The Levelland ISD Board of Trustees held a special meeting Monday evening with the focus of discussion revolving around an appeal for the recent 2023 Property Value Study and a budget work session.
The 2023 Property Value Study for Levelland ISD (LISD) was conducted by the Hockley County Appraisal District (Hockley CAD) and was released in January.
The values submitted by the Hockley CAD did not meet the threshold set by the Texas Comptroller of Public Accounts which has resulted in LISD being assigned state values and a loss in funding of roughly $700,000 for the 2023-2024.
LISD appealed the state values assignment with the assistance of Perdue Brandon Fielder Collins & Mott, LLP.
The district was assigned state values by the comptroller as local values were not within a 5% variance of the 95% to 100% set by the comptroller.
In turn, the district turned to their delinquent tax attorneys to file the districts appeal with the comptroller’s office. Their job was to find what numbers the Hockley CAD submitted were actually correct and what numbers the Comptroller had were incorrect.
“In that appeal, we started out with an estimated $34 million difference in values,” explained Levelland ISD Superintendent Becky McCutchen. “The [Hockley] CAD was $34 million lower than the comptroller. Through our appeal they were able to find about $2 million, that still left us at $32 million and it did not get us where you needed to be within the variance.”
What the means for the district is that they will be capping off this current year’s budget with $700,000 less in funding than anticipated. As school district across the state continue to face funding woes, the likelihood of LISD having to prepare for $700,000 less in funding for the upcoming budget year is strong possibility.
McCutchen explained that the next property study will not be released until the end of next January or a little bit sooner. However, the district is anticipating a similar result as the information the comptroller is what is in place now.
She added that the speaker that provided an update for the appeal during Monday’s meeting feels that there is a solid chance the next property study is not going to meet the comptroller’s values which would result in that loss of $700,000 in the upcoming school year budget.
Back to this current budget year, the district will have more concrete numbers by August. What felt like a balanced budget at the beginning of the year, McCutchen says the district is looking at a deficit budget due to the $700,000 loss in funding. The district will be having to take a look at their fund balance to cover the current year.
The larger issue on the horizon for the district is maneuvering the fund balance for a deficit budget in the coming year.
“The problem we are having is when we move into the new school year we are planning for because of the funding concerns of issue we are having in that being a deficit budget,” said McCutchen. “We are concerned about our fund balance because the law states we have to retain 90 days of operating expense of the fund balance.”
McCutchen added that the 90 days being state law is because the Texas Education Agency (TEA) gives sends payments at certain times of the year. She added that the tax money the district receives begins to pick up in October, November and December.
“For instance, we begin the new budget year in September and may not have any additional funds coming in,” explained McCutchen. “We still have to have to operate our district, we have payroll, pay the bills and cover expenses. You use your fund balance to get through that until TEA sends payments and tax dollars come in to offset that.” If the district goes below the 90 days, there is a possibility the districts financial accountability ratings could drop.
The board was provided a preliminary budget for the upcoming year.
“We have tried to cut additional expenses in different areas,” said McCutchen. “One of the things we did was absorb a lot of staff positions in the way of not rehiring. That resulted in estimated $1.1 million savings.”
At this point in time, the district has no intention of cutting any programs because the entirety of the operation revolves around the students.
“Schools are for kids and we have to take care of them,” said McCutchen. “We also know that our staff has to be taken care of as well.”
As student programs have been a talking point, much discussion and opinion was shared following LISD opting out of the South Plains Educational Co-Op (SPECO). A decision that was made for financial responsibilities, McCutchen emphasized that special education students within the district would retain the same level of care after opting out of SPECO.
It was explained that the state determines a school district’s need. It is determined if local dollars are enough for the district to operate based on assumed or mandatory local tax rate.
If local dollars are enough, the state offers no additional funds. However, if it is determined additional funding is needed the state will add those funds.
Funding of school districts was broken into two parts as there is a property tax component and a state aid component.
In regard to property tax, values are determined by the Hockley CAD. The tax rate is comprised of Maintenance & Operation (M&O) and Interest and Sinking (I&S). Also, if the M&O rate is capped, there must be a Voter-Approval Tax Rate Election.
In the state aid portion, there is a legislative state funding formula and values are determined by the comptroller. Those values are influenced by enrollment, Average Daily Attendance (ADA), special populations, enrichment pennis and property wealth. The values are not adjusted for inflation as there is a basic allotment of $6,160.
The district is funded using a formula that is set in statute and based on the number of students enrolled, student demographics, attendance and the school’s participation in special programs.
The district funding formula includes: The basic allotment which is $6,160 per student and does not include an inflation factor.
The ADA, which is the average number of students attend class on any given day.
Weighted-student units which is student populations that need more educational resources including those classified as atrisk, economically disadvantaged, bilingual, special education, gifted and talented, career and technical education and dyslexia.
Projections were provided for the board as hard numbers have not been made available yet. In those projections, the M&O tax rate is at .6792, the I&S is .2600 and the total tax rate is at .9392. The current budget rates are .7142 for M&O, .2600 for I&S and .9742 for a total rate.
The district is projecting 2.574 in student membership, 2,276 in ADA and 3,647 in Weighted Average Daily Attendance (WADA). For the current year, student membership was at 2,617, ADA was at 2,341 and the WADA was at 3,744.
McCutchen explained that the district loses roughly 70 students a year. However, during the snapshot day last year in October, the district was down 70 students but by the end of the year kids had enrolled and LISD was only down 19 students.
The WADA deals with the special programs kids are in such as career and technology classes which are weighted more. Additionally, special education and bilingual classes are weighted more which provides slightly more funding.
Numbers can be nailed down once the district receives their certified values from the Hockley CAD on July 25. From there, the values are submitted to TEA and then returns with information that tells the district what the compressed tax rate can be.
TEA also issues a Summary of Finance which is based off of all the data they retain in regard to programs, attendance and numbers. Those are changed regularly as TEA continue to receive data.
Moving forward in the budget timeline, the district will advertise for a public meeting to discuss the budget and tax rate on August 1. A public meeting will be held to discuss the proposed budget and tax rate on August 28. The next fiscal year will begin September 1.
Housekeeping items addressed throughout the meeting included the approval of instructional materials for 20242025. McGraw Hill is the newly adopted science curriculum for K12. The item was required to appear before the board due to the purchase exceeding $50,000.
The item was approved for a total price of $160,593.71.
The board approved professional new hires in Amanda Leach as the new Levelland Middle School (LMS) assistant principal and Christi Peck as the new South Elementary assistant principal.
The Board of Directors of the Hockley County Appraisal District is seeking nominations from each entitled taxing entity to fill a vacancy on the board.
The Hockley County Appraisal District board position was previously held by DeEtte Edens. The spot became vacant as a result of Edens resignation from the LISD Board.
After a brief discussion, the group moved forward with nominating Board Member Mike Stafford.
Looking toward the upcoming school year, McCutchen has fielded multiple questions regarding the state of the visitors stands at Lobo Stadium as the Levelland Lobos football season begins in August. As part of the damage done from the storms caused at the end of May, the visitors stands were a part of the damage assessed.
However, McCutchen emphasized home games will still be played at Lobo Stadium and that is not subject to change even if the damage stands are not repaired by the start of the season.