More high school classrooms. A fieldhouse. A middle school expansion.
That wish list to serve a growing student population would be funded by the state in a perfect world for Teton County School District No. 1 administrators.
But decreases in mineral royalties, which have stretched budgets and tightened state purse strings, have made funding for capital construction uncertain, leaving school districts to consider other ways to pay for such projects.
“As that has been on the horizon, a lot of the school districts have started saying, ‘Oh, how are we going to fund some of the projects ourselves?’” said Kristen Mayo, the district’s executive director of resources.
Several options exist for school districts, including asking the School Facilities Commission for money, a lengthy process Teton County is undergoing for potential upgrades at Jackson Hole Middle School; putting a bond measure on the local ballot; and dipping into cash reserves.
Cash reserves, the quickest and most straightforward of the choices, come with a catch. The state allows school districts to keep just 15% or less of their foundation guarantees, the minimum amount of state funding they are assured, in cash reserves at the end of their fiscal year. Teton County also has $2.09 million in pre-1997 cash reserves that the state doesn’t count against the total when calculating that 15% threshold.
The fiscal year ended June 30, and as Mayo told the school board at its meeting June 13, the district has the potential to surpass 15% for the first time in years. Though property tax collections for fiscal year 2019 stopped June 30, the district won’t know the total until the end of July.
Total cash reserves for fiscal year 2019 will not be calculated until October or November because of the auditing and reporting process, but as of the June meeting the district was about $200,000 short of that 15% and expected roughly $1 million in revenue after June 30. Mayo suggested creating a capital construction fund for the surplus so the district doesn’t have to give the money back to the state (see sidebar for an overview on school funding).
State statutes allow districts to move funds from cash reserves to a less flexible fund limited to construction “for the purpose of purchasing or replacing specified equipment or a depreciation reserve for equipment and school building repair.”
“You’re allowed to put 10% of [the foundation guarantee] into a capital account,” Mayo said, “for building or expanding or adjusting things that our major maintenance fund won’t cover.”
With a 2019 foundation guarantee of $50.43 million, according to Wyoming Department of Education data, the district could have set aside about $5 million, but Mayo said the district wanted to save just enough to bring it below the 15%, rather than the bulk of the $7.56 million the district is allowed to keep in its cash reserves this year.
“We wouldn’t want to move all of it into a capital account,” Mayo said, “because then you have less flexibility.”
Nearing the 15% threshold is something the district has moved toward as part of an effort to build the cash reserves. Even as its foundation guarantee has climbed by more than $13 million since 2013, cash reserves have more than doubled, moving from being 8% of the guarantee to 13% in fiscal year 2018.
For some in the community, needing to create a capital construction fund gives the appearance that the district is sitting on lots of money, especially given that the district also voted at the same meeting to raise the recreation district mill levy from 0.45 to 0.9 mills to raise money for recreation projects that the district administers.
“They’re asking for more money, yet they’re setting aside money,” said Bob Culver of the Jackson Hole Tea Party. “There’s a logical discontinuity. The appearance of those things taken together is that they need to step back and take a look at the efficiency of the district.”
Mayo said that even though it may appear the district is both saving and asking for more money, the general fund cash reserves and the recreation district, which is separate from the school board, are entities with distinct collection mechanisms. In the face of diminishing state funding for capital construction, Mayo wants to be prudent and maximize money on hand.
“In just being fiscally responsible, it’s smart to have like three months of expenses in cash reserves,” she said. “The state doesn’t let us do that.”