2015 – 2016 OFFICIAL BUDGET

RICHARDSON INDEPENDENT SCHOOL DISTRICT

Where all students learn, grow and succeed.

RICHARDSON INDEPENDENT SCHOOL DISTRICT

Richardson, Texas

ANNUAL BUDGET FOR FISCAL YEAR

From July 1, 2015 to June 30, 2016

BOARD OF TRUSTEES

Kim Caston, President

Jean Bono

Justin Bono

Lanet Greenhaw

Kristin Kuhne

Eron Linn

Kris Oliver

APPOINTED OFFICIALS

Dr. Kay Waggoner, Superintendent Patti Kieker, Deputy Superintendent

Tony Harkleroad, Deputy Superintendent, Finance and Support Services Tabitha Branum, Assistant Superintendent, Secondary Schools

Dr. Chris Goodson, Assistant Superintendent, Elementary Schools Dr. Fernando Medina, Assistant Superintendent, Human Resources

Sandra Hayes, Assistant Superintendent, Technology Mia Martin, General Counsel

Karah Womack, Executive Director, Communications and Public Affairs

For questions regarding budget or financial information, contact: Tony Harkleroad, Deputy Superintendent, Finance and Support Services

469.593.0331

Table of Contents

Superintendent’s Budget Message ....................................................................... 1

Legal Notice of Budget Hearing ............................................................................ 2

Budget and Tax Rate Adoption Calendar ............................................................. 3

Budget Overview................................................................................................... 4

Financial Forecasts ............................................................................................... 5

Employee Compensation .................................................................................... 12

Official Budget..................................................................................................... 16

Operating Fund ................................................................................................... 22

Child Nutrition Fund ............................................................................................ 25

Debt Service Fund .............................................................................................. 27

Miscellaneous Statistics and Analysis ................................................................. 30

1

NOTICE OF PUBLIC MEETING TO DISCUSS BUDGET AND PROPOSED TAX RATE

The Richardson Independent School District will hold a public meeting at 6:30pm, June 22, 2015 in the Administration Building Auditorium, 400 S Greenville Ave, Richardson Texas. The purpose of this meeting is to discuss the school district's budget that will determine the tax rate that will be adopted. Public participation in the discussion is invited. The tax rate that is ultimately adopted at this meeting or at a separate meeting at a later date may not exceed the proposed rate shown below unless the district publishes a revised notice containing the same information and comparisons set out below and holds another public meeting to discuss the revised notice.

Maintenance Tax $1.040050/$100 (proposed rate for maintenance and operations) School Debt Service Tax Approved by Local Voters $0.300000/$100 (proposed rate to pay bonded indebtedness)

Comparison of Proposed Budget with Last Year's Budget The applicable percentage increase or decrease (or difference) in the amount budgeted in the preceding fiscal year and the amount budgeted for the fiscal year that begins during the current tax year is indicated for each of the following expenditure categories.

Maintenance and operations 3.54 % increase

Debt Service 6.44 % increase

Total expenditures 3.97 % increase

Total Appraised Value and Total Taxable Value (as calculated under Section 26.04, Tax Code)

Preceding Tax Year Current Tax Year

Total appraised value* of all property $20,058,890,911 $21,601,491,134 Total appraised value* of new property** $157,345,949 $219,979,536 Total taxable value*** of all property $17,023,572,244 $17,963,727,977 Total taxable value*** of new property** $157,345,949 $219,979,536 *Appraised value is the amount shown on the appraisal roll and defined by Section 1.04(8), Tax Code. ** "New property" is defined by Section 26.012(17), Tax Code. *** "Taxable value" is defined by Section 1.04(10), Tax Code.

Bonded Indebtedness Total amount of outstanding and unpaid bonded indebtedness* $414,619,987

*Outstanding principal. Comparison of Proposed Rates with Last Year's Rates

Maintenance & Operations

Interest & Sinking Fund*

Total

Local Revenue Per Student

State Revenue Per Student

Last Year's Rate $1.040050 $0.300000* $1.340050 $6,351 $2,533 Rate to Maintain Same Level of Maintenance & Operations Revenue & Pay Debt Service $1.037708 $0.300000* $1.337708 $6,578 $2,462

Proposed Rate $1.040050 $0.300000* $1.340050 $6,590 $2,462 *The Interest & Sinking Fund tax revenue is used to pay for bonded indebtedness on construction, equipment, or both. The bonds, and the tax rate necessary to pay those bonds, were approved by the voters of this district.

Comparison of Proposed Levy with Last Year's Levy on Average Residence Last Year This Year Average Market Value of Residences $206,135 $220,758 Average Taxable Value of Residences $170,522 $173,683 Last Year's Rate Versus Proposed Rate per $100 Value $1.340050 $1.340050 Taxes Due on Average Residence $2,285.08 $2,327.44 Increase (Decrease) in Taxes

$42.36

Under state law, the dollar amount of school taxes imposed on the residence homestead of a person 65 years of age or older or of the surviving spouse of such a person, if the surviving spouse was 55 years of age or older when the person died, may not be increased above the amount paid in the first year after the person turned 65, regardless of changes in tax rate or property value. Notice of Rollback Rate: The highest tax rate the district can adopt before requiring voter approval at an election is $1.340100. This election will be automatically held if the district adopts a rate in excess of the rollback rate of $1.340100.

