Controlling expenses when the COVID-19 pandemic hit and a bump in local revenue helped the Blair Oaks R-2 School District minimize the effects of state budget cuts announced earlier this year.
In April and May, Gov. Mike Parson withheld more than $358 million from K-12 education for the 2019-20 fiscal year, which ended Tuesday.
For the Blair Oaks system, that meant about $189,522 was withheld from the foundation formula and $13,385 for transportation - a total of $202,907.
The Blair Oaks Board of Education amended the 2019-20 budget Tuesday to reflect those changes.
Of that $202,907, the district actually lost approximately $198,000 because it was able to reduce expenses, such as utilities, transportation, supplies, food, professional development and student activity expenses, during the 41-day school closure. The decrease in state revenue was also offset by an increase in local revenue, Superintendent Jim Jones said.
"Our expenditures did not reach the level that we thought they might," Jones said.
Jones said the district expects to receive about $19,000 from the federal Coronavirus Aid, Relief, Economic Security Act. Since this is a limited amount, he said, the district was cautious about spending during the closure.
"We were able to end up extremely close to where we thought we would be at the end of the year," Jones said.
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In April 2019, voters approved a bond issue for the district to build a new high school and other building needs as well as a plan to increase the district's operating tax levy by 30 cents, which would give Blair Oaks flexibility to pay for the new high school's staff, facility maintenance, educational programs and utilities, and other operating needs.
The tax levy increase was designed to allow the district to increase its fund balance for the next two years and decrease it the three following years. Because of this, the original 2019-20 budget had a surplus of $226,000, Jones said.
"When we took the hits from the withholding of $202,000, we were still in the black a little bit, but what we were able to do during the extended school closure was to decrease some expenditures," Jones said.
On June 6, Jones said the budget cuts would reduce the flexibility the district planned to have during this three-year period. At that point, he hadn't considered a reduction in expenditures, he said.
"I'm not going to say the flexibility has been recovered because we haven't really fully realized the shortfalls that may occur during the 2020-21 school year, but I feel a lot better than I did two weeks ago," Jones said.
Parson told district leaders it is likely there will be more withholds this month due to state budget shortfalls, said Mallory McGowin, communications coordinator for the Missouri Department of Elementary and Secondary Education.
"While we do not have an official estimate on how restrictions may impact DESE's July payment to school districts, at the State Board of Education meeting on June 9, Dr. Roger Dorson, DESE's deputy commissioner in the Division of Financial and Administrative Services, said he would suggest school leaders prepare for a withholding in July," McGowin said.
As part of its budget work, the Blair Oaks board also approved a transfer of $100,000 from the general fund to the capital projects fund to construct and equip the new high school. This money will be transferred by June 30, 2024.
"One challenge that we ran into since the COVID-19 situation is interest rates have plummeted," Jones said. "And we were expecting to be drawing interest on the money that we have in the bank from the bond issue. Since interest is at zero, we're drawing nothing, so we're losing about $12,500 a month. This $100,000 ultimately over time will help offset a little bit of the challenge that we're facing due to the historically low interest rates."