Good evening. This meeting is now convened. The time is 06:46PM. I'd like to ask everyone to please silence all cell phones. A form of the board members is present in the auditorium. Our first order of business is to hear from speakers to agenda items. Public comment during school board meetings will only be available to those persons who have signed up to speak prior to the meeting, time per current protocol. Verbal and other disruptions by persons during the school board meeting are not acceptable as they inhibit the board's ability to conduct business and the public's ability to observe those
processes. Persons who participate in such behavior will be given one warning, and if the behavior is repeated, they'll ask to leave the meeting. We have nine registered speakers who will have up to two minutes each per board policy. We ask that you stay on topic and refrain from naming individuals, especially students, as their identity is protected under the law. That you may name your own child. I ask that you please respect our procedures and the other speakers, and at the end of your comments and end your comments promptly when your time has expired and the timer rings.
Our public comment will proceed beginning with public officials, followed by HISD parents and students. Do we have elected Trustee, Maria Benzon? Is she here? There you are. Good to see you. And then we'll also follow that with Trustee, Michael McDonough. We are here today because our children deserve better. Every dollar in this district belongs to the children of Houston, not to consultants, not to site contracts to our kids. Before I speak about the budget, I wanna celebrate miss Brooke Corso from Pin Oak Middle School. She recently won the Texas Library Association's librarian of the year award,
a statewide honor. She's proof of what a great librarian does for a child. She opens worlds, she builds readers, and she changes lives. And here is the painful irony. She earned that award at a time when libraries across Houston ISD are closed. Every child deserves a librarian like her. That starts with having a library in every school. Not just not just in schools in more privileged neighborhoods, every child, every school. Now let's talk about the money. The Texas Observer revealed that superintendent Miles, already earning 462,000
in base salary plus a 173,000 in board approved bonuses, was simultaneously moonlighting as a paid consultant for third future schools, the charter network he founded, collecting an additional 190,000 over three years. In February, he renegotiated that deal for a 58 percent raise right as he was closing our schools. House bill thirty three seventy two was passed specifically to ban this kind of moonlighting. Our superintendent cannot serve two masters, and Houston's children should not be the ones who pay the price. Since the HISD takeover,
since the state takeover, HISD is serving 13,000 fewer students than just two years ago. Fewer students mean less funding. The share of uncertified the the share of uncertified teachers jumped from point 3% to nearly 20%, an untested experiment according to the University of Houston's researchers. And the teachers who stay, they keep showing up for kids. Right now, a teacher at Lanier Middle School coached three robotics teams to a world level competition out of 400 teams. She and her students raise funds. They put in hundreds of hours, and the district won't allow her to attend because of star testing.
This is more than educate this the mentorship, the spark that makes a child believe they can compete with the best in the world. That spark came from their teacher. She earned the right to see it shine. And while all this unfolds, our still our children still need counselors in every school, libraries, and every building. So I urge you, protect our public dollars, fire Mike Miles, hire a superintendent with integrity, one who puts our children first. Houstonians are not asking for the impossible. We are asking for what was always promised, accountability,
equity, and leadership that invests in our kids. Thank you. Thank you. Good evening. It's budget season, and this has long been an area of focus for me. For nearly twenty years, I built some of the largest and most complex campus budgets in this district. Across multiple administrations and CFOs, I saw consistent effort to be both fiscally responsible and responsive to campuses. At its best, the system worked because the dollars followed the student. It wasn't perfect, but allocating resources as close to the classroom as possible serves schools well.
As this public process begins, I have one concern and two requests for the board of managers. My concern is straightforward. School budgets in HISD are a product of the number of students, their identifying characteristics, the associated weights, a unit allocation, and a campus attendance rate. Yet this year, campuses are subject to a 4% cap on budget increases over the prior year. That means a school that legitimately earns a five, six, 7% increase, and that could be by serving more high needs students, growing enrollment, and or improving attendance, will still be limited to 4%.
Regardless of how dutifully the campus leader approached that work, there is an artificial cap on how many dollars they will get in the coming year. This cap is not a state requirement. It's a local decision. And in effect, it tells campus leaders, you did the work, you generated the funding, but you don't get to keep it. This amount recaptured is detailed for PUA schools as their ceiling slash floor. This self imposed cap that dismisses the earnest work of school leaders begs the conclusion, either you have a funding formula or you don't. If we do have a formula,
it should be honored. If it can be overwritten, then we need to be honest that it is not truly a formula. My two requests for the board of managers are simple and actionable. The first is this, ask for the ceiling floor amount for each PUA campus. Not in the aggregate, rather ask for it itemized by school. The budget office has already made this calculation, so I would suspect you could have it before the I would also ask that per that that you ask for per student funding at every campus. The total campus budget divided by student enrollment. Request this for the coming year and for the two years prior.
