Queue, Inc. is offering public schools free previews of Queue’s best-selling test prep and curriculum-based workbooks. Queue publishes test prep workbooks in reading comprehension and math for grades 2-8 based on the TAKS standards as well as a a wide variety of workbooks in language arts, reading comprehension, math and science ideal for test prep.

Go to http://www.qworkbooks.com/TX/TX.html for descriptions.

Mansfield Independent School District (MISD) in Mansfield, Texas has invested $1.7 million in the Fast ForWord® family of products.

Mansfield Independent School District (MISD) in Mansfield, Texas has invested $1.7 million in the Fast ForWord® family of products from Scientific Learning to help the district's struggling readers and boost the performance of students already at grade level reading proficiency. Designed to accelerate learning by developing the student brain to process more efficiently, the Fast ForWord educational software was purchased this spring will be used this school year by elementary, intermediate, middle and high school students within Mansfield's 37 schools.

"If I go to the gym, I get stronger every time I go. That's what Fast ForWord does, but it challenges your brain," said Dr. Bob Morrison, MISD superintendent. "Lots of programs are trying to help children, but Fast ForWord builds connectivity from the front brain to the back brain. It's the connectivity that's the issue. Therefore, the more you do, the stronger the brain gets."

The decision to implement the software district-wide was made after a yearlong pilot program at the district's Alice Ponder Elementary School. Vernon Newsom, Mansfield's former superintendent, authorized the purchase of the one-site pilot, which delivered Fast ForWord software to the school's 334 second, third and fourth graders.

By the end of the school year, the elementary students' average Reading Progress Indicator gain was 1.1 years in 45 days and their performance on the 2008 Texas Assessment of Knowledge and Skills (TAKS) rose by seven points. "That was the largest gain they've had in several years," said Morrison who assumed the position of superintendent in July 2009. "We found that students who were struggling made great gains, and students already at grade level were now reading two to three levels above. With Fast ForWord, along with other changes implemented by the school staff, Alice Ponder Elementary rose from the rank of Academically Acceptable to Recognized."

Goals for the full-scale implementation of the software differ depending on the grade level. Every elementary student is expected to work on the programs to create a foundation for success. Middle and high school principals will have the flexibility to determine the greatest needs their schools have and use the program accordingly. "Fast ForWord has different levels of exercises, so the school that has had every kid pass the TAKS can implement it differently than the school with struggling kids," said Morrison.

Full-scale adoption of the Fast ForWord program will commence in the 2009-10 school year. The reading intervention software is being installed this summer, and staff members will receive training in August and early September.

Forney Independent School District Selects Wireless Network to Enable E-Book Learning Initiative

Forney Independent School District of Texas is building its wireless network with Bluesocket’s next-generation, high-performance WLAN solution including its award winning 802.11n 1800 series BlueSecure^TM Access Points. The Texas school district serves over 7,600 students located in fourteen schools composed of grades K-12.

To proactively address fiscal constraints, the District launched a 1:1 student notebook initiative in 2004 to overcome a shortage of text books. Through the E-Book Program each student in grades 5-12 will receive an 802.11n-enabled notebook pre-loaded with curriculum-specific course materials including electronic text books, homework assignments and in-class testing. Initially piloted at one of the elementary schools, the district-wide program roll out will be completed during the 2010-2011 school year.

With the success and continued growth of the E-Book program, the District recognizes the need for advanced network management capabilities and user location tracking. They continue to add Access Points as new schools are brought into the program and require fast, reliable and automatic network access. As the program expands across the District, IT administrators need an efficient and effective way to administer the technology and monitor network usage.

“A high-speed, reliable 802.11n wireless network that offers location-based tracking and simultaneous user log-in is essential to the success of the E-Book program,” says Mark Hunter, Network Engineer at Forney Independent School District. “We also knew we needed a solution that would provide significant scalability and performance and Bluesocket’s vWLAN™ architecture is ideally suited to meet our needs. At the client level, our teachers are focused on delivering the highest quality education to our students and don’t have the time or resources to deal with connectivity issues or slow network performance. The Bluesocket solution is a great fit with simple licensing, massive scalability and robust performance. As well, the ability to integrate with and extend the investment of our existing third-party access points was a huge bonus for the District.”

Bluesocket surpassed tough competition during an extensive test period, both in product performance and onsite support. With Bluesocket’s assistance, Hunter was able to set up a 3-month demo at one of the elementary schools. “Having unlimited access to the Bluesocket hardware and onsite engineering support was really amazing. Bluesocket made it clear from the beginning that they view our relationship as a long-term partnership, now and in the future,” says Hunter.

