The district may be over-budgeting for state aid, leaving an additional $20.5 million deficit in that category at the end of the coming year. That would be in addition to any structural budget deficit already projected.
Updated on 9/7/2010 with additional information based on a conversation with Texas Education Agency. Please scroll to the bottom to see the update.
On Friday, we were forwarded an email from Pam Colli, of Flower Mound, that was being sent to local homeowners associations within Lewisville ISD. The email raises a number of questions about LISD's financial situation, including a couple of claims we had not seen before:
· In the 2007-2008 school year, LISD over projected enrollment by 1,600 children. LISD had projected a 48,500 student enrollment and actually only had 46,900 students. Because of the over projections, LISD owes the State of Texas Department of Education $14.3 Million.
· In the 2008-2009 school year, LISD over projected enrollment by 2,619 children. LISD had projected a 50,200 student enrollment and actually only had 47,581 students. Because of the over projections, LISD owes the State of Texas Department of Education $22.6 Million.
· This all means that for those 2 years combined, LISD owes the State $36.9 Million and they have to pay it back. What did they do with all the money that they received for the students that we did not have????? They spent it.
There are other claims in the email, but I want to focus on the above, since they are the big ones. I note that since it is a holiday weekend, it will be Tuesday before I can talk to anyone from TEA or LISD who can clarify the information.
I did reach out to Colli to see if I could get more information about the source, and she said that she had called the Texas Education Agency in Austin, and that they had given her that information. Since we don't have access to TEA personnel this weekend, I did consult online data from TEA's Public Education Information Management System (PEIMS) to see if I could verify enrollment data.
Enrollment numbers can by tricky, because students move around, both in-district and out-of-district. State funding comes to a district based on weighted average daily attendance (WADA), so attendance is tracked closely by the state. PEIMS has enrollment data for each school district in the state from 2009/10 school year, going back for a number of years.
LISD's budget each year contains enrollment projections for the upcoming year and the three following years. As with most projections, the further out you project, the less certain you can be. So each year, projections are modified based on the current outlook.
Here is what I found for the past three years:
Year:
2007/08
2008/09
2009/10
Projected Enrollment Per Budget
50,755
51,213
50,646
PEIMS Enrollment Reported
49,637
50,216
50,840
Over-Estimation (under-estimation)
1,118
997
(194)
As you can see, these numbers don't at all match the numbers claimed in the email.
Because enrollment estimations are used when hiring teachers, and most of the money for that comes from local sources, it is important that a district get as close as possible to being right on this. In this case, it would appear that actual enrollment numbers are closer to the projections than what the email claims. The caveat is that since the source claims the numbers were verbally relayed, we really don't know what version her source was using.
On the chance that the numbers being quoted might be Weighted Average Daily Attendance (WADA) numbers, I thought I would check those. Final WADA is not available for 2009/10 yet, but here's what we have for the previous two years, which are the years claimed in the email:
Year:
2007/08
2008/09
Projected WADA Per Budget
57,962
58,940
Actual WADA
57,262
57,976
Over-Estimation
700
964
Given the amount of budgeted state revenue in each of those years was $2,275 and $1,965 per WADA, we would estimate that the amount of state revenue overestimated would only be about $1,592,569 and $1,894,092 in those years - a far cry from the $14.2 million and $22.6 million claimed in the email.
We'll follow up with LISD and TEA on Tuesday, but for now, it seems like this email doesn't have much credibility.
Update 9/7/2010, 8:30 a.m. Colli's letter has now been published in the Cross Timbers Gazette. We've continued to correspond with Colli, and have submitted a question to TEA.
Update 9/7/2010, 1:11 p.m. I'm going to try to clarify this more later, but I want to get this out here ASAP.
The numbers we're talking about here are Foundation School Program numbers. This is where the majority of state funding comes from.
In the 2007-08 budget, the district calculated for its budget that it would receive $99,974,167 from FSP. The State of Texas, using its own enrollment projections had calculated $114,979,434, which after subtracting $755 for a previous overage, it paid the district $114,978,679. When the near-final numbers came in, with actual WADA being considered, the correct amount should have been $100,616,187, a difference of $14,363,247. So that's where the $14.3 million number came in. (rounding error included).
