In anticipation of a potential bond election in May to finance the district needs, the Klein ISD board of trustees heard a plan Nov. 17 to lower the district's reserves to $110.8 million. The plan assumes a balanced budget for the next seven years, taking the district's operating fund balance to $128.3 million in an effort to properly size the proposed bond package.
KISD Chief Financial Officer Thomas Petrek presented the board with the reserve utilization plan that the administration worked through, taking out projects from the bond package to be paid with reserves of about $8.4 million.
Documentation provided by the district's finance department indicates that the 2015 bond package began with proposed projects totaling $725.6 million. There were a number of projects deemed necessary, but were excluded in the recommendations package totaling $498.1 million.
Central office water and sanitary utilities, musical instrument replacements and marquees were among the items originally enumerated as projects to be paid out of the district's regular budget over a five year span.
District finance staff determined that it would be prudent to put these projects back in the bond package and take out approximately $8.4 million of short-term technology purchases in order to lower the debt service tax rate by 1 cent.
Technology projects to be paid out of the district's reserves include computer services, student support services and security services totaling $6.3 million.
Additionally, some items totaling $2.7 million were not put in the budget at for fiscal year 8/31/15 due to a positive variance of $11 million from the previous year. These included instructional materials, classroom library items and professional development.
Petrek said the 17.5 million reduction in reserves leaves more than the policy of 2.5 months of working capital.
"It would leave us still in very fine financial shape and would not put our district in any financial hardship in the senior administration's opinion," he said.
Judy Rimato, associate superintendent for communications and planning for KISD, said the district agrees with Petrek's assessments of its long term financial health because they have passed a balanced budget over the past few years.
"We would still be in excellent financial shape," she said.
The proposed general operating fund including the $11 million surplus will be an action item in the budget review meeting in January.
Meanwhile, KISD Superintendent Jim Cain will be a guest speaker on Nov. 19 at the Houston Northwest Chamber of Commerce Government Affairs Transportation Committee meeting to discuss the bond proposal. The meeting is scheduled at 8:30 a.m. at the chamber offices at 3920 Cypress Creek Parkway, Ste. 120.
