[00:00:02]
ALL RIGHT. GOOD AFTERNOON EVERYONE.
[1. CALL TO ORDER AND ESTABLISH QUORUM]
WE'LL CALL THIS SPECIAL MEETING OF THE CARROLL ISD BOARD OF TRUSTEES TO ORDER ON AUGUST 5TH, 2024 AT 5:00 PM.DID I SAY AUGUST 5TH? I MEANT SEPTEMBER 9TH, 2024 AT 5 P.M..
OUR FIRST AGENDA ITEM IS EXECUTIVE SESSION.
[2. EXECUTIVE SESSION (Part 1 of 2)]
THEREFORE, WE WILL ADJOURN TO EXECUTIVE SESSION IN ACCORDANCE WITH TEXAS GOVERNMENT CODE 551.071, 551.072, 551.074 AND 551.0821 AT 5:01 P.M..ALL RIGHT, GOOD AFTERNOON. WE'LL CALL THIS MEETING BACK TO ORDER AT 6 P.M..
[3. OPENING PRAYER AND PLEDGES OF ALLEGIANCE/MOMENT OF SILENCE]
WILL YOU ALL PLEASE RISE? DEAR LORD, WE COME BEFORE YOU TODAY WITH GRATEFUL HEARTS, SEEKING YOUR GUIDANCE AND WISDOM IN OUR DISCUSSIONS AND DECISIONS.IT'S IN JESUS CHRIST'S NAME THAT WE PRAY.
AMEN. WILL YOU PLEASE JOIN ME IN THE PLEDGE OF ALLEGIANCE? NOW FOR THE TEXAS FLAG.
PLEASE JOIN ME FOR A MOMENT OF SILENCE.
OKAY. OUR NEXT AGENDA ITEM IS PUBLIC COMMENTS.
MISS SHELTON, DO WE HAVE ANY PUBLIC COMMENTS TONIGHT? WE DO NOT HAVE ANY THIS EVENING.
WE HAVE NONE. SO WE'LL MOVE ON TO THE INFORMATION PORTION OF OUR MEETING TONIGHT.
[6. INFORMATION]
ITEM NUMBER 6, 6.1, CONSIDER MAXIMUM CLASS SIZE WAIVER EXEMPTION, MR. NICKEL. GOOD EVENING, MR. BRYAN, AND BOARD OF TRUSTEES.EACH SCHOOL DISTRICT IN TEXAS IS REQUIRED TO REVIEW ITS CLASS SIZE ENROLLMENT TO DETERMINE WHETHER ITS CLASS SIZES FOR GRADES KINDERGARTEN THROUGH FOUR MEET THE REQUIREMENTS OF TEC 25.112.
IF THE REVIEW INDICATES THAT ANY CLASS FOR GRADES K THROUGH FOUR EXCEEDS THE ALLOWABLE CLASS SIZE LIMIT OF 22 STUDENTS PER CLASS, THE DISTRICT MUST SUBMIT A REQUEST FOR EXEMPTION UNDER TEC 25.112(D) DISTRICTS ARE TO ENTER ONLY THE TOTAL NUMBER OF CLASSES OR SECTIONS, AND THE REASONS PER CAMPUS THAT EXCEED THE 22 TO 1 RATIO.
CLASS SIZE LIMITS DO NOT APPLY TO PHYSICAL EDUCATION OR FINE ARTS CLASSES.
THE EXCEPTION REQUEST MUST BE SUBMITTED TO THE COMMISSIONER NOT LATER THAN THE LATER OF OCTOBER 1ST OR THE 30TH DAY AFTER THE FIRST DAY THE SCHOOL DISTRICT EXCEEDS THE LIMIT.
CLASS SIZE LIMITATIONS GENERALLY APPLY THROUGHOUT THE SCHOOL YEAR, WITH THE FOLLOWING EXCEPTIONS.
ONE. IT'S ANY 12 WEEK PERIOD SELECTED BY THE DISTRICT WITH A SIGNIFICANT PORTION OF MIGRATORY CHILDREN, AND THAT'S 25.1121.
OR THE SECOND SITUATION WOULD BE THE LAST 12 WEEKS OF ANY SCHOOL YEAR FOR ALL OTHER DISTRICTS.
WE HAVE FOUR SECTIONS FOR THIRD GRADE IN JOHNSON ELEMENTARY.
WE HAVE THREE SECTIONS OF THIRD GRADE.
OLD UNION, ONE SECTION OF FOURTH GRADE, ROCKENBAUGH ELEMENTARY, TWO SECTIONS OF FOURTH GRADE, AND WALNUT GROVE ELEMENTARY, ONE SECTION OF FIRST GRADE AND ONE SECTION OF THIRD GRADE.
ALL RIGHT, OPEN IT UP FOR QUESTIONS, COMMENTS? YES, I JUST HAD--OH GO AHEAD.
OH I WAS JUST GOING TO ASK, HAVE ANY TEACHERS OR PRINCIPALS EXPRESSED CONCERNS WITH THE CLASS SIZE AND THEIR ABILITY TO MANAGE THOSE? THEY HAVE NOT EXPRESSED ANYTHING TO THAT DEGREE.
[00:05:04]
INCREASE, WE WOULD LOOK AT OTHER OPTIONS.NOW THAT WAS MY EXACT QUESTION.
I THINK WHEN THE COMMUNITY OFTEN FRETS AND CLASS SIZES ARE HUGE, WHATEVER, AND AGAIN, THESE ARE WE'RE TALKING ABOUT IN EVERY CASE PROBABLY JUST GOING FROM THE STATE 22 TO A 23.
