed to another district or
districts which operate all schools therein in compliance with the minimum standards. The Division of
Elementary and Secondary Education of the Arkansas Department of Education (the " Division ")
reviews annual reports to determine whether the school district is in compliance with the standards.
Under the Division regulations and guidelines, schools may be classified as accredited,
accredited-cited or probationary. Schools which meet all policies and standards promulgated by the
Division are classified as accredited. For those schools classified as accredited-cited or accredited-
probationary, the Division has promulgated maximum times allowable for correction of particular
violations of standards. A school that has been classified as accredited-cited and does not correct the
violation in the allowable time will be placed on probation. If a school in probationary status fails to
comply within the allotted time frame, the school will be recommended to the State Board of Education
for loss of accreditation status. For a district that falls into probationary status, the State Board of
Education may take any number of actions listed in Division’s Rules Governing Standards For
Accreditation of Arkansas Public Schools and School Districts, including dissolution and annexation.
The District currently meets all standards and policies of the Division and is fully accredited.
10
Assessed Valuation. Taxable property is valued for tax purposes as of January 1 of each year. However,
the assessment process is not completed until November of the year of assessment. See FINANCIAL
INFORMATION, Assessment of Property and Collection of Property Taxes. The assessed valuation
of taxable property located within the boundaries of the District (as of January 1) has been as follows:
Year
Real
Estate
Personal
Property
Utilities and
Regulated Carriers
Total
Assessed Value
2019
$1,449,402,375
$246,950,192
$86,104,191
$1,782,456,758
2020
1,627,328,238
266,885,358
89,309,530
1,983,523,126
2021
1,755,944,308
289,656,608
92,669,658
2,138,270,574
2022
1,895,422,595
323,847,143
109,971,822
2,329,241,560
2023
2,167,180,545
350,888,183
114,781,030
2,632,849,758
Financial Institution Deposits. The total deposits of banks with principal offices within the boundaries
of the District as of the end of each year have been as follows:
Year
Bank Deposits
2019
$16,800,730,000
2020
17,797,063,000
2021
23,416,001,000
2022
24,270,836,000
2023
22,575,497,000
Major Employers. The principal industries, commercial or governmental entities, and other major
employers within the boundaries of the District are as follows:
Company
Business or Product
Number of
Employees
University of Arkansas
Higher Education
5,000
Washington Regional System
Healthcare
3,300
Fayetteville Public Schools
K-12 Education
1,565
VA Hospital
Healthcare
1,500
City of Fayetteville
Municipality
900
Tyson's of Fayetteville
Food Manufacturing
750
Washington County + Sheriff Department
Public
650
Twin Rivers Foods, Inc.
Poultry Industry Corporate Office
600
ConAgra formerly Pinnacle Foods
Food Manufacturing
500
Rausch Coleman Dev Group
Homebuilding
500
Employees. The number of persons presently employed by the District are as follows:
Number
Superintendent and Central District Staff
29
Principals
16
Assistant Principals
28
Classroom Teachers
853
Other Non-Teaching Personnel
639
TOTAL
1,565
DEBT STRUCTURE
Outstanding Indebtedness. The principal categories of indebtedness which the District is authorized to
incur are commercial bonds (offered at public sale on competitive bids), revolving loan bonds and
certificates of indebtedness (representing loans from the State Department of Education), installment
contracts (payable in subsequent fiscal years) and postdated warrants (warrants drawn in one fiscal year
for payment in a subsequent fiscal year). In addition, the District is authorized to lease property from
the owner under lease agreements giving the District the option to purchase the property leased.
Commercial bonds and revolving loan indebtedness are payable from debt service tax revenues.
Installment contracts, postdated warrants and lease-purchase obligations are payable from maintenance
and operation tax revenues.
11
The present outstanding debt of the District is as follows:
Date of Obligations
Amount
Outstanding
Immediately After
Issuance of
These Bonds
Final
Maturity
Tax Rate (in mills per dollar)
Voted for Payment as Rolled
Back After Reassessment
(applicable to real estate)
COMMERCIAL BONDS
02/09/10 (QSCB)
$ 52,305,000
02/09/27
None
11/10/10 (QSCB)
31,460,000
11/01/29
20.0
09/29/11 (QSCB)
1,114,000
09/01/28
None
08/08/12 (QZAB)
1,920,000
06/01/34
None
11/01/12 (QZAB)
930,000
06/01/35
None
09/08/16
4,860,000
06/01/30
None
06/04/19
7,220,000
06/01/35
None
06/11/20
169,645,000
06/01/50
Continuation of existing 20.0
07/11/24
117,630,000
02/01/50
None
REVOLVING LOAN BONDS AND/OR CERTIFICATES OF INDEBTEDNESS
None
POST-DATED WARRANTS
None
INSTALLMENT CONTRACTS
None
LEASE-PURCHASE OBLIGATIONS
None
Parity Debt. The District has not reserved the right to issue additional bonds on a parity with the
outstanding debt listed above.
Debt Ratio. The ratio of outstanding debt after issuance of these Bonds ($387,084,000) to current
assessed valuation ($2,632,849,758) will be 14.7%.
Computation of Dollar Amount of Debt Service Tax Levied. The most recent county-wide
reassessment of taxable property was completed in Washington County in 2023. The next county-
wide reassessment is scheduled for completion in Washington County in 2027. For purposes of
Amendment 59, the year in which the reassessment is completed is known as the "Base Year." For a
general discussion of the reassessment requirement and its effect on assessed value and tax rate, see
FINANCIAL INFORMATION, Constitutional Amendment No. 59 and 79, infra.
Constitutional Amendment No. 79 provides for an annual state credit against ad valorem
property tax on a homestead in an amount not less than $300. Effective with the assessment year
beginning on or after January 1, 2023, the amount of the credit was increased to $425. The tax
reduction is reflected on the tax bill sent to the property owner by the county collector. Amendment
No. 79 provides that the credit shall be applied in a manner that would not impair a bondholder’s interest
in ad valorem debt service revenue. In addition, Amendment No. 79 provides that the "General
Assembly shall, by law, provide for procedures to be followed with respect to adjusting ad valorem
taxes or millage pledged for bonded indebted purposes, to assure that the tax or millage levied for
bonded indebtedness purposes will, at all times, provide a level of income sufficient to meet the current
requirements of all principal, interest, paying agent fees, reserves, and other requirements of the bond
indenture."
12
The taxing units within the county are entitled to reimbursement of the reduction from the
annual state credit. Pursuant to legislation, the state sales tax was increased by 0.5%. The purpose of
the legislation is to raise revenues that the State sends back to school districts to replace the money lost
as a result of the state credit. Therefore, for purposes of calculating projected revenues available for
debt service discussed below, the District has assumed that it will receive debt service revenues equal
to the debt service revenues it would have received prior to the adoption of Amendment No. 79.
The debt service tax levied for collection in 2024 for use in the 2024-2025 school year, and
thereafter, has been computed by multiplying the 2023 assessment ($2,632,849,758) by the total number
of debt service mills (20.0 mills).
