Dripping Springs ISD to consider budget assumptions

DRIPPING SPRINGS  —  At its Feb. 20 agenda review meeting, the Dripping Springs ISD Board of Trustees discussed the potential budget assumptions and parameters for FY 2024-25.

The proposed budget assumptions and parameters are used in developing the preliminary General Fund budget for 2024-25, covering all estimated revenues and proposed expenditures, according to agenda documents. They are used as a starting point in building the budget. Data elements may be updated throughout the budget process as more information is received, with updates presented to the board during the budget preparation process.

Key assumptions for 2024-25 include the following:

• Student enrollment of 8,900 based on Population and Survey Analysts’ (PASA) moderate growth model, reduced to 98% for funding estimates.

• Average daily attendance rate of 95.25% (five-year average)

• Property value growth estimate of 8%

• One-percent pay increase for all staff

• Number of new full-time equivalent positions (this will be provided in March)

• Budget parameter of 2% (level of deficit approval based on board policy)

General Fund revenues are calculated under current law with an estimate of the maximum compressed tax rate (MCR). Because there is no additional funding for school districts, lower student growth and inflationary impacts, DSISD administration is recommending a 1% pay increase for all staff as a starting point. However, this is different from the district’s initial recommendation and from the 2023-24 budget assumptions and parameters, where there was a 3% increase in staff pay.

“You probably noticed a change from December. In December, we were recommending a 3% pay increase and we have changed that to a 1% pay increase,” said Chief Financial Officer Gina Mitschke. “We received updated enrollment projections from PASA in January and then we also received preliminary comptroller values. We did have some concerns that we were not going to include that frozen levy, but that did happen, so we do feel pretty comfortable and confident with the values that we’ve received.”

“With those two pieces of new information, we entered that into — along with a lot of other data that I’m not going to go into — the state aid template that they just released in early February. And it does reflect a significant deficit, which is outside board policy. That’s the reason that I have changed the recommendation from the 3% to the 1%,” Mitschke continued.

The chief financial officer also explained that the biggest impact to DSISD is the slower enrollment growth: “We are still growing, which requires new staff and you still want to increase pay for teachers, but we are not growing enough to bring in the additional funding needed to accommodate everything,” she said.

DSISD is not alone, however, as more than 80% of school districts may be adopting deficit budgets this year, which is unprecedented, according to Mitschke.

While he appreciates the administration’s work in navigating the challenges in the budgeting process, trustee Rob McClelland said that he is having trouble with the low staff pay increase, especially because he has heard from staff members that they are concerned about compensation.

“I just can’t even stomach that … I don’t think I am comfortable from this seat going, ‘Yeah, I am okay with the bare minimum of 1% adjustment for cost of living’ when the stocks just hit a huge dump because inflation is still outpacing estimates,” he said. “And so, in full appreciation for the challenge that we have, that’s hard for me.”

McClelland said that he would like for the district to look at bumping up the pay increase number to 2-3%.

Board president Stefani Reinold said that she believes that this is the beginning stages of a larger conversation surrounding the full budget.

Mitschke responded, agreeing that this is the starting point and the assumptions can always change.

And, superintendent Dr. Holly Morris-Kuentz stated that since 2019, DSISD has had no new funding and there have been “healthy raises” given year after year.

“At some point, that comes knocking and without new funding, we are reaching that point. I think, as we look at this deficit, the deficit is higher than what we can have y’all approve,” Morris-Kuentz said. “We can’t get authorization for the deficit with the 1% that we have, so we already have to do cuts. So, just keep in mind you may want to see that full picture before you want us to try and do a 2% or 3% just because it does add further to that deficit, which has to come out of fund balance, which is a year over year cost.”

As trustee Shannon O’Connor’s term is ending in May, she noted that the board of trustees needs to be looking at enrollment projections 3-4 years in the future. She said that while the budget assumptions/parameters are a starting point, the board needs to be mindful that every change made is a lot of additional work for staff.

“So, what they are bringing us is their best estimation of a starting point that likely could be the ending point, but Elaine [Cogburn] reminded us last year that every time we go in and try to make changes based on what we want to do, even though they’ve given us their best estimate and data from the experts, is all the work that goes into it,” O’Connor said. “We are limited by our board policy. We have not seen any projections … We have been adjusting our compensation. We have to remember that we have this one-time compensation. We do have constraints that we have to work within. I would just remind you that in our heads, if we think that this is a starting point we can change constantly through this budget process, that’s probably not going to work.”

Mitschke said that the district is in the process of trying to schedule a budget workshop to further discuss the General Fund budget, changes to the budget assumptions and parameters, etc. In addition, the budgets for the Child Nutrition Fund and Debt Service Fund will also be developed during the budget process.

The board did not take any action at its agenda review meeting. However, at its regular meeting held on Monday, Feb. 26, the board unanimously approved the 2024-25 budget assumptions and parameters as presented. These will be used in developing the preliminary General Fund budget for 2024-25 covering all estimated revenues and proposed expenditures.

DSISD has also scheduled a budget workshop for 5 p.m. on Tuesday, March 5.