While district officials warned against making premature decisions, board members discussed applying contingency funds toward previously eliminated projects from the $1.26 billion bond at the Feb. 10 board agenda review meeting.
The details
Since October, FBISD’s available contingency funds have grown from $33.08 million to $68.64 million based on the cost-saving budget cuts from recent projects, said Daniel Bankhead, executive director of construction and design.
Contingency funds from the district’s 2014 and 2018 bonds can be used on any bond project, while the 2023 bond contingency funds can only be used to fulfill projects within their respective proposition, Chief Financial Officer Bryan Guinn said.
This is due to a 2019 law requiring school districts to split special-purpose items, such as technology and athletics, into their own propositions, Community Impact previously reported.
Although the board has discretion to revive once-eliminated projects, Guinn said it would be a “premature” call given the remaining 16% of projects still need final cost estimates.
“We can’t say with any certainty the remaining projects are going to come at or below budget,” he said. “Do we have potentially some flexibility on the bond side? The answer is like, yes, we do, but we don't know what that may look like.”
District officials said the remaining 16% of the projects could either:
- Go up to $80 million dollars over budget—in which the contingency funds could be applied for completion
- Be within budget and leave $68 million in contingency funds
- Come under budget and contribute to the contingency funds
District officials were alerted last February of a $163.2 million shortfall as the result of the failure to adjust project costs for inflation when the bond proposal was delayed from November 2022 to May 2023, Community Impact reported.
The board voted in October to free up $96 million in the 2023 bond by eliminating Elementary School No. 55 in the Harvest Green community, deferring a special education transportation facility and adjusting the scope of fine arts and synthetic turf projects Community Impact reported. At the time, the district reported a bond shortage of $57.3 million.
“We voted to [eliminate projects] and, in my opinion, break promises that we made to the community and the bond. So I think we're all looking for ways to hopefully bring those projects back into play,” trustee David Hamilton said.
The options
Hamilton inquired about the potential to fund some bond maintenance projects with the district’s annual maintenance and operations funding.
Bond finances are acquired from the interest and shrinking, or I&S, tax rate, which makes payments on debts that finance school families, according to the Texas Education Agency. The maintenance and operations portion of the tax rate, or M&O, pays for everyday maintenance and staff salaries.
However, Guinn noted many of the maintenance items, such as air conditioning repairs listed under Proposition A, are bond projects because they’re larger-scale and have a longer lifespan. He recommended projects designated under the bond not be reassigned to the general fund.
“It's like using all of your paycheck to pay instead of dipping into savings,” board President Kristin Tassin said. “So in your own budget, we don't want to use all of our paycheck to repair something and then not be able to eat next week.”
Looking ahead
The district will receive the cost estimate for the remaining bond projects by the end of March, Bankhead said.
Additionally, the district is undergoing a cost-saving audit to look at general budget efficiency, yielding the potential to re-evaluate staff and operational spending, with results coming between April and June, Bankhead said.
Trustee Angie Hanan said even with an optimized operational budget, she is concerned with increased costs may incur as the district serves a growing number of special education, low-income and emerging bilingual students.
“I do look forward to our cost-saving audit, but I just I don't see how we're in great shape with funding, especially with the forecast of more more money that could go to public education going somewhere else, based on this [legislative session], and that we have not seen an increase in the [basic] allotment for our students,” Hanan said.
Additionally, district staff might have to look to alternative funding sources to fund once-eliminated projects if the district is also prioritizing staff raises, Tassin said.
“If we're going to spend the [contingency funds] and put those in the classroom, then we have to find another avenue for putting [Elementary School No. 55] back on the map,” Tassin said.