Following the test period Bluesocket worked closely with Hunter to customize a solution for the Forney District. The initial implementation is scheduled to be completed this summer and will support the two high schools with more than 250 high-performance 1800 series BlueSecure™ 802.11n Access Points. Once the district is fully implemented, the Bluesocket deployment will have in excess of 700 high-performance 1800 series BlueSecure™ 802.11n Access Points. Additionally, the Bluesocket management system will enable the District to leverage and extend the life cycle of their existing network, improve network security with location-based controls and secure guest access, and reduce IT administrative time through a single management platform.

Palestine ISD

This predominately rural district is located in Anderson County, approximately 95 miles southeast of Dallas and 135 miles north of Houston. Encompassing 220 square miles, the district includes the city of Palestine, which is located at the intersection of various major highways. Government, retail trade, and transportation/warehousing are some of the largest non-agricultural employment sectors. County unemployment levels historically exceed those of the state and nation, and the April 2009 unemployment rate continued that trend at 7.2%. Wealth levels are below those of the state; however, this is somewhat mitigated by the lower cost of living of the region. Roughly one third of the district's tax base is residential with another one third commercial/industrial. Reaching a total of $1 billion in fiscal 2009, tax base growth has been steady over the past five fiscal years, averaging annual gains of approximately 8% during this time period.

The area's population has remained fairly stable with minimal growth since the 2000 Census at an average annual rate of less than 1%, which was below that of the state. Ongoing demographic patterns have led to a trend of flat to modestly declining enrollment. With a small enrollment base of approximately 3,300 students in fiscal 2009, the district's enrollment has fluctuated in recent years, with a slight decline of less than 1% on average annually since fiscal 2004. District officials project ongoing, modest enrollment declines over the near term, although new and improved school facilities may draw more students to the district.

The district has typically maintained strong financial reserves, although urgent capital needs have pressured prior years' operating results, assisted by maximum O&M tax rate levies and new, more conservative financial management. Audited results for fiscal 2008 continued the positive trend and the district reported a healthy solid unreserved general fund balance of $7.9 million or almost 32% of spending in fiscal 2008, which exceeded the district's operating reserve policy amount of at least three months of expenditures. Despite an originally budgeted operating deficit, district officials anticipate closing fiscal 2009 with positive operating results and a modest addition of $450,000 to general fund reserves. Preliminary information regarding fiscal 2010 includes the expectation of a balanced budget, even with modestly declining enrollment assumptions.

Prior to the current authorization of $64 million approved by voters in May of 2009, the district had very little general obligation debt outstanding. With a history of failed bond elections, deferred capital needs have been pressing. The current offering represents the entire authorization passed by 60% of the voters, which should position the district well to meet a substantial portion of its deferred capital needs. The authorization will be used for renovation, expansion, and improvement to all district facilities and it is expected to meet the district's capital needs for the next 10 years. With the current issue, debt levels are high, reaching 6.8% of TAV on a direct basis or almost $3,900 per capita without consideration of possible state support on this issuance. Under somewhat optimistic tax base growth assumptions, the district's debt service tax rate is projected to remain near the maximum allowed by state law to issue new debt. Amortization is below average at 22% in 10 years.

Cypress-Fairbanks ISD

The district is the third largest in the state in terms of student population. It is located in west and northwest Harris County and covers 186 square miles, including the unincorporated communities of Cypress and Fairbanks, as well as the City of Jersey Village. Enrollment has grown at a rapid clip, averaging over 5% over the last five fiscal years. The slowdown of single family home construction in the last two years resulted in a lower than previously projected enrollment growth rates; however, enrollment is still experiencing large annual increases of 3,500 to 4,000 students. District officials have revised enrollment estimates for the next three years to reflect the slower near-term growth. Although the district's tax base is primarily residential, the commercial component represents almost one-fourth of the taxable value. Tax base growth has averaged more than 10% per year for the past five years, including a $3.5 billion increase in fiscal 2009 to $31.4 billion.

The 'AA-' long-term rating reflects the district's solid tax base, sound management practices, historically healthy financial position, and operating and capital pressures associated with rapid enrollment growth. The district's debt burden is high and is expected to remain high due to the its substantial capital needs and slow principal amortization. Considering the district's rapid growth, its financial position remained stable over time. However, fiscal 2008 operations were significantly pressured due to lower than expected enrollment growth and budget pressures from implementation of HB1, which changed the school funding formula. Further significant declines in the district's fund balance reserves will likely put downward pressure on the its underlying long-term bond rating.

