001[Music] Hey. [Music] Hey. Hey. [Music] This special meeting of the Waco Independent School Board is hereby called to order. All items which may be discussed or voted upon this evening have been posted as required by state law. I extend a warm welcome to those present and to our television viewers. The board's purpose is to set goals, listen to reports of the superintendent, approve budgets, contracts, and personal personnel appointments and make policy for the district. We are not here to make management decisions or solve problems of individuals. Management is the responsibility of the superintendent or staff. I ask you turn your cell phones to silent alert if you have not already done so. We appreciate the time you have taken to join us and for your interest in the Waco Independent School District. Do we have
002anyone sign up for public comment? We'll move on to item three. Review and discuss the proposal budget and tax rate for 202526 fiscal year presented by Miss Davis. Sorry. So the debt service fund is mostly I mean the debt is set when we issue bonds and um or refund bonds and then the other the only thing other thing that really affects it is the tax rate and the property values. And then this year and even last year a little bit um the hold harmless we that has had much more of an impact than it has in previous years just because of the um increase in the homestead exemption. So we'll start with looking a little bit at the general fund again. Uh just a review because some of you are new and have probably haven't
003had this. I I review it even when you're not new, but that's okay. um legal requirements and overview view of the budget process. Then we'll talk I have the enrollment in here. It's the same slide we had last time, but I always want to put it in here so I've got that reference point of what we use for our revenue um projections. And then our certified property values and the proposed tax rates that come off of those. And then we'll look at the um funds required to be adopted in the official budget which are the general fund, the child nutrition fund, and the debt service fund. And then there are four other budgets, three funds that you will also adopt. We don't really talk about those a lot because they we are just the fiscal
004agent for those funds, but we'll talk about them at the end. So um the legal requirements for the budget they must be developed in accordance with generally accepted accounting principles which means we have to have the budget set on the same basis and um governmental funds are on a modified acral basis of accounting. So we have to adopt but set the budgets in the same way and for districts with a September 1st. Now districts could have a choice of two fiscal years. You can have a June 1st through July 31st or a September 1 through August 31. Um we still can have originally you could only have September 1 through August 31 and we still are doing that. Um at some point you know a lot of districts have changed to a July 1 because
005they feel like it sort of fits the with school starting earlier. they feel like that that sort of fits your um calendar, school calendar better. The problem with that is many years you don't actually know what your funding is going to be by June 1st or you know actually or July 1 because you're looking at setting a budget early in June and you may like this year and that would have been very difficult to interpret all the changes in the law and still get that out. Um, also you don't know what your certified values are and they do. That's less important I think than it would have been say 10 years ago before HB3 in 2019. Um, because there wasn't that same that symbiotic relationship between state revenue and u property taxes, but that is
006something that the district could consider at some point of changing their fiscal year. And then we have to have a public hearing and it must be held prior to the adoption of the budget and tax rate. We will do our public hearing on the night of the 28th before you adopt the budget and tax rate. And then the um minute we so from tonight when you set the date for that to for the 28th to adopt those two things. We will have to advertise in the paper. We have to give 10 days notice of that public hearing and adoption. And the budget must be adopted by August 31st. Past August 31st into September, you don't have a budget. You don't legally have the authority to spend because for governmental authorities, the budget is your legal
007authority to um obligate the district. And then the last day to adopt a tax rate is September 30th or 60 days after the certification of the RO. So we did get our role certified on the 24th. So that would be 60 days from that date. And then the budget the budget has to be adopted before you adopt the tax rate. So these are the budgets that are included in the official budget. There's um the general fund of course as you can see makes up most of our um official budget. It's 80% of our official budget. In green there you see our debt service fund which is 12% of the um official budget and then the special revenue funds are 8%. However, of those that's mostly child nutrition fund which is part of the official budget
008and then it has those other funds I just talked about that you we will also adopt budgets for um that is those other funds are we have two in the 497 fund which is the greater Waco advancedmies both Guam and Guaca have separate budgets and then the challenge academy which is our juvenile justice alternative of education program. We are the physical agent for that program even though the detention center is located in Lagga. We've been the fiscal agent I think since I protested an increase back in maybe 2006 or seven. Um anyway, and then the last one, we are also the fiscal agent for the regional day school program for the deaf. So this is our the factors that influence the budget. We shouldn't be a surprise. We've talked a lot about these. Um, of
009course, this year I put number one, state legislation, because that had the biggest influence on our budget this year. Student enrollment and attendance, our property values and tax rates and property values and the tax collections because those two numbers will influence how much we get for uh state revenue. And then um the available federal funding, we did talk about that some um we you know the freeze that we had for those funds has been lifted at least for this coming year and so we should not see much of an impact. We did get a revised planning estimate for our um title funds uh yesterday and it did go down a little bit but we're just talking about $40,000 overall. And then um of course re the recruitment and retention that does affect what because we're
