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TEA Correspondence

A Microsoft Word version of this letter is available for download and PRINTING.

September 30, 2008

TO THE ADMINISTRATOR ADDRESSED:

Subject: 2007–08 Near-Final Summary of Finances

The “near-final” Summary of Finances (SOF) for the 2007–08 school year and other related reports have been updated and posted to the School Finance Web site. These reports may be used for the purpose of preparing your district’s annual financial audit. The reports reflect the following important updates and information:

  • ADA and FTEs – The SOF reflects the updated student attendance data submitted by districts through the Public Education Information Management System (PEIMS) in July for the 2007–08 school year. The near‑final calculation of students in weighted average daily attendance (WADA) can be found on line 9 of the SOF. For districts that receive the Pre-K Expansion Grant, adjustments to the ADA and Bilingual ADA related to this program have been subtracted from the refined ADA and Bilingual ADA that were derived from the PEIMS attendance data. Therefore, the Total Refined ADA and Bilingual ADA that are indicated in the SOF will not match districts’ PEIMS submissions. A report entitled Adjusted ADA Detail Report provides the details of this calculation.
  • New Instructional Facility Allotment (NIFA) – The NIFA allotment shown on the SOF has not been changed to reflect actual ADA related to this program. The actual NIFA amount earned in 2007–08 will be reflected on the final version of the SOF in April 2009.
  • ADA Decline Adjustment Section 42.005 of the Texas Education Code provides school districts that experience declines in ADA from one year to the next with an adjustment to their current- year ADA. The ADA of a district may be adjusted to reflect up to 98 percent of the district’s prior-year ADA, depending on the availability of funding. The 2007 General Appropriations Act provided $11 million for the purpose of ADA adjustments in districts with declining enrollments. This level of funding will allow districts with declining enrollments to be funded at 95.60 percent of the ADA they had in 2006-07. A report entitled Adjusted ADA Detail Reportprovides the details of this calculation.
  • Total Tax Collections – The M&O and I&S tax collections your district reported on the Tax Information Survey in summer 2008 have been used on this SOF. If your district did not complete the survey, then budgeted tax collections for the 2007–08 school year as reported to PEIMS will continue to be used until audited tax collections are incorporated on the final version of the SOF in April 2009. If your district receives an Instructional Facilities Allotment (IFA) for a lease-purchase agreement, your district’s local share of the IFA allotment has been subtracted from the M&O tax collection amount.
  • Transportation Allotment Your district’s 2007–08 near-final transportation allotment is based on the data submitted on the 2007–08 Route Services Report.
  • Existing Debt Allotment (EDA)– A report entitled EDA State Aid Calculation reflects the “near- final” state and local shares of EDA based on the updated ADA and CPTD values. Settle-up amounts for 2007-08 will be incorporated into the 2008-09 EDA payments which we expect to make in late October. If your district refinanced eligible debt during the 2007-08 school year, an amendment is required.
  • Instructional Facilities Allotment (IFA) – The state and local shares of IFA have been recalculated to reflect updated ADA and CPTD values. Settle-up amounts for 2007–08 will be incorporated into the 2008–09 IFA fall payments, which we expect to make in late October. If your district has refinanced eligible debt during 2007–08, an amendment is required, and adjustments may be necessary.
  • High School Allotment Your district’s high school allotment is calculated by multiplying your district’s high school (grades 9–12) ADA by $275. Your district’s allotment has been updated with high school ADA from the July 2008 PEIMS submission. See the Other Programs section on the SOF for your district’s updated allotment amount. This allotment is part of your district’s FSP funds, and it makes up a part of each FSP payment.
  • Teacher Salary Allotment Your district’s teacher salary allotment is calculated by multiplying the district’s eligible teachers, librarians, nurses, and counselors by $2,500 or $1,250, depending on their full-time or part-time status. See the Other Programs section on the SOF for your district’s updated allotment amount. The allotment was updated with 2007–08 average counts submitted via the Web-based Foundation School Program (FSP) Application’s Staff Salary Module. Any necessary corrections to the allotment will be made on the final version of the SOF in April 2009.
  • Staff Salary Allotment Your district’s staff salary allotment is calculated by multiplying the district’s eligible staff by $500 or $250, depending on their full-time or part-time status. See the Other Programs section on the SOF for your district’s updated allotment amount. The allotment was updated with 2007–08 average counts submitted via the Web-based Foundation School Program (FSP) Application’s Staff Salary Module.  Any necessary corrections to the allotment will be made on the final version of the SOF in April 2009.
