Comprehensive Annual Financial Report · a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of Management’s Discussion and

Comprehensive AnnualFinancial Report

For the Year EndedAugust 31, 2015

4250 Cook RoadHouston, Texas 77072

www.aliefisd.net

Alief Independent School District

Prepared by the Business Services Division:

Charles Woods

Deputy Superintendent of Business

Deanna Wentz, CPA

Assistant Superintendent of Finance

Grace Chang, CPA

Controller

Comprehensive Annual Financial Report

For the Year Ended August 31, 2015


4250 Cook Road

Houston, Texas 77072

www.aliefisd.net

Alief Independent School District Comprehensive Annual Financial Report

For the Year Ended August 31, 2015 Table of Contents

Exhibit/

Table Page

Introductory Section Title Page Table of Contents Principal Officials and Advisors 1 Organizational Chart 2 Letter of Transmittal 3 Certificate of Excellence in Financial Reporting 10 Certificate of Achievement for Excellence in Financial Reporting 11 Certificate of Board 12

Financial Section Report of Independent Auditors 13

Management’s Discussion and Analysis 16 Basic Financial Statements

Government-Wide Financial Statements Statement of Net Position A-1 28 Statement of Activities B-1 29 Fund Financial Statements

Governmental Funds Balance Sheet – Governmental Funds C-1 30 Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position C-2 31 Statement of Revenues, Expenditures, and Changes in Fund Balance – Governmental Funds C-3 32 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balance of Governmental Funds to the Statement of Activities C-4 33 Proprietary Funds Statement of Net Position – Proprietary Funds D-1 35 Statement of Revenues, Expenses, and Changes in Net Position - Proprietary Funds D-2 36 Statement of Cash Flows - Proprietary Funds D-3 37 Fiduciary Fund Statement of Fiduciary Assets and Liabilities – Agency Fund E-1 38 Notes to the Basic Financial Statements 39 Required Supplementary Information Schedule of Revenues, Expenditures, and Changes in Fund Balance - Original Budget, Final Amended Budget, and Actual – General Fund F-1 68 Schedule of the District’s Proportionate Share of the Net Pension Liability of a Cost-Sharing Multiple-Employer Pension Plan – Teacher Retirement System of Texas (TRS) F-2 69 Schedule of District Contributions to the Teacher Retirement System Pension Plan F-3 70 Notes to Required Supplementary Information 72

Alief Independent School District Comprehensive Annual Financial Report

For the Year Ended August 31, 2015 Table of Contents

Exhibit/

Table Page

Financial Section (continued)

Other Supplementary Information

Combining and Individual Fund Statements and Schedules Schedule of Revenues, Expenditures, and Changes in Fund Balance - Original Budget, Final Amended Budget, and Actual – Debt Service Fund G-1 73 Schedule of Revenues, Expenditures, and Changes in Fund Balance - Original Budget, Final Amended Budget, and Actual - Food Service Program H-1 74 Combining Statement of Net Position – Internal Service Funds I-1 75 Combining Statement of Revenues, Expenses, and Changes in Net Position – Internal Service Funds I-2 76 Combining Statement of Cash Flows – Internal Service Funds I-3 77 Statement of Changes in Assets and Liabilities – Agency Fund J-1 78 Schedule of Delinquent Taxes Receivable K-1 79

Statistical Section (Unaudited)

Financial Trends Net Position by Component 1 81 Changes in Net Position 2 83 Fund Balances of Governmental Funds 3 87 Changes in Fund Balances – Governmental Funds 4 89 Revenue Capacity Assessed Value and Actual Value of Taxable Property 5 91 Property Tax Rates - Direct and Overlapping Governments 6 92 Principal Taxpayers 7 94 Property Tax Levies and Collections 8 95 Debt Capacity Ratios of Outstanding Debt by Type 9 96 Ratios of Net General Obligation Bonded Debt Outstanding 10 97 Computation of Estimated Direct and Overlapping Debt 11 98 Demographic and Economic Information Demographic and Economic Statistics 12 99 Principal Employers 13 100 Operating Information Full-Time Equivalent District Employees by Position 14 101 Operating Statistics 15 103 Teacher Base Salaries 16 105 School Building Information 17 106 Fund Balance and Cash Flow Calculation Worksheet – General Fund 18 114

Introductory Section


Principal Officials and Advisors

As of August 31, 2015

Board of Trustees

Length of Term

Board of Trustees Service Expires Occupation

Dr. John Hansen, President 22 Years 2015 Investment Manager Ms. Tiffany Thomas, Vice-President 2 Years 2017 Non-Profit Manager Ms. Sarah Winkler, Secretary 18 Years 2017 Homemaker Ms. Ann Williams, Assistant Secretary 8 Years 2015 Educator Mr. Nghi Ho, Member 14 Years 2017 Financial Planner Ms. Dedre Jefferson, Member 1 Year 2017 Educator Mr. Rick Moreno, Member 8 Years 2015 Paramedic

Administrative Officials

Length Official Position of Service Mr. H.D. Chambers Superintendent 5 Years Ms. Gina Tomas Deputy Superintendent of Instruction 28 Years Mr. Charles Woods Deputy Superintendent of Business 23 Years Ms. Deanna Wentz Assistant Superintendent of Finance 20 Years

Consultants and Advisors

Andrews Kurth, L.L.P. Bond Counsel – Houston, Texas

USCA Municipal Advisors, L.L.C.

Financial Advisor – Houston, Texas

Whitley Penn, L.L.P. Independent Auditors – Houston, Texas

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“Preparing students for tomorrow—Caring for them today”

P.O. Box 68 * Alief, Texas 77411 * (281) 498-8110 * Fax: (281) 498-4051 Administrative Services Division

January 19, 2016 Members of the Board of Trustees and Citizens of the Alief Independent School District State law requires that all general-purpose local governments publish within 150 days of the close of each fiscal year a complete set of financial statements presented in conformity with generally accepted accounting principles (GAAP) and audited in accordance with generally accepted auditing standards by a firm of licensed certified public accountants. Pursuant to that requirement, we hereby issue the comprehensive annual financial report of the Alief Independent School District for the fiscal year ended August 31, 2015. This report consists of management’s representations concerning the finances of the District. Consequently, management assumes full responsibility for the completeness and reliability of all of the information presented in this report. In order to provide a reasonable basis for making those representations, management of the District has established a comprehensive internal control framework that is designed to protect the government’s assets from loss, theft, or misuse. Additionally, the internal control framework is designed to compile sufficient reliable information for the preparation of the District’s financial statements in conformity with GAAP. Because the costs of internal controls should not outweigh their benefits, the District’s comprehensive framework of internal controls has been designed to provide reasonable assurance rather than absolute assurance that the financial statements will be free from material misstatement. To the best of our knowledge and belief, this financial report is complete and reliable in all material respects. The financial statements of the District have been audited by Whitley Penn, L.L.P., a firm of licensed certified public accountants. The goal of the independent audit is to provide reasonable assurance that the financial statements of the District for the fiscal year ended August 31, 2015 are free of material misstatement. The independent audit involves examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. The independent auditors concluded, based upon the audit, that there was a reasonable basis for rendering an unmodified opinion that the District’s financial statements for the fiscal year ended August 31, 2015 are fairly presented in conformity with GAAP. The independent auditors’ report is presented as the first component of the financial section of this report. The independent audit of the financial statements is part of a broader, federally mandated “Single Audit” designed to meet the special needs of federal grantor agencies. The standards governing Single Audit engagements require the independent auditor to report not only the fair presentation of the financial statements, but also on the audited government’s internal controls and compliance with legal requirements, with special emphasis on internal controls and legal requirements involving the administration of federal awards. These reports are available in the District’s separately issued Single Audit Report.

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The comprehensive annual financial report is presented in three sections: introductory section, financial section, and statistical section. The introductory section includes this transmittal letter, the District’s organizational chart, and a list of principal officials and advisors. GAAP require that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of Management’s Discussion and Analysis (MD&A). This letter of transmittal is designed to complement MD&A and should be read in conjunction with it. The District’s MD&A can be found immediately following the report of independent auditors. The statistical data section includes selected financial and demographic information, generally presented on a multi-year basis. Profile of the District The Alief Independent School District, established in 1917, encompasses 36.6 square miles in southwest Harris County. The District is an independent political subdivision of the State of Texas governed by an elected board of trustees. The board is elected to staggered four-year terms by the District’s residents. Based on legislative authority codified in the Texas Education Code, the Board (1) has exclusive power to manage and govern the District; (2) can acquire and hold real and personal property; (3) shall have power to levy and collect taxes and to issue bonds; (4) can contract for appointed officers, teachers, and other personnel as well as for goods and services; and (5) has the right of eminent domain to acquire real property. The District is located primarily within the City of Houston and totally within Harris County, Texas. The District is not included in any other governmental reporting entity and there are no component units. Any charter school within District’s boundaries is funded separately by the State’s Foundation School Program based on their student attendance as well as their program participation. The Alief Independent School District has a population of approximately 274,000 and employs approximately 6,400 employees. These employees provide educational services for the 47,376 students enrolled in the Alief Independent School District. The twenty-four elementary schools (pre-kindergarten through fourth or fifth grade), six intermediate schools (fifth and sixth grades), six middle schools (sixth or seventh grade through eighth grade), two ninth grade centers, four high schools (ninth grade through twelfth grade), and one early college high school, are accredited by the Southern Association of Colleges and Schools and the Texas Education Agency (TEA). A list of school buildings with year of construction can be found in the Statistical Section. The Alief Independent School District provides a full range of educational services appropriate to grade levels pre-kindergarten through twelfth grade. These include regular and enriched academic education, special education for handicapped students, occupational education, and educational services for those with limited English proficiency. These basic programs are supplemented by a wide variety of offerings in fine arts, athletics, and other extracurricular programs. Budgeting The annual budget serves as the foundation for the District’s financial planning and control. Each school district in Texas is required by law to prepare annually a budget for the General Fund, the Food Service Program, and the Debt Service Fund. The budget process begins in January when the Long-Range Plan is presented to the Board of Trustees. The enrollment projections contained in this plan form the basis for significant budgetary decisions including per pupil allocations to each campus, instructional staffing allocations, and other required service levels. Once the Long-Range Plan is approved, the Board of Trustees can begin discussions concerning budget strategies and priorities, and establish the budget calendar. Personnel units are allocated to each campus based on projected student enrollment following state mandated ratios, as applicable. Each campus receives a basic allotment per student to be used for supplies, materials, equipment, staff development and other appropriate instructional costs. Decisions concerning utilization of this allocation are made by the site-based decision making teams. Budgets for non-campus units are developed by department heads and reviewed by the Budget Committee. Following the budget development process, consolidated budgetary information is presented to the Board of Trustees in workshops and regular meetings. The proposed budget must be prepared by August 20th for a September 1st fiscal year start date. The Board President must call a board meeting for the purpose of discussing and adopting the budget and the tax rate. A notice of this meeting is required to be published at least 10 days, but not more than 30 days before the public meeting. Budget-to-actual comparisons are provided in this report for each individual governmental fund or program for which an appropriated annual budget has been adopted.

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Profile of the District (continued)

Budgeting (continued) The District maintains budgetary controls within all of its financial systems to ensure compliance with all the statutory provisions of the Texas Education Agency. The budget may be amended during the year to address unanticipated or changing needs of the District. Changes to functional expenditure categories, revenue objects, or other sources and uses accounts require Board approval. However, budget changes not requiring an increase in total appropriations and within functional categories may be approved by management without Board approval. Expenditures may not legally exceed budgeted appropriations, as amended, at the function level by fund. Outstanding encumbrances at the end of the fiscal year are represented as assigned fund balance and are treated as expenditures in the following year upon receipt of the goods and services. Factors Affecting Financial Condition The information presented in the financial statements is perhaps best understood when it is considered from the broader perspective of the specific environment within which the District operates. Local Economy The local economy is based predominantly on commercial and financial activities. Shell Development Company’s Westhollow Research Center is situated in the western portion of the District. Chevron Chemical, a Halliburton Company, is also located in the District. Property values increased 10% for 2014-15 after a 7% increase in the previous year. The increase is primarily in residential properties. Approximately 47% of Alief students reside in apartments, while the remaining 53% reside in the various residential subdivisions in the District. Since apartment construction, occupancy rates, and development of residential subdivisions heavily influence enrollment rates, District personnel carefully monitor these factors throughout the year. The District experienced fairly significant increases in enrollment during the 1990’s– approximately 1,300-1,500 students per year. The rate of increase then began to decline for several years. However, in 2005-06, Alief experienced a large boost in enrollment (1,974 students) due to evacuee students as a result of hurricanes Katrina and Rita. The increase was followed by a corresponding decrease in 2006-07 and 2007-08. For the next three years annual increases were between 200 and 250 students. In 2011-12, enrollment decreased by 366 to 45,464 followed by an increases of 309 students in 2012-13, and 540 students in 2013-14. The projected increase for 2014-15 was 268; however, there was a fairly significant increase of 1,063 (2%). This level of increase is not expected to continue. With a large number of students residing in apartments, this enrollment variation was directly tied to apartment occupancy rates. There is very minimal residential construction within the district boundaries and minimal amounts of vacant land for such construction. Based on these facts and the trends for the last several years, the expectation is that we will continue to see fairly flat enrollment for the foreseeable future (+/- 1%-2%). The projection for 2015-16 is 47,751 – an increase of 375 students from the prior year. State Funding and Tax Levy The State of Texas provides funding for public education via a financing formula which weights student attendance levels, property value per student, the District’s tax effort, and regional variations in payroll and other costs. The District is considered a “property-poor” school district because the assessed value of property per student is lower than the Equalized Wealth Level of $319,500. The fiscal matters/school finance bill passed during the 82nd Legislative Session significantly reduced funding for Texas school districts for 2011-12 and 2012-13. Due to an improved economy, when the Legislature next met in 2013 additional funds were available and allocated to school districts for the 2013-14/2014-15 biennium. The current State funding formulas are summarized as follows:

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Factors Affecting Financial Condition (continued) State Funding and Tax Levy (continued)

Tier I of the funding formula allots an amount per student ($4,950 for 2013-14 and $5,040 for 2014-15) to each school district based on average daily attendance (ADA) with additional weight given for special programs. From the total Tier I allotment, a deduction is made for the local district’s share based on the individual district’s property tax base multiplied by a constant tax levy of $1.00 (or the compressed rate if the compressed rate is not $1.00) per $100 of assessed taxable property value. The remainder represents the State’s share of Tier I funding. Under this methodology, a district’s wealth factors significantly into its share of state funding. The higher the wealth per student, the higher the proportional deduction from the Tier I total.

However, after calculating State aid using the above formula, another calculation is done to adjust to the “Target Revenue” amount set in 2006-07 (and then adjusted slightly in 2009-10). If a district receives less than the target amount under the Tier I formulas, the district receives “Additional State Aid for Tax Reduction (ASATR)” to bring their revenue up to the target amount. The current target revenue system and the huge variances in district funding created by this system was the subject of a huge amount of debate during the last two Legislative sessions. Districts around the State, including Alief, are currently involved in a lawsuit to address the unconstitutionality (inequity to students/taxpayers, inadequacy and inefficiency) of the current method for funding schools.

Tier II of the formula rewards the tax effort of a district by guaranteeing that tax effort in the current year, beyond the required local share of Tier I, will yield a minimum amount of money per weighted student in average daily attendance (WADA). In Tier II, for the first six pennies of tax above the compressed rate, the State will subsidize tax receipts as needed to produce a guaranteed level of revenue per student per penny of property tax levy. The guaranteed yield for those six pennies remained unchanged for 2013-14 ($59.97) and increased to $61.86 for 2014-15. The guaranteed yield on any additional pennies above the compressed rate plus six cents (up to the maximum rate of $1.17) is fixed at $31.95 for all years.

In summary, State formula funding increased by $11.6 million, mainly due to updates to certified

property value for prior years ($4.6 million) and additional student attendance and special programs. Although there were increases in the basic allotment for Tier I, and the guaranteed yield for Tier II, the District’s local fund assignment increased (due to increases in property value) by approximately the same amount, offsetting increases in funding from the formula changes.

Salary increases were not possible for most districts in Texas for 2011-12, including Alief, due to the State budget reductions. For the 2012-13 fiscal year, the Board approved a $1,000 supplement (total cost of $5.4 million) for all eligible employees since giving a permanent increase was not feasible or sustainable beyond the current year without additional State funding. With additional funds available and allotted by the State Legislature for the 2013-14/2014-15 biennium, salary increases of 3.50% and 5.03% of the midpoint were feasible and approved by the Board for the 2013-14 and 2014-15 fiscal years, respectively. Payroll related expenditures also increased due to increases in stipends for high school math/science teachers, increase in the rate of pay for substitutes and increases in the number of positions. Budgeted general fund positions were increased by 116 for 2014-15. These position increases include teachers, special education teachers, counselors, manual trades, and paraprofessionals. The required tax rate is calculated after determining the necessary level of expenditures to meet District’s educational goals and facility requirements and estimating state aid. The general fund tax rate adopted by the Board for 2008-09 was $1.125 which exceeded the rollback tax rate and required a voter election. The voters approved this rate at the election held on November 20, 2008. The general fund tax rate remains at $1.125 for 2014-15.

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Factors Affecting Financial Condition (continued) Fund Balance

General Fund – The District strives to maintain a general fund balance equal to approximately two months of operating expenditures.

Debt Service Fund – The District strives to maintain a debt service fund balance of not more than 1/12 of the preceding year’s required principal and interest payments for all outstanding bonds.

Food Service Program – The fund balance for food service should not exceed three months of average food service operating expenditures.

Major Initiatives and Accomplishments In September 2003, the voters in the Alief Independent School District approved a $175 million bond referendum. The District has issued nine installments from this referendum totaling $165.7 million. The District does not currently have plans to issue the remainder in the near future. In an election on May 9, 2015, the voters approved a bond referendum totaling $341 million by a vote of 830 (72.3%) for to 318 against. A community led Bond Steering Committee began meeting in the fall of 2014 and presented to the Alief School Board in February, 2015. Major projects include in this referendum are: a career center, a multi-purpose center, a fine arts addition at Kerr High School, gymnasium additions at each middle school, facilities for Pre-K expansion, school buses, and other district renovations. The 2014-15 financial structure of the Alief Independent School District provided support to work toward or accomplish the following goals: 1. Prepare all students for a successful transition to multiple post-secondary opportunities. $360,000

was budgeted to add a counselor at each middle school specifically to help students prepare for and transition to high school. Four additional career and technology teachers were also added to expand those programs ($200,000). An additional $165,000 was budgeted for dual credit textbooks to increase programs for dual credit between high school and Houston Community College.

2. Provide a safe and secure environment for all students and staff. Completion of the $2.75 million in

facility modifications that were budgeted in the prior year for the escalation of security enhancements recommended by campuses. In addition, the District has budgeted $145,000 for a camera system on all special transportation buses.

3. Strengthen and improve the organizational health, climate, and relationships with our staff and

community. The FAME program initiative will be carried out by the District’s Family Engagement Department and the 45 family engagement liaisons that are on staff ($1.4 million). $1.46 million was budgeted for the Communities in Schools (CIS) program which was expanded from 27 to 30 campuses. CIS is a non-profit organization that encourages at-risk students to remain in school by providing and coordinating social services that meet their physical and emotional needs. $185,000 was budgeted for a K-12 Insight study. $160,000 was budgeted for Playworks at 6 campuses to ensure kids have a place that is safe and welcoming – where they can play, thrive and contribute and that every child takes this positive experience back to the classroom and their communities.

4. Efficiently and effectively manage taxpayer funds and capital improvement plans that benefit

students, staff and the community. The 2014-15 budget provides for a $0.01 reduction in the tax rate. The District pays approximately $290,000 per year from the Internal Service Health Insurance Fund for the Total Family Care Wellness Clinic which waives co-pay for employees and their dependents.

5. Expand the use of technology for the purpose of improving student and staff preparation, instruction,

effectiveness and efficiency. $4.2 million was budgeted to fund the current year requirements of the District Technology Plan. Additionally, $1.17 million was budgeted at the campus level to assist with technology enhancements that meet the need of each campus.

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Factors Affecting Financial Condition (continued) Major Initiatives and Accomplishments (continued) For the 2015 District and campus accountability ratings from the Texas Education Agency, Alief ISD received the “Met Standard” rating for 38 of its 41 campuses (93%). The District also received a rating of “Met Standard”. All campuses and districts in Texas were labeled as either Met Standard or Improvement Required. 59% of Alief campuses were awarded one or more Distinction Designations. Kerr High School, Budewig Intermediate School, Miller Intermediate School, Youngblood Intermediate School, and Outley Elementary School met all performance indices and all eligible Distinction Designations in the accountability system. TEA awards these distinctions in the areas of English language arts, math, science, social studies, closing the gap, student progress and post-secondary readiness. In addition, Kerr High School was recognized as one of the top high schools in the area by the Children at Risk organization. Kerr ranked as the 3rd best high school in the greater Houston area and the 7th best in Texas in the 2015 rankings. Awards and Acknowledgements The Association of School Business Officials International (ASBO) awarded a Certificate of Excellence in Financial Reporting to the Alief Independent School District for its Comprehensive Annual Financial Report for the fiscal year ended August 31, 2014. We believe that our current report continues to conform to the high standards of the certificate of excellence program, and we are submitting it to ASBO. In addition, the Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to Alief Independent School District for its Comprehensive Annual Financial Report for the fiscal year ended August 31, 2014. In order to be awarded a Certificate of Achievement, a government unit must publish an easily readable and efficiently organized Comprehensive Annual Financial Report, whose contents conform to program standards. Such reports must satisfy both accounting principles generally accepted in the United States of America and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe our current report continues to conform to the Certificate of Achievement Program requirements, and we are submitting it to the GFOA. The District also received the GFOA’s Distinguished Budget Presentation Award and the ASBO’s Meritorious Budget Award (MBA) for its annual budget document. In order to qualify for these budget awards the budget document was judged to be proficient in several categories as specified by these two organizations. Alief was recognized by the ASBO as one of 19 entities that have participated in the MBA program for more than 15 years and the only school district in Texas to receive this honor of participating for so many years. Alief is proud to have received a 13th consecutive highest rating under the Schools FIRST (Financial Integrity Rating System of Texas), a financial accountability system for Texas school districts developed by the Texas Education Agency. The primary goal of Schools FIRST is to ensure quality performance in the management of school districts’ financial resources. The District has also received the highest award level for six years from the Texas Comptroller Leadership Circle program which highlights annually those entities that are setting the bar with their transparency efforts. The financial management staff of the Alief Independent School District wishes to express its appreciation to the Board of Trustees for their concern in providing fiscal accountability to the patrons of the District and thereby contributing their full support in the development of one of the best educational financial operations within the State of Texas. The preparation of this report could not have been accomplished without the dedicated services of the District’s Accounting Department as well as the technical support provided by the independent auditing firm of Whitley Penn, L.L.P. Sincere appreciation is extended to those personnel who assisted and contributed to the preparation of the Comprehensive Annual Financial Report.

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Sincerely, Mr. HD Chambers Mr. Charles Woods Superintendent Deputy Superintendent of Business

Ms. Deanna Wentz

Assistant Superintendent of Finance

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Association of School Business Officials International

The Certificate of Excellence in Financial Reporting Award is presented to


For Its Comprehensive Annual Financial Report (CAFR) For the Fiscal Year Ended August 31, 2014

The CAFR has been reviewed and met or exceeded

ASBO International’s Certificate of Excellence standards

Mark C. Pepera, MBA, RSBO, SFO John D. Musso, CAE, RSBA President Executive Director

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Financial Section

Houston Offi ce

3411 Richmond Avenue

Suite 500

Houston, Texas 77046

713.621.1515 Main

whitleypenn.com

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REPORT OF INDEPENDENT AUDITORS To the Board of Trustees Alief Independent School District Houston, Texas Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of Alief Independent School District (the “District”) as of and for the year ended August 31, 2015, and the related notes to the financial statements, which collectively comprise the District’s basic financial statements as listed in the table of contents. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

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To the Board of Trustees Alief Independent School District

Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, each major fund, and the aggregate remaining fund information of the District, as of August 31, 2015, and the respective changes in financial position, and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Emphasis of Matter As discussed in Note 1 and 22 to the financial statements, the District adopted the provisions of GASB Statement No. 68, Accounting and Financial Reporting for Pensions – an amendment of GASB Statement No. 27, and GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date – an amendment of GASB Statement No. 68, as of August 31, 2015. Our opinion is not modified with respect to this matter. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis on pages 16 through 27 and budgetary comparison information and pension information on pages 68 through 72 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the District’s basic financial statements. The accompanying supplementary information, such as the combining and individual fund statements and compliance schedules and other information, such as the introductory and statistical section, are presented for the purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual fund statements and schedules and other supplementary information are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States

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To the Board of Trustees Alief Independent School District

of America. In our opinion, the combining and individual fund statements and schedules and other supplementary information are fairly stated in all material respects in relation to the basic financial statements as a whole. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated January 14, 2016, on our consideration of the District’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the District’s internal control over financial reporting and compliance. Houston, Texas January 14, 2016

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Management's Discussion and Analysis

In this section of the comprehensive annual financial report, we offer readers of the District’s financial statements a narrative overview and analysis of the financial activities of the District for the fiscal year ended August 31, 2015. Please read it in conjunction with the independent auditors' report and the District's financial statements, which follow this section.

Financial Highlights The assets and deferred outflows of resources of the District exceeded its liabilities and deferred

inflows of resources at the close of the fiscal year by $341,025,995 (net position). Of this amount, $74,550,415 (unrestricted net position) may be used to meet the District’s ongoing obligations.

The District’s net position increased $24,217,148 as a result of this year’s operations.

Due to the implementation of GASB Statements No. 68 and 71, the District has restated the

beginning net position in the government-wide Statement of Activities, effectively decreasing the net position as of September 1, 2014 by $61,139,797. At August 31, 2015, the District reported a liability of $53,962,550 for its proportionate share of the TRS’s net pension liability.

The District’s governmental funds reported combined ending fund balances of $152,880,560.

