Budget Workshop Report 2009-06-09
From The Lovejoy Way
This is the UNOFFICIAL report of the Budget Workshop held on June 9, 2009 by Daris A Nevil
Contents |
Approve Real Estate Constract
The board approved a real estate contract for the property located on Country Club, close to Hart Elementary.
Ted Moore Budge Presentation
Budgeting Calendar
- June 25 approval of budge
- July 30 approval of tax rate
- July 25 statutory date of appraisals from Tax District
- Two year budget cycle
Drop in Attendance
- 97% attendance in the past
- 96% this year, cost of $275K
- Guilbeau: Why did it drop?
- Moore: We don't know. Elementary attendance is down.
- Moore: LISD is blessed with a high-target revenue due to increased appraisal in 2004-2005
- Currently at $7170, held harmless forever
- Now at $7290 due to increase of $120/WADA guaranteed by state law
- New state aid is $1.5-1.6M
- Expect to pick up another $1M for 2010-2011
- This will be a very lean increase for that school year
- Moore: The additional state aid did not eliminate LISD's budget shortfall
- Casey: Are we offering incentives in Elementary school for improved attendance?
- Moore: No, but we could do that.
Budget Shortfall
- Net result of trimming revenue and adding increased state revenue still requires that we trim $700k-$800k from budget.
- Belt tightening is incorporated in tonight's proposed budget
- Now asking all budget managers to strip 5% off what they had in 2008-2009
- The budget managers include the school principals
- Already passed salary increase to teachers, counselors, nurses last February
- Moore: I recommend a 3% increase for all everyone else except me (Ted Moore)
Stimulus Money
- This year we have non-recurring, stimulus dollars that must be spent by 2010
- We should not use this for recurring costs
- Recommend that $400K be used to retain support positions slated for elimination, such as library aids, receptionists, etc
- Recommend no layoffs for 2009-2010, but put them on notice that they may be cut in the next year
- Gives them a chance to move to another position in the district or find work in another district
- This stimulus fund has the fewest strings, unusual to have freedom to spend 50% on supplanting current expenses
- The remainder is targeted to special education
Tax Increase
- Propose raise tax from $1.04 to $1.06
- LISD gets 100% recapture on the $0.02.
- Hard to plead our case before the state if we are not maximizing our income from the local tax income
Other Belt Tightening Proposals
- Delay opening of Willow Springs MS to fall 2012 (>1,000 students at Sloan Creek MS before opening WSMS)
- Delay bond issue for next elementary school until Nov 2011
- Current growth rate of 5% allows us to hold Interest & Sinking rate at $0.47 even with new bond
- Use 1 year stimulus to fund staff
- The $0.02 increase will purchase 2 buses and instructional technology
- If no $0.02 increase then these purchases will be moved into the 2010-2011 year
- Gives us more breathing room in the 2010-2011
- Gilbeau: Are buses for growth or replacement?
- Womack: Growth
- Westbrook: What is the technology?
- Womack: Variety of ipods, computers, handheld technology, software, etc
- Moore: Master plan for technology goes through 2013, can send (Westbrook) that plan
Shay Adams Presentation
- June 25th is the budget hearing and the audience has a chance to ask questions
- The budget numbers are based on the $1.06 Maintenance & Operations tax rate
- In March I was interviewed by an MS student by email, "Does the economy affect the school budget" I answered "No", but now I see how even the interest we earn on our balances is way down ($400K) from the past
- Be careful of comparing this 10 month year to a normal 12 month year
- Teachers salaries are Sept to June, Admin is all year round
- Gilbeau: Actual budget increase is from $24M to $29M
- Adams: $169K in raises for para-professionals (admin)
- Moore: Prosper is at $1.17 M&O
- Hickman: Prosper also approved a $750M bond
- Adams: Around 80% of our budget is made up of personnel costs (by contract)
- Accounting Categories
- 6100 - teachers, substitutes, maintenance employees, all district employees
- 6200 - speakers, contractors, attorneys, utilities, referees and officials, SRO officers
- 6300 - tangible items, toilet tissue, chalk, computers
- 6400 - travel, fees and services, membership fees for coops, UIL contest fees, meals for travel, awards (recognition and awards)
- 6600 - capital outlay - anything in excess of $25,000, anything less is 6300. This category includes land, tractors, buses, etc.
