Texas Rising: April/May 2011

8/6/2019 Texas Rising: April/May 2011

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Susan Combs exas Comptroller o Public Accounts | Partnering with local governments to solve important issues

April | May 201

Study evaluates publicschool spending and

student progress

see page 6


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Its rare anymore that you can get something or nothing. Butgetting a good deal is something that never goes out o style.Whether youre serving taxpayers, shareholders or yoursel,the benets o running an ecient, value-or-money operationare the common denominator.

In our Texas Risingcover story, read how the FinancialAllocation Study o exas (FAS) has looked at how spendingmatches up with academic progress in exas public schools and districts. Te reportalso details best practices that other schools can emulate to operate more ecientlyand increase their eectiveness.

Successul government means doing the best job with the resources given us. Veribest

ISD near San Angelo proves you dont have to be big to be scally transparent and ndsavings. It is among more than 200 exas local governments that have achieved theComptrollers Gold Leadership Circle designation.

We hear plenty about incentives that help new businesses get o t he ground. But theyarent always necessary thanks to the initiative o some exans. Luis Morales took $500and started an artisan ood business in San Antonio, selling to restaurants and directlyto consumers at weekly ar mers markets. We hear, too, rom armers market operatorsabout the keys to successul selling.

Given the tight nancial times acing state government today, the Comptrollers ocehas decided to make the leap to online-only publications. Well be able to save on printingand mailing costs while still providing you with the thoughtul and inormativearticles youve come to expect. I hope youll take the time to subscribe to our publicationsemail list, so we can let you know when we publish new content telling you about scaltransparency, government procurement, economic development and anything else thatcan help local governments be ecient and promote investment in you r communities.See you online!

Susan Combs Texas Comptroller of Public Accounts

A message rom the Comptroller

TeTexas Rising ThepaperusedorTexasRisingisprintedonpaperthatcontains10%PostConsumerWaste.PleaseRecycleResponsibly.

TEXpansionDallas Metroplex As Texas grows by

thousands o new residents each week, businesses

and industries are expanding their operations and

building new acilities throughout the state. Here is a sampling

o recently announced expansions in the Dallas-Fort Worth

Metroplex and around Texas.

Premier Studios, LLC h

90 acres under contract a

plans to build a 1 million-

square-oot television and

movie production studio

that will create an estimat

450 jobs in Frisco.

College StationTexas A&M University has awarded a $34million building contract to Skansa USA or a new Arts and

Humanities acility. The 107,000-square-oot building will house

aculty oces, classrooms, and perormance and rehearsal

spaces. Completion is scheduled or summer 2012.

San AntonioH-E-B plans to open 19 Texas stores inA 112,000-square-oot Bulverde H-E-B Plus store opened in Feb

adding 160 workers to the 260 transerred rom an older, sm

nearby store it replaced. It is the rst o our opening in the

San Antonio area this year.

Reata Pharmaceuticals andAbbott

Laboratoriesare expanding their operations,

partnering in an $800 million venture to launch

a chronic kidney disease drug. The Irving

development is expected to create 100

new jobs.

Minneapolis-based MoneyGram International

is moving its global headquarters to a 46,000-square-

oot acility in Dallas. It plans to hire 150 employees

by 2012 with an annual average salary o $115,000.

Hyundai Capital is expanding its U

operations by adding an automotiv

nance ofce in Plano. The compan

will open the acility with 230 worke

and expand to almost 400 by 2013.

For more inormation, visit the Oce o the Governor Economic Development and Tourism Division at www.governor.state.tx.us/or Texas A&M Universitys Real Estate Center at http://recenter.tamu.edu.

Race to Learn is Coming to Texas SchoolsTexas schoolchildren will be the rst in this country to try out an engaging, cro

educational program linked to Formula 1 racing.

Created by AT&T Williams, the F1 racing team, in conjunction with Cambridge Universitinteractive Race to Learn sotware or elementary school students will soon make its U.S. a pilot program at Del Valle Independent School District outside Austin. The U.S. Grand Pbased rom 2012 at the Circuit o the Americas currently under construction in Del Valle.

