Edcouch-Elsa schools to ask for $4.5 million loan to keep afloat

EDCOUCH - The Edcouch-Elsa school district does not have enough money to operate through the rest of the summer.

The School Board is set to hold a special meeting this evening to consider requesting a $4.5 million line of credit from First National Bank in Edinburg to cover the district's regular operating expenses until the Texas Education Agency doles out its aid for the month of August in the fall, Superintendent Michael Sandroussi said Monday.

"We want to make sure we have enough money to pay our bills," Sandroussi said.

Basic operating costs for the district run about $5 million a month, and its financial reserves do not cover that, Sandroussi said. TEA reported the district's reserves at $477,000 as of April 18.

In recent years, TEA has apportioned its August funding in September - when the state's new fiscal year begins, said TEA spokeswoman Debbie Ratcliffe. Usually, districts plan ahead for the anticipated month without state funds, she said.

"They should have seen this coming," Ratcliffe said of Edcouch-Elsa school leaders.

But, Sandroussi said, the district is struggling to expand buildings for a growing student population and also pay rising fuel and utility costs.

Board trustee Florestela Rodriguez said she believes the reason for the financial problems is actually because the district is overspending on payroll. With diesel fuel currently costing about $2 a gallon more than last year, the district's loan would be able to pay for more than 2 million gallons of fuel.

A September 2007 Monitor story showed the district spent more than $1.3 million than it had budgeted for substitute teachers and part-time and temporary employees. And a 2006 state report said the district regularly employs 77 employees more than it should, given its size.

"It's what happens when you're not taking control of your district and your responsibilities," Rodriguez said of the district's financial troubles.

Another TEA spokeswoman, DeEtta Culbertson, said it is uncommon for a district to need a loan to cover its expenses during the one month schools don't receive state funding.

The state recommends districts keep two to three months worth of operating expenditures - for Edcouch-Elsa, that's about $10 to $15 million - to not disrupt operations during planned funding gaps.

"Usually when they are getting into that situation (of needing a loan), they are going to have other financial problems" in the future, Culbertson said.

The school board of trustees is set to meet 6:30 p.m. tonight at the district administration building, 920 W. Santa Rosa Ave. in Edcouch. Sandroussi said the district will be able to easily pay off any loan it gets when TEA's August money comes in September.

"As soon as we get the money from TEA, we'll pay the bank off," he said.

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Jared Taylor covers law enforcement and general assignments for The Monitor. You can reach him at (956) 683-4439.