- Accounting Categories
- Debt service payments are made only twice a year, in February and August
- Because we are in a 10 month budget cycle we will not include the August debt payment, that will come out of the 2009-2010 budget (which will have 3 debt payments)
- Not proposing an increase in lunch prices in 2009-2010
- The cafeterias also provide lunches to the daycare and the individual booster clubs
- Hickman: How much does the $0.02 bring in?
- Adams: $389K
- Gilbeau: In the CASE meeting did people propose extras that were not wanted?
- Moore: The results were rank-ordered. A couple of people said they did not like the Academic Center. A couple of people said they favor going back to the Special Education Coop, and that would be a savings. People prefer a 30 minute bus ride over a 45 minute bus ride. The prevailing sentiment was that convenience for parents was more important.
- Adams: Good feedback, perceptions of CASE members not always in line with our explanation
- Moore: Personal experience of CASE members affected their judgment
- July 30th Meeting
- Budget Approval Meeting
- Team of 8 training (requires 3 hours)
- Superintendent evaluation
- Plan to do all three of these on the July 30
- Senate Bill 3 repealed the 65% rule, so LISD is not using it this year.
- Thought: The new budget proposes a 3% admin raise, which was placed on hold in February. The net outcome of this is that admin personnel get their 3% raise anyway.
- Thought: The taxpayers will be voting on whether to have technology, since that is what is budgeted to use the $0.02 increase.
- Moore: The board could move the technology funding back into the main budget, and move the 3% admin raise to the $0.02 ($165k)
- The 3% teacher raise was mandated by legislature, so every other district is about where we are
- Westbrook: Is anyone else concerned about the $0.02 tax increase?
- Gilbeau: No
- Westbrook: Bad timing, poor economy, if we continue to take every opportunity to raise taxes, It just seems like the wrong time to do it. If there is a way to make the budget without the $0.02 then I like to see us do that.
- Casey: Everything you said is true, However, I think that everyone who moved to Lovejoy wants to pay the extra $100 for taxes (Westbrook "I agree")
- Ellrich: It's 2 dinners out for the $350K homeowner. You can't do budget cuts without asking for more money. My neighbors and friends have said they are for the $0.02.
- Hickman: Because you have a good school district your property value is higher. Lots of people in the district don't have kids in school any longer.
- Gilbeau: I sit on the fence on this issue. I don't like the $0.02 increase. What is the true impact of maximizing the dollars in years to come? I'm ok with $1.06 if we said we were doing that today.
- Moore: Let me provide some context. It is a good business decision to move to $1.06. You have to make the decision if it is a good political decision. We are doing the easy-to-trim things in 2009-2010. In a year from now we'll have eaten up the excess in capacity.
- We have about $450K in approved position which are being delayed for a year (from Dec 2008). About 3/4 of that is in teacher position, and the other 1/4 is in support positions. We only have one ground crew person to maintain 5 campuses (there are 4 positions in maintenance)
- If we don't do the $0.02 this year then you'll need to do it next year.
- Thought: Does the current budget take into allowance the cost of the election this Oct?
- Adams: In 2010-2011 we will open up 15 positions (about $800k), which is an additional $0.02.
- Thought: Did the CASE comittee approve the 3% raise to admin?
- Moore: I'm completely respectful that it is the board's decision. I'm not hired to make political decision. I can recommend it as a good business decision.
- Ellrich: Not a wise business/political decision to have a $0.02 raise in 2010 and a bond election in 2011.
- Hickman: If we approve the $0.02 tonight then we can always do away with it by July 30.
- Moore: There still could be a surprise in what we get in state aid. The TEA must interpret the law.
- Adams: We have as yet to talk about raises in the 2010-2011 budget.
- MacDonald: I'm not sure I am for the $0.02 raise, but you have to start with the cuts now. We must sell that we are doing the best we can with the money we have. We really have to look at cutting. I'm the last person in the world to cut.
- Shay: Here is the list of belt-tightening items in the proposed budget
- $329,000 in non-personnel budgets
- $50,000 in non-contracted payroll (overtime, supplemental duty,etc.)
