The Kalispell Public Schools board got a first look at the preliminary budget for the 2022-23 school year on Tuesday.

There is still work to be done and information to receive from other government entities before the final budget goes for board approval on Aug. 9, district Business and Financial Director Denise Williams said.

The elementary district is anticipated to operate on about $38 million for the upcoming school year, and the high school district on approximately $40 million. These amounts include the following funds: general, transportation, bus depreciation, tuition, retirement, adult education, technology, debt service and building reserve.

“These are all the budgeted funds you have to officially adopt in a budget. We have a lot of what you call cash funds, or non-budgeted funds, not included here,” Williams said, such as food service and student activities funds.

“We’re just developing the really, really, deep-in-the-weeds kind of numbers for the budget and I still need to compile them all into one number,” she said.

One of the key pieces of information the business office is awaiting is what the taxable value will be for the coming year. This information comes from the Montana Department of Revenue.

“We won’t get the actual number until Aug. 1, but I can tell you, just looking at the past few years our taxable value has been increasing. There’s lots of development out there going on that’s probably going to contribute to an increase in taxable value,” she said.

Another factor impacting the budget is enrollment, which has increased. Enrollment is tied to the amount of state funding schools receive to educate students.

Looking ahead, Williams broached the topic of levies. The elementary district benefits from a 10-year technology levy that ends in the 2023-24 school year. For the first year, the elementary district will impose a $557,158 general fund levy voters approved in 2021. Trustees decided not to impose it last school year due to available federal Covid-19 relief money from the Elementary and Secondary School Emergency Relief Fund (ESSER). A total of about $1 million in ESSER funding was used to cover a budget deficit in the 2021-22 school year. ESSER money will no longer be available after Sept. 30, 2024.

“We want to be prepared for that and plan for that,” Williams said.

Currently, the elementary district general fund is operating at 99% of the maximum allowable budget set by the state and the high school district is operating at 91% of the max.

“In the [high school] general fund we’re only at 91% of the maximum and those maximum budgets … they’re not enough to actually meet what we could be doing and that’s why we’re trying to get a levy passed at the high school just so we can move forward with certainty in funding our operations, so this is pretty low. The other AAs in the state are close to maximum. So this is a place I’d like to see us run a levy,” Williams said.

“Eighty-eight to 90% of the general fund is devoted to salaries and benefits of our staff. Only about 10% of those budgets we can spend on technology, books, utilities, insurance, all those other items that are non-staffing. They add up and those are rising too,” she added.

IN ANOTHER agenda item, the board approved spending $552,800 from the interlocal fund for school purchases such as classroom furniture, wrestling mats, band instruments, a ceramic kiln, Chromebooks, choir risers, acoustic shell, stair treads, smart panels, among other items.

The interlocal fund primarily contains remaining end-of-year money from the elementary and high school districts, for example, utility savings. With some past exceptions of covering budget shortfalls, the interlocal fund has been viewed as a savings account to cover expensive or one-time expenses. Over time, the board began earmarking expenses such as artificial turf replacement at Legends Stadium, for example. It has also been used to purchase property for school sites. Currently, the district is looking at organizing the interlocal fund in a budget form rather than “setting aside” or “earmarking” funds.

Trustee Lloyd Bondy questioned if it was prudent to approve the purchases in light of potential budget shortfalls if levies don’t pass.

“What I’d say right now is we're not in a position where we’re looking at making cuts,” Hill said. “We still have an opportunity to pass a levy. Recognizing that 90% of our budget is geared to salary and benefits, we still need to be able to have computers. We still need to be able to have band instruments, desks and chairs, the things to run day-to-day operations.”

Hill also explained that it would be difficult for Flathead High School to make a large purchase, using the purchase of $40,000 wrestling mats as an example.

“[Flathead principal] Michele [Paine] is going to look at her budget and say, OK, I need to get wrestling mats, how am I going to do this and what am I going to cut out of what I would typically budget for?” Hill said. “I might be able to squeeze out $5,000 or $10,000 but I don’t get to roll that over from year to year because of how state formulas work. So really, the only mechanism we really have is not to spend in the current year and move that to the interlocal agreement in hopes the board would then approve that expenditure in two, three years.”

Trustee Jack Fallon agreed that a high school levy is needed, however, once ESSER money is gone interlocal funds may be used to cover those costs while addressing any possible cutbacks.

“We are going to hit a cliff when the ESSER money is no longer available and some of the money in the interlocal agreement may be needed for one year’s worth of some operational aspect during which we would have to review how we teach …” Fallon said.

“But in the meantime, this kind of request is infrequent. It makes sense for our interlocal agreement in that there is still going to be a need for passing a high school levy.”

Reporter Hilary Matheson may be reached at 406-758-4431 or hmatheson@dailyinterlake.com.