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A healthy stash of reserve funds may be the saving grace for the Roaring Fork Schools — at least for the short term — as district finance officials begin to look at the economic impacts of the ongoing public health crisis.
Looking to next school year, the district may want to lean heavily on some of its roughly $10 million in reserves to make up what could be upwards of a 10%, or nearly $5 million, funding reduction from the state of Colorado next school year.
“While we have had to react to budget volatility in other years, we have always had the luxury of time to develop a thoughtful plan,” District Finance Director Nathan Markham and retiring Chief Financial Officer Shannon Pelland noted in a memo penned to the school board last week.
In particular, following the impacts of the Great Recession of 2008, the district went through a lengthy public process to determine budget priorities and come up with spending areas that could be cut.
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“The short turnaround time for this budget will be a major challenge,” Markham and Pelland advised.
School districts across the state have been asked to hold off until the end of May to develop and adopt their 2020-21 budgets.
The latest Colorado economic forecast is due May 12, after which the Joint Budget Committee of the General Assembly is to present a much-revised proposed state budget to the Legislature.
Prior to the statewide COVID-19 outbreak and the resulting business and school shutdowns over health concerns, public schools were expecting a 2% to 3% increase in funding for next year, Markham said.
The state now estimates schools will be seeing anywhere from a 1% to 10% reduction in funding compared to this year.
Districts across the state are in scramble mode determining exactly what that could mean for local schools’ budgets.
The Garfield Re-2 School Board is scheduled to have a financial update and talk about the implications for Rifle, Silt and New Castle schools at its regular Tuesday evening Zoom meeting online. Advance information was not immediately available.
Roaring Fork’s Markham and Pelland prepared a preliminary budget reduction analysis for the school board to consider. It includes cuts of 3%, 6% or 10% in total program funding — ranging anywhere from $1.45 million to $4.95 million — for the district serving Glenwood Springs, Carbondale and Basalt.
On the table for consideration — once the final state numbers are presented — are furlough days for all district staff, anywhere from a 1% to 5% pay reduction, and cuts in curriculum and individual school discretionary funds.
The crisis comes as the district had been considering asking voters in November for a mill levy override to increase teacher and staff pay. That’s now most likely off the table, Superintendent Rob Stein said at the April 22 school board tele-meeting.
“Our goal is always to prioritize people and programming,” Stein said. “But it’s up to the board what budget adjustments we may need to make.”
The budget analysis document also includes one-time funding sources that could be used to mitigate and/or phase in budget reductions.
Included are $900,000 in Rural Sustainability funds, $4.5 million in various capital reserve funds, and $6 million in general fund reserves.
“Reserves may have to play a much more important part in balancing next year’s budget, because we’ve had such a short time to react to this and the magnitude of the decisions we’re going to have to make,” Pelland said.
Given the likelihood that it may take multiple years to recover, the district can enter into a more involved public input process for the 2021-22 budget year, she said.
