MEETING 2 MONDAY, AUGUST 1, MISD Center for the Performing Arts

Transcription

1 MEETING 2 MONDAY, AUGUST 1, 2016 MISD Center for the Performing Arts

2 AGENDA Welcome & Meeting 1 Recap Select Chairpersons & Secretary Define Consensus How School Finance Works & MISD Financial Overview Debt Service & Bond History Demographic Projections Small group study Closing

3 COMMITTEE LEADERSHIP

4 COMMITTEE LEADERSHIP Selection of Committee Chairpersons and Secretary Chairperson Roles: Help lead each committee meeting and make adjustment to agendas, when needed. Facilitate large group discussions on all information provided. Ensure all ideas and/or positions of committee members are heard and given equal time. Maintain group focus and guide committee to its goals. Give formal presentation to Mansfield ISD Board of Trustees with the FGPC s final recommendations. Secretary Roles: Document accurate notes, without bias. Notes will be posted on committee website for public viewing.

5 DEFINE CONSENSUS

6 Consensus Defined DEFINE CONSENSUS Consensus is defined by Merriam-Webster as: Goal 1 a: a general agreement b: the judgment arrived at by most of those concerned 2 group solidarity in sentiment and belief; (concerned with the process of deliberating and finalizing a decision) Goal is to agree on definition and then, once recommendation goes forward, for everyone to be able to support.

7 DEFINE CONSENSUS What is this Committee s Definition of Consensus? Options: Unanimous agreement Unanimous consent (can live with it ) Unanimous agreement minus one or two votes Unanimous consent minus one or two votes Super majority thresholds (90%, 80%, 75%, two-thirds, and 60% are common) Simple majority

8 HOW SCHOOL FINANCE WORKS & MISD FINANCIAL OVERVIEW

9 SCHOOL FINANCE: THE BIG PICTURE A school district s budget is generated from three sources: Federal funding (10%) State funding (39%) Local tax effort (51%) FEDERAL LOCAL STATE

10 FEDERAL FUNDING Appropriated for special programs or to provide services to a specific group of students Cannot be used to replace state or local dollars to fund a program About half of federal funds go directly to school districts The remainder goes to the state or to regional service centers FEDERAL

11 STATE FUNDING Foundation School Program Provides state funding to school districts Administered by TEA Meant to ensure that all school districts, regardless of property wealth, receive "substantially equal access to similar revenue per student at similar tax effort, considering all state and local tax revenues of districts after acknowledging all legitimate student and district cost differences. FEDERAL STATE

12 STATE FUNDING Foundation School Program Instructional Facilities Allotment (IFA) Local Revenue must be below $350,000 per ADA for the District to receive IFA Existing Debt Allotment (EDA) Currently, the guaranteed yield for EDA provides $35 per student in average daily attendance (ADA) per penny of tax effort. FEDERAL STATE

13 STATE FUNDING State funding system is COMPLICATED The simplest explanation: FEDERAL Each district receives different level of funding STATE Basic funding levels are primarily established by looking at wealth per student Tax base divided by number of students Lower wealth per student = more state funding Higher wealth per student = less state funding

14 LOCAL TAX EFFORT Generated from property taxes (not sales taxes) FEDERAL Called ad valorem taxes Each year, a school district adopts two tax rates: Maintenance & Operations (M&O) Interest & Sinking (I&S) LOCAL

15 MAINTENANCE & OPERATIONS (M&O) TAX RATE Funds the day-to-day maintenance and operations of the district Salaries (for teachers and other staff) Facility repairs and maintenance Bus repairs, maintenance and fuel Food services School supplies and materials Utilities (electricity, water, etc.) For the average citizen FEDERAL this is similar to: House repairs Car fuel LOCAL Routine services Groceries Cleaning supplies Utilities

16 INTEREST & SINKING (I&S) TAX RATE Also referred to as Debt Service. Funds debt repayment for big ticket items New building construction Existing building renovations Land purchases Program-specific equipment Technology* School buses* For the average citizen FEDERAL this is similar to: New home purchase House renovations LOCAL Land for a home New appliances New home computer New car *Historically, MISD has not funded these items through I&S funds.

17 LOCAL TAX EFFORT M&O I&S The Annual District Budget is passed by the School Board of Trustees percent of a district s M&O budget pays for salaries, fuels and utilities. I&S funds may only be used to repay debt. They may not be used for salaries, utilities or other day-to-day expenses.