THAT'S CORRECT, AND TO TRUSTEE BOTTOM'S POINT, IF THE PRINCIPALS AND THE TEACHERS ARE LIKE 22, 23.
NO? WE'RE OKAY WITH THAT? WE'RE NOT CONCERNED, RIGHT? IT DOESN'T INCLUDE ALL ELEMENTARY CLASSES.
I JUST I THINK YOU SAID ABOUT A HALF A DOZEN OR SO THAT IT IMPACTS.
MR. NICKEL, WILL YOU REPEAT THOSE NUMBERS AGAIN? WHICH CAMPUSES? SURE. CARROLL ELEMENTARY HAS FOUR SECTIONS OF THIRD.
THIS HAS BEEN A BIG CLASS THAT'S BEEN TRACKING THROUGH OLD UNION ELEMENTARY, HAS ONE SECTION OF FOURTH ROCKENBAUGH ELEMENTARY, TWO SECTIONS OF FOURTH, AND AT WALNUT GROVE WE HAVE ONE SECTION OF FIRST AND ONE SECTION OF THIRD.
SO, MR. NICKEL, IF I THINK BY THIS POINT WE'RE TWO WEEKS INTO THE SEMESTER OR THE YEAR.
DO WE ANTICIPATE THERE WILL BE MORE ENROLLMENTS IN THE COMING WEEKS? AND IF SO, DOES THAT CHANGE WHAT YOU DO? IF YOU NEED TO PUT AN EXTRA CHILD OR 2 OR 3 INTO A CLASSROOM, DO YOU REREPORT IT? DO YOU MOVE PEOPLE AROUND? HOW DO YOU DO? WHAT DO YOU DO IF WE HAVE MORE KIDS ENROLLED? FROM THIS STANDPOINT, IF WE HAD ADDITIONAL CLASSES THAT WOULD NEED A WAIVER, WE WOULD HAVE TO COME BACK THROUGH THIS PROCESS OF NOTIFICATION.
AS FAR AS ANTICIPATING, I KNOW THAT LEADING UP TO THE FIRST DAY OF SCHOOL, I SPOKE TO CARROLL ELEMENTARY IN PARTICULAR, AND I SAID, HEY, HISTORICALLY, WHAT HAVE OUR CLASSES DONE AND SO SHE WENT BACK AND LOOKED AT THE PREVIOUS LIKE THREE YEARS, AND SHE SAID THAT EACH GRADE LEVEL VARIED BY ROUGHLY 3 TO 4 KIDS DURING THE YEAR, SOMETIMES UP, SOMETIMES DOWN.
BECAUSE THIS WAS STARTING THE YEAR AND MY CONCERN WAS, WELL, YOU KNOW, DO WE TRADITIONALLY ENROLL EIGHT, NINE, TEN KIDS IN A GRADE LEVEL, WHICH WOULD THEN CAUSE A WHOLE 'NOTHER SET OF PROBLEMS? AND SHE SAID, HISTORICALLY, 3 TO 4 STUDENTS IN ONE DIRECTION OR THE OTHER WOULD BE A BIG VARIANCE.
WHEN YOU ASK FOR A WAIVER, IS IT ALWAYS APPROVED OR LIKE IS IT EVER DISAPPROVED? WHAT HAPPENS TO THE WAIVER? THEY'RE MOSTLY APPROVED.
I DON'T THINK I'VE EVER SEEN ONE APPROVED BY TEA.
WHENEVER IT GOES THROUGH THE PROPER CHANNELS AND THE BOARD APPROVES IT, AND I WOULD SAY THAT IF WE SAW SIGNIFICANT INCREASES IN ENROLLMENT, KNOWING THAT STUDENT TEACHER RATIO IS SO CLOSELY TIED TO ACADEMIC SCORES.
IF WE STARTED SEEING THESE CLASSES JUMP BY TWO AND THREE KIDS.
MOTION. THIS WAS INFORMATION ONLY.
THANK YOU, MR. NICKEL. YEAH. SECOND ITEM ON THE AGENDA IN SECTION SIX IS 6.2 BUDGET WORKSHOP 2024 PROPOSED TAX RATE FOR THE 2024-2025 FISCAL YEAR.
MR. JOHNSON. THANK YOU, PRESIDENT BRYAN.
SO TONIGHT I'M BRINGING TO YOU AN ALTERNATIVE TO THE TAX RATE WE DISCUSSED AT THE LAST MEETING.
IT'S THE MAXIMUM COMPRESSED RATE OF THE MCR OF 0.961669, AND THEN THE FIVE ENRICHMENT PENNIES, THE INTEREST AND SINKING RATE OF 33, AND THAT WAS A PROPOSED DECREASE IN THE ACTUAL ADOPTED RATE BY ABOUT A HALF A PENNY, AND THE CHANGE IN THE MAINTENANCE OPERATION RATE AND THEN THAT RATE, THE COMBINED RATE WAS ABOVE THE NO NEW REVENUE RATE THAT I'LL GO OVER HERE IN A MINUTE BY ABOUT 3.5%, BY ABOUT 3.5 PENNIES. AN ALTERNATIVE, IF THE BOARD SO CHOOSES, CAN DO A MAINTENANCE AND OPERATION RATE OF .6669, INTEREST AND SINKING RATE OF .294801, AND THAT WOULD BE A DECREASE IN THE PRIOR YEAR ADOPTED RATE BY FOUR PENNIES.
THAT WOULD GIVE THE DISTRICT A RATE OF EXACTLY THE SAME AS THE NO NEW REVENUE RATE.