Not units, not weights, just dollars per student. It's simple math, and it will provide a clear, comparable picture across the district. Now intuitively, you might think it is basically the same. I assure you it is not. Again, don't take my word for it. Request that data, examine and discuss it, and see what emerges. Finally, despite the district continuing to lose enrollment, we know the PUA campuses, as a percentage, are holding their own. We know that PUA campuses maintain the confidence of the community, carry the larger load of the overall district data,
and still deliver an academic program that is collaborative, engaging, and results oriented. In essence, we know that PUA campuses matter, and they need to be supported to keep doing that work. The state of Texas has not funded public education at the level it should, particularly since COVID. That is not the fault of anyone in this room. While tightening budgets is necessary, how we do it matters, and there is nothing wrong with the traditional task of digging through the sofa for loose change. There is, however, something wrong with treating the PUA campuses like that old reliable couch.
Thank you. Thank you. I understand that, trustee Savant Moore has, arrived as well. Would you like to come up? Good evening. Always a pleasure to see you. Today, when it comes to the budget, all I ask is that you do right by teachers and that you do right by Northeast Houston, especially black children, Hispanic children that need you to do right by them. I asked God why am I continue to be surrounded by elders that are not good examples to me. When I looked at the video and I saw a colleague question because they were
asking the hard questions, it hurt me. And so we must respect our colleagues. We can agree to disagree sometimes. We cannot be led by emotion. We have to respect womanhood. We have to respect our colleagues. We also know that you made a difficult decision today by terminating the future state rep, Michelle Williams. But remember, your termination is actually an elevation because when we first met Laura Simmons,
she met the superintendent, and she became a state rep. And now we have met Michelle Williams, and this November, she will be elected as a state rep. And remember that you can do wrong to God's children, but he will elevate them right in front of you. And so we must do right. And us that are powerful men, we must respect women. I may not agree with everything she says, but she still is my sister. We must respect the women that do the hard work. I look to my left. There's more women than men that's doing the work.
I'm a teacher, but there's more women in the classroom that are doing the work. So us that call ourselves leaders, let's continue to do right by them. Because god told me he will show me examples of what not to do so that I can do what is right. God bless you, and god bless HISD. Thank you. Miss Smith, you wanna call the other speakers? Remaining speakers are Ella Taylor, student, Laura Henry, parent, Christine Hurley, parent. Any other speakers? Please move to the front row.
Helen Taylor is not here today. Okay. I'm Laura Henry. I'm a parent. I'm also a national board certified teacher in a different district. I wanna publicly thank Michelle Williams for always putting kids first. Right now when it comes to the budget, there's a lot of teachers that are sitting at home getting paid because they've been fired because they also too refuse to break the law. I work in a different district, so I get a lot of HISD kids. And, one of them went really last year, grew in writing so much. And I said, man, you've grown so much this year. And he said, miss, that's because I came from HISD. I didn't have a teacher last year.
My teacher missed too many days of school, so they fired her, and then we didn't have a teacher at all. And he didn't have another teacher. So I want you to know that if you hear that all the kids in HISD teachers all the kids have HISD teachers, they don't. We're moving them from class to class. A lot of them don't have teachers. All of us who are parents know that because our kids haven't had teachers. And I didn't even come here to say that today, so I'm not gonna finish my speech, but I'll I'll just start it. The introduction of future two schools, where the first few hours are devoted to academics and then the rest of the day is devoted to experiences,
That's kind of a new thing that was recently started by, by another woman who now I'm not on my speech, so I forget her name. But it's a she's got something very similar. You need to take this as a warning. It's an experiment. There's no data for this stuff. According to the Houston Chronicle, Miles wants a 100 of these schools. You need to ask some real questions. When you asked him what the downside was at the meeting, he said, maybe the money. You need to look into a lot more than that. Look at the Wired article where they look at the Alpha School in Brownsville and look at what's happened to the kids emotionally that can't get the rewards because they're
not fast enough in that two hours. Look at what people are saying AI does to children cognitively. Don't just listen, and I know you guys are busy, but when you got people experimenting with kids, you guys have got to do the work. Thank you. Thank you. Twice in one night. I'm gonna I think when we look at the budget, there are these obvious categories that we look at as areas to save money. And I would like to keep expanding on their areas where we're missing opportunity, and one of them would be in risk management. And I'm bringing this up because I was very
I was gobsmacked to read the eighteen eighty two partnership agreements to see that the partnership schools are not required to have basic insurance. I wanna make sure you understand. The paper towel vendor has to have minimum insurance, but the eighteen eighty two partners don't have to have insurance. The TEA contract template had a whole section dedicated to minimal insurance that every eighteen eighty two partner should have.
Now we don't want bad things to happen, and they usually don't, but sometimes bad things happen. I think mister Miles actually knows of an eighteen eighty two partner in Jasper ISD where some bad stuff has happened. In his third future school in 2025, a teacher was arrested for molesting a student. Two weeks ago, another teacher was arrested for assaulting a student. I think this would indicate that there are problems that come up in 1882 partnerships,
and it seems like the partner should have insurance. Lawsuits are expensive, and we should not as a taxpayer, I shouldn't have to pay for an eighteen eighty two partner for their mistakes. You're giving them all the money. So they have plenty of money to pay for their own insurance to cover their own decision making and their own actions. Don't pawn this mistake onto other schools that aren't getting the full allotment. Thank you. Thank you. Dorcas Hand, Suzanne Lyons, and Lisa Robinson.
