Trustees receive budget update

By George Slaughter, News Editor
Posted 3/22/23

A Katy ISD official told school trustees Monday that the district will be receiving more money from various sources.

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Trustees receive budget update


A Katy ISD official told school trustees Monday that the district will be receiving more money from various sources.

Chris Smith, the district’s chief financial officer, gave a budget update at a special March 20 school board meeting. On revenues, he said the district expects to receive an additional $7 million in compensatory education (called Comp Ed) funding due to the growing number of economically disadvantaged students enrolled in the district.

Smith said the percentage of economically disadvantaged students in Katy ISD has grown from the low 30s to about 44-45%. The district receives more money with that change in percentage, he said.

Smith said the district expects to receive $3.4 million in insurance claim money following Winter Storm Yuri in February 2021.

“It’s frustrating to talk about this yet again,” Smith said. “I expected this money well over a year ago.”

The district is looking, at least indirectly, at receiving $2.5 million from the U.S. Government through the Elementary and Secondary School Emergency Relief (ESSER) III fund. Smith said the district does not directly budget the money, and needed to budget based on what he described as “routine, but we can count on.”

Smith said the district expects about $1.9 million in additional interest earnings. Smith said interest rates have soared.

“It’s continued to go up, and we think that’s a conservative number,” Smith said, adding that the district has about $300 million invested, with more interest bringing in more money. However, he said, he was not to a point where he was ready to amend the budget. He said he wanted to look at the numbers again in the summer.

Smith said the district can also expect money through property value audits for 2020 and 2021. He said he did not want to guess the figure, but describe it as a “very good wildcard number.” He said that figure would be the highest value of what he was sharing at the meeting.

Once the audits are completed, Smith said, they are sent to the state comptroller’s office, where they will be reviewed. Such a review could take one month, Smith said, or it could go longer, perhaps six months. When the comptroller’s office finishes the review, the audits are then given to the Texas Agency for processing.

“When they get that, they’ll process it fast,” Smith said. “They won’t hold on to it until they get their budget renewed.”

Despite the increases in revenues, Smith said the district was facing explosive student enrollment growth versus a sluggish average daily attendance. The district expects to bring in $2 million less due to this issue, he said.

“It’s going to hurt our budget,” Smith said.

On expenses, Smith said the district expects to underspend on payroll by about $10 million.

“We never spend our entire budget on payroll,” Smith said.

Anticipated increases in expenses, Smith said, were for expanding self-insurance ($3.4 million, which Smith suggested the anticipated Winter Storm Yuri claim funds be applied towards); additional funding for portable building moves ($2.9 million); additional property insurance premiums ($1.35 million); knowledge, skills, abilities and tools ($500,000), and additional program startup funding ($250,000).

Overall, Smith said these changes decrease the budget deficit from about $16.8 million to about $2.4 million.

“Where I didn’t need to be conservative when it came to expenses, I wasn’t,” Smith said, adding that he thought officials were also conservative on income figures. He said he wanted to think that the district would have a surplus, particularly after the two property value audits are completed.

Katy ISD Board of Trustees, budget