For purposes of calculating revenues available for debt service, it has also been assumed that
the assessed value of all property in the District will remain the same, without increase or decrease. On
this basis, the total debt service tax levied in each year will be as shown under Debt Service Schedule
and Coverage, below.
Debt Service Schedule and Coverage. For purposes of the following table, it is assumed that the
assumptions made in Computation of Dollar Amount of Debt Service Tax Levied are accurate and that
the annual rate of tax collections in each year will be 100%. See FINANCIAL INFORMATION,
Collection of Taxes, for the actual historical rate of collection. On this basis, the annual debt service
requirements for previously issued bonds and these Bonds, the revenues available for debt service and
coverage are as follows:
Fiscal
Year
Ending
June 30
Total
Principal and
Interest of
Previously
Issued Bonds
Total
Principal&
Interest of
These Bonds
Total
Revenues
From Debt
Service Mills
Coverage
2025
$14,905,690
$2,716,236.11
$52,656,995
2.99
2026
14,908,225
5,114,225.00
52,656,995
2.63
2027
14,907,957
5,112,975.00
52,656,995
2.63
2028
14,903,714
5,116,225.00
52,656,995
2.63
2029
14,905,486
5,113,725.00
52,656,995
2.63
2030
14,294,800
5,225,725.00
52,656,995
2.70
2031
10,986,149
7,936,475.00
52,656,995
2.78
2032
10,981,299
7,940,725.00
52,656,995
2.78
2033
10,980,981
7,941,100.00
52,656,995
2.78
2034
10,981,594
7,942,450.00
52,656,995
2.78
2035
10,818,564
8,104,600.00
52,656,995
2.78
2036
9,976,563
8,949,850.00
52,656,995
2.78
2037
9,977,938
8,948,350.00
52,656,995
2.78
2038
9,975,188
8,949,850.00
52,656,995
2.78
2039
9,978,313
8,943,600.00
52,656,995
2.78
2040
9,976,813
8,945,200.00
52,656,995
2.78
2041
9,979,013
8,947,800.00
52,656,995
2.78
2042
9,979,613
8,946,000.00
52,656,995
2.78
2043
9,978,463
8,944,600.00
52,656,995
2.78
2044
9,975,413
8,948,200.00
52,656,995
2.78
2045
9,975,738
8,951,200.00
52,656,995
2.78
2046
9,979,875
8,943,200.00
52,656,995
2.78
2047
9,977,550
8,949,200.00
52,656,995
2.78
2048
9,976,600
8,948,200.00
52,656,995
2.78
2049
9,977,700
8,945,000.00
52,656,995
2.78
2050
9,975,550
8,949,200.00
52,656,995
2.78
13
Pledge of State Aid. A.C.A. §6-20-1204 provides that if the Trustee does not receive the bond payment
from the District at least five (5) calendar days before the principal or interest is due under the
Resolution, the Division of Elementary and Secondary Education immediately shall cure any deficiency
in payment by making payment in the full amount of the deficiency to the Trustee. If the Division
makes the bond payment, and the District fails to remit the full amount to the Division, the Division will
withhold from the District the next distribution of state funding.
Uniform Rate of Tax. Amendment No. 74 establishes a statewide 25-mill property tax minimum for
maintenance and operation of the public schools (the "Uniform Rate of Tax"). The Uniform Rate of
Tax replaces that portion of local school district ad valorem taxes available for maintenance and
operation of schools.
Defaults. No debt obligations of the District have been in default as to principal or interest payments or
in any other material respect at any time in the last 25 years.
Infectious Disease Outbreak. The World Health Organization declared a pandemic following
the global outbreak of COVID-19, a respiratory disease caused by a new strain of coronavirus. On
March 13, 2020, a national emergency was declared. The Governor of the State of Arkansas (the
"State") declared a state of emergency due to the outbreak of COVID-19, which spread to the State
and to many counties, and also instituted mandatory measurers via various executive orders to
contain the spread of the virus. These measures, which altered the behavior of businesses and
people, had a negative impact on regional, state and local economies and caused volatility in the
financial markets in the United States.
Developments with respect to COVID-19 may continue to occur. The continued spread of
COVID-19 or the declaration of another pandemic could have a material adverse effect on the
District, its student enrollment and collections of the debt service taxes pledged to the Bonds.
It is the goal of the State to have all students physically present for each school year.
However, the State has instructed all Districts to be prepared to shift to other delivery methods
should the need arise.
THE RESOLUTION
Set forth below is a summary of certain provisions of the Resolution. This summary does not
purport to be comprehensive and reference is made to the full text of the Resolution for a complete
description of its provisions.
Bond Fund. The pledged revenues will be deposited into a Bond Fund which will be held by, or under
the direction of, the District. Moneys in the Bond Fund will be used solely for the payment of principal
of, interest on and Trustee’s fees in connection with the Bonds, except as otherwise specifically provided
in the Resolution. Any surplus of the pledged revenues over and above the amount necessary to insure
the payment as due of principal of, interest on and Trustee’s fees in connection with the Bonds will be
released from the pledge and may be withdrawn from the Bond Fund and used for other school purposes.
The Treasurer of the District will withdraw from the Bond Fund and deposit with the Trustee, not later
than fifteen (15) calendar days before each interest payment date and not later than fifteen (15) calendar
days before the due date of any Trustee fees, moneys in an amount equal to the amount of such Bonds
or interest, or Trustee’s fees, for the sole purpose of paying the same, and the Trustee shall apply such
moneys for such purpose.
Deposit of Sale Proceeds. The Bonds will be delivered to the Trustee upon payment by the purchaser
of the Bonds in cash of the purchase price. The amount, if any, necessary to pay interest on the Bonds
until revenues from tax collections are available in sufficient amount therefor will be deposited in the
Bond Fund. The balance of the total sale proceeds will be deposited in the Construction Fund created
14
by the Resolution (the "Construction Fund"). Amounts in the Construction Fund will be disbursed for
costs and expenses of the Project (including interest on the Bonds during the construction period) upon
filing in the official records pertaining to said Fund of a certificate of the District setting forth the
information provided for in the Resolution.
Investments. (a) The District may, from time to time invest moneys held for the credit of the
Construction Fund in Authorized Investments or in bank certificates of deposit.
(b) The District may, from time to time, invest moneys held for the credit of the Bond Fund in
Authorized Investments or in bank certificates of deposit the principal of and interest on which are fully
insured by the Federal Deposit Insurance Corporation.
(c) Investments shall remain a part of the Fund from which the investment was made. All
earnings and profits from investments shall be credited to and all losses charged against, the Fund from
which the investment was made.
(d) The term "Authorized Investments" means direct obligations of the United States of America
or obligations the principal of and interest on which are fully guaranteed by the United States of
America.
Trustee. The Trustee was designated by the Underwriter.
The Trustee shall only be responsible for the exercise of good faith and reasonable prudence in
the execution of its trust. The Trustee is not required to take any action for the protection of Bondholders
unless it has been requested to do so in writing by the holders of not less than 10% in principal amount
of the Bonds then outstanding and offered reasonable security and indemnity against the cost, expenses
and liabilities to be incurred therein or thereby.
