Moffat County School District Board of Education members have less than a month to make a decision that could affect students five years down the road.
School officials are projecting declining enrollment and flat revenues that will put them about $3 million below where they want to be in 2008 if spending continues to increase 2 percent a year. Bottom line, the district's fund balance would drop from $6.6 million to $1.6 million.
"That's not a very healthy fund balance, especially considering where we've come from," said Mike Brinks, the district's finance director.
One problem is that a fund balance that low would require the district to borrow money from the state to pay bills until certain revenues came in.
The school district is starting its budget process for the 2005 year, and Superintendent Pete Bergmann warns that the numbers are "very preliminary and very tentative."
He calls this stage "the pregame."
The district is anticipating $16,735,550 in revenues this year and $17.302,920 in expenditures, which Bergmann said they're on target to meet. School Board members agreed to dip into reserves this year to finance several much-needed capital projects.
Revenues are expected to drop by more $300,000 for the next school year -- attributed in part to a projected loss of 49 students.
"That's an $80,000 decline in state funding for next year if our projections are any good, and at this point, they're about as accurate as we can get," Brinks said.
To maintain a fund balance that would keep the district from borrowing from the state, the budget would have to remain flat. Even then, the district would fall below the required $4.5 million fund balance in 2007.
"The most variable thing we're facing now is student enrollment," Bergmann said. "We have been losing kids."
The majority of the school's budget comes from per-pupil funding, which was $5,627 a student this year and will increase to $5,711 next year.
The school district had 2,336.6 students this year and projects to have 2,145.5 by the 2009 school year.
Small increases in state funding aren't making up for the loss of students Bergmann said.
He has asked the School Board to consider how it wants to spend money for the next year and to give some indication as to whether members would support a budget that grows 2 percent, 1 percent or stays flat.
"I don't believe it's unrealistic to deal with a 0 percent increase in our expenditures because of declining enrollment and natural attrition," Bergmann said.
Administrative officials are gathering a "wish list" of expenditures, which they will put onto a spreadsheet.
When it is determined how much the district will spend next year, they will start whittling away at that wish list.
The school board will discuss its spending priorities and limits at its February meeting.
Christina M. Currie can be reached at 824-7031, ext. 210, or firstname.lastname@example.org.