Popular Annual Financial Report For the fiscal year ended in August 31, 2014.

Harris County/Houston, Texas

6 3 0 0 IR V IN G TON B L V D .

H OUSTON , TEXAS 7 7 0 2 2

713-694-6300

w w w . hcd e - t e x a s . o r g

Always Educating Always

Always Educating Always Educating Always Educating Always Educating Always Educating Always Educating Always Educating Always

Educating

Educating Harris County/Houston, Texas

3

Message from the Superintendent

3

Letter to the Community

4

About Harris County/Houston, Texas

5

Mission, Goals, and Governance

6 7

Administrative Officials About the Department

Property Values and Taxes

9

Number of Districts/Entities Served Economic Impact to ISDs

13

11

Impacting the Lives of Children in Harris County Business Indicators

19

Financial Strength and Efficiency Indicators General Fund - Tax Revenue Sources of Funds Uses of Funds Grants Debt

24 25

Capital Projects

22 23

21

26

Business Awards and Accomplishments

14

20

27

a message from the superintendent Thank you for your interest in Harris County Department of Education (HCDE). The Popular Annual Financial Report (PAFR) offers a comprehensive snapshot of HCDE’s success in facilitating programs and services that impact the lives of learners across Harris County. This report also offers insight into our financial transparency, and it showcases our efficiencies in operations. Established in 1889, HCDE continues to evolve in its capacity to serve Harris County area school districts, local municipalities, charter schools, and taxpayers. Operating from a very small tax base, we are proud of our ability to leverage federal, state, and local dollars. By doing so, we are able to increase our services to the students and districts across Harris County. Harris County is composed of approximately 4.25 million people, is the largest county in Texas, and the third most populous county in the United States. The city of Houston and Harris County remain on the cutting edge of innovative technology, industry, healthcare, and education. As a result, the students of Harris County benefit in ways unlike the majority of students across the state and nation. HCDE is committed to continuing to serve as a catalyst for all learners. We are committed to our exceptional track record in equalizing education as we advance teaching and learning. We applaud the school districts of Harris County for their continued confidence in our programs and services, and we thank the residents of Harris County for their support of public education. To learn more about HCDE, please visit www.hcde-texas.org. Again, thanks for your interest in Harris County Department of Education! We look forward to serving you. Sincerely,

James Colbert, Jr. County School Superintendent

letter to the community We are pleased to present the HCDE Popular Annual Financial Report (PAFR) for the fiscal year ended August 31, 2014. This report is designed to make the financial operations of the Department easy to understand for our citizens and other readers. We have also included information about our program and service delivery to the learners and taxpayers of Harris County. Our staff is committed to provide quality financial information that is transparent and readily available to the public. We have created a transparency page at http://www.hcde-texas.org/docs/221-HCDEFinancialTransparency.pdf to further highlight our fiscal results and successes. For the past five years, the Department has received the Transparency Award from the Texas Comptroller’s Office (Platinum Level). The PAFR summarizes the financial activities and operating results of the Department and was gathered from the financial information reported in our FY2013-14 Comprehensive Annual Financial Report (CAFR). The CAFR is a more comprehensive document that is prepared in conformance with generally accepted accounting principles (GAAP) and audited by Whitney Penn, P.C., who expressed an “unmodified” (the highest) opinion, meaning that—in their opinion—the financial statements present fairly, in all material respects, the respective financial position of the governmental activities of the Department. The PAFR is unaudited and presented on a GAAP basis. While the underlying accounting methods are similar to the CAFR, the PAFR simplifies reporting by not including all segregated funds, required presentations, and full disclosure of all material financial and nonfinancial events in the notes to the basic financial statements. Citizens desiring to review the CAFR may obtain a copy from the Business Support Services Division at (713) 696-8249, or may view it on the HCDE website at www.hcde-texas.org. Respectfully,

Jesus J. Amezcua, Ph.D., CPA, RTSBA

about harris county/houston, texas HCDE is located in Harris County in the upper Gulf Coast region of Texas, approximately 50 miles from the Gulf of Mexico. Harris County, with 4.36 million people, is the largest county in Texas and remains the third most populous in the United States. It ranks as one of the top ten fastest growing counties in the nation. Harris County’s population base includes a wide variety of racial, ethnic, and socio-economic groups that give the area a rich diversity and cosmopolitan feel. Harris County and the Houston metropolitan area comprise a leading region of business development in the nation. Houston continues to be a leader in aerospace, industrial engineering, and medical research, but diversification is fueling the local economy. The County’s major hospitals, many of these concentrated just south of downtown Houston in the Texas Medical Center, offer world-class facilities for general and specialized medical needs. Houston is the fourth largest city in the nation, and, in 2014, employment is higher than at any point of Houston’s history. It is important to note that 90 percent of new jobs are in non-energy dependent sectors, thus continuing to add diversity to the overall Houston economy. These positive economic indicators should continue to positively affect the Department’s tax base. In fiscal year 2014, there were 25 public school districts, as well as charter, private, and parochial schools located either entirely or partially within Harris County. The County is also home to many colleges, universities, institutes, and technical schools.

m a p o f 25 h a r r i s co un ty s cho o l dis tricts

North Forest

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2014 Popular Annual Financial Report

mission, goals & governance our m is si o n Harris County Department of Education: Catalyst For Excellence in Educating All Learners

goals HCDE will: • Implement research initiatives assessing community educational needs • Partner with business to research career readiness • Develop effective programs securing/promoting educational success for every learner • Gather data informing the educational community of proven strategies • Create innovative delivery systems and models promoting strategies • Inform, educate, and train educators • Leverage resources for the best outcomes

organi zat i on a l au t h o rity a n d g overn a n ce HCDE, a political subdivision of the state of Texas, is located in Houston. It was created by the Texas Legislature in 1889 and operates under provisions of former Chapters 17 and 18 of the Texas Education Code and other laws applicable to school districts. The Harris County Board of Education (Board), elected by voters of Harris County, Texas, has governance responsibility over all activities and operations of the Department. The Board consists of seven members who serve overlapping, six-year terms. The Department is a primary governmental unit and is not included in any other governmental “reporting entity.” The Harris County Department of Education Public Facility Corporation (PFC) has been included as a blended component unit in the financial statements of the Department. The PFC, a legally separate entity, is reported as a capital projects fund that is part of the Department’s operations, and its purpose is to finance the Department’s construction and building acquisition needs. The Education Foundation of Harris County (EFHC) is included as a discretely-presented component in the financial statements of the Department. The EFHC, a non-profit entity, was set up to raise money to support the Department. A financial statement may be obtained from the office of the EFHC. No other organizations meet the criteria specified by GASB 39 to be included as a component unit within the reporting entity.

angie chesnut President

debra kerner Vice-President

howard jefferson Trustee

erica lee Trustee

Marvin Morris Trustee

kay smith Trustee

2 0 1 3 -2 0 1 4 boa r d o f t r u s t e e s

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2014 Popular Annual Financial Report

diane trautman Trustee

administrative officials James colbert, jr. County School Superintendent Jesus J. Amezcua, Ph.d., CPA, RTSBA Assistant Superintendent for Business Services Celes Harris, M.Ed. Assistant Superintendent for Student Services Linda Pitre, Ed.D. Assistant Superintendent for Professional Support Services