Approximately 52% of this total amount, $78,875,783, is available for spending at the government’s discretion (unassigned fund balance).

The combined ending fund balances for the District’s governmental funds increased by $3,726,685. The General Fund ended the year with an unassigned fund balance of $78,875,783 or 20% of the

total general fund expenditures, a slight decrease from prior year.

Overview of the Financial Statements This annual report consists of a series of financial statements plus additional supplemental information as required by its state oversight agency, the Texas Education Agency (TEA). The District’s basic financial statements consist of three sections: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the basic financial statements. The following sections describe the measurement focus of the two types of statements and the significant differences in the information they provide. Government-wide Financial Statements The focus of government-wide financial statements is on the overall financial position and activities of the District. The District’s government-wide financial statements include the statement of net position and the statement of activities (on pages 28 and 29), which are prepared using accounting principles that are similar to commercial enterprises. These statements provide information about the activities of the District as a whole and present a longer-term view of the District's property and debt obligations and other financial matters.

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Management's Discussion and Analysis (continued) The statement of net position includes all the District's assets, deferred outflows of resources, liabilities, and deferred inflows of resources at the end of the year, with the difference among these elements reported as net position. This difference is similar to the total owner’s equity presented by a commercial enterprise. Net position is one way to measure the District’s financial health or position. Over time, increases or decreases in the District’s net position are an indicator of whether its financial health is improving or deteriorating, respectively. To fully assess the overall health of the District, however, other factors should be considered as well, such as changes in the District's average daily attendance or its property tax base and the condition of the District's capital assets. The purpose of the statement of activities is to present the revenues and expenses of the District. Again, the items presented on the statement of activities are measured in a manner similar to the approach used by a commercial enterprise in that revenues are recognized when earned or established criteria are satisfied, and expenses are reported when incurred by the District. Thus, revenues are reported even when they may not be collected for several months or years after the end of the accounting period, and expenses are recorded even though they may not have used cash during the current period. The District's revenues are divided into those provided by outside parties who share the costs of some programs, such as tuition received for summer school and grants provided by the U.S. Department of Education to assist children with disabilities or from disadvantaged backgrounds, and revenues provided by the taxpayers or by TEA in the equalization funding processes (general revenues). Although the statement of activities looks different from a commercial enterprise’s income statements, the financial statement is different only in format, not substance. The financial information for the year ended August 31, 2015 includes the District’s catering services program, day care services program, and after school program. The catering services program offers catered meals and snacks for District meetings, the day care facilities offer child care services to employees, while the after school program provides K-6th grade students homework help and enrichment activities. These activities are accounted for as governmental activities effective September 1, 2014. The District has no component units for which it is financially accountable. Fund Financial Statements Fund financial statements (starting on page 30) report the District's operations in more detail than the government-wide statements by providing information about the District's most significant funds – not the District as a whole. For governmental activities, these statements tell how services were financed in the short term, as well as what resources remain for future spending. They reflect the flow of current financial resources, and supply the basis for tax levies and the appropriations budget. For proprietary activities, fund financial statements tell how goods or services of the District were sold to departments within the District or outside parties and how the sales revenues covered the expenses of the goods or services. The remaining statements, fiduciary statements, provide financial information about activities for which the District acts solely as a trustee or agent for the benefit of those outside of the district. Laws and contracts require the District to establish some funds, such as the debt service fund. The District's administration establishes other funds to help it control and manage money for particular purposes.

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Management's Discussion and Analysis (continued) All of the District’s funds can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds.

Governmental funds – Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government’s near-term financing requirements. Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government’s near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balance provide reconciliation to facilitate this comparison between governmental funds and governmental activities.

The District maintains several individual governmental funds organized according to their type (special revenue, debt service and capital projects). Information is presented separately in fund financial statements for the general fund, special revenue fund, debt service fund, and capital projects fund. These funds are all considered major funds, except for the debt service fund. The District adopts an annual appropriated budget for its general fund, food service program within the special revenue fund, and debt service fund. Budgetary comparison schedules have been provided to demonstrate compliance with these budgets.

Proprietary funds – Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. There are two proprietary fund types – enterprise and internal service funds. The District used to account for its day care program, catering service program, and after school program in the enterprise funds. However, the funds were terminated September 1, 2014 and the program activities were transferred to the General Fund. The internal service funds are an accounting device used to accumulate and allocate costs internally among the various functions. The District uses the internal service fund to report activities for its self-funded insurance programs. The basic proprietary fund financial statements can be found on pages 35-37 of this report. Fiduciary funds – Fiduciary funds are used to account for resources held for the benefit of parties outside the government. The District is the trustee, or fiduciary, for money raised by student activities. All of the District’s fiduciary activities are reported in a separate Statement of Assets and Liabilities on page 38 and a Statement of Changes in Assets and Liabilities on page 78. We exclude these resources from the District’s other financial statements because the District cannot use these assets to finance its operations. The district is only responsible for ensuring that the assets reported in these funds are used for their intended purposes.

Notes to the basic financial statements The notes to the financial statements (starting on page 39) provide narrative explanations or additional data needed for full disclosure in the government-wide statements or the fund financial statements.

Other information In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information that further explains and supports the information in the financial statements. Required supplementary information can be found on pages 68-72 of this report.

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Management's Discussion and Analysis (continued) Other supplementary information including combining statements and compliance schedules can be found on pages 73-80 of this report.

Government-Wide Financial Analysis The District’s overall financial position and operations for the past two years are summarized as follows, based on the information included in the government-wide financial statements. The adoption of Governmental Accounting Standards Board (GASB) Statements No. 68, Accounting and Financial Reporting for Pensions – an amendment of GASB Statement No. 27, and No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date – an amendment of GASB Statement No. 68, for the year ended August 31, 2015, has resulted in the restatement of the District’s beginning net position for the fiscal year 2015 government-wide financial statements to reflect the reporting of net pension liability and deferred outflows of resources for its qualified pension plan and the recognition of pension expense in accordance with the provisions of the Statement. Net position as of September 1, 2014 was decreased by $61,139,797 to reflect the cumulative effect of adoption. The net pension liability of $66,261,585 and the deferred outflows of resources of $5,121,788 at August 31, 2014 were reported as a prior period adjustment to the net position on September 1, 2014. Refer to Note 12 for more information regarding the District’s pension. The beginning deferred outflows include contributions made from September 1, 2013 through August 31, 2014, totaling $5,121,788.

The District used Enterprise Funds to account for revenues and expenditures of the daycare facilities, the food service department’s catering operations, and the after school program in 2013-14 and prior. The District reclassified the activities of the daycare fund, catering fund, and after school program to the General Fund effective September 1, 2014. The effects of this change, as of September 1, 2014, are an increase of $247,046 to the net position of the governmental activities. The District’s total assets and deferred outflows of resources exceeded total liabilities and deferred inflows of resources by $341,025,995. The District’s unrestricted net position – the part of net position that can be used to finance day-to-day operations without constraints established by debt covenants, enabling legislation, or other legal requirements – was $74,550,415 on August 31, 2015. Unrestricted net position decreased by $52,043,558 from the prior year, mainly due to the impact of implementation of GASB Statements 68 and 71. The increase of $15,437,383 in receivables from the prior year directly relates to the increase in state formula funding settle-up and federal grant expenditure reimbursement at year-end, which also attributes to the net decrease of $9,779,496 in cash and investments as of August 31, 2015. The decrease in bonds payable resulted from re-payments and refunding on outstanding bonds. The decrease of $12,299,035 in net pension liability from $66,261,585 at August 31, 2014 was mainly due to favorable investment earnings of the Teacher Retirement System of Texas. Net Investment in capital assets (e.g., land, buildings, furniture and equipment), less any related debt used to acquire those assets that is still outstanding is $240,898,879. Although the District’s debt issuances are used primarily to acquire capital assets, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. An additional portion of the District’s net position (approximately 7%) represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted net position ($74,550,415) or 22% of the District’s net position, may be used to finance day-to-day operations without constraints established by debt covenants, enabling legislation, or other legal requirements.

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Management's Discussion and Analysis (continued)

Net Position Summary

August 31, August 31, August 31, August 31, August 31, August 31,

2015 2014 2015 2014 2015 2014

Cash and cash equivalents 112,409,375$ 139,040,064$ 200,899$ 112,409,375$ 139,240,963$ Investments 30,576,715 13,524,623 30,576,715 13,524,623 Receivables 45,547,606 30,014,785 95,438 45,547,606 30,110,223 Inventories, at cost 1,475,348 1,446,776 1,475,348 1,446,776 Prepaid items 21,780 21,780 Capital assets, net of accumulated depreciation 405,254,343 397,319,555 7,083 405,254,343 397,326,638

Total assets 595,263,387 581,367,583 303,420 595,263,387 581,671,003

Deferred loss on refunding 4,694,766 4,862,501 4,694,766 4,862,501 Deferred outf low s from pension activities 14,240,229 14,240,229 Total deferred outflows

of resources 18,934,995 4,862,501 18,934,995 4,862,501

Accounts payable 11,748,719 9,989,461 3,860 11,748,719 9,993,321 Interest payable 238,893 317,001 238,893 317,001 Payroll deductions 2,747,861 2,236,248 2,747,861 2,236,248 Accrued w ages payable 7,152,031 5,396,588 9,443 7,152,031 5,406,031 Unearned revenue 138,342 136,393 43,071 138,342 179,464 Bonds payable 171,306,157 180,887,337 171,306,157 180,887,337 Compensated absences 5,675,378 5,626,430 5,675,378 5,626,430 Claims payable 3,695,152 3,939,028 3,695,152 3,939,028 Net pension liability 53,962,550 53,962,550

Total liabilities 256,665,083 208,528,486 56,374 256,665,083 208,584,860

Deferred inflow s from pension activities 16,507,304 16,507,304 Total deferred inflows

of resources 16,507,304 16,507,304

Net position:Net Investment in capital 240,898,879 225,322,439 7,083 240,898,879 225,329,522

assetsRestricted 25,576,701 26,025,149 25,576,701 26,025,149 Unrestricted 74,550,415 126,354,010 239,963 74,550,415 126,593,973

Total net position 341,025,995$ 377,701,598$ -$ 247,046$ 341,025,995$ 377,948,644$

Governmental Activities Business-type Activities Total

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Changes in Net Position

August 31, August 31, August 31, August 31, August 31, August 31,

2015 2014 2015 2014 2015 2014

Revenues

Program revenues:Charges for services 7,327,758$ 6,444,057$ 1,354,797$ 7,327,758$ 7,798,854$ Operating grants/contributions 102,137,420 100,872,983 102,137,420 100,872,983

General revenues:Property taxes 159,887,804 148,374,985 159,887,804 148,374,985 State-aid formula grant 237,669,884 226,119,215 237,669,884 226,119,215 Other 1,119,102 1,670,274 309 1,119,102 1,670,583

Total revenues 508,141,968 483,481,514 1,355,106 508,141,968 484,836,620

Expenses

Instruction and instructional 309,645,831 289,267,587 309,645,831 289,267,587 related servicesrelated services Instructional/school leadership 31,932,755 30,330,149 31,932,755 30,330,149 Support services - student 76,085,722 71,044,660 76,085,722 71,044,660 Administrative support services 10,327,012 9,778,090 10,327,012 9,778,090 Support services - non-student based 45,745,348 43,825,449 45,745,348 43,825,449 Ancillary services 3,222,117 2,227,081 3,222,117 2,227,081 Debt service 5,106,464 5,596,853 5,106,464 5,596,853 Intergovernmental charges 1,859,571 1,948,840 1,859,571 1,948,840 Other business-type activities 1,358,420 1,358,420

Total expenses 483,924,820 454,018,709 1,358,420 483,924,820 455,377,129

Change in net position 24,217,148 29,462,805 (3,314) 24,217,148 29,459,491 Net position - beginning 377,701,598 348,238,793 247,046$ 250,360 377,948,644 348,489,153 Prior period adjustments (60,892,751) (247,046) (61,139,797) Net position - ending 341,025,995$ 377,701,598$ -$ 247,046$ 341,025,995$ 377,948,644$

Governmental Activities

Business-type Activities Total

The restatement of the beginning net position in fiscal year 2015 is the result of the District’s implementing GASB Statements No. 68 and 71, along with the reclassification of activities from business–type to governmental activities effective September 1, 2014. The implementation is discussed above in MD&A and more information is available in notes to the basic financial statements. Governmental activities. Net position of the District's governmental activities increased $24,217,148. The total cost of all governmental activities this year was $483,924,820, and the amount that the District’s taxpayers paid for these activities through property taxes was $159,887,804, or approximately 33% of the total cost, same as prior year.

$-

$50,000,000

$100,000,000

$150,000,000

$200,000,000

$250,000,000

2014-15 2013-14

Governmental Activity Revenue

Charges for services

Operating grants/ contributions

Property taxes

State revenues-unrestricted

Other

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Management's Discussion and Analysis (continued) Significant changes in revenues and expenses include: The 8% increase in property taxes revenue is the net result from the increase of 10% in property

value and the reduction of $0.01 in tax rate. The increase in state-aid formula grant of $11.6 million resulted from the increase of 1,063 in student

enrollment, updates to certified property values ($4.6 million), and the one time only supplement for the newly required employer’s contribution to the Teacher Retirement System (TRS) ($2.9 million).

In addition to the 5.03% pay adjustment for employees, additional personnel units, additional employer’s contribution to TRS, and increased health insurance costs have contributed to the increase of $20.4 million in total instruction and instructional related services.

The pay adjustment, new positions, TRS contribution, and higher insurance claims also contributed to the increase of $5.0 million in student support services.

Total expenses above include depreciation of $16.9 million. Capital outlay of $25.0 million is not included in the above total expenses. In the government-wide financial statements, capital outlay is shown as an increase in the capital assets reported on the statement of net position and depreciation expense is recorded in the statement of activities in order to spread recognition of the cost of capital assets over their useful lives.

Business-type activities. Business-type activities were reclassified as governmental activities effective September 1, 2014.

Financial Analysis of the District’s Funds

As noted earlier, the District uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements.

Governmental funds. The focus of the District’s governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the District’s financing requirements. In particular, unassigned fund balance may serve as a useful measure of a government’s net resources available for spending at the end of the fiscal year.

As of the end of the current fiscal year, the District’s governmental funds reported combined ending fund balances of $152,880,560, an increase of $3,726,685 from last year along with a prior period adjustment of $239,963 for reclassification of activities that used to be accounted for in the enterprise funds. Approximately 52% of the total amount, $78,875,783, constitutes unassigned fund balance. The remainder of the fund balance is nonspendable, restricted, committed, or assigned for particular purposes as follows: 1) nonspendable for inventories-$1,475,348; 2) restricted for debt service-$17,172,934, food service-$6,810,433, and capital acquisitions and contractual obligations-$2,255,927; 3) committed for capital improvement to facilities-$30,028,682, technology equipment and bus replacement-$3,500,000, self-funded insurance-$3,000,000, potential federal sequestration-$1,500,000, and campus activities-$1,259,718; 4) assigned for outstanding encumbrances-$1,326,357 and compensated absences-$5,675,378.

Nonspendable1%

Committed,26%

Restricted, 17%

Assigned,4%

Unassigned, 52%

2014-15

Nonsepndable1%

Committed, 21%

Restricted,19%

Assigned, 4%

Unassigned, 55%

2013-14

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Management's Discussion and Analysis (continued) The general fund is the primary operating fund of the District. At the end of the current fiscal year, unassigned fund balance of the general fund was $78,875,783, while the total fund balance was $102,413,345. The fund balance of the general fund decreased $3.1 million from previous year. The state formula funding and local property tax revenues increased $11.6 million and $11.1 million, respectively, due to the significant increase of 1,063 in student enrollment, updates to certified property values for prior years and a 10% increase in property value for current tax year. However, the increase was offset by the pay adjustment of 5.03% to employees totaling $13.5 million, additional 116 positions ($5.4 million), increases in stipends for high school math/science and bilingual teachers and substitute teachers ($1.7 million), additional employer’s contributions to the health insurance internal service fund for participants and claims ($2.6 million), expanded tutorials and campus innovation grants ($2.1 million), and a transfer of $1.0 million more than prior year to the capital projects fund. As a measure of the general fund’s liquidity, it may be useful to compare unassigned fund balance to the total fund expenditures. Unassigned fund balance represents 20% of the total general fund expenditures. Food service fund balance at the end of 2014-15 was $7,249,954, a decrease of $2.7 million from previous year mainly due to a $3.8 million expenditure for kitchen renovations at Hastings and Elsik high schools, and Alexander, Mahanay, and Smith elementary schools to increase efficiency and create a more inviting atmosphere to encourage additional students to participate in meal service. The fund balance for food service should not exceed three months of average food service operating expenditures. Based on the newly implemented calculation formula from the Texas Department of Agriculture, the District has exceeded the threshold by $110,000, partly due to several approved capital items were not delivered prior to year-end. The debt service fund has a total fund balance of $17,172,934 that is reserved for the payment of debt service. The $2.3 million increase in fund balance was mainly due to District’s required annual deposits into a reserve account for the Qualified School Construction Bonds (QSCB), Series 2009 and 2010. These annual deposits plus the interest earned on the reserve accounts will be used to pay off the debt upon maturity in 2024 and 2027. The fund balance is currently above the District’s benchmark of 1/12

th of the preceding year’s expenditures by $3.3 million. The District intends to utilize this reserve in coming years in order to minimize the impact on the tax rate from the 2015 bond referendum. Fund balance for the capital projects fund at August 31, 2015 was $24,784,609. As a result of unspent bond proceeds in previous years, the fund began the year with $17,508,003 in fund balance. The Board also approved a fund transfer of $16,493,214 from the general fund for improvements at campuses, and bus and phone system replacement, and an issuance of schoolhouse bonds in the amount of $9.4 million. The District spent $19,211,070 in the current year on various projects. The remaining fund balance is mainly for future projects, including computer and textbook replacement, HVAC upgrade, roof replacement, phone system replacement, and various improvement projects throughout the District. Proprietary Funds. The District’s proprietary funds provide the same type of information found in the government-wide financial statements, but in more detail. The internal service fund is used to account for the District’s self-funded insurance programs. The workers’ compensation fund experienced an increase of $131,312 in net position resulting in a balance of $1,193,507 at August 31, 2015. The increase was primarily due to lower claim costs compared to prior year. The health insurance fund’s fund balance decreased by $1,666,128, mainly due to increased number of claims and claim costs, especially for prescriptions.

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General Fund Budgetary Highlights

Over the course of the year, District personnel recommended, and the Board of Trustees approved, several revisions to budgeted revenues and appropriations. Revisions to the revenue budget were necessary due to changes in estimates for local and state revenue. Revisions to appropriations were necessary due to changes in spending needs over the course of the year, and other unexpected occurrences.

The District’s major budget amendments during the year are summarized as follows:

A $16.5 million budget amendment was approved for a transfer from the general fund to the capital projects fund to meet the immediate improvement needs at campuses ($10.7 million), the phone system upgrade ($4.1 million), and bus replacement ($1.7 million).

The expenditure budget was increased by $11.6 million to reflect year-end payroll and benefits

projection, $2.8 million for district-wide building modification and maintenance, additional $1.7 million for tutorials, a total of $1.6 million for day care, catering and after school program activities, $0.4 million for campus innovation grants, $0.4 million for vehicles, $0.4 million for technology equipment and software, $0.3 million for property value audits, $0.3 million for facility condition assessment, $0.2 million for PSAT/SAT reviews, and $0.2 million for special education. However, the increase was offset by a decrease of $1.7 million for school buses based on the delivery status at year-end.

The revenue budget was amended based on modified projections: a $4.0 million increase due to property value appraisal adjustments, a total of $1.4 million increase in fee based programs such as day care, catering, and after school programs, a $2.5 million increase in TRS on-behalf payments, and an $11.0 million increase to state funding due to enrollment exceeding projections and updates to certified property values.

After revenue budgets and appropriations were adjusted as described, the District’s general fund balance of $102,413,345 differs from the final budgetary fund balance of $92,631,691 reported in the budgetary comparison schedule on page 68. This is primarily due to the expenditures that were less than final budgeted amounts. Various expenditure categories came in under the adjusted budget, including payroll ($6.1 million), operating supplies and materials ($1.0 million), contracted services for special education and juvenile justice alternative education ($0.9 million), vehicles ($0.5 million), technology equipment ($0.5 million), employee and student travel ($0.5 million), fuels ($0.4 million), textbooks and instructional materials ($0.3 million), and building modifications ($0.3 million).

Capital Asset and Debt Administration

Capital Assets The District’s investment in capital assets for its governmental activities as of August 31, 2015, amounts to $405,254,343 (net of accumulated depreciation of $358,754,052). This investment in capital assets includes facilities and equipment for instruction, transportation, athletics, administration, and maintenance. The net increase in the District’s investment in capital assets for the current year was $7,927,705. Additional information on the District’s capital assets can be found on pages 52-53 in the notes to the financial statements.

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Capital Asset Summary


August 31, August 31,

2015 2014 (as restated)

Land 65,433,741$ 65,433,741$ Buildings and improvements 312,121,824 307,387,543 Furniture and equipment 17,807,497 16,999,464 Construction in progress 9,891,281 7,505,890

Total capital assets

(net of depreciation) 405,254,343$ 397,326,638$

The ending balance as of August 31, 2014 has been restated to reflect the reclassification of the business-type activities to governmental activities effective September 1, 2014, for comparison. Debt At year-end, the District has the following long-term liabilities:

General Obligation Bonds 171,306,157$ 180,887,337$ Compensated Absences 5,675,378 5,626,430 Claims Payable 3,695,152 3,939,028 Net Pension Liability 53,962,550 66,261,585

Totals 234,639,237$ 256,714,380$

August 31,

2015

August 31,

2014 (as restated)


Bonded Debt – The District’s bonded debt decreased by $9.6 million at year-end. The District retired $18,283,793 of debt during 2014-15 and issued $9,430,000 in unlimited tax schoolhouse bonds. The District also issued $9,255,000 in unlimited tax refunding bonds to advance refund $9,280,000 of the Series 2007 bonds. The ratio of net general bonded debt to assessed valuation is a useful indicator of the District’s debt position. This data is presented in the statistical section on page 97 and reflects a continuing decrease in the ratio of net bonded debt to assessed value for the past 10 years. The underlying rating on the District’s bonds is “Aa1” from Moody’s and “AA” from Standard and Poors. The municipal rating of “AAA” on the District’s bonds reflected the Texas Permanent School Fund (PSF) guarantee.

Pension - The adoption of GASB 68 and 71 resulted in the District’s reporting of net pension liability and deferred inflows/outflows of resources for its qualified pension plan and the recognition of pension expense in accordance with the provisions of the GASB Statements. The decrease in the District’s net pension liability (NPL) to $53,962,550 at August 31, 2015 from $66,261,585 at August 31, 2014 was the result of a significant increase in net investment income in the TRS plan during 2014.

25


District’s key pension statistics related to the TRS plan as of and for the fiscal year ended August 31, 2015:

Net Pension Liability 53,962,550$ Pension Expense 4,987,883$

More detailed information about the District's long-term liabilities is presented on pages 53-56 and 57-62 in the notes to the basic financial statements.

Economic Factors and Next Year's Budgets and Rates

As part of the budget development process, the District’s management has taken into consideration the factors that drive school district budgets: enrollment, property value, state funding, facility needs, and the economy. The District's elected and appointed officials considered these and other factors when setting the fiscal year 2015 general fund budget and tax rate. The adopted budget is based on the following significant assumptions: District enrollment was projected to increase by 268 for 2014-15; however, the actual increase was

1,063 (2%). The fairly large increase in enrollment is not expected to continue based on the current apartment occupancy rates and limited amounts of new residential construction. Enrollment is projected at 47,751 for 2015-16, an increase of 375 students from 2014-15

General fund revenues are projected to increase $13.8 million (3%) compared to the final 2014-15

general fund revenues. The increase is primary in property tax collections due to another 7% increase in property value.

The General Fund expenditure budget for 2015-16 is projected to be at $425.9 million, a 6% increase.

The education of students is a labor-intensive process and payroll expenditures comprise

approximately 87% of the General Fund budget. The Board approved a pay raise of 4% on mid-point. The cost of the salary increase was approximately $10.4 million. Additional increases in payroll related expenditures are due to additional positions ($5.3 million). A total of 114.5 new positions were approved, including 53.5 teaching positions, 17 Pre-K aides, and 13 campus based paraprofessionals.

Significant non-payroll related budgetary focus areas were technology plan ($4.7 million), school buses and other vehicle replacements ($2.4 million), and facility repair, maintenance and upgrades ($2.7 million).

The tax rate was calculated after determining the necessary level of expenditures to meet District’s

educational goals and facility requirements and estimating State aid. The Board adopted the tax rate of $1.125 for maintenance and operations, which will maintain adequate fund balance level to mitigate current and future risks. The debt service portion of the tax rate is $0.155 for 2015-16 – no change from the 2014-15 rate. Declining debt service requirements and budgeted transfers from the general fund have allowed for a 6-penny reduction over the last six years. Projections, prepared for the Bond Steering Committee and Board of Trustees, and widely publicized prior to the May referendum indicate that the anticipated impact of issuing the $341 million in new debt over the next six years is an projected tax rate increase of 8.5 cents. Even with this projected increase, we anticipate the District will still have one of the lowest debt service tax rates in Harris County.

26


Requests for Information This financial report is designed to provide our citizens, taxpayers, customers, investors, and creditors with a general overview of the District's finances and to show the District's accountability for the money it receives. Questions concerning any of the information provided in this report, or requests for additional information, should be addressed to the Office of the Assistant Superintendent of Finance, Alief I.S.D., 4250 Cook Road, Houston, Texas, 77072.

