Business Manager and CFO Roundtable Discussion January 25, 2017 Hank Johnson Consultant

Agenda Sponsor Introductions Upcoming Events Updates on Recent TEA Correspondence FIRST Gear-Up for the 2017-2018 Budget Current News and Updates/Reminders Small Group Discussions Discussion for Future Meetings Questions and Comments

Sponsor Depository bank for Region 11 Service Center Established in 1960 A community-focused financial institution Offers a full range of financial services to individuals, businesses and nonprofit organizations Recently merged with OmniAmerican Bank Operates 64 banking facilities in East, North and Central Texas North Texas operations are headquartered in Fort Worth

Upcoming Events Public Funds Investment Training - May 11, 2017 (9:00am - 03:00pm) The Business Center at ESC Region 11 is hosting a Public Funds Investment Training. This session is presented by guest speaker Patrick Shinkle, Associate Director for the Center for Public Management at the University of North Texas. Shinkle has more than 17 years of experience in public funds management in Texas, including 12 years as Administrator of LOGIC and five years as part of the TexPool management team. Shinkle has spoken on investment management, disaster recovery planning, computer security awareness, and technology-related issues. CPAs will receive CPE credit.

Recent TEA Correspondence: Annual Client Satisfaction Survey of Regional Education Service Centers and Executive Directors Commissioners review of ESCs Audit of ESC finances Review of ESC performance Review of client satisfaction Other factors as determined by the commissioner

Recent TEA Correspondence: Texas Advanced Placement/International Baccalaureate Incentive Program  Funded Components for the 2015-2016 School Years Test Fee Subsidies (must meet eligibility requirements) $30 state test fee subsidy for each AP or IB exam, and From USDE grant , TEA will also provide: Test fee subsidy of $16 for each AP exam, and Test fee subsidy of $65 for each IB exam Teacher Training Reimbursements Up to $450 per eligible teacher

Recent TEA Correspondence: Texas Advanced Placement/International Baccalaureate Incentive Program  Funded Components for the 2016-2017 School Years Test Fee Subsidies (must meet eligibility requirements) $30 state test fee subsidy for each AP or IB exam, and From USDE grant , TEA will also provide: Test fee subsidy of $16 for each AP exam, and Test fee subsidy of $65 for each IB exam Teacher Training Reimbursements Up to $450 per eligible teacher

Recent TEA Correspondence: Accounting of Grant Funds for High Quality Prekindergarten Programs  Fund code 429 Revenue object code 5829 Differentiate 2015-2016 and 2016-2017 revenues

Recent TEA Correspondence: School Year 2017–2018 (Fiscal Year 2018) Indirect Cost Rate Procedures for LEAs Independent School Districts and Education Service Centers – Two Options Make a one-time request to have a currently negotiated rate (that is, the rate for school year 2016–2017) extended, or Submit an Indirect Cost Rate Proposal (ICRP) to receive a rate for school year 2017–2018 only. (No current action is required of ISDs and ESCs that have an indirect cost rate extended through June 30, 2018, June 30, 2019, or June 30, 2020, based on a prior one- time request to extend indirect cost rates.)

Recent TEA Correspondence: School Year 2017–2018 (Fiscal Year 2018) Indirect Cost Rate Procedures for LEAs Open-Enrollment Charter Schools – Two Options Make a one-time request to have a currently negotiated rate (that is, the rate for school year 2016–2017) extended, or Submit the SC5050 Request for Federal Funding and Indirect Cost Rate for Charter Schools to request a rate for school year 2017– 2018 only. (Open-enrollment charter schools that have an indirect cost rate extended through June 30, 2018, June 30, 2019, or June 30, 2020, based on a prior one-time request to extend indirect cost rates, are still required to submit the SC5050 to request that an extended indirect cost rate for school year 2017–2018 be issued.)

Recent TEA Correspondence: School Year 2017–2018 (Fiscal Year 2018) Indirect Cost Rate Procedures for LEAs Restrictions Applicable to One-time Requests for Rate Extension Only LEAs with a 2016-2017 currently negotiated rate may request a rate extension (that is, the LEAs 2016-2017 currently negotiated rate is based on the 2016-2017 ICRP). LEAs that extended their school year 2014–2015 or 2015-2016 indirect cost rate through June 30, 2017, are ineligible to request another rate extension. To receive a rate for school year 2017– 2018: LEA must submit either an ICRP (ISDs or ESCs) or SC5050 (open-enrollment charter schools). No action required for LEAs that extended their school year 2014– 2015 or 2015-2016 indirect cost rate beyond 2017.