Race to Learn uses Formula 1 undamentals to teach a variety o interdisciplinary toprom balancing a budget and investigating wind ow to pitching sponsorships and

Read more at www.TexasAhead.org.T

pansion See whos

sting in North Texas

e 3

reasons or

as resilience

e 4

k at why Veribest

e very best

e 5

T rates school districtnding, student progress

e 6

rt purchasing can helptch tight budgets

e 8

wing Alamo-areas team up to sell

ir region

ge 10

0 was enough tonch artisan business

e 11

Were moving online.

These cost-conscious times bring new challenges or all state

agencies. At the Comptrollers oce, our goal is to provide the

highest level o service or Texans without increasing spending.

To help meet this goal,were examining our printing costs and moving

orward with plans to provide more content, including issues o Texas Rising,

online. I you have not already subscribed to our Texas Risingemail

update list, its easy to do at www.TexasRising.org.

RisingexasApril|May2011

DallasIrving

Plano

Frisco


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Mike Reissig, associate deputy comptroller,explains why the Texas economy is resilient.

Te recent recession was a turbulent ti me or

economies around the world and or exas.

However, the housing sector, oil and gasproduction, and a helpul business environmenthelped exas get through relatively better thanmost other states, and will boost the stateseconomy going orward.

Why did the housing bubble notaect Texas like other states?

Te main thing was that while housing values were increasingall across the nation, what you ound in exas was that a much

higher percentage o the increase o thevalue o houses was as aresult o underlying strength in the economy and not o thehousing bubble. So that as our values increased, within thatincrease was legitimate demand rom people moving up to biggerhouses, who had gotten some o the new jobs that were createdin the state.

Did the energy sector contribute to the lesserTexas recession?Teres a misperception out there that the state wouldtransition rom being an oil and gas economy to being ahigh-tech economy. But what really happened was that you

had the oil and gas economy still being a big part o our economy,

and we added a large high-tech economy. And so the oil and gaseconomy, which sometimes tends to be a little counter-cyclicalcompared to the rest o the nation, actually will help us, will buerus in weak economic times. It is kind o like having a portolio oinvestments, part o which tends to be counter-cyclical. Tats whatthe oil and gas sector does or us now.

What actors contribute to Texas reputation ashaving an environment or success?Labor costs are relatively low in the state. axes are low inthe state compared to other parts o the nation. We have alot o available land. We put in place tort reorm that has

had a benecial impact on business in the state. Weve really createdan environment that is going to help us signicantly over the comingdecade and even urther. I would expect our economic perormancecompared to the rest o the nation is going to continue to be positiveor the oreseeable uture.

Since 2005, Russell Gallahan has served as an economic development analyst orthe Comptrollers Local Government Assistance and Economic DevelopmentDivision and the regional representative or South Texas.

Region 8 encompasses 26 counties along the lower Rio Grande Riverrom Val Verde and Edwards counties in the northwest to San Patricio

County along the Gul o Mexico, southward to Cameron and Hidalgo counties.Previously, Russell worked more than 15 years in the private sector, developing andoperating hotel projects in Texas, Tennessee and Florida. He is the administrator or theType A and Type B sales tax or economic development and provides assistance to localgovernments on implementation o all local sales taxes.

Local Government Assistance and Economic

Development Prole: Serving Region 8 Russell Gallahan

Q:

A:

Q:A:

Q:A:

TeTexas Rising

ousing, EnergyTexas EconomicRebound

For ve years, Veribest Independent School District (ISD)has published its budgets, nancial reports, checkregisters, tax statements and board meetingminutes online.

Veribest was the 13th school district awarded a Gold Texas

Comptroller Leadership Circle designation in recognition o its

demonstrated commitment to transparency. The gold seal is

eatured on the ISD website, along with a public statement on

the benets o transparency.

Veribests taxpayers, employees and students can learn

how the district spends its budget by accessing the monthly

check register online.

Opening the checkbook to the public makes the district

think twice about how it spends its money, says Bill Merry,director o technology. Merry and Business Manager Denise

Dusek maintain high transparency standards by publishing

current data in a timely ashion.

Merry believes that Veribest ISDs unique annual community

workshop is the key to public condence in the districts

nancial decisions.

Our March workshops lay it all out on the table, he says.

During the workshops, board members, administrative staf,

educators, students and parents examine the budget and

decide how to have the greatest educational impact on stud

and teachers.