For fiscal 2008, the district posted a large $24 million deficit, reducing its total fund balance levels to $55 million, or 9% of operations, down from $79 million, or 14% in fiscal 2007. The district adopted a balanced budget for fiscal 2009 and expects to add an estimated $4 million to fund balance. The district made significant expenditure adjustments to the budget to achieve these results including no pay increases, the elimination of about 450 teaching positions, and cutting support positions. The district maintains one of the lowest cost per pupil in the state, reflective of management's prudent fiscal stewardship and tight budgetary measures. The district's 2010 budget includes a $9.5 million general fund surplus, despite the opening of three new campuses.

Fort Bend ISD

Located in northeastern Fort Bend County, the district is a rapidly growing residential and commercial sector of the Houston metropolitan statistical area (MSA). Along with continuing residential development, particularly in the county's many master-planned communities, expanded high-technology development has supplemented the county's historical base of mineral production, manufacturing, and agriculture. As a result, taxable assessed valuation (TAV) has nearly doubled over the last nine years to $23 billion in fiscal 2009, from roughly $12 billion in fiscal 2002. Preliminary fiscal 2010 TAV estimates point to more modest growth from the fiscal 2009 values.

The current offering represents the second installment of $428 million, the district's largest bond package, approved by a wide margin at an election held in November 2007. The district's current debt service tax rate of $0.23 per $100 TAV compares favorably to other school districts with similar growth pressures. The voters were presented with the possibility of debt service tax rates increasing to a maximum of $0.32 per $100 TAV to support the entire bond program, and the district anticipates a modest three and a half cent increase to the current tax rate as a result of this offering.

Direct debt is moderately high at over $2,200 per capita and nearly 4% of TAV even after adjusting for state support for about 14% of the outstanding district debt. Overlapping debt attributable to 46 entities (including many MUDs) is substantial, totaling nearly $1.2 billion, increasing the district's overall debt burden to over $5,000 per capita and nearly 9% of TAV. Debt service carrying charges remain moderate at 11% of general and debt service funds in fiscal 2008. Principal amortization is slow at 34% in 10 years, which is not unusual for fast-growing school districts.

Despite the fast enrollment growth trend over the last few years, the district has maintained strong financial operations due to extensive cost-containment efforts and conservative revenue projections in the development of its annual budgets. After several years of slight decreases in financial margins due to planned drawdowns for one-time capital expenditures, the district added annually to its operating reserves for five years from fiscal years 2003 to 2007. At the close of fiscal 2007, the district maintained a solid unreserved general fund balance totaling $107.4 million, or 25% of spending. For fiscal 2008, the district posted a $9 million deficit due to lower than budgeted enrollment gains and corresponding expenditure increases associated with staffing for the expected larger student base. Despite this deficit, the district's unreserved fund balance remained healthy at $93.4 million, or 19.7% of spending. The fiscal 2009 adopted budget assumed another $9.5 million drawdown; however, due to its conservative assumptions and tight budgetary controls, the district now expects to end the year with balanced results. The district's financial management staff is working to close a $15 million preliminary budget deficit for fiscal 2010. The preliminary budget is based on minimal enrollment growth.

Fort Bend County's population, estimated at 532,141 in 2008, has grown by 50% since the 2000 census population count of 354,452. The population of Sugar Land, the county's largest city, similarly grew by a rapid 26% to nearly 80,000 during the same period. Growth in the county has been sustained by the continued development of master-planned communities. Despite the slowdown in home sales, the median home price in the Houston MSA has held steady at about $150,000 and experienced very modest swings in prices since 2005. The county's unemployment rate of 6% in April 2009 remains well below state and national averages of 6.4% and 8.6%, respectively. Wealth levels of the county's population are notably higher than those for the Houston MSA and state.

Corpus Christi ISD

Corpus Christi Independent School District is the one of the largest in the state with an enrollment of nearly 38,000, serving a population of about 208,000. The district includes a significant portion of the city of Corpus Christi (general obligation bonds rated 'AA-' by Fitch). TAV gains have averaged 8.6% annually in the last five years with officials projecting continued growth but at a more moderate pace. Although enrollment has been essentially flat, increased residential development, particularly in the southern sector of the district, is expected to modestly increase the district's student population in the lower grade levels.

