TAX RATE HEARING August 20, 2018

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1 Where all students connect, learn, grow and succeed TAX RATE HEARING August 20, 2018 Providing the resources required to accomplish our mission.

2 AGENDA Our Mission and Strategies General (Operating) Fund Tax Ratification Election (TRE) Next Steps Where all students connect, learn, grow and succeed. 2

RISD SUCCESS FOR ALL STUDENTS BALANCING FINANCIAL

earning admission to the college or university of

that pays a living wage FINANCIAL AWARDS One of seven

from Texas State Comptroller 11 years running AA+ /

3 RISD SUCCESS FOR ALL STUDENTS BALANCING FINANCIAL RESPONSIBILTY OUR GOAL All RISD students graduate earning admission to the college or university of their choice - or Enter the workforce in a career that pays a living wage FINANCIAL AWARDS One of seven Texas Financial Honor Roll Districts Superior Rating from Texas State Comptroller 11 years running AA+ / Aaa bond rating Where all students connect, learn, grow and succeed. 3

Small class sizes Safe and enriching environments

4 SUCCESS FOR ALL STUDENTS We believe that success for all students is a product of: Great teachers Small class sizes Safe and enriching environments Where all students connect, learn, grow and succeed. 4

5 WHAT BROUGHT US TO THIS POINT? RISD state funding has been declining. Operating expenses have increased over the last 5 years. Salaries and compensation Additional classroom and special ed teachers Innovative academic programs Cost of operating neighborhood schools budget had a deficit of $6.3 million. Deficit at $1.04 M&O tax rate will increase over the next five years as state funding continues to decline. Where all students connect, learn, grow and succeed. 5

6 OUR MISSION & STRATEGIES MISSION The mission of RISD is to ensure that ALL connect, learn, grow and succeed through relevant and personalized learning experiences distinguished by a welcoming and accepting climate a safe, innovative, and adaptive environment a supportive, collaborative, and invested culture among students, staff, families, and community STRATEGIES We will ensure that we have diverse and engaging programs and learning opportunities to meet the unique needs of all our students. We will guarantee that all students will perform at or above grade level. We will recruit, retain, and reward quality personnel. We will ensure that ALL families, businesses, and community partners are fully engaged in the mission of our district. We will actively pursue creative funding sources and responsibly manage current resources to support our mission. We will ensure that our facilities and infrastructure adapt to support our mission. Where all students connect, learn, grow and succeed. 6

7 Community Recommendation: RISD Needs More Funding For Schools Strategic Planning Finance Team Conclusions/Recommendations Engaged 300+ community members to develop a five-year strategic plan. Strategic Plan Finance Team charged to analyze district finances, conduct benchmark comparisons and make recommendations. Description Neighboring Districts Richardson ISD Operating Spending per Student $8,155 $7,717 Operating Tax Rate $1.10 $1.04 English Language Learners (ELL) 20.2% 25.8% Economically Disadvantaged 49.1% 54.0% Special Education Students 9.3% 11.0% Where all students connect, learn, grow and succeed. 7

8 Action Team Conclusions Our current financial structure is inadequate to accomplish the district s mission. While we need to ensure our operations are as efficient as possible, we cannot solve our financial issues through cost-cutting. We are currently spending over 5% less per student than our North TX and statewide peers, despite having students with greater needs [ELL +30% / ED +15% / SPED +16%]. This disparity is not caused by investment decisions, but lack of funds; our M&O tax rate is $1.04 compared to average of $1.12 for our North TX neighbors (before homestead exemption). Without some change in our revenue stream, our fund balance will be gone by We have little control over legislative outcomes regarding school finance; we cannot count on additional funding in the near term. We need to take immediate actions that will increase sustainable sources of revenue in order to accomplish the district s mission. Where all students connect, learn, grow and succeed. 8

9 Where all students connect, learn, grow and succeed. General (Operating) Fund 9

10 General (Operating ) Fund Before and After REVISED FOR ADOPTED CERTIFED VALUE FY FY CHANGE Tax Revenue $ 249,290,336 $ 251,560,693 $ 2,270,356 State Revenue $ 67,966,325 $ 67,795,051 $ (171,274) Other Revenue $ 30,878,931 $ 30,878,931 $ - Total Revenue $ 348,135,592 $ 350,234,675 $ 2,099,082 Adopted Expenditures $ (333,449,313) $ (333,449,313) $ - Potential Expense Increase $ - $ (1,250,000) $ 1,250,000 Recapture $ (5,869,577) $ (5,940,408) $ 70,831 Other Uses $ (1,000,000) $ (1,000,000) $ - Change in Fund Balance $ 7,816,702 $ 8,594,954 $ 778,251 Unassigned Fund Balance as a % of Expenditures 24.5% 25.0% Where all students connect, learn, grow and succeed. 10

11 Expenditure Summary GENERAL FUND DESCRIPTION RECURRING RECURRING STRATEGIC PLAN TOTAL Current Commitments Additional Staff Allocations $ 1,056,413 $ - $ 1,056,413 Compensation 2.5% Raise; Market Adjustment $ - $ 6,670,000 $ 6,670,000 Instruction Special Student Services Staffing $ 4,301,539 $ - $ 4,301,539 Safety and Security Audit; Additional SRO's; Director $ 427,546 $ 129,200 $ 556,746 Facilities Facilities Department Supplies $ 223,500 $ - $ 223,500 Transportation Bus and Camera Replacement $ - $ - $ - Expenditure Reductions Reductions and Eliminations $ (600,000) $ - $ (600,000) Total Expenditure Increase $ 5,408,998 $ 6,799,200 $ 12,208,198 Transfer to Enhancement Fund $ 1,000,000 $ 1,000,000 Recapture $ 5,869,577 $ 5,869, Adopted Expenditures $ 321,241, Adopted Expenditures $ 340,318,890 Compensation and other increases contingent on passage of Tax Ratification Election Where all students connect, learn, grow and succeed. 11