But note that the district had budgeted conservatively based on $99,974,167, which is lower than the final number. The extra money was banked, and LISD earned interest on it.
In the next year, the $14,363,247 was subtracted from the $114,990,213 that the state calculated, again based on its own enrollment projections. In this way, LISD "trued-up" with the state, and did not owe anything else on the liability. So the state paid out $100,626,479. But in this year, LISD only budgeted $88,022,373, knowing that once again, enrollment projections would come in short. By the end of the year, the actual amount the state should have paid ended up being $92,321,581, which was $22,668,632 $22.7 million less than the original inflated figure of $114,990,213 that the state had figured.
Again, since LISD budgeted conservatively, that $22.7 million had been banked the district was able to bank $12.6 million and was earn interest. The $22 million was taken right off the top of the 2009/10 amount that the state would have otherwise sent.
At this point, the amount of state over-paymentsdifference banked should have been about $37.1 $27.6 million, based on the difference between budget and state aid received.
In 2009/10, the state figured up, based on its own projections, that it would pay LISD $94,283,817. After subtracting the $22,681,514 overage from the previous year, it paid $71,802,303 $71,602,303. Here's where things have gone awry: the 2009/10 LISD budget called for $102,641,989 in state aid. But, the state had only ended up paying $71,602,303, thus LISD over-budgeted by $31.0 million. By the end of the year the state's DPE (District Planning Estimate) number showed that based on actual enrollment and WADA, the district should have received $75,375,158.
What this means, in the end is that the district had over-budgeted in 2009/10 by approximately $27.2 million. THAT money was likely spent. In order to do so, the district would have had to draw down the $27.2 $27.3 million from the $37.1 $27.6 million that had been banked. This leaves about $9.9 -$3.4 million banked from previous overage.
(Of course the differences above between budget and actual state aid assume the actual amounts spent stayed on-budget. It's possible the windfall was spent, but we just haven't gotten that far yet)
So, what does it mean going forward into 2010/11?
Well, the State of Texas estimates our current allocation at $90,195,062 for this coming year. No adjustment is shown yet, but if estimates hold true, LISD could actually end up with about $3.7 million added to that. This would bring us up to about $93.9 million in expected state aid. But, the LISD budget calls for $114,420,608 in state FSP dollars.
If the state estimates held true, then the 2010/11 school year would end up with another $20.5 million in over-estimation of budget over actual state aid received. If we covered $9.9 million of this with the remainder of our banked amount from previous state over-payments, This still leaves us with $10.6 Although this doesn't represent a debt to the state, it would represent a total of $47.7 $51.5 million in over-estimation of revenue from the state in the current and previous fiscal years, and would mean that LISD has spentplanned to spend a total of $10.6 $20.5 million more than it could reasonably expect to take in. Of course, preliminary numbers from 2010/11 would not be available until September of 2011, so we wouldn't know until then. Perhaps the district knows something more about an increase in WADA than the state knows, since that had been the case in previous years.
In any case, we think conservative budgeting would have been to include the banked amount on the budget, and show it each year so that board members and the public could see the trend. Especially in this year and last year when amounts were likely being drawn down from the over-payment, that is something that should have been shown, so that board members would not be surprised in the next year when there was nothing to draw down against, and it would artificially appear that state funding had dropped.
See links below for TEA source data. LISD budget numbers are found on lisd.net.
Update 9/7/2010 11:33 p.m. This is a big hairy mess. I should be in bed, but I'm sitting here trying to reconcile these numbers with a spreadsheet, and I realize that I got some math wrong in what I originally wrote in the last update. I'm going to strike out the numbers I got wrong, and update them with corrected versions, which seem to be worse. Here's a PDF of my spreadsheet.
From: pcolli1@****.com To: pcolli1@****.com CC: ******@dallasnews.com Sent: 9/4/2010 1:19:30 P.M. Central Daylight Time Subj: Please Get this Message Out to Your Homeowners in Your Subdivision RE: Lewisville ISD Tax Increase Upcoming Vote
Hi Everyone,
I am sending this email out to the presidents/property management companies of the HOA’s in Flower Mound to see if you all will PLEASE forward this email to the home owners in your subdivisions in regards to the upcoming LISD Tax Increase Measure that will be put to the voter’s mid September and early voting has already started.
