LONGVIEW INDEPENDENT SCHOOL DISTRICT Longview, Texas

Transcription

1 LONGVIEW INDEPENDENT SCHOOL DISTRICT Longview, Texas FISCAL YEAR BUDGET EXECUTIVE SUMMARY September 1, 2006 to August 31, 2007 BOARD OF TRUSTEES John Preston, President Sam Satterwhite, Vice President Anne Hugman, Secretary Ted Beard, Assistant Secretary John Harrison Dr. Chris Mack Dr. Troy Simmons ADMINISTRATIVE STAFF Dr. Dana S. Marable, Superintendent Michael Fletcher Assistant Superintendent - Business & Finance Andrea Mayo Assistant Superintendent - Human Resources/Community Relations Charlotte Parramore Assistant Superintendent - Curriculum & Instruction Dr. Jennifer Scott Assistant Superintendent - Administrative & Pupil Services Pat Collins Director of Extra-curricular Activities

2 FISCAL YEAR EXECUTIVE BUDGET SUMMARY Believe in Excellence for All

3 1 September, 2006 Board of Trustees Longview Independent School District Longview, Texas Dear Board Members: We are proud to publish and disseminate the Fiscal Year Budget Summary to the Board of Trustees and to the community. This document complements our detailed budget document which was adopted on August 21, 2006 and is intended to provide an executive summary of District operations. We welcome the opportunity to present and discuss operational plans and related financial impact with all interested parties. The District s Mission Statement, Strategic Goals, Operational Goals, Performance Objectives, and Board Policy dictate the development of the Governmental Funds Budgets. The General Fund, the Debt Service Fund, and the Food Service Fund are the only budgets that must be legally adopted by the Board of Trustees. The Special Revenue funds budgets include competitive and non-competitive grants. This document includes: Longview ISD Mission, Goals, Objectives, Budget Process and Issues, and School Finance Issues. Charts and graphs of historical-to-current analysis for revenues and expenditures among Governmental funds. Charts and graphs of historical-to-current analysis for Property Tax data. Performance data for Academic and Financial measures; historical-to-current. Budget highlights for Acknowledgements and Closing information.

4 2 The budget is an instructionally driven process representing a responsive balance between the educational needs of students and the ability of the community and state to provide the necessary financial support to serve them. Mission Statement Believing in excellence for all, the Longview Independent School District will guarantee the highest level of academic achievement and character development of each learner by providing challenging curriculum and exemplary instruction within a safe environment. Strategic Goals Develop and implement an aligned, rigorous curriculum Provide a variety of intensive, accelerated instruction for at-risk students Ensure that all students develop positive character attributes Provide a safe, healthy, and orderly environment for all Provide and maintain facilities in alignment with the district s mission Ensure high quality staff, committed to excellence Establish effective two-way communication with all stakeholders Budget Process Budget Planning December 2005 Budget Preparation January-August 2006 Budget Reviews-Board March-August 2006 Budget Adoption August 2006 Tax Rate Adoption August 2006 Budget Amendments Monthly Financial Audit January 2007

5 3 Budget Planning The development of broad-based budget goals occur during planning meetings starting in early fall. The District Improvement Team, the Superintendent, and the Central Office Leadership Team develop goal setting priorities for School Board consideration throughout the year. The budget calendar is also reviewed by the Board at the start of the second semester. Budget Preparation LISD uses a site-based budget allocation approach for all campus operating expense budgets. Initially, per student allocations are given to campuses in an equitable manner. Additional funding is allowed on the campuses based on the number of atrisk students served. This additional funding comes from General Operating and Special Revenue funding sources. The Campus Improvement Team and the Principal determine the budgets for each line item using the goals and strategies for the campus and LISD. Program improvements are requested separately and are subject to approval based on affordability. Assistant Superintendents and Department Directors support the campuses with their budgets in an efficient manner. The Director s approach to budgeting is historical unless enrollment changes significantly. Staff allocations align with comparison studies and student enrollment projections. Teacher staffing is set according to the State and the District s Board approved student/teacher ratio. These staff allocations are reviewed to address the needs of new Texas mandates and the needs of changing student sub-groups. Upon completion of the campus budget worksheets, meetings are scheduled for staffing reviews and program improvement reviews. These meetings are interactive and provide valuable information for final budget compilation. Board of Trustee Budget Review The salary and compensation plan for instructional staff is reviewed early in March. If estimated revenue sources are available, the District staff recommends adoption of the salary plan in March or soon thereafter. This allows LISD to be competitive with pay when recruiting new staff and effective in retaining experienced staff. The salary and compensation plan for support staff is generally adopted in July. The Board reviews other budget segments during workshops throughout the budget cycle. Other segments would include new staffing requests, revenue calculations, salary studies, legislative issues that impact budgets, and capital improvement requests.