Corpus Christi is the eighth largest city in Texas. The area's economic base consists primarily of petrochemicals, shipping, tourism, agriculture, and the military. The Port of Corpus Christi ranks as the sixth largest in the nation in terms of tonnage and 44th in the world. Padre Island National Seashore, with 68 miles of beach, and Mustang Island State Park are leading tourist attractions. The Corpus Christi Army Depot is the largest industrial employer in south Texas, and there is a U.S. Navy installation in the area. Wealth levels are below state and national norms, although this is somewhat offset by the area's lower cost of living. Comparable to much of the nation, local employment levels have recently experienced softening since last year, although the city's April 2009 unemployment rate of 5.4% remains below county and state rates of 5.7% and 6.4%, respectively, for the same time period.

The district has historically maintained healthy and stable unreserved general fund balances, ranging from 15% to nearly 19% of spending. Moreover, the majority of the general fund balance has historically been undesignated. Audited fiscal 2008 results were again solid with an undesignated general fund balance of $42 million or 16% of spending and above the district's informal target of 15%. The total general fund balance represents 20% of expenditures and transfers out. For fiscal 2009, district officials estimate closing the fiscal year with operating results that either break-even or add modestly to reserves. Fiscal 2010 budget projections currently anticipate increased state funding levels that also provide for mandated teacher salary increases and roughly $2.5 million in one-time, capital project spending that will not drawdown on reserves.

As in the case of most school districts in Texas that have flat to declining enrollment growth, the district will continue to face operating pressures. The district levied an operations and maintenance (O&M) tax rate of $1.04 per $100 taxable assessed value (TAV) in fiscal 2008, the maximum allowable without voter approval under the state's funding formula. Under the funding formula, the school district may increase its O&M tax rate up to a maximum of $1.17 per $100 TAV but requires voter approval to do so. At the district's November 2008 election, the district requested and voters approved an additional two cents levy for O&M effective in fiscal 2009. Moreover, approximately $2 million in budgetary capacity for O&M will be provided by this issuance starting in fiscal 2010 after all outstanding lease revenue bonds have been refunded.

Forney ISD

Located approximately 20 miles to the east of Dallas in Kaufman County, the district encompasses 85 square miles that includes the city of Forney. Housing affordability and the ongoing expansion of the Dallas-Fort Worth metro area have led to accelerated growth in the district over the past decade, although less than half of the district is currently built-out. After posting rapid enrollment increases of 14% annually over the past five years, current year enrollment moderated to a still notable 7.5%, increasing total enrollment to 7,500 students. Similar to student growth, the predominately residential tax base expanded at an annual rate of 16% over the last five years, but slowed to a more moderate 6% in fiscal 2009 as home construction cooled. There is some taxpayer concentration, including a power plant which accounts for nearly 18% of the district's total taxable assessed valuation (TAV). Preliminary values for fiscal 2010 again indicate more modest levels of tax base growth due to the softening of the local housing market.

Financial performance remains stable and adequate with the district recording positive net results in five of the past eight years. However, reserve levels as a percentage of spending have trended downward in light of growing annual expenditure levels. Audited fiscal 2008 results posted an adequate $3.6 million unreserved general fund balance, equal to 8% of spending, down from double-digit reserves as high as 20% in fiscal 2002 and below the district's informal fund balance goal of 12%. For fiscal 2009, district officials estimate adding another $1 million to general fund reserves, assisted in part by the anticipated change of the district's reporting period to June 30, which will provide results on a 10 month basis. Break-even operational results are budgeted for fiscal 2010 according to district officials, during which the district will open its second high school.

Given the district's historical capital needs, its proactive efforts to build facilities slightly ahead of its enrollment needs, and attempts to offset leveraging with future TAV growth, debt levels are high and amortization is slow. After this issuance, overall debt per capita rises to approximately $8,200 and 13% of TAV. The district still has $49.7 million of authorization remaining from a 2006 election. Debt levels may decline slightly over the near term, since there are reportedly no pressing capital needs that require new money issuances, but Fitch anticipates that they will remain high over the long term.

Azle ISD

Azle Independent School District (ISD is bisected by Parker and Tarrant counties in north Texas. The district's primary population center is the city of Azle, a small agricultural center located 15 miles northwest of downtown Ft. Worth. As evidenced by numerous high-end residential developments, Azle is transitioning from an agricultural-based economy into an affluent bedroom community for the Ft. Worth-Arlington metropolitan statistical area (MSA). Primarily residential in its composition, the district's taxable assessed valuation (TAV) has grown by a compound annual average of approximately 13% since fiscal 2005. However, the district's small enrollment base has remained relatively stable at about 5,800 during this same period due to the influx of retirees associated with the higher-end lake-front residential development predominant in the district's newer housing stock.

