Manor ISD financial briefing: S&P flags need to rebuild reserves within two years

Manor ISD finance staff reported to the board that the district’s fiscal metrics remain under pressure and that S&P Global indicated the district must rebuild its fund balance within two years to avoid a downgrade in credit outlook.

Moises/Santiago (finance presentation) said the district currently shows roughly 1.2 months of operating reserves versus a recommended minimum of four months. S&P’s commentary moved the outlook to 'AA negative' even though the district retained a high rating. Finance staff highlighted positive signals — a growing tax base and steady enrollment — but also a three‑year decline in assigned/unassigned fund balance that S&P flagged as a concern.

Staff outlined steps being taken: appeal of state property‑value controller figures (which has returned amounts in prior years), reclaiming one‑time revenues rather than using them for recurring costs, and the need to adopt surplus budgets (not just balanced budgets) to rebuild reserves. Finance noted available but untapped loan proceeds and one‑time recoveries (staff referenced recapture and refund efforts that could total roughly $4 million), but cautioned those are not sustainable ongoing revenue.

Trustees asked for reserve targets and the implications of a downgrade; staff said a downgrade would raise future borrowing costs and urged a plan to rebuild reserves over a two‑year horizon.