January 10, 2023 — Regular Meeting
Conroe ISD Board Meeting — 2023-01-10
Regular Meeting — Unofficial Notes
Based on auto-generated transcript. Not an official record.
Generated 2026-03-28 15:03 UTC
Unofficial Meeting Notes
Conroe ISD Board Workshop — January 10, 2023
These are unofficial notes based on an auto-generated transcript and may contain errors or omissions.
Citizens Participation
No citizens signed up to address the board.
Item 2: Educational Specifications Review
Background: The board had a full presentation on educational specifications (Ed Specs) at the December workshop. Approval was deferred to the January board meeting at Trustee Chase's request.
Key Discussion Points:
- Mr. Foster (Facilities) explained three items requiring board approval at next week's board meeting:
1. The educational specifications document itself
2. The method of compliance (qualitative or quantitative method for calculating student functional capacity)
3. The level of flexibility (L2 vs. L3 per TEA facility standards)
- Flexibility Level (L2 vs. L3): The district recommends Level 2, consistent with past practice. Mr. Foster confirmed that L2 still allows teachers full flexibility for flexible seating, grant-funded classroom innovations, etc. Level 3 would involve glass walls, movable partitions, and an education delivery model more akin to Montessori, which the district does not use. L2 also supports the district's safety-focused approach (concrete/cinder block fully enclosed rooms vs. glass/movable walls).
- Teacher Input: Trustee Chase asked whether teachers were consulted. Dr. Noel explained the committee included building principals and curriculum directors who serve as liaisons to their teacher teams, rather than pulling teachers directly from classrooms. The Ed Specs represent a higher-level building construction standard; teachers and principals will still determine how they function within the buildings.
- 50,000 sq. ft. Trigger Point: A question remains outstanding to TEA regarding this provision. Mr. Foster expressed confidence that the spirit of the standard supports the district's interpretation, though the legal language was ambiguous. TEA/AG response timing is unknown. Mr. Foster noted he participated in a TASA presentation with a committee member who helped write the standard and is confident in the district's compliance.
No vote taken. Approval planned for the January regular board meeting (next week) on all three items.
Item 3: General Fund Capital Capacity
Presenter: Darren Rice, CFO
Fund Balance Analysis
- Unassigned fund balance at 8/31/22: $173.3 million
- 20% target: $124 million
- Available above target: $49.3 million
- Board-approved bond contingency fund (November): $18.8 million
- Land purchases for upcoming bond: ~$30 million
- Remaining capacity above 20% target: ~$551,000
- A reimbursement resolution will be brought to the January board meeting to allow the $30 million in land purchases to be reimbursed from future bond proceeds
Bond Ratings & PSF
- District rating: AA+ (one notch below AAA)
- The Permanent School Fund (PSF) guarantee is currently at capacity statewide — districts cannot access it
- Without PSF, the district can still sell bonds but at a slightly higher rate (~3 basis points difference)
- Only a few school districts have AAA ratings on their own, and those are fully built-out communities no longer issuing bonds (e.g., Highland Park)
2023-24 Budget Challenges
- Legislative session expected to bring: new school safety legislation, truth-in-taxation rework, additional tax compression, and growth challenges
- No funding mechanism in the current formula for employee raises (a 2% raise costs ~$12.5 million)
- No mechanism to adjust for 8% inflation
- ESSER funding cliff: ~225 positions (~$16 million) funded by ESSER III must transition to the general fund
- Employee retention stipend (currently ESSER-funded) will also need a new funding source
Capital Needs Without a Bond
Annual estimated needs if no bond passes:
| Category | Annual Cost |
|---|---|
| Portable buildings (~100/year for 3,000 new students) | ~$25 million |
| Technology (new, replacement, infrastructure) | ~$20 million |
| Infrastructure (roofs, full HVAC overhauls) | ~$15 million |
| Buses | ~$3 million |
| Total | ~$63 million/year |
Note: Bond expenditures for items with shorter lifespans (buses ~10 years, technology ~5 years) would be matched to appropriately short bond tranches.
