School districts are required by state law to ask voters for permission to sell bonds to investors in order to raise the capital dollars required for projects such as renovations of existing buildings or building a new school. Essentially, the voters are giving permission for the District to take out a loan and pay that loan back over an extended period of time, much like a family takes out a mortgage loan for their home. A school board calls a bond election so voters can decide whether or not they want to pay for proposed capital projects. School boards then have the authority to sell bonds when the capital projects are needed.

A facilities assessment was completed last school year that highlighted several maintenance and security needs requiring immediate attention, such as the failing HVAC chiller and piping systems at MIS & HPMS. The November 2024 Bond will address these immediate and necessary capital improvements as well as other district and campus improvements. It will make more funds available to increase HPISD teacher salaries, which continue to lag behind neighboring districts, due to constraints within the state funding formulas.  It will also allow for future facility needs through land procurement. 

The Legislature passed a law in 2019 requiring every school bond proposition to include those six words, regardless of whether the tax rate is actually increasing. The law makes no exceptions. While there is nothing Highland Park ISD can do about this requirement, it is important for the community to understand that the tax rate will not change as a result of the November 5 vote.

The 2024 Highland Park ISD bond proposal is a community-driven plan developed by an advisory committee of HPISD stakeholders. The committee was composed of 23 representatives with various perspectives, including parents, business leaders, and community members. It met repeatedly during the Spring 2024 semester from February through April. The committee ultimately recommended the Board of Trustees consider a $130 million to $140 million bond package, to address immediate capital improvement needs and other campus upgrades, make more funds available to increase teacher salaries, and create future flexibility through land procurement. On August 6, 2024, the Board of Trustees unanimously called for a November bond referendum.

The May 2015 Bond was an intensive capital improvement bond program that focused on building new campuses, making major renovations and additions to existing campuses, and the construction of the Clements Leadership Center, which included upgraded professional development spaces, separate athletic offices, and a new natatorium. The amount of the bond was $361M and required a significant investment from the HPISD community in the form of a tax rate increase.

The proposed November 2024 Bond is much different than the 2015 Bond in scope, cost, and tax rate impact.  The November 2024 Bond is focused on the following areas:

• Immediate Priorities – Includes upgrades and replacements of major mechanical systems, updating outdated facilities, and improving safety and security programs
• Budget & Compensation Optimization Priorities – Focuses on projects that will reduce costs to the District’s general operating budget so that those savings can be used to ensure our teachers and staff earn salaries that are competitive with area districts
• Property Priorities – Acquisition of land to allow future District leaders the opportunity to provide and create the best opportunities for future generations of HPISD students
• Campus & District Priorities –  Intended to support campus facilities and student programs to ensure they are provided adequate resources to facilitate high-level academic instruction and extracurricular activities for all students

With the requested amount of $137.3M, the financial impact to property owners from the November 2024 Bond is significantly lower than the $361M for the 2015 Bond.  There will not be a tax rate increase if the bond is approved.

Bond funds can only be used for the construction, acquisition and renovation of school buildings, the acquisition of land and the purchase of capital equipment such as technology and school buses. Bond funds cannot be used to directly pay for most ordinary operating costs such as salaries, supplies, utilities, etc. However, we can capitalize appropriate bond expenditures to free up otherwise encumbered dollars to help pay for teacher salary increases.

Funding maintenance and technology projects through bonds instead of the general operating budget saves more general operating funds for teacher and staff salaries. Some of the projects in the 2024 bond — such as transportation and various technologies — will save an estimated $2.5 million annually in general operating funds once the projects are fully implemented.

The May 2015 Bond was very successful from a financial standpoint. All projects in the bond were completed timely and under budget. The bond included the demolition and reconstruction of Bradfield, Hyer, and University Park elementary campuses, major renovations and additions to Armstrong Elementary, and the addition of Boone Elementary. In addition, the projects included major renovations and additions to both MS-MIS and HPHS, as well the construction of the Clements Leadership Center, and renovations/maintenance upgrades to Highlander Stadium. 

