School board accepts preliminary budget

The Hot Springs County School Board unanimously accepted a preliminary budget on April 21 as required by state statute, with school district business manager Chauncy Johnson pointing out, “It’s not something you have to approve, but you do need to accept a preliminary budget for the district.”

Johnson bookended his summary of the preliminary budget with cautions that “these numbers are very preliminary,” as he outlined the district’s revenue projection of $11,166,515 for the 2022-23 school year, and proposed that the board accept that amount as the district’s fiscal year 2023 budget.

According to Johnson, for funding purposes, the district’s Average Daily Membership (ADM) of enrolled students is calculated using either a three-year rolling average or the most recent ADM report for the prior year, whichever is higher.

“Right now, the ADM is 651.856,” Johnson said. “The 2021-22 ADM rolling average was 649.903, so this is up a little bit. The most recent ADM report indicated 661 students. I’m hoping that this number will continue to be up, because that’s advantageous to the district.

The budget would go up to the tune of about $170,000, and I try to be pretty conservative with our numbers.”

Johnson identified key funding items for fiscal year 2022-23 as including the legislature adding an Energy Cost Adjustment (ECA) for utilities.

“This increase is approximately $40,000 to the district, so it’s not a huge amount,” Johnson said. “But with the increases in costs for electricity, natural gas and fuel prices, anything we can get to add to that with inflation is a great thing.”

Johnson reported that federal funding for COVID-19 is projected at $3.3 million, and the district hasn’t “tapped into SR3 funds, as we’re still spending down SR2 funds, and in the coming year or two, we’ll have this $3.3 million available, although it’s restricted to specific things under the American Rescue Plan.”

While Johnson did not include the $3.3 million in the approximately $11 million preliminary budget, since its funding needs to be committed by this September, he confidently predicted local revenues for the district would either stabilize or continue to increase, due to increased production in the community’s mineral extraction industries, plus higher projections for property tax revenue as enough people move into the community to drive the prices of its property up.

Johnson elaborated on how the $3.3 million would be used over the next two fiscal years, “or the next full fiscal year, and part of fiscal year 2024,” for learning loss intervention initiatives.

Although Johnson acknowledged that the district has been “overspending what was budgeted during this fiscal year, to the tune of about $300,000,” he was able to confirm for board trustee Clay Van Antwerp that those funds are reimbursable, and “that $300,000 we’ve spent, above and beyond what was budgeted for this year, will come back to us in fiscal year 2023,” as Johnson conducts “final tune-ups” closer to the end of the year.

“I believe you will see this budget increase as a result of those reimbursables,” Johnson said. “I don’t know exactly where they’re going to land at the moment.”

When board clerk Joe Martinez wondered aloud whether a legislature cap was still in place, Johnson noted its relatively recent repeal, as district superintendent Dustin Hunt pointed out, “Several districts had a huge expenditure, well over what even their general funds could handle based on that cap, so they pulled that back because it could be catastrophic to certain small districts.”