Public

Board of Trustees Attorney Superintendent James Colbert

Assistant Supt. of Professional Support Linda Pitre

Assistant Supt. of Student Services Celes Harris

Assistant Supt. of Business Services Jesus Amezcua Special Assistant to Superintendent Jimmy Wynn

Executive Director of Facilities Les Hooper

Director of Research/Evaluation Jeannette Truxillo

Director of Client Development Services Louise Henry

Director of Choice Partners Derek Gillard

Chief Accounting Officer Rosa Maria Torres

Director of Technology Danny Vu

Senior Director of Therapy Services Jean Polichino

Director of Grants Development Gayla Rawlinson

Director of CASE for Kids Lisa Caruthers

Director of Construction Jay Atkins

Director of Purchasing Jorgannie Carter

Director of Texas Virtual Schools Angela Smith

Senior Director of Special Schools Dee Mattox-Hall

Director of Alternative Certification Lidia Zatopek

Chief Information Officer Jim Schul

Director of Maintenance Sonny Janczak

Director of Adult Education Eduardo Honold

Director of Communications & Public Information

Tammy Lanier

Director of Records Management Curtis Davis

Director of Head Start Venetia Peacock

Director of Safe and Secure Schools Ecomet Burley

Director of Curriculum Services Brenda Mullins

Organizational Chart Key

Effective 3.5.2015

Executive Director of Human Resources Natasha Truitt

Executive Leadership Team Members

Leadership Team Members

6

Principal of Highpoint East Marion Cooksey

Principal of Highpoint North David Oquin

Principal of ABC West Victor Keys

Principal of ABC East Mindy Robertson

Campus Principals

2014 Popular Annual Financial Report

about the department p rofi le o f t h e d e pa rt me nt HCDE is an entity separate and distinct from county agencies of Harris County, Texas. The Department was the original school district in Harris County, Texas, established by the Texas State Legislature in 1889. While virtually all the other county school districts in Texas became obsolete as independent school districts incorporated and assumed the responsibilities of facilitating public education, HCDE’s service strategy evolved rapidly to respond to educational and community needs. As a result, HCDE is one of only two remaining county school districts in the state. The Department’s primary service area, geographically, covers 1,788 square miles. The Department offers services to 25 rural, suburban, and urban school districts, located either entirely or partially within Harris County, to neighboring school districts and governmental agencies in surrounding counties, as well as to schools, education service centers, and other governmental agencies statewide.

p rog ram s a n d se rv i c e s Adult Education: Offers classes to educationally disadvantaged adults beyond compulsory school age in the Houston/Harris County metropolitan area. Call 713-692-6216. Alternative Teacher and Principal Certification Programs: Trains and supports degreed professionals to become teachers and administrators. Candidates attend teacher training and teach in a public school with the guidance of an assigned teacher/mentor. Call 713-696-0775. Business Services: Through the School Finance Council, HCDE’s Business Services division serves school district business managers and CFOs. HCDE’s School Finance Council provides training and pertinent information relative to school finance and business operations. Call 713-696-8249. Center for Safe and Secure Schools: Advances safe and secure environments in schools; now offering Emergency Operations Plan Assistance. Call 713-696-3142. Choice Partners Cooperative: Provides best-value, shared-services solutions, direct facilities consulting, and legal, competitively bid contracts to schools, higher education, municipalities, counties, and other governmental and nonprofit organizations. No member fee; sign an interlocal contract to join. Call 1-877-696-2122. Center for After-School, Summer and Expanded Learning: Mobilizes the community to work together to ensure that every child in Harris County has access to an after-school program. Call 713-696-1331. Early Childhood Intervention–ECI Keep Pace: Serves families with children under age 3 with developmental delays or disabilities. This statewide agency is hosted regionally by HCDE and covers northern Harris and southern Montgomery counties, including 13 school districts. This program will end in FY2015. The children will be served by a different entity. Call 281-397-4000. Head Start Area I: Empowers preschool children ages 3-5 and their families with school readiness skills. Head Start is a federally funded program for low-income families administered locally by HCDE. Call 713-672-9343. Instructional Support Services: Provides professional development and instructional support to administrators, teachers, support personnel, students, parents, and the community. Call 713-696-8200. Center for School Governance, Executive Leadership, and Fiscal Accountability: Conducts and presents research, management and program performance reviews, strategic planning, efficiency studies, and training/consultation to school board members and administrators. Call 713-696-8259.

7

2014 Popular Annual Financial Report

about the department Records Management: Provides low-cost, high-tech solutions to store records for governmental entities. Develops records control schedules and provides training, consulting, electronic imaging, microfilming, and commercial record center services. Call 713694-9022. Research and Evaluation: Provides quality, scientific-based evaluation services that meet the needs of HCDE, school districts, and other community groups. Call 713-696-8291. Resource Development/Texas Center for Grants Development: Supports efforts to locate and obtain funds which forward new programs, program enhancement, and expansion needs. Call 713-696-8293. Special Schools: Assists area school districts by providing special and alternative schools. HCDE’s Special Schools meet the needs of students with disabilities as well as those who have been expelled and/or are adjudicated youth. Call 713-696-8218. Therapy Services: Provides assessment, intervention, consultation, training, and direct service to children with disabilities and their families. Call 713-696-8232.

How is HCDE funded? HCDE generates approximately 76% of the funding it uses to serve children and adult students through grants and by charging reasonable fees for the services it provides. Approximately 24% (or 1/4) of HCDE’s funding is generated from a local property tax rate that may never exceed ONE cent. The average homeowner in Harris County pays an estimated $9 per year to HCDE. Do school districts pay the full cost of services provided by HCDE? HCDE has a below-market fee structure that reduces cost to districts. The current two-thirds of 1-cent property tax rate collected by HCDE creates the organizational infrastructure of management and accountability that allows the services that HCDE provides to be developed. Does HCDE have services that can be accessed by out-of-county entities? Services from out-of-county entities generate additional revenues that HCDE uses to support services to Harris County educators, districts, and students while not costing Harris County taxpayers a dime. Again, this is one way in which HCDE leverages its resources for taxpayers from approximately $20 million to about $75 million.

8

2014 Popular Annual Financial Report

property values and taxes ta x aut h o r i t y HCDE received its tax authority in 1937 by Harris County voters authorizing an equalization tax not to exceed $0.01. Consistent with statutory requirements, equalization tax funds are expended to equalize educational opportunities and advance public free schools in Harris County. HCDE follows the Texas Comptroller’s Truth in Taxation - A Guide to Setting Tax Rates for Taxing Units Other than Schools.

a b ou t p ro pe rt y ta x e s The tax year runs concurrently with the calendar year, January 1 through December 31. Property taxes are levied by October 1 in conformity with Subtitle E., Texas Property Tax Code, on the appraised value listed as of the prior January 1 for all real and business personal property located within Harris County Department of Education’s taxing jurisdiction of Harris County, Texas. Taxes are due upon receipt of the tax bill in October. On February 1st of each year, a tax lien attaches to property to secure the payment of all taxes, penalties, and interest ultimately imposed. Taxes become delinquent if not paid before February 1. On July 1, additional penalties and interest are imposed on unpaid taxes. Appraised values are established by the Harris County Appraisal District of Harris County, Texas. The Department’s property tax rate is established in accordance with state law. The Department’s County Board of Education sets the equalization tax rate. Currently, the Department does not have a debt service rate. Billing and collection of tax levies are performed by the Harris County Tax Assessor-Collector’s Office. Tax revenues received are used in financing the Department’s general government expenditures, in accordance with applicable law.

