[1. Call to Order]
[00:00:06]
MAY I PLEASE HAVE EVERYONE'S ATTENTION BEFORE THE PUBLIC HEARING BEGINS? WE ASK THAT EVERYONE, PLEASE SILENCE YOUR CELL PHONE. THE FORT BEND ISD BOARD OF TRUSTEES IS HOLDING A PUBLIC HEARING AS REQUIRED BY LAW. FOLLOWING THE PRESENTATION, THE BOARD WILL ASK ANYONE PRESENT WANTS TO MAKE COMMENTS ON THE PRESENTATION. WE ALSO ASK THAT MEMBERS OF THE AUDIENCE BE RESPECTFUL OF OTHERS BY REMAINING QUIET. SO THAT EVERYONE IS ABLE TO HEAR THE PRESENTATION AND THE QUESTIONS ASKED. THANK YOU. THANK YOU SERGEANT. THE TIME IS 5:30 P.M.
AND THIS MEETING IS HEREBY CALLED TO ORDER, OR THIS HEARING IS HEREBY HEREBY CALLED TO ORDER. WE HAVE THE PRESENCE OF A QUORUM ATTENDING IN PERSON. AND NOTICE OF THIS HEARING HAS BEEN POSTED ONLINE AND AT THE FORT BEND ISD ADMINISTRATION BUILDING FOR AT LEAST 72 HOURS. TONIGHT
[2.A. 2023-24 FIRST Rating]
IS OUR 20 2324 PUBLIC HEARING ON OUR FIRST READING, AND I WILL TURN IT OVER TO YOU, DOCTOR SMITH. THANK YOU, MADAM PRESIDENT. GOOD EVENING EVERYONE. AS YOU JUST HEARD THIS EVENING, WE'RE GOING TO BE PROVIDING OUR FIRST RATING REPORT. MISTER GWEN AND HIS TEAM HAVE BEEN HARD AT WORK, AND THEY ARE PREPARED TO BEGIN OUR PRESENTATION. AND THIS EVENING'S PRESENTATION WILL BE DONE BY OUR EXECUTIVE DIRECTOR OF FINANCE, MISS KELLY SCHLACKS. AND I'LL TURN IT OVER TO HER. GOOD EVENING, MADAM PRESIDENT. MEMBERS OF THE BOARD AND DOCTOR SMITH. I'LL PROVIDE AN OVERVIEW OF WHAT FIRST IS THE DISTRICT'S PERFORMANCE ON FIRST AND SOME OTHER REQUIRED DISCLOSURES. FIRST IS AN ACRONYM THAT STANDS FOR THE FINANCIAL INTEGRITY RATING SYSTEM OF TEXAS, AND IT WAS DEVELOPED BY THE TEXAS EDUCATION AGENCY IN ORDER TO MEASURE THE FINANCIAL PERFORMANCE OF SCHOOL DISTRICTS. THE RATING THIS EVENING THAT WE'LL BE DISCUSSING IS BASED ON 21 INDICATORS THAT HAVE BEEN ESTABLISHED BY THE COMMISSIONER OF EDUCATION. SOME OF THOSE INDICATORS ARE QUESTIONS THAT REQUIRE YES OR NO RESPONSES, EITHER POSITIVE OR NEGATIVE RESPONSES, WHILE OTHER INDICATORS COULD EARN A SCORE OF ANYWHERE BETWEEN FIVE AND TEN POINTS. SOME OF THOSE POINTS ARE AWARDED ON A SLIDING SCALE. SO FOR INSTANCE, ONE QUESTION THAT MIGHT BE WORTH A MAXIMUM OF TEN POINTS A DISTRICT COULD EARN ANYWHERE FROM TEN. 0 TO 10 POINTS. SO MAYBE TWO POINTS. FOUR POINTS OR SIX POINTS DEPENDING ON THE SCALE SET BY T A AND WHERE THAT RATING LANDS