The Trustee may resign by giving notice in writing to the Secretary of the Board of Directors.
Such resignation shall be effective upon the appointment of a successor Trustee by the District and
acceptance of appointment by the successor. If the District fails to appoint a successor Trustee within
30 days of receiving notice of resignation, the Trustee may apply to a court of competent jurisdiction
for appointment of a successor. The holders of a majority in principal amount of outstanding Bonds, or
the Board of Directors of the District, may at any time, with or without cause, remove the Trustee and
appoint a successor Trustee.
Modification of Terms of Bonds. The terms of the Bonds and the Resolution will constitute a contract
between the District and the registered owners of the Bonds. The owners of not less than 75% in
aggregate principal amount of the Bonds then outstanding have the right, from time to time, to consent
to the adoption by the District of resolutions modifying any of the terms or provisions contained in the
bonds or the Resolution; provided, however, there shall not be permitted (a) any extension of the
maturity of the principal of or interest on any bond, or (b) a reduction in the principal amount of any
bond or the rate of interest thereon, or (c) the creation of any additional pledge on the revenues pledged
to the Bonds other than as authorized in the Resolution, or (d) a privilege or priority of any bond or
bonds over any other bond or bonds, or (e) a reduction in the aggregate principal amount of the Bonds
required for such consent.
Defeasance. When all of the Bonds shall have been paid or deemed paid, the pledge in favor of the
Bonds (see BONDS BEING OFFERED, Security and Source of Payment, supra) shall be discharged
and satisfied. A Bond shall be deemed paid when there shall have been deposited in trust with the
Trustee or with another bank or trust company (which other bank or trust company must be a member
of the Federal Reserve System), as escrow agent under an escrow deposit agreement requiring the
escrow agent to apply the proceeds of the deposit to pay the principal of and interest on the Bond as due
at maturity or upon redemption prior to maturity, moneys or Government Securities sufficient to pay
15
when due the principal of and interest on the bond. If the principal of the Bond is to become due by
redemption prior to maturity, notice of such redemption must have been duly given or provided for.
"Government Securities" shall mean direct or fully guaranteed obligations of the United States of
America, noncallable, maturing on or prior to the maturity or redemption date of the bond. In
determining the sufficiency of a deposit there shall be considered the principal amount of such
Government Securities and interest to be earned thereon until their maturity.
Defaults and Remedies. If there is any default in the payment of the principal of or interest on any
Bond, or if the District defaults in the performance of any other covenant in the Resolution, the Trustee
may, and upon the written request of the owners of not less than 10% in principal amount of the Bonds
then outstanding shall, by proper suit compel the performance of the duties of the officials of the District
under the Constitution and laws of the State of Arkansas and under the Resolution and protect and
enforce the rights of the owners by instituting appropriate proceedings at law or in equity or by other
action deemed necessary or desirable by the Trustee. If any default in the payment of principal or
interest continues for 30 days the Trustee may, and upon the request of the owners of not less than 10%
in principal amount of the then outstanding Bonds shall, declare all outstanding Bonds immediately due
and payable together with accrued interest thereon.
No owner of any bond shall have any right to institute any suit, action, mandamus or other
proceeding in equity or at law for the protection or enforcement of any right under the Bonds or the
Resolution or under the Constitution and laws of the State of Arkansas, unless such owner previously
shall have given written notice to the Trustee of the default, and unless the owners of not less than 10%
in principal amount of the then outstanding Bonds shall have made written request of the Trustee to take
action, shall have afforded the Trustee a reasonable opportunity to take such action, and shall have
offered to the Trustee reasonable security and indemnity against the cost, expenses and liabilities to be
incurred and the Trustee shall have refused or neglected to comply with such request within a reasonable
time. No one or more owners of the Bonds shall have any right in any manner by his or their action to
affect, disturb or prejudice the security of the Resolution, or to enforce any right thereunder except in
the manner provided in the Resolution. All proceedings at law or in equity shall be instituted, had and
maintained in the manner provided in the Resolution and for the benefit of all owners of outstanding
Bonds. Any individual rights of action are restricted by the Resolution to the rights and remedies therein
provided. Nothing shall, however, affect or impair the right of any owner to enforce the payment of the
principal of and interest on any bond at and after the maturity thereof.
Action may be taken by the Trustee without possession of any bond, and any such action shall
be brought in the name of the Trustee and for the benefits of all the owners of bonds.
No delay or omission of the Trustee or any owner of a bond to exercise any right or power
accrued upon any default shall impair any such right or power or be construed to be a waiver of any
such default or acquiescence therein, and every power and remedy given to the Trustee and to the
owners of the Bonds may be exercised from time to time and as often as may be deemed expedient.
The Trustee may, and upon the written request of the owners of not less than 10% in principal
amount of the Bonds then outstanding shall, waiver any default which shall have been remedied before
the entry of final judgment or decree in any suit, action or proceeding or before the completion of the
enforcement of any other remedy. No such waiver shall extend to or affect any other existing or
subsequent default or defaults or impair any rights or remedies consequent thereon.
There is no requirement that the District furnish periodic evidence as to the absence of default
or as to the compliance with the terms of the Bonds, the Resolution or law.
16
FINANCIAL INFORMATION
Sources and Uses of Funds. The following combined summary of Revenues, Expenditures and Fund
Balances are taken from the District’s 2023, 2022 and 2021 Audits. For complete information
concerning the District, please review the actual Audits at www.arklegaudit.gov/ and
https://emma.msrb.org/.
REVENUES
2023
2022
2021
Property taxes
$ 96,037,529
$ 91,287,603
$ 87,661,429
Investment income (loss)
1,888,580
74,444
89,455
Other local revenues
232,157
97,759
635,675
State revenues
32,453,026
32,469,851
39,079,140
Federal revenues
0
0
0
TOTAL REVENUES
$130,611,292
$123,929,657
$127,465,699
EXPENDITURES
Instruction
$ 72,092,228
$ 66,545,424
$ 60,312,893
Support services
43,089,271
38,840,408
34,500,637
Non-instructional services
1,020
378
0
Capital outlay
541,773
609,200
578,376
Debt Service - Principal
0
0
0
Debt Service - Interest
0
0
0
Paying agent fees
0
0
0
TOTAL EXPENDITURES
$115,724,292
$105,995,410
$ 95,391,906
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES
$ 14,887,000
$ 17,934,247
$ 29,073,793
OTHER FINANCING SOURCES
(USES)
(16,375,732)
(19,333,678)
(16,273,296)
EXCESS OF REV & OTHER
SOURCES OVER (UNDER) EXPND
& OTHER USES
(1,488,732)
(1,399,431)
12,800,497
FUND BAL, BEG OF YEAR
29,931,909
31,331,340
18,530,843
FUND BAL, END OF YEAR
$ 28,443,177
$ 29,931,909
$ 31,331,340
17
Collection of Taxes. Tax collections of the ad valorem tax levied by the District are shown in the
following table. School taxes voted at the school election are collected in the next calendar year and
normally received by and used by the District during the school fiscal year beginning in such calendar
year.