Fund Balances The following estimated balances will remain at the end of the current fiscal year and are not encumbered with or by a corresponding debt obligation, less estimated funds necessary for operating the district before receipt of the first state aid payment. Maintenance and Operations Fund Balance(s) $83,026,306 Interest & Sinking Fund Balance(s) $17,332,653

2

2015-16 Budget and Tax Rate Adoption Calendar September 2014 through June 2015 - Ongoing budget status meetings with the Superintendent and Superintendent’s Council. September 2014 through June 2015 - Board of Trustees legislative, alternative funding, bond and budget status monthly reports. October 6 - Board of Trustees Financial Integrity Rating System of Texas hearing and discussion. November 2014 through June 2015 - Board of Trustees Budget Committee meetings to review budget proposals/projections and provide input to staff. November 3 - Board of Trustees acceptance of Comprehensive Annual Financial Report. December 8 – Board of Trustees budget discussion. January 12 - Board of Trustees budget and demographic update discussion. February 12 – Budget Review Team (BRT) meeting to discuss budget and compensation. February 16 – Board of Trustees budget discussion. March 23 – Board of Trustees budget and compensation discussion. April 6 – Board of Trustees budget discussion and legislative updates. April 20 – Board of Trustees budget discussion and legislative updates. April 23 and 24 - Discussions with Moody’s and Standard & Poor’s rating agencies (reported to the Board of Trustees). April 30 - Dallas Central Appraisal District certifies and delivers estimated appraisal roll. May 18 - Board of Trustees budget discussion and legislative updates. June 1 - Board of Trustees budget and compensation discussion. June 22 - Board of Trustees meeting and public hearing on the 2015-16 proposed budget and tax rate. Board of Trustee budget adoption, tax rate adoption, and approval of final end of year 2014-15 budget amendments and acceptance of the preliminary estimated certified tax roll.

3

Richardson Independent School District 2015-16 Budget Overview

The District’s vision, mission, and goals are as follows: Vision: Where all students learn, grow and succeed. Mission: To serve and prepare all students for their global future. Goals: Goal 1: Students are highly engaged in their educational life. Goal 2: Profound Curriculum is the foundation for learning. Goal 3: RISD has high performing, student focused teachers.

Goal 4: RISD ensures excellence in operations.

We believe that the budget process and proposed budget support our Vision, Mission, and Goals by evaluating available resources and focusing them on these issues. The district is required to adopt budgets for the General or Operating Fund, Child Nutrition Fund, and Debt Service Fund. Discussions in the Budget Overview will focus on the Operating Fund, unless noted otherwise, as this is the primary fund for the district and is the only fund currently subject to limitations from the school finance system and wealth equalization. The district faces a number of financial challenges and has developed a variety of strategies to address them, including: • A comprehensive multi-year financial plan, • Annual analysis of peer district comparative financial data, • Engaged stakeholder groups in the budget process, • Interaction with Superintendent and the Board of Trustees (see adoption calendar for details)

regarding budget throughout the year. The multi-year financial plan allows staff to be more proactive versus reactive regarding anticipated revenues, expenditures, and fund balance. The current multi-year financial plan, including assumptions for enrollment, taxable values, revenues, expenditures, and fund balance is as follows:

4

It is important that readers understand where district revenue comes from and how funds are spent, particularly in the Operating Fund, since it is subject to revenue limitations under current school finance legislation. Comparison of Revenues and Expenditures

Legislative Impact on School Finance School finance was a major issue during the 2015 legislative session, but ultimately was secondary to the legislature’s desire to provide some form of tax relief. House Bill (HB) 1 increases funding for public education, but does not address shortcomings in school finance identified through the most recent court ruling. Background – House Bill (HB) 1 from 2006 made significant changes to the Texas Education Code that focused on school property tax rate reduction. HB 1 also created revenue limitations using 2005-06 retained revenue levels to establish a target revenue level for each district. The 2009 legislative session made some school finance adjustments through HB 3646 that basically retained the structure from HB 1 as to revenue limitations and target revenue, but provided limited added funding to districts. The following is a summary of the main points of HB 3646. Districts are guaranteed or held harmless to an amount of revenue at least equal to the state and local target revenue per weighted pupil established under HB 1 plus at least $120 per weighted pupil in new funds. This equaled about $4.9 million for RISD; however, districts were required to use much of the added funds to pay for an added mandatory pay raise for staff.

5

The equalized wealth level for taxes up to the compressed rate (which for our district is $1.00) increased to approximately $476,500 for 2009-10, $481,900 for 2010-11, and $487,300 in 2011-12 and 2012-13. This means that the district will not make a recapture payment since our wealth level per weighted student falls below this level. While recapture fell, state revenue fell by an equal amount, and we had no net gain in available revenue from this change. The first six cents above the compressed rate are equalized to the Austin ISD yield. The equalized wealth level for operating tax rates after that remains at $319,500. Texas elected to fund the cost of HB 3646 and balance their budget using federal stimulus dollars, which were only available for two years and the margins tax created to offset reductions in school property tax generated lower than projected revenue. These decisions contributed to the massive State budget deficit in 2011. This deficit coupled with the Legislative leadership’s desire to not raise taxes or access the rainy day fund, meant that the 2011 Legislative session included a number of possible funding reductions to education. Our Board and Administration started developing budget reduction strategies for several different scenarios of funding loss using input from our staff and community. We prioritized reductions to consider and refined the scenarios as the legislative session progressed. The 2011 Legislative session ended with an appropriations bill that cut funding for public education by approximately $5.4 billion over the biennium. However the session ended with no resolution as to how this funding reduction would be distributed to districts. The Governor called a special session to attempt to address school funding; however, we were required to adopt our budget prior to any resolution on school funding from the special session. Using what we felt was the most likely scenario, our budget for 2011-12 assumed a loss of $20 million in state funding. The special session focused on two methods of implementing reductions to education. One involved across the board reductions for all districts and another focused reductions more heavily on districts with higher target revenue levels. The end result was the passage of SB1 which provided somewhat of a compromise. For RISD, the primary effects of SB1 were a 7.61% reduction in the regular program allotment in Tier I for 2011-12 and a 2% reduction in 2012-13. Reductions to the regular program allotment have the effect of reducing the district’s weighted average daily attendance (WADA). Our Additional State Aid for Tax Relief (ASATR) was also reduced by 7.65% starting in 2012-13, which means our hold harmless funds were reduced starting in 2012-13. This equated to a loss of $14.2 million and $21.7 million in funding for 2011-12 and 2012-13, respectively. The bill stipulates that ASATR will be eliminated by 2017, but does not specify how this will occur. We were in a much stronger financial position than most districts due to the conservative approach of our Board of Trustees and administration over the years. While we made reductions, we were able to avoid the large layoffs and major program reductions that many other districts made during this time.

