Board Workshop2019-20 Budget Process

January 24, 2019

As of January 24, 2019

at 3pm1

BUDGET PROCESS CALENDAR

2

Budget Basics

3

GLOSSARY OF TERMS

1. Student Enrollment – Number of students registered to attend school

2. Average Daily Attendance (ADA) – A ratio of the number of days actually attended to the number of the total days possible to attend

3. Full Time Equivalence (FTE) – The amount of instructional time required with a student that will be equivalent to an ADA.

4. Weighted Average Daily Attendance (WADA) – Based on Formula (Tier 1Entitlement less Transportation Allotment , New Instructional Facility Allotment, High School Allotment) * [1-((ABA-BA)*.5)/ABA)]

ABA

5. Cost of Education Index (CEI) - Reflect geographic variation in known resource costs and costs of education beyond the control of school districts through an adjustment to the basic allotment

4

GLOSSARY OF TERMS

6. Equalized Wealth Levels (EWL) - The first EWL is equal to the maximum school district property wealth per WADA provided by the basic allotment. This level applies to the tax effort up to a school district’s compressed tax rate (CTR) and is currently $514,000, which is tied to the basic allotment. The second EWL is determined by the funding provided to Chapter 42 school districts for their tax effort that exceeds the CTR, up to six golden pennies (which there is no recapture on) that are used in Tier II. This EWL is tied to the Austin Independent School District’s yield per WADA per penny. The third EWL is set in statute at $319,500 per WADA, and it applies to any tax effort that exceeds the “CTR plus six cents” and is tied to the copper pennies that are also used in Tier II.

7. Tier I – State Foundation Entitlement Funds – Based on District and student characteristics

8. Tier II – State Enrichment Entitlement Funds – Based on tax effort and WADA

9. Basic Allotment – (BA) Set by Statute at $5,140 at compressed rate of $1. (RRISD $5,129)

10. Adjusted Basic Allotment (ABA) – Basic Allotment modified by CEI (RRISD $5,566)

11. Guaranteed Yield - Guaranteed amounts for pennies of tax effort are set in statute and/or General

Appropriations Act called the Guaranteed Yield Per Penny.

5

CAMPUS & DEPARTMENT ALLOCATIONS

Campus Allocation

per Student

High School Middle School Elementary School

Basic (Form A) $126 $104$100

($44,000 min.)

Fine Arts $34 $5$10,000 distributed to

campuses based on need

Campus Allocations based on 95% of Projected Student Enrollment

DEPARTMENTS - Receive the same funding as prior year unless additions or subtractions are

necessary due to programmatic changes.

6

BUDGETING FOR SALARIES & BENEFITS

Salary/Benefit Type Amount

Filled Positions All Actual Salary

Vacant Positions Teaching/Scheduled Positions $49,400

Pay Range Positions Midpoint

Benefits Health Insurance Annual Contribution

Life Insurance Annual Contribution

Worker's Compensation Factor Based on Position

7

Historical Trends

8

TRENDS: STUDENT ENROLLMENT, ADA, WADA

9

TAXABLE PROPERTY VALUE TREND

$16.5

$18.7 $20.5 $20.6

$19.8 $20.1 $20.8 $21.3

$25.2

$27.6

$30.8

$33.7

$36.6

$38.9

$-

$5.0

$10.0

$15.0

$20.0

$25.0

$30.0

$35.0

$40.0

$45.0

2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20

Bill

ions

10

TAXABLE PROPERTY VALUE TREND AND WADA

11

PROPERTY VALUE GROWTH

12

COMPARISON: START TO FINAL PROPERTY VALUE GROWTH

Property Value

Growth2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21

% Start of Budget 3% 6% 9% 8% 8% 6% 5%

% Adopted Budget 11.2% 12% 11.2% 9.8% 8.6%

% Actual 12.98% 9.56% 11.59% 9.46% 8.66%

13

MAINTENANCE & OPERATIONS TAX RATE TRENDSame M&O Tax Rate

Since 2009-10

14

DEBT SERVICE TAX RATE TREND Lowest Debt Tax Rate

Since 1985-86

15

16

ADMINISTRATIVE COST RATIO

Note: 2018-19 data is not yet available.

6.64%

6.68%

5.36%

5.18%

4.96%

4.85%

4.64%

4.52%

4.84%

4.71%

4.69%

4.84%

4.83%

8.55%

0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% 8.00% 9.00%

2005-06

2006-07

2007-08

2008-09

2009-10

2010-11

2011-12

2012-13

2013-14

2014-15

2015-16

2016-17

2017-18

TEA Recommendation

17

School Finance System

18

ProgramFunding

WeightFunding Amount Direct Spend Rate

General Education 1.00 $5,566

Talented & Gifted (TAG) 1.12 $6,234 55%

Career & Technical Education (CTE)1.35

$7,514 58%

Special Education 1.10 to 5.0 $6,123 to $27,830 52%

State Compensatory Education &

Pregnancy Related Services1.20 & 2.41 $6,679 to $13,414 52%

Bilingual 1.10 $6,123 52%

FUNDING WEIGHTS

19

HOW IS STATE FUNDING CALCULATED?

20

PROPERTY TAX AND STATE REVENUE TRENDS

* Current year property tax collections only. Does not include delinquent collections, penalty or interest.21

FUNDING ALLOCATIONS FOR PUBLIC EDUCATION

Source: Texas Legislative Budget Board (LBB) and General Appropriations Act enacted by the 85th Legislature, Regular Session (2017)22

2017-18 vs. 2018-19 COMPARISON

2017-18

Actuals

2018-19

Budget

Change

From Projections

Tax Collections

(current year)$340,735,733 $368,638,368 $27,902,635

State Revenue $26,665,479 $39,103,166 $12,437,687

Less: Chapter 41 Payments ($9,150,054) ($29,364,662) ($20,214,608)

NET STATE REVENUE $17,515,425 $9,738,504 ($7,776,921)

Note: Only major revenues are presented. Chapter 41 recapture payments are actually

expenditures but are part of school funding formulas.23

EXPENDITURE TREND(General Operating Fund)

24

Budget Assumptions

25

2018-19 BUDGET ASSUMPTIONS

Original Adoption

Taxable Property Value Growth: 8.6%

Tax Collection Rate: 99.5%

M & O Tax Rate: $1.04

Student Enrollment Growth: 654

Updated Projections (December 2018)

Taxable Property Value Growth: 8.66%

Tax Collection Rate: 99.5%

M & O Tax Rate: $1.04

Student Enrollment Growth: 1,071

(417 above projection)

26

BUDGET ASSUMPTIONS

2019-20 Projection

Taxable Property Value Growth: 6.0%

Tax Collection Rate: 99.5%

M & O Tax Rate: $1.04

Student Enrollment Growth: 795

2020-21 Projection

Taxable Property Value Growth: 5.0%

Tax Collection Rate: 99.5%

M & O Tax Rate: $1.04

Student Enrollment Growth: 544

27

Budget Projections(The Good, the Bad, the Ugly)

28

WHAT IS NOT INCLUDED

2019-20 Projection

• Salary increases

• Adjustments for Year 3 of TASB study

• Health insurance contribution changes

• Other requests/items

2020-21 Projection

• Salary increases

• Adjustments for Year 3 of TASB study

• Health insurance contribution changes

• Opening of new elementary campus

• Other requests/items

29

30

Fund Balance

31

UNRESTRICTED

FUND BALANCE(AS OF JUNE 30, 2018)

32