East Valley School District short on cash

Spokane Public Schools isn’t the only district with budget woes. The East Valley School District is restricting spending through the end of this school year.

“Revenues didn’t come in as expected,” said Christine Burgess, district superintendent. “We have a cash flow problem while we wait for levy funds that won’t be available until May.”

Burgess said the district will initiate a hiring freeze, delay school maintenance projects and approve only grant-funded travel and workshops through the end of the school year.

A districtwide survey the school board was planning for later this year has been put on hold.

There won’t be any reductions in student services this year and any contractual agreements will be honored, said Burgess.

The district overestimated its revenue for the year, partly due to a tax levy rollback last fall and partly because the amount the state reimburses the district for its teachers came in lower than anticipated. Because of that, the district has been drawing from its reserve fund. “Another factor has been the escalating costs of servicing the special education population who have moved into the district,” Burgess said. “Additional staff is needed to serve these students while the state lid on funding special education is set at a level and overages must be absorbed by the district.”

Burgess said that despite substantial reductions made in past years and other efforts to build the fund balance, the declining enrollment, a flat levy, rising inflation and unfunded mandates have reduced the district’s reserve funds.

Enrollment for February is 4,073 students. The district has lost 700 students during seven years of declining enrollment. This trend is likely to continue since state and local rules prohibit development of rural-zoned tracts within the district’s boundaries, and areas east of Barker Road aren’t connected to the sewer.

It’s not usual for districts to have cash flow issues this time of year, but many districts are able to borrow from their capital project funds to get by until May.

East Valley doesn’t have any capital project funds to borrow from because the district hasn’t had a bond since 1996.

The district has hired Al Swanson as its interim fiscal manger through August. Swanson was the assistant superintendent of finance and interim superintendent for the Mead School District until he retired last year.

Richard Cook, the district’s fiscal manager for the last two and a half years, has requested a medical leave, Burgess said.

Burgess said that Swanson is in the “discovery phase” of his budget analysis to figure out the extent of the problem. He should be able to give the district some hard numbers in a few weeks.

“We ask the community to give us time, be supportive and we’ll get the information out as soon as we have it. We’re doing our best to use tax money as intended. We’re looking at everything and we’ll need to have some serious conversations about next year’s budget,” Burgess said.