Steamboat Pilot & Today

Steamboat Springs — Why the Steamboat Springs School District will have a $6.8 million fund balance for cash flow purposes will be "the big discussion this year."

That's what Dale Mellor, director of finance and operations for the school district, predicted after Wednesday's public meeting on the school district's budget.

The question about why so much money would be leftover at the end of the year was posed during the meeting by Bill Kennedy, a retired superintendent from New York who lives in Steamboat Springs. Kennedy said he was "astounded" that the Steamboat School District's remaining fund balance would be 40 percent of its total expenditures of $17 million.

Mellor said the issue of having that fund balance also has surfaced during recent negotiations of the Collaborative Bargaining Team and is an issue that cannot be solved during one meeting.

He also explained that the fund balance is used for cash flow, so the school district does not have to borrow funds during the school year. Colorado sch--ool districts operate on a fiscal year that ends June 30.

Local property taxes, which make up most of the Steamboat School District's revenues, are received in March and April.

The fund balance is used to pay the bills until those payments come in and is spent down close to zero just before the property taxes are received, Mellor said.

About 10 years ago, the state moved from a calendar year to the year ending June 30. School districts found themselves with fund balances in June, and many have since spent those fund balances down, Mellor said.

"Steamboat just felt over the years it was more fiscally responsible to keep that fund balance," Mellor said.

School districts that don't have a fund balance end up borrowing mo----ney, which they can do through the state without paying interest.

Brad Kindred, president of the Steamboat Sprin--gs Education Assoc--iation, asked whether the school district aims to put away funds in reserves, to which Mellor said, "No."

But, Mellor added, he budgets conservatively.

He also said that if the School Board's philosophy shifts to not carrying a fund balance for cash flow purposes, it would be appropriate to spend the fund balance on one-time needs, such as facilities.

Also during the meeting, the Education Fund Board's about $2 million reserve was questioned. The Education Fund Board, which administers funds from the city's sales tax for education, keeps the reserve as backup in case the sales tax were not renewed by voters, Fund Board President Robin Crossan said.

Kindred said he appreciated the school district's openness with the budget and the time Mellor took to explain it in detail to the several dozen people who came to the meeting.

He said he agreed that the fund balance issue would be an important one to discuss this coming year, as well as how to distribute inadequate funds.

During the meeting, Mellor described how the school district receives funding based on the state's finance formula and said in relation to the cost of living in Steamboat, it is "totally inadequate."

-- To reach Susan Cunningham, call 871-4203 or e-mail scunningham@steamboatpilot.com