  • State Aid Reduction for WADA Sold – If a Chapter 42 district entered into an Option 4 agreement with a Chapter 41 district, the reduction in state aid for selling WADA has been recalculated using the district’s “near-final” revenue per WADA. An updated report entitled State Aid Reduction for WADA Sold shows how this latest WADA charge is derived. The number of WADA being sold does not reflect the “near-final” WADA that the Chapter 41 district must purchase. The number of WADA bought/sold may need to be adjusted depending on the “near-final” Chapter 41 Cost of Recapture report. 
  • Homestead Exemption Hold Harmless – An updated allotment is included in this SOF reflects the near-final homestead exemption hold harmless state aid related to the $15,000 homestead exemption. See the Other Programs section on the SOF for your district’s allotment amount.
  • Salary Transition Hold Harmless – See the Other Programs section on the SOF for your district’s updated allotment amount. These funds are related to a $3,000 salary increase for teachers and others subject to the minimum salary schedule that was mandated in 1999. The funds are intended to compensate districts for expenses related to delivering that pay raise that are not covered by increases in state aid that resulted from changes in funding components in 1999. The number of teachers and full-time librarians, nurses, and counselors indicated on the SOF is derived from 2007–08 average counts submitted via the Web-based Foundation School Program (FSP) application’s Staff Salary Module.
  • Additional Aid for School Employee Benefits – These funds are intended to help pay for health care coverage that was mandated in 2001. Any necessary corrections to the allotment will be made on the final version of the SOF in April 2009.
  • Additional State Aid for Frozen Levy Reduction  – A new allotment is included in this SOF and can be found in the Other Programs section.  This allotment reflects hold harmless additional state aid due to the passage of House Bill 5 in 2007, which extended the benefits of the M&O tax rate reductions authorized by House Bill 1 in 2006 to the elderly and disabled whose taxes were already frozen.
  • Public Education Grant Allotment The Public Education Grant allotment is not included in this SOF.  It will be incorporated on the final version of the SOF in April 2009.   
  • Reduction in Additional Aid for Per Pupil Allotment – Districts that do not receive Tier I state aid from the Foundation School Fund are subject to a reduction of the per pupil allotment. The reduction in the per pupil allotment is based on the increase in the Available School Fund per capita rate from $238 to $280 and increases in current-year recapture amounts.  This allotment has been updated on the district’s SOF.
  • Revenue Targets For those districts new to Chapter 41 in 2006–07 or later, the WADA used for calculating the Additional State Aid for Tax Reduction (ASATR) revenue targets will incorporate the mid-sized district adjustment authorized in Section 42.104, Education Code.  The application of this adjustment will apply only to the calculations related to the state funding and recapture costs associated with a district’s compressed 2005 tax rate.
  • Chapter 41 Districts below the $319,500 Equalized Wealth Level – Several allotments have been revised for districts that received notification of their Chapter 41 status in July 2007 based on preliminary estimates of property value and WADA, but now have wealth per WADA lower than the $319,500 equalized wealth level based on the PEIMS data and property values used on this report. The calculations of the Homestead Exemption Hold Harmless, the Salary Transition Hold Harmless, and the Additional Aid for School Employee Benefits have been recalculated according to Chapter 42 formulas.

The section of the SOF entitled FSP Allocations and Adjustments shows the amount of each district’s “near-final” settle-up. If the district has been underpaid, the amount owed the district will be paid in October 2008.  If the district has been overpaid, recovery of the amount overpaid will start in September 2008 and will be made by reducing the district’s 2008–09 monthly payments from the Foundation School Fund. The rate of recovery will be based on the same percentage that Foundation School Fund monthly payments are based on in accordance with the district’s 2008–09 payment class. Districts can review their 2007–08 Foundation School Program Payment Ledgers, which are also available on the School Finance Web site.

The State Funding SOF and related reports Web page is located at
http://www.tea.state.tx.us/school.finance/funding/sofweb7.html

If you have any questions about this SOF, please contact a state funding consultant in the Division of State Funding at (512) 463-9238.

Sincerely,

Helen Daniels,
State Funding Director

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