The real information regarding why LISD is projecting a deficit next school year of $22 million is NOT being told. Dr. Roy did his town meetings in various schools in the spring and his message was basically “Your Schools, Your Child, Your Choice” in regards to raising our property taxes. Everyone is worried that we will have to cut things out of the budget and therefore our children will suffer.
Well, sometimes, we have to tighten our belts in economic situations. There are many things that I am aware of that LISD is finally doing to save money but everyone needs to understand what is really going on.
The REAL TRUTH is this:
· In the 2007-2008 school year, LISD over projected enrollment by 1,600 children. LISD had projected a 48,500 student enrollment and actually only had 46,900 students. Because of the over projections, LISD owes the State of Texas Department of Education $14.3 Million.
· In the 2008-2009 school year, LISD over projected enrollment by 2,619 children. LISD had projected a 50,200 student enrollment and actually only had 47,581 students. Because of the over projections, LISD owes the State of Texas Department of Education $22.6 Million.
· This all means that for those 2 years combined, LISD owes the State $36.9 Million and they have to pay it back. What did they do with all the money that they received for the students that we did not have????? They spent it.
· Also, for many years, we have been told that we were a property rich school district and had to pay into the State’s funds for poorer school districts, considered “Robin Hood”. The truth is that LISD has NEVER had to pay the “Robin Hood” tax.
Other Things to Consider:
· The upper management is too heavy. LISD creates new positions and titles to promote within.
· Why did LISD have to build 2 separate football facilities – Flower Mound H.S. and now Marcus H.S.? Why couldn’t they have built one really nice one for the 2 high schools to share? Then maybe taxpayers would not have to pay to play the Lewisville vs Marcus, Marcus vs Flower Mound, Flower Mound vs Lewisville, etc. at the old Cowboy Stadium and now moved to the University of North Texas (UNT) Stadium.
· When the new Marcus football stadium was built, LISD had to move and rebuild the baseball field and soccer fields. Was that free????
· Why is LISD building a new 9th and 10th grade campus for Lewisville High School and a 9th grade campus for Marcus High and a separate one for Flower Mound High??
· Instead of building a new basketball gym at Marcus, why didn’t LISD built one really nice arena for both Marcus and Flower Mound.
· It is all about accountability and no one has asked the Lewisville Board of Regents or Dr. Roy to be accountable. Someone has to pay – nothing is Free.
If you would like to call the Texas Department of Education to verify this information, please do. I talked to a gentleman named Leo Lopez and his direct number is (512) 463-****. The main number is (512) 463-9734.
I have tried to get the Flower Mound Leader as well as the Dallas Morning News to put this in print but to no avail. That is why I have decided to go this route. Bottom line is we should vote NO on the tax increase. LISD does have a $100 Million dollar slush fund and maybe they can work on ways to better manage our tax payers dollars along with the State of Texas funds that we receive.
Sincerely,
Pam Colli
Poster
Thread
Anonymous
Posted: 2010/9/6 10:23 Updated: 2010/9/6 14:44
Re: Entire Email
I understand Pam's frustration but weren't the funds for all of the building projects that she mentions from bond elections that were passed by LISD voters? The time to have protested these items were when the bond election(s) were held.
Poster
Thread
Anonymous
Posted: 2010/9/6 15:01 Updated: 2010/9/6 18:57
Re: Entire Email
Appreciate the last line of your story. Ms. Colli's numbers are laughable and clearly meant to sway voters to defeat the tax increase election. That may be the appropriate response to the vote; let's let the voters decide that based on facts, not fiction. The numbers cited and some of the arguements listed are crazy and pure fabrication for anyone that has watched the district over the years.
The district's 2008 financial statement, sent by Colli, only shows a total of $1,033,247 owed to other governmental entities.
