For the Fiscal Year Ended June 30, 2011

For the Fiscal Year Ended June 30, 2011 Dr. Ralph H. Draper Superintendent of Schools Christine A. Porter, CPA, RTSBA Associate Superintendent, Financial Services Division Ann Westbrooks, CPA, RTSBA Executive Director of Finance, Finance Department Mary Welch Director of Accounting, Finance Department

SPRING INDEPENDENT SCHOOL DISTRICT

PRINCIPAL OFFICIALS & ADVISORS

BOARD OF TRUSTEES

Justine Durant, President Regional Director, Cigna Healthcare of Texas, Inc.

Jana Anders, Vice-President Vice President, Investex Credit Union

Jeffrey Mitchell, Secretary Independent Consultant

Calvin Tang, Assistant Secretary Chief Financial Officer, NACE International

Ron Crier, Member Consultant, HouData

Mel Smith, ESQ., Member Attorney, Espey & Associates, P.C.

Dr. Deborah Jensen, Member Co-Director of Programming & Implementation – Southeast Regional T-STEM Center

ADMINISTRATION

Dr. Ralph H. Draper, Superintendent

Dr. Dalane Bouillon, Associate Superintendent for Curriculum & Instructional Services

Christine A. Porter, Associate Superintendent for Financial Services

Renee Coleman, Associate Superintendent for Human Resources

Regina Curry, Associate Superintendent for Public Relations and Technology

Ruthie Foreman, Area Superintendent

Ann Sandoval, Area Superintendent

CONSULTANTS AND ADVISORS

Null-Lairson, Auditors

Thompson & Horton, L.L.P., Legal Counsel

Bracewell & Giuliani L.L.P., Legal Counsel

Rogers, Morris & Grover, L.L.P., Legal Counsel

Perdue, Brandon, Fielder, Collins & Mott, L.L.P., Tax Attorneys

Vinson & Elkins L.L.P., Bond Counsel

RBC Capital Markets, Financial Advisors

i SPRING INDEPENDENT SCHOOL DISTRICT TABLE OF CONTENTS

Page Number Exhibit I. INTRODUCTORY SECTION Principal Officials and Advisors i Table of Contents ii Letter of Transmittal 1 Organizational Chart 15 GFOA Certificate of Achievement 17 ASBO Certificate of Excellence 19

II. FINANCIAL SECTION Independent Auditors' Report 21 Management's Discussion and Analysis (Unaudited) 23 BASIC FINANCIAL STATEMENTS Government-wide Financial Statements: Statement of Net Assets 35 A-1 Statement of Activities 36 A-2 Fund Financial Statements: Balance Sheet - Governmental Funds 37 B-1 Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Assets 38 B-2 Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds 39 B-3 Reconciliation of the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balances to the Statement of Activities 40 B-4 Statement of Net Assets - Proprietary Funds 41 B-5 Statement of Revenues, Expenses and Changes in Net Assets - Proprietary Funds 42 B-6 Statement of Cash Flows - Proprietary Funds 43 B-7 Statement of Fiduciary Assets and Liabilities - Fiduciary Fund 44 B-8 Notes to Basic Financial Statements 45 B-9

(Continued)

ii SPRING INDEPENDENT SCHOOL DISTRICT TABLE OF CONTENTS (Continued)

Page Number Exhibit REQUIRED SUPPLEMENTARY INFORMATION (Unaudited) Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual - General Fund 75 C-1 Notes to Required Supplementary Information 76 C-2

COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES Major Governmental Funds: Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual - Debt Service Fund 77 D-1 Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual - Capital Projects Fund 78 D-2 Non-Major Governmental Funds: Combining Balance Sheet - Non-Major Governmental Funds - Special Revenue Funds 80 E-1 Combining Statement of Revenues, Expenditures and Changes in Fund Balance - Non-Major Governmental Funds - Special Revenue Funds 86 E-2 Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual - Child Nutrition Fund 92 E-3 Internal Service Funds: Combining Statement of Net Assets - Internal Service Funds 93 F-1 Combining Statement of Revenues, Expenses and Changes in Net Assets - Internal Service Funds 94 F-2 Combining Statement of Cash Flows - Internal Service Funds 95 F-3 Agency Funds: Statement of Changes in Assets and Liabilities - Fiduciary Funds 97 G-1 OTHER SUPPLEMENTARY INFORMATION Compliance Schedules: Schedule of Delinquent Taxes Receivable 100 H-1 Indirect Cost Computation Schedule 102 H-2

(Continued)

iii SPRING INDEPENDENT SCHOOL DISTRICT TABLE OF CONTENTS (Concluded)

Page Number Table III. STATISTICAL SECTION (Unaudited) Financial Trends: Net Assets by Component - Last Nine Fiscal Years 104 I Changes in Net Assets - Last Nine Fiscal Years 106 II Fund Balances, Governmental Funds - Last Ten Fiscal Years 108 III Changes in Fund Balances, Governmental Funds - Last Ten Fiscal Years 110 IV Revenue Capacity: Assessed Value and Actual Value of Taxable Property - Last Ten Fiscal Years 113 V Property Tax Rates - Direct and Overlapping Governments (Per $100 of Assessed Valuation) - Last Ten Fiscal Years 114 VI Principal Taxpayers - Current Fiscal Year and Nine Years Ago 116 VII Property Tax Levies & Collections - Last Ten Fiscal Years 117 VIII Debt Capacity: Outstanding Debt by Type - Last Ten Fiscal Years 118 IX Ratios of Net General Obligation Bonded Debt Outstanding Last Ten Fiscal Years 119 X Computation of Estimated Direct and Overlapping Debt 120 XI Demographic and Economic Information Demographic and Economic Information - Last Ten Fiscal Years 122 XII Principal Employers - Current and Four Years Ago 123 XIII Operating Information Full-Time Equivalent District Employees by Type - Last Eight Fiscal Years 124 XIV Operating Statistics - Last Ten Fiscal Years 125 XV Teacher Base Salaries - Last Ten Fiscal Years 126 XVI School Building Information - Last Ten Fiscal Years 127 XVII Spring ISD Map and Facility Locations 130 XVIII

Spring Independent School District www.springisd.org

16717 Ella Blvd.  Houston, Texas 77090  Tel. 281.891-6075  Fax 281.891.6066

November 8, 2011

The Honorable Board of Trustees Spring Independent School District 16717 Ella Blvd. Houston, Texas 77090

Dear Board Members:

The Comprehensive Annual Financial Report of the Spring Independent School District (the “District”, “Spring ISD” or “SISD”), Houston, Texas, for the fiscal year ended June 30, 2011, is submitted herewith. The Comprehensive Annual Financial Report is management’s report of financial operations to the Board of Trustees (the “Board”), taxpayers, grantor agencies, employees, the Texas Education Agency (“TEA”), and other interested parties. The government-wide financial statements in this report provide an overview of the District’s governmental activities, while detailed fund financial statements describe specific activities of each fund group used in accounting for the District’s financial transactions. This report was prepared by the District’s Finance Department in accordance with generally accepted accounting principles (“GAAP”) and reporting standards as promulgated by the Governmental Accounting Standards Board (“GASB”).

Responsibility for the accuracy of the data and completeness and fairness of the presentation, including all disclosures, rests with the District. We believe that the data, as presented, is accurate in all material respects; that information is presented in a manner designed to set forth fairly the financial position and results of operations of the District as measured by the financial activity of its various funds; and that all disclosures necessary to enable the reader to gain the maximum understanding of the District’s financial activities have been included. In order to provide a reasonable basis for making these representations of responsibility, management of the District has established a comprehensive internal control framework that is designed to protect the District’s assets from loss, theft or misuse. Additionally, the internal control framework is designed to compile sufficient reliable information for the preparation of the District’s financial statements in conformity with GAAP. Because the cost of internal controls should not outweigh their benefits, the District’s comprehensive framework of internal controls has been designed to provide reasonable assurance rather than absolute assurance that the financial statements will be free from material misstatement. To the best of our knowledge and belief, this financial report is complete and reliable in all material respects.

The financial statements of the District have been audited by Null-Lairson, a firm of licensed certified public accountants. The goal of the independent audit is to provide reasonable assurance that the financial statements of the District for the fiscal year ended June 30, 2011, are free of material misstatement. The independent audit involves examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. The independent auditors concluded based upon the audit, that there was a reasonable basis for rendering an unqualified opinion that the District’s financial statements for the fiscal year ended June 30, 2011, are fairly presented in conformity with GAAP. The independent auditors’ report is presented as the first component of the financial section of this report.

The independent audit of the financial statements is part of a broader, federally mandated “Single Audit” designed to meet the special need of federal grantor agencies. The standards governing Single Audit engagements require the independent auditor to report not only on the fair presentation of the financial statements, but also on the audited government’s internal controls and compliance with legal requirements, with special emphasis on internal controls and legal requirements involving the administration of federal awards. These reports are available in the District’s separately issued Single Audit Report.

GAAP requires that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of Management’s Discussion and Analysis (“MD&A”). This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. The District’s MD&A can be found immediately following the report of the independent auditors.

REPORTING ENTITY

An act of the Thirty-Eighth Legislature of the State of Texas in 1923 provided the statutory authority for the creation of independent school districts in the State of Texas. The District was established and incorporated in 1935 by the combination of two separate schools districts, the Spring School District and the Harrell School District. As an independent school district, a seven-member board of trustees elected from residents of the District constitutes the governing body. Based on legislative authority codified in the Texas Education Code, the trustees (1) have exclusive power to manage and govern the District; (2) can acquire and hold real and personal property; (3) shall have power to levy and collect taxes and to issue bonds; (4) can contract for appointed officers, teachers, and other personnel as well as for goods and services; and (5) have the right of eminent domain to acquire real property.

As required by GAAP, the financial statements of the reporting entity include those of the District (the primary government), an independent reporting entity clearly within the criteria established by GASB.

The District encompasses approximately 57 square miles and is located in northern Harris County, Texas, approximately 20 miles north of downtown Houston. Interstate Highway 45 (“I-45”) traverses the District north to south, and Farm-to-Market Road 1960 (“FM 1960”) bisects the District east to west approximately at its midpoint. The unincorporated community of Spring is located in the District. The District’s system presently includes twenty-six elementary schools, six traditional middle schools, a school-of-choice middle school, three traditional high schools, a school-of-choice high school, and a virtual high school. Marshall Elementary School’s opening was delayed last year and opened in August 2011.

The District is one of twenty-four public school districts located in Harris County. It provides a program of public education from pre-kindergarten through grade twelve. The purpose and responsibility of the District is to provide a thorough and efficient educational system for the children enrolled in public schools within its boundaries whereby each child has access to programs and services that are appropriate to his or her educational needs. In addition to the regular educational program, the District offers programs in areas such as vocational education, special education, gifted and talented, bilingual and compensatory education. All District schools are fully accredited by the TEA and the Southern Association of Colleges and Schools.

The District continues to experience rapid growth in the number of students enrolled. Peak enrollment was 36,397 in 2011 and 35,509 in 2010, an increase of 888 and 1,278 students respectively. Average daily attendance increased by 865 students in 2010-2011 and by 1,123 students in 2009-2010.

ORGANIZATIONAL PURPOSE

Vision Statement

This statement reads, “By 2015, Spring Independent School District will be recognized nationally as a leader among learning organizations and known for exemplary student achievement.” This was adopted by the Board in 2007-2008. This statement is the focus of all decisions being made and programs chosen for the District.

Mission Statement

The mission of the Spring Independent School District is to develop students who excel academically, reason and solve problems rationally, and act responsibly by displaying good character and citizenship.

Division Missions

Administration: Establish protocol and mobilize District resources to achieve the District vision.

Curriculum and Instructional Services: Continually advance student achievement within our learning organization.

Financial Services: Support the learning organization through recognized financial leadership and innovative progressive programs for resource management.

Human Resources: Recruit, hire and retain quality staff who are committed to student success.

Public Relations and Technology: Promote Spring Independent School District as a nationally recognized learning organization and mobilize District resources to achieve the District vision.

Spring ISD is both a growing and changing school district. We take pride in the fact that more families are choosing SISD as the place for the education of their children, and we recognize and value the beliefs and cultures represented by all our families. We are committed to working together as parents, educators, and community members.

Expectations of the District, its Board of Trustees, its staff, students and community are reflected in its core philosophy. Spring ISD:

 Believes in providing a basic educational program of instruction that permits each student to attain his or her academic potential.  Believes that the education of our students is a responsibility shared equally by the Board, students, their families and staff members, with the expectation that all will actively support and participate in the development of our children.  Encourages all students to participate in school programs and activities for the purpose of discovering personal strengths and abilities and developing well-rounded interests.  Believes that patriotism, responsible citizenship, self-discipline, respect for authority and respect for others, including an understanding of our heritage, should be emphasized in all aspects of the District’s operation.  Expects that parents will participate, support and cooperate in the education and discipline of their children.  Believes in selecting staff members of the highest quality and rewarding them on the basis of achievement and performance.  Expects that each staff member will be a model of commitment to professionalism and a model and example of good citizenship to the students, to the community, and to one another.  Believes that it is the responsibility of the Board to establish policy and direction for the District and to delegate the management and operation of the District to the Superintendent and the staff.  Recognizes and respects the financial trust placed in the Board of Trustees by the taxpayers of the District and understands that taxpayers expect that the District will be operated in a fiscally responsible manner.

DECLARATION OF AFFIRMATION

The Core Business of Schools

The core business of schools, and therefore school districts, is to provide every staff member and student opportunities to be engaged in interesting work each day, which allows them to be contributing citizens of a democratic society.

 There is always room for improvement.  The primary customers of schools are the students.  A changed core business requires changed roles.  Beliefs, vision and results define the system.  Leadership is everyone’s business.  Capacity building is the key.

SIX KEYS FOR ACHIEVEMENT

The Six Keys for fostering and maintaining high motivation and achievement should be present in classrooms. They are the human need for:

 Safety  Success  Love and Belonging  Freedom and Independence  Fun and Enjoyment  Valued Purpose

LONG-TERM FINANCIAL PLANNING

Enrollment is projected to increase 2.1% during the 2011-2012 school year and 6.2% by the 2013-2014 school year. Currently there are 651 students per square mile in the District.

In the 2006-2007 fiscal year, the District passed a $280 million dollar bond authorization as part of a plan to accomplish the goals and objectives described in the District’s Five-Year Strategic Plan. Approximately 58 percent of this bond addresses student enrollment growth.

The District’s approach to responding to the combination of fast student growth in a restricted funding environment with increasing academic standards has been to ensure that the budget process is instructionally driven and guided by the Strategic Plan. The major budget priorities are to ensure financial stability in an ever changing economic environment while providing engaging learning opportunities for both staff and students.

DISTRICT STRATEGIES AND INITIATIVES

The Five-Year Strategic Plan is a living document, providing the framework and guidance for the District to outline its priorities and goals of the District for the five-year period from 2010 - 2015. The Five-Year Strategic Plan sets out the District’s objectives and strategies necessary to achieve its goals. The goals are:

 Spring ISD will build student learning capacity in order for students to be post-secondary ready and contributing members of a democratic society.  Spring ISD will build both staff learning and leadership capacity in order for staff to positively impact others.  Spring ISD will build community capacity in order to support meaningful partnerships.  Spring ISD will ensure effective and efficient utilization and/or compliance of systems and resources in order to support the learning organization.

MAJOR INITIATIVES AND ACCOMPLISHMENTS

District Achievements

 Spring ISD has received the 2011 Achievement of Excellence in Procurement Award, an honor shared by only 16 school districts and 28 government agencies in Texas.  Two schools received Exemplary ratings and nine schools received Recognized ratings for 2010-2011 from TEA.  Jenkins Elementary School Chess Club was recognized at the Board meeting for winning first place in the 2010 National First Move Online Chess Club competition.  Three schools have been recognized by the National Center for Educational Achievement (NCEA) for high performance in academic areas for 2010. Ponderosa Elementary School was recognized for academic performance in the area of writing; Link Elementary School for mathematics; and Smith Elementary School for science.  Spring ISD Supply Chain Services has received the Texas Association of School Business Officials (TASBO) Purchasing Award of Merit for the third consecutive year.  Ponderosa Elementary School and Smith Elementary School received the Healthier US School Gold Award from the National School Nutrition Association.  The Child Nutrition Department received the following awards from the Texas Association of School Nutrition: Gold Award for Membership, Breakfast Participation Award and Silver Award for Certification.  The District received the Certificate of Excellence in Financial Reporting for its Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2010 from the Association of School Business Officials for the 30th consecutive year.  The District received the Certificate of Achievement for Excellence in Financial Reporting for its Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2010 from the Government Finance Officers Association for the 30th consecutive year.

Staff Achievements

 Spring High School special education instructor received a Special Education Inclusion Award from the Texas Education Agency and Best Buddies and was honored as an outstanding Special Education Advisor for the Best Buddies chapter of Spring High.  A nurse at Dekaney High School has been named the 2011 Preceptor of the Year by the Lone Star College - Montgomery nursing program.  The READ 180 Stage C educator at Dekaney High School has been named the 2011 READ 180 Outstanding Educator by Scholastic for using the READ 180 system to help students overcome their reading challenges.  Spring ISD bilingual and English as a Second Language (“ESL”) teachers received special recognition from the Suburban Houston Association for Bilingual Education (“SHABE”).  The Director of Operations has been named the 2011 Texas Gulf Coast Maintenance and Operations Association Director of the Year.  The Director of Child Nutrition and a supervisor received the Star Member Award from the National School Nutrition Association.

 The Tax Assessor was named Region 6 Director and named Certified Tax Assessor of the Year at the local level.  A Child Nutrition supervisor received the Outstanding Achievement Award from the Texas Association of School Nutrition.  A Child Nutrition employee received the Presidents Gold for Leadership from the Texas Association of School Nutrition.  A Child Nutrition employee was named Specialist of the Year by the the Texas Association of School Nutrition.  A Child Nutrition supervisor was named Vice-President of the Texas Association of School Nutrition.

Student Recognition

 The Spring High School Lion Battalion participated in the premier Junior Reserve Officer Training Corp (“JROTC”) Leadership Academy held at Camp Strake in Conroe this summer.  A member of the Spring High School Future Farmers of America (“FFA”) Chapter served as a Texas FFA Foundation Ambassador at the 82nd annual Texas Future Farmers of America Convention.  Westfield High School Army JROTC students received seven individual Outstanding Awards at the National Army JROTC 2010 Summer Camp.  At the Rice University Drill Meet, the Spring High School Navy JROTC took first place in academic overall competition, first place in female color guard competition and first place in the 1600-yard relay.  The Spring High School Color Guard qualified for the Winter Guard International World Championships and took twelfth place.  The Westfield High School JROTC took first place overall in the Texas Leadership Bowl competition. Cadets took second place in the Western Army Cadet Command National Championship.

Student Academic Achievements

 Four Spring ISD students have been named commended in the 56th Annual National Merit Scholarship Program.  Two Spring ISD students have been named finalists in the 2010-11 National Hispanic Recognition Program.  Two Spring ISD students have been recognized by the 2010-11 National Achievement Program.  Two Spring ISD students took first place in the 2010 National Kavli Science Video Contest. The video titled “Science is Cool! Know Your Science” earned the students a trip to Washington D.C. where the top ten finalists were recognized.  Fourteen Spring ISD middle school students were recognized for earning state recognition in the Duke University Talent Identification Program for their scores on the Scholastic Achievement Test (“SAT”).

 The Westfield High School valedictorian, was named the South Texas District National Forensic League (NFL) Student of the Year. In addition, she is a Texas Forensic Association state qualifier in public forum debate and domestic extemporaneous speaking, University Interscholastic League (“UIL”) state qualifier in informative speaking and NFL national qualifier in U.S. extemporaneous speaking.  Six Carl Wunsche Sr. High School students earned top honors at the State Health Occupations Students of America competition.  The Westfield High School JROTC took first first place in the Texas Leadership Academic Bowl.

Student Artistic Achievements

 The Spring High School Chorale has been selected as a winner in the Mark of Excellence National Choral Honors Project for the third consecutive year.  The Spring High School Wind Ensemble has been selected as a winner in the Mark of Excellence National Wind Band Honors Project for the second time.  Two Spring High School students qualified for the 2010-11 Texas All-State Choir. Nine Spring ISD students were selected by audition to perform with the Texas All-State Band and Orchestra at the Texas Music Educators Association Convention in February. The students represent the top one percent of the over 40,000 Texas instrumental students who began the rigorous audition process last fall.  Two Spring High School students were recognized for earning Gold Key awards for their art entries in the Harris County Department of Education 2011 Regional Scholastic Art Awards competition.  The Spring High School Chamber Choir earned superior ratings and was named 1st runner-up for their outstanding performance in the 2011 American Classic Madrigal and Chamber Choir Festival.

Student Athletic Achievements

 Dekaney High School: Girls Basketball District Champion and Area Finalist, Boys Basketball District Champion and Regional Semi-Finalist, Boys Track Regional Qualifier and Girls Track Regional Qualifier.  Spring High School: Girls Track Regional Qualifier, Swimming 2011 Regional Qualifier, Cross Country Regional Qualifier, Boys Track State Qualifier and State Pole Vault Champion, Boys Basketball State Playoffs and Girls Soccer 2011 State Playoffs.  Westfield High School: Boys Track Regional Qualifier, Girls Track 2011 Regional and State Qualifiers, Cross Country Regional Qualifier, Boys Soccer 2011 State Playoffs, and Girls Swimming Regional Qualifier.  Bammel Middle School: 7th Grade A & B Football District Champions, 7th Grade B & 8th Grade A Boys Basketball District Champions, 7th Grade A & C Basketball Co-Champions.  Claughton Middle School: 8th Grade A Football Co-Champions, 8th Grade B & C Football District Champions, 7th Grade Boys C Basketball Co-Champions, 8th Grade Boys C Basketball District Champions, 7th Grade A & B and 8th Grade Girls Basketball District Champions.

 Bailey Middle School: 8h Grade Volleyball Co-Champions, 7th & 8th Grade Girls Cross Country District Champions, 8th Grade A Girls Basketball District Champions and 8th Grade Boys B Basketball Team District Champions.  Wells Middle School: 7th & 8th Grade Girls Track and Field District Champions, 8th Grade A Football Co-Champions, 7th Grade Football District Champions and 7th Grade A Boys Basketball Co-Champion.  Twin Creeks Middle School: 8th Grade A Volleyball Co-Champions, 7th Grade A Boys Basketball Co-Champions and 7th Boys Track & Field District Champions.

Education Foundation

The District receives support from the Spring Education Foundation (the “Foundation”), a non-profit organization. The Foundation seeks funds to support initiatives related to the District’s Five-Year Strategic Plan. The goal of the Foundation is to raise funds for teacher initiative projects and for campus initiative projects that attempt to improve student achievement and success. Grant awards are up to $1,000 for teacher or classroom projects, up to $5,000 for campuses, and up to $10,000 for multi-campus projects. During 2010-2011 grants were awarded totaling $114,340 to improve services to students. The foundation does not meet the criteria for inclusion in the District’s financial statements under the provisions of GASB Statement No. 39.

ECONOMIC CONDITION AND OUTLOOK

The information presented in the financial statements is perhaps best understood when it is considered from the broader perspective of the specific environment within which the District operates.

The Houston metropolitan area ranks as the fourth-largest metropolitan area in the country. Demographically and economically, the region has rapidly diversified into a cosmopolitan, international center of business and industry. The District must be prepared to meet the challenges of educating an increasingly heterogeneous student population. Furthermore, in light of the recent growth of service- sector jobs in the Houston area, these children must be prepared for careers requiring high-level skills in mathematics, science, and technology in addition to solid reading and writing skills.

Local Economy

The District’s economy has historically been based upon mineral production and residential development. The expansion of the Houston metropolitan area northward along I-45, the main Houston/Dallas traffic artery, and along FM 1960 has had a substantial impact on the economy of the District. The District is primarily commercial in character with numerous shopping centers, automobile dealerships, hotels and combination business park/multi-family developments that have been built along I-45 and FM 1960.

The following is a summary of the tax base by category for fiscal years 2011 and 2010:

2011 2010 Type of Property Amount % Amount % Residential $4,201,674,116 47.32% $4,394,089,204 45.60

Commercial, Industrial and Multi-Family 4,193,664,063 47.22% 4,725,826,933 49.04%

Acreage 86,700,468 0.98% 117,552,023 1.22% Vacant Lots and Tracts 251,298,376 2.83% 237,901,706 2.47% Utilities 128,947,652 1.45% 132,330,501 1.37% Mineral Reserves 17,658,463 0.20% 28,270,459 0.30% Total Assessed Value 8,879,943,138 100.00% 9,635,970,826 100.00% Less: Exemptions (1,576,533,606) (1,618,762,953)

Net Taxable Value $7,303,409,532 $8,017,207,873

The percentage mix of property values by category in the District has been fairly consistent over the past several years.

Residential Properties

For the 2011 fiscal year, the Harris County Appraisal District listed 39,555 single-family residences. This compares to 38,943 dwellings in this category for last year. Developers continue to develop new subdivisions throughout all geographic areas. The 612 new residences occurred throughout the District.

The average value of the residential property in the 2011 fiscal year was $90,041, which compares to $106,698 in the 2010 fiscal year. This represents a 15.61% decrease in the average home value from the prior year. The continual decline in market conditions influences development of new residential subdivisions within the District boundaries. During the 2011 fiscal year, the assessed value for residential properties decreased $192,415,088 or 4.38% under the previous year.

Commercial, Industrial and Multi-Family Properties

We have seen a decrease in commercial growth primarily due to economic conditions. During the 2011 fiscal year, the assessed value for commercial properties decreased $532,162,870 or 11.26% under the previous year. Acreage The vacant acreage tracts continue to decrease as residential and commercial properties are built. From the 2010 to the 2011 fiscal year we experienced a shift in this category of property by approximately 575 acres.

Vacant Lots and Tracts

The total number of vacant lots continuously changes due to new subdivision sections.

Mineral Reserves

The assessed value for the various mineral reserves experienced a decrease of $10,611,996 or 37.54% under the previous year. The decrease is due to a decline in both production and pricing.

RELEVANT FINANCIAL POLICIES

Accounting System

The diverse nature of the District’s operations and the necessity of legal compliance preclude recording the financial transactions of the District in a single fund. The District’s accounting system is organized and operated on a “fund basis.” Each fund is a distinct, self-balancing accounting entity. The various funds are fully described in Note 1 of the Notes to the Financial Statements.

In developing, evaluating, and improving the District’s accounting system, consideration is given to the adequacy of the internal control structure. Internal controls are designed to prevent loss from unauthorized use or disposition and that transactions are executed in accordance with management’s authorization and recorded properly to permit the preparation of financial statements in accordance with GAAP. The concept of reasonable assurance recognizes that the cost of a control should not exceed the benefits likely to be derived, and the evaluation of costs and benefits requires estimates and judgments by management.

All internal control evaluations occur within the above-mentioned framework. We believe the District’s internal control structure adequately safeguards assets and provides reasonable assurance of the proper recording of financial transactions.

Single Audit

As a recipient of federal and state awards, the District is also responsible for ensuring that an adequate internal control structure is in place to ensure compliance with applicable laws and regulations related to these programs. This internal control structure is subject to periodic evaluation by management and the internal audit staff of the District.

As a part of the District's single audit, tests are made on the internal control structure, including that portion related to federal awards programs, as well as to determine that the District has complied with applicable laws and regulations. The results of the District's single audit for the fiscal year ended June 30, 2011 indicated no instances of material weaknesses in the internal control structure and no instances of material noncompliance with applicable laws and regulations.