ON THAT SCALE. THIS SLIDE SHOWS THE RATING A DISTRICT WOULD ACHIEVE BASED ON THE NUMBER OF POINTS EARNED. SO IF A DISTRICT RECEIVES 90 TO 100 POINTS, IT WOULD RECEIVE A SUPERIOR RATING OR THE HIGHEST RATING THAT COULD BE ACHIEVED. THIS IS THE 20 2324 RATING YEAR. HOWEVER, THE RATING IS USING FINANCIAL DATA FROM OUR FISCAL YEAR 2223, SO IT LAGS A YEAR BECAUSE THAT'S THE LAST YEAR THAT TO HAS INFORMATION ON FOR ALL DISTRICTS ACROSS THE STATE. SO LATER ON IN THE BOARD MEETING, YOU'LL BE APPROVING YOUR WE'RE SET TO APPROVE THE ANNUAL FINANCIAL REPORT FOR 24. AND THAT ANNUAL REPORT WOULD BE USED IN NEXT YEAR'S FIRST READING. SO THERE IS A ONE YEAR LAG. I DO WANT TO POINT OUT THAT THERE ARE FIVE INDICATORS THAT ARE CONSIDERED CRITICAL. AND IF THOSE INDICATORS ARE NOT MET, IT COULD MEAN A REDUCTION IN THE SCORE OR SIGNIFICANT REDUCTION OR FAILURE FIRST. SO I WON'T GO OVER EACH OF THESE BECAUSE WE WILL BE REVIEWING EACH OF THOSE INDICATORS. AND WE KIND OF TAKE IT FOR GRANTED. BUT I JUST WANT TO POINT OUT THAT THAT THOSE ARE THOSE ARE MISSION CRITICAL TO MEET. SO WE ARE REQUIRED TO GO OVER EACH OF THOSE INDICATORS IN A PUBLIC HEARING. AND I'LL RUN THROUGH THOSE. BUT FIRST I WANT TO MENTION THAT THERE'S TWO INDICATORS THAT TO DID NOT RATE THIS YEAR. THEY JUST ELECTED NOT TO RATE THEM. AND THAT'S INDICATOR TEN THAT LOOKS AT BUDGETED REVENUES TO ACTUAL REVENUES. AND INDICATOR 15 THAT LOOKS AT A DISTRICT'S AVERAGE DAILY ATTENDANCE. AND SO WHAT THEY DID FOR THOSE INDICATORS IS THEY'VE GIVEN ALL DISTRICTS THE MAXIMUM NUMBER OF POINTS FOR THOSE TWO INDICATORS. AND WE'LL HAVE TO JUST WATCH WHAT TI DOES.I WOULD HAVE A FEELING THEY MAY END UP CHOOSING TO SCORE SOME OF THOSE NEXT YEAR. SOME OF THESE INDICATORS WERE DURING THE COVID YEARS. THEY YOU KNOW, THEY GAVE US A BREAK BECAUSE IT WAS HARD TO MAYBE MEET SOME OF THOSE PROJECTIONS DURING COVID WITH AVERAGE DAILY ATTENDANCE AND EVEN WITH THE BUDGETED REVENUES, BECAUSE WE WERE EXPERIENCING A LOSS OF STUDENTS. OKAY. FOR THE FIRST INDICATOR, THE DISTRICT RECEIVED A POSITIVE RESPONSE FOR FILING THE ANNUAL FINANCIAL REPORT ON TIME. AND FOR INDICATOR TWO, WE RECEIVED A POSITIVE RESPONSE FOR THERE NOT
[00:05:05]