Tax R ate s a n d Va l u e s The Department’s tax rate for the 2013 tax year was $.006358 per $100 assessed property valuation. The assessed property valuation for the same period was $315.5 billion, resulting in an adjusted tax levy of $25.9 million. The assessed valuation increased 9 percent from $289.6 billion in tax year 2012 to $315.5 billion in tax year 2013. The ‘current tax’ collection rate for fiscal year 2013-14 was 98.71 percent, an increase of .21 percent from the fiscal year 2012-13 current tax’ collection rate of 98.5 percent. The average (homeowner) taxpayer paid $9.67 per year. Tax values are assessed as of January of each calendar year. The tax assessments for tax year 2014 will be collected in fiscal year 2014-2015.

9

2014 Popular Annual Financial Report

property values and taxes FISCAL YEAR

TAX YEAR

TAX RATE

ACTIVITY-ALL TAX YEARS CURRENT AMOUNT PERCENT TAX LEVY COLLECTED COLLECTED

ASSESSEDAPPRAISED VALUES

UNCOLLECTED AT 8/31/2014

2014

2013

0.006358

$20,064,263

$19,805,270

98.71%

$315,575,070,777

$258,993

2013

2012

0.006617

19,167,433

18,882,728

98.51%

289,669,533,021

130,408

2012

2011

0.006581

2011

2010

0.006581

18,141,665

17,894,045

98.64%

275,667,298,681

94,933

17,889,672

17,625,587

98.52%

271,838,192,122

80,064

2010

2009

0.006050

17,176,403

16,782,324

97.71%

283,907,489,994

77,055

2009

2008

0.005840

16,424,565

16,029,681

97.60%

281,242,543,339

59,691

2008

2007

0.005853

15,021,841

14,862,017

98.94%

254,536,385,397

48,130

2007

2006

0.006290

14,421,398

14,309,733

99.23%

226,221,497,827

48,452

2006

2005

0.006290

13,204,424

12,894,080

97.65%

199,232,651,239

48,291

2004 & PRIOR

2003 & PRIOR

VARIOUS

VARIOUS

VARIOUS

VARIOUS

VARIOUS

125,700

Totals:

$971,717

Principal Taxpayers in Harris County, Texas for Tax Year 2014 RANK

TAXPAYERS

TAXABLE VALUE (a)

PERCENT OF TOTAL ASSESSED VALUE (b)

1

EXXON MOBIL CORP

3,224,580,463

1.02%

2

CENTERPOINT ENERGY INC

2,780,024,858

0.88%

3

SHELL OIL CO

2,372,359,282

0.75%

4

CHEVRON CHEMICAL CO

2,156,757,286

0.68%

5

EQUISTAR CHEMICALS LP

1,256,492,086

0.40%

6

HEWLETT PACKARD

1,217,931,183

0.39%

7

NATIONAL OILWELL INC

1,054,591,372

0.33%

8

CRESCENT REAL ESTATE

917,216,307

0.29%

9

WAL MART

875,506,421

0.28%

10

LYONDELL CHEMICAL CO

784,716,345

0.25%

TOTAL:

$16,640,175,603

5.27%

(a) Taxable value equals appraised value less exemptions (b) Total assessed value: $315.5 (expressed in billions) Source: Harris County (Texas) Appraisal District

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2014 Popular Annual Financial Report

number of districts/entities served Division

Harris County ISDs

Out of County ISDs and ESCs

Other

Private non-profits

Other general entities

Governmental entities

Total Served

Overall Agency

26

692

381

239

110

350

1798

Adult Education

15

0

5

19

0

6

45

Alternative Certification Teachers

12

12

8

0

0

1

33

Business Services

26

51

18

9

7

31

142

CASE for Kids

10

1

11

29

0

0

51

Center for Grants Development

26

43

105

116

61

26

377

Center for Safe and Secure Schools

25

12

6

6

2

23

74

Choice Partners

25

330

177

51

2

245

830

Client Development

25

345

179

50

2

255

856

Communications & Public Information

25

8

10

3

20

4

70

Digital Learning

11

18

4

0

2

1

36

Early Childhood Intervention

10

3

11

12

6

4

46

Facilities

0

0

0

0

0

0

0

Head Start

12

0

10

8

2

4

36

Human Resources

0

0

0

0

0

0

0

Instructional Support Services

26

64

68

13

4

6

181

Purchasing Internal

0

0

0

0

0

0

0

Records Management

19

6

7

2

0

10

44

Research & Evaluation

14

0

3

3

0

1

21

School Governance

25

9

5

0

0

3

42

Special Schools: ABC

20

6

3

0

0

0

29

Special Schools: Highpoint

12

0

0

0

0

0

12

Technology Services

25

413

43

3

2

6

492

Texas Virtual School Network

20

268

28

0

5

2

323

Therapy Services

14

5

8

1

0

1

29

During 2013-2014, HCDE divisions served 1,798 different entities including 26 school districts in Harris County (includes North Forest ISD), as tracked in the Service Delivery database on the HCDE portal. During the year the number of school districts served by divisions ranged from 0 (i.e. three internal support divisions) to all 26 with HCDE divisions serving an average of 16.5 Harris County districts. HCDE also served 692 out-of-county school districts and Educational Service Centers, 381 other educational entities (i.e. charter schools, private schools, and colleges and universities), 350 governmental entities, 239 private non-profit organizations, and 110 other entities. See details by division in the following table. **Overall Agency counts are unduplicated

11

2014 Popular Annual Financial Report

number of districts/entities served in 2013-2014 Furthermore, as is seen in the following table, school districts in Harris County received services from 9 – 19 divisions, with an average of 15.2 divisions. Aldine ISD

18

Goose Creek ISD

17

Pasadena ISD

19

Alief ISD

17

Houston ISD

18

Pearland ISD

15

Channelview ISD

13

Huffman ISD

15

Sheldon ISD

16

Clear Creek ISD

16

Humble ISD

15

Spring ISD

16

Crosby ISD

14

Katy ISD

15

Spring Branch ISD

19

Cy Fair ISD

16

Klein ISD

17

Stafford

13

Dayton ISD

9

La Porte ISD

15

Tomball ISD

14

Deer Park ISD

16

New Caney ISD

12

Waller ISD

15

Galena Park ISD

18

North Forest ISD

9

12

2014 Popular Annual Financial Report

economic impact to isds ESTIMATED SERVICES TO ALL ISD’S/CHARTER SCHOOLS BY USING 2013-14 HARRIS COUNTY DEPARTMENT OF EDUCATION SERVICES Harris County Department of Education is proud to provide this profile of economic impact to the District relative to the identified programs and services. This partnership maximizes the resources available to the District’s students, teachers, and educational leaders and helps HCDE realize its mission as a catalyst for excellence for ALL leaders.