BUDGETARY CONTROLS

The District maintains budgetary controls to ensure compliance with legal provisions embodied in the annual appropriated budget approved by the District's Board. Budgetary control is maintained at the organizational level. Principals and department heads have primary responsibility for controlling and amending their budgets as necessary and ensuring that no expenditure is made unless funds have been properly authorized. Funds are properly authorized when approved by the Board.

Activities of the General Fund, Child Nutrition Fund, and Debt Service Fund are included in the annual appropriated budget. The Special Revenue Funds and Capital Projects Funds are included for informational purposes only. The level at which expenditures cannot legally exceed the appropriated amount is established by function within an individual fund. The District also maintains an encumbrance accounting system as one technique of accomplishing budgetary control. Encumbered amounts lapse at year-end but are reappropriated as part of the following year's budget.

CASH MANAGEMENT

During fiscal year 2011 cash was invested in the Texas Local Government Investment Pool (“TexPool”) and certificates of deposit. TexPool is a public funds investment pool established by the Texas Treasury Safekeeping Trust Co. to provide a safe environment for the placement of local government funds in authorized short-term, fully-collateralized investments. The total amount of interest earned in the governmental funds and proprietary funds for the fiscal year ended June 30, 2011 was $335,720, a decrease of $1,038,577 from the fiscal year ended June 30, 2010. This decrease was due primarily to lower interest rates earned as a result of current market conditions and the use of capital project funds to complete construction on new facilities.

The District's investment policy is to minimize credit and market risks while maintaining a competitive yield on its portfolio. Accordingly, deposits were either insured by federal depository insurance or collateralized by securities pledged to the District. All collateral on deposits was held either by the Federal Reserve Bank or a third party bank in the District’s name.

RISK MANAGEMENT

The objectives of the risk management program are to safeguard the assets of the District, minimize the financial effect of potential losses, and provide a reasonable level of employee benefits consistent with affordable funding.

The District purchases commercial insurance for real and personal property with a blanket limit of $1,025,170,501. In no event shall liability under this policy arising out of one occurrence exceed $500,000,000 nor shall liability in any one occurrence for any one building, any one structure or business personal property at any one location exceed 125% of the individually stated value for such property as shown in the latest statement of values on file with the company, nor shall liability exceed a specific limit of insurance applying to any insured loss, coverage or location(s).

Casualty risks are insured with limits of $1,000,000 for general liability and $1,000,000 combined single limit for automobile liability. Professional liability risks are insured with a limit of $3,000,000 aggregate limit. The policies are subject to specific deductibles as shown in each policy.

The District is exposed to various risks related to torts: theft of, damage to and destruction of assets; errors and omissions; and natural disasters. The District’s risk management program encompasses various means of protecting the District against losses through commercial insurance carriers.

The District’s workers’ compensation self-insurance program provides medical and indemnity payments as required by law for on-the-job-related injuries and is accounted for in the Workers’ Compensation Fund, an Internal Service Fund. A third-party administrator manages and oversees claims loss control. The District obtained excess loss insurance, which limited annual claims paid from the Workers’ Compensation Fund for the fiscal year ended June 30, 2011 to $300,000 for any individual participant and an aggregate limit of $1,000,000. The liability for outstanding losses includes an amount for claims that are incurred but not reported.

In addition, the District’s Safety and Risk Management Department implements various risk control techniques, including annual hazard surveys. The District practices aggressive administration to maintain and improve efficiency in the management of workers’ compensation claims. The claims and related expenses are charged to an internal service fund that receives revenue from the General Fund from a budget established for that purpose.

Various types of insurance coverage are made available to the employees. Portions of the coverage available, such as medical insurance, is provided through a program with contributions made both by the District and the employees. Other available benefits offered to employees on a voluntary basis include dental, vision, cancer, life, and long-term disability insurance, as well as dependent and supplemental- life insurance policies.

INDEPENDENT AUDIT

The Texas Education Code Section 44.008 requires an annual audit of the accounts, financial records, and transactions of the District by independent certified public accountants selected by the Board. This requirement has been complied with, and the independent auditors’ report has been included in this report.

FINANCIAL REPORTING AWARDS

GFOA Certificate of Achievement

The Government Finance Officers Association of the United States and Canada (“GFOA”) awarded a Certificate of Achievement for Excellence in Financial Reporting to the District for its Comprehensive Annual Financial Report for the fiscal year ended June 30, 2010. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized Comprehensive Annual Financial Report. This report must satisfy both generally accepted accounting principles and applicable legal requirements.

A Certificate of Achievement is valid for a period of one year only. We believe that our current Comprehensive Annual Financial Report continues to meet the Certificate of Achievement Program’s requirements and we are submitting it to the GFOA to determine its eligibility for another certificate.

FINANCIAL SECTION

Independent Auditors’ Report

To the Board of Trustees Spring Independent School District Spring, Texas

We have audited the accompanying financial statements of the governmental activities, each major fund and the aggregate remaining fund information of Spring Independent School District (the “District”) as of and for the year ended June 30, 2011, which collectively comprise the District’s basic financial statements as listed in the table of contents. These financial statements are the responsibility of the District’s management. Our responsibility is to express opinions on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions.

In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, each major fund, and the aggregate remaining fund information of the District as of June 30, 2011, and the respective changes in financial position and cash flows, where applicable, thereof, for the year then ended in conformity with accounting principles generally accepted in the United States of America.

In accordance with Government Auditing Standards, we have also issued our report dated November 1, 2011 on our consideration of the District’s internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts, grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report, issued under separate cover, is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit.

The Management’s Discussion and Analysis and budgetary comparison information on pages 23 through 34 and pages 75 through 76, respectively, are not a required part of the basic financial statements but are supplementary information required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements.

3411 Richmond | Suite 500 | Houston, TX 77046 | (P) 713.621.1515 | (F) 713.621.1570 www.null-lairson.com

We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the District’s basic financial statements. The combining and individual fund statements and schedules and other supplementary information, as listed in the table of contents, are presented for purposes of additional analysis and are not a required part of the financial statements. The combining and individual fund statements and schedules and other supplementary information are the responsibility of management and are derived from and relate directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole.

The Introductory Section and Statistical Section listed in the table of contents have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we express no opinion on them or provide any assurance on them.

Houston, Texas November 1, 2011

SPRING INDEPENDENT SCHOOL DISTRICT

MANAGEMENT’S DISCUSSION AND ANALYSIS For the Fiscal Year Ended June 30, 2011 (Unaudited)

Our discussion and analysis of Spring Independent School District’s (the “District”) financial performance provides an overview of the District’s financial activities for the fiscal year ended June 30, 2011. It should be read in conjunction with the District’s financial statements.

FINANCIAL HIGHLIGHTS

On the government-wide financial statements, the assets of the District exceeded liabilities at June 30, 2011 by $50,402,835. Of this amount, $37,809,270 is unrestricted.

At June 30, 2011 the District’s governmental funds financial statements reported combined ending fund balances of $87,860,821. Of this amount, $2,099,925 is non-spendable inventories in the general fund and $23,626,231 is unassigned and available to spend at the District’s discretion.

At the end of the current fiscal year, total fund balance for the general fund was $25,726,156, or 10.69% of total general fund expenditures.

OVERVIEW OF THE FINANCIAL STATEMENTS

This discussion and analysis is intended to serve as an introduction to the District’s basic financial statements. The District’s basic financial statements are comprised of three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the basic financial statements. This report also contains required supplementary information and other supplementary information in addition to the basic financial statements themselves.

Government-Wide Financial Statements

All the District’s services are reported in the government-wide financial statements, including instruction, student transportation, general administration, school leadership, and child nutrition services. Property taxes, state and federal aid, and interest and investment earnings finance most of the activities. Additionally, all capital and debt financing activities are reported here.

The government-wide financial statements are designed to provide readers a broad overview of the District’s finances, in a manner similar to a private-sector business.

The statement of net assets presents information on all of the District’s assets and liabilities, with the difference between the two reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether the District’s financial position is improving or declining.

23 The statement of activities presents information showing how the District’s net assets changed during the most recent fiscal year. All changes in net assets are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Therefore, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave).

Fund Financial Statements

The District uses fund accounting to record and report specific sources of funding and spending for particular purposes. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The District, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the District can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds. The fund financial statements provide more detailed information about the District’s most significant funds – not the District as a whole.

Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. Most of the District’s activities are included in governmental funds, which focus on (1) how cash and other financial assets that can readily be converted to cash flow in and out, and (2) the balances left at year-end that are available. However, unlike the government-wide financial statements, governmental fund financial statements provide a detailed short-term view that helps determine whether there are more or fewer financial resources that can be spent in the near future to finance the District’s programs. Because this information does not encompass the additional long-term focus of the government-wide statements, we provide additional information in Figure A-1 that explains the relationship (or differences) between them.

The District’s governmental funds are the General Fund, Debt Service Fund, Capital Projects Funds and Non-major Governmental Funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund schedules of revenues, expenditures, and changes in fund balance for the General Fund, Debt Service Fund and Capital Projects Funds, each of which is considered to be a major fund. Individual fund data for each of the non-major governmental funds is provided in the form of combining statements elsewhere in this report.

Proprietary funds are used to account for operations that are financed similar to those found in the private sector. These funds provide both long and short-term financial information. The District maintains one type of proprietary fund (internal service fund) to report activities of the District’s self-insured health insurance and workers’ compensation programs. Because these services benefit governmental rather than business-type functions, they have been included within governmental activities in the government-wide financial statements.

24 The proprietary fund financial statements provide separate information for the District’s self- insured health insurance fund and workers’ compensation fund. Both Internal Service Funds are combined into a single, aggregated presentation in the proprietary fund financial statements. Individual fund data for the internal service funds is provided in the form of combining statements elsewhere in this report.

Fiduciary funds are used to account for assets held by the District in a trustee capacity or as an agent for individuals, private organizations and/or other funds. The District is responsible for ensuring that the assets reported in these funds are used for their intended purposes. All of the District’s fiduciary activities are reported in a separate statement of fiduciary net assets and a statement of changes in fiduciary net assets. The District’s fiduciary funds are considered to be agency funds which accounts for the District’s Student Activity Funds. We exclude these activities from the District’s government-wide financial statements because the District cannot use these assets.

Notes to the Basic Financial Statements

The financial statements also include notes that provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The statements are followed by a section of required supplementary information that further explains and supports the information in the financial statements. The remainder of this overview section of management’s discussion and analysis explains the structure and contents of each of the statements. Figure A-1 summarizes the major features of the District’s financial statements, including the portion of the District government they cover and the types of information they contain.

Other Information

In addition to the basic financial statements and accompanying notes to the basic financial statements, this report also presents certain required supplementary information concerning a comparison of the District’s General Fund budgeted and actual revenues and expenditures.

The combining and individual fund statements and schedules referred to earlier in connection with non-major governmental funds and internal service funds are presented immediately following the required supplementary information.

Figure A-1. Major Features of the District’s Government-wide and Fund Financial Statements

Fund Statements Type of Statements Government-wide Governmental Funds Proprietary Funds Fiduciary Funds Entire District's The activities of the Activities the District Instances in which the government (except District that are not operates similar to District is the trustee or Scope fiduciary funds) proprietary or fiduciary private business: agent for someone self-insurance else’s resources: student activity funds

Statement of net assets Balance sheet Statement of net assets Statement of fiduciary assets and liabilities Required financial Statement of activities Statement of revenues, Statement of revenues, Statement of changes statements expenditures and expenses and changes in assets and liabilities changes in fund in net assets balances Statement of cash flows

Accounting basis Accrual accounting and Modified accrual Accrual accounting Accrual accounting and measurement economic resources accounting and and economic resources and economic resources focus focus current financial focus focus resources focus

All assets and Only assets expected All assets and liabilities, All assets and liabilities, Type of asset/liability liabilities, both financial to be used up and both financial and both short-term and information and capital, short-term liabilities that come capital, and short-term long-term and long-term due during the year and long-term or soon thereafter; no capital assets included

All revenues and Revenues for which All revenues and All revenues and expenses during the year, cash is received during expenses during the year, expenses during the Type of inflow/outflow regardless of when cash or soon after the end regardless of when year, regardless of information is received or paid of the year; expendi- cash is received or when cash is tures when goods or paid received or paid services have been received and payment is due during the year or soon thereafter

26 GOVERNMENT-WIDE FINANCIAL ANALYSIS

As noted earlier, net assets may serve over time as a useful indicator of the District’s financial position. The District’s assets exceeded liabilities by $50.4 million at June 30, 2011 and by $68.3 million at June 30, 2010.

Figure A-2 The District’s Net Assets

Governmental Activities

2011 2010 Current and other assets $162,903,722 $178,821,291 Capital assets 652,139,858 661,885,069 Total Assets 815,043,580 840,706,360

Current liabilities 70,756,024 54,988,219 Noncurrent liabilities 693,884,721 717,460,456 Total Liabilities 764,640,745 772,448,675

Net Assets: Invested in capital assets, net of related debt (14,326,305) 2,835,609 Restricted 26,919,870 33,948,320 Unrestricted 37,809,270 31,473,756

Total Net Assets $50,402,835 $68,257,685

The District’s net assets are comprised of the following elements as illustrated in Figure A-2. Invested in Capital Assets, net of Related Debt ($14.3) million reflects the District’s investment of $652 million in capital assets (e.g., land, construction in progress, building and equipment) in addition to the balance remaining from recent bond sales less the outstanding debt used to acquire those assets.

The second element of net assets shown in Figure A-2 is Restricted, which is used to segregate those net assets for which external constraints have been placed (example: constraints imposed by creditors, grantors or by law). The District is reporting a balance of $26.9 million which represents balances for debt service, child nutrition and federal and state programs.

The third element of net assets is Unrestricted, which consists of net assets that do not meet the criteria of the other two elements described above. The District is reporting a balance of $37.8 million in this category.

The District’s net assets decreased by $17.9 million during the current fiscal year. The largest changes were the decrease in cash which was used to acquire capital assets and a decrease in the value of capital assets due to depreciation.

27 Changes in net assets

The District’s total revenues for the fiscal year ended June 30, 2011 as shown on the Statement of Activities were $350,427,169. A significant portion (30.2%) of the District’s revenue comes from taxes. State aid and other grant revenues represent 44.3%, while only 3.0% relate to charges for services. (See Figure A-3) The total cost of all programs and services was $368,282,019, of which 52.9% is for instructional-related services. (See Figure A-4)

Figure A-3 Sources of Revenue for the fiscal year ended June 30, 2011

0.2% 3.0% Charges for Services

22.3% Operating Grants

44.3% Property Taxes

State Aid and Other Grants

30.2% Investment Earnings and Miscellaneous Revenue

Figure A-4 Expenses by Major Function for the fiscal year ended June 30, 2011

60.0% Instruction & Instructional 52.9% Related 50.0% Instructional & School Leadership Support Services - Student 40.0% Administrative Support Services 30.0% Support Services - Non-Student 20.0% 14.8% 12.3% 9.0% Ancillary Services and 10.0% Intergovernmental Charges 5.6% 5.1% 0.3% Debt Service 0.0% Functional Expenses

28 Governmental Activities

Governmental activities decreased the District’s net assets by $17,854,850 for the fiscal year ended June 30, 2011. The following table presents the changes in the District’s net assets for the fiscal years ended June 30, 2011 and 2010:

Changes in the District’s Net Assets

Governmental Activities 2011 2010 Revenues Program Revenues Charges for services $10,460,410 $15,560,379 Operating grants and contributions 78,131,452 71,695,698 General Revenues Property taxes 105,791,575 116,936,692 State aid and other grants 155,359,010 142,738,962 Investment earnings 335,720 1,374,297 Miscellaneous 349,002 400,637 Total revenues 350,427,169 348,706,665

Expenses Instructional 186,355,298 179,364,938 Instructional resources and media services 3,785,951 4,287,682 Curriculum and staff development 4,857,694 4,980,528 Instructional leadership 4,214,263 3,777,107 School leadership 16,365,168 16,222,713 Guidance and counseling services 11,449,391 10,505,490 Social work services 332,157 277,244 Health services 3,024,288 3,044,167 Student (pupil) transportation 13,539,173 12,914,480 Child nutrition services 19,809,835 18,129,556 Co-curricular activities 6,407,739 6,515,163 General administration 18,759,069 30,908,984 Plant maintenance and operations 35,085,443 37,947,852 Security and monitoring services 3,288,930 3,658,199 Data processing services 5,895,207 5,933,620 Community services 1,000,945 1,000,270 Fiscal agent/shared services arrangement 194,917 271,471 Alternative education 5,760 5,121 Interest and fiscal charges 33,002,562 32,749,723 Other intergovernmental charges 908,229 948,696 Total expenses 368,282,019 373,443,004

Change in net assets (17,854,850) (24,736,339) Beginning net assets 68,257,685 92,994,024 Ending net assets $50,402,835 $68,257,685

29 The following table presents the cost of each of the District’s largest functions as well as each function’s net cost for the fiscal year ended June 30, 2011 (total cost less charges for services generated by the activities and operating grants and contributions). The net cost reflects what was funded by state revenues as well as local tax dollars.

 The cost of all governmental activities this year was $368,282,019.  The amount of the cost that was paid by those who directly benefited from the program was $10,460,410 and  The amount paid by grants and contributions was $78,131,452.  The amount that our taxpayers paid for these activities through property taxes was only $105,791,575.

Net Cost of Selected District Functions (in millions of dollars)

2011 2010 Total Cost Net Cost Total Cost Net Cost of Services of Services of Services of Services

Instructional $186.3 $147.8 $179.4 $142.2 Plant Maintenance & operations 35.1 33.2 37.9 37.0 Interest and fiscal charges 33.0 22.1 32.7 23.6

FINANCIAL ANALYSIS OF THE DISTRICT’S FUNDS

The District’s accounting records for general governmental operations are maintained on a modified accrual basis as prescribed by the Financial Accountability System Resource Guide, Texas Education Agency, with the revenues being recorded when available and measurable to finance expenditures of the fiscal period. Expenditures are recorded when services or goods are received and the fund liabilities are incurred, except for unmatured long-term debt. The general governmental operations include the following funds: General, Special Revenue, Debt Service, and Capital Projects.

Revenues for general governmental functions totaled $344,779,044 for the fiscal year ended June 30, 2011 an increase of 3.0% from the prior fiscal year. Property tax revenues decreased by 6.8% due to a decrease in property values. In turn, state revenues increased to offset the decrease to property tax revenue as part of the State of Texas target revenue funding. Target revenue calls for an increase in state funding when property tax revenue decreases. State revenue also increased due to an increase in weighted average daily attendance. There was a 12.0% increase in federal funding due to the receipt of funds from the American Recovery and Reinvestment Act (“ARRA”).

30 Expenditures for general governmental operations totaled $372,145,385 during the fiscal year ended June 30, 2011 a decrease of 12.1% from the fiscal year ended June 30, 2010. The primary cause of the decrease in expenditures is the District had significantly lower spending on construction and remodeling than in the previous year.

The general fund is the chief operating fund of the District. At the end of the current fiscal year, unassigned funds of the general fund was $23,626,231 while total fund balance was $25,726,156. Unassigned fund balance represented 9.8% of total general fund expenditures, while total fund balance represented 10.69%.

The general fund balance increased by $2,952,427 during the fiscal year ended June 30, 2011. This increase is due to savings from energy conservation, a mid-year hiring freeze as well as overall conservative spending throughout the District.

The debt service fund had a total fund balance of $28,257,184 all of which is restricted for the payment of debt service and for tax refunds. The decrease in fund balance was $6,422,652. The decrease is primarily due to a decrease in property tax collections and declining property values.

The capital projects fund had a total fund balance of $24,634,651 at the close of fiscal year ended June 30, 2011. The fund balance is restricted to expenditures for capital outlays including the acquisition or construction of capital facilities and other capital assets. The decrease to fund balance of $24,716,295 was caused by the completion of construction and renovation projects.

General Fund Budgetary Highlights

Over the course of the year, the District revised its budget three times. These adjustments resulted in a decrease in the final expenditure budget of $8,757,222 under the original budget. This decrease is made up of four major components. There was an increase for carryover encumbrances, for additional positions to accommodate growth across various functions, and High School Allotment expenses. These increases were offset by a decrease to General Fund expenditures for movement to State Fiscal Stabilization Funds, a federal special revenue fund.

Final budgeted revenues were decreased during the year by $10,155,296 under the original revenue budget due primarily to the movement of General Fund revenues to State Fiscal Stabilization Funds, a federal fund. The decrease was offset by state revenue received due to an increase in student enrollment, decreased property tax collections and High School Allotment revenues.

31 The difference between the original budget and the final amended budget of the general fund can be briefly summarized below:

Appropriations

$2,600,000 Increase in payroll and benefit expenditures to account for additional staff 2,475,445 High School Allotment expenditures 1,162,186 Increase in miscellaneous appropriations resulting from 2009-2010 rollover encumbrances 244,906 Miscellaneous increases to other appropriations (900,000) Decrease for energy savings (14,339,759) Move expenditures to State Fiscal Stabilization Funds

$(8,757,222) Total Appropriations Decrease

Revenues

$4,482,887 Increased state revenues due to higher actual student attendance, adjusted student populations and decreased property tax collections 2,475,445 High School Allotment Revenue 825,000 Increase to federal revenues for Junior Reserve Officers’ Training Corps and School Health and Related Services 572,211 Miscellaneous net increases in other estimated revenues (3,850,156) Decrease to tax revenue due to decreased values (14,660,683) Move revenues to State Fiscal Stabilization Funds

($10,155,296) Total Revenues Decrease

CAPITAL ASSETS AND DEBT ADMINISTRATION

Capital Assets

The District has invested a net $652 million in a broad range of capital assets, including land, buildings and improvements, equipment and furniture and automotive equipment. This amount represents a net decrease (including additions and deductions net of accumulated depreciation) of $9.7 million under last year.

Major capital assets events during the current fiscal year included the following:

 Construction in progress additions were $191,808 and transfers to buildings were $17,990,433 as construction was completed on new and existing buildings.  Buildings increased by $27,978,422 as construction and renovations were completed on new and existing buildings.  The remainder of increases in capital assets was improvements and additions to existing facilities, furniture and equipment and vehicles.

32 District’s Capital Assets

2011 2010 Land $76,715,192 $76,605,486 Construction-in-progress 210,114 18,008,739 Buildings and improvements 713,245,238 685,266,816 Equipment and furniture 63,764,259 59,008,361 Automotive equipment 23,504,916 23,167,690 Total 877,439,719 862,057,092 Accumulated depreciation (225,299,861) (200,172,023)

Net capital assets $652,139,858 $661,885,069

More detailed information about the District’s capital assets is presented in Note 5 to the basic financial statements.

Debt Administration

Debt-management policies seek to provide the most favorable climate for District debt projects while upholding the highest rating possible for debt instruments. Management policies include the following points.

 All debt service obligations will be met when due.  Long-term financing will be restricted to capital projects and purchases of equipment.  Long-term bonds will not be issued to finance current operations.  The District will cooperate and communicate with bond-rating agencies and work towards obtaining the most favorable municipal bond rating possible.  Outstanding obligations will be reviewed frequently to ensure the most favorable funding structure for the District.  All necessary information and material regarding the District’s financial status will be provided to the appropriate parties.

The ratio of net general bonded debt to assessed valuation is a useful indicator of the District’s debt position. This data is presented in the schedule “Ratios of Net General Obligation Bonded Debt Outstanding” (Table X) in the statistical section and reflects a ratio of net bonded debt to assessed value of 8.93%, as compared to 8.3% last year.

The District continues to enjoy strong underlying bond ratings. The latest Moody’s Investor Services, Inc. affirmed rating is Aa3 and Standard and Poor’s Corporation affirmed rating is A for the District’s debt obligations. All of the outstanding ad valorem tax bonds of the District carry a credit enhancement rating of AAA due to the Permanent School Fund guarantee.

More detailed information about the District’s debt administration is presented in Note 8 to the basic financial statements.

33 ECONOMIC FACTORS AND NEXT YEAR’S BUDGETS AND RATES

The 2011-2012 general fund budget was largely affected by the 82nd Texas Legislative Session. The Texas Legislature convened in its 82nd Regular Session (the “Regular Session”) on January 11, 2011, and ended the Regular Session on May 30, 2011. During the Regular Session, the Legislature enacted a budget that reduced public school state funding by approximately $4 billion for the 2012-2013 State fiscal biennium, as compared to the budget for the 2010-2011 State fiscal biennium. The reductions were made in light of a projected State deficit estimated to be $27 billion for the 2012-2013 State fiscal biennium, based upon the State Comptroller’s biennial revenue estimate of January 10, 2011. Because the Legislature did not adopt implementing legislation providing for funding the public school finance system for the upcoming biennium, the Governor called the Legislature into a 30-day special session on May 31, 2011 (the “First Called Session”).

On June 29, 2011, during the First Called Session, Senate Bill 1 (“SB 1”) was enacted by the Legislature, and the bill was sent to the Governor to be signed into law. SB 1 will reduce State funding for public schools in the State by $2 billion for each fiscal year of the upcoming biennium. The reductions will be made by applying an across the board percentage reduction in funding for all school districts in 2012. The 212 funding reductions are to be moderated by the use of $830 million of Federal funds available for education jobs in the State in 2012. Of the $2 billion in budget cuts for fiscal year 2013, $500 million will be saved by reducing the target revenue hold harmless funding provided in HB 1 adopted by the Legislature in 2007. Such cuts to target revenue hold harmless provisions of the current Finance System will impact higher spending districts that have a higher target revenue more significantly than districts with lower target revenues.

As a result of the reduction to revenue, the District made several changes to staffing, programs and services for the 2011-2012 fiscal year. The most notable changes are listed below:

 Reduced bus transportation to the 2 mile state limit  Decrease all operating budgets by 10%  Reduce central office staff by 13.5%  No raises were given  Increased student to teacher ratio at both elementary and secondary campuses

REQUESTS FOR INFORMATION

This financial report is designed to provide our citizens, taxpayers, business community, and investors and creditors with a general overview of the District’s finances and to demonstrate the District’s accountability for the money it receives. If you have questions about this report or need additional financial information, contact the Division of Financial Services, Attn: Executive Director of Finance at 16717 Ella Blvd., Houston, Texas 77090 or call (281) 891-6075.

