Strictly Private and Confidential Gadsden Independent School District

Strictly Private and Confidential Gadsden Independent School District No. 16 $9, 500, 000 - General Obligation School Building Bonds, Series 2014 August 14, 2014

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History of Assessed Valuation 2

New vs. Re-Appraisal 3

History of Tax Rates History of Total Residential Tax Rates 4

Debt Management Plan Overview § Bond Election Timing § Every four years – § § § 5 $38, 000 bond election approved by voters on February 4, 2014 with bonds to be sold as follows: • $9, 500, 000 to be sold on September 25, 2014 • $9, 500, 000 to be sold in 2015, 2016 and 2017 or as directed by the District – Next bond election – February 2018 for approximately $37, 000 – Next two mill levy election – February 2018 Bond Maturity Schedule § Declining debt service to permit new bonds in future without tax increase § 10 final maturity (20 -year maximum maturity pursuant to State law) § Create capacity by retiring debt as quickly as cashflow from tax levy will permit G/O Education Technology Lease Purchase Certificates of Participation (COPs) § Sold annually or biannually (or as directed by the District) to pay for technology equipment, software, hardware, tech support and maintenance § Notes will be retired within two years Bond & COP Tax Rate § Maintain a combined GOB & COP debt service tax rate at or below $14. 35 level § Maintain SB 9 levy @ $2. 00

Bonding Capacity 6

Outstanding and New Issue Debt Service 7

Bond Sale Calendar 8

Weekly Municipal Market Update August 11, 2014

Short-Term Market Overview Yields in the short-term tax-exempt variable rate demand note (VRDN) market moved higher last week, particularly in the second half of the week. As the demand from August coupon reinvestments waned, yields were pushed higher, although in a controlled fashion of roughly 1 bps per day. The SIFMA Index was reset at 0. 05%, down 1 bps on the week. SIFMA vs. LIBOR 10 Source: Bloomberg

Long-Term Market Overview Municipal GO “AAA” MMD Yield Curve Changes The weakness in equity markets in the previous week spilled over to early last week, as the S&P 500 Index was down nearly 1% through Thursday’s close. However, news reports on Friday that Russian President Putin was pulling back, at least temporarily, from what looked to be an imminent invasion of Ukraine, appeared to be the spark for a sharp snapback in stocks. By Friday’s close, equities had recovered their losses from early in the week to finish up fractionally. The “risk off” weakness in equities early in the week provided a good backdrop for Treasury bonds, which traded to their low yield levels for the year. Treasuries were also able to hold on to the majority of their gains on Friday when stocks were rallying. For the week as a whole, the yield on the 30 -yr Treasury declined by 5 bps to 3. 23% and the yield on the 10 -yr was down by 7 bps to 2. 42%. Readers will recall that we started 2014 with yields of roughly 3% on the 10 -yr and 4% on the 30 -yr, with many analysts predicting that yields would head higher as the Fed began its tapering of quantitative easing (QE) purchases of Treasuries and agency securities. Now, as we near the end of QE, we are sharply lower in yield than we were when we began the year, even as the unemployment rate has dropped and there are some signs that inflation may be picking up. The muni market gained along with Treasuries last week, outperforming the Treasury market by declining in yield more. Yields on the Municipal Market Data (MMD) AAA GO curve decreased by between 10 bps and 12 bps for maturities of 10 -yrs and longer, with the larger declines in the middle of the yield curve. The outperformance for munis on the week was due to yields declining on Friday even as Treasury yields increased slightly after the equity market recorded its large gains on the day. It will be interesting to see if munis can maintain those gains in the upcoming week, especially as we will see one of the heavier new issue calendars of the summer (more than $6 bn) that includes three large issues, each of more than $800 mm – Minnesota GO’s, New York City GO’s, and the Port Authority of New York and New Jersey. This upcoming week also sees the expiration of the short extension given to the Puerto Rico Electric Power Authority (PREPA) to repay two letters of credit (LOC) totaling nearly $675 mm. Those LOCs originally were scheduled to expire on July 7 th, but were extended first until July 31 st and then to August 14 th. According to data from Lipper, municipal bond mutual funds saw inflows of $17 mm last week – this was a decline from the $17 mm of inflows in the preceding week. High yield funds again saw inflows of $60 mm as they continued to recover some funds lost earlier that coincided with some of the most negative headlines coming out of Puerto Rico. 11 Source: Bloomberg and Thomson Municipal Market Data U. S. Treasury Yield Curve Changes

Municipal Market Fund Flows Until Fund Flows stabilize, trading in the municipal market will remain volatile § According to data from Lipper, for the week ended August 06, 2014, weekly municipal bond funds reported $17 million in inflows, down from previous week’s $419 million of inflows - For the year, weekly and monthly municipal funds have recorded $11. 155 billion in net inflows and have only recorded net weekly outflows 6 times (31 reporting weeks thus far) - For the third consecutive week, high yield municipal funds experienced modest inflows, recording $60 million in net inflows. Lipper Municipal Fund Flows Period ended August 06, 2014 12

Tax-Exempt Market Dynamics Muni Bonds: 2014 Issuance versus Redemptions Net Inflows in 24 of the First 31 Weeks of the Year 2013 & 2014 Municipal Weekly Volume Credit Spreads Remain Tight for Highly Rated Issuers 13 Source: Bloomberg, Lipper and Thomson Municipal Market Data

Comparison of Minimum vs. Current vs. Maximum AAA MMD 2013 & 2014 Comparison 14 Source: Thomson Municipal Market Data Historical Ten Year Comparison

Current Municipal Market Conditions: “AAA” MMD After closing at 3. 30% the previous week, the 30 -year “AAA” MMD decreased by 10 bps from August 1 – August 8 to a current rate of 3. 20% “AAA” MMD January 1, 2007 to Present Shift in “AAA” MMD Since July 2013 January 1, 2007 to Present 10 Year 20 Year 30 Year Maximum 5. 740% 5. 940% 2. 100% 2. 950% 2. 470% 3. 200% 4. 860% Minimum 1. 470% 2. 150% Current Shift in 30 -year "AAA" MMD 2007 2008 2009 0. 250% 0. 790% -0. 900% July 1, 2013 to Present 2010 0. 520% 2011 -1. 130% 2012 -0. 740% 2013 +1. 330% Source: TM 3, Thomson Reuters 10, 20, and 30 year “AAA” MMD shown to represent different average lives of municipal transactions Rates as of August 8, 2014 15 10 Year 20 Year 30 Year Maximum 3. 040% 4. 270% 4. 510% Minimum 2. 140% 2. 990% 3. 220% Average 2. 152% 3. 121% 3. 457%

Bond Buyer 20 General Obligation Bond Index 53 Year Historical Perspective Bond Buyer 20 GO Index since January 1961 % of Time in Each Range Since 1961 Today’s 4. 33% level is lower than 79. 51% of historical rates since January 1961 16 Source: Bloomberg as of July 31, 2014 {Bond Buyer Index unavailable at time of distribution} Weekly yields and indexes released by the Bond Buyer. Updated every Thursday at approximately 6: 00 pm EST. 20 Bond General Obligation Yield with 20 year maturity, rated AA 2 by Moody's Arithmetic Average of 20 bonds' yield to maturity.