6 4 Budget and Tax Rate Adoption The Gregg County Appraisal District certifies the appraisal rolls to the taxing units in July and LISD publishes the required legal notice. The LISD Business Office calculates the rollback tax rate in early August. For the FY budget, the required legal hearing notice was published in the Longview News Journal on August 9, The Board of Trustees held the public hearing on August 21, After the hearing the Board reconvened and adopted the proposed budget and the proposed tax rate. Budget Amendments Budget amendments, if necessary, are submitted to the Board of Trustees monthly for consideration and approval. The final amended budget for the fiscal year ending August 31, 2006, was taken to the Board and approved on August 23, It reflects all amendments previously approved plus any final amendments. The District s external auditor will use the final amended budget in compiling the annual financial audit. Audited Financial Statements The final step in the budget cycle is the approval of the audited financial statements by the Board of Trustees. This report includes budget-to-actual comparisons and expresses opinions about LISD s ability to manage its $75.5 million governmental funds budget. The financial audit is scheduled for completion, review and approval in January, In summary, LISD budget preparation is part of a continuous cycle of planning, organizing, and evaluating to achieve the District s goals and objectives. Budget Issues Longview ISD is located in Northeast Texas within the City of Longview. The 2000 census of the city was 73,334. The economy is based on oil production and manufacturing. Appraised values have increased by 21% over the last two years. Oil and mineral values are a major contributor to this increase. Student enrollment continues to be a major concern for LISD. The historical enrollment trend shows a 1.8% decrease over the last three years.

7 5 Budget Issues Continued The Board of Trustees and school officials have a facility needs planning session scheduled for October 16, The team will discuss the need for a facility master plan to address aging schools and to assess the feasibility for a future bond issue. If these needs are established, LISD will be forming committees to assist us in the development of a capital improvement plan. Funding is another critical budget issue. LISD was at the ceiling of the Maintenance & Operations tax rate of $1.50 in , the same rate as 450 other school districts. By special session, the Texas legislators approved House Bill 1 which compresses the M & O tax rate to $1.33 with an allowance by Board approval of 4 cents. The LISD adopted M & O tax rate is $1.37. The rate for will be compressed to a ceiling of $1.04. The intent of this action by the legislature was to provide property tax relief to homeowners. The legislators would supplement the decrease in school district tax revenue with additional state funding through enforcement of a new business tax and by closing franchise tax loopholes. The legislators also elected to use some state revenue surplus until the new business tax revenue is actually received. Translation and enforcement of HB1 has created some concern and uncertainties in future school finance. A recent quote by school finance experts summarizes the thoughts of most school officials about HB I - Short term help, long term straight jacket. Budget Priorities Longview ISD budget priorities for include: Attain competitive salaries, stipends and benefits for all employees with an emphasis on salaries for teachers, librarians, nurses, and counselors. Maintain strict staffing plans to address efficiency. Provide for adequate levels of funding for instructional improvement including staff development. Provide adequate funding for safe and secure schools. Provide adequate funding for maintenance projects to protect our facilities. Maintain an adequate fund balance for financial safety and future improvements. Manage all district resources efficiently and effectively. Provide all of our students every opportunity to be successful.