BEING A HAVING AN UNMODIFIED OPINION ON THE FINANCIAL REPORT AS A WHOLE. AND AGAIN, SO THIS WAS FOR FISCAL YEAR 23. AND WHITLEY PIN ISSUED THAT ANNUAL THAT OPINION ON OUR FINANCIALS LAST YEAR. INDICATOR THREE LOOKS AT WHETHER THE DISTRICT WAS COMPLIANT WITH ALL TERMS OF INMATE DEBT PAYMENTS IN ACCORDANCE WITH THE TIME SCHEDULE, AND WE RECEIVED A POSITIVE RESPONSE FOR THAT. AND THEN INDICATOR FOUR LOOKS AT WHETHER A DISTRICT MADE TIMELY PAYMENTS TO ALL GOVERNMENT AGENCIES. THAT INCLUDES THE INTERNAL REVENUE SERVICE, THE TEXAS RETIREMENT SYSTEM, TEXAS WORKFORCE COMMISSION AND ANY OTHER GOVERNMENTAL A POSITIVE RE FOR THAT INDICATOR. INDICATOR FIVE LOOKS AT WHETHER OR NOT OUR NET POSITION AT JUNE 30TH 23 WAS POSITIVE. YOU MAY RECALL WHEN WE WERE LOOKING AT THE ANNUAL REPORT FOR 24 THAT WE DO HAVE A NEGATIVE NET POSITION, BUT IN THIS INDICATOR TO DOES ALLOW DISTRICTS TO ADD BACK THAT PENSION LIABILITY AND THE OTHER POST-EMPLOYMENT LIABILITY THAT WE HAVE TO BOOK UP TO BE COMPLIANT WITH GOVERNMENTAL ACCOUNTING STANDARDS. AND ONCE WE ADD THOSE TWO LIABILITIES BACK, WE DO END UP WITH A POSITIVE FUND BALANCE. AND THAT'S NOT UNUSUAL FOR DISTRICTS ACROSS THE STATE TO HAVE A NEGATIVE NET POSITION DUE TO HAVING TO RECORD THOSE LIABILITIES. INDICATOR FIVE SIX LOOKS AT THE ASSIGNED AND UNASSIGNED FUND BALANCE OF THE GENERAL FUND OVER A THREE YEAR PERIOD, AND WHETHER OR NOT THERE WAS A 25% DECREASE ON THAT FUND BALANCE. AND WE OUR FUND BALANCE DID NOT DECREASE BY 25%. IT WAS WELL, WELL BELOW THAT. AND SO WE RECEIVED A POSITIVE YES RESPONSE FOR THAT. AND YOU MAY RECALL THAT A SIGN FUND BALANCE IS THE BALANCE WE USUALLY HAVE FOR PURCHASE ORDERS THAT ARE ROLLED OVER FROM ONE BUDGET YEAR TO THE NEXT, THAT WE ALLOW THAT BUDGET TO TRANSFER TO THE FOLLOWING YEAR, AND THEN ASSIGNED UNASSIGNED. FUND BALANCE IS THE FUND BALANCE THAT WE USUALLY MAINTAIN. THE 60 DAYS OF FUND BALANCE AND THE BOARD COMMITS THAT OTHER 30 DAYS FOR THAT TOTAL OF THE 90 DAYS FUND BALANCE. I JUST WANT TO MAKE SURE YOU KNEW WHAT THOSE TERMS WERE. WE THROW THEM AROUND ON THE ACCOUNTING WORLD, BUT YOU GUYS MAY NOT BE AS FAMILIAR FOR INDICATOR SEVEN. IT LOOKS AT THE CASH ON HAND AS WELL AS INVESTMENTS IN THE GENERAL FUND, AND WHETHER IT WAS SUFFICIENT TO COVER OPERATIONAL EXPENDITURES. WE RECEIVE THE MAXIMUM NUMBER OF POINTS FOR THAT INDICATOR. TEN.AND THEN ON INDICATOR EIGHT THAT LOOKS AT OUR CURRENT ASSET TO CURRENT LIABILITY RATIO. THAT'S A COMMON RATIO THAT EVEN BUSINESSES LOOK AT. BUT WE EARNED SIX OF TEN POINTS HERE.