School
Year
School
Tax Levied
School
Tax Collected
Rate of Collections
(net of collection fees %)
2018-2019
$74,016,562
$75,764,441
102.36
2019-2020
79,468,452
73,160,628
92.06
2020-2021
81,369,151
88,394,228
108.63
2021-2022
90,547,831
92,407,349
102.05
2022-2023
97,612,052
98,851,384
101.27
5-year average rate of collections – 101.32%
Overlapping Ad Valorem Taxes. The ad valorem taxing entities in the State of Arkansas are
municipalities, counties, school districts and community college districts. All taxable property located
within the boundaries of a taxing entity is subject to taxation by that entity. Thus property within the
District is also subject to county ad valorem taxes. Property located within a municipality and/or within
a community college district is also subject to taxation by that entity or entities. The ad valorem taxing
entities whose boundaries overlap the District and their real estate ad valorem tax rates are:
Name of Overlapping Entity
Total Tax Rate
(in mills)
Washington County
6.5
City of Elkins
5.0
City of Farmington
5.0
City of Fayetteville
6.8
City of Johnson
5.0
City of Tontitown
3.5
City of Goshen
3.0
Assessment of Property and Collection of Property Taxes. Under Amendment No. 59 to the Arkansas
Constitution, all property is subject to taxation except for the following exempt categories: (i) public
property used exclusively for public purposes; (ii) churches used as such; (iii) cemeteries used
exclusively as such; (iv) school buildings and apparatus; (v) libraries and grounds used exclusively for
school purposes; (vi) buildings, grounds and materials used exclusively for public charity; and (vii)
intangible personal property to the extent the General Assembly has exempted it from taxation, provided
that it be taxed at a lower rate, or provided for its taxation on a basis other than ad valorem. Amendment
No. 59 also authorizes the General Assembly to exempt from taxation the first $20,000 of value of a
homestead of a taxpayer 65 years of age or older.
Amendment No. 59 provides that, except as otherwise provided therein in connection with the
transition period following a county-wide reassessment (see Constitutional Amendment Nos. 59 and
79, infra), (1) residential property used solely as the principal place of residence of the owner shall be
assessed in accordance with its value as a residence, (2) land (but not improvements thereon) used
primarily for agricultural, pasture, timber, residential and commercial purposes shall be assessed upon
the basis of its value for such use, and (3) all other real and tangible personal property subject to taxation
shall be assessed according to its value (the Arkansas Supreme Court has held that the unqualified word
"value," as used in a prior, substantially identical, constitutional provision, means "current market
value").
(b) Property owned by public utilities and common carriers and "used and/or held for use in the
operation of the company . . ." is assessed for tax purposes by the Tax Division of the Arkansas Public
Service Commission. A.C.A. § 26-26-1605 provides that the Tax Division "shall assess the property at
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its true and full market or actual value" and that all utility property of a company, whether located within
or without the State of Arkansas, is to be valued as a unit. Annually, the company files a report with
the Tax Division. The Tax Division reviews these reports, along with other reports (such as reports to
shareholders, the Federal Communications Commission, the Federal Energy Regulatory Commission
and the Interstate Commerce Commission), to determine the value of the property. Valuation is
currently made on the basis of a formula, as set forth in A.C.A. § 26-26-1607, with consideration given
to (i) original cost less depreciation, replacement cost less depreciation or reconstruction cost less
depreciation; (ii) market value of capital stock and funded debt; and (iii) capitalization of income. As
provided in A.C.A. § 26-26-1611, once the value of a company’s property as a unit is determined, the
Tax Division removes the value allocable to out-of-state property and assigns the remainder among
Arkansas taxing units on the basis of value within each jurisdiction. The Tax Division certifies the
assessment to the county assessor who enters the assessment as certified on the county assessment roll.
County officials have no authority to change such assessment. See LEGAL MATTERS, Legal
Proceedings.
All other property is assessed by the elected assessor of each Arkansas county (or other official
or officials designated by law). This includes both real and tangible personal property. A.C.A. 26-26-
1902 requires each county to appraise all market value real estate normally assessed by the county
assessor at its full and fair value every four (4) years.
(c) Amendment No. 79 requires the county assessor (or other official or officials designated by
law), after each county-wide reappraisal, to compare the assessed value of each parcel of real property
reappraised or reassessed to the prior year’s assessed value. If the assessed value of the parcel increased,
then the assessed value of that parcel must be adjusted as provided below.
Subject to subsection (e) below, if the parcel is not the homestead and principal place of
residence ("homestead") of a taxpayer, then any increase in the assessed value in the first year after
reappraisal cannot be greater than 10% (or 5% if the parcel is the taxpayer’s homestead) of the assessed
value for the previous year. For each year thereafter, the assessed value shall increase by an additional
10% (or 5% if the parcel is the taxpayer’s homestead) of the assessed value for the year preceding the
first assessment resulting from reappraisal; however, the increase cannot exceed the assessed value
determined by the reappraisal prior to adjustment under Amendment No. 79.
For property owned by public utilities and common carriers, any annual increase in the assessed
value cannot exceed more than 10% of the assessed value for the previous year. The provisions of this
subsection (c) do not apply to newly discovered real property, new construction or substantial
improvements to real property.
(d) If a homestead is purchased or constructed on or after January 1, 2001 by a disabled person
or by a person over age 65, then that parcel will be assessed based on the lower of the assessed value as
of the date of purchase (or construction) or a later assessed value. If a person is disabled or is at least
65 years of age and owns a homestead on January 1, 2001, then the homestead will be assessed based
on the lower of the assessed value on January 1, 2001 or a later assessed value. When a person becomes
disabled or reaches age 65 on or after January 1, 2001, that person’s homestead should thereafter be
assessed based on the lower of the assessed value on the person’s 65th birthday, on the date the person
becomes disabled or a later assessed value. This subsection (d) does not apply to substantial
improvements to real property. For real property subject to subsection (e) below, the applicable date in
this subsection (d), in lieu of January 1, 2001, is January 1 of the year following the completion of the
adjustments to assessed value required in subsection (e).
(e) If, however, there has been no county-wide reappraisal and resulting assessed value of
property between January 1, 1986, and December 31, 2000, then real property in that county is adjusted
differently. In that case, the assessor (or other official or officials designated by law) compares the
assessed value of each parcel to the assessed value of the parcel for the previous year. If the assessed
19
value of the parcel increases, then the assessed value of the parcel for the year in which the parcel is
reappraised or reassessed is adjusted by adding one-third (l/3) of the increase to the assessed value for
the year prior to appraisal or reassessment. An additional one-third (1/3) of the increase is added in each
of the next two (2) years.
The adjustment contemplated by subsection (e) does not apply to the property of public utilities
or common carriers. No adjustment will be made for newly discovered real property, new construction
or substantial improvements to real property.
(f) Property is currently assessed in an amount equal to 20% of its value. The percentage can
be increased or decreased by the General Assembly.
