CFO outlines balanced 2025-26 budget plan; board schedules adoption meeting for Aug. 25

The Zapperman Municipal School District (SMSD) chief financial officer presented a draft 2025-26 budget and tax-rate plan at a joint workshop with the Daphne City Council on Aug. 5, saying the district expects a balanced budget and a slight decrease in the proposed tax rate.

The CFO said this was "workshop number 2" and that the district plans to adopt the budget at a public meeting on Aug. 25. He told the board the district's certified net taxable value rose about 3.31 percent and that the proposed tax rate will decrease by roughly "0.44cent," leaving the district's current rate at 0.6122 against a stated minimum limit of 0.6689.

Why it matters: the presentation tied several revenue and enrollment measures to the district's spending plans and borrowing needs. Trustees heard that property taxes remain the district's primary revenue source (about 81 percent of revenue in the general fund model presented), and that shortfalls in cash flow will require short-term borrowing until property-tax collections arrive in January and February.

Most important facts and supporting detail: the CFO said the district uses a refined average daily attendance (ADA) figure for state funding calculations; the refined ADA for 2024-25 was presented as 3,177. The district is using conservative assumptions: a 99 percent tax-collection rate, a $55 increase in the basic allotment in state funding, and certified M&O and I&S rates shown as 0.7822 and 0.2152 per $100 of valuation in the CFO's slides.

On debt and short-term borrowing, the CFO said the district plans to issue a tax anticipation note to cover the September-December cash shortfall and expects to borrow $7,000,000 this year (down from $9,000,000 borrowed the prior year). For the debt-service fund, the CFO reported plans to amortize bonds early: an expected $2,400,000 payout this year with planning for about $2,800,000 next year to reduce outstanding debt without raising the tax rate.

Child nutrition and other funds: the CFO reviewed the child nutrition fund and said projected year-end fund balance for 2025-26 is about $200,000; the district is reducing capital outlays for the program and monitoring federal and state reimbursements closely. He said recent guidance from the Texas Department of Agriculture and changes to indirect-cost multipliers reduced recoverable indirect-cost revenue, so the district is using conservative estimates and will amend the budget later if necessary.

Enrollment and program discussion: trustees and staff discussed refined ADA versus enrollment and growth at the district's STEM magnet. The superintendent and other speakers said the STEM academy's growth is a primary driver of ADA increases, that some grade levels have capacity constraints, and that the district is monitoring potential effects from newly passed vouchers but had not seen an impact for the current year. The CFO and superintendent said voucher guidance from state policymakers remains limited and that any material effect may show up in later years.

Capital and maintenance planning: trustees asked about aging HVAC and other maintenance needs after a bond measure failed. Board members and the superintendent said the district continues to "bandage" older central-plant equipment and that some contingency or protected fund-balance planning is being reintroduced. Trustees were told the district retains a maintenance note and a separate longer-term maintenance borrowing arrangement; the maintenance note is being repaid from M&O funds and is amortized differently than the short-term tax anticipation notes.

Next steps and deadlines: the CFO reminded the board of legal notice timing for tax-rate adoption (the presentation referenced the district's notice windows) and set the formal budget and tax-rate adoption meeting for Aug. 25 at 7 p.m. The CFO also noted the statutory window for final tax-rate action falls no later than Sept. 30 in the scenario discussed.

Votes at a glance: the only formal board action recorded in the meeting minutes was a motion to adjourn. Secretary Malongo moved to adjourn; Trustee Sanchez seconded. The motion carried, 5-0.

Ending: trustees asked staff to return with finalized budget documents and any amended line items after further review; the district will post the Aug. 25 adoption agenda and supporting materials per the scheduled timeline.