Bond Planning Subcommittee Meeting 3: December 11, 2019
Meeting Agenda • Meeting 2 Recap • District Financial Overview & Bond History • Bond Planning Process • Overview of Facility Assessment and Schedule • Defining Consensus
Meeting 2 Recap
In Meeting 2… We discussed: • Facility Tour Reflections • Take aways • Surprises • Challenges • Older vs. newer comparisons • Features of Quality Schools • School Transformations • How has the world changed since you were in high school? • What do students need to know and be able to do in order to be contributing member of society? • What types of experience should a student have that would prepare them for long term success? • What type of spaces fit Victoria?
House Norms • Everyone participates – no one dominates • Begin and end on time • Take personal breaks as needed • Respect all opinions
District Financial Overview
School Finance: The Big Picture A school district’s budget is generated 2% 2% from three sources: • Federal funding 48% 48% • State funding • Local tax effort 50% 50% Federal State Local
Federal Funding • Appropriated for special programs or 2% 2% to provide services to a specific group of students • Cannot be used to replace state or local dollars to fund a program (supplanting) • About half of federal funds go directly to school districts • The remainder goes to the State Federal State Local
State Funding Foundation School Program • Provides state funding to school districts • Administered by TEA • Meant to ensure that all school districts, regardless of property wealth, receive “substantially equal access to similar 50% 50% revenue per student at similar tax effort, considering all state and local tax revenues of districts after acknowledging all legitimate student and district cost differences.” Federal State Local
Local Tax Effort • Generated from property taxes (not sales taxes) • Victoria Central Appraisal District sets taxable home values 20.33% • Called “ad valorem” taxes $77.7 MM 48% 48% • Each year, a school district adopts two tax rates, which determine the total tax rate: M&O • Maintenance & Operations (M&O – aka general fund) • Interest & Sinking I&S (I&S – aka debt service) Federal State Local
Maintenance & Operations (M&O) Tax Rate Funds the day-to-day maintenance and For the average age citiz izen en operations of the district this is is simila milar to: • Salaries (for teachers and other staff) • Facility repairs and maintenance ✓ House repairs ✓ Car fuel • Bus repairs, maintenance and fuel ✓ Routine services • School supplies and materials ✓ Groceries • Utilities (electricity, water, etc.) ✓ Cleaning Supplies ✓ Utilities
Interest & Sinking (I&S) Tax Rate Funds debt repayment for “big ticket” items For the average age citiz izen en • New building construction this is is simila milar to: • Existing building renovations ✓ New home purchase • Land purchases ✓ House renovations • Program-specific equipment ✓ Land for a home • Technology ✓ New appliances • School buses ✓ New home computer ✓ New car 12
I&S (Debt Service) Funding What at is a a bo bond? nd? A bond is a debt investment in which an investor INVES VESTOR OR loans money to a school district, with interest, IOU + BOND for a defined period of time. Essentially, it’s interest similar to a family taking out a mortgage for the purchase of their home. $ School districts issue bonds to pay for “big BORROWER ER ticket” capital needs: new facilities, (School District) renovations, land, technology, etc.
Local Tax Effort I&S M&O I&S funds may only be used The Annual District Budget to repay debt. is passed by the School Board of Trustees. They cann nnot t be used ed for r salar laries, ies, utili ilities ties or other her 84.8 % of the District’s M&O day-to to-day y expen penses. ses. budge dget suppor pports ts person sonne nel l salari laries es and d relat lated d costs. sts.
HB3 • House Bill 3, a school finance bill passed by the 86th Texas No money for new facilities to Employee pay increases address growth or renovations to Full-day PreK funding Legislature earlier this year existing facilities Increased base funding per student provided additional state funding for our schools and aims to $ X provide property tax relief to Texans. • Reduced M&O property tax rates M&O I&S by approximately $0.07cents per $100 valuation this year and potentially more over the next two years.
Local Tax Effort I&S M&O Capped at $.50 per $100 of Capped at $0.97 per $100 of property value. property value. Every cent requires voter approval If a district wants to raise the rate in a Bond Election. beyond the cap, it requires voter approval through the holding of a Tax Ratification Election. 16
Current Victoria ISD Tax Rate M&O I&S TOTAL TAX RATE TAX RATE TAX RATE + = $0.97 $0.2235 $1.1935 per $100 of property value
Tax Rate History Maintenance Debt Service 0.2263 0.2927 0.2926 0.2926 0.2790 0.2596 0.2344 0.2263 0.2263 0.2263 0.2235 1.15 1.04 1.04 1.04 1.04 1.03 1.03 1.03 1.03 1.03 0.97 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2020
2019-20 General Fund Budget 15% Payroll Costs Supplies, Materials & Equipment 85% 85%
Bond History
Bond History $10,375,000 1989 989 $31,000,000 1998 998 $99,841,004 200 007 $58,999,992 200 008
Bond Planning Process Overview
Bond Planning Process ASSESS REVIEW STUDY VISION Set Long Range Study Assess Needs Review Educational Vision Demographics & at Existing Financial for Academic Enrollment Facilities Data Programming Projections Identify deficiencies Understand the financial Determine evolution of Determine areas of and inequities implications to make program demands, underutilization, in existing fiscally-sound instructional objectives, overcapacity and needs campuses recommendations expectations and for future growth standards Ongoing oing Respo ponsib nsibilit ities es of VISD
Bond Planning Process PRIORITIZE RECOMMEND CONSIDER CALL Prioritize Make Board Considers Board Calls a Potential Recommendations Calling Bond Bond Election Projects to the Board Election Board is required to take Develop consensus on Present findings and action on calling bond Board studies the how to address the recommended course of within 78 days of desired recommendations to District’s needs action to Trustees Election Day determine action Responsibility ponsibility of the Bond d Planning ning Subcommi committ ttee ee
Bond Planning Process EDUCATE VOTE APPROVE SELL District Educates Voters Consider Voters Approve District Sells Bonds Voters on the Proposition(s) Bond Election to Investors Proposal School bond propositions A majority of voters District issues bond sales must be held with the voting in favor of the in increments over time It’s the school district’s General elections in May proposition(s) gives the to match the schedule of role to communicate or November Board authority to project design and facts about the bond sell bonds construction Shared d Responsibil ponsibility ty
Bond Planning Process LEVY DESIGN BID CONSTRUCT Board Levies Project Construction Project Design Projects Bid I&S Tax Rate Construction takes Project design is a Projects are bid in the approx. 12-14 mos. for multifaceted process that The Interest & Sinking tax competitive market to an elementary and begins conceptual and rate (set annually) is select a contractor and 24-28 mos. for a concludes with levied to make annual get the best value for the high school construction documents debt payments District
Facility Assessment Overview
Facility Assessment Overview We h e have e a t a tea eam of pr profes ession sional als s who have e bee een: n: • Gathering documents of the VISD facilities • Walking and observing 17 sites, 85 separate structures and 1,431,771 square feet of district facilities • Reviewing and documenting with VISD staff any known needs of the district and facilities • Downloading institutional knowledge important to the task at hand • Meeting with leadership to understand what the future vision of VISD is and how the facilities need to serve that future
Assessment Components The assessments are focused on deficiency items discovered by the Assessment Team as they survey each facility. The items addressed can be broken up into the following categories: • Campus Data and Utilization • Electrical (previous renovations, compliance, • Plumbing programming, etc.) • Roofing • Site Civil (site paving, drainage, • Fire Protection accessibility) • Food Service • Architectural Exterior and Interior • Technology • Structural • Security • Mechanical
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