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Disclaimer. The following presentation has not been approved or endorsed by the GISD Board of Trustees or the GISD Administration. This information contained in this presentation is my sole responsibility and I take full responsibility for any factual errors. - Norman Pappous.

I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
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    The following presentation has not been approved or endorsed by the GISD Board of Trustees or the GISD Administration.

    This information contained in this presentation is my sole responsibility and I take full responsibility for any factual errors.

    - Norman Pappous


    This presentation will demonstrate that the terms of the Conciliation Agreement will:

    • Harm GISD’s tax base and GISD’s ability to collect the same level of revenue without raising taxes.
    • Force GISD to adopt budgets that spread resources thinner among our students, teachers, and staff than other communities that have no additional requirements attached to their federal relief funding.
    GHA, the City of Galveston and GISD did not negotiate the Conciliation Agreement or sign it. It is being enforced by the State.

    It was never created, ordered, or reviewed by any legislature or court!

    You’re out of order!

    Conciliation Agreement requires Galveston to house a minimum number of “Economically Disadvantaged” (ED) families. No other community has this requirement in order to receive their federal funding.



    • Choose to rebuild all your public housing units and we will give the city $200 million.
    • Choose to not rebuild all your public housing units and the city will not receive any federal funds.

    No other community in Galveston County is mentioned in the Conciliation Agreement.

    No other Galveston County school district will be adversely impacted.


    School districts not adversely affected by Conciliation Agreement


    School district adverselyaffected by Conciliation Agreement

    Galveston County offers over 88% of all public housing residents just one school district to attend:GISD.

    Over 65% of all Section 8 vouchers in Galveston County are issued by GHA

    Housing Authority residents cannot attend these school districts

    Housing Authority residents can attend these school districts

    The Conciliation Agreement provides for those who lost their homes to be rebuilt on site, or to be bought out and relocated.  The students of these families will be able to use this federal funding to have a choice of what school district and schools they will attend in the future. Why won't the students of public housing have this choice? Same funds - unequal benefits.


    Clear Creek ISD braces for spending cuts

    By Hayley Kappes

    The Daily News

    Published October 24, 2010

    LEAGUE CITY — With no expectation of additional state dollars for the next four years, Clear Creek Independent School District officials are identifying ways to cut spending.School districts throughout the state are facing cuts as the state Legislature prepares to address a shortfall that is expected to top $20 billion.

    The Dallas Morning News

    By Robert T. Garrett


    The bottom line: Public schools, college students, and government

    employees, not just poor and needy, might very well lose money grants…

    “They’ll have to cut,” said for Rep. Heflin, R-Houston, The House’s

    budget chief during the last budget meltdown, in 2003. “When you look at the big numbers, I just don’t think there’s any way you can make it match without making some reductions in education, both higher and public education,” [k-12]

    impact fees and housing affordability 2007 report sponsored by hud s office of policy development

    Does the Conciliation Agreement

    have a financial impact on GISD?

    Impact Fees and Housing Affordability – 2007 report sponsored by HUD’s office of policy development

    5 Types of Impact Fees –

    Parks and libraries

    Police and fire

    Water and Sewer



    “School impact fees are the most expensive and libraries the least”

    texas law used to require school impact studies

    Does the Conciliation Agreement

    have a financial impact on GISD?

    Texas Law used to require school impact studies!

    Tx Gov’t Code 2306.0661 (f)(8)

    (f) The rules must require the department to consider the following topics in relation to a proposed housing development:        (8)  the anticipated impact on local school districts;

    Judge Terry Means - 2005 written opinion in Arbor Bend Villas v Tarrant Housing Finance (p.15):"Furthermore, Texas state law now requires state agencies to consider school impact when evaluating applications seeing state-issued financial assistance for proposed public housing. See Tex. Gov't Code Ann. Sec. 2306.0661 (f) (8) (2004). Simply because TCHFC considered the potential impact that the Arbor-Bend project could have on the community does not constitute direct evidence of familial-status discrimination. Were the court to rule otherwise, communities would be forced to embrace unlimited housing projects regardless of the potential impact."


    The Conciliation Agreement will impact GISD’s tax revenues!





    Let’s review some basic Economics….






