The Texas Schools Financial Integrity Rating System of Texas, or FIRST, rating system was established by the Texas Legislature in 1999 and implemented in the 2001-02 school year. The system ensures public schools manage taxpayer funds responsibly and direct as much funding as possible toward classroom instruction, Chief Financial Officer Chris Smith said at the Oct. 27 board meeting.
“To maintain a superior achievement rating for more than two decades while experiencing tremendous growth across our district is something we are especially proud of,” Smith said in a news release. “This recognition demonstrates that our financial practices not only support student learning but also reflect a deep respect for the trust placed in us by our community.”
The specifics
Smith said the 2025 rating is based on an external audit of the district’s fiscal year 2023-24, during which it met or exceeded standards in nearly every area against 21 financial indicators, including:
- Fiscal stability through a 6.7% average increase in fund balance over three years, and maintaining over 131 days of reserved funds as of August 2024
- Growth management through the 14% student enrollment increase over the past five years
- Administrative efficiency through the district’s administrative cost ratio of 4.04%, among the lowest in Texas
Take a step back
For the past two years, the district has adopted a budget totaling over $1 billion with a projected shortfall when accounting for staff raises, Community Impact reported. However, the shortfalls are expected to become surpluses after accounting for underspending, Smith said in July.
Despite a slight 2-cent increase in the debt-related tax payments for the 2020-22 school years, the state’s buy-down of the maintenance and operations tax rate, which funds salaries, has decreased by $0.40 per $100 in taxable value since the 2018-19 school year.
Additionally, the district has had an approximately three-year bond cycle since 1994 with nearly $2.38 billion in bond-related debt as of August 2024, per the website.
Zooming out
Lamar CISD also received an A for the 2023-24 school year, per the TEA.
In 2024, the district received a B due to the $1.52 billion bond debt passed in November 2022, which exceeded its assets, or the equity created by existing schools and properties, Community Impact reported.
Former trustee Kay Dazinger said LCISD was being “penalized for being a hypergrowth district” by receiving a lower rating, while Chief Financial Officer Jill Ludwig said the district will continue to issue additional debt in the future to fund the construction of new schools needed to keep up with rapid growth.
Moving forward
As a metric of financial management, Smith said high FIRST ratings also contribute to strong credit ratings, which in turn lower interest costs on district borrowing for new schools and infrastructure.
