Funding Capital Projects 101

1
Funding Capital Projects 101

• Carroll ISD
• Long-Range Facility Planning Meeting
• December 3, 2008

2
School Budget Basics

• School districts operate on limited revenue
  sources federal funding, state funding and local
  revenue (tax collections, gate receipts,
  marketing, interest, donations).

3
School Budget Basics

• School budgets are divided into two separate
  funds MO - maintenance and operations
  (supplies, salaries, etc.) and IS - interest and
  sinking (bonded indebtedness)

4
School Budget
2008-2009 82 Million
Maintenance Operations 1.04 Debt Service
(I S) .375 Total Tax Rate 1.415
2008-2009 Tax Rate
I S
M O
84 of MO Budget Is Personnel
5
Chapter 41 District
School Finance Robin Hood
In Millions
6
School Budget Basics

• The IS side of the budget may not be used for
  operational costs. One common misconception is
  that you can use debt service (bond) money to pay
  for salaries. This is not legal.

7
School Budget Basics

• Districts maintain a Fund Balance account (a sort
  of reserve fund) that can be accessed for
  one-time facility/needs expenditures.
• Most districts do not maintain a large enough
  balance to meet all facility needs so they have
  to have a bond election to get permission for a
  loan.

8
Carroll ISDs Fund Balance

• CISD currently has a fund balance of 28 million
  (about 9 million came from the 2008 oil/gas
  lease and the 2006 sale of the Peytonville
  property)
• 7 million of this 28 million amount has been
  designated by Board vote for capital
  improvements/start-up costs to address student
  growth.

9
Carroll ISDs Fund Balance

• District policy requires CISD to maintain at
  least a 45-day operating reserve (approx. 8.5
  million)
• The Texas Education Agency recommends an Optimum
  Fund Balance, which is calculated based on
  district cash flow needs and expenditure levels
  (approximately 21 million for CISD)

10
Committees Options

• Attendance Rezoning
• Temporary Facilities
• Building Additions/Expansions
• Modified Facility Use
• New Facilities
• Other Revenue Sources (Marketing, Donations,
  etc.)
• Priority/Urgent Projects (Fund Balance)
• Bond Election

11
School Bond Election Basics

• Public schools rely on the support of local
  taxpayers for funding to construct and improve
  facilities. This public vote is held during a
  school bond election.

12
School Bond Election Basics

• Only the local School Board can call the bond
  election.
• Elections may be called on one of two uniform
  election dates May or November
• It takes 60-90 days following voter approval to
  complete the saleof bonds and begin work.

13
School Bond Election Basics

• The Board must call the bond election 62 days
  prior to election day (70 days before an
  even-year Nov. election)
• The election laws no longer allow a school
  district to call a bond election on a day other
  than a uniform election day.

14
Bond Election Basics

• School bond elections can consist of one or more
  propositions.
• Bond propositions may include purchases of land,
  construction of new facilities,
  maintenance/capital improvements of existing
  facilities, safety/security projects, furniture
  equipment, including technology.

15
The Road To A Recommendation

• School Board Forms Facility Committee
• Facility Committee Completes Needs Assessment
• Facility Committee Prioritizes/Defines Project
  List
• Facility Committee Makes Final Recommendation To
  School Board
• School Board Makes Final Decisions