Student Classroom Educator Programs

Number of attendees Number of students at professional receiving services development

Total estimated cost of services paid by district

Total estimated cost with HCDE assistance

Adult Education

-

10,374

-

5,848,322

Center for Safe and Secure Schools

1,690

161,678

430,560

944,485

Cooperative for After-School Enrichment

1,844

6,750

-

8,848,246

Early Childhood Intervention

-

2,291

-

6,279,504

Head Start

37

1,194

-

17,310,090

Instructional Support Services (Professional Development)

4,852

-

584,002

1,575,709

Research and Evaluation

23

-

58,000

622,453

Special Schools

-

1,015

8,388,313

15,256,821

Techology Services Cloud

12,447

34,911

232,710

331,038

Digital Technology

524

-

-

34,824

Therapy Services

-

5,956

7,414,297

10,017,449

Subtotal

21,417

224,169

$17,107,882

$67,068,941

Support Programs

Number of attendees Number of students at professional receiving services development

Total estimated cost of services paid by district

Total estimated cost with HCDE assistance

Alternative Certification

-

-

-

646,014

Business Services

558

-

292,407

361,182

Center for School Governance

2

-

19,805

163,682

Resource Development

1,637

-

560

-

Texas Learns

-

-

-

532,351

Subtotal

2,197

-

$312,772

$1,703,229

Support Programs at no expense to taxpayer

Number of attendees at professional development

Number of students receiving services

Total estimated cost of services paid by district

Total estimated cost with HCDE assistance

"Choice Partners "

6

-

2,974,484

9,561,314

Records Management

-

-

1,411,920

2,403,638

Tx Virtual School

217

-

806,371

1,995,420

Subtotal

223

-

$5,192,775

$13,960,372

TOTALS

23,837

224,169

$22,613,429

$82,732,542

13

2014 Popular Annual Financial Report

s

0

3

2

6

9

2

7

2

8

8

impacting the lives of children in harris county

Economic Impact to Public Schools HCDE and other governmental entities have partnered through interlocal agreements for various governmental services in the areas of adult education programs, alternative certification, school finance trainings, school safety, purchasing cooperative programs, early childhood intervention services. head start programs, instructional training programs, records management, research and evaluation services, technology services, texas learns support, and therapy services. HCDE tax effort: $20,261,566 leveraged to $82.7 million in FY 2013-2014 ->

A 4 to 1 ratio!

23,837 educators served 224,169 students served

PRICELESS

4 to 1 economic impact ratio Cost of impacting the lives of children in Harris County $82,732,542 Cost of services $22,163,429

FY14 HCDE Economic Impact to ISDs Tomball ISD, $793,264 Spring Branch ISD, $2,436,534

Waller ISD, $230,089 Aldine ISD, $3,741,690

Stafford ISD, $414,913 Spring ISD , $7,858,534

Alief ISD, $2,013,913

Channelview ISD, $3,849,462 Clear Creek ISD, $597,319

Sheldon ISD, $2,421,981

Crosby ISD, $1,001,762

Pearland ISD, $559,472

Cypress Fairbanks ISD, $3,955,937

Pasadena ISD, $2,204,824

Dayton ISD, $89,252 Deer Park ISD, $834,958

Other ISDs, $3,148,199

4

Galena Park ISD, $4,169,248

3

2

1

0

Charters In County, $2,216,106

Goose Creek CISD, $3,292,954

Other, Inc. Cities, County, Universities, $12,147,702

0

8

8

8

2

9

4

2

1

4

4

3

4

North Forest ISD, $109,678

Houston ISD, $14,843,683

New Caney ISD, $147,108 La Porte ISD, $1,861,778 Klein ISD, $2,049,790

Katy ISD, $2,682,350

Huffman ISD, $184,192 Humble ISD, $2,875,851

HCDE maximizes tax resources to provide an economic impact to ISDs at a ratio of $4 to $1. Absent HCDE's investtment of resources, Harris HCDEdistricts maximizes resources to provide economic impact ISDs at a at ratio of $4 to $1.tax rate of 1 to 15 cents on their County school would tax be required to generate morean than $82.7M to replacetothe services an average local maintenance and operation (ISDs may have the ability increaseschool their rate due to statutory limitations.) Absent HCDE's rate. investtment ofnot resources, HarristoCounty districts would be required to

generate more than $82.7M to replace the services at an average local tax rate of 1 to 15 cents on their maintennanec and operation rate.

14

2014 Popular Annual Financial Report

Center for After-School, Summer and Expanded Learning 713-696-1332

Over the past 10 years, CASE has raised over $50 million from funding sources including Texas Education Agency (TEA), Texas Workforce Commission (TWC), Houston Endowment, Frost Bank, and the Education Foundation of Harris County. Most of these dollars are then passed on to community partners who operate the programs in our neighborhood schools. • CASE has been providing quality after-school programming to the youth of Harris County since 1999. • CASE also facilitates the CASE AmeriCorps program, placing volunteers inside after-school programs to educate and lead youth in exciting activities, community service projects, and Kids’ Day curriculum. • CASE’s mission is to strengthen, support, and sustain quality after-school programming for all children.

Adult Education 713-692-6216

10,300 Students Served - FY 2013-2014

HCDE’s Adult Education division provides exceptional adult education services to all adults desiring to improve their basic skills in order to obtain a job or advance a career. Obtaining such skills usually leads to the students’ active participation in their communities as well as the ability to help educate their children.

Adult Education services include but are not limited to: • • •

Preparation for the GED Adult Basic Education (Grade equivalent 1-8) Adult Secondary Education (Grade Equivalent 9-12)

English as a Second Language (ESL) is another essential program offering and is delivered in the following sections: • • • •

Levels 1-6 (Beginning Literacy ESL to Advanced ESL) English Language Civics Citizenship Workplace ESL

Did you know?

• HCDE provides Adult Education services in 14 school districts: Alief, Channelview, Crosby, Cy-Fair, Deer Park, Galena Park, Goose Creek, Huffman, Katy, Klein, LaPorte, Pasadena, Sheldon and Spring Branch. • HCDE’s Adult Education division operates two learning centers, one in Houston and the other in Baytown. • We teach over 800 classes a year and we employ 360 employees (mostly part-time staff) to provide these services. • Plus, we offer services in 60 other sites around Harris County in schools, churches, and in other community-based venues.

Educating

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Always Educating Always Educating Always Educating Always Educating Always Educating Always Educating Always Educating Always

Educating

Did you know?

P RO G RA M S

HCDE’s CASE program provides quality after-school programming in 70 after-school sites across greater Harris County, serving approximately 12,000 students in elementary grades through high school.