EXHIBIT A-1

SPRING INDEPENDENT SCHOOL DISTRICT

STATEMENT OF NET ASSETS

June 30, 2011

Primary Government Governmental Activities ASSETS Cash $53,276,444 Temporary investments 36,617,909 Receivables: Property taxes 16,237,302 Allowance for uncollectible taxes (2,519,400) Accrued interest and other receivables 701,780 Due from governmental agencies 53,305,106 Inventories, at cost 2,208,993 Bond issuance cost, net 3,075,588 Capital assets not being depreciated: Land 76,715,192 Construction-in-progress 210,114 Capital assets net of accumulated depreciation: Buildings and improvements 541,429,679 Equipment and furniture 20, 701, 267 Automotive equipment 13,083,606 Total assets 815,043,580

LIABILITIES Due to state and others 1,218,401 Accounts payable 8,352,987 Current year loans payable 18,000,000 Interest payable 12,970,614 Accrued wages payable 29,900,767 Due to student groups 229,200 Unearned revenues 84,055 Non-current liabilities: Due within one year 21,566,154 Due in more than one year 672,318,567 Total liabilities 764,640,745

NET ASSETS Invested in capital assets, net of related debt (14,326,305) Restricted Debt service 18,671,550 Child nutrition 7,464,804 Federal & state programs 783,516 Unrestricted 37,809,270 TOTAL NET ASSETS $50,402,835

See accompanying notes to basic financial statements. 35 EXHIBIT A-2

SPRING INDEPENDENT SCHOOL DISTRICT

STATEMENT OF ACTIVITIES

For the Fiscal Year Ended June 30, 2011

Net (Expenses) Program Revenues Revenue and Operating Changes in Net Assets Charges for Grants and Governmental Function/Programs Expenses Services Contributions Activities Primary government Governmental activities: Instruction $186,355,298 $87,124 $38,451,065 ($147,817,109) Instructional resources and media services 3,785,951 172,113 (3,613,838) Curriculum/staff development 4,857,694 2,393,233 (2,464,461) Instructional leadership 4,214,263 665,827 (3,548,436) School leadership 16,365,168 1,169,618 (15,195,550) Guidance and counseling services 11,449,391 4,250,264 (7,199,127) Social work services 332,157 7,460 (324,697) Health services 3,024,288 295,657 (2,728,631) Student (pupil) transportation 13,539,173 5,650 738,730 (12,794,793) Child nutrition services 19,809,835 4,781,758 14,478,855 (549,222) Co-curricular activities 6,407,739 397,285 194,341 (5,816,113) General administration 18,759,069 4,851,187 340,961 (13,566,921) Plant maintenance and operations 35,085,443 109,100 1,779,970 (33,196,373) Security and monitoring services 3,288,930 11,062 174,957 (3,102,911) Data processing services 5,895,207 1,366,959 (4,528,248) Community services 1,000,945 217,244 561,736 (221,965) Fiscal agent/shared services arrangement 194,917 178,430 (16,487) Alternative education 5,760 (5,760) Interest and fiscal charges 33,002,562 10,911,276 (22,091,286) Other intergovernmental charges 908,229 (908,229) Total governmental activities $368,282,019 $10,460,410 $78,131,452 ($279,690,157)

General revenues: Taxes: Property taxes - Maintenance & Operations 74,558,719 Property taxes - Debt Service 31,232,856 State aid - Formula Grants 153,040,581 Grants and contributions not restricted to specific programs 2,318,429 Investment earnings 335,720 Miscellaneous 349,002 Total general revenues 261,835,307 Change in net assets (17,854,850) Net Assets - beginning 68,257,685 Net Assets - ending $50,402,835

See accompanying notes to basic financial statements.

36 EXHIBIT B-1

SPRING INDEPENDENT SCHOOL DISTRICT

BALANCE SHEET GOVERNMENTAL FUNDS

June 30, 2011

Non-Major Other Total Debt Capital Governmental Governmental General Service Projects Funds Funds

ASSETS

Current assets: Cash $9,151,902 $27,457,000 $14,920,300 $1,001,382 $52,530,584 Temporary investments 14,356,258 452,400 13,411,284 6,995,569 35,215,511 Receivables: Property taxes 12,003,194 4,234,108 16,237,302 Allowance for uncollectible taxes (1,987,700) (531,700) (2,519,400) Accrued interest and other receivables 646,536 37,314 10,744 7,186 701,780 Due from governmental agencies 43,982,388 9,322,718 53,305,106 Interfund receivables 4,332,353 13,778 1,871,887 6,218,018 Inventories, at cost 2,099,925 109,068 2,208,993

TOTAL ASSETS $84,584,856 $31,649,122 $28,356,106 $19,307,810 $163,897,894

LIABILITIES

Due to state and others $29,061 $1,189,340 $1,218,401 Accounts payable 3,647,488 $821 $3,604,843 1,099,835 8,352,987 Current year loans payable 18,000,000 18,000,000 Accrued salaries and expenditures 25,575,903 4,324,864 29,900,767 Interfund payables 1,871,887 6,137 116,612 3,366,886 5,361,522 Due to student groups 229,200 229,200 Deferred revenues 9,505,161 3,384,980 84,055 12,974,196

Total Liabilities 58,858,700 3,391,938 3,721,455 10,064,980 76,037,073

FUND BALANCE

Non-spendable: Inventory 2,099,925 109,068 2,208,993 Restricted: Debt service 28,257,184 28,257,184 Capital projects 24,634,651 24,634,651 Grant funds 8,139,252 8,139,252 Committed: School activity funds 994,510 994,510 Unassigned 23,626,231 23,626,231 Total Fund Balance 25,726,156 28,257,184 24,634,651 9,242,830 87,860,821

TOTAL LIABILITIES AND FUND BALANCE $84,584,856 $31,649,122 $28,356,106 $19,307,810 $163,897,894

See accompanying notes to basic financial statements.

37 EXHIBIT B-2

SPRING INDEPENDENT SCHOOL DISTRICT

RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET ASSETS

June 30, 2011

Total fund balances-governmental funds $87,860,821

Amounts reported for governmental activities in the statement of net assets are different because:

· Capital assets used in governmental activities are not financial resources and therefore are 652,139,858 not reported as assets in governmental funds.

· Deferred amounts from bond issuance costs are not financial resources and 3,075,588 therefore are not reported as assets in the governmental funds.

· Certain receivables will be collected this year, but are not available soon enough to pay for 12,890,141 current period expenditures and therefore are deferred at the fund level.

· Interest payable on the current portion of long-term liabilities is not included in fund statements. (12,970,614)

· Long-term liabilities are not due and payable in the current period and therefore are not reported as liabilities in the fund statements. Long term liabilities at year-end consist of: Bonds payable $675,920,000 Premium on bond issuance 11,060,756 Accretion payable 4,599,188 Accrued vacation payable 1,013,015 (692,592,959)

Total net assets-governmental activities $50,402,835

See accompanying notes to basic financial statements.

38 EXHIBIT B-3

SPRING INDEPENDENT SCHOOL DISTRICT

STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS

For the Fiscal Year Ended June 30, 2011

Non-Major Other Total Debt Capital Governmental Governmental General Service Projects Funds Funds REVENUES: Local Revenues: Property taxes $74,023,706 $31,016,446 $105,040,152 Tuition and fees 418,846 418,846 Earnings on investments 54,675 88,119 $170,928 $16,657 330,379 Food sales 4,781,758 4,781,758 Other local 1,519,925 2,455,412 3,975,337 Total Local Revenues 76,017,152 31,104,565 170,928 7,253,827 114,546,472 State Revenues 165,834,020 10,911,276 2,712,712 179,458,008 Federal Intergovernmental Revenues 2,556,529 48,218,035 50,774,564 Total Revenues 244,407,701 42,015,841 170,928 58,184,574 344,779,044

EXPENDITURES: Current: Instruction 146,745,364 29,503,305 176,248,669 Instructional resources and media services 3,342,751 97 3,342,848 Curriculum and staff development 2,527,654 2,356,724 4,884,378 Instructional leadership 3,753,151 455,996 4,209,147 School leadership 16,119,482 246,216 16,365,698 Guidance and counseling services 7,891,385 3,739,825 11,631,210 Social work services 334,483 698 335,181 Health services 2,911,561 126,107 3,037,668 Student (pupil) transportation 12,308,122 95,470 12,403,592 Child nutrition services 19,293,416 19,293,416 Co-curricular activities 5,146,216 23,545 5,169,761 General administration 6,797,246 6,797,246 Plant maintenance and operations 24,565,722 59,586 509,890 25,135,198 Security and monitoring services 3,135,056 382 9,189 3,144,627 Data processing services 3,444,584 1,192,056 4,636,640 Community services 469,058 535,714 1,004,772 Debt Service: Principal retirement of capital leases 24,582 24,582 Principal retirement of bonds 19,645,000 19,645,000 Interest on bonds, tax anticipation notes and capital leases 36,168 32,712,166 32,748,334 Bond issuance and tax anticipation notes costs and fees 69,930 6,878 20,919 97,727 Capital Outlay: Facilities acquisition and construction 20,880,785 20,880,785 Intergovernmental Charges: Fiscal agent/shared services arrangement 16,183 178,734 194,917 Alternative education 5,760 5,760 Other intergovernmental charges 908,229 908,229 Total Expenditures 240,552,687 52,364,044 20,961,672 58,266,982 372,145,385

Excess (deficiency) of revenues over (under) expenditures 3,855,014 (10,348,203) (20,790,744) (82,408) (27,366,341) Other Financing Sources (Uses): Sale of property 40,171 40,171 Transfers in 3,925,551 3,925,551 Transfers out (942,758) (3,925,551) (4,868,309) Total Other Financing Sources (902,587) 3,925,551 (3,925,551) (902,587)

Net change in fund balance 2,952,427 (6,422,652) (24,716,295) (82,408) (28,268,928)

FUND BALANCES, JULY 1 22,773,729 34,679,836 49,350,946 9,325,238 116,129,749

FUND BALANCES, JUNE 30 $25,726,156 $28,257,184 $24,634,651 $9,242,830 $87,860,821

See accompanying notes to basic financial statements.

39 EXHIBIT B-4

SPRING INDEPENDENT SCHOOL DISTRICT

RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES

For the Fiscal Year Ended June 30, 2011

Net change in fund balances-total governmental funds ($28,268,928)

Amounts reported for governmental activities in the statement of net activities are different because:

· Governmental funds report capital outlays as expenditures. However, in the statement of activities (7,351,918) the cost of those assets is allocated over their estimated useful lives and reported as depreciation or amortization. This is the amount by which depreciation and amortization of $27,773,851 exceeded capital outlays of $20,421,933 in the current period.

· The net effect of miscellaneous transactions involving capital assets (transfers, adjustments and (2,393,293) dispositions) is a decrease to net assets.

· Statement of activities reports an increase in revenues due to current activity in deferred revenues 751,423 which is not reported at the fund level.

· Some expenses/revenues reported in the fund level financials are deferred in the government-wide 705,597 financials.

· Repayment of bond principal is an expenditure in the governmental funds, but the repayment 19,645,000 reduces long-term liabilities in the statement of net assets.

· Some capital asset additions are financed through capital leases. In governmental funds, a capital 24,582 lease arrangement is considered a source of financing, but in the statement of net assets, the lease obligation is reported as a liability. Repayment of capital lease principal is an expenditure in the governmental funds, but repayment reduces the lease obligation in the statement of net assets.

· Some expenses/revenues reported in the statement of activities do not require the use of current financial (861,702) resources and therefore are not reported as expenditures/revenues in governmental funds.

· The net expense of internal service funds is reported with governmental activities. (105,611)

Change in net assets-governmental activities ($17,854,850)

See accompanying notes to basic financial statements.

40 EXHIBIT B-5

SPRING INDEPENDENT SCHOOL DISTRICT

STATEMENT OF NET ASSETS PROPRIETARY FUNDS

June 30, 2011

Governmental Activities Internal Service Funds ASSETS

Current Assets: Cash $745,860 Temporary investments 1,402,398

Total assets $2,148,258

LIABILITIES

Current Liabilities: Interfund payable $856,496 Claims payable 1,291,762

Total liabilities 2,148,258

NET ASSETS

Unrestricted net assets

Total Net Assets $

See accompanying notes to basic financial statements.

41 EXHIBIT B-6

SPRING INDEPENDENT SCHOOL DISTRICT

STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS PROPRIETARY FUNDS

For the Fiscal Year Ended June 30, 2011

Governmental Activities Internal Service Funds

Operating Revenues: Employer and employee contributions $10,909,194 Total Operating Revenues 10,909,194 Operating Expenses: Administrative cost 829,570 Claims expense and other operating expenses 11,133,334 Total Operating Expenses 11,962,904

Operating Loss (1,053,710)

Non-operating Revenues Earnings on investments 5,341 Total Non-operating Revenues 5,341

Loss Before Transfers (1,048,369)

Transfers From Other Funds 942,758

Change in Net Assets (105,611)

Net Assets, July 1 105,611 Net Assets, June 30 $

See accompanying notes to basic financial statements.

42 EXHIBIT B-7

SPRING INDEPENDENT SCHOOL DISTRICT

STATEMENT OF CASH FLOWS PROPRIETARY FUNDS

For the Fiscal Year Ended June 30, 2011

Governmental Activities Internal Service Funds

Cash flows from operating activities: Cash received for premiums $14,024,429 Cash paid for claims (13,698,569) Cash paid to vendors (1,838,548)

Net cash used in operating activities (1,512,688)

Cash flows from noncapital financing activities: Transfer from other funds 942,758

Cash flows from investing activities: Earnings on investments 5,341

Net decrease in cash and cash equivalents (564,589)

Cash and temporary investments, July 1 2,712,847

Cash and temporary investments, June 30 $2,148,258

Reconciliation of Operating Loss to Net Cash Used in Operating Activities

Operating Loss ($1,053,710)

Adjustments to reconcile operating loss to net cash provided by (used in) operating activities: Decrease in other receivables 32,721 Decrease in interfund receivables 2,858,739 Decrease in due to others (402,137) Decrease in accounts payable (5,678) Increase in interfund payable 256,496 Decrease in claims payable (3,199,119)

Net cash used in operating activities ($1,512,688)

See accompanying notes to basic financial statements.

43 EXHIBIT B-8

SPRING INDEPENDENT SCHOOL DISTRICT

STATEMENT OF FIDUCIARY ASSETS AND LIABILITIES FIDUCIARY FUND

June 30, 2011

Agency Fund ASSETS

Cash $513,403

Total Assets $513,403

LIABILITIES

Due to state and others $48,207 Due to student groups 465,196

Total Liabilities $513,403

See accompanying notes to basic financial statements.

44 EXHIBIT B-9

SPRING INDEPENDENT SCHOOL DISTRICT

NOTES TO BASIC FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2011

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A. Reporting Entity

The Spring Independent School District (the “District”) Board of Trustees (the “Board”) is a seven-member group, which has governance responsibilities over all activities related to public school education within the District. Because members of the Board are elected by the public; have authority to make decisions; appoint management and significantly influence operations; and have primary accountability for fiscal matters; the District is not included in any other governmental “reporting entity” as defined in the Governmental Accounting Standards Board (“GASB”) Statement No. 14, The Financial Reporting Entity. There are no component units which meet the criteria for inclusion within the reporting entity as specified by GASB Statement No. 39, Determining Whether Certain Organizations are Component Units.

The District receives funding from local, state and federal government sources and must comply with the requirements of these funding source entities.

B. Government-wide and Fund Financial Statements

The government-wide financial statements (i.e., the statement of net assets and the statement of activities) report information on all of the nonfiduciary activities of the District. For the most part, the effect of interfund activity has been removed from these statements. Direct expenses are not eliminated from the various functional categories. Interfund services that are provided and used are not eliminated in the process of consolidation. Government activities are normally supported by taxes and intergovernmental revenues and are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. The District reports its internal service funds as governmental activities.

The statement of activities demonstrates the degree to which the direct expenses of a given function or segment is offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment, and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not included among program revenues are reported instead as general revenues.

EXHIBIT B-9 (Continued)

SPRING INDEPENDENT SCHOOL DISTRICT

NOTES TO BASIC FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2011

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

B. Government-wide and Fund Financial Statements (Continued)

Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual governmental funds are reported as separate columns in the fund financial statements.

C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation

The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as is the proprietary fund. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met.

Amounts reported as program revenues include 1) charges to customers or applicants for goods, services or privileges provided, and 2) operating grants and contributions. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes.

The fiduciary fund financial statements reflect the District’s agency funds, reporting only assets and liabilities and do not have a measurement focus.

Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. The District considers property tax revenues to be available if they are collected within 60 days of the end of the fiscal year- end. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due.

EXHIBIT B-9 (Continued)

SPRING INDEPENDENT SCHOOL DISTRICT

NOTES TO BASIC FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2011

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Continued)

Property taxes, revenues received from the State of Texas and interest associated with the current fiscal period are all considered to be susceptible to accrual and have been recognized as revenues of the current fiscal year. All other revenue items are considered to be measurable and available only when cash is received by the government.

The accounting policies of the District comply with the rules prescribed in the Financial Accountability System Resource Guide by the Texas Education Agency (“TEA”). These accounting policies conform to generally accepted accounting principles (“GAAP”) applicable to governments.

The District's accounting system is organized and operated on the basis of funds, each of which is a separate accounting entity with a self-balancing set of accounts. The District's resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled. The individual funds are grouped into three basic fund categories and are briefly described below.

Governmental Funds - Those through which most governmental functions of the District are financed. The acquisition, use and balances of the District’s expendable financial resources and the related liabilities are accounted for through the Governmental Fund Types. The following are the District’s major governmental funds:

General Fund - The General Fund is the District's general operating fund and accounts for all financial transactions except those required to be accounted for in another fund. Major revenue sources within the General Fund include local property taxes, state funding under the Minimum Foundation Program and interest earnings. Expenditures include all costs associated with the daily operations of the schools except for programs funded by certain local, state and federal sources, child nutrition, school construction and debt service on general obligation and refunding bonds.

EXHIBIT B-9 (Continued)

SPRING INDEPENDENT SCHOOL DISTRICT

NOTES TO BASIC FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2011

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Continued)

Debt Service Fund - This fund accounts for the accumulation of resources for, and the payment of, general obligation bonds principal, interest and related costs. The primary revenue sources are local property taxes levied specifically for debt service and state funding under the Existing Debt Allotment. These financial resources are restricted for debt service.

Capital Projects Fund - This fund accounts for the proceeds of general obligation bond sales. Proceeds from the sale of bonds are used exclusively for capital outlays, including acquiring school sites, constructing and equipping new school facilities, and renovating existing facilities. The financial resources in this fund are either restricted, committed or assigned.

The District reports the following non-major governmental funds:

Special Revenue Funds - The Special Revenue Funds account for the District's Child Nutrition Fund, School Activity Funds, state funding of the technology allotment and all other federal, state and locally funded grants. These grants are awarded to the District with the purpose of accomplishing specific educational tasks as defined in the grant awards. The proceeds of these specific revenue sources are restricted or committed.

Additionally, the District reports the following funds:

Proprietary Funds: Used to account for operations that are financed in a manner similar to those found in the private sector, where the determination of net income is appropriated for sound financial administration.

Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the District’s internal service funds are charges to customers for services. Operating expenses for internal service funds include the cost of services and administrative expenses. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses.

EXHIBIT B-9 (Continued)

SPRING INDEPENDENT SCHOOL DISTRICT

NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2011

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Continued)

Internal Service Funds - These funds account for the District's self-insured employee health insurance fund and the self-insured workers' compensation fund.

Fiduciary Fund: Used to account for amounts held by the District in a trustee capacity. These funds are accounted for on an accrual basis.

Agency Fund – This fund is custodial in nature and does not involve measurements of results of operations. This fund accounts for the District’s Student Activity Funds, which collect monies through fund-raising efforts of the individual schools or school-sponsored groups. The school principals are responsible, under the authority of the Board, for collecting, controlling, disbursing and accounting for all student activity funds.

D. Assets, Liabilities and Net Assets or Equity

Deposits and Investments

The District’s cash and cash equivalents are considered to be cash on hand, demand deposits, and short-term investments with original maturities of three months or less from the date of acquisition. Investments are reported at fair value, which is the amount at which the investment can be exchanged in a current transaction between willing parties.

Receivables, Payables, Property Tax Revenue and Deferred Revenue

Activities between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as “advances to/from other funds.” All other outstanding balances between funds are reported as “due to/from other funds.”

EXHIBIT B-9 (Continued)

SPRING INDEPENDENT SCHOOL DISTRICT

NOTES TO BASIC FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2011

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

D. Assets, Liabilities and Net Assets or Equity (Continued)

Receivables, Payables, Property Tax Revenue and Deferred Revenue (Continued)

The appraisal of property within the District is the responsibility of the Harris County Appraisal District (“HCAD”), an independent governmental unit with a board of directors appointed by the taxing jurisdictions within the county and funded from assessments against those taxing jurisdictions. On January 1 of each year an enforceable lien is placed on all real property within the District to secure collection of property taxes. Property taxes for a fiscal year are levied based on HCAD appraised values on approximately October 1st and are due by the following January 31st. Unpaid taxes become delinquent on February 1st .

The tax rates applicable to general governmental services and debt service for 2010-2011 were $1.04 and $0.42, respectively, based on a taxable value of $7,303,409,532. Uncollected taxes are recorded as deferred revenues in the fund financial statement net of the related allowance for uncollectible taxes. The resulting net taxes receivable is stated at the amount estimated to be collectible based upon the District's collection experience. The property tax receivable allowance is equal to 15.52% of outstanding property taxes at June 30, 2011.

Refunds to taxpayers result when property taxes are reduced subsequent to being levied due to a reduction of appraised value resulting from a taxpayer lawsuit filed against HCAD, the correction of tax roll errors, or overpayments made by taxpayers.

Inventories

Under the District's system of accounting for inventories, materials and supplies are charged to an inventory account on the basis of the weighted average invoice cost, and are subsequently recognized as expenditures when consumed. Inventories include gasoline, custodial, maintenance, office and instructional supplies. Child Nutrition commodity inventory is recorded at fair market value on the date received.

Revenue is recognized at fair market value when commodities are distributed to the schools. General Fund and Child Nutrition inventories are categorized as non-spendable portions of fund balance to indicate that the assets are not available financial resources.

EXHIBIT B-9 (Continued)

SPRING INDEPENDENT SCHOOL DISTRICT

NOTES TO BASIC FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2011

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

D. Assets, Liabilities and Net Assets or Equity (Continued)

Encumbrances

The District utilizes encumbrance accounting in its governmental funds. Encumbrances represent commitments related to contracts not yet performed (executor contracts), and are used to control expenditures for the year and to enhance cash management. The District often issues purchase orders or signs contracts for the purchase of goods and services to be received in the future. At the time these commitments are made, which in its simplest form means that when a purchase order is prepared, the appropriate account is checked for available funds. If an adequate balance exists, the amount of the order is immediately charged to the account to reduce the available balance for control purposes. The encumbrance account does not represent an expenditure for the period, only a commitment to expend resources.

Prior to the end of the year, every effort is made to liquidate outstanding encumbrances. When encumbrances are outstanding at the fiscal year end, the District likely will honor the open purchase orders or contracts that support the encumbrances. For reporting purposes, as noted earlier, outstanding encumbrances are not considered expenditures for the fiscal year. If the District allows encumbrances to lapse, even though it plans to honor the encumbrances, the appropriations authority expires and the items represented by the encumbrances are usually reappropriated in the following year’s budget. When deemed significant, open encumbrances at fiscal year-end are included in restricted, committed, or assigned fund balance, as appropriate. If the encumbrance amount is insignificant to the financials as a whole, the amount will remain in unassigned fund balance.

Capital Assets

Capital assets which include land, buildings, building improvements and equipment are reported in the applicable governmental activities column in the government-wide financial statements. Capital assets are defined by the District as assets with an initial, individual cost of more than $5,000 and an estimated useful life in excess of two years or if software, an estimated useful life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation.

The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed.

EXHIBIT B-9 (Continued)

SPRING INDEPENDENT SCHOOL DISTRICT

NOTES TO BASIC FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2011

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

D. Assets, Liabilities and Net Assets or Equity (Continued)

Capital Assets (Continued)

Buildings, building improvements and equipment are depreciated using the straight-line method over the following estimated useful lives:

Useful Life Assets (Years) Building and building improvements 40 Automotive equipment: Buses 15 Other 10 Office equipment 5 Computer equipment 5 Software 3

Compensated Absences

District policy does not allow staff members to be compensated for accrued and unused sick leave. Full time staff members can contribute one day of sick leave annually to benefit staff members whose own leave has been exhausted due to catastrophic illness. Twelve-month classified staff members (maintenance, warehouse and nonexempt supervisory staff members) are granted annual vacation days based on consecutive years of service. Staff members may carry no more than 60 days of accrued vacation days to the following year. Staff members are paid for accumulated unused vacation time only upon termination of employment.

Long-term Obligations

In the government-wide financial statements and proprietary funds in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities or proprietary fund type statement of net assets. Bond premiums and discounts are deferred and amortized over the life of the bonds. Bond issuance costs are reported as deferred charges and amortized over the term of the related debt.

EXHIBIT B-9 (Continued)

SPRING INDEPENDENT SCHOOL DISTRICT

NOTES TO BASIC FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2011

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

D. Assets, Liabilities and Net Assets or Equity (Continued)

Long-term Obligations (Continued)

In the fund financial statements, governmental funds recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures.

Fund Equity

Beginning with fiscal year 2011, the Spring Independent School District implemented GASB Statement No. 54 “Fund Balance Reporting and Governmental Fund Type Definitions.” This Statement provides more clearly defined fund balance categories to make the nature and extent of the constraints placed on a government’s fund balances more transparent. The following classifications describe the relative strength of the spending constraints:

Nonspendable fund balance – amounts that are not in spendable form or are required to be maintained intact. As such, the inventory and prepaid items have been properly classified in the Governmental Funds Balance Sheet (Exhibit B-1).

Restricted fund balance – amounts that can be spent only for specific purposes because of local, state or federal laws, or externally imposed conditions by grantors or creditors. With the exception of School Activity Funds, the fund balances of Grant Funds are classified as restricted. The fund balances of the Debt Service Fund and Capital Projects Funds are also classified as restricted.

Committed fund balance – amounts constrained to specific purposes by the District itself, using its highest level of decision-making authority (i.e. the Board of Trustees). To be reported as committed, amounts cannot be used for any other purposes unless the District takes the same highest level of action to remove or change the constraint. The District has committed fund balances in the Special Revenue Funds. The detail is shown below:

Commited for Special Revenue Fund School Activity Funds $994,510

EXHIBIT B-9 (Continued)

SPRING INDEPENDENT SCHOOL DISTRICT

NOTES TO BASIC FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2011

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

D. Assets, Liabilities and Net Assets or Equity (Continued)

Fund Equity (Continued)

The District establishes (and modifies or rescinds) the fund balance commitments by passage of a resolution. A fund balance commitment is further indicated in the budget document as a commitment of the fund.

Assigned fund balance – amounts the District intends to use for a specific purpose. Intent can be expressed by the District or by an official or body to which the Board of Trustees delegates the authority.

Unassigned fund balance – amounts that are available for any legal expenditure. Positive amounts are reported only in the general fund.

Per Policy CE (local) assigned fund balances are established by the Board, Superintendent or Chief Financial Officer.

When an expenditure is incurred for purposes for which both restricted and unrestricted fund balance is available, the District considers restricted funds to have been spent first. When an expenditure is incurred or which committed, assigned, or unassigned fund balances are available, the District considers amounts to have been spent first out of committed funds, then assigned funds, and finally unassigned funds.

Accounting Estimates

The preparation of the financial statements in accordance with GAAP requires management to make use of estimates and assumptions that affect amounts reported in the financial statements as well as certain disclosures. Actual results could differ from these estimates.

EXHIBIT B-9 (Continued)

SPRING INDEPENDENT SCHOOL DISTRICT

NOTES TO BASIC FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2011

2. BUDGETARY INFORMATION

Each school district in Texas is required by law to prepare annually a budget of anticipated revenues and expenditures for the General Fund, Child Nutrition Fund and Debt Service Fund for the fiscal year beginning September 1 (or July 1, if the District has elected to change the start of the fiscal year). The Texas Education Code requires the budget to be prepared not later than August 20 (June 19 for a fiscal year start date of July 1) and adopted by August 31 (June 30 for a fiscal year start date of July 1) of each year. The District's administration determines budgetary funding priorities using a modified zero-based budgeting concept, which is consistent with GAAP. Final budget allocations are determined by the Board, which subsequently establishes a tax rate sufficient to support the approved budget. The annual budget, which is prepared on the modified accrual basis of accounting, must be adopted by the Board at a scheduled meeting after giving ten days public notice of the meeting. The District annually adopts a legally authorized appropriated budget for the General Fund, Child Nutrition Fund and Debt Service Funds.

