EAU CLAIRE — A likely byproduct of shutting down schools this spring due to the coronavirus pandemic, the Eau Claire school district is getting a $7.7 million surplus out of its 2019-2020 budget, surpassing school officials’ earlier expectations of $4 to $5 million in savings from the previous school year.
The district saved the most in transportation, salary and fringe benefits costs, said Abby Johnson, executive director of business services, at a Wednesday meeting of the district’s Budget Development Committee.
The district’s expenses during the 2019-20 school year came in at $156.6 million, about $10.5 million less than the school board budgeted for last fall. (The district’s revenues last year were about $2.9 million less than budgeted, which resulted in the $7.7 million surplus.)
When schools closed statewide in mid-March, students were no longer bused to school and didn’t participate in some extracurriculars and sports.
“The big changes came in the contracted services area,” Johnson said, including student busing and substitute teachers filling in for open staff positions.
The district spent about $6 million less than expected on salary and fringe costs last year, and also didn’t fill some vacant positions during the school year, Johnson added.
The $7.7 million surplus could bump the district’s fund balance up to about $35.4 million, Johnson said. That means the fund balance would be sitting at 26.9% — it would be within the district’s preferred range of 25% to 32% for the first time since at least 2014, according to district figures.
“We were concerned about that number getting too low, concerned about how it impacted our credit rating and ability to borrow,” Johnson said. “Our auditors like us to be between 25% and 32%. They’ll also tell you they don’t have many school districts in that percent range.
“The challenge will be to try to maintain (that balance),” she added.
Budget previewed for 2020-21
As of Wednesday, the district is projecting a possible mill rate of $7.76 per $1,000 of equalized value for its 2020-21 budget.
(Homeowners’ exact property taxes are collected based on their property’s assessed value, depending on their municipality, and are not directly calculated using equalized value.)
The district is also projecting a total tax levy of $58.5 million. That tax levy would be about $3.8 million lower than the 2019-20 tax levy, because the district’s state aid is expected to increase this year, Johnson said.
“If state aid goes up, the tax levy goes down,” Johnson said.
The district is anticipating an approximate $165.4 million budget for 2020-21, with a projected $768,000 budget deficit, Johnson said. It would be slightly lower than the district’s initial budget for 2019-20, which was $167.1 million.
Johnson repeatedly emphasized that as of Wednesday, those numbers are only projections, and are expected to change before the school board votes on the final budget at the end of October.
“I know these numbers will change, and I can tell you what we expect will change,” Johnson said.
There’s a “pretty hefty list” of items with price tags still being finalized that could change next year’s budget before the school board’s vote at the end of the month, Johnson warned.
The district is still predicting how many substitute teachers will be needed; making staffing adjustments, as some staffers shift to virtual teaching; predicting various employee pay adjustments; potentially considering a change to the district’s contract with busing company Student Transit; and potentially considering a temporary reduction to student athletic fees.
The district’s revenue is expected to take a slight hit from a few pandemic factors in the 2020-21 school year, Johnson said: It’s reducing its student parking permit fees from $50 to $12.50, a $28,000 loss, and it’s anticipating not being able to sell some school sporting events tickets, a roughly $180,000 loss.
But there’s another funding source in play for next year: The district is receiving just over $1.5 million in funding from the federal CARES Act, which was signed into law in March. School officials are required to categorize how they plan to spend that funding, and the money will be available until September 2022, Johnson said.
“We’re trying to figure out our plan and what we want to use that for, so we can get approval from the DPI,” Johnson said.
The school board is scheduled to vote on the district’s 2020-21 budget on Oct. 26.