AND SOME OF YOU THAT ARE ON THE BOARD MAY RECALL THAT WE HAVE NOT ALWAYS MET THE MAXIMUM NUMBER OF POINTS ON THIS INDICATOR. AND THAT'S BECAUSE AT THE END OF 23, WE DID HAVE THE BOND PROGRAM. THE 23 BOND PROGRAM, WHERE WE COULD HAVE ISSUED DEBT AT THE POINT AT THAT TIME, BUT WE CHOSE NOT TO BECAUSE THE BOND WAS JUST GETTING STARTED. BUT TO GIVE YOU A PERSPECTIVE, WE WOULD HAVE HAD TO ISSUE 210 MILLION OF THAT DEBT AND HAVE IT SIT IN OUR CASH OR INVESTMENT ACCOUNT JUST SITTING THERE. WE DIDN'T REALLY NEED THE MONEY AT THE TIME BECAUSE WE DIDN'T KNOW VENDORS THAT MONEY, BUT WE WOULD HAVE HAD TO BEEN PAYING INTEREST ON THAT DEBT. AND SO THEN WE WOULD HAVE HAD TO LOOK AT WHETHER OR NOT TO INCREASE OUR DEBT SERVICE RATE, WHICH WE DIDN'T WANT TO DO. AND SO WE COULD HAVE MET THE INDICATOR HERE WITH THE MAXIMUM POINTS OF TEN. BUT WE CHOSE NOT TO DO THAT AND TO KEEP THAT DEBT SERVICE RATE DOWN, BUT STILL TRYING TO MEET OUR FIRST OVERALL RATING. AND YOU REMEMBER THAT THE DISTRICT DOES HAVE THE COMMERCIAL PAPER PROGRAM. IT'S KIND OF A PAY AS YOU GO. SO WE ISSUE THAT DEBT AS IT'S NEEDED TO PAY THE VENDORS. AND SO AT THE END OF 23, WE DIDN'T HAVE ANY COMMERCIAL PAPER OUTSTANDING BECAUSE WE WERE JUST GETTING STARTED ON THEIR. INDICATOR NINE LOOKS AT GENERAL FUND REVENUES AND WHETHER OR NOT THEY EXCEEDED EXPENDITURES. AND IF NOT, DID WE HAVE 60 DAYS OF CASH ON HAND AND WE RECEIVED THE MAXIMUM NUMBER OF POINTS FOR THAT INDICATOR. FOR INDICATOR TEN, THAT WAS THE ONE THAT WAS NOT EVALUATED BY TI. BUT WHAT IT DOES IS IT LOOKS AT THE GENERAL FUND BUDGETED REVENUES AND COMPARES IT TO ACTUAL REVENUES OVER A THREE YEAR PERIOD. AND TO MAKE SURE THAT THERE'S NOT A 10% VARIANCE. AND EVEN THOUGH TO DIDN'T EVALUATE THIS INDICATOR, THAT'S AN INDICATOR THAT WE DO LOOK AT TO MAKE SURE THAT WE WOULD HAVE MET THAT REQUIREMENT AND WE WOULD HAVE. INDICATOR 11 LOOKS AT THE RATIO OF LONG TERM LIABILITIES TO TOTAL ASSETS. AND IF IT WAS SUFFICIENT TO SUPPORT THE LONG TERM SOLVENCY OF THE DISTRICT, AND WE RECEIVED THE MAXIMUM NUMBER OF POINTS FOR THAT INDICATOR, AND THEN INDICATOR 12 LOOKS AT THE DEBT
[00:10:05]
