GCISD trustees approve $139.6M operating budget

Despite cuts, employees to see first raise in years

The Grapevine-Colleyville Independent School District board of trustees adopted a $139.6 million operating budget in June for 2012-13 that offers employees a 1 percent cost-of-living raise and a 1 percent incentive payment — employees' first raises in two years. The realities of this year's budget crisis, though, mean the district is having to dip into its fund balance to cover expenses.

GCISD trustees, who approved this year's budget on June 18 in time for a July 1 fiscal year start, had been working to craft the 2012-13 budget since November. But although trustees worked to keep widespread cuts away from the classroom by trimming operating expenses and identifying additional revenue sources, GCISD will still face a $6.4 million shortfall.

"We have passed a deficit budget this year," Superintendent Robin Ryan said, "and we anticipate passing a deficit budget until the formula changes or until additional revenue is placed in education, and education is made a priority by the legislators of this state."

Budget deficit

The formula to which Ryan is referring is the state funding model for education approved during the 2005 legislative session, which cut school property taxes by one-third, expanded the business tax to make up the difference, and tied districts' local and state revenue together.

Education officials and lawmakers now know that combination is not working. The business tax revenue has not been able to fill the funding gap created by dropping property taxes, thus producing a "structural deficit" for school districts. And although a variety of factors have increased the cost of education, the funding formula locked districts' funding levels at the amount they were receiving in 2005.

Add to the flawed formula a massive shortfall in the state budget during the 2011 legislative session, in which Texas school districts sustained roughly $5.3 billion in cuts, and GCISD is one of hundreds of districts pinching their pennies.

GCISD's share of the cuts made in 2011 was roughly $14.2 million in reduced expenditures over the 2011-13 biennium. Still, the district projected to end the 2011-12 fiscal year with a fund balance of about $52.5 million, which officials say will help absorb additional state funding cuts in the future.

"While the reductions are not as bad as we first feared during the beginning of the last legislative session, they still are drastic cuts to public education all across the state," Ryan said. "They are damaging to kids and to teachers and certainly diminish what happens in the classroom."

GCISD also contributed $26.24 million to the state during the 2011-12 school year in the form of a Chapter 41 recapture payment. Chapter 41 payments, taken annually from property wealthy districts, get redistributed to lower-income schools. Officials estimate about $28 million will be sent to the state during the 2012-13 year.

Trimming costs

Crafting the budget was not easy, as trustees approved numerous cost-cutting measures meant to reduce effects on the classroom.

"When you don't have adequate dollars to provide the education that's expected, then every point of the budget development process is a challenge," Ryan said.

For cost savings, trustees approved authorizing the sale of $425,000 of district property and upgrading the district's outdated surveillance video management system from analog cameras to digital cameras to reduce operational costs over the next five years.

Staffing was another area that saw cuts. The district eliminated more than 50 positions this year, including 33 full-time-equivalent night shift custodial positions. That move is estimated to save the district $200,000 every year under a five-year contract by outsourcing the service to a janitorial and custodial services group.

And trustees in February provided a retirement and resignation incentive to 25 middle or high school employees and 15 elementary school employees who gave early notice. Resignations and retirements are helping the district conform to new staff models that require fewer teachers.

The district also looked to save money on bond projects in the works.

In May 2011, 68 percent of voters approved issuing $124.5 million in bonds to fund projects in GCISD, including equipment, furniture, facility renovations and expansions. GCISD sold $92 million in bonds during the 2011-12 fiscal year.

To capture historically low interest rates, the district also authorized selling the remaining $32.5 million of bonds sooner than the anticipated spring 2013 timeframe. The move is expected to save GCISD about $18.8 million over the lifespan of the bonds. It will also soften the tax rate impact, helping taxpayers realize an additional 3.05 cents per $100 valuation in taxes, as opposed to the previously cited 3.93 cents.

With the interest rate set to expire July 31, trustees authorized refunding about $37.9 million in existing variable rate bonds from the old programs for a savings of about $14.3 million.

"When adequate funds are not available, building a budget is certainly very difficult," Ryan said. "Fortunately, we have planned very well and have a fund balance that will support the deficit budget over the next few years."



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