8 6 School Finance Issues o o o o o o o Along with the previous comments about HB 1 and the tax relief provisions, the legislators authorized other changes in public education that have a financial impact. In summary form, they are: State pay raises in the net amount of $2,000 for teachers, librarians, nurses, and counselors. A high school allotment of $275 per HS student for college readiness and HS success initiatives. A transparency initiative for more public access to school financial information. Joint school district elections and city elections on uniform election dates. The 4 th Monday in August will be the official start date for all public schools, effective in August, Financial Integrity Rating System of Texas (FIRST) changes. More grant opportunities based on student achievement. Accounting for School District Operations School Districts manage budgets through numerous funds. The major category of school funds is called Governmental Funds. Within the Governmental Funds category are the General Fund, the Debt Service Fund, Special Revenue Funds, and Capital Projects Fund. The Board of Trustees is only obligated to approve budgets for three funds: the General Fund, the Debt Service Fund, and the Food Service Fund. The other funds are generally created by grants. Governmental Funds The following charts and graphs present historical comparisons of revenues and expenses for all LISD Governmental Funds. These schedules provide short-term summaries that help the reader determine the basic financial condition of Longview ISD.

9 7 Governmental Fund Revenues All the revenue and expense tables include TRS On-Behalf accounting which is added to the adopted budget. For , TRS On-Behalf adds $2,400,000 Description FY 2003 FY 2004 FY 2005 FY 2006 Estimate FY 2007 Budget General Fund $ 50,052,549 $ 49,862,062 $ 53,074,490 $ 56,301,588 $ 60,059,939 Special Revenue Debt Service Fund Capital Projects $ 11,213,077 $ 11,028,190 $ 13,917,779 $ 16,028,001 $ 12,514,122* $ 1,580,136 $ 3,052,203 $ 3,195,310 $ 3,213,679 $ 2,961,724 $ 528 $ 36 $ 14 $ 22 $ 0 Total $ 62,846,290 $ 63,942,491 $ 70,187,593 $ 75,543,290 $ 75,535,785 * The Special Revenue fund for will increase as grants are awarded to LISD during the year. Special Revenue 16.48% Debt Service Fund 3.92% General Fund 79.59%

10 8 Governmental Fund Expenditures Description FY 2003 FY 2004 FY 2005 FY 2006 Estimate FY 2007 Budget General Fund $ 51,913,852 $ 46,642,256 $ 48,682,390 $ 51,961,884 $ 60,059,939 Special Revenue Debt Service Fund Capital Projects Fund $ 11,259,848 $ 10,874,693 $ 13,679,416 $ 16,400,030 $ 12,437,814 $ 1,839,161 $ 3,062,947 $ 3,068,998 $ 3,024,904 $ 3,037,650 $ 158,156 $ 289 $ 2 $ 0 $ 0 Total $ 65,171,017 $ 60,580,185 $ 65,430,806 $ 71,386,818 $ 75,535,403 Special Revenue 16.47% Debt Service Fund 4.02% Genral Fund 79.51% Analysis - The revenue and expenditure charts for the Governmental Funds show budget cuts between FY 2003 and FY These cuts allowed LISD to start a fund balance growth. The General Fund Reserves are estimated to be $15.5 million at the close of FY2006.

11 FY FY 2007 Budget 9 General Fund Expenditures by Object The following chart and graph indicate how significant the payroll cost is for LISD. The education of students is labor intensive. The general fund budget reflects payroll costs at $49.4 million or 82.29% of budget. Description FY 2003 FY 2004 FY 2005 FY 2006 Estimated FY 2007 Budget Payroll Cost $ 42,036,194 $ 39,014,704 $ 40,049,181 $ 41,938,084 $ 49,413,333 Operating Expenses * $ 6,725,620 $ 6,716,661 $ 7,401,815 $ 8,544,932 $ 8,941,897 Debt Service $ 2,893,321 $ 176,871 $ 176,347 $ 171,354 $ 160,886 Capital Outlay $ 258,677 $ 733,931 $ 1,054,991 $ 1,300,420 $ 1,532,311 Total $ 51,913,812 $ 46,642,167 $ 48,682,334 $ 51,961,884 $ 60,048,427 * Operating expense includes contract services, supplies, and travel costs Operating Expense 14.89% Debt Service 0.27% Capital Outlay 2.55% Payroll 82.29%