Any other registered speakers? This concludes our public comments. Okay. We're now, we'll now have a presentation on our workshop topic, which is the twenty twenty six-twenty twenty seven District budget. Superintendent Miles, you have the floor. Thank you, Mr. President and Board members. I'll give a preamble and then I'll go upfront and present the budget presentation. We're here today to walk through how our budget supports what matters most. Strong instruction, better outcomes for students and responsible use of our dollars. This is not just a financial exercise, it's a strategic one.
Every dollar must support instruction, accelerate achievement and move us to our 2035 vision. We're operating in a constrained environment, yes, with declining enrollment and revenue pressures. But we are making deliberate choices to protect classrooms, invest in our teachers and principals and maintain long term financial stability. You'll see how this budget reflects those priorities and positions the District for the future. This is an iterative process and today is about ensuring alignment as we move forward towards the final adoption in June.
And if you give me a minute, I'll displace to the front. Alrighty. This is our first budget workshop. We have maybe one, maybe two more, depending on whether the board wants an additional one. And then, of course, we'll have the June board meeting to consider passing the budget. So, just for tonight, it's a bigger overview. We're going to talk about the key principles of effective budgeting, the funding overview, how the budget works, we could have a graduate level course on it, but we're just going to go through the highlights, our current financial position and then assumptions and methodology for school budget,
that's how it how we start. In the end, we hope that the board will understand HISD's financial picture a little bit better, connect the twenty six-twenty seven budget to the guiding principles and action plan, and then provide some transparency into the schools and department budgets. This is where we are in the timeline. This is just to note that the budget process starts back in January, an effective budget process starts back in January and it starts with the action plan, and we do a lot of work prior to getting to this point.
And so now you see that we're at the board budget workshop number one, and then you can see in May and then in June. Just a quick reminder, all documents, all presentations are draft until the board actually approves or doesn't approve a budget on June 11. We have budget assumptions and changes continuing until we get to the budget. Alright. So the key principles of effective budgeting, yeah, there are four. I'll talk about each one quickly. Yes, keep cuts as far away from the classroom as possible,
prioritize resources. Prioritize means you have to put your money where your actions are. Make decisions now that will support long term financial stability, sustainability, and then design the district to prepare students for year 2030, year 2035 world and workplace. Keeping cuts away from the classroom, I won't read this, you can read, but, it does mean we have to have high quality instruction, safe and orderly environment and resources for special ed as a priority, maintain competitive salaries, and then ensure that, that we have instructional leadership.
Just on that note, keeping pets away from the classroom, putting your money into the classroom, this is the total investment. On the right hand side, you see 57% of the budget went to instruction and instructional leadership in 2023. This year, 72%. That's a huge increase in the amount of money going to kids and teacher salaries and, instruction. By the way, teacher salaries have gone up from about $65,000
per teacher on average in 2023. Next year, it will be over 83,000 on average per teacher. That's a $15,000 increase in three years. That's how much we put our money and our priorities in the teachers and effective teaching. Number two, keeping, classroom, the money towards the classroom was number one. Number two is you have to prioritize to meet district vision and goals. This is the principle of every district, but not everybody actually prioritize. You can't spend all the money when you have declining you can't afford all the
things when you have declining enrollment or not enough money coming in from the federal government or the in the state government. We have to make tough choices. We cannot fund everything. So you're gonna see how we prioritize. Number and by the way, it says here that the priorities have to be done so that we meet the district's goals and vision. This vision statement hasn't changed, so you're gonna see our money into two places. One is significantly narrower achievement gaps. That's reading, writing, math, and science. And then, two, year 2035 world and workplace.
So there's money going into that. That's the district vision and of course the board goals, you know, by heart, but where they are, the four of them. So you're gonna see how that's tied to the board goals. Number three, the principles of, effective budgeting and number three is make decisions now that will support long term financial stability. Take a look at this, you've seen similar versions of this for three years. That blue and red line, those numbers were given to us in May 2023.
The elected boarder that hired Alvarez and Marsal to put that graph together. These are exactly their numbers. And what that shows you is declining fund balance and their prediction in '24, '25, and '26 fiscal year of a drastic decline because ESSER dollars would stop. You can see that starting in '22 and '21 really was, money placed into the fund balance because the the district didn't spend as much money during COVID when kids were not in school.
After that, in '22, '23, and '24 fiscal year, you see an inflation of the fund balance because of COVID relief money. But then Alvarez Marcel predicted that it would drop precipitously when you stop getting $325,000,000 in, ESSER funding, and you would have to pay for the salary increase that happened in '21 and all the other ESSER funded positions because there's no more ESSER money. So anything that was a recurring expense,
you would have to pay for. Well, you can see Jim Terry, the finance department, this district, and the budget priorities that we put in place over the last two and three years has actually avoided the cliff and now we have a stable budget. That green line is the three month recommended ninety day balance. So, we're well above that and that is what TEA guidelines suggest, three months or ninety days of fund balance. So that was priority number three in the last principle number three.
The last principle is, and I believe this is not a principle for all districts, but it is for us, that the budget needs to be designed at least in part to prepare students for year 2030, year 2035 world and workplace. That's not a typical goal, but it is part of our vision. Those are the four principles of effective budgeting. So let's talk about action planning and budgeting. I train the central office team and principals and EDs on this timeline, this process.