010looking at salaries and benefits to keep us competitive and then inflation and other um unavoidable cost increases. The budget goals first um is prioritizing student achievement. The second one is the effective uh efficient and you might recognize these from our strategic plan a little bit. Um our efficient and effective re resource allocation and then investing in in staff and um staff development and retention of staff, monitoring and improving facilities and technology. investing in the physical security that h was a little bit higher um priority previous um cycle, but we've put a lot of money into our safety and security over the last few years. So um we kind of moved some of these other things up. And then lastly, the long-term financial stability um and transparency. Now, you know, financial stability is higher up for
011me, but that's okay. So on funding a school district. So we've talked about this property taxes. Most of our money, property taxes and state foundation school program. This is the general fund. Almost all of our money comes from this source. Over 90% of our revenues come from these two sources. Um first of all, property taxes. The values are determined by the appraisal district. So it's very important that we have um good appraisals. There were a few years back in uh right actually shortly before I came here I think in 2002 three that we were not getting the local values because our local values were not um what the comprollers's office thought they should be because they do a study and if your values are not consistent with what they think they should be they will
012give you state values rather than local values. So then the tax rate is comprised of two rates. Our maintenance and operations rate that funds our general fund and then our interest and syncing rate that funds our debt service, our bonded debt. The M rate is compressed since uh it has been compressed. It started being compressed in 2005 and we'll look at a chart on that in a little while. Um but it has become since 2019 and HB3 that compression changed and it gets compressed every year now. So um that it gets calculated by the state based on the uh average property values and property value increases throughout the state and um our rate our base rate gets compressed that way. So we have this um maximum compressed rate that we start with and then we
013do have additional enrichment pennies that are available through the VATR which we did have a U tax ratification election in 2015 and the we did vote in 13 additional pennies. Now those have been compressed somewhat now too. So we'll look at that too. Oops. State funding. So on the state funding the formulas are set by the legislature which we just got through doing. Our basic aotment now is 6215. It has been set for the bianium. There is no adjustment for inflation. The allotments are impacted by your average your enrollments in some cases. Um for instance some of our allotments like those new allotments were based on enrollment not average daily attendance. We talked about that. And then average daily attendance is a basically probably the the biggest factor for most of our a lotments. Our
014regular ed is based on average daily attendance as well as some of our special programs. And then those special populations identification of special populations such as bilingual or special ed um career and technology. Then our property values and wealth. And then the property tax collections because the our property tax collections are our local share of that revenue. Um then again our enrichment pennies that are approved by the local tax um payers that helps with our guaranteed yield. So as I said over 90% of the general funds revenues comes from those two sources and the relationships. We've talked about this before. The way it's set, the the formulas are now it doesn't matter. You used to back in the day, we had to be really careful about setting those, making sure we had them perfect to
015get them to calculate our revenues. Now, if your values, if you're off a little bit on your collections, then that's just going to be offset by our state program revenue to a large extent anyway. So it's less um important which is good since we have to project so many things out way in advance of knowing what they're going to be. So that's a little bit helpful that they um that we don't have to be as careful about that. So funding of school districts the state aotments like I said are based mainly on ADA and then the special programs allotments that are based on weighted ADA. They have a weight for these special programs that varies depending on the program. So you see those there bilingual education, career technology, college career, military readiness, comp ed, um
016dyslexia, early childhood, gifted and talented and special education. The other a lotments that we talked about that are not there the um tier 2 funding is also based on ADA. However, like the new teacher aotment is based on teacher counts and the experience of teachers. So that's the way we'll get that that funding. TEA has already put something out based on our PES report on how many teachers we had at each um experience level and have estimated what we're going to get. But that's will be built that will change based on PES throughout the year. They'll um evaluate that. So then, as I said, we talked about this last month. I'm not going to spend a lot of time, but we have a projected enrollment loss of 187 between last year and this year. Um,
017first day, I think we were down about 550 kids, but that's coming back up. I think two we had 274 the register that first day. So, um, that's coming back up. And then our projected average daily attendance, there was a loss of 143. And that's the number I'm using to um calculate our state revenue on the property values. The current year state certified property values are used to calculate the foundation program revenue and the district has to estimate those values because there are differences even um as as I said the comproller is going to look at that and make sure our values equal what they think they should be. There's still differences between the local values used to collect property taxes and the property values used in our state funding because there are some exemptions
