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Eanes school board sets budget, OKs $4 million pull from fund balance
Thursday, September 2, 2010
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Eanes school board members recently approved a $66.4 million operating budget for the coming school year that will pull up to $4.3 million from the $26.3 currently remaining in the district’s unreserved fund balance.
During an Aug. 25 meeting, board members also let the tax rate ride next year at the current $1.20250 per $100 evaluation level. That approved rate includes a $1.04 maintenance and operations tax that feeds the general fund balance and a $.1625 debt service tax.
“As projected, the 2010-11 budget includes use of general fund reserves due to factors such as the economic environment and state funding, (which has remained) essentially at the same level since 2006,” district Superintendent Nola Wellman said. “Throughout the coming year, the district will seek ways to trim expenditures whenever possible without adversely affecting the classroom.”
The district expects to collect $94.1 million in property taxes this year, down from the $99.6 million it collected last year. The revenue the district receives from the state this year will increase $3.2 million to $15.4 million to cover that decrease in property tax revenue.
In addition to the $66.4 million the district will expend to operate its facilities during the 2010-11 school year, it will give the state another $53.2 million in recapture money that will be used to help operate property poor school districts.
“Developing a financial plan or budget for our school district should, like a business or household, be done with a long-term perspective,” said Paul Stone, board president. “It is simply a fact of life that there is rarely enough money to pay for everything we would like to have. There are also things we cannot control – state education funding, property values, the number of families moving into the district and the general economy – that directly impact our finances.”
Stone said the district had developed its fund balance over the past years to give board members and administrators time to adjust to those types of uncontrollable financial forces.
“The district is keenly aware that planned deficit budgets cannot continue forever because the fund balance would eventually be exhausted,” Stone said. “So the challenge for this year and in years to come is to continue setting priorities to maintain the excellence that our community expects and deserves, fund as many of the priorities as possible [and] then adjust the budget accordingly. The community expects us to figure it all out, and we will.”
The support the district receives from the community through the Eanes Education Foundation and campus booster clubs makes a huge difference in difficult financial times, Wellman said. EEF gave the district a check for $1.01 in support during the Aug. 25 meeting that will fund 19 teacher positions in the coming school year. An estimated 85 percent of the expenses the district covers each year are in salaries, which means any major reductions in its operating budget will have to revolve around teacher and staff cuts.
“The Board of Trustees will discuss expenditure reductions through the budgeting process, which gears up after January,” Wellman said. “Any future budget reductions that the board may discuss will not take place until 2011.”
In a July 28 preliminary budget presentation, district business office head Larry Keiser told board members that the district would continue to drain the fund balance for at least the next seven years, or until the state overhauls the public school finance system.
You know, $4MM here, $4MM there. After awhile, it begins to add up!
In all seriousness, folks, this district has a financial problem. EISD spends far more than it brings in (Robin Hood or no, what we have to spend is what we have to spend.) We rely on charity from EEF to pay teachers. And we now have a board of trustees who believe that they can add $150MM in infrastructure and only $100,000 in ongoing maintenance and operations expenses.
EISD is a financial train wreck. And good old Dr. W. is all too happy to drive the train over the cliff, because she can just move on to the next district and do it all again.
But those of us who have made our lives in Austin will be left to deal with the wreckage.
Vote no to the Bond!
It’s amazing to see this story, telling us that the Trustees have dipped into the rainy day fund for $4.0mm to close the 2011 budget, and stories
1) showing the Trustees are posting a $150MM bond program for a vote in Sept
2) EISD needed $1.0MM in a gift from EEF as well, indicating it will be $5.0MM in the red in 2011, and
3) recent stories wherein Dr. Wellman was quoted as saying that even tougher times are ahead of us, and
4) stories about a double dip recession; and
5) stories about stagnant to falling property values across Austin as the national recession catches up with us at last.
I think the previous poster has a point: any observer of these facts would say that the risk of a financial collapse is very, very real. It’s like that old Bush era bumper sticker: If you’re not completely appalled, you haven’t been paying attention.
Vote no to the bond. Clean house and un-elect all three trustees up for re-election in May. There is still time to save this district’s finances, but not if the current board gets its wish list bond and Dr. Wellman continues to spend $5.0MM deficits.
I’ve been paying attention for some years now and I have an alternative view (and am not in any way appalled). I want to state up front that this is my opinion based on my own research and observation and although the odds are 100%+ that I am going to be called an idiot, misinformed, or a dupe for Dr. Wellman, I am sticking with it.
The legislature’s decisions about public school funding in Texas have caused many school districts’ financial situations to be volatile. Before Dr. Wellman’s arrival, it seemed to me we were in crisis mode every year – slashing the budget, emergency pleas for money to fill a budget shortfall. Dr. Wellman implemented a long range budgeting process that attempted to look ahead and consider the legislature’s impact over a longer term period. This appears to be why the EISD fund balance is at a record high – something like $20 million more than the minimum recommended by state standards. Dr. W and the trustees have been fiscally responsible by building up that fund balance over the last few years KNOWING that we might find ourselves in exactly this situation. And they were criticized for it …..I heard many people grumble about the District having too much money in the rainy day fund and why didn’t they spend it. The reason that fund balance was so high was so the District could have resources to cover shortfalls in the event the legislature DIDN’T DO THE RIGHT THING in 2011 and change the school finance formula. The fund balance we have now will allow for deficit spending until there is more information about school finance formulas at which time they can make the appropriate adjustments. This is smart and prudent fiscal planning. Put money away during years you can (even if there is grumbling) to use in years you know will be tough. If the legislature doesn’t make adjustments than EISD will.
