VISD Superintendent talks tax increase, hurricane recovery

Oct. 29--The Victoria school district cannot write a check back to every taxpayer after the one-time, 11-cent tax increase, said Superintendent Quintin Shepherd.

"We have committed to repaying the taxpayers," Shepherd said. "How does a district do that? We haven't made that final determination."

Shepherd discussed how the community could be repaid after the one-year tax increase and what would happen to that money during a conversation with the Victoria Advocate Editorial Board on Tuesday. The discussion focused on the school district's insurance and Federal Emergency Management Agency process and how that relates to the one-year tax increase.

The total tax rate is $1.3763 per $100 of assessed valuation, of which $1.15 per $100 of assessed valuation is for day-to-day operations and 22.63 cents per $100 of assessed valuation goes to pay off debt.

The 11-cent tax increase on $100 of assessed valuation would generate about $4.5 million. At the conclusion of the 2019 tax year, the increase would fall off.

The Victoria Advocate asked Shepherd questions about Hurricane Harvey recovery.

What are options to repay the community after the one-year tax increase?

"If you wanted to pay down future bond payments, the benefit comes back to the taxpayer -- lower taxes in the future. Bond defeasance would be an option. Another option would be to have a conversation with the community. If we need to run another bond campaign at some point in the future and we could estimate the total costs at X dollar amount, can we reduce that bond request by the amount of money that we raised through the 11-cent tax increase? ... We knew we took the money without a bond request, and now we are going to pay you back in conceivably what would be lower taxes in the future."

How did the one-time, 11-cent tax increase come to be and how does it relate to the reimbursement level that the district has received? What does it mean for the future?

"We needed to come up with some funds so we could start doing renovations and get the schools back to functioning ... The way we were paying for the projects was out of our fund balance, so what we are seeing is our fund balance decrease and decrease ... Our glide path was turning down pretty quickly given how we were spending through funds, then rolling over into a new school year ... The 11-cent tax increase was designed as a stopgap measure so we could get funds from the community until we started getting funds from FEMA and insurance. The question on all of our minds was 'when will that happen?' and there's no definitive answer ... We started higher than 11 cents, but we were able to bring that down because just before we voted, we started actually receiving a little bit of FEMA funds .... Since that time, we've been aggressively working with our insurance company and representatives at FEMA to try to get as much money moving as possible."

Where is the district on its insurance reimbursement?

"The net outstanding claim for insurance is about $1.9 million. There have been areas where there hasn't been any question with insurance, and we've gone through the process and had those funds received. There are other areas within our insurance claim where we're still in consideration -- call it dispute if you want to -- but try to work out whether it's a viable insurance claim."

What are the plans for the money raised in the 11-cent tax increase?

"It'll sit in the fund balance until we decide how it comes back to the taxpayers ... What we don't want to do is take that money and then spend it on creating new programs or hiring new staff -- reoccurring costs -- then come back to the taxpayers and now say we need a whole bunch more money."

Have you made a decision not to spend the funds raised through the 11-cent tax increase?

"Not exactly; we still have projects to take care of ... When we go to replace the refrigeration units, which will be covered by insurance, we have to have the funds to pay for that up front, so we'll use the 11-cent tax increase still as the stopgap measure it was initially designed for."

Has a decision been made about a future bond proposal?

"Absolutely not. We're not going to take one step in that direction until we've gathered a tremendous amount of community input."

How often can the community expect to have FEMA and insurance updates from the district?

"It's an effort to be transparent, so we're committed to putting these reports out every other month ... Essentially it's just two pages, and it breaks down into the stuff we've done and the stuff we're going to do ... trying to keep everybody appraised of our progress."

Gabriella Canales reports on education for the Victoria Advocate. She may be reached at gcanales@vicad.com or 361-580-6578.

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