District pulls $1M from funds

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The 2007-08 school year presented a "perfect storm" - financially speaking - for the Steamboat Spring School District, resulting in a nearly $1 million gap between revenues and expenses, Finance Director Dale Mellor told the School Board during its meeting Monday.

"This has been compared to the perfect storm of state issues, (financial) environment issues and elements that are out of our control," Mellor said. The district came up about $922,000 short, and after balancing its budget, the school system has about $6 million remaining in reserve.

The state of Colorado designated Steamboat as one of two "categorical buyout districts" across the state, meaning the district generates enough money through property taxes to be excluded from state funding.

The state paid the district $265,000 over the course of the last year, but requested the money back at the end of the year. The only other district to get a complete buyout in 2007-08 was the Gunnison Watershed School District.

Board member Laura Anderson said that because the district is bringing in enough money from property taxes, the "buyout" status was not as damaging as it appears.

"It's basically a wash, which is a good thing," she said.

The state also provided less funding in vocational education support because the district had not spent all of the funds available to it in years past. A change in how funding for handicapped students with the Northwest Board of Cooperative Educational Services resulted in $63,000 less funding for the school district.

Mellor also said the district lost about $100,000 in expected revenue over the year because of a drop in interest rates.

"We all know what's happened to interest rates over the past couple years," he said.

Other expenditures included an increase in food costs and snow removal from the Camp Soda Creek school site over the past year. Although food costs were not much more than previous years, it still exceeded the budgeted amount by more than $44,000, Mellor said. Much of that was anticipated, but about $4,000 was added to the lunch funds.

Legal costs set the district back about $22,000, including board training for policy governance.

Board members questioned Mellor on the specifics of the budget, including who approves overtime and substitute pay, which was $144,000 over budget.

"A lot of these were expected, a lot of these had good reasons behind them. My frustration is the timing and not hearing about it before now," Anderson said.

Mellor explained the delay was due to a software switch and a late notification from the state regarding the district's buyout status.

"This will not happen again on my watch. It has not happened before and it will not happen (again)," Mellor said.

In his report to the district, Mellor stated, "We anticipated a $264,000 fund balance expenditure with the approved budget last October. ... We exceeded that expenditure by another $657,000."

Of that additional amount, Mellor said about $500,000 of it was out of the district's control, including the cost of snow removal from Camp Soda Creek and an increase in insurance costs.

Despite the setbacks and difficulties, Mellor said the district's finances would be back on track by the time the next budget cycle begins.

"We will have a balanced budget by the time December gets here. I'm very confident," Mellor said.

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