1 LISD Budget & Tax Hearing August 23, 2004 Presentation by: R.J. Barber, Ed.D. Superintendent Jesus J. Amezcua, CPA Chief Financial Officer Rudy Sanchez,

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LISD Budget & Tax HearingAugust 23, 2004

Presentation by:

R.J. Barber, Ed.D.Superintendent

Jesus J. Amezcua, CPAChief Financial Officer

Rudy Sanchez, RTATax Assessor - Collector

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Executive Summary

LISD receives moneys from three major sources:

17% Local Taxpayers – money used to

match State Funds

82% State of Texas Grants

1% Federal Funds – Competitive Grants

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Total General Fund Revenues by Major Source

LOCAL REVENUES

17.25%

STATE REVENUES

82.16%

FEDERAL REVENUES

0.58%LOCAL

$ 27,059,920

STATE

128,863,341

FEDERAL

913,000

TOTAL

$156,836,261

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Moneys from the Local Taxpayer

Via Appraisal Values from the Appraisal District

Tax Rate set by Board of Trustees

LISD must pay the first 86 cents of the education of a student and the rest are enrichment funds that match state dollars through tier 2 funds

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Let’s Analyze our Tax Rate for M&O

.86 cents required by the State for Tier 1

.462291 Enrichment Match to bring in 83%

in State funds [Max is .64 cents]

1.32291 Total tax rate for last year

Note: Many districts DO NOT have this many pennies left. In fact, this is one of the reasons for West Orange Cove Lawsuit.

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Where are we from the $1.50 CAP?

Tax rate since 1993

1992-1993 $0.8683

1993-1994 $1.0350

1994-1995 $1.0350

1995-1996 $1.0000

1996-1997 $1.0239

1997-1998 $0.9837

1998-1999 $1.02628

1999-2000 $1.22291

2000-2001 $1.28291

Nov 2001 $1.50 New Cap

2001-2002 $1.32291

2002-2003 $1.32291

2003-2004 $1.32291

Note: Robin Hood Started in 1993, Another Reason for West Orange Cove.

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What are the revenues set?

Values x Tax Rate x collection rate = [($1,552,188,980 x $1.4741)/100 + $779,792] x 92% collection rate = $21,767,904

Amount necessary to generate:(1) .86 required match AND(2) enrichment enough to cover the total cost of educating 24,000+ children

Jorgannie Garza

WHAT ELSE DID YOU WANT TO INCLUDE HERE... WHERE THE "AND" APPEARS?

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Where are the Appraised Values?

1992-1993 1,165,027,413

1993-1994 1,203,400,429

1994-1995 1,283,385,896

1995-1996 1,346,689,990

1996-1997 1,269,001,135

1997-1998 1,313,353,144

Note: Robin Hood Started in 1993, Another Reason for West Orange Cove.

1998-1999 1,329,307,098

1999-2000 1,359,509,407

2000-2001 1,391,120,115

Nov 2001 $1.50 New Cap

2001-2002 1,430,691,752

2002-2003 1,492,399,445

2003-2004 1,681,169,772

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1,681,169,772

1,492,399,445

1,430,691,752

1,391,120,115

1,359,509,407

1,329,307,098

1,313,353,144

1,269,001,135

1,346,689,990

1,283,385,896

- 200,000,000 400,000,000 600,000,000 800,000,000 1,000,000,000 1,200,000,000 1,400,000,000 1,600,000,000 1,800,000,000

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004 Assessed Value 2,235,600,605 - Total Ex emptions (554,430,833) = Net Tax able Value

Assessed Value 2,168,024,420 - Total Ex emptions (675,624,975) = Net Tax able Value









Net Taxable Values

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Taxable Values

Taxable Value from previous yearsMinimum growth of ~ $40 million/year

Taxable Value increase2004-2005 $ 1,681,169,772

2003-2004 1,492,399,445

Increase of $ 188,770,327

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Moneys from the State of TEXAS