18 LOCAL TAX EFFORT M&O Capped at $1.04 per $100 of property value If a district wants to raise the rate beyond that, it can only go as high as $1.17 but must receive voter approval in a Tax Ratification Election. I&S Capped at $0.50 per $100 of property value Every cent requires voter approval in a Bond Election.

19 MISD TAX RATE M&O TAX RATE I&S TAX RATE MISD TOTAL TAX RATE $1.04 $0.47 $1.51 per $100 of property value

20 HOW MISD COMPARES Lake Worth Crowley Rio Vista Eagle Mountain/Saginaw Kennedale Everman Castleberry Venus Cleburne Joshua Keller White Settlement Burleson Mansfield Alvarado Birdville Carroll Grandview Hurst-Euless-Bedford Arlington Fort Worth Granbury Azle Godley Keene $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $

21 MISD ADOPTED BUDGET General Fund Debt Service Fund Food Service Fund Revenues Local and intermediate sources $ 122,610,644 $ 54,038,162 $ 6,963,000 $ 183,611,806 State program revenues 143,736,861 3,748,990 85, ,570,851 Federal program revenues 4,828,737 8,932,567 13,761,304 Total revenues $ 271,176,242 $ 57,787,152 $ 15,980,567 $ 344,943,961 Total Expenditures Payroll Costs $ 235,807,705 $ - $ 6,293,442 $ 242,101,147 Contracted Services 21,022, ,500 21,252,512 Supplies and Materials 12,622,582-8,870,067 21,492,649 Other Costs 4,601,625-58,550 4,660,175 Debt Service 1,821,182 55,770,585 57,591,767 Capital outlay 1,490, ,017 1,922,620 Total Expenditures $ 277,365,709 $ 55,770,585 $ 15,884,576 $ 349,020,870 Excess (deficiency) of revenues over expenditures (6,189,467) 2,016,567 95,991 (4,076,909) Other Financing Sources (Uses) Other resources 550, ,000 Total other financing sources and uses $ 550,000 $ - $ - $ 550,000 Net change in fund balances (5,639,467) 2,016,567 95,991 (3,526,909) Fund Balance - September 1 (Beginning) $ 94,977,773 $ 21,580,001 $ 3,346,668 $ 119,904,442

22 DEBT SERVICE & BOND HISTORY

23 FUNDING THROUGH DEBT SERVICE School districts issue bonds to pay for their big ticket capital needs, like new facilities and renovations. What is a bond? A bond is a debt investment in which an investor loans money to a school district, with interest, for a defined period of time. Essentially, it s similar to a family taking out a mortgage for the purchase of their home. INVESTOR $ BOND BORROWER (School District) IOU + interest

24 FUNDING THROUGH DEBT SERVICE A Bond Election: School districts are required by law to ask their local voters for permission to sell bonds. A school board calls a bond election, and voters decide whether or not they want to issue bonds (debt) for identified needs. If voters approve the bond election, the school district then raises the I&S tax rate to repay the debt to investors.

25 FUNDING FEASIBILITY How much can I afford? 50-cent debt test Existing debt service Assumed values at time of bond sale Interest rate secured at time of bond sale Structure of the bond sale Bonds are typically sold in phases to match project schedules Districts can decide pay-off terms (state law allows for max. 40 years)

26 DEBT PORTFOLIO Structure of the MISD Debt Portfolio Majority of Bonds are Unlimited Tax Bonds with interest rates of % with exception of one issue for $50 million that is a Variable Rate Bond with a current rate of 1.75% Maturities range from Next refunding opportunity will be November 2016 Mansfield ISD has NO Capital Appreciation Bonds (CABS)

27 BOND ELECTION HISTORY Bond Election Date Total March 7, 1992 $ 20,000,000 March 30, 1996 $ 67,700,000 March 9, 1999 $ 80,000,000 March 13, 2001 $ 180,500,000 February 2, 2002 $ 25,000,000 October 4, 2003 May 13, 2006 November 8, 2011 TOTAL $ 226,100,000 $ 241,455,000 $ 198,530,000 $ 1,039,285,000