Voter approval is simply an authorization for the District to sell bonds. The bonds are sold in the future only when the funds are needed. The Board of Trustees will have to take action to authorize each bond sale after approval of a bond referendum. Capital improvements and budgetary items are made public and will be reviewed and approved by the Board before implementation

HPISD enrollment peaked in 2014-15 at 7,091 students and was 6,437 in the most recent 2023-24 school year.  Since the 2016-17 school year, annual Kindergarten classes have been about 100 students less each year than graduating Senior classes.  That trend is expected to continue through 2028-29. Enrollment is currently projected to level out at approximately 6,000 students in the 2029-30 school year and beyond. 

There are several possible reasons for declining enrollment, including a general decline in births across the United States since 2008, families having fewer children than prior generations, and the barrier for young families to live in the Park Cities due to the cost of home ownership, among other factors. 

Ensuring that we continue to invest in HPISD is one possible way to stem the enrollment decline.  Additionally, the District is focusing on providing a high-quality Pre-School option for Pre-K age students which is anticipated to help with mitigating the current enrollment decline trend.

The November 2024 Bond is not about enrollment or student capacity needs.  Instead, the primary goals are to ensure our current facilities are maintained at high levels, to capitalize allowable expenditures to free up dollars for increased staff salaries, to provide land for future facilities development, and to ensure we are providing our current students with the best programs and opportunities for their overall educational development.

During the November 2015 bond assessment, the district did consider the possibility that enrollment would not meet growth projections.  Historically, the District’s growth had met or exceeded demographers’ moderate growth projections.  Therefore, the District believed that planning for the forecasted growth was the more prudent course of action, and not planning for it would be much riskier.  If the district did not plan for the projected growth and it happened, the existing problems would be compounded and the future solution would be much more expensive.  If the district planned for growth and it did not happen, then the schools would have extra capacity of about one extra classroom per grade level, which could be used for other purposes such as grade level libraries, offices, etc.  It is common for schools not to operate at 100% capacity at all times.

Golden Pennies election, right-sizing and budget optimization efforts, salary increases since 2020-21, fund balance increases, early retirement of debt, new ELA and math curriculum, selling bonds for lower interest rates than projected

All schools will benefit from the proposed bond program.  While the financial focus will be primarily on Armstrong Elementary, MS-MIS, and HPHS due to the age of their facilities and mechanical systems, the four new elementary schools will also benefit.  The Community Advisory Committee agreed that every student and every campus should benefit from a successful bond election.

While the new campuses don’t need mechanical, electrical, and/or plumbing replacements, each campus does have its own unique wants and needs for improvements/upgrades.  Just like building a new home, there are some areas of each campus that will need improvements and life cycle maintenance over the next five years and would benefit from bond dollars to help improve the student and staff experience.  In relation to the overall bond, the financial investment in the four new campuses will be less than 1.5% of the total bond amount.

The state legislature sets the cost to educate each student through the basic allotment and other weighted formulas. The basic allotment, however, has not been adjusted since 2019, despite a 20.4% inflation rate increase. The number of students who show up each day, combined with the per student formula, determine the size of HPISD’s overall base budget (i.e., money the district keeps).

The Dallas Central Appraisal District is responsible for assigning property values for homes and commercial properties in the Highland Park ISD boundaries.  DCAD uses current home sales and other data to determine individual property values.  The State Comptroller annually audits all appraisal districts in Texas to ensure that local appraisal districts are assigning appropriate property values that are within a limited range of expected values.  

The public school funding formula in Texas only provides funds for the day-to-day operations of school districts.  Highland Park ISD uses 85% of those funds for employee salaries.  The remaining 15% is used for instructional supplies, ordinary contracted maintenance and repairs, utilities, insurance, and other miscellaneous expenditures.  Funds are not provided in the state formula for larger maintenance and capital expenditures, so school districts use bonds as the primary source of funds to construct, maintain, and upgrade facilities, and purchase capital equipment.

Yes, other Texas school districts are using bond funds to pay for allowable items currently in the Maintenance & Operations (M&O) fund, which frees up M&O dollars to pay for teacher and staff salaries. This strategy is prevalent among school districts greatly impacted by recapture. 

Visit bond2024.hpisd.org for a detailed list of bond projects and more information. 

