Good morning!  I hope you had a great Spring Break and enjoyed the week.  I certainly did, and Wyvonna and I enjoyed a trip to visit my sister and brother-in-law in Alpine, Texas.  It was good to just get away and relax for a couple of days.  I know we always enjoy our breaks, and now it is time to really focus on our next round of TAKS testing, and to keep the emphasis on improving student success up to the end of the school year.

On the Tuesday night of the week before Spring Break we began our budget work sessions with the Board of Trustees as we start the preparation of the 2009-2010 school year budget.  We have some difficult challenges ahead of us as we develop this budget because of the economic situation and the current school finance funding system being based on "target revenue."  I want to remind everyone that we are building a budget for 2009-10 based on revenues from state and local sources that we received in 2006-07.  Therefore this is the fourth year in which we have to build a budget based on the target revenue established in 2006-07.  I would also remind everyone that we do not get the benefit of property value increases whether from new construction or reappraisals.  We will have more tax revenue paid to us, but for each dollar of tax revenue paid to the school district because of property value increases, the state deducts a dollar from the amount of state aid we receive.  Therefore it is the state of Texas that is benefitting from these property value increases.  For us it is simply a "wash."  We will receive additional revenue from the state because of our student growth, but certainly this will be less than previous years because of the slowdown in our student growth caused by the economic situation.  With property values increasing at a greater percentage than our student growth, and the fact that we do not receive the benefit of that property value increase, we are actually losing revenue.  This school year we grew over 2800 students yet received almost $10 million less from the state than we received the prior year.  It is projected that we will grow a little over 2100 students this next school year, yet we will receive approximately $8.8 million less in state revenue.  A fast-growth school district such as Northside cannot continue to operate under these conditions of target revenue and no revenue growth from property value increases.

Certainly inflationary costs have affected us as well as program costs in some areas.  As we project out our revenues it becomes evident that we would have to use fund balance to take care of the amount our expenses would exceed our revenues.  Week before last at the Texas School Alliance meeting we found out that over 70% of the Alliance districts would have to operate with a deficit budget to just maintain current levels.  Neither we nor these other districts can do this; therefore, the only alternative is to cut back on our expenditures.  This is why, along with the effects of the current economic situation, we have been reviewing every position that becomes vacant to determine whether it will be filled, have cut back on using substitutes in certain vacated positions, did not pay the retention stipend in December, and have asked all departments to review carefully all expenditures.  And as I have mentioned to all school groups I have talked with recently, we may be looking at less than a 3% salary increase.  It is absolutely necessary for the Legislature to do something to help all school districts financially.  I am confident that we will end up with a budget that will meet our needs and keeps us on financially stable footing.  As we proceed I ask that you understand the difficult situation we are in and the importance and necessity of waiting until the Legislature makes some funding decisions before we can finalize anything on the budget.  Also, I emphasize that the financial issues I have talked about are affecting all school districts, and we are probably in better financial condition than most.  It is only the Legislature that can address school funding and solve this situation.

The week before Spring Break the Chairman of the House Education Committee and the Chairman of the Senate Education Committee introduced House Bill 3 and Senate Bill 3.  They are identical bills and address major changes in the state accountability system.  On Friday I spent most of the day in Austin with other school superintendents and staff from the Texas School Alliance districts discussing and going over the bill.  No doubt, if this bill is passed, major changes will occur in the accountability system, the focus of TAKS testing will be on post-secondary readiness, and flexibility will be given in the 4x4 requirements and diploma programs.  I will mention more about these proposed changes as the legislation proceeds through the process.

Congratulations to Roland Sandoval, band director at O'Connor High School, for being selected to membership in Phi Beta Mu, an International School Bandmaster Fraternity.  In order to be considered for membership in Phi Beta Mu, one must have at least ten years of successful teaching experience and must have produced and maintained an outstanding and consistent band program in public schools.  This is quite an honor for Mr. Sandoval and for O'Connor High School.  We are proud of you!

Also, I had mentioned previously that we had four of our high school Academic Decathlon teams qualify for the state competition.  Only Katy ISD had more high schools qualify with five.  At the state competition there were forty teams competing and O'Connor placed 12^th, Warren placed 13^th, Holmes/Business Careers placed 24^th, and Clark placed 35^th.  Each school did very well and several individual honors were brought home by each team.  Also, Adriano Gonzalez of Holmes/ Business Careers High School was named Academic Decathlon Coach of the Year.  We are very proud of all these teams and their coaches, and especially proud of Adriano for his award.  Great job!

Teams from the GT Leadership classes of Clark, O'Connor and Jay were finalists in the National Endowment for Financial Education Junior Duel competition held on February 28.  In preliminary competition, teams had to construct and describe a realistic solution to the financial problems found in a case study provided for the competition.  The solution had to be supported with relevant data and information extracted from student research.  The six finalists were chosen from the written case solutions submitted to the San Antonio CPA Society.  The finalists then had to provide a 10-minute presentation of their solutions to a panel of judges and had to answer questions from the panel of judges regarding their solution.  Students were judged on their problem identification, solution, and the overall quality and professionalism of the students' presentation.  Congratulations to the students from Clark, O'Connor and Jay who competed and placed in this competition.

Again, welcome back after Spring Break!  Even though the weather wasn't perfect, we got some much needed rain.  I hope you have a great week and We Believe in Northside!