Money troubles cause problems for Rio Hondo ISD

RIO HONDO - The Rio Hondo school district drafted a five-year plan to raise its fund balance after the state warned failure to boost revenues threatens its accreditation, officials said Wednesday.

Last year, the district's financial shortfall led the Texas Education Agency to assign an official to monitor the district, DeEtta Culbertson, a spokeswoman for the agency in Austin, said.

The district's fund balance dropped to $836,000 after rising costs gouged its $26 million budget, Superintendent Anneliese McMinn said.

District officials started putting $410,000 into the district's fund balance last year to raise revenues to the state-recommended level of $2.5 million within four years, McMinn said.

District officials cut costs to raise the fund balance to $1.9 million, she said.

"We made all necessary changes," she said.

Tuesday, the state released a list that showed Rio Hondo and Edcouch-Elsa as the two Rio Grande Valley school districts with financial problems that threatened their accreditation.

"It means for the last two years they had problems with finances," Culbertson said of the Rio Hondo district.

In November, the state assigned Linda Romeros, the McAllen school district's former longtime chief financial officer, to monitor the district, Culbertson said.

"The monitor's duty is to work with the district and board to offer advice and perhaps training (and) to observe and report back to the agency on the district's progress," Culbertson said.

Across the Valley, Rio Hondo joins financially troubled school districts in Edcouch-Elsa and Santa Maria on the list of districts for which the state assigned monitors, state records show.

In Rio Hondo, the rising cost of fuel, insurance and electricity had chipped away at the budget since about 2005, McMinn said.

"You put all those things together and it was the perfect storm," she said.

Electricity costs soared from $450,000 to $1.2 million; insurance premiums jumped from $35,000 to $750,000; and the cost of diesel rose by about $200,000, she said.

The district contracted with another company to cut insurance costs to $400,000 and a new $750,000 air conditioning system reduced electrical costs to $850,000, she said.

Attrition helped the district save $900,000 after 20 employees dropped from the district's payroll, she said.

Attrition resulted in the loss of seven teachers who taught elective courses, she said, adding the district didn't cut teachers who taught state-required core classes.

"We were able to do it without affecting instruction," she said.