First draft of school budget maintains healthy fund balance of 15-plus percent

Money could sustain district for 55 days in an emergency

The state of the Gunnison RE1J school district’s budget doesn’t look any better than it did a month ago. But some of the details of how the district will deal with a loss of nearly $1 million in revenue are laid out a little more clearly in a first draft of the budget that came out on Monday, April 26.

Budget cuts are coming from the same places the district’s administrators had predicted in a preliminary draft: teacher attrition, a cut administrator, one-time spending cuts and reductions to other expenditures.
And through it all, district business manager Stephanie Juneau has managed to keep the budget fund balance a little higher than it needs to be. And that might come in handy, since 90 percent of the district’s revenue comes from property taxes that could come in more slowly next year.
The fund balance is a contingency reserve that the district will fall back on in emergencies. The state requires the district to keep 3 percent of its operating budget in reserve; a school board policy ups the ante to 12 percent. But the draft budget has a fund balance of more than 15 percent.
“It could be more important next year,” Juneau says. “I think we’re seeing more people paying [taxes] late or homes are being lost to foreclosure, so we have to wait for a tax sale.”
The school board was very appreciative of Juneau’s efforts and the work that has been done by the administrative council, which has been integral in this year’s budget process. And exceeding the state requirement for a fund balance by five times didn’t seem excessive to anyone.
Juneau told the board, “If as few as 20 percent of the district’s taxpayers decided to pay their taxes after the end of the school year as opposed to on time in the spring, the district would fully utilize its 15 percent fund balance to support operations.
“In a time when foreclosures are high and money is tight, the likelihood of local property owners paying their taxes late is not out of the question,” Juneau continued.
Even with such a high fund balance, if all other revenues were to dry up overnight, the district would still be able to continue operations for only an additional 55 days.
And the fund balance will go up again in 2011-2012, “to ensure the return of $318,261 in one-time expenditures being eliminated from the budget for next year,” Juneau told the board.
That figure is a combination of $226,183 that didn’t need to be transferred to the capital reserve fund this year, because of bond funds that are paying for the district’s renovations and more than $92,000 that will not be transferred to support athletics, which will have to live off of fund balances of its own.
A second draft of the school’s budget will be presented to the school board on May 24. To see a copy of the first draft of the district’s 2010-11 budget, go to gunnisonschools.net and click on the “Financial Information” link under the “School Board” tab.