Future budget cuts, a $3.5 million loan, 2025 levy vote facing Byron ISD

An additional $1.6 million in budget cuts, a likely levy referendum on next November’s ballot and an up to $3.5 million loan to meet financial obligations is the takeaway from Monday night’s Byron School Board meeting.
Supt. Dr. Mike Neubeck updated board members and others in attendance at the meeting on what the district is doing to recover from a $2 million shortfall that was revealed when the district’s finances were audited.
The audit is still preliminary and the final audit report will be presented at the Truth in Taxation meeting on Dec. 16, Neubeck said. A revised budget for FY25 that reflects the accurate financial data will be presented at that meeting.
The initial $2 million shortfall was primarily concentrated in District-wide salaries and benefits, he said. Preliminary audit findings show an incorrect base salary was utilized during negotiations which led to an overestimation of the district’s capacity to fund additional expenses. Salary increases, the report found, were incorrectly recorded in the revised budget and the shortfall was not detected until March.
Neubeck again reiterated that there were other contributing factors including an increase in health insurance costs, loss of COVID relief funding, staff retention efforts, inflationary increases in purchased services and state funding challenges.
When the $2 million shortfall was identified the district cut $1.5 million from the 2024-25 budget.
Even with those reductions the district does not meet the minimum fund balance level of 8%. Following FY24, he said, the balance has dropped to less than 1%.
Going forward making additional cuts of $1.6 million for the 2025-26 fiscal year are needed with board members Monday night passing a resolution directing the administration to come to the board with recommendations to reach that figure.
In working on a budget for FY26, Neubeck said, the district also must take into consideration a decrease in enrollment, the effect of the Paid Family Leave Act that will go into effect January 2026, contractual increases, health insurance costs, unemployment for hourly employees during the summer months, and inflationary increases for services.
In addition to the audit, the district had Ehlers Financial Advisors conduct a detailed cash flow analysis of the district as a $4.9 million debt service payment is due at the end of January 2025.
Ehlers recommended that because of the current cash constraints the district borrow up to $3.5 million with the loan being secured against future aid. The money would bridge the gap and meet the district’s financial obligations. Neubeck said that the district would not be borrowing that entire amount but would be able to access it if needed.
The board gave approval to enter into that loan Monday night.
Neubeck also said that in order to come up with a long-term solution, district officials anticipate that they will return to the voters at the November 2025 General Election to ask for approval of a per pupil levy to help pay for district operating costs. A levy referendum of $800 per pupil failed at the 2024 General Election.
Although the final audit results will be known on Dec. 16 and the audit results will be posted on the District website, residents will have to wait until January or February to learn the exact cuts that the administration will be recommending to the board.
Neubeck said the administration will be communicating to staff and the community throughout the process.