6

The Texas House and Senate considered various public school funding options during the 2013 session, and the end result was passage of SB1. Key funding increases in SB1 included $3.4 billion added to funding distributed by the following:

• increase the Regular Program Allotment Factor to 1 • increase the basic allotment from $4,765 to $4,950 in 2013-14 and $5,040 in 2014-15 • reduce target revenue hold harmless by $282 million in 2013-14 and $417 million in

2014-15 • includes $838.7 million in funding for instructional materials already required under

statute • increase Student Success Initiative funding by $24 million

This amounted to additional net State funding for RISD of approximately $8 million. Current - RISD is a plaintiff district in litigation against the State regarding the adequacy of the school finance system. While District Judge Dietz has issued a ruling in our favor, the State has appealed the case to the Texas Supreme Court. A ruling is not expected until later in 2015 or early 2016. In the 2015 session, the House Public Education Committee attempted to address at least portions of the antiquated school finance system and provide significant additional funds for public education, while including tax relief in the form of lower franchise and sales tax. The Senate was more focused on tax relief than on overhauling the current school finance system. The Senate bills included a smaller increase in funding for public education and tax relief in the form of lower franchise tax and an increase in the state mandated homestead exemption. Senate leaders were reluctant to attempt an overhaul of the current school finance system until the Texas Supreme Court issues a final ruling on the school finance litigation noted earlier. The final approved version of HB 1 is closer to the Senate’s version of school funding and tax relief than to what was proposed by the House and includes an increase in the basic allotment within the funding formula and an increase in the guaranteed yield for enrichment pennies. The net effect is an increase in funding of approximately $5,274,000 for RISD starting in 2015-16. None of the last several legislative sessions have produced a solution to the issue of adequate school funding. State sponsored adequacy studies and school finance proposals have largely been based on what the State could afford to fund or was willing to fund versus what it actually costs to educate to the current mandates. The district will continue to work with our legislators to try to improve funding. Enrollment One of our most significant challenges involves projecting enrollment. Our actual enrollment for 2014-15 was in line with projections by Templeton Demographics. Templeton provided updated projections to the Board in January 2015 for a ten year period, and these have been incorporated into our multi-year financial plan. While enrollment is projected to grow, it will be at a more modest rate.

7

The district has conducted campus capacity reviews in areas with the highest enrollment growth and identified schools to increase instructional space in order to serve more students at their neighborhood school. Construction of additional space has begun at Prairie Creek Elementary and is projected to be complete by the start of school in 2016. Recapture Current school finance laws involve property wealth equalization (also known as recapture) that is tiered depending on the operating tax rate for a district. A complex system of weights for certain student populations; allotments/adjustments; cost of education index; etc. is used to establish the amount of revenue retained. RISD’s current wealth level falls below the equalized wealth levels for our current operating tax rate. Based on the current formula and wealth levels, RISD would only pay recapture if the operating tax rate were increased above $1.06. This does not result in increased retained revenue since earlier decreases in recapture were simply offset by reductions in state revenue. RISD has sent over $420.1 million to the State in Recapture payments as follows: History of Recapture Payments Under the Robin Hood Plan

8

Competitive Pay for All District Employees We monitor other district’s salary schedules regularly and make necessary modifications to our salary schedules to remain competitive. The Human Resources Department aggressively seeks top teachers, including beginning teachers, by offering open contracts as early in the hiring process as possible. An open contract guarantees the teacher a position within RISD although the school assignment will be determined later. This practice allows the district to retain the most qualified candidates and balance the average experience for staff. We modified our teacher compensation schedule several years ago, moving away from a step schedule for RISD veteran teachers. These teachers receive compensation increases as approved by the Board of Trustees. We developed a hire-in schedule for teachers joining the district. This compensation structure allows us to provide higher compensation to teachers who have been with the district versus those newly hired.

Details of Increased Employee Compensation for the 2015-16 Fiscal Year: The proposed budget for 2015-16 includes funds to provide eligible staff with a 3% increase in base salary at an estimated total operating cost of $6 million. The estimated operating cost reflects the cost of raises to staff funded from the general operating fund. Raises to staff whose salary is funded from sources other than the operating fund will be paid from the same source used to fund their base pay. Teacher-Type employees are teachers, counselors, nurses, and librarians. The salary adjustment is the greater of a 3% increase in base salary or the increase in the hire-in schedule. Employees must receive an evaluation rating of at least satisfactory to receive the increase. Administrative and Support Staff will receive the greater of a 3% salary adjustment from base pay or the assigned competency step adjustment based on years of experience in their respective positions. Employees must receive an evaluation rating of at least meets expectations or satisfactory on their last evaluation to receive the salary increase. The proposed budget includes an additional $500,000 in district contribution towards the cost of medical coverage for employees to partially offset projected premium increases. The district will provide a $2,000 critical need stipend to full time secondary math, secondary science, Languages Other Than English (LOTE), and special education teachers for 2015-16. This stipend will be subject to annual review of critical needs areas, annual review of available funding, and other factors as identified by the district and Board of Trustees.

Property Values

The Dallas Central Appraisal District (DCAD) provides an estimated preliminary certification of property values by the end of April each year and then certified property values in July. DCAD then provides monthly updates to the certified roll throughout the year to reflect changes in exemptions, value protest resolutions, etc.

9

Property values for calculating operating revenue under the State funding formula are based on the Texas Comptroller’s property tax determination of value each year, which are generally higher than DCAD values. The district works though a multi-step appeal process each year in order to receive what is referred to as local value or the DCAD valuation. Ideally the appeal process would be resolved by the end of the fiscal year, but it can take years to resolve in some instances. The Comptroller does not include the local optional homestead exemption impact.

The district’s multi-year financial plan projections involve expectations as to the final tax roll that we use to collect tax levy and the Comptroller’s value to determine operating revenue from the State. Changes in taxable value estimates have no net recurring impact on the operating budget due to the limitations imposed by the school finance system. Currently, if tax revenues go up or down then State aid changes, and we receive the same net recurring amount per weighted student. Changes in DCAD property values do have a direct impact on debt service revenue as this fund is not subject to wealth equalization or the Comptroller’s valuation. 2015-16 preliminary values received are 10.1% higher than current estimated 2014-15 final values. While this is encouraging, values will fall due to protests by the end of the year and final assessed values. The district has lost an average of 6.5% from the preliminary values to the final values over a 10 year period, with a high of a 10.3% loss and a low of a 3.7% loss.