[00:10:08]
REVENUE RATE AND I'LL GO OVER THAT HERE IN A SECOND.WHERE THE DISTRICT COULD CHOOSE THE BOARD OF TRUSTEES COULD CHOOSE TO DECREASE WOULD BE THE INTEREST IN SINKING RATE, AND I'LL TALK A LITTLE BIT ABOUT THE IMPACT FROM DOING THAT HERE IN A SECOND. MR. JOHNSON, CAN YOU GO BACK TO THAT SLIDE, PLEASE? AND JUST JUST FOR OUR COMMUNITY'S WELL-BEING, LET'S I'D LIKE TO GO BACK, AND I KNOW THAT WE'VE DONE THIS IN THE PAST, BUT JUST KIND OF DESCRIBE WHAT M&O IS, WHAT I&S IS, AND MAYBE I CAN START AND YOU CAN FILL IN THE BLANKS.
THAT IS ON YOUR PROPERTY TAX BILL.
THERE'S ONE LINE ITEM ON THERE THAT SAYS CISD, CORRECT? MM HMM.
THAT TOTAL TAX RATE OF WHAT YOU WERE TALKING ABOUT IN YOUR FIRST SLIDE OF 0.99690.
SO THAT TOTAL TAX RATE IS MADE UP OF TWO DIFFERENT ENTITIES.
ONE IS YOUR M AND O WHICH IS YOUR MAINTENANCE AND OPERATION, AND ONE IS YOUR INS, WHICH IS YOUR INTEREST AND SINKING, CORRECT? CORRECT. SO YOUR M&O, LOOKING AT THIS SLIDE HAS TWO PARTS A TIER ONE AND A TIER TWO.
WE CAN'T WE HAVE NO SAY IN THAT AS A BOARD.
THAT IS DETERMINED BY STATE FORMULA, CORRECT? CORRECT, AND THAT'S THE MAXIMUM COMPRESSION RATE OF WHAT YOU SEE FOR .6169 RIGHT AND SO THE ENRICHMENT TAX RATE THE BOARD AND THE COMMUNITY DOES HAVE A SAY IN THAT CORRECT AND SO THERE IS 19 PENNIES AVAILABLE IN THE ENRICHMENT TAX RATE.
EIGHT OF THOSE ARE GOLDEN PENNIES CORRECT? CORRECT. SO THOSE EIGHT GOLDEN GOLDEN PENNIES ARE NOT SUBJECT TO RECAPTURE.
SO THOSE EQUATE TO EACH PENNY EQUATES TO ABOUT A MILLION.
ABOUT A MILLION AND A QUARTER IS OUR TAX BASE A MILLION AND A QUARTER, AND SO THE FIRST FIVE GOLDEN PENNIES, THE BOARD HAS THE ABILITY TO PASS THOSE WITHOUT VOTER OR COMMUNITY APPROVAL.
CORRECT. THAT IS CORRECT. OKAY, AND SO WE HAVE DONE THAT, BUT TO TAKE ADVANTAGE OF THE NEXT THREE PENNIES, GOLDEN PENNIES THAT AREN'T SUBJECT TO RECAPTURE, WE WOULD HAVE TO GO OUT ON THE BALLOT IN NOVEMBER OR MAY OR WHENEVER THE ELECTION CYCLE IS, TO GET VOTER APPROVAL OF THOSE ADDITIONAL PENNIES. CORRECT.
CORRECT, AND SO THOSE ARE ALSO SUBJECT TO VOTER APPROVAL.
RIGHT. YES. OKAY. SO IF WE WERE TO GO OUT FOR THE THREE GOLDEN PENNIES, THAT'S NOT SUBJECT TO RECAPTURE, AND THEN THE NINE ADDITIONAL COPPER PENNIES WHICH IS SUBJECT TO RECAPTURE IN EACH PENNY WE RECEIVE, WHAT, 40%? ROUGHLY, I'M GOING TO RECALCULATE.
VALUE OF THAT COPPER PENNY, AND THEN WE SEND 60% BACK TO RECAPTURE BACK TO THE STATE.
THAT'S CORRECT. TO THE BLACK HOLE THAT WE HAVE NO IDEA WHERE THEY THEY SPEND THAT MONEY.
CORRECT. OKAY. THAT'S CORRECT, AND SO, SO FOR THE COMMUNITY WHEN YOU LOOK AT YOUR PROPERTY TAX BILL AND YOU SEE THAT CISD LINE ITEM, THAT EQUATES TO ABOUT 65% OF YOUR ENTIRE PROPERTY TAX BILL.
IT'S 65%, AND WE, THE BOARD AND THE COMMUNITY ONLY HAVE ACCESS TO DETERMINING THAT TIER TWO RATE, WHICH IS WE COULD ASK THE COMMUNITY FOR AN ADDITIONAL, WHAT, NINE, TEN, 11, 12 PENNIES, CORRECT, IF WE SO DESIRED, AND THAT WOULD EQUATE TO--DO YOU HAVE OFF THE TOP OF YOUR HEAD, WHAT THAT WOULD EQUATE TO THOSE ADDITIONAL 12 PENNIES FOR US ANNUALLY? IT WOULD BE ABOUT $3.5 MILLION ON THE THREE ADDITIONAL GOLD PENNIES, AND I THINK IT WOULD BE ABOUT 4 TO 4 AND A HALF ON THE COPPER AFTER YOU PAID RECAPTURE, AND RIGHT NOW WE'RE SITTING AT APPROXIMATELY A PROJECTED $8.5 MILLION DEFICIT.
