Q&A: Rangely DISTRICT’S annual budget

RANGELY — Rangely School District RE-4 is starting to formulate its 2009-2010 budget. As part of that process there have been a number of questions related to the budget and the recent bond passage. Below are the most commonly asked questions and responses from the district.

  • Why did the district go for a bond that included renovating Parkview if they knew that it was going to be closed?

The board has not made any decisions on a building closure at this point. When the facilities’ needs assessments were done in the fall of 2007 and the spring of 2008, the economic situation was quite different. Oil was near $100 per barrel and it looked like the district had a good chance of a significant increase in our student population. Even when the final bond language was being written the student number projections were over twice what the district ended up gaining. If those numbers had been a new trend for the district, renovating Parkview would have made sense. The three buildings in the district have a total capacity for more than 1,100 students, but only 464 are enrolled at this year. The high school and middle school have room for 760 students. Reviewing the efficiency of all operations makes sense at this point, before large amounts of bond money are expended.

  • Why is the budget a problem? The bond money should provide more than enough revenue for the district’s needs.

The bond money can only be used to pay for materials and equipment. It cannot be used to fund the district’s ongoing operating costs. That means the bond cannot pay for things like salaries, day-to-day transportation and maintenance or utilities. These things make up the largest portion of the district’s overall budget.

  • If the bond money cannot be used for the day-to-day operating costs of the district, why is the district dealing with this issue now instead of before the election?

The district has been spending down fund balance for the last several years. This is public record and was known to everyone who followed the district’s finances. Maintaining small class sizes, the number of elective classes offered, student activities and athletics, and reasonably competitive compensation are examples of ongoing costs to the district. To maintain the same level of all these things, and in an intentional effort to try to improve achievement, the district made the decision to spend out of the fund balance reserves. (There were also some uncontrollable cost increases in the form of higher insurance premiums and unexpected maintenance needs.) When the economy was in a different situation, the district had a reasonable expectation that the revenues (money coming in) would increase to eventually offset the funds being spent out of reserves. In the current situation, it makes sense to re-evaluate. The district has additional reserves, and could continue to spend them, but would only delay facing some complex and difficult choices.

  • What are the options for the district’s budget?

One option would be to continue to spend reserves, but again, that would only delay dealing with the situation. Parkview could be renovated, and the district could operate for a year or two using reserves to backfill the yearly revenue gap. But after that the reserves would be at a place where the district would have few options to fix the situation.
A second option is to spend some reserves and try to find ways to save some money. This will work for a few years, but again, there is a limit on the reserves available to the district.
Option three is to make some significant changes in district operations now, and try to formulate a balanced budget and operations plan that the district can sustain for years into the future. And at the same time keep the existing reserves for emergency situations.

  • Why is the district considering such large changes? Why not look for a lot of small savings that would allow things to pretty much stay the same?

Certainly the district is looking for savings everywhere. School district expenses generally fall into three broad categories; salaries and benefits (85 percent); utilities and maintenance (10 percent) and instructional supplies and materials (5 percent). The funding gap is in the range of $300,000-$400,000. Even if the district bought absolutely no instructional supplies and materials, the savings would not cover the gap.
n What specific options are being looked at by the district?
Everything is on the table at this point. At the budget workshop held in January, the participants made a list of priorities and areas to investigate in the search for significant savings. That list included athletics, transportation, salaries and benefits, maintenance, food service, contracted services and facilities.
The district’s budgetary priorities are:
1. Academic achievement.
2. Staff retention and recruiting.
3. Budget should be driven by student needs, and focus on including all students.
4. Expenditures should have a direct connection to the students’ needs, and be within our stated mission and vision.
5. Every facet of the district operations should be examined for efficiency, including facility capacity and use.
6. The budget should address the public’s perception of how athletics are operated within the district.
The district is encouraging input on this whole process. There have been suggestions of going to a four-day school week to save on transportation and food service costs. There was even a unique idea brought up in the last board meeting about a possible way to fund the district’s facilities costs. All suggestions are being looked at and analyzed.

  • What’s next?

The administration is working to provide information to the board as quickly as possible. The board will then make a determination about the actions they feel are necessary to formulate a budget that will work now, and be sustainable in the future.
There will be more information supplied to the community, and certainly the district will give the community multiple opportunities for comment and suggestions before any final decisions are made.