The total of the millage levied by each taxing entity (municipalities, counties, school districts
and community college districts) in which the property is located is applied against the assessed value
to determine the tax owed. The assessed value of taxable property is revised each year and the total
millage levied in that calendar year is applied against the assessed value for the calendar year. Assessed
value for each year is determined as of January 1 of that year. Tangible personal property, including
automobiles, initially acquired after January 1 and before June 1 is required to be assessed in the year
of acquisition. Otherwise, only property owned by a taxpayer on January 1 is assessed for that calendar
year.
The total taxes levied by all taxing authorities are collected together by the county collector of
the county in which the property is located in the calendar year immediately following the year in which
levied. Taxes are due and payable between the first business day in March and October 15, inclusive.
Taxes not paid by October 15 are delinquent and subject to a 10% penalty. Real estate as to which taxes
are delinquent for two successive years is certified to the State Land Commissioner, who offers the
property for sale. The proceeds of such sale are distributed among the taxing authorities. Delinquent
real property may be redeemed by the taxpayer within two years of the delinquency. Delinquent
personal property taxes may be collected by distraint and public sale of the taxpayer’s property.
Constitutional Amendment Affecting Personal Property Taxes. At the 1992 general election, a
Constitutional amendment was approved which exempts from all personal property taxes items of
household furniture and furnishings, clothing, appliances and other personal property used within the
home. The effective date of the amendment was January 1, 1993.
Constitutional Amendment Nos. 59 and 79. Prior to the adoption of Amendment No. 59 to the Arkansas
Constitution, the Constitution mandated that:
"All property subject to taxation shall be taxed according to its value, that value
to be ascertained in such manner as the General Assembly shall direct, making the same
equal and uniform throughout the State. No one species of property from which a tax
may be collected shall be taxed higher than other species of property of equal value . . .
."
In the case of Arkansas Public Service Commission v. Pulaski County Board of Equalization,
266 Ark. 64, 582 S.W.2d 942 (June 25, 1979), the Supreme Court of Arkansas held that the then current
assessment process, as prescribed by certain legislation and administrative regulations, was in violation
of the Constitutional mandate in that (1) it provided for the assessment of certain property on the basis
of "use value" as opposed to market value, (2) it did not provide for equal and uniform assessments
throughout the State and (3) it provided for assessments based on past, as opposed to current, market
values. The Court ordered a statewide reassessment to bring the assessments into conformity with the
constitutional requirements. It was provided that the reassessment would be completed over a five year
period, with 15 of the 75 counties in the State to be reassessed each year. The reassessment was
accomplished in calendar years 1981 through 1985.
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Legislative studies indicated that the effect of the Court-ordered reassessment would be to
substantially increase real estate assessments in most or all counties of the State, with the result being,
if tax rates remained the same, to substantially increase real estate taxes. The Arkansas General
Assembly submitted to the electors of the State a proposed Constitutional amendment designed to
prevent the substantial tax increase that would otherwise result from the reassessment. The proposed
Amendment was approved at the 1980 General Election and is now Amendment No. 59 to the Arkansas
Constitution.
At the 2000 general election, Constitutional Amendment No. 79 was adopted by a majority of
the voters and went into effect on January 1, 2001. Among other things, Amendment No. 79 allows for
an annual state credit against ad valorem property tax on a homestead in the amount of not less than
$300 (currently $425). The credit must not be applied in a manner that would impair a bondholder’s
interest in ad valorem debt service revenues.
Amendment No. 59 provides that whenever a county-wide reassessment results in an increase
of assessed value of 10% or more, the tax rate of each taxing unit on property located in that county is
to be adjusted as provided in the Amendment. The year in which the reassessment is completed is
designated the "Base Year". The assessed valuation for the Base Year is based on the reassessment.
Amendment No. 79 requires that rollback adjustments under Amendment No. 59 be determined after
the adjustments are made to assessed value under Amendment No. 79 (see FINANCIAL
INFORMATION, Assessment of Property and Collection of Property Taxes).
The tax rate applicable to other real property is computed by (1) deducting from the Base Year
assessed value of the real estate the assessed value of newly-discovered real estate and new construction
and improvements to real property to arrive at the reassessed value of previously assessed real property,
(2) determining the tax rate necessary to produce from the previously assessed real property (on the
basis of the Base Year assessment) the same amount of revenues produced from such property in the
Base Year (on the basis of the last previous assessed value and the tax rate applicable to collections in
the Base Year), and (3) either (a) fixing the tax rate determined in (2) as the tax rate for the real property,
including newly-discovered real property and new construction and improvements to real estate, or (b)
if the tax rate so fixed would produce less than 110% of the revenues from real estate produced in the
Base Year, increasing the tax rate in an amount sufficient to produce such 110% of revenues.
The General Assembly, in Act No. 848 of 1981, implemented the procedures of Amendment
No. 59. A.C.A. § 26-26-404, provides that the computation is to be made separately for each tax source
or millage levy (in the case of the school districts this would require separate computations for operation
and maintenance millage and debt service millage), with the new tax rate for each millage levy to be
rounded up to the nearest 1/10 mill. In the case of debt service millage, the tax rate as so adjusted will
continue as the continuing annual tax rate until retirement of the bonds to which pledged. The adjusted
rate for operation and maintenance millage would be subject to change at each annual school election
in accordance with law.
Amendment No. 79 provides that the tax rate for personal property and property of public
utilities and regulated carriers should be the same as that for real property. Personal property rates
currently not equal to real property rates should be reduced to the level of the real property rate unless a
higher rate is "necessary to provide a level of income sufficient to meet the current requirements of all
principal, interest, paying agent fees, reserves, and other requirements" of a bond issue.
Amendment No. 59 contains the following specific provision in regard to debt service millage:
"The General Assembly shall, by law, provide for procedures to be followed with
respect to adjusting ad valorem taxes or millage pledged for bonded indebtedness
purposes, to assure that the adjusted or rolled-back rate of tax or millage levied for
bonded indebtedness purposes will, at all times, provide a level of income sufficient to
21
meet the current requirements of all principal, interest, Paying Agent’s fees, reserves,
and other requirements of the bond indenture."
A.C.A. § 26-26-402(b) provides:
"If it is determined that the adjustment or rollback of millages as provided for herein
will render income from millages pledged to secure any bonded indebtedness
insufficient to meet the current requirements of all principal, interest, paying agent fees,
reserves and other requirements of a bond indenture any such pledged millage shall be
rolled back or adjusted only to a level which will produce at least a level of income
sufficient to meet the current requirements of all principal, interest, paying agent fees,
reserves, and other requirements of the bond indenture."
If the assessed value of all classes of taxable property located in a school district remain at the
same level, without increase or decrease, and the total school tax rates applicable to real and personal
property remain constant, then the annual revenues derived from taxable real and personal property will
be the same in each year. This would be true of annual revenues available for debt service on bonds, as
well as other annual revenues of the district.