PER $100 OF ASSESSED PROPERTY VALUE AND WHETHER OR NOT THAT WOULD BE SUFFICIENT TO SUPPORT ALL THE FUTURE DEBT PAYMENTS. AND WE RECEIVED THE MAXIMUM SCORE FOR THAT INDICATOR. 13 LOOKS AT THE ADMINISTRATIVE COST RATIO AND WHETHER OR NOT THAT WAS EQUAL TO OR LESS THAN THE THRESHOLD SET BY TI. THAT THRESHOLD TO LOOKS AT OUR AVERAGE DAILY ATTENDANCE OF DISTRICTS. AND IF YOU FALL WITHIN A CERTAIN RANGE. SO WE FALL OVER 10,000 OF ADA. AND SO WE'RE THE HIGHEST THRESHOLD THAT NEEDS TO BE SET. AND TO THRESHOLD FOR A DISTRICT OUR SIZE WAS 0.0855. AND THE DISTRICT DISTRICT'S ADMINISTRATIVE COST RATIO WAS 0.0755. SO WE WERE BELOW THAT THRESHOLD AND WE PASSED AND RECEIVED ALL TEN POINTS. THERE FOR INDICATOR 14. THE DISTRICT DID NOT HAVE A 15% DECLINE IN STUDENT TO STAFF RATIO OVER A THREE YEAR PERIOD, SO WE RECEIVED THE MAXIMUM POINTS OF TEN FOR THAT INDICATOR. 15 WAS ANOTHER INDICATOR THAT WAS NOT EVALUATED BY TA, AND THAT LOOKS AT THE AVERAGE DAILY ATTENDANCE, THE ACTUAL ADA, AND COMPARES IT TO WHAT THE DISTRICT WOULD HAVE SUBMITTED DURING THE BIENNIAL PUPIL PROJECTION. AND SO WE RECEIVED THE MAXIMUM NUMBER OF POINTS FOR THAT INDICATOR. FIVE AND WE'LL HAVE TO LOOK AND SEE WHETHER TA DECIDES TO EVALUATE THAT INDICATOR NEXT YEAR. IT'LL BE TIME TO SUBMIT OUR NEXT BIANNUAL PUPIL PROJECTION. SINCE THE LEGISLATURE WILL BE SET TO MEET AND SET A NEW ESTABLISH A NEW YEAR TWO YEAR BUDGET HERE FOR INDICATOR 16, DID WE FILE OUR ANNUAL FINANCIAL REPORT AND WAS IT WITHIN A 3% VARIANCE? THE TEAMS IS THE PUBLIC EDUCATION INFORMATION MANAGEMENT SYSTEM. AND THAT'S REALLY JUST AN ELECTRONIC FILING OF ALL OF OUR ANNUAL FINANCIAL INFORMATION IN ELECTRONIC FORM TO TI. BUT WE ALSO HAVE TO UPLOAD A PDF VERSION OF THAT REPORT. AND SO WHAT THEY DO IS COMPARE THAT ELECTRONIC VERSION TO THE PDF VERSION TO MAKE SURE THAT THERE'S NOT THERE'S LESS THAN A 3% VARIANCE. AND JUST OUR SYSTEM OF RECORD USUALLY ROUNDS EVERY EVERY AMOUNT TO THE WHOLE DOLLAR. AND SOMETIMES THERE CAN BE ROUNDING DIFFERENCES. BUT FOR OUR ANNUAL REPORT, OUR DIFFERENCE WAS $269 ON A $1.1 BILLION OF EXPENDITURES. SO WE WERE WELL BELOW THAT THRESHOLD. INDICATOR 17 REVIEWS WHETHER THE EXTERNAL AUDIT REPORT WAS FREE OF ANY INSTANCES OF MATERIAL WEAKNESSES IN INTERNAL CONTROLS.AND WE PASSED THAT INDICATOR, THE CEILING WAS PASSED THERE AND FOR INDICATOR 18, IT ALSO LOOKS AT WHETHER THE EXTERNAL AUDITOR WAS FREE OF MATERIAL NONCOMPLIANCE FOR ANY GRANTS, CONTRACTS AND LAWS. AND WE RECEIVED THE MAXIMUM NUMBER OF POINTS FOR THAT INDICATOR.