    Galveston’s current housing surplus creates a lower equilibrium price and, therefore, a lower tax base.










    The current financial crisis lowers demand which further lowers Galveston’s equilibrium housing price and tax base.









    S3 = current housing surplus plus new public and mixed income units - advocated by GHA and City Council






    Tax base has shrunk further than necessary due to the implementation of the Conciliation Agreement.









    Issuing vouchers to qualified renters would not further worsen a bad market!





    No new housing introduced into Galveston’s market by GHA means equilibrium stays at E3!


    rental yields dictate market and appraisal values
    Letter to the Editor

    Occupancy Rates

    Mr. Jackson, I have rentals in Galveston and lowered my rent on a water-view two-bedroom, two-bath from $900 usual rent to $700, just to get it rented in this slow market. I have lowered another from $600 to $400. There are so many vacancies in homes and apartments in Galveston now. Always, I am agreeable to bargain and adjust the rent lower if the tenant is desirable, has a good payment history, a job and understands my rules. I’ve rented to ex-felons, families, singles, students — and I do not discriminate. I have no vacancies now. If you want to live in Galveston, and you have a DHAP or Section 8 voucher or even if you pay your own rent, landlords like myself will be willing to bargain and lower the rent, so don’t be afraid to ask your own price and come to an agreement….The landlords are suffering in Galveston and will need to pay their property taxes soon, so bargain with them and their agents.Pat HazelwoodGalveston10/27/2010

    • Pre-Ike
    • 85 – 95%
    • Current
    • 65 – 75%
    • It is unquestionable that GHA’s plans will either lower appraisal values or lower the rate of appraisal value growth!
    Rental Yields Dictate Market and Appraisal Values!
    Payment In Lieu Of Tax


    Section 8 Housing

    • GHA buys, owns, and maintains the housing – taking it off the tax rolls, determining rental rates, and making PILOT payments.
    • GISD forced to negotiate for PILOT payments with GHA.
    • PILOT payments funded by annual Congressional appropriation – did anyone watch the election returns?!
    • 22% cuts in non-defense discretionary spending!
    • What happens to GISD’s money if Congress defunds the PILOT program?
    • $52,000 – Galveston County “low income” limit eligibility
    • Private property owners own and maintain property – property stays on tax rolls.
    • GHA provides payments to renters.
    • Property owner pays normal tax due.
    • GISD gets paid no matter what happens in Washington DC!
    Texas City negotiated with HUD (prior to Ike), got rid of most of their public housing, and went to a voucher program.

    There are over 500 Section 8 housing units in Galveston paying GISD full value on their property taxes!

    Chief Economist for GHA and

    Galveston City Council

    “How is the housing question to be settled then? In present-day society, it is settled just as any other social question: by the gradual economic leveling of demand and supply...” - Engels, “The Housing Question” 1872


    Annual Impact to GISD Tax Levy 2001 - 2010

    This impact represents 569 units – financial impact to GISD will increase if City Council adopts public/private partnership development (AKA Subsidized Housing)!

    Actual Annual Tax Levy Impact to FISD, CCISD, LMISD, DISD, TCISD?


    economics 101 aka the inescapable conclusion

    Economics 101AKA “The Inescapable Conclusion”

    In order to collect the same level of tax revenue,

    GISD Trustees will have to raise tax rates!

    CCISD, FISD, DISD, LMISD, and TCISD will not!

    the adequacy of educational cost functions lessons from texas june 2009
    The Adequacy of Educational Cost Functions: Lessons from Texas June 2009
    • It costs significantly more to produce higher levels of output quality, both in terms of changes in passing rates and in the percent of students taking advanced courses. It also costs districts more to operate in environments that require a more resource intensive instructional technology, such as when the percentage of economically disadvantaged students or of special education students is high or when districts are relatively remote from large metropolitan areas. For an example, when evaluated at the sample mean values for all explanatory variables, the cost of educating an economically disadvantaged student is 27.6% higher than the education cost for a student who is not eligible for free or reduced lunch.

    *Timothy J. Gronberg

    Department of Economics

    Texas A&M University

    *Dennis W. Jansen

    Department of Economics

    Texas A&M University

    *Lori L. Taylor

    The Bush School of Government and Public Service

    Texas A&M University

    GISD has the highest % of economically disadvantaged students in the county and one of the highest in Texas!