CORRECT. EVEN IF WE ASKED THE VOTERS TO RAISE THEIR TAXES BY THAT ADDITIONAL 12 PENNIES, WE STILL WOULDN'T BE ABLE TO CREATE THE REVENUE STREAM TO EVEN BALANCE THE 8.5 MILLION, WHICH IS GOING TO GO UP NEXT YEAR, AND THEN THE NEXT YEAR AND THE YEAR AFTER THAT IF THE 89TH LEGISLATIVE SESSION DOES ABSOLUTELY NOTHING FOR PUBLIC FINANCE, IS THAT CORRECT? THAT IS CORRECT, AND SO THE SECOND PART OF OF THE PROPERTY TAX FOR CISD IS I&S, WHICH IS THE INTEREST AND SINKING AS YOUR DEBT SERVICE.
SO WE HAVE SEVERAL BONDS OVER THE YEARS THAT THIS COMMUNITY HAS VOTED FOR FOR INFRASTRUCTURE IMPROVEMENTS, CAPITAL IMPROVEMENTS, TECHNOLOGY, THAT TYPE OF THING, AND RIGHT NOW WE ARE AT A RATE OF 33 PENNIES.
[00:15:02]
CORRECT. OKAY, AND SO THE STATE SAYS THAT WE MUST TAX THE AMOUNT EQUIVALENT TO AT LEAST MAKE TO GENERATE THE REVENUE TO AT LEAST MAKE OUR BOND PAYMENT ANNUALLY.CORRECT. RIGHT. OKAY, AND SO WE HAVE KEPT THAT 33 PENNIES.
IN FACT, RIGHT NOW WE'RE PROJECTING THE DEFACEMENT OF WHAT, YEAR WHAT, 2030? 2030. 2030, SO WE'RE TALKING ABOUT OUR DISTRICT ESSENTIALLY BEING DEBT FREE IN THE YEAR 2030 IF WE CONTINUE AT THIS RATE OF PAYING DOWN OUR DEBT.
CORRECT. SO I'M NOT COUNTING THOSE.
SO IF WE WERE JUST IN THEORY, IF WE WERE TO ACTUALLY DO WHAT WE'RE DOING, WHICH WE ARE, AND PAY DOWN THAT DEBT IN 2030, PAY IT OFF IN 2030.
THIS BOARD COULD ESSENTIALLY SAY, OKAY, WE'RE WIPING OUT THAT 33 PENNIES ON YOUR ON YOUR TAX BILL.
CORRECT. I MEAN, WE COULD IF WE WANTED TO.
CORRECT. CORRECT, AND SO BUT THAT WOULD LEAVE US NO ROOM, REALLY TO THEN IF WE NEEDED A SHORT TERM BOND, A TWO YEAR, A FIVE YEAR OR SEVEN YEAR TO PAY OFF TO FIX OUR ROOFS OR OUR INFRASTRUCTURE THAT IS OUT THERE ON OUR 11 CAMPUSES, PLUS THIS ADMIN BUILDING. CORRECT. CORRECT.
OKAY. SO I GUESS MY POINT IS, IS THAT WE DON'T REALLY HAVE THAT MUCH ABILITY TO AFFECT THE MAXIMUM COMPRESSION RATE REALLY NOTHING AT ALL BECAUSE IT'S FORMULA.
TO ME, AND I'M SURE TO THE REST OF THIS BOARD, IT'S GOING TO BE VERY DIFFICULT TO CONVINCE OUR COMMUNITY TO VOTE FOR A TAX RATE INCREASE, AND SO WE DO HAVE SOME WIGGLE ROOM, THOUGH, WITH OUR I&S RATE, AND I THINK THAT YOU'RE GOING TO GO OVER THIS IN A SECOND BECAUSE YOU MENTIONED THE NO NEW REVENUE RATE, AND LET ME JUST SAY THAT IF ANYBODY OUT THERE AND MR. JOHNSON, IF YOU KNOW OF ANY SCHOOL DISTRICT OUT THERE THIS YEAR HAS GONE, HAS PASSED A TAX RATE THAT IS AT OR BELOW THE NO NEW REVENUE TAX RATE WE WOULD LIKE TO KNOW.
I HAVE NOT HEARD OF ANY AT THIS POINT.
YES. OKAY. WE DON'T WANT TO DO THAT.
WE WANT TO RELIEVE THE TAX BURDEN ON OUR COMMUNITY, AND I THINK THAT THIS BOARD WOULD BE WELL SUITED TO CONSIDER DROPPING OUR I&S RATE BY A NUMBER OF PENNIES.
THAT EQUATES TO THE AMOUNT THAT WE NEED TO RAISE THE M&O RATE TO MEET EXPENSES, AND THAT WAY IF WE DO THAT, WE STAY AT OR BELOW THE NO NEW REVENUE TAX RATE.
CORRECT? THAT IS CORRECT, AND IF WE DO THAT, AND I THINK YOU'RE PROBABLY GOING TO TELL US THIS IN A SECOND, BUT I'M JUST CONFIRMING THAT IF WE WERE TO DO THAT, THAT WOULD IMPACT OUR DEFEASEMENT SCHEDULE BY HOW LONG? ABOUT A YEAR. ABOUT A YEAR.
SO INSTEAD OF IN 2030, DEFEASING ALL OF OUR DEBT AND GOING DEBT FREE, WE'RE ADDING A YEAR 2031 AND WE'RE REDUCING THE TAX BURDEN ON OUR COMMUNITY UNLIKE 1199 SCHOOL DISTRICTS IN THE STATE OF TEXAS.