018that we may grant that the state does not grant. So, um I think that some of those that I have listed there like freeport exemption, lease vehicles, pollution control, solar energy deductions. Um, they do not when you're calculating your state revenue, they do not allow for the TIFF. We do have it. We have one TIFF left, TIFF number three that I think will end next year. Um, but they do come back and give us a supplemental revenue. Um, they will come in and survey us in the fall or in the spring and we do get some supplemental revenue to make up for the fact that it's not included here. Cheryl, when you with the tiff, you say it is ending. Will will that opportunity come back again in the future? >> No problem. Not unless
019the law changes. In 1998, they changed the all our tiffs were prior to 1998. They changed the law in 1998. School districts and it's because of the way the state funding works. School districts could not enter into a new tiff. we were because we've been held harmless basically for the for the taxes that we put into a tiff. So as of 98, we can't enter into a new tiff or expand an existing tiff and still be held harmless. And this tiff number three is a small one. It's not the tiff number one was the big one that we I think ended two years ago. So um the the legislation particularly Senate Bill 4, Senate Bill 23 and House Bill 9 increased the homestead exemption for this coming year. Now again that has to go to
020the voters in November but we were under the legislature gave us the direction to go ahead and use those lower values because you know they so far the home the voters haven't voted them down yet. So, uh, I think they just told us to go ahead and use those and doing our calculations. So, the homestead exemption moved from 100,000 to 140,000 and the over 65 disabled from 10,000 to 60,000 and then they instituted a business personal property exemption of 125,000. The and again these have to be approved by the voters in November. So the estimated two 2025T2 value for the state funding purposes is 8 bill541,113 and 693. That's uh like I said that's our C what we call the CPTD values. This is what it looks like for our local values. This now it
021chart is our local values. This is what we will tax on. Um, our net taxable values, you see those. We had our preliminary values were about $9.2 billion dollar that came down. Our certified values were 8.8 billion. That 9.2 billion that was preliminary. They did give us this based on the new homestead exemptions as well. So, that's not a difference. There's been years that, you know, that was not in our preliminary. we didn't or we didn't get a run with those numbers in it, but this year we did get that. So that is a decrease of about 357 million. Um most of that is because of appeals that they might have between when the preliminary preliminary is done April 30th and so then we get the uh certified on July 25th by July 25th. So
022the change from preliminary to final certified is a 3.9% decrease. And then from the prior year as you can see because and this now is impacted by the homestead exemption because last year our homestead exemption was of course 100,000. This year it's 140,000. So the taxable values now are 4.65% lower than they were last year. Um, but our actual values went up 1.75%. So, we still did have a small increase, not as big as it has been in some years. As you can see in some of those previous years, we had rather large increases in the years, but this year was only 1.75%. So, then this is our other um effective tax rate assumptions that we have to do in in using uh in calculating our tax rate. So we have to total new market
023value of 170 million this year and then our new taxable value is 155 million. The new exemptions value lost is $43 million and the increased exemptions value loss is $585 million. So you can see our average homestead value. We had the count of the residences. There was 14,000 since 631 last year. 14,684 this year. So we did have some increase uh about 53 um residences in this past year. The average market value of them went up slightly from 240,000 to 242,000. the average homestead residence exemptions went up considerably from 129,000 to 8 to 153,000. So that brings the average um taxable value of residences down. So our average value went from $110,000 last year to $89,000 this year. So we do have some protested properties still outstanding as of the time they certified our values.
024Um there's 43 of them, which isn't really not bad because we there's been years we've had a lot more than that. Um the market value of those is 23.8 million and the value that they included in our numbers was 16.7 million. So this is where we estimate what our tax rate and or what our tax collections are going to be for funding. So the total current delinquent collections will be 64.3 million for M and 21.4 million for INS for a total M and INS collections of $85.7 million. The total current M taxes levied is 87 uh $3 million. We are estimating that we're going to pay into that tiff number three that we were just talking about 108,000. And then our tax refunds um that are under the uh the tax code made under the
025tax code are 38,744 estimate. That's what they were actually um certified at for this past year. Since it's a low amount, I just used that same number going forward for next year. Um as so the com the tax office also has to certify by law has to certify a collection rate for us. So our current year collection rate was 102%. Our year two collection rate was 103% and our year one was 97%. Now they can't make us go above 100%. So last year they actually wanted me to do 100%. I set it a little bit lower because the year one last year was even lower than that 97%. So we did over. So in the next section you see we overcolcted a little bit this year because that year before there were so many adjustments
