YISD approves remaining $32M loan piece after lender backed out

EL PASO, TEXAS (KFOX14/CBS4) — Ysleta Independent School District trustees approved moving forward Wednesday night with the remaining $32 million of a temporary loan package first approved earlier this year.

District leaders said the money is meant to help cover payroll and other expenses as the district waits for state or tax revenue to come in.

Superintendent Dr. Xavier De La Torre said YISD typically receives more than $25 million a month from the state, but there are months when that revenue does not come in. He said the district needs enough money in its fund balance to cover payroll during those gaps.

“We’re getting dangerously close to not having the cash, to be able to do that,” De La Torre said, referring to covering payroll during months when the district does not receive state revenue.

De La Torre said the short-term borrowing is typically paid back within about six months, with interest between 4% and 5%.

The district said trustees first approved a larger $63.2 million temporary loan package in May. Part of that package was finalized, but the remaining $32 million was not.

YISD Trustee Chris Hernandez made clear Wednesday’s vote was not for an additional loan.

“We’re simply replacing the financial institution giving us the loan,” Hernandez said.

De La Torre said one financial institution did not move forward after reviewing the district’s financial situation, including discussion of an internal audit.

The audit is the same one KFOX14/CBS4 reported on in June, which warned YISD could run into serious trouble with its general fund within one to two years if no major changes are made.

Jordan Salas reports on YISD approves remaining $32M loan piece after lender backed out (Credit: KFOX14/CBS4)

De La Torre said the lender listened to discussion of the audit, which he said used “powerful language,” including words such as “insolvency” and “unable to pay debts.” He said the lender decided it was in its best interest not to lend the money.

The audit also flagged YISD’s use of temporary loans, saying the district continues to need short-term loans to meet financial obligations.

Hernandez said Wednesday’s vote points back to that concern.

“It’s a reminder of the situations that we’re in,” Hernandez said. “It’s never a good sign when we’re having to take out loans to meet payroll and to do it repeatedly.”

The vote comes weeks after YISD trustees approved the district’s 2026-27 budget. District projections showed a deficit of about $12.2 million for the next school year.

De La Torre said YISD is dealing with declining enrollment, rising costs and state funding challenges.

“The message is that we’re in a very delicate financial situation,” De La Torre said. “And so we’re doing everything we can to keep our employees, you know, gainfully employed and paid for their work.”

Hernandez said he is concerned about the district’s available reserves getting closer to zero.

He said YISD may eventually have to consider staff cuts or campus closures and wants district administration to bring those recommendations forward publicly.

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