Steamboat Springs Steamboat Springs school officials are hoping for the best. But in the midst of a severe economic downturn statewide, Superintendent Cyndy Simms and Finance Director Dale Mellor are preparing for the worst.
On Monday night, the Steamboat Springs School Board is expected to vote on a 2003-04 "Budget Parameters Resolution." That resolution will provide the framework for Simms and her staff to find up to $500,000 to cut from next year's budget.
Simms and Mellor already have discussed possible cuts, though they decline to identify in what form some of the cuts may take. Simms, who leaves the district at the end of June to become superintendent in Mercer Island, Wash., said she plans on administrative team assistance for cut recommendations.
Most of the recommended cuts will be announced at the School Board's June 2 study session in order for the district's preliminary budget to be set by June 30 -- the end of the 2002-03 school fiscal year.
Though Simms and School Board President Paul Fisher said they hope certified staff members will not be part of the cuts, it is inevitable that reductions will involve personnel, Simms said.
"Most of the cuts Dale (Mellor) and I are looking at have to involve salaries and benefits to maintain the 80 percent," Simms said.
School Board policy dictates the district can't spend more than 80 percent of its revenue on salaries and benefits. The district typically spends about 80 percent on salaries and benefits, meaning that if cuts are made only to areas other than salary and benefits, the total percentage spent on salaries and benefits will surpass the 80 percent marker.
"When 80 percent of your budget is people, then almost any (budget) variation that will occur will be people-related," Fisher said.
The reduction dilemma is one facing many of Colorado's 178 school districts. The Oak Creek-based South Routt School District recently approved dismissing its middle school principal in addition to not renewing two teaching positions in order to stop spending from its reserves.
Whether big or small, Colorado school districts are encountering similar problems. Declining enrollment and decreased state and local revenues are forcing districts to cinch their budgets, and the long-term financial outlook indicates continued declining enrollment and economic hardships, district officials say.
Colorado public schools are financed under the provisions of the Public School Finance Act of 1994. The legislation, which provided more than $4.1 billion in school funding for the 2002-03 budget year, establishes a formula by which a per-pupil funding amount for each district is determined.
Through the per-pupil funding amount, a district's total finance formula revenue is determined.
Variances in the formula, such as student enrollment, district size and cost of living, result in differing per-pupil amounts for each district.
The state provides at least some per-pupil funding for all districts, but it relies on wealthier districts such as Steamboat Springs to fund much of their revenue through local property taxes. Last year, Steamboat Springs received the least state assistance of any district in Colorado, Mellor said.
Each year, the state determines a "base" per-pupil rate that applies to every school district, regardless of size or wealth. For fiscal year 2003-04, the base amount is $4,570. Amendment 23, approved by voters in 2000, mandates an annual base rate increase of inflation plus 1 percent until 2010. For the 2003-04 school fiscal year, inflation was determined to be 1.9 percent, a reflection of the state's floundering economy.
The final per-pupil amount for the Steamboat Springs School District will be $6,999, according to Mellor. Last year, the final per-pupil amount was $6,851.
The base rate increase will result in $263,610 in increased finance formula revenue for the Steamboat Springs School District next year.
However, district officials say the increase is quickly washed out by steady or increasing fixed costs, salary increases and rising insurance costs. Plus, a projected decline of almost six students in district enrollment, at a cost to the district of $6,999 per student, could result in approximately $40,000 in lost revenue.
According to a preliminary budget prepared by Mellor and distributed at the May 12 School Board study session, an estimated 5 percent increase in district salaries, the cost of additional special education teachers and rising insurance costs will result in $765,000 in added expenditures for the 2003-04 school year. When the $263,610 increase in revenue from the state finance formula is factored in, the result is approximately $500,000 more needed for expenditures than can be met through revenue.
Also compounding budget woes is a decrease of $455,790 in other, non-finance formula revenue, according to Mellor's budget. This decrease is a result of less half-cent sales tax revenue and fewer state monies for mineral leases and textbook revenue.
Simms admits the preliminary budget prepares for the worst. For example, the likelihood salary increases will reach 5 percent is slim. Though there will undoubtedly be an increase, chances are it will be in the 2 percent to 4 percent range.
"Five percent, we believe, is probably the highest percentage amount combining the step (salary increase) and the competitive market adjustment," Simms said. "We think it's safe, but we don't know that. We'll know June 1."
Conservative or not, the Steamboat Springs School District will need to make cuts for expenditures to meet revenue.
"There's going to be cuts," Fisher said. "Absolutely some of the toughest decisions are those that are fiscally related and involve people's jobs. Cuts are absolutely the toughest thing to do."
--To reach Brent Boyer call 871-4234 or