026because of homestead exemption there were so many that we w of uh that when we were adopting it the year before we actually collected less and we drew down our fund balance considerably in our debt service fund because there were so the adjustments were so high from that that particular year. So last year I wanted to try to bring it up a little bit. They don't really let you bring it up much. So I'm gonna have to pay it back this year. That's okay. I got some interest revenue on it anyway. That half million dollars. So the INS levy paid was 23.9 million. The total INS dispersements were 24.1. So you can see we're actually shelling out more than we're getting even with that. We still have to pay this half million dollars back. So
027less the um t but that's because of the state revenue that we get. We'll look at that the less the tiff amount for the prior year 3740 and the tiff current year calculated portion is 40,230. So our total INS is that we need is 24074328. Our previous year debt was this 23571380. So, our excess collections were $52,000. So, I have to set a tax rate for this coming year that will pay back that $52,000 sort of. So, here is the calculation of our tax rate. This is also this is our MCR, our maximum compressed rate as set in law. Now, um, so we start out with the our prior year comproller certified taxable values. We look at what the chief appraiser certified values were. Then we bring in what our new um, central chief appraisers
028values are and that 4.65% decrease. And then from there, that's where we get that new comproller. We estimate that new comprollers value. Now this is you know a very important number in calculating state revenue. Um this calculation doesn't always uh work out completely but this is where we start. So using that though and using the state property value increases across the whole state and the average increases then the state will com will calculate this maximum compressed tax rate. You know gone are the days when we could actually set a tax rate if the three cent we could do that extra three cents if that's what we wanted to. Now we're really restricted on what we can set for a tax rate. So our maximum compressed tax rate is 62.81 or 6281. Um the local preliminary
029MCR is the same. The state compression percentage was uh and the so the limitation this is a minimum that they set that we that they can't make us go below this amount which is the 56.89. So we get the lesser of our local preliminary MCR or the um state compression percentage. So the lesser of this one is our local number which is the 6281. Then we add in those previously approved voter pennies that we did in 2015. Um 8 cents for um our golden pennies and then 5.83 cents for our uh copper pennies. Now that's what that's a a 13 cent 13.83 cent uh enrichment rate. We actually approved in 2015 17 cents. So that the copper pennies rate has been compressed from the original um I think it was would it have been nine
030cents that I guess that we got then down to this 5.83 cents. So while that has um is built into the formula so it doesn't necessarily negatively impact us at this point it does leave us capacity. Now it's not a lot of capacity but we do have a tax rate capacity of 3.17 cent if we wanted to do another TR to uh go out for the voters to approve that. Right now though, our total M tax rate with our enriched pennies is 7664. Same rate it was last year for M. That's has is unchanged. And then our INS tax rate that is required to pay our debt is going to be 26.02 for a total tax rate of a dollar2. Miss Davis, um the golden pennies and the copper pennies are those hours to indefinitely
031because they were approved by voters. Is that correct? So this isn't >> unless the law changes >> unless the So those are like we can count on that ongoing unless the legislature >> and I mean they have um I mean there's some things that they have done this year for instance they took the we were supposed to have an inflationary adjustment on our enrichment tax rates that are on our guaranteed yield piece that we get off of these pennies. Now, we did not get that adjustment. They took that they took out that inflationary adjustment from the law and they put it toward the increase in the basic allotment. So, we still gained some money on that for sure, but we would have gained more had they not decreased that inflationary adjustment on the guaranteed yield.
032Now, we are getting sort of out to where um reason it probably didn't hurt us as much as we're richer than we were when we um used to get the a lot more from the guaranteed yield than we do now because we were a much poorer district. But that's they can manipulate it in that way and they did this year. >> Good. Thanks. >> Okay. So, here is what our comparison of the tax rate for the two-year. Last year, again, like I said, 7664 was the tax rate for M. There's no change there. Our interest in sinking last year was 28.254. We are adopting a rate of 2602 for the current year or proposing a rate for that. And then so that is a 2.2 cent reduction in the debt service rate and in the
033total tax rate because our total tax rate last year was $14.89 and this year it'll be a$1266. So again that same 2.2% 2% decrease in the tax rate. Um, now during the bond election, I do have a note there that during the bond election, we estimated that rate would be 32 cents, but because the property value increases and the increase in the homestead exemption, um, that is only going to be the 26 cents. So, we're way under 6 cents under what we had said during the bond election. So, here is what that looks like with all these changes in the law that we've had over the years. Um, we go back to when the law first started changing. Um, there was no that's what we were right at a$145 I think in our M. So,
034just under a$160 in total. And then, so the first year in 2006, they compressed our M rate from that $1.50 50 cap. Like I said, we were only a$145, but they compressed it down to I think it was a$130 that first year, and then the second year it went down to A$14. So, the maximum rate you could have had was A$14. So, then um we had our TR um well, in 2015, so you can see that went up a little bit. Our MO amounts went up a little bit. And the dark blue at the bottom is our debt service rate. The lighter blue is our general fund. And so as it has started compressing in 2019, you can see that general fund piece getting smaller and smaller as they have compressed the tax rate. And