The District's administration performs budget reviews three times a year by which budget requirements are re-evaluated and revisions recommended to the Board. The Board approves amendments to the budget, which are required when a change is made to any one of the functional expenditure categories defined by the TEA. Expenditures may not legally exceed budgeted appropriations, as amended, at the function level by fund. Unexpended appropriations lapse at year-end.

3. CASH AND TEMPORARY INVESTMENTS

The District's banking and investment policies are in accordance with laws and regulations of the Public Funds Investment Act (the “Act”), State of Texas and the TEA. The Act and policies mandated by the District's Board authorize the District to invest in obligations of the U. S. Treasury or the State of Texas, certificates of deposit, money market savings accounts, repurchase agreements, commercial paper and public funds investment pools.

The District's funds are required to be deposited and invested under the terms of a depository contract pursuant to the School Depository Act. The depository bank deposits for safekeeping and trust with the District's agent bank-approved pledged securities in an amount sufficient to protect District funds on a day-to-day basis during the period of the contract. The pledge of approved securities is waived only to the extent of the depository bank's dollar amount of Federal Deposit Insurance Corporation (“FDIC”) insurance.

EXHIBIT B-9 (Continued)

SPRING INDEPENDENT SCHOOL DISTRICT

NOTES TO BASIC FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2011

3. CASH AND TEMPORARY INVESTMENTS (Continued)

Cash

At year-end, the carrying amount of the District's government-wide general ledger for cash and certificates of deposit was $53,276,444. The $53,396,014 depository bank balances were covered by FDIC insurance and by collateral held by the District's agents in the District's name.

The District's depository cash balances were properly collateralized or insured at all times during the year. The highest combined balances of savings and time deposits occurred on July 1, 2010 in the amount of $98,288,663, of which $50,377,300 was certificates of deposit and $47,911,363 was cash. Sterling Bank pledged securities on that date with a market value of $112,684,957.

On July 21, 2010 the Dodd-Frank Wall Street Reform and Consumer Protection Act was signed by President Barack Obama. This permanently raises the standard FDIC deposit insurance amount to $250,000. The FDIC also extended the ruling providing unlimited insurance for non- interest bearing transaction accounts through December 31, 2012. Spring ISD’s non-interest bearing accounts are covered by this ruling; however, the interest bearing accounts and certificates of deposit must have approved pledges in excess of the $250,000 FDIC coverage.

Investments

Temporary investments consist of balances held by Texas Local Government Investment Pool (“TexPool”).

TexPool is a public funds investment pool created by the Texas Treasury Safekeeping Trust Company (the “Trust Company”) to provide a safe environment for the placement of local government funds in authorized short-term, fully-collateralized investments, including direct obligations of or obligations guaranteed by the United States or State of Texas or their agencies; federally insured certificates of deposit issued by Texas banks or savings and loans; commercial paper and fully collateralized direct repurchase agreements secured by U. S. Government agency securities and placed through a primary government securities dealer. The Trust Company was incorporated by the State Treasurer upon authority of the Texas Legislature as a special purpose trust company with direct access to the services of the Federal Reserve Bank to manage, disburse, transfer, safe keep and invest public funds and securities more efficiently and economically. The State Comptroller of Public Accounts exercises oversight responsibility over TexPool. Oversight includes the ability to significantly influence operations, designation of management and accountability for fiscal matters.

EXHIBIT B-9 (Continued)

SPRING INDEPENDENT SCHOOL DISTRICT

NOTES TO BASIC FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2011

3. CASH AND TEMPORARY INVESTMENTS (Continued)

Investments (Continued)

TexPool operates in a manner consistent with the SEC's Rule 2a7 of the Investment Company Act of 1940. TexPool uses amortized cost rather than fair value to report net assets to compute share prices. The fair value of the position in TexPool is the same as the value of TexPool shares. Accordingly, the District's investments in TexPool are stated at cost, which approximates fair value.

In accordance with the provisions of GASB Statement No. 31, Accounting and Financial Reporting for Certain Investments and for External Investment Pools, the District's investments have been recorded at fair value based upon quoted market prices as of June 30, 2011, with the difference between the purchase price and market price being recorded as investment income. None of the District's investments have been reported at amortized cost.

At June 30, 2011, the fair value and carrying amount of the District's investments are summarized as follows:

Weighted Average Maturity (Days) TexPool $36,617,909 43

Total $36,617,909

Credit Risk Related to Investments

The District’s investment policy states that the investment portfolio will be diversified to avoid incurring undue concentration in securities of one type of securities of one financial institution, so that no single investment or class of investments can have a disproportionate impact on the total portfolio. This restriction does not apply to U.S. Treasury securities or investment pools.

Credit risk is the risk that another party to a deposit or investment transaction will not fulfill its obligations. This is not to be confused with market risk, which is the risk that the market value of an investment, collateral protecting a deposit, or securities underlying a repurchase agreement, will decline. Market risk is not depicted in this note.

State law and the District’s investment policy limits investments in all categories to top ratings issued by nationally recognized statistical rating organizations.

EXHIBIT B-9 (Continued)

SPRING INDEPENDENT SCHOOL DISTRICT

NOTES TO BASIC FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2011

3. CASH AND TEMPORARY INVESTMENTS (Continued)

Investments (Continued)

Credit Risk Related to Investments (Continued)

As of June 30, 2011, TexPool represented 100.0% of the General Fund, Debt Service Fund, Capital Projects Fund, Child Nutrition Fund and Internal Service Fund investments and are rated AAAm by Standard & Poors Corporation.

Interest Rate Risk

As a means of minimizing risk of loss due to interest rate fluctuations, the District requires that investment maturities in the General Fund, Debt Service Fund, Capital Projects Fund, and Special Revenue Funds will not exceed a weighted average maturity of 365 days. The District’s Investment Policy also limits that no investment shall have an original stated maturity greater than two or three years depending on the instrument. The District, also, ensures diversification and holds investment instruments until maturity.

Custodial Credit Risk

Custodial credit risk for investments is the risk that, in the event of the failure of the counterparty (e.g. broker dealer) to a transaction, a government will not be able to recover the value of its investments or collateral securities that are in the possession of another party. The District’s policy requires that a third party custodian or a bank trust department hold all securities owned by the District.

Adjustment to Investments’ Fair Value

The District’s portfolio value fluctuates in an inverse relationship to any change in interest rate. Accordingly, if interest rates have risen, the portfolio value will have declined. If interest rates have fallen, the portfolio value will have risen. Market values of commercial paper are based on quoted market values. The investments are reported by the District at fair value in accordance with GAAP. The District had no gains or losses from the sale of securities because they were held to maturity.

Investments held at June 30, 2011 were carried at their fair market value and needed no adjustment. The total investment income was $335,720.

EXHIBIT B-9 (Continued)

SPRING INDEPENDENT SCHOOL DISTRICT

NOTES TO BASIC FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2011

4. RECEIVABLES

Receivables as of June 30, 2011 for the District’s individual major funds, non-major, and internal service funds in the aggregate, including applicable allowances for uncollectible accounts are as follows:

Debt Capital Non-Major/ General Service Projects Other Total

Property taxes $12,003,194 $4,234,108 $16,237,302 Due from state 43,982,388 $9,262,642 53,245,030 Due from other governments 60,076 60,076 Accrued interest 1,027 36,946 $10,744 48,717 Miscellaneous receivables 645,509 368 7,186 653,063

Gross receivables 56,632,118 4,271,422 10,744 9,329,904 70,244,188

Less allowance for uncollectibles (1,987,700) (531,700) (2,519,400)

Total net receivables $54,644,418 $3,739,722 $10,744 $9,329,904 $67,724,788

Governmental funds report deferred revenue in connection with receivables for revenues that are not considered to be available to liquidate liabilities of the current period. Governmental funds also defer revenue recognition in connection with resources that have been received, but not yet earned. At June 30, 2011, the various components of deferred revenue and unearned revenue reported in the governmental funds are as follows:

Deferred Unearned

Deferred property taxes, General Fund $9,505,161 Deferred property taxes, Debt Service Fund 3,384,980 Advance funding, Special Revenue Funds $84,055

Total deferred revenue for governmental funds $12,890,141 $84,055

EXHIBIT B-9 (Continued)

SPRING INDEPENDENT SCHOOL DISTRICT

NOTES TO BASIC FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2011

5. CAPITAL ASSETS

A summary of changes in capital asset activity is as follows:

Transfers, Adjustments Adjustments Balance and and Balance June 30, 2010 Additions Dispositions June 30, 2011

Capital assets not being depreciated

Land $76,605,486 $109,706 $76,715,192 Construction-in-progress 18,008,739 191,808 ($17,990,433) 210,114

Total capital assets not being depreciated 94,614,225 301,514 (17,990,433) 76,925,306

Capital assets being depreciated

Buildings and improvements 685,266,816 14,300,157 13,678,265 713,245,238 Furniture and equipment 59,008,361 5,271,942 (516,044) 63,764,259 Automotive equipment 23,167,690 548,320 (211,094) 23,504,916

Total capital assets being depreciated 767,442,867 20,120,419 12,951,127 800,514,413

Less accumulated depreciation for:

Buildings and improvements (155,584,801) (18,260,466) 2,029,708 (171,815,559) Furniture and equipment (35,527,795) (7,959,620) 424,423 (43,062,992) Automotive equipment (9,059,427) (1,553,765) 191,882 (10,421,310)

Total accumulated depreciation (200,172,023) (27,773,851) 2,646,013 (225,299,861)

Governmental activities capital assets, net $661,885,069 ($7,351,918) ($2,393,293) $652,139,858

EXHIBIT B-9 (Continued)

SPRING INDEPENDENT SCHOOL DISTRICT

NOTES TO BASIC FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2011

5. CAPITAL ASSETS (Continued)

Depreciation expense was charged to functions/programs of the governmental activities as follows:

Instruction $14,341,671 Instructional resources and media services 525,278 Curriculum and staff development 10,153 Instructional leadership 105,619 School leadership 420,548 Guidance and counseling services 74,126 Health services 64,741 Student (pupil) transportation 1,649,421 Child nutrition services 1,814,510 Co-curricular activities 1,290,695 General administration 126,769 Plant maintenance and operations 5,629,313 Security and monitoring services 304,164 Data processing services 1,400,446 Community services 16,397

Total $27,773,851

Construction-in-progress consisted of the following projects and remaining commitments:

Project Expended Outstanding Authorization June 30, 2011 June 30, 2011

Safe Route to Schools $60,000 $35,254 $24,746 Lone Star Early College 1,150,073 174,860 975,213

Total $1,210,073 $210,114 $999,959

EXHIBIT B-9 (Continued)

SPRING INDEPENDENT SCHOOL DISTRICT

NOTES TO BASIC FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2011

6. INTERFUND RECEIVABLES, PAYABLES AND TRANSFERS

The composition of interfund balances in the fund financial statements as of June 30, 2011 was as follows:

Receivable Payable

General Fund $4,332,353 $1,871,887 Debt Service Fund 6,137 Capital Projects Funds 13,778 116,612 Non-major Governmental Funds 1,871,887 3,366,886 Internal Service Funds 856,496

Total $6,218,018 $6,218,018

All interfund balances are routine in nature, used to pay back funds as necessary and are expected to be repaid within one year. Most of the amounts represent short-term borrowing between funds for operating expense payments.

Interfund transfers are defined as “flows of assets without equivalent flow of assets in return and without requirements for repayment”. The following is a summary of the District’s transfers for the year ended June 30, 2011:

Transfers In Transfers Out Net

General Fund $942,758 ($942,758) Debt Service Fund $3,925,551 3,925,551 Capital Projects Funds 3,925,551 (3,925,551) Internal Service Funds 942,758 942,758

Total $4,868,309 $4,868,309 $

Funds were transferred from the General Fund to the Internal Service Funds to zero out the net assets in preparation to close these funds in 2011-2012. The Capital Projects funds transferred funds to the Debt Service Funds to use savings from construction and renovation projects to repay outstanding debt related to bonds sold.

EXHIBIT B-9 (Continued)

SPRING INDEPENDENT SCHOOL DISTRICT

NOTES TO BASIC FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2011

7. SHORT-TERM LOANS

A Tax Anticipation Note (TAN) in the amount of $14,500,000 was issued by the District in August 2010 in order to meet the District’s short-term cash flow needs created by the timing of property tax receipts. The interest rate on the note was 2.0115% and was paid in full in November 2010 prior to maturity. Interest incurred on the note totaled $34,448, net of premium.

The District issued a new TAN in June 2011 in the amount of $18,000,000 to meet short-term cash flow needs created by a mismatch between an evenly distributed expenditure budget and unevenly distributed revenue collection. The note has an interest rate of 1.75% and will mature on February 28, 2012. However, the TAN will be paid in full prior to maturity.

Short-Term Note Payable:

Beginning Ending Balance Additions Reductions Balance

Tax Anticipation Note (TAN) $32,500,000 ($14,500,000) $18,000,000

8. LONG-TERM DEBT

Long-term debt of the District consists principally of general obligation and refunding bonds payable. Debt Service requirements are payable solely from future revenues of the Debt Service Fund which consist principally of property taxes collected by the District, state funding and investment income.

Certain outstanding bonds may be redeemed at their par value prior to their normal maturity dates in accordance with the terms of the related bond indentures.

EXHIBIT B-9 (Continued)

SPRING INDEPENDENT SCHOOL DISTRICT

NOTES TO BASIC FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2011

8. LONG-TERM DEBT (Continued)

The following is a summary of the long-term liability activity of the District for the fiscal year ended June 30, 2011:

Balance Refunding/ Balance Due Within July 1, 2010 Additions Retirement June 30, 2011 One Year

General obligation and refunding bonds $695,565,000 $19,645,000 $675,920,000 $19,740,000 Premium from sale of bonds 11,970,372 909,616 11,060,756 Accretion on capital appreciation bonds 4,396,210 $202,978 4,599,188 Capital leases 24,582 24,582 Accrued vacation 1,013,411 534,600 534,996 1,013,015 534,392 Claims payable 4,490,881 7,328,657 10,527,776 1,291,762 1,291,762

Total $717,460,456 $8,066,235 $31,641,970 $693,884,721 $21,566,154

Internal Service Funds predominantly serve the governmental funds. Accordingly, long-term liabilities for them are included as part of the above totals for governmental activities. At year- end, $1,291,762 of claims payable is included in the above amounts. Claims and judgments and compensated absences are generally liquidated by the general fund. The District considers all claims to be current liabilities. We expect that medical and workers’ compensation claims will be filed on a timely basis and, therefore, consider all claims payable current.

The District issues general obligation bonds to provide funds for construction and equipment of school facilities, buses and to refund general obligation bonds. These bonds are direct obligations and pledge the full faith and credit of the District. These are issued as 25 year current interest bonds, term bonds, serial bonds and/or capital appreciation bonds (“CABs”) with various amounts of principal maturing each year.

EXHIBIT B-9 (Continued)

SPRING INDEPENDENT SCHOOL DISTRICT

NOTES TO BASIC FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2011

8. LONG-TERM DEBT (Continued)

General obligation and refunding bonds payable at June 30, 2011 are summarized as follows:

Date Series Series Maturing Interest Original Outstanding Issued Through Rates (%) Issuance Balance

1998-A 2022 4.250 - 6.250 $26,000,000 $18,875,000 1999 2023 5.000 - 7.000 6,625,000 3,550,000 2001 2026 4.500 - 6.500 28,250,000 22,650,000 2001-A 2026 4.000 - 5.125 52,450,000 41,975,000 2002 2027 3.875 - 5.875 32,000,000 26,300,000 2003 2028 3.000 - 5.000 24,650,000 20,900,000 2003-A 2028 2.000 - 5.250 23,225,000 10,675,000 2004 2029 2.500 - 5.000 57,300,000 40,890,000 2005 2030 3.000 - 6.000 100,000,000 90,250,000 2005-A 2030 5.000 57,695,000 57,695,000 2006 2030 4.000 – 6.000 26,715,000 25,620,000 2007 2033 4.250 – 5.000 84,000,000 82,500,000 2008-A 2034 3.625 – 5.000 142,290,000 139,905,000 2009 2035 2.750 – 5.000 94,135,000 94,135,000

$755,335,000 $675,920,000

The Unlimited Tax Schoolhouse Bonds, Series 2009 include CABs maturing between 2011 and 2013. CABs are issued at a discount to their par (or maturity) value and will accrete this difference until maturity. At June 30, 2011 total general obligation and refunding bonds payable includes $4,599,188 accretion on capital appreciation bonds.

EXHIBIT B-9 (Continued)

SPRING INDEPENDENT SCHOOL DISTRICT

NOTES TO BASIC FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2011

8. LONG-TERM DEBT (Continued)

Principal and interest payments on general obligation bonds payable at June 30, 2011 are summarized as follows:

Year Ending June 30 Principal Interest Total

2012 $19,740,000 $33,196,680 $52,936,680 2013 21,045,000 32,691,537 53,736,537 2014 21,660,000 32,000,202 53,660,202 2015 24,485,000 29,080,909 53,565,909 2016 25,595,000 27,996,420 53,591,420 2017-2021 145,805,000 121,176,853 266,981,853 2022-2026 185,840,000 81,878,305 267,718,305 2027-2031 181,705,000 32,747,988 214,452,988 2032-2035 50,045,000 4,323,625 54,368,625

Total $675,920,000 $395,092,519 $1,071,012,519

On May 12, 2007, patrons of the District voted in favor of a bond referendum in the amount of $280 million. This bond program provides funding for the construction of six new elementary schools, one replacement elementary school, and a transportation/maintenance center. It also provides for the purchase of land and the design for a fourth comprehensive high school. Also included in the bond program are planned school renovations and the purchase of buses and technology infrastructure.

At June 30, 2011, the District had no authorized but unissued bonds.

9. RISK MANAGEMENT

Property, Casualty and Liability Insurance

The District is exposed to various risks of loss related to torts, theft of, damage to and destruction of property; errors and omissions; and natural disasters for which the District carries commercial insurance. Settled claims have not exceeded insurance coverage in any of the previous three fiscal years. There has not been any significant reduction in insurance coverage from that of the previous year.

EXHIBIT B-9 (Continued)

SPRING INDEPENDENT SCHOOL DISTRICT

NOTES TO BASIC FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2011

9. RISK MANAGEMENT (Continued)

Health Insurance Fund

Through December 31, 2010, the District sponsored a modified self-insurance plan to provide health care benefits to staff members and their dependents. This plan was established as a “Single Entity Risk Pool” under Chapter 172, Section 13.913 of the Texas Education Code. The risk pool has three trustees who supervise the disbursement of funds. Transactions related to the plan are accounted for in the Health Insurance Fund (the “Fund”), an internal service fund of the District. Partial staff member contributions are required for personal coverage and total staff member contributions are required for coverage of dependents. The District obtained excess loss insurance which limited annual claims paid from the Fund through December 31, 2010 to $200,000 for any individual participant and an aggregate limit equal to approximately $19 million.

As of January 1, 2011, the District discontinued the self-funded health insurance plan. At that time, employees became eligible to purchase health insurance through TRS-Active Care which is the statewide health plan for public education employees established by the 77th Texas Legislature and is a fully insured plan administered by Blue Cross and Blue Shield of Texas. The self-funded health plan will continue to pay claims incurred prior to December 31, 2010. As most claims are filed immediately after medical services, the majority of residual claims were paid within the first few months.

Estimates of claims payable and of claims incurred but not reported at June 30, 2011, are reflected as claims payable of the Fund. These estimates were determined based on claims information supplied by the claims administrator. The plan is funded to discharge liabilities of the Fund as they become due.

The following is a summary of the changes in claims payable for the Health Insurance Fund for fiscal years 2010 and 2011:

Current Year Beginning of Claims and Balance at Fiscal Fiscal Year Changes in Claims Fiscal Year Claims Payable Estimates Payments Year End

2010 $2,256,863 $22,121,300 $21,084,040 $3,294,123 2011 3,294,123 9,338,959 12,986,566 353,484

EXHIBIT B-9 (Continued)

SPRING INDEPENDENT SCHOOL DISTRICT

NOTES TO BASIC FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2011

9. RISK MANAGEMENT (Continued)

Workers' Compensation

The District established an Internal Service Fund to provide a self-insured risk management program for workers' compensation. Transactions related to the plan are accounted for in the Workers' Compensation Fund. Claims administration, loss control and consultant services are provided by a third-party administrator. The District obtained excess loss insurance, which limited annual claims paid from the Workers' Compensation Fund for the year ended June 30, 2011 to $300,000 for any individual participant and an aggregate limit of $1,000,000.

The total claims liability of the Workers’ Compensation Fund at June 30, 2011 was $938,278 and has been fully funded through General Fund contributions. Claims payable, including an estimate of claims incurred but not reported, was determined based on the District's historical claims experience and an estimate of the remaining liability for known claims.

The following is a summary of the changes in claims payable for the Workers’ Compensation Fund for fiscal years 2010 and 2011:

Current Year Beginning of Claims and Balance at Fiscal Fiscal Year Changes in Claims Fiscal Year Claims Payable Estimates Payments Year End

2010 $1,190,596 $626,559 $620,397 $1,196,758 2011 1,196,758 453,523 712,003 938,278

EXHIBIT B-9 (Continued)

SPRING INDEPENDENT SCHOOL DISTRICT

NOTES TO BASIC FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2011

10. RETIREMENT PLAN

Plan Description

The District contributes to the Teacher Retirement System of Texas (TRS), a cost-sharing multiple employer defined benefit pension plan. TRS administers retirement and disability annuities, and death and survivor benefits to employees and beneficiaries of employees of the public school systems of Texas. It operates primarily under the provisions of the Texas Constitution, Article XVI, Sec. 67, and Texas Government Code, Title 8, Subtitle C. TRS also administers proportional retirement benefits and service credit transfer under Texas Government Code, Title 8, Chapters 803 and 805, respectively. The Texas state legislature has the authority to establish and amend benefit provisions of the pension plan and may, under certain circumstances, grant special authority to the TRS Board of Trustees. TRS issues a publicly available financial report that includes financial statements and required supplementary information for the defined benefit pension plan. That report may be obtained by downloading the report from the TRS internet website, www.trs.state.tx.us, under the TRS Publications heading, by calling the TRS Communications Department at 1-800-223-8778, or by writing to the TRS Communications Department, 1000 Red River Street, Austin, Texas 78701.

Funding Policy

State law provides for a member contribution rate of 6.4% for fiscal years 2011, 2010 and 2009, and a state contribution rate of 6.644% for the period January 2010 through June 2011, 6.4% for the period September through December 2009, and 6.58% for the period of July through August 2009 and for fiscal year 2009. In certain instances the reporting district is required to make all or a portion of the state’s 6.644% for the period January 2010 through June 2011, 6.4% for the period September through December 2009, and 6.58% contribution for the period of July through August 2009 and for fiscal year 2009. Contribution requirements are not actuarially determined but are established and amended by the Texas state legislature. The state funding policy is as follows: (1) The state constitution requires the legislature to establish a member contribution rate of not less than 6.0% of the member’s annual compensation and a state contribution rate of not less than 6.0% and not more than 10% of the aggregate annual compensation of all members of the system. (2) A state statute prohibits benefit improvements or contribution reductions if, as a result of a the particular action, the time required to amortize TRS’ unfunded actuarial liabilities would be increased to a period that exceeds 31 years, or, if the amortization period already exceeds 31 years, the period would be increased by such action.

EXHIBIT B-9 (Continued)

SPRING INDEPENDENT SCHOOL DISTRICT

NOTES TO BASIC FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2011

10. RETIREMENT PLAN (Continued)

Contributions

Staff members of the District are required to pay 6.4% of their eligible gross earnings to the TRS pension plan. The State of Texas contributed 6.644% for the period January 2010 through June 2011, 6.4% for the period September through December 2009, and 6.58% for the period of July through August 2009 and for fiscal year 2009 of all employees’ eligible gross earnings, except for those staff members subject to statutory minimum requirements and those staff members being paid from and participating in federally funded programs. State statues establish these rates. The statutory minimum requirements are based on the State of Texas teacher schedule adjusted based on local tax rates. For staff members funded by federal programs, the federal programs are required to contribute 6.644% for fiscal years 2011 and 2010 (6.58% for fiscal year 2009).

Contributions made by the State, District, and staff members; and the District’s covered payroll for the fiscal years ended June 30, 2011, 2010 and 2009, are as follows:

State TRS District Staff Contributions Required Members’ District’s Made on Behalf Contributions Contributions Covered of the District to TRS to TRS Payroll

2011 $10,318,299 $3,246,240 $13,066,371 $204,162,238 2010 9,995,417 3,226,588 12,916,428 201,819,386 2009 9,471,042 2,658,619 11,973,548 187,073,602

For the current fiscal year and each of the past two years, the District’s actual contributions were equal to 100% of the required contribution. The contributions made by the State on behalf of the District have been recorded in the government-wide and in the fund financial statements of the District as both state revenues and payroll expenditures. These contributions are the legal responsibility of the State.

EXHIBIT B-9 (Continued)

SPRING INDEPENDENT SCHOOL DISTRICT

NOTES TO BASIC FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2011

11. RETIREE HEALTH PLAN

Plan Description

The District contributes to the Texas Public School Retired Employees Group Insurance Program (TRS-Care), a cost-sharing multiple-employer defined benefit postemployment health care plan administered by the Teacher Retirement System of Texas (TRS). TRS- Care Retired Plan provides health care coverage for certain persons (and their dependents) who retired under TRS. The statutory authority for the program is Texas Insurance Code, Chapter 1575. Section 1575 grants the TRS Board of Trustees the authority to establish and amend basic and optional group insurance coverage for participants. TRS issues a publicly available financial report that includes financial statements and required supplementary information for TRS-Care. That report may be obtained by visiting the TRS web site at www.trs.state.tx.us under the TRS Publications heading, by calling the TRS Communications Department at 1-800-223-8778, or by writing to the Communications Department of the Teacher Retirement System of Texas at 1000 Red River Street, Austin, Texas 78701.

Funding Policy

Contribution requirements are not actuarially determined but are legally established each biennium by the Texas Legislature. Texas Insurance Code, Sections 1575.202, 203, and 204 establish state, active employee, and public school contributions, respectively. The State of Texas and active public school employee contribution rates were 1.0% and 0.65% of public school payroll, respectively, with school districts contributing a percentage of payroll set at 0.55% for fiscal years 2011, 2010 and 2009. Per Texas Insurance Code, Chapter 1575, the public school contribution may not be less than 0.25% or greater than 0.75% of the salary of each active employee of the public school.

EXHIBIT B-9 (Continued)

SPRING INDEPENDENT SCHOOL DISTRICT

NOTES TO BASIC FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2011

11. RETIREE HEALTH PLAN (Continued)

Contributions made by the State, District, and staff members for the fiscal years ended June 30, 2011, 2010 and 2009, are as follows:

State TRS District Staff Contributions Required Members’ District’s Made on Behalf Contributions Contributions Covered of the District to TRS CARE to TRS CARE Payroll

2011 $1,929,731 $1,234,783 $1,327,055 $204,162,238 2010 1,934,704 1,193,496 1,311,826 201,819,386 2009 1,801,441 1,098,181 1,215,956 187,073,602

For the current fiscal year and each of the past two years, the District’s actual contributions were equal to 100% of the required contribution. The contributions made by the State on behalf of the District have been recorded in the governmental funds financial statements of the District as both state revenues and payroll expenditures. These contributions are the legal responsibility of the State.