Capital Maintenance Fund History
- Board established a $50 million Capital Maintenance Fund in 2019 to support needs not funded in the bond
- $20 million seeded from fund balance; $10 million/year budgeted from general fund for 3 years
- Fund is now ~90% depleted; program is essentially complete
- This diverted $50 million from programs (dyslexia, special education, CTE, etc.)
Significant Board Discussion:
- Trustee Hubert emphasized the need for a dedicated capital maintenance account going forward, noting prior boards focused on minimizing the tax rate at the expense of maintenance funding
- Dr. Noel provided historical context: prior boards from 2000-2014 used over $100 million from the general fund balance for capital projects (including building Bonnie Wilkinson Elementary entirely from cash) to keep the tax rate low, but this money was never replenished and came at the cost of programs
- The 2019 bond committee identified $1.5 billion in needs but was capped at ~$807 million (which failed), ultimately passing at $654 million — leaving ~$700+ million unfunded
- Mr. Foster described the district's facility assessment process (done with engineers/architects, most recently summer 2022, required by TEA every 5 years)
Per-Student Spending Comparison
- Conroe ISD: $8,701/student (or $8,546 when the $10M capital maintenance diversion was active)
- Katy ISD: $9,623/student — a ~$70 million/year difference at Conroe's enrollment
- Magnolia ISD: $9,124/student — a ~$30 million/year difference
- Conroe has the second-lowest tax rate in the Houston area
- Dr. Noel emphasized this is not an excuse but a reality that affects competitiveness in programs while praising staff for achieving strong results despite the funding gap
VATRE (Voter Approved Tax Rate Election) — Golden & Copper Pennies
- District currently uses 5 of 8 available golden pennies (accessed 2 additional in 2019 due to funding formula changes)
- 3 remaining golden pennies available via VATRE: ~$9 million/penny ($5.5M local + $3.5M state)
- 9 copper pennies available: ~$4.5 million/penny ($5.5M local minus $1M state recapture)
- Total potential additional revenue from all 12 remaining pennies: ~$67.5 million/year
- Most peer districts have accessed additional pennies (Humble, Katy, Spring Branch, Splendora, New Caney all above Conroe's level)
Board Discussion on VATRE:
- Dr. Noel noted VADERs are difficult to pass (Magnolia and Klein were unsuccessful; College Station succeeded by tying it specifically to staff raises)
- Multiple trustees expressed interest in exploring it but acknowledged political difficulty of asking for both a bond and a tax rate increase simultaneously, especially with rising property values
- Trustee Stokes expressed reservations about hesitating to ask the community for what's needed
- Trustee Williams noted the political difficulty but acknowledged the competing pressures
- No decision made; staff indicated willingness to explore further if directed
Item 4: Bond Program Capacity (Debt Service)
Presenter: John Roebuck, BOK Financial (Financial Advisor since 2005)
Key Financial Points
- District has generated $174 million+ in savings since 2008 through refunding and early debt payoff
- Total tax rate down 16 cents over the last 4 years due to legislative compression
- Current debt: ~$1.6 billion
- Debt-to-assessed-value ratio: ~3.5-4% (state maximum is 10%; lower than 1990 levels)
- Current Bond Buyer Index rate: 3.72% (below 3-year average of 4.12%)
- PSF guarantee currently unavailable; district would sell at its own AA+ rating
Bond Capacity Scenarios
25-Year Debt Structure:
| Scenario | Estimated Capacity |
|---|---|
| No tax rate increase | $1.1 – $1.3 billion |
| 1 cent increase | ~$200 million additional |
| 3 cent increase | ~additional capacity beyond that |
30-Year Debt Structure:
- Adds approximately $75-100 million more capacity
- No tax rate increase: $1.175 – $1.375 billion
Assumptions: Conservative property value growth (8% year 1, declining to 5%), 4.5% interest rate, first bond sale ~$300 million.