27

Basic Financial Statements

Exhibit A-1

Data

Control Governmental

Codes Activities

1110 Cash and cash equivalents 112,409,375$ 1120 Investments 30,576,715

Receivables:1220 Property taxes 11,402,0091230 Allowance for uncollectible taxes (1,744,742)1240 Due from other governments 34,919,2331250 Accrued interest 37,6771290 Other receivables 933,4291300 Inventories, at cost 1,475,348

Capital Assets, net of accumulated depreciation1510 Land 65,433,7411520 Buildings and improvements, net 312,121,8241530 Furniture and equipment, net 17,807,4971580 Construction in process 9,891,281 1000 Total Assets 595,263,387

Deferred Outflows of Resources

1700 Deferred loss on refunding 4,694,766 1705 Deferred outflows from pension activities 14,240,229

Total Deferred Outflows of Resources 18,934,995

2110 Accounts payable 11,748,7192140 Interest payable 238,8932150 Payroll deductions and withholdings 2,747,8612160 Accrued wages payable 7,152,0312300 Unearned revenue 138,3422501 Due within one year

Bonds payable 18,035,000Compensated absences 750,000Claims payable 3,253,523

2530 Due in more than one yearBonds payable, net of premium 153,271,157Compensated absences 4,925,378Claims payable 441,629

2540 Net pension liability 53,962,550 2000 Total Liabilities 256,665,083

Deferred Inflows of Resources

2605 Deferred inflows from pension activities 16,507,304 Total Deferred Outflows of Resources 16,507,304

Net Position

3200 Net Investment in Capital Assets 240,898,879Restricted for:

3820 Food Service 7,249,9543850 Debt Service 18,326,747 3900 Unrestricted 74,550,415

Total Net Position 341,025,995$

The accompanying notes to the basic financial statements are an integral part of this statement.


Statement of Net Position

August 31, 2015

Assets

Liabilities

28

Exhibit B-1

Net (Expense),

Revenue and

Changes in Net

Position

Primary Government

Data Operating

Control Charges Grants and Governmental

Codes Functions/Programs Expenses for Services Contributions Activities

11 Instruction 295,472,289$ 296,397$ 47,065,587$ (248,110,305)$ 12 Instructional resources and media services 5,638,005 387,833 (5,250,172) 13 Curriculum & instructional staff development 8,535,537 4,728,252 (3,807,285) 21 Instructional leadership 5,475,653 1,113,334 (4,362,319) 23 School leadership 26,457,102 1,645,121 (24,811,981) 31 Guidance, counseling, & evaluation services 19,239,691 1,654,636 (17,585,055) 32 Social work services 607,759 285,566 (322,193) 33 Health services 5,080,124 4,900,920 (179,204) 34 Student transportation 16,091,588 21,173 3,971,401 (12,099,014) 35 Food services 24,771,368 2,843,704 24,116,733 2,189,069 36 Extracurricular activities 10,295,192 3,259,719 2,788,906 (4,246,567) 41 Administrative and support services 10,327,012 719,785 (9,607,227) 51 Facilities maintenance and operations 36,548,888 98,570 1,028,916 (35,421,402) 52 Security and monitoring services 5,773,141 269,347 291,805 (5,211,989) 53 Data processing services 3,423,319 131,230 (3,292,089) 61 Community services 3,222,117 538,848 542,649 (2,140,620) 72 Interest on long-term debt 4,826,206 6,764,746 1,938,540 73 Bond issuance costs and fees 280,258 (280,258) 93 Payments to fiscal agent 426,523 (426,523) 95 Payments to JJAEP 183,318 (183,318) 99 Payments to appraisal district 1,249,730 (1,249,730)

TG Total governmental activities 483,924,820 7,327,758 102,137,420 (374,459,642)

Data

Control

Codes General revenues:MT Property taxes, levied for general purposes 140,538,965 DT Property taxes, levied for debt service 19,348,839SF State-aid formula grant 237,669,884IE Investment earnings 248,375MI Miscellaneous revenue 870,727TR Total general revenue 398,676,790 CN Change in net position 24,217,148

Net position - beginning 377,701,598 Prior period adjustments (60,892,751)

Net position - ending 341,025,995$

The accompanying notes to the basic financial statement are an integral part of this statement.


Statement of Activities

Year Ended August 31, 2015

Program Revenues

Government Activities:

29

Exhibit C-1

Data Special Capital Debt Total

Control General Revenue Projects Service Governmental

Codes Fund Fund Fund Fund Funds

1110 Cash and cash equivalents 59,998,731$ 8,718,384$ 27,519,859$ 10,504,167$ 106,741,141$ 1120 Investments 23,545,346 1,502,676 5,528,693 30,576,715

Receivables:1220 Property taxes 9,755,895 1,646,114 11,402,0091230 Allowance for uncollectible taxes (1,491,334) (253,408) (1,744,742)1240 Due from other governments 22,569,034 11,261,368 1,088,831 34,919,2331250 Accrued interest 34,439 146 3,092 37,6771260 Due from other funds 11,910,574 49,151 11,959,7251290 Other receivables 720,246 41,924 762,1701310 Inventories, at cost 1,035,827 439,521 1,475,348

1000 Total Assets 128,078,758$ 21,964,019$ 27,519,859$ 18,566,640$ 196,129,276$

2110 Accounts payable 7,881,376$ 1,029,546$ 2,681,568$ 1,000$ 11,593,490$ 2150 Payroll deductions and withholdings 2,747,861 2,747,861 2160 Accrued wages payable 6,722,464 429,567 7,152,031 2170 Due to other funds 49,151 11,856,892 53,682 11,959,725 2300 Unearned revenue 138,342 138,342

2000 Total Liabilities 17,400,852 13,454,347 2,735,250 1,000 33,591,449

Deferred Inflows of Resources

2600 Unavailable revenue - property taxes 8,264,561 1,392,706 9,657,267Total Deferred Inflows of Resources 8,264,561 1,392,706 9,657,267

Fund Balances

Nonspendable:3410 Nonspendable - inventories 1,035,827 439,521 1,475,348

Restricted:3450 Restricted - grant funds 6,810,433 6,810,433 3470 Restricted - capital acquisitions and

contractual obligations 2,255,927 2,255,927 3480 Restricted - debt service 17,172,934 17,172,934

Committed:3510 Committed - construction 7,500,000 22,528,682 30,028,682 3530 Committed - equipment 3,500,000 3,500,000 3540 Committed - self-insurance 3,000,000 3,000,000 3545 Committed - other 1,500,000 1,259,718 2,759,718

Assigned:3590 Assigned - other 7,001,735 7,001,735 3600 Unassigned 78,875,783 78,875,783

3000 Total Fund Balances 102,413,345 8,509,672 24,784,609 17,172,934 152,880,560

4000 Total Liabilities, Deferred Inflows

of Resources, and Fund Balances 128,078,758$ 21,964,019$ 27,519,859$ 18,566,640$ 196,129,276$



Balance Sheet - Governmental Funds

August 31, 2015

Assets

Liabilities

30

Exhibit C-2

Total fund balances - governmental funds balance sheet 152,880,560$

1,989,112

405,254,343

(160,512,000)

9,657,267

(5,675,378)

Deferred loss on refunding 4,694,766

(2,267,075)

(64,995,600)

Net Position of Governmental Activities 341,025,995$



Reconciliation of the Governmental Funds Balance Sheet

to the Statement of Net Position

August 31, 2015

Amounts reported for governmental activities in the statement of net position are different because:

The District uses the internal service fund to charge the costs of self-insuranceactivities to appropriate functions in other funds. The assets and liabilities of theinternal service funds are included in the governmental activities in the statementof net position. The net effect of this consolidation is to increase net position.

Deferred outflow/inflow from pension activities represents a consumption($14,240,229) or an acquisition ($16,507,304) of net position that applies to afuture period(s) and will not be recognized as an outflow/inflow of resources untilthen.

Capital assets used in governmental activities are not financial resources and,therefore, are not reported in governmental funds. The cost of these assets is$764,008,395 and the accumulated depreciation is $358,754,052 resulting in anet addition to net position.

In addition, long-term liabilities, including bonds payable, are not due andpayable in the current period, and, therefore, are not reported as liabilities in thegovernmental funds, resulting in a net decrease of $160,512,000.

Property taxes receivable and the penalty and interest will be collected in thefuture, but are not available soon enough to pay for the current period'sexpenditures. These receivables are deferred inflows of resources in the fundfinancial statements.

Long term liabilities for compensated absences are not included in the fundliabilities which decrease the net position on the government-wide basis.

Various other reclassifications and eliminations are necessary to convert fromthe modified accrual basis of accounting to the accrual basis of accounting.These include recognizing the liabilities of ($238,893) associated with long-termdebt interest, issuance premiums ($10,794,157), and net pension liability($53,962,550).

31


Exhibit C-3

Data Special Capital Debt Total

Control General Revenue Projects Service Governmental

Codes Fund Fund Fund Fund Funds

Revenues

5700 Local sources 143,919,038$ 5,765,085$ 21,826$ 19,445,677$ 169,151,626$ 5800 State program revenues 260,007,127 6,082,995 5,970,344 272,060,4665900 Federal program revenues 10,927,049 56,512,751 794,402 68,234,202

5030 Total Revenues 414,853,214 68,360,831 21,826 26,210,423 509,446,294

Expenditures

Current:

0011 Instruction 256,546,366 30,150,900 4,500 286,701,7660012 Instructional resources and media services 4,985,524 153,582 5,139,1060013 Curriculum & instructional staff development 4,086,094 4,553,231 8,639,3250021 Instructional leadership 4,607,823 887,109 5,494,9320023 School leadership 26,075,898 285,699 26,361,5970031 Guidance, counseling, & evaluation services 18,593,310 784,670 19,377,9800032 Social work services 350,818 266,860 617,6780033 Health services 4,629,650 472,366 5,102,0160034 Student transportation 15,428,922 340 15,429,2620035 Food services 168,935 24,311,777 24,480,7120036 Extracurricular activities 4,920,660 4,984,217 9,904,8770041 Administrative and support services 8,228,677 180 8,228,8570051 Facilities maintenance and operations 35,797,024 35,797,0240052 Security and monitoring services 5,837,078 5,837,0780053 Data processing services 3,143,672 4,203 3,147,8750061 Community services 2,793,191 426,666 3,219,857

Debt service:

0071 Debt service - principal on long-term debt 18,283,793 18,283,7930072 Debt service - interest on long-term debt 6,158,067 6,158,0670073 Bond issuance costs and fees 125,031 155,227 280,258

Capital outlay:

0081 Facilities acquisition and construction 2,944,471 3,756,069 19,081,539 25,782,079Intergovernmental charges:

0093 Payments to shared services arrangements 426,523 426,5230095 Payments to Juvenile Justice Alt. Ed. Prog. 183,318 183,3180099 Payments to appraisal districts 1,249,730 1,249,730

6050 Total Expenditures 400,997,684 71,037,869 19,211,070 24,597,087 515,843,710

1100 Excess (Deficiency) of Revenues Over

Expenditures 13,855,530 (2,677,038) (19,189,244) 1,613,336 (6,397,416)

Other Financing Sources (Uses)

7911 Capital-related debt issued (general obligation bonds) 9,430,000 9,430,0007911 Refunding bonds issued 9,255,000 9,255,0007915 Transfer in 16,493,214 500,000 16,993,2147916 Premium on issuance of bonds 542,636 739,273 1,281,9098911 Transfer out (16,993,214) (16,993,214)8949 Payment to refunded bond escrow agent (9,842,808) (9,842,808)

Total Other Financing Sources (Uses) (16,993,214) 26,465,850 651,465 10,124,101

1200 Net Change in Fund Balances (3,137,684) (2,677,038) 7,276,606 2,264,801 3,726,685

0100 Fund balances - September 1 (beginning) 105,311,066 11,186,710 17,508,003 14,908,133 148,913,912Prior period adjustments 239,963 239,963

3000 Fund Balances - August 31 (ending) 102,413,345$ 8,509,672$ 24,784,609$ 17,172,934$ 152,880,560$


Statement of Revenues, Expenditures, and Changes in Fund Balance

Governmental Funds



32

Net change in fund balances - total governmental funds 3,726,685$

(1,534,816)

25,031,699

(16,903,006)

18,283,793

(18,685,000)

9,280,000

(255,203)

(48,948)

Compensated absences (sick and vacation pay) are measured by the amountsearned during the year in the statement of activities. In the governmental funds,however the expenditures for these items are measured by the amount offinancial resources used (essentially the amounts actually paid or to be paid atyear end for retiring employees.) This year vacation and sick leave paid out wasless than the amounts earned, decreasing net position.

Property taxes and penalty and interest receivables at year end will not becollected for several months after the district's fiscal year ends, so they are notconsidered available revenues and are deferred in the governmental funds.Unavailable tax revenues decreased by this amount this year and is a decreaseto net position.


Reconciliation of the Statement of Revenues, Expenditures, and

Changes in Fund Balance of Governmental Funds to the Statement of Activities


Amounts reported for governmental activities in the statement of activities("SOA") are different because:

The District uses internal service funds to charge the costs of self insurance toappropriate functions in other funds. The net income/loss of internal servicefunds is reported with governmental activities. The net effect of thisconsolidation is to decrease net position.

Capital outlays are reported in governmental funds as expenditures. However, inthe statement of activities, the cost of those assets is allocated over theirestimated useful lives as depreciation expense. The amount of capital outlayduring the year increases net position.

Depreciation is not recognized as an expense in governmental funds since itdoes not require the use of current financial resources. The net effect of thecurrent year's depreciation is to decrease net position.

Repayment of bond principal is an expenditure in the governmental funds, butthe repayment reduces long-term liabilities in the statement of net position.

Current year proceeds from bond issuance are other financing sources in thefund financial statement, but should be shown as an increase in long-term debtin the government-wide statement.

Current year advance refunded bonds reduce long-term debt in the government-wide statement.

33

Exhibit C-4

Net change in fund balances - total governmental funds (continued)

78,108

Interest on capital appreciated bonds 651,107Gain/loss on refunding (167,735)

51,280

Deferred outflows increased 9,118,441Deferred inflows (increased) (16,507,304)Net pension liability decreased 12,299,035

(205,988)

5,000

Change in Net Position of Governmental Activities 24,217,148$

Amounts recognized in the governmental fund basis and the statement of netposition differ due to the sale or retirement of assets.

Donated capital assets are not reported in governmental funds as revenues.However, in the statement of activities, the revenues are increased by the fairvalue of the capital assets.


The net change in net pension liability, deferred outflows, and deferred inflows isreported in the statement of activities but does not require the use of currentresources and, therefore, is not reported as expenditure in the governmentalfunds. The net change consists of the followings:

An accrual for interest expense is not recognized in the governmental fund basisbut is in the statement of activities. The interest accrual this year was less thanlast year thereby increasing net position.

Bond premiums/discounts

Some expenses reported in the statement of activities do not require the use ofcurrent financial resources and these are not reported as expenditures ingovernmental funds:

34

Exhibit D-1

Governmental

Activities

Data Internal

Control Service

Codes Funds

Assets

Current Assets:1110 Cash and cash equivalents 5,668,234$ 1290 Other receivables 171,259

Total current assets 5,839,493

1000 Total Assets 5,839,493

Liabilities

Current Liabilities:2110 Accounts payable 155,229 2200 Accrued expenses 3,253,523

Total current liabilities 3,408,752

Noncurrent Liabilities2590 Claims Payable 441,629

Total noncurrent liabilities 441,629

2000 Total Liabilities 3,850,381

Net Position

3900 Unrestricted net position 1,989,112

Total Net Position 1,989,112$



Statement of Net Position

August 31, 2015

Proprietary Funds

35

Exhibit D-2

Governmental

Activities

Data Internal

Control Service

Codes Funds

Operating Revenues

5700 Local sources:5754 Interfund services provided 40,596,871$ 57XX Other 1,995,1585020 Total Operating Revenues 42,592,029

Operating Expenses

6200 Purchased and contracted services 3,106,4896400 Other operating expenses 41,024,7586030 Total Operating Expenses 44,131,247

1200 Operating (Loss) (1,539,218)

Nonoperating Revenues

7000 Interest income 4,402Total Nonoperating Revenues 4,402

1300 Change in Net Position (1,534,816)

0100 Total Net Position - beginning 3,523,928

3000 Total Net Position - ending 1,989,112$



Statement of Revenues, Expenses, and Changes in Net Position

Proprietary Funds


36

Exhibit D-3

Governmental

Activities

Internal

Service

Funds

Cash Flows from Operating Activities

Cash receipts from interfund services providedand used 40,596,871$

Cash receipts from insurance reimbursements 2,130,063 Cash payments to vendors for goods and services (3,245,759)Cash payments for claims (41,268,634)

Net Cash (Used) by Operating Activities (1,787,459)

Cash Flows from Investing Activities

Interest on cash and investments 4,402

Net Cash Provided by Investing Activities 4,402

Net (decrease) in cash and cash equivalents (1,783,057)

Cash and cash equivalents - beginning of year 7,451,291

Cash and cash equivalents - end of year 5,668,234$

Reconciliation of Operating (Loss) to

Net Cash Provided (Used) by Operating Activities

Operating (loss) (1,539,218)$ Adjustments to reconcile operating (loss) to net cash

provided (used) by operating activities:Decrease in other receivables 134,905Decrease in prepaid items 21,780(Decrease) in accounts payable (161,050)(Decrease) in accrued expenses (160,442)(Decrease) in noncurrent claims payable (83,434)

Net Cash (Used) by Operating Activities (1,787,459)$


Statement of Cash Flows



Proprietary Funds

37

Exhibit E-1

Data

Control

Codes

1110 Cash and cash equivalents 702,806$

2190 Due to student groups 702,806$

Assets

Liabilities



Statement of Fiduciary Assets and Liabilities

Agency Fund

August 31, 2015

38

Alief Independent School District Notes to the Basic Financial Statements Note 1 – Summary of Significant Accounting Policies

The Alief Independent School District (the “District”) is an independent public educational agency operating under applicable laws and regulations of the State of Texas. The District is autonomously governed by a seven member Board of Trustees elected to staggered four-year terms by the District’s residents. The District prepares its basic financial statements in conformity with generally accepted accounting principles promulgated by the Governmental Accounting Standards Board (GASB) and other authoritative sources identified in Statement on Auditing Standards of the American Institute of Certified Public Accountants; and it complies with the requirements of the appropriate version of the Texas Education Agency’s Financial Accountability System Resource Guide (“the Resource Guide”) and the requirements of contracts and grants of agencies from which it receives funds. The following is a summary of the most significant policies: A. Reporting Entity

The District is considered an independent entity for financial reporting purposes and is considered a primary government. The Board of Trustees (the “Board”) is elected by the public and has the authority to make decisions, appoint administrators and managers, and significantly influence operations. It also has the primary accountability for fiscal matters. Therefore, the District is a financial reporting entity as defined by the Governmental Accounting Standards Board (GASB) in its Statement No. 61, The Financial Reporting Entity: Omnibus; an amendment of GASB Statements No. 14 and No. 34. The District is not financially accountable for any other organizations; therefore, no component units are included within the reporting entity. The District receives funding from local, state, and federal government sources and must comply with the requirements of these funding entities. As required by U.S. generally accepted accounting principles, these basic financial statements have been prepared, based on considerations regarding the potential for inclusion of other entities, organizations, or functions, as part of the District’s financial reporting entity. The District has implemented GASB Statement No. 39, Determining Whether Certain Organizations are Component Units. The District receives support from various PTO, booster clubs and foundation organizations. None of these organizations meet the criteria specified by GASB No. 39 to be included in the District’s financial statements. Therefore, there are no component units included within the reporting entity.

Considerations regarding the potential for inclusion of other entities, organizations, or functions in the District’s financial reporting entity are based on criteria prescribed by generally accepted accounting principles. These same criteria are evaluated in considering whether the District is a part of any other government or other type of reporting entity. The overriding elements associated with prescribed criteria considered in determining that the District’s financial reporting entity status is that of a primary government are: that it has a separately elected governing body; it is legally separate; and it is fiscally independent of other state and local governments.

B. Government Wide and Fund Financial Statements

The government-wide financial statements (i.e., the statements of net position and the statement of activities) report information on all of the nonfiduciary activities of the primary government. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities, which are supported by taxes, state foundation funds, grants, and intergovernmental revenues, are reported separately from business-type activities which rely on fees and charges for support. The statement of activities demonstrates the degree to which the direct expenses of a given function are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function and 2) grants and contributions that are restricted to meeting operational or capital requirements of a particular function. Taxes and other items not properly included among program revenues are reported instead as general revenues.

39

Alief Independent School District Notes to the Basic Financial Statements Note 1 – Summary of Significant Accounting Policies (continued)

B. Government Wide and Fund Financial Statements (continued) All interfund transactions between governmental funds and between governmental funds and internal service funds are eliminated on the government-wide statements. Interfund activities between governmental funds and fiduciary funds remain as due to/due from on the government-wide statement of net position. Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the latter are excluded in the government-wide financial statements. Major individual governmental funds are reported as separate columns in the fund financial statements.

C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation

The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. The government-wide financial statements are reported using the economic resources measurement focus, as are the proprietary fund financial statements. The government-wide statements, proprietary fund statements, and fiduciary fund financial statements are reported using the accrual basis of accounting. Revenues are recorded when earned and expenses are recognized when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. With this measurement focus, only current assets, current liabilities, deferred inflows of resources and fund balances are included on the balance sheet. Operating statements of these funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. Revenues are recognized in the accounting period in which they become both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Under modified accrual accounting, expenditures are recognized in the accounting period in which the fund liability is incurred, if measurable, except for principal and interest on general long-term debt, which is recognized when due. Revenues from local sources consist primarily of property taxes. Property tax revenues and revenues received from the State are recognized under the susceptible-to-accrual concept. Miscellaneous revenues are recorded as revenue when received in cash because they are general not measurable until actually received. Investment earnings are recorded as earned, since they are both measurable and available. Property tax levies collected after the fiscal year-end which would be available to finance current operations are immaterial and remain as deferred inflows of resources.

Revenues from grants accounted for in the Special Revenue Fund are recognized as soon as all eligibility requirements imposed by the provider have been met. Any excess of revenues or expenditures at fiscal year-end is recorded as unearned revenue or due from the granting agencies, respectively. The proprietary fund types and fiduciary funds are accounted for on a flow of economic resources measurement focus and utilize the accrual basis of accounting. This basis of accounting recognizes revenues in the accounting period in which they are earned and become measurable and expenses in the accounting period in which they are incurred and become measurable. The fund equity is segregated into restricted net position and unrestricted net position.

When both restricted and unrestricted resources are available for use, it is the District’s policy to use restricted resources first when appropriate, and then unrestricted resources as they are needed.

40


C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation (continued)

Implementation of New Standards In the current fiscal year the District adopted two new statements of financial accounting standards issued by the Governmental Accounting Standards Board (GASB): Statement No. 68, Accounting and Financial Reporting for Pensions – an amendment of

GASB Statement No. 27 Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement

Date – an amendment of GASB Statement No. 68 GASB 68 establishes standards of accounting and financial reporting, but not funding or budgetary standards, for defined benefit pensions and defined contribution pensions provided to the employees of state and local government employers through pension plans that are administered through trusts or equivalent arrangement. This Statement replaces the requirements of Statement No. 27, Accounting for Pensions by State and Local Governmental Employers, as well as the requirements of Statement No. 50, Pension Disclosures. The requirements of GASB 68 apply to the financial statements of all state and local governmental employers whose employees are provided with pensions through pension plans that are administered though trusts or equivalent arrangements, and to the financial statements of state and local governmental nonemployer contributing entities that have a legal obligation to make contributions directly to such pension plans. This Statement establishes standards for measuring and recognizing liabilities, deferred outflows of resources, deferred inflows of resources, and expense/expenditures related to pensions. Note disclosure and Required Supplementary Information (RSI) requirements about pensions also are addressed. For defined benefit pension plans, this Statement identifies the methods and assumptions that should be used to project benefit payments, discount projected benefit payments to their actuarial present value, and attribute that present value to periods of employee service. The adoption of GASB 68 has no impact on the District’s governmental fund financial statements, which continue to report expenditures in the contribution amount determined legislatively for the Teacher Retirement System of Texas (TRS) plan. The calculation of pension contributions is unaffected by the change. However, the adoption has resulted in the restatement of the District’s beginning net position for the fiscal year 2015 government-wide financial statements to reflect the reporting of net pension liability, deferred inflows of resources, and deferred outflows of resources for its qualified pension plan and the recognition of pension expense in accordance with the provisions of the Statement. Net position as of September 1, 2014, was decreased by $61,139,797 to reflect the cumulative effect of adoption. The net pension liability of $66,261,585 and the deferred outflows of resources of $5,121,788 at August 31, 2014 were reported as a prior period adjustment to the net position on September 1, 2014. Refer to Note 12 for more information regarding the District’s pension. GASB 71 amends Statement No. 68 to require that, at transition, a government recognize a beginning deferred outflow of resources for its pension contributions, if any, made subsequent to the measurement date of the beginning net pension liability. Since the measurement date of the pension plan was different than the District’s fiscal year-end, the effects from the District’s reported contributions to the plan subsequent to the respective measurement date of the plan as an increase in deferred outflows of resources and a decrease in net position, as follows: • TRS – The beginning deferred outflows include contributions from September 1, 2013 through

August 31, 2014, totaling $5,121,788.

41


D. Fund Accounting

The accounts of the District are organized on the basis of funds in accordance with the provisions of the Resource Guide. Each fund is considered to be a separate accounting entity. The operations of each fund are accounted for by providing a separate set of self-balancing accounts, which comprise its assets, liabilities, deferred inflows of resources, fund equity, revenues, and expenditures or expenses. For financial statement presentation, the District’s fund financial statements provide more detailed information about the District’s funds-not the District as a whole.

The District reports the following major governmental funds:

General Fund The General Fund is the government’s primary operating fund. It is used to account for all financial transactions not properly includable in other funds. The principal sources of revenues include local property taxes, state and federal source revenues not accounted for in other funds. Expenditures include all costs associated with the daily operations of the schools.

Special Revenue Fund The Special Revenue Fund is used to account for various programs. Specifically, this type of fund is used to account for the District’s Food Service Program, including local, state, and federal revenue sources, for federally financed programs (grants) where unused balances are returned to the grantor at the close of specified project periods and other state and local revenue specific programs. The Food Service Operation is the only required budgeted program. Project accounting is employed to maintain integrity for the various sources of the funds. Resources accounted for in this fund are awarded to the District for the purpose of accomplishing specific educational tasks as defined by the grantors in contracts or other agreements. Capital Projects Fund The Capital Projects Fund includes funds that are used to account for the expenditures of resources accumulated from sales of bonds and related interest earnings for the acquisition and construction of school facilities and other capital asset acquisitions.

