1. School Finance –A Region One Overview Synopsis of Finance Update by Lynn Moak at Region One By Jesus Amezcua, CPA, LISD CFO

2. State Funding Outlook Deficit at state level Minimal growth Options –Rainy day fund –Expense cuts –Limited revenue increases

3. School Finance Data Financial Data –A). School FIRST Data (Financial Report Card for school Districts ) Superior Achievement Rating for LISD –B). Dropout Data ( Audit of leaver records by CPA) –C). Financial Calculations –D). Various Updates

4. Drop out Audit Begins with Risk Assessment using internal control questionnaire Determine sampling requirements

5. Financial Calculations Basic Funding Elements –No change in basic allotment $2,537 –No change in Cost of Education (COE) Index –No change in small scale adjustments Tier II Guaranteed Yield –2000-2001 $24.70 –2001-2002 $25.81 –2002-2003$27.14 Equalized wealth at $305,000 per WADA

6. Calculations (part 2) Gap Funding -2002-2003 amount reduced by gain in property value per WADA between 2001-2002 and 2002-2003 –Not applicable to LISD Declining Enrollment Adjustment – 2% decrease – Nor applicable to LISD Homestead Hold Harmless –Adjustment continues for impact of transition from $5k to $15K Hold Harmless for new salary -relates to $3000 increase from 1999-2000

7. Calculations (part 3) Hold harmless for insurance –Identify revenue increases Tier II in 2002-2003 ($27.14) and 2000-2001 ($24.70) –Any gap aid received –Assumes 75% of increase goes for the insurance –Transition aid if $900 times health insurance participants is more than 75% of the increase

8. Calculations (part 4) Minimum effort transition assistance –Maintenance of Effort (MOE) 2000-2001 contribution per full time employee Multiply this amount times the number of full time employees for 2002-2003 to determine (Maintenance of Effort) Minimum effort is $1,800 times each participating employee –If the MOE amount is not sufficient to fund the $1,800 (or $150 x 12 months), minimum effort transition assistance is provided. –Left over formula gains above the 75% must be counted first

9. Contingent Appropriations IFA ($50 M) (N/A) 29 cent tax rate for EDA (N/A) –For any debt payment before 9-1-01 Property value decline (N/A) 50% of optional homestead (N/A) Property tax losses due to protest (N/A)

10. Property Tax Rollback Calculation No change in basic calculation –Tax rate needed to maintain prior year state and local M&O revenue per wada –Revenue gain from formula increases –Use of maximum tax rate in current year to calculate increases –Additional 6 cents per $100 (LISD capped @ 3) –Amount needed for debt service

11. Tax Rollback and Tax Notice Appraiser to provide estimate by June 7 th Certified Tax Roll by July 25 th No change from prior year Tax and Budget Hearings

12. 403 Property Value Audits Comptroller will correct tax court rulings and changes Audit will also pick up properties left out previously LISD has had audit the last three years by Ray, Wood and Bonilla

13. No Child Left Behind Accountability 10 Components Highly qualified teachers and teacher aides Mentor Program for recruiting and retaining teachers Specific Requirements

14. 403 B Certification Effective June 1, 2002 certification guidelines by TRS Salary reduction agreements with new approved vendors All others are grand fathered Additional monitoring by State and local districts

15. Section 125 Cafeteria Plan Due to new health insurance requirements, LISD will have to allow a change in status for all health insurance employees Election time will be expanded from August to December 2002 New program that includes credit card to be launched in July 2002

16. New Finance System New Purchase Orders –April 2002 New Checks –April 2002 New Purchasing, accounting, accounts payable – April 2002 New Payroll June 2002 Training for schools and campuses May 2002 Schools and Campuses will come on line June 2002

17. Summary Many changes in laws and new programs June Budget Submission July Budget Workshops and presentations August Budget Approval