- $316,000 in positions for the 2010-2011 school year (cut being realized this year via Stimulus Funding of $320,000)
- $50,000 in staff development training funding from general fund
- Moore: I'd like to see strong support from the board for the tax raise, because it will take the 7 of you to sell it. I am asking you to give the voters the choice.
- Westbrook: What are the hard costs of the election?
- Booker: The cost was around $13K or $14k for the board election last May
Vote on Tax Rate Increase
- Hickman: Question from anyone? Motion to approve Maintenance & Operations tax rate of $0.02...
- Gilbeau: So moved
- Ellrich: Second
- Unanimous in the affirmative
- Hickman: Item #9 - Option 3 of Chapter 41 Actions. Must enter into Option 3 prior to tax rate
- Unanimous in the affirmative
- Hickman: Consider date of June 25 for public hearing on budget and tax rate
- Unanimous in the affirmative
New Hire
- Moore: Let me introduce Bruch(sp?) Hutchman position of Dir of Admin Services and District Effectiveness
- Email: What is Mr Hutchman's salary and benefits?
- Moore: Summer leadership, pre-ap program, assisted by Casey, Tonya has one on grade profile assisted by MacDonald, Ellrich graduates from leadership TASB
- Meeting adjourned.
Ted Moore Email Express June 12, 2009
Budget Decisions for 2009-2010
The LISD board of trustees met on Tuesday evening, June 9, to hold a workshop on the development of the budget and to consider a proposed tax rate. The board will consider adoption of our 2009-10 budget at our regularly scheduled June 25th meeting and then the board will adopt the tax rate on July 30th to fund that budget. It may seem odd to you that we adopt the budget one month and fund it the next. By law, we have to adopt the budget by June 30th because our fiscal year begins July 1 and by law, we cannot adopt a tax rate until we have the certified appraisal rolls which we will receive by the statutory deadline of July 25th. Please allow me to share information from the budget workshop in a question and answer format.
Q: Is it accurate that the State of Texas is requiring a teacher pay raise?
A: Yes, the state funding bill is requiring all school districts to pass along a pay raise to teachers, counselors, librarians, and nurses. LISD had chosen to pass along a pay raise to this group in February to aid recruiting for the 12th grade program. Some of you have suggested that this was ill advised in this economy. Fortunately, our board approved teacher raises early to aid a very successful recruiting semester and as it turned out, we would have been required to pass along a raise anyway.
Q: Does the proposed budget pass along raises to personnel other than teachers?
A: Yes, the proposed budget passes along the same 3% raise to all other personnel except for the superintendent. I have asked the board to freeze my base salary for next year due to the current economic times and the impact on our operating budget.
Q: Did LISD indeed receive the mid size adjustment that we had been communicating about with our legislators?
A: Yes, we will receive the mid size adjustment to state funding; while we do not yet know the exact amount, we project an increase in the neighborhood of $1.2 million
Q: Based on current economic times, did LISD cut personnel?
A: Yes, the district has cut over $400,000 in approved positions that had yet to be filled for the 2009-10 school year. Approximately ¾ of these positions were secondary instructional positions and the other ¼ were support positions such as grounds/maintenance. In addition, the district has identified approximately $300,000 in campus support positions that are scheduled to be eliminated in the 2010-11 school year. LISD was able to postpone the cutting of these positions by one year by utilizing federal stimulus money. This will allow the people in these positions to have a full year to find employment elsewhere in the district or seek employment outside of the district. The CASE committee which has advised the administration on a prioritization of potential cuts offered that some of the functions of these potential areas to cut could be manned by volunteers. This will give our campuses a year to work with their volunteers to develop a volunteer plan to support any program that loses staff in the 2010-11 school year.
Q: Has the district scrubbed the budget to find other areas of savings that will not compromise the quality of our children’s experiences?
A: Yes, we have made a 5% cut in our operating budget in a year when our student population will grow more than 10%. This will equate to a cut of $329,000 in non-personnel budgets, $50,000 in non-contract payroll such as overtime, supplemental duty, etc and $50,000 in staff development that will be shifted into the stimulus fund category. In summary, we have trimmed the 2009-2010 budget in a combination of cuts and stimulus fund utilization by an approximate amount of $1.09 million
Q: As you have worked through the budget development, have you lowered any revenue estimates from earlier in the semester?