Second topic – transfer students. I was at Eanes Elementary when enrollment dipped so low there was talk of shuttering the school. The transfer policy was in its infancy and the Booster Club decided to do a big promotion and open house to get transfers to come in to the school. It wasn’t led by District admin, it was led by the school parent leaders. They viewed the policy as beneficial to their school – it filled a vacant seat and brought $3K to $5k (not sure the exact amount) per student into the District. I’m not sure how this policy – which in its infancy was a very positive thing – has become such a negative. A year ago when someone on the blogs questioned how many spots in our top 10% were “taken” by those transfer students, I got a hold of a 2009 graduation program and looked up the zip codes of all the top 10 students in the program. Out of 56 kids there were two that weren’t either 78733 or 78746 and one was a teacher’s child. I realize that that may vary from year to year but that didn’t seem excessive to me, especially given that those students brought a significant amount of money into the budget. And for those bloggers that think transfer students are gaming our numbers, several of those bloggers appear to be parents of gifted children leaving EISD because our GT program is a joke (their words – no offense to Carol Reese – the GT coordinator for EISD who just won the honor of the best GT teacher in the state of Texas) so I don’t really understand how that is gaming the system if we are bringing in transfer students to replace gifted kids. Surely those gifted kids could do the TAKS in their sleep and thus this strategy would actually be hurting our scores not helping, if that was our goal.
Third topic – the benefit I see to a large public high school like WHS is a broad spectrum of class offerings, academics and extracurriculars. I get the impression that posters on this site would prefer that WHS be a math and science academy with no sports programs. I am a fan of both and not one to the exclusion of the other. And we seem to be accomplishing both quite well – Robotics Team, 47 National Merit Scholars this year (kuddos to the gifted kids that stayed in EISD despite our shortcomings), at least one or two students every year scoring perfect scores on SAT and ACT (kuddos again), 98% going to college, 30+ APs and five languages offered. My kids did fine in all their AP classes and didn’t feel they were overcrowded – the teachers were incredible. And great sports programs and high standing in Lone Star Cup, too. Sports seems to be the whipping boy of these blogs but if you eyeball the rosters on the athletics website, there are something like 1,000 kids at the high school on teams – 40%+ – so these programs are clearly in demand by families.
Finally – bonds. I’ll vote for those I am in favor of and I appreciate that the trustees tried to balance all the different opinions and give the voters choices. I call that leadership.
I am now finished and am prepared to take my lashes. It won’t be pretty.
Yes yes yes! Thank you so much writing your post and taking the time to do the research.
On the bonds — these don’t come out of our budget. That’s why we have bonds. That’s the point of them.
To the others — How do you propose we close the budget hole in the future if state funding doesn’t come through? 85% is in salaries. So give me a list of teachers, we’ll fire them, and we won’t have to spend the rainy day money.
I appreciate your thoughts, post 3. Your experiences are different from my own. And I think you’ve introduced some facts not in evidence, as they say. I’ll start there.
Dr. Wellman has never produced a multi year plan. Paul Stone noted this fact earlier this summer when he asked for one so he could evaluate the likelihood that EISD would have to hit the rainy day fund again in 2011-12. It doesn’t exist. The board asked Dr. W. to produce a 3 year plan in 2003, by the way, so it is reasonable that you’d think there was one.
Next, the fund balance was increased more than it was hit over the past several years because along with EEF (which has been supplying more than $750,000 in operating funds for the past several years) EISD had windfalls from increased property valuations coupled with some timely increases in the tax rate. Dr. Wellman herself explained this at a board meeting in, I think, June. EISD raised extra revenue after the budgets were set: voila, an increase to the fund balance. Last year, I believe, we had planned to hit the fund balance for $3.0MM and then because of the windfall in extra revenue, didn’t have to take the money out of the rainy day fund. That is not management, it is luck.
Third, I have never read that the transfer students are taking the top spots, although that is another novel assault on the practice. Transfer students are taking at least some spots that are vacated by children leaving the district for whatever reason, and they are highly selected so that they don’t drag down our exemplary rating. But I’ve never before read that they’re stealing the positions in the vaunted top 10% that is so critical to the University-of-Texas group of parents. I applaud your initiative of looking up the residences of these kiddos, but it’s hardly scientific.
Fourth, I have a totally different real-world view of AP class size. I have two kids (both graduates of WHS) who were both in all AP classes but who are many years apart in age. Between the first and the second, the AP class sizes soared–more than doubled–and the same teachers who taught #1 required about a quarter of the work of kid #2. That’s no slam on the teachers, it’s a reflection of the work load that comes with out of control AP class sizes, but it did result in us hiring outside writing coaches for a kid who made all A’s in WHS AP English classes.
Fifth, GT may not be a joke today, but we took our second kid out of GT in 7th grade simply because it had proven to be a total waste of time for kid #1 who had just graduated WHS. Maybe it’s gotten better; maybe it’s gotten worse. It just wasn’t useful for our kids.
Finally, I couldn’t care less if kids do or don’t play sports. I just want to see that sports programs are under the same scrutiny as, say, cuts to academic programs. Because from my view, one keeps rolling along, and the other is being decimated.
Tale of Two Experiences:
I remember it exactly the same way you do. I was there at EE at the same time and I have been paying attention, like you.
Thanks for your post, you are exactly right.