S ER V ICE S

Always Educating Always

6,750 Students Served - FY 2013-2014

Early Childhood Intervention (ECI) Keep Pace 281-397-4000

Did you know?

Our ECI Keep Pace staff assists children under the age of 3 (from birth to 36 months) with • Developmental delays in movement, communication, social skills, eating, dressing, toileting, or problem-solving • Diagnosed conditions such as Down’s Syndrome or seizure disorder • Unusual development in movement skills or behavior

Children are served in natural environments such as in the home, in child care centers, at mother’s day out facilities, or in other community sites. We provide a wide array of services to families. Visit www.hcde-texas.org for more information. *This program will end FY15. The children will be served by a different entity.

Special Schools Division 713-698-8218

1,000 Students Served - FY 2013-2014

The Special Schools division of HCDE currently serves 25 school districts in Harris and surrounding counties. The four campuses provide highly specialized programs for students from ages 5-22. Our campuses provide alternative pathways for student success. The two Academic and Behavior Center (ABC) campuses serve special education students placed by the Admission, Review and Dismissal (ARD) committees from their home districts. The students have been identified with intellectual or developmental disabilities or are labeled Emotionally Disturbed. Each classroom is staffed with a highly qualified, certified teacher and an educational aide who work with up to six students. The small class sizes offer students individualized or small group instruction to develop their academic and social skills to their full potential. The two Highpoint campuses serve students who have been placed by their home districts for violations of the district’s Student Code of Conduct or Chapter 37 of the Texas Education Code. The Highpoint campuses serve students in grades six through twelve. Each classroom is staffed with a highly qualified, certified teacher who works with up to fifteen students in each class. Academics, credit recovery, and social skills are the emphasis in the curriculum provided to the Highpoint students.

Our four campuses give all of the students the opportunity through alternative pathways to return to their home campuses and districts to be successful. With dedicated staff, caring environments, structured programming, and a strong transition program upon their return, our students are able to successfully re-integrate back into their home districts.

Did you know?

• Our curriculum is aligned with the Texas Essential Knowledge and Skills (TEKS). • High school students are able to recover or accelerate the acquisition of credits to graduate. • A strong social skills program teaches self-discipline, decision-making skills, and personal responsibility for students to own and solve their own problems. • A transition program, with targeted goals, provides support for the student, parents, and home campus staff upon the student’s return to ensure success at the home campus.

Educating

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Always Educating Always Educating Always Educating Always Educating Always Educating Always Educating Always Educating Always

Educating

School districts included in the ECI Keep Pace regional service area of 43 zip codes include Aldine, Conroe, Cy-Fair, Huffman, Humble, Klein, Magnolia, New Caney, Splendora, Spring, Tomball, and Waller. ECI Keep Pace-HCDE, one of 58 ECI programs in Texas, helps families with infants who are developing later than children their age in activities such as sitting, walking, talking, or playing with toys.

P RO G RA M S

ECI Keep Pace serves families of children birth to age 3 with disabilities or developmental delays. Services are regionalized, and HCDE is the affiliate sponsor of the program that now serves 13 school districts surrounding northern Harris County. Special Schools Division 25 school districts.

S ER V ICE S

Always Educating Always

2,200 Students Served - FY 2013-2014

Therapy Services 713-696-8232

Our services include evaluation, intervention, problem-solving, and training.

Did you know?

• Division therapists provided over 17,000 days of service in fulfillment of these contracts, with the most frequently-provided service being occupational therapy • Our services are paid for primarily through contracts from districts and programs on a fee-for-service basis. • HCDE Therapy Service staff goes to schools, homes, day care centers- wherever infants and toddlers spend their days or where school-aged children receive their education.

How they do what they do. Our therapy staff: • • • • • •

Ensures students have proper positioning equipment for sitting and accessing learning materials Teaches self-help skills needed for school including feeding and toileting Improves a child’s mobility so he/she can navigate classrooms, hallways, or playgrounds Fosters social/emotional health through play-based activities Supports teachers by helping them understand the impact of a child’s disability on curriculum content Provides problem-solving strategies that remove obstacles existing in classroom activities or in the environment

Center for Safe and Secure Schools: • • •

Advances safe and secure environments in schools. Offers safety audits and emergency operations plan assistance. Offers training and certification plan assistance.

Center for Safe and Secure Schools www.safeandsecureschools.org

Head Start 713-694-6300

1,200 Students Served - FY 2013-2014

Head Start is a federally-funded program for preschool children from low-income families and HCDE operates 14 Head Start locations. Children who attend Head Start participate in a variety of educational activities. They also receive free vision, hearing, nutrition, and developmental screening, have healthy meals and snacks, and enjoy playing indoors and outdoors in a wholesome setting.

Head Start helps all children succeed. Services are offered to meet the special needs of children with disabilities. Children in Head Start are between the ages of three and five years old.

Did you know?

• Our Head Start division provides services to children and families in at least 43 Zip Codes in east Harris County.

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Always Educating Always Educating Always Educating Always Educating Always Educating Always Educating Always Educating Always

Educating

Our staff also provides training to parents, volunteers, educators, community healthcare professionals, and early intervention professionals. We partner with colleges and universities to assist in creating a new generation of specialists to serve children with disabilities.

P RO G RA M S

Our Therapy Services division has a staff of over 140 specialists including art therapists, music therapists, occupational therapists, occupational therapist assistants, physical therapists, and physical therapy assistants who serve children 0-21 years of age who are challenged by learning disabilities, audio or visual impairments, orthopedic impairments, attention deficit disorder, intellectual disabilities, and/or autism.

S ER V ICE S

Always Educating Always

6,000 Students Served - FY 2013-2014

Instructional Support Services 713-696-8200

The mission of the Instructional Support Services division is to advance excellence in education for all students– one teacher at a time. This group of professionals provides professional development and instructional support to administrators, teachers, support personnel, students, parents, and the community. Our consultants will meet with individual administrators and other staff as part of program improvement planning to help design and meet specified staff development needs. We can also support educators through curriculum development, alignment, and implementation. Consultants may be available on a long-term basis for specified projects.

Always Educating Always Educating Always Educating Always Educating Always Educating Always Educating Always Educating Always

Educating

S ER V ICE S

Always Educating Always

4,800 Students Served - FY 2013-2014

English/Language Arts Mathematics Science Social Studies

We also offer services in the areas listed below: • • • • • • •

Elementary Art Behavior Management Bilingual/ESL Digital Learning Early Childhood Gifted and Talented The Scholastic Art and Writing Awards

Cooperative Programs

Choice Partners Cooperative offers quality, legal procurement and contract solutions to meet government purchasing requirements.