12 10 Major Sources of Funds Longview ISD is primarily supported by property taxes. Property tax collections are 59% of all sources of revenue in the Governmental Funds for State revenues amount to 23% of all sources and Federal revenues amount to 13% of all sources. The 5% balance is from local sources such as: food service activity, investment income, tuition, athletic receipts, and fees. Description Revenues: Local & Intermediate FY 2003 FY 2004 FY 2005 FY 2006 Estimate FY 2007 Budget $ 40,185,354 $ 42,116,457 $ 45,549,410 $ 48,915,477 $ 46,452,978 State Program $ 15,230,519 $ 13,447,731 $ 13,476,749 $ 12,997,710 $ 18,683,300* Federal Program Total Revenues $ 7,430,417 $ 8,378,303 $ 11,161,434 $ 13,630,103 $ 10,399,507* $ 62,846,290 $ 63,942,491 $ 70,187,593 $ 75,543,290 $ 75,535,785 *For revenues will increase in the state and federal categories as grants are awarded. $80,000,000 $70,000,000 $60,000,000 $50,000,000 $40,000,000 $30,000,000 $20,000,000 $10,000,000 $0 FY 2003 FY 2004 FY 2005 FY 2006 Est FY 2007 Bud Local State Federal

13 FY FY 2007 Budget 11 Major Uses of Funds The funding of direct classroom instruction is the highest priority at Longview ISD. Our district spends over 58% of the Governmental Funds budget on instruction and instructional related services. The other expense categories are student services at 13%, administrative services at 11%, maintenance, security, technology support, and debt service at 18%. Description Expenditures: FY 2003 FY 2004 FY 2005 FY 2006 Estimate FY 2007 Budget Instruction & Related Student Services Admin. Services Maintenance & Support $ 37,099,142 $ 34,055,032 $ 37,038,799 $ 40,554,997 $ 43,573,326 $ 10,140,004 $ 9,710,042 $ 10,601,191 $ 11,397,031 $ 11,999,045 $ 6,367,120 $ 6,331,074 $ 7,240,370 $ 8,030,167 $ 8,072,298 $ 11,564,751 $ 10,484,037 $ 10,550,446 $ 11,404,024 $ 11,890,734 Total $ 65,171,017 $ 60,580,185 $ 65,430,806 $ 71,386,219 $ 75,535,403 The budget will change as grants are awarded and as budgets are amended. $80,000, $70,000, $60,000, $50,000, $40,000, $30,000, $20,000, $10,000, $0.00 FY 2003 FY 2004 FY 2005 FY 2006 Est FY 2007 Bud Instruction &Related Student Services Admin. Services Maint. & Support

14 FY Budget 12 Assessed Value of Taxable Property The Gregg County Appraisal District certifies the tax roll in July of each year based on property values as of January 1 st of the tax year. LISD assessed values have grown by an average of 7% per year for the last four years. The fiscal year assessed value is $3,154,645,421. This value is used for the tax levy in the school year. The final values from the previous year are used for allocating state funds to school districts. Longview ISD Assessed Values ($1,000's) $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $0 FY 2003 FY 2004 FY 2005 FY 2006 FY Comparison of Levy on Average Residence Residential property accounts for 47% of the tax base in LISD. The average homeowner market value has increased over the last five years. An expanding economy is a contributor to the market value increases. The tax rate has been fairly constant until this new fiscal year. Recently adopted legislation has reduced the tax rate for to $1.468 per hundred as compared to $1.61 last year. Levy on Average Residence $1,200 $1,000 $800 $600 $400 $200 $ FY 2003 FY 2004 FY 2005 FY 2006 FY 2007

