The idea of selling the Coeur d'Alene School District's central office building lost some of its luster Monday when school board members were advised the building isn't worth much more than the district paid for it.

During their regular monthly meeting, trustees received a presentation from Brian Wallace, the district's finance director, and a report from Superintendent Matt Handelman detailing the potential value of the building.

The reports were created in response to Trustee Dave Eubanks' request last month that school officials consider selling the property in order to replace $1.9 million moved, with board approval, from the district's unrestricted fund balance account to cover a building project shortfall at Winton Elementary. The aging school was demolished and rebuilt using funds from a $32.7 million bond approved by voters in 2012. It was one of five schools that underwent major construction projects covered by the bond.

"I think to sell (the district office) at this point would be very premature, and we would be undercutting a larger future profit if we held onto it for a little bit longer," said board chair Christa Hazel, following the presentations. "But I think it should always be in the back of our minds, 'is this the time?' I don't think this is the time."

Hazel said she believes it would be in the best interest of the school district for the board to seek other alternatives to find new revenue to replenish the contingency fund.

Eubanks said while he remains concerned about the district's contingency reserve amount, he is going to step away from the idea of selling the building to resolve the issue.

"...the value of the building isn't what I thought it was. I thought it was around $3 million that we could get fairly readily... I hope we will continue the discussion of managing our money better. We've got to do something about that contingency reserve, or whatever you want to call it, that part of our funds that says 'in case of emergency, break glass.' We've got to have an amount of money in there that we've got safeguarded, and I think it needs to be greater than it is at this time."

The school district purchased the district office building facing the intersection of Northwest Boulevard and Ironwood Drive in 2013. The district's total investment to own the 20,454-square-foot office facility and move into it was $2.5 million.

The building's taxable assessed value is $2.08 million. A broker's informal analysis of the building in January estimated a market value of $2.5 million to $2.8 million.

The building provides assigned office spaces for 35 full-time employees and 30 employees who travel throughout the district to complete their duties.

"I would say we're at 90 percent capacity in terms of using the space," Handelman said.

He told the trustees a formal appraisal has been requested and is expected to be completed by the end of August.

Handelman also told the trustees that there is no Idaho code or governmental accounting standard that prohibits the district from selling the building and using the proceeds to replenish the contingency reserve. If the sale involved federal funds, the use of the money would be restricted, Handelman said, but that is not the case with the district office building.

"One thing to remember in all this is if we were to sell it, it might solve the problem of refilling some of the fund balance, but it does not solve the problem of deficit spending, because it is one-time funds, and depending on what we did to house the district office, it might increase our annual expenditures," Handelman said.

Prior to Handelman's presentation, Wallace provided details about the condition of the district's fund balance and contingency reserve.

Wallace said the board's policy calls for an unappropriated fund balance of 4 percent, with a 1 percent contingency reserve, and at this time, the district is above the policy point. He said he believes the fund balance will be close to 5 percent at the end of the next fiscal year.

Wallace also showed the trustees that while the district is in sound fiscal shape right now, if the district continues an ongoing pattern of deficit spending, the fund balance will eventually fall below the amount required in local policy.

From 2006-07, the district's expenditures were less than its revenue. Beginning in 2011-12, after the district no longer had federal stimulus dollars to rely on, its expenditures began to creep past its revenue.

"With our current situation, I think it's likely that we're going to need to address that starting with the next budget cycle," Wallace said.

He said the district is positioned to move forward with its programs and keep its promises to the community.

"We're in good shape, and we have time to look at our operating deficits and close that gap...

There are several ways to do that. Often, as you get new revenues...not all of them need to go to new initiatives. Sometimes you're going to have to say part of those revenues need to go to cover the gap," Wallace said. "There is also looking at programs that are maybe not being as effective, and you want to look at reductions."

He said through that combination of actions, the district should be able to scale back the deficit spending.

The trustees will hold a workshop Aug. 24 to review the fund balance situation.