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McALLEN — The school board here voted Monday to approve an almost $285 million budget that includes significant steps toward fiscal austerity, along with a more aggressive compensation bump than trustees previously anticipated being able to pay for — although the decision split the board.
Facing lower income due to tax compression, a negative enrollment outlook that’s liable to continue and more staff than it needs, the district’s financial situation has become increasingly uncomfortable.
The state requires that Texas districts keep 75 days of operating expenses in their fund balances. McAllen’s fund balance puts it about $2.2 million over that minimum.
Trustees have largely looked at that $2.2 million as what they have to work with to provide employees some kind of compensation increase, which, polling indicates, is strongly desired at the district.
Trustees ultimately approved a one-time tiered longevity package for employees and a 1% raise across the board, which together will cost $3,947,676 — a third scenario more expensive than the other two the board had been weighing.
Superintendent J.A. Gonzalez told trustees a variety of cost savings measures underlie that plan being feasible.
“So once we had this dialogue, in working back and forth, we felt comfortable with what our board is asking,” he said. “We believe that scenario three will work.”
Administrators laid out over $7.295 million in planned cuts.
A $3.3 million staffing reduction plan that aims to lose over 60 positions through attrition accounts for the lion’s share of those cuts.
The district is in the process of reassigning 11 administrators, expecting to save $849,406. It’s looking at dropping another 52 positions through attrition by the end of the 2023-2024 school year as well — mostly teachers and librarians — with an expected savings of about $2.45 million.
The district’s human resources department is slated to hunt for additional excess positions through the summertime.
The district also anticipates saving about $1.14 million with 8% departmental budget cuts; $841,000 through reducing overtime by 38%; $423,000 from a hiring freeze; $426,000 through cutting staff travel; and $12,500 by eliminating some marketing and communications stipends.
Eliminating the district’s middle school block and second planning period scheduling, floated as an option to save over $4.5 million, appears to lack support and is not currently being pursued.
District leadership also appears to so far to be refraining from shelving high-profile special projects, another area the board considered cuts in.
There’s also the possibility of the district pulling millions more through a voter approved tax rate election trustees are considering and the sale of some property.
Whether the district is in a position to approve an almost $4 million compensation increase, even with all those prospective cuts, was a matter of disagreement on the board.
Three trustees voted against doing so.
“Based on our budget workshop, it’s very clear that we cannot afford $3,947,676 … without dipping into our fund balance, and I’m not in favor of making further decisions that continue us on the same trajectory,” said Trustee Lucia Regalado, who voted against going with scenario three. “Again, I have asked over and over that we stay within our budget and what we can afford, maintaining our financial stability on the 75 days and I cannot in good conscience support something that is another contingency.”
Trustees Sofia Pena and Aaron Rivera also voted against. Rivera said he was concerned about contingencies as well and felt the board hadn’t discussed the choice long enough.
Pena said the decision simply doesn’t jive with the board’s weeks-long budget struggle which, at its core, was the same struggle the board went through last year.
“And all of the sudden all is well. All is well. I have a really hard time believing that. So that’s my statement to that: All is not well here,” she said.
Other trustees felt more comfortable with the decision.
“So this is not causing any issue from a financial standpoint, from a rating standpoint,” Trustee Sam Saldivar said. “We’ll still have the A rating, and we’ll be able to continue to move forward. But we’ll be able to compensate the employees right now with this decision.”
Board President Debbie Crane Aliseda has been laudatory of the board’s budget work.
She remained laudatory Monday, despite the split vote.
“It’s very obvious that this board reads their packets,” Crane Aliseda said when the budget talk ended. “They ask all sorts of very thoughtful, thought out questions. They’re reaching out to their constituents, and we’re all very passionate for the same goal. And it’s wonderful to be able to sit in the room with everybody who’s so passionate.”