The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 established prescription drug coverage for Medicare beneficiaries know as Medicare Part D. Under Medicare Part D, TRS-Care receives retiree drug subsidy payments from the federal government to offset certain prescription drug expenditures for eligible TRS-Care participants. For the year ended June 30, 2011, 2010 and 2009, the subsidy payments received by TRS-Care on-behalf of the District were $545,408, $514,211, and $432,402, respectively. These payments are recorded as equal revenues and expenditures in the governmental funds financial statements of the District.

12. SHARED SERVICES ARRANGEMENT

The District participates in a shared services arrangement for a Regional Day School for the Deaf with nine other school districts. Although 2.97% of the activity of the shared services arrangement is attributable to the District's participation, the District does not account for revenues or expenditures in this program and does not disclose them in these financial statements. Cypress-Fairbanks Independent School District is the fiscal agent manager and is responsible for all financial activities of the shared services arrangement.

EXHIBIT B-9 (Continued)

SPRING INDEPENDENT SCHOOL DISTRICT

NOTES TO BASIC FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2011

12. SHARED SERVICES ARRANGEMENT (Continued)

Presented below are the revenues paid to the fiscal agent manager by the State and the District and related program expenditures incurred by the fiscal agent manager on behalf of the District:

Revenues State revenue distributed by TEA $55,517 Local revenue paid by the District 184,717

Total Revenues $240,234

Expenditures Payroll costs $238,965 Contracted services 1,058 Supplies and materials 17 Miscellaneous expenses 194

Total Expenditures $240,234

The District also participates in a shared services arrangement with a Regional Day School for the Deaf with Aldine Independent School District. This arrangement differs from that of Cy-Fair Independent School District in that the District only pays for services provided to students that are not enrolled in the Regional Day School for the Deaf. The costs associated with these services vary based on need.

Total costs paid to Aldine Independent School District for evaluation and admission, review and dismissal (“ARD”) services for non-enrolled students totaled $10,200 for the fiscal year ended June 30, 2011.

13. COMMITMENTS AND CONTINGENCIES

The District received significant financial assistance from federal and state governmental agencies in the form of grants. The disbursement of funds received under these programs generally requires compliance with terms and conditions specified in the grant agreements and are subject to audit by the grantor agencies and the TEA. Any disallowed claims resulting from such audits would become a liability of the general fund. However, in the opinion of management, potential disallowed claims, if any, would not have a material effect on the financial statements of the individual fund types included herein or on the overall financial position of the District at June 30, 2011.

EXHIBIT B-9 (Continued)

SPRING INDEPENDENT SCHOOL DISTRICT

NOTES TO BASIC FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2011

13. COMMITMENTS AND CONTINGENCIES (Continued)

From time to time, the District is a defendant in legal proceedings relating to its operations as a school district. In the best judgment of the District's management, the outcome of any present legal proceedings will not have any material adverse effect on the District's financial condition.

14. SUBSEQUENT EVENT

On August 23, 2011 the District issued Unlimited Tax Refunding Bonds, Series 2011 (the “Bonds”) in the amount of $60,965,000. The proceeds from the sale of the Bonds will be used to refund a portion of the District’s outstanding Unlimited Tax Bonds Series 1999, 2001 and 2001-A.

EXHIBIT C-1

SPRING INDEPENDENT SCHOOL DISTRICT

SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL GENERAL FUND

For the Fiscal Year Ended June 30, 2011

Variance with Final Budget Original Final Positive Budget Budget Actual (Negative) REVENUES: Local Revenues: Property taxes $79,400,156 $75,550,000 $74,023,706 ($1,526,294) Tuition and fees 682,500 436,099 418,846 (17,253) Earnings on investments 250,000 67,900 54,675 (13,225) Other local sources 1,113,001 1,479,113 1,519,925 40,812 Total Local Revenues 81,445,657 77,533,112 76,017,152 (1,515,960) State Revenues 174,781,147 167,113,396 165,834,020 (1,279,376) Federal Intergovernmental Revenues 850,000 2,225,000 2,556,529 331,529 Total Revenues 257,076,804 246,871,508 244,407,701 (2,463,807)

EXPENDITURES: Current: Instructional 155,745,065 147,826,253 146,745,364 1,080,889 Instructional resources and media services 3,646,592 3,831,242 3,342,751 488,491 Curriculum and staff development 2,880,321 3,773,652 2,527,654 1,245,998 Instructional leadership 3,841,529 3,891,469 3,753,151 138,318 School leadership 15,645,794 16,033,097 16,119,482 (86,385) Guidance and counseling services 8,244,644 7,962,014 7,891,385 70,629 Social work services 290,527 400,527 334,483 66,044 Health services 2,811,315 2,971,436 2,911,561 59,875 Student (pupil) transportation 10,945,166 12,122,372 12,308,122 (185,750) Co-curricular activities 4,959,529 5,634,634 5,146,216 488,418 General administration 8,860,779 7,434,610 6,797,246 637,364 Plant maintenance and operations 30,087,664 27,411,130 24,565,722 2,845,408 Security and monitoring services 3,403,520 3,398,050 3,135,056 262,994 Data processing services 3,554,485 3,632,152 3,444,584 187,568 Community services 460,170 512,449 469,058 43,391 Debt Service: Principal retirement of capital lease 24,590 24,582 8 Interest on tax anticipation note and capital lease 76,720 36,168 40,552 Tax anticipation note fees 35,000 69,930 (34,930) Intergovernmental Charges: Fiscal agent/shared services arrangement 195,200 16,500 16,183 317 Alternative education 122,819 50,000 5,760 44,240 Other intergovernmental charges 1,010,316 910,316 908,229 2,087 Total Expenditures 256,705,435 247,948,213 240,552,687 7,395,526

Excess (deficiency) of revenues over (under) expenditures 371,369 (1,076,705) 3,855,014 4,931,719 Other Financing Sources (Uses): Sale of property 50,000 40,171 (9,829) Transfers out (942,758) (942,758) Total Other Financing Sources (Uses) 50,000 (902,587) (952,587)

Net change in fund balance 371,369 (1,026,705) 2,952,427 3,979,132

FUND BALANCE, JULY 1 22,773,729 22,773,729 22,773,729

FUND BALANCE, JUNE 30 $23,145,098 $21,747,024 $25,726,156 $3,979,132

See accompanying notes to required supplementary information.

75 EXHIBIT C-2

SPRING INDEPENDENT SCHOOL DISTRICT

NOTES TO REQUIRED SUPPLEMENTARY INFORMATION For the Fiscal Year Ended June 30, 2011

1. Budgets and Budgetary Accounting

Each school district in Texas is required by law to prepare annually a budget of anticipated revenues and expenditures for the General Fund for the fiscal year beginning September 1 (or July 1, if the District has elected to change the start of the fiscal year). The Texas Education Code requires the budget to be prepared not later than August 20 (June 19th for a fiscal year start date of July 1) and adopted by August 31 (June 30 for a fiscal year start date of July 1) of each year. The District's administration determines budgetary funding priorities using a modified zero-based budgeting concept, which is consistent with GAAP. Final budget allocations are determined by the Board, which subsequently establishes a tax rate sufficient to support the approved budget. The annual budget, which is prepared on the modified accrual basis of accounting, must be adopted by the Board at a scheduled meeting after giving ten days public notice of the meeting. The District annually adopts a legally authorized appropriated budget for the General Fund.

The District's administration performs budget reviews three times a year by which budget requirements are re-evaluated and revisions recommended to the Board. The Board may approve amendments to the budget, which are required when a change is made to any one of the functional expenditure categories or revenue object accounts defined by the TEA. Expenditures may not legally exceed budgeted appropriations, as amended, at the function level by fund. Unexpended appropriations lapse at year-end.

Management may amend the budget without seeking Board approval if appropriations are not moved between functions. Therefore, appropriations may be transferred between objects, sub- objects, organizations, programs and projects without Board approval. During fiscal year 2011, General Fund appropriations were decreased by $8,757,222 and revenues were decreased by $10,155,296.

2. Variances with Final Budget

The variance in the revenue budget is due to lower than expected tax collections, differences in the final settle up in state revenue and the final TRS on-behalf calculations.

There was a significant variance in the final budget versus final actual expenditures. This variance is primarily due to savings related to energy conservation efforts resulting in lower than expected utility costs and a mid-year hiring freeze.

The final amount expended in the school leadership and student transportation functions by $86,385 and $185,750 respectively. These overages were funded by available amounts in other functional categories. All other expenditures within the General Fund were within budgeted appropriations.

______

MAJOR GOVERNMENTAL FUNDS ______

DEBT SERVICE FUND

This fund is used to account for revenues from property taxes levied specifically for debt service and earnings on temporary investments and the expenditure of these revenues in payment of general long-term debt principal and interest.

CAPITAL PROJECTS FUND

The Capital Projects Fund is used to account for proceeds from the sale of general obligation bonds and the expenditure of these funds for the construction and equipping of new school facilities, the purchase of school sites, renovation of present facilities and the purchase of school buses.

EXHIBIT D-1

SPRING INDEPENDENT SCHOOL DISTRICT

SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL DEBT SERVICE FUND

For the Fiscal Year Ended June 30, 2011

Variance with Final Budget Original Final Positive Budget Budget Actual (Negative) REVENUES: Local Revenues: Property taxes $32,065,448 $31,792,400 $31,016,446 ($775,954) Earnings on investments 300,000 85,000 88,119 3,119 Total Local Revenues 32,365,448 31,877,400 31,104,565 (772,835) State Revenues 11,106,714 11,032,178 10,911,276 (120,902) Total Revenues 43,472,162 42,909,578 42,015,841 (893,737)

EXPENDITURES: Debt service: Principal retirement of bonds 19,645,000 19,645,000 19,645,000 Interest on bonds and capital leases 32,712,166 32,712,166 32,712,166 Bond issuance costs and fees 30,000 10,000 6,878 3,122 Total Expenditures 52,387,166 52,367,166 52,364,044 3,122

Excess (deficiency) of revenues over (under) expenditures (8,915,004) (9,457,588) (10,348,203) (890,615)

OTHER FINANCING SOURCES (USES): Transfers in 10,100,000 3,925,551 (6,174,449) Total Other Financing Sources (Uses) 10,100,000 3,925,551 (6,174,449)

Net change in fund balance (8,915,004) 642,412 (6,422,652) (7,065,064)

FUND BALANCE, JULY 1 34,679,836 34,679,836 34,679,836

FUND BALANCE, JUNE 30 $25,764,832 $35,322,248 $28,257,184 ($7,065,064)

77 EXHIBIT D-2

SPRING INDEPENDENT SCHOOL DISTRICT

SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL CAPITAL PROJECTS FUND

For the Fiscal Year Ended June 30, 2011

Variance with Final Budget Final Positive Budget Actual (Negative) REVENUES: Local Revenues: Earnings on investments $250,000 $170,928 ($79,072) Total Revenues 250,000 170,928 (79,072)

EXPENDITURES: Plant maintenance and operations: Fees 249,903 56,230 193,673 Other supplies 3,356 (3,356) Security and monitoring services: Miscellaneous contracted services 521 382 139 Debt service: Bond issuance costs and fees 304,426 20,919 283,507 Facilities acquisition and construction: Salaries 1,477,362 404,722 1,072,640 Lobbying 131,183 78,862 52,321 Land improvements/fees/purchase 4,343,243 109,706 4,233,537 General construction 21,196,688 14,491,965 6,704,723 Fees 1,025,600 1,028,424 (2,824) Other supplies 4,219,995 969,861 3,250,134 Equipment 6,138,677 3,797,245 2,341,432 Total Expenditures 39,087,598 20,961,672 18,125,926

Excess of revenues over (under) expenditures (38,837,598) (20,790,744) 18,046,854

OTHER FINANCING SOURCES (USES): Transfers out (10,100,000) (3,925,551) 6,174,449 Total Other Financing Sources (Uses) (10,100,000) (3,925,551) 6,174,449

Net change in fund balance (48,937,598) (24,716,295) 24,221,303

FUND BALANCE, JULY 1 49,350,946 49,350,946

FUND BALANCE, JUNE 30 $413,348 $24,634,651 $24,221,303

78 ______

NON-MAJOR GOVERNMENTAL FUNDS ______SPECIAL REVENUE FUNDS

The Special Revenue Funds are used to account for the District’s Child Nutrition operations, School Activity funds, and all federal, state and locally funded grants. These grants are awarded to the District with the purpose of accomplishing specific educational tasks.

• Elementary and Secondary Education Act (“ESEA”), Title IV, Part A - Safe and Drug Free Schools and Communities (SDFSC) - Funds are used to develop age-appropriate programs for prevention or intervention regarding violence and drug/alcohol abuse. • Elementary and Secondary Education Act (“ESEA”), Title I, Part A - Improving Basic Programs - Funds are used to provide opportunities for children to acquire the knowledge and skills contained in the challenging State content standards and to meet the challenging State performance standards developed for all children. • Elementary and Secondary Education Act (“ESEA”), Title I, Part B - Even Start Family Literacy - Funds are used to help parents become full partners in their children’s education, help children reach their full potential as learners and provide literacy training for their parents by integrating adult education and early childhood education into a unified family-centered program. • Individuals with Disabilities Education Act (“IDEA”), Part B - Formula - Funds are used to operate educational programs for children with disabilities. • Individuals with Disabilities Education Act (“IDEA”), Part B - Preschool - Funds are used for preschool children with disabilities. • Child Nutrition Fund - Accounts for all transactions in the District’s Child Nutrition program. This includes the federally funded National School Lunch program and breakfast programs. • Vocational Education - Technical Preparation - Funds are used to provide a combined secondary and post-secondary program of technical skills in the areas of engineering, science, mechanical (industrial or practical arts or trades), agriculture, health, and business. • Vocational Education - Basic - Funds are used to provide instruction related to career and technology education and to develop new and/or improved career and technology education programs for paid and unpaid employment.

• Elementary and Secondary Education Act (“ESEA”), Title II, Part A - Teacher and Principal Training and Recruiting - Funds are used to increase student achievement through teacher and principal quality and increasing the number of highly qualified teachers, principals and assistant principals in schools. • Elementary and Secondary Education Act (“ESEA”), Title II, Part D - Enhancing Education Through Technology - Funds are used to implement and support a comprehensive system that effectively uses technology in elementary and secondary schools to improve student academic achievement.

Continued ______

NON-MAJOR GOVERNMENTAL FUNDS ______SPECIAL REVENUE FUNDS

• Elementary and Secondary Education Act (“ESEA”), Title III, Part A - English Language Acquisition and Language Enhancement - Funds are used to improve the education of limited English proficient children, by assisting the children in learning the English language andmeet challenging State academic content and student academic achievement standards. • American Recovery and Reinvestment Act (“ARRA”), Title XIV - State Fiscal Stabilization Fund (SFSF) - Funds are used to advance essential education reforms to benefit students from early learning through post-secondary education. Funds are to help stabilize local government budgets in order to minimize and avoid reductions in education. This program is to help ensure that state school districts have the resources to avert cuts and retain teachers. • Medicaid Administrative Claiming Program - Funds are used for reimbursement of eligible administrative costs for activities attributed to the implementation of the Medicaid state plan. • American Recovery and Reinvestment Act (“ARRA”), Title II, Part D - Enhancing Education through Technology - Stimulus funds granted for the implementation and support of a comprehensive system that effectively uses technology in elementary and secondary schools to improve student academic achievement. • American Recovery and Reinvestment Act (“ARRA”), IDEA, Part B - Formula - Stimulus funds granted to operate educational programs for children with disabilities. • American Recovery and Reinvestment Act (“ARRA”), IDEA, Part – Preschool - Stimulus funds for preschool children with disabilities. • American Recovery and Reinvestment Act (“ARRA”), Title I, Part A - Improving Basic Programs - Stimulus funds to provide opportunities for children to acquire the knowledge and skills contained in the challenging State content standards and to meet the challenging State performance standards developed for all children. • Elementary and Secondary Education Act (“ESEA”), Title VI, Part A - Summer School Limited English Proficiency (LEP) - Funds are used for summer school programs for LEP students who will be eligible for admission to kindergarten and first grade at the beginning of the next school year. • Life Skills Program - Funds are used to reduce high school dropout rates, increase high school graduation rates and enhance parenting skills for students who are pregnant or parents and at risk of dropping out of school. • Advanced Placement Incentives - Funds are used to provide reimbursement for Advanced Placement teacher training approved by the College Board. Funds are also awarded to specific campuses based on student scores on Advanced Placement examinations and are to be used for enhancement of academic programs at awarded campuses.

Continued ______

NON-MAJOR GOVERNMENTAL FUNDS ______SPECIAL REVENUE FUNDS

• Student Success Initiative - Funds are used for teacher training and allocations to schools to implement scientific, research-based programs for students who have been identified as unlikely to achieve the third grade TAKS reading standard by the end of the third grade. • Technology Allotment - Funds are used to purchase technological software or equipment that contributed to student learning, or to pay for educational personnel involved in the use of these materials. • Pre-K Early Start - Funds are used to implement or expand kindergarten or prekindergarten programs not required under Texas Education Code 29.153.

• State Funded Special Revenue Funds - Accounts for state funded special revenue funds that have not been specified above. • School Activity Funds - Accounts for transactions of school sponsored activities benefiting students and staff. This includes fund raising activities, vending sales, incentive programs and corporate and private donations. • Rodeo Institute for Teacher Excellence (“RITE”) Grant - Funds are used to address at-risk students’ failure to develop reading skills. • Locally Funded Special Revenue Funds - Locally funded special revenue funds not specified above. • Career and Technology Education (“CTE”) Advisory Board Scholarship - Funds are used to expand and improve CTE program. • Spring Education Foundation Grants - Funds awarded by the Spring Education Foundation to individual teachers based on programs designed by the teachers to enhance and improve educational opportunities for the students.

SPRING INDEPENDENT SCHOOL DISTRICT

COMBINING BALANCE SHEET NON-MAJOR GOVERNMENTAL FUNDS - SPECIAL REVENUE FUNDS

June 30, 2011

ESEA ESEA Title I ESEA Title I Title IV Part A Part B IDEA Part A Improving Basic Even Start Part B SDFSC Programs Family Literacy Formula ASSETS

Cash Temporary investments Other receivables $1,641 Due from governmental agencies 1,582,110 $69,725 $783,650 Interfund receivables 212,394 Inventories at cost

TOTAL ASSETS $ $1,796,145 $69,725 $783,650

LIABILITIES

Due to state and others $1,182,666 Accounts payable 46,167 $4,958 $131,645 Accrued salaries and expenditures 567,312 26,861 260,114 Interfund payables 37,906 391,891 Deferred revenues

Total liabilities 1,796,145 69,725 783,650

FUND BALANCE

Non-spendable: Inventory Restricted: Grant funds Committed: School activity funds

Total Fund Balance

TOTAL LIABILITIES AND FUND BALANCE $ $1,796,145 $69,725 $783,650

80 EXHIBIT E-1

ESEA Title II ESEA Title II IDEA Vocational Vocational Part A Part D Part B Child Education Education Teacher/Principal Enhancing Educ Preschool Nutrition Tech Prep Basic Grant Train/Recruit Through Tech

$6,872 6,995,569

$19,195 279,665 $47,918 $41,702 271,594 109,068

$19,195 $7,662,768 $ $47,918 $41,702 $

$6,674 69,967 $4,683 $12,692 121,323 $702 24,869 6,503 47,216 12,150

19,195 197,964 47,918 41,702

109,068

7,355,736

7,464,804

$19,195 $7,662,768 $ $47,918 $41,702 $

81 SPRING INDEPENDENT SCHOOL DISTRICT

COMBINING BALANCE SHEET NON-MAJOR GOVERNMENTAL FUNDS - SPECIAL REVENUE FUNDS

June 30, 2011

Cash Temporary investments Other receivables Due from governmental agencies $168,216 $2,788,142 $44,849 Interfund receivables Inventories at cost

TOTAL ASSETS $168,216 $2,788,142 $ $44,849

LIABILITIES

Due to state and others Accounts payable $16,634 $31,582 Accrued salaries and expenditures 61,436 2,333,059 $25,372 Interfund payables 90,146 423,501 19,477 Deferred revenues

Total liabilities 168,216 2,788,142 44,849

FUND BALANCE

Non-spendable: Inventory Restricted: Grant funds Committed: School activity funds

Total Fund Balance

TOTAL LIABILITIES AND FUND BALANCE $168,216 $2,788,142 $ $44,849

82 EXHIBIT E-1 (Continued)

ARRA ARRA ARRA ESEA, Title I ESEA Tile VI IDEA IDEA Part A Part A Advanced Part B Part B Improving Summer Life Skills Placement Formula Preschool Basic Programs School LEP Program Incentives

$131 $540,375 $20,674 1,852,280 $1,441 7,886 $15,402

$540,375 $20,674 $1,852,411 $ $9,327 $15,402

$224,263 $248,396 $7,225 83,940 $9,327 291,979 13,449 1,544,208

540,375 20,674 1,852,411 9,327

$15,402

15,402

$540,375 $20,674 $1,852,411 $ $9,327 $15,402

83 SPRING INDEPENDENT SCHOOL DISTRICT

COMBINING BALANCE SHEET NON-MAJOR GOVERNMENTAL FUNDS - SPECIAL REVENUE FUNDS

June 30, 2011

State Student Funded Success Technology Pre-K Special Revenue Initiative Allotment Early Start Funds ASSETS

Cash Temporary investments Other receivables Due from governmental agencies $413,174 $592,324 $17,202 Interfund receivables $1,229,334 Inventories at cost

TOTAL ASSETS $413,174 $1,229,334 $592,324 $17,202

LIABILITIES

Due to state and others Accounts payable $511,614 $42,694 $14,800 Accrued salaries and expenditures $390,699 122,521 Interfund payables 22,475 427,109 2,402 Deferred revenues

Total liabilities 413,174 511,614 592,324 17,202

FUND BALANCE

Non-spendable: Inventory Restricted: Grant funds 717,720 Committed: School activity funds

Total Fund Balance 717,720

TOTAL LIABILITIES AND FUND BALANCE $413,174 $1,229,334 $592,324 $17,202

84 EXHIBIT E-1 (Conclude)

Locally CTE Spring Total School Funded Advisory Education Non-Major Activity RITE Special Revenue Board Foundation Governmental Funds Grant Funds Scholarship Grants Funds

$994,510 $1,001,382 6,995,569 5,380 $34 7,186 $60,076 9,322,718 $12,981 $122,296 1,871,887 109,068

$999,890 $60,076 $12,981 $34 $122,296 $19,307,810

$1,189,340 $828 1,099,835 $29,016 4,324,864 $5,380 31,060 $34 3,366,886 84,055 84,055

5,380 60,076 34 84,883 10,064,980

109,068

$12,981 37,413 8,139,252

994,510 994,510

994,510 12,981 37,413 9,242,830

$999,890 $60,076 $12,981 $34 $122,296 $19,307,810

85 SPRING INDEPENDENT SCHOOL DISTRICT

COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE NON-MAJOR GOVERNMENTAL FUNDS - SPECIAL REVENUE FUNDS

For the Fiscal Year Ended June 30, 2011

ESEA ESEA Title I ESEA Title I Title IV Part A Part B IDEA Part A Improving Basic Even Start Part B SDFSC Programs Family Literacy Formula REVENUES: Local Revenues: Earnings on investments Food sales Other local State Revenues Federal Intergovernmental Revenues $3,063 $4,282,877 $148,355 $4,518,145 Total Revenues 3,063 4,282,877 148,355 4,518,145

EXPENDITURES: Current: Instruction 2,960,505 2,320,788 Instructional resources and media services Curriculum and staff development 3,063 1,143,183 71,229 Instructional leadership 2,067 148,157 School leadership Guidance and counseling services 1,906,788 Social work services 698 Health services 60,983 Student (pupil) transportation Child nutrition services Co-curricular activities Plant maintenance and operations Security and monitoring services Data processing services Community services 176,424 148,355 Payments to fiscal agents 10,200 Total Expenditures 3,063 4,282,877 148,355 4,518,145

Net change in fund balances

FUND BALANCES, JULY 1

FUND BALANCES, JUNE 30 $$$$

86 EXHIBIT E-2

$16,657 4,781,758 1,479 114,985 $92,772 15,049,350 $21,910 $327,085 $399,214 $1,776 92,772 19,964,229 21,910 327,085 399,214 1,776

25,611 21,570 314,075 155,203

340 5,606 244,011 1,776 4,746 7,404

62,415

19,293,416

402,998 9,189

92,772 19,705,603 21,910 327,085 399,214 1,776

258,626

7,206,178

$ $7,464,804 $$$$

87 SPRING INDEPENDENT SCHOOL DISTRICT

COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE NON-MAJOR GOVERNMENTAL FUNDS - SPECIAL REVENUE FUNDS

For the Fiscal Year Ended June 30, 2011

ESEA Title III ARRA ARRA Part A Title XIV Medicaid ESEA Title II English Language State Fiscal Administrative Part D Acquisition and Stabilization Claiming Enhancing Educ Enhancement Fund Program Through Tech REVENUES: Local Revenues: Earnings on investments Food sales Other local State Revenues Federal Intergovernmental Revenues $619,573 $14,325,875 $65,124 $132,384 Total Revenues 619,573 14,325,875 65,124 132,384

EXPENDITURES: Current: Instruction 528,972 13,767,912 Instructional resources and media services Curriculum and staff development 32,754 19,431 44,356 Instructional leadership 57,847 88,028 School leadership 229,744 Guidance and counseling services 140,254 Social work services Health services 65,124 Student (pupil) transportation Child nutrition services Co-curricular activities Plant maintenance and operations Security and monitoring services Data processing services Community services Payments to fiscal agents 168,534 Total Expenditures 619,573 14,325,875 65,124 132,384

Net change in fund balances

FUND BALANCES, JULY 1

FUND BALANCES, JUNE 30 $$$$

88 EXHIBIT E-2 (Continued)

ARRA ARRA ARRA ESEA, Title I ESEA Tile VI IDEA IDEA Part A Part A Advanced Part B Part B Improving Summer Life Skills Placement Formula Preschool Basic Programs School LEP Program Incentives

$72,084 $17,084 $4,515,040 $88,380 $3,597,029 $30,083 4,515,040 88,380 3,597,029 30,083 72,084 17,084

2,422,524 1,303 3,009,612 30,083 5,410

305,293 715 447,367 9,787 147,747

1,544,006 86,362

95,470

5,884

134,166 72,084

4,515,040 88,380 3,597,029 30,083 72,084 15,197

1,887

13,515

$ $$$$ $15,402

89 SPRING INDEPENDENT SCHOOL DISTRICT

COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE NON-MAJOR GOVERNMENTAL FUNDS - SPECIAL REVENUE FUNDS

For the Fiscal Year Ended June 30, 2011

State Student Funded Success Technology Pre-K Special Revenue Initiative Allotment Early Start Funds REVENUES: Local Revenues: Earnings on investments Food sales Other local State Revenues $413,174 $979,745 $1,049,161 $66,479 Federal Intergovernmental Revenues Total Revenues 413,174 979,745 1,049,161 66,479

EXPENDITURES: Current: Instruction 396,702 187 1,022,773 20,795 Instructional resources and media services 97 Curriculum and staff development 25,383 Instructional leadership School leadership 16,472 Guidance and counseling services Social work services Health services Student (pupil) transportation Child nutrition services Co-curricular activities Plant maintenance and operations 106,892 Security and monitoring services Data processing services 1,192,056 Community services 1,005 Payments to fiscal agents Total Expenditures 413,174 1,192,243 1,049,161 127,784

Net change in fund balances (212,498) (61,305)

FUND BALANCES, JULY 1 930,218 61,305

FUND BALANCES, JUNE 30 $ $717,720 $ $

90 EXHIBIT E-2 (Conclude)

Locally CTE Spring Total School Funded Advisory Education Non-Major Activity RITE Special Revenue Board Foundation Governmental Funds Grant Funds Scholarship Grants Funds

$16,657 4,781,758 $2,107,194 $181,493 $60,000 $32,606 $72,640 2,455,412 2,712,712 48,218,035 2,107,194 181,493 60,000 32,606 72,640 58,184,574

2,171,620 181,493 66,178 30,176 49,813 29,503,305 97 2,430 2,356,724 455,996 246,216 3,739,825 698 126,107 95,470 19,293,416 17,661 23,545 509,890 9,189 1,192,056 3,680 535,714 178,734 2,171,620 181,493 69,858 32,606 67,474 58,266,982

(64,426) (9,858) 5,166 (82,408)

1,058,936 22,839 32,247 9,325,238

$994,510 $ $12,981 $ $37,413 $9,242,830

91 EXHIBIT E-3

SPRING INDEPENDENT SCHOOL DISTRICT

SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL CHILD NUTRITION FUND

For the Fiscal Year Ended June 30, 2011

Variance with Final Budget Original Final Positive Budget Budget Actual (Negative) REVENUES: Local Revenues: Earnings on investments $80,000 $20,000 $16,657 ($3,343) Food sales 5,347,000 5,347,000 4,781,758 (565,242) Other local 10,000 5,125 1,479 (3,646) Total Local Revenues 5,437,000 5,372,125 4,799,894 (572,231) State Revenues 115,000 115,000 114,985 (15) Federal Intergovernmental Revenues 13,360,000 16,415,000 15,049,350 (1,365,650)

Total Revenues 18,912,000 21,902,125 19,964,229 (1,937,896)

EXPENDITURES: Child nutrition services: Payroll costs 7,634,100 7,814,100 7,595,310 218,790 Purchased and contracted services 454,150 441,150 363,413 77,737 Supplies and materials 9,947,750 11,634,750 10,150,723 1,484,027 Other operating expenses 94,750 98,750 53,133 45,617 Capital outlay 680,000 1,355,153 1,130,837 224,316 Plant maintenance and operations: Purchased and contracted services 6,000 440,125 402,998 37,127 Security and monitoring services: Payroll costs 4,500 4,500 5,145 (645) Purchased and contracted services 6,000 6,000 4,044 1,956

Total Expenditures 18,827,250 21,794,528 19,705,603 2,088,925

Net change in fund balances 84,750 107,597 258,626 151,029

FUND BALANCE, JULY 1 7,206,178 7,206,178 7,206,178

FUND BALANCE, JUNE 30 $7,290,928 $7,313,775 $7,464,804 $151,029

92 ______

INTERNAL SERVICE FUNDS ______

The Internal Service Funds are used to account for transactions of the District’s self-funded health insurance plan and workers’ compensation plan.