We are projecting a 4% increase in 2015-16, 2% in 2016-17, 1% in 2017-18 and then flat for 2018 through 2020. This is higher than previously projected and will provide additional future bond capacity without raising the debt tax rate and/or protection from interest rate risks on future bonds. RISD remains one of the few districts that continue to provide a local optional homestead exemption to our residential taxpayers. This, combined with a moderate debt tax rate, results in one of the lowest tax levies for our taxpayers of any district in the metroplex (a comparison of tax impact on property owners is provided later in the document). 2015-16 Budget Recommendations While our approach to budgeting has been more conservative than many of our peer districts, we believe it created the most stability for our staff and represented the most sustainable approach for our community. This conservative approach put us in a much stronger financial position than many districts, contributing to our high credit rating, balanced sustainable budget, low tax levy compared to area districts, strong reserves and ability to avoid major layoffs. The proposed budget for 2015-16 continues to include a more aggressive approach to revenue than in prior years. Revenue calculations use the exact enrollment projections from the demographer with no buffer for negative variance and a more aggressive attendance estimate. Calculations also include a more aggressive estimate of the guaranteed yield for enrichment pennies (also referred to as the Austin yield). This means that negative variances from items such as lower than projected enrollment growth will have to be funded from positive variances on expenses or from the operating fund balance. Alternatives involving immediately increasing the tax burden on our community or exhausting our reserves are not recommended at this time.

10

2015-16 Budget Increase Recommendations

11

The remainder of this document contains details as to proposed budgets by fund and function and miscellaneous statistics and analysis. Please feel free to contact our offices with questions. Thank you.

12

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alf

13,9

57,1

6813

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13,9

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13,9

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16Fe

dera

l Rev

enue

3,27

3,31

53,

273,

315

3,27

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53,

273,

315

3,27

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315

17To

tal O

ther

Rev

enue

Sou

rces

(s

um o

f lin

es 1

3 th

roug

h 16

)11

4,62

5,86

711

5,04

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811

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111

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Pro

ject

ed R

even

ue (l

ine1

1 +

line

17)

288,

695,

921

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825

300,

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303,

545,

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521 22

Pro

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A)

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23 24P

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:27

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ses

6,02

5,92

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452,

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(1,2

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97)

(1,2

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93)

(1,1

95,8

87)

30R

educ

tion/

(incr

ease

) to

mai

ntai

n ba

lanc

ed

budg

et(2

,521

,550

)(3

3,39

4)(1

49,7

30)

(421

,665

)(6

72,7

36)

(576

,267

)

Exp

endi

ture

s fo

r 201

4-15

incl

ude

all r

ecur

ring

budg

et in

crea

ses

up to

and

incl

udin

g th

ose

in th

e Ju

ne 2

015

Bud

get S

tatu

s R

epor

t.

14

Ric

hard

son

ISD

Mul

ti Ye

ar F

inan

cial

Pla

n

OPE

RAT

ING

FU

ND

BAL

ANC

E

2014

-201

520

15-2

016

2016

-201

720

17-2

018

2018

-201

920

19-2

020

1O

pera

ting

Fund

Bal

ance

Ana

lysi

s2

Beg

inni

ng F

und

Bal

ance

79,7

38,0

9481

,259

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93,0

3879

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78,8

64,4

3378

,537

,169

3%

of t

otal

exp

endi

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s27

.86%

27.4

4%26

.78%

26.2

1%25

.78%

25.4

4%4

Bud

get s

urpl

us/(d

efic

it)

2,52

1,55

033

,394

149,

730

421,

665

672,

736

576,

267

5R

even

ue in

crea

ses/

budg

et re

duct

ions

6E

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nd B

alan

ce82

,259

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81,2

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% o

f tot

al e

xpen

ditu

res

28.7

4%27

.45%

26.8

3%26

.35%

26.0

0%25

.63%

8 9P

ropo

sed

uses

of f

und

bala

nce:

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mpl

oyee

Com

pens

atio

n11

Inst

ruct

iona

l Enh

ance

men

t Fun

d1,

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l Pro

gram

s/C

apita

l Pro

ject

s13

Per

man

ent S

choo

l Fun

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l (ad

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es 1

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000

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015

Pro

pose

d E

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alan

ce81

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3616

% o

f tot

al e

xpen

ditu

res

28.4

0%27

.11%

26.4

9%26

.02%

25.6

7%25

.30%

Not

e - w

e w

ill tr

y to

man

age

fund

bal

ance

to s

usta

in b

etw

een

21.5

and

23.

5% (r

ange

was

20-

22%

prio

r to

2009

HB

364

6).

Line

4 re

pres

ents

the

diffe

renc

e be

twee

n to

tal r

even

ue a

nd to

tal e

xpen

ses

from

the

Bud

get P

roje

ctio

ns s

heet

. Pro

ject

ed d

efic

its

can

be e

limin

ated

/redu

ced

by im

plem

entin

g op

tions

to in

crea

se re

venu

es o

r dec

reas

e ot

her e

xpen

ses.

Thi

s si

mpl

y re

flect

s im

pact

if

no a

ctio

n is

take

n, b

ut th

is w

ould

not

nec

essa

rily

be th

e re

com

men

datio

n fro

m s

taff.

NO

TE:

We

will

nee

d to

mai

ntai

n fu

nd b

alan

ce d

esig

natio

ns fo

r ext

raor

dina

ry re

pairs

in th

e ev

ent t

he c

apita

l exp

ense

s in

the

sum

mer

of 2

015

exce

ed a

vaila

ble

bond

fund

s.

15

OFFICIAL BUDGET

The Official Budget is presented for the Operating Fund, the Child Nutrition Fund and the Debt Service Fund.

