10 years ago, district was $400K in the red

Christopher Maher, Jim Wells County Correspondent

Ten years ago, the San Diego Independent School District was struggling financially, Texas Education Agency monitors had been called in to bring the district into compliance and audits showed problems ranging from a negative fund balance to improper use of loans.

On Jan. 16, the district received its audit for the 2007 school year, which indicated a healthy fund balance of more than $5 million, plus an additional $8.5 million in the bank from a bond that is scheduled to be used this year for the construction of a new elementary school.

The district's current situation sits in stark contrast to that of 10 years ago.

An audit for the 1997 school year found the district in the red, with a fund balance of negative $455,240. That audit showed a number of problems in the district, including using a $2 million loan intended for facility improvements to pay off a previous bank loan, making budget amendments without board approval, and one loan was received and never recorded on the financial ledgers.

"Due to the severe financial deficit of the district the Texas Education Agency was requested to assist the district in correcting the district financial statements and provide a financial plan to correct the increasing deficit," the audit stated.

In 1998, the district's fund balance hit its lowest point when it dropped into the red at a negative $978,644. The fund balance rebounded the next year, when an audit showed the district in the black, with a positive balance of $873,429.

By 2002, with the help of a $2.4 million bond to construct the high school athletic facility, the fund balance was at $5.3 million. The expenditure of that bond money dropped the district back down to $1.1 million by the 2005 audit, but by 2007 the district had replaced that money and ended the year with a fund balance of $5.1 million.

Superintendent Luis Pizzini said Friday raising the tax rate to the maximum rate allowed by law in 2006 has helped the district meet its financial obligations. With a student loss rate of 5 percent each year for the past three years, however, the district has also implemented a simple plan for maintaining financial stability.

"I attribute the sound financial state of the district to closely monitoring purchases and closely monitoring the amount of staff we hire," Pizzini said. "We have to keep the classrooms balanced."

Pizzini said although the $8.5 million bond that was approved for the construction a new elementary school will not be sufficient to fund the estimated $12.7 million cost of construction, the fund balance can be used to make up the difference.

"Had it not been for this healthy fund balance that we have, we would have had to scale back and not provide a new building for all the elementary school students," Pizzini said. "We've been fortunate to have board support when we recommend purchases or ask them to consolidate staff positions. They've been very supportive of that, and that has helped us stay focused financially."