LISD Receives Revenues from: Tier I = Foundation Funds – These are Basic Allotment

and includes: Regular Funds……………………………….. $56,329,225 State Compensatory…………… .15 Weight $11,633,235 Bilingual Funds ………………… .10 Weight $3,591,750 CATE Funds……………………. .35 Weight $3,069,073 Special Ed Funds………... Various Weights $11,994,785 Gifted & Talented …………………………… $372,514 Transportation ………………………………. $429,563

Part of the General Fund = $12,248,824

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LISD Receives Revenues from:

Tier 2 = Enrichment Funds $41,298,542

.5933 out of 64 cents

Part of the General Fund $20,699,369

Depends on local tax effort the first year of biennium

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LISD Receives Revenues from:

Tier 3 = IFA $7,884,394 & EDA $2,326,320

.1512 tax rate for Debt Service to generate required payment match from local revenues of $2,400,000

Part of the Debt Service $2,232,734Targeted at .1512 cents at 92 percent.

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Biennium and 8 to 1 dollars

Legislature meets on Jan 1999 1999-2000 (Sets Max) 2000-2001 Legislature meets on Jan 2001 2001-2002 (Sets Max) 2003-2004 Special Session May 2004 Legislature meets on Jan 2005 (West Orange Case

on going) 2004-2005 (sets Max) 2005-2006

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What is our current max?

Max set in 2001-2002:

$18,458,579

Max proposed for 2003-2004:

$20,699,369

Jorgannie Garza

WHAT DO WE INCLUDE HERE???

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When setting the tax rate, we need to consider the following:

Appropriation Needs Salaries Programs Etc…

Values

Tax Rate CAP

Collection Rate

Partners Values and Collections

Cost per WADA for LISD and Partner

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LISD Appropriations Needs are:

2003-2004 $143,646,640

2004-2005 $152,924,281

Increase of $ 9,277,641

Reduction in Fund Balance of $3,988,748

Target Fund Balance at the end of Year $11,858,509

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PFC issues and impact to General Fund

Paid through Maintenance & Operations Call to repay in 10 years and move it to Debt

Service – 5 cents Good Rating necessary to reduce interest cost Fund Balance of at least 1 to 2 months is

necessary to sell bonds and have them insured. No State Guarantee One or more bond sales Negotiated Sale

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How does this budget affect the General Fund Balance?

GENERAL OPERATING FUND BALANCE

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

ACTUAL ACTUAL ACTUAL PROJECTED PROPOSED

2000-2001 2001-2002 2002-2003 2003-2004 2004-2005

Undesignated Unreserved Fund Balance Designated Fund Balance

$13,811,845

$19,820,873 $21,034,919$18,847,257

$11,858,509

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Taxable Values

Average increase in the last 10 years is$40 million

2004 values = $180 Million OR 400% increase

IMPLICATIONS: More Local Dollars, More State Dollars, Less WADA Money next year only.

The following year, the District will get less state dollars and will have to increase the rate to meet the .86 cent match.

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Why increase taxes in the following year?

For 2004-2005, LISD is using the 2003 tax values for State Minimum Match (.86 cents)

For 2005-2006, LISD will use the 2003 values which means that state dollars will be reduced then.

Let’s Look at the template…

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Implications of $180 Million in values

GENERAL FUND: More in Local taxes: $504,046 More in State dollars this year: $2,241,133 Less in WADA funds: $2,214,000

ONLY if Partner district decides that other districts are more attractive than LISD in terms of Cost per WADA

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GENERAL FUND:Cost per WADA was $4,101 with Prelim.