The Fine Arts programs will realize significant positive benefits from a successful bond.  There are several projects that will directly impact Fine Arts, including:

• Improvements to auditoriums at both MS-MIS and HPHS
• Replacement of needed band & orchestra instruments 
• New band uniforms
• Purchase of trucks and trailers for out-of-town band competitions and activities
• Addition of activity buses to make out-of-town competitions and activities more cost effective and easier to schedule
• Improvements in select Fine Arts classrooms
• Add turf to Grassmere field for improved band practice conditions

Athletic programs would also realize significant benefits from a successful bond.  Some of the projects that impact athletic programs are:

• Replacement of turf in the indoor facility and at the baseball field
• Addition of turf to the MS-MIS athletic field and the Grassmere field
• Improvements to the softball field, including improved batting cages & bullpen areas (new turf is not needed at this time)
• Addition of activity buses to make out-of-town competitions and activities more cost effective and easier to schedule
• Upgrades to Highlander Stadium could also occur with remaining 2015 bond funds, such as new stadium lighting, season ticket seating replacement, visitor restroom renovations, and other miscellaneous improvements

Project planning would begin immediately if the bond is passed in November.  It generally takes about three months to plan and complete a bond sale, so funding to the District could occur as early as February 2025.  While some projects could begin immediately after funding, most projects are expected to be initiated in the summer 2025, with various completion dates depending on the complexity of the project.

Bond dollars legally can only be spent on allowable capital expenditures and not on ordinary operating expenses such as teacher salaries.  However, certain day to day operating expenditures in the District’s annual budget are also allowable bond expenditures.  The challenge with the state funding formula is that almost two-thirds of all tax dollars collected by HPISD for the general operating budget are required to be sent to the state as recapture.  However, no tax dollars collected for bond programs are subject to recapture; 100% of those funds remain in the District.

By moving allowable costs from the general operating budget to the bond program, saved operating dollars are available to increase teacher and staff salaries.  Some of the projects that will help save money in the general operating budget include:

• Annual District-level software – Approx. $1,000,000 annually savings
• Addition of activity buses for extracurricular activities and elementary school field trips – Approx. $400,000 annual savings versus charter bus costs
• Purchase buses for special education bus routes – Approx. $450,000 annual savings versus contracted bus services
• Convert old lighting to LED in older facilities – Approx. $150,000 in annual savings
• Purchase of instructional textbooks and equipment – Approx. $500,000 in annual savings

There will be no change or increase to the tax rate if the bond passes.  Currently, the District has capacity in the I&S budget to provide all of the projects proposed in the November 2024 bond without any tax rate impact to HPISD property owners.

HPISD currently has $306.5M of principal debt. The debt is serviced twice annually and the current debt is scheduled to be fully retired by February 2039, or just under 15 years from today.  Many districts extend their debt payments out 30, 40, or even 50 years.  However, HPISD has historically been more conservative in structuring new debt and has chosen to pay off any new debt within 20 years.  The District will incorporate the same conservative strategy for the 2024 bond to ensure no new debt is extended more than 20 years from the date of issue.

HPISD consistently considers efficiencies to improve current budget conditions and to ensure the district is financially sound.  Since the Texas school funding formula requires a significant portion of Maintenance & Operations (M&O) tax collections to be sent to the state as recapture ($107M paid in recapture by HPISD in 2022-23), and 85% of the District’s budget is already allocated to salaries, there are limited options to realize significant savings.  However, there is constant focus to ensure that the District is responsible stewards of taxpayer dollars and that administration reduces expenditures where possible.

The Golden Pennies election in November 2021, along with support from HPEF Mad for Plaid, PTAs, PTOs, Dads Club, and other support organizations, has provided a significant boost to the HPISD budget and has been instrumental in allowing significant salary increases over the past three years to make teacher salaries more competitive with area districts,  Additionally, District leadership has been proactive to ensure operational efficiencies are realized, available fund balances are invested at the highest possible interest rates while ensuring safety of principal, and staffing levels are aligned with enrollment levels.  Additionally, the growth of the Pre-School program has provided additional funds for the District and increased student enrollment.

