Kalispell Public Schools will operate on a budget totaling $70.5 million for the 2020-21 school year.

The board of trustees approved a $34 million budget for the elementary district and a $36.5 million budget for the high school district.

In reaching a balanced budget, the district may tap into interlocal agreement funds to cover a $1.4 million shortfall.

This breaks down to a $345,000 shortfall in the elementary general fund and a $397,000 shortfall in the high school district. The remainder, is related to the district’s self-funded health insurance plan.

“We will go through the year and if we get to the end of the year and it looks like we need to access these dollars in the interlocal agreement, then we will start to move expenditures away from the general fund into the interlocal agreement,” Kalispell Public Schools Director of Business Services and Operations Gwyn Andersen said. “We also have a $700,000 need to correct the shortfall in health insurance.”

The district’s self-funded insurance plan deficit has accumulated over the past few years. The district will cover 70% of the shortfall and employees 30%, through health insurance contributions. The district had floated a loan using money from the interlocal agreement fund to cover a deficit in the health insurance plan, but it hasn’t reached a point where repayment could begin. Remaining self-funded is more cost-effective despite the deficit, but Andersen noted, “We had to do something to rectify the situation.”

The interlocal agreement fund contains year-end money from the elementary and high school districts that may be spent any time throughout the year for any purpose with board action, but it is not meant to cover ongoing costs. This fund currently contains $3.7 million.

“We have been over the last few years earmarking some of the money in the interlocal agreement fund because we know we have some large needs that are coming up and we think it’s wise to start to save some funds to meet those needs,” Andersen said.

The district has slated portions of the funding to cover needs such as new curriculum, track resurfacing, gym floor refinishing and future replacement of the artificial turf at Legends Stadium. It has also been used to float loans for the self-funded insurance plan. In the past, it was also used to purchase land and cover technology expenses when levies failed on the high school district.

Compared to the last school year, the elementary district budget increased by 0.37%, or about $127,060. The high school budget increased by 6.62%, or about $2.3 million. The increases were primarily in the tuition fund, which covers additional special education costs, and in the transportation fund, where money is being raised to build a bus facility.

“We’re currently using city property with the Transportation Department, and the city wants it back, so they’re giving us time to build a new facility,” Andersen said.

The school district’s primary revenue source is state funding, which is based on enrollment. Money also comes from local taxpayers through property tax. Taxpayers in the elementary district will generate a total of $12.8 million, approximately 37.7% of the budget. Taxpayers living in the high school district will contribute $13.7 million, about 37.6% of the total budget.

Reporter Hilary Matheson may be reached at 758-4431 or hmatheson@dailyinterlake.com.