Student successes and school happenings are normally discussed in this column. However, this week I would like to discuss the future of many small West Texas schools, like Richland Springs ISD, in an ever-changing Texas.

Residents of Richland Springs are concerned and need to become informed on the financial health and future of our district. School finances must come to the forefront as the health of the school district impacts more than just the students educated in the school system.

The Texas Urban Triangle – comprised of the metropolises of Dallas-Fort Worth, Houston, San Antonio, and Austin – contains nearly 75 percent of the state’s population. According to Michael Neuman of Texas A&M University, projections in the state’s population trends indicate that over the next 20 years, population in the area will account for 80 percent of the state’s total. The most rapid population growth in the state will be in the Triangle cities’ fringes. Simply stated, families are moving to this area of Texas to find jobs. There is not an abundance of adequate paying jobs in our county to support growing families with school age children.

According to the 2004 U.S. Census Bureau, 30.9 % of school-age children ages 5-17 in San Saba County are in poverty. Young families in search of better jobs must relocate in areas where jobs are more plentiful. The net result is a decrease in population in San Saba County and thus in area schools.

Richland Springs ISD is no exception and is losing student population. As of today, our current student population is 137 students. Our school currently has 37 fewer students than it did in 2007-2008. The district had 36 ‘no-shows’ on the first day of school this year. This large decrease in student population was not expected. Student population is the determining factor on monies received from the state. Our district’s projected budget deficit for the 2008-2009 school year is $196,776. Our final budget deficit amount will not be known until the district’s auditor, Burl Lowery, completes his financial audit in August 2009.

Student population trends and district fund balances have a proportional relationship. The following tables show trends at Richland Springs ISD for the past 9 years:

Student Population Trends 2000-2009 Fund Balances per B. Lowery Audit

2000-2001 - 168 students $253,389 as of August 31, 2001

2002-2003 – 143 students $282,401 as of August 31, 2003

2003-2004 – 177 students $494,323 as of August 31, 2004

2004-2005 – 190 students $625,540 as of August 31, 2005

2005-2006 – 186 students $544,790 as of August 31, 2006

2006-2007 – 199 students $768,388 as of August 31, 2007

2007-2008 – 184 students $669,694 as of August 31, 2008

2008-2009 - 137 students $472,918 (estimate)

With the unexpected loss of more than 20% of our student population in just one year’s time, we must make corrections to our student/staff ratio and thus our bottom line. Financial survival is on everyone’s minds. The only meaningful reduction in expenses comes from salaries. Salary reductions in the amount of $176,771 will take place by the end of the 2008-2009 school year. Four employees will be reduced from our staff for the 2009-2010 school year. This staff reduction is painful, but necessary. Other non-salary budget reductions in expenses will also be accomplished. We will continue to monitor and adjust as circumstances dictate. Another area the board decided to address is the indebtedness of the school cafetorium. Four years ago, the district assumed a new M&O debt of $57,972.50/year for a new cafetorium. Normally, major school building construction is bonded debt and is voted upon by the district voters and if approved is included as an I&S tax rate. The cafetorium construction project was a lease-purchase agreement and did not require voter approval. M&O funds are for the day to day operations of a school district. The yearly cafetorium payment of approximately $58,000 comes out of the Maintenance and Operations (M&O) budget, where salaries, instructional supplies, building maintenance, transportation, and food service are funded. For the past four years, $57,972.50 that is normally used for day to day operations of the district has been diverted to repaying the cost of the cafetorium construction. The added cost of the cafetorium was not such a big issue when our student population was near 200 students, but with current student population at 137 students, the board of trustees felt the bond issue is necessary because the lease purchase is placing a financial burden of $57, 972.50/year on the district. The board of trustees voted to hold a bond election this May to move the cafetorium debt from M&O to I&S. The cost of holding a bond election is approximately $20,000. Voters of the district will determine the fate of the cafetorium bond issue this May.

Currently, the local taxes for Richland Springs ISD are M&O $1.17 per $100 value. Any tax rate above the $1.04 M&O rate generally requires a tax payer election for approval. For 2008-2009, Richland Springs ISD adopted a state approved one-time emergency $0.13 above the $1.04 M&O tax rate currently allowed by the state. If the RSISD Board of Trustees again adopt a tax rate of $1.17 in August 2009 for the 2009-2010 school year, this triggers a tax rollback election in November 2009 to rollback taxes to the $1.04 level, unless this is changed by the legislature. We will know the fate of the cafetorium bond election in May 2008, but we would not know the fate of a tax rollback election until November of 2009. Voters of the district will determine the fate of the cafetorium bond issue, and the tax roll back election if a tax rate of $1.17 is adopted again by the board of trustees. Below are various scenarios/projections to consider:

School year Tax rate Refined ADA Deficit (est.)

2008-2009 1.17 with adj. for decline 134.68 196,776

Note: Beginning in 2009-2010 the above mentioned $176,771 savings will become effective

2009-2010 1.17 with adj. for decline 134.68 0 no bond

2009-2010 1.04 with adj. for decline 134.68 160,000 no bond

Note: May 2009 cafetorium bond passage would add $58,000 to M&O budget in 2009-2010

School year Tax rate Refined ADA Surplus (est.)

2009-2010 1.17 with adj. for decline 134.68 58,000 w/bond

School year Tax rate Refined ADA Deficit (est.)

2009-2010 1.04 with adj. for decline 134.68 102,000 w/bond

The state legislature is considering providing additional pennies above the $1.04 as district discretionary pennies. This will not be known until the end of this legislative session. The state legislative action may be too little and too late for schools who are experiencing declining enrollment.