SO I JUST WANTED TO EXPLAIN THAT TO THE COMMUNITY AND MAKE SURE THAT THIS BOARD UNDERSTANDS THAT YOU KNOW, WE'RE FIRST LOOKING OUT TO THE TAXPAYER AND WE HAVE THAT FIDUCIARY RESPONSIBILITY, AND WE'VE BEEN VERY FISCALLY RESPONSIVE OVER THE LAST THREE AND A HALF YEARS THAT WE'VE BEEN ON THE BOARD, AND WE WANT TO CONTINUE THAT, AND BUT WE'RE NOT GOING TO BE ABLE TO CONTINUE THAT IN THE YEARS AHEAD, IF THE 89TH LEGISLATIVE SESSION DOES ABSOLUTELY NOTHING FOR PUBLIC SCHOOL FINANCE, IS THAT CORRECT? ABSOLUTELY. OKAY. ALL RIGHT.
NOW, JUST ON THAT POINT, THE NEXT LEGISLATIVE SESSION MEETS NEXT SUMMER, IN 2025? JANUARY. OKAY, SO WE'LL KNOW, I GUESS, AT THE BEGINNING OF NEXT YEAR, WHAT THEY DECIDE TO DO WITH THE BASIC ALLOTMENT AND WHATEVER WE HAVE TO DO TO
[00:20:02]
REACT TO BALANCING OUR BUDGET AND WHATEVER WE NEED TO DO IN THE FUTURE, WE CAN DECIDE THAT AFTER WE LEARN WHAT THE STATE LEGISLATURE IS GOING TO DO, AND I KNOW WE WERE ALL DISAPPOINTED THAT THEY DIDN'T DO ANYTHING THE LAST LEGISLATIVE SESSION, BUT WE'RE STILL HOPEFUL.I THINK THAT THEY'RE GOING TO INCREASE THE BASIC ALLOTMENT SO THAT WE WON'T HAVE TO TALK ABOUT TAX RATE CHANGES AS MUCH, RIGHT? ABSOLUTELY, YEAH, THAT'LL COME OUT PROBABLY IN MAY.
TYPICALLY WE FIND OUT IN MAY WHAT THEY'VE DONE OR LIKE LAST YEAR WHAT THEY HAVEN'T DONE, AND WE I GUESS I KNOW WE ADJUSTED OUR TAX YEAR SO WE WON'T HAVE TO IMPROVE NEXT YEAR, NEXT YEAR'S BUDGET UNTIL JUNE OR JULY TIME FRAME? YEAH. IT HAS TO BE DONE IN JUNE.
YEAH. OUR END OF OUR FISCAL YEAR NOW IS JUNE 30TH.
SO I MEAN, I THINK THAT'S A VERY GOOD POINT, TRUSTEE LANNEN.
I THINK THE PRESSURE NEEDS TO BE PUT ON.
WE DID A CALCULATION JUST TO INDEX TO THE COST OF INFLATION SINCE 2019, WHICH IS THE LAST TIME OUR ELECTED OFFICIALS IN AUSTIN DID ANYTHING TO THE BASIC ALLOTMENT, AND IT EQUATED TO ABOUT 987 OR 1000 BUCKS.
RIGHT UNDER A THOUSAND. SO INSTEAD OF STARTING AT 6160, WE'RE STARTING AT IF WE STARTED AT 7160 WITH ALL THE WEIGHTING, THAT WOULD PROVIDE US A PRETTY GOOD BUMP WITHIN OUR BUDGET AND WE WOULD BE FINE.
SO, I MEAN, EVEN IT'S A VERY SIMPLE FIX IF YOU DON'T WANT TO CHANGE THE FORMULA AT ALL, JUST INDEX THE BASIC ALLOTMENT TO THE COST OF INFLATION. EVERYBODY WILL BE JUST FINE, AND THEN IF NOT, WHY IN THE WORLD WOULD WE NOT BE ABLE TO KEEP A PORTION OF THE PROPERTY TAXES THAT WE HAVE TO SEND BACK TO THE STATE JUST TO MEET ACTUAL COST PER YEAR? RIGHT. IT'S A SIMPLE, SIMPLE FIX, AND I DON'T SEE HOW IT'S BEING MADE TO BE SO COMPLICATED, BUT YOU KNOW, WE CAN ALWAYS TRUSTEE LANNEN, YOU KNOW, CROSS OUR FINGERS AND PRAY FOR THE BEST OUTCOME POSSIBLE BUT, YOU KNOW, I DON'T HAVE A LOT OF CONFIDENCE IN THESE GUYS.
ONE LAST QUESTION, MR. JOHNSON. SO THE I&S RATE THAT WE'RE TALKING ABOUT RIGHT NOW, DECREASING IT.
EXCELLENT POINT, EXCELLENT POINT.
YES. THIS IS TO YOUR POINT, PRESIDENT BRYAN, WE HAVE TWO SEPARATE RATES, AND THEY ARE VERY TWO SEPARATE AND DISTINCT PURPOSES, AND NO, YOU CANNOT USE ANY OF THE MONEY GENERATED FROM THE INTEREST AND SINKING TAX RATE TO PAY SALARIES OR UTILITIES, FOR INSTANCE.
SO THAT IS SOLELY FOR THE PAYMENT OF DEBT.
THE RESULT, AND I THINK IT'S PRETTY EASY TO SEE, IS THAT IF THE LOWER INTEREST AND SINKING RATE WILL, WILL COLLECT LESS TAXES THEN IT'LL EXTEND THE PAYOFF OF DEBT BY ABOUT ANOTHER YEAR. NONETHELESS, WE WILL STILL CONTINUE TO PAY OFF DEBT EARLY.