28 Year I&S Tax Rate 1992 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $- I&S RATE HISTORY I&S Tax Rate History

29 BOND REFUNDINGS SUMMARY Savings From Bond Refundings Since 2010 Refunding Bond Series Total Debt Service Savings COMMENTARY: Series 2010 $ 5,566,204 Series 2011 $ 107,459 Series 2012A $ 6,446,252 Series 2012B $ 6,105,307 Series 2013A $ 9,338,849 Series 2013B $ 9,804,681 Series 2013C $ 2,098,075 Series 2014 $ 958,298 Series 2015 $ 11,522,177 Series 2015A $ 4,563,399 TOTAL SAVINGS $ 56,510,701 Refundings not only saved $56.5 million in interest for MISD taxpayers, they also allowed for the issuance of the $198,530, Bond Authorization when tax base and enrollment figures lagged due to the overall economy. While many other fast growth districts were impacted by the recently passed CAB law, MISD has ZERO CAB maturities in their total debt structure. MISD has maintained outstanding Aa2/AA/AA + underlying ratings from Moody s, S&P and Fitch rating services. Those ratings combined with the Aaa/AAA PSF ratings allow MISD to achieve the lowest interest rates available for all bond financings.

30 DEMOGRAPHIC PROJECTIONS

31 DEMOGRAPHIC UPDATE The epicenter of growth continues to be east of SH-360. Previous attendance zone adjustments resulted in better distribution of students across the district at all levels. Demographic Data to Consider Decline in Kindergarten for 6 years in a row. Decline in 1st grade for 4 of the last 6 years. Earlier increases at lower grades have now formed bulges in the secondary grades. New apartments are expected to be produced at a rate of 1-2 for the next 10 years. 60% of new students will come to MISD as a result of new construction. Currently approximately 1400 students residing in MISD are attending charter or private schools.

32 ELEMENTARY SCHOOL CONSTRUCTION TIMELINE February May 2016: August 2016: August 2017: Judy Miller Attendance Zone Committee Process. Glen Harmon moves to new Glen Harmon campus. Charlotte Anderson moves to Judy Miller. Charlotte Anderson moves to new Charlotte Anderson. Judy Miller opens.

33 ELEMENTARY ENROLLMENT PROJECTIONS (EAST OF SH 360) Elementary School Capacity students Enrollment Anderson Cabaniss Daulton Harmon Spencer ,021 1,079 Smith Miller 94 * * * * without Judy Miller (opening August 2017) Cora Spencer Elementary School exceeded capacity in Elizabeth Smith Elementary School exceeded capacity in

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35 ELEMENTARY ENROLLMENT PROJECTIONS (EAST OF SH 360) After Opening of Judy Miller Elementary Daulton Spencer Smith Miller

36 INTERMEDIATE SCHOOL ENROLLMENT PROJECTIONS Intermediate School Capacity 1,000 students Enrollment Cross Timbers Icenhower Lillard ,068 1,110 1,140 Low Orr ,002 Shepard Mary Lillard is projected to exceed capacity in

37 MIDDLE SCHOOL ENROLLMENT PROJECTIONS Middle School Capacity 1,000 students Enrollment Coble Howard Jobe Jones 952 1,033 1,098 1,121 1,153 Wester Worley ,043 Danny Jones is projected to exceed capacity in

38 HIGH SCHOOL ENROLLMENT PROJECTIONS High School Capacity 2,500 students Enrollment Lake Ridge Legacy Mansfield Summit Timberview Frontier 247 * * * * Lake Ridge High School is projected to exceed capacity in Mansfield High School is expected to exceed capacity in Frontier has no attendance zone, so it has no resident student population. Frontier students are counted here in their home attendance zone.

39 DISTRICT WIDE PROJECTIONS Enrollment Projections 33,830 34,227 34,669 35,183 35,811 36,606 Growth (Increase)

40 THREE SCENARIOS OF GROWTH Added Students Added Students Low Growth Scenario 1,815 1,696 Moderate Growth Scenario 2,797 3,685 High Growth Scenario 3,266 4,692

41 NEW DEVELOPMENTS Lakeway Estates SEETON ROAD

42 NEW DEVELOPMENTS Aura Southgate Apartments

43 DEMOGRAPHIC PROJECTIONS SMALL GROUP STUDY 1. Summarize the growth needs 2. Brainstorm possible solutions

44 CLOSING QUESTIONS?

45 NEXT MEETING MONDAY, AUGUST 15, :00 PM LAKE RIDGE HIGH SCHOOL CAFETERIA