Major Taxpayers. Based on the 2023 assessment, the top ten taxpayers within the boundaries of the
District are:
Name
Assessed Value
Percentage of District’s
Assessed Value (%)
Ozark Go C/O Ozark Electric Co (Utility Only)
$25,589,781.00
0.97
Southwestern Electric Power Co (Utility Only)
17,819,862.98
0.68
Ozark Electric Cooperative Corp (Utility Only)
16,196,497.02
0.62
Black Hills Energy Arkansas (Utility Only)
16,038,607.02
0.61
Mathias Shopping Centers, Inc.
13,884,570.53
0.53
Wal-Mart Stores Inc.
13,826,665.61
0.53
Fayetteville Student Housing District
12,876,434.04
0.49
Tyson Foods Inc.
11,425,317.89
0.43
Aptitude Arkansas LLC
11,000,105.96
0.42
Platform 1 QOZB Property – Fayetteville LLC
9,803,508.07
0.37
LEGAL MATTERS
Litigation Over State Funding for Schools. In an Order issued November 9, 1994, the Honorable
Annabelle C. Imber held that the existing state funding system for public education violated the equal
protection provision of the Arkansas Constitution and violated Article 14, § 1 of the Arkansas
Constitution by "failing to provide a general, suitable and efficient system of free public education."
Lake View School Dist. No. 25 of Phillips County, Arkansas v. Jim Guy Tucker, Case No. 92-5318
(1994). After years of litigation and legislation, the Arkansas Supreme Court concluded (on May
31, 2007) that the system of public school financing was now in constitutional compliance.
At the 1996 general election, a Constitutional Amendment was passed ("Amendment No. 74")
which establishes a statewide 25-mill property tax minimum for maintenance and operation of the
public schools (the "Uniform Rate of Tax"). The Uniform Rate of Tax replaces that portion of local
school district ad valorem taxes available for maintenance and operation. The Uniform Rate of Tax is
to be collected in the same manner as other school property taxes, but the revenues generated from the
Uniform Rate of Tax are remitted to the State Treasurer for distribution to the school districts.
Legal Proceedings. No litigation is pending, or to the best knowledge of the District threatened,
questioning the existence of the District, its boundaries, the title of any member of the Board of Directors
22
to his office, or questioning the authority of the District to issue the Bonds or any proceedings relating
thereto.
Legal Opinion. Issuance of the Bonds is subject to the unqualified approving opinion of Bond Counsel,
to the effect that the Bonds have been lawfully issued under the Constitution and laws of the State of
Arkansas and constitute valid, binding and enforceable obligations of the District.
Tax Exemption - Opinion of Bond Counsel. In the opinion of Bond Counsel, under existing law, the
interest on the Bonds is exempt from Arkansas income tax and from property taxes.
Also, in the opinion of Bond Counsel, interest on the Bonds under existing law (a) is excluded
from gross income for federal income tax purposes, and (b) is not an item of tax preference for purposes
of the federal alternative minimum tax imposed on individuals and corporations; however, it should be
noted that with respect to certain corporations (as defined for federal income tax purposes), for the
taxable years beginning after December 31, 2022, such interest will be taken into account in
determining adjusted financial statement income for the purposes of computing the alternative
minimum tax imposed on such corporations. The opinion set forth above is subject to the condition
that the District comply with all requirements of the Code that must be satisfied subsequent to the
issuance of the Bonds in order that interest thereon be (or continue to be) excluded from gross income
for federal income tax purposes. These requirements generally relate to arbitrage and the use of the
proceeds of the Bonds and the Project. Failure to comply with certain of such requirements could
cause the interest on the Bonds to be so included in gross income retroactive to the date of issuance of
the Bonds. The District has covenanted to comply with all such requirements.
Prospective purchasers of the Bonds should be aware that (i) with respect to insurance
companies subject to the tax imposed by Section 831 of the Code, Section 832(b)(5)(B)(i) reduces the
deduction for loss reserves by 15 percent of the sum of certain items, including interest on the Bonds,
(ii) interest on the Bonds earned by certain foreign corporations doing business in the United States
could be subject to a branch profits tax imposed by Section 884 of the Code, (iii) passive investment
income including interest on the Bonds may be subject to federal income taxation under Section 1375
of the Code for Subchapter S corporations that have Subchapter C earnings and profits at the close of
the taxable year if greater than 25% of the gross receipts of such Subchapter S corporation is passive
investment income, and (iv) Section 86 of the Code requires recipients of certain Social Security and
certain Railroad Retirement benefits to take into account in determining gross income, receipts or
accruals of interest on the Bonds.
Prospective purchasers of the Bonds should be further aware that Section 265 of the Code
denies a deduction for interest on indebtedness incurred or continued to purchase or carry the Bonds
or, in the case of a financial institution, that portion of a holder’s interest expense allocated to interest
on the Bonds, except with respect to certain financial institutions (within the meaning of Section
265(b)(5) of the Code).
Current and future legislative proposals, if enacted into law, clarification of the Code or
court decisions may cause interest on the Bonds to be subject, directly or indirectly, in whole or
in part, to federal income taxation or otherwise prevent holders of the Bonds from realizing the
full current benefit of the tax status of such interest. On August 16, 2022, President Biden signed
the Inflation Reduction Act of 2022 (the "IRA"), which, among other things, makes certain
changes to the federal tax laws affecting the taxation of certain corporations for tax years
beginning after December 31, 2022. The introduction or enactment of any legislative proposal
or clarification of the Code or court decisions may affect, perhaps significantly, the market price
for, or marketability of, the Bonds. Prospective purchasers of the Bonds should consult their
own tax advisors regarding any proposed or enacted federal or state tax legislation (including
particularly, without limitation, the IRA), regulations or litigation, as to which Bond Counsel
expresses no opinion.
23
Tax Exemption - Original Issue Premium. As shown on the cover page of this Official Statement,
certain of the Bonds are being sold at an original issue premium (collectively, the "Premium Bonds").
An amount equal to the excess of the issue price of a Premium Bond over its stated redemption price
at maturity constitutes premium on such Premium Bond. An initial purchaser of a Premium Bond
must amortize any premium over such Premium Bond's term using constant yield principles, based on
the purchaser's yield to maturity (or, in the case of Premium Bonds callable prior to their maturity, by
amortizing the premium to the call date, based on the purchaser's yield to the call date and giving effect
to the call premium). As premium is amortized, the amount of the amortization offsets a corresponding
amount of interest for the period and the purchaser's basis in such Premium Bond is reduced by a
corresponding amount resulting in an increase in the gain (or decrease in the loss) to be recognized for
federal income tax purposes upon a sale or disposition of such Premium Bond prior to its maturity.
Even though the purchaser's basis may be reduced, no federal income tax deduction is allowed.
Purchasers of the Premium Bonds should consult their tax advisors with respect to the determination
and treatment of premium for federal income tax purposes and with respect to the state and local tax
consequences of owning a Premium Bond.
Tax Exemption - Original Issue Discount. As shown on the cover page of this Official Statement,
certain of the Bonds are being sold at an original issue discount (collectively, the "Discount Bonds").
The difference between the initial public offering prices, as set forth on the cover page, of such
Discount Bonds and their stated amounts to be paid at maturity constitutes original issue discount
treated as interest which is excluded from gross income for federal income tax purposes, as described
above.
