Canutillo ISD approves $2.75 million budget deficit, no pay raises

The Canutillo Independent School District Board of Trustees voted unanimously Tuesday to approve a $67.9 million budget with a $2.75 million deficit for the 2024-25 school year, with no pay raises for most of its employees.

The previous school year, the district adopted a $67.2 million budget.

The district initially projected a $4.4 million budget shortfall for the coming school year after making several budget cuts, on top of a $6.6 million deficit for the current one.

Now Canutillo ISD is expecting to end the 2023-24 school year with a roughly $535,000 surplus.

Canutillo ISD communications director Gustavo Reveles said the majority of these funds came from selling the district’s central office building to the Texas Department of Transportation. Reveles said the department made an offer of $6.8 million, but could not yet disclose the final sale amount as it hasn’t been approved. The district is looking into different options to relocate its central office.

The district also improved attendance rates, giving the district an additional $360,000 in revenue.

This comes after the district made a series of budget cuts, including layoffs, to address the deficit.

Now Canutillo ISD will likely need to tap into its reserves to cover the upcoming school year’s deficit.

The district expects to end the current school year with about $13.8 million in its reserves, or enough to keep the district running for 70 days.

If the deficit for the upcoming school year remains the same, that would reduce the district’s reserves to $10.3 million, or enough to keep it running for 55 days.

“This will still bring us below our minimum fund balance, but we are still a work in progress,” Executive Director of Financial Services Cristina Pulley said during Tuesday’s meeting. “We are still working to bring down that deficit.”

Texas school districts need to have enough reserves to run for at least 75 days to get an A in the Financial Integrity Rating System of Texas.

Canutillo ISD looks into starting public facility corporation

Trustees also discussed the possibility of starting a nonprofit, known as a public facility corporation, or PFC, that can issue bonds for construction projects without voter approval.

Voters in May narrowly approved a $387 million bond measure for new schools and districtwide improvements to reverse declining enrollment. The bond did not include funds for a new district headquarters, but the PFC could be used to issue bonds for new offices.

“We don’t have a definite plan yet. We just wanted to put it out there that’s one of the options the district has, especially as we move forward with finalizing funding for a new central office,” Reveles told El Paso Matters.

The board heard a presentation from the district’s attorney, Arnold Cantu, that mentioned using a PFC to fund a workforce housing development, but Reveles said these are preliminary conversations. These types of corporations are most often used by public housing authorities but could be created by municipalities and school districts, among other government entities, according to Texas local government code.

Bonds approved by a PFC would not affect a district’s tax rate, Cantu said.

“Any bond issued by the PFC would have to be paid from revenues either coming from the developer in some instances, or from the district,” he said.

While the PFC could not raise the tax rate, the board of trustees could raise taxes to pay the bonds issued by the corporation. The PFC would have to give public notice and residents could petition that the bonds be put on a ballot.

The PFC would also allow the district to get a tax exemption on these projects and shield it from legal liability, Cantu said.

The El Paso Independent School District started a PFC in 2015 to pay for the construction of a new administrative building in Northeast El Paso after years of leasing a building near the airport from the city, the El Paso Times reported. EPISD built its new administrative office in Downtown El Paso using bonds issued by the PFC. The offices were completed and opened in 2021.

Canutillo ISD raises Montessori teacher pay

Canutillo ISD Trustees also voted unanimously to raise the starting pay for Montessori teachers from about $46,000 to $60,000 a year, the same as traditional teachers.

This comes after two of the district’s three Montessori teachers left to work somewhere else, Chief Human Resources Officer Martha Carrasco said during the meeting.

If the district is unable to recruit new Montessori teachers, it may not be able to continue the program during the 2024-25 school year.

“If we’re not going to be able to carry it on moving forward or if you want to you can convert it to a prek-K to 3 (program),” Carrasco said.

Trustees also discussed the possibility of offering a stipend to teachers who have both a Montessori and Texas teaching certification. Carrasco said the district currently doesn’t have any teachers who would qualify for it.