Choice Partners includes: • • • • •

Facilities planning and facility contracts to meet needs for remediation, renovation and remodeling Supplies and service contracts, including a unique school supply catalog Food contracts for bread, dairy, grocery, produce and cleaning/ware washing products. Technology products, cloud services, software, consulting and resources for today’s electronic demands Choice Energy Partners provides energy contractors that help governmental entities exercise power over energy costs

Choice Partners www.choicepartners.org

Records Management Services http://www.hcde-texas.org/default.aspx?name=RecordsHome

Educating

P RO G RA M S

• • • •

AN D

We offer support in the following core areas:

INDICATORS OF SUCCESSFUL BUSINESS OPERATIONS fy20 1 3 -1 4 wa s a su c c e ssf ul yea r fo r hcde. Following are key financial indicators: • • • • • • • • • • • • • • •

Exceeded the 96 percent tax collection rate goal; actual current taxes collected were at 98.7% Administered over $31M in local, state, and federal grants including indirect cost Provided $75.8M in economic benefits through cooperatives, grants, and fees for services, including professional development “Unmodified” opinion expressed by the independent auditors—which is the best type of auditors’ opinion No “Findings” or “Questioned Costs” in the annual financial report Maintained a credit rating of “AAA” from Standard & Poor’s and “Aaa” from Moody’s Received the Certificate of Excellence in Financial Reporting award from Association of School Business International (ASBO) Received the Certificate of Achievement Award of Excellence in Financial Reporting from Government Finance Officers Association (GFOA) Received the Award for Outstanding Achievement in Popular Annual Financial Reporting from the Government Finance Officers Association (GFOA) Received the Meritorious Budget Award from Association of School Business Officials International (ASBO) Received the Distinguished Budget Presentation Award from Government Finance Officers Association (GFOA) Received the Award of Merit for purchasing best practices from Texas Association of School Business Officials (TASBO) Received the Platinum Circle Award in the Texas Comptroller’s Leadership Circle Program (HCDE is the first entity to achieve a perfect score in meeting the Texas Comptroller’s criteria.) Received the Certification from the Government Treasurers’ Association of Texas (GTOT) for the investment policy Received numerous awards through the Texas School Public Relations Association (TSPRA) for various business reporting documents

from WHERE DID FY 2013- 14 REVENUES COME ? HCDE accounts are organized on the basis of funds, including: A) B) C) D)

The General Fund accounts for all revenues and expenditures not reported in another fund. The Special Revenue Funds account for specific revenue sources that are limited to being used for a particular purpose. The Debt Service Fund accounts for the payment of debt. The Capital Projects Fund tracks the accumulation and use of resources for acquiring, constructing, and rehabilitating capital assets such as buildings.

Other Sources

The $1.6M difference between total revenues of $77.4M on page 22 and total expenditures of $75.8M on page 23 will increase the Department’s fund balance for future use.

Local Sources

Local sources of revenue generated $48,156,204, or 62 percent of total revenues. This is an increase of 4 percent over the previous fiscal year. Local revenue sources include charges for services, property taxes, local grants, and miscellaneous revenues. Charges for services are a significant source of revenue for the Department, and in fiscal year 2014, these constituted 30 percent of total revenues. Property taxes (what you, as a citizen, pay for supporting education in Harris County) accounted for 27 percent of total revenues. Other sources, including local grants and miscellaneous income represented 7 percent of total revenues.

State Sources

State sources of revenue totaled $6,720,147 or 9 percent, of total revenues. State revenues decreased this year by $723,337, or 10 percent, over last year, mainly due to a decrease in state funded grants.

Federal Sources

Revenues from federal sources constituted $22,547,986, or 29 percent, of total revenues. These federal sources include grants for the Adult Education, Center for After-School, Summer and Extended Learning, Early Childhood Intervention Keep Pace, and Head Start programs, and various non-major governmental funds. Federal revenues showed a decrease of $10,307,810 from last year due to the last year of funding the Texas Learns initiatives; the GREAT (Getting Results Educating Adult Texans) Center and the WIA (Workers Investment Act) initiative.

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2014 Popular Annual Financial Report

hcde financial strength & Efficiency INDICATORS as o f au g u s t 3 1, 2014

• Efficient Leverage Indicator

• Financial Strength Indicator

GF Fund Balance to Expenditures

How much is available in reserves?

Unassigned Fund Balance $14,901,561 -----------------------------Total GF Expenditures $46,095,791 plus transfers out

Unassigned GF Fund Balance $14,901,561 ----------------------------------Total GF Fund Balances $26,601,199

Goal: Benchmark: Danger:

> 30% of G/F Exp. 10% to 29% Under 10%

Goal: Benchmark: Danger:

32%

Rounded

> 75% 50% to 75% > 50%

56%

GF-General Fund Rainy Day Fund Balance-Funds reserved for the use of unexpected expenditures. Unassigned Fund Balance-Funds not yet restricted, committed, or assigned.

HCDE Efficiency Indicators • Tax Revenue to Total Revenue Ratio

• Fee for Service Revenue Ratio

Total Tax Revenue $20,261,566 -----------------------------Total Revenue $82,722,254

Total Fee for Service Revenues (GF) $22,774,848 ----------------------------------Total Revenues $82,722,254

How are revenues spread across All Funds?

How efficient is HCDE at leveraging local taxes?

Goal: Benchmark: Danger:

< 20% of revenue 20% to 30% More than 30%

Goal: Benchmark: Danger:

24%

> 30% of annual revenue 10% to 29% Under 10%

28%

Rounded

20

2014 Popular Annual Financial Report

general fund - tax revenue fiscal y ea r 2 0 1 4 HCDE Property Tax Use - By Division For the year ended August 31, 2014 $20,261,566

HCDE Property Tax Use By Division For the year ended August 31, 2014

Debt Payment- Debt Service Fund 13%

$20,261,566

Special Schools 11%

Board of Trustees 1%

Note: Divisions generate fees and

Business Support Services 4%

other revenues to offset program costs. The tax allocation for each

Center for Safe & Secure Schools (CSSS) 2% Center for School Governance & Fiscal Accountability 1% Communications

In Kind - Grant Matching Funds 10%

division on this chart is for the

3%

property tax distributed to each

Technology Administration 1%

division based on need in order to

Reserved Fund Balance for future projects & debt 2%

deliver the services to the school

Reserved Fund Balance for program support & debt 2% Education Foundation 1%

districts. In addition, grant funded

Technology Program Support Services 18%

programs also require administrative support from technology, facilities, business, human resources in order to implement their mission.

Facilities- Support Services 10% Therapy Services 1% Department Wide 5%

Resource Development 2% Research & Evaluation 2% Records Management 0%

Human Resources 2% Superintendent's Office 2% Purchasing Support 2%

Instructional Support Svcs 3%

Note: Divisions generate fees and other revenues to offset program costs. The tax allocation for each division on this chart is for the property tax distributed to each division based on need in order to deliver the services to the school districts. In addition, grant funded programs also require administrative support from technology, facilities, business, human resources in order to implement their mission.