15 13 Property Tax Rates On 8/21/06, the Board of Trustees adopted a tax rate of $1.468 per $100 in value for the school year. The components of the tax rate are $1.37 for Maintenance & Operations (M & O) and $0.098 for Debt Service. The following list shows a history of the adopted rates: FY M & O $ 1.50, Debt $ = $ FY M & O $ 1.50, Debt $ = $ FY M & O $ 1.50, Debt $ = $ FY M & O $ 1.50, Debt $ = $ FY M & O $ 1.37, Debt $ = $ Principal Taxpayers The list below provides a view of Longview ISD s top ten taxpayers, their type of business, their assessed value, and their percentage of total assessed value. These principal taxpayers account for % of the total tax base. (2006 values) Taxpayer Type of Property Assessed Value LeTourneau Inc. Heavy Equipment Manufacturer % of Total Assessed Value $111,280, % Chinn Exploration Land/Improvements 67,236, % Longview Regional Hospital Hospital 63,060, % AEP/Southwestern Electric Electric Utility 60,272, % Wal-Mart/Sam s Club Retail Stores 30,841, % GSHS Inc/Good Shepherd Hospital Hospital 28,131, % Southwestern Bell Telephone Telephone Utility 27,104, % J W Power Company Compressor Manufacturer 25,961, % Longview Mall LP/Simon Property Shopping Mall 21,387, % Air Liquide America Corporation Liquid Oxygen Plant 21,359, % Total $456,634, %

16 FY Budget 14 Student Enrollment A demographic and housing study for Longview ISD was completed in July, This study was prepared by Texas School Planning, Inc., The Omega Group, Inc., and SA Research Corporation. The five-year minimum growth projection in the study showed an enrollment of 8556 in The actual enrollment as of 9/20/06 is Since the 2000 study, the enrollment trend has been declining slightly with some upward and downward spikes from year to year. Hurricane Katrina caused an upward spike of approximately 100 students in The source of the data in the chart below is from the Texas Education Agency - Public Education Information Management System (PEIMS). Year Elementary Middle School High School Total FY 2000 FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 Elementary Middle School High School Total

17 15 Educational Performance Measures Texas Assessment of Academic Skills (TAAS) Competency in basic skills such as reading, writing and mathematics were formerly measured by performance on the Texas Assessment of Academic Skills (TAAS). The TAAS and other standardized achievement tests were used to measure the quality of education provided by the district. The primary assessment instrument has been the TAAS test, which provided the basis of the Texas Accountability System. Overall, the District individual campus accountability rating and District TAAS performance have steadily improved. Texas Assessment of Knowledge and Skills (TAKS) The Texas Assessment of Knowledge and Skills (TAKS) measures the statewide curriculum of specific subjects at specific grade levels and is a completely new testing program. In comparison to the previous state assessment (TAAS), the TAKS includes a broader assessment of the Texas Essential Knowledge and Skills (TEKS), which is the statewide curriculum. The TAKS is a more rigorous assessment and questions are asked in a more authentic manner to measure student knowledge of the TEKS. The school year was the first year for the TAKS to be administered and was considered somewhat of a transition year for accountability purposes. The District s 2002 accountability ratings were carried forward to the 2003 school year. Campus 2002 ratings were not carried forward to 2003, but school performance data has been reported on the annual Academic Excellence Indicator System (AEIS) Report and School Report Card. AEIS reports were released in August A summary of the District s performance on the TAKS was also made available at that time. Texas Accountability System Description Exemplary Recognized Acceptable Overall District Acceptable Maintained Acceptable from TAAS Acceptable Acceptable Acceptable

18 16 Texas Assessment of Academic Skills (TAAS) Description State District State District Reading 88.9% 87.8% 91.3% 89.6% Writing 87.9% 88.2% 88.7% 88.3% Math 90.2% 89.8% 92.7% 92.7% Social Studies 77.0% 65.5% 83.7% 74.7% Texas Assessment of Academic Skills (TAKS) Note: The TAKS test replaces the TAAS test in Descripti on State District State District State District State District Reading /ELA 85% 83% 83% 79% 87% 81% Writing 91% 91% 90% 92% 91% 91% Math Social Studies First Year for TAKS No Data Released 76% 91% 74% 86% 72% 88% 66% 84% 75% 87% 63% 80% The test is based on 2 standard error measures below the panel recommendation * The test is based on 1 standard error measures below the panel recommendation * The test is based on the panel recommendation * * Panel recommendation is a passing standard on the TAKS assessment established by the State Board of Education. The standard differs in each grade level and in each content area of study.