I am glad to see that Paul Stone has taken the lead in developing a long-term plan. He is fiscally conservative as well as financially perceptive. He clearly understands opportunity and timing. We may never experience a better time than now to make needed improvements. The district should take advantage of the historically low cost of capital and a soft construction market. I seriously doubt that we will see these favorable conditions again in our lifetimes. It takes a real leader to step up when needed.
When were “the timely increases in the tax rate”? In 2006, we had a tax rate of 1.5625 per $100,000. In 2007, the tax rate decreased by 23% to 1.2025 and has been the same for the last four years. In fact, E.I.S.D. now has the lowest tax rate in all of Central Texas. I would not call it luck to have the highest academic ranking in the area as well as the lowest taxes.
The fund balances are high, although if they are depleted by $4-5M/yr they won’t be for much longer. Part of the reason that they are so high is because the District has been underfunding maintenance for years; hence the proposed “critical needs” portion of the bond package includes millions of dollars for deferred and/or preventive maintenance. If the District had been adequately funding those programs for the past several years its deficits would have been much larger or, conversely, its fund balances would have been much lower.
The District is now addicted to periodic bond issues in order to fund its maintenance budget. This allows it to avoid the hard choices inherent in balancing the budget, and successfully “punts” the obligation to maintain our physical plant to the future. This will ensure that we will pay for today’s maintenance, tomorrow; more specifically, in our dotage, assuming that we can afford to keep our houses [I don't believe that bond obligations are subject to being "capped" at age 65].
Indeed, the bond issue is so imprecise as to what is to be spent that it invites the use of bond proceeds to provide a “slush fund” to defray capital expenses on an ad hoc basis. This enables the current board to spend money on items (1) that haven’t been specifically approved by the taxpayers [as happened to some of the 2006 bond proceeds] and/or (2) that are directed to whatever interest group is most insistent in their demands for capital expenditures [e.g. ADA, Special Ed, TLC, Athletics, etc.].
Finally, I think human experience has shown that it is easier to spend borrowed money than earned income. The bond issue is replete with projects the District has deemed unworthy of putting into its annual capital budget, but which it happily will spend if it doesn’t have to pay the money back until everyone associated with it has retired. Good examples of this are the $2M for stadium and scoreboard “improvements”, $5M for Middle School artificial turf playing fields and $5M for ADA compliant playgrounds.
This bond issue is not about children, except in the sense that they, rather than we, will pay for it. It is about an overly-ambitious and unnecessary building program which, if approved, will enable the District to put off for another few years the inevitable day of reckoning. Will we be better able to afford it, then?
Except for the “$5.0MM for ADA compliant playgrounds.” Any new construction would have to be ADA compliant by law. So really, he should have said we don’t need $5.0MM in new playgrounds.
Because if we build new ones, they must by ADA compliant. One cannot lawfully build “non-ADA compliant” playgrounds.
The other $7.0MM for ADA compliance on existing facilities is also critical, and the district will need to determine if it wants to further ignore ADA (as it has for 20 years except for new construction) and risk additional lawsuits in the future, which will become increasingly difficult to win given the passage of time and bonds.
No lashes – thank you (really really) for not lashing (yet) but I have a few responses to you and Mr. Allensworth:
My comment on the multi-year plan was based on an article in the paper that showed a graph and explained that if we continue our current spending, the fund balance would be depleted in xx year. I assumed that was multi-year planning but if it was not then it was helpful but does fall short of a true multi-year budget. We should have one and thank you to Paul Stone for pushing this effort.
With respect to your inability to credit the administration in any way for the surplus – say they it is all dumb luck (vs. conservative budgeting) then they would have continued this dumb behavior and spent the excess every year after having received it. They did not. Keeping the surplus – however lucky in receiving it – is good management and we have that surplus today. Thank you administration and trustees (from at least one citizen).
Criticism of funding maintenance in the bonds – options in the Robin Hood world – (1) pay for 50 cents of M&O in the regular budget by taxing citizens $1 (recapture sends half away) or (2) shift appropriate maintenance to the bonds which tax citizens at 50 cents to pay 50 cents. Isn’t that a smarter move? I agree that we don’t need to lose sight of what our true M&O is …..but isn’t this good stewardship of taxpayer money?
To those posters that say vote down bonds because buildings don’t matter – why would great teachers want to work in inadequate buildings? Why do we want our students to work in inadequate buildings? You don’t build a house and then never spend any money on maintenance. We are not “addicted to bonds”, our schools require maintenance. I don’t in any way get this “no bonds ever” argument. The Eanes Elementary parents sure think a building is important. They think an exemplary education at Eanes Elementary requires a bond of $20+ million. So how do you reconcile that with the position that excellence is about teachers not buildings? Vote against a practice facility if you want but saying no to all bonds is detrimental to our schools and our children.
And the argument that we are piling debt on to our children doesn’t fly with me either. The buildings the current children are learning in were paid for by predecessor families. Why wouldn’t our community continue to invest in the future from generation to generation and maintain what was built for our kids by others.
Last comment – I agree that all programs should be funded fairly but be cautious that what you see as well-funded extracurriculars may actually be well-funded by parent organizations and not the district. Parents with kids in extracurriculars are writing checks right and left.
And it would be great if No Lashes would address the question raised by Top Schools Lowest Taxes regarding tax rates.
If you consider planning your household budget to grow broke in 3 years, than you should appreciate that our district has that multiple-year plan in place. How anyone would call that financial planning (much less sound planning) mystifies me.
