2014-06-25 / Front Page

RISD nearing financial cliff - Revenues $16 million - Expenditures $21 million


A workshop to discuss budget issues at the Raymondville school district went beyond the normal run of the mill agenda items.

Lorenzo Sanchez, the outgoing chief executive officer with the district, gave a presentation few people were expecting to hear.

He said that if the district does not implement cuts at all levels, it could find itself in a terrible financial situation that could take years to fix.

“I have been predicting in the last five years and I am predicting it today,” he told the board of trustees during Tuesday’s workshop. “You are going to start taking some actions maƱana - tomorrow .”

Sanchez said the district’s total revenues stand at more than $16 million, including $1 million from the wind farm money, but it has expenditures of more than $21 mllion.

That is leaving the district with a deficit of more than $3.1 million.

Part of that is due to a decline in property values costing the district about $900,000 in revenues, he said.

He told the board of trustees that cutting expenses at all levels is going to delay the financial cruch, but it won’t go away.

The district has been spending money on projects as if it’s going out of style, and Sanchez said they should put a stop to capital projects and invest in the most important thing - staff.

Even so, the staff will not be immune from the painful measures the district will have to implement.

He said raising property taxes by five cents to meet the bond obligation of $1.8 million could be one alternative.

“By cutting $5,000 here, $5,000 there and so on you could end up saving a lot,” Sanchez said. “Turn out the lights at nighttime, too.”

That’s because the district spends more than $100,000 a month on electricity.

“What I am telling you today is not going to go away,,” Sanchez said. “It will only delay it. The train will keep moving.”

Johnny I. Pineda, the district superintendent, said earlier that they are about to approach the fiscal cliff.

“This is our fourth budget workshop,” he said, “and the message is still the same - we must control our spending.”

He said later that eight teaching vacancies are not going to be filled because that will result in more than $400,000 saved.

“Two to four more unfilled vacancies would put us in better shape,” Pineda said. “I also strongly recommend that we put a stop to some projects.”

Board member Mario Tijerina said he voted last year against building a covered barn for the district’s fleet of buses because of the cost involved.

Ram Ramirez, another board member, said he understands that cuts are needed, but cutting down on personnel is something he doesn’t want to do.

Lupe Ruiz, the board’s president, said Sanchez’s report is preliminary, not final.

“We will make whatever changes are necessary to maintain our budget and protect our students and staff,” he said.

Sanchez’s contract with the district has come to an end after the board did not renew it during an April meeting.

He came on board in 2008 under a contract as a consultant that paid him about $70,000 a year.

He was ousted from his job in July 2011 by the board and was hired as the district chief financial officer a month later.

The previous board, in a 6- to-0 vote in September of that year, hired him after he worked as business consultant for the district for the last 3-1/ 2 years.

Ruiz said at the time that “Mr. Sanchez has done his job with the district. But it was the decision of the board to go in a different direction.”

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