With both a building reserve and general fund levy failing at the polls last week, the Ennis School Board is going to have some tough decisions to make in the coming weeks.
“In order for us to get back to the level of last year, we needed to have our levy approved,” said Doug Walsh, Ennis School superintendent. “Since we didn’t, we’re under the assumption that we’re going to be $75,000 short or there abouts.”
The shortfall means the school district is looking at cuts – that could mean everything from programs to field trips to staff.
Complicating matters is the lack of any real clear funding plan from the state as Gov. Brian Schweitzer continues to sit on the state’s budget bill, House Bill 2, and two other accompanying bills that deal with school funding.
On May 3, the Ennis School District asked voters to approve a $103,000 general fund levy, but it was defeated. This levy would have ensured the school district had the same level of funding as last year, no matter what state funding came down.
This leaves the school board in a sticky place, Walsh said. At the Monday school board meeting, the board decided not to approve the rehire of non-tenured teachers. However, the board will meet again next Monday to take up the issue again.
And while the district is anticipating it will be short of funds from the state this year, it does have excess reserves in its general fund.
At the beginning of this fiscal year, Ennis had their maximum amount of regular general fund reserves, which by state law is 10 percent of the general fund, or, in Ennis’ case, about $260,000.
This money is designed to solve cash flow problems for school districts since their fiscal year starts July 1, but property taxes typically don’t come in until November.
Ennis also has excess general fund reserves of about $704,000. This money has come from settled property tax disputes or delinquent tax payments and Ennis has carried an excess general fund reserve balance for the last several years.
However, this past session, the legislature decided to limit how much reserves school districts can hold in the excess reserve accounts, said Lance Melton, executive director of the Montana School Board Association.
The limit established by the legislature is 15 percent in total general fund reserves, this includes the 10 percent in standard general fund reserve accounts, Melton said. If school districts have more than that in reserves next year, that money will go back to the state’s general fund.
However, one kicker to this is the legislature, in Senate Bill 329, (which is still sitting on Schweitzer’s desk unsigned) gave school districts the one-time authority to transfer their excess general fund reserve money to any budgeted account, he said.
This means the Ennis School Board can move that $704,000 in excess general fund reserves to another fund in their budget. But which fund they move it to will determine to a large degree how the money will be spent.
During her campaign for school board, new board member Lisa Frye told people that money should go to pay for teachers so the school wouldn’t have to deal with cutbacks.
“That money can be transferred to the flex fund and can be used for a multitude of things including making up for a shortfall this year,” Frye said.
Doing this would give the teachers at the school confidence and security, she said.
However, the excess general fund money is a one-time deal and using it for ongoing expenses at the school is risky, Walsh said.
“We think it’s better to transfer that someplace else to see what we can use it for without losing it or becoming dependent on it,” he said. “It might go to a building reserve fund, because you can keep that fund and then use it for buildings and other things.”
When the excess general reserve funds began collecting a few years ago due to some protested property taxes, the board at that time voted to save it for capital improvements, Walsh said.
“We want to put it some place where it can help us long term,” he said.
However, putting it in the building reserve fund is too limiting, Frye said. If the money went into the flex fund, the school board would have more ability to spend it on things they need, be it buildings, school supplies or teachers.
“Transferring it to the flex fund could give the teachers the reassurance they need,” she said.
Many school districts in the state don’t have any excess in their general fund, Melton said. But for some districts that do have some excess, they are using it to help backfill their general fund to get them through this rough patch of state funding.
“They might be able to transfer those excess balances over to the flex fund and cover the short fall for a year or two,” he said.
Walsh is working over the budget this week and the school board will take up the issue at their meeting on Monday. He’ll have a much better idea then if the district is going to make any cuts in staff.
Like always, the idea is to make any cuts as far away from students as possible, Walsh said.
“First of all you’re going to look at supplies, travel, field trips. You’re going to look at different programs and that’s about as far as you’re going to go and then you’re going to look at personnel,” he said. “I think the biggest thing is we’re not trying to hurt kids. This is about the kids. We’ve got a solid teaching staff and we want to keep them if we can, but these are tough times.”
The school board meeting will be at 5 p.m. Monday evening.