HCDE Division

Amount

HCDE Division

Amount

ABC-East

$925,663

Human Resouces

433,038

ABC-West

587,013

Instructional Support Svcs-Professional Development Services

343,958

Adult Education Program (Matching Funds)

136,665

Purchasing Support Services

427,646

Alternative Teacher Certification

143,119

Records Management Services

91,861

Assistant Supt Budgets

465,329

Research & Evaluation

422,130

Board of Trustees

194,851

Resource Development

501,075

899,935

Scholastic Arts Program

48,151

311,389

Special Education- Therapy Services

224,625

Center for School Governance & Fiscal Accountability

99,791

Special Schools Administration

437,649

Communication & Public Information

653,013

Superintendent's Office

505,113

Client Development Services

410,161

Technology Program Support Services

3,688,795

Technology Administration

169,658

Business Support Services Center for Safe & Secure Schools

(CSSS)

Department Wide

1,002,028

Transfers out (pass through monies for programs)

Facility Expenditures

1,958,740

Matching Funds- CASE After School Program Fund

550,787

Reserved Fund Balance for future projects & debt

484,097

PFC Debt Payment- Debt Service Fund

1,877,199

Facility - Construction Services

124,696

QZAB Debt payment - Debt Service Fund

1,877,199

Education Foundation

200,704

Matching Funds ECI Fund

1,282,149

Highpoint East

243,752

Highpoint-North

56,003

Total All Divisions

$20,261,566

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2014 Popular Annual Financial Report

from where did fy2013-2014 money come? fiscal year 2014

FY 2013-14

FY 2012-13

LOCAL SOURCES Charges for Services

$22,774,848

$21,794,986

20,261,566

19,375,195

4,653,717

4,417,941

466,073

672,441

48,156,204

46,260,563

Grants-Restricted to Specific Program

4,710,852

5,713,001

TRS On-Behalf Payments

2,009,295

1,732,483

6,720,147

7,445,484

22,547,986

32,855,796

$77,424,337

$86,561,843

Property Taxes, Levied for General Purposes Local Grants Miscellaneous

Total Local Sources:

STATE SOURCES

Total State Sources:

FEDERAL SOURCES Grants-Restricted to Specific Program

Total Revenues: major funds

s pecial revenue funds General

Head Start Program

Federal Great Center Project

Houston Endowment Grant

Nonmajor Total Governmental Governmental Funds Funds

$43,502,487

$-

$100,000

$1,186,048

$3,367,669

$48,156,204

State Program Revenues

2,720,828

-

-

-

3,999,319

6,720,147

Federal Program Revenues

1,658,526

10,355,948

1,210,299

-

9,323,213

22,547,986

$47,881,841

$10,355,948

$1,310,299

$1,186,048

$16,690,201

$77,424,337

REVENUES Local Sources

Total Revenues

22

2014 Popular Annual Financial Report

HOW WAS FY2013-14 MONEY SPENT? EXPENDITURES

FY 2013-14

FY 2012-13

Adult Education Program

$4,150,520

5.47%

$4,619,062

5.53%

Alternative Teacher Certification

511,485

0.67%

301,613

0.36%

Assistant Superintendents' Offices

465,329

0.61%

458,711

0.55%

Board of Trustees

194,851

0.26%

158,756

0.19%

Business Support Services

1,654,106

2.18%

1,605,591

1.92%

Center for Safe & Secure Schools

747,801

0.99%

409,064

0.49%

Center for School Governance & Fiscal Accountability

129,596

0.17%

177,207

0.21%

Choice Facility Partners

1,592,628

2.10%

1,579,519

1.89%

Client Development Services

410,161

0.54%

403,990

0.48%

Communications & Public Information

653,013

0.86%

653,799

0.78%

Center for After-School, Summer and Expanded Learining

6,932,759

9.14%

8,171,013

9.77%

Department Wide

5,489,076

7.24%

5,509,651

6.59%

Digital Learning

1,607,457

2.12%

2,057,974

2.46%

Early Childhood Intervention Keep Pace

4,871,057

6.42%

5,130,418

6.14%

Education Foundation

200,754

0.26%

200,035

0.24%

External Relations Office

0

0.00%

6,265

0.01%

Facilities Support Services

451,170

0.59%

552,735

0.66%

Head Start Program

13,604,585

17.93%

14,495,379

17.34%

Human Resources

924,157

1.22%

874,293

1.05%

Instructional Support Services

1,223,398

1.61%

965,705

1.16%

PFC Capital Projects

0

0.00%

26,845

0.03%

Preschool Initiative

36,600

0.05%

0

0.00%

Purchasing Support Services

427,646

0.56%

394,816

0.47%

Qualified Zone Academy Bonds (QZAB)

110,972

0.15%

311,727

0.37%

Records Management Services

1,527,654

2.01%

1,516,613

1.81%

Research & Evaluation

492,641

0.65%

467,427

0.56%

Center for Texas Grant Development (Resource Development)

504,065

0.66%

551,069

0.66%

Retirement Leave Benefits

410,154

0.54%

219,305

0.26%

Scholastic Arts & Writing Program

72,286

0.10%

71,961

0.09%

Special Education Related Services-Therapy

7,931,371

10.46%

7,703,718

9.22%

Special Schools Program

10,623,818

14.00%

9,977,362

11.94%

Superintendent's Office

505,248

0.67%

370,259

0.44%

Technology Support Services

4,192,273

5.53%

4,145,077

4.96%

Texas LEARNS

421,492

0.56%

6,857,589

8.20%

Principal on Long-Term Debt

1,916,429

2.53%

1,811,428

2.17%

Interest on Long-Term Debt

651,734

0.86%

841,469

1.01%

Bond Issuance Costs

220,000

0.29%

0

0.00%

100.00%

$83,597,445

100.00%

debt service:

Totals: $75,858,286

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2014 Popular Annual Financial Report

GRANTs Grants are resources that are limited to being used for specific purposes by the grantor. During fiscal year 2013-14, HCDE received $31,912,555 in revenues from local, state, and federal grants. This represents a 26 percent decrease of $11,074,183 over fiscal year 2012-13. Below is a chart presenting the last ten years in grants for the Department.

$50,000,000 $45,000,000 $40,000,000 $35,000,000 $30,000,000 $25,000,000 $20,000,000

LOCAL

$15,000,000

STATE

$10,000,000

FEDERAL

$5,000,000 $-

2014

2013

2012

2014 FEDERAL

2011

2010

2009

2013

2008

2012

2007

2006

2011

2005

2010

$22,547,986

$32,855,796

$28,329,457

$30,146,813

$31,919,181

STATE

4,710,852

5,713,001

6,841,825

7,253,451

5,034,166

LOCAL

4,653,717

4,417,941

4,966,634

6,693,136

5,124,748

$31,912,555

$42,986,738

$40,137,916

$44,093,400

$42,078,095

2009 FEDERAL

2008

2007

2006

2005

$32,870,856

$33,069,146

$33,848,308

$30,371,781

$30,814,669

STATE

4,144,134

5,046,756

3,742,295

4,024,874

3,835,931

LOCAL

4,416,313

3,204,374

5,115,563

6,497,405

4,735,049

$41,431,303

$41,320,276

$42,706,166

$40,894,060

$39,385,649

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2014 Popular Annual Financial Report

debt Harris County Department of Education debt service requirements of bonds and notes are payable from future revenues consisting of school contracts. These bonds and notes were issued as 3 through 17-year bonds and notes, with varying amounts of principal maturing each year. The Department is in compliance with all significant limitations and restrictions. Effective interest rates on currently outstanding lease revenue bonds range from 3.5 to 5.75 percent. The QZABs have a zero interest rate. The maintenance tax notes have effective interest rates of 2.4 to 5.75 percent. The Department has never defaulted on any principal or interest payments. Years Ended August 31