16

RICHARDSON INDEPENDENT SCHOOL DISTRICTOFFICIAL BUDGETFISCAL YEAR 2015-16

Child Debt Total byOperating Nutrition Service Enrolled

Fund Fund Fund Total Student*

Estimated RevenuesLocal Revenue 189,262,314 4,985,821 52,326,538 246,574,673 6,305 State Revenue 103,687,196 88,235 103,775,431 2,654 Federal Revenue 3,273,315 11,646,710 14,920,025 382

Total Revenues 296,222,825 16,720,766 52,326,538 365,270,129 9,341

Appropriations11 - Instruction 188,841,067 188,841,067 4,829 12 - Library & Media Services 5,261,207 5,261,207 135 13 - Curriculum/Instructional Staff Development 4,241,104 4,241,104 108 21 - Instructional Administration 4,734,059 4,734,059 121 23 - School Leadership 21,125,102 21,125,102 540 31 - Guidance and Counseling 14,796,303 14,796,303 378 32 - Attendance and Social Work 907,417 907,417 23 33 - Health Services 4,403,908 4,403,908 113 34 - Student Transportation 4,773,993 4,773,993 122 35 - Child Nutrition 16,572,509 16,572,509 424 36 - Co-Curricular / Extra Curricular Activities 6,037,153 6,037,153 154 41 - General Administration 7,866,660 7,866,660 201 51 - Plant Maintenance & Operations 25,361,376 143,257 25,504,633 652 52 - Security and Monitoring Services 1,566,613 1,566,613 40 53 - Data Processing Services 5,106,737 5,106,737 131 61 - Community Services 176,894 5,000 181,894 5 71 - Debt Administration 9,941 51,867,892 51,877,833 1,327 95 - Juvenile Justice Alternative Education Program 50,000 50,000 1 97 - Tax Increment Fund 241,650 241,650 6 99 - Other Intergovernmental Charges 929,897 929,897 24

