The backstory
According to Northwest ISD documents, FIRST is a result of House Bill 5 of the 83rd Texas Legislature that required the commissioner of education to forecast the future financial solvency of school districts.
To ensure that school districts are continuously improving financial management of school resources, FIRST has several objectives including:
- Measuring and reporting the extent to which financial resources are allocated for district instructional purposes
- Evaluating the quality of financial management decisions
- Reporting the results to the general public
Northwest ISD documents stated that the district’s numerical grade was 98 out of 100. A school district’s score is based on on 20 indicators or questions that include:
- Was the district in compliance with the payment terms of debt agreements at fiscal year end?
- Did the district make timely payments to the Teachers Retirement System, Texas Workforce Commission, Internal Revenue Service and other governmental entities?
- Was the ratio of long-term liabilities to total district assets sufficient to support long-term solvency?
The district came up two points shy of scoring 100 because of its fast growth, Pastusek said. Specifically, it scored 8 out of 10 points on the question, “What is the correlation between future debt requirements and the district’s assessed property value?”
“This indicator is a little tough in a fast-growth district because it basically says that our property value stays the exact same over the life of that future debt, so for the next 25 years,” Pastusek said. “We all know that we’re growing a lot faster than that, but that isn’t included when they look at property value. I don’t feel like it’s completely accurate, but we still get eight points for it.”