SO IT'S NOT LIKE THAT THERE'S NOT STAYING WE'RE NOT STAYING WITH THE EARLY DEBT RETIREMENT.
WE ARE STAYING WITH THE DEBT RETIREMENT, JUST NOT TO THE DEGREE BEFORE, AND JUST SO THE COMMUNITY KNOWS, MR. JOHNSON. IS IT 2042 IS OUR LAST? I BELIEVE THAT IS CORRECT.
SO WE WOULD BE PAYING OFF OUR DEBT TEN, 11 YEARS EARLY.
CORRECT, AND SO ON THE PRELIMINARY, AND THIS IS WHAT PRESIDENT BROWN WAS REFERRING TO EARLIER, EVEN THOUGH IT IS NOT AN INCREASE IN THE TAX RATE, IT IS IN FACT A DECREASE IN THE ACTUAL TAX RATE, THE NO NEW REVENUE RATE AND I'LL DISCUSS THAT IN A SECOND IS WHAT THAT ACTUAL ADOPTED OR PROPOSED RATE IS MEASURED AGAINST.
BE THAT AS IT MAY, WE COULD LOWER ENTITIES.
THIS ENTITY COULD LOWER IT UNDER THOSE CIRCUMSTANCES TO 96 TO GENERATE THE SAME REVENUE.
AGAIN, NOT NOT GERMANE TO THIS DISCUSSION, BUT THAT'S WHAT WE'RE FORCED TO DO.
NO NEW REVENUE TO THE PROPOSED AND STATUTORY LANGUAGE REQUIRES THAT WHEN THIS TAX RATE IS ADOPTED, THAT YOU GO BY THE LANGUAGE I'VE WRITTEN HERE, WHICH IS I MOVE THAT THE PROPERTY TAX RATE BE INCREASED BY THE ADOPTION OF A TAX RATE .9969, WHICH IS EFFECTIVELY A 3.66% INCREASE IN THE TAX RATE, NOT THE ACTUAL TAX RATE.
SO, MR. JOHNSON, JUST I'D LIKE TO JUST EMPHASIZE THAT POINT.
WHAT YOU HAVE HERE IN QUOTES IS ACTUALLY IN STATUTE.
[00:25:03]
INCREASE. CORRECT? THAT IS ABSOLUTELY CORRECT.THAT'S WHERE THAT'S DETAILED, AND SO AN ALTERNATIVE, IF WE ADOPTED IF THE BOARD CHOSE TO ADOPT A NO NEW REVENUE RATE BY LOWERING THE I&S, IT WOULD SAY OBVIOUSLY WHAT WE'VE GOT HERE IS, WHICH I MOVED TO APPROVE THE TAX RATE OF .961701 PER $100 VALUATION, WHICH IS THE SAME AS THE NO NEW REVENUE RATE, A MAINTENANCE AND OPERATION OF .6669.
LINE NINE AND LINE TEN ARE NOW THE SAME AS A RESULT OF REDUCING THAT INTEREST AND SINKING, LIKE WE DISCUSSED A MINUTE AGO, I THINK WHAT WOULD BE GREAT IF WE COME BACK AT OUR NEXT MEETING AND WE CAN EVEN REDUCE THAT BY 0.00001.
SO WE CAN SAY NOT SAME AS, BUT LOWER THAN THE NEW REVENUE RATE, AND JUST YOU MAY BE ABLE TO EXPLAIN THIS BETTER, MR. JOHNSON, BUT FOR OUR COMMUNITY, THE NO NEW REVENUE RATE IS WHEN PROPERTY VALUES INCREASE IN A YEAR.
IF A TAXING AUTHORITY LIKE US KEEPS THE TAX RATE THE SAME, WE WOULD HAVE MORE REVENUE JUST BECAUSE WE'RE TAXING AT THAT RATE ON HIGHER PROPERTY VALUES. CORRECT? CORRECT.
CORRECT. SO THE STATE UNDERSTANDING THAT REDUCES THAT RATE TO THE AMOUNT WHERE THOSE NEW PROPERTY VALUES EQUATE TO THE EXACT AMOUNT OF REVENUE THAT WE RECEIVED LAST YEAR AT THAT EFFECTIVE TAX RATE.
CORRECT? CORRECT. THAT'S IT, AND SO WHAT WE'RE SAYING IS THAT WE'RE GOING TO WE'RE GOING TO HAVE THAT RATE INCREASE BY 3.66, BUT WE'RE GOING TO REDUCE THAT I&S RATE, WHICH ARE COMBINED IN YOUR PROPERTY TAXES BY 3.66.
SO THERE'S NO NEW REVENUE RATE INCREASE.
IN FACT, IF WE CAN DO IT BY 0.0001, WE CAN SAY WE'RE ACTUALLY LOWER THAN THAT.
SO, MR. JOHNSON, JUST TO REITERATE WHAT PRESIDENT BRYAN SAID EARLIER, IT'S POSSIBLE THAT IF WE GO THIS ROUTE, ESPECIALLY IF WE ADD THE 0.001 ON THE END WE MAY BE THE ONLY SCHOOL DISTRICT IN THE STATE OF TEXAS TO ACTUALLY NOT ONLY REDUCE TAXES, BUT GO BEYOND WHAT WE EVEN HAVE TO DO.
IS THAT CORRECT? THAT IS CORRECT.
