Waco ISD earns an A in Texas'school-finance rating; bond debt cost a few points, finance director says

Waco Independent School District received a superior (A) rating under the Texas Education Agency's School FIRST financial accountability system, finance staff told the board during a required public hearing.

"Ta da, our score. So we received an a, superior achievement. We received a score of 92 out of a 100," Sherry Smith, the district's executive director of finance, told trustees during the public hearing.

Nut graf: The rating reflects district performance across 21 indicators grouped as critical (pass/fail), ceiling, solvency and financial-competency measures. Smith said Waco ISD passed all critical indicators and recorded strong solvency and competency scores overall but lost a few points on specific solvency measures tied to the district's long-term liabilities.

Key facts: Smith said the district's total net position was $47,632,717, comfortably above the zero threshold for that indicator. She noted the district scored maximum points on most solvency indicators but lost points on indicators 11 (ratio of long-term liabilities to total assets, where Waco ISD's ratio was 0.7012), 12 (correlation between future debt requirements and assessed property value) and 13 (administrative cost ratio). Smith said the issuance of multiple bond series (including unlimited tax bonds in 2022 and 2023) increased the district's debt and contributed to the lower scores on those measures.

Board discussion: Trustees asked for specifics about the indicators and how bond proceeds and debt service affected the ratios; Smith provided the district's submission timeline (report submitted Jan. 26) and copies of the report for the public.

Bottom line: Waco ISD met the state's financial reporting requirements and earned an A, while finance staff flagged three solvency items where bonds and size-based administrative benchmarks trimmed a handful of points.