LONGMONT — After scrounging for options since November, the St. Vrain Valley School District is anticipating it will have enough in Taxpayer’s Bill of Rights reserves by June 30, the required deadline.
Also, by June 30, the district is planning to pay off its entire amount in interest-free debt owed to the state under a recently enacted law.
District officials made these announcements while
presenting the proposed 2003-04 fiscal year budget at Wednesday night’s school board meeting.
In November, the district revealed it was facing a $13.8 million shortfall. Because of this, the district had to sign a financial-recovery plan with state Treasurer Mike Coffman in order to secure interest-free loans from the state. The bulk of these loans went toward employee paychecks.
In order for the district to receive the loans, it had to agree to salary cuts, administrative staff layoffs and district program adjustments.
According to the 2003-04 budget proposal, which reflects these cuts, the district will pull in about $117.9 million in general fund revenue and spend about $115.5 million, leaving about $2.4 million for unexpected charges during the year.
However, TABOR requirements call for a 3 percent additional reserve in seven of the district’s 14 funds. Three of the seven do not have a TABOR reserve at this time.
To meet the June 30 TABOR reserve deadline, the general fund needs $3.46 million, the capital reserve fund needs $141,168 and risk management needs $55,301.
To come up with the combined $3.66 million in TABOR reserves, the school board will allow the district to receive about $2.2 million, or 60 percent, in cash recently released from two self-insurance pools and about $1.5 million, or 40 percent, in undeveloped land.
“We need that 60 percent in cash on hand for emergency purposes,” said Joanne Harbert, the district’s director of finance.
According to a recent opinion by state Attorney General Ken Salazar, a government entity can use the appraised value of undeveloped real estate to satisfy a percentage of the TABOR reserve.
The district has decided to use undeveloped land appraised at $2.77 million, which is located just west of South Sherman Street and south of Kansas Avenue to satisfy 40 percent, or $1.5 million, of the reserve requirement.
On April 23, Gov. Bill Owens signed a bill, proposed by Sen. Ron Tupa and Rep. Jack Pommer, that allows school districts to sell property and deposit the proceeds into its general fund.
“We basically sell some property to the state treasurer,” Harbert said. “We get the money to pay off the loan, and he gives us a chance to buy the building back.”
On Wednesday night, the board decided it would allow the district to begin considering what property it could sell in order to come up with the $5.08 million needed to repay state loans.
According to the law, the district would be able to regain ownership of the property by making payments during a one-year lease-purchase agreement with the buyer, who could be either Coffman, a private financial institution or another private lessor.
Tupa and Pommer, both Boulder Democrats, crafted the bill with Coffman’s assistance to help St. Vrain avoid violating a state law that prohibits a district to enter multiyear debt obligations without voter approval.
District administrators did not indicate which properties could be sold but said they are looking at the Career Development Center building.
If the CDC is sold, the district would still be able to use the facility as it normally would.
Kendra Fish can be reached at 303-776-2244, Ext. 211, or by e-mail at email@example.com.