(Seguin) — The “sky is not necessarily falling.” Those were the words used by Seguin ISD School Board President Cinde Thomas-Jimenez, as she helped to sum up a presentation by the district’s Chief Financial Officer, Tony Hillberg, who recently discussed the potential impact that a drop in lakefront property values could have the district’s funding. That potential impact is based on the level of threat that the Seguin ISD faces in regards to the possible dewatering of area lakes.
Texas school districts rely heavily on local property tax collections and state funding to remain in operation. Hillberg’s presentation to the school board this week came in response to the recent release of a study by the Guadalupe Appraisal District, which discloses a potential decline in lake-front property values.
The study concluded that “reduced lake levels associated with potentially failing damns could result in a 28 percent decrease in the value of certain lakefront properties.
But Hillberg says recent legislative changes, such as House Bill 3, have been put into place to help stabilize the financial impact that this kind of drop in values could have on Texas school districts.
“One of the things that we have come to really realize over the last few months is the beneficial impact of HB 3, House Bill 3 on school funding when it comes to fluctuations in local property values regardless whether the values go up or down. The state has changed the formulas and is putting forth virtually dollar per dollar to get to a certain part of revenue per student for any given school district,” said Hillberg.
The district needs about $61 million in this current fiscal year to cover its operation expenses. In his explanation to the school board, Hillberg states for “example, if the district had experienced a current year value loss of about 30 percent, for all property and not limited to lake-front property, the district would expect local tax collection effort of about $24 million. In this example, the state would contribute $37.7 million to achieve the calculated needed revenue of $61.7 million for the General Operating Fund.
Hillberg says it is not likely that valuations will be much different than what is currently being reported, because the valuation snapshot is taken on the first of January.
“So any impact with lake dewatering valuation decline is likely not going to happen until or if it happens at all — obviously that’s going to be if there is any dewatering but if it happens at all, it would be potentially by next January which would impact the 21-22 school year so where we are right now in the budgetary process — the snapshot has already been taken and like I said, we will know those preliminary values in April of this year,” said Hillberg.
Hillberg also reminded the school board of the district’s conservative approach toward finances, which has allowed the district to build a healthy fund balance.
This week’s presentation by Hillberg to the school board is just the first of many as he says he hopes to keep the district on top of all the latest in the lake litigation battle between lake property owners and the Guadalupe-Blanco River Authority. The court process is still underway with an anticipated trial date set for October.
That, again of course, is only if an agreement isn’t reached before that date by all the parties involved. Part of potentially rectifying the issue and helping to dissolve the level of threat against the Seguin ISD and those lakefront property owners has been the possible creation of other water control and improvement districts along the Guadalupe River and those hydro electric lakes (WCID). The WCID would allow the lake residents to tax themselves in order to raise the necessary money for the replacement and repair of the dams.
As reported earlier this month, the entire 100 page study on lakefront property values released by the appraisal district is available for public viewing at guadalupead.org.