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Allen ISD board debates post-TRE priorities
By Conner Hammett, chammett@starlocalnews.com
The Allen ISD Board of Trustees debated the merits of a possible change to the district's fund balance policy at Monday night's board workshop.
The discussion began with a rundown of the current fund balance by Deputy Superintendent Mark Tarpley. He recommended the board raise the district's minimum recommended fund balance from 15 percent of annual operating expenses to 20 percent, matching Texas Education Agency recommendations. He also recommended the board consider establishing a minimum fund balance target for each budget year.
Board members were generally in favor of raising the minimum fund balance. But when Place 2 Trustee Carl Clemencich suggested the board raise the minimum even higher, a debate emerged regarding the proper use of the fund balance and the board's financial responsibility to taxpayers in the wake of the successful Tax Ratification Election (TRE) in October, which raised the district's overall tax rate to the state maximum of $1.67.
Place 1 Trustee Susan Olinger said she was hesitant to "handcuff" future boards through such a policy, especially since future school boards can always use budget directives to increase the fund balance for a particular budget year.
Jason Shepard, Place 3, said setting a higher-than-normal minimum would send the message that the board is responsibly handling the extra tax revenue to residents who voted in favor of a tax increase.
But Louise Master, Place 6, said voters were told in October that the district needed the money to pay teachers, not bolster its reserve fund.
Lois Lindsey, Place 4, said she was in favor of raising the minimum to 20 percent but sees no reason to aim for anything higher than the TEA's recommendation.
"To many people, it looks like you're taking money and just putting it over here and letting it sit instead of using it for what they came through and gave it to us for," she said. "I don't think you're going to find a whole lot of people that voted for that TRE who didn't want it used for things we've used it for already."
After nearly 40 minutes of discussion, an informal vote was taken for both a 20 percent and 25 percent minimum. Board President Gary Stocker cast the tie-breaking vote in favor of 20 percent.
A board discussion of the fund balance was prompted in part by questions raised in May by Master and Lindsey, who asked the board to consider the possibility of offering employees more than the budgeted 1 percent midpoint pay raise using the district's high fund balance.
During his presentation, Tarpley explained that the fund balance is the district's assets minus its liabilities, or the amount of money the district has left after expenses have been deducted from state and local revenues. It provides the district with contingency funds in case of a major event or disaster and can also been used for one-time, planned uses. It is also used to cover periodic deficits throughout the year as the district awaits state aid payments and local property tax collections and would be used if the district saw its state aid decreased due to state recapture.
The district currently has $38.7 million in unassigned fund balance, or 27 percent of its overall expenditures. It exceeds TEA's minimum recommended fund balance by $10 million.
The change to the district's fund balance policy will likely be on the next regular meeting agenda, Tarpley said.
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