19 FY FY2007 Budget 17 Financial Performance Measures Financial Integrity Rating System of Texas Senate Bill 218 requires each school district to prepare a financial report and hold a hearing to inform the community of the district s financial rating under 21 accountability measures informally known as FIRST. The contents of the 21 measures are business related financial standards. Within the 21 measures are five critical indicators, in which if any one of the five are unfavorable, the district receives a substandard rating. These five indicators are: Was the total fund balance less reserved fund balance greater than zero in the general fund? Were there no disclosures in the annual financial report and/or other sources of information concerning default on bonded indebtedness obligations? Was the annual financial report filed within one month after the January 28 th deadline? Was there an unqualified opinion in the annual financial report? Did the annual financial report not disclose any instances of material weakness in internal controls? Longview ISD received official notification of the 2006 FIRST rating in an August 11, 2006 letter from the Texas Education Agency. The rating is Superior Achievement, scoring a 20 out of a possible 21 on this external financial performance measure. The rating measures the previous school year s financial performance data which is from school year Bond Ratings The latest Longview ISD bond rating on a $6.3 million unlimited tax refunding, series 2004 is Aaa from Moody s Investor Service. An A1 rating is affirmed on LISD s general obligation debt outstanding. These ratings are considered very favorable. Maintenance of a high credit rating is critical in ensuring low interest rates.

20 18 Source Description Calculation Cost- Including Benefits House Bill- 1 House Bill- 1 Accounting Local Local State Mandated Salary Increase for Teachers, Librarians, Nurses, and Counselors Approved Increase to Salary Schedule for Teachers, Librarians, Nurses, and Counselors 634 $ 1,268, % INC Varies at Each Step $ 1,497, % INC Local Approved New Staff Varies $ 636, % INC Local Local Significant Budget Increases and Accounting Changes LISD Budget General Operating Fund The following chart is a brief overview of the major changes to the General Fund budget. Additional increases are shown in the detail of the general fund budget. The prior year adopted general fund budget without TRS On-Behalf accounting was $50,953,253. The general fund budget without TRS On-Behalf accounting is $57,691,627. Health Supplement Transfer to Salary for All Eligible Staff Approved 3% Cost-of-Living and Equity Adjustments for Admin., Para-Prof., and Manual Trades Projected Increase in Gasoline and Utilities New Reserve for Capital Improvements, Follett Library System, Equipment, and Furniture Total Significant Increases to General Fund Total Percentage Increase Over Last Year s Budget $ 1041 $ 73 Varies at Each Pay Grade $ 538, % INC $ 741, % INC $ 545, % INC $ 585, % INC $ 5,812, % INC

21 19 Long Range Compensation Plan Longview Independent School District has adopted a pay grade system developed by the Texas Association of School Boards. LISD participates in a comprehensive pay study in February of each year. The results of the study show market conditions of pay for every school district job. The salaries and benefits study of a comparison group of schools show, how LISD rates with their peers. The Board of Trustees has approved pay decisions based on these detailed studies. As of , the salaries and benefits for our teachers, librarians, nurses and counselors are comparable and very competitive with our peer group of school districts. This action by the Board allows us to retain good teachers and attract new teachers. We recognize that we have to be competitive with all other staff salaries and benefits. Each year we plan to continue with the market studies and the TASB pay grade system to retain and attract quality employees. As pointed out in this document, school district operations are high end, labor intensive, more so than other businesses. Student success relies on superb staff delivering exceptional instruction. Acknowledgements We appreciate the leadership and support provided by the Longview Independent School District Board of Trustees. We also appreciate the District Improvement Team, the Campus Improvement Teams, Parents, and Volunteers for development, implementation, and maintenance of an outstanding educational program for our children. We thank Clear Creek ISD for sharing their executive summary budget document as a format for our own summary, Karen Bane, Director of Finance, Judy Hawkins, Superintendent s Secretary, and Xenia Durham, Budget Manager for their edits/revisions, and Rebeca Cooper, Director of Research, Planning, and Accountability for providing student performance data in the completion of the LISD Executive Budget Summary. We will continue to strive for Excellence for All at Longview Independent School District. Dr. Dana S. Marable Superintendent of Schools Michael Fletcher Assistant Superintendent for Business & Finance