Budget challenge projected for Cd'A schools

COEUR d’ALENE — Public school officials in Coeur d’Alene are looking for ways to stabilize a budget that has been balanced in recent years using quick fixes the district’s business manager says are not sustainable.

But the news is not cause for alarm, said Superintendent Stan Olson on Friday, during a mid-year budget workshop at the district’s Midtown Center.

“We’re going to have to sharpen our cutting knives a bit, or we’ll have to look at the overall budget to do some repositioning in the next budget to get us stable again,” Olson said.

Katie Ebner, the district’s business manager and treasurer, went over changes in revenues and expenditures that are projected to leave the district in the red for 2018.

The total anticipated deficit of $820,000 will likely be covered by a transfer of $350,000 into the district’s general operating fund from special funds outside the general fund, and by taking $470,000 from the district’s contingency fund.

“We should not be resolving a budget issue with one-time funds,” Ebner said, of using transfers from special funds to patch holes in a general fund that according to Ebner, represents $72 million in expenditures.

There is also a strong desire, Ebner said, to avoid using fund balance contingency money to cover deficits in future years, because the practice depletes the district’s reserves.

The beginning fund balance for 2018 is $4.5 million. The board has a policy that states the district must have 5 percent of prior year budgeted revenues ($3.4 million) in the fund balance, leaving $1.1 million the board can use to cover the deficit before violating its policy.

The special funds outside the general operating fund hold money associated with federal programs like Medicaid and forest funds. Money from school district enterprises like School Plus, the district’s tuition-based child care program, are also held in special funds.

But there are fewer one-time dollars in these special funds this year because the district administration transferred $817,212 from those special funds to balance the budget in 2017. That year, there was a $600,000 deficit.

The 2018 deficit is due mainly, Ebner said, to increased expenses from changes in staffing costs, including a 2 percent pay raise for all employees that was agreed to during teacher contract negotiations last summer.

“Our folks deserve raises. They have earned raises,” said Olson during the workshop.

The district’s revenues have also diminished, Ebner said, because the district is receiving less state revenue than projected based on the average daily attendance formula.

Ebner said the $470,000 deficit left after the $350,000 is transferred into the general fund represents less than 1 percent of the district’s general fund expenditures.

“It just shows that we live close to the margins, and those big numbers, as it relates to the rest of our budget, is a very small sliver of the pie,” Ebner said.

School board chair Casey Morrisroe said the transfers were made into the general fund after the board called for zero deficit spending.

School officials are discussing having better disclosure of these fund transfers going forward, Morrisroe said.

He said he feels there should be more awareness of the practice and an opportunity for the board to weigh in if the district administration feels it necessary to use transfers to address a budget deficit.