LISD's 10 year context, which includes three years of projections. CFO Mike Ball noted that state funding, represented by the yellow bar, is approaching a point at which it legally can't get any lower. (Data courtesy LISD)

In a workshop session April 2, Lewisville ISD CFO Mike Ball and superintendent Kevin Rogers addressed the school board and detailed the troubled financial waters the district is about to enter, as well as specialized staffing needs going forward.

According to Ball’s budget projections over the next three years, LISD is facing a deficit of $4.6 million this year, $19.8 million in the 2019 fiscal year and $44.3 million in the 2020 fiscal year. In addition to declining state funding and estimated $10 million per year increases to salaries, the biggest culprit is the state’s robin hood recapture penalties, which are about $700,000 this year but project to jump to $35.9 million for fiscal year 2019 and $73.5 million for fiscal year 2020.

Recapture comes from what has popularly been known as the Robin Hood law since its inception in 1993, and it does exactly what it sounds like — it takes from rich school districts and gives to the poor ones. It was passed in response to a Texas Supreme Court ruling that held the prior school funding system unfairly discriminated against poorer school districts to the point of violating the state constitution.

Wealth for recapture is based on property wealth measured against weighted average daily attendance, meaning LISD’s unexpected loss of 782 students this year, in addition to rising property values, put it into a position where it needs to pay recapture.

Ball noted this year’s deficit has already been cut by as much as $3.2 million with staffing positions that were left unfilled due to a reduced need.

Ball said the district is approaching a point at which state funding legally can’t get any lower.

“We’re at a point in those top [near future] years here where those yellow bars that represent state funding are not going to get any smaller, because what’s included in that is the TRS on behalf and the available school fund, which is constitutionally mandated,” Ball said.

The district has enough money in the bank that Ball’s projections include fund balance of $100.6 million at the end of fiscal year 2020.

Rogers suggested that a citizen committee be formed this summer to find which parts of the budget to slash. He said they would need to make sure to have accountants and financial experts on such a committee.

Rogers said they would have to be prepared to let go of some important items, but that the district is fortunate to see problems this far in advance.

“I have on the slide, ‘no sacred cow,’ we’ve got to be prepared to put everything on the table and make some choices,” Rogers said. “We have time to do these course corrections in an orderly manner with the least amount of disruptions.”

Data courtesy LISD.

Ball’s projections were based on assumptions that the property values would increase 9.5 percent over the next two fiscal years, that non-payroll expenditures would increase 1 percent annually, that current staffing would remain constant and that all employees would receive a 3 percent raise every year, assumptions that the board challenged. Jenny Proznik questioned the property value projections, saying that they were different than the ones given to the Facility Advisory Committee, which was in charge of budgeting the district’s $737 million bond package passed last year. Ball said that the projections given to the FAC were long-term, meaning they had much more room for error, and extremely conservative so that the district wouldn’t be caught with a revenue stream that was weaker than expected down the line. He said that the 9.5 percent projection is only over the next two years.

Kronda Thimesch was skeptical of a 1 percent annual increase in non-payroll budget, and Ball said it would be challenging to meet that number because a lot of those expenses are out of the district’s control.

“What we want to emphasize is that these numbers are simply assumptions for creating the projections, we’re not necessarily saying that’s what we ought to use over the next few years,” Ball said. “But to the extent that we change that we just have to be aware of the impact, good or bad, that that’ll have on the bottom line.”

The board was also briefed on staffing requirements for next year, broken down into positions that were approved for hiring, positions that were declined and positions that district staff wanted the board’s input on. There were 14 approved positions, including 10 special education teachers. They break down as two specially diagnosed instruction teachers, two self-contained teachers, three diagnosticians, two psychologists and a dyslexia specialist. In three of these positions, material notes that there is a demand for far more hires.

The other four positions are for English as a second language instructional aides, all specifically for the Lewisville feeder system.

The positions that were not approved for hire include elementary learning facilitators, a title 1 instructional coach and a secondary ESL coordinator to help oversee the growing population of non-English speaking students.

Six more sets of positions were up for board discussion — behavior intervention specialists, school resource officers, college and career counselors, a gifted and talented program facilitator and an AVID teacher.