Northside trustees adopt FY 2026 budgets, hold tax rate steady and approve $84.36M defeasance plan

The Northside Board of Trustees on Aug. 26 adopted the district—s fiscal year 2026 budgets and kept the district—s total tax rate flat at $1.0049, after a staff presentation and several finance motions that the board approved later in the meeting.

District finance staff presented the proposed Maintenance and Operations (General) fund, the Child Nutrition Fund and the Debt Service (Interest and Sinking) fund and explained how property value changes, exemptions and House Bill 2 adjustments affect revenue. Finance staff told trustees the district is budgeting conservatively for continued enrollment declines, and noted a remaining projected general-fund shortfall that will be drawn down from an instructional-continuity reserve the board previously set aside.

Why it matters: The board—s votes commit how the district will collect and spend taxpayer funds for the coming year and include an $84.36 million defeasance plan intended to reduce future debt service costs for taxpayers. Board members emphasized that payroll remains the district—s largest expense and thanked finance staff for seeking efficiencies while holding pay increases approved earlier by the board.

Key points: - Staff said local revenue is decreasing while state aid has increased under recent school-finance changes; finance staff reported total revenues rose roughly $50 million from last year—s original budget while planned expenditures decreased compared with last year—s budgeted levels. Finance staff noted a projected general-fund deficit for the current fiscal year and for FY26, planned to be covered by the district—s instructional continuity set-aside. - The Child Nutrition Fund was presented as balanced operationally but with a planned fund-balance spenddown under Texas Department of Agriculture rules; the district is not raising paid meal prices this year. - The Debt Service Fund presentation described proposed defeasance/refunding actions and a projected surplus in that fund after the defeasance.

Votes at a glance (board actions taken Aug. 26): - Fourth budget amendment (current fiscal year): Approved. Finance staff described an $18 million additional state-aid adjustment recently moved into the current year, rebalancing revenues and expenditures and leaving a projected FY25 operating deficit near the level described in staff materials. Outcome: approved. - Resolution committing fund balance: Approved. The board formally reaffirmed and adjusted the prior $140 million instructional-continuity commitment so the audit can determine the final balance and how much will carry forward. Outcome: approved. - Defeasance resolution: Approved. Trustees authorized defeasance of not less than $84,360,000 in bonds to reduce future debt-service payments. Staff said the defeasance is projected to save taxpayers about $26 million over time. Outcome: approved. - Adoption of FY26 budgets: Approved. The board adopted the General Fund (M&O), Child Nutrition Fund and Debt Service Fund budgets as presented. Outcome: approved. - Adoption of tax rate: Approved. Trustees adopted a total tax rate of $1.0049 (M&O 0.6694; I&S 0.3355), the same rate as the prior year. Staff stressed the district is not increasing the rate and described the vote language required by law about effective rates and property-value changes. Outcome: approved.

What trustees and staff said: Finance presenter Megan Bradley (finance staff) summarized the revenue and expenditure drivers and told the board, "We are still showing a $38,000,000 deficit in the general fund," and explained that the instructional-continuity reserve would cover the shortfall if no further budget changes were adopted. Trustees repeatedly thanked the finance team for months of work on the budgets and for the district—s pay plans for employees.

Next steps and context: Staff said additional budget amendments are likely through the year as the Texas Education Agency releases further guidance. The board approved the routine items and voted to direct staff to complete the defeasance transactions and finalize budget documents; no additional public hearing items were raised during the hearing portion. The district will publish final budget documents and complete the audit that will finalize fund-balance numbers.