The Montezuma-Cortez Re-1 School District budget outlook for the 2017-2018 school year is full of “very good news,” according to Finance Manager Carla Hoehn.
Hoehn presented the district’s preliminary budget to the Board of Education at its regular meeting on Tuesday. A vote on the budget is expected at the board’s June 20 meeting.
“Earlier in the year, we had news that there would be heavy cuts, but the Legislature worked things out, and the cuts are not as deep as expected,” Hoehn told the board.
Revenues for next school year are expected to be about $21.9 million, including a state funding increase of about $225 per student.
District expenditures are projected at $18.2 million and include salary step increases for all staff members. The district transfers about $3.6 million to other funds and the three charter schools in the county — Battle Rock, Children’s Kiva Montessori and Southwest Open School.
Hoehn said the budget increase means there won’t be cuts to district programs or personnel for next year.
Superintendent Lori Haukeness also was optimistic.
“I’m excited and pleased with the budget we have this year,” she said.
Revenue this year is up from the 2016-2017 school year, when the district’s total revenue was $21.3 million, according to district documents. However, this year’s revenue is still lower than in the 2015-2016 year, when revenue was just over $22 million.
Revenue from the state has increased from the 2016-2017 year by about $930,000, while local tax revenue has decreased by about $375,000.
Though the district will have more money next year, it’s not enough, officials said.
The negative factor — which the Colorado Legislature recently voted to rename the “budget stabilization factor” – takes away about $2.5 million in funds the district normally would receive, Hoehn said.
The budget stabilization factor is used to balance the state’s budget by reducing the amount the Legislature allocates to public schools across the state.
If the budget stabilization factor were not in place, the district could use the funding to address needs such as the aging bus fleet, Hoehn said.
Even though teachers will get raises this year, Re-1 salaries still aren’t as competitive with those of other districts, officials said.
“We have to find a way to give our teachers more money,” board member Sherri Wright said.
Colorado voters passed a law in November’s election that will require the minimum wage to be raised to $12 per hour by 2020. Board member Pete Montaño said that new law will shift wages up for employees at all pay grades in the district, raising district expenditures across the board.
Board President Jack Schuenemeyer said the district is losing employees to other local entities, such as government departments, that offer higher salaries.
Wright and Hoehn noted that the Re-1 district is one of few across the state that has not asked voters for a mill levy override to increase district funding.
If voters were to approve such a measure, it would raise local property taxes to provide more funding for schools. The board has discussed asking voters to approve a mill levy override in this fall’s election.
For the 2017-2018 year, the district’s fund balance is about $6 million, Hoehn said. However, that includes two reserved amounts that cannot be used. The district reserves about $760,000 for TABOR, as well as $1.2 million for a pending court decision involving Kinder Morgan.
The district’s usable fund balance will be about $4 million, Hoehn said. She suggested that the board consider allocating funds to the reserve so the district maintains a healthy fund balance.
The bare minimum for a school district’s fund balance should be about $2.8 million to cover two months of district expenses, she said.
She suggested setting a goal of a $4.2 million fund balance for 2019, which would be about three months of operating expenses.
“There we could say we would be in very good financial shape,” she told the board.
Also at the meeting, school board members voted to retroactively authorize a salary step raise for staff who were in the district in 2009.
Haukeness said the district faced a budget crisis after the Great Recession, and the board froze salaries for three years starting in 2009, meaning no raises were granted to staff members that year.
The board granted the salary raise for the 142 staff members who were employed in the district in 2009 and are still with the district. The financial impact for the raise will be about $112,000, Haukeness said.
The district could only afford to retroactively grant one of the three raises from the time when salaries were frozen, she said.