Laredo ISD reports $22.5 million in June disbursements; bond-expenditure rate lags at 73%

Laredo Independent School District finance staff told the board’s Business & Support Committee on Aug. 7 that June disbursements totaled $22,500,000, of which $17,100,000 were payroll and $5,300,000 covered other goods and services.

The presentation of unaudited financial statements for the fiscal year ended June 30 showed mixed results: tax collections for July–June were $36,200,000 (98.49% of the $36,800,000 budgeted), general fund revenues realized slightly above projection at about 101%, while expenditures overall were about 97.16% of budget. Miss Ayala, who presented the report, said the district’s payroll component remained the largest expenditure and that one-time payments and reclassification of positions from ESSER funds contributed to year-over-year expenditure increases.

Why it matters: Finance staff warned the board that the district did not meet an 85% expenditure threshold on certain projects (the report showed a 73.39% spend rate as of June 30). Miss Ayala said falling short of required expenditure rates could, in a worst-case scenario after an audit, lead to bond interest becoming taxable: “They may make the bonds taxable,” she said, noting that would make future bond sales more difficult and costly.

Supporting details: The packet and discussion included the following figures and explanations presented by staff: - June disbursements: $22,500,000 (payroll $17,100,000; other goods/services $5,300,000). (Miss Ayala, 00:04:55–00:05:55) - Tax collections July–June: $36,200,000 (98.49% of the $36,800,000 budgeted). (Miss Ayala, 00:07:55–00:08:55) - Payroll costs highlighted elsewhere in the presentation: $13,000,000 as a main component of expenditures; total expenditures increased by about $12,700,000 year over year, in part because of a one-time payment in July and positions moved from ESSER to the general fund. (Miss Ayala, 00:08:55–00:11:30) - Other financing sources/uses included transfers of roughly $18,300,000 related to health insurance and approximately $17.6 million for the Sierra High School project. (Miss Ayala, 00:12:00–00:13:30)

Budget amendments and carryovers: Finance presented several budget amendments for committee review: increases to multiple capital-projects and bond-series funds and general operating fund adjustments (agenda items listed as BA# 252601–252604). The board was also asked to approve assigning $268,446 of fund balance to carry forward outstanding purchase orders into FY2025–26; Miss Ayala explained the assignment is requested so auditors see the rollforward in the audit report. She noted the district can roll purchase orders without board approval but asked the board to authorize the formal assignment for the financial report.

Investment earnings and distribution: The report showed $1.8 million in interest earnings for the quarter and $7.6 million year to date, distributed mainly to the general operating fund. Staff said most funds are held in an investment pool that yields higher returns than bank deposits, with about 13% kept in bank accounts for liquidity.

Project-phase explanation: When trustees asked why the expenditure percentage lagged, district staff and a construction representative explained that some projects (for example, the Sierra High School demolition phase) are low-cost phases that depress percent-spent calculations until heavier-cost phases (foundations, plumbing, new construction) begin. Staff said they expect the percentage to rise as projects progress.

Board questions and context: Trustees asked whether not meeting the percentage automatically triggers penalties; finance staff said not automatically — an audit would be required before any taxability determination. Trustees pressed for monitoring and faster project spending where feasible; staff said some timing and procurement constraints make rapid spend difficult but that they are tracking balances and will reallocate completed-project balances to active projects.

Ending: Finance staff recommended the board approve the proposed assignments and amendments so that the auditor’s report will reflect the rollforward; the committee moved the items forward for consideration at upcoming board workshop and regular meetings.