Eanes Elementary has been neglected for far too long. Bonds previously voted for its improvements have not been spent. They need serious improvements and tying their needs to a new elementary in Valley View (when we already have excess capacity for resident students at the elementary level) is just an example of how the structure of the bonds ignores the citizens committee that was hand picked to review proposals (and approved the Eanes renovations but not the construction of a new Valley View). Indeed, sadly the Valley View community is being utilized to try to help pass all three bonds by promising them a school. Perhaps if residents in that area reviewed past bonds past for Eanes that had never been spent and realized that the real cost of building an elementary at Valley View has not bee factored in, they might start wondering if the school will be built even if the bond passes. Under the way we’ve been running our bond issues there is no guarantee that it would.
To the vast majority of people opposing the bonds, there is a need to have a critical needs bond after these are defeated to address true critical needs. I totally agree that ADA playgrounds are NOT in the same category as adding PA systems, lights, stands and artificial turf to the middle school fields. We should all be ashamed that our district does not have a single ADA compliant playground were a student in a wheelchair can play outside at recess.
As for teachers–new buildings are nice, but most teachers I know care more about their students and the learning that’s happening than the physical surroundings.
In case you missed the way school finance is structured, the maintenance & operations tax is to pay for maintenance and bond taxes are to pay for capital improvements. While bonds have been used to try to ameliorate the ravages of Robin Hoods, we’re starting to realize that these bond issues are not being used as contemplated when voted on because we lack the internal controls to do so. A citizen’s bond oversight committee, not a citizen’s bond progress committee, appointed by board members, not the administration, is a necessity before we proceed with further bonds. And that’s to protect our children, not to hurt them.
The comment about the lowest tax rate is a red herring, and I would think that any person thinking independently would understand why. Even so, I’ll take you through the math.
A district can easily have a tax rate lower than average, if it has higher property values than average. To raise the same $1.00, a district with an average property value of $100,000 would have to have a tax rate of $1:00/thousand in value, while a district with an average property value of $200,000 would only have to have a tax rate of $0.50/thousand. Higher value property districts have better have lower tax rates, or the problem is really out of control. The fact that we have the room in our property values to be the base to raise $150 million does not in anyway mean that we can afford to borrow the money.
The relevant number here are what we can afford to maintain. Yes, you have room to raise the tax rate, but that is also disconnected to what it is you can afford. I can get a mortgage at 4%. But I cannot afford a mortgage on a $1.0mm home.
In the case of EISD you have an entity that spends more than it raises in revenue. Consistently. Has done it year over year now for quite some time. Last year the loss it reports was $3.5 million, but the true loss is closer to $5.0. They took $3.5 out of the rainy day fund, raised (as I recall; going from memory here) $750,000 from EEF and took the Federal Stimulus money of about $1.0 million and used it to pay general expenses (not the special ed expenses it was supposed to be spent on when authorized by the Federal government). That is a deficit spending of $5.0, financed by savings, a windfall, and charity.
The projected loss of $4.5 million next year includes EEF’s contribution of another $1.0 million. Thank you EEF, but really: what if they don’t raise a dime? Isn’t the true projected loss $5.5 million?
That, my friend, is the issue. This district spends more than it takes in. It is operating on the principal that before it runs out of luck, charity, and savings, the Texas legislature will fix school finance.
When your only way out of a financial hole is to wait for the Texas Lege to fix something, then you are ignoring reality: the Texas Lege has had 10 years to fix education funding. What makes our trustees think the Lege will do in the next three years what it has failed to do in the past?
Wishful thinking, charity, and luck are no ways to run a district.
Vote no to the bonds.
No Lashes I agree with you. Well said.
I have been reading these blogs and slowly forming my opinion. Filtering all the anger and passion, they lead me to conclude that sustaining the outstanding reputation of EISD requires ongoing investment. I like the direction the district is heading and will vote to support the bonds.
And what will financial disaster do for that reputation? You sound like one of the school board members. Are you betting that the Legislature will change the funding formulas to save us from running out of money in three years? Forget about anger and passion, you’re ignoring the cold hard financial facts that make these bonds a loser for everyone! We can better support our schools by passing a bond in May that includes the internal controls we presently lack and utilizes more accurate numbers. The district is heading for financial disaster–Wellman herself said we would deplete our available fund balance in three years. I don’t know what you can like about that direction.
Eanes mom, your assumption that EISD is headed for financial disaster is opposite of what I glean. The district purposely built up the fund balance in anticipation that it would run controlled deficits until the legislature changes school financing OR cut expenses as needed to make the fund balance last longer – a savvy long term plan (read the article). The bonds actually invest my tax dollars into many projects that help to reduce operating costs. Meanwhile teachers and programs are protected that keep the reputation of the district strong. Hardly the doomsday financial scenario that you fear.
“This (2010-2011 school year) is going to (involve) some strong tightening of the belt and make some people uncomfortable,” she said. “We’ll have some squealing. When we get to 2011-12 and 2012-13, it’s going to be all out yelling.” – Superintendent Nola Wellman
Vote No.
@ Eanes dad:
Please continue your explanation of how teachers and programs are protected.
Is it that savvy long term plan that relies on a charitable organization to fund teachers? (EEF makes up for approx $900,000 in teacher salaries that the district simply doesn’t have.)
Perhaps its the $20 million Prop 3, that includes an outdoor swim center that will run at an M & O busting $153,000 (or a whopping $382,000 for an indoor facility). Interestingly, Prop 3 doesn’t include salaries for facility maintenance or management, so go ahead and add another $60,000 – $90,000 on to that M & O price.
(And, no, the district can’t make back M & O costs on the swim center or the covered practice field/weight room/dance room/cheer room through rentals.)
