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Pasadena ISD reviews one-year "disaster pennies" to offset storm losses and rising insurance costs
Summary
At a special Aug. 15 meeting, Pasadena ISD trustees reviewed options to add temporary “disaster pennies” to the maintenance & operations tax rate to help cover uninsured tornado and hurricane damage and higher premiums; staff said options could reduce a projected $15.1 million deficit to about $8.7 million for 2024–25.
The Pasadena ISD Board of Trustees on Aug. 15 heard a budget workshop on whether to adopt one-year “disaster pennies” on the district’s maintenance and operations tax rate to help cover uninsured costs and sharply higher insurance premiums following severe storm damage.
Ben Poppy, the district’s budget presenter, told trustees the district could use a combination of disaster-pennies options without triggering a voter election if the M&O rate remains at the state threshold staff identified. “We are eligible to do 7.51 pennies,” he said, calling that the maximum that could be implemented without voter approval. Staff presented alternative scenarios including 1.22, 4.22 and 5.00 pennies and showed how each would affect the 2024–25 budget.
Why it matters: Trustees have faced repeated storm-related costs. Staff estimated tornado-related damages at about $8.6 million and described an increase in property-and-casualty insurance costs (staff cited a roughly $4.3 million spike over two years, with a recent renewal at about $3.8 million). The district’s June budget projection showed a $15.1 million deficit; applying eligible disaster pennies reduced the modeled shortfall to roughly $8.7 million for one year, staff said. The board was told the disaster-pennies option under discussion would apply only to 2024–25 unless the trustees later chose to extend it.
Supporting details: Staff explained the legal and historical context that led to the current window for disaster pennies, citing earlier tax-compression changes tied to House Bill 3 and later adjustments under Senate Bill 2. Poppy said the district had consulted TEA staff and outside counsel to confirm eligibility and the mechanics of staying under the voter-approval threshold.
Insurance and future exposure: Trustees were also told that Hurricane Burl damage assessments were unfinished; early estimates for the hurricane exceeded $8 million, and staff warned the district could face additional out-of-pocket exposure next year. Trustees asked whether insurance had paid on prior claims; staff said some insurance money was received but that net exposures and rising deductibles left the district millions “upside down.”
Process and next steps: Staff reminded the board that the tax-notice publication used the highest option to preserve flexibility and that the board can lower the rate after notice but cannot increase it. Trustees were told they must approve the budget and set the tax rate at the district’s next regular meeting, currently scheduled for Aug. 27. The board moved on to other agenda items and then announced a closed executive session on personnel; no administrative personnel action was recommended in open session.
The meeting record also noted compliance with the Texas Open Meetings Act and included an invocation and pledges; there were no public comments on the agenda.