The District also reports the following non-major governmental fund:

Debt Service Fund The Debt Service Fund is used to account for the payment of interest and principal on all bonds of the District. Primary sources of revenue for debt service are local property taxes, the state existing debt and instructional facilities allotments, and the federal subsidy for interest payments on the Qualified School Construction Bonds.

Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The District reports the following proprietary fund:

Internal Service Fund The District’s two internal service funds are used to account for the operations of the District’s medical insurance plan and workers’ compensation plan, which are supported by employer and/or employee contributions. Expenses include plan benefit payments to employees and charges incurred in administering the plan. The estimated amount due for claims incurred, but not reported (IBNR) at year-end, are included as fund liabilities.

Additionally, the District reports the following fiduciary fund:

Agency Fund

The Agency Fund is used to account for the cash receipts and disbursements of the school activity funds of the individual schools. These funds have no revenues, expenditures, or equity, and the District does not budget for them.

42

Alief Independent School District Notes to the Basic Financial Statements

Note 1 – Summary of Significant Accounting Policies (continued)

E. Cash and Cash Equivalents

The District considers the following items cash and cash equivalents for financial reporting purposes (including the statement of cash flows for the Proprietary Funds): cash on hand, deposits with financial institutions, money market mutual funds, balances in private-managed public funds investment pools, and short-term investments with original maturities of three months or less from the date of acquisition.

F. Investments Investments consist primarily of U.S. Government Agency Securities which are stated at fair value based

on quoted market prices. The net increase or decrease in the fair value of investments is netted with investment income in local sources of revenue. Investments are generally held to maturity.

G. Interfund Activity

Interfund activity results from loans, services provided, reimbursements, or transfers between funds. Loans are reported as interfund receivables and payables as appropriate and are subject to elimination upon consolidation.

H. Inventories Inventory is stated at weighted average cost. The costs are recorded as expenditures as the individual inventory items are consumed. Inventory consists of general and food service supplies and commodities. Although commodities are received at no cost, they are recorded in the inventory and revenue at market values as supplied by the Texas Department of Human Services. When consumed, commodities are recorded as expenditures. A portion of fund balance is non-spendable to reflect minimum inventory quantities considered necessary for the District’s continuing operations, generally in an amount equal to inventory values on hand at the end of the year.

I. Prepaid Items

Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both the government-wide and fund financial statements. The cost of prepaid items is recorded as expenditures/expenses when consumed rather than when purchased.

J. Capital Assets

Capital assets, which include land, buildings, furniture and equipment, and construction in progress, are reported in the applicable governmental activities column in the government-wide financial statements. Capital assets are defined by the government as assets with an initial, individual cost of more than $5,000 and an estimated useful life of greater than one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Costs of the Facilities Acquisition and Construction Function that relate to overall planning of District facilities, managing overall District assets and overall construction projects are treated as period costs and are not capitalized unless related to specific assets. Donated capital assets are recorded at estimated fair market value at the date of donation.

The costs of normal maintenance and repairs that do not add to the value of the assets or materially extend asset lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. When assets are retired or otherwise disposed of, the related costs or other recorded amounts are removed.

43


Note 1 – Summary of Significant Accounting Policies (continued) J. Capital Assets (continued)

Buildings and furniture and equipment of the District are depreciated using the straight line method over the following estimated useful lives:

Assets Years

Building & Improvements 40Vehicles 7-10Computer Equipment 7Other Equipment 5-15Software 5

K. Unearned Revenue

Unearned revenue at year-end represents funds received in advance for which expenditures have not been incurred for grants.

L. Deferred Outflows/Inflows of Resources

Deferred outflows and inflows of resources are reported in the statement of financial position as described below: A deferred outflow of resources is a consumption of a government’s net assets (a decrease in assets in excess of any related decrease in liabilities or an increase in liabilities in excess of any related increase in assets) by the government that is applicable to a future reporting period. The District has two items that qualify for reporting in this category:

Deferred outflows of resources for refunding Reported in the government-wide statement of net position, this deferred charge on refunding results from the difference in the carrying value of refunded debt and its reacquisition price. This amount is deferred and amortized over the shorter of the life of the refunded or refunding debt.

Deferred outflows of resources for pension Reported in the government-wide financial statement of net position, this deferred outflow results from pension plan contributions made after the measurement date of the net pension liability and the results of differences between expected and actual actuarial experiences. The deferred outflows of resources related to pensions resulting from District contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the next fiscal year. The other pension related deferred outflows will be amortized over the expected remaining service lives of all employees (active and inactive employees) that are provided with pensions through the pension plan which is currently 6.94 years.

A deferred inflow of resources is an acquisition of a government’s net assets (an increase in asset in excess of any related increase in liabilities or a decrease in liabilities in excess of any related decrease in assets) by the government that is applicable to a future reporting period. The District has two items that qualify for reporting in this category:

Deferred inflows of resources for unavailable revenues Reported only in the governmental funds balance sheet, unavailable revenues from property taxes arise under the modified accrual basis of accounting. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available.

Deferred inflows of resources for pension Reported in the government-wide financial statement of net position, these deferred inflows result primarily from the differences between projected and actual earnings on pension plan investments. These amounts will be amortized over a closed five year period.

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M. Long-Term Debt

In the government-wide financial statements and proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities or proprietary fund type statement of net position. Bond premiums and discounts are deferred and amortized over the life of the bonds using the straight line method. Bonds payable are reported net of the applicable bond premium or discount. Bonds issuance costs are expensed when incurred.

In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance cost, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures.

N. Compensated Absences

The District maintains a policy allowing employees meeting established requirements to be compensated for unused sick leave at retirement. Annual vacation time is granted to eligible employees on the first day of July of each year and all unused vacation time lapses after eighteen months. The estimated liability for accumulated sick leave and vacation time is reported in the governmental-wide statement of net position for the portion that is not currently payable from available financial resources at year end and is accounted for as assigned fund balance in the governmental funds – General Fund.

O. Fund Equity

The fund balance in governmental funds has been classified as follows to describe the relative strength of the spending constraints: Nonspendable fund balance – amounts that are not in spendable form or are required to be maintained intact. As such, the inventory has been properly classified as nonspendable in the Balance Sheet - Governmental Funds (Exhibit C-1). Restricted fund balance – Amounts that can be spent only for specific purposes because of local, state or federal laws, or externally imposed conditions by grantors or creditors. The fund balances for the Food Service Program, Debt Service Fund, and the portion from bond proceeds in the Capital Projects Fund are classified as restricted.

Committed fund balance – amounts constrained to specific purposes by the District itself, using its highest level of decision-making authority (i.e. the Board of Trustees). To be reported as committed, amounts cannot be used for any other purposes unless the District takes the same highest level of action to remove or change the constraint. The District establishes (and modifies or rescinds) fund balance commitments by passage of resolutions. The District has committed fund balance in several governmental funds. The detail is shown below:

Special Capital

General Revenue Projects

Fund Fund Fund

Committed

Capital improvement to facilities 7,500,000$ 22,528,682$ Technology equipment and buses 3,500,000 Self funded insurance 3,000,000 Federal sequestration 1,500,000 Campus activities 1,259,718$ 15,500,000$ 1,259,718$ 22,528,682$

45


Note 1 – Summary of Significant Accounting Policies (continued) O. Fund Equity (continued)

Assigned fund balance – amounts the District intends to use for a specific purpose. Intent can be expressed by the District or by an official or body to which the Board of Trustees delegates the authority. Per Policy CE local, assigned fund balance amounts are established by the Superintendent or designee, Assistant Superintendent of Finance, at year-end as follows:

General

Fund

Outstanding encumbrances 1,326,357$ Compensated absences 5,675,378

7,001,735$

Unassigned fund balance – amounts that are available for any purpose. Positive amounts are reported only in the General Fund.

When an expenditure is incurred for purposes for which both restricted and unrestricted fund balance is available, the District considers restricted funds to have been spent first. When an expenditure is incurred for which committed, assigned, or unassigned fund balances are available, the District considers amounts to have been spent first out of committed funds, then assigned funds, and finally unassigned funds.

P. Pension

The fiduciary net position for the TRS has been determined using the flow of economic resources measurement focus and full accrual basis of accounting. This includes for purposes of measuring the net pension liability, deferred outflows of resources, and deferred inflows of resources related to pension, pension expense, and information about assets, liabilities and additions to/deductions from TRS’s fiduciary net position. Benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value.

Q. Use of Estimates

The preparation of financial statements, in conformity with generally accepted accounting principles, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenditures during the reporting period. Actual results could differ from those estimates.

R. Data Control Codes

Data control codes refer to the account structure prescribed by the Texas Education Agency (TEA) in the Resource Guide. TEA defines and requires this uniform account structure for school districts in Texas.

46

Alief Independent School District Notes to the Basic Financial Statements Note 2 - Stewardship, Compliance, and Accountability

A. Budgetary Data

The Board of Trustees adopts an annual "appropriated budget" for the General and Debt Service Funds and the Food Service Program included in the Special Revenue Fund. Budgets are prepared using the same method of accounting as for financial reporting. The District is required to present the adopted and final annual amended budgeted revenues and expenditures for the general fund and each major special revenue fund. The Food Service Program is not a major fund. The General Fund budget report appears in the required supplementary information section where the District compares the final annual amended budget to actual revenues and expenditures. Per regulatory requirements, the Debt Service Fund and the Food Service Program are required to be reported with the annual original budget, amended budget, and actual revenues and expenditures. These schedules are included as Other Supplementary Information at the end of the Financial Section of the District’s Comprehensive Annual Financial Report in Exhibit G-1 and H-1, respectively. The Capital Projects Fund budget is prepared on a project-basis based on the proceeds available from bond issues and planned expenditures outlined in applicable bond ordinances. Capital Projects Fund equity, which represents unexpended appropriations, is re-appropriated in the subsequent fiscal year’s budget until available funds for acquisition and construction of facilities have been utilized. Each major construction contract is approved based on the existing availability of bond proceeds and/or approved but unissued bonds. The following procedures are followed in establishing the budgetary data reflected in the fund financial statements:

1. Prior to August 20th, the District prepares a budget for the next succeeding fiscal year beginning September 1st. The operating budget includes proposed expenditures and the means of financing them.

2. A meeting of the Board is then called for the purpose of adopting the proposed budget. At least

ten days public notice of the meeting must be given. 3. Prior to September 1st, the budget is legally enacted through passage of a resolution by the

Board. Once a budget is approved, it can only be amended at the function and fund level by approval of a majority of the members of the Board. During the year, amendments are presented to the Board at its regular meetings. As required by law, such amendments are made before the fact, are reflected in the official minutes of the Board, and are not made after fiscal year-end. Because the District has a policy of careful budgetary control, several amendments were necessary during the year. All supplemental appropriations must be within limits of available revenues and fund equity.

4. Each budget is controlled by a budget manager at the fund, function, and major object level. All

budget appropriations lapse at year-end.

B. Encumbrances

Encumbrance accounting, under which purchase orders, contracts and other commitments are recorded in order to reserve that portion of the applicable appropriation, is used in all governmental funds. Encumbrances outstanding at year-end are commitments that do not constitute expenditures or liabilities. Since under Texas law, appropriations lapse at the end of each fiscal year, outstanding encumbrances are appropriately provided for in the subsequent fiscal year’s budget to provide for the liquidation of the prior commitments.

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Note 3 – Cash and Investments

The District’s cash and investments are reported at fair value. The District’s cash and investment accounts are classified as either cash and cash equivalents or investments. The cash and cash equivalents include cash on hand, deposits with financial institutions, money market mutual funds, and short-term investments in private-managed public funds investment pool accounts (Texpool, LOGIC, and Lone Star). The investments, which have maturities at purchase of greater than three months, consist of U.S. Government Agency Securities. The Board of Trustees of the District has adopted a written investment policy regarding the investment of its funds as defined in the Public Funds Investment Act of 1995 (Chapter 2256, Texas Government Code). The Public Funds Investment Act requires an annual audit of its investment practices. Audit procedures in this area, conducted as part of the audit, disclosed that in the area of investment practices, management reports, and establishment of appropriate policies, the District was in substantial compliance with the requirements of this Act. Additionally, the investments and investment practices of the District are in compliance with the Trustees’ investment policies. The District invests primarily in time deposits, public funds investment pools, and obligations of certain U.S. Government agencies, although the District’s investment policy allows other investment options authorized by State statute. The District generally holds all U.S. Government Securities to maturity. The District did not have any derivative investment products during the year.

State law and District policy provides that collateral pledged as security for bank deposits must have a fair value of not less than the amount of the deposits and must consist of 1) obligations of the U.S. or its agents and instrumentalities; 2) direct obligations of the State of Texas or its agencies; 3) other obligations, the principal and interest on which are unconditionally guaranteed or insured by the State of Texas; and/or 4) obligations of states, agencies, counties, cities, and other political subdivisions of any state having been rated as to investment quality by a nationally recognized investment rating firm and having received a rating of not less than A or its equivalent. The Texas Education Code and the Public Funds Investment Act regulate deposits and investment transactions of the District. The District is authorized by the Texas Education Code to place the proceeds from debt issues in properly secured or collateralized interest bearing time deposits with any Texas state or national bank having federal depository insurance (FDIC) coverage for depositors or directly in bonds or other obligations of the United States, provided that these time deposits cannot be cashed, sold, or redeemed for an amount less than that originally invested by the District. Additionally, the Texas Education Code authorizes the District to invest in direct debt securities of the U.S. or other types of bonds, securities, warrants, etc., which the District is authorized by law to invest. In accordance with applicable statutes, the District has a depository contract with the Bank of America as of August 31, 2015. The District may place funds with the depository in interest and non-interest bearing accounts. Statutes and the depository contract require that all funds in the depository institution be fully secured by federal depository insurance or a combination of federal depository insurance and acceptable collateral securities and/or an acceptable surety bond. The collateral securities must be delivered to the District or placed with an independent trustee institution with safekeeping receipts delivered to the District. In accordance with State statutes pertaining to lawful collateralization of District deposits, safekeeping receipts are issued in the name of the depository with proper indication that the collateral securities are pledged by the depository to secure funds of the District. The depository can change collateral securities pledged to secure District funds only upon obtaining the written approval of the District.

48

Alief Independent School District Notes to the Basic Financial Statements Note 3 – Cash and Investments (continued)

At August 31, 2015, the District’s cash and investment balances were as follows:

Total Governmental Fiduciary

Fair Value Activities Funds

Cash and Equivalents

Cash and checking accounts 4,616,696$ 3,913,890$ 702,806$ Texpool 14,712,039 14,712,039 Local Government Investment Cooperative 25,283,525 25,283,525 Lone Star Investment Pool 68,499,921 68,499,921 Total Cash and Cash Equivalents 113,112,181 112,409,375 702,806 Investments

U.S. Agency obligations FFC 2,879,117 2,879,117 FHL 17,129,774 17,129,774 FMC 5,538,374 5,538,374 FNM 5,029,450 5,029,450 Total Investments 30,576,715 30,576,715

Total Cash and Investments 143,688,896$ 142,986,090$ 702,806$

There is $5,844,234 held in the Lone Star Investment Pool within the Debt Service Fund for the Qualified School Construction Bonds (QSCB), Series 2009 and 2010. In addition, U.S. Agency obligations totaling $5,528,693 were for the QSCB, Series 2009. The reserve funds will be used to pay off the debt upon maturity in 2024 and 2027. The District’s investments are insured, registered, or the District’s agent holds the securities in the District’s name. Therefore, the District is not exposed to custodial credit risk. Custodial credit risk for investments is the risk that, in event of the failure of the counterparty (e.g., broker dealer) to a transaction, a government will not be able to recover the value of its investments or collateral securities that are in the possession of another party. The District’s policy requires that a third party bank trust department hold all securities owned by the District. As of August 31, 2015, the bank balance of the District’s deposits was $4,906,940 and the combination of federal depository insurance and pledged collateral securities was $3,935,775. This exposure to custodial risk at August 31, 2015 was due to the District’s transition into new depository bank, Frost Bank, effective September 1, 2015. Local Government Investment Pools The District invested in the Local Government Investment Pools (Texpool, LOGIC, and Lone Star) during the year. The three entities are public investment pools established pursuant to the Interlocal Cooperation Act and Public Investment Act of Texas. The pools are considered to be “2 A-7 like pools” under GASB Statement No. 31. The fair value of District’s portions in such pools is the same as the values of the shares. The investment pools are not evidenced by securities that exist in physical or book entry form and, accordingly, do not have custodial risk. Texpool policies require that local government deposits be used to purchase investments authorized by the Public Funds Investment Act of 1987, as amended. The Texas State Comptroller of Public Accounts has oversight responsibility for Texpool. The governing body of LOGIC is provided by six voting members who represent participating entities while the Lone Star is governed by an eleven-member Board of Trustees comprised of individuals representing entities participating in the pool. An advisory board composed of participants and other knowledgeable individuals provides additional oversight.

49

Alief Independent School District Notes to the Basic Financial Statements Note 3 – Cash and Investments (continued)

Credit Risk State law and the District’s investment policy limit investments in all categories to top ratings issued by nationally recognized statistical rating organizations. Investment credit ratings by category are shown below.

Fair Investment

Value Rating

Texpool 14,712,039$ AAAmLocal Government Investment Cooperative 25,283,525 AAAmLone Star Investment Pool 68,499,921 AAAf/S1+U.S. Agency obligations 30,576,715 AA+

139,072,200$

Interest Rate Risk In accordance with its investment policy, the District manages its exposure to declines in fair value by limiting the weighted average maturity of its investment portfolio to less than 18 months.

At August 31, 2015, the weighted average maturities of the District’s investments were as follows:

Weighted Average Percentage

Fair Maturity of

Value (days) Portfolio

Texpool 14,712,039$ 35 11%Local Government Investment Cooperative 25,283,525 41 18%Lone Star Investment Pool 68,499,921 41 49%U.S. Agency obligations 30,576,715 313 22%

Total 139,072,200$ 100%

Portfolio weighted average maturity 101 Adjustment to Investment’s Fair Value The fair value of the U.S. Government Agency Securities is based on quoted market prices. The investments are reported by the District at fair value. The amount of increase or decrease in the fair value of investments during the year ended August 31, 2015, is included in investment income as shown below:

Interest Income 246,164$ Net increase in Fair Value of Investments 2,211

Total Investment Income 248,375$

50

Alief Independent School District Notes to the Basic Financial Statements Note 4 – Property Taxes

Property taxes are levied by October 1st on the assessed value listed the prior January 1st for all real and business personal property located in the District in conformity with Subtitle, E, Texas Property Tax Code. Taxes are due on receipt of the tax bill and are delinquent if not paid before February 1st of the year following the year in which imposed. On January 1st of each year, a tax lien attaches to the property to secure the payment of all taxes, penalties, and interest ultimately imposed. Appraised values are established by the Central Appraisal District (CAD) of Harris County, Texas. Taxes are levied by the District’s Board of Trustees based on the appraised values from the CAD. Billing and collection of tax levies are performed by the District.

Property tax rates, established in accordance with state law, are levied on real and personal property within the District’s boundaries for use in financing general government and debt service expenditures. Tax rates levied to finance general government and debt service expenditures for 2014-15 were $1.125 and $0.155, respectively, per $100 of valuation. Based on an assessed valuation of approximately $12.6 billion, the resulting tax levy, after exemptions and adjustments, was approximately $161.1 million. Allowances for uncollectible taxes are based on historical experience in collecting property taxes. Uncollectible personal property taxes are periodically reviewed and written off, but the District is prohibited from writing off real property taxes without specific statutory authority from the Texas Legislature.

Net property taxes receivable at August 31, 2015, consisted of the following:

Debt

General Service

Fund Fund Totals

Delinquent taxes - Current year levy 1,607,222$ 221,453$ 1,828,675$

Delinquent taxes - Prior years' levies 4,524,042 789,405 5,313,447 Delinquent Taxes Receivable 6,131,264 1,010,858 7,142,122

Receivable for penalties and interest 3,624,631 635,256 4,259,887

Total Property Taxes Receivable 9,755,895 1,646,114 11,402,009

Less allowance for uncollectible taxes (1,491,334) (253,408) (1,744,742)

Net Property Taxes Receivable 8,264,561$ 1,392,706$ 9,657,267$

Note 5 – Receivables Due From Other Governments Receivables due from other government agencies at August 31, 2015, consisted of the following:

Governmental

Funds

State grant expenditure reimbursement from the state 19,545,928$ Federal grant expenditure reimbursement passed through the state 15,153,898 Federal grant expenditure reimbursement passed through local agencies 219,407

34,919,233$

51

Alief Independent School District Notes to the Basic Financial Statements Note 6 – Interfund Receivables and Payables

Interfund balances at August 31, 2015, represent short term advances to cover operating results intended to be periodically paid back on a short term basis.

Due From Due To

General Fund Special Revenue Fund 11,856,892$ Capital Projects Fund 53,682 Debt Service Fund (49,151)$

Due From (To) Other Funds 11,910,574$ (49,151)$

The District had not cleared the interfund receivables and payables at year end. Interfund balances represent short-term borrowings between funds for operating expense payments or amounts collected in the General Fund to be distributed to other funds, e.g. employee and employer contributions for medical insurance to be distributed to the Health Insurance Fund, or operating expenditures processed through General Fund for Special Revenue Fund. All interfund balances are expected to be settled shortly after year-end.

During the fiscal year ended August 31, 2015, the District transferred excess funds from the General Fund in the amount of $500,000 to the Debt Service Fund to allow for a $0.01 reduction in tax rate for 2014-15, and $16,493,214 to the Capital Projects Fund for various renovation projects district-wide, phone system improvement, and school buses.

Transfer Out Transfer In Amount

General Fund Debt Service Fund 500,000$ General Fund Capital Projects Fund 16,493,214

16,993,214$

Note 7 – Capital Assets Capital asset activity for the governmental activities for the year ended August 31, 2015 was as follows:

Beginning

Balance Ending

(as restated) Additions Retirements Transfers Balance

Capital assets, not being depr.Land 65,433,741$ 65,433,741$ Construction in progress 7,505,890 10,501,760$ (8,116,369)$ 9,891,281

Total capital assets, not being depr. 72,939,631 10,501,760 (8,116,369) 75,325,022

Capital asset, being depreciatedBuildings and improvements 620,163,200 10,349,428 (2,543,612)$ 8,116,369 636,085,385 Furniture and equipment 50,179,781 4,185,511 (1,767,304) 52,597,988

Total capital assets being depr. 670,342,981 14,534,939 (4,310,916) 8,116,369 688,683,373

Less Accumulated Depreciation for:Buildings and improvements (312,775,657) (13,532,856) 2,344,952 (323,963,561) Furniture and equipment (33,180,317) (3,370,150) 1,759,976 (34,790,491)

Total Accumulated Depreciation (345,955,974) (16,903,006) 4,104,928 (358,754,052)

Total capital assets being depr., net 324,387,007 (2,368,067) (205,988) 8,116,369 329,929,321

Governmental activities capital assets, net 397,326,638$ 8,133,693$ (205,988)$ -$ 405,254,343$

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Alief Independent School District Notes to the Basic Financial Statements Note 7 – Capital Assets (continued)

The beginning balance has been restated to reflect the reclassification of the business-type activities to governmental activities effective September 1, 2014. The effect of this change as of September 1, 2014, is an increase of $7,083 in governmental activities capital assets, net.

Construction in progress and remaining commitments under related construction contracts at August 31, 2015 follows:

Authorized Contract Other Related Total Remaining

Contract Expenditures Costs CIP Commitment

HVAC Renovation - Smith, Hearne, & Mahanay Elem. 9,962,000$ 9,200,966$ 690,315$ 9,891,281$ 761,034$

9,962,000$ 9,200,966$ 690,315$ 9,891,281$ 761,034$

Depreciation expense was charged to the governmental functions as follows:

Governmental Activities Expense

Instruction 10,685,816$ Instructional resources and media services 522,921 Instructional leadership 37,070 School leadership 241,248 Guidance, counseling & eval. services 49,719 Health services 39,379 Student transportation 1,236,974 Food service 750,807 Extracurricular activities 533,543 Administrative and support services 2,120,069 Facilities maintenance and operations 324,551 Security and monitoring services 3,803 Data processing services 357,106

Total Depreciation Expense-Governmental Activities 16,903,006$

Note 8 – Long-Term Debt

Long-term debt consists of bonds payable, related accretion values on premium of capital appreciation bonds, and a provision for compensated absence, claims payable, and net pension liability. Bonds are payable solely from future revenues of the Debt Service Fund. The District is in compliance with all significant bond compliance requirements. Internal Service Funds serve the governmental funds. Accordingly, long-term liabilities for them are included as part of the totals for governmental activities. See Note 14 for disclosures regarding claims payable for Health Insurance and Workers’ Compensation. Other long-term liabilities are generally liquidated with resources of the General Fund. See Note 15 for additional disclosures regarding compensated absences and Note 12 for defined benefit pension plan.