    GISD only receives 20% more for an economically disadvantaged student. We lose at least 7.6% per ED student!

    more data
    More Data….
    • The state's school funding system is set up to pay districts more for their impoverished students, but some believe the extra dollars aren't enough.
    • But it costs an estimated 40 percent more to educate children from low-income families, according to expert testimony in school funding trials.

    According to S&P, economically disadvantaged students cost 1.35 times as much to educate, on average, as the non-disadvantaged student.

    Schools see more minority, poor kids

    By Gary Scharrer and Ericka Mellon– MySanAntonio.com; Express-News; 01/10/2010

    The Conciliation Agreement mandates Economically Disadvantaged students attend the ISD with the highest percentage of Economically Disadvantaged students!.
    “At Risk” AND “Free Lunch”

    This population of students require more resources for a student to attain a similar achievement level as a non- “at risk and free lunch” student.

    GISD has 25 times more than FISD!

    No way to know how many “At Risk and Free Lunch” students will attend GISD due to the Conciliation Agreement – but isn’t GISD doing more than our fair share?


    At Risk & Free Lunch –

    % of Student Population


    % of Total ISD State Revenue for Galveston County



    The Conciliation Agreement reinforces this disproportionate distribution of resources and obligations!


    Where was the Impact Study?!

    The Conciliation Agreement adversely impacted

    just one school district - GISD!


    Numbers do NOT include GHA’s proposed

    “mixed-income” ED students!

    The Conciliation Agreement adversely impacted

    just one school district - GISD!

    annual budget deficit

    Number of ADDITIONAL

    Economically Disadvantaged students

    Annual Budget Deficit

    Texas provides an extra .2 weighting per economically disadvantaged student. Studies show educating these students to the achievement level of a non-economically disadvantaged student requires a .3 weighting! We are losing at least .1 weighting per student due to the Conciliation Agreement.

    Annual Deficit


    Edgewood vs. Kirby

    “We conclude that, in mandating "efficiency," the constitutional framers and ratifiers did not intend a system with such vast disparities as now exist. Instead, they stated clearly that the purpose of an efficient system was to provide for a "general diffusion of knowledge." The present system, by contrast, provides not for a diffusion that is general, but for one that is limited and unbalanced. The resultant inequalities are thus directly contrary to the constitutional vision of efficiency…. There must be a direct and close correlation between a district's tax effort and the educational resources available to it; in other words, districts must have substantially equal access to similar revenues per pupil at similar levels of tax effort.”

    The Texas Supreme Court weighs in…..

    texas constitution article 1 bill of rights section 3 equal rights

    “All free men, when they form a social compact, have equal rights, and no man, or set of men, is entitled to exclusive separate public emoluments, or privileges, but in consideration of public services.”

    • The right of an education is fundamental.
    • Providing an education is the state’s responsibility.
    • In meeting it’s responsibility, the state cannot favor some over others.
    Texas Constitution, Article 1, Bill of Rights, Section 3, Equal Rights

    Conciliation Agreement forces TDHCA to violate the Texas Constitution


    GISD’s budget will be annually impacted between $307,000 and $1,300,000+.

    • GISD’s tax revenue will be annually impacted $500,000+.
    • These figures significantly increase with GHA’s future proposed “mixed income” developments!
    • Estimated legal costs will be less than one year of GISD’s lowest impact cost.
    let s not be naive
    The Conciliation Agreement is signed and the signatories have no motivation to change it.

    GISD has no other option but to take the Conciliation Agreement to a person that has never formally been asked to review it – a judge.

    Conciliation Agreement was never ordered,

    reviewed, or approved by any court!

    Let’s not be naive


    The Board recommends the creation of a $250,000 budget amendment to pay for all costs associated with stopping any adverse consequences of all Federal funding distributions not equitably shared by other area ISDs.

    The Board instructs the Superintendent to retain a suitable law firm.

    The Board instructs the Superintendent to ask the law firm to formally present recommended options prior to the Board’s January meeting.

    The Board recommends that these agenda items, or items that seek to negate or alter the votes on the above agenda items, will not be revisited until the current Conciliation Agreement is voided in whole or is approved by a court with appropriate jurisdiction.