INDICATOR 19 LOOKS AT WHETHER THE DISTRICT POSTED ALL REQUIRED FINANCIAL INFORMATION ON ITS WEBSITE IN ACCORDANCE WITH THE TEXAS EDUCATION CODE, AND WE HAVE FILED ALL OF OUR INFORMATION ON OUR WEBSITE, AND WE RECEIVE THE FULL FIVE POINTS FOR THAT INDICATOR. FOR INDICATOR 20, THAT LOOKS AT WHETHER OR NOT THE SCHOOL BOARD DISCUSSES THE DISTRICT'S PROPERTY VALUES AT A BOARD MEETING WITHIN 120 DAYS OF ADOPTING THE BUDGET. AND WE HAVE DISCUSSED PROPERTY VALUES. WHEN WE WERE GOING OVER THE BUDGET. SO THAT CEILING INDICATOR WAS WAS MET, AND THEN LASTLY, IT LOOKS AT WHETHER THE SCHOOL DISTRICT RECEIVED AN ADJUSTED REPAYMENT SCHEDULE FOR AN OVER ALLOCATION OF THE FOUNDATION SCHOOL PROGRAM DUE TO FINANCIAL HARDSHIP. AND SO THE FOUNDATION SCHOOL PROGRAM IS THE MAIN PROGRAM THE STATE USES TO FUND DISTRICTS. THE STATE FUNDING, AND WE DID NOT RECEIVE AN OVER ALLOCATION OR ADJUSTMENT REPAYMENT SCHEDULE. AND SO WE PASSED THAT INDICATOR. SO OVERALL, WE RECEIVED 95 POINTS OR SUPERIOR ACHIEVEMENT. AND THAT'S THE HIGHEST RATING A DISTRICT COULD ACHIEVE FOR FIRST READING. AND SO THAT'S GOOD NEWS TO REPORT. PART OF THE REQUIREMENTS OF FIRST ALSO REQUIRE US TO DISCLOSE REIMBURSEMENTS MADE TO THE SUPERINTENDENT AND TO BOARD MEMBERS FOR FISCAL YEAR 20 2223. AND SO THIS TABLE SHOWS THE REIMBURSEMENTS THAT HAVE BEEN MADE FOR THAT FISCAL YEAR. AND IT'S MAINLY TRAVEL AND RELATED EXPENSES THAT THE SUPERINTENDENT AND THESE BOARD MEMBERS THAT WE REIMBURSE THEM FOR, FOR, FOR WHEN THEY WERE TRAVELING AS PART OF DISTRICT BUSINESS. WE'RE ALSO REQUIRED TO SHARE THE SUPERINTENDENT'S CONTRACT, AND THAT CONTRACT IS LOCATED ON THE DISTRICT'S WEBSITE AT THE LINK SHOWN HERE. AND IN ADDITION, WE'LL BE POSTING THIS FIRST RATING PRESENTATION ON OUR EXTERNAL WEBSITE UNDER THE DEPARTMENT'S FINANCE WEBPAGE. JUST FOR TAXPAYERS TO BE ABLE TO GO AND REVIEW AND AN EASE OF
[00:15:06]
FINDING THIS INFORMATION. AND NOW I'LL BE GLAD TO ANSWER ANY QUESTIONS RELATED TO FIRST.THANK YOU, MISS SLACKS. DO WE HAVE ANY QUESTIONS FROM THE TRUSTEES? OKAY, SO WE HAVE NO QUESTIONS, BUT DO WE HAVE ANY PUBLIC COMMENT FROM ANY MEMBERS OF THE PUBLIC RELATED TO THIS FIRST READING PRESENTATION? IF SO, YOU CAN STEP UP TO THE MICROPHONE AT THE PODIUM. OKAY, I SEE NONE. THANK YOU SO MUCH FOR THAT PRESENTATION. AND THANK YOU GUYS FOR YOUR WORK ON GETTING THIS THIS REPORT HANDLED. WITH THAT, I WILL TAKE A MOTION TO ADJOURN. I MOVE TO ADJOURN. WE ARE ADJOURNED AND WE WILL BE BACK TO START OUR REGULAR BOARD MEETING AT 6 P.M.
* This transcript was compiled from uncorrected Closed Captioning.