12 $1.17 M&O Tax Rate Sustainably Funds Operations $355,000,000 Expenses Revenue at $1.17 Revenue at $1.14 Revenue at $1.10 Revenue at $1.04 $345,000,000 $335,000,000 $325,000, Operating Expenses $323 million $315,000,000 $305,000,000 $295,000,000 $285,000,000 FY FY FY FY FY One-time expenses $1,250,000 $4,750,000 $4,000,000 $2,250,000 $3,500,000 Where all students connect, learn, grow and succeed. 12

13 TAX RATE HISTORY $2.00 $1.80 $1.60 $1.60 $1.63 $1.65 $1.67 $1.80 $1.81 $1.82 $1.82 $1.82 $1.63 HB1: Tax Rate Compression $1.40 $1.34 $1.34 $1.34 $1.34 $1.34 $1.34 $1.34 $1.34 $1.34 $1.39 $1.39 $1.20 $0.35 $1.00 $0.80 $0.60 $0.40 $1.04 $0.20 $ OPERATING DEBT SERVICE Where all students connect, learn, grow and succeed. 13

14 Impact of Tax Increase on Average Residence Last Year This Year Increase Taxes Due to 2018 DCAD Value Increase $ 2, $ 3, $ Tax Rate Increase $ Taxes Due to Recommended Tax Rate Increase of $0.13 $ $ $ Note: Difference of 12 cents from newspaper notice of public hearing increase of $ due to rounding. Where all students connect, learn, grow and succeed. 14

15 Where all students connect, learn, grow and succeed. Tax Ratification Election (TRE) 15

16 WHAT IS A TAX RATIFICATION ELECTION (TRE)? The Tax Rate consists of two components (per $100 of property value) Maintenance & Operations Tax Bond Tax Total Tax $1.04 $0.35 $1.39 Sustainable revenue required to operate schools Unchanged since 2007 Lowest rate since 1991 Costs of infrastructure: new facilities, renovations, etc. Increased $0.05 in 2016 Where all students connect, learn, grow and succeed. 16

As School Property Taxes Increase RISD gets property tax increase

17 I am paying more school property taxes. Doesn t that mean the school district has more money? As School Property Taxes Increase RISD gets property tax increase dollars ONE time THEN State Funding decreases the next year $ Where all students connect, learn, grow and succeed. 17

18 WE Are Paying A Bigger Share of Funding for our Schools 100% 90% Local Share of Funding State Share of Funding 80% 70% 60% 63% 67% 71% 75% 79% 82% 84% 85% When property values go up, state aid goes down. 50% 40% 30% 20% 10% 37% 33% 29% 25% 21% 18% 16% 15% The only way to get more revenue per student is to increase the tax rate or hope for legislative change. 0% Where all students connect, learn, grow and succeed. 18

19 2017 TAX RATES NORTH TEXAS PEERS DISTRICT M&O I&S Total WYLIE ISD (COLLIN COUNTY) $1.17 $0.47 $1.64 MCKINNEY ISD $1.17 $0.45 $1.62 GRAND PRAIRIE ISD $1.17 $0.43 $1.60 ALLEN ISD $1.14 $0.43 $1.57 MANSFIELD ISD $1.04 $0.50 $1.54 FRISCO ISD $1.04 $0.42 $1.46 GARLAND ISD $1.04 $0.42 $1.46 MESQUITE ISD $1.04 $0.42 $1.46 PLANO ISD $1.17 $0.27 $1.44 ROCKWALL ISD $1.04 $0.40 $1.44 IRVING ISD $1.17 $0.26 $1.43 RICHARDSON ISD $1.04 $0.35 $1.39 CARROLLTON-FARMERS BRANCH ISD $1.17 $0.21 $1.38 ARLINGTON ISD $1.04 $0.33 $1.37 DALLAS ISD $1.04 $0.24 $1.28 Where all students connect, learn, grow and succeed. 19

20 Sample Ballot Language Approving the ad valorem tax rate of $1.52 per $100 valuation in Richardson Independent School District for the current year, a rate that is $0.13 higher per $100 valuation than the school district rollback tax rate, for the purpose of generating additional local and state revenue for district maintenance and operations. Where all students connect, learn, grow and succeed. 20

21 Next Steps August 20, 2018 Conduct public hearing on tax rate, adopt new tax rate and adopt amended and restated order calling tax ratification election August 21, 2018 Provide notice of election to county clerk and voter registrar (not later than 60 th day before election) October 1, 2018 Board approves tax roll November 6, 2018 Election day (90 th day is November 18, 2018) must use General Election day since it falls within range of dates November 12, 2018 Canvass election results (3 to 11 days after election), Board approves tax roll November 13, 2018 Mail tax statements (could mail earlier depending on election results) Where all students connect, learn, grow and succeed. 21

Where all students connect, learn, grow and succeed BUDGET May 7, 2018

Where all students connect, learn, grow and succeed. 2018-19 BUDGET May 7, 2018 RICHARDSON ISD MISSION The mission of Richardson Independent School District is to ensure that ALL connect, learn, grow and