Superintendent explains financial situation
(Seguin) — The lack of additional state dollars is reportedly sending the Seguin ISD into a deficit budget of more than $3.5 million. In an attempt to explain its financial situation as it moves into the 2024-2025 school year, Seguin ISD Superintendent Dr. Veronica Vijil rolled out a letter to district employees last week. The letter was provided after the Seguin ISD Board of Trustees was made aware of its current situation during a special board workshop led by new Chief Financial Officer Liz Oaks.
Vijil says school districts did not receive additional funding from the state through the last legislative session. Additionally, she stated that ESSER funds (federal government funds received during COVID for instructional recovery) have also ended — leaving many districts in the same fate of having to propose a “deficit budget” for approval. Those ESSER funds reportedly played a crucial role this current year, where there was a $5 million assignment of ESSER funds, which helped to pay for employee raises, stipends, and other important needs.
“Unfortunately, Seguin ISD will join the many school districts in Texas operating on a deficit budget. What does this mean? A deficit budget means we have more expenses than revenue. School finance is complex. However, all school districts have a ‘fund balance’ which acts as a ‘savings account’ to be used for emergencies. During the current fiscal year (2023-2024), we designated a portion of our fund balance to pay for certain projects and initiatives. This means that we ended up operating on a deficit budget this school year because we used our ‘savings account’ to pay for expenses,” said Vijil. “Of course, when inflation is happening and everything else, and we haven’t had an increase in the basic allotment, it’s going to hurt us, of course, and this is what everyone is experiencing.”
She adds that the district’s Leadership Team continues to work diligently to identify cost savings and ways to increase their revenue.
“If you have ever run a tight household budget, you know that you have to look at every possible opportunity to save money. Rather than proposing a reduction in force, we have looked at potential savings by reassigning positions to vacant positions and closing positions through attrition. Personnel costs make up about 87 percent of the district’s total operating budget. These are difficult decisions to make. The board of trustees elevates the importance of instruction and student outcomes in Seguin ISD. Also, while possibly rumored, we are not considering any cuts in fine arts programming nor librarians or nurses. However, we have to be mindful of any additions that could increase costs,” said Vijil.
Despite entering into a deficit budget, Vijil says the district is prioritizing the non-use of its fund balance. Although other districts are experiencing the same crisis, having a fund balance puts the Seguin ISD in a positive position to work toward a balanced budget.
“That’s what fund balance is for in the end. If you need to take it out. That’s why it is called a fund balance. It’s the savings account that we will resort to. We don’t want to get to a level that is beneath the policy. We have said in Seguin ISD that we will have 25 percent of our operating budget always — that we don’t touch — in fund balance. We are there. We are okay. We are fine. We just don’t want to get so close that we have resort to, count on, only fund balance,” said Vijil.
On top of receiving no additional funding, Vijil says there’s no magic answer to why the district finds itself in the position that it does. That’s because she says school finance is and has always been tricky.
“It’s not to say that we don’t want any finger pointing here. We are going to continue to do the best job that we can and look for every opportunity to increase revenue. What things are in our control? We can do a better job of focusing on — parents we need your kids in school. We need them in class. We need your help so a concerted effort to raise our average daily attendance. That is something that is in our control. We are along with everyone else. We’ve looked at everything. We are not overstaffed. We are using our money with much much more fiscal responsibility as much as we can and this is just another effort to take a look at is there anything else that we can repurpose, cut, cost savings, as well as what we can do to help ourselves by increasing revenue,” said Vijil.
This latest news has also questioned the future of salaries and other benefits for the upcoming fiscal year. At this time, Vijil says the school board has been presented a few scenarios that could potentially be proposed. However, those questions are still being worked out and will be included when the district proposes its upcoming budget in June.
The growing community and the fast development of new homes are helping the district see the light at the end of the tunnel.
“We know that there are some things that will potentially help us in the future such as new neighborhoods and overall growth within the community. This equates to increased student enrollment. Additionally, the legislature begins a new session in January. During the last legislative session, there was a discussion about a possible increase in the student basic allotment,” said Vijil.
Vijil says the district is working hard to ensure that the students needs are met come August. She says news of this deficit should also not be confused with the district’s recent bond projects and the district’s continued plans to accommodate all this anticipated growth.
“There’s two pots of money. There’s the maintenance and operations and there’s the interest and sinking funds. Bonds contribute to the interest and sinking so that is primarily for construction and facility work and it can not cross over into the maintenance and operations and as I mentioned in the letter, human capital, people account for (87 percent) of the budget and so unfortunately that I&S side can’t cross into the M&O side,” said Vijil.
Wrapping up her letter, Vijil adds, “We will be ready for them. Operating in a deficit budget does not mean closure for us. Rather, it is an opportunity for us to work together and thrive through this challenge for the benefit of our students. They are, after all, the reason we are here. We are Matadors; we will get through this together.”