So you criticize the administration because they draw from the fund balance (which has purposefully been increased for just this purpose0 and then ’straight from the horse’s mouth’ you criticize because the superintendant states that if necessary in the future she will cut costs if necessary to balance the budget. I totally agree with eanes dad – we’ve been watching the district manage the difficult effort of school finance for years and they have always managed year over year to deal with the situation and at the same time receive increasingly strong financial ratings every year. I have confidence they will continue to do what is necessary.
And so disappointed to hear disparagement of the district parents that voluntarily write checks for over $1 million to support the district. Historically, the trustees have been very conservative about “relying” on EEF but since EEF has come through in increasing amounts for the last 6+ years EISD has carefully included in the budget.
Oh, Daddy-
It’s hard to explain even simple concepts to closed minds like yours, but I will try.
First, note that the bond proposal(s) offer three options. Voters do not have to approve all three. Do not let the negative doomsday commentators convince you that their opposition to all three means the alternative is to approve all three. Voters should and will approve what they want to fund.
Second, teachers and programs are and have been protected by the district shrewdly using 100% bond money to fund capital projects that could otherwise be funded with M&O dollars at 47%. Thank you board and administration for wisely spending my tax dollars.
Third, your numbers are fabricated and outright in conflict with what the professionals have determined. In fact, with a modicum of research on the EISD website, even a closed negative mind like yours can see that many of the proposed bond projects REDUCE M&O expenses. That is called investing.
Finally, stop the negative doomsday rantings. The EXEMPLARY status of the district and every school in it does not happen without the outstanding leadership our district enjoys. Why do you fight that????
Mr/Ms Tale of Two. Your premise is that the trustees and the administration have managed to deal with the situation and that is prudent financial management. I guess we just have to agree to disagree.
It is not prudent financial judgment, in my view, to have increased the fund balance as you champion. This is the exact equivalent of a family or a business increasing its debt load so it can continue to spend at its preferred levels. This is exactly what has gotten the U.S. in trouble and collapsed the financial markets as people and companies borrowed money in the mistaken belief that real estate only goes up, so we might as well refinance our house and take the trip to Europe. What you consider “prudent” I consider crazy.
What I consider “prudent” is to
1) stop relying on others to balance our budget. Stop thinking that the State of Texas, in control of people who fundamentally disagree with the notion of free public education, is going to fix School Finance. It won’t. Texas is controlled by “starve the beast” conservatives. That is simply the way it is. Dr. Wellman and the trustees should acknowledge the likelihood that Texas will “fix” school finance is misplaced optimism.
2) stop borrowing money to pay for current expenses. The purpose of long term debt is to create long term value. Over $10MM of the current bond proposal is to deal with current expenses deferred.
3) stop borrowing money for “show.” The improvements to the stadium, the new pool, the astroturf tracks, are the equivalent, to me, of putting in a new pool when you’ve just lost your job. We don’t need them to provide a superior academic experience to our children.
4) prioritize. Education first. Things that support our kids future must be prioritized. Our trustees cannot prioritize, hence a bond program that gives everyone what they want, without the trustees having to express an opinion about EISD needs.
5) Regain public trust. You may be perfectly happy the “let’s save the money (fund balance) and not send the kids to the dentist (defer needed expenses into the future) but the public has begun to see through this as a shell game. The trustees have lost the trust of people who see this move-it-to-the-future approach as inconsistent with their real world experiences.
Businesses that behave like EISD go bankrupt. The debt is called, and there is no way to pay it back.
Bankruptcy is a real possibility, Mr/Ms Tale. Many cities, towns, and states have gone bankrupt with such reckless approaches to public finance. What makes you think that cannot happen here? We are consistently spending more than we bring in. We are borrowing larger and larger pools of cash and spending larger and larger amounts of that borrowed money on what are essentially operating costs. We are building things that increase our operating expenses, but we cannot increase our top line more than the State of Texas allows.
Prudent? I think not.
They are not criticizing the fact we have the reserve funds and EEF- they are simply pointing out that we need that much help to operate successfully. If we increase M&O costs with any new facilities and the state decreases our funding which is more than likely what is going to happen- then how much MORE will we have to make up? This number could be anywhere from $1 to several million dollars.
The point is- do a small bond now that is critical needs in May when we have had some bond debt retired creating a very small or no increase in taxes. See what the state does with education funding which we know will not be to our benefit and then move on any capital growth projects.
But in the meantime- determine why we are dipping so far into the reserve fund and make some administrative costs as far from the kids as possible. Companies are decreasing admin across the country- we should be doing the same. We should not wait until we are forced to make this choice- act now to add more to reserves or decrease the amount we pull from reserves.
“A tale of two” — It’s necessary to cut costs now. In case you hadn’t heard. Please pass the word on along to the superintendent.
To Eanes dad –
First – I didn’t mention all three propositions, you did. (Post #14 …”will vote to support the bonds.”) I mentioned funding and Prop 3 costs.
Second – The numbers I used for the swim center costs were taken directly from a presentation that was given by Coach Allman at a board meeting on August 3, 2010. Those are his research numbers, not mine. That is not be close-minded, it is being factual.
@ A tale-
I did not disparage the people who have generously donated to EEF. (It would certainly be “closed minded” of me to disparage my own family, since we give to EEF.) It simply doesn’t make since to base any kind of tax-funded entity budget on charitable donations.