It starts in January with the district action plan. And you can see throughout the the last several months, it's an iterative process where you have action planning, prioritizing on the one side, on the left side, and you have then budget development process that matches that iteratively at the same time. You don't do budget first from last year and just cut it by 5% or add 2%. You have to prioritize and this is the way to do it.
And that's how we avoided the fiscal cliff and that's why you'll see great coherence between the expenditures of money in this district and, the action plan that is produced. So we're we're now here and you can see, we're at the the April 23 board workshop. We we still have some more work to do before it's all tight together, but a lot of it has already been planned out. So let me show you how we do that. Quickly, I won't I'll race through these slides because I presented to the board the action
plan a month ago. Key action one, improve the quality of instruction. That's always going to be key action, number one. Number two, sustain and accelerate achievement for HIC students. Number three, implement the Future2 program number four, expand access to high quality post secondary pathways improve sped instruction service delivery and outcomes, provide accurate timely information to the HSE community, strengthen the teacher evaluation and compensation system, and then strengthen early, early childhood education, pre k through second grade, and then finally strengthen central office operations and efficiencies.
Those were the nine key actions that I presented to the board. And the question then is, are those key actions, first of all, tied to the board goals and vision? And then, second of all, is it prioritized in the budget? And how can it be? So the answer here is you can see the the, alignment to the board goals. You have these documents, I'm racing through them, but, you know, stop me anytime. And then what we do in the action plan, you've seen this in the hard copy of the action plan, there's money tied to each action.
This is not the whole set of mind. This is money that we're going to prioritize over and above what we would normally do. So quality of instruction, there's already I told you, 72% of the of the budget is tied to instruction and instructional leadership. We've grown that. What this says is we're not going to grow that more next year. We're going to spend the significant amount of money that we spend in instruction. But for example, sustain and accelerate achievement, when you talk about accelerate math or the literacy things we're going to do over
and above what we did this year, that over and above will cost $3,000,000. We're gonna prioritize the budget, so will we do these things first? So these are on top of what we already spend and in some cases in a department, it'll be an add on. In some cases, it'll be a repolarization of resources. But the biggest point here is these figures are in the action plan, and these figures you're gonna see are at the top of the budget allocation so that we know we will spend the money on the priorities.
So if something has to get cut, it won't be these things. Alright. So that's that's how we get to this point. We start with our actions and our priorities. We make sure they're aligned with our goals and the vision. And now we can start a budget, which actually started back in January also. But let me go quickly on how the budget works. I know you already know this. I just want to be real fast about it. We can answer questions about it there if you wish. Basically, there's three sources of funds. The large portion down there,
the green is, local funding, and that's mostly property taxes. The blue portion is the is the, state or federal funding, and that's mostly title monies. Title one, title two, all the title money to federal grants. That's the 12%. There's an asterisk there. We it's it's supposed to be 12%, but we're not getting probably a little over $21,000,000 we've been shorted. We may still get it from the federal government broker, it looks like we may not.
Decrease in the title money during the year, during this year. So, there wasn't a linked budget for a decrease of $21,000,000 in title funds at the beginning of the school. Nonetheless, it's usually around 12%. In the green, you have the state funding and that is the student enrollment on ZDA. We're gonna talk about state funding in the next slide. But that's it. Those are the three sources of revenue, and that's what we have to work with, for our budget. And for us, it's somewhere around, at least in the general fund,
not counting the other funds, around $2,000,000,000. So the elements of state funding, you're gonna see similar to this in the school funding in a minute, but it is a basic allotment from the state. The legislature often increases that a little bit, and we're always looking for more dollars per student on that basic allotment. And then, obviously, maybe not obviously, but it's it's multiplied by enrollment. So our enrollment percentage somewhere around 94%, not 94%, that's ADA. Enrollment is declining,
so it's in the number of kids that we have, attending. And then the average daily attendance is the attendance of the students. So enrollment is the number of kids. Average daily attendance is what what percentage do they attend school. It's around 94%. And then we add, not multiply, the weighted ADA. What that means is the state also gives us a weighted ADA. What that means is there's different weights or allocations for different types of kids. So special education will get will get the number of students we have,
22,000 something, times a weight, an allocation, and that is added, not multiplied, to the to the funding. Emerging bilingual, homeless, all of these cat different categories get a different weight. And so that's all that together is what the state funding is that, part of the circle, I think, was 14%. Okay. Alright. Just quickly, I know you know about recapture, but this is always an important thing for for a district the size of Houston in a large urban area. The combination of the local funding and the state funding is your entitlement.
And if the district and there's a set number that the state will look at to say this is what you're entitled to. And if we get more money coming in through property taxes generally, then we are entitled to then we have to give that money back to the state and that's called recapture. If we have less money, more than what we're entitled to, other other districts would be sending money to the state, that will be given to us. And so we are often in a recapture situation, it depends on a lot, but mostly taxes.
There's our current financial position. I know you've had briefings every once in a while and you've had audit committee reports, so I'm not going to go into a lot of detail. You have this in your packet. Only to call out the beginning fund balance this year is $748,000,000 and we're projecting a fund balance of $751,000,000 so a fairly balanced budget. In other words, if we get to the projected fund balance of $751,000,000 our expenditures will almost match our revenue this year.