Since salaries are 85% of the operating budget, most efforts to cut costs or find spending efficiencies have been focused on being efficient with staffing levels.  It is difficult to cut measurable costs from the final 15% of the budget, since that portion includes instructional supplies, software, utilities, insurance, property tax collections fees, legal and audit services, maintenance contracted services, extracurricular transportation, etc.  However, every effort has been made to be efficient in those expenditures.

The District has also heightened its focus on finding alternative revenue sources, including investment earnings, athletic gate ticket sales, facility rental income, and Pre-School program growth revenues.  As discussed prior, the proposed bond will provide the District with significant opportunities to reduce budgeted expenditures and maximize spending efficiencies.

By maintaining the $0.17 I&S tax rate the past three years, HPISD is in a position to propose a bond and to service the associated new debt with no tax rate increase.  In the summer 2024, the District prepaid $5M of scheduled debt early, and is planning to prepay an additional $6M in the summer 2025.  By prepaying the debt and maintaining the $0.17 tax rate, the District is in a position to service current debt, add debt from a successful 2024 bond election, and still have capacity for future debt when future bond elections are needed for aging facilities and capital equipment. 

HPISD has an “Aaa” underlying rating from Moody’s Investors Service, the highest rating available.  HPISD is one of only three districts in Texas with a Moody’s “Aaa” rating.  Additionally, HPISD has an “AA+” rating from Fitch Ratings, which is based on Fitch’s expectation that the “District will maintain superior financial resilience through a typical economic downturn, underpinned by its sound expenditure flexibility, moderate carrying costs, and a low long-term liability burden.” 

Additionally, HPISD had an audited general fund balance of $35,325,252 as of fiscal year-end 2023.  The fund balance represented 5.37 months of operating expenditures, which is above the five months of fund balance recommended for July 1 fiscal year districts.

Overall, HPISD is in a financially strong and healthy position.

After completing all projects that have a positive financial impact on the M&O budget, the proposed bond is expected to reduce M&O expenditures and/or increase M&O revenues by almost $2.5M annually. Those annual savings/revenues could be used directly to support increasing teacher and staff salaries.    

Unlike M&O tax collections for the general operating budget, I&S tax collections to service bond debt are not subject to recapture.  HPISD keeps approximately one-third of all M&O tax collections, while the remaining two-thirds is sent to the state as recapture.  However, the District keeps 100% of all I&S tax collections since bond program dollars are not subject to any recapture.

The state legislature sets the cost of each student through the basic allotment and other weighted formulas. The basic allotment has not been adjusted since 2019, despite a 20.4% inflation rate increase. The number of students who show up each day, combined with various student formulas determine the size of the overall base budget (i.e., money the district keeps). 

Districts that collect tax revenues that are above the annual allocation provided by the funding formula must send the excess tax collections to the state as “Excess Local Revenue”, or recapture.  If a district does not collect enough local taxes to support their calculated funding formula amount, then the state supplements the local tax collections to ensure the district receives total funding per the formula.

In summary, districts that don’t collect enough taxes to support the budget allocated by the formula receive additional funding.  Districts that collect surplus local taxes above the budget allocated by the funding formula must send the “excess” tax collections to the state.

Since the recapture program started in 1995, HPISD has sent approximately $2,000,000,000 in local taxpayer dollars to the state.

All projects in the bond have estimated useful lives of somewhere between 3 and 30+ years.  The debt will be structured with various maturities, all of which will be less than or equal to the useful life of the assets.  There will be no debt amount that has a maturity beyond the useful life of the asset it is supporting.  

The I&S tax rate is approved for 2024 at $0.17 and will remain at that rate this year regardless of whether or not the bond passes or fails.  Administration will continue recommending the $0.17 tax rate in future years to either pay down current debt early, to service new debt from the November 2024 bond, or a combination of both.  There are not any plans at this time to reduce the tax rate if the bond isn’t approved.

Taxes are frozen for homeowners over 65 and cannot go above their frozen levy amount that was calculated when they turned 65. If the tax rate goes up or their individual property values increase, their tax levy will not increase, and will remain the same for as long as they own the residence and don’t make improvements.

Early voting for the 2024 Bond election is from Oct. 21 – November 1. Election Day is Tuesday, Nov. 5.

You can find a list of polling locations at dallascountyvotes.org