Farmington district faces $4 million deficit
FARMINGTON – A decline in kindergarten enrollment for the Farmington Municipal School District will contribute to a possible $4 million budget deficit for the upcoming school year.
The district’s enrollment dropped by 129 students from 11,070 students in the 2014-2015 school year to 10,941 students for current school year, according to district Chief Financial Officer Randy Bondow.
Kindergarten enrollment declined by 137 students from 960 students last school year to 823 students. The enrollment for kindergarten in the 2013-2014 school year was 936 students.
The district made enrollment gains in other grades, however, leading to a total net drop of 129 students.
Bondow said the drop in kindergarten enrollment could lead to a loss of about $1.5 million in state funding for the 2016-2017 school year.
Deputy Superintendent Phil Valdez said the district has seen similar enrollment changes in the past, but district administrators are not sure what led to the increase in kindergarten enrollment in the 2013-2014 and 2014-2015 school years, and what led to the drop this school year.
“When you go to each grade level, you will see some fluctuations (in enrollment),” Valdez said. “But looking at kindergarten, that is the only (grade) where there is that drastic loss.”
Bondow said when the loss of funding from the enrollment drop is combined with a projected increase in health insurance costs and a desire to avoid dipping into the district’s cash balance, the district will have to overcome a possible $4 million loss in funding by cutting operations expenses.
An increase of about 16 percent in health insurance premiums is projected to cost the district about $880,000.
The district has used $3.9 million of its cash balance the previous two school years to pay for operations expenses and is projected to spend $1.8 million this year, for a total of $5.7 million, according to Bondow.
The cash balance for the district at the start of 2013-2014 school year was $11.7 million and is projected to be about $6 million by the end of the current school year.
“We’re trying to get to a balanced budget next year,” Bondow said. “That’s why we are looking at close to $4 million that we have to cut to get there.”
If the district uses a portion of its cash balance for the fourth year in a row, Bondow said it would affect the bond rating the district receives from the Moody’s Investors Service and could lead to higher interest rates on its general obligation bonds.
Bondow has spoken to principals at each school and district department heads in initial meetings about the district’s budget, and will start holding meetings next month to further discuss possible budget cuts.
Most of the budget work will take place following this year's state legislative session. Education officials are waiting to see if their funding is increased, Bondow said.
“We need to see what the Legislature does to see if that $4 million materializes or it ends up being a bigger or smaller problem,” Bondow said. “It’s going to be a kind of a process for the next three to four months.”
Joshua Kellogg covers education for The Daily Times. He can be reached at 505-564-4627.