035um we're getting more money from the state. I mean, we're not necessarily losing money. We're not gaining money, but we're not really necessarily losing money from the state, but more of it's coming from the state coffers than from our local property taxes. So then looking at um our revenue challenges the you know we have continuing enrollment declines um as I just talked about we've got some loss this year is coming up but we we're not quite sure where that will be yet. Then there was uh this year the clarification of the new state funding allocations. I was telling Dr. I ran I have templates from three different sources. Mo Casey put out one. Tasbo put out one. Omar Garcia put out one on region 13. Ran the same numbers through all three and got three
036different answers. Not always really close answers either. So it was a even the experts were I think a little confused on this this year. And then of course as we talked about there's an interest rate um uncertainty. We have been generating a lot of money off of our investment income. Um there they are kind of saying it will go down in September, but they said that last year, too. Um and then there's a loss of our indirect cost revenue that was generated off our federal stimulus funds. We've already that's already built into this budget we're going to look at. We've already taken some loss for that. And then we still aren't quite sure what's going to happen with our Medicaid funding, SHs, and um our MAC program. I've also taken those down somewhat, but um
037I'm not quite sure where we're we need to be with those. Um on the expenditure challenges, you we had a lot of program increases that were mandated with the new legislation, mostly salary increases, and then we had unavoidable rate increases that we've talked about, utilities, um fuels, insurance, those kinds of things. and we've had some budget shortfalls including our our health benefits that we have to make up and then you know we have an inability to meet the market wage rates right now. Um we're not we did increase some of our um auxiliary imperas a few years ago but you know the market's catching up with us on that and we're still not really uh certainly not ahead of the market with our teacher rates wage rates either. And then we have a lack of
038funding that has been for a number of years now for maintenance technology vehicle replacements. those. We did put a lot of money into buying buses as we brought transportation in last year, but I think we only got I think we bought five special ed buses and three of those micro buses. So, we still need to be replacing buses. Looking at our beginning fund balance, our beginning fund balance was $65.1 million. We had a projected deficit in the current year of 7.5 million. I think that um is going to be that was the projected deficit for budget that has come down considerably. Um I had it at uh six Oh yeah, sorry. Um so that would have given us a beginning fund balance for this year of 57.6. That 7.5 million that we adopted in the
039budget last year is going to come down considerably. I think that's going to be at least $3 million less than that. So, we'll probably have somewhere around three to three or four three and a half to four million. A big chunk of that though is we received um some in insurance recovery for hail damage and some roof projects. That was a million and a half we had budgeted for that. We've only spent 60,000 of it. So, those funds need to roll over. We've got some bids coming to do that work on those roofs. So, that's one thing that um did not get spent. And I think we've got some other um revenues that have I still don't have a number from the state. They did the comprollers's office gave us new numbers on the appeal
040of our 2021 values, but that has still not been run through the formulas by TEA. I'm not quite sure what that is going to be but I think that uh projected deficit is going to be much better because we have underspent quite a bit on the current year. Um then so um our estimated revenues coming into this next year is 162.5 million. Our proposed appropriations were 168.9 which was a $6.4 million of revenues over or expenditures over revenues. And then we have our um an operating transfer that we do to cover the losses in Guama, Guaca, and the Day School for the Deaf. Then our net change in fund balance instead of the 8.2 million it was last year is only 6.7. So that's some better some and and we'll understand that because I mean
041as much as I I build in uh salary savings when I put in the salary proposals I only budget group health because we have a lot of our employees don't take it. I budget it at um about 80% of what the actual fee is. So I do try to build in a lot of salary savings but with vacancies and um other underexpendures we always underspend by several million dollars. Um the proposed ending fund balance at August 31st is right now is 50.9 million and that's 30% 30.1% of our expenditures which under our policy we need to be at 20%. So, we're still in good shape as far as um that goes. So, here is um a look at the proposed budget for the general fund. As I we talked about um you can see 162.4
042million in revenues. Of that, 68.7 is local revenue. Um mostly property tax collections. The other big chunk would be um investment earnings is still is kind of a a large amount there. The rest of them are not a very large amounts. We have get money from you know athletics from rentals and um gate receipts and uh just those kinds of things. A small amount from tuition. We get some uh physical agent fees from those programs we just talked about that they pay us as our as their fiscal agent. estate programs. Two pieces here. 90.8 million in total for state revenues. Part of that about nine million of that is the TRS on behalf. So for TRS, we pay in a portion of TRS and then the state also contributes some towards our retirement program. Um,
043the way it basically works is if you're a certified employee, like a teacher or whatever, they will pay TRS up to the statutory minimum schedule. Now, the statutory minimum schedule is pretty low compared to what most districts are paying now. But, and anything that we pay over statutory minimum, then we have to pay TRS on. And that um does not impact any of our auxiliary or paraprofessional staff. The state will pay on them completely. But um on teachers or any other certified personnel um supervisors, administrators, then we have to pay a portion of that. But that's about $9 million that they do contribute towards our retirement. And then federal programs, mostly indirect cost revenues. Mishar is what we still have of that. And that's about $3 million for next year. On our expenditures, about 90