The amount of original issue discount which is treated as having accrued with respect to such
Discount Bond is added to the cost basis of the owner in determining, for federal income tax purposes,
gain or loss upon disposition of such Discount Bond (including its sale, redemption, or payment at
maturity). Amounts received upon disposition of such Discount Bond which are attributable to accrued
original issue discount will be treated as tax-exempt interest, rather than as taxable gain, for federal
income tax purposes.
Original issue discount is treated as compounding semiannually, at a rate determined by
reference to the yield to maturity of each individual Discount Bond, on days which are determined by
reference to the maturity date of such Discount Bond. The amount treated as original issue discount on
such Discount Bond for a particular semiannual accrual period is equal to the product of (i) the yield
of maturity for such Discount Bond (determined by compounding at the close of each accrual period)
and (ii) the amount which would have been the tax basis of such Discount Bond at the beginning of
the particular accrual period if held by the original purchaser, less the amount of any interest payable
for such Discount Bond during the accrual period. The tax basis is determined by adding to the initial
public offering price on such Discount Bond the sum of the amounts which have been treated as
original issue discount for such purposes during all prior periods. If such Discount Bond is sold
between semiannual compounding dates, original issue discount which would have been accrued for
that semiannual compounding period for federal income tax purposes is to be apportioned in equal
amounts among the days in such compounding period.
Non-Litigation Certificate. Upon delivery of the Bonds the District will furnish a certificate to the effect
that no litigation not described in the Official Statement is then pending which would affect the validity
of or security for the Bonds.
Official Statement Certificate. Upon delivery of the Bonds, the District will furnish a certificate to the
effect that the Official Statement does not contain any untrue statement of a material fact or omits to
state a material fact required to be stated therein to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
24
CONTINUING DISCLOSURE CERTIFICATE
The following is a summary of certain provisions of the Continuing Disclosure Certificate,
which will be executed by the District.
Purpose of the Continuing Disclosure Certificate. The Continuing Disclosure Certificate describes the
District’s continuing obligation to provide certain financial and other information with respect to the
Bonds, and is for the benefit of the Beneficial Owners of the Bonds.
Provision of Annual Financial Information and Operating Data. The District has agreed to provide
within ninety (90) days after the end of the District’s fiscal year, its Annual Financial Report ("AFR").
The AFR will include, among other things, the information contained under DESCRIPTION OF THE
SCHOOL DISTRICT, Assessed Valuation, DEBT STRUCTURE, Outstanding Indebtedness,
DEBT STRUCTURE, Debt Service Schedule and Coverage, FINANCIAL INFORMATION,
Sources and Uses of Funds, and FINANCIAL INFORMATION, Collection of Taxes. The District
will also provide its audit within ninety (90) days after the audit has been completed and received by
the District. The annual financial statements shall be prepared using accounting practices prescribed by
A.C.A. § 10-4-413 as it may be amended from time to time, or any successor statute, and shall be audited
by the Legislative Joint Auditing Committee, Division of Legislative Audit of the State of Arkansas, or
by an independent certified public accountant. The District shall also provide, not later than ninety (90)
days after the end of the District’s fiscal year, its LEA Financial Report. Additionally, the District will
provide timely notice of the occurrence of listed events relating to the Bonds as hereinafter described.
The District has agreed to provide this information in an effort to comply with Rule 15c2-12 of the
Securities and Exchange Commission, as the same may be amended from time to time (the "Rule").
Any or all of the foregoing information may be incorporated by reference from other documents,
including official statements of debt issues with respect to the District that are available to the public on
the Municipal Securities Rulemaking Board ("MSRB") website or filed with the Securities and
Exchange Commission.
Notice of Listed Events. The District agrees that it will furnish to the MSRB, not later than ten (10)
business days after the occurrence of such event, notice of any of the following events with respect to
the Bonds:
(a) principal and interest payment delinquencies;
(b) non-payment related defaults, if material;
(c) unscheduled draws on debt service reserves reflecting financial difficulties;
(d) unscheduled draws on credit enhancements reflecting financial difficulties;
(e) substitution of credit or liquidity providers, or their failure to perform;
(f) 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 tax status of the security, or other material events affecting the tax-
exempt status of the security;
(g) modifications to rights of security holders, if material;
(h) bond calls, if material;
(i) defeasances and tender offers;
25
(j) release, substitution, or sale of property securing repayment of the securities, if material;
(k) rating changes;
(l) bankruptcy, insolvency, receivership or similar event of the obligated person;
(m) the consummation of a merger, consolidation or acquisition involving an obligated
person or the sale of all or substantially all of the assets of the obligated person, other than in the ordinary
course of business, the entry into a definitive agreement to undertake such action or the termination of
a definitive agreement relating to any such actions, other than pursuant to its terms, if material;
(n) appointment of a successor or additional trustee or the change of name of a trustee, if
material;
(o) incurrence of a "Financial Obligation" (as defined below) of the obligated person, if
material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms
of a financial obligation of the obligated person, any of which affect security holders, if material; and
(p) default, event of acceleration, termination event, modification of terms, or other similar
events under the terms of a financial obligation of the obligated person, any of which reflect financial
difficulties.
"Financial Obligation" is defined as a (i) debt obligation; (ii) derivative instrument entered into
connection with, or pledged as security or a source of payment for, an existing or planned debt
obligation; or (iii) guarantee of (i) or (ii). The term Financial Obligation does not include municipal
securities as to which a final official statement has been filed with the MSRB pursuant to the Rule.
The District further agrees that it will furnish to the MSRB notice of any failure of the District
to provide the annual financial information or operating data required hereunder on or before the date
specified.
District to Disseminate Information and Notices. The District agrees to disseminate the AFR to the
MSRB, and to disseminate any notice of a material event specified above to the MSRB.
Amendment; Waiver. Notwithstanding any other provision of the Continuing Disclosure Certificate,
the District may amend the Continuing Disclosure Certificate, and any provision of the Continuing
Disclosure Certificate may be waived, provided that the following conditions are satisfied:
(a) If the amendment or waiver relates to the provisions of Sections 3(A), 4, or 5(A) of the
Continuing Disclosure Certificate, it may only be made in connection with a change in circumstances
that arises from a change in the identity, nature or status of an obligated person with respect to the Bonds,
or the type of business conducted;
(b) The undertaking, as amended or taking into account such waiver, would, in the opinion
of nationally recognized bond counsel, have complied with the requirements of the Rule at the time of
the original issuance of the Bonds, after taking into account any amendments or interpretations of the
Rule, as well as any change in circumstances; and
(c) The amendment or waiver either (i) is approved by the owners of the Bonds in the same
manner as provided in the Resolution for amendments to the Resolution with the consent of owners, or
(ii) does not, in the opinion of nationally recognized bond counsel, materially impair the interests of the
owners or Beneficial Owners of the Bonds.