EXHIBIT F-1

SPRING INDEPENDENT SCHOOL DISTRICT

COMBINING STATEMENT OF NET ASSETS INTERNAL SERVICE FUNDS

June 30, 2011

Health Workers' Insurance Compensation Total ASSETS

Current Assets: Cash $731,745 $14,115 $745,860 Temporary investments 224,689 1,177,709 1,402,398

Total Assets $956,434 $1,191,824 $2,148,258

LIABILITIES

Current Liabilities: Interfund payables $602,950 $253,546 $856,496 Claims payable 353,484 938,278 1,291,762

Total Liabilities 956,434 1,191,824 2,148,258

NET ASSETS

Unrestricted net assets

Total Net Assets $ $ $

93 EXHIBIT F-2

SPRING INDEPENDENT SCHOOL DISTRICT

COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS INTERNAL SERVICE FUNDS

For the Fiscal Year Ended June 30, 2011

Health Workers' Insurance Compensation Total

Operating Revenues: Employer and employee contributions $10,045,194 $864,000 $10,909,194 Total Operating Revenues 10,045,194 864,000 10,909,194 Operating Expenses: Administrative cost 730,252 99,318 829,570 Claims expense and other operating expenses 10,579,679 553,655 11,133,334 Total Operating Expenses 11,309,931 652,973 11,962,904 Operating Income (loss) (1,264,737) 211,027 (1,053,710)

Non-operating Revenues: Earnings on investments 1,277 4,064 5,341 Total Non-operating Revenues 1,277 4,064 5,341

Income (loss) before transfers (1,263,460) 215,091 (1,048,369)

Transfers from (to) other funds 1,196,304 (253,546) 942,758

Change in Net Assets (67,156) (38,455) (105,611)

Net Assets, July 1 67,156 38,455 105,611 Net Assets, June 30 $ $ $

94 EXHIBIT F-3

SPRING INDEPENDENT SCHOOL DISTRICT

COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS

For the Fiscal Year Ended June 30, 2011

Health Workers' Insurance Compensation Total

Cash flows from operating activities: Cash received for premiums $13,398,144 $626,285 $14,024,429 Cash paid for claims (12,986,566) (712,003) (13,698,569) Cash paid to vendors (1,646,743) (191,805) (1,838,548)

Net cash used in operating activities (1,235,165) (277,523) (1,512,688)

Cash flows from noncapital financing activities: Transfer from (to) other funds 1,196,304 (253,546) 942,758

Cash flows from investing activities: Earnings on investments 1,277 4,064 5,341

Net decrease in cash and cash equivalents (37,584) (527,005) (564,589)

Cash and temporary investments, July 1 994,018 1,718,829 2,712,847

Cash and temporary investments, June 30 $956,434 $1,191,824 $2,148,258

Reconciliation of Operating Income (Loss) to Net Cash Used In Operating Activities

Operating Income (loss) ($1,264,737) $211,027 ($1,053,710)

Adjustments to reconcile operating income to net cash provided by (used in) operating activities: Decrease in other receivables 18,001 14,720 32,721 Decrease in interfund receivables 2,750,000 108,739 2,858,739 Decrease in due to others (400,720) (1,417) (402,137) Decrease in accounts payable (20) (5,658) (5,678) Increase (decrease) in interfund payable 602,950 (346,454) 256,496 Decrease in claims payable (2,940,639) (258,480) (3,199,119)

Net cash used in operating activities ($1,235,165) ($277,523) ($1,512,688)

______

FIDUCIARY FUNDS ______AGENCY FUNDS

The Agency Funds consists of the Student Activity Funds that are used to account for monies held by schools through fund-raising efforts of the individual schools or school-sponsored groups. These funds also hold monies that are due to government agencies for items such as sales tax, textbooks, etc. which are remitted when required. The school principal is responsible, under the authority of the Board, for collecting, controlling, disbursing and accounting for all student activity funds.

EXHIBIT G-1

SPRING INDEPENDENT SCHOOL DISTRICT

STATEMENT OF CHANGES IN ASSETS AND LIABILITIES FIDUCIARY FUNDS

For the Fiscal Year Ended June 30, 2011

Balance Balance Agency Fund July 1, 2010 Additions Deductions June 30, 2011

ASSETS Cash $469,165 $2,117,193 $2,072,955 $513,403

Total Assets $469,165 $2,117,193 $2,072,955 $513,403

LIABILITIES Due to state and others $54,804 $408,757 $415,354 $48,207 Due to student groups 414,361 1,708,436 1,657,601 465,196

Total Liabilities $469,165 $2,117,193 $2,072,955 $513,403

______

COMPLIANCE SCHEDULES ______

These compliance schedules are required by the Texas Education Agency and are not required disclosures in the Comprehensive Annual Financial Report.

SPRING INDEPENDENT SCHOOL DISTRICT

SCHEDULE OF DELINQUENT TAXES RECEIVABLE

For the Fiscal Year Ended June 30, 2011

Assessed/Appraised Last Ten Years Tax Rates Value For School Ended June 30, (1) Maintenance Debt Service Tax Purposes

2002 and Prior Years Various Various Various

2003 (2) $1.47 $0.32 $5,307,474,590

2004 1.47 0.29 5,720,152,380

2005 1.49 0.38 6,181,064,470

2006 1.50 0.45 6,615,825,544

2007 1.31 0.40 7,265,663,955

2008 1.04 0.40 7,754,492,450

2009 1.04 0.42 8,173,286,959

2010 1.04 0.42 8,017,207,873

2011 1.04 0.42 7,303,409,532

Taxes paid into Tax Increment Zone under Chapter 311, Tax Code $102,220,280

100 EXHIBIT H-1

Beginning Maintenance Debt ServiceEnding Balance Current Year's Total Total Entire Year's Balance 7/1/2010 Total Levy Collections Collections Adjustments 6/30/2011

$748,684 ($20,388) ($4,852) ($105,870) $617,574

284,841 (2,918) (635) (379) 280,909

279,675 (8,434) (1,664) (373) 269,204

657,028 (227,902) (58,123) 11,698 382,701

511,628 (98,884) (31,113) 17,497 399,128

481,860 (107,777) (35,607) 12,122 350,598

689,729 (102,233) (86,742) (119,485) 381,269

1,411,424 (141,206) (143,759) (208,836) 917,623

7,198,595 (589,870) (737,573) (1,209,760) 4,661,392

$105,920,403 (72,965,074) (29,771,030) 3,184,299

12,263,464 $105,920,403 ($74,264,686) ($30,871,098) ($1,603,386) 11,444,697

4,427,086 Add: Penalties & Interest Receivable 4,792,605 $16,690,550 Total Taxes Receivable $16,237,302

$290,308 $290,308

101 EXHIBIT H-2

SPRING INDEPENDENT SCHOOL DISTRICT

INDIRECT COST COMPUTATION SCHEDULE FOR 2011-2012

For the Year Ended June 30, 2011

School Tax Superintendent's Indirect Direct Account Name Board Collection Office Cost Cost Miscellaneous Total

GENERAL ADMINISTRATION

Payroll costs $323,304 $412,788 $4,403,888 $5,139,980 Legal services 223,976 $171,585 395,561 Audit services 88,558 88,558 Tax appraisal and collection 908,229 908,229 Lobbying 2,950 2,950 Professional services 9,324 9,324 Education service centers 50 47,227 47,277 Contracted repairs 137,479 137,479 Miscellaneous contract $13,494 53,885 27,388 569,523 664,290 Textbooks and reading 110 819 9,202 10,131 Supplies 74 19,616 2,059 232,799 254,548 Travel 19,991 5,151 14,394 111,500 151,036 Election costs 79,388 79,388 Miscellaneous costs 24,920 1,851 24,215 70,171 121,157 Capital outlay 8,500 8,500

Total Expenditures $137,867 $1,312,146 $705,689 $5,550,692 $312,014 $ $8,018,408 (1)

Total Expenditures for General and Special Revenue Funds (See Fund Statements) $298,819,669 Less: Deductions of unallowable costs Total Capital Outlay $2,023,017 Total Debt and Lease 130,680 Plant Maintenance 24,919,031 Food 7,993,629 Stipends Total Indirect Cost (above) 5,550,692 Subtotal 40,617,049 Net Allowed Direct Cost $258,202,620

Cumulative Total Cost of Buildings before Depreciation $713,245,238 Historical Cost of Buildings over 50 Years Old Amount of Federal Money in Building Cost (net of above) $1,008,482 Total Cost of Furniture & Equipment before Depreciation $63,764,258 Historical Cost of Furniture & Equipment over 16 Years Old $823,173 Amount of Federal Money in Furniture and Equipment (net of above) $14,314

(1) $312,933 in Data Processing expenditures and $908,229 in Other Intergovernmental charges are included in the general administration costs.

102 ______

STATISTICAL SECTION ______

Statistical Tables are used to provide detailed data on the physical, economic, social and political characteristics of a government. They are intended to provide financial report users with a broader and more complete understanding of the government and its financial affairs than it is possible from the basic financial statements. The information is provided in five categories.

• Financial Trends Information – intended to assist users in understanding and assessing how a district’s financial position has changed over time.

• Revenue Capacity Information – intended to assist users in understanding and assessing the factors affecting the District’s ability to generate its own-source revenues.

• Debt Capacity Information – intended to assist users in understanding and assessing the District’s debt burden and its ability to issue additional debt.

• Demographic and Economic Information – intended to assist users in understanding the socioeconomic environment within which the District operates and to provide information that facilitates comparisons of financial statement information over time and among other school districts.

• Operating Information – intended to provide contextual information about the District’s operations and resources to assist readers in using financial statement information to understand and assess the District’s economic condition.

The District’s Statistical Tables usually cover ten fiscal years and often present data from outside the accounting records. The source of information is from District data found in this report, unless indicated otherwise. The tables are unaudited due to the nature of the information contained therein.

SPRING INDEPENDENT SCHOOL DISTRICT

NET ASSETS BY COMPONENT

Ten Fiscal Years (accrual basis of accounting) (Unaudited)

2011 2010 2009 2008

Governmental Activities: Invested in capital assets, net of related debt ($14,326,305) (3) $2,835,609 $2,535,483 $21,280,376 Restricted net assets 26,919,870 33,948,320 69,691,671 58,874,971 Unrestricted net assets 37,809,270 31,473,756 20,766,870 29,479,569

Total Primary Government Net Assets $50,402,835 $68,257,685 (4) $92,994,024 $109,634,916

(1) The District changed its fiscal year-end from August 31 to June 30 beginning with fiscal year 2003. All previous years are fiscal year ended August 31. (2) Fiscal year 2003 represents the ten-month period September 1 through June 30. (3) Construction and renovations on new and existing facilities has slowed as projects are completed. The depreciation of capital assets for the current year exceeded the amount of assets added. Thus debt related to capital assets exceeds the current value of capital assets. (4) The decrease is due to the building and furnishing of a new elementary school and renovating existing facilities as well as the depreciation of existing capital assets.

104 TABLE I

2007 2006 2005 2004 2003 (1) (2) 2002

$33,629,642 $34,699,604 $30,712,352 $33,987,898 $37,111,977 $36,589,707 41,816,206 39,266,416 32,383,687 18,460,013 18,214,292 10,971,536 38,692,460 38,482,973 27,843,816 32,163,165 39,388,639 28,815,484

$114,138,308 $112,448,993 $90,939,855 $84,611,076 $94,714,908 $76,376,727

105 SPRING INDEPENDENT SCHOOL DISTRICT

CHANGES IN NET ASSETS

Ten Fiscal Years (accrual basis of accounting) (Unaudited)

2011 2010 2009 2008 Expenses: Governmental Activities: Instruction $186,355,298 $179,364,938 $165,391,863 $157,522,480 Instructional resources and media services 3,785,951 4,287,682 3,870,736 3,520,250 Curriculum and staff development 4,857,694 4,980,528 6,090,323 4,411,843 Instructional leadership 4,214,263 3,777,107 4,089,482 3,958,670 School leadership 16,365,168 16,222,713 15,926,699 15,914,563 Guidance and counseling services 11,449,391 10,505,490 11,483,534 9,670,230 Social work services 332,157 277,244 282,416 269,930 Health services 3,024,288 3,044,167 2,748,701 2,539,519 Student (pupil) transportation 13,539,173 12,914,480 12,303,033 11,902,205 Child nutrition services 19,809,835 18,129,556 17,843,882 16,619,082 Co-curricular activities 6,407,739 6,515,163 5,980,793 5,124,601 General administration 18,759,069 30,908,984 25,878,114 16,094,055 Plant maintenance and operations 35,085,443 37,947,852 37,646,495 33,314,551 Security and monitoring services 3,288,930 3,658,199 3,415,009 2,890,072 Data processing services 5,895,207 5,933,620 5,541,820 5,891,652 Community services 1,000,945 1,000,270 692,467 504,358 Fiscal agent/shared services arrangement 194,917 271,471 149,291 165,059 Alternative education 5,760 5,121 15,675 16,848 Interest and fiscal charges 33,002,562 32,749,723 28,900,444 26,528,266 Other intergovemental charges 908,229 948,696 946,045 888,360

Total Primary Government Expense 368,282,019 373,443,004 (3) 349,196,822 (3) 317,746,594 (3)

Program Revenues: Governmental Activities: Charges for Services: Instructional 87,124 224,568 184,910 220,041 Child nutrition services 4,781,758 5,180,309 4,833,179 5,456,410 Co-curricular activities 397,285 378,187 393,639 153,644 General administration 4,851,187 9,464,328 8,360,171 Other activities 343,056 312,987 252,024 284,628 Operating Grants and Contributions 78,131,452 71,695,698 53,030,372 52,219,876

Total Primary Government Program Revenues 88,591,862 87,256,077 67,054,295 58,334,599

Net Expense Total Primary Government Expense (279,690,157) (286,186,927) (282,142,527) (259,411,995)

General Revenues and Other Changes in Net Assets: Governmental Activities: Property taxes - maintenance & operations 74,558,719 82,710,565 84,424,949 80,633,171 Property taxes - debt service 31,232,856 34,226,127 35,932,696 31,357,344 State aid 153,040,581 141,068,615 139,521,748 134,003,651 Other grants 2,318,429 1,670,347 902,692 1,018,792 Invesment earnings 335,720 1,374,297 3,933,278 7,705,422 Miscellaneous 349,002 400,637 791,272 185,223

Total Primary Government General Revenues 261,835,307 261,450,588 265,506,635 254,903,603 (4)

Special Item - demolition of buildings

Change in Net Assets Total Primary Government ($17,854,850) ($24,736,339) ($16,635,892) ($4,508,392)

(1) The District changed its fiscal year-end from August 31 to June 30 beginning with fiscal year 2003. All previous years are fiscal year ended August 31. (2) Fiscal year 2003 represents the ten-month period September 1 through June 30. (3) Increase due to student growth, continued construction of new buildings and renovations to existing buildings. (4) State aid increased due to a change in the funding formula and student growth.

106 TABLE II

2007 2006 2005 2004 2003 (1) (2) 2002

$144,937,255 $128,347,250 $117,201,649 $112,239,515 $94,948,115 $91,827,208 3,388,879 2,975,545 2,676,846 2,560,328 2,197,049 2,136,347 2,589,444 3,357,059 2,690,175 2,373,924 1,876,575 2,633,832 3,505,689 3,305,065 2,947,236 2,653,591 2,184,163 2,299,123 14,353,900 13,565,023 11,793,631 10,552,123 7,843,285 8,741,988 8,078,480 7,518,625 6,279,924 6,611,243 5,566,283 5,563,840 235,265 169,594 162,768 141,595 109,523 118,435 2,302,274 1,982,898 1,688,385 1,591,879 1,212,312 1,249,213 9,703,647 9,013,674 7,865,245 6,335,317 5,002,888 5,355,808 15,040,438 12,737,465 11,026,499 10,600,478 8,510,011 8,208,673 4,549,724 3,930,971 4,220,218 4,213,115 3,250,895 3,489,751 23,484,456 18,586,736 16,297,530 19,253,917 12,809,394 14,951,064 31,185,713 27,886,883 26,579,739 27,097,788 15,766,430 17,113,256 2,627,963 2,479,710 2,379,553 1,954,835 1,424,271 1,552,344 4,944,171 4,151,190 3,367,408 2,977,678 2,162,130 2,177,116 375,215 358,651 197,739 215,305 188,378 412,886 224,920 217,356 145,166 148,858 122,100 119,826 21,175 24,844 16,104 56,059 212,246 104,732 21,122,420 22,420,773 17,102,416 15,165,187 10,286,633 12,136,132

292,671,028 263,029,312 234,638,231 226,742,735 175,672,681 180,191,574

259,217 360,432 334,115 283,799 215,126 325,729 5,512,076 5,371,144 5,212,030 4,910,454 4,147,469 4,227,310 402,958 385,339 460,518 518,678 436,322 500,321 5,471,478 5,035,142 5,371,132 5,928,566 5,134,741 3,923,583 219,105 211,627 364,339 263,782 260,065 344,067 51,127,335 54,929,274 38,914,883 36,255,611 28,949,216 27,443,816

62,992,169 66,292,958 50,657,017 48,160,890 39,142,939 36,764,826

(229,678,859) (196,736,354) (183,981,214) (178,581,845) (136,529,742) (143,426,748)

96,741,261 99,425,718 91,759,718 83,613,667 77,420,498 71,558,683 29,718,837 29,937,884 23,512,924 16,631,697 16,971,837 11,270,658 97,874,980 83,456,212 71,152,006 66,872,589 57,904,378 58,924,072 861,546 1,066,715 198,012 284,457 802,634 499,845 6,037,401 7,122,069 3,488,953 1,044,183 1,706,359 3,069,619 134,149 26,929 198,380 31,420 62,217 130,005

231,368,174 221,035,527 190,309,993 168,478,013 154,867,923 145,452,882

(2,790,035)

$1,689,315 $21,509,138 $6,328,779 ($10,103,832) $18,338,181 $2,026,134

107 SPRING INDEPENDENT SCHOOL DISTRICT

FUND BALANCES - GOVERNMENTAL FUNDS

Last Ten Fiscal Years (modified accrual basis of accounting) (Unaudited)

2011 (3) 2010 2009 2008

General Fund: Non-spendable $2,099,925 Unassigned 23,626,231 Reserved $3,124,290 $4,500,968 $3,541,338 Unreserved 19,649,439 23,768,151 35,062,248

Total General Fund $25,726,156 $22,773,729 $28,269,119 (5) $38,603,586

All other governmental funds: Non-spendable $109,068 Restricted 61,031,087 Committed 994,510 Reserved $34,971,230 $42,608,688 $33,416,229 Unreserved, reported in: Debt Service Fund 50,000 50,000 50,000 Capital Projects Fund 49,350,946 125,616,911 129,677,951 Special Revene Fund 8,983,844 10,225,777 10,594,295

Total all other governmental funds $62,134,665 (4) $93,356,020 (4) $178,501,376 $173,738,475 (6)

(1) The District changed its fiscal year-end from August 31 to June 30 beginning with fiscal year 2003. All previous years are fiscal year ended August 31. (2) Fiscal year 2003 represents the ten-month period September 1 through June 30. (3) GASB 54 new fund balance categories required beginning with fiscal year ended June 30, 2011. (4) Decrease due to use of capital projects funds to complete construction and renovations. (5) Decrease primarily due to the completion of renovations at Westfield High School and lower than expected student enrollment. (6) Increase due to the sale of bonds to construct and renovate new and existing facilities.

108 TABLE III

2007 2006 2005 2004 2003 (1) (2) 2002

$3,052,789 $3,296,635 $2,229,870 $2,020,685 $2,762,145 $2,134,558 40,329,610 42,182,209 30,364,910 27,107,952 30,749,086 22,732,570

$43,382,399 $45,478,844 $32,594,780 $29,128,637 $33,511,231 $24,867,128

$30,236,269 $26,970,404 $22,313,375 $17,220,312 $14,943,291 $6,583,805

36,000 36,000 36,000 36,000 36,000 36,000 20,792,436 64,037,701 149,016,177 61,170,744 37,677,750 69,073,974 10,064,203 7,498,517 6,445,250 5,527,262 4,607,897 3,661,931

$61,128,908 $98,542,622 $177,810,802 $83,954,318 $57,264,938 $79,355,710

109 SPRING INDEPENDENT SCHOOL DISTRICT

CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS

Last Ten Fiscal Years (modified accrual basis of accounting) (Unaudited)

2011 2010 2009 2008

Revenues: Local Revenues: Property taxes $105,040,152 $112,737,837 $119,222,314 $113,522,414 Tuition and fees 418,846 541,143 473,149 526,037 Earnings on investments 330,379 1,365,913 3,890,609 7,601,267 Food sales 4,781,758 5,180,309 4,833,200 5,456,410 Other local 3,975,337 4,280,586 4,780,909 4,510,999 Total Local Revenues 114,546,472 124,105,788 133,200,181 131,617,127 State Revenues 179,458,008 165,397,105 165,690,477 162,663,097 Federal Intergovernmental Revenues 50,774,564 45,475,807 24,250,960 20,239,747 Total Revenues 344,779,044 334,978,700 323,141,618 314,519,971

Expenditures: Current: Instruction 176,248,669 172,981,284 160,983,375 154,124,290 Instructional resources and media services 3,342,848 3,959,873 3,565,248 3,254,057 Curriculum and staff development 4,884,378 5,012,408 6,142,627 4,471,818 Instructional leadership 4,209,147 3,876,158 4,220,231 4,045,700 School leadership 16,365,698 16,573,760 16,343,560 16,241,484 Guidance and counseling services 11,631,210 10,794,157 11,846,763 9,980,543 Social work services 335,181 277,244 282,416 269,930 Health services 3,037,668 3,122,624 2,820,659 2,602,012 Student (pupil) transportation 12,403,592 12,023,450 12,685,874 18,136,563 Child nutrition services 19,293,416 17,444,173 16,938,876 16,416,712 Co-curricular activities 5,169,761 5,458,857 4,976,835 4,082,298 General administration 6,797,246 6,713,999 7,116,219 6,483,125 Plant maintenance and operations 25,135,198 27,782,055 28,608,214 26,315,127 Security and monitoring services 3,144,627 3,544,689 3,390,385 2,956,089 Data processing services 4,636,640 4,755,116 4,252,426 4,762,039 Community services 1,004,772 1,012,623 706,927 510,793 Debt Service: Principal retirement of capital lease 24,582 26,303 Principal retirement of bonds 19,645,000 16,445,000 9,240,000 11,419,748 Interest on bonds, tax anticipation notes and capital leases 32,748,334 33,564,028 30,404,423 30,568,686 Bond issuance and tax anticipation notes costs and fees 97,727 519,759 1,075,984 1,496,265 Capital Outlay: Facilities acquisition and construction 20,880,785 76,463,879 101,330,363 77,142,860 Intergovernmental Charges: Fiscal agent/shared services arrangement 194,917 271,471 149,291 165,059 Alternative education 5,760 5,121 15,675 16,848 Other governmental charges 908,229 948,696 946,045 888,360 Total Expenditures 372,145,385 423,576,727 428,042,416 396,350,406

Excess (deficiency) of revenues over (under) expenditures (27,366,341) (88,598,027) (104,900,798) (81,830,435)

Other Financing Sources (Uses): Sale of property 40,171 56,396 29,194 98,596 Transfers in 3,925,551 Proceeds from capital lease 50,885 Settlement proceeds Bonds issued 94,135,000 Refunding bonds issued 226,290,000 Contractual obligations issued 13,188,832 Premium from issuance of bonds 5,165,038 Capital lease purchases Payment to escrow agent (49,516,239) Settlement payments Arbitrage rebate payment Transfers out (4,868,309) (2,150,000) (400,000) Total Other Financing Sources (Uses) (902,587) (2,042,719) 99,329,232 189,661,189

Net change in fund balances ($28,268,928) (3) ($90,640,746) (3) ($5,571,566) (3) $107,830,754 (4)

Debt Service (Principal and Interest) as a Percentage of Non-Capital Expenditures 14.9% 14.2% 12.1% 13.4%

(1) The District changed its fiscal year-end from August 31 to June 30 beginning with fiscal year 2003. All previous years are fiscal year ended August 31. (2) Fiscal year 2003 represents the ten-month period September 1 through June 30. (3) Decrease is due primarily to the use of Capital Projects fund balance in order to build and furnish new schools and facilities. (4) The increase to net change from previous year is due to the sale of general obligation bonds to fund construction and renovations to new and existing facilities.