ValuesNEW Cost per WADA is $4,183 MORE in State Funds $82 x 27,000 LOSS: $82 x 27,000 = $2,214,000$7,537,000 less $2,214,000= $5,323,000

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Impact to Cost per Wada

Variable Increase = Gain Decrease = Gain

LISD Values Wada Up = Less Wada Down = Up

LISD Rate or Collections

Wada Up = Less Wada Up = Up

Partner

Values

Their cost per Wada Up = More

Their cost per Wada Down=Less

Partner Rate or Collections

Their Cost per Wada Up = More

Their cost per Wada Down =Less

These assume that the partner variables and enrollment remain the same.

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WADA Considerations

Deer Park ISD Example7,500 x $200 = $1,500,000 7,500 x $83 = $622,500Gain is = $877,500

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Considerations

Reduce the tax rate and continue WADA Contracts [ Cost of WADA = $4,100 ]

Keep the tax rate and loose some of the contracts [ Cost of WADA = $4,183 ]

83 x 27,000 = $2,241,000

Jorgannie Garza

DO WE DELETE THIS SPREADSHEET SINCE WE ARE NOT INCREASING THE TAX RATE?

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DEBT SERVICE FUND:Local taxes Needed: $2,453,234

State dollars this yr: $10,210,714

Less rate required at 92% of values: $.1512

Reduction in I&S rate of $0.0286

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Debt Service Fund

Increase in Taxable Values

of over $180,000,000

3¢ Tax Rate reduction due to values

to meet Debt Service Payments

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Presentation by Tax Assessor Collector / on values

Values: Improvements: $69 M

Exemptions: $111,206,897 M

Laredo Medical Center: $108 MHEB –South: $3.2 M

Current Year 2003 $1,492,399,445Certified 2004 $1,681,169,772

Variance $ 188,770,327

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Presentation by Tax Assessor Collector

CurrentRate

Rollback Rate

Effective Rate

(Not required)

Proposed

Rate

M&O $1.32291 1.3664 1.3064 $1.32291

I&S

$.1798 0.1512 $0.1512

Total

$1.50$1.51 $1.47411

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Summary

Preliminary Budget Prelim- Values

$80 Million $1.54 3 cents in M&O 1 cent in I&S WADA Cost $4,100 WADA Gain $5.9 M

Option Budget # 1 Certified Values

$180 Million $1.4741 No change in M&O and 2.8 cent reduction in I&S. WADA Cost $4,183 State Gain and Loss

$2,214,000 Local Gain $531,179 Loss $2.214,000 in WADA K

Preliminary Values

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Option Budget # 2 = $1.4641 One cent reduction in

M&O and 2.8 cents reduction in I&S

3.8 cents reduction WADA Cost - $4,156 Gain in State of

$2,726,888 More Local Funds

$293,380

Options

Option Budget # 3 = $1.4591 Two cents reduction in

M&O and 2.8 cents reduction in I&S

4.8 cents reduction WADA Cost - $4,142 Gain in State of

$2,416,304 More Local Funds

$225,964

Jorgannie Garza

DO WE DELETE THIS SPREADSHEET?SINCE THE WHOLE PRESENTATION CHANGED WITH THE NEW INCREASES?

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Basis for Recommendation

$180 Million unprecedented increase

WADA K are maintained at 1.4741 cents reduction.

Reduction in Fund Balance is minimized

LISD to rely on WADA gain to balance the budget

Possible increase in the future for PFC = 5 cents

Possible increase due to .86cent Min match in 2005

Collection rate of 92% due to increase in values

Reduction in value for I&S of 2.8 cents

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Summary: What to look for?

For 2005-2006:Maintain a conservative look at salaries:

$1,500 teachers3% for other employees

This means: $3,200,000 in new money. $1,500,000 Furniture Money for new schools

$4,700,000

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Summary: What is the next step?

Adopt the budget

Adopt the tax rateM&O $1.32291I&S $0.15120

Total $1.4741

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Comments???

Documents

1 LISD Budget & Tax Hearing August 23, 2004 Presentation by: R.J. Barber, Ed.D. Superintendent Jesus J. Amezcua, CPA Chief Financial Officer Rudy Sanchez,