And that is a balanced budget and that would be huge since when we got here that budgeting for the second year, we had a $520,000,000 deficit that we had to overcome. And by the way, we decreased purchased services from $520,000,000 in 2023 to 250,000,000. There's not a lot of vendors who are happy about that, by the way, in contracts. 520,000,000 decreased to 250,000,000. That's how much outside people are getting.
Now we need some vendors, of course. Like, Hazel Health is a good vendor that helps our kids with health care, in the schools and in the Sunrise Centers. And so I don't I don't wanna dissolve vendors. All I'm saying is we had way too much money being spent on outside contractors and now we have that money going into instruction. Budget bright spots, we're hoping we get a balanced budget this year that would have to reduce our budget deficit. You see that line going horizontal, not declining. That's huge for a district with declining enrollment to beat balanced budget.
You hear all the stories of counties and cities and other districts, having huge budget deficits because most of them are in the same place. A lot of extra money got placed in to return expenses, bad financial management by other people, got us a huge deficit, and now we're gonna be balanced. We maintained our Moody's AAA rating. We're one of five or six districts in the state with that rating. And there's a this is not magic. This is not easy. You need a good financial person at the helm and a team and then good
prioritization, good discipline in spending, not trying to do all the things that that everybody wants us to do, that's how you maintain your Moody's AAA rating. And then continued central office efficiencies, we continue to find ways to be more efficient. There are constraints. I just need to point them out. If we're gonna point out the the the bright spots, here are the constraints. We are predicting, more enrollment decline. You saw the HURC report. That wasn't a bright spot with demographic changes. We didn't go over economic mobility,
but that's happening too. As prices rise, people seek lower income housing. Loss of disaster pending, what this means is last year we went out for three disaster pennies, That was about $50,000,000 That's a one time expenditure. You won't see that. That's actually a decrease to the budget because we're not going to get that money. And then this is not a a huge constraint, but it is something that to to to be cautious about, and that is the legislative session, starts up anew in January during this coming school year,
2627 school year. And usually, there isn't a hit mid year, but it could mean lower revenue or flat revenue. And when you have decline in enrollment, that means or inflation, then that means you have to be conservative in your budget. Alright. So let's start the budget process. This started at the January and then we make tweaks to it all along. On the left hand side, and this is real fast, but to do effective budgeting and to build a proper budget,
you have to make some assumptions and you have to make some educated guesses as to your revenue stream for the next year and your expenditures for the next year. So on the left hand side, you see, this is what we think the revenue side of the house will look like. And in the end, you see that green number there, 55,000,000. We think our revenue will decrease overall. Yes. There are some areas where we're gonna add money like the teacher incentive allotment. There's 27,000,000. We will sell we will be able to sell some property.
We think, dollars 25,000,000 in property sales. That's because we didn't make as many sales last year or this this year, and we may have a few more properties upcoming online for that. The board may approve that. That a lot of it is a hit. I already talked about the disaster relief, pennies, 50,000,000 that we won't be getting, so it's a decrease in revenue. The enrollment decline I talked about, so we won't be getting that. So all total, we see a decrease in overall revenue, meaning that our estimated budget revenue for fiscal year twenty seven is $2,000,000,000
On the right hand side and, again, this is a a draft document. These numbers will change at least a little bit, and then when we actually get the number of enrollment decline or, property sales, that's you know, it shows up. On the right hand side, you have to make some educated guesses about your expenditures and you can see at the top, we're already because of the pay for performance plan, that increases the amount of money going to teacher salaries. In particular, in this case, TUA salaries are going to increase by 12,000,000.
NES salary is actually gonna decrease partly because of the decline in the number of teachers who are because of enrollment decline and partly because their budget is going to the hospital model to pay for performance. So they will lose a little bit, not a lot, instead of being about $11,000 on average over the average salary. They're only gonna be $9,000 over the average salary. So that's why you see decreases. So the other things at the top there are from the action plan.
So a lot of the things on the top there are from the action plan. So we put in the expenditures right away so that that's what we will fund and that those things don't get cut. Now as far as the decrease in expenditures, you see there the central office cuts, we are going to be downsizing a little bit. We are consolidating schools, meaning we close schools. I already talked about the NES. Cuts to overtime and extra duty payment, accounting for vacancies and one time expenditures,
those cuts amount to $98,000,000 so we actually will decrease expenditures $46,000,000 million dollars $47,000,000 You see? So, yes, the top is an increase, the second half is a decrease, the total then is a decrease of $46,000,000 That brings us almost to a balance, but did you see that the decrease to the revenue was 55, decrease in total expenditure is 46.7. Depending on where our ending fund balance is, we might we'll be close to that balance that you see at the bottom there,
€753,000,000 So that is a fairly balanced budget. We're not done. There'll be some changes here and there, but you have to start with generally a balanced budget in order to do the work. And so these numbers will get fine tuned over the next couple of months before we bring the budget to the board. Should I keep going, sir? We'll take some questions now and then we'll go to to that later. Thank you, Mr. Chairman. A lot of great stories.