And finally, Eanes dad, you start out a post with the extremely belittling statement, “It’s hard to explain even simple concepts to closed minds like yours, but I will try,” and you accuse me of
“negative doomsday rantings”. My posts do not impune your character nor question your intelligence. Please try some civility.
we just see the other side – i don’t understand your logic. increasing the fund balance happens when their is a surplus of revenue over expenses. it is the exact opposite of debt – it is a savings account. and it is good business to put excess aside when you know the state of texas has a flawed funding plan and you will need to use it in the future to maintain consistency of programs from year to year and to draw down as necessary. believe me – no one in eanes thinks the state of texas is going to save us. we haven’t for a decade now. eanes made brutal cuts back in 2002 time frame and they’ll do it again if they need to.
spend spend spend – what $4.5 million are you going to cut? It would be helpful for voters to know where your budget axe will fall. all the items that many posters imply are frivolous and for “show” are used daily by hundreds even thousands of kids in this district.
Ok, peace. I agree that emotional posting serves no positive purpose. That is a two way street, of course.
I have a passion for Eanes. I love the people. I am thankful for the investments of the past. I want to invest in the future. The current leaders seem to be doing their best and are using, in my opinion, a reasonable financial plan.
I appreciate the choice that the board has offered in the three bond proposals. It is not a perfect scenario, but one that I can support. I hope others do the same and stop with the negative, misleading and vicious postings.
Tale of Two, I like you. You’re easy to talk to.
The fund balance is not akin to a savings account. It has been increased over time because EISD has chosen to pay current expenses in the future. In fact, the Fund Balance is funded by debt.
For example, would you agree that if you make your mortgage payment every month by putting it on a credit card, you may have saved cash, but not expense? The mortgage company got their cash, but you just borrowed it against the card, to pay sometime in the future. Many people have taken this approach often to finance expenditures, so it’s pretty common.
By not properly expensing maintenance and operations in the past, EISD has essentially borrowed the money against the future. It now needs to float a bond to pay for those expenses in the past.
Those expenses are not in the operating statements of the district; they go onto the balance sheet as prepaid expenses to be reimbursed when the next bond is floated.
I do not know which expenses need to be cut, my friend. I’m not a trustee. I just believe that school districts should live within the taxes they collect and not spend more than that by charging it to the future. Others may disagree.
But to carry on my metaphor what people are pointing out is that eventually the credit card company asks to be paid. And that is what $10MM of Prop 1 is for.
Dr. Wellman knows she’s spending more than we take in: and she knows that if this bond doesn’t pass, we will have to go cold turkey and cut to the bone. Isn’t that evidence that the problem is much bigger than some on this message board appear to believe? She’s telling you she has no way out except for this bond. No way out.
We can see how we got here: this bond program is a referendum as to whether we should continue what many consider to be a reckless financial approach.
OK – I am beginning to finally understand our disagreement. Yes – I agree that if you put your mortgage payment on a credit card, you may have more cash but also have more debt. That is not what I see happening. As taxpayers, we pay our mortgage every month/year when we pay our taxes. Past debt/bonds are paid down with the 20 plus cents of our taxes. $1.04 goes to M&O and the rest to pay our mortgage. So I assume you instead are criticizing putting repairs on a credit card – meaning future bonds. I can appreciate this but here is another analogy. You buy a new car and get a loan to pay for it (same as issuing bonds to build buildings 5 years ago). So you make the payment every month (pay bond taxes every month) and you don’t really have a lot of repairs as you have a new car. You can’t wait until the debt is paid off as you imagine you will have lots of money. But what reallyhappens is that about the time you pay off your debt, your car is aging and you start to have a lot of repair bills such that even after you pay off your car loan your paying just as much in repairs. In other words, as long as you want to have a car you have an expense either way – one way is a car payment and one way is a repair bill. At some point, you might decide that if you are going to pay that much in repairs that you buy a new car. Same payments to your personal budget – $300 a month for repairs or $300 a month for a car payment. But we’re in the strange world of school finance in Texas where I am penalized for repairs and maintenance. The District would have to tax me $600 to cover $300 of repairs because of Robin Hood recapture but would tax me $300 through a bond. If someone is trying to eke the most out of the tax base I very much hope they would put as much in a bond as they possibly could. We get so much more out of our tax dollars. I’d rather have a new car than pay twice as much to bandaid the old one together. Plus, we have paid down our old bonds. I don’t know the actual numbers but our tax rate is down now because past bonds are paying down. All school districts use bonds to finance capital. Our alternative is to do as private schools do and run a capital campaign so people can write big personal checks to pay for buildings. So pick and choose which bonds you like or don’t but the notion that any school district in Texas will do better without any bonds is not a responsible strategy.
As for what to cut, I appreciate your are not a trustee but if you are going to criticize you should be forthcoming about what you would cut. It isn’t easy. Some history – back in 2002-2004ish, the district made brutal cuts to adjust to Robin Hood recapture. The trustees (this was before Dr. Wellman arrived) proposed the option of closing an elementary school. Parents went balistic. If you look at the demographic study on the EISD website: http://www.eanesisd.net/aboutdistrict/Eanes%20ISD%202009%20Demographic%20Report.pdf
we lost in-district enrollment in 2003 – 2005. (There was probably more basis to close a school back then then there is today. In 2009, there were only 250 out of district transfer students at all elementary schools and that includes teacher children.) Most likely parents who could moved to private school back then because of all the cuts that were made and the uproar that ensued. But from 2005 on as funding stabilized and we brought in money from transfer students, IN-DISTRICT ENROLLMENT HAS INCREASED every year contrary to the numerous posts on this site and is projeted to increase through 2014. I am sure some of the increase is from the economy and private school kids coming back but I also believe that is because of the steadiness of program funding, the addition of new programs like robotics and film, and the performance of the students across the board which encourages parents to move their children here.