Because the community collectively decides what its nan

priorities should be, when a community member sees an init

being implemented, he or she doesnt wonder who came up w

it, Merry says. He or she says, I was a part o this process.

Finding ways to save while providing students with the be

technology possible has been a VISD priority and is direc

attributable to transparency. Merry estimates that by emp

ing thin client technology and saving on hardware, mach

replacements and work equipment, Veribest has saved an

estimated $765,000 in classroom technology over the

past six years.

When you can demonstrate these savings, he says, you a

truly at the leading edge o nancial transparency.

Check out Veribest ISDs checkbook and other fnancial

documents at www.veribestisd.net.

A rural Class A school district just east o San Angelo, Veribest was onthe rst in exas to be completely nancially transparent. by Megha

RANSPARENCYVeribestat

210 exas local governments haveearned the Comptrollers GoldLeadership Circle designation.


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TeTeTexas Rising

Te most eective orm o government stretches the taxdollars it collects as ar as it possibly can. For exas schooldistricts, not only is that wise, it is imperative.

Te 2009 exas Legislature charged the Comptrollerwith identiying school districts that combine academicachievement with cost-eective operations in eect, todetermine which districts are providing a good return onexans investment. Te Financial Allocation Study oexas (FAS) examines how public schools and districtsspend those dollars compared to scal peers o up to 40other districts or campuses that operate in similar costenvironments, based on actors that aect the cost oproviding education, such as regional wages and studentcharacteristics. It also scores the districts eectiveness inimproving its students perormance in math and reading/English language arts relative to those expenditures.

On the academic side, we looked at student academicprogress, rather than absolute levels o achievement, saysom Currah, FASs research lead.

Te FAS report provides an array o b est practicesrom the most ecient and eective school districts thatcan be used by other districts wishing to improve theiroperations. It also oers a series o Comptroller recom-mendations that could save millions o dollars.

Some of the biggest and most easily identifiable savings can come from purchasing.

In ar West exas, the 62,000-student El Paso ISD employsa variety o group purchasing arrangements, includingthe exas A ssociation o School Boards BuyBoard, theexas Procurement and Support Services-administeredState o exas CO-OP and exas Multiple Award Schedule(XMAS) and Education Services Center cooperatives.All combined, El Paso ISD estimates about $1 millionannual procurement savings.

Construction Savings:

Many exas districts, particularly in suburban areas, areconstantly trying to stay ahead o population growth.

Some have realized that when theyve ound a good desior a campus, they can save money by reusing those plan

Construction savings arent just conned to educatiobuildings. Cedar Hill ISDs administration and the city shathe Cedar Hill Government Center, saving the school distrabout $150,000 per year in operational costs compared withe ormer school building previously used or administratioand making a convenient location or citizens to transact businwith both entities. According to the city, the $27.5 milliogovernment center saved about $4 million over building twseparate acilities to serve the needs o the 8,200-studentschool district and 45,000-resident city.

Watch online how Cedar Hill has saved at www.FASTexas.org.

Among the recommendations that could createpotential savings:

Change the 22-student limit for K-4 classrooms to an average

class size o 22, permitting school districts the fexibility to workwith their teachers to sta their classrooms in a mannerconsistent with local conditions and preerences withoutsacricing student perormance.

Adopt electronic textbooks.

Allow school districts to publish public notices electronically.

Reduce school energy spending.

To read all the recommendations and fnd out how much money Texas school

districts could potentially save, view the FAST report at www.FASTexas.org.

Savings Around Texas

Comptroller study evaluates publicschool spending and student progressby Gerard MacCrossan

Over time, we think that schooldistricts may be able to apply

some things weve pointed out

in our report to help improvetheir performance.Tom Currah, FAST Research Lead

FAST examines how Texas public school district and campus spending practic

lend themselves to efficient use of dollars for education. We are looking

spending and the intersection with academic outcomes. As new financial and

academic data becomes available, the online FAST tool will be updated so th

users can see how to continue to manage their resources.

Beth Hallmark, Comptrollers Data Services Division

FAST Offers Financial Efficiency Ideas to Schools


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The Comptroller recently released the

2008-09 Economic DevelopmentCorporation Report, detailing the

activities o EDCs in cities

across Texas.