110 TABLE IV

2007 2006 2005 2004 2003 (1) (2) 2002

$124,978,832 $128,307,888 $114,352,519 $100,240,939 $93,881,809 $82,125,100 581,547 550,204 497,061 542,626 449,788 565,392 5,877,442 6,941,680 3,389,909 995,021 1,659,553 2,852,163 5,512,076 5,371,144 5,212,030 4,910,454 4,147,469 4,227,310 4,276,693 4,646,345 3,607,208 3,054,694 1,522,794 1,710,305 141,226,590 145,817,261 127,058,727 109,743,734 101,661,413 91,480,270 125,594,623 108,054,993 92,585,944 89,019,695 76,460,021 76,660,507 20,329,061 27,177,387 14,939,939 12,159,770 10,387,066 9,226,743 287,150,274 281,049,641 234,584,610 210,923,199 188,508,500 177,367,520

139,498,271 125,723,384 115,385,314 111,238,909 95,466,804 90,883,107 3,143,544 2,781,054 2,504,545 2,447,370 2,138,952 2,036,889 2,640,921 3,441,427 2,743,994 2,436,338 1,921,092 2,657,939 3,543,339 3,357,054 2,965,193 2,682,599 2,202,747 2,256,696 14,590,601 13,850,169 12,020,340 10,795,231 8,032,090 8,781,687 8,298,821 7,750,917 6,451,241 6,863,951 5,778,872 5,669,219 235,265 169,594 162,768 141,595 109,523 118,435 2,348,009 2,024,093 1,722,216 1,623,798 1,244,577 1,225,911 9,425,225 8,440,041 12,906,939 6,673,174 5,590,508 5,148,937 15,479,157 12,305,340 10,956,113 10,650,727 8,507,828 8,268,957 3,582,791 3,293,757 3,709,722 3,693,000 2,961,851 3,052,671 6,574,787 6,143,948 5,727,141 6,036,447 4,694,978 4,727,610 23,587,959 21,717,711 18,249,302 17,825,895 11,636,463 14,021,877 2,792,353 2,373,768 2,360,885 1,844,372 1,442,601 1,599,730 3,983,093 3,324,810 2,568,715 2,425,455 1,814,340 1,823,018 367,903 360,229 192,559 244,156 184,050 428,913

500,000 74,681 73,792 72,935 8,735 10,090,752 11,345,645 10,873,396 7,492,525 3,906,404 6,321,845

27,820,961 28,010,955 19,598,134 17,159,662 11,240,777 14,454,261

105,324 194,550 808,764 744,683 111,979 262,740

44,995,119 116,850,878 68,237,199 46,534,500 57,944,562 42,192,035

224,920 217,356 145,166 148,858 122,100 119,826 21,175 24,844 16,104 56,059 212,246 104,732

323,350,290 374,201,524 300,380,431 259,833,096 227,338,279 216,165,770

(36,200,016) (93,151,883) (65,795,821) (48,909,897) (38,829,779) (38,798,250)

53,166 23,624 195,175 25,212 36,280 37,395

18,389 26,715,000 157,695,000 68,800,000 24,650,000 84,450,000 11,725,000

29,143 5,228,273 3,909,164 426,154 696,830 (13,242,693) (49,000) (131,379) (3,363,309) (3,499,996) (3,310,143) 26,767,767 163,118,448 71,216,683 25,383,110 81,251,563

($39,510,159) ($66,384,116) $97,322,627 $22,306,786 ($13,446,669) $42,453,313

13.5% 15.3% 13.6% 11.6% 9.0% 12.0%

111

TABLE V

SPRING INDEPENDENT SCHOOL DISTRICT

ASSESSED VALUE AND ACTUAL VALUE OF TAXABLE PROPERTY

Last Ten Fiscal Years (Unaudited)

Actual Value Fiscal Commercial Total Total Year Ended Industrial and Vacant Lots Mineral Less: Assessed Direct June 30, (1) Residential Multi-Family Acreage and Tracts Utilities Reserves Exemptions Value Rate (3)

2011 $4,201,674,116 $4,193,664,063 $86,700,468 $251,298,376 $128,947,652 $17,658,463 $1,576,533,606 $7,303,409,532 $1.46

2010 4,394,089,204 4,725,826,933 117,552,023 237,901,706 132,330,501 28,270,459 1,618,762,953 8,017,207,873 1.46

2009 4,731,615,080 4,441,318,756 108,505,919 228,478,111 126,933,520 36,071,420 1,499,635,847 8,173,286,959 1.46

2008 4,589,945,978 4,056,697,320 116,458,636 214,114,766 124,320,066 33,233,028 1,380,277,344 7,754,492,450 1.44

2007 4,166,858,231 3,872,957,478 120,123,832 202,609,896 125,521,238 29,160,282 1,251,567,002 7,265,663,955 1.71

2006 3,826,530,658 3,529,543,592 106,988,818 187,390,179 118,839,305 26,988,150 1,180,455,158 6,615,825,544 1.95

2005 3,551,254,250 2,766,929,420 138,373,660 154,960,020 113,708,060 24,881,730 589,777,410 6,160,329,730 1.87

2004 3,175,860,860 2,628,580,120 141,413,370 156,408,310 116,897,510 21,451,680 520,459,470 5,720,152,380 1.76

2003 (2) 2,865,463,530 2,527,928,410 141,099,320 107,973,380 126,597,600 25,626,470 487,214,120 5,307,474,590 1.79

2002 2,578,197,000 2,323,144,120 160,631,880 95,522,340 116,852,930 31,763,750 443,743,800 4,862,368,220 1.70

Source: Harris County (Texas) Appraisal District provides the District's tax office with appraised values for properties within the District's taxing authority. Appraised value equals actual value. Actual value less exemptions equal taxable value. Taxable value times the tax rate set by the District's Board of Trustess each fall equals the tax levy. The term "assessed value" means taxable value.

113 SPRING INDEPENDENT SCHOOL DISTRICT

PROPERTY TAX RATES - DIRECT AND OVERLAPPING GOVERNMENTS (PER $100 OF ASSESSED VALUATION)

Last Ten Fiscal Years (Unaudited)

2011 2010 2009 2008

Spring Independent School District $1.46 $1.46 $1.46 $1.44 Bammel UD 0.45 0.45 0.45 0.40 C.N.P. UD 0.36 0.33 0.33 0.33 Harris County (Includes Harris County Flood Control District) 0.42 0.40 0.42 0.42 Harris County Department of Education 0.01 Harris County MUD #5 1.20 1.10 0.97 0.92 Harris County MUD #16 0.69 0.62 0.56 0.61 Harris County MUD #36 0.19 0.22 0.22 0.30 Harris County MUD #43 0.64 0.60 0.60 0.60 Harris County MUD #44 0.38 0.38 0.35 0.35 Harris County MUD #58 1.13 1.02 1.02 1.15 Harris County MUD #82 0.80 0.78 0.78 0.78 Harris County MUD #86 0.85 0.85 0.90 0.95 Harris County MUD #150 0.93 0.85 0.85 0.85 Harris County MUD #154 0.77 0.73 0.62 0.57 Harris County MUD #189 0.70 0.70 0.70 0.85 Harris County MUD #200 0.55 0.49 0.48 0.48 Harris County MUD #205 1.17 1.12 1.18 1.23 Harris County MUD #211 0.55 0.55 0.56 0.56 Harris County MUD #215 1.35 1.22 0.95 0.93 Harris County MUD #217 1.39 1.15 1.15 1.15 Harris County MUD #221 0.50 0.49 0.49 0.49 Harris County MUD #233 0.75 0.75 0.75 0.75 Harris County MUD #249 1.11 1.15 1.17 1.20 Harris County MUD #304 0.85 0.85 0.85 0.90 Harris County MUD #399 1.34 1.34 1.34 1.34 Harris County WCID #91 0.36 0.40 0.40 0.40 Harris County WCID #92 0.15 0.15 0.32 0.33 Harris County WCID #109 0.25 0.25 0.25 0.25 Harris County WCID #110 0.55 0.53 0.50 0.50 Harris County WCID #136 0.49 0.36 0.26 0.25 Houston, City of 0.64 0.64 0.64 0.63 Inverness Forest ID 0.49 0.45 0.45 0.45 Lone Star College 0.12 0.11 0.11 0.12 North Park PUD 0.46 0.46 0.46 0.35 Northgate Crossing MUD #1 1.33 1.29 1.23 1.30 Northgate Crossing MUD #2 1.03 1.04 1.05 1.05 Northgate Crossing Rd. UD 0.23 0.21 0.21 0.21 Northwest Harris County MUD #20 0.49 0.49 0.49 0.48 Northwest Harris County MUD #21 0.30 0.30 0.30 0.30 Northwest Harris County MUD #22 0.85 0.82 0.73 0.73 Northwest Harris County MUD #23 0.86 0.84 0.78 0.78 Ponderosa Forest UD 0.10 0.10 0.10 0.10 Port of Houston Authority 0.02 0.02 0.02 0.02 Postwood MUD 0.68 0.65 0.66 0.67 Rankin Road West MUD 1.28 1.28 1.20 1.20 Spring West MUD 1.06 1.09 1.09 1.09 Tattor Road MUD 0.60 0.55 0.50 0.50 Timber Lane UD 0.91 0.87 0.72 0.72 Westador MUD 0.17 0.17 0.15 0.16

Source of Information: Harris County Appraisal District Note: An individual resident of Spring Independent School District resides in only one utility district. Therefore, the total taxes applicable to the individual resident are significantly less than the sum of the tax rates shown.

114 TABLE VI

2007 2006 2005 2004 2003 2002

$1.71 $1.95 $1.87 $1.76 $1.79 $1.70 0.40 0.40 0.40 0.40 0.41 0.41 0.33 0.33 0.35 0.40 0.40 0.45 0.43 0.43 0.43 0.43 0.43 0.43

0.91 0.91 0.88 0.91 0.91 0.91 0.71 0.71 0.73 0.74 0.69 0.69 0.33 0.36 0.45 0.50 0.61 0.63 0.60 0.60 0.60 0.60 0.60 0.60 0.36 0.38 0.39 0.50 0.53 0.53 1.15 1.25 1.75 2.10 2.10 2.20 0.79 0.81 0.81 0.86 0.88 0.88 0.95 0.95 0.95 0.95 1.10 1.10 0.85 0.82 0.82 0.82 0.82 0.82 0.62 0.62 0.62 0.62 0.62 0.62 0.90 0.92 0.92 0.99 1.03 1.05 0.49 0.50 0.53 0.56 0.57 0.57 1.34 1.35 1.35 1.35 1.35 1.35 0.67 0.67 0.69 0.79 0.85 0.86 0.93 0.93 0.96 0.80 0.80 0.76 1.15 1.15 1.15 1.17 1.20 1.25 0.60 0.75 0.95 1.16 1.30 1.35 0.75 0.75 0.75 2.79 3.35 1.20 1.20 1.20 1.20 1.20 1.20 0.95 0.98 1.07 1.17 1.17 1.18

0.40 0.40 0.40 0.40 0.40 0.35 0.36 0.43 0.50 0.52 0.55 0.55 0.25 0.25 0.25 0.25 0.23 0.23 0.50 0.53 0.54 0.54 0.54 0.54 0.25 0.25 0.33 0.25 0.25 0.25 0.65 0.65 0.65 0.66 0.66 0.65 0.45 0.45 0.45 0.45 0.45 0.45 0.12 0.12 0.12 0.12 0.11 0.11 0.35 0.35 0.32 0.30 0.30 0.30 1.27 1.25 1.24 1.18 1.08 0.97 1.02 1.00 0.99 0.93 0.83 0.72 0.23 0.25 0.26 0.32 0.42 0.53 0.53 0.65 0.70 0.72 0.76 0.80 0.50 0.60 0.60 0.60 0.65 0.75 0.76 0.78 0.81 0.84 0.89 0.92 0.78 0.78 0.79 0.82 0.75 0.85 0.10 0.10 0.35 0.35 0.35 0.35 0.02 0.02 0.02 0.02 0.02 0.02 0.80 0.70 0.72 0.74 0.76 0.83 1.25 1.29 1.35 1.40 1.30 1.27 1.09 1.14 1.15 1.18 1.20 1.20 0.50 0.50 0.50 0.50 0.50 0.50 0.65 0.65 0.65 0.65 0.67 0.67 0.21 0.25 0.25 0.25 0.25 0.28

115 TABLE VII

SPRING INDEPENDENT SCHOOL DISTRICT

PRINCIPAL TAXPAYERS

Current Year and Nine Years Ago (Unaudited)

2011 2002 Percentage of Percentage of Assessed Total Assessed Assessed Total Assessed Valuation (1) Rank Valuation (2) Valuation (1) Rank Valuation (3)

Houston Pipeline $115,468,109 1 1.58%

Houston Northwest Medical Center, Inc. 103,906,503 2 1.42% $54,748,390 2 1.13%

ETC Marketing 68,703,659 3 0.94%

Centerpoint Energy, Inc. (4) 66,388,982 4 0.91% 47,666,350 3 0.98%

Cardinal Health 43,124,256 5 0.59%

Wal-Mart Stores, Inc. 41,787,139 6 0.57% 39,413,310 4 0.81%

Centaurus 31,324,772 7 0.43%

GALP Waters Limited Partnership 30,748,825 8 0.42%

Lakeview Apartments 28,213,769 9 0.39% 28,846,350 8 0.59%

Cypresswoods Land Development 25,512,833 10 0.35%

Enron Corporation 184,877,030 1 3.80%

EQR Trails at Dominion 37,486,630 5 0.77%

WDOP SUB I & II LP 36,435,780 6 0.75%

Southwestern Bell Telephone Co. 32,095,270 7 0.66%

Hitachi Construction 26,503,420 9 0.55%

Fred Haas Toyota, Inc. 25,962,990 10 0.53%

$555,178,847 7.60% $514,035,520 10.57%

(1) Assessed (taxable) value equals appraised value after exemptions. (2) Net taxable value: $7,303,409,532 (3) Net taxable value: $4,862,368,220 (4) Centerpoint Energy, Inc. was previously Reliant Energy.

Source: Harris County (Texas) Appraisal District

116 Table VIII

SPRING INDEPENDENT SCHOOL DISTRICT

PROPERTY TAX LEVIES AND COLLECTIONS

Last Ten Fiscal Years (Unaudited)

Collected within the Fiscal Year of the Levy Total Collections to Date Fiscal Net Tax Levy Percentage Collections Percent of Total Year Ended for the of Net Tax in Subsequent Tax Collections June 30, (1) Fiscal Year (3) Amount Levy Years Amount To Net Tax Levy

2011 $105,920,403 $102,736,104 96.99% $102,736,104 96.99%

2010 114,915,733 108,926,898 94.79% $1,327,443 110,254,341 95.94%

2009 118,377,871 114,403,033 96.64% 3,057,215 117,460,248 99.22%

2008 112,254,097 106,080,944 94.50% 5,791,884 111,872,828 99.66%

2007 123,960,062 117,688,681 94.94% 5,920,783 123,609,464 99.72%

2006 128,626,196 122,289,835 95.07% 5,937,233 128,227,068 99.69%

2005 114,554,890 109,222,599 95.35% 4,949,590 114,172,189 99.67%

2004 100,267,173 96,150,744 95.89% 3,847,225 99,997,969 99.73%

2003 (2) 94,610,455 90,908,649 96.09% 3,420,897 94,329,546 99.70%

2002 82,605,944 79,945,470 96.78% 2,436,181 82,381,651 99.73%

(1) The District changed its fiscal year-end from August 31 to June 30 beginning with fiscal year 2003. All previous years are fiscal year ended August 31. (2) Fiscal year 2003 represents the ten-month period September 1 through June 30. (3) Appraised value less exemptions equal taxable value. The beginning taxable value net of adjustments times the tax rate set by the District's Board of Trustees each fall equals the total net tax levy. The net tax levy for prior years reflects ongoing adjustments applied to that year's tax levy.

Source: Harris County (Texas) Appraisal District provides the District's tax office with appraised values for properties within the District's taxing authority.

117 Table IX

SPRING INDEPENDENT SCHOOL DISTRICT

OUTSTANDING DEBT BY TYPE

Last Ten Fiscal Years (Unaudited)

Governmental Activities Fiscal Total Ratio of Debt Year Ended General Obligation Accretion on Capital Contractual Capital Primary to Assessed Debt per June 30, (1) & Refunding Bonds Apprecition Bonds Obligations Leases Government Value (3) ADA (4)

2011 $675,920,000 $4,599,188 $680,519,188 9.32% $20,315

2010 695,565,000 4,396,210 $24,582 699,985,792 8.73% 21,450

2009 712,010,000 4,198,401 716,208,401 8.76% 22,729

2008 627,115,000 515,773 627,630,773 8.09% 20,724

2007 461,824,748 5,697,725 467,522,473 6.43% 15,786

2006 471,915,500 11,690,292 483,605,792 7.31% 16,465

2005 455,926,145 17,148,048 $620,000 510,081 474,204,274 7.67% 17,825

2004 308,509,541 21,217,182 1,215,000 584,762 331,526,485 5.80% 13,257

2003 (2) 246,637,066 23,526,110 1,780,000 658,553 272,601,729 5.14% 11,444

2002 225,893,471 27,528,271 1,780,000 34,658 255,236,400 5.25% 11,224

118 Table X

SPRING INDEPENDENT SCHOOL DISTRICT

RATIOS OF NET GENERAL OBLIGATION BONDED DEBT OUTSTANDING

Last Ten Fiscal Years (Unaudited)

Fiscal Gross Less Reserve Net Ratio of Debt Year Ended Bonded for Retirement Bonded to Assessed Debt per June 30, (1) Debt (3) of Bonded Debt Debt Value (4) ADA (5)

2011 $680,519,188 $28,257,184 $652,262,004 8.93% $19,471

2010 699,961,210 34,629,836 665,331,374 8.30% 20,388

2009 716,208,401 42,492,107 673,716,294 8.24% 21,380

2008 627,630,773 33,180,899 594,449,874 7.67% 19,629

2007 467,522,473 29,404,111 438,118,362 6.03% 14,793

2006 483,605,792 26,055,637 457,550,155 6.92% 15,578

2005 473,074,193 22,143,602 450,930,591 7.30% 16,950

2004 329,726,723 17,072,283 312,654,440 5.47% 12,502

2003 (2) 270,163,176 14,698,250 255,464,926 4.81% 10,724

2002 253,421,742 6,352,892 247,068,850 5.08% 10,864

(1) The District changed its fiscal year-end from August 31 to June 30 beginning with fiscal year 2003. All previous years are fiscal year ended August 31. (2) Fiscal year 2003 represents the ten-month period September 1 through June 30. (3) Gross bonded debt includes general obligation and refunding bonds and accretion on capital appreciation bonds. (4) See Table V for assessed value data. (5) See Table XV for student enrollment data.

119 TABLE XI

SPRING INDEPENDENT SCHOOL DISTRICT

COMPUTATION OF ESTIMATED DIRECT AND OVERLAPPING DEBT

June 30, 2011 (Unaudited)

Gross Debt Outstanding Percent Share Taxing Body Amount as of Overlapping (1) of Debt

C.N.P. UD $19,632,583 7/31/2011 100.00% $19,632,583 Harris County 2,235,736,628 7/31/2011 2.67% 59,694,168 Harris County Flood Control District 94,092,820 7/31/2011 2.67% 2,512,278 Harris County Department of Education 7,980,000 7/31/2011 2.67% 213,066 Harris County MUD #5 13,072,983 7/31/2011 64.18% 8,390,240 Harris County MUD #16 7,520,000 7/31/2011 100.00% 7,520,000 Harris County MUD #43 3,170,449 7/31/2011 100.00% 3,170,449 Harris County MUD #44 2,358,095 7/31/2011 100.00% 2,358,095 Harris County MUD #58 2,277,471 7/31/2011 100.00% 2,277,471 Harris County MUD #82 24,329,718 7/31/2011 100.00% 24,329,718 Harris County MUD #86 11,300,000 7/31/2011 100.00% 11,300,000 Harris County MUD #96 23,671,745 7/31/2011 100.00% 23,671,745 Harris County MUD #150 16,938,729 7/31/2011 60.73% 10,286,890 Harris County MUD #154 15,165,009 7/31/2011 99.81% 15,136,195 Harris County MUD #189 4,061,294 7/31/2011 100.00% 4,061,294 Harris County MUD #200 10,051,443 7/31/2011 100.00% 10,051,443 Harris County MUD #205 946,632 7/31/2011 100.00% 946,632 Harris County MUD #211 2,155,000 7/31/2011 100.00% 2,155,000 Harris County MUD #215 561,262 7/31/2011 100.00% 561,262 Harris County MUD #217 6,742,758 7/31/2011 100.00% 6,742,758 Harris County MUD #221 8,110,000 7/31/2011 87.69% 7,111,659 Harris County MUD #233 7,282,795 7/31/2011 100.00% 7,282,795 Harris County MUD #249 14,589,754 7/31/2011 100.00% 14,589,754 Harris County MUD #304 17,660,380 7/31/2011 100.00% 17,660,380 Harris County MUD #399 3,921,939 7/31/2011 100.00% 3,921,939 Harris County WCID #91 1,075,000 7/31/2011 100.00% 1,075,000 Harris County WCID #109 8,230,000 7/31/2011 2.12% 174,476 Harris County WCID #110 23,010,000 7/31/2011 61.86% 14,233,986 Harris County WCID #136 2,870,000 7/31/2011 100.00% 2,870,000 Houston, City of 2,896,233,963 7/31/2011 0.09% 2,606,611 Inverness Forest ID 2,955,000 7/31/2011 3.62% 106,971

(Continued)

120 TABLE XI (Concluded)

SPRING INDEPENDENT SCHOOL DISTRICT

COMPUTATION OF ESTIMATED DIRECT AND OVERLAPPING DEBT

June 30, 2011 (Unaudited)

Gross Debt Outstanding Percent Share Taxing Body Amount as of Overlapping (1) of Debt

Lone Star College System $527,195,000 7/31/2011 6.28% $33,107,846 North Park PUD 6,170,000 7/31/2011 91.70% 5,657,890 Northgate Crossing MUD #1 5,427,634 7/31/2011 100.00% 5,427,634 Northgate Crossing MUD #2 15,998,627 7/31/2011 100.00% 15,998,627 Northgate Crossing RUD 5,686,973 7/31/2011 100.00% 5,686,973 Northwest Harris County MUD #20 3,940,000 7/31/2011 100.00% 3,940,000 Northwest Harris County MUD #21 400,000 7/31/2011 100.00% 400,000 Northwest Harris County MUD #22 4,258,577 7/31/2011 100.00% 4,258,577 Northwest Harris County MUD #23 1,831,160 7/31/2011 100.00% 1,831,160 Port of Houston Authority 739,197,397 7/31/2011 2.67% 19,736,570 Postwood MUD 1,060,866 7/31/2011 100.00% 1,060,866 Rankin Road West MUD 7,510,507 7/31/2011 100.00% 7,510,507 Spring West MUD 8,470,088 7/31/2011 39.73% 3,365,166 Tattor Road MUD 5,260,000 7/31/2011 100.00% 5,260,000 Timber Lane UD 37,800,559 7/31/2011 88.05% 33,283,392 Westador MUD 3,342,141 7/31/2011 100.00% 3,342,141

Total net overlapping debt 436,512,207

Spring Independent School District, net 652,262,004

Total direct and overlapping debt $1,088,774,211

Source: Municipal Advisory Council of Texas Note: An individual resident of Spring Independent School District resides in only one utility district. Therefore, the total debt applicable to the individual resident is significantly less than the sum of direct and overlapping debt shown.

(1) Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the District. The percentage of overlapping debt is estimated using taxable assessed property values. Percentages were estimated by determining the portion of the overlapping taxing authority's taxable assessed value that is within the District's boundaries and dividing it by the overlapping taxing authority's total taxable assessed value.

121 TABLE XII

SPRING INDEPENDENT SCHOOL DISTRICT

DEMOGRAPHIC AND ECONOMIC INFORMATION

Last Ten Fiscal Years (Unaudited)

Fiscal Total Per Capita Year Ended Personal Personal Unemployment June 30, (1) Population Income Income Rate

2011 (3) 9.0%

2010 (3) 4,092,459 8.6%

2009 4,070,989 $196,779,227,000 $48,337 7.6%

2008 3,984,349 190,226,395,000 47,743 4.8%

2007 3,912,196 179,774,583,000 45,952 4.3%

2006 3,858,432 172,908,565,000 44,813 5.1%

2005 3,735,075 154,979,338,000 41,493 5.7%

2004 3,672,691 141,838,018,000 38,620 6.3%

2003 (2) 3,616,850 130,008,960,000 35,945 6.8%

2002 3,558,978 125,095,721,000 35,149 6.1%

(1) The District changed its fiscal year-end from August 31 to June 30 beginning with fiscal year 2003. All previous years are fiscal year ended August 31. (2) Fiscal year 2003 represents the ten-month period September 1 through June 30. (3) Personal income data not available for 2010 or 2011. Population data not available for 2011.

Source: U.S. Department of Labor, Bureau of Labor Statistics for Harris County. Data not available for Spring ISD alone.

122 TABLE XIII

SPRING INDEPENDENT SCHOOL DISTRICT

PRINCIPAL EMPLOYERS

Current and Five Years Ago (Unaudited)

2011 2006 Percentage Percentage of Total of Total Employees Rank Employment (2) Employees Rank Employment (3)

Wal-Mart Stores 28,500 1 1.06% 11,627 9 0.65%

Memorial Hermann Healthcare System 20,551 2 0.76% 11,013 10 0.61%

M. D. Anderson Cancer Center 18,012 3 0.67% 12,221 7 0.68%

H-E-B 16,500 4 0.61%

United Airlines (4) 16,290 5 0.61% 14,579 5 0.81%

Exxon-Mobil 14,600 6 0.54%

Kroger Co. 14,015 7 0.52%

Methodist Hospital System 13,322 8 0.50%

Shell Oil Co. 10,700 9 0.40% 18,015 3 1.01%

Schlumberger 9,612 10 0.36%

Houston Independent School District 31,463 1 1.76%

City of Houston 21,441 2 1.20%

Administaff, Inc. 16,615 4 0.93%

Haliburton 13,650 6 0.76%

Harris County 11,855 8 0.66%

162,102 6.03% 162,479 9.07%

(1) The District implemented GASB Statement No. 44 effective July 1, 2005; therefore data from fiscal years prior to 2006 is not available. (2) Total employment 2011 equals: 2,690,900 (3) Total employment 2006 equals: 1,791,139 (4) United Airlines and Continental Airlines merged in 2011.

Source: Houston Chronicle Top 100 Employers for 2011 and Houston Business Journal, Book of Lists for Harris County for 2006.

