Summit school board discusses funding shortfalls for 2020-21 and beyond
How much the district dips into reserves depends on possible CARES Act money
DILLON — Gov. Jared Polis allocated $2 million from the federal CARES Act to Summit School District, but uncertainties linger about whether the district will be able to use the coronavirus relief money to help with its general fund.
At Thursday’s virtual board of education meeting, district Chief Financial Officer Kara Drake presented the latest proposed district budget for the 2020-21 school year. Drake qualified that her proposed budget would change significantly if the $510 million Polis allocated to public schools across the state can be spent by schools at their discretion — namely to ease the projected financial burden for next year due to the novel coronavirus pandemic’s economic effect.
“I think the hope among legislators is that those funds can be used to backfill that loss in school funding,” Drake said to the school board. “But at this time, that is not really what’s approved from the federal level.”
Drake said state legislators are applying for federal waivers so the CARES Act funding can make up for all but 11%, or $66 million, of the $576 million the state is forecasting as its net reduction in funding to statewide programming for next school year.
If Summit can use its portion of the $510 million at the district’s discretion, that would ease the district’s need to tap into its reserves by nearly half to make up for the decrease in funding Drake forecasts. As of Thursday, that decrease, without an allotment from those CARES Act funds, would be 7.5%.
Without the CARES Act money, Drake showed the board members the district would make up for that decrease in funding by spending down its reserves in 2020-21 by $4.3 million, leaving $6.9 in reserves — a reduction of 38%. Drake said if the state permits Summit to use the money on the general fund, that would help in the amount of $2 million
“Then the spend down of reserves would only be $2.3 million,” Drake said. “So that’s the really big unknown right now. And I’ve been watching and reading all of the latest information that the (Colorado Department of Education) has been putting out on a regular basis, and they don’t have clear guidance on those additional funds yet.”
There was some conversation among board members about the hit to reserves, but board Treasurer Chris Alleman said although that may cause anxiety, “in actuality that is what reserves are for.”
Click here to listen to Thursday’s Summit School District Board of Education meeting, including the discussion surrounding next year’s budget, which begins at the 1 hour, 48-minute mark.
Drake’s forecast also included a $320,000 hit, down to $80,000, in interest revenue from a district bond fund. Board Secretary Gini Bradley asked whether the board could look into refinancing the bond fund and borrow back, similar to a mortgage, to help with the general fund hit. Drake said they couldn’t, as money from that kind of refinance could be used only for projects like a capital project.
“… There are not a lot of quick solutions for this budget,” Alleman said. “I think we all agree it will be next year’s budget when we have time to meet with different stakeholder groups. Next year, will be really tough conversations we will have to have, especially if state budget continues to fall the way it is. I agree it’s not the best-case scenario. … Next year, know there’s going to be a lot of real heavy, hard conversations we are going to have to have with our district and the community.”
Other budget details that were discussed include the outstanding variable of a state school finance act being discussed in the Colorado Legislature that could help with the district’s reduction to its program funding. Drake also said the district asked schools and departments to tighten their belts, which they all did by about 10%, with the majority of those reductions coming in conferences and travel.
Drake said the Summit district will get $170,000 from the CARES Act through the state Department of Education’s Title 1 allocation but that it has “very strict guidelines” on how it can be used.
“The uses are basically all response-related to COVID,” Drake said. “So cleaning supplies, professional development for teachers, technology for remote learning, tutoring and extra support for kids to catch them up. Those are all approved uses with these funds. But the funds, they are very clear, cannot be used to backfill lost revenue.”
Support Local Journalism
Support Local Journalism
As a Summit Daily News reader, you make our work possible.
Now more than ever, your financial support is critical to help us keep our communities informed about the evolving coronavirus pandemic and the impact it is having on our residents and businesses. Every contribution, no matter the size, will make a difference.
Your donation will be used exclusively to support quality, local journalism.
Start a dialogue, stay on topic and be civil.
If you don't follow the rules, your comment may be deleted.
User Legend: Moderator Trusted User
As the Summit School District prepares for all online instruction, adults are focusing their attention on the health and well-being of the students.