Debt Per Student Comparison
- If Conroe matched Splendora's debt-per-student ratio ($45,848), the district could support a $3.3 billion bond election
- Peer district recent bond elections: Montgomery ($326M), Willis ($201M), Magnolia ($228M) — but per-student, these are equivalent to much larger Conroe bonds
Recent Bond Election Results (Statewide)
- 971 elections called totaling $116 billion
- ~39% failure rate on a proposition basis
- General purpose/school buildings: high success rate
- Athletic facilities: frequently voted down
- Technology: 12 of 14 passed in recent cycle
Item 5: Construction Cost Market Update
Presenter: Mr. Foster (Facilities)
Construction Cost Trends
- General inflation: ~8% year-over-year
- Construction inflation: nearly 30% in the most recent year (~3-3.5x general inflation)
- Diesel fuel remains $4-5/gallon (critical cost driver for earthmoving and deliveries)
- Elementary school costs have risen significantly: Snyder (2012) under $20M → Hines (recent) significantly higher → Bartlett projected even higher
- District uses 6% annual escalation in bond planning budgets; recent actuals have exceeded this
Bartlett Elementary
- Bids go to market Thursday this week
- Board approval for construction expected at February board meeting
- Target budget: ~$37 million (construction)
Planning Schedule — Critical Request
Mr. Foster requested authorization to begin design assignments for three major projects:
1. New high school (Conroe area, on district-owned land adjacent to police station/Stockton JH on East Loop)
2. 7-8-9 secondary campus (land under contract, closing expected April)
3. New elementary prototype (with potential for multiple builds)
Rationale:
- Elementary schools take ~5 years from concept to opening
- High schools take ~8 years from concept to opening
- If a November 2023 bond passes, elementary schools need to open by 2025 — design must start now
- New Conroe High School target opening: 2027 (Conroe HS projected to reach 6,500-7,000 students by 2028 without relief)
- Design work is not wasted even if the bond fails — these schools will eventually be needed
- Pre-bidding before peer districts provides competitive advantage (as demonstrated with Grand Oaks)
Cost Estimates (Rough):
| Facility | Est. Construction | Est. All-In |
|---|---|---|
| Elementary | ~$37-39M | ~$42-45M |
| 7-8-9 Campus (~250K sq ft) | ~$80-85M | ~$95-100M |
| High School (~550K sq ft) | ~$220M | ~$260-265M |
Board Discussion:
- Trustees asked about contractor accountability for timelines (liquidated damages clauses exist but have never been assessed)
- Discussion about whether missing an August opening means waiting a full year — Mr. Foster confirmed mid-year high school openings are essentially impossible (UIL, programs, zoning); elementary mid-year is possible but highly disruptive
- Confirmed this pre-design work cost is included in the $30 million already allocated
- Design assignments will be brought to next week's board meeting for approval
Item 6: Bond Referendum Legal Briefing
Presenter: Marcus Dietz, Orrick Herrington & Sutcliffe (Bond Counsel, ~20 years with the district)
Legal Authority & Proposition Requirements (SB 30, 2019)
General proposition can include: construction, renovation, land, buses, safety/security equipment
Separate propositions required for:
- Stadiums with 1,000+ seats
- Natatoriums
- Recreational facilities (other than gyms, playgrounds, play areas)
- Performing Arts facilities
- Teacher housing
- Technology equipment (other than backbone/integral building technology)
Key Clarifications from AG's Office
- Practice fields for extracurriculars not used for competition are likely not general purpose (may need separate proposition)
- Athletic competition fields with seating under 1,000: likely qualify for general purpose
- Performing Arts: if predominant purpose is staging performances → separate proposition; if used daily for classes with occasional performances → general purpose
- AG reviews and must approve every bond issuance; pre-clearance on borderline items is advisable
- Useful life requirements: bonds cannot finance items lasting less than 1 year; debt term limited to 120% of useful life
Election Timing
- May 6, 2023: Call deadline February 17
- November 2023: Call deadline August 21, 2023
- Possible legislative changes: elections may be limited to November only; some discussion of limiting to presidential election years (did not pass last session)
Ballot Language
- Must include plain language description, total debt amount, and in ALL CAPS: "THIS IS A PROPERTY TAX INCREASE" — regardless of whether the tax rate actually increases