123 TABLE XIV

SPRING INDEPENDENT SCHOOL DISTRICT

FULL-TIME EQUIVALENT DISTRICT EMPLOYEES BY TYPE

Last Nine Fiscal Years (1) (Unaudited)

2011 2010 2009 2008 2007 2006 2005 2004 2003 Teachers: Special Duty Teacher 22.4 12.8 1.1 8.7 0.8 3.0 18.7 Teacher 2,268.2 2,338.0 2,189.2 2,156.3 2,070.4 1,934.8 1,800.8 1,755.3 1,655.7 Substitute Teacher 1.0 14.7 21.0 29.3 12.0 52.2 26.9 29.1 27.7 Total Teachers 2,269.2 2,352.7 2,232.6 2,198.4 2,083.5 1,995.7 1,828.5 1,787.4 1,702.1 Professional Support: Art Therapist 0.2 Psychological Associate 1.0 Corrective Therapist 0.1 Counselor 75.3 73.2 75.3 67.4 61.6 64.4 61.3 60.1 62.7 Educational Diagnostician 32.5 30.5 27.0 26.9 23.0 23.0 24.5 27.4 25.9 Librarian 31.7 39.0 33.9 33.6 32.8 28.3 27.5 28.0 25.5 Occupational Therapist 1.0 2.0 1.0 0.7 Physical Therapist 1.0 1.0 School Nurse 39.5 41.0 35.0 33.0 34.0 29.6 28.0 26.8 24.5 LSSP/Psychologist 12.0 11.0 9.0 9.0 8.0 11.0 11.0 12.0 10.5 Social Worker 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 Speech Therapist/Speech-Language Pathologist 15.0 22.5 21.8 24.9 21.5 22.5 25.1 24.8 28.1 Work-based Learning Site Coordinator 3.0 Teacher Facilitator 253.4 132.6 97.8 78.2 58.2 54.3 40.0 45.4 25.2 Department Head 2.3 4.1 13.2 9.9 11.3 Athletic Trainer 4.0 4.1 6.9 7.0 4.0 5.0 6.0 6.0 6.0 Campus Professional Personnel 1.3 5.5 7.0 6.0 2.0 2.9 6.6 24.0 12.2 Non-Campus Professional Personnel 95.0 82.0 76.0 69.1 69.0 82.5 80.7 65.9 93.0 Total Professional Staff 560.7 443.4 392.7 359.6 323.2 338.8 322.6 333.4 314.6 Campus Administration: Assistant Principal 73.1 72.0 76.0 70.1 63.9 66.7 64.3 61.4 60.0 Instructional Officer 0.9 Principal 36.0 36.0 33.0 33.0 31.0 30.0 27.0 23.7 22.1 Athletic Director 1.0 1.0 Teacher Supervisor 1.0 1.0 1.5 Total Campus Administration 110.1 108.0 110.0 104.1 96.4 96.7 91.3 86.0 83.1 Central Administration: Assistant/Associate/Deputy Superintendent 6.0 6.0 6.0 5.5 5.0 5.0 6.0 5.0 3.0 Instructional Officer 25.5 25.5 24.5 23.3 13.0 15.0 15.0 20.0 37.2 Superintendent 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 Teacher Supervisor 5.0 3.0 4.0 3.2 2.0 4.0 5.0 5.0 Athletic Director 1.0 1.0 1.0 1.0 2.0 2.0 2.0 2.0 1.0 Tax Assessor/Collector 1.0 1.0 1.0 1.0 1.0 2.0 1.0 1.0 1.0 Business Manager 1.0 1.0 1.0 1.0 Director of Personnel/HR 4.0 4.0 4.0 3.0 Total Central Administration 44.5 42.5 42.5 39.0 24.0 29.0 30.0 34.0 43.2

Educational Aides 509.8 387.4 388.5 426.9 301.9 354.6 367.0 365.0 314.8

Auxilliary Staff 1,685.9 1,666.6 1,460.1 1,342.1 1,084.2 1,329.4 1,125.6 1,216.8 1,101.4

Total Staff Full-Time Equivalent 5,180.2 5,000.6 4,626.4 4,470.1 3,913.2 4,144.2 3,765.0 3,822.6 3,559.2

(1) The District implemented GASB Statement No. 44 effective July 1, 2005; therefore data from fiscal years prior to 2003 is not available.

Source: District records

124 TABLE XV

SPRING INDEPENDENT SCHOOL DISTRICT

OPERATING STATISTICS

Last Ten Fiscal Years (Unaudited)

Percentage of Fiscal Average Cost Government Cost Student to Students in Year Ended Daily Operating Per Percentage Wide Per Percentage Teaching Teacher Free/Reduced June 30, (1) Attendance Expenditures (3) Student Change Expenses Student Change (4) Staff Ratio Lunch Program

2011 33,499 $298,748,957 $8,918 (1.72%) $368,282,019 $10,994 (3.92%) 2,269.20 14.76 71.5%

2010 32,634 296,130,349 9,074 0.64% 373,443,004 11,443 3.25% 2,352.70 13.87 68.1%

2009 31,511 284,124,379 9,017 0.96% 349,196,822 11,082 5.61% 2,232.60 14.11 61.8%

2008 30,285 270,476,985 8,931 9.25% 317,746,594 10,492 6.17% 2,198.40 13.78 66.9%

2007 29,616 242,118,313 8,175 9.00% 292,667,025 9,882 10.35% 2,083.50 14.21 59.6%

2006 29,371 220,277,990 7,500 (0.25%) 263,029,312 8,955 1.54% 1,995.80 14.72 55.0%

2005 26,603 200,017,076 7,519 (3.01%) 234,638,231 8,820 (2.72%) 1,828.50 14.55 52.5%

2004 25,008 193,859,124 7,752 18.45% 226,742,735 9,067 22.94% 1,787.40 13.99 46.5%

2003 (2) 23,821 155,896,406 6,544 (3.16%) 175,672,681 7,375 (6.93%) 1,702.10 14.00 43.9%

2002 22,741 153,690,835 6,758 1.52% 180,191,574 7,924 (4) 1,619.40 14.04 40.4%

(1) The District changed its fiscal year-end from August 31 to June 30 beginning with fiscal year 2003. All previous years are fiscal year ended August 31. (2) Fiscal year 2003 represents the ten-month period September 1 through June 30. (3) Operating expenditures are total expenditures less debt service and capital outlays. (4) The District implemented GASB Statement No. 34 effective September 1, 2001; therefore comparative data from fiscal years prior to 2002 is not available.

Source: District Academic Excellence Indicator System (AEIS) reports

125 TABLE XVI

SPRING INDEPENDENT SCHOOL DISTRICT

TEACHER BASE SALARIES

Last Ten Fiscal Years (Unaudited)

Fiscal Region IV Statewide Year Ended Minimum Maximum Average Average Average June 30, (1) Salary (3) Salary (3) Salary (3) Salary (4) Salary (4)

2011 $44,205 $58,321 $49,132

2010 44,205 58,321 49,260 $50,129 $48,263

2009 43,205 57,321 47,988 49,186 47,159

2008 41,581 53,428 46,774 48,053 46,179

2007 39,548 51,220 46,228 46,675 44,897

2006 37,048 48,720 42,559 43,852 41,744

2005 36,500 48,000 42,404 43,107 41,011

2004 36,000 46,500 41,515 42,531 40,478

2003 (2) 35,500 46,000 40,999 41,964 39,974

2002 34,000 45,500 39,886 41,149 39,232

(1) The District changed its fiscal year-end from August 31 to June 30 beginning with fiscal year 2003. All previous years are fiscal year ended August 31. (2) Fiscal year 2003 represents the ten-month period September 1 through June 30. (3) Source: District records, based on new teacher entry schedule for teachers with bachelor's degree. (4) Source: Texas Education Agency website; Region and state information for 2011 not available at this time.

126 TABLE XVII

SPRING INDEPENDENT SCHOOL DISTRICT

SCHOOL BUILDING INFORMATION

Last Ten Fiscal Years (Unaudited)

School (Year Opened) 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002

High Schools Spring (1968) Square feet 454,195 454,195 454,195 454,195 454,195 454,195 454,195 454,195 454,195 454,195 Capacity 2,840 2,840 2,840 2,840 2,840 2,840 2,840 2,840 2,840 2,840 Peak enrollment 3,134 3,090 3,043 3,172 3,126 3,506 3,095 2,923 2,896 2,797 Westfield (1976) Square feet 549,603 549,603 549,603 549,603 549,603 549,603 549,603 549,603 549,603 549,603 Capacity 3,338 3,338 3,338 3,338 3,338 3,338 3,338 3,338 3,338 3,338 Peak enrollment 2,571 2,554 2,644 2,233 2,748 3,469 3,048 2,645 3,934 3,838 Andy Dekaney (2007) Square feet 487,000 487,000 487,000 487,000 487,000 Capacity 2,500 2,500 2,500 2,500 2,500 Peak enrollment 2,444 2,311 1,956 1,330 Carl Wunsche Sr. (2006) (2) Square feet 273,178 273,178 273,178 273,178 273,178 273,178 111,843 111,843 111,843 111,843 Capacity 1,500 1,500 1,500 1,500 1,500 1,500 470 470 470 470 Peak enrollment 1,565 1,559 1,447 1,461 1,436 136 156 139 105 Middle Schools Wells (1977) Square feet 182,661 182,661 182,661 182,661 182,661 182,661 182,661 182,661 182,661 182,661 Capacity 1,378 1,378 1,378 1,378 1,378 1,378 1,378 1,378 1,378 1,378 Peak enrollment 1,170 1,172 1,353 1,258 1,346 1,330 991 976 1,586 1,592 Duiett (1980) Square feet 137,391 137,391 137,391 137,391 137,391 137,391 137,391 137,391 137,391 124,311 Capacity 924 924 924 924 924 924 924 924 924 924 Peak enrollment 978 910 1,056 894 850 1,121 1,083 1,092 1,104 1,009 Twin Creeks (1984) Square feet 155,516 155,516 155,516 155,516 155,516 155,516 155,516 155,516 155,516 143,069 Capacity 1,072 1,072 1,072 1,072 1,072 1,072 1,072 1,072 1,072 1,072 Peak enrollment 842 832 892 1,014 952 1,626 1,497 1,419 1,326 1,252 Bammel (2003) Square feet 228,121 228,121 228,121 228,121 228,121 228,121 228,121 228,121 228,121 Capacity 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 Peak enrollment 1,274 1,125 1,318 1,655 1,669 1,537 1,445 1,232 Stelle Claughton (2003) Square feet 219,716 219,716 219,716 219,716 219,716 219,716 219,716 219,716 219,716 Capacity 1,303 1,303 1,303 1,303 1,303 1,303 1,303 1,303 1,303 Peak enrollment 1,341 1,392 1,501 1,424 1,412 1,496 1,448 1,360 Rickey C. Bailey (2006) Square feet 201,178 201,178 201,178 201,178 201,178 201,178 Capacity 1,200 1,200 1,200 1,200 1,200 1,200 Peak enrollment 1,206 1,211 1,299 920 949 Dr. Edward Roberson (1971) Square feet 176,000 176,000 178,168 178,168 178,168 178,168 178,168 178,168 178,168 178,168 Capacity 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 Peak enrollment 1,204 1,075 784 1,424 1,297 1,141 1,363 1,764 1,725 Elementary Schools Original J. O. & Gertie Mae Salyers (1959) (3) Square feet 49,964 49,964 Capacity 522 522 Peak enrollment 709 483 Original Bammel (1965) (5) Square feet 55,317 55,317 55,317 55,317 55,317 55,317 55,317 55,317 55,317 Capacity 488 488 488 488 488 488 488 488 486 Peak enrollment 686 509 566 588 657 601 598 604 712 Bammel (2010) (5) Square feet 112,000 112,000 Capacity 800 800 Peak enrollment 869 Ponderosa (1971) Square feet 96,149 96,149 96,149 96,149 73,585 73,585 73,585 73,585 61,345 61,345 Capacity 800 800 800 800 636 636 636 636 636 636 Peak enrollment 756 729 823 825 814 780 639 642 606 624

(Continued)

127 TABLE XVII (Continued)

SPRING INDEPENDENT SCHOOL DISTRICT

SCHOOL BUILDING INFORMATION

Last Ten Fiscal Years (Unaudited)

2011 2010 2009 2008 2007 2006 2005 2004 2003 2002

Elementary Schools (Continued) John A. Winship (1972) Square feet 71,456 71,456 71,456 71,456 71,456 71,456 71,456 71,456 71,456 71,456 Capacity 768 768 768 768 768 768 768 768 768 744 Peak enrollment 517 553 516 830 829 959 864 803 758 691 Pat Reynolds (1973) Square feet 83,280 83,280 83,280 83,280 83,280 83,280 83,280 83,280 83,280 83,280 Capacity 884 884 884 884 884 884 884 884 884 733 Peak enrollment 713 703 685 755 767 1,004 948 908 880 758 Otto H. & Avalt H. Meyer (1976) Square feet 91,213 91,213 91,213 91,213 91,213 91,213 91,213 91,213 91,213 75,960 Capacity 1,108 1,108 1,108 1,108 1,108 1,108 1,108 1,108 1,108 876 Peak enrollment 751 669 1,128 1,290 1,195 1,241 1,594 1,282 1,124 1,038 Mildred I. Jenkins (1976) Square feet 91,865 91,865 91,865 91,865 91,865 91,865 91,865 91,865 91,865 91,865 Capacity 896 896 896 896 896 896 896 896 896 896 Peak enrollment 831 844 858 835 827 861 1,061 989 936 928 Pearl M. Hirsch (1978) Square feet 81,268 81,268 81,268 81,268 81,268 81,268 81,268 81,268 73,053 73,053 Capacity 692 692 692 692 692 692 692 692 692 742 Peak enrollment 831 820 828 811 816 816 769 769 654 639 George E. Anderson (1979) Square feet 77,968 77,968 77,968 77,968 77,968 77,968 77,968 77,968 77,968 77,968 Capacity 836 836 836 836 836 836 836 836 836 712 Peak enrollment 832 846 865 841 809 774 850 840 797 777 Joan Link (1982) Square feet 83,300 83,300 83,300 83,300 69,197 69,197 69,197 69,197 69,197 69,197 Capacity 800 800 800 800 736 736 736 736 736 703 Peak enrollment 788 753 809 781 787 735 688 702 823 791 L. E. Smith (1986) Square feet 78,638 78,638 78,638 78,638 78,638 78,638 78,638 78,638 78,638 78,638 Capacity 784 784 784 784 784 784 784 784 784 778 Peak enrollment 887 851 855 931 896 830 1,039 974 1,085 892 Joseph S. Beneke (1986) Square feet 86,999 86,999 86,999 86,999 86,999 86,999 86,999 86,999 86,999 86,999 Capacity 892 892 892 892 892 892 892 892 892 697 Peak enrollment 869 842 977 921 896 923 956 893 882 855 Deloras E. Thompson (1996) Square feet 108,400 108,400 108,400 108,400 108,400 108,400 108,400 108,400 108,400 108,400 Capacity 1,054 1,054 1,054 1,054 1,054 1,054 1,054 1,054 1,054 1,037 Peak enrollment 763 816 867 852 789 1,189 1,209 1,091 1,004 952 Heritage (2000) Square feet 93,625 93,625 93,625 93,625 93,625 93,625 93,625 93,625 93,625 93,625 Capacity 818 818 818 818 818 818 818 818 818 865 Peak enrollment 589 578 817 764 742 912 818 814 813 801 B. F. Clark Intermediate (2003) Square feet 87,269 87,269 87,269 87,269 87,269 87,269 87,269 87,269 87,269 Capacity 840 840 840 840 840 840 840 840 840 Peak enrollment 612 578 730 844 670 694 706 686 J. O. & Gertie Mae Salyers (2003) (3) Square feet 96,400 96,400 96,400 96,400 96,400 96,400 96,400 96,400 96,400 Capacity 824 824 824 824 824 824 824 824 824 Peak enrollment 628 645 642 711 669 1,071 953 862

(Continued)

128 TABLE XVII (Concluded)

SPRING INDEPENDENT SCHOOL DISTRICT

SCHOOL BUILDING INFORMATION

Last Ten Fiscal Years (Unaudited)

2011 2010 2009 2008 2007 2006 2005 2004 2003 2002

Elementary Schools (Continued) B. F. Clark Primary (1990) (4) Square feet 79,000 79,000 79,000 79,000 79,000 79,000 79,000 79,000 79,000 79,000 Capacity 716 716 716 716 716 716 716 716 716 771 Peak enrollment 750 786 1,001 1,143 879 960 906 687 1,045 1,054 Chet Burchett (2005) Square feet 105,000 105,000 105,000 105,000 105,000 105,000 105,000 Capacity 800 800 800 800 800 800 800 Peak enrollment 799 838 775 719 676 730 Milton Cooper (2005) Square feet 102,205 102,205 102,205 102,205 102,205 102,205 102,205 Capacity 800 800 800 800 800 800 800 Peak enrollment 743 732 1,065 1,195 1,233 928 Ginger McNabb (2006) Square feet 102,762 102,762 102,762 102,762 102,762 102,762 Capacity 800 800 800 800 800 800 Peak enrollment 700 664 620 703 690 Northgate Crossing (2008) Square feet 105,000 105,000 105,000 105,000 Capacity 800 800 800 800 Peak enrollment 726 669 588 Donna Lewis (2006) Square feet 102,700 102,700 102,700 102,700 102,700 102,700 Capacity 800 800 800 800 800 800 Peak enrollment 790 788 801 741 827 Carolee Booker (2008) Square feet 102,700 102,700 102,700 102,700 Capacity 800 800 800 800 Peak enrollment 984 917 828 R. J. Hoyland (2009) Square feet 105,000 105,000 105,000 Capacity 800 800 800 Peak enrollment 807 762 Ralph Eickenroht (2009) Square feet 102,700 102,700 102,700 Capacity 800 800 800 Peak enrollment 578 615 Helen Major (2009) Square feet 105,000 105,000 105,000 Capacity 800 800 800 Peak enrollment 525 478 Gloria Marshall (2011) (6) Square feet 103,500 103,500 Capacity 800 800 Peak enrollment

Portable Buildings (1) 150 150 150 150 149 148 133 128 126 125

(1) The District utilized portable buildings providing classrooms and restrooms in schools where enrollment exceeded capacity. (2) This building was originally for special education and vocational programs. In August 2006, it was completely rebuilt for a high school purpose. (3) A new Salyers Elementary was built and opened in August 2003. (4) Until August 2003, Clark Primary was Clark Elementary and included students from PK-5. (5) A new Bammel Elementary was built and opened in August 2010. (6) Marshall Elementary was completed in August 2010 and will open in August 2011.

Source: District records.

129 45

HARRIS COUNTY Table XVIII

32 Spring Creek

NORTHGT NORTHGATE TOLLHARD ROADY

Spring ISD CROSSING RDG

FOREST

RIDGE HARDY W.

SPRING STUEBNER HARD 45 Y Map and TOLLWAY SPG STUEBNER RILEY FUZZEL Wunsch RD TOLL HARDY School e LEXINGTON HANNOVER WUNSCHE HARDY E. PARK FRST LOOP OLD L 5 LEXINGTON Spring EXINGT TO Facility HANNOVER WN Creek CYPRESS WOODS SPGSSPRING SPRING Spring O N LEXINGTON WDS ALDINE LEXINGTON Winship Locations E. LOUETTA RD 35 WOODS Spring Cr Salyers SPRING CRK ee 38 Parkway k LOUETTA CRSSNG Smith LOUETTA GLEN WESTFIELD HARRIS COUNTY 36 BIRNAMWOOBRECKENRIDGED Mc Nabb Twin CreeksBRADBURY FORESTBaile Spring FRST y 30 CYPRESSWOOD 6 D Marshall 29 S .C 3 TOLLROAD 11 W E Gully S M WD S A E J HARDY R LEO P Y CYPRESS OLD ALDINEC NORTH HILLS WESTFIELD NORTH SPRING 17 Burchett ESTATES ENCHANTED CYPRESSWOOD NORTH TRAILS OAKS 45 VILLAGES OF Hirsch SPRING CROSSING SPRING OAKS 23 CYPRESS TRLS Spring NORTH HLLS RD TOLL HARDY HIGHLAND FAIRFAX Creek ESTATES TIMBERLANE EAGLE

Cypress GLEN H

CY O

PR V ESS STA Creek TI O Dueitt N CRSNG Bammel C POSTWD WESTADOR Y WHITAKER P SANDPIPER BANQUO

PINE OAKESS Cypress Creek ELLA REYNALDO 9 NORTHGA PONDEROSA CYPRESS 25 C TE FOREST Cypress Jenkins Y RED OAK

S P FOREST WAY TRAILS STATION R KUYKENDAHL CHANTILLY T A NORTH PARK Creek E Park WOODS Cypress NORTHGATE TION S BUTTEPonderos CRK a FOREST Creek FOREST TREASCHWIG S 14 FRST GREENGT W PECAN IH-45 1960 D 33 LKS FOREST LYNNGT OLDE Dekaney OAKS Leadership 1 18. CLARK PRIMARY PONDEROSA FOREST Center 16 13

FALLING CREEK SUGAR PINE V N HO Anderson . (Grades. PK-2) 281-891-8600 GA Booker Wells IMPERIAL IMPER CYPRESSWOOD F T Major Cypress M E Westfield Police Dept Creek GREEN GLADEBRK RDG Cypresswood 12 FRST F.M. 1960 W. 12625 River Laurel OAK CRKE . 45 4 SOUTHRIDGEMeyer C.C. GLADE RDG VILLAG 28 Bammel HARRIS IAL 10 Houston, TX 77014-3642 COUNTY BAMMELE Roberson 39 W VALL STUEBNER - 31 AIRLINE 34 7 WILLO WALTERS VILLAG FERNGLADE CORNE NORTH Distribution40 2 BLVD WEST EY FRST Reynolds Center FORESTELLA BLVD Support NORTH WESTFIELD NORTH Services 19. CLARK INTERMEDIATE RSTONE CORNERSTONEE Bammel 41 LANDING Transportatio VIEW n 33. PONDEROSA 281-891-8180 VILLAG (Grades. 3-5) 281-891-8540 TORREYBAMMEL- Child HARRELL - DWYER RD RICHEY 42 Nutrition 17202 Butte Creek PINES N. HOUSTON VL 43 1825 Rushworth LG KUYKENDAHL VETERANS Beneke EAST RICHEY NORTH Houston, TX 77090-2332 NW PINES GLEN WILLOW Houston, TX 77014-3642 15 BRIARCHASE VW PL ABBEY GREEN BARREN EAGLE NORTHVIEW SPGS PARK MEMORIAL LANDING 34. REYNOLDS 281-891-8240 HAMBLEDON SABLECHASE 20. COOPER 281-891-8660 ELLA Eickenroht21 45 COMMERCE PARK 3975 Gladeridge NORTH 18655 Imperial Valley SABLERDG WAL Houston, TX 77068-2422 SPGS PT Houston, TX 77073-8183 RICHEY RD. TERS SILVERGLEN GRAND VALLEY WEST NORTH BARREN 24 AIRTEX IMPERIAL SILVERGLEN TC JESTER RUSH WEST W RT Hoyland 35. SALYERS 281-891-8570 Lewis 37 Clark 21. EICKENROHT 281-891-8840 18 WITTERSHAW REMINGTOH N 26 Thompson Primary ELLA BLVD RANC 25705 Hardy Street L 19 Clark IMPERIAL 15252 Grand Point Dr. 8 E Int. R GREEN

Claughton SPEARS RD U Spring, TX 77373-2684

V A HO Houston, TX 77090

ANTOINE L CRANBROOK SPEARS RD PKWY 22 SHAW Cooper 36. SMITH 281-891-8420 Heritage W.RAN KIN 22. HERITAGE 281-891-8510

CAMDEN KUYKENDAHL VETERANS RANKIN RD 26000 Cypresswood RDG HLLW 20 12255 T.C. Jester 27 Link Houston, TX 77067-1381 Spring, TX 77373-5800 NORTHBOROUGHVLLG RUSHWOOD RDG HLLW 23. HIRSCH 281-891-8330 37. THOMPSON 281-891-8480 LEADERSHIP CENTER 12470 Walters Road 16717 Ella Blvd. 281-891-6000 2633 Trailing Vine Spring, TX 77373-7716 Houston, TX 77014-2422 Houston, TX 77090-4299 9. DUEITT 281-891-7800 1 Eagle Crossing 24. HOYLAND 281-891-8810 38. WINSHIP 281-891-8210 Spring, TX 77373-7535 2200 Wittershaw 2175 Spring Creek HIGH SCHOOLS Houston, TX 77090 Spring, TX 77373-6199 1. DEKANEY 281-891-7260 10. ROBERSON 281-891-7700 1500 Southridge 22351 Imperial Valley 25. JENKINS 281-891-8300 Houston, TX 77073-1102 Houston, Texas 77090-4298 4615 Reynaldo SUPPORT FACILITIES Spring, TX 77373-6821 11. TWIN CREEKS 281-891-7850 39. SPRING ISD POLICE 2. EARLY COLLEGE 281-891-7260 DEPARTMENT 281-891-6911 16713 Ella Blvd. #1 27100 Cypresswood Spring, TX 77373-6300 26. LEWIS 281-891-8720 210 North Forest Blvd. Houston, TX 77090-4298 3230 Spears Road Houston, TX 77090-5520 Houston, TX 77067-5241 12. WELLS 281-891-7750 3. SPRING 281-891-7000 40. DISTRIBUTION CENTER 19428 I-45 N 4033 Gladeridge Houston, TX 77068-2399 27. LINK 281-891-8390 SUPPLY CHAIN SERVICES Spring, TX 77373-2999 2815 Ridge Hollow 281-891-6465 Houston, TX 77067-1939 15330 Kuykendahl 4. WESTFIELD 281-891-7130 Houston, TX 77090-4104 16713 Ella Blvd. ELEMENTARY SCHOOLS 28. MAJOR 281-891-8870 Houston, TX 77090-4298 13. ANDERSON 281-891-8360 16855 Sugar Pine Dr. 41. CHILD NUTRITION and 6218 Lynngate Houston, TX 77090 TRAINING CENTER 5. WUNSCHE 281-891-7650 Spring, TX 77373-7238 15330 Kuykendahl 281-891-6445 900 Wunsche Loop 29. MARSHALL Houston, TX 77090-4104 Spring, TX 77373-2530 14. BAMMEL 281-891-8150 24505 Birnamwood Blvd. 17309 Red Oak Spring, TX 77373 42. TRANSPORTATION CENTER Houston, TX 77090-1297 281-891-6490 MIDDLE SCHOOLS 30. MCNABB 281-891-8690 341 East Richey Rd. 6. BAILEY 281-891-8000 15. BENEKE 281-891-8450 743 East Cypresswood Dr. Houston, TX 77073 3377 James C. Leo Dr. 3840 Briarchase Spring, TX 77373-5516 Spring, TX 77373-1701 Houston, TX 77014-2755 43. SUPPORT SERVICES CENTER 31. MEYER 281-891-8270 MAINTENANCE 281-891-6405 7. BAMMEL 281-891-7900 16. BOOKER 281-891-8750 16330 Forest Way OPERATIONS 281-891-6425 16711 Ella Blvd. 22352 Imperial Valley Houston, TX 77090-4798 CONSTRUCTION/ Houston, TX 77090-4213 Houston, TX 77073-1011 ENERGY 281-891-6430 32. NORTHGATE CROSSING SAFETY/RISK 8. CLAUGHTON 281-891-7950 17. BURCHETT 281-891-8630 281-891-8780 MANAGEMENT 281-891-6440 3000 Spears Road 3366 James C. Leo Dr. 23437 Northgate Crossing 341 East Richey Rd. Houston, TX 77067-5235 Spring, TX 77373-1700 Spring, TX 77373-5687 Houston, TX 77073 130

Spring ISD Vision Statement By 2015, Spring Independent School District will be recognized nationally as a leader among learning organizations and known for exemplary student achievement.

Spring Independent School District 16717 Ella Boulavard • Houston, Texas 77090 281.891.6000 • www.springisd.org

Spring Independent School District is an equal opportunity employer. The Board of Trustees and its agents, officers and staff members shall not discriminate on the basis of gender, race, disabling condition, age, color, religion, national origin, military status, or any other legally protected status in making decisions regarding staff members or students.