Tomball ISD adopts balanced budget, increases employee pay

"The job market in the Houston, Tomball and Magnolia areas is very strong," Ross said. "Tomball ISD must maintain a strong competitive position to maintain the quality of staff we are accustomed to employing."

Ross said the district benefitted from increased attendance due to enrollment growth and improved attendance of existing enrollment, which led to increased revenues and an ability to put forward a balanced budget despite the increase in expenditures.

Despite approving a balanced budget, Ross said the district will have to amend the 2014-15 budget to a deficit budget in the near future. The Governmental Accounting Standards Board, which sets accounting policies and procedures for all governmental entities in the U.S., will require the Teacher Retirement System to use a specific methodology to calculate the unfunded pension liability of the pension plan for the fiscal year ending August 2014. The GASB will also require government entities with pension plans to record as a long-term liability the unfunded pension liability, Ross said.

"Texas public school districts are now considered to be contributing partners with the state of Texas to the Teacher Retirement System pension plan," Ross said. "On the district balance sheet an increase in liabilities is directly offset with a decrease in fund balance."

Ross said there will be a liability share assessed against the district before the end of the 2014-15 fiscal year, but what that amount will be is unknown at this time. Once determined, the budget will be amended to decrease the fund balance to accommodate for the increase in liability. The new standards could make the district appear financially weaker, he said, despite it not costing the district any money. It does, however, prevent the district from spending it.

"We will have to amend the budget soon and we will close the year with a deficit as a result of these new standards," Ross said.

Tomball ISD's tax rate for the 2014-15 school year will hold steady at $1.36, and has remained at that level for seven years because of careful planning and a projected 5.59 percent increase in district enrollment, Ross said.

"It's really a big deal that there has been no hike in the tax rate in the district for the past seven years, especially when the state doesn't make it easy on the district," said Michael Pratt, vice president of the Tomball ISD school board. "Seven years in a row is very impressive."