- Once called, an election cannot be rescinded (per AG guidance during COVID)
Political Advertising Restrictions
- Once the election is called, the district and staff (in official capacity) cannot advocate for or against the bond
- Board members and staff in their private/individual capacity may advocate
- District can only provide factual, informational materials
- All informational materials will be reviewed by bond counsel for legal sufficiency
- No use of district resources (email, Wi-Fi, buildings) for advocacy
- Teachers can advocate on their own time, not using school resources
- Violation: Class A misdemeanor
Board Discussion:
- Trustee Hubert asked about pre-election informational materials; Mr. Dietz clarified the bright line is when the election is officially called
- Trustee Hubert referenced a previous accusation from a state representative about electioneering — confirmed no violation occurred
- Dr. Noel emphasized the district will be "hyper-conservative" and will not push advocacy lines that other districts may approach
Item 7: Bond Planning Committee Schedule
Committee Composition
- Target: ~150 members (from 350+ applicants)
- Selection: Board-nominated members automatically included; remaining selected by random draw ensuring representation from every feeder zone, employees, parents, and community members
- Committee roster to be brought to next week's board meeting for approval
- Significant increase from last bond's ~45-member committee
Meeting Schedule (All at Jet Center, 5:30 PM start, ~2 hours)
| Date | Topic |
|---|---|
| Feb 7 | District overview, school finance, bond fund uses |
| Feb 23 | Demographics (PASA), construction costs, financial capacity |
| Mar 7 | New construction, land, capacity additions, major renovations |
| Mar 21 | Master plans, gyms, playgrounds, safety/security, transportation, infrastructure |
| Mar 30 | Review/consensus building for Proposition A items |
| Apr 11 | Athletics, CTE |
| Apr 25 | Technology, devices, financial update |
| May 11 | Package building/completion |
| June | Community Town Halls for feedback (timing around graduations) |
| July | Committee reviews community feedback, makes final adjustments |
| August | Committee presents final recommendation to the Board |
Key Process Notes
- All meetings will be public; presentations posted online on a dedicated bond website
- Community town halls planned before final package (modeled after Montgomery ISD's successful approach)
- Board members may attend committee meetings but should not vote and should be cautious about influencing small-group discussions
- No more than 3 board members at any meeting to avoid quorum issues
- Dr. Noel will provide executive summary updates at board workshops
- Dr. Noel emphasized an interactive, hands-on committee process with table discussions rather than presentation-heavy format
Anticipated Need
- Dr. Noel estimated the committee will see approximately $3 billion in total identified needs
- The committee will need to recommend a package significantly below that amount
- Board direction on parameters (e.g., maximum tax rate increase tolerance) will be important to guide the committee's work
Overall Themes & Key Takeaways
1. Financial constraints are significant: The district has the second-lowest tax rate in the Houston area, spends considerably less per student than peer districts, and has limited general fund capacity after land purchases and the depletion of the capital maintenance fund.
2. Bond capacity exists: At no tax rate increase, the district can support $1.1-$1.3 billion in bonds (25-year structure) or $1.175-$1.375 billion (30-year structure).
3. Needs far exceed capacity: Approximately $3 billion in needs will be presented to the bond committee, requiring difficult prioritization decisions.
4. Time is critical: Design work for a new high school, 7-8-9 campus, and elementary prototype must begin immediately to meet opening targets (elementary 2025, high school 2027).
5. VATRE remains an option but no decision was made; political feasibility concerns were discussed alongside acknowledgment that the district is leaving significant state funding on the table.
6. November 2023 is the target bond election date, with the call deadline of August 21, 2023.
No formal votes were taken at this workshop. Items for next week's regular board meeting include: Ed Specs approval, reimbursement resolution, bond committee roster approval, and designer assignments for three major projects.