The district has consistently posted large financial reserves with undesignated fund balances of 34%-38% of expenditures and transfers out since fiscal 2006. Fiscal 2009 results will reflect a planned $5 million drawdown of general fund balance to fund one-time capital projects. The anticipated unreserved undesignated balance will equal approximately 18% of expenditures and transfers and provides ample financial flexibility. The district has an unreserved, undesignated general fund balance policy of three months of operating expenditures and expects to meet its target for fiscal 2009 and fiscal 2010. The district expects a balanced budget for fiscal 2010.

Given that its last authorization was passed in 1997, the district's debt profile is favorable with a direct debt burden of $690 per capita and 1% of TAV after adjusting for state support of about 15% of outstanding debt. Overall debt levels are modest at $1,292 per capita and 2% of TAV. The principal pay-out rate, including the accreted values of outstanding capital appreciation bonds, is above average at 64% in 10 years. The district requested voter approval for a $99 million bond program in May 2008 but the election failed. Pending the results of a facility needs study, the district may seek to issue additional debt in the intermediate term to fund deferred maintenance needs while meeting its general fund reserve policy.

The district's proximity to the Ft. Worth's growing employment base has fueled modest but higher-end residential development. The district's tax base is diverse as its top 10 taxpayers comprise less than 6% of total values. Tarrant County wealth levels are slightly above average, equal to 104% of the state average.

Lubbock-Cooper ISD

Located immediately to the south of the city of Lubbock, the district encompasses 117 square miles and approximately 15,000 individuals, with a portion of the district residing within the city's boundaries. The district is part of the larger Lubbock metropolitan statistical areas (MSA), which is an economic hub in West Texas. Government, retail trade, and education/health services are some of the area's largest non-agricultural employment sectors. Unemployment levels in the area are historically below those of the state and nation, and the metro area's May 2009 unemployment rate continued that trend at 4.6%. While area wealth levels are below average, they are affected by the large student population at Texas Tech University and somewhat mitigated by a lower cost of living in the region. Historically a more rural, agricultural area, available land combined with proximity to the regional Lubbock employment base in conjunction with the district's favorable academic reputation has recently spurred residential development. Reaching a total of $1.2 billion in fiscal 2009, the tax base growth has been very rapid, averaging annual gains of approximately 20% since fiscal 2005. Preliminary values for fiscal 2010 reflect slower although still healthy levels of tax base growth due to the softening of the local housing market. Tax base gains have outpaced rapid enrollment increases during the same time period of not quite 6% on average annually, resulting in a total of almost 3,400 students district-wide by the end of fiscal 2009.

The district's financial position is a credit positive. Despite growth pressures, conservative financial management has generated modest operating surpluses annually since fiscal 2004 and maintained solid reserves of no less than 28% of spending, which exceeded the district's operating reserve policy amount of at least three months of expenditures. Audited fiscal 2008 results continued this positive trend with the district reporting a strong unreserved general fund balance of $9 million or 43% of spending, assisted in part by the change of the district's reporting period to June 30, which provided results on a 10-month basis. Even with the financial impact of opening a new campus, district officials anticipate closing fiscal 2009 with the addition of at least $500,000 to general fund reserves and the fiscal 2010 budget is projected to again produce a modest surplus.

Debt levels are very high and amortization is exceptionally slow, even for a rapidly growing district. After this issuance, direct debt per capita rises to $8,035 and 10% of taxable assessed valuation (TAV); overall debt levels are slightly higher. Almost tripling the district's debt, the current offering represents the entire $80 million authorization approved by 60% of voters in May of 2009, the majority of which will be used to build two new school facilities that are needed to relieve current overcapacity in existing facilities. At current enrollment growth levels, district officials project this authorization will meet capital needs for at least the next five years. The district's debt service tax rate is projected to remain at or near the state's statutory test to issue new debt under possibly aggressive tax base growth assumptions. This issuance will extend the district's amortization schedule to 40 years and in conjunction with its structure, will slow principal payoff to not quite 10% in 10 years.

Coppell ISD

Located approximately 18 miles northwest of downtown Dallas, the district serves the city of Coppell and small portions of Dallas and Irving in northwest Dallas County. The district's most significant growth occurred in the 1990s, and until a few years ago, it was considered to be relatively built out at about 10,000 students. Recently a large 350-acre tract of land around North Lake that lies within the district's property boundaries in the city of Dallas was rezoned to residential use. The property is planned to be developed in five phases over a term of approximately ten years. Although the district estimates a potential 30% increase in student population upon eventual full build-out, the first phase is not expected to generate a student base that would require additional school facilities. Given its lakeside location, proximity to downtown Dallas, and the scarcity of developable land in the area, this property will likely be developed with high-end luxury residences, which will add to the district's already wealthy tax base.