THANK YOU. I WOULD DEFINITELY THINK PROBABLY IN THE 6A HIGH GROWTH THIS TYPE AREA, YOU KNOW, PROBABLY SMALLER SCHOOLS IN WEST TEXAS OR THAT ARE NOT GROWING THAT HAVE KEPT THE SAME TAX RATE IT'S PROBABLY EASIER TO BE AT THE NNR LEVEL, BUT YEAH, ESSENTIALLY WHAT WE'RE TALKING ABOUT IS A SWAP.
THE I&S ACTUALLY HAS NO IMPACT ON THE NNR RATE AT ALL.
SO WE'RE ESSENTIALLY THE M&O NO NEW REVENUE.
SO ANYWAY, THAT'S THE HAPPY TO ANSWER ANY QUESTIONS AT THIS POINT.
I MEAN, I LIKE YOUR OPTION OF GOING BELOW THE NEW NO NEW REVENUE RATE.
I THINK THAT'S AWESOME, AND I THINK THAT'S WHAT SHOULD BE RECOMMENDED AT OUR SEPTEMBER 23RD MEETING, BUT I'LL OPEN IT UP TO THE BOARD FOR THEIR OPINIONS.
MR. JOHNSON, YOU AND I WERE AT A TAD MEETING NOT LONG AGO.
TAKING WHAT YOU KNOW, TAD HAS DONE RECENTLY WHAT WOULD THIS BE FOR THE TAXPAYER IN TERMS OF THEIR WAITING? I GUESS IT IS THAT THEY APPROVED EVERY TWO YEARS HAVING THAT NEW--THE REAPPRAISAL PLAN? THE APPRAISAL PLAN YEAH. SO THEY THEY APPROVED A REAPPRAISAL PLAN THAT HAPPENED EVERY TWO YEARS AND THAT'S TO START NEXT YEAR.
SO PROPERTY WOULDN'T BE APPRAISED, I GUESS, FOR THREE YEARS.
IF YOU ARE IN A RESIDENTIAL, IF YOU'RE IN A HOME AND IT'S YOUR RESIDENTIAL, IT'S YOUR HOMESTEAD.
IT WOULD DEPEND ON YOUR RELATIONSHIP OF WHAT IS KNOWN AS A CAP VERSUS THE APPRAISED.
SO IF YOUR PROPERTY, YOUR PROPERTY CAN ONLY GO UP 10% BY STATUTE EACH YEAR TAXABLE, BUT IF YOUR TAXABLE VALUES EXCEED YOUR IF YOUR APPRAISED VALUE EXCEEDS YOUR TAXABLE VALUE THEN EACH YEAR, THE TAD CAN INCREMENT THE TAXABLE VALUE BY 10% UNTIL THEY REACH THAT, AND CARROLL, IN SOUTHLAKE THERE IS A SUBSTANTIAL AMOUNT IN THAT CAP.
IS THAT WHAT YOU'RE REFERRING TO? I JUST HAVEN'T EXPLAINED BY YOU.
YEAH, YEAH, AND SO THE OTHER PROPERTY WOULD NOT HAVE APPRAISAL.
SO IF YOU OWNED A BUILDING AND THEY DIDN'T APPRAISE IT FOR THREE MORE YEARS, OBVIOUSLY THEN YOU WOULD NOT HAVE YOU WOULD NOT SEE AN INCREASE IN YOUR VALUE, AND DEPENDING ON WHAT THE TAX RATE DID FOR THOSE INDIVIDUAL THREE YEARS, YOU KNOW, THAT WOULD DETERMINE WHAT YOUR TAX LIABILITY WOULD BE, BUT YOUR VALUE, WHICH DRIVES THE TAX RATE, IN ADDITION TO THE
[00:30:01]
TAX RATE THAT'S APPLIED TO THAT, DETERMINE WHAT YOUR TAX LIABILITY IS.IF YOU COULD GO BACK TO THE SLIDE THAT HAS THE COMPRESSION RATE AGAIN THE COMPRESSION MINIMUM.
SO IF WE LOOK AT THE MAXIMUM COMPRESSION RATE, YOU CAN SEE THAT IN 21-22 THE STATE CALCULATED WHAT OUR MCR WAS 8886 WENT DOWN 8288 AND THEN LAST YEAR THE 23-24 WAS THE BIG YEAR.
SO THERE WERE TWO PARTS OF THE COMPRESSION IN IN THE LAST LEGISLATIVE SESSION.
WE ALREADY HAD A PREDETERMINED CALCULATION THAT SCHOOLS NORMALLY GO THROUGH.
THE LEGISLATURE CHOSE TO ADD TO THAT WHICH INCREASED THAT MCR, WHICH DECREASED THE MCR AND INCREASED THE AMOUNT THAT IT WAS COMPRESSED BY, AND SO WE WENT DOWN, GOSH, ALMOST $0.20 ON THE 22-23 TO 23-24, AND THE FLOOR FOR THE MCR STATEWIDE IS THE 6169, AND SO WE DIDN'T MOVE MUCH. WE MOVED TO THE FLOOR AS MOST DISTRICTS DID, AND SO THAT'S THE REASON WE DIDN'T SEE THE COMPRESSION WE'VE SEEN OVER THE PAST COUPLE OF YEARS.
YOU ARE IN TOUCH WITH FOLKS IN AUSTIN, CONSULTANTS MOAK CASEY.
WERE YOU HEARING, TOO? I ANTICIPATE THAT TO HAPPEN.
YES. OKAY. SO WE LOVE SOUTHLAKE.
IT'S GREAT TO LIVE HERE, BUT WE DO GET THE SHORT END OF THE STICK AND THAT IS THAT THIS HAS HAPPENED AND THIS IS NOT AFFECTED IN A GOOD WAY THE RECAPTURE.
IT'S HELPED RECAPTURE A LITTLE BIT.
