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ROISD reduces I&S tax rate, amends budget; calls for middle school bond election

August 30, 2022

 

A Special Meeting of the Red Oak ISD School Board was called for Monday, August 29, 2022, due to the Texas Tax Code 26.05(b) which requires a supermajority vote for a tax rate that exceeds the sum of the no-new-revenue M&O tax rate and the current debt rate.

 

At the August 18, 2022, Board Meeting, only five members were present and the vote to approve the tax rate was 4-1. However, a supermajority vote requires 60% (5 of 7) of all members, not just members present, to be in favor of the order, ordinance, or resolution. At the August 29, 2022, meeting, required for the tax rate to be effective for this year, the motion for the tax rate was approved 6-1.

 

Overall, the ROISD tax rate has been reduced by over 19% over the past four years. This year, ROISD has lowered both the Maintenance and Operations (M&O) tax rate which pays for all salaries, educational materials, and district operations and the Interest and Sinking (l&S) tax rate which pays for our debt. The Red Oak ISD total tax rate was reduced from last year's rate of $1.3256 to $1.2910 per $100 of certified property value.

 

The l&S reduction was established following the certified property values provided by Ellis County in July and concerns from citizens.

 

ROISD Tax Rate

M&O

l&S

Total

 

2021-22

$0.9603

$0.3653

$1.3256

June

$0.9429

$0.3653

$1.3082

M&O reduced $0.0174

August

$0.9429

$0.3481

$1.2910

l&S reduced $0.0172

Total reduction $0.0346

 

The required motion states that the property tax rate be increased by the exact percentage of the proposed tax rate over the no-new-revenue (NNR) rate, even if it is a reduction over the previous year. The M&O NNR tax rate is 16.77% less ($.78476) than the proposed rate ROISD M&O rate of $.9429, which was reduced from $.9603 in 21-22.

 

While the District will receive more in taxes from local property value increases, even with a reduced ROISD tax rate, the local increase is proportionately matched by a reduction in state funding.

 

Red Oak ISD, in the end, does not receive a windfall of more funding based on local taxes increasing. In short, the more our community taxpayers pay (approx. addition of $2M), the less the state gives the District (approx. reduction of $2M).

 

The approved M&O tax rate is at the lowest compressed rate authorized by TEA. Any further reductions would result in additional loss of state funding, and the inability to adjust the M&O for increases in salaries, additional staffing needs, or other expenses.

 

August 18, 2022

 

Red Oak ISD held a Board Meeting on August 18, with Board Members approving a reduction in the tax rate, an amended budget, and calling for a November bond election for a single item – a second middle school.

 

ROISD 2022-23 TAX RATE

 

The approved 2022-23 tax rate is being reduced again. The adopted budget in June reduced the M&O rate, and now, after receiving the certified property values by Ellis County, the District is also reducing the I&S rate.

 

The Red Oak ISD total tax rate was reduced from last year’s rate of $1.3256 to $1.2910 per $100 of certified property value. The decrease included reductions in both the maintenance and operations (M&O) and interest and sinking (I&S) rates. The I&S reduction was established following the certified property values provided by Ellis County in July and concerns from citizens.

 

ROISD Tax Rate                  M&O               I&S                  Total

2021-22                     $0.9603          $0.3653          $1.3256

June                           $0.9429          $0.3653          $1.3082          M&O reduced $0.0174

August                      $0.9429          $0.3481          $1.2910          I&S reduced $0.0172

                                                                                                            Total reduction $0.0346

 

Overall, the ROISD tax rate has been reduced by over 19% over the past four years. The approved M&O tax rate is at the lowest compressed rate authorized by TEA. Any further reductions would result in additional loss of state funding, and the inability to adjust the M&O for increases in salaries, additional staffing needs, or other expenses.

 

“While we are continuing to pay off previous District bonds for schools, we are also keenly aware of the financial issues in our community,” stated Superintendent Brenda Sanford. “We have a low debt service ratio and felt it was important to try and add some additional savings to our taxpayers.”