The district's taxable assessed valuation (TAV) has steadily grown at a compound average annual rate of nearly 7% over the last five fiscal years. For Fiscal 2010, however, TAV is projected to decline modestly due to appeals. Although the district's tax base has matured, the prospects for continued TAV growth over time continue to be strong given the ongoing commercial development along major thoroughfares that traverse it. The district's tax base is currently comprised of about 43% residential and 50% commercial and industrial with no taxpayer concentration with the top ten taxpayers comprising about 8.1% of the total tax base. Local wealth levels remain above state and national averages. TAV per capita is high at nearly $173,000, indicative of higher value residential and commercial development.

The current offerings will be used to refund the series 2008 maintenance tax notes plus other outstanding obligations that are currently callable. Also included in the current offering is about $11 million in new money for additional capital needs. In May 2009, the district's voters approved two propositions totaling $55.9 million. Of this amount, $15 million was to refund the maintenance tax notes and $40.9 million for renovations and repairs of facilities, technology updates, and other facility improvements. The refunding will enable the district to restructure its debt while generating about 5% in debt service savings. Including the current offering, the district's overall debt ratios are moderate and the principal amortization rate is below average with 42% retired in ten years.

Financial performance and reserve levels are strong. Fiscal 2008 ended with a $2.5 million general fund operating surplus, increasing its unreserved general fund balance to $27 million or 27% of spending. Preliminary fiscal 2009 projections point to a $3.7 million operating deficit, which is better than the budgeted $4.7 million deficit. For fiscal 2010, management is projecting another $3.8 million drawdown, although the district typically budgets conservatively and achieves better results. Assuming the full drawdown is realized, reserve balances should remain healthy.

Presidio ISD

Presidio Independent School District is one of two school districts that serve an estimated 2008 population of approximately 7,467 in Presidio County. Located along the Texas-Mexico border, the economy is dominated by ranching, and tourism with Big Bend National Park and other attractions located nearby. The largest employers include the school district itself and the federal government (border and customs agents). There is some trade activity generated by the location of an international bridge crossing into Ojinaga, Mexico.

Presidio County's high unemployment rate of 10.7% in 2008 is reflective of the area's limited economic activity, as well as the agricultural nature of the service area and sizable in-migration from Mexico. Wealth levels, as expected, are well-below the statewide average, although low incomes are partially offset by the low cost of living. Enrollment has experienced modest declines averaging about 2.5% annually over the last five years, reflecting the volatility of the area's limited economy as well as its mobile work force. Officials project a rebound in enrollment in the near-term given the worsening economic environment outside the district, which is expected to drive prior residents to return to the area.

Presidio Independent School District is a beneficiary from the sale of non-resident weighted average daily attendance (WADA) to property rich school districts in the state. In fiscal 2008, the district received $1 million in such funds. Non-resident WADA revenues are restricted in their use to instructional technology. Nonetheless, the additional revenue, which does not affect the district's state appropriation award, provides considerable enhancement to the district's financial operations. As a practice, officials conservatively exclude these funds when balancing the budget. Upon receipt of non-resident WADA revenue, the budget is amended. Furthermore, these funds are separately reserved in the general fund, and not included in the unreserved/ undesignated fund balance.

Financial operations have remained consistently strong with large financial reserves and undesignated fund balances of 32%-41% of expenditures and transfers out since fiscal 2006. In fiscal 2008 the district reported a $4.5 million net surplus and unreserved/undesignated general fund balances of $3.8 million, or 32% of operating expenditures and transfers out. The district designates substantial general fund balance levels for construction projects and salaries; and reserved fund balances for technology improvements. For fiscal 2008, designated fund balances totaled $14.1 million and reserved fund balances totaled $6.2 million, respectively. The current level of reserves remains in excess of the district's three-month fund balance target. The district is one of the poorest school districts in the state with regards to wealth per average daily attendance. As such, state appropriations account for almost 82% of operating revenues, prior to the inclusion of attendance credit sales.

The district's small taxable assessed valuation continues to record modest annual growth, as development in the area remains limited. Tax collections, somewhat typical for border communities, are weak but improving; current collections hover around 80% over the last several years, while total collections are closer to 90%. In an effort to improve collections, Presidio County, the City of Presidio and the district have partnered together and designated two to three employees solely for tax collection purposes. Taxpayer concentration has moderately improved for the district but remains substantial; the top 10 taxpayers represent 23% of the district's $82.7 million tax base down from 39% in fiscal 2006. While a credit risk, some concern over the top taxpayer, which represents 12% of total taxable assessed valuation, is mitigated by the telephone utility's essential nature.