IT'S HELPED RECAPTURE A LITTLE BIT.
TWO YEARS AGO WE SENT 37 MILLION I BELIEVE LAST YEAR IT WAS ABOUT 18 MILLION.
WHAT IT DID NOT IMPROVE WAS THE MONEY WE GET TO KEEP.
WHAT IS YOUR ESTIMATE FOR RECAPTURE THIS YEAR? WELL, RECAPTURE BECAUSE WE DIDN'T COMPRESS MUCH AND WE DID SEE SOME GROWTH IN THE TAX BASE.
I'M EXPECTING IT TO BE, YOU KNOW, BETWEEN 25 AND 25.55.
JUST OVER 20% OF OUR BUDGET? YEAH. YEAH.
SO 20% OF LOCAL TAX DOLLARS GET SENT BACK TO THE STATE.
WOULD THAT BE A FAIR WAY OF SAYING IT? YEAH. DESPITE THE FACT THAT WE, NOT UNLIKE EVERY DISTRICT IN THE STATE OF TEXAS, ARE SUFFERING FINANCIALLY.
GO BACK ON TRUSTEE YEAGER'S INITIAL COMMENT ON THE TAD, WHAT THEY'RE PROPOSING TO DO, WHICH IS FREEZE THE VALUATIONS, IT'S FREEZE THE VALUATIONS, AND I KNOW THAT THERE ARE SEVERAL TARRANT COUNTY SCHOOL DISTRICTS THAT DO NOT PAY INTO RECAPTURE THAT WEREN'T TOO HAPPY WITH THAT.
CAN YOU SO WHEN YOU HAVE A TAXABLE VALUE TAXABLE VALUE AND TIER ONE COSTS ARE KIND OF SYNONYMOUS, RIGHT.
IF YOU HAVE THAT RELATIONSHIP THAT'S PRETTY STATIC THEN IF YOU GENERATE, YOU KNOW, 50 MILLION OUT OF YOUR YOUR MAXIMUM COMPRESSION RATE IN YOUR TIER ONE COST OF 50 MILLION, THEN YOU GET FUNDED FOR EXACTLY WHAT YOU'RE RESPONSIBLE FOR, RIGHT? DOES THAT MAKE SENSE? VALUE TIMES TAX RATE $50 MILLION VALUE TIMES THE MCR IN THE FUNDING FORMULA HAVE TO BE THE SAME.
WHAT HAPPENS IS IF YOU FALL OUT OF THAT 10% VARIANCE, THE STATE SAYS YOUR VALUES SHOULD BE GENERATING $60 MILLION, BUT THE TRUTH IS, YOU ONLY COLLECT 50 IN ACTUAL TAX VALUE IN ACTUAL TAXES, AND SO THERE'S A $10 MILLION DISCONNECT, AND SO IT'S THE RELATIONSHIP OF THE VALUE THAT DRIVES THE TAX COLLECTIONS THAT ARE TO FUND YOUR TIER ONE OR LOCAL FUND ASSIGNMENT IN THE STATE FUNDING FORMULA.
THEY POTENTIALLY COULD LOSE STATE DOLLARS, BUT HOW WOULD IT IMPACT US ON LIKE LIKE FOR US WE SEND MORE BACK AND RECAPTURE, BUT WHAT ABOUT THE SAME FOR US, STILL THE SAME.
WHAT'S UNIQUE IN OURS IS A LITTLE BIT DIFFERENT.
OURS IS NOT LIKE EVERYBODY ELSE, AND SO JUST AS SOON AS WE GOT THIS, I HAD MOAK CASEY RUN THEM.
I RAN A MODEL. I GAVE IT TO MOAK CASEY, AND BECAUSE WE'RE A RECAPTURE DISTRICT, IT IMPACTS US A LITTLE BIT DIFFERENTLY AND SO WHAT I JUST DESCRIBED, WHERE A LOT OF DISTRICTS THAT AREN'T THE SAME AS US, COULD LOSE A SUBSTANTIAL AMOUNT OF MONEY IF THEY DIDN'T GENERATE ENOUGH.
IF THAT RELATIONSHIP WAS OUTSIDE OF THAT 10% VARIANCE.
THE TAD DOESN'T REPORT TO SCHOOL DISTRICTS, DO THEY? NO. NO, THEY REPORT TO WHO? THE TAXPAYER CORRECT.
YOU KNOW, WHO THEY SHOULD BE BLAMING.
[00:35:01]
THEY SHOULD BE BLAMING THE INEPT SCHOOL FINANCE FORMULA THAT HASN'T BEEN TOUCHED SINCE 2019.MAYBE THEY NEED TO GET ON A BUS AND GO DOWN TO AUSTIN AND TALK TO THEIR REPRESENTATIVES DOWN THERE TO MAKE THOSE CHANGES SO THAT THEY CAN CONTINUE TO RECEIVE THE OUR RECAPTURE PAYMENT THAT THEY'RE COMPLAINING ABOUT NOW, NOT RECEIVING THAT MUCH OF.
OKAY. ANY ANYTHING ELSE FOR MR. JOHNSON? OKAY.
[2. EXECUTIVE SESSION (Part 2 of 2)]
551.072, 551.074 AND 551.0821 AT 6:35 P.M..WE'LL CALL THIS MEETING BACK TO ORDER AT 8:04 P.M..
WE DO NOT HAVE ANY ACTION FROM EXECUTIVE SESSION, SO IF NO OBJECTION, WE'LL ADJOURN THIS
MEETING AT 8:04 P.M..
* This transcript was compiled from uncorrected Closed Captioning.