Friday, September 13, 2024
The Granbury Independent School District board of trustees took key financial steps in its latest meeting Aug. 19, by adopting a new budget, setting a tax rate and initiating a debt relief plan.
GISD BUDGET
During the meeting, GISD’s Chief Financial Officer Emmett Whitefield outlined three different budgets for the district: general operating, debt service and child nutrition.
The general operating budget has been set at $93,901,941, reflecting a revenue increase of $792,000, or 0.85%, compared to the previous year.
The district is currently facing rising fuel costs, which have jumped by 109% over the past three years. Whitefield reported GISD’s fuel expenses were $310,000 in 2020-2021, $570,000 in 2021-2022 and $644,000 in 2022-2023. He said he anticipates these costs will exceed last year's figure.
Even though the district’s budget has increased 0.85% this year, President Barbara Townsend pointed out that enrollment numbers will undoubtedly be higher than last year’s as well. According to Whitefield, student enrollment is projected to reach 8,200.
Vice President Courtney Gore also noted that many surrounding districts are adopting deficit budgets, meaning they are spending more than their allocated funds for the fiscal year.
“I do not know the percentage, but I know that the surrounding districts are all adopting deficit budgets,” Whitefield said. “We've been lucky that we have increased our allotments for our departments, and you can ask any department in there. They haven't gotten any more money in the last few years, so we're expecting them to work within those guidelines and within those amounts to keep us at a balanced budget.”
“I can tell you that 80% of all districts in the state of Texas are having a deficit budget,” Townsend added.
The reason for that, Gore noted, is because the state is not funding the school districts, as the basic allotment for education funding has not increased since 2019 — despite increasing costs.
“The cost of education has gone up, but the amount of monies that we receive from the state is not changing,” Gore added.
The district’s debt service budget is designed to manage bond payments for buildings and equipment. Whitefield said the budget is set up to bring in $13,911,918, which includes an $8,880,000 prepayment on bonds. This will bring in projected expenditures of $12,904,748, leaving a surplus of $1,007,170.
Whitefield also noted that since 2005, the district has refinanced or paid off $168,259,000 in bonds ahead of schedule, resulting in savings of $29,502,139 for taxpayers.
"I think that's worth noting, and I think it's actually worth repeating that our taxpayers need to know that these debts that we have are being paid off early,” Place 2 Trustee Nancy Alana said. “I think it's a great job of management by our superintendent and our CFO.”
The child nutrition budget is set to generate $4,666,268 in revenue with expenditures of $4,768,218, leaving a fund balance of $1,051,130. This balance represents 22.4% of operating costs, which Whitefield said aligns with board policy.
TAX RATE
The board approved the 2024-2025 tax rate with a 4:1 vote, setting it at $0.9319 per $100 of property valuation. This rate comprises $0.7869 for maintenance and operation (M&O) and $0.145 cents for debt service. Whitefield noted this represents a slight reduction of 0.23 cents from the previous year.
As a Chapter 49 or recaptured district, Whitefield explained that Granbury’s tax revenues are also higher compared to districts in less affluent areas, like West Texas. He added that Texas law mandates a minimum tax rate of 9% for all districts, with Granbury’s maximum capacity set at $0.6169 cents per dollar. The district’s current M&O rate of $0.7869 cents includes an additional 17 cents approved by voters last November.
Gore highlighted that since this is GISD’s maximum compressed tax rate, the district cannot lower the rate further. Therefore, any potential budget cuts would need to come from reducing teacher positions or lowering teacher salaries.
GISD Superintendent Jeremy Glenn explained that 85.6% of budget goes to payroll, and that in order to make significant budget cuts, the district would need to focus on reducing staff positions.
“You could trim 10% off of campus budgets, off of extracurriculars, probably without doing much harm,” Glenn said. “But you start going deeper to 20% and 25%, it's going to do substantial harm to programs like band, athletics, and our UIL academic programs. However, if you're looking to make significant cuts, obviously it has to be in payroll, and 85% of the budget is staff.”
Glenn then praised the district's ability to maintain high performance levels despite budget constraints, crediting not only Whitefield and the business office, but all GISD campuses as well.
"Everybody's trying to do more with less. We've asked them to do more with less," he said. "And the industry continues to perform at a high level, even though we're squeezing everybody's budget ... It's something that we're proud of, but it does speak volumes to the leadership of our board of trustees, but also to what we do in the business office, what our HR department is doing, what Stacie Brown's doing in our curriculum department; it trickles down all of our campuses as well.”
Townsend also inquired about the district’s administrative versus teaching staff ratios compared to state averages. Whitefield explained that the district's administrative costs are about half of the typical rate for districts of a similar size, with a ratio of .0777 compared to the state average of 0.125. Glenn confirmed the district’s administrative staff is substantially below the state average.
"In other words, what you're just saying, as far as our administration staff is concerned, it's half the size that the standard is in the state of Texas?” Townsend asked, with a confirmation from Whitefield.
Secretary Billy Wimberly proposed that the property tax rate be increased to $0.9319 per $100 of property value, which was approved with a 4:1 vote as Place 3 Trustee Melanie Graft was absent.
Place 7 Trustee Karen Lowery, who opposed the motion, expressed concerns about the wording. She pointed out that while the memo indicated a decrease in the tax rate, the motion's language referred to an increase.
Whitefield clarified that while there is a reduction in the tax rate, it’s not a reduction in the tax collected.
Since Lowery opposed the motion, Gore made a motion to reconsider, as she said she wanted to seek further input from Lowery. However, Lowery declined to provide additional information.
The board voted a second time, with the motion again passing 4:1.
DEBT RELIEF
The board also discussed and approved a motion to authorize the defeasance and redemption of $8,880,000 in GISD’s unlimited tax refunding bonds, meaning the district will pay off a portion of its existing debt early. This move is expected to save taxpayers $1,983,081 in interest payments.
“Just to note, because I know this question has come up, these monies cannot be used for new construction, these monies cannot be used for maintenance on old construction, and these monies cannot be used to purchase school busses,” Glenn said. “What they can be used for is to pay down debt previously approved by the community, and that's what we're asking for tonight.”
“The way that the I&S (interest and sinking fund) works is the taxpayers determine what they want us to spend that money on, and that is the only thing we can spend that money on,” Townsend added. “We don't get to choose, so we can't go fix anything. We can't just decide, ‘Well, we need more buses, so we can use that.’ That is why we use the money to pay down our debt and save the taxpayers the interest value.”
Lowery then inquired about the timing of the redemption and its impact on routine maintenance and repairs. Whitefield clarified that the funds from this redemption can only be used to pay off debt and do not affect the budget for maintenance or other expenditures.
“It's governmental fund accounting and this particular fund, the only thing we're allowed to do is pay off debt,” he explained. “It's not M&O, where we can fix stuff and take care of salaries and those things. The I&S budget can only be the taxable rate to pay off existing bonds.”
Wimberly then made a motion to adopt the order authorizing the defeasance and redemption of a portion of GISD’s unlimited tax refunding bonds. Following a second from Gore, the motion passed unanimously.
