In Highland Park ISD, everything is done in partnership with our community, right down to building the annual budget.
Eight community members serve on HPISD’s Finance Committee, along with all seven school board members, the superintendent, the assistant superintendent for business services and the director of business services. The committee meets six times per year and studies everything from enrollment and salary trends to details of the district’s budget.
Every December, we begin work on the budget for the upcoming school year. The operating budget is determined by the following five major components:
1) student enrollment
3) recapture cost
4) payroll cost
5) non-payroll cost
From February to August, each component is analyzed by district administrators and a set of assumptions are presented to the HPISD Finance Committee for discussion.
Accurate enrollment projections are vital. These projections are used to estimate the remaining four components of the budget. Enrollment is monitored and reported to the School Board and Finance Committee for each six-week period by grade and by campus.
House Bill 1, passed by the 79th Legislature during a special session in 2006, revamped the taxing system to provide property tax relief. The bill also created a minimum revenue allocation per Weighted Average Daily Attendance (WADA). Under the state’s formula, HPISD is guaranteed $5,608 per WADA. In addition to the guaranteed revenue per student, the district will receive other state revenue allotments for specific purpose state programs.
Other revenue in the district operating budget includes local property tax collections, penalties and interest from delinquent tax collections, interest earnings from investments, athletic participation fees, athletic gate receipts, summer school fees, parking garage fees, facility rental receipts, and most importantly - gifted revenue from the PTAs, the Mad For Plaid campaign, and the Sports Club. The gifted revenue is not recaptured, so HPISD is able to pour every penny of those dollars into education. On the other hand, property tax collections are recaptured at 72 percent, so 72 pennies of every dollar collected through local property taxes are sent to the state for redistribution. Still, property taxes remain the primary source of the district’s available cash, and collections are monitored on a daily basis. All other revenues are monitored monthly and reported to the board via the district’s financial statements.
The district’s recapture (Robin Hood) payment to the state is the largest single operating expenditure, and it continues to increase as local property values increase. By the end of the current 2008-09 operating budget, the district will have paid more than $825 million to the state for recapture.
Since 85 percent of the district’s budget is comprised of personnel costs, numerous processes are in place to ensure that payroll and benefits expenditures are maintained as adopted by the Board of Trustees. These costs consist of salaries, professional stipends, extra-duty and extra-curricular stipends, allowances, medical and dental benefits and other payroll deductions. Each February, central administrators meet with campus principals and other district administrators to determine staffing needs for the projected student enrollment for the next year. Detailed lists of campus staff are maintained, identifying resignations, retirements and any other staff changes.
Class load and assignment are determined for each staff position. Minimum enrollment per class at the middle and high schools is established and monitored. In addition, pupil/teacher ratios are established; new course offering considerations are discussed for educational advantage versus financial impact; and the impact of class waivers to determine K-4 teaching positions needed to comply with state-mandated 22-to-1 pupil-teacher ratios is reviewed. Through this procedure, personnel units are approved for budget inclusion. Campus administrators do not have the authority to add personnel units that are not approved using this procedure.
On a monthly basis, payroll expenditures are monitored by the central business office staff for unusual trending. Other processes performed by the business office staff consist of working with an independent insurance consultant to determine annual funding and claim projections for medical, dental and life insurance benefits. The consultant presents a report to the Board of Trustees on an annual basis prior to the new insurance plan year.
The remaining 15 percent of the operating budget consist of various non-payroll budgets to include utility costs, property casualty and general liability insurance, student transportation, external tax appraisal and collection fees, external auditors, school supplies, and various other expenditure budgets. Each year in April, campus principals and department managers prepare and submit a non-payroll budget to the Business Office. Campus budgets are built on a per-pupil allocation basis, while department budgets are built according to need. After the budgets are reviewed with department managers, the budgets are summarized by department and presented to the Finance Committee. The Finance Committee then recommends the proposed budget to the Board of Trustees for adoption.
After the operating budget is adopted, the individual components of the budget: enrollment, revenue projections, recaptures payment, payroll and non-payroll budgets are tracked on a monthly basis. Monthly and year-to-date financial statements are presented to the Board of Trustees in the monthly Board Agendas. At the end of each budget (fiscal) year, an external independent audit firm performs an audit of the district’s accounting records and the district issues a Comprehensive Annual Financial Report. Before the annual report is completed and issued, district administrators are already starting the budget preparation process for the next year.
By consistently practicing carefully designed processes, including a series of checks and balances, HPISD is able to ensure sound fiscal stewardship. We thank our community for its partnership in enabling us to provide the best education possible to each HPISD student.