Steamboat Springs School District 2010-11 budget highlights
The Steamboat Springs School District has indicated that it will have to cut about $2 million from the 2010-11 school year budget. The reduced revenue and increased expenses include:
■ A $1.148 million reduction to the finance formula, which determines the amount of money the district receives from the state based on per-pupil funding.
■ A $427,000 reduction in projected gifts from the Education Fund Board because of less sales tax revenue and the funding now being shared with Hayden and South Routt.
■ A $96,000 increase to the Public Employees’ Retirement Association, which provides the district’s employee retirement benefits.
■ A $6,000 increase to the district’s employee health insurance benefits. Each Routt County school district projects employee health and retirement benefits to increase.
■ A $300,000 allocation for unemployment insurance. This year, the district budgeted $65,000 for unemployment, more than any other year.
■ Other factors make up the rest of the $2 million, including the district projecting to collect less fees and earn less interest from its bank accounts.
Legislation and voter-approved amendments that affect school funding
■ Gallagher Amendment (1982) — Shields homeowners from significant property tax increases from rapidly rising home values to keep homeowners’ share at 45 percent.
■ Taxpayers Bill of Rights (1992) — TABOR requires voters to approve tax increases and limits revenues to the increase in population plus inflation.
■ Amendment 23 (2000) — Requires per-pupil funding for K-12 education to increase by inflation plus 1 percent each year through 2011 and by inflation each year after.
■ Referendum C (2005) — Called a “Time-out from TABOR,” it allows the state to retain all revenues it collects from 2005 to 2010 regardless of the TABOR limit.
The positive March revenue forecast the state released Friday includes news that is good and bad for Colorado school districts, state Sen. Al White said.
With additional revenue, he said state lawmakers won’t have to make further cuts than what they identified after the last quarterly revenue projection was released in December. At least they don’t have to make more cuts now, said White, a Hayden Republican and member of the Joint Budget Committee. He said further cuts might be necessary when the fourth-quarter revenue projection is released in June.
White said it’s the first time since December 2008 that additional cuts weren’t necessary after the release of a revenue projection.
“From that standpoint, that’s the good news,” White said. “The bad news is we still have a long way to go to recover from the projections in revenue we’ve seen so far.”
White said that means the previously forecast $260 million cut from K-12 education statewide still will occur in an effort to trim about $1 billion from the state’s 2010-11 fiscal year budget. That includes a $110 million rescission that school districts already have returned to the state this year.
The possible K-12 cut was announced in November. Since then, Colorado school districts, including those in Routt County, have sought ways to reduce their budgets, and some of those measures are being implemented.
The Steamboat Springs School District on Monday said it wouldn’t renew contracts of 14 probationary licensed staff and 17 classified staff members, such as custodians, bus drivers and secretaries. Superintendent Shalee Cunningham has said the district is trying to reduce staff through attrition and nonrenewals instead of layoffs.
The Hayden School Board on Wednesday voted not to renew the contract
of Superintendent Greg Rockhold. School Board President Brian Hoza said Rockhold will be replaced, but an administrator position will be cut after the board approved reorganizing the district from three to two schools.
The South Routt School Board on Thursday appointed Secondary Dean of Students Raylene Olinger to replace elementary school Principal Michael Young, who will resign after the school year. Superintendent Scott Mader said Olinger’s position wouldn’t be filled, which leaves the district with one fewer administrator.
Hayden and South Routt are working to cut about $500,000 from their 2010-11 budgets. Each district aims to cut about 7 to 10 percent of its general fund.
Revenue and expenditures
The state finance formula determines how much per-pupil funding each Colorado school district receives based on its Oct. 1 pupil count. Steamboat this year budgeted for 2,118 full-time students, the number it will budget for in 2010-11.
Steamboat Finance Director Dale Mellor recently put together a preliminary revenue budget for 2010-11 that includes a nearly $20.1 million general fund. It’s more than $1.6 million, or about 7.5 percent, less than this year’s general fund budget.
That reduction is from less revenue in the finance formula, which includes property taxes; two mill levy overrides, passed in 2001 and 2006 to attract and retain staff; specific ownership taxes, for car registrations; and revenue from the state, called equalization, that makes up the difference for the district’s per-pupil funding not provided by local sources.
Local sources will provide an estimated 83.5 percent of the district’s general fund in 2010-11.
Those sources include property taxes (68 percent of local funding), Education Fund Board gifts (12 percent); mill levy overrides (9 percent); specific ownership taxes (6 percent); other local sources, such as other taxes (3 percent); and school fees (2 percent).
The state government (15 percent); federal government (1 percent); and other sources, such as interest (0.5 percent); provide the rest of the district’s annual operating funds.
In the past, voter-approved general obligation bonds have provided more than $54 million to the district. More than $24.7 million expanded and remodeled Steamboat Springs High School, and more than $29.6 million built the new Soda Creek Elementary School and expanded Strawberry Park Elementary School.
Since it was first approved in 1993, the city of Steamboat Springs’ half-cent sales for education has provided more than $31 million in gifts to the district through the Education Fund Board.
The district has more than $15 million in reserves, but Mellor said they can be used only for specific purposes, not to help alleviate next year’s staff cuts or program reductions.