Updated Template – January 4, 2017 2016-17, Cell G70 is now available (blocked in previous version) Preloaded with bond debt used for hold harmless Issued prior to 9/1/2015 Compare preloaded amount with SOF Cells for future years also available

Updated Template – January 4, 2017 Corrects hold harmless calculation for some fractional funded districts Updates per capita rate for 2016-2017 Updates Chapter 41 minimum cost per WADA for 2015- 2016 and 2016-2017 Updates un-equalized taxes for EDA/IFA local share requirements

TEA’s Proposed Schedule for Changes to FIRST Beginning January 2017 Evaluate FIRST indicators Determine whether indicators still meet objectives Beginning February 2017 Develop new indicators Implementation 2019-2020

TEA’s Proposed Schedule for Changes to FIRST Beginning March 2017 List to consider (most recent) Splitting indicator #1 into 2 indicators Splitting indicator #2 into 2 indicators Other items but not limited to: Planning for property value fluctuations Student counts vs actuals More differentiation in district grades Any other items that improve efficiency and effectiveness Appeal process

TEA’s Proposed Schedule for Changes to FIRST May 2017 Solicit feedback from Districts Charters ESCs Other stakeholders Update for feedback June 2017

TEA’s Proposed Schedule for Changes to FIRST June through September 2017 Training Face to Face Webinar Note: Preliminary commitment for our July Roundtable meeting

TEA’s Proposed Schedule for Changes to FIRST September 2017 through December 2017 Prepare adoption packet for proposed amendments to FIRST Submit for public comment Respond to public comment Final adoption of new FIRST rules and indicators

TEA’s Proposed Schedule for Changes to FIRST June 2018 through June 2019 Transition period for districts and charters August 2019 Release ratings under new rules and indicators Transition year June 2019 through June 2020 – Full implementation August 2020 – Release ratings based on new rules and indicators.

Gear-Up for 2017-2018 Budget Update Projections: 2016-2017 results Students Revenue Expenditures Fund Balance

Gear-Up for 2017-2018 Budget Projections: 2016-2017 Students Enrollment Attendance Weighted Average Daily Attendance Recalibrate or adjust trends

Gear-Up for 2017-2018 Budget Projections: 2016-2017 Revenue Tax Collections State Aid Federal Funding ASATR Recapture

Gear-Up for 2017-2018 Budget Projections: 2016-2017 Expenditures Payroll Non-Payroll Recapture

Gear-Up for 2017-2018 Budget Projections: 2016-2017 Fund Balance Projected revenue Projected expenditures Net results Beginning balance Projected ending balance

Gear-Up for 2017-2018 Budget Estimates: 2017-2018 Student Student enrollment - growing or declining? New program(s)? Trend changes/adjustments New homes Aging out neighborhoods Re-greening Cohort survival

Gear-Up for 2017-2018 Budget Estimates: 2017-2018 Revenue Local Taxes Taxable values Tax Rate State Aid FSP Equalization Other Programs ASATR Per Capita TRS on be-half Federal Programs Other Revenue

Gear-Up for 2017-2018 Budget Estimates: 2017-2018 Expenditures Payroll Staffing Rates of Pay Non - Payroll Operating Capital Outlay Debt Payments

Gear-Up for 2017-2018 Budget 2017-2018 Budget Process Budget Calendar with key ingredients Well defined timeline with specific dates Staffing Student growth Program changes (Master Schedule – secondary) Date for budget adoption Date of tax rate adoption

Update: New Overtime Rules Final Rule Effective December 1, 2016 Nationwide injunction on new rule – November 22, 2016 Blocks DOL enforcement DOL appealed injunction

News from Legislature – House Budget Provides for expected enrollment growth of about 165,000 students over the next two years Includes an additional $1.5 billion for public education Contingent upon the passage of legislation That reduces Recapture, and Improves equity in the school finance system

News from Legislature – Senate Budget Adds $2.65 billion to cover student enrollment growth More than 80,000 per year over the next two years Increases instructional materials allotment by $29.6 million Provides an additional $32 million for high quality preK Continues funding at current levels for Communities in Schools Includes $5 million for Pathways in Technology Early College High School (P-TECH), a new program designed to help students pursue careers in technology Provides $10 million to support Education Commissioner initiatives

Small Group Discussion Changes to FIRST Gearing up for 2017-2018 Budget preparation Timeline Budget Calendar Priorities

Discussion for Future Meetings Future Topics Dates for Future Meetings

Questions and Comments