District begins process to address funding shortfall

By Tony Farkas
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SHEPHERD — The Shepherd ISD Board of Managers approved a measure seeking answers to a funding shortfall that cropped up early this year.

At its regular meeting on Thursday, board was made aware that after a state Comptroller’s Office review of San Jacinto County Appraisal District’s property valuations, there was a discrepancy that would mean Shepherd would receive less state aid.

Chief Financial Officer Sonya Fulgham told the board that according to the study, the funding shortfall could mean a loss of between $725,000 and $1.1 million, a worst-case scenario.

Robert Westbrook of Education Service Center Region 6 said that the more funding the district receives from property taxes, the less it receives in state aid.

The Appraisal District determined values of $564 million in the county, which is what the school district based its budget on. However, the Comptroller’s Office in its study determined values of $606 million. Westbrook said that if the values were within 5 percent one way or the other, the state would consider that within a grace area and leave matters alone.

However, he said the differences here were greater than the 10 percent window, and since the district was not collecting taxes at the top level, but should be, the state reduced its aid accordingly, he said.

Fulgham said the impact means the district lost $324,000 in state aid in just the first few months of 2024.

Westbrook suggested working with the district’s tax attorney to file an appeal on the district’s behalf; if the appeal is successful in getting the Comptroller’s Office to adjust its values to within the grace percentage, then the district will not be affected.

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He also suggested meeting with the Chief Appraiser for the CAD, as well as its board, to discuss the impact of the values.

Superintendent Jason Hewitt said the district did nothing wrong budgeting; since it has to base its numbers on the values provided by the CAD, and the Comptroller review wasn’t done until months later. He also said that the last three budgets were within the grace area, and it allowed the district to put aside a fund balance.

Board Vice President Andy Reeves questioned how the district could make up the loss, and Fulgham said there are several budget items that have had no activity, which added together would come to $1.1 million; however, Hewitt said that the funds might be needed if something happened.

He did say that as part of the plan the administration would institute a 10 percent cut across the board and will scrutinize every federal fund for savings.

In other business, the board:

•approved a list of objectives for the superintendent for the 2024-25 school year;

•approved a resolution allowing the hiring or use of pastors as volunteers for counseling students;

•approved an application for a Jobs and Education for Texans Grant; and

•approved changes to the district improvement plans for all campuses.