District Underspends Budget By $4.6 Million

Cutting back on spending for supplies, fuel, extra manpower and a host of other things, the Rapid City Area Schools finished $4.6 million under budget for the 2008-2009 school year according to the District’s recently released annual report. These cuts to General Fund spending came on top of Board approved cuts that took place in the spring of 2008. With these savings, the District began the current 2009-2010 school year in a much more stable financial condition than had been predicted in the spring of 2008.

The Rapid City Area Schools grabbed headlines and packed nearly 1,000 people into the Central High School gymnasium in the spring of 2008 when the District announced that it would have to cut several million dollars from its budget. During public hearings and regular board sessions, the Board debated cuts to library staff, elementary band, custodial services and other programs. Additional cuts included the elimination of the Virtual High School program as well as several administrative positions. Although the Board approved cuts totaling nearly $2.2 million, the adopted budget was expected to reduce the District’s reserve or savings account to a level far below what auditors had recommended.

Without fanfare or public notice, however, over the course of the school year, administrators and staff cut an additional $4.6 million from the budget in an effort to stabilize the District’s financial position. The savings came from virtually every program covered by the District’s General Fund. In elementary instruction, for example, the District underspent its budget by $397,000 by eliminating extra duty for teachers, reducing the number of temporary teachers, noon duty supervisors and saving $84,000 on supplies. Middle school and senior high school administrators reduced spending by nearly $610,000 by adopting similar strategies.

Following the wishes of the Board and the suggestions of many members of the public, the Administration focused especially on cuts furthest from students. In Support Services, the District saved nearly $520,600 by reducing custodial services and building upkeep. Another $215,000 in expenses were avoided as prices fell and the District conserved on fuel, natural gas and electricity.

Across the District, employees cut back on supplies, with many departments spending only 50 to 60 percent of their usual budgets. Even the Board of Education pitched in. Underspending for Board travel, consulting, advertising and supplies resulted in a 10.6 percent savings compared to the original budget.

In fact, the overall effort to reduce spending was so pervasive that only a few programs failed to fall in line. Notably, high school athletics and activities came in over budget. Male athletics at Central and Stevens were over by 35 and 25 percent respectively. Female athletics at Central and Stevens overspent their budgets by 36.5 and 12.1 percents. Non-athletic extracurricular activities, for the most part, also ended the year over budget.

With the $4.6 million in additional savings, the District was able to end the fiscal year with $9.15 million in its reserve account or, in the language of school administrators, an 11.01 percent fund balance. At this level, the District is close to reaching its goal of having an auditor-recommended minimum fund balance of 12 percent to cover periods of time between tax collections when cash flows run low.

As the District begins the budget process for the 2010-2011 school year, the economic environment is not looking good. State tax collections have been hurt by the economy and legislators told school district officials this week that schools are unlikely to see much more than a 1 percent increase in state aid to education next year. Nevertheless, last year’s nearly heroic efforts by administrators and staff to hold the line on spending have averted a crisis for the moment and given some hope to students, parents and employees who feared another round of major budget cuts next year.

A copy of the District’s 2009 Annual Report is available here. (Warning: this file is 27 megabytes. Try right-clicking and saving the file if you have problems opening it.) The budget situation may also be affected by ongoing contract negotiations between teachers and the District. For an update on these negotiations, see Kayla Gahagan’s article in the Rapid City Journal.

Federal Funds Request Will Exceed $9.8 Million

Administrators will ask the school board to approve the District’s application for $9,820,854 in federal funds at the board meeting on Thursday, June 18. This year’s grant application is the largest ever and hopes to tap some of the stimulus funds made available by Congress and President Obama.

Given the state of the economy and recent budget cuts locally, this federal money will play a larger role in the District’s general fund budget next year than ever before. If the application is funded, federal dollars would account for nearly one in eight dollars spent by the District from its general fund in 2009-2010. 

The increasing importance of federal money follows a trend that has been ongoing for the last five years. In 2004-2005, the District received $7.67 million for operations from Uncle Sam. If approved, this year’s grant would cap a five-year rise that has seen federal funding grow from 11.1 percent of the general fund budget in 2004-2005 to nearly 12.5 percent in 2009-2010.

Board Agenda Highlights

• 2009-2010 budget update
• contract approvals for Western Dakota Tech bargaining groups
• contract approval for food service employees
• Board of Education legislative resolutions  including requests that the Legislature: allow cities to enact a 1 cent sales tax to support local schools; provide enhancements to the education funding formula to take effect after the federal stimulus money runs out, provide additional funding for technical education, and provide additional funding to meet the needs of students enrolled as a result of a court order.

The biggest share of the District’s federal funds come under the provisions of Title I of the Elementary and Secondary Education Act. Passed originally in 1965, this act has been amended many times. In 2001, it was relabeled the No Child Left Behind Act.

Title 1 funds can be used to provide supplementary educational services to schools with high percentages of students whose family incomes are below the poverty level. For next year, these schools include Black Hawk, Canyon Lake, General Beadle, Horace Mann, Knollwood, Rapid Valley, South Park and Valley View elementary schools, as well as North Middle School. Supplementary educational services can include instructional services for reading and math, professional development and support for parental involvement.

Although Title I dollars come from Uncle Sam (or more accurately those of us who pay federal taxes), the money is actually awarded to the Rapid City Area Schools and other districts by the state Department of Education. According to Lisa Plumb, who oversees federal grants for the District, the award is generally made in August shortly before school starts.

This year, Plumb says, administrators have been particularly challenged to identify effective ways to spend an expected $3 million in one-time federal stimulus funds without creating expectations for continued operational funding in future years. “We have looked particularly at technology purchases,” Plumb says, “like Promethean boards in the classroom.”

The Administration has cautioned the Board that increased federal funding has come with higher expectations for reporting and accountability for student success. “Moreover, the district must use the grant monies to supplement, not supplant local monies,” the Administration’s memo concludes. In other words, board members, legislators and taxpayers shouldn’t look to the federal government to solve Rapid City’s educational funding issue. If local and state dollars don’t keep pace with federal funding, Uncle Sam’s dollars may not be forthcoming at the same level in the future.

Judge Rules Against Schools in Funding Lawsuit

Judge Lori Wilbur today rejected the arguments of students and parents who sought to force the State to provide more funding to education in South Dakota. Rapid City was one of the districts in question in the lawsuit. In her decision, Wilbur essentially accepts the State’s argument that Rapid City’s budget problems over the last ten years are a product of declining enrollments and a reflection of the district’s own spending priorities. She also accepts the State’s implication that some of Rapid City’s problems result from poor decision-making by the administration and the board.  

The plaintiffs in the case may choose to appeal the decision and, no doubt, some legislators will feel vindicated. Students, parents and teachers in Rapid City, however, will find no remedy for the frustrations they feel. Teacher work loads continue to increase, diminishing the ability of teachers to forge strong connections with individual students. Drop out rates remain high and graduation rates comparatively low. Meanwhile, student achievement for advanced students continues to fall.

When the lawsuit was filed, many people, including Governor Rounds, argued that education funding issues didn’t belong in the courts. Clearly, those of us who believe we have a moral obligation and an inherent self-interest in doing more for our children need to continue to make our case in the most important court in South Dakota – the court of public opinion.

To read Chet Brokaw’s full story, check out Education Week at http://www.edweek.org/ew/articles/2009/04/08/261150bcsdschoolfundinglawsuit_ap.html