Despite impact of decreased enrollment school district won’t seek levy

The Whitefish School District will not be adding a levy to the school election ballot this spring despite a decrease in enrollment having an impact on the budget numbers.

During the current school year, the elementary district’s enrollment decreased by 52 students while the high school enrollment stayed nearly the same as last year.

District Business Director Lucie Shea said that although enrollment is down an inflationary increase of 1.5% approved during the 2021 Montana legislative session, and a relief in certain budget areas from the federal government’s coronavirus relief fund packages resulted in the district’s ability to balance the budget without a voted levy.

“We have sharpened our pencils even more than before and we concluded that we can balance the budget without running the usual general fund operating levy,” she told the school board on March 9. “Now we decided to go that route for several reasons; one, we’re still in uncertain times, we don’t know how the community will feel about it. Two, we believe that a balanced budget that doesn’t require an operating levy is a good message to the community about our approach to raising taxes… and three, all the additional monies that we got from the federal government for COVID.”

State funding for schools is determined partially by enrollment.

Even with the inflationary increase, the elementary district budget is still expected to be short about $100,000 from the previous year. The high school district, however, increased by almost $200,900 which more than made up for the decrease in the elementary enrollment. The total general fund across both elementary and high school districts is expected to be about $15.1 million, which is an increase of about $100,800 in the budget from the 2020-21 school year.

Shea says the ability to balance the general fund budget without a voted levy was due to both the inflationary increases and the extra money acquired through the coronavirus relief funding from the CARES Act and other stimulus packages.

The money from the coronavirus relief funds cannot be used to make up a shortfall in the general fund and must be spent on issues related to COVID-19, Shea said. However, these funds were able to be used to pay for staff sick time, substitute teachers, remote learning, some maintenance costs related to cleaning and disinfection and other various categories. Using the relief funding in these categories freed up some money to be reallocated to different budget lines which in turn helped make up for a potential shortfall in the general fund budget.

“Even though a lot of those monies were spent on additional things we needed, or additional sick time or technology, still some of it helped us in the general fund and we still have some savings,” Shea explained.

Although the district will not ask for a voter-approved levy, the board did approve a permissive levy which will not appear on the ballot. The only increase from that will be in the building reserve fund levy and it will have minimal impact on taxpayers, the district notes.

In the building reserve fund levy, the board approved a $3,800 increase in the elementary district and a $5,400 increase in the high school. Combined, that works out to an annual impact of 38 cents for a home with a taxable value of $200,000 and 80 cents for a home valued at $500,000.

This is the maximum amount that the district can levy in this fund and is predetermined by the state.

“This is something that is funded by a state formula and we’re allowed to increase it by a very small dollar amount every year,” Shea told the board. “I say we go for it because it's a great operations, maintenance and facilities reserve fund.”

The building reserve fund pays for all kinds of maintenance and repair projects from replacing roofs to fixing gutters to installing a new boiler among other maintenance needs.

The building reserve levy is important for building maintenance funding as the city’s payment to the school district from the city tax increment finance fund sunsetted last year.

Through an agreement between the school district and the City of Whitefish, the city's tax increment finance district had been providing funds back to the school district until the TIF district ended in 2020. From the beginning of the TIF district in 1987 until it ended last year, a total of $12.5 million went directly to the district based upon the tax value of the residential property in the district.

Shea said in the last fiscal year the school district received over $1 million in TIF funds.

“The reason why we feel we need every single dollar and cent in that building reserve fund is that our tax increment money from the City of Whitefish expired in 2020 after 30 years,” she explained. “Now that is going away, so that’s why we feel that the increase in the building reserve levy is necessary.”

Shea told the school board that the district has around $750,000 in that fund as of this month.

In the board meeting Shea also proposed that, due to the ongoing public health concern caused by COVID-19, the school board trustee election be held by mail this year.

The school board approved these measures in the March business meeting and the mail-in ballot for the May 4 election will only include voting on the trustee election.

The school board will approve the final budget for the 2021-22 school year this summer.