And if property values go down, yes taxes will go up and we will be taxed similar to all the other school districts around us whose property values are lower but tax rates are higher.
So we will agree to disagree. I have too much history to be persuaded by your financial arguments and I suspect you are not persuaded by mine either. And I too am tired of typing.
Eanes does not recoup in transfer dollars what it spends to educate each of these out of district students. Further, the families of transfer students do not pay taxes to support EISD coffers, therefore I believe we see a net loss to our district.
I am a first time poster and long time reader and appreciate all the information, fact and opinion, that these posts supply. I totally understand the concept of financing a new car rather than constantly paying on the old one. I believe that many of the taxpayers might agree that we need a new or at least a late model used one. But in this economy, do we get the fully loaded Lamborghini to take our kids to school (no offense to anyone who actually does that) and hope we can afford the repairs in the future or do we just get a nice, reliable 4-door sedan?
Also, will someone please explain soft-costs. I see a lot of posts that state 100% of the bond stays in the district, but I heard in a board meeting that 30% comes off the top of the bond for soft-costs. I’m just trying to compare bond money with money subject to recapture thru “Robin Hood”.
“Help me understand”-
There are clearly benefits in reading these blogs. Although you have to filter through some emotional posts, it is a good source to understand different points of view.
Frankly, I believe most, if not all, of the bloggers are passionate about our district. Opinions differ and that is what makes our country great.
I can make a stab at explaining “soft costs.” In any development or construction project, there are expenses for engineers, attorneys, architects, etc. that add significantly to the overall costs. In addition, there are reserves for the unknown such as price increases, working around newly uncovered pipes or easements, discovering asbestos or mold hidden in walls, etc. etc. Some (not all) of the projects, particularly the larger ones have used an industry “rule of thumb” percentage included in the estimates.
All of this information is readily available on the EISD website and/or by talking with the professionals in EISD.
Soft costs-
architect, engineering, consultants, Broadus & Associates, fees
Also- Broadus- per their contract will get a percentage of the total amount of Bonds passed- Broadus drew up the long term spending and building plan.
?? If there wasn’t a fee for a percentage of the total bonds passed what would their recommendations look like?? would they be different?? Just a simple thing to think about..
Also- Lake TRavis and AISD have both hired in house architects to reduce their bond soft costs… Imagine the savings to tax payers for a salaried architect versus a contract one…
of the professionals in the school district who will discuss soft costs with a member of our community. Many of us have tried informally with no success and also formally via requests for public information only to hit a stone wall.
It sure seems odd to me that some postings to this site claim there are issues with transparency. Makes me wonder, why?
I am more involved than most taxpayers in this community. I attend board meetings when I can, check the website, read the Picayune, talk with other parents, etc.
When I have a question about Eanes Elementary, I ask Cynthia and she answers. When I have a question about Hill Country, I ask Kathleen and she answers it. Same at the high school. I have a question about bus routes and Tim answers it.
Now I cannot imagine the average resident wanting to see details of soft costs, but my guess is that Les Reddin (got his name off the website) would help you understand.
Perhaps the “many of us” who have tried asking are not being nice or not clear about what is being asked or something. My experience has been different.
help me understand – i believe you raise the right question. it’s just that the answer isn’t easy and is very personal to each voter and family given the special interests in our district. “priority” is in the eye of the beholder. one man’s lamborghini is another man’s sedan or used car and vica versa. for example,
- voters that want a math and science academy and no sports may think most of bond 1 and all of bonds 2 and 3 are lamborghinis because they contain sports facilities
- voters whose kids have graduated may think its all lamborghinis
- no new tax supports may think its all lamborghinis
- families of swimmers and other swimming supporters may think a swimming pool in bond 3 is a sedan and the one designed might even be a used car to them
- same for dance, wrestling, band, etc on the bond 3 practice facility
- eanes elementary parents may believe the $5 million reno in bond 1 is a used car or worse but non-eanes elementary voters may think a $20 million reno in bond 2 is a lamborghini
- non valley-view voters may believe a new elementary is a lamborghini but the vv families may believe its a sedan – a basic deserved by their neighborhood
- elementary school parents often don’t support technology and programs at the high school – lamborghinis they say
- happy citizens with good eisd experiences may think 1, 2 and 3 are all sedans – necessary for excellent achievement and not excessive
- there are probably lots of folks who wanted lamborghinis and didn’t get them at all
these are my views from reading these boards so hopefully i didn’t misrepresent a group. just trying to show how hard this is.
would still like to hear from spend, spend, spend on what the cost cuts would be. given each of our own special interests, we need to be able to assess how your views will impact our world.
I understand that everyone has their own priorities, but I don’t think anyone would mistake a swimming pool or covered activity center for a sedan. A Lamborghini is a Lamborghini, no matter how bad you want it or think you deserve it. It’s whether or not you are willing to pay the upfront and ongoing costs to support it. It seems to me that the way the bonds are structured, the only way I can buy a sedan to address the critical needs of the district is to get it fully loaded and/or purchase the Lamborghini.
The postings to these blogs certainly illustrate the concept that ’something isn’t right here’. Perhaps the questions those individuals asked would require the release of information the district leadership didn’t want available for public review. To assume those asking questions and arriving at the conclusion there is a lack of transparency were ‘not nice’ or ‘not clear’ is wishful thinking at best. Dig deeper.