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Alief Independent School District Notes to the Basic Financial Statements Note 8 – Long-Term Debt (continued)

A summary of long-term debt transactions of the District for the year ended August 31, 2015, follows:

Balance Issued Refunded Balance

August 31, and and August 31, Current

2014 * Additions Retired 2015 Portion

Bonds 169,390,793$ 18,685,000$ (27,563,793)$ 160,512,000$ 18,035,000$ Accretion on premium

capital appreciation bonds 651,107 25,100 (676,207) Issuance premiums 10,845,437 1,281,909 (1,333,189) 10,794,157

Total bonds payable 180,887,337 19,992,009 (29,573,189) 171,306,157 18,035,000

Accrued compensated absences 5,626,430 1,052,940 (1,003,992) 5,675,378 750,000 Claims payable 3,939,028 41,024,758 (41,268,634) 3,695,152 3,253,523 Net Pension Liability 66,261,585 9,330,057 (21,629,092) 53,962,550

75,827,043 51,407,755 (63,901,718) 63,333,080 4,003,523 Governmental activity long-term liabilities 256,714,380$ 71,399,764$ (93,474,907)$ 234,639,237$ 22,038,523$

* Per GASB 68, beginning balance for net pension liability includes the restatement of net pension liability at

September 1, 2014. Annual requirements to amortize all bonded debt outstanding as of August 31, 2015, follow:

Year Ending

August 31 Principal Interest Total

2016 18,035,000$ 5,150,905$ 23,185,905$ 2017 17,825,000 4,471,805 22,296,805 2018 16,905,000 3,806,911 20,711,911 2019 13,540,000 3,222,027 16,762,027 2020 9,870,000 2,797,047 12,667,047

2021-2025 52,642,000 9,614,323 62,256,323 2026-2030 27,155,000 2,674,489 29,829,489 2031-2035 4,540,000 297,637 4,837,637

160,512,000$ 32,035,144$ 192,547,144$

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Alief Independent School District Notes to the Basic Financial Statements Note 8 – Long-Term Debt (continued) Bonded debt at August 31, 2015, is comprised of the following individual issues:

Original Interest Range of Debt

Issue Amount Description Rate % Maturities Outstanding

41,228,656$ Unltd. tax schoolhouse & ref. bonds, Series 2007 4.00 - 4.38 2016-27 15,220,000$

8,890,000 Unltd. tax schoolhouse bonds, Series 2008 3.50 - 4.00 2016-28 5,775,000

16,297,000 Unltd. tax schoolhouse bonds, QSCBs, Series 2009 - - 2024 16,297,000

21,630,000 Unltd. tax refunding bonds, Series 2009 3.00 - 5.25 2016-19 8,595,000

16,480,000 Unltd. tax schoolhouse bonds, QSCBs, Series 2010 5.20 2027 16,480,000




9,785,000 Unltd. tax refunding bonds, Series 2012A 2.00 - 5.00 2016-25 7,540,000

31,740,000 Unltd. tax schoolhouse & ref. bonds, Series 2013 2.00 - 4.00 2016-33 29,865,000

15,830,000 Unltd. tax refunding bonds, Series 2013A 3.00 - 5.00 2016-25 11,090,000


9,430,000 Unltd. tax schoolhouse bonds, Series 2015 2.50 - 4.00 2016-35 9,430,000

Total bonds 160,512,000

Current portion (18,035,000)

Unamortized premiums 10,794,157

Total long-term debt 153,271,157$

A portion of the bonds sold in the Series 2007 were capital appreciation bonds. The 2007 obligations had a principal value of $778,656 and a maturity value of $2,590,000. The accreted interest on these obligations had been paid upon maturity in the fiscal years ended August 31, 2014 and 2015. The District is scheduled to make annual deposits into a reserve fund account for the QSCB, Series 2009 and 2010, respectively. These annual deposits plus the interest earned on the reserve accounts will be used to pay off the debt upon maturity in 2024 and 2027.

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Alief Independent School District Notes to the Basic Financial Statements Note 9 – Advance Refundings of General Long-Term Debt Current Year Refunding

On December 4, 2014, the District issued $9,255,000 in Unlimited Tax Refunding Bonds with interest rates in the range of 2.5% - 4% to advance refund $9,280,000 of outstanding Series 2007 with interest rates from 4%-4.375%. The proceeds were deposited in an irrevocable trust with an escrow agent to provide all future debt service payments on the refunded bonds. At August 31, 2015, $9,280,000 of the Series 2007 bonds are considered to be defeased and the liability for these bonds has been removed from the Statement of Net Position.

The District advance refunded the Series 2007 Bonds to reduce the total debt service payments by approximately $849,110 and to obtain an economic net gain (difference between the present values of the debt service payments on the old and new debt) of $760,892. The reacquisition price exceeded the net carrying amount of the old debt by $562,808. The $562,808 is considered a deferred outflow of resources and amortized over the remaining life of the refunded debt or the life of the new debt, whichever is shorter. See Note 1 for additional disclosures regarding deferred outflows of resources.

Prior Year Refundings

In the prior years, the District defeased certain outstanding school construction and refunding bonds by placing the proceeds of new bonds in an irrevocable trust to provide for all future debt service payments on the old bonds. Accordingly, the trust account assets and the liability for the defeased bonds are not included in the District’s financial statements. As of August 31, 2015, $9,280,000 of the previously refunded bonds is considered defeased.

Note 10 – Revenues from Local Sources

During the current year, revenues from local sources reported in governmental funds consisted of the following:

Special Capital Debt

General Revenue Projects Service

Fund Fund Fund Fund Totals

Property taxes 139,530,620$ 19,241,528$ 158,772,148$ Penalties, interest, and

other related tax income 1,191,170 179,691 1,370,861 Extracurricular activities 861,235 2,398,484$ 3,259,719 Food sales 111,190 2,693,560 2,804,750 Investment income 179,716 17,996 21,826$ 24,435 243,973 Tuition and fees 674,468 674,468 Other 1,370,639 655,045 23 2,025,707

143,919,038$ 5,765,085$ 21,826$ 19,445,677$ 169,151,626$

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Alief Independent School District Notes to the Basic Financial Statements Note 11 – General Fund Federal Program Revenues

A summary of federal program revenues received in the General Fund for the year ended August 31, 2015, follows:

CFDA

Number Amount

Indirect Costs:Texas Support for Homeless Education (TEXSHEP) 84.196 1,081$ ESEA Title I, Part A 84.010A 347,359 National School Lunch Program 10.555 1,351,982 School Breakfast Program 10.553 395,180 Carl D. Perkins Career & Technology 84.048A 9,491 Title II Part A - TPTR 84.367A 21,205 Title III Part A LEP 84.365A 28,414 Title IV Part B - 21st Century 84.287C 31,680 Funds for the Improvement of Education 84.215F 6,835 Summer School LEP 84.369A 861 Refugee and Entrant Assistance 93.576 1,819

ROTC Program N/A 337,437 SHARS - Medicaid Reimbursement Program N/A 8,393,705

Total 10,927,049$

Program or Source

Note 12 – Defined Benefit Pension Plan

Plan Description The District participates in a cost-sharing multiple-employer defined benefit pension that has a special funding situation. The plan is administered by the Teacher Retirement System of Texas (TRS). TRS’s defined benefit pension plan is established and administered in accordance with the Texas Constitution, Article XVI, Section 67 and Texas Government Code, Title 8, Subtitle C. The pension trust fund is a qualified pension trust under Section 401(a) of the Internal Revenue Code. The Texas Legislature establishes benefits and contribution rates within the guidelines of the Texas Constitution. The pension’s Board of Trustees does not have the authority to establish or amend benefit terms. All employees of public, state-supported educational institutions in Texas who are employed for one-half or more of the standard work load and who are not exempted from membership under Texas Government Code, Title 8, Section 822.002 are covered by the system. Pension Plan Fiduciary Net Position Detailed information about the TRS’ fiduciary net position is available in a separately-issued Comprehensive Annual Financial Report that includes financial statements and required supplementary information. That report may be obtained by writing to TRS at 1000 Red River Street, Austin, TX, 78701-2698; by calling (512) 542-6592; or on the Internet at http://www.trs.texas.gov/about/documents/cafr.pdf.

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Alief Independent School District Notes to the Basic Financial Statements Note 12 – Defined Benefit Pension Plan (continued)

Benefits Provided TRS provides service and disability retirement, as well as death and survivor benefits, to eligible employees (and their beneficiaries) of public and higher education in Texas. The pension formula is calculated using 2.3 percent (multiplier) times the average of the five highest annual creditable salaries times years of credited service to arrive at the annual standard annuity except for members who are grandfathered, the three highest annual salaries are used. The normal service retirement is at age 65 with 5 years of credited service or when the sum of the member’s age and years of credited service equals 80 or more years. Early retirement is at age 55 with 5 years of service credit or earlier than 55 with 30 years of service credit. There are additional provisions for early retirement if the sum of the member’s age and years of service credit total at least 80, but the member is less than age 60 or 62 depending on date of employment, or if the member was grandfathered in under a previous rule. There are no automatic post-employment benefit changes; including automatic cost of living adjustments (COLAs). Ad hoc post-employment benefit changes, including ad hoc COLAs can be granted by the Texas Legislature as noted in the Plan Description above. Contributions

Contribution requirements are established or amended pursuant to Article 16, Section 67 of the Texas Constitution which requires the Texas Legislature to establish a member contribution rate of not less than 6% of the member’s annual compensation and a state contribution rate of not less than 6% and not more than 10% of the aggregate annual compensation paid to members of the system during the fiscal year. Texas Government Code Section 821.006 prohibits benefit improvements, if as a result of the particular action, the time required to amortize TRS’ unfunded actuarial liabilities would be increased to a period that exceeds 31 years, or, if the amortization period already exceeds 31 years, the period would be increased by such action. Employee contribution rates are set in state statute, Texas Government Code 825.402. Senate Bill 1458 of the 83rd Texas Legislature amended Texas Government Code 825.402 for member contributions and established employee contribution rates for fiscal years 2014 thru 2017. It also added a 1.5% contribution for employers not paying Old Age Survivor and Disability Insurance (OASDI) on certain employees effective for fiscal year 2015 as discussed in Note 1 of the TRS 2014 CAFR. The 83rd Texas Legislature, General Appropriations Act (GAA) established the employer contribution rates for fiscal years 2014 and 2015.

2015 2014

Member 6.70% 6.40%Non-Employer Contributing Entity (State) 6.80% 6.80%Employers/District 6.80% 6.80%

The District contributed 100% of the annual required contribution for fiscal years 2014 and 2015.

The contribution amounts for the District’s fiscal year 2015 are as follows:

District Contributions 9,898,055$ Member Contributions 20,699,972 NECE (State) On-behalf Contributions 14,928,820 Contributors to the plan include members, employers and the State of Texas as the only non-employer contributing entity. The State is the employer for senior colleges, medical schools and state agencies including TRS. In each respective role, the State contributes to the plan in accordance with state statutes and the General Appropriations Act (GAA).

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Note 12 – Defined Benefit Pension Plan (continued)

Contributions (continued)

As the non-employer contributing entity (NECE) for public education and junior colleges, the State of Texas contributes to the retirement system an amount equal to the current employer contribution rate times the aggregate annual compensation of all participating members of the pension trust fund during that fiscal year reduced by the amounts described below which are paid by the employers. Employers (public school, junior college, other entities or the State of Texas as the employer for senior universities and medical schools) are required to pay the employer contribution rate in the following instances:

On the portion of the member's salary that exceeds the statutory minimum for members entitled to the statutory minimum under Section 21.402 of the Texas Education Code.

During a new member’s first 90 days of employment. When any part or all of an employee’s salary is paid by federal funding sources, a privately sponsored

source, from non-educational and general, or local funds. When the employing district is a public junior college or junior college district, the employer shall

contribute to the retirement system an amount equal to 50% of the state contribution rate for certain instructional or administrative employees; and 100% of the state contribution rate for all other employees.

In addition to the employer contributions listed above, when employing a retiree of the Teacher Retirement System, the employer shall pay both the member contribution and the state contribution as an employment after retirement surcharge. Actuarial Assumptions

The total pension liability in the August 31, 2014 actuarial valuation was determined using the following actuarial assumptions:

Valuation Date August 31, 2014 Actuarial Cost Method Individual Entry Age Normal Amortization Method Level Percentage of Payroll, Open Remaining Amortization Period 30 Years Asset Valuation Method 5 Year Market Value Discount Rate 8.00%

Long-Term Expected Investment Rate of Return* 8.00% Salary Increases* 4.25% to 7.25% Weighted-Average at Valuation Date 5.55% Payroll Growth Rate 3.50% *Includes Inflation of 3%

The actuarial methods and assumptions are primarily based on a study of actuarial experience for the four year period ending August 31, 2010 and adopted on April 8, 2011. With the exception of the post-retirement mortality rates for healthy lives and a minor change to the expected retirement age for inactive vested members stemming from the actuarial audit performed in the Summer of 2014, the assumptions and methods are the same as used in the prior valuation. When the mortality assumptions were adopted in 2011 they contained a significant margin for possible future mortality improvements. As of the date of the valuation there has been a significant erosion of this margin to the point that the margin has been eliminated. Therefore, the post-retirement mortality rates for current and future retirees were decreased to add additional margin for future improvement in mortality in accordance with the Actuarial Standards of Practice No. 35.

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Discount Rate

The discount rate used to measure the total pension liability was 8.0%. There was no change in the discount rate since the previous year. The projection of cash flows used to determine the discount rate assumed that contributions from plan members and those of the contributing employers and the non-employer contributing entity are made at the statutorily required rates. Based on those assumptions, the pension plan’s fiduciary net position was projected to be available to make all future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. The long-term expected rate of return on pension plan investments is 8%. The long-term expected rate of return on pension plan investments was determined using a building-block method in which best-estimates ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates of geometric real rates of return for each major asset class included in the System ’s target asset allocation as of August 31, 2014 are summarized below:

Asset Class

Global Equity

U.S. 18 % 7.0 % 1.4 % Non-U.S. Developed 13 7.3 1.1 Emerging Markets 9 8.1 0.9 Directional Hedge Funds 4 5.4 0.2 Private Equity 13 9.2 1.4Stable Value

U.S. Treasuries 11 2.9 0.3 Absolute Return 0 4.0 0.0 Stable Value Hedge Funds 4 5.2 0.2 Cash 1 2.0 0.0Real Return

Global Inflation Linked Bonds 3 3.1 0.0 Real Assets 16 7.3 1.5 Energy and Natural Resources 3 8.8 0.3 Commodities 0 3.4 0.0Risk Parity

Risk Parity 5 8.9 0.4 Alpha 1.0 Total 100 % 8.7 %

Long-Term

Expected

Portfolio

Real Rate

of Return *

Target

Allocation

Real Return

Geometric

Basis

* The Expected Contribution to Returns incorporates the volatility drag resulting

from the conversion between Arithmetic and Geometric mean returns.

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Note 12 – Defined Benefit Pension Plan (continued)

Discount Rate (continued)

The following presents the District’s proportionate share of net pension liability for TRS calculated using the discount rate of 8%, as well as the District’s proportionate share of the respective net pension liability if it was calculated using a discount rate that is 1% less than or 1% greater than the discount rate that was used (8%) in measuring the 2014 Net Pension Liability.

Current

1% Decrease Discount Rate 1% Increase

(7%) (8%) (9%)

District's Proportionate Share of the Net Pension Liability 96,427,804$ 53,962,550$ 22,206,448$

Pension Liabilities, Pension Expense, Deferred Outflows of Resources, and Deferred Inflows of

Resources Related to Pensions

At August 31, 2015, the District reported a liability of $53,962,550 for its proportionate share of the TRS’s net pension liability. This liability reflects a reduction for State pension support provided to the District. The amount recognized by the District as its proportionate share of the net pension liability, the related State support, and the total portion of the net pension liability that was associated with the District were as follows:

District's Proportionate Share of the Net Pension Liability 53,962,550$ State's Proportionate Share of the Net Pension Liability Associated with the District 152,309,015

Total 206,271,565$

The net pension liability was measured as of August 31, 2014 and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. The employer’s proportion of the net pension liability was based on the employer’s contributions to the pension plan relative to the contributions of all employers to the plan for the period September 1, 2013 through August 31, 2014.

At August 31, 2014 the employer’s proportion of the collective net pension liability was 0.2020208% which was an increase of 0.0075308% from its proportion measured as of August 31, 2013. The change in proportion was immaterial and therefore disregarded this year. There were no changes of assumptions or other inputs that affected measurement of the total pension liability during the measurement period.

There were no changes of benefit terms that affected measurement of the total pension liability during the measurement period. There was a change in employer contribution requirements that occurred after the measurement date of the net pension liability and the employer’s reporting date. A 1.5% contribution for employers not paying Old Age Survivor and Disability Insurance (OASDI) on certain employees went into law effective September 1, 2014. The amount of the expected resultant change in the employer’s proportion cannot be determined at this time.

For the year ended August 31, 2015, the District recognized pension expense of $4,987,883 and revenue of $14,080,685 for support provided by the State.

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Pension Liabilities, Pension Expense, Deferred Outflows of Resources, and Deferred Inflows of

Resources Related to Pensions (continued)

At August 31, 2015, the District reported its proportionate share of the TRS’s deferred outflows of resources

and deferred inflows of resources related to pensions from the following sources:

Deferred Outflows Deferred Inflows

of Resources of Resources

Differences between expected and actual experience 834,548$ Changes of assumptions 3,507,626 Net difference between projected and actual investment earnings 16,493,159$ Changes in proportion and differences between District' contributions and proportionate share of contributions 14,145 Contributions paid to TRS subsequent to the measurement date 9,898,055

Total 14,240,229$ 16,507,304$

The $9,898,055 reported as deferred outflows of resources related to pensions resulting from District contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended August 31, 2016. Other amounts of the employer’s balances of deferred outflows

and inflows of resources related to pensions will be recognized in pension expense as follows:

Year Ending August 31,

2016 (3,393,153)$ 2017 (3,393,153)2018 (3,393,153)2019 (3,393,153)2020 730,137Thereafter 677,345

Totals ($12,165,130)

Note 13 – Retiree Health Plan

Plan Description The District contributes to the Texas Public School Retired Employees Group Insurance Program (TRS-Care), a cost-sharing multiple-employer defined benefit postemployment health care plan administered by the Teacher Retirement System of Texas. TRS-Care provides health care coverage for certain persons (and their dependents) who retired under the Teacher Retirement System of Texas. The statutory authority for the program is Texas Insurance Code, Chapter 1575. Section 1575.052 grants the TRS Board of Trustees the authority to establish and amend basic and optional group insurance coverage for participants. The Texas Legislature determines the funding of benefits and has no continuing obligation to provide benefits beyond each fiscal year. Currently, the benefits of TRS-Care are financed through a combination of retiree premiums and percentage of payroll contributions from active employees, school districts, and the State of Texas.

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Note 13 – Retiree Health Plan (continued) Benefit Provisions and Service Requirements Retirees can receive a free basic level of coverage and optional coverage is also available. All dependent coverage is optional. Basic coverage is a comprehensive major medical group health insurance plan. Generally, TRS public school retirees with more than 10 years of service and their dependents are eligible for this insurance coverage. Funding Policy Contribution requirements are not actuarially determined but are legally established each biennium by the Texas Legislature. Texas Insurance Code, Sections 1575.202, 203, and 204 establish state, active employee, and public school contributions, respectively. The State of Texas contributed 0.5%, 1%, and 1% for fiscal years 2013, 2014, and 2015, respectively. The active public school employee contribution rate was 0.65% while school districts contributing a percentage of payroll set at 0.55% for fiscal years 2013, 2014, and 2015. Per Texas Insurance Code, Chapter 1575, the public school contribution may not be less than 0.25% or greater than 0.75% of the salary of each active employee of the public school. Funding for optional coverage is provided by those participants selecting the optional coverage. For employees funded by federal programs, the federal programs are required to contribute 0.5% for fiscal year 2013, and 1% for fiscal years 2014 and 2015. The District contributed 100% of the annual required contribution for fiscal years 2013, 2014, and 2015. Contributions Made Contributions made by the State, District, and employees, and the District’s annual covered payroll for the years ended August 31, 2013, 2014, and 2015 are as follows:

State TRS District Percentage of District's

Pension Contributions Required Total Payroll Employees' Annual

Fiscal Made on Behalf Contributions Contributed Contributions Covered

Year of the District to TRS by District to TRS Payroll

2013 1,228,010$ 1,649,975$ 0.60% 1,781,610$ 274,093,839$ 2014 2,563,600 1,857,975 0.65% 1,854,206 285,263,235 2015 2,794,877 1,995,057 0.65% 2,008,207 308,954,860

The contributions made by the State on behalf of the District have been recorded in the financial statements of the District as both state revenues and payroll expenditures. These contributions are the legal responsibility of the State.

TRS issues a publicly available financial report that includes financial statements and required supplementary information for TRS-Care. That report may be obtained by writing to TRS at 1000 Red River Street, Austin, TX, 78701; by calling (512) 542-6592; or on the Internet at http://www.trs.texas.gov/about/documents/cafr.pdf.

The Medicare Prescription Drug, Improvement, and Modernization Act of 2003, which was effective January 1, 2006, established prescription drug coverage for Medicare beneficiaries known as Medicare Part D. Under Medicare Part D, TRS-Care receives retiree drug subsidy payments from the federal government to offset certain prescription drug expenditures for eligible TRS-Care participants. For the years ended August 31, 2013, 2014, and 2015, the allocated subsidy payments received by TRS-Care on-behalf of the District were $1,049,792, $770,705, and $1,269,336, respectively. These payments are recorded as equal revenues and expenditures in the governmental funds financial statements of the District.

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Alief Independent School District Notes to the Basic Financial Statements Note 14 – Risk Management

The District is exposed to various risks related to torts: theft of, damage to, and destruction of assets; errors and omissions; and natural disasters. The District’s risk management program encompasses various means of protecting the District against loss by obtaining property, casualty, and liability coverage through commercial insurance carriers, self-insurance, and from participation in a risk pool. The District’s participation in the risk pool is limited to paying premiums for its general liability insurance coverage. There has not been any significant reduction in coverage from that of the previous year.

The District provides health benefits to its employees and dependents through a self-funded employee health benefit plan which is accounted for in the Health Insurance Internal Service Fund. This fund is principally supported by contributions from the District and the employees. The District makes contributions to cover the majority of the premiums for employees, and the employees are required to make contributions to cover the remaining employee costs and their dependents. The Internal Service Fund charges the General Fund premiums for the District’s contribution. A third party administrator acting on behalf of the District processes health claim payments. The District has obtained excess loss insurance which limits the District’s claims paid to $275,000 annually for any individual occurrence. The District also provides workers’ compensation to employees through a self-insured plan which is accounted for in the Workers’ Compensation Internal Service Fund. The Internal Service Fund charges the General Fund premiums for the District’s contribution. The District has obtained excess loss insurance which limits the District’s claims paid to $600,000 for any individual occurrence.

Settled claims have not exceeded insurance coverages in any of the previous three fiscal years. Estimates of claims payable and of claims incurred, but not reported at August 31, 2015, are reflected as accrued expenses and claims payable of the Fund. The liabilities include an amount for claims that have been incurred but were not reported until after August 31, 2015. The liability reported in the fund is one of the requirements of Governmental Accounting Standards Board Statement No. 10, which requires that a liability for claims be reported if information prior to the issuance of the financial statements indicates that it is probable that a liability has been incurred as of the date of the financial statements, and the amount of the loss can be reasonable estimated. Because actual claims liabilities depend on such complex factors as inflation, changes in legal requirements, and damage awards, the process used in computing claims liability is an estimate based on historical claims. Analysis of claims liability for the fiscal year 2015 is as follows:

2015 2014 2015 2014

Accrual, September 1 3,205,261$ 2,863,754$ 733,767$ 985,976$ Current year estimates 40,106,119 38,041,504 918,639 952,395 Payments for claims 40,212,675 37,699,997 1,055,959 1,204,604

Accrual, August 31 3,098,705$ 3,205,261$ 596,447$ 733,767$

Health Insurance Workers' Compensation

Of the claims liability for Workers’ Compensation Fund, $441,629 is recorded as noncurrent liabilities.

The following year-by-year exposure details the number of annual workers compensation claims.

2005-06 342 2010-11 3102006-07 383 2011-12 2922007-08 358 2012-13 2932008-09 348 2013-14 3012009-10 325 2014-15 282

Ten year average 323

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Alief Independent School District Notes to the Basic Financial Statements Note 15 – Compensated Absences The District has a vacation policy for noncontractual employees (administration and other full-time employees)

whereby eligible employees receive vacation pay from one to twenty-five days, dependent upon the number of years of service, after the completion of a year’s service in the District. All vacation days must be used within an eighteen-month period from the first day of July of each year, and unused vacation pay cannot be carried over to future periods. The liability for unused vacation days at August 31, 2015 is $2,024,233 and is included in the liabilities on the government-wide statement of net position. The District’s sick leave policy is coordinated with a state mandated sick leave policy whereby substantially all full-time teaching and paraprofessional employees receive up to thirteen days sick leave per year. State sick leave days accrue at the rate of five per year without limit to accumulation. The unused balance may be transferred to another District within the Texas public school system. All state sick leave days must be used prior to retirement from the Texas public school system to receive the benefit. The District pays for all state sick leave days used. Additional local sick leave of up to eight days per year accrues to employees eligible to receive state mandated sick days. All employees not eligible for state mandated sick days may receive up to thirteen days of local leave. Local sick leave may be accumulated to a maximum of 120 days; however, the District does not pay accumulated local sick leave upon termination with the District. Employees are eligible to receive payment for local sick leave (up to a maximum of 80 days) upon qualified retirement from the District, dependent upon the number of years of service with the District. The liability for estimated amounts earned by District employees meeting the requirement for compensation is $3,651,145 at August 31, 2015, all of which is reported in the liabilities on the government-wide statement of net position. The management of the District has assigned a portion of the fund balance in the General Fund to pay the estimated vacation and sick leave liabilities.