04499 million of that is um in instruction and instructional related services. As you can see, that's up considerably from the adopted budget of 92.8 million this past year. Reason for that is because most of our new revenue went into teacher salary increases and then the benefits that had to go along with that. So that is most of that increase is in the teacher salaries. Um instructional and school leadership actually went down slightly from 12.9 adopted last year to 12.7 in the adopted budget for this year. That's your um campus leadership, principal offices and your um program leadership in central office for instruction. on student support services. Again, that went down slightly from 19.7 million to 19.5 million. Student support services includes guidance in counseling, social work services, health services, um transportation, food, food service, not
045in the general fund, but um and then co extracurricular activities. And the then um our administrative support services also went down from 6.1 million down to a little bit still at 6.1 million but from 6.124 to 6089. Stu non- studentent based support services went up a million dollars that it went from 27.4 million to 28.5 million. Now, non- studentent support services includes um plant maintenance and operations, security and monitoring services, and technology. So, again, we've still had some rather large increases in our um in safety and security, but we also had some increases in our maintenance and operations as well, such as property insurance. We know that that went up about $300,000 because of the new V buildings. Um anyway, so that's that went up and part of it was we were just a little
046bit low on some of our I took a little bit too much salary savings out of plantmates and operations last year because we did that good salary increase. They actually had kept their employees almost the entire year. They were fully staffed most of the year and that has not been the case for a number of years. So, you know, it's a kind of a double-edged sword. Good thing that we were staffed. I know maintenance appreciated that they had staff all year. Um, community services went from a million down to 581,000. Now, that is mostly because the transformation zone contract that we had last year was part of community services. And since that ended, that is that decrease for uh in the community services. debt services went up from $318,000 to $480,000 and then our intergovernmental
047charges went from a million 965 to 2.127. did go up and we talked about that intergovernmental charges are mostly um payments that we make to the challenge academy, payments that for our share of the challenge academy, payments to the day school for the deaf for our students that are attending there. Um, payments into the TIFF are in here. And finally, the payments to the, uh, appraisal district, our share of the appraisal district, which again went up $85,000 this year. So, um, we're we're going to check that out, right? Anyway, so that's that is the increase there for the intergovernmental charges. So, our total expenditures against 168.9 million. other sources and uses that is actually down because our um enrollments in Guam and Guaca are up. So last year I budgeted at 535,000. It ended up
048being about 331,000 it looks like. So it's it's going to be consistent with that next year. 298,000. We did raise our tuition a little bit for Guam. We didn't raise it for Guaca, but we did raise it a little bit for Guam. hasn't been raised in I don't know six or seven years. So we um raised it slightly. But while that number goes down up here in instruction, that increased tuition that we pay to them is actually in that number too. So um we didn't really save a lot of money on that. So our net change in fund balance again is 6.7 million. So the beginning fund balance of 57.6 down to 50.9. uh is projected for budget purposes. Kevin, I'm not gonna really talk, we talked a little bit more about the these revenues
049last time, so I'm not going to really go into detail. If there's any questions, we can kind of see where they went up. Local revenues. Um again, our property taxes because of the homestead exemption are going down about a million, too. and our state foundation school program with all those new revenues that we received for salary increases and all actually went up 6.1 million. The offset of those two um just not including like the investment income going down which is just an estimate at this point uh is about 5 4.9 million or actually picked up between the two. So, our total um local and intermediate source revenue um actually that's our total revenue is down about a million dollars overall. Oh, let me let me just address a little bit on the when you see
050these decreases in the federal funds, some of that is -ate projects that we had this year that we may or may not get again um depending on applying for them. And then again we talked about that Medicaid on our appropriations. This is the increase in appropriations pretty flat with um this is by object of expenditure instead of functional expenditures like you're required to adopt for budget purposes. So biggest increases here is in payroll which is to be expected because that's where we got our new money was for those salary increases. So as you can see we have the biggest increase there is payroll. Most of the other things were rather flat. Supplies and materials went up slightly. Contracted services is down. Other operating costs are down. And our debt service and capital outlay be don't
051even really show on the chart because we don't really have a lot of uh cost in those areas for the general fund. >> Mr. Davis. Uh, does TRS I know that you know with the teacher pay raises and some of that being from the state so from us. Um, so looking at the payroll costs for this projected year, is that including the TRS contributions? >> Yes, it is. >> Okay. In the payroll cost diagram here >> because the payroll cost will include salaries, wages, and all the benefits. >> Okay. and some of those other benefits that are associated with that salary increase. Medicare, um workers comp, unemployment, um health insurance went up to it's not uh not a feature of the salary increase, but that one, as we talked about, did go up quite a