Since 1989, the Development

Corporation Act has allowed cities

to orm Type A or Type B economic

development corporation (EDC) unded by a

local option sales tax, to attract businesses and create

job opportunities or their residents. A board o directors

appointed by its city council administers each EDC.

In 2008, the 666 EDCs generated $555.5 million in sales

tax revenue or local economic development activities.This sales tax continues to be the states primary local

revenue source or economic development, although EDCs

can also generate revenue rom bond, loans, grants and

other sources. The EDCs total revenue rom all sources was

$832.5 million. The fscal 2009 total slipped to $538.2 million

or the 680 EDCs operating in 2009, and total EDC revenues

declined to $675.3 million, mainly resulting rom sharp

declines in bond proceeds and loans.

State law specifes a wide variety o project types that EDCs

can und. In 2008 and 2009, the leading expenditure

category was capital projects $500 million or capital

expenditures and more than $284 million in debt serviceto fnance them. These include transportation systems,

such as roads and overpasses, as well as b usiness

inrastructure such as utilities.

EDCs also spend more than $110 million each year providing

direct business incentives to encourage businesses to

locate or expand their operations in a Texas community

instead o another state or country. For example, Seguin

incentivized Caterpillar to relocate one o its primary

assembly plants to the city. The EDC partnered with

Seguin Independent School District, Guadalupe

County, the Texas Enterprise Fund and private partners

to create an incentive package to attract the statessecond largest economic development project, in

terms o job creation and investment, in fscal 2008-09.

The recent recession had little impact on the overall

fnancial health o EDCs during fscal 2008-09. EDCs

reported that cash reserves available or economic

development projects declined only 4 percent during

the biennium to $853.9 million.

For more inormation on economic development sales

tax, visit www.texasahead.org/lga/econdev.html.

Partnering or Impact: Sales tax generates more than $500 million for economic development in Texas

Private business is a partner in the recovery eort.Were taking a business approach, Greer says.[Were] outsourcing and letting private industryperorm certain unctions.

Transparency shows spending patternsFinancial transparency is an integral part o theprocess or both Deer Park and Farmers Branch,exas Comptroller Leadership Circle members thatrecognize the value o knowing what the city spendsin order to know where to save. Its important thattheres a lot o scrutiny, or people to see wherethe money goes, Greer says.

Local governments with tighter budgets in fscal 2011can save by buying through the State o Texas CO-OP.Read more at www.window.state.tx.us/procurement.

For most mid-size cities and counties in Texas, scal 2011 brought tighter budgets and

the need or increased scal efciency. Many governments witnessed declines in sales tax

collections in all 2010 when compared with the previous year.

by Meghan Vail Its important that theres a lot oscrutiny, or people to see wherethe money goes. Gary Greer, Farmers Branch city manager

We scrubbed the budget as much aswe could. We reduced capitalexpenditures to the bare minimum. Keith Nelson, Deer Park nance director

Tools to Help Governments Get GooTxSmartBuy Become a State of Texas CO-OP member for access to Tx

Search e-catalogs for products and competitive prices a

www.TxSmartBuy.com.

Place a purchase order that is received by a contractor im

Questions? E-mail [email protected] or call (88

or (512) 936-2764 in Austin.

Texas Multiple Award Schedules (TXMExisting competitively awarded government contracts ar

Texas state procurement needs.

A list of vendor catalogues is available at

www.window.state.tx.us/procurement/prog/txmas.

Catalogs contain item specications, ordering and invoicing

Questions? Contact the TXMAS coordinator at (512) 463-

TeTexas Rising

Smarter BuysTighter Budgets

Lower revenue requires lower spendingWith budget cuts looming, local governments got creativewith strategies to save.

As Deer Park ocials prepared the scal 2011 budget,they had to ace t he challenges o reduced revenuesproduced by scal 2010 taxable s ales that were lowerthan 2009. Te suburban Houston-area city prepared abudget management plan to identiy areas or cuts thatwould reduce its $36 million scal 2011 budget by $3.5million nearly 10 percent. Deer Park roze salaries onewly hired employees and eliminated 17 vacantbudgeted positions.

We scrubbed the budget as much as we could, saysFinance Director Keith Nelson. We reduced capitalexpenditures to the bare mini mum.