Note 16 – Fund Equity

A summary of nonspendable, restricted, committed, and assigned fund balance, as of August, 31, 2015, for all Governmental Fund Types follows:

Special Capital Debt

General Revenue Projects Service

Fund Fund Fund Fund

Nonspendable

Inventories 1,035,827$ 439,521$ -$ -$

Restricted

Food service operations 6,810,433$ Authorized construction 2,255,927$ Retirement of bonded Indebtedness 17,172,934$

-$ 6,810,433$ 2,255,927$ 17,172,934$

Committed

Capital improvement to facilities 7,500,000$ 22,528,682$ Technology equipment and buses 3,500,000 Self funded insurance 3,000,000 Federal sequestration 1,500,000 Campus activities 1,259,718$ 15,500,000$ 1,259,718$ 22,528,682$ -$

Assigned

Outstanding encumbrances 1,326,357$ Compensated absences 5,675,378

7,001,735$ -$ -$ -$

Total 23,537,562$ 8,509,672$ 24,784,609$ 17,172,934$

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Alief Independent School District Notes to the Basic Financial Statements Note 16 – Fund Equity (continued) Outstanding encumbrances by major function at August 31, 2015 follow:

Instruction 242,416$ Student transportation 504,478 Facilities maintenance and operations 255,021 Facilities acquisition and construction 134,928 Other 189,514

Total 1,326,357$

Note 17 – Net Investment in Capital Assets The net investment in capital assets at August 31, 2015, consists of the following:

Governmental activities capital assets, net of accumulated depreciation 405,254,343$

Capital related debt: Bonds payable (160,512,000) Unamortized issuance premiums (10,794,157) Deferred loss on refunding 4,694,766 Unspent schoolhouse bond proceeds 2,255,927

Net Investment in Capital Assets 240,898,879$

Note 18 – Litigation and Contingencies

From time to time the District is a defendant in legal proceedings relating to its operations as a school district. In the best judgment of the District’s management, the outcome of any present legal proceedings will not have any adverse material effect on the accompanying financial statements.

Note 19 – Arbitrage

In accordance with the provisions of Section 148(f) of the Internal Revenue Code of 1986, as amended, bonds must satisfy certain arbitrage rebate requirements. Positive arbitrage is the excess of (1) the amount earned on investments purchased with bond proceeds over (2) the amount that such investments would have earned had such investments been invested at a rate equal to the yield on the bond issue. In order to comply with the arbitrage rebate requirements, positive arbitrage must be paid to the U.S. Treasury at the end of each five year anniversary date of the bond issue. The District has estimated that there is no arbitrage liability as of August 31, 2015.

66

Alief Independent School District Notes to the Basic Financial Statements Note 20 – Shared Service Arrangement

The District participates in a Shared Service Arrangement (SSA) for deaf education services with 10 other school districts. Approximately 33% of the students served by the SSA are attributable to the District. The District does not account for revenues or expenditures of this program and does not disclose them in these financial statements. However, intergovernmental charges in the General Fund include payments to the fiscal agent for the District's share of project deficits. The District neither has a joint ownership interest in fixed assets purchased by the fiscal agent, Fort Bend ISD, nor does the District have a net equity interest in the fiscal agent. The fiscal agent is neither accumulating significant financial resources nor fiscal exigencies that would give rise to a future additional benefit or burden to Alief ISD. The fiscal agent manager is responsible for all financial activities of the SSA. Shared Service Arrangement expenditures of $426,523 were attributable to Alief ISD participation.

The District also participates in a SSA with Region 4 Education Service Center and 27 other school districts for services to students with visual impairments. Region 4, the fiscal agent, provides funds to school districts to supplement certified orientation and mobility specialist salaries. The supplement of $20,000 to Alief ISD was recorded in the Special Revenue Fund.

Note 21 – Juvenile Justice Alternative Education Program

The District is required by law to participate in a Juvenile Justice Alternative Education Program (JJAEP) in coordination with the county juvenile board. A JJAEP is mandated by Chapter 37 of the Texas Education Code to provide education for certain expelled and adjudicated youth based on standards of academic accountability and performance as approved by the Texas Juvenile Probation Commission. The District paid $183,318 to place students in a JJAEP in 2014-15.

Note 22 – Prior Period Adjustments and Restatement The District has restated the beginning net position and fund balance as follows:

Governmental

Activities General Fund

Beginning Net Position/Fund Balance as Previously Reported 377,701,598$ 105,311,066$

Implementation of GASB 68 and 71 (61,139,797) Reclassification of activities from the Enterprise Funds to the General Fund 247,046 239,963 Prior Period Adjustments - Total (60,892,751) 239,963

Beginning Net Position/Fund Balance, Restated 316,808,847$ 105,551,029$

As a result of implementing GASB Statements No. 68 and 71, the District has restated the beginning net position in the government-wide Statement of Activities, effectively decreasing the net position as of September 1, 2014 by $61,139,797. The decrease results from the difference between the beginning net pension liability (NPL) of $66,261,585 and the beginning deferred outflows of resources of $5,121,788 for the transition year only. The District used Enterprise Funds to account for revenues and expenditures of the daycare facilities, the food service department’s catering operations, and the after school program in 2013-14 and prior. Revenues for the daycare and after school program are primarily from fees paid from participants in the program. The revenues in the catering fund are from food provided to various campuses and departments for various types of meetings and events. The District reclassified the activities of the daycare fund, catering fund, and after school program to the General Fund effective September 1, 2014. The effects of this change, as of September 1, 2014, are an increase of $239,963 in the fund balance of the General Fund and an increase of $247,046 in the net position in the government-wide Statement of Activities. The difference of $7,083 resulted from the investment in capital assets.

67

Required Supplementary Information

Exhibit F-1

Actual Variance with

Data Amounts Final Budget

Control (Budgetary Positive 2014

Codes Original Final Basis) (Negative) Actual

Revenues:

5700 Local sources 140,336,737$ 146,568,157$ 143,919,038$ (2,649,119)$ 131,762,657$ 5800 State program revenues 246,708,055 260,213,363 260,007,127 (206,236) 247,023,980 5900 Federal program revenues 10,042,615 10,043,417 10,927,049 883,632 9,482,192

5020 Total Revenues 397,087,407 416,824,937 414,853,214 (1,971,723) 388,268,829

Expenditures:

Current:

0011 Instruction 250,331,424 260,747,339 256,546,366 4,200,973 230,621,839 0012 Instructional resources and media services 4,828,363 5,230,783 4,985,524 245,259 4,651,3860013 Curriculum & instructional staff development 4,022,455 4,357,049 4,086,094 270,955 3,839,5880021 Instructional leadership 4,365,381 5,041,425 4,607,823 433,602 4,205,2460023 School leadership 25,774,512 26,539,795 26,075,898 463,897 24,454,3910031 Guidance, counseling, & evaluation services 18,399,314 19,041,441 18,593,310 448,131 16,466,8670032 Social work services 310,210 474,116 350,818 123,298 308,7040033 Health services 4,600,220 5,034,973 4,629,650 405,323 4,134,8520034 Student transportation 15,822,798 16,621,000 15,428,922 1,192,078 14,127,9900035 Food services 280,000 168,935 111,0650036 Extracurricular activities 4,285,529 5,463,931 4,920,660 543,271 4,040,2030041 Administrative and support services 7,650,447 8,682,558 8,228,677 453,881 7,714,5030051 Facilities maintenance and operations 38,448,324 36,524,357 35,797,024 727,333 34,568,0590052 Security and monitoring services 5,707,026 6,168,045 5,837,078 330,967 5,653,2610053 Data processing services 3,311,618 3,514,675 3,143,672 371,003 3,254,2770061 Community services 1,936,865 3,027,963 2,793,191 234,772 1,864,8990081 Facilities acquisition and construction 737,929 3,440,048 2,944,471 495,577 3,851,3140093 Payments to shared service arrangements 420,000 526,600 426,523 100,077 424,1700095 Payments to Juvenile Justice Alt. Ed. Prog. 500,000 500,000 183,318 316,682 411,477 0099 Payments to appraisal districts 1,295,000 1,295,000 1,249,730 45,270 1,113,193


1100 Excess of Revenues Over

Expenditures 4,339,992 4,313,839 13,855,530 9,541,691 22,562,610

Other Financing (Uses)

8911 Transfer Out (500,000) (16,993,214) - (16,993,214) (16,022,410)Total Other Financing (Uses) (500,000) (16,993,214) (16,993,214) (16,022,410)

Net Change in Fund Balance 3,839,992 (12,679,375) (3,137,684) 9,541,691 6,540,200

0100 Fund Balance - beginning 105,311,066 105,311,066 105,311,066 98,770,866Prior period adjustments 239,963

3000 Fund Balance - ending 109,151,058$ 92,631,691$ 102,413,345$ 9,541,691$ 105,311,066$

Budgeted Amounts


Schedule of Revenues, Expenditures, and Changes in Fund Balance

Original Budget, Final Amended Budget, and Actual - General Fund


with comparative actual balances for the Year Ended August 31, 2014

2015

68

Exhibit F-2

District's Proportion of the Net Pension Liability 0.2020208 %

District's Proportionate Share of the Net Pension Liability 53,962,550$ State's Proportionate Share of the Net Pension Liability Associated with the District 152,309,015 Total 206,271,565$

District's Covered-Employee Payroll (for Measurement Year) 285,263,235$

District's Proportionate Share of the Net Pension Liability as a Percentage of its Covered-Employee Payroll 18.92 %Plan Fiduciary Net Pension as a Percentage of the Total Pension Liability (1) 83.25 %Plan's Net Pension Liability as a Percentage of Covered-Employee Payroll (1) 72.89 %

(1) Per the Teacher Retirement System's Comprehensive Annual Financial Report. Total pension liability is calculated using a new methodology, and will be presented prospectively in accordance with GASB 68.

The amounts presented for each Plan year which ends the preceding August 31 of the District's fiscal year. Ten years of data is not available.

2014


Schedule of the District's Proportionate Share of the Net Pension Liability

of a Cost-Sharing Multiple-Employer Pension Plan

Teacher Retirement System of Texas (TRS)

69

2006 2007 2008

Teacher Retirement System

Contractually Required Contributions 2,592,327$ 2,694,957$ 3,134,753$ Contributions in Relation to the Contractually Required Contributions (2,592,327) (2,694,957) (3,134,753) Contribution Deficiency (Excess) -$ -$ -$

District's Covered-Employee Payroll 240,104,624$ 256,554,831$ 260,631,885$

Contributions as a Percentage of Covered- Employee Payroll 1.08% 1.05% 1.20%

The amounts presented for the fiscal years were determined as of the District's fiscal year end, August 31.

A 1.5% contribution for employers not paying Old Age Survivor and Disability Insurance (OASDI) on certain employees went into law effective September 1, 2014.


Schedule of District Contributions to the Teacher Retirement System Pension Plan

Last Ten Fiscal Years

70

Exhibit F-3

2009 2010 2011 2012 2013 2014 2015

3,610,184$ 4,157,163$ 4,386,043$ 3,753,025$ 4,323,780$ 5,121,788$ 9,898,055$

(3,610,184) (4,157,163) (4,386,043) (3,753,025) (4,323,780) (5,121,788) (9,898,055) -$ -$ -$ -$ -$ -$ -$

266,274,751$ 280,624,588$ 282,533,188$ 271,838,556$ 274,093,839$ 285,263,235$ 308,954,860$

1.36% 1.48% 1.55% 1.38% 1.58% 1.80% 3.20%


Schedule of District Contributions to the Teacher Retirement System Pension Plan


71

Alief Independent School District Notes to Required Supplementary Information

Budgets and Budgetary Accounting Each school district in Texas is required by law to prepare annually a budget of anticipated revenues and expenditures for the General Fund, the Food Service Program that is included in the Special Revenue Fund, and the Debt Service Fund before the beginning of the fiscal year. For fiscal year beginning September 1st, the Texas Education Code requires the budget to be prepared not later than August 20th and adopted by August 31st of each year. The District’s administration determines budgetary funding priorities and the budgets are prepared in the same basis of accounting that is used for reporting in accordance with generally accepted accounting principles. Final budget allocations are determined by the Board, which subsequently establishes a local property tax rate sufficient to support the approved budget. The annual budget, which is prepared on the modified accrual basis of accounting, must be adopted by the Board at a scheduled meeting after giving ten days public notice of the meeting. The District annually adopts legally authorized appropriated budgets for the General and Debt Service Funds, and the Food Service Program included in the Special Revenue Fund. The District’s administration performs budget reviews during the year in which budget requirements are reevaluated and revisions are recommended to the Board. The Board may approve amendments to the budget, which are required when a change is made to any one of the functional expenditure categories or revenue object accounts as defined by the Texas Education Agency for each individual fund type. Expenditures may not legally exceed budgeted appropriations, as amended, at the function level by fund. Unexpended appropriations lapse at year-end. Management may amend the budget without seeking Board approval if appropriations are not transferred between functions. During fiscal year 2015, General Fund appropriations were increased by $19.8 million.

Pension Changes in Assumptions. Modifications to the actuarial methods and assumptions are based on a study of actual experience as adopted on April 8, 2011. The assumptions and methods used in the current valuation are the same except for the following modifications:

Small reductions in the rates of retirements at most age and service combinations. Decrease in the post-retirement rates of mortality for both males and females. The salary increase assumption in the first year of employment was reduced. The method for determining the actuarial value of assets was modified to a method that sets the

actuarial value of assets as the expected actuarial value of assets plus 20% of the difference between the actual market value of the assets and the expected actuarial value of assets.

Amounts reported for 2014 reflect the adoption of a new mortality assumption that the average life expectancy for members over 65 years of age will increase by roughly nine months over the next four years.

72

Other Supplementary Information


Combining and Individual Fund Statements and Schedules


Debt Service Fund

Debt Service Fund is used to account for revenues from debt service taxes and earnings on investments which are used for payment of interest and principal on the District’s bonded indebtedness.

Exhibit G-1





Revenues

5700 Local sources 19,095,758$ 19,095,758$ 19,445,677$ 349,919$ 19,069,410$ 5800 State program revenues 5,940,451 5,940,451 5,970,344 29,893 8,217,658 5900 Federal program revenues 856,960 856,960 794,402 (62,558) 795,259

5020 Total Revenues 25,893,169 25,893,169 26,210,423 317,254 28,082,327

Expenditures Debt service:

0071 Principal on long-term debt 20,225,260 18,960,000 18,283,793 676,207 18,564,863 0072 Interest on long-term debt 6,413,910 5,682,703 6,158,067 (475,364) 7,157,462 0073 Bond issuance costs and fees 10,000 156,478 155,227 1,251 125,498

Total debt service 26,649,170 24,799,181 24,597,087 202,094 25,847,823

6030 Total Expenditures 26,649,170 24,799,181 24,597,087 202,094 25,847,823

1100 Excess of Revenues

Over (Under) Expenditures (756,001) 1,093,988 1,613,336 519,348 2,234,504


7911 Refunding bonds issued 9,255,000 9,255,000 15,830,0007915 Transfer in 500,000 500,000 500,000 1,000,0007916 Premium on issuance of bonds 739,273 739,273 1,647,5848949 Payment to refunded bond

escrow agent (9,842,809) (9,842,808) 1 (17,354,900)

7080 Total Other Financing Sources

(Uses) 500,000 651,464 651,465 1 1,122,684

1200 Net Change in Fund Balances (256,001) 1,745,452 2,264,801 519,349 3,357,188

0100 Fund balance - September 1 (beginning) 14,908,133 14,908,133 14,908,133 11,550,945

3000 Fund Balance - August 31 (ending) 14,652,132$ 16,653,585$ 17,172,934$ 519,349$ 14,908,133$

Budgeted Amounts


Schedule of Revenues, Expenditures, and Changes in Fund Balance

Original Budget, Final Amended Budget, and Actual - Debt Service Fund


with comparative actual balances for the Year Ended August 31, 2014

2015

73

Special Revenue Fund – Food Service Program

Special Revenue Fund is used to account for various federal, state, and locally funded programs. The Food Service Program included in the Special Revenue Fund is used to account for federal reimbursement revenues originating from the United States Department of Agriculture and allowable expenditures under the National School Lunch Act.

Exhibit H-1





Revenues

5700 Local sources 3,310,000$ 3,310,000$ 2,750,510$ (559,490)$ 3,193,880$ 5800 State program revenues 160,000 160,000 162,616 2,616 160,475 5900 Federal program revenues 22,550,000 22,550,000 22,435,743 (114,257) 21,967,129

5020 Total Revenues 26,020,000 26,020,000 25,348,869 (671,131) 25,321,484

Expenditures Current:

0035 Food services 27,705,050 25,852,061 24,311,777 1,540,284 23,377,848 0081 Facilities acquisition and construction 3,819,900 3,756,069 63,831


1100 Excess of Revenues

Over (Under) Expenditures (1,685,050) (3,651,961) (2,718,977) 932,984 1,943,636

0100 Fund balance - September 1 (beginning) 9,968,931 9,968,931 9,968,931 8,025,295

3000 Fund Balance - August 31 (ending) 8,283,881$ 6,316,970$ 7,249,954$ 932,984$ 9,968,931$

Budgeted Amounts


Schedule of Revenues, Expenditures, and Changes

in Fund Balance - Original Budget, Final Amended Budget

and Actual - Food Service Program


with comparative actual balances for the Year Ended August, 31, 2014

2015

74

Internal Service Funds

Internal Service Funds are used to account for the operations of the District’s self-funded insurance programs. Workers’ Compensation Fund – This fund is used to account for the operations of the District’s self-funded workers’ compensation plan, which is supported by employer contributions. Expenses include benefit payments to employees, excess loss insurance premiums, and related administrative costs. Health Insurance Fund – This fund is used to account for the operations of the District’s medical insurance program which is supported by both employee and employer contributions. Expenses include claims, excess loss insurance, and related administrative costs.

Exhibit I-1

Total

Data 753 755 Internal

Control Workers' Health Service

Codes Comp. Insurance Funds

Assets

Current Assets

1110 Cash and cash equivalents 1,829,770$ 3,838,464$ 5,668,234$

1290 Other receivables 9,434 161,825 171,259

Total current assets 1,839,204 4,000,289 5,839,493

1000 Total Assets 1,839,204 4,000,289 5,839,493

Liabilities

Current Liabilities

2110 Accounts payable 49,250 105,979 155,229

2200 Accrued expenses 154,818 3,098,705 3,253,523

Total current liabilities 204,068 3,204,684 3,408,752

Noncurrent Liabilities

2590 Claims Payable 441,629 441,629

Total noncurrent liabilities 441,629 441,629

2000 Total Liabilities 645,697 3,204,684 3,850,381

Net Position3900 Unrestricted Net Position 1,193,507$ 795,605$ 1,989,112$


Combining Statement of Net Position

August 31, 2015


75

Exhibit I-2

TotalData 753 755 Internal

Control Workers' Health ServiceCodes Comp. Insurance Funds

Operating Revenues

5700 Local sources:

5754 Interfund services provided 1,200,000$ 39,396,871$ 40,596,871$

57XX Other 22,433 1,972,725 1,995,158

5020 Total Operating Revenues 1,222,433 41,369,596 42,592,029

Operating Expenses

6200 Purchased and contracted services 174,339 2,932,150 3,106,489

6400 Other operating expenses 918,639 40,106,119 41,024,758

6030 Total Operating Expenses 1,092,978 43,038,269 44,131,247

1200 Operating Income (Loss) 129,455 (1,668,673) (1,539,218)

Nonoperating Revenues

7000 Interest income 1,857 2,545 4,402

Total Nonoperating Revenues 1,857 2,545 4,402

1300 Change in Net Position 131,312 (1,666,128) (1,534,816)

0100 Total Net Position - Sept. 1 (beginning) 1,062,195 2,461,733 3,523,928

3000 Total Net Position - Aug. 31 (ending) 1,193,507$ 795,605$ 1,989,112$

Alief Independent School Distric

Combining Statement of Revenues, Expenses, andChanges in Net Position



76

Exhibit I-3

Total

753 755 Internal

Workers' Health Service

Comp. Insurance Funds

Cash Flows from Operating Activities

Cash receipts from interfund services providedand used 1,200,000$ 39,396,871$ 40,596,871$

Cash receipts from insurance reimbursements 12,999 2,117,064 2,130,063 Cash payments to vendors for goods and services (141,649) (3,104,110) (3,245,759)Cash payments for claims (1,055,959) (40,212,675) (41,268,634)

Net Cash Provided (Used) by Operating Activities 15,391 (1,802,850) (1,787,459)

Cash Flows from Investing Activities

Interest on cash and investments 1,857 2,545 4,402

Net Cash Provided by Investing Activities 1,857 2,545 4,402

Net increase (decrease) in cash and cash equivalents 17,248 (1,800,305) (1,783,057)

Cash and cash equivalents, beginning of year 1,812,522 5,638,769 7,451,291

Cash and cash equivalents, end of year 1,829,770$ 3,838,464$ 5,668,234$

Reconciliation of Operating Income (Loss) to Net

Cash Provided (Used) by Operating Activities

Operating income (loss) 129,455$ (1,668,673)$ (1,539,218)$ Change in assets and liabilities:

Decrease (increase) in other receivables (9,434) 144,339 134,905Decrease in prepaid items 21,780 21,780Increase (decrease) in accounts payable 32,690 (193,740) (161,050)(Decrease) in accrued expenses (53,886) (106,556) (160,442)(Decrease) in noncurrent claims payable (83,434) (83,434)

Net Cash Provided (Used) by Operating Activities 15,391$ (1,802,850)$ (1,787,459)$


Combining Statement of Cash Flows



77

Agency Fund

Agency Fund is used to account for assets held by the District as an agent for various student groups throughout the District.


Exhibit J-1

Balance Balance

September 1, August 31,

2014 Additions Deductions 2015

Cash and cash equivalents 655,506$ 2,121,376$ 2,074,076$ 702,806$

Due to student groups 655,506$ 2,121,376$ 2,074,076$ 702,806$

Student Activities

Assets

Liabilities


Statement of Changes in Assets and Liabilities


Agency Fund

78

1 2

Fiscal Tax

Year Year

2006 and prior 2005 and prior $ Various $ Various $ Various $ Various

2007 2006 1.3700 0.2200 1.5900 9,757,522,264

2008 2007 1.0400 0.2250 1.2650 10,930,285,059

2009 2008 1.1250 0.2150 1.3400 11,678,270,448

2010 2009 1.1250 0.2150 1.3400 11,382,538,806

2011 2010 1.1250 0.2150 1.3400 10,528,509,701

2012 2011 1.1250 0.2050 1.3300 10,568,573,158

2013 2012 1.1250 0.1950 1.3200 10,729,494,394

2014 2013 1.1250 0.1650 1.2900 11,484,302,868

2015 2014 1.1250 0.1550 1.2800 12,589,736,484

1000 Totals


Schedule of Delinquent Taxes Receivable

Fiscal Year Ended August 31, 2015

Tax Rates

Maintenance Debt Service Total

3

Assessed/Appraised

Value for School

Tax Purposes

79

Exhibit K-1

10 20 30 30a 40 50

Beginning Current Maintenance Debt Service Entire Ending

Balance Year's Total Total Year's Balance

9/1/2014 Total Levy Collections Collections Adjustments 8/31/2015

1,049,693$ 22,423$ 3,490$ (406,987)$ 616,793$

364,952 14,547 2,337 (1,453) 346,615

340,916 13,154 2,847 (472) 324,443

563,814 56,738 10,840 (816) 495,420

579,249 77,484 14,803 1,558 488,520

813,415 90,321 17,255 (5,698) 700,141

913,141 162,728 29,645 (8,935) 711,833

1,147,155 274,534 47,576 (18,834) 806,211

1,557,726 683,422 100,228 49,395 823,471

161,148,627$ 140,026,306 19,293,646 1,828,675

7,330,061$ 161,148,627$ 141,421,657$ 19,522,667$ (392,242)$ 7,142,122$

Penalty and interest receivable on taxes 4,259,887

Total taxes receivable per Governmental Fund Balance Sheet 11,402,009$

80


Statistical Section (Unaudited)

Financial Trends

These schedules contain trend information to show how the District’s financial performance and position have changed over time.

2006 2007 2008

Governmental Activities: Net Investment in Capital Assets 145,256,794$ 154,692,993$ 164,864,417$ Restricted 12,873,527 10,398,258 10,489,139 Unrestricted 77,692,963 85,694,386 81,379,868 Total Governmental Activities Net Position 235,823,284 250,785,637 256,733,424

Business-type Activities: Investment in Capital Assets 124,277 113,646 96,662 Unrestricted (128,168) (107,406) (71,482) Total Business-type Activities Net Position (3,891) 6,240 25,180

Primary Government Net Investment in Capital Assets 145,381,071 154,806,639 164,961,079 Restricted 12,873,527 10,398,258 10,489,139 Unrestricted 77,564,795 85,586,980 81,308,386 Total Primary Government Net Position 235,819,393$ 250,791,877$ 256,758,604$

GASB Statement No. 65 was implemented for the year ended August 31, 2014. 2013 and prior have been restated regarding expensing of bond issuance costs.

GASB Statements No. 68 and 71 were implemented for the year ended August 31, 2015.2014 and prior were not restated for GASB 68 and 71, or for reclassifying the activities of the enterprise funds to the general fund effective September 1, 2014.