I'm looking at the slides you just showed with the grid of all the revenues and expenditures. And each one of these lines tells a story, right? It speaks to the key priorities, to the action plan. And one that I really was surprised to see, and maybe you give a little color, is a $6,000,000 increase to minimum wage employees in the central office. Can you can you talk a little bit about what motivated that and and the spirit of why we're doing that? Yes. I can. And we'll we have more time on on more specific line items at the next
workshop. But for right now, there's a couple things. We know that when we when we cut staff or cut central office departments, a lot of times that means people. The rest of the folks are working as hard or harder than they have before. And, you know, it's a challenging time. The economy is not too good or at least is a little unstable or unpredictable. Inflation is up. Gas is up. And so we have to try. I know it's a it's a you know,
6,000,000 is can impact our budget bottom line, but, we need to make sure that we continue to raise our salaries for the people who work in this building and out in the schools that do out who are hourly employees. Thank you for the presentation. I have a question about the state funding formula. I just want to confirm that we're talking about average daily attendance versus enrollment, which is why it's important for students to be in the classroom, correct, in that calculation? Absolutely. I mean, two percentage points can make a huge difference when you're talking about millions of dollars.
So, yes, that's average daily attendance is is the percentage at which students attend school. So you could have a huge you could have an enrollment increase, but if your average daily attendance goes down enough, it will wipe that increase in enrollment out. Great. Thank you. And to that end, it is my understanding, correct me if I'm wrong, that the entitlement that's generated by the state funding comes to the district and the districts get to decide how that money is spent at the campus level. The idea isn't that the money flows as an individual because we're talking about ADA
and not enrollment. It doesn't flow to the campus that way. Is that correct? Yeah. So there's a there's a little bit of difference there, and then maybe you can weigh in if if you want. But the there are specific entitlements for specific groups of kids. So a a school, in some cases, will get that directly. For example, if if there's a special needs student, that money will be allocated to that school or to the district to support that student. So it's I know it's a little bit complex, but that that money will flow.
If a if a school has emergent bilingual students, you're gonna see here in a minute when I go to school formulas, they will get that emergent bilingual weight. That's the way it's supposed to be. It wasn't always like that. Can you go one back, I think? That one. Is that meant of recapture, this distribution? Does this have recapture included in it? Yes. No. This is just I mean, if we didn't have recapture with 74%, The assessed the assessed value of our district, good evening, will be here April 30, and that will then allow us to go back in and look at the calculation
and see if in fact we will be paying it, recapture. But right now, the we we have not included recapture into into, our calculations. You didn't see it on the assumption page. So the 74% may go down. Yeah. That's that's right. But that would mean that the other pieces of pie would go. Okay. Thank you. Remember, this is this is recapture. This is a revenue chart, not an expenditure chart. Correct. Okay. Thank you. As we go through this, one thing I'm wondering if you could share
as we continue the presentation is, as I look at the budget overview slide, if you could highlight any risks to these assumptions that we're making at this point. I know you highlighted the whole thing that we could change it could change. The thing I'm thinking about is, for example, you're calling out the change in federal dollars that we didn't expect. As we look at these other numbers on this table here, if you could just highlight other risks to these assumptions that we might expect an impact? Yes. There's a couple.
I mean, sometimes, some things have come out of the blue, like the the federal some of the changes that the department of that at the federal level has has had and and some of the guidelines and policy changes midyear. So that's that's one thing and we frankly didn't predict that. Some of the other budget challenges or constraints, enrollment, If we lose 2,000 more more students, that's a huge hit to the revenue side. The teacher, the teacher incentive allotment,
we think is pretty solid. I don't think there'll be any legislative change to that. In fact, that hopefully will just blow. Property sales, we have a couple that are under contract or nearing, close of contract, so we feel pretty confident. But, you know, if the economy is like what it was last year with the market going down, then we may we may not get to 25,000,000. So Jim and I, mostly Jim's team, does market analysis. They they do a good job. What is our what is our best guess?
And we're usually pretty conservative, on on our budgeting so that we don't get hit. Even if we did get a hit, we won't be able to make it. One more clarification. Let's say a lot of people their personal budgets might be impacted by the rising cost of gas, something like that. Are there other costs maybe in that perspective with that perspective that we might be thinking about as a district, as, let's say, cost of certain things are going up? Yes, I think and I don't know if you've already budgeted for inflation or an increase
in costs. Yeah. The, individual, chiefs in their departments and over in transportation, they have made an estimate. They know that, you will be going up. And so, we we certainly provide the support and help to each to each department in terms of allowing our expertise to help them in their budgeting process. But I think that everybody is, very aware of the implications of what's what's happening out in the economy. Especially transportation and FMO. I know that FMO understands that the material costs go up,
supplies go up until they budget for that. Good question. So quickly on the school budget framework, again, we're gonna bring all of these budgets to you. If you haven't received the school budgets already, you'll get them. Just quickly, just a quick context. During the COVID years and the Esherick years, this district, and and last year, this district tried to keep the budgets the same. That mean that meant hold harmless on enrollment, hold harmless or keep the budget allocation and the weights the same.
That meant giving more dollars during the, ESSER funding to schools for more people, more programs, more everything, because it didn't need to be paid for, at least at that moment. That was very irresponsible, and I say that not to be mean, but just to let you know the extent of what we had to do to change it, and what we had to do to prioritize and claw back some of those excesses so that we would have money to put into instruction and the teacher salaries.
