Tax rate will not increase in the face of state shortfall, LISD official says

A new Leander ISD middle school is scheduled to open this fall at the same time district officials seek to overcome a $2 million state funding gap.

The opening of Florence Stiles Middle School, 3250 Barley Road, Leander, will add at least 19 teachers and more than a dozen administrative and auxiliary positions to the district. Additional teachers will transfer from existing campuses. The school will cost approximately $1.6 million to operate in its first year, with an expected enrollment of 764 students.

Ellen Skoviera, LISD assistant superintendent for business and operations, said operating costs must come from the budget, which is being trimmed districtwide.

"We are having to find the cost of utilities and such that we wouldn't have had to find if we didn't open [the school]," she said. "That's putting pressure on the budget."

But the pressure will not be passed on to taxpayers. Based on property value projections and enrollment, Skoviera said she expects LISD's property tax rate—one of the highest in Central Texas—to remain stable.

"I can comfortably say that it will be about the same or maybe less perhaps, but it won't be more," she said.

Stiles Middle School

The school board initially postponed opening Stiles Middle School, LISD's eighth middle school, due to budget constraints. The 82nd Texas Legislature cut $15 million from LISD's budget last year and an additional $22 million this school year. Skoviera said the district anticipated the reduction and cut accordingly in 2011, banking an additional $5 million with the expectation of opening the new school.

"We knew we would at least have to find another couple of million dollars just to compensate for that difference," she said. "So, it's really both of those things that continue to put pressure on the budget."

Voters approved issuing $39.6 million in bonds for Stiles Middle School, though Project Manager James Conkle said the campus will likely come in under budget. Because construction is still ongoing, a final cost to develop the campus remains undetermined.

In May, LISD approved the purchase of two new buses totaling $184,000 in part to transport Stiles students. Because of hazardous traffic concerns surrounding the middle school, bus services will be available to all students the first year of classes. Few sidewalks are in place within the 2-mile radius typically unserviced by LISD transportation.

Jimmy Disler, executive director of capital improvements, said the city is considering a traffic light at the intersection of Ronald Reagan Boulevard and CR 179. A new traffic study was conducted after the board approved new attendance boundaries in November, he said, though the report is not yet available.

Budget gap and forecast

In the summer months prior to the start of the fiscal year Sept. 1, staff will discuss needs versus wants, and each department is being asked to trim its budget by 5 percent.

"That's what these months are about, those conversations," Skoviera said. "Each one of us that is the head of a chain of functions in the district—whether it be instruction or assessment or whatever—we are all active right now working at the line-item level with our reportable departments."

Ongoing costs for Stiles Middle School come from the operating budget, but bonds funded the furnishing and construction of the campus. Projected property value increases—3.47 percent combined in Williamson and Travis counties since last year—could help the district maintain or lower the interest and sinking tax rate.

"Rising property values do not help us on the operating side," Skoviera said. "But on the debt side, it's a function of how much debt you need to pay and on how much property value you can levy the tax."

LISD's overall tax rate is $1.49976 per $100 of value. The maintenance and operations budget receives $1.04, and $0.45976 per $100 of value funds existing debt. Skoviera said LISD has refinanced debt to keep its tax rate less than $1.50 per $100 of value.

Bond rating

In May, the global rating agency Fitch Ratings downgraded LISD's bond rating to AA-, matching Standard & Poor's rating of the district's $1.3 billion in outstanding debt.

However, the downgrade will not affect the district's borrowing ability because the bonds are also backed by the state's permanent school fund—a multibillion-dollar account in part used to guarantee bonds issued by local school districts. The backing gives LISD a AAA rating when financing and refinancing debt.