$5.9 million budget deficit looms for HCISD

The process of pinching pennies is underway for Hays CISD officials as they aim to rectify a projected deficit prior to finalizing its 2019 budget.

Even with trimming roughly $2.1 million in expenses, the district still faces the possibility of operating $5.9 million in the red next fiscal year.

It could lead to the district having “some hard discussions” in the future on how they can fix the problem, said Hays CISD superintendent Eric Wright.

“It’s a tough call and at some time, we will have to have a balanced budget,” Wright said. “We will get there, but it won’t be an easy process.”

Annette Folmar, Hays CISD chief financial officer, provided Hays CISD’s Board of Trustees Aug. 20 information on several substantial cuts. That included the removal of $837,000 from central administration costs.

Hays CISD also plans to use $874,500 in Title 1 funding to supplement salaries in campuses across the district. Title 1 is a designation given to campuses with 40 percent or more of its student base coming from low-income families. The federal government provides funding to those campuses to assist low-income students academically.

Wright said the district moved salaries from the general fund to Title 1 and Title 2 funding, as it is what most schools use “for best practices.”

District officials also sought other avenues to cut costs as well, including removing an Athletic Director position that had been budgeted this fiscal year.

District officials plan to offer Betsy Russell, Hays CISD director of student services, more responsibilities to make district athletics successful without bringing in a new person at this time.

“We looked at ways we could cut the budget, and we felt that was a way to do so,” Wright said.

However, board trustees differed on possible ways to further offset the budget deficit; some discussion centered on utilizing reserves in the general fund.

Currently, the district has saved an amount equal to 25 percent of its current general fund costs, which can be used for up to 90 days of operation, if needed. 

Wright was hesitant to use that money, citing the need to possibly draw from reserves when Johnson High opens in 2019.

Trustee Will McManus said eventually the district will run out of reserves, if it chooses to use it to pay down a deficit that could continue to grow. Going below 20 percent in reserves could impact the district’s ability to sell bonds in the future, McManus said.

“I don’t know what the answer is and I’m not going to pretend that I do. But it’s not a good way to be fiscally sound or disciplined,” McManus said.

However, McManus believed cutting costs and trimming the budget, rather than waiting for the state to change its current funding formula, is a better option.

Wright said he’s lived through such budget crunches before and the “ugly truth” is Hays CISD has limited options. While the district must pay to attain a “good, high quality staff,” it could also reach a point where cost of living increases across the board might not be feasible.

“My philosophy is you have to kick the can down the road because we’re in the people business and you have to be able to recruit and retain good quality staff,” Wright said. “We have to milk that as long as we possibly can.”

Trustee Willlie Tenorio believed the district should keep advocating for changes in the education funding system, as Hays CISD is penalized due to its fast growth.

“I don’t think we should stop trying to influence and try to get something better,” Tenorio said.

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