The Denton school board on Tuesday night encouraged city officials to reach out to other interested parties in their efforts to sell the full-service hotel, restaurant and convention center project to the community.
The city wants the school district’s support in funding a $25 million city-owned 100,000-square-foot convention center that would be part of a project including a full-service hotel and restaurant on 13 acres of University of North Texas property. The vacant, undeveloped UNT property is currently tax-exempt.
The city voted last week to create a tax-increment reinvestment zone and is asking the school district to consider contributing 75 percent of the debt service tax revenue it would generate from the restaurant and hotel property to the project over a 30-year period, with Denton County giving 75 percent of its real property increment.
City officials have said Denton would contribute all revenue it generates from the convention center project, including tax revenue generated from the hotel and restaurant, to pay the debt on the convention center. The developer would be responsible for making up any shortfalls annually, according to city officials.
At a meeting Tuesday, school board member Jim Alexander brought up concerns about how much community groups would be charged for use of the center. He also said he would like to see Texas Woman’s University, where he is a professor, as part of the planning process.
“I want to make sure that all of the elements of the community have a real shot at using this for the best interest of the community,” Alexander said.
Assistant City Manager Jon Fortune agreed and said the focus is to be as “inclusive as possible.”
“The opportunity that we have for our community is not only to make it a facility that the school district, the universities, other social organizations in the community can use, but also to make it the type of facility [where] we can bring outside guests into our community.”
Alexander encouraged the city to partner with other groups in getting the community to buy into the project. The groups could not only help the city but also bring events to the convention center, he said.
“For this to be a really successful convention center in Denton, you need to widen your umbrella little bit and you need more than just the city of Denton and University of North Texas [as] active players,” he said.
School board members also asked questions about the makeup and responsibilities of the tax-increment reinvestment zone board, who would be in charge of operating the convention center, and who would make construction decisions
Superintendent Jamie Wilson said the district must look at all sides. He said he can see the district’s participation in the project in two ways — it would generate money to be contributed to the convention center project, and it would generate revenue for the district that it’s currently not receiving.
Board President Glenna Harris said she thought Tuesday’s discussion was a “good exchange of information and insight from both sides.” She said the board enlightened city officials about other interested parties in the project and how the facilities might be of interest to them.
Harris added that there have been a lot of properties that have gone off tax rolls and bringing a project like this online would bring property not currently taxable into taxable status. The revenue generated would then help fund the district’s operating budget and pay off debt, she said.
She said school board members will have to decide whether they feel participating in the project would be beneficial to residents and in the best interest of students, and will consider at what level they might want to participate and for how long.
Fortune previously said the city will check back with the school district and the county in late July or early August for a final decision on their levels of participation in the project.
Following the discussion, the school board voted to adopt a $212.5 million operating budget that includes a nearly $4.7 million deficit.
The district projects it will generate $207 million in revenue for its operating budget next fiscal year — $4.7 million less than projected expenses for the next budget year. District officials have said they intend to make up for the shortfall with general fund reserves. School officials have said that as of last year, $60 million of the district’s $73.6 million balance in reserves was undesignated.
District officials attributed the shortfall in the 2014-15 fiscal budget to personnel costs and expenses related with the opening of Adkins Elementary School this August in the Lantana area.
School officials have said $2.8 million is being set aside for a compensation plan for district employees’ raises that is to be recommended for the board’s approval soon.
Expenses related with the opening of Adkins Elementary include $123,830 for custodial and grounds expenses and $739,000 for the equivalent of 13.5 staff positions.
About 84 percent of the district’s operating budget is designated for employee salaries, which total $179.5 million. According to district documents, the district intends to add 21.5 staff positions throughout the district next fiscal year, at an expense of $915,657. Of the additional staff positions, 13.5 staff units are designated for Adkins, and district officials have said that teachers and staff at existing schools where enrollment is projected to decline are being assigned to the new campus.
Next fiscal year’s budget reflects a $5 million reduction in state funding. District officials have said that as property values increase, state funding allocations decrease, and according to district documents, projected revenue generated from property taxes and allocated to the operating fund will be an $8.9 million increase above revenue generated for the current year’s budget.
District documents project a districtwide enrollment increase of 382 students in the new school year.
The district is projecting balanced budgets for its debt service and child nutrition funds.
The Denton school district’s operating budget expenses are $3.8 million more than expenses projected last year for the current fiscal budget.
This makes the third straight fiscal year the district has adopted an operating budget with a deficit. For 2012-13, trustees adopted an operating budget with a $2.7 million deficit but completed the year adding $13.5 million to its operating savings. Last June the board adopted a budget with a $4.3 million shortfall. While the district was able to decrease the deficit to $2.3 million, reserves were used for some one-time purchases this year and the district plans to finish this year with a $5.5 million deficit, according to Debbie Monschke, the district’s executive director of budget and finance.
In a previous interview, Monschke said the district can’t continue to routinely adopt budgets with deficits.
The new budget takes effect July 1. The district is proposing a 1-cent property tax rate increase, which board members are slated to consider in September.
In other action Tuesday, the school board voted 6-0 to increase elementary and secondary meal prices by 25 cents to offset increased milk prices and employee compensation costs, and to also comply with U.S. Department of Agriculture regulations for paid lunch equity. Starting this fall, elementary and secondary lunch prices will cost $2.75 and $3, respectively.
The school board on Tuesday also agreed to extend Wilson’s contract two years through 2017. The superintendent has a year remaining in his current contract.
BRITNEY TABOR can be reached at 940-566-6876 and via Twitter at @BritneyTabor.