McAllen ISD, MISD, school board, financial report, health insurance, bond projects, HVAC, cybersecurity, Veterans Memorial Stadium
Arnoldo Mata
McAllen TX - McAllen Independent School District closed fiscal year 2025-2026 approximately $12 million under budget, but board members raised concerns Tuesday about rising health plan costs that have reduced the district’s preliminary fund balance and could require significant changes in the coming year.
Deputy Superintendent for Business and Operations Lorena Garcia presented the final quarterly financial report for fiscal year 2025-2026 at the board’s regular meeting Oct. 6 in the Dr. Ricardo Chapa Boardroom, 2000 N. 23rd St.
Unaudited revenues for the year totaled $271.6 million, with expenditures of $302 million. The $30.3 million difference reflected planned uses of fund balance, including a maintenance tax note payoff, retention stipends, facility and technology reserves, state-funded program expenditures and $3.3 million in prior-year commitments. The preliminary total fund balance as of June 30, 2026, is estimated at $121.9 million, with the general fund unassigned balance at $101.9 million.
Those figures, however, are reduced by $3.1 million due to a large lag claims bill received from the district’s health plan fund after the numbers were posted.
“We received an unusually large bill that included services rendered as far back as January but were not billed until July,” Garcia said. “In comparison to last year, it was a very significant difference.”
Garcia said the district’s largest single health plan expenditure is currently neonatal care and that a full report, including a plan of action, will be presented at the Oct. 20 board meeting, along with a separate report on the health plan fund.
Board President Lucia Regalado acknowledged the budget performance while signaling that the health plan situation requires urgent attention.
“We really need to start looking at our health insurance,” Regalado said. “We’ve done everything we could possibly do without changing plans, but we’re getting to the point that our claims are getting too high and we can’t keep up with those claims with the amount of money that is coming in from the district and the employees. So we’re just going to have to visit those plans and see how we can adjust so that we could be able to pay those claims without using our fund balance. It’s an issue. It’s a concern going across the state and we’re all feeling the high cost of healthcare, but we’ll have more discussions and more presentations on this, especially during the budget workshops in the spring semester.”
Trustee Aaron Rivera noted the district’s overall fiscal discipline.
“What this report shows is that we are $12 million under budget from last year,” Rivera said. “I just want to thank the superintendent and Miss Garcia. That’s not easy to do, especially in this environment and all the budget pressures we’re facing.”
Trustee Roberto Haddad asked whether the late filing of claims, some dating back to January, was standard practice.
“Is that a common practice from our third-party administrator that we should try to dissuade them of in the future?” Haddad asked.
Garcia confirmed it is a common industry practice but said the dollar figure this cycle was unusually high and that a change in how the district’s auditors directed staff to forecast future expenditures also contributed to the increased liability figure.
Trustee Dr. Elizabeth Kittleman pressed on the source of the delay.
“Is it the third-party administrator delaying in presenting the claims to the plan, or is it the providers dropping the charges?” Kittleman asked.
Garcia said it could be a combination of both and committed to addressing the question in the Oct. 20 report.
Bond Projects
The board approved work authorizations for three projects funded through the district’s 2026 bond program and authorized the competitive sealed proposal process as the project delivery method for all three.
Work Authorization No. 4 with Halff Associates Inc. covers HVAC improvements at McAllen Memorial High School at an estimated construction cost of $3.5 million to $4 million. Plans will be refreshed to comply with the 2024 building code adopted by the city in January 2026. The engineering fee is approximately $175,000, with plans to go out to bid by November. Full construction is estimated to take 18 to 20 months.
Work Authorization No. 3 with Halff Associates Inc. covers a security surveillance system at James Nikki Rowe High School at an estimated construction cost of $550,000 to $600,000, with an engineering fee of $24,000.
An amendment to Work Authorization No. 3 with Chianine Engineering LLC covers exterior modifications at William B. Travis Middle School at an estimated construction cost of $40,000 to $45,000, with no additional fee.
Trustee Erica de la Garza-Lopez asked administration to walk the board through the process of using existing bond-funded engineering contracts for the projects.
Garcia explained that the district owns the plans and specifications, and that hiring different architects or engineers would result in duplicate costs. She said all three projects were on the bond list and that the bond oversight committee was informed prior to the board meeting.
Trustee Haddad raised questions about construction administration oversight, including the number of committed site visits and the project schedule for the Memorial HVAC project, where conflicting timeframes appeared in the documentation.
“There’s conflicting information where it says eight and then in parentheses five weeks,” Haddad noted, referring to the project design schedule.
Administration confirmed the engineering firm had committed to a maximum of four weeks.
Haddad also asked about the bond project public accountability dashboard.
“Once that website launches, it will be immaterial whether it’s an externally managed project or an internally managed project. It’ll be reported in the same vertical system,” administration confirmed.
Stadium Final Payment
The board approved a final payment of $120,869.20 to Helis Construction Inc. for contract No. 2026-180 covering upgrades to McAllen Veterans Memorial Stadium. All punch list items have been completed.
Board members raised concerns about water ponding along the ADA access areas of the track and about protecting the new track surface during the upcoming holiday parade. Administration said staff met with the city and the platform company and that the track manufacturer has reviewed the proposed platform. Staff will be present during the parade to monitor conditions.
Cybersecurity Insurance
The board approved awarding Request for Proposal No. 2027-1013 for cybersecurity liability insurance to Frost Insurance Agency Inc. of San Antonio in the amount of $37,865.29 for a primary term of one year commencing Nov. 21, 2026, with the option to renew for three additional one-year terms. The board also authorized the superintendent to execute required applications and related documents.
Policy Updates
The board approved on second reading an update to board policy CFB Local, increasing the capitalization threshold for individual capital assets from $5,000 to $10,000.
The board also approved on second reading Texas Association of School Boards Localized Policy Manual Update 127, incorporating recent state legal and local policy changes. The motion carried 4-0 with one abstention.
Recognitions
The board recognized October as Principal Month under a proclamation by Gov. Greg Abbott and honored principals from elementary, middle and high school campuses. The board also recognized October as National Head Start Awareness Month and honored Head Start campus principals and program representatives.
Closed Session
The board recessed to closed session to discuss human resources recommendations, employee resignations and retirees, school safety and security, pending litigation and possible real estate acquisition. Upon returning to open session, the board approved human resources recommendations for the 2026-2027 school year.
Next Meeting
The board’s next regular meeting is scheduled for Oct. 20, 2026, at 5:30 p.m. in the Dr. Ricardo Chapa Boardroom.