Subject: 2000-2001 Updated Preliminary Summary of Finances

Enclosed is an updated preliminary Summary of Finances (SOF) and other related materials for the 2000-2001 school year. An initial preliminary SOF was mailed out in March 2000. Please note the following concerning these materials:

· 1999 CPTD Value - In accordance with Rider 2 of the Appropriations Act, the CPTD value being used in the LPE column of this SOF (for those districts that did not offer an optional homestead exemption for tax year 1999) is the district's 1998 CPTD value (the value used in 1999-00) increased by 3.86 percent. In the DPE column, the CPTD value being used (for those districts that did not offer an optional homestead exemption for tax year 1999) is the district's final value for tax year 1999 (the "T2" value), as was certified by the Comptroller on June 30, 2000.

For those districts that offered an optional homestead exemption for tax year 1999 as permitted by Section 11.31(n) of the Property Tax Code, the commissioner has determined that an adjustment, as authorized by Section 42.2522 of the Texas Education Code, can be made. The adjustment will be in the form of an adjustment to the final certified "T2' value for tax year 1999. For LPE purposes, the CPTD value that is used on the updated SOF is the district's 1998 CPTD value, less one-half of the 1999 tax year value of the district's optional homestead exemption, increased by 3.86 percent. For DPE purposes, the CPTD value that is used on the updated SOF is the Comptroller's "T4" 1999 value. All calculations under the DPE column, as well as the calculations for salary transition, hold harmless additional aid, and existing debt allotment under the LPE column, that involve the use of the 1999 CPTD value will be made using the "T4" value.

Please be aware that if the CPTD value being used in the LPE column is less than the value being used in the DPE column, the district will be overpaid (assuming the projected student counts and tax collections are accurate).

· Student Counts - All student counts (ADA, FTEs, and enrollment counts) used in the LPE column are the counts on which the appropriation for the Foundation School Program was based. The student counts were originally reported to the agency in the fall of 1998 by the district on the Pupil Projection for the Next Biennium survey. The student counts in the DPE column are agency projections based on the estimates currently being used for the 1999-00 school year. Please keep in mind that the student counts in the LPE column are the basis (along with the estimated CPTD value and tax collections) for the district's cash flow during the year.

· Tax Collections - For Tier II purposes, the M&O tax collection amount on both the LPE and DPE columns has been set to the tax collection limit for DTR (found on page 4 of the SOF). The LPE tax collection limit for DTR will be different than the DPE limit for two reasons. First, the CPTD value used for LPE purposes is different than the CPTD value under the DPE column. Secondly, the LPE limit was calculated, in accordance with statutory provisions, using an estimate of 1998-99 tax collections, while the DPE limit uses actual, audited 1998-99 tax collections. Please keep in mind that the DPE tax collection limit for DTR is the real limit and that the LPE tax collection limit is only used for cash flow purposes.

· "Hold Harmless" Additional State Aid - If the district qualifies for "hold harmless" additional state aid, the amount is shown on page 4 of the SOF under the Additional Aid category. If the district's loss in local revenue resulting from the additional $10,000 homestead exemption is not entirely offset with additional state aid, the difference is made up with additional "hold harmless" state aid. A printout is enclosed showing how the "hold harmless" amount, if any, was derived.

· Salary Transition Entitlement - If the district qualifies for salary transition, the amount is shown on page 4 of the SOF under the Additional Aid category. If the district's cost of the $3,000 raise is not entirely offset with 80 percent of the additional state aid resulting from the funding element increases, the difference is made up with salary transition. A printout is enclosed showing how the salary transition amount, if any, was derived. The number of FTEs for teachers and full-time librarians, nurses, and counselors will be updated when 2000-2001 PEIMS fall submission staff data become available.

· Existing Debt Allotment (EDA) and Instructional Facilities Allotment (IFA) - If the district qualifies for EDA or IFA, the amount of each allotment appears on the first page of the SOF under the Additional Aid heading. A printout detailing the EDA calculations is enclosed.

· Projected Settle-up - The preliminary projected settle-up amount is indicated on page 5 of the SOF in the DPE column. If the district is currently projected to be overpaid for the 1999-00 school year, that projected overpayment is shown as the Adjustments-to-Date amount. If the district is currently projected to be underpaid for the 1999-00 school year, the Adjustments-to-Date amount will be zero, since the underpayment is paid in a lump sum. Please keep in mind that the projected settle-up will change as new data become available.

· Other - This SOF does not yet include the New Instructional Facilities Allotment (NIFA) or the Pre-K Expansion Program grant funds. When those allotments are determined, an updated SOF will be sent to the district.

The Worksheet to Assist Districts in Calculating Rollback Rate and Worksheet to Assist Districts in Completing the Notice of Public Meeting To Discuss Budget and Proposed Tax Rate will only be available through our web page (www.tea.state.tx.us/school.finance).

If you have any questions concerning this mailing, please contact us at (512) 463-9238.

Sincerely,
Omar Garcia, Senior Director
Division of State Funding

For further information on this topic, contact State Funding at (512) 463-9238.

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