MOKANE, Mo. - The South Callaway R-2 School District is facing a reduced budget in the coming fiscal year after COVID-19 cutbacks.
"It's absolutely, without question, the most interesting and scary budget since the first one I had here," Superintendent Kevin Hillman said during last week's board of education meeting.
Board members passed the amended budget during the meeting.
Like other area school distructs, including Fulton-58, South Callaway adjusted its Fiscal Year 2021 budget after receiving word the state of Missouri would be withholding hundreds of millions of dollars in education spending due to the economic impact of the ongoing pandemic. FY21 starts July 1.
Hillman said the district estimates it will receive $108,000 less than anticipated. It has also lost its "hold harmless" with the state.
"There are districts in the state that are given 'hold harmless' status for budgeting," he explained. "It means that the state funds can certainly fluctuate but cannot fall below the amount of FY2010. This is in part because of the heavy dependency on local assessment in our district."
South Callaway gets a large percentage of its funding from local property taxes - 85.96 percent, compared to 7.3 percent federal and the rest state - with a huge portion depending on the Callaway Energy Center. The nuclear plant by far the biggest taxpaying entity within the district. The district's hold harmless status helps cushion it against fluctuations in property valuation by ensuring the state doesn't greatly decrease the amount of funds it provides.
For the moment, that cushion is gone.
"Transportation is underfunded greatly, that's going to take a hit," Hillman said. "We're going to feel the impact of this for at least three years."
Hillman pointed out the district has little control over how much money it receives - pretty much all it can do is propose a tax levy increase.
"The big lever we do have control on is how we go about expenses," he said.
One area that's seeing major cutbacks: facility improvements. The district was planning to spend a chunk of change on tuck-pointing, for example; that project will have to wait. But, Hillman pointed out, those projects won't wait forever. The expenses are just getting pushed back a year.
The district also won't be purchasing any buses during this coming fiscal year, though it plans to purchase two in FY22.
"Our fund balances are healthy," Hillman said. "We had $1.6 million sitting in the capital projects fund and (last year) spent just shy of $600,000. We're trying to get it down to $300,000."
The district is facing several COVID-19-related expenses, though $97,200 in CARES Act funds will help cover them. That includes cleaning equipment and infrared thermometers to help monitor student health.
District staff will see a small pay bump: $250 is being added to the base pay, though that's less than Hillman had hoped.
"That raise plus a benefits increase equals an $87,000 increase to our budget that doesn't go away," he said. "A couple hundred bucks (adds up to) a lot of money."
Hillman said the district will not operate at a deficit during FY21 under the budget adopted during last week's meeting.
"I feel strong about our budget," he said. "It's a lot like the other one, but it's ultra-conservative this year."
This article was edited at 2:21 p.m. June 17, 2020, to correct the name of the school district.