Total Appropriations 296,189,431 16,720,766 52,109,542 365,019,739 9,334

*Based on 2015-16 enrollment projection of 39,107 students

17

RIC

HA

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SON

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EPEN

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Func

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11 -

Inst

ruct

ion

199

Ope

ratin

g Fu

nd18

4,22

2,28

8

59

9,79

3

3,30

3,71

9

71

5,26

7

-

-

18

8,84

1,06

7

240

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ld N

utrit

ion

-

-

-

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vice

-

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l for

Fun

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184,

222,

288

599,

793

3,

303,

719

715,

267

-

-

188,

841,

067

Func

tion

12 -

Libr

ary

& M

edia

Ser

vice

s19

9 O

pera

ting

Fund

4,94

1,91

2

25,4

50

245,

986

47

,859

-

-

5,

261,

207

24

0 C

hild

Nut

ritio

n-

-

-

-

-

-

-

59

9 D

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ce-

-

-

-

-

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To

tal f

or F

unct

ion

124,

941,

912

25

,450

24

5,98

6

47,8

59

-

-

5,26

1,20

7

Func

tion

13 -

Cur

ricul

um/In

stru

ctio

nal S

taff

Dev

elop

men

t19

9 O

pera

ting

Fund

3,57

1,64

5

201,

078

15

2,13

7

316,

244

-

-

4,24

1,10

4

240

Chi

ld N

utrit

ion

-

-

-

-

-

-

-

599

Deb

t Ser

vice

-

-

-

-

-

-

-

Tota

l for

Fun

ctio

n 13

3,57

1,64

5

201,

078

15

2,13

7

316,

244

-

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4,24

1,10

4

Func

tion

21 -

Inst

ruct

iona

l Adm

inis

trat

ion

199

Ope

ratin

g Fu

nd4,

199,

356

30

7,84

1

151,

857

75

,005

-

-

4,

734,

059

24

0 C

hild

Nut

ritio

n-

-

-

-

-

-

-

59

9 D

ebt S

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ce-

-

-

-

-

-

-

To

tal f

or F

unct

ion

214,

199,

356

30

7,84

1

151,

857

75

,005

-

-

4,

734,

059

Func

tion

23 -

Scho

ol L

eade

rshi

p19

9 O

pera

ting

Fund

20,8

26,5

07

104,

145

15

4,78

5

39,6

65

-

-

21,1

25,1

02

24

0 C

hild

Nut

ritio

n-

-

-

-

-

-

-

59

9 D

ebt S

ervi

ce-

-

-

-

-

-

-

To

tal f

or F

unct

ion

2320

,826

,507

10

4,14

5

154,

785

39

,665

-

-

21

,125

,102

18

RIC

HA

RD

SON

IND

EPEN

DEN

T SC

HO

OL

DIS

TRIC

T20

15-2

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Deb

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Func

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31 -

Gui

danc

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d C

ouns

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g19

9 O

pera

ting

Fund

14,1

90,8

29

229,

148

27

1,16

1

55,1

65

50,0

00

14

,796

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240

Chi

ld N

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-

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599

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vice

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l for

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14,1

90,8

29

229,

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27

1,16

1

55,1

65

-

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00

14

,796

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Func

tion

32 -

Atte

ndan

ce a

nd S

ocia

l Wor

k19

9 O

pera

ting

Fund

869,

670

8,11

0

24

,348

5,

289

-

-

90

7,41

7

240

Chi

ld N

utrit

ion

-

-

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-

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-

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599

Deb

t Ser

vice

-

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-

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Tota

l for

Fun

ctio

n 32

869,

670

8,11

0

24

,348

5,

289

-

-

90

7,41

7

Func

tion

33 -

Hea

lth S

ervi

ces

199

Ope

ratin

g Fu

nd4,

156,

086

16

8,60

0

71,6

08

7,61

4

-

-

4,40

3,90

8

240

Chi

ld N

utrit

ion

-

-

-

-

-

-

-

599

Deb

t Ser

vice

-

-

-

-

-

-

-

Tota

l for

Fun

ctio

n 33

4,15

6,08

6

168,

600

71

,608

7,

614

-

-

4,

403,

908

Func

tion

34 -

Stud

ent T

rans

port

atio

n19

9 O

pera

ting

Fund

512,

416

4,15

8,11

2

72

,815

30

,650

-

-

4,

773,

993

24

0 C

hild

Nut

ritio

n-

-

-

-

-

-

-

59

9 D

ebt S

ervi

ce-

-

-

-

-

-

-

To

tal f

or F

unct

ion

3451

2,41

6

4,

158,

112

72,8

15

30,6

50

-

-

4,77

3,99

3

Func

tion

35 -

Chi

ld N

utrit

ion

199

Ope

ratin

g Fu

nd-

-

-

-

-

-

-

24

0 C

hild

Nut

ritio

n6,

625,

325

30

9,27

6

9,44

4,40

8

60

,500

13

3,00

0

16,5

72,5

09

59

9 D

ebt S

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ce-

-

-

-

-

-

-

To

tal f

or F

unct

ion

356,

625,

325

30

9,27

6

9,44

4,40

8

60

,500

-

13

3,00

0

16,5

72,5

09

19

RIC

HA

RD

SON

IND

EPEN

DEN

T SC

HO

OL

DIS

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T20

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6100

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6300

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tal

Func

tion

36 -

Co-

Cur

ricul

ar/E

xtra

Cur

ricul

ar19

9 O

pera

ting

Fund

4,48

8,51

6

512,

833

25

9,02

0

776,

784

-

-

6,03

7,15

3

240

Chi

ld N

utrit

ion

-

-

-

-

-

-

-

599

Deb

t Ser

vice

-

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-

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-

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-

Tota

l for

Fun

ctio

n 36

4,48

8,51

6

512,

833

25

9,02

0

776,

784

-

-

6,03

7,15

3

Func

tion

41 -

Gen

eral

Adm

inis

trat

ion

199

Ope

ratin

g Fu

nd6,

050,

421

78

0,50

5

410,

637

62

5,09

7

-

-

7,

866,

660

24

0 C

hild

Nut

ritio

n-

-

-

-

-

-

-

59

9 D

ebt S

ervi

ce-

-

-

-

-

-

-

To

tal f

or F

unct

ion

416,

050,

421

78

0,50

5

410,

637

62

5,09

7

-

-

7,

866,

660

Func

tion

51 -

Plan

t Mai

nten

ance

& O

pera

tions

199

Ope

ratin

g Fu

nd14

,964

,569

8,

007,

430

1,89

1,63

5

49

7,74

2

-

-

25

,361

,376

240

Chi

ld N

utrit

ion

143,

257

-

-

143,

257

59

9 D

ebt S

ervi

ce-

-

-

-

-

-

-

To

tal f

or F

unct

ion

5115

,107

,826

8,

007,

430

1,89

1,63

5

49

7,74

2

-

-

25

,504

,633

Func

tion

52 -

Secu

rity/

Mon

itorin

g Se

rvic

es19

9 O

pera

ting

Fund

479,

008

1,07

6,70

5

10

,000

90

0

-

-

1,

566,

613

24

0 C

hild

Nut

ritio

n-

-

-

-

-

-

-

59

9 D

ebt S

ervi

ce-

-

-

-

-

-

-

To

tal f

or F

unct

ion

5247

9,00

8

1,

076,

705

10,0

00

900

-

-

1,56

6,61

3

Func

tion

53 -

Dat

a Pr

oces

sing

Ser

vice

s19

9 O

pera

ting

Fund

3,98

4,57

0

1,03

3,80

7

58

,598

29

,762

-

-

5,

106,

737

24

0 C

hild

Nut

ritio

n-

-

-

-

-

-

-

59

9 D

ebt S

ervi

ce-

-

-

-

-

-

-

To

tal f

or F

unct

ion

533,

984,

570

1,

033,

807

58,5

98

29,7

62

-

-

5,10

6,73

7

20

RIC

HA

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SON

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T SC

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6300

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Payr

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Deb

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sEx

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tal

Func

tion

61 -

Com

mun

ity S

ervi

ces

199

Ope

ratin

g Fu

nd17

6,89

4

-

-

-

-

-

176,

894

24

0 C

hild

Nut

ritio

n5,

000

-

-

-

-

-

5,

000

59

9 D

ebt S

ervi

ce-

-

-

-

-

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21

OPERATING FUND

The Operating Fund is the fund where most expenditures are recorded for the operation of the schools and central offices. Expenditures paid from this fund include teachers’ and administrators’ salaries and benefits, classroom supplies and equipment, educational computing, utilities, routine maintenance of buildings and transportation costs. The maintenance and operations budget is included in the Operating Fund. Also included in the Operating Fund are budgets for tuition based programs and co-curricular activities.

22

RICHARDSON INDEPENDENT SCHOOL DISTRICTOFFICIAL BUDGET - OPERATING FUNDFISCAL YEAR 2015-16

2014-15 2015-16Adopted Increases Official Percent of PercentageBudget (Decreases) Budget Total Change

Estimated RevenuesLocal Revenue 179,854,160 9,408,154 189,262,314 63.89% 5.23%State Revenue 104,942,021 (1,254,825) 103,687,196 35.00% (1.20%)Federal Revenue 2,808,315 465,000 3,273,315 1.11% 16.56% Total Revenues 287,604,496 8,618,329 296,222,825 100.00% 3.00%

Appropriations11 - Instruction 183,565,650 5,275,417 188,841,067 63.76% 2.87%12 - Library & Media Services 5,143,643 117,564 5,261,207 1.78% 2.29%13 - Curriculum/Instructional Staff Development 3,418,200 822,904 4,241,104 1.43% 24.07%21 - Instructional Administration 5,184,605 (450,546) 4,734,059 1.60% (8.69%)23 - School Leadership 20,526,058 599,044 21,125,102 7.13% 2.92%31 - Guidance and Counseling 10,987,265 3,809,038 14,796,303 4.99% 34.67%32 - Attendance and Social Work 808,754 98,663 907,417 0.31% 12.20%33 - Health Services 3,950,728 453,180 4,403,908 1.49% 11.47%34 - Student Transportation 4,463,791 310,202 4,773,993 1.61% 6.95%36 - Co-Curricular/Extra Curricular Activities 5,876,465 160,688 6,037,153 2.04% 2.73%41 - General Administration 7,633,365 233,295 7,866,660 2.66% 3.06%51 - Plant Maintenance & Operations 25,458,177 (96,801) 25,361,376 8.56% (0.38%)52 - Security and Monitoring Services 1,553,565 13,048 1,566,613 0.53% 0.84%53 - Data Processing Services 4,800,058 306,679 5,106,737 1.73% 6.39%61 - Community Services 171,690 5,204 176,894 0.06% 3.03%71 - Debt Administration 9,941 - 9,941 0.00% 0.00%95 - Payments to JJAEP 50,000 - 50,000 0.01% 0.00%99 - Other Intergovernmental Charges 896,510 33,387 929,897 0.31% 3.72% Total Appropriations 284,498,465 11,690,966 296,189,431 100.00% 4.11%

