Published: August 27, 2008 09:58 am            

Trustees approve budget, tax rate

Agree to pay down bonds with I&S funds

By Pete Kendall

special to the times-review



Cleburne school trustees took less than 10 minutes Monday night to approve a $50.8 million budget and $1.23 per $100 valuation tax rate.

They needed slightly longer to address an age-old question facing all Texas school boards: When is an operating fund balance considered sufficiently funded?

Cleburne ISD begins the 2008-09 year with a fund balance of about $10.5 million. The state recommends that school districts keep enough money in reserve to cover three months operating expenses.

By voting to call $1.3 million in 2001 bonds early and fund them from the interest and sinking fund, or debt service, portion of the tax rate, the board showed it preferred to keep the $10.5 million fund balance intact for the time being.

Alden Nellis, the only community member to address the board, advocated retiring a minimum of $1.3 million in bonds through the fund balance so the I&S tax rate could be reduced by about a nickel.

“I was suggesting that they pay the bonds down, $1.3 million from the general fund balance, which right now has an excess of $10.5 million,” Nellis said, “and then lower the rate from 19 cents to 14 cents.

“This was in line with their estimates on possibly having a 15 cent rate without retiring any bonds early. If they retired the bonds early out of the general fund, then they wouldn’t have to take that into account on setting their I&S rate. They could set it at 14 cents, which would give the taxpayers a 5.66 cent break on their tax.”

He said he wouldn’t have been “at all” concerned about the fund balance dipping too low to take care of emergencies.

“They’re almost too high by the state regulations,” Nellis said.

The board disagreed.

“Our impression was there’s an amount in savings we need to have to meet our bills when our bills come due,” said board president Stu Madison. “The recommendation is to have as high as $12 million. What we’re looking at having is about $10.4 million. We felt that reducing our fund balance any further would be detrimental to the finances of this district, especially in light of some of the problems we faced last year.

“We need to keep a good savings account to pay our bills. That’s what we voted for.”

Besides calling $1.3 million in bonds early, the board voted to use $650,000 of accumulated I&S fund balance to redeem additional bonds. The district calculates the result be a $628,000 savings in interest to taxpayers.

“We had the opportunity to reduce our bond indebtedness by close to $2 million,” Madison said. “The board felt the most prudent action to take was to retire our debt early.”

The board also approved an amended 2008-09 budget that includes a payment to Texas Education Agency of $362,304.31. TEA ordered the school to repay that amount after an investigation by agency auditors revealed the district had improperly spent federal education title funds.

TEA also requires the district to document and obtain agency approval for expenditures related to grant funds.

The board also approved fund balance expenditures of $1.99 million for an indoor workout facility and $1.74 million to replace outdated technology hardware and for the full integration of technology into all school district classrooms.

In other action, the board unanimously:

zx Adopted the 2008-09 salary scales for teachers and staff

zx Approved a certified tax roll of some $3.1 billion

zx Adopted a maintenance and operation tax rate of $1.04, identical to 2007-08

zx Adopted the I&S tax rate of 19 cents

zx Approved the purchase of elementary technology software

zx Approved hiring Ashley Bryant as a teacher at Santa Fe Elementary, Cynthia Daniels as a nurse at Cleburne High School, Miranda Davis as a teacher at Marti Elementary, Charles Kim Race and Andrea Wooten as teachers at Smith Middle School and Rosibel Ordonez as a teacher at Cooke Elementary.

        

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