Steamboat School District taps budget reserves to cover COVID-19 losses
STEAMBOAT SPRINGS — With some significant funding uncertainties due to the COVID-19 pandemic, the Steamboat Springs Board of Education agreed to dip into the district’s fund balance by $525,000.
“We don’t take going into the fund balance lightly,” said board member Katy Lee at a June 29 meeting, during which the final budget was unanimously approved. “But this is an unusual situation — and those funds are meant for times like these.”
One of the primary uncertainties is the student count. Based on a parent survey, Director of Finance Mark Rydberg said they are budgeting for a 5% drop in enrollment.
Although much later than normal, Colorado school districts did finally receive the Per Pupil Funding amount. For the 2019-20 school year, it was $8,460 per student. For 2020-21, it is set at $7,996 — about a 5.5% drop.
In total, the district is anticipating a drop in revenue than what was initially projected before the pandemic of about $1.4 million. However the district did receive about $1.5 million in CARES stimulus funding, though it has COVID-19 specific spending requirements, and must be spent by the end of 2020. Some of the specifics on what are allowable expenses are still yet to be determined, Rydberg said.
The fund balance as of June 30 was $7.7 million, according to Rydberg.
Spread evenly over 12 months, the fund balance, he described, “grows or shrinks annually depending on the difference between revenue and expense every year. It is needed and used every year for cash flow purposes.”
Of that, $1.1 is restricted and can only be spent on a specified use and $6.6. million in unrestricted. The $525,000 represents 8% of the unrestricted portion.
“Using fund balance to cover operations is an unsustainable fiscal practice,” according to Rydberg. “This recommendation is not made lightly. I strongly believe that not spending more than the district receives is a critical decision.”
Still, Rydberg said, the district is in a good position in that it has a healthy fund balance, and that he feels the $525,000 amount is manageable.
“The whole year is going to be bumpy,” he said.
Undoubtedly, the 2020-21 budget will be revised in January, Rydberg said.
And he noted a risk under which the state could change — and reduce — the Per Pupil Funding amount in the middle or at the end of the school year.
In addition, if more than the 5% of projected students don’t enroll this year, that would have a significant impact. Likewise, if the districts get more students than estimated, revenue would increase significantly.
“The student count number is really crucial,” Rydberg said. And they should have a much better number by Labor Day.
There was a reduction of 15.52 positions in full time employees across the district, all cut through attrition and open positions.
While it was part of earlier discussions, staff days furlough are not part of the approved budget.
Total district revenue for fiscal year 2021 is estimated at $30.86 million, about $1.7 less than 2020. Expenses are estimated at approximately $31.38 million, a $1.2 million decrease from 2020.
From the Education Fund Board allocated funded by the half-cent sales tax, Steamboat schools saw a reduction of over $800,000 from what was initially anticipated.
While there is uncertainty about the rest of the year’s sales tax revenue, Rydberg said he felt the board was “rightfully conservative in setting budget numbers.”
Other local drops in revenue — totaling about $300,000 — came from less in Colorado Mountain College payback for concurrent enrollment classes taught at the high school, less interest income due to lower rates and a reduction in some other miscellaneous revenue sources, like trip fees and rent.
In terms of payroll expenses, the district is still in negotiations with the Steamboat Springs Education Association.
Payroll expenses account for 82.7% of general fund expenses. For now, that item has a placeholder, Rydberg said, with $1.18 million from ballot measure 4A, which passed in November 2019 and funds teacher staff and salaries.
A Collective Bargaining Team negotiation session is planned for Wednesday.
To reach Kari Dequine Harden, call 970-871-4205, email kharden@SteamboatPilot.com or follow her on Twitter @kariharden.
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