Revenue drop forces Cuero ISD to cut personnel
March 26, 2016 at 9:12 p.m.
Updated March 27, 2016 at 6 a.m.
CUERO - Interim superintendent Dr. Ben Colwell has been in office since only the beginning of the year but he already has earmarked at least $3 million in potential cuts - including personnel - in next year's budget.
The cuts come as Cuero Independent School District faces the double whammy of the Texas Education Agency recapturing roughly $5.3 million in funding and the downturn in revenue from declining Eagle Ford values.
"We are looking at our staff, and we will cut some of our staff this year that have been added over the four or five years that the Eagle Ford kept increasing those values," Colwell said. "It's no different than any family would do faced with the same budget situation."
The current budget crunch has come after the Eagle Ford boom sent the district's local and intermediate source revenues soaring from $6.2 million in 2009-2010's budget to peak above $22 million for 2014-2015's budget.
School board president B.J. Drehr, who has been a board member for 12 years, said the district is looking at a 30 percent budget cut as the district prepares for local revenues to fall to about $16 million for at least the next three years. While he admitted the district will not be able to make all the cuts in the coming fiscal year, he said he hopes a plan will emerge to get the district through the downturn.
"I can say that if you look back ... we did a good job of educating kids with that $15.5 million, so there's no reason to think that we can't do the same thing," Drehr said. "We just had a surplus of money coming in that we did some things with."
Other cuts being looked at are reducing the pre-K program from a full-day to a half-day program. The school district had been subsidizing the additional half day, and the reduction will cut at least three teachers and save $250,000.
"We're going back to 'what do you need to spend' instead of, 'here's your money, go ahead and spend,'" said Cuero ISD's assistant superintendent of finance Mark Iacoponelli. "Teachers usually, they just are given a budget and here is what you can spend. Now it's pre-plan it, tell us what you really need so if you don't need stuff we can save the money."
The revenue increase from the oil boom made Cuero a Chapter 41 or "property wealthy" school district, which meant that most, if not all, of the state funds it receives are recaptured in the following fiscal year. In fiscal year 2014-2015, the number was $661,000 of recapture; this year that figure ballooned to $4.3 million. That money will be taken from the district's $18 million general fund, which has grown by roughly $4 million during the past few years, Colwell said.
All three men said that while Cuero's situation is not ideal, it is better than some of its neighbors. Karnes City, which raked in tens of millions of revenue from burgeoning land and mineral values during the Eagle Ford shale boom, is facing at least $48 million in recapture to the TEA during the next fiscal year.
Just down the road in Yorktown's school district, the TEA will be looking for $15 million in recaptured funds.
Instruction costs in Cuero ISD, defined by the TEA as salaries of teachers, teachers' aides and classroom assistants, among others, expanded from fiscal year 2015 to 2016 from $9.3 million to nearly $12.5 million, respectively.
Colwell and Iacoponelli attributed the cost difference to a pay raise for district employees as it struggled to retain employees. The revenue increase allowed for the district to afford the increased costs, which brought teacher pay on par with local districts like Victoria.
The years of rising revenues also led to what Colwell described as more "lenient" budget practices when it came to how money was spent.
"I don't think there was as much accountability asked of the teachers as we are asking of them now," Colwell said. "In the past for instance, if a teacher would have $600 remaining in a particular budget item, they could spend that. . It could be for next year. That is not an acceptable practice in the way that we are trying to do it now. We want to furnish everything they want this year, but we're not going to stockpile for the next year either."
Colwell does not see the budget cuts as affecting the school district's instructional capacity, even if some class sizes rise. He is optimistic that Cuero ISD will emerge from the current situation as high achieving as it currently is.
"Cuero's got an excellent school district, and when we get through with this, we're still going to have an excellent school district. We had an excellent school district before we had the money," Colwell said.