Principal

Total Requirements

Interest

2015

2,071,428

462,803

2,534,231

2016

2,156,428

405,063

2,561,491

2017

2,191,428

349,976

2,541,404

2018

2,241,429

293,888

2,535,317

2019

2,301,429

235,849

2,537,278

2020-2023

8,785,716

421,629

9,207,345

$19,747,858

$2,169,208

$21,917,066

TOTALS

HCDE Debt Service Requirements

QZAB Bond* 19%

PFC Lease Revenue Bond** 76%

PFC QZAB Maintenance Notes

Annual debt service requirements to maturity for lease revenue bonds, QZABs, and maintenance tax notes are as follows:

Series

Bond Type

Original Issue

Interest Rates

2006A

LEASE REVENUE

$16,000,000

3.50-5.75%

2/15/2023

$11,440,000

$-

($9,890,000)

$1,550,000

2006B

LEASE REVENUE

5,815,000

3.50-4.50%

2/15/2023

3,715,000

-

(305,000)

3,410,000

2014

LEASE REVENUE REFUNDING

9,635,000

2.40%

2/20/2014

-

9,685,000

(50,000)

9,635,000

2009A

QZAB *

6,320,000

0.00%

8/31/2023

4,514,287

-

(451,428)

4,062,858

2009B

TAX NOTES

1,285,000

-

(195,000)

1,090,000

20,954,287

9,685,000

(10,891,428)

19,747,858

510,678

-

(429,786)

80,892

$21,464,965

$9,685,000

($11,321,214)

$19,828,750

2,000,000 3.00-4.00% 8/31/2019

Totals Deferred Amounts: For Issuance Premiums Totals

Beginning Balance

$16,652,808 $4,062,858 $1,201,400 $21,917,066

Debt principal at August 31, 2014 is comprised of the following individual issues:

Maturity Dates

Maintenance Notes 5%

Additions

Reductions

* QZAB = Qualified Zone Academy Bonds * *Public Facility Corporation

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2014 Popular Annual Financial Report

Amount Outstanding

CAPITAL PROJECTS Ca p ital P ro j e c t s F u n d The HCDE Capital Projects Fund account, on a project basis, for projects financed by the proceeds of bond issues, QZAB bonds, and maintenance tax notes, or for capital projects otherwise mandated to be accounted in this fund. Capital projects for FY14 included an installation of a covered walkway at Highpoint East.

Lea s e R e v e n u e B o n d s In January 2006, the HCDE PFC issued lease revenue bondsSeries 2006A, 2006B, and 2006C. The bonds are earmarked HCDE Parking Garage and Conference Center for the purchase and renovation of a facility for administrative offices, meeting rooms, warehouse, records storage, and printing; and the construction of new ABC and Highpoint schools. Bond money was spent on furnishing and equipping the new facilities. In February 2014, a portion of the 2006A Bond was refunded with series 2014 Refunding.

Q ualified Zone Academ y Bonds (QZAB) In May 2009, the HCDE PFC issued qualified zone academy bonds-Series 2009A. In 1997 the U.S. Congress enacted the Tax Payer Relief Act which authorized Qualified Zone Academy Bonds, allowing qualifying schools and communities to borrow at little or no interest cost. The bonds are earmarked for the energy renovation, furnishing, and equipping of HCDE schools (ABC Centers Interior, HCDE Conference Center

and Highpoint Schools).

Mai nt ena n c e Ta x N ot e s In May 2009, the HCDE PFC issued maintenance tax notesSeries 2009B. The notes are earmarked for energy renovation of buildings used primarily for administrative purposes. Photos depict structures financed by the HCDE Public Facility Corporation (PFC).

26

HCDE Adult Education Learning Center

2014 Popular Annual Financial Report

BUSINESS OFFICe aWARDS AND ACCOMPLISHMENTS Harris County Department of Education’s Comprehensive Annual Financial Report (CAFR) for the fiscal year ended August 31, 2013, was awarded the Certificate of Achievement for Excellence in Financial Reporting by the Government Finance Officers Association of the United States and Canada (GFOA). The Certificate of Achievement is the highest form of recognition for excellence in state and local government financial reporting. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized comprehensive annual financial report, whose contents conform to program standards. Such CAFR must satisfy both generally accepted accounting principles (GAAP) and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe our CAFR continues to conform to the Certificate of Achievement program requirements and we are submitting our CAFR for the current year to the GFOA. The Government Finance Officers Association of the United States and Canada (GFOA) has given an Award for Outstanding Achievement in Popular Annual Financial Reporting to Harris County Department of Education for its Popular Annual Financial Report for the fiscal year ended August 31, 2013. The Award for Outstanding Achievement in Popular Annual Financial Reporting is a prestigious national award recognizing conformance with the highest standards for preparation of state and local government popular reports. In order to receive an Award for Outstanding Achievement in Popular Annual Financial Reporting a government unit must publish a Popular Annual Financial Report whose contents conform to program standards of creativity, presentation, understandability, and reader appeal. An Award for Outstanding Achievement in Popular Annual Financial Reporting is valid for a period of one year only. We believe our current report continues to conform to the Popular Annual Financial Reporting requirements, and we are submitting it to GFOA. Harris County Department of Education has also received the Meritorious Budget Award from the Association of School Business Officials International (ASBO) of the United States and Canada (GFOA) for the fiscal year 2014-15 budget document based on the highest quality that reflects the guidelines established by the national Advisory Council on State and Local Budgeting and GFOA’s best practices on budgeting. The Distinguished Budget Preparation Award is valid for a period of one year only. We believe our current budget presentation report continues to conform to the Distinguished Budget Presentation Award requirements, and we have submitted our fiscal year 2014-15 Budget Presentation to GFOA. On March 25, 2014 Harris County Department of Education was awarded the Platinum Leadership Circle highlighting the organization’s efforts for financial transparency online for the fifth straight year. For more information on the Texas Comptroller Leadership Circle Program, please refer to the Comptroller’s website at http://www.window.state.tx.us/comptrol/checkup/leadership.php.

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2014 Popular Annual Financial Report

The information contained in this Popular Annual Financial Report was compiled by the Business Office. We would like to acknowledge the following individuals for the development of this report: JESUS J. AMEZCUA, Ph.D., CPA, RTSBA, Assistant Superintendent for Business Services ROSA MARIA TORRES, RSTBA, Chief Accounting Officer JOHN WEBER, MBA, RTSBA, Accounting, Reporting and Compliance Officer Individuals wishing to review the full disclosure financial statements should refer to Harris County Department of Education’s Comprehensive Annual Financial Report, which is available online at the HCDE website at www.hcde-texas.org It it the policy of Harris County Department of Education not to discriminate on the basis of race, color, national origin, gender, limited English proficiency, or handicapping condition (s) in its programs.

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