School districts' rainy day funds shrink as student populations decrease

OSCEOLA COUNTY — Many of the schools within the Mecosta-Osecola Intermediate School District are feeling the crunch of tight budgets. Rainy day funds are shrinking at an alarming rate.

For the Evart Public School District, members of the board have been able to set aside 7 percent, which is about $550,000 to $600,000, according to the district's superintendent, Howard Hyde. That percentage, however, has been steadily shrinking through the years as the costs of education increases while state funding per pupil and the number of enrolled students has dropped, he added.

"It keeps me up at night," Hyde said. "I focus on it all the time and we in Evart got to find a way to deal with this continuing shortage."

Solutions to the problem are few and far between, and may not be enough in the long run if the situation doesn't change.

"We're going to have to find a way to stop spending as much as we're spending," Hyde said. "At some point we might have to propose a millage."

In neighboring Reed City, is school district is facing what superintendent Tim Webster calls a "dangerously low" fund equity. The district fund holds about 2 percent, or $200,000. A severe decline in student enrollment is the main problem, Webster said, and the district already has reduced its staff for the upcoming year.

"We're trying our best to keep teachers and programs ," he added. "We don't want to eliminate programs. It's possible we might have to take out a bond."

To combat student decline, the district is intent to focus on marketing strategies and on increasing student test scores while closing the gap between students who rank high and those who rank low.

The Big Rapids Public Schools’ rainy day fund budget is currently 6.5 percent of the total budget, a figure which will be determined exactly after the district’s audit in the fall.

“We feel we’re moving in the right direction with the budget,” said BRPS Superintendent Tim Haist. “We made it a goal to add one percent to that emergency fund each year until it reaches 10 percent of our overall budget. That budget did get fairly low, but we’ve worked together to move it in the right direction.”

Crossroads Charter Academy of Big Rapids allocates 20 percent of the annual budget to its rainy day fund.

“This part of the budget is actually down a little bit because of some different things we did this past year,” said Ross Meads, the interim superintendent for the school district.

The past year, Crossroads had to plan for costs associated with its plan to physically improve the middle school and high school. The school also made repairs to the main parking lot, as the flood earlier this year caused the school to add the cost of damage to the parking lot and athletic fields.

“The extra expenses dipped into the fund but we’re very comfortable with 20 percent,” Meads said. “It’s actually higher than the state recommends.”

The Chippewa Hills School District is among many schools who are struggling with budgets and contingency funds. According to Sandy Weir, director of finance, the district currently designates 6 percent its 2013-14 general general operating budget for emergency expenditures.

Due to shrinking funds from federal and state levels this has put a "cash flow crunch" on the district Weir added.

"The fund continues to decline," Weir said. "We are probably in the same situation as other districts. We are treading water to keep our other programs going and unable to set aside funding for emergencies."

With declining student numbers, the district has postponed