Though I can’t speak for the post ’spend, spend, spend’, I have a few suggestions for cost cutting ideas.
1. Drastically reduce legal expenses by resolving problems on campus rather than litigating everything from requests for public records to lawsuits against the states’s education commissioner. Here’s an example of an unnecessary and frivolous expense.
http://www.chron.com/disp/story.mpl/metropolitan/education/6975711.html
2. Reduce the number of administrators. We have added numerous positions in central administration since Wellman’s arrival, and the administrative salaries have risen at a much higher rate than those of our teachers. Why? Without increases in enrollment this appears to be money that could be better spent.
3. Reduce the expenditures for redecorating and landscaping central administration. I’ve noticed extensive and never ending improvements here, while immediate structural needs in our schools go unmet.
4. Reduce expenditures such as improvements to the jumbotron, top of the line camera and video equipment, artificial turf and batting cages that cost $318,000.
5. Monitor and reduce travel expenses.
6. Eliminate out of control spending as illustrated by the $450,000 spent on signage near the high school that was subsequently removed because they weren’t approved by the City of Westlake. Who approved this expenditure? The question has been asked over and over with still no clear response form the school board or administration (golden opportunity for our new Communications Director to provide a bit of transparency).
Would love to see more community brainstorming and suggestions for reductions in spending that extend beyond cuts to our teaching staff.
Why do we not have a solar parking lot at Westlake High School- think M&O reductions…
“Cost Cutting” has managed to come up with only a handful of cost cutting ideas. The no more than $5000 that was alocated to be a part of the referenced lawsuit is a laughable cost cutting idea. Our administation costs as a percentage of our overall budget is on par with the state average. How much would you have us cut in travel expenses? Trips to away games for sports teams? How many bus routes, and which ones? The rest of these items are items paid for by bond dollars, not the operational budget.
Everyone knows that there will likely need to be spending cuts in the future until the legislature is once again forced through a lawsuit to change funding levels. Thank goodness for the wisdom and foresight of the school board in building the fund balance. It is raining people, and time to use that fund for what it was intended for. We have several year’s worth of money we can use to help offset the number of cuts we may need to make. This, and the use of bond money for as much as we possibly can, will help delay the possibilty of cuts that would impact your children.
Let’s see… post #38
1. the story is from April 26, five months ago
By ERICKA MELLON
HOUSTON CHRONICLE
April 26, 2010, 6:33AM
2. Wellman has hired administrators who do their job properly as opposed to those administrators from the old days that didn’t know HOW to do cost estimates and get efficiencies from the dollar.
3. The central admin. landscaping is hardly extensive…much less the so-called improvements.
4. has anyone mentioned you don’t have to mow, water or feed artifical turf?
5. If we don’t travel, we can only compare ourselves to AISD?
6. Have you had to have an EMS or emergency vehicle fine YOU at the high school?
I reread the article at the top of this blog and it appears that the district has a plan. And it seems like a well thought out and logical plan.
No doubt cost cuts will be needed if Texas school finance does not change. EISD has done that before and began the cost cutting, as Clint Sayers has said during board meetings, “as far from the students as possible”. Meaning start with administration and carefully work, as needed, toward employees that directly impact students.
EISD went through such budget cuts in 2004 or so and has slowly added back administrative positions since then to help support the teachers. Perhaps that is why there seems to be an increase in admin expenses over the past several years.
A flexible plan that anticipates some use of the fund balance to “soften the blow” seems like a decent plan to me.
1. Legal expenses – $5k for a questionable lawsuit plus retainers and monthly bills paid to at least five law firms and the additional expense of in house legal counsel. We spend well into six figures annually on legal expenses which is a huge increase in expense since Wellman’s arrival.
2. The superintendent has increased the administrative and support staff by leaps and bounds. Compare the number of administrative jobs prior to her arrival with what is presently in place; another disproportionate increase. Why so many more people to do the same job and at what cost to the teachers and students. Many of these are close to six figure salaries.
3. Between 3/2008 and 12/2008 thousands in bond expenditures for landscaping, additional parking spaces, new furniture, carpeting, computers etc. for central administration. Now the proposal is to move central admin to an elementary school with a downtown view. This is not a priority that will provide bang for the buck for our teachers and students.
4. Between 3/6/2008 and 8/14/2008 $1,050,573.72 was spent on artificial turf. Artificial turf only lasts 5-6 years before needing replacement. Why have we been paying a private videographer $500 each game to film football when we have such an incredible tech program and equipment at our disposal?
5. Reduce travel to conferences out of state and to different countries. Substitute online conferencing here at home. It may not be as fun or as luxurious, but we have the technology to learn online. Multiply the number of employees traveling. It adds up to a lot.
6. There has been no public reporting of EMS having difficulty accessing emergency situations on any of our campuses. It is not likely that other school districts of our size and proximity to EMS resources have felt the need to purchase over $400,00 worth of signage without seeking prior approval from the required public officials.
With thoughtful, responsible and creative cost cutting we can come closer to operating a balanced budget without negatively impacting the quality of education for our students.
Okay, wake up. There is no proposal to “move central admin to an elementary school with a downtown view.” That idea was shelved months ago, even if it was a smart way to give the high school the square footage and acreage that it needs and would have taken away the need for some of the portables. Portables are an inefficient and abusive environment for our children and we should be ashamed to have any portables in operation for longer than necessary.
Stop nitpicking and recognize that Nola Wellman has made amazing advances in this district and keeps this community a desireable place to live and work for thousands of families who want the best for their children.