Debt ratios, adjusted for 85% debt service support by the state, are low. Given that its last authorization was passed in 1997, the district's debt profile is favorable with a direct debt burden of $272 per capita and 2% of TAV after adjusting for state support. Overall debt levels are modest at $414 per capita and only 3% of TAV. The principal pay-out rate, including the accreted values of outstanding capital appreciation bonds, is average at 50% in 10 years. No additional borrowing is planned, with capital needs to be met through available reserves.

Galveston ISD, TX at 'A+'; Outlook Revised to Stable

Hurricane Ike, which came ashore at Galveston on Sept. 12-13, 2008 flooded approximately 75% of homes and businesses on the island. Damage was particularly severe on Bolivar Peninsula just to the east of Galveston, where the vast majority of structures in the communities of Crystal Beach and Gilchrist were destroyed by storm surge. These areas also are within district boundaries. Galveston's population is currently estimated at roughly 45,000, compared to 56,000 prior to the storm.

Current enrollment at GISD is about 80% of the pre-storm level, and three of the district's 11 campuses remain closed. District officials estimate damage to facilities, including clean-up and damage mitigation, at between $60 million and $65 million. District officials estimate that total out-of-pocket expenses will be between $6 million and $8 million, due to a recent announcement by the Federal Emergency Management Agency that it will reimburse 90% of repair costs, as opposed to the normal 75%.

The district has spent roughly $25 million to date on clean-up and repair costs, funded by a combination of existing reserves, insurance proceeds and FEMA reimbursements. Use of district resources is expected to result in a significant drawdown of general fund reserves for fiscal 2009; the current estimate is for a roughly $11.4 million loss, reducing the general fund balance to about $15 million. The fiscal 2008 unreserved general fund balance totaled $26.4 million, or approximately 34% of spending.

On a positive note, fiscal 2009 property tax collections have come in better than expected. District officials report that thru June current collections were approaching 95%, with a final payment installment still to come. State law allows storm-affected taxpayers the option of slowing their tax payment without penalties, with the final amount due six months after the traditional date and just one month before the fiscal year end. Property taxes are the largest district general fund revenue source, comprising more than 80% of total operating revenues.

As expected, district officials report a significant decline in TAV for fiscal 2010 to approximately $4 billion from $4.96 billion last year, a nearly 18% drop. This figure likely will be adjusted in coming months as the appraisal appeal process continues. TAV growth had been healthy over the previous five fiscal years, averaging more than 10% annual gains from fiscal 2004-2008. District officials anticipate that the district's total property tax rate for fiscal 2010 will not increase despite the TAV loss, as a result of significant spending reductions planned for the year.

Following the storm the initial operational risk for the district was largely mitigated for fiscal 2009 by the district's sizeable operating reserves. The financial challenge continues for fiscal 2010, due to a sharply lower TAV and smaller student count. The district has responded with spending reductions led by layoffs and a voluntary reduction in force that has shaved an estimated 300 positions for the coming year. In addition, three campuses will not be in use, and the district plans no salary increases beyond regular step adjustments and a state funded pay hike. District staff anticipates that the fiscal 2010 general fund budget will be smaller than that of the prior year, although specifics have yet to be generated. They also plan to keep the total tax rate unchanged at $1.165 per $100 of TAV. The district restructured a portion of its GO debt following the storm, extending $5 million in payments to provide some short-term debt service tax rate flexibility.

State legislation passed following the storm that ensures state payments to the district for displaced students through fiscal 2010, although those students are enrolled elsewhere. In addition, the state has waived through fiscal 2010 the district's wealth equalization payments, which are estimated to be nearly $15 million to the extent necessary to cover district out-of-pocket expenses. Finally, state regulations allow the district to apply for FEMA-eligible repair monies from the state in advance, allowing the district to proceed with reconstruction without draining resources and/or borrowing funds. FEMA's assistance program is a reimbursement system, which often stresses local governments' financial position in the months following a natural disaster. Through this combination of external support and spending reductions, district staff expects to rebuild operating reserves to pre-Ike levels within one to two years.

While significant challenges remain in terms of residents and businesses returning to Galveston, the city's economic prospects brightened considerably with the recent announcement that the University of Texas (UT) will repair and rebuild fully its Galveston medical branch, which historically has been the city's largest employer. Funding for the project - estimated at more than $1 billion - will come from a combination of state and FEMA money. This will likely result in the return of most of the 3,000 UTMB jobs that the UT Board of Regents had voted to eliminate following the storm; these represented nearly one-half of the pre-storm employment total. Also, the Shriners voted in July to reopen its Shriners Hospital for Children in Galveston, which is an internationally recognized burn treatment facility. Galveston's economy also is anchored by tourism and port activities; both have returned to a degree, although they have been affected by the national recession. Additional evidence of recovery is in the number of building permit applications files since the storm, which exceeded 20,000 in mid-July.