23

RICHARDSON INDEPENDENT SCHOOL DISTRICTOPERATING FUND BUDGET - ESTIMATED REVENUESFISCAL YEAR 2015-16

2014-15 2015-16Adopted Increases Official Percent of PercentageBudget (Decreases) Budget Total Change

Local Sources:Property Taxes5711 Property Taxes-Current Year 162,000,755 9,810,756 171,811,511 58.00% 6.06%5711 Property Taxes-Enrichment Tax-Local Collections 6,558,218 558,338 7,116,556 2.40% 8.51%5712 Property Taxes-Prior Years 1,750,000 (500,000) 1,250,000 0.42% (28.57%)5719 Penalty & Interest 1,200,000 (200,000) 1,000,000 0.34% (16.67%)

Total Property Taxes 171,508,973 9,669,094 181,178,067 61.16% 5.64%

Fees & Tuitions5739 Fees & Tuition 4,689,187 54,060 4,743,247 1.60% 1.15% Enterprising Activities 5752 Game Receipts-All Sports 510,000 - 510,000 0.17% 0.00%

Miscellaneous Revenues5742 Investment Income 575,000 - 575,000 0.20% 0.00%5759 Athletic Concession Commission 80,000 - 80,000 0.03% 0.00%5743 Rentals on Facilities 1,846,000 - 1,846,000 0.62% 0.00%5744 Gifts 20,000 - 20,000 0.01% 0.00%5745 Theft and Vandalism 10,000 - 10,000 0.00% 0.00%5749 Other Misc. Income 615,000 (315,000) 300,000 0.10% (51.22%)

Total Other Local Revenues 8,345,187 (260,940) 8,084,247 2.73% (3.13%)

Total Local Sources 179,854,160 9,408,154 189,262,314 63.89% 5.23%

State Sources:5811/5812State Aid Including Hold Harmless &

Salary Transitional Entitlement 90,984,853 (1,254,825) 89,730,028 30.29% (1.38%)5831 TRS On Behalf 13,957,168 - 13,957,168 4.71% 0.00%Total State Sources 104,942,021 (1,254,825) 103,687,196 35.00% (1.20%) Federal Sources:5929 Miscellaneous Federal 600,000 465,000 1,065,000 0.36% 77.50%5931 School Health and Related Services 2,208,315 - 2,208,315 0.75% 0.00%Total Federal Sources 2,808,315 465,000 3,273,315 1.11% 16.56%

Total Operating Fund 287,604,496 8,618,329 296,222,825 100.0% 3.00%

24

CHILD NUTRITION FUND

The Child Nutrition Fund is where revenues and expenditures are recorded for the school lunch and breakfast program. Expenditures of the Child Nutrition Fund are funded from lunch and breakfast sales, state grants and federal grants. This fund is included with other Special Revenue Funds.

25

RICHARDSON INDEPENDENT SCHOOL DISTRICTOFFICIAL BUDGET - CHILD NUTRITION FUNDFISCAL YEAR 2015-16

2014-15 2015-16Adopted Increases Official Percent of PercentageBudget (Decreases) Budget Total Change

Revenue5751 Cafeteria Sales 4,863,695 107,126 4,970,821 29.73% 2.20%5742 Investment Income 15,000 - 15,000 0.09% 0.00%5829 State Reimbursements 88,332 (97) 88,235 0.53% (0.11%)5920 Federal Reimbursements 11,606,851 39,859 11,646,710 69.65% 0.34% Total Revenue 16,573,878 146,888 16,720,766 100.00% 0.89%

Expenditures

35 Food Service Payroll 5,757,220 868,105 6,625,325 39.62% 15.08%

Contracted Services 477,276 (168,000) 309,276 1.85% (35.20%) Materials & Travel 9,691,747 (186,839) 9,504,908 56.84% (1.93%) Capital Outlay 140,000 (7,000) 133,000 0.80% (5.00%)

51 Plant Maintenance & Operations Payroll 108,667 34,590 143,257 0.86% 31.83%

Contracted Services 388,968 (388,968) - 0.00% (100.00%)61 Community Service

Payroll 10,000 (5,000) 5,000 0.03% (50.00%) Total Expenditures 16,573,878 146,888 16,720,766 100.00% 0.89%

26

DEBT SERVICE FUND

The Debt Service Fund contains monies that are set aside to pay principle and interest on debt incurred through the sale of bonds. The proceeds from bonds are used to finance long-term improvements to school buildings as well as to build and equip new schools.

27

RICHARDSON INDEPENDENT SCHOOL DISTRICTOFFICIAL BUDGET - DEBT SERVICE FUNDFISCAL YEAR 2015-16

2014-15 2015-16Adopted Increases Official Percent of PercentageBudget (Decreases) Budget Total Change

Revenue71-5711 Property Taxes-Current Yr. 47,765,816 3,634,072 51,399,888 98.23% 7.61%71-5712 Property Taxes-Prior Yrs. 500,000 (150,000) 350,000 0.67% (30.00%)71-5719 Penalty & Interest 300,000 - 300,000 0.57% 0.00%97-5746 Property Taxes-TIF 132,650 109,000 241,650 0.46% 82.17% Total Property Taxes 48,698,466 3,593,072 52,291,538 99.93% 7.38%

5742 Investment Earnings 35,000 - 35,000 0.07% 0.00%Total Revenue 48,733,466 3,593,072 52,326,538 100.00% 7.37%

Debt Service Requirements71-6500 Debt Payments 48,589,065 3,278,827 51,867,892 99.54% 6.75%97-6499 TIF Payments 132,650 109,000 241,650 0.46% 82.17%Total Debt Service Requirements 48,721,715 3,387,827 52,109,542 100.00% 6.95%