26
In the event of any amendment or waiver of a provision of the Continuing Disclosure Certificate,
the District shall describe such amendment in the next AFR, and shall include, as applicable, a narrative
explanation of the reason for the amendment or waiver and its impact on the type (or in the case of a
change of accounting principles, on the presentation) of financial information or operating data being
presented by the District. In addition, if the amendment relates to the accounting principles to be
followed in preparing financial statements, (i) notice of such change shall be given in the same manner
as for a Listed Event under Section 5(B) of the Continuing Disclosure Certificate, and (ii) the AFR for
the year in which the change is made should present a comparison (in narrative form and also, if feasible,
in quantitative form) between the financial statements as prepared on the basis of the new accounting
principles and those prepared on the basis of the former accounting principles.
Additional Information. Nothing in the Continuing Disclosure Certificate shall be deemed to prevent
the District from disseminating any other information, using the means of dissemination set forth in the
Continuing Disclosure Certificate or any other means of communication, or including any other
information in any report or notice made hereunder, in addition to that which is required by the
Continuing Disclosure Certificate. If the District chooses to include any information in any report or
notice made hereunder in addition to that which is specifically required by the Continuing Disclosure
Certificate, the District shall have no obligation under the Continuing Disclosure Certificate to update
such information or include it in any future report or notice.
Noncompliance. In the event of a failure of the District to comply with any provision of the Continuing
Disclosure Certificate, any beneficial owner may take such actions as may be necessary and appropriate,
including seeking mandamus or specific performance by court order, to cause the District to comply
with its obligations under the Continuing Disclosure Certificate. Noncompliance with the Continuing
Disclosure Certificate shall not be deemed an Event of Default under the Resolution, and the sole
remedy under the Disclosure Agreement in the event of any failure of the District to comply with the
Continuing Disclosure Certificate shall be an action to compel performance.
27
CONTINUING DISCLOSURE PAST COMPLIANCE
While the District has not made any determination as to materiality, the following charts reflect
the District’s compliance and non-compliance with previous undertakings under the Rule for the past
five (5) years.
Annual Financial Information and
Operating Data
("Annual Report")
Pursuant to previous Continuing Disclosure undertakings by the District, the District has
agreed to provide to the MSRB its Annual Report within ninety (90) days after the end of each fiscal
year (the "Submittal Deadline").
Fiscal Year
Ending June 30
Submittal Deadline
Date Filed
(1)
Status of
Compliance
2019
09/28/19
09/04/19
Compliant
2020
09/28/20
09/24/20
Compliant
2021
09/28/21
09/27/21
Compliant
2022
09/28/22
09/27/22
Compliant
2023
09/28/23
09/20/23
Compliant
(1)
Actual date Annual Report was filed on MSRB’s EMMA portal.
Audited Financial Statements
("AFS")
Pursuant to previous Continuing Disclosure undertakings by the District, the District has
agreed to provide to the MSRB its AFS within ninety (90) days after the audit has been completed and
received by the District.
Audit for
Fiscal Year
Ending June 30
Legislative Audit
Release Date
Date Filed
(1)
Status of
Compliance
2018
02/18/19
03/04/19
Compliant
2019
03/13/20
03/20/20
Compliant
2020
02/16/21
04/20/21
Compliant
2021
03/14/22
04/20/22
Compliant
2022
03/10/23
03/20/23
Compliant
(1)
Actual date AFS was filed on MSRB’s EMMA portal.
Listed Events
Within ten (10) business days after the occurrence of a Listed Event set forth in previous
Continuing Disclosure undertakings (the "Listed Event"), the District has agreed to provide a notice of
such Listed Event to the MSRB.
The Listed Event
Date of
Occurrence
Date Filed
(1)
Status of
Compliance
Notice of Full Redemption/Defeasance Issue 04/01/14
CUSIP 3126756M8
07/14/20
06/12/20
Compliant
Notice of Full Redemption/Defeasance Issue 04/01/14
CUSIP 3126755U1
07/14/20
06/12/20
Compliant
Notice of Full Redemption/Defeasance Issue 05/01/15 D
07/14/20
06/12/20
Compliant
Call Notice for Redemption in Full/Defeasance Issue 01/01/13
07/14/20
06/11/20
Compliant
Call Notice for Redemption in Full/Defeasance Issue 08/01/12 B
07/14/20
06/11/20
Compliant
Redemption Notification Issue 03/01/15
07/14/20
06/11/20
Compliant
Call Notice for Redemption in Full Issue 12/01/13
07/14/20
06/11/20
Compliant
Notice of Full Redemption Issue 01/01/12
07/14/20
06/14/20
Compliant
(1)
Actual date Listed Event was filed on MSRB’s EMMA portal.
The District has taken steps to ensure that the Annual Reports, AFS and Listed Events are
timely filed as required by its continuing disclosure undertakings.
28
MISCELLANEOUS
Bond Rating. Moody's Investors Service, Inc. ("Moody’s"), has assigned an "Aa2" enhanced rating to
the Bonds. Certain information was supplied to the rating agency to be considered in evaluating the
Bonds. Any rating issued will reflect only the views of the rating agency, and any explanation of the
significance of such rating on the Bonds should be obtained from the rating agency. There is no
assurance that the ratings obtained for the Bonds will be retained for any given period of time or that
the same will not be revised downward or withdrawn entirely by the rating agency for the Bonds if, in
its judgment, circumstances so warrant. Neither the Underwriter nor the District undertake any
responsibility to oppose any revision or withdrawal of the rating. Any such downward revision or
withdrawal of the rating obtained may have an adverse effect on the market price of the Bonds. The
assignment of the enhanced rating reflects the additional bond security provided by A.C.A. §6-20-
1204.
Underwriting. The Underwriter has purchased the Bonds from the District at public sale upon
competitive bids at a price of $115,324,379.25 (par amount of Bonds ($117,630,000.00), less net
original issue discount ($2,022,058.70), less Underwriter's discount ($283,562.05)).
Interest of Certain Persons. Stephens Inc. is serving as Municipal Advisor to the District in connection
with the issuance of the Bonds. Stephens Inc., in its capacity as Municipal Advisor, has relied on the
opinion of Bond Counsel and, other than yield and average weighted maturity calculations, has not
verified and does not assume any responsibility for the information, covenants and representations
contained in any of the legal documents with respect to the federal or state income tax status of the
Bonds or the possible impact of any present, pending or future actions taken by any legislative or
judicial bodies. The information set forth herein has been obtained from the District and other sources
believed to be reliable but has not been independently verified by the Municipal Advisor.
The Municipal Advisor’s fee and Bond Counsel’s fee for services rendered with respect to the
sale of the Bonds is contingent upon the issuance and delivery of the Bonds.
The Municipal Advisor has reviewed the information in this Official Statement in accordance
with, and as part of, its responsibilities to the District and, as applicable, to investors under the federal
securities laws as applied to the facts and circumstances of this transaction, but the Municipal Advisor
does not guarantee the accuracy or completeness of such information.
The Board of Directors of the District has authorized the preparation and distribution of this
Official Statement.
FAYETTEVILLE SCHOOL DISTRICT NO. 1 OF
WASHINGTON COUNTY, ARKANSAS
By
Kevin Faught
STEPHENS INC.
MUNICIPAL ADVISOR