College Station ISD

Located in Brazos County, approximately 90 miles equidistant from Houston and Austin, College Station ISD encompasses 103 square miles and approximately 91,000 individuals. The district serves the city of College Station, which is part of the larger College Station-Bryan metro area that serves as a regional hub for the predominately rural surrounding area. With its roughly 55,000 students, the large, flagship campus of the Texas A&M University System in College Station drives much of the local economy. Government, health care, and education are some of the area's largest non-agricultural employment sectors that historically provide stability to the local economy. Unemployment levels in the area are typically below those of the state and nation and the metro area's June 2009 unemployment rate rose but continued that trend at 6.5%. At a preliminary value of $6.1 billion in fiscal 2010, tax base growth remains healthy, averaging annual gains of approximately 11% since fiscal 2005. Tax base gains have outpaced healthy enrollment increases of not quite 4% on average annually, resulting in a total of almost 9,600 students district-wide by the end of fiscal 2009.

The district's financial position is a credit positive. Despite growth pressures, conservative financial management has generated substantial operating surpluses annually since fiscal 2004, and the district's very solid reserve levels have trended upward. The district continued to maintain strong reserve levels in fiscal 2008, reporting an unreserved general fund balance of slightly more than $34 million or 49% of spending. Liquidity also remained substantial at almost $36 million or roughly six months of cash on hand. A modest operating deficit of approximately $1.4 million was budgeted in fiscal 2009; however, district officials now report they anticipate a smaller deficit in the amount of approximately $500,000 by year's end. Another modest operating deficit of $2.2 million is currently projected in the preliminary fiscal 2010 budget, primarily due to the additional operating costs associated with opening a new school. The district has no immediate plans to approach voters for additional M&O tax rate increases.

Burleson ISD

Burleson ISD is located in the northern portion of Johnson County and south central portion of Tarrant County, approximately seven miles south of Fort Worth, along Interstate Highway 35 West. The district includes the city of Burleson. the principal commercial center. Affordable land, new transportation routes, and proximity to the Fort Worth-Arlington metro area have in recent years spurred residential development primarily in the north and western portions of the district, fueling rapid population growth of almost 7% since 2000. The district estimates only about half of the district is currently built out. In light of such development, enrollment has grown rapidly, and in fiscal 2009, district-wide enrollment reached almost 9,500 students, having grown at an annual average rate of slightly more than 5% since fiscal 2004.

Taxable assessed valuation (TAV) growth, which has been historically weighted toward residential property values, continues to outpace student enrollment gains at almost 14% annually over the past five years. Various properties within the district's boundaries are located in workable portions of the Barnett Shale, one of the United States' largest natural gas fields. In fiscal 2009, a surge in drilling efforts contributed a majority of the very large, almost 30% growth in TAV, which in turn, increased tax base and sector concentration. For fiscal 2010, preliminary TAV growth approximates a more moderate 7% rate of growth, due in part to declines in natural gas prices and the downturn of the local housing market.

The district's financial reserves have trended upwards since fiscal 2002, and audited results for fiscal 2008 continued that pattern. The district again reported a very strong, unreserved general fund balance of $15 million or 25% of spending in fiscal 2008, which approximates the district's informal operating reserve target of at least three months of expenditures. Fiscal 2009 results are anticipated to add another $1-2 million to this cushion, assisted in part by annual leasing payments for mineral rights on various district properties and the change of the district's reporting period to June 30, which provided results on a 10-month basis. The fiscal 2010 budget includes balanced operations with modest salary increases while still adding to reserves and district officials report an additional, discretionary operating tax levy might be sought from voters later in the year.

District debt levels are high, particularly on a per capita basis, and they will remain so considering ongoing growth pressures, even after factoring in state support for a portion of existing debt service. This issuance represents the third portion of the district's largest ever authorization at $259 million, approved by about 60% of the voters in November 2006. The current offering will be used primarily for completion of Burleson ISD's second comprehensive high school that is expected to open by 2010. At current growth levels, district officials project this authorization will meet capital needs for the next three to five years. The district's debt service tax rate is projected to remain at or near the state's statutory test to issue new debt under possibly optimistic tax base growth assumptions. Amortization of principal is very slow, even for a fast-growth district, with about 15% retired in ten years.