The reserves include $183,000 for multiple year commitments, which is statutorily required for expenditures that extend beyond the fiscal year, and a Taxpayers Bill of Rights, or TABOR, requirement to set aside 3 percent of district revenues, more than $823,000.
A $5.6 million reserve, what Mellor calls fund balance, is the district’s cash fund that pays expenses throughout the school year until property tax revenue is remitted in March.
The district’s more than $3.2 million debt service reserve is used to retire long-term debt, or pay back bonds. Its more than $1.5 million capital reserve can be used only for capital. The more than $1.2 million capital projects reserve, from the Soda Creek/Strawberry Park bond, can be spent on only those two schools.
“In accounting terms, a reserve is something that has to be legally restricted,” Mellor said. “We couldn’t spend it even if we wanted to.”
On average each year, the district spends 87 percent of its revenue on staff salaries and benefits; 9 percent on services, such as utilities, professional development and postage; 3 percent on supplies; and 1 percent on other expenses, such as transfers from one account to another required by statute or to balance budgets.
Legislation, statewide cuts
On Thursday, the House Education Committee approved the public school finance bill. Colorado’s Amendment 23 requires that the base per-pupil funding amount increase each year until 2011 by the rate of inflation plus 1 percent.
The public school finance bill must be approved by the House and Senate before going to the governor.
The rate of inflation this year is negative 0.6 percent, so the base increased 0.4 percent, or $22.03, to $5,529.71 in 2010-11. The rest of per-pupil funding is determined by factors such as cost of living, district size and at-risk student population.
This year’s per-pupil funding was $7,239.77 in Steamboat, $8,819.28 in Hayden and $9,090.44 in South Routt, according to the Colorado Department of Education.
Because Amendment 23 requires that per-pupil funding increase each year, White said state lawmakers created an additional equity factor, a negative factor, which reduces funding for each district by the same percentage. It’s called the State Budget Stabilization Factor.
According to a Colorado Legislative Council Staff fiscal note for the public school finance bill, the reduction for all state school districts is 6.35 percent. That translates to a total reduction in K-12 funding of more than $365 million from what full funding of Amendment 23 would have provided.
Vody Herrmann, the assistant commissioner for public school finance for the Department of Education, said these were by far the deepest cuts she’s seen in her 10 years with the department.
“There may have been reductions. There may have been rescissions,” she said. “But never has it gone below where there would have been a net decrease to school funding.”
Herrmann said additional K-12 cuts likely would be necessary in 2011-12 and probably in 2012-13. Districts already are preparing.
Cunningham called 2010-11 year two of four for budget cuts. This year, the district trimmed nearly $500,000. In 2011-12 and 2012-13, the district estimates having to cut an additional $1 million each year.
In addition to about $1.6 million less in finance formula revenue, Mellor said the rest of the projected $2 million shortfall was increased costs. That includes $6,000 for the district’s employee health insurance, $96,000 for retirement benefits through the Public Employees’ Retirement Association and $300,000 for unemployment insurance.
A majority of that $1.6 million was cut through the nonrenewal of the 31 licensed probationary and classified staff. The rest was cut mostly through resignations (7), retirements (9), and employees retiring on 110-day contracts (4).
From administration, Cunningham said, the district will eliminate the office manager position and last year eliminated the curriculum director position, which saved Steamboat $111,000.
Cunningham said some positions in which staff members have chosen to leave after the school year would be filled. She said the district also is doing some shuffling, with 20 staff members changing positions. Two staff members are returning from leaves of absences.
The rest of the $2 million will be cut through budget reductions. The district has held more than 20 meetings with staff and parent groups to discuss the budget and get feedback.
“It’s important every year,” Cunningham said about meeting with staff and parents. “I’m a bottom-up administrator. I don’t make decisions from the top down. We need to know what the sentiment is, especially from teachers, because we focus on teaching and learning.”
Additional budget reductions include moving maintenance and operations to the school sites, bidding snow removal, eliminating low-capacity bus routes, eliminating low-capacity sports or making them Tier 2 to support themselves, reducing the administration program budgets and school site budgets by 10 percent, and reducing the Northwest Colorado Visiting Nurse Association contract with the district.
Suggested ways to generate revenue include increasing fees, such as rental fees and field trip fees (or reducing field trips); increasing the family sports fee cap to $375 from $300; increasing lunch prices; and not offering scholarships for full-day kindergarten and then charging all students $200 a month for 10 months, instead of $225 for the nonscholarship students.
The budget does not include any salary increases for employees. The district’s Collaborative Bargaining Team still is negotiating. The team is scheduled to vote April 8, but Cunningham said it has recommended freezing salaries in 2010-11, except for credit that licensed staff would receive for academic advances.
The Steamboat Springs School Board was scheduled to consider approving the decision not to renew licensed probationary and classified staff at its March 29 meeting. But Cunningham said she wasn’t ready to recommend those changes to the board.
Cunningham said the budget is “ever-changing” based on information the district receives about decreasing revenue and increased costs.
Board members don’t have to approve the budget until June. The final budget is due to the state by Jan. 31.