$100,000 short, still: Rangely schools plan to dip into reserve again

RANGELY I Even with additional budget cuts, and projecting a possible slight increase in state funding, the Rangely School District is still facing a $100,000 shortfall.
That means the district may have to dip into its reserve fund again — a pattern the Rangely School Board is hoping to discontinue.
“We’re looking at using reserves for one more year,” said outgoing Superintendent Dwayne Newman, who has accepted a similar position in Monte Vista. “Right now, it looks like the district will have a budget where they will have to spend down the fund balance by about $100,000 next year.”
In order to make up the shortfall, the board is considering asking voters to approve a mill levy override.
“It’s likely it would be pennies a year for the average homeowner, but (the district) could increase yearly operating revenue by about $260,000, which would not only take care of operating revenue needs, but let them build a fund balance,” Newman said.
If the board decides to seek a mill levy increase, the issue would be put on the ballot in November, Newman said.
“I’m encouraging them to see if they have the support for an override, so they could start building that (revenue) cushion,” Newman said. “The bond money ($15 million approved by voters last November for building improvements) cannot be used for day-to-day operations of the district. (That money) is for capital projects only.”
With the cost-cutting steps the board has taken, plus the possibility of increased revenue with a mill levy override, Newman hopes the district can avoid reductions in the number of teachers.
“We need to sit back and wait and see what the actual savings are from the building closure (of Parkview Elementary) and the consolidation (of the middle school and high school) mean to the bottom line of the budget,” Newman said. “But the district still has a cash flow problem. They need to find ways to get more yearly operating revenue to maintain programs at the level they are now.
“If not, they would have to look at significant cuts … if you equate that to personnel, that’s two teaching positions. When you talk about a district that’s already cut down to what I consider bare-minimum staffing, two teachers would be a major change at how we deliver education.”
The board will also take the next year to study other budget-cutting options, including the possibility of going to a four-day school week and eliminating some after-school activities, such as soccer and baseball.
At a budget meeting May 18, the board began the session with a $270,000 deficit. By the end of the night, the board had trimmed the shortfall to $100,000.
Focusing its attention on making budget cuts, even painful ones, the board decided to eliminate in-town bus routes as well as bus transportation for preschool and kindergarten students.
“There are certainly some folks who will be impacted,” Newman said. “We may see some kids who don’t show up for preschool because of that.”
Kari Way, director of Giant Step Preschool, told the board she has 13 students who would be affected by the elimination of bus transportation.
Using a third party to transport schoolchildren was discussed, but the board dismissed that option.
“There was discussion about a private person using district vehicles, but we couldn’t do that,” Newman said. “Essentially then, they would be running a bus route for us. You’d have to license that person and drug test them, all of the things we do with our regular drivers.”
Newman said the district expects to save about $30,000 a year with the elimination of the bus routes, factoring in expenses such as fuel costs, driver time and wear and tear on vehicles.
The biggest budget savings came from the board’s decision to not pay a $94,000 increase in employee health insurance premiums. Instead, the board decided to do what Newman said some other school districts, including Craig, are doing, which is use a partially self-funded plan for employee insurance.
“You pay a premium to the insurance company, then the district buys some insurance directly,” Newman said. “It’s called re-insuring your risk. You buy it from another insurance carrier.
“You have the insurance administrative unit run the paperwork, but the bills get paid directly by the district,” Newman continued. “You buy this reinsurance out of what you would save, and pocket the rest. It (the savings), basically, goes into its own fund. The district can then use the interest to help offset the cost of an increase in future years.”
Employee salaries and benefits total about 85 percent of the school district’s total budget, Newman said, with insurance accounting for about 20 percent of that number.
“We pay over $800,000 a year in health insurance on our employees,” Newman said. “The good thing through these (self-insured) plans, the benefits for the employees don’t change. They don’t end up having to pay higher co-pays or higher deductibles.”
In another cost-cutting move, the board decided to decrease the budget spent on drug testing for athletes by $8,000.
“That will still leave some money in the budget to do drug testing; we’ll just do it a different way,” Newman said. “At this point, we test every athlete at the beginning of the season, and then we test randomly after that. We’re looking at just testing randomly. That would cut down on the expense dramatically.”
In another budget-related issue, Newman said the board “remained committed to giving staff the step raises for next year.”
The board also wants to clear up some comp time issues.
“There are a number of employees who have been accruing comp time,” Newman said. “The board will look at a number in June to settle all that and get back to zero, so there’s not this large amount owed that crops up and needs to be paid out every few years.”
With the closing of the elementary building and the consolidation of the middle school and high school, teachers and staff have been packing up for the move.
The district’s administrative and Board of Cooperative Educational Services offices will move temporarily, for the summer, into the former grade school.
“Then this summer (the board) will have further conversation where to house those offices permanently,” Newman said. “The only thing remaining is to complete the kitchen at the new elementary school, and contractors are telling us they can have that ready by the end of the summer. Then they could completely vacate Parkview.”
Asked about the district’s plans for the former grade-school building, Newman said, “They’ll either find another entity that would want to take it over, or get started on demolition, if that was the choice.”