Principal InterestPayments Payments Other Amounts Total

Detailed Debt Service to be Paid to be Paid to be Paid PaymentUnlimited Tax School Bldg. Bonds, Series 1998B 4,185,000 136,013 1,000 4,322,013 Unlimited Tax School Bldg. Refunding Bonds, Series 2005 - - 1,000 1,000 Unlimited Tax School Bldg. Bonds, Series 2005 - - 1,000 1,000 Unlimited Tax School Bldg. Refunding Bonds, Series 2006 250,000 814,140 1,000 1,065,140 Unlimited Tax School Bldg. Bonds, Series 2006 980,000 22,050 1,000 1,003,050 Unlimited Tax School Bldg. Refunding Bonds, Series 2006A 425,000 1,151,860 1,000 1,577,860 Unlimited Tax School Bldg. Bonds, Series 2007 1,520,000 93,600 1,000 1,614,600 Unlimited Tax School Bldg. Bonds, Series 2008 1,805,000 869,500 1,000 2,675,500 Unlimited Tax School Bldg. Bonds, Series 2009 100,000 378,625 1,000 479,625 Unlimited Tax School Bldg. Bonds, Series 2010 1,230,000 490,000 1,000 1,721,000 Unlimited Tax School Bldg. Refunding Bonds, Series 2010 150,000 398,600 1,000 549,600 Unlimited Tax School Bldg. Refunding Bonds, Series 2011 4,070,000 388,713 1,000 4,459,713 Unlimited Tax School Bldg. Bonds, Series 2011 - 1,727,244 1,000 1,728,244 Unlimited Tax School Bldg. Refunding Bonds, Series 2012 - 750,100 1,000 751,100 Unlimited Tax School Bldg. & Refunding Bonds, Series 2012 1,395,000 3,886,125 1,000 5,282,125 Unlimited Tax School Bldg. & Refunding Bonds, Series 2013 3,210,000 2,928,500 1,000 6,139,500 Unlimited Tax School Bldg. Bonds, Series 2014A 3,075,000 540,713 1,000 3,616,713 Unlimited Tax School Bldg. Refunding Bonds, Series 2014B - 857,700 1,000 858,700 Unlimited Tax School Bldg. Bonds, Series 2015 7,470,000 482,963 1,000 7,953,963 Unlimited Tax School Bldg. Bonds, Series 2015A 3,025,000 922,719 1,000 3,948,719 Unlimited Tax School Bldg. Bonds, Series 2015B - 1,350,227 1,000 1,351,227 Professional Services Bond Counsel - - 17,500 17,500 TIF Payments Skillman Corridor - - 241,650 241,650 Estimated Closing Costs for

New Bond Issues 750,000 750,000 Total required for Debt Service 32,890,000 18,189,392 1,030,150 52,109,542

28

RICHARDSON INDEPENDENT SCHOOL DISTRICTDEBT SERVICE SCHEDULESFISCAL YEAR 2015-2016SUMMARY OF ALL DEBT PAYMENTS

Total PrincipalCalendar Year Principal Interest and Interest

2016 32,890,000 18,189,392 51,079,392

2017 20,029,995 19,053,092 39,083,087

2018 22,805,000 15,914,731 38,719,731

2019 22,410,000 14,937,786 37,347,786

2020 20,244,992 17,096,894 37,341,886

2021 24,215,000 13,123,854 37,338,854

2022 21,425,000 12,113,589 33,538,589

2023 22,415,000 11,144,124 33,559,124

2024 20,480,000 10,176,860 30,656,860

2025 20,195,000 9,251,866 29,446,866

2026 17,825,000 8,363,711 26,188,711

2027 18,680,000 7,507,300 26,187,300

2028 17,070,000 6,689,831 23,759,831

2029 17,870,000 5,888,506 23,758,506

2030 15,375,000 5,129,225 20,504,225

2031 13,570,000 4,461,400 18,031,400

2032 13,515,000 3,830,319 17,345,319

2033 12,685,000 3,223,763 15,908,763

2034 12,400,000 2,639,744 15,039,744

2035 12,170,000 2,058,663 14,228,663

2036 12,770,000 1,458,881 14,228,881

2037 10,855,000 882,938 11,737,938

2038 8,920,000 392,813 9,312,813

2039 2,715,000 106,438 2,821,438

2040 1,090,000 20,438 1,110,438

414,619,988 193,656,157 608,276,145

*Note: Total principal and interest does not include $1,030,150 in administrative fees, TIF payments and bond issuance costs to be paid in 2015-2016.

29

Miscellaneous Statistics and Analysis

10-Year Comparative Data

Change in the Tax Bill of a $100k Single-Family Residence (w / Homestead Exemption)

Comparison of ISD Tax Rates per $100 Property Value

30

Richardson ISD10-Year Comparative Data

2003-04 2013-14 % ChangeOperating Expenses (less recapture) 234,377,644$ 251,352,494$ 7.2%

Debt Service Expenses 49,571,844$ 48,956,665$ (1.2%)

Child Nutrition 9,332,298$ 14,019,892$ 50.2%

Tax Rate 1.820 1.340 (26.4%)

Limited English Proficient Students /English Language Learners 6,394 9,488 48.4%

Economically Disadvantaged Students 14,243 22,009 54.5%

Total Enrollment 34,441 38,169 10.8%

CPI (inflation) increase per US Bureau of Labor Statistics 25.0%

Total Staff 4,329 4,806 11.0%

Central Administration Staff 48 48 0.0%

Data obtained from TEA's 2003 Academic Excellence Indicator System (AEIS) Report and 2014 Texas Academic Performance Report (TAPR). Beginning in 2012-13, AEIS transitioned into what is now referred to as the TAPR.

2003-04 AEIS financial data uses 2003-04 original adopted budget information:Total Operating Expenses (less recapture) are identified as budgeted operating fund expendituresDebt Service Expenses are defined as non-operating debt service expenditures (object 6500).Child Nutrition Expenses are defined as budgeted expenditures for Food Services (function 35).

2013-14 TAPR financial data uses the actual 2012-13 year-end audited financials:Total Operating Expenses (less recapture) are defined as operating disbursements.Debt Service Expenses are calculated using debt service expenditures for all funds less the operating fund portion.Child Nutrition Expenses are defined as food service expenditures (Function 35).

31

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.00%

$1,1

18.1

0$7

26.7

7

Not

e: D

istri

cts

in b

old

wer

e C

hapt

er 4

1 di

stric

ts in

201

4-15

RIS

D ra

nks

5th

whe

n so

rted

by ta

x le

vy o

n a

non-

hom

este

ad.

Rec

ent Y

ears

' Tax

Rat

es

2014

-15

2013

-14

33