 

“We know some will say it is still not enough, but we must also raise the bar of our academic standards – a goal which increases expenditures, especially when it comes to hiring and retaining the highest level of educators for the classroom,” Sanford added. “We have increased salaries, added bonuses, incentives, and increased benefits to recruit and keep our highly qualified staff. We are also anticipating an additional 300-400 students this year across the district, which will mean the hiring of additional staff to transport, feed, and educate our new Hawks.”

 

“The property value increase means a decrease in state funding of over $2 million for the district. That’s the balance we keep mentioning – as we gain in property tax revenue, we lose in state revenue,” added Superintendent Sanford.

 

“We value our taxpayers and are fiscally responsible with the funds we are given. Red Oak ISD will continue to watch every penny and seek cost savings to further increase staff pay and provide savings to our taxpayers,” Sanford concluded.

 

The maintenance and operations budget funds daily costs and recurring or consumable expenditures, such as teacher and staff salaries, supplies, food, gas, and utilities. The I&S fund is used to repay debt for longer-term capital improvements approved by voters through bond elections.

 

AMENDED BUDGET

 

Part two of setting the financial picture for the 2022-23 school year, was approving an amended budget from the one originally adopted in June. Again, within the state’s Foundation School Program funding formula, increased tax revenue from property values results in a decrease in state aid. Increases in homeowner taxes are the direct result of increased property values.

 

2022-2023                 2022-2023

Original                      Amended

Budget                       Budget                       Differences

Tax Sources              $27,363,238              $29,395,770              $2,032,532

State Sources           $34,692,852              $32,660,320              ($2,032,532)

 

The amended budget approved by the Board complies with all state and local requirements and is a balanced budget.

 

CALL FOR A MIDDLE SCHOOL BOND ELECTION

 

The Red Oak ISD Board unanimously approved calling for a November 8 Bond Election for a single item – a new, second middle school with a 1,200 student capacity for $94,000,000. The District finalized the purchase of the land right after the previous bond was called this past January.

 

After the May Bond Election, community feedback was received indicating the District should consider reducing the number of projects and focus solely on a new second middle school with a higher student capacity.

 

This is the next step after the August 3 Public Hearing when the Board approved the Initiation of Design Phase for a new middle school. Following a two-hour discussion, the Board motioned and approved the design phase to begin. The Design Phase includes multiple individuals and teams working behind the scenes along with the District including architects, engineers – civil, mechanical, electrical, plumbing, and structural, and consultants on roofing, kitchen, landscaping, acoustical, safety, and others.

 

The goal is to save both money and time by having much of the initial design work completed before the bond. Should the bond pass, the district can more quickly begin the bidding and procurement process to lock in prices, and with the design phase completed, construction can begin earlier with the goal of opening by August 2025. (It typically takes 24-28 months to complete a project of this size.)

 

Since August 3, the Superintendent has designated a Pre-Design Committee including all cabinet members, two middle school administrators, a middle teacher, and a curriculum coordinator to work with Corgan on big picture ideas for visual preference/design and programming with input from a cross-section of district personnel.

 

The goal is to have a public review in October before early voting for the community to see renderings.

 

“We heard on social media, post-bond surveys, and meetings, that we needed to focus on our greatest need – a second middle school – and voters would like to see what they are voting for, so we are going to have renderings and schematics for the public to see before the November 8 election,” stated Superintendent Brenda Sanford.

 

General Bond Information – November 8, 2022

  • Proposition A – Constructing, Acquiring, and Equipping a New (2nd) Middle School
  • Total cost – $94M
  • Early Voting –
    • October 24-November 4 (times vary)
    • Red Oak Municipal Center and Cowboy Church of Ellis County
  • Election Day
    • Tuesday, November 8, 7 a.m. to 7 p.m.
    • Red Oak Municipal Center and Eastridge Baptist Church