LONGMONT — The St. Vrain Valley School District, which was expecting in December to have a $6.3 million deficit on July 1, has worked its way out of the hole and toward a $2.7 million beginning 2003-04 general fund balance.
However, this “surplus” will be short-lived.
During the 2003-04 budget year, which begins July 1, the district also will have to spend $5.5 million to pay back the debt it has accumulated over the last year.
In November, the district revealed it was facing a multimillion-dollar deficit and decided to strike a deal with state Treasurer Mike Coffman to secure state loans.
At the end of the 2003-04 budget year — June 30, 2004 — the district expects to be free of debt, with ending balances of $0 for each of its 14 funds.
“We will be at $0,” echoed Joanne Harbert, the district’s director of finance, after the school board adopted a final version of the 2003-04 budget Wednesday night during its regular meeting.
According to Chief Financial Officer Mark Pillmore, in order to reach the $2.7 million beginning general fund balance, the district utilized three options: forward-purchase agreements, the state’s recently enacted lease-purchase agreement and reduced district spending.
Earlier this year, the board decided to sell $96.2 million in voter-approved bonds. In the past, when the district has received bond money, it has invested it into an account with Wells Fargo Bank and collected interest periodically.
On April 21, the district decided to enter into what are known as forward-purchase agreements. These agreements basically allow the district to receive advanced, one-time interest payments on invested bond money.
So instead of receiving interest payments on the $96.2 million each year for about 12 years, the district decided to receive the full interest payment up front.
On Wednesday, Pillmore announced the district would receive about $3.98 million from the agreement. In April, the board was anticipating only about $2.1 million.
Some of this $3.98 million has also gone to help the district reach its 2 percent, or $2.3 million, contingency reserve goal, Harbert said.
Before June 30, the district also plans to take advantage of the state’s recently enacted lease-purchase agreement measure, Pillmore said. This measure allows school districts facing budget deficits to sell property, deposit the cash into their operating accounts, and regain ownership of the property through a lease-purchase agreement.
The district will use this agreement to pay back the $5.08 million debt collected from the state’s interest-free loan program. But over the coming budget year, it will have to pay the state $5.08 million to regain ownership of its property, Harbert said.
Since the money from the agreement would be deposited in the current 2002-03 budget and paid back in the 2003-04 budget year, a portion of this extra money helped raise the beginning fund balance to $2.7 million for next year, Harbert said.
Staffing cutbacks, a hiring freeze, “careful” spending and energy conservation also have helped the district save more than it anticipated in December, Pillmore said.
During the next budget year, the district expects to make and spend $297.7 million. The general fund makes up about $118.6 million of the total.
Before approving the 2003-04 budget, board member Sandi Searls laughed nervously.
“I guess it makes me nervous having gone through this before,” Searls said in reference to the 2002-03 budget, which revealed a $13.8 million deficit.
Also Wednesday, the board appointed Paige Gordon as principal of Elementary 22 when it opens next fall. Gordon recently taught fifth grade at Eagle Crest Elementary.
Elementary 22 will be north of 17th Avenue near Red Cloud Road in Longmont. The new school is expected to open in August 2004.
Kendra Fish can be reached at 303-776-2244, Ext. 211, or by e-mail at firstname.lastname@example.org.