052bit as well. So, this kind of looks at what those salary increase benefits were. Again, we've talked about this before on how much um this cost of the increase for the teachers was 3.7 million and then our administrative professional and auxiliary and all. So, a total t cost of the salary increases was just under 5,4.9 million. Our benefits that were related to that were $589,000. We received um money under HB2 of $3.7 million. So we had we came up with out of other monies which included to some extent because the benefits were included in that ABC allotment that we got that we could pay for the the benefits with that. So we came up with a million8 outside of that money that was done that was given to us for the salary increases. Again we
053we talked about this last time what our other salary other cost increases were. Um there's that benefit number of a million3 um an increase in our state funding for special education. So 2.3 million went into that program. It is offset by revenue. So that is um costneutral in a lot of respects for us. Um and then our tuition costs went up for the JJ and advanced academics went up 308,000. I was talking about a while ago. And then our property and casualty insurance went up 200,000. This is the child nutrition fund budget. Um right now I do have this uh balanced. We will probably be coming I know we'll be coming back in September as we identify some projects because we still do need to draw this fund balance down. we have an excess, you
054know, unlike some districts, we actually make money in our food service program and so we have an excess fund balance here. Um, and we need to draw that down. Right now, we have um 1.2 million in campus walk-in cooler freezers that we have bid and that will go be constructed in this coming year. That's not included in this budget yet. We'll amend that in once we uh get into the next year. and then.5 million in emergency generators. Um, we have to spend down 2.8 million of this fund balance to be in compliance with TDA. You can only keep three months worth of fund balance for um your program and we're over that amount. >> Hard. It just seems like, and this isn't against our cafeteria of food service any seems like for the past two
055or three years, we've always had a extra in this and it's always been waiting for coolers or refrigerators or something. Is that like a delay that we can expect every year? >> Part of it because the ones the freezer coolers we talked about last year are these same freezer coolers. They didn't get done this year. >> Okay. So, >> so it rolls over then. >> Yeah. So, we still we bid them. We had the design work done in all this past year and bid them and I think they were awarded maybe last month at the board meeting. Oh, they'll come in August. So, they'll be awarded this month, but then they won't be constructed and spent until next year. So, the same ones we were talking about last year. The >> same thing. So, will
056we be able to pull that down this year to within >> I'm hoping so. I mean, that's we did a lot of equipment purchases this past year. We did draw it down about three looks like we're going to draw it down about 400,000 this year from some of the small equipment items that we got. Um, but yeah, there's and you know, part of the thing is I shouldn't probably say that out loud. Um, we could probably, you know, they they get paid on the same salary schedules. We have to have an adopted salary schedule and we could probably um we also have a contract. We contract our food service program and TDA keeps a tight control on those contracts. We have to the even the bid form that goes out TDA has to approve and
057so we're really limited and they have to make money. So part of the contract with Zedexo is they have to make money. So they keep adding to our fund balance and we're like, well, we need to draw this down. So, I think there needs to be um well, I I I know we've talked about maybe bringing that in house like we did the transportation department and that might be something that needs to be looked at in future years, but um right now unloping, you know, we've we've stayed with them. We have another year on the contract. one more year after this. Yeah. So, that is something that we could look at at that time. So, anyway, it looks like they're going to be about 7.3 million because we did draw it down some this year
058for next year until we amend in that money to do those uh that walk-in freezer cooler. So then our debt service funds. This is uh what the debt service budget looks like. Again, we are going to be drawing that down. Not the $52,000 that we're required to under um because of our excess tax collections last year, but because we have some investment income and we have some hold harmless. Uh well the whole harmless goes into the calculation but because we have some investment income in our local revenues um that does give us a little bit of a cushion on drawing that 52,000. It'll only looks like it'll draw down about 237,000. So that still gives us pretty good shape. You can see we got down to about 3.9 million um ending fund balance in 2324
059which was a little bit low for us because we'd been running over 4 million. And so when you have at least a little bit of fund balance, it cushions you against those adjustments and values because you have no other source really of revenue for the debt service fund. and you want to be able to have some flexibility in case you know if you do choose to um refund bonds or do something of that nature. So this will be um like I said that will have an ending fund balance with what's planned right now of 5.3 million. Our debt service for this next year in principal payments will be 10,250,000. You can see that is up quite a bit from what it's been. Our principal payments LA this past year were 5,ion240 um and then that's