So there wasn't a real good formula in the past because we kept if you had a 100 EB, emerging bilingual students, and you lost 50, you still got money for a 100 EB students. If you got this much money for homeless students and you lost students, homeless students, you didn't have as many, you still got that much. We held harmless this district held harmless on enrollment until last year. We stopped that, finally. In other words, you got this much money for 10,000
1,000 students. You went down to 800 students. You still got money for a thousand students. That is no way that is not a formula. That is a formula for disaster over budget and things like that. So that's what we had to do this year. We finally use actually the formula that almost every other district uses. And so to compare that formula in the budget to last year's formula or the year before's formula, two years ago's formula, is not really accurate
because we would lock in the whole harmless, the excesses. So if the school had, a 100 teachers and, really, they didn't have as many kids, but they they were kept a 100 teachers because they could because their budgets didn't decrease. We can't lock that formula in. So schools may think they still need a 100 teachers, but they have eight 200 fewer kids when they've been held harmless. So, we finally put the real weights in place. And that's why in order to make sure that we don't continue this hold harmless,
we did reduce we are keeping our budgets whole at least for this year, the next year, no no less than 1% and no more than 4%. The difference though is they're gonna have to pay for the teacher salaries and we're not holding we're not holding harmless on enrollment. So here's the formula. You know that these are the parts of the formula. So here's what it looks like. So again, let me go back again. We're gonna use the formula almost every other district uses, which is you look at enrollment,
you look at ADA, you look at a base resource allocation, you look at weights, and in our case, which is different, the salary that we will pay for the teachers is not the salary schedule. The salary is paid for performance, and I'll explain that in a minute. So this is it in in graphically. Every school got a base of 1,400. We multiply that by the enrollment. This is again like the state. And then we multiply it by the average daily attendance. Now that's not much different. Where it really differs. We've changed the weights to fit the state's weights,
and we're not holding harmless anymore. So that whatever the state gives us for EB students, that's what we we did through the school. And some schools saw a swing. They had a lot more EB students than before, so they're getting more money. Some students lost money because they don't have the EB students anymore, not the same amount. Or special ed or or homeless, any of these special categories. And there's one other thing I gotta tell you about the weights, which is different than this district has ever done, and it's about time. Now we have a,
academic need wait. $500 per students for NES and special focus schools. So PUA schools that are special focus, $500 per student, academic weight, which is matches, and in some places a little lower, in some places a little higher, than the magnet subsidy. And I'll just say it in public, if we're gonna have a magnet subsidy, which we should, and support our magnet program is we also should have an academic needs subsidy because
your most effective teachers, your highest paid teachers, and your resources should be prioritized or skewed towards the schools that are struggling the most or the students that are struggling the most. And so that's part of the weights that's different than before. And then finally, like I said, the play for performance. One thing we did to to be to cut some slack is we kept the number of people, that you had last year at school the same, the number of teachers.
And we pay we multiply that by the average pay for performance salary. And if at the end of the after, you know, in October when we true up, you have more teachers on the higher end, we will make up the difference. If you have fewer teachers on the we have more teachers on the lower end, you may get the difference. So here's the average for the pay for performance that way. Trying to get higher paid higher performing teachers doesn't hurt you. So that's the that's the pay for performance, salary, put benefits, and that is what the schools are getting per pupil.
And so you're gonna see that, in any case, we try to make it so that it's fairly fair. Your budget is about the same as last year, not we can't go 4% higher or 1% lower. Except that now, because the teacher salaries are higher, schools actually have less money for non salary things, or they had to cut salary. So that school I was talking about, that example of a 100 teachers, they lost 800 kids, they're still getting paid for a 100 teachers, or they still have 100 teachers.
They're gonna have to cut some stuff most likely to to work efficiently. So that's, that's the school budgets in job picture. If you haven't got them already, you you will get the school by school. You'll see base, projected enrollment, ADA, weights, salary for people. Every every school. And keep in mind, we true up, meaning, if in August you have more kids coming, we when we true up and it's usually in December, June, January? It's in November, we will we will true up means if you got more kids,
you get more money. If you have higher attendance, you know, you'll you'll get your higher, ADA. And if your your weights may change because you might get more EB students, more SPED students, fewer SPED. Whatever it is, your weights may change a little bit. We'll true up in November. And in some cases, we've trued up in in the August, in in those cases where they had wide swings in enrollment. So they need the money, you know, earlier. Mister president, that's the end of my presentation. Next board workshop, you'll see that we're gonna detail the assumptions a little bit better.
We'll give you actual proposed budget for for the district. We'll go over we'll send you even more detail on school budgets. At that point, we'll give you the central office budget, the department budget, and we'll talk about health insurance. Great. Any questions? Go ahead. I do. I have a question. On the academic weight, is that something different than the way we've done it before? And when will these schools know that they're gonna be receiving those extra funds? And will it be the whole year, or does it go back to enrollment again? It it is it is a whole year.