A: Yes, student attendance in 2008-09 was almost 1% lower than we had projected. A 1% drop in attendance costs the district ~$300,000 in state aid. In addition, while we had used conservative estimates in interest income and rental income, both have dropped so we lowered our estimates for 2009-2010 as well.
Q: Does LISD have a sufficient fund balance considering that enrollment and attendance are both estimates that drive revenue?
A: Yes, the LISD fund balance at the close of this school year will be above 30% of this year’s operating budget. Our goal is to remain at or above 25% which equals approximately 3 months of operating expenses.
Q: When we passed the last bond issue, the I&S tax rate was projected to remain stable at 47.5 cents. Did our appraised values grow enough to allow our I&S rate to remain stable at 47.5 cents?
A: Yes, based on preliminary values it appears that our I&S rate for 2009-2010 will be unchanged from this year and levied at 47.5 cents
Q: Considering that LISD will make over $1 million dollars in budget cuts and/or replacement of expenditures with federal stimulus dollars, will our M&O rate remain stable at $1.04?
A: The proposed budget has been built utilizing an M&O rate of $1.06. This is a 2 cent increase and under current law will require voter approval. The LISD Board of Trustees will set the tax rate on July 30. If they adopt the tax rate of $1.06, then they will call an election to seek your approval in late September.
Q: Why is voter approval required for the board of trustees to increase taxes by 2 cents?
A; Under HB1, which compressed our tax rate down to $1, the legislature set up a structure to allow local discretion, but to keep some checks and balances in place. All school districts have the option of raising the M&O rate up to $1.17. The law gives the school board the authority to raise the M&O rate to $1.04 which Lovejoy has done. After $1.04, a board may adopt a higher tax rate, but voter approval is required before it is levied. If our board does indeed adopt a tax rate of $1.06, they will call the election in September so that we know early in the year if we are going to receive the revenue or not.
Q: Why is the proposed increased just 2 cents?
A: 2 cents is the amount that we need to balance our budget without including any cuts that will have a major impact on our programs. In addition, the State of Texas provides an incentive to school districts to raise our local tax effort. For every penny we levy about $1.00, the State of Texas adds ~40 cents on top of that up to $1.06. Above $1.06, the state does not add in additional dollars and in our case, revenue above $1.06 is subject to recapture (Robin Hood).
Q: Will Lovejoy ISD be required to pay recapture (Robin Hood) of our local tax dollars to Austin?
A: No, under the new law, Lovejoy ISD will not pay any recapture on an M&O rate at $1.06 or less. For the first time since Robin Hood began, Lovejoy ISD is no longer required to pay any money back to Austin as recapture as long as our M&O rate is at or below $1.06. However, even though we no longer pay recapture, it does not mean more dollars for our schools; the amount we no longer pay is off set by a reduction in state aid.
Q: What items in the budget would be cut if our voters do not pass the additional 2 cents for our M&O budget?
A: If our voters decide not to authorize the 2 cent increase, we will cut the purchase of two school buses ($205,000) and additional instructional technology ($176,000). The two school buses are needed to keep up with our growing student population and during the spring semester when we have a good deal of travel for competition, the allocation of busing will become a large challenge. The technology dollars are for classroom level technology that is in our next deployment of instructional technology called for in our technology master plan. If our board does indeed adopt a tax rate of $1.06, we will provide more detail related to these two budget items.
Q: What would be the cost of a 2 cent tax increase for a homeowner in Lovejoy ISD?
A: If you already have the Over 65 exemption, the cost to you would be $0. The average home value in LISD is on the tax roll at $355,942 and a 2 cent increase at that value would cost you $71.19 per year. If your home is valued at $500,000, the increased tax would be $100 for the year. If your home is valued at $750,000, then your increase would be $150. Finally, if your home is on the tax roll at $1,000,000, your increase would be $200 for the year.
Q: In addition to the budget workshop, did the board of trustees take action on any other important item?
A: Yes, the board approved a contract for the purchase of a maintenance facility. This purchase was authorized by the 2007 bond issue. The district is currently leasing property for transportation and maintenance and plans to purchase the same property on Country Club Road that we are currently leasing. The sales price is a good value for the district at approximately $6.70 per sf for a total sales price of $940,000. The parcel is 3.223 acres, 15,888 sf of building space, and 31,000 sf of paving.