060going to be 10,250 this year. So uh the way the debt was structured the in investment um interest revenue is coming down considerably from 20.7 million down to 15.8 million and then the that difference will be picked up in principal payments. So looking at that, what it looks like, they keep it very flat. When you issue bonds, part of what your financial advisor's job is to do is to keep this debt flat. So you can keep a fairly even tax rate to on on this. So you can see we paid off um we have paid off our 2016 series will be paid off in 2030. There's just a little bit left on that. And the 2016 series was a refunding of some of our 20089 bonds that we issued to when we built University and
061Hines, Dean Highland, and Bells Hill. Um, and then the 21 series in yellow was actually refunded most the rest of the 20089 bonds and another bond series that we still had outstanding. This these are actually taxable bonds. So, uh, all of the repairs, uh, or the renovations and additions that we did with 20089 because this is the 2008 bonds that were completely uh, refund funded with these bonds. um because they're taxable. There is no penalty to where if you were to um get rid of one of those buildings that you would have to pay you would have to pay money back to the bonds because they were taxable bonds to begin with. So then the orange is our 2022 bonds that we issued in this last uh election and the green is our 2022B. The
06222 were issued in March or so and then the 22B were in August. So they ended up with both 22s and then 23 was um this the last series and the final bonds that we had um available to us with the 2021 election. So, those will pay off. Um, the 202 and 22b pay off in 2022 and the 2023 bonds pay off in 203. But as you can see, they remain pretty stable from 2039 when those uh 2021 refunding bonds finish to uh 203 or 202. So these are the other budgets as I said that are required to be adopted by the board are uh two budgets that make up the greater Waco advancedmies. The health care and the manufacturing health care budget um is about a million251. The manufacturing budget is a million369. Now
063the health care uh program is funding itself currently. Guamama still is just a little short even with the increase that we did of funding its program. So it's about 67,000 or $68,000 short of funding its program. Mlennon County Challenge Academy, they get no money ever because I control that pocket book and so they're always in balance. Um and then the day school for the deaf is uh the sources there. they they are the ones that are dipping into um our fund balance if you will because that most of what we have to um move over there to make them whole is for the day school for the deaf. So their expenditures right now are budgeted at 795,000 and the revenues are 564,000. So we'll need to transfer 230,000 over there to make them whole. Okay,
064that's it for the proposed budget. So the tonight you will need to set the date for the public meeting to adopt for the hearing and then the adoption of the budget and the tax rate. And then the only other thing on the calendar after that is 91 is the start of the fiscal year. We roll those new budgets in. We got We got This was This We're moving. Thank you, Miss Davis. We're moving on to item number four. Consider, discuss, and take appropriate action regarding the notice of the public meeting to discuss budget and proposed tax rate for the 202526 fiscal year. Setting the proposal tax rate and the date, time, and place for the public meeting presented by Cheryl Davis. So, what you have in your packet here is the actual notice that will
065go in the paper this weekend that this is our truth in taxation. The notice as required by law that sets out and we'll talk a little bit more about that at the public hearing. I kind of go through some of these calculations there. Um, gives you the the same that we've just kind of talked about with the comparison of the budget and the increase decrease over last year. the appraise values um talking about what our bonded indebtedness is. We still have outstanding bonds of 44 444 uh million dollars. And then it compares those rates with last year's rates to generate the same amount of revenue to cover our programs. And then there's a comparison of the levy with last year's levy and the impact on the average residents. So with that homestead exemption, it would
066go down $222 a year. Um and then the fund balances are estimated at the point in time I gave this to the controllers. Also in that packet is the that we are now required to give you is the tax rate calculation worksheet. Um this is what the tax office actually does this for us and goes ahead and calculates what uh what we can use. And so we go we have a circular calculation with this. We go back and forth between us and the tax office to get um that especially that debt rate down to the the portion of a penny that they're satisfied with. And the other thing I didn't mention that's was also in your other packet is what the official budget looks like by function because the the sheet we were looking at
067kind of groups some of the functions. This is what you actually adopt by function. This is what you're required by law to adopt. And then this other kind of weird schedule that is posted on our um website is required to be posted on our website. It actually combines the general fund, the food service fund, and the debt service fund in one schedule, which kind of makes no sense at all, but that that's the schedule that's going to be posted. So, we'll post that tomorrow after this meeting. Thank you, uh, Miss Davis. I will now entertain a motion. Um, I move that we approve the notice. No, we we approve the notice of public meeting to discuss budget and proposed tax rate for the 2025 2026 fiscal year, setting the proposed tax rate and the date,
068time, and place for the public meeting August 28, 2025 at 6 p.m. at the Waco ID administration building. >> Thank you, Mr. David. Do I have a second? >> Second. >> Thank you, Mr. Bledo. >> Mr. Bledo, is there any discussion? >> No. >> Mr. Abnusi, is there any discussion? >> No. >> Mr. Davis, is there any discussion? >> No. >> Mr. Mr. Patton, is there any discussion? >> No. >> Mr. Cho, is there any discussion? >> No. >> All in favor say I. >> I. It passes. This is the Waco SD board of trustees will now go into close session at 707 this time to pursue the Texas Open Meeting Act, Texas Government Code Chapter 551 sections 071.072.076 [Music] Heat. [Music] Heat. [Music] We at 8:16 the board will reconvene in open session and
069we're and we're adjourned. [Music]