Net Position by Component


(Accrual Basis of Accounting)

81

Table 1

2009 2010 2011 2012 2013 2014 2015

175,638,327$ 184,166,944$ 188,284,687$ 201,935,569$ 204,368,407$ 225,322,439$ 240,898,879$ 8,895,342 10,450,821 11,586,640 16,088,572 20,730,469 26,025,149 25,576,701

87,694,572 85,136,413 97,003,015 104,092,145 123,139,917 126,354,010 74,550,415 272,228,241 279,754,178 296,874,342 322,116,286 348,238,793 377,701,598 341,025,995

79,680 62,698 45,715 28,733 14,033 7,083 (19,948) 134,035 261,398 258,517 236,327 239,963 59,732 196,733 307,113 287,250 250,360 247,046

175,718,007 184,229,642 188,330,402 201,964,302 204,382,440 225,329,522 240,898,879 8,895,342 10,450,821 11,586,640 16,088,572 20,730,469 26,025,149 25,576,701

87,674,624 85,270,448 97,264,413 104,350,662 123,376,244 126,593,973 74,550,415 272,287,973$ 279,950,911$ 297,181,455$ 322,403,536$ 348,489,153$ 377,948,644$ 341,025,995$

82

2006 2007 2008 2009

Expenses

Governmental Activities:Instruction 233,647,083$ 229,391,365$ 237,424,958$ 247,286,593$ Instructional resources and media services 5,236,527 5,427,962 5,476,659 5,809,567 Curriculum & instructional staff development 5,357,740 6,019,879 5,552,441 5,930,673 Instructional leadership 3,348,764 3,806,670 4,482,897 4,574,156 School leadership 19,738,259 21,146,761 21,873,047 22,857,292 Guidance, counseling, & evaluation services 11,892,232 12,677,861 13,431,519 13,702,431 Social work services 316,013 360,882 343,671 385,079 Health services 3,188,416 3,480,875 3,491,833 3,654,976 Student transportation 11,205,740 11,391,228 12,365,992 12,479,717 Food services 18,913,378 20,469,574 21,395,396 23,060,046 Extracurricular activities 3,580,719 3,573,298 6,033,720 6,101,366 Administrative and support services 8,047,232 8,853,616 7,599,987 7,944,731 Facilities maintenance and operations 31,308,791 34,756,982 36,629,961 37,791,144 Security and monitoring services 3,211,158 3,653,553 3,698,996 4,334,225 Data processing services 2,515,592 3,063,516 2,823,818 2,943,228 Community services 1,585,834 1,758,389 1,689,077 1,593,841 Debt service - interest on long-term debt 11,898,143 13,063,934 11,560,522 10,722,841 Bond issuance costs and fees 146,153 467,012 123,278 329,997 Facilities repair and maintenance 955,266 1,524,400 951,696 887,698 Payments to fiscal agent 255,731 337,042 332,535 418,234 Payments to JJAEP 292,260 274,924 238,958 242,861 Payments to appraisal district 1,148,482 1,243,536

Total Governmental Activities 376,641,031 385,499,723 398,669,443 414,294,232

Business-type Activities:Day care 465,549 509,850 564,264 586,447 Catering 121,982 111,450 98,679 82,657 After school program 124,631 366,645

Total Business-type Activities 587,531 621,300 787,574 1,035,749 Total Primary Government Expenses 377,228,562 386,121,023 399,457,017 415,329,981

Program Revenues

Governmental Activities:Charges for Services

Instruction 662,008 342,027 200,957 153,251 Food Service 5,729,798 4,713,755 4,082,201 3,666,337 Extracurricular activities 203,819 241,384 3,149,079 2,123,895 Other activities 216,730 549,685 610,336 572,124

Operating Grants and Contributions 94,358,072 78,163,521 81,775,489 86,729,543 Total Governmental Activities 101,170,427 84,010,372 89,818,062 93,245,150

Business-type Activities:Day care 734,790 512,109 571,804 554,023 Catering 116,062 119,322 103,686 89,156 After school program 131,024 427,122

Total Business-type Activities 850,852 631,431 806,514 1,070,301 Total Primary Government Program Revenues 102,021,279 84,641,803 90,624,576 94,315,451

Net (Expense) / Revenue

Governmental Activities (275,470,604) (301,489,351) (308,851,381) (321,049,082)Business-type Activities 263,321 10,131 18,940 34,552

Total Primary Government Net (Expense)/Revenue (275,207,283)$ (301,479,220)$ (308,832,441)$ (321,014,530)$





83

Table 2

Page 1 of 2

2010 2011 2012 2013 2014 2015

267,291,725$ 264,137,361$ 248,160,056$ 257,902,354$ 276,133,315$ 295,472,289$ 7,020,333 6,256,902 5,409,215 5,318,189 5,291,762 5,638,005 8,780,906 8,754,244 6,837,468 6,323,996 7,842,510 8,535,537 4,490,815 4,511,333 4,266,462 4,292,135 5,024,401 5,475,653

23,656,708 23,998,365 23,843,299 24,176,702 25,305,748 26,457,102 15,219,080 15,714,558 15,465,860 15,180,618 17,514,377 19,239,691

537,189 689,856 615,635 545,770 530,725 607,759 3,804,570 3,928,374 3,818,948 3,974,373 4,671,762 5,080,124

13,352,370 13,894,082 14,148,380 14,845,454 15,541,887 16,091,588 23,430,045 23,825,543 23,151,927 24,953,484 24,050,471 24,771,368 6,098,803 6,295,765 6,628,189 7,108,074 8,735,438 10,295,192 8,590,304 8,087,228 8,804,024 8,804,195 9,778,090 10,327,012

38,715,158 37,702,627 35,530,519 34,565,434 34,858,666 36,548,888 4,831,918 5,003,486 5,126,144 5,074,935 5,621,863 5,773,141 3,038,107 3,182,353 3,385,549 3,092,688 3,344,920 3,423,319 1,592,651 1,475,447 1,356,940 1,448,734 2,227,081 3,222,117 9,191,210 8,875,868 7,689,346 6,399,578 5,471,355 4,826,206

390,635 152,593 167,909 450,267 125,498 280,258

353,141 404,559 381,853 379,426 424,170 426,523 245,805 332,085 233,061 142,318 411,477 183,318

1,271,604 1,215,517 1,161,250 1,139,493 1,113,193 1,249,730 441,903,077 438,438,146 416,182,034 426,118,217 454,018,709 483,924,820

677,561 686,857 652,538 682,306 696,851 83,861 84,213 78,099 94,510 101,716

418,845 401,958 472,304 548,198 559,853 1,180,267 1,173,028 1,202,941 1,325,014 1,358,420

443,083,344 439,611,174 417,384,975 427,443,231 455,377,129 483,924,820

185,698 188,148 223,597 396,320 246,692 296,397 3,651,407 3,453,509 3,001,533 3,001,738 3,182,542 2,843,704 2,084,186 2,335,160 2,445,130 2,539,383 2,653,277 3,259,719

633,274 402,999 426,450 349,266 361,546 927,938 120,250,450 133,768,773 100,164,260 95,638,896 100,872,983 102,137,420 126,805,015 140,148,589 106,260,970 101,925,603 107,317,040 109,465,178

720,490 705,688 622,057 701,311 707,771 92,586 91,276 86,687 101,766 110,851

504,192 486,444 474,334 485,047 536,175 1,317,268 1,283,408 1,183,078 1,288,124 1,354,797

128,122,283 141,431,997 107,444,048 103,213,727 108,671,837 109,465,178

(315,098,062) (298,289,557) (309,921,064) (324,192,614) (346,701,669) (374,459,642)137,001 110,380 (19,863) (36,890) (3,623)

(314,961,061)$ (298,179,177)$ (309,940,927)$ (324,229,504)$ (346,705,292)$ (374,459,642)$

84

2006 2007 2008 2009

General Revenues and Other Changes in Net Position

Governmental Activities:Property Taxes, Levied for General Purposes 137,737,633$ 134,678,958$ 114,516,140$ 132,561,455$ Property Taxes, Levied for Debt Service 20,097,037 21,568,352 24,717,837 25,288,339 State-aid Formula Grant - Unrestricted 138,292,793 151,698,777 169,401,567 173,016,448 Investment Earnings 5,408,593 8,387,651 6,009,600 1,816,361 Miscellaneous 802,055 117,966 154,024 3,861,296

Total Primary Government General Revenues 302,338,111 316,451,704 314,799,168 336,543,899

Business-type Activities:After school program

Total Business-type General Revenues

Change in Net Position

Governmental Activities 26,867,507 14,962,353 5,947,787 15,494,817 Business-type Activities 263,321 10,131 18,940 34,552 Total Primary Government Change in Net Position 27,130,828$ 14,972,484$ 5,966,727$ 15,529,369$


GASB Statements No. 68 and 71 were implemented for the year ended August 31, 2015.2014 and prior were not restated for GASB 68 and 71, or for reclassifying the activities of the enterprise funds to the general fund effective September 1, 2014.





85

Table 2

Page 2 of 2

2010 2011 2012 2013 2014 2015

128,549,221$ 117,425,644$ 119,998,495$ 121,283,572$ 129,409,437$ 140,538,965$ 24,560,687 22,452,443 21,862,614 21,041,862 18,965,548 19,348,839

168,696,910 172,843,384 191,062,650 206,278,185 226,119,215 237,669,884 431,503 309,169 326,742 252,319 190,952 248,375 385,678 2,379,081 1,912,507 1,459,183 1,479,322 870,727

322,623,999 315,409,721 335,163,008 350,315,121 376,164,474 398,676,790

309309

7,525,937 17,120,164 25,241,944 26,122,507 29,462,805 24,217,148 137,001 110,380 (19,863) (36,890) (3,314) -

7,662,938$ 17,230,544$ 25,222,081$ 26,085,617$ 29,459,491$ 24,217,148$

86

2006 2007 2008 2009

General FundReserved 2,325,243$ 3,190,030$ 1,698,234$ 1,465,511$ Unreserved 70,550,282 75,648,277 74,693,136 79,780,223 NonspendableCommittedAssignedUnassigned

Total General Fund 72,875,525$ 78,838,307$ 76,391,370$ 81,245,734$

All Other Governmental FundsReserved, reported in:

Special Revenue Fund 7,202,538$ 5,536,891$ 5,420,140$ 4,102,554$ Debt Service Fund 4,383,290 3,617,483 3,683,682 3,198,316 Capital Projects Fund 24,187,726 23,164,609 9,204,564 15,789,787

Nonspendable, reported in:Special Revenue Fund

Restricted, reported in:Special Revenue FundDebt Service FundCapital Projects Fund

Committed, reported in:Special Revenue FundCapital Projects Fund

Total All Other Governmental Funds 35,773,554$ 32,318,983$ 18,308,386$ 23,090,657$

GASB Statement No. 54 was implemented for the year ended August 31, 2011.

2014 and prior were not restated for reclassifying the activities of the enterprise funds to the general fundeffective September 1, 2014.


Fund Balances of Governmental Funds


(Modified Accrual Basis of Accounting)

87

Table 3

2010 2011 2012 2013 2014 2015

1,516,428$ 81,674,874

1,140,714$ 1,098,200$ 1,083,326$ 1,053,665$ 1,035,827$ 14,000,000 15,500,000 15,500,000 15,500,000 15,500,000 6,051,469 6,101,868 5,817,065 6,357,459 7,001,735

66,547,883 69,779,862 76,370,475 82,399,942 78,875,783 83,191,302$ 87,740,066$ 92,479,930$ 98,770,866$ 105,311,066$ 102,413,345$

4,815,831$ 4,618,379

12,858,243

654,564$ 396,646$ 393,339$ 393,111$ 439,521$

4,417,326 6,372,332 7,631,956 9,575,820 6,810,433 5,613,406 8,168,192 11,550,945 14,908,133 17,172,934 4,651,789 1,746,599 10,490,912 3,376,613 2,255,927

865,640 974,721 1,085,085 1,217,779 1,259,718 2,497,704 4,538,338 5,751,043 14,131,390 22,528,682

22,292,453$ 18,700,429$ 22,196,828$ 36,903,280$ 43,602,846$ 50,467,215$

88

2006 2007 2008 2009

Revenues

Local sources 170,601,708$ 172,318,236$ 153,803,790$ 168,902,768$ State program revenues 174,927,715 187,828,104 207,940,906 209,407,403 Federal program revenues 57,297,026 40,432,903 42,353,882 51,653,354

Total Revenues 402,826,449 400,579,243 404,098,578 429,963,525

Expenditures

Current:

Instruction 223,296,069 218,575,895 227,297,651 235,449,746 Instructional resources and media services 4,671,690 4,867,166 5,021,042 5,218,855 Curriculum & instructional staff development 5,267,870 5,996,185 5,532,624 5,875,593 Instructional leadership 3,291,563 3,754,993 4,529,196 4,477,163 School leadership 19,552,434 20,920,348 21,775,332 22,583,743 Guidance, counseling, & evaluation services 11,742,871 12,601,772 13,455,408 13,563,774 Social work services 286,333 390,864 345,018 384,560 Health services 3,154,304 3,423,454 3,446,214 3,599,593 Student transportation 10,303,937 10,097,174 10,899,143 11,789,213 Food services 18,314,549 20,469,587 20,757,677 22,284,650 Extracurricular activities 3,270,746 3,180,972 5,570,188 5,519,158 Administrative and support services 7,040,263 7,034,967 6,298,690 6,603,321 Facilities maintenance and operations 31,596,213 34,915,847 36,615,547 37,724,908 Security and monitoring services 3,327,406 3,644,290 3,700,098 4,381,295 Data processing services 2,985,886 3,055,118 2,576,567 2,656,028 Community services 1,588,116 1,710,579 1,694,234 1,630,959

Debt service:

Debt service - principal on long-term debt 22,080,000 22,395,000 23,350,000 23,425,000 Debt service - interest on long-term debt 11,925,283 11,983,633 11,589,026 10,756,925 Bond issuance costs and fees 146,153 467,012 123,278 329,997

Capital outlay:

Facilities acquisition and construction 17,965,107 32,189,806 23,272,682 16,688,670 Intergovernmental charges:

Payments to shared services arrangements 255,731 337,042 332,535 418,234 Payments to Juvenile Justice Alt. Ed. Prog. 292,260 274,924 238,958 242,861 Payments to appraisal districts 1,148,482 1,243,536 Total Expenditures 402,354,784 422,286,628 429,569,590 436,847,782

Excess (Deficiency) of Revenues Over

Expenditures 471,665 (21,707,385) (25,471,012) (6,884,257)


Capital-related debt issued (general obligation bonds) 23,380,000 23,758,793 8,890,000 16,297,000 Transfers in 4,000,000 2,000,000 Premium on issuance of bonds 132,097 1,168,032 123,478 1,455,098 Proceeds from refunding bonds 17,469,863 21,630,000 Transfers out (4,000,000) (2,000,000) Payment to refunded bond escrow agent (18,181,092) (22,861,206)

Total Other Financing Sources (Uses) 23,512,097 24,215,596 9,013,478 16,520,892

Net Change in Fund Balances 23,983,762$ 2,508,211$ (16,457,534)$ 9,636,635$

Debt Service as a Percentage of Noncapital Expenditures 8.88% 8.82% 8.59% 8.15%

2014 and prior were not restated for reclassifying the activities of the enterprise funds to the general fundeffective September 1, 2014.


Changes in Fund Balances - Governmental Funds



89

Table 4

2010 2011 2012 2013 2014 2015

162,106,015$ 149,475,106$ 148,703,460$ 149,677,109$ 156,915,792$ 169,151,626$ 199,952,377 208,372,437 221,263,584 237,156,706 261,862,774 272,060,466

89,430,955 100,365,874 70,149,302 65,124,258 65,013,842 68,234,202 451,489,347 458,213,417 440,116,346 451,958,073 483,792,408 509,446,294

255,530,854 257,764,076 237,627,758 248,092,841 263,213,678 286,701,766 6,470,078 5,737,578 4,852,212 4,785,282 4,821,148 5,139,106 8,852,727 8,795,449 6,942,342 6,388,270 7,787,509 8,639,325 4,432,324 4,480,605 4,226,768 4,275,903 5,004,511 5,494,932

23,365,581 23,903,673 23,579,038 23,849,161 24,711,316 26,361,597 15,151,975 15,796,767 15,471,593 15,136,781 17,322,466 19,377,980

534,863 683,766 615,482 555,212 521,787 617,678 3,728,611 3,909,006 3,775,720 3,943,600 4,561,262 5,102,016

12,669,103 12,988,215 13,245,120 13,750,535 14,127,990 15,429,262 22,688,014 23,307,248 22,383,579 24,318,429 23,377,848 24,480,712

5,505,931 5,653,178 6,007,965 6,496,649 8,274,752 9,904,877 7,104,254 6,800,240 7,318,509 7,204,939 7,715,128 8,228,857

37,941,030 37,171,852 35,114,324 33,671,488 34,569,046 35,797,024 4,818,910 5,109,055 5,150,800 5,049,496 5,653,567 5,837,078 2,614,251 2,737,535 2,931,028 2,926,067 3,254,822 3,147,875 1,585,946 1,485,986 1,330,970 1,462,468 2,202,425 3,219,857

22,660,000 21,344,371 20,025,000 19,580,000 18,564,863 18,283,793 9,200,411 9,322,154 8,034,542 6,664,199 7,157,462 6,158,067

390,635 152,593 167,909 450,267 125,498 280,258

19,980,625 8,318,317 11,479,041 12,196,204 15,759,408 25,782,079

353,141 404,559 381,853 379,426 424,170 426,523 245,805 332,085 233,061 142,318 411,477 183,318

1,271,604 1,215,517 1,161,250 1,139,493 1,113,193 1,249,730 467,096,673 457,413,825 432,055,864 442,459,028 470,675,326 515,843,710

(15,607,326) 799,592 8,060,482 9,499,045 13,117,082 (6,397,416)

16,480,000 14,630,000 9,430,000 2,200,000 2,000,000 10,000,000 3,846,002 16,022,410 16,993,214 1,837,293 615,742 809,986 3,068,814 1,647,584 1,281,909

23,779,371 9,205,000 15,680,000 26,895,000 15,830,000 9,255,000 (2,200,000) (2,000,000) (10,000,000) (7,846,002) (16,022,410) (16,993,214)

(25,341,974) (9,663,594) (16,314,205) (29,095,471) (17,354,900) (9,842,808) 16,754,690 157,148 175,781 11,498,343 122,684 10,124,101

1,147,364$ 956,740$ 8,236,263$ 20,997,388$ 13,239,766$ 3,726,685$

7.15% 6.87% 6.69% 6.11% 5.67% 4.98%


Changes in Fund Balances - Governmental Funds



90


Revenue Capacity

These schedules contain information to help assess the factors affecting the District’s most significant local revenue source, the property tax.


Table 5

Fiscal Year Taxable Total

Ended Real Property Personal Property Less Assessed Direct

August 31, Value Value Exemptions Value Rate (1)

2006 9,540,625,578$ 1,121,653,140$ 1,554,121,683$ 9,108,157,035$ 1.7200$

2007 10,181,442,703 1,163,920,453 1,587,840,892 9,757,522,264 1.5900

2008 11,520,761,904 1,253,541,794 1,844,018,639 10,930,285,059 1.2650

2009 12,421,149,945 1,278,300,390 2,021,179,887 11,678,270,448 1.3400

2010 12,063,547,482 1,352,729,337 2,033,738,013 11,382,538,806 1.3400

2011 11,189,812,940 1,299,421,156 1,960,724,395 10,528,509,701 1.3400

2012 11,075,566,762 1,241,639,739 1,748,633,343 10,568,573,158 1.3300

2013 11,221,851,962 1,263,132,509 1,755,490,077 10,729,494,394 1.3200

2014 11,912,698,464 1,408,178,476 1,836,574,072 11,484,302,868 1.2900

2015 13,161,503,875 1,505,887,372 2,077,654,763 12,589,736,484 1.2800

(1) Tax rates are per $100 of assessed value.

Source: Harris County Appraisal District provides the District's tax office with appraised values for properties within the District's taxing authority.

Appraised Value


Assessed Value and

Actual Value of Taxable Property


91

Taxing Authority 2006 2007 2008 2009

Overlapping Rates:

Beechnut MUD 1.250$ 1.250$ 1.050$ 1.050$ Bissonnet MUD 0.590 0.590 0.480 0.480 Chelford City MUD 0.430 0.430 0.430 0.430 Chelford One MUD 0.410 0.410 0.410 0.410 Harris County * 0.454 0.646 0.636 0.636 Harris County MUD 120 0.710 0.710 0.730 0.730 Harris County MUD 147 0.850 0.850 0.830 0.820 Harris County MUD 158 0.500 0.500 0.450 0.420 Harris County MUD 359 0.300 0.300 0.270 0.285 Harris County MUD 372 0.310 0.260 0.210 0.190 Houston, City of 0.647 0.645 0.644 0.639 Houston Community College SystemKingsbridge MUD 0.820 0.820 0.800 0.780 Mission Bend MUD 1 0.450 0.135 0.280 0.250 Mission Bend MUD 2 0.934 0.934 0.900 0.900 Renn Road MUD 0.680 0.680 0.630 0.630 West Harris County MUD 4 1.000 1.000 0.930 0.900 West Harris County MUD 6 0.700 0.700 0.690 0.690 West Keegans Bayou ID 0.161 0.161 0.121 0.121

Total 11.1961$ 11.0213$ 10.4910$ 10.3610$

District Direct Rates:

Maintenance & Operations 1.5000$ 1.3700$ 1.0400$ 1.1250$ Debt Service 0.2200 0.2200 0.2250 0.2150

Total District Direct Rates 1.7200$ 1.5900$ 1.2650$ 1.3400$

* Includes Harris County, Harris County Department of Education, Harris County Flood Control District, Harris County Hospital District, and the Port of Houston Authority

Source: District's Tax Office


Property Tax Rates - Direct and Overlapping Governments


(per $100 of Assessed Value)

92

Table 6

2010 2011 2012 2013 2014 2015

1.050$ 0.830$ 0.850$ 0.850$ 0.850$ 0.810$ 0.540 0.600 0.620 0.630 0.630 0.590 0.430 0.430 0.430 0.430 0.430 0.425 0.420 0.510 0.530 0.565 0.565 0.565 0.636 0.648 0.637 0.637 0.636 0.636 0.730 0.730 0.730 0.700 0.680 0.640 0.850 0.880 0.900 0.940 0.940 0.910 0.400 0.380 0.420 0.420 0.450 0.500 0.295 0.305 0.305 0.305 0.300 0.270 0.190 0.190 0.190 0.190 0.190 0.175 0.639 0.639 0.639 0.639 0.639 0.631 0.092 0.092 0.097 0.097 0.097 0.107 0.780 0.780 0.780 0.780 0.780 0.780 0.250 0.250 0.250 0.250 0.280 0.280 0.900 0.850 0.850 0.850 0.850 0.840 0.630 0.665 0.690 0.760 0.760 0.750 0.950 1.050 1.060 1.090 1.090 1.090 0.720 0.720 0.760 0.760 0.650 0.550 0.121 0.111 0.111 0.100 0.100 0.100

10.6230$ 10.6605$ 10.8485$ 10.9925$ 10.9173$ 10.6489$

1.1250$ 1.1250$ 1.1250$ 1.1250$ 1.1250$ 1.1250$ 0.2150 0.2150 0.2050 0.1950 0.1650 0.1550 1.3400$ 1.3400$ 1.3300$ 1.3200$ 1.2900$ 1.2800$

93

Table 7

Percentage Percentage

of Total of Total

Assessed Assessed Assessed Assessed

Taxpayer Value (1) Rank Value (2) Value (1) Rank Value (3)

Shell Oil Co. 323,728,717$ 1 2.6 % 85,457,897$ 2 0.9 %

FSP N Westchase LLC 142,518,070 2 1.1

Jacobs Engineering Group Inc. 120,415,791 3 1.0

Centerpoint Energy Inc. 115,924,023 4 0.9 109,734,290 1 1.2

Columbia Texas Westchase 90,602,112 5 0.7

Pinnacle Owner Corp. 90,424,846 6 0.7

CHCA West Houston LP 85,717,801 7 0.7 46,995,883 8 0.5

One Westchase Center LLC 83,600,000 8 0.7

Camden Property Trust 79,545,071 9 0.6 51,938,982 5 0.6

Wal Mart 69,608,290 10 0.6

Granite One West LTD 72,683,170 3 0.8

3150 Briarpark LP 65,676,515 4 0.7

IP - West Oaks Mall JCP LP 51,498,942 6 0.6

Caroline Partners LTD 50,321,036 7 0.6

Lexington Lion Houston 38,752,344 9 0.4

MSPA Acquisition 36,987,500 10 0.4

Totals 1,202,084,721$ 9.5 % 610,046,559$ 6.7 %

(1) Assessed (taxable) value equals appraised value after exemptions

(2) Total assessed value equals: 12,589,736,484$

(3) Total assessed value equals: 9,108,157,035$

Source: Harris County Appraisal District

2006


Principal Taxpayers

Current Year and Nine Years Ago

2015

94

Table 8

Fiscal Year Net Tax Levy Collections

Ended for the in Subsequent

August 31, Fiscal Year (1) Amount Years Amount

2006 157,115,775$ 153,426,932$ 97.7 % 3,279,146$ 156,706,078$ 99.7 %

2007 156,061,121 152,242,755 97.6 3,471,751 155,714,506 99.8

2008 138,946,498 135,198,092 97.3 3,423,963 138,622,055 99.8

2009 157,359,592 153,176,191 97.3 3,687,981 156,864,172 99.7

2010 152,649,194 149,803,018 98.1 2,357,656 152,160,674 99.7

2011 141,285,530 139,037,613 98.4 1,547,776 140,585,389 99.5

2012 140,758,658 138,529,174 98.4 1,517,651 140,046,825 99.5

2013 141,688,655 139,818,581 98.7 1,063,863 140,882,444 99.4

2014 148,196,902 146,589,781 98.9 783,650 147,373,431 99.4

2015 161,148,627 159,319,952 98.9 159,319,952 98.9

(1) Appraised value less exemptions equal taxable assessed value. The beginning taxable value net of adjustments times the tax rate set by the District's Board of Trustees each year equals the total net tax levy. The tax levy for prior years reflects ongoing adjustments applied to that year's tax levy.

Source: District records

Total Collections to Date


Property Tax Levies and Collections


Collected within the Fiscal

Year of the Levy

Percentage Percent of Total

of Net Tax Tax Collections

Levy To Net Tax Levy

95


Debt Capacity

These schedules present information to help assess the affordability of the District’s current debt burden and its ability to issue additional debt in the future.

Table 9

Total Primary

Government

Fiscal General Debt

Year Ended Obligation per

August 31, Bonds Student (2)

2006 269,389,790$ 2.96 % 5,652$

2007 272,684,039 2.79 5,979

2008 257,964,782 2.36 5,715

2009 250,681,165 2.15 5,526

2010 245,902,674 2.16 5,395

2011 224,303,762 2.13 4,894

2012 204,269,970 1.93 4,493

2013 201,212,389 1.88 4,396

2014 180,887,337 1.58 3,906

2015 171,306,157 1.36 3,616

(1) See Table 5 for assessed value data.(2) See Table 15 for student enrollment data.