Poster
Thread
Anonymous
Posted: 2010/9/7 18:19 Updated: 2010/9/7 20:43
Re: 2008 Financial Statement
Do you have any idea about the claim that LISD has never been a Robin Hood/Chapter 41 district? I could have sworn that there was a vote several years ago on whether to give money directly to the state, find a poor school district and work directly with them, etc. If we had that election, then LISD was in Robin Hood/Chapter 41 but I can't find anything on the web to determine that.
Good question. TEA tells me that we are indeed a Chapter 41 district, but that we didn't actually end up with enough excessive wealth to have to send money in to the state or to another district.
Like you, I sort of remember having that decision. I'm not sure if it was at the polls, or whether it was just something that was written about.
Poster
Thread
Anonymous
Posted: 2010/9/7 21:09 Updated: 2010/9/7 21:39
Re: 2008 Financial Statement
I remember that vote as well.
One of the ways the state can take money from "wealthy" districts is to give them less state funding. The district doesn't have to write the state a check.
Superintendent Addresses Some Aspects of State Aid Questions
In today's Friday Flash email, Lewisville ISD Superintendent Dr. Jerry Roy addressed some of the assertions made by the original emailer, but not our question about last year and this year's over-budgeting for state aid. Since the Friday Flash is not archived online for non-subscribers, we're reposting the whole thing:
As you know, our district facilitates questions concerning rumors in the community. Recently, there have been questions about administrative costs, last year's stimulus funds, budget cuts, our financial status with the State and being a recapture district. Below is a brief list of the facts regarding these questions:
Administrative costs - Based upon the AEIS data from the Texas Education Agency, LISD's total expenditures for administrative costs is 2.9 percent. Our administrative cost to instructional budget ratio is 6 percent. The state allows districts, with 10,000 or more students, to have an administrative to instructional cost ratio of up to 11 percent. Please note we opened four facilities this school year, Career Center East, Hebron Ninth-Grade Center, Lewisville Elementary as well as a new and expanded DeLay Middle School.
Stimulus funds - Last school year, the district received $120 per student. The state mandated a portion of the $120 go toward raises for teachers, librarians, counselors, speech pathologists and nurses. The district expanded this five-employee group to six by adding diagnosticians. Out of the $120, $80 was used for the raises for these six employee groups. The Board approved to use the outstanding funds to provide raises for remaining staff.
Budget Cuts - Last school year, the district cut $19 million by reducing staff through attrition, implementing a hiring freeze except for teaching positions, reducing campus and administrative operational budgets, reducing the substitute budget and adjusting school start times for the 2010-11 school year which saved transportation costs.
LISD Owes the State Money - Annually, the state makes enrollment projections for all Texas public school districts. The projections are either too high or low. For the past few years, the state's projections for LISD have been high. Therefore, LISD reserves the additional funds sent by the state and earns interest off these funds. Subsequently, the state adjusts future payments to recoup the over-payment. The outcome is a net increase for the district since we have earned interest on the reserved funds.
LISD is a Recapture District - Recapture, or Robin Hood, districts are those that fall under the provisions of Chapter 41 of the Education Code. The provisions of Chapter 41 require districts that have property wealth in excess of $319,500 per student in weighted average daily attendance to shed wealth. Generally, LISD does not actually send money to the sate or another district. Instead, the state just reduces its aid to the district accordingly.
We are proud to be a Texas Education Agency "Recognized" district with 38 schools rated "Exemplary" and 20 "Recognized" campuses. This is due to more than 6,000 individuals who put student success first every day.
Throughout the year, I encourage you to visit the district "Rumor Watch" webpage at www.lisd.net/communications/rumors. For additional questions, please contact the Office of Public Information at 469-948-8152 or send an e-mail to Public Information Officer Karen Permetti at permettik@lisd.net.
I will note that we often do email Karen Permetti, just like we did at the beginning of this week when this email came out. We have yet to receive any response.
LISD Over-budgeting for State Aid may be Explained
I'm still looking at the numbers, but one reader sent us some further explanation of why LISD's budget for state aid was so high, in comparison to the state projections. Part of the amount has to do with the SFSF Foundation School Grant, which is some federal stimulus money. Another part of the amount has to do with state over-projections of district property tax revenue.
I'll post something as soon as I can intelligently explain it.
Entire Email
LISD Over-budgeting for State Aid may be Explained