It is a it is a per pupil funding measure, and you'll only get that weight if you're a special focus school. It's included in the budget for the NAS schools, so that's how we budget for the NAS program. Okay. Thank you. Thank you. I have one more question about that. You mentioned and I think I just am and not I have not been focused on this. So you mentioned that the magnet schools already have a per pew pupil can you just run that by me? I'm sorry. Yeah. It is a very complicated formula. Does anybody wanna tackle that?
Oh, I didn't mean the formula. I just wasn't that sure. I did not realize that there was a per pupil allocation for the There's a there's a what we call a subsidy magnet subsidy, and it's very complicated. It has to do with, you get a certain amount of money for the kids who are in performance arts, you get a certain amount of money for kids who are in a different magnet kind of program, and so it's if you have several different programs, you get several different funding streams, for your magnet subsidy. And it's a wide range. Some some schools get
got $800,000 total as their magnet subsidy. Other schools only got $5,060,000 dollars for their magnet subsidy. It it depends on the programming. Got it. And so we've been doing that for some time, and now you're adding this allocation for our academic, weight. That's right. We're not cutting I I hope you didn't hear me say Mhmm. Because I didn't I don't think I said we were cutting manual jobs. You just did. So here's my follow-up to that because I was trying to follow. So I followed everything up until you said so if I understand what you said. So if you have lots of high performing teachers,
you're gonna have larger salaries and you're gonna make up the difference. I didn't understand when you said if they have a disproportionate amount of teachers that are that are at the other end of the scale. I didn't get the part about that you make up the difference, meaning that I didn't get that part. Yes. So in order to budget, principals have to know, what amount of money their teachers are getting. And it's easier when you have you know, I already know I have fifteen year I have five teachers who are on the fifteenth year because there's a salary schedule. So I can I can plug that in?
Right now, it's hard for a principal to know what their total salary amount is because they don't know how many proficient teachers they'll have, how many progressing teachers they'll have, and how many exemplary teachers they have. Because that starting in August, that's how teachers will get paid. So what we've done is said, look. We get you don't know that, but we're gonna we're gonna cover the cost of their salaries. So what what we're gonna do is we're gonna give you the average amount. So if you have 50 teachers, just gonna give you 50 times the average salary,
I think is somewhere around 83,000. So if you multiply 50 times 83, that's your salary amount. But let's say now it's now it's September, and we know what their evaluation is, we know how many new teachers are starting at progressing one or progressing two, and then we're going to multiply that out. And if it's more than 50 times 83,000, we're gonna add that to your budget. If, however, you've got only new teachers, we're not making an average of 83. We're gonna multiply that out, and we're gonna take money for you.
So we will pay for the teachers that you have. So what you're saying is if there's a surplus in the pot at the end, they owe it back to the district. They can't accidentally. Is that am I Yeah. I mean, that's right. Because know. I mean, we don't think anybody would strive to get just new teachers. No. Got it. I mean, that would be one way to get money, I guess, if we didn't have this rule. Thank you. So I I was kinda struggling with the the the same issue, and I think I've clarified it. I'd like to rearticulate it in a way. The cost of teachers is gonna be the cost of teachers.
The $1,400 base times enrollment times ADA is to cover everything else. Is is that a way of thinking about it? Or or the teachers are gonna cost what the teachers are gonna cost, and then the two items above it covers everything else. Yeah. I yeah. I think that's a good way of thinking about it. But, what a principal is thinking about right now, though, is I have one pot of money. The teachers are gonna cost what the teachers are gonna cost, but the teacher what the teachers are gonna cost is more than what it was last year.
Yeah. Almost across the board. So that's so yes. That's good. They have one pot of money, the teacher's gonna gonna take one part of it and, yeah, everything else is left. Okay. Great. Well, I think this has been a great presentation. Clearly, this is, you got a lot of work to do and we have a lot of work to do to absorb it all. And I appreciate the work in putting this together. I know it's a lot, and I know the team over here has done a lot of lot of good, work on the action plan and on getting this to the point where it is. I know that coming up in our next,
session, we'll have detailed budgets and per pupil budgets for PUA and NES, and we'll be able to share that with the community at the next meeting. So and I believe this is going to be posted as well after this meeting. Yes. Everybody will have these documents. And so we really appreciate the hard work here. And I do recognize, and I know the Board recognizes that you have to start with an action plan, you have to prioritize. And when you have a tight revenue projection with falling enrollment. We have to make tough decisions.
And I know that's hard on people, but I appreciate those tough decisions being made. So thank the team and thank you for this presentation. So at this point, we are going to go into an executive session, just a very quick one. So we will then this will go into a closed session under Chapter five fifty one of Texas Government Code Open Meetings Act, subsection 551.004 through 551.0089. Should Board final action, vote or decision on any matter considered in the closed session be required,
such final action, vote or decision shall be taken in an open meeting covered by this notice upon the reconvening of this public meeting or at a subsequent public meeting of the Board upon notice thereof. The Board has recessed to closed session at 07:53PM on 04/23/2026. Okay. We are now back into open session at 08:21PM on April 23. I believe we have no other items on the agenda. So if anybody would like to say something or say good night,
we'll be adjourned. So we'll see you at the next good night. We'll see you at the next board meeting, which is in the future. Our next workshop is on May 20, and our next regular board meeting is on the May 14.