Value (1)


Ratios of Outstanding Debt by Type


Ratio of Debt

to Assessed

96

Table 10

Ratio of Net

Fiscal Less Reserve Net Bonded

Year Ended Gross Bonded for Retirement Net Bonded Debt per

August 31, Debt of Bonded Debt Debt Student (2)

2006 269,389,790$ 4,383,290$ 265,006,500$ 2.91 % 5,560$

2007 272,684,039 3,617,483 269,066,556 2.76 5,899

2008 257,964,782 3,683,682 254,281,100 2.33 5,633

2009 250,681,165 3,198,316 247,482,849 2.12 5,455

2010 245,902,674 4,618,379 241,284,295 2.12 5,293

2011 224,303,762 5,613,406 218,690,356 2.08 4,772

2012 204,269,970 8,168,192 196,101,778 1.86 4,313

2013 201,212,389 11,550,945 189,661,444 1.77 4,144

2014 180,887,337 14,908,133 165,979,204 1.45 3,584

2015 171,306,157 17,172,934 154,133,223 1.22 3,253

(1) See Table 5 for assessed value data.(2) See Table 15 for student enrollment data.


Value (1)


Ratios of Net General Obligation Bonded Debt Outstanding


Bonded Debt

to Assessed

97

Table 11

Gross Debt Amount

Taxing Body Outstanding Overlapping

Beechnut MUD 3,865,000$ 100.00 % 3,865,000$ Bissonnet MUD 11,850,843 100.00 11,850,843 Chelford City MUD 5,520,000 85.51 4,720,152 Chelford One MUD 5,517,918 100.00 5,517,918 Harris County 2,229,169,312 3.23 72,002,169 Harris County Dept. of Education 7,410,000 3.23 239,343 Harris County Flood Control District 83,017,090 3.23 2,681,452 Harris County MUD 120 13,230,000 100.00 13,230,000 Harris County MUD 147 1,700,000 100.00 1,700,000 Harris County MUD 158 8,994,952 100.00 8,994,952 Harris County MUD 359 5,695,000 100.00 5,695,000 Harris County MUD 372 9,850,000 100.00 9,850,000 Houston Community College 645,860,000 7.78 50,247,908 Houston, City of 2,997,596,341 6.07 181,954,098 Kingsbridge MUD 23,650,000 3.09 730,785 Mission Bend MUD 1 2,485,000 50.30 1,249,955 Mission Bend MUD 2 7,865,000 100.00 7,865,000 Port of Houston Authority 659,089,397 3.23 21,288,587 Renn Road MUD 6,795,000 66.24 4,501,008 West Harris County MUD 4 3,760,000 81.80 3,075,680

Total Net Overlapping Debt 411,259,850

Direct:

Alief Independent School District Gross Debt 171,306,157

Total Direct and Overlapping Debt 582,566,007$

(1) Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the District. The percentage of overlapping debt is estimated using taxable assessed property values. Percentages were estimated by determining the portion of the overlapping taxing authority's taxable assessed value that is within the District's boundaries and dividing it by the overlapping taxing authority's total taxable assessed value.

Source: The Municipal Advisory Council of Texas

Overlapping

Percent


Computation of Estimated Direct and Overlapping Debt

August 31, 2015

98

Demographic and Economic Information

These schedules provide demographic and economic indicators to help in understanding the environment in which the District operates and to facilitate in comparisons over time.

Table 12

Average

Assessed Value Median Per Capita

Fiscal Residential per Residential Household Estimated Personal Unemployment

Year Units (1) Unit (1) Income (2) Population (2) Income (3) Rate (3)

2006 43,848 107,437$ 47,159$ 3,858,432 46,132$ 5.0 %

2007 44,953 125,383 49,977 3,912,196 49,634 4.2

2008 45,867 133,510 52,391 3,980,602 47,788 4.3

2009 46,413 136,121 50,569 4,070,989 48,337 6.5

2010 46,616 129,999 50,422 4,109,362 44,757 8.4

2011 46,716 121,219 50,928 4,180,894 48,935 8.5

2012 46,873 117,747 51,289 4,253,700 52,805 7.4

2013 46,972 115,739 52,489 4,336,853 53,141 6.3

2014 47,034 118,079 54,178 4,441,370 Not Available 5.5

2015 47,183 130,467 Not Available Not Available Not Available 4.4

(1) Source: Harris County Appraisal District(2) Source: U.S. Census Bureau(3) Source: TRACER of Texas Workforce Commission

The data is for Harris County and the most recent information is not available yet.

The District is located within Houston, Texas and there is not a source for obtaining the information specially for the District.


Demographic and Economic Statistics


99

Table 13

Percentage Percentage

of Total of Total

Employer Employees Rank Employment Employees Rank Employment

Wal-Mart Stores, Inc. 32,000 1 1.07 % 29,554 1 1.19 %H-E-B Grocery Co. 21,471 2 0.72 University of Texas, M.D. Anderson 20,357 3 0.68 15,293 8 0.62 Cancer Center Memorial Hermann Healthcare System 20,055 4 0.67 16,248 7 0.65 Houston Methodist Hospital System 16,961 5 0.57 Kroger Co. 15,216 6 0.51 12,803 9 0.52 United Airlines 15,108 7 0.51 Exxon Mobil Corp. 12,814 8 0.43 16,732 6 0.67 Schlumberger 12,207 9 0.41 National Oilwell Varco 11,563 10 0.39 Houston Independent School District 25,521 2 1.03 City of Houston 20,600 3 0.83 Administaff 19,851 4 0.80 Continental Airlines 19,661 5 0.79 Halliburton 11,868 10 0.48

Source: Employment numbers were obtained from the Houston Chronicle for Greater City of Houston area. The District is located within Houston, Texas and there is not a source for obtaining the information specifically for the District.

Percentage of total employment was calculated using total non-agricultural employment for the Houston-The Woodlands-Sugar Land Metropolitan Statistical Area (MSA) and was obtained from the TRACER of Texas Workforce Commission.


Principal Employers

Current Year and Nine Years Ago

2015 2006

100


Operating Information

These schedules provide information about the District’s operations and resources to assist in using the financial statement information to better understand and assess the District’s economic condition.

Position: 2006 2007 2008 2009

Professional Staff

Teachers 3,067 3,238 3,066 3,077

Support Staff Counselors 103 106 106 105 Educational Diagnosticians 53 55 56 60 Librarians 43 44 44 45 Nurses 42 44 45 44 Psychologists 2 2 2 2 Therapists 41 36 39 37 Other Support Staff 274 151 153 154 Subtotal 558 438 445 447

Administrators Administrative/Instructional Officers 8 12 10 9 Assistant Principals 103 107 105 111 Assistant Superintendents 8 9 10 9 Principals 41 40 42 44 Superintendent 1 1 1 1 Teacher Supervisors 33 35 47 42 Subtotal 194 204 215 216

Total Professional Staff 3,819 3,880 3,726 3,740

Educational Aides 503 485 426 417

Auxiliary Staff 1,547 1,782 1,789 1,741 Total Employees 5,869 6,147 5,941 5,898

Source: Texas Education Agency website


Full-Time Equivalent District Employees by Position


101

Table 14

2010 2011 2012 2013 2014 2015

3,081 3,037 2,968 3,102 3,135 3,261

107 116 109 110 118 127 50 38 35 33 38 38 45 46 42 42 39 39 50 51 48 42 32 36 6 14 19 21 10 13

32 34 34 35 37 36 266 312 240 169 185 199 556 611 527 452 459 488

7 9 7 8 10 11 111 116 109 110 108 113

8 8 8 8 9 8 44 41 45 45 45 45 1 1 1 1 1 1

41 40 37 43 44 51 212 215 207 215 217 229

3,849 3,863 3,702 3,769 3,811 3,978

395 518 488 562 548 527

1,885 1,757 1,696 1,637 1,715 1,730 6,129 6,138 5,886 5,968 6,074 6,235


Full-Time Equivalent District Employees by Position


102

Average Cost

Fiscal Daily Operating per

Year Enrollment Attendance Expenditures (1) Student

2006 47,664 43,247 348,900,151$ 8,068$ 2.1 %

2007 45,609 41,573 354,998,130 8,539 5.8

2008 45,139 41,143 371,613,621 9,032 5.8

2009 45,367 41,396 384,953,788 9,299 3.0

2010 45,582 41,634 413,464,878 9,931 6.8

2011 45,830 41,996 415,543,840 9,895 (0.4)

2012 45,464 41,987 391,284,615 9,319 (5.8)

2013 45,773 42,308 402,843,431 9,522 2.2

2014 46,313 42,772 427,472,163 9,994 5.0

2015 47,376 43,548 466,089,893 10,703 7.1

(1) Operating expenditures are total expenditures less debt service and capital outlay.

(2) GASB Statement No. 65 was implemented for the year ended August 31, 2014. 2013 and prior have been restated regarding expensing of bond issuance costs.

GASB Statements No. 68 and 71 were implemented for the year ended August 31, 2015. 2014 and prior were not restated for GASB 68 and 71, and reclassifying the activities of the enterprise funds to the general fund effective September 1, 2014.



Operating Statistics


Percentage

Change

103

Table 15

Government Cost Student to

Wide per Teaching Teacher

Expenses (2) Student Staff Ratio

376,641,031$ 8,709$ 2.3 % 3,067 15.5 68.5 %

385,499,723 9,273 6.5 3,238 14.1 69.2

398,669,443 9,690 4.5 3,066 14.7 70.0

414,294,232 10,008 3.3 3,077 14.7 76.3

441,903,077 10,614 6.1 3,081 14.8 78.3

438,438,146 10,440 (1.6) 3,037 15.1 78.6

416,182,034 9,912 (5.1) 2,968 15.3 80.8

426,118,217 10,072 1.6 3,102 14.8 81.7

454,018,709 10,615 5.4 3,135 14.8 80.9

483,924,820 11,112 4.7 3,261 14.5 80.3

Students in


Operating Statistics


Percentage of

Percentage Free/Reduced

Change Lunch Program

104


Table 16

County Statewide

Fiscal Minimum Maximum Average Average

Year Salary (1) Salary (1) Salary (2) Salary (2)

2006 39,000$ 64,183$ 44,084$ 41,743$

2007 41,500 67,126 46,825 44,897

2008 43,000 69,767 48,232 46,178

2009 44,000 71,337 49,376 47,158

2010 45,500 75,239 50,236 48,263

2011 46,500 76,881 50,712 48,639

2012 46,000 76,881 50,536 48,375

2013 46,000 75,492 51,124 48,821

2014 47,300 76,903 52,356 49,692

2015 50,000 79,753 54,284 50,715

(1) Source: District records(2) Source: Texas Education Agency website


Teacher Base Salaries


105

Building: 2006 2007 2008 2009

High Schools

Hastings (1973)Square footage 495,243 495,243 495,243 495,243 Capacity 7,455 7,455 7,455 7,455 Enrollment 3,429 3,179 3,145 3,261

Elsik (1981)Square footage 505,830 505,830 505,830 505,830 Capacity 7,282 7,282 7,282 7,282 Enrollment 3,312 3,134 3,343 3,301

Taylor (2001)Square footage 502,000 502,000 502,000 502,000 Capacity 3,000 3,000 3,000 3,000 Enrollment 2,958 2,719 2,795 2,783

Kerr (1994)Square footage 122,682 122,682 122,682 122,682 Capacity 800 800 800 800 Enrollment 770 765 788 806

Hastings Ninth Grade Center (1999)Square footage 190,572 190,572 190,572 190,572 Capacity 2,654 2,654 2,654 2,654 Enrollment 1,090 1,078 1,035 970

Elsik Ninth Grade Center (1999)Square footage 190,572 190,572 190,572 190,572 Capacity 2,654 2,654 2,654 2,654 Enrollment 1,106 1,112 1,083 999

Annex (1987)Square footage 105,946 105,946 105,946 105,946 Capacity * * * *Enrollment * * * *

Alief Learning Center (1994)Square footage 84,000 84,000 84,000 84,000 Capacity 728 728 728 728 Enrollment 205 344 224 160

Middle Schools

Alief (1968)Square footage 222,579 222,579 222,579 222,579 Capacity 1,380 1,380 1,380 1,380 Enrollment 1,099 1,029 1,014 1,045

Olle (1974)Square footage 152,317 152,317 152,317 152,317 Capacity 1,450 1,450 1,450 1,450 Enrollment 1,085 1,034 1,035 1,153



School Building Information


* Enrollment and capacity for the Annex are included with the respective high school campus.

106

Table 17

Page 1 of 4

2010 2011 2012 2013 2014 2015

495,243 495,243 495,243 495,243 495,243 495,243 7,455 7,455 7,455 7,455 7,455 7,455 3,353 3,304 3,202 3,212 3,302 3,299

505,830 505,830 505,830 505,830 505,830 505,830 7,282 7,282 7,282 7,282 7,282 7,282 3,265 3,253 3,295 3,302 3,292 3,321

502,000 502,000 502,000 502,000 502,000 502,000 3,000 3,000 3,000 3,000 3,000 3,000 2,835 2,869 2,840 2,834 2,895 3,084

122,682 122,682 122,682 122,682 122,682 122,682 800 800 800 800 800 800 771 802 778 800 809 787

190,572 190,572 190,572 190,572 190,572 190,572 2,654 2,654 2,654 2,654 2,654 2,654 1,018 1,009 1,005 988 930 937

190,572 190,572 190,572 190,572 190,572 190,572 2,654 2,654 2,654 2,654 2,654 2,654 1,031 1,063 985 1,001 971 1,026

105,946 105,946 105,946 105,946 105,946 105,946 * * * * * ** * * * * *

84,000 84,000 84,000 84,000 84,000 84,000 728 728 728 728 728 728 170 171 204 163 151 137

222,579 222,579 222,579 222,579 222,579 222,579 1,380 1,380 1,380 1,380 1,380 1,380 1,067 966 916 941 982 992

152,317 152,317 152,317 152,317 152,317 152,317 1,450 1,450 1,450 1,450 1,450 1,450 1,025 1,000 954 1,052 1,098 1,101

107

Building: 2006 2007 2008 2009

Middle Schools (cont.)

Killough (1976)Square footage 191,540 191,540 191,540 191,540 Capacity 1,784 1,784 1,784 1,784 Enrollment 1,040 1,007 981 920

Holub (1981)Square footage 171,442 171,442 171,442 171,442 Capacity 1,620 1,620 1,620 1,620 Enrollment 1,141 1,040 1,028 1,060

Albright (1983)Square footage 174,145 174,145 174,145 174,145 Capacity 1,620 1,620 1,620 1,620 Enrollment 1,403 1,283 1,240 1,269

O'Donnell (1993)Square footage 192,655 192,655 192,655 192,655 Capacity 1,400 1,400 1,400 1,400 Enrollment 1,243 1,127 1,143 1,182

Intermediate Schools

Owens (1994)Square footage 112,693 112,693 112,693 112,693 Capacity 1,323 1,323 1,323 1,323 Enrollment 1,024 1,039 1,051 1,061

Klentzman (1995)Square footage 104,500 104,500 104,500 104,500 Capacity 1,458 1,458 1,458 1,458 Enrollment 1,049 1,048 1,043 975

Youngblood (1996)Square footage 110,093 110,093 110,093 110,093 Capacity 2,365 2,365 2,365 2,365 Enrollment 1,069 1,075 1,137 1,128

Mata (1999)Square footage 111,226 111,226 111,226 111,226 Capacity 2,695 2,695 2,695 2,695 Enrollment 1,010 1,013 911 892

Miller (2000)Square footage 119,419 119,419 119,419 119,419 Capacity 1,284 1,284 1,284 1,284 Enrollment 943 953 989 993

Budewig (2003)Square footage 115,400 115,400 115,400 115,400 Capacity 1,250 1,250 1,250 1,250 Enrollment 1,304 1,171 1,088 1,110

Elementary Schools

Youens (1965)Square footage 101,977 101,977 101,977 101,977 Capacity 1,286 1,286 1,286 1,286 Enrollment 919 935 919 959




108

Table 17

Page 2 of 4

2010 2011 2012 2013 2014 2015

191,540 191,540 191,540 191,540 191,540 191,540 1,784 1,784 1,784 1,784 1,784 1,784 1,007 973 993 938 969 1,046

171,442 171,442 171,442 171,442 171,442 171,442 1,620 1,620 1,620 1,620 1,620 1,620

914 926 879 893 876 868

174,145 174,145 174,145 174,145 174,145 174,145 1,620 1,620 1,620 1,620 1,620 1,620 1,278 1,239 1,186 1,245 1,252 1,265

192,655 192,655 192,655 192,655 192,655 192,655 1,400 1,400 1,400 1,400 1,400 1,400 1,198 1,300 1,273 1,233 1,273 1,271

112,693 112,693 112,693 112,693 112,693 112,693 1,323 1,323 1,323 1,323 1,323 1,323

955 923 1,002 1,026 1,041 1,099

112,693 112,693 112,693 112,693 112,693 112,693 1,634 1,634 1,634 1,634 1,634 1,634

979 1,047 994 948 964 1,044

110,093 110,093 110,093 110,093 110,093 110,093 2,365 2,365 2,365 2,365 2,365 2,365 1,115 1,151 1,140 1,148 1,105 1,113

111,226 111,226 111,226 111,226 111,226 111,226 2,695 2,695 2,695 2,695 2,695 2,695

860 855 826 819 815 813

119,419 119,419 119,419 119,419 119,419 119,419 1,284 1,284 1,284 1,284 1,284 1,284

925 927 898 917 923 875

115,400 115,400 115,400 115,400 115,400 115,400 1,250 1,250 1,250 1,250 1,250 1,250 1,136 1,193 1,165 1,224 1,173 1,202

101,977 101,977 101,977 101,977 101,977 101,977 1,286 1,286 1,286 1,286 1,286 1,286

995 1,024 1,069 1,062 1,006 1,002

109

Building: 2006 2007 2008 2009

Elementary Schools (cont.)

Boone (1969)Square footage 115,282 115,282 115,282 115,282 Capacity 1,176 1,176 1,176 1,176 Enrollment 879 837 783 891

Martin (1970)Square footage 99,000 99,000 99,000 99,000 Capacity 1,128 1,128 1,128 1,128 Enrollment 993 962 960 922

Chambers (1971)Square footage 101,832 101,832 101,832 101,832 Capacity 1,200 1,200 1,200 1,200 Enrollment 766 711 612 628

Smith (1972)Square footage 115,419 115,419 115,419 115,419 Capacity 1,093 1,093 1,093 1,093 Enrollment 971 856 899 869

Mahanay (1973)Square footage 102,995 102,995 102,995 102,995 Capacity 1,384 1,384 1,384 1,384 Enrollment 745 752 748 733

Kennedy (1975)Square footage 100,034 100,034 100,034 100,034 Capacity 1,376 1,376 1,376 1,376 Enrollment 901 906 908 901

Chancellor (1977)Square footage 94,555 94,555 104,573 104,573 Capacity 1,200 1,200 1,376 1,376 Enrollment 906 888 830 808

Liestman (1978)Square footage 99,916 99,916 99,916 99,916 Capacity 1,251 1,251 1,251 1,251 Enrollment 1,047 1,162 874 801

Petrosky (1979)Square footage 98,221 98,221 98,221 98,221 Capacity 1,176 1,176 1,176 1,176 Enrollment 841 829 809 731

Heflin (1981)Square footage 85,964 85,964 85,964 85,964 Capacity 1,001 1,001 1,001 1,001 Enrollment 878 785 720 688

Cummings (1983)Square footage 91,822 91,822 91,822 91,822 Capacity 1,076 1,076 1,076 1,076 Enrollment 672 645 609 616




110

Table 17

Page 3 of 4

2010 2011 2012 2013 2014 2015

115,282 115,282 115,282 115,282 115,282 115,282 1,176 1,176 1,176 1,176 1,176 1,176

920 864 828 839 894 906

99,000 99,000 99,000 99,000 99,000 99,000 1,128 1,128 1,128 1,128 1,128 1,128

909 901 932 931 926 964

101,832 101,832 101,832 101,832 101,832 101,832 1,200 1,200 1,200 1,200 1,200 1,200

599 601 656 683 756 788

115,419 115,419 115,419 115,419 115,419 115,419 1,093 1,093 1,093 1,093 1,093 1,093

787 787 725 751 806 886

102,995 102,995 102,995 102,995 102,995 102,995 1,384 1,384 1,384 1,384 1,384 1,384

751 741 704 721 713 793

100,034 100,034 100,034 100,034 100,034 100,034 1,376 1,376 1,376 1,376 1,376 1,376

872 845 842 837 797 811

104,573 104,573 104,573 104,573 104,573 104,573 1,376 1,376 1,376 1,376 1,376 1,376

781 766 763 785 780 847

99,916 99,916 99,916 99,916 99,916 99,916 1,251 1,251 1,251 1,251 1,251 1,251

881 893 925 883 878 905

98,221 98,221 98,221 98,221 98,221 98,221 1,176 1,176 1,176 1,176 1,176 1,176

686 652 633 672 673 650

85,964 85,964 85,964 85,964 85,964 85,964 1,001 1,001 1,001 1,001 1,001 1,001

712 793 769 744 753 828

91,822 91,822 91,822 91,822 91,822 91,822 1,076 1,076 1,076 1,076 1,076 1,076

581 603 545 586 602 646

111

Building: 2006 2007 2008 2009

Elementary Schools (cont.)

Rees (1984)Square footage 92,424 92,424 92,424 92,424 Capacity 984 984 984 984 Enrollment 1,025 918 696 698

Alexander (1984)Square footage 92,424 92,424 92,424 92,424 Capacity 984 984 984 984 Enrollment 768 881 883 889

Hearne (1987)Square footage 97,400 97,400 97,400 97,400 Capacity 1,176 1,176 1,176 1,176 Enrollment 1,127 1,053 967 1,080

Landis (1989)Square footage 104,523 104,523 104,523 104,523 Capacity 1,760 1,760 1,760 1,760 Enrollment 735 709 739 789

Sneed (1990)Square footage 104,523 104,523 116,991 116,991 Capacity 1,580 1,580 1,756 1,756 Enrollment 1,064 1,055 989 1,055

Best (1991)Square footage 104,532 104,532 104,532 104,532 Capacity 1,785 1,785 1,785 1,785 Enrollment 933 828 743 793

Outley (1994)Square footage 94,967 94,967 94,967 94,967 Capacity 1,773 1,773 1,773 1,773 Enrollment 1,088 973 965 1,000

Hicks (1996)Square footage 111,881 111,881 111,881 111,881 Capacity 2,094 2,094 2,094 2,094 Enrollment 1,245 1,266 947 894

Bush (1997)Square footage 111,881 111,881 111,881 111,881 Capacity 2,086 2,086 2,086 2,086 Enrollment 968 835 843 902

Collins (1999)Square footage 112,327 112,327 112,327 112,327 Capacity 2,684 2,684 2,684 2,684 Enrollment 937 923 898 879

Horn (2005)Square footage 110,800 110,800 110,800 110,800 Capacity 1,100 1,100 1,100 1,100 Enrollment 975 881 863 850

Holmquist (2007)Square footage 121,423 121,423 Capacity 1,040 1,040 Enrollment 980 923




112

Table 17

Page 4 of 4

2010 2011 2012 2013 2014 2015

92,424 92,424 92,424 92,424 92,424 92,424 984 984 984 984 984 984 685 715 686 681 717 730

92,424 92,424 92,424 92,424 92,424 92,424 984 984 984 984 984 984 885 932 879 831 871 837

97,400 97,400 97,400 97,400 97,400 97,400 1,176 1,176 1,176 1,176 1,176 1,176 1,112 1,056 1,080 1,151 1,169 1,020

104,523 104,523 104,523 104,523 104,523 104,523 1,760 1,760 1,760 1,760 1,760 1,760

778 868 882 890 952 925

116,991 116,991 116,991 116,991 116,991 116,991 1,756 1,756 1,756 1,756 1,756 1,756 1,142 1,212 1,177 1,232 1,190 1,258

104,532 104,532 104,532 104,532 104,532 104,532 1,785 1,785 1,785 1,785 1,785 1,785

853 745 827 846 879 909

94,967 94,967 94,967 94,967 94,967 94,967 1,773 1,773 1,773 1,773 1,773 1,773 1,085 1,068 1,050 1,058 1,050 1,072

111,881 111,881 111,881 111,881 111,881 111,881 2,094 2,094 2,094 2,094 2,094 2,094

873 851 755 731 729 876

111,881 111,881 111,881 111,881 111,881 111,881 2,086 2,086 2,086 2,086 2,086 2,086

994 986 1,024 961 984 973

112,327 112,327 112,327 112,327 112,327 112,327 2,684 2,684 2,684 2,684 2,684 2,684

879 975 1,071 1,090 1,063 1,117

110,800 110,800 110,800 110,800 110,800 110,800 1,100 1,100 1,100 1,100 1,100 1,100

930 912 936 963 1,137 1,149

121,423 121,423 121,423 121,423 121,423 121,423 1,040 1,040 1,040 1,040 1,040 1,040

990 1,069 1,171 1,161 1,167 1,204

113

Table 18

1. Total General Fund Balance as of August 31, 2015 102,413,345$

2. Total General Fund Nonspendable Fund Balance 1,035,827

3. Total General Fund Restricted Fund Balance

4. Total General Fund Committed Fund Balance 15,500,000

5. Total General Fund Assigned Fund Balance 7,001,735

6. Estimated amount needed to cover fall (9/1/15 - 1/31/16) cash flow deficits in the General Fund (Net borrowed funds and funds representing unearned revenues) 38,062,630

7. Estimate of two months' (9/1/15 - 8/31/16) average cashdisbursements during the fiscal year 71,221,031

8. Estimate of delayed payments from state sources (58XX)including August payment delays 17,740,097

9. Estimate of overpayment from state sources equal to variancebetween Legislative Payment Estimate (LPE) and DistrictPlanning Estimate (DPE) or District's calculated earned stateaid amount

10. Estimate of delayed payments from federal sources (59XX) 15,373,305

11. Estimate of expenditures to be reimbursed to General Fund fromCapital Projects Fund (uses of General Fund cash after bondreferendum and prior to issuance of bonds)

12. Optimum Fund Balance and Cash Flow (sum of lines 2 through 11) 165,934,625

13. Excess (Deficit) Net Unassigned General Fund - Fund Balance (Line 1 minus Line 12) (63,521,280)$


Fund Balance and Cash Flow Calculation Worksheet

General Fund

August 31, 2015

This schedule, a former standardized calculation of fund balance and cash flows for the general fund, isoptional per Texas Education Agency.

114

Documents

Comprehensive Annual Financial Report · a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of Management’s Discussion and