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A sign outside the Hurst-Euless-Bedford ISD Administration Building at 1849 Central Dr, Bedford. (Matthew Sgroi | Fort Worth Report).
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Though Hurst-Euless-Bedford ISD faces potential budget deficits of up to $23 million in the future, Superintendent Joe Harrington and trustees say the district is in a better spot than others across Tarrant County.

In a June 10 budget workshop, district officials provided Harrington and trustees with an update on the district’s financial status, future outlook and adjustments necessary to navigate the losses of state and federal funding.

The presentation showed that the district faces a $9.5 million deficit in its current budget and is looking toward a $20 million deficit in its 2024-25 budget. Despite those projections, HEB ISD will not be forced to cover deficits by dipping into district reserves. By using a fund initially set aside for future payroll, HEB ISD could keep reserves intact until the 2026-27 school year.

What are the set aside funds?

In 2019, Texas passed House Bill 3, changing the formula for how public schools are funded.

The state enacted transition grants to ensure that all districts would receive at least a 3% increase in per-student funding — HEB ISD has been a recipient since 2019. The grants expire in 2024. 

How were they used?

The district saved these extra funds to prepare for the end of state support in 2024, Dobie Williams, the district’s deputy superintendent of business operations, said.

“Many districts are having discussions about closing schools … we’re not having any of those discussions,” trustee Julie Cole said. “Not to say this is the direction we want any of us to go in, but I think we’re better off than a lot of our neighbors.”

The district’s current budget shows an estimated revenue of $217.5 million, with anticipated expenses of $227 million. While the discrepancy results in a projected deficit of $9.5 million, the gap is completely bridged by rollover funds from the previous year amounting to $4 million and a transfer of $5.5 million from the set aside fund.

Currently, HEB ISD has $48.6 million in that set aside fund. Initially, the district anticipated needing nearly $13 million from the set aside fund to bridge the gap, but was able to close it through interest revenue.

The presentation also highlighted expenses from the district’s capital project fund for the current school year, including:

$13.1 million for the Bellaire Elementary rebuild.

$7.4 million for baseball and softball concessions and press box improvements. 

$1.75 million for ongoing security projects.

$932,000 for replacement vehicles.

The fund retains an unallocated balance of $16.2 million.

Not only do shades of optimism emanate from the district’s inventory of set aside funds, Harrington noted that district enrollment isn’t falling at an unsustainable rate. 

“I think that we have a really good shot at continuing to control our enrollment through open enrollment, or other aspects where other districts can’t, because of our reputation and the successes we’ve had academically,” Harrington said.

Enrollment across HEB ISD grew for the 2023-24 school year to 23,226 from 22,942 the year before. While enrollment is projected to fall for the 2024-25 school year, it is not expected to fall below 2022-23 levels. Still, Zonda Education demographers project the district to lose 1,000 students by the 2033-34 school year.

Fewer students means fewer funds from the state. Public schools receive state funding based on the number of students who attend classes.

“It’s more of a flat to a small deficit,” Harrington said. “HEB beat the odds this past year where we grew when they did not expect us to. People are still seeking out HEB.”

In March, trustees were presented their first look at the projected budget for the 2024-25 school year in which the district projected a revenue of $213 million against expenditures of $230 million.

By Monday’s meeting, the revenue budget increased to nearly $214 million while expenditures rose to nearly $234 million. Facing a $20 million budget deficit, district officials presented plans to allocate dollars from the set aside fund to cover the difference.

Several factors contribute to the district’s increased expenditures, including:

A $1.14 million rise in property insurance costs.

$600,000 for new staff positions.

An additional $220,000 for school resource officers.

$200,000 for the sports and visual/performing arts uniform replacement cycle.

$178,000 for AP exam costs.

$150,000 for increased electricity expenses.

For the 2024-25 school year, an allocation of $20 million leaves a remaining balance in the set aside fund of $23.1 million. Assuming no legislative changes and continued flat to declining enrollment, another $21 million will be required for the 2025-26 school year, depleting the fund to $2.1 million. 

By the 2026-27 school year, the district anticipates using the remaining balance, but will also then be forced to dip into reserves. HEB ISD currently holds $121.8 million in reserves, which could cover almost six months’ worth of expenses. The district tries to keep at least five months of expenses in its reserves, according to the district. 

Covering a $20 million deficit for the 2026-27 school year would lower the district’s reserves to $97.8 million, which could still cover nearly five months of expenses. This trend continues into the 2027-28 school year, with a projected deficit of $23 million, leaving a fund balance sufficient for almost four months of expenses.

“We just have to continue to watch,” Harrington said. “We want to make sure we fill all seats. Just a few empty seats is not beneficial to maximizing the programs that we offer.”

Matthew Sgroi is an education reporter for the Fort Worth Report. Contact him at matthew.sgroi@fortworthreport.org or @MatthewSgroi1. At the Fort Worth Report, news decisions are made independently of our board members and financial supporters. Read more about our editorial independence policy here.