Fort Bend ISD is projecting a $22 million revenue shortfall when compared to budgeted amounts, according to first quarter financial data presented during the Dec. 7 board of trustees meeting.

FBISD Chief Financial Officer Bryan Guinn said the numbers are preliminary and show only projections after the first quarter, which began in July and ended Sept. 30.

The current budget, which has been amended twice, has $740.4 million of revenue and $759.1 million of expenditures. After the first quarter, Guinn said revenue is projected to total $718.5 million with $755.8 million in expenditures.

“The basis of the issues that we are facing today are going to date back to March when federal, state and county officials declared a state of disaster due to COVID-19,” Guinn said. “At that time, we were in the middle of preparing our budget and had no indication how long the crisis would last.”

While the district had planned to use some of its fund balance this fiscal year, Guinn told trustees to expect a draw down of fund balance greater than what was budgeted.

In October, the district had 95 days of unrestricted fund balance—five days over the 90-day requirement—which is worth about $10.1 million, Guinn said. Additionally, FBISD had set aside $15 million of economic stabilization, meaning the district has $25.1 million available for COVID-19 response and any potential revenue shortfalls this fiscal year.

“If we had to make decisions tonight, what would that look like?” Guinn said. “As of today, our expenditures for the next school year would need to be about $728 million to avoid going below our 90-day fund balance. To keep that in perspective, our 2020-21 budget was $737 million, so there would be some adjustments that would need to be made.”

Guinn said one option to mitigate revenue shortfalls and their effects on the district’s fund balance would be to hold a voter-approval tax rate election, or VATRE, which would allow the district to adopt a tax rate higher than its current voter-approval tax rate.

A VATRE requires an efficiency audit of the district, which Guinn said district staff recommend is performed in February regardless of whether the board decides to hold a VATRE in November.

“In light of everything that’s happened, I think we would be remiss not to move forward with an efficiency audit at this time,” FBISD trustee Jim Rice said. “Whether or not it turns out we have to have a [VATRE] in November, we need to be prepared for that."

Guinn said further guidance on the need to call a VATRE will be presented in February. If the board decides to move forward with a VATRE, the proposed tax rate would be voted on in August, and the election would be held in November.