Efciency audits reveal potential savingsNorth exas city Farmers Branch had its own strategy.Since 2007, City Manager Gary Greer has selected threeo the citys departments or annual eciency audits.Tis year, the audits were expanded to include sevendepartments. Greer identies departmental services,evaluates their utility and nds the most cost-eectiveway to provide them.

During scal 2010, Farmers Branch saw a 14 percentdecline in taxable sales rom the previous year. Facing abudget reduction, city leaders opted to cut costs, notraise property taxes. Te city reorganized departments toeliminate duplicated services, ofered an early buyoutor retirees, and has rerained rom increasingemployee salaries.


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Texas Rising

with two zeros less than the suggested $50,000 seed mHumble House Foods became a reality.

Selling their unique artisan cheeses at the Pearl Brewmarket in San Antonio and local armers markets, thbuilt a customer base that appreciates resh handmade cwith no preservatives or chemicals. Tey also brancheinto pestos and spreads, which Morales says have becothe bread and butter o our business.

In its rst year, Humble House Foods posted reven$40,000. Morales expected 2010 would exceed $125,000 the books are closed. Last all, the company signed a le

on a 1,200-square-oot location.

Find out more about Humble House Foods products

cheese-making classes and learn more about the comstory at www.humblehouseoods.com.

Customer Loyalty is Key to Farmers Market Success1) Consistency When you bill your armers market as a year-round, rain or shine

its important that vendors be there every week.

2) First Impressions Matter Successul vendors have a knack or drawing potecustomers in with interesting signage and welcoming smiles.

3) Quality Counts Customers are drawn to armers markets because they belieproducts are oten superior to store bought.

Read more tips or Farmers Market success at www.TexasRising.org.Sources: Pearl Farmers Market, San Antonio, and Sustainable Food CenterFarmers Market, Austin.

T

LuisMorales,HumbleHouseFoodsFounder

Humble Budget,Tasty Venture.

The obstacle of a tiny budget wasnt too to overcome for Humble House Foods foLuis Morales. by David Bloom

With $500 and an inability to take no or an

answer, San Antonio ood cratsman, Luis

Morales has turned a passion into a successul

business venture.But the whole process o getting licensedto operate a ood business is almost designedto discourage anyone rom starting a business,Morales says.

Undaunted, Morales read every book hecould nd about exas ood laws and howto get an operation up and running.

In the summer o 2009, Humble HouseFoods sub-leased a 10-oot by 12-oot roomrom a local coee roaster. With the basicingredients or their cheeses and an investment

each others economic development activities.

New Braunels worked closely with Seguin and the new

Caterpillar plant, providing work orce training to hundreds o

workers at the Alamo Colleges Central Texas Technology Center.

That partnership was very important and beneted the entire

region, says Kate Silvas, assistant director or Seguin EDC. I would

encourage other communities to think outside o the box o their

political jurisdictions and reach out to one another.

Schertz Economic Development Corporation leaders were

asked to join the alliance because o the recent urry o new

businesses. Schertzs strategic location and increasing number o

warehouse and distribution centers made it a natural t, Brockman

says. The recent announcements that spurred the three cities

to ormalize the alliance include Sysco Foods new 635,000-

square-oot distribution center in Schertz that is expected to

be completed in late 2011, Caterpillars new Schertz plant that

will supply its recently opened Seguin acility, and Baptist Health

Systems planned hospital in north New Braunels.

We thought that it made sense, says Jef Jewell, Schertzs

economic development director. It makes us more competitive on

a wider scale. We need to be taking original approaches with

economic development because companies dont just have

options within the United States.

More or Less Silvas says the Seguin EDC has used thetri-city partnership to expand its outreach eforts without

increasing its budget.

As an alliance, the three cities can better aford to

participate in domestic and international trade missions

We are maximizing our monetary resources the best

that we can, Brockman says. Well grow wealthier

individual communities and a wealthier region. That kind

o partnership is invaluable.

Forupdates on the 10/35 EconomicDevelopmentAlliance,visit

the New Braunels Chambero Commerce atwww.nbcham.org

Three cities on the northwestern outskirts o San Antoniohave pooled their economic development resources in aneort to become a regional recruiting powerhouse.

Were going to compete with the big cities or new business, but

at the same time we are providing a niche or businesses that are

looking to locate somewhere outside o San Antonio or Austin,

says Rusty Brockman, director o economic development or the

Greater New Braunels Chamber o Commerce.

Working Together In July 2010, New Braunels, Schertz and

Seguin economic development ocials signed a contract creating

the 10/35 Economic Development Alliance, agreeing to combine

certain economic development eforts and providing a regional

marketing strategy or attracting more business prospects. The

alliance stems rom the three cities proximity and access to

Interstates 10 and 35.

Partnering is nothing new or these cities, which already share

Guadalupe and Comal County resources and work orce training

acilities. For the past ve years, Seguin and New Braunels

Economic Development ocials have worked inormally to support

Schertz

Seguin

25,175

22,011

31,465

36,494

57,540

SanAntonio

IH-35

IH-10

2010 Population

2000 PopulationSource: U.S.CensusBureau

Regional Partnering Combines EconomicDevelopment Resources by Tracey Lamphere

New Braunfels

eaming UptoARAC NEW INVESMENS

The Town Center at Creekside isoneofNewBraunfelsnewestdevelopments.

18,694


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Austin 11%

Fort Worth 5.9%

Dallas 6.6%

San Antonio 5.7%

Apartment lease revenue gains in 2010Revenues rom apartment leasing in Austin rose by 11 percent in 2010, leading three

other Texas cities posting more than 5 percent increases. A survey o 23 markets

by ALN Apartment Data Inc. reported that the Dallas market increased 6.6 percent,

the second highest year-over-year leasing revenue increase.

Source: The Real Estate Center at Texas A&M University

12 | Texas Rising

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Permit No. 1411Texas Risingis one o the ways the Comptrollers oce strivesto assist taxpayers and the people o Texas. The newsletter is aby-product o the Comptrollers constitutional responsibilities tomonitor the states economy and to estimate state governmentrevenues. Articles and analysis appearing in Texas Risingdo notnecessarily represent the policy or endorsement o the TexasComptroller o Public Accounts. Space is devoted to a wide varietyo topics o Texas interest and general government concern.

STAFFDelane Caesar

Director o Data Services

Creative Directors

Beth Hallmarkand Dan Lynch

Editorial Team Leader

Karen Hudgins

Editor

Gerard MacCrossan

Staf WritersDavid Bloom, Michael Castellon, Tracey Lamphere,Russell Gallahan, Clint Shields, Meghan Vail,Mark Wangrin and Bruce Wright

Graphics Team Leader

Dwain Osborne

Art Direction and Layout

Jeremy Van Pelt

Staf Photography

Jack Grieder

Additional PhotographyPage 3, Hyundai; Page 9, City o Deer Park, City o Farmers Branch;Page 10, NewQuest Properties.

Web Publications Coordinator

Julie Lewis

FIELD OFFICESComptroller eld oces are located in Abilene, Amarillo, Austin,Beaumont, Brownsville, Bryan, Corpus Christi, Dallas, Denton,El Paso, Fort Worth, Houston, Laredo, Lubbock, Lukin, McAllen,Odessa, San Angelo, San Antonio, Sherman, Tyler, Victoria, Waco andWichita Falls, as well as Chicago, Los Angeles, New York and Tulsa.

HOW TO REACH USToll-ree telephone line: (800) 531-5441, ext. 3-3116; in Austin,463-3116.

COMPTROLLERS WEB SITEWindow on State Government ison the World Wide Web at www.window.state.tx.us.

Online subscriptions, renewals or cancellations o Texas Rising maybe entered at www.TexasRising.org

The TexasComptroller o PublicAccounts isan equal opportunity employer and does not discriminate onthebasis o race, color, religion, sex, national origin, ageor disabili ty in employment or in the provision oany services, programs or activities.

In compliance with the Americans with Disabilities Act, this document may be requested in alternativeormats. Contact the Data Services Division at (512) 463-4900 or (800) 531-5441, ext. 3-4900 (VOICE), (512)463-4226(FAX), or visit theLBJ State OceBuilding, 111 E. 17th St., Room311, Austin, Texas.

Texas Comptroller o Public AccountsPublication #96-1260,April | May 2011

RisingexasApril | May 2011

Texas Rising: April/May 2011

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