Did Round Rock ISD Overcharge Taxpayers by $31 Million?

While RRISD Superintendent Jesus Chavez was drumming up hysteria over teacher layoffs should the state dare to cut the education budget, he revealed something rather surprising: his ISD has a Rainy Day Fund of nearly $200 million, $35 million of which is immediately available. (Since the original interview on KVUE, Dr. Chavez has revised the 'immediately available' figure down to $31 million.) The 'fluidity' of all these numbers prompted me to do some investigating into these mysterious funds.

According to documents available on the RRISD website, the 'Rainy Day Fund' (unreserved balance fund,) is set up to cover the cost of operating the district for 2 full months, (about $57.9 million), and to cover any possible delays in revenue collection (another $117.6 million!). According to what ISD claims it needs to hold, this totals $169.5 million.*  Since there is actually $198,000,798 in the RDF, $31.5 million more in than what they think they need for a 'rainy day,' that is what Superintendent Chavez considers 'available.'

While it does seem wise to have some reserve funds, the ISD formula leading to $169 million seems overly generous. Between 2003 and 2007, the reserve fund grew from $68.6 million to $115 million, but seems to have made a huge jump since then. Even if the district can justify amassing such an astronomical amount, one would assume the fund was established to be spent at some point. Furthermore, if we accept the premise that the district needs to sit on $169 million, why are they collecting $31.5 million more than 'needed'? Since the Round Rock ISD property tax rate, at $1.38, is significantly higher than the state average of $1.22, perhaps we the taxpayers are being drastically over-charged.

In investigating the RRISD finances, I found some other disturbing trends. The current bond debt stands at $739,213,931, (including an increase of over $53 million dollars between June 2009 and June 2010). Interest on district bond debts is $44 million for 2011, but will climb to a whopping $108 million in 2016. (In the meantime, the ISD has another $91.3 million in a debt service fund reserve.) Perhaps part of the justification for such hefty reserves is that, like many other government entities, the ISD has a looming debt crisis of its own.
I suspect that much of the scaremongering by our school districts is an attempt to direct attention toward the state budget and away from any scrutiny of district spending and borrowing. Ironically, these districts are demanding use of the State's Rainy Day Fund, but seem completely unwilling to make any cuts or tap into their own, sometimes extensive, backup funds. It is disingenuous (and frankly disgusting) for these districts to use children and teachers as 'hostages' when there are other ways to manage the economic recession. Parents and taxpayers should not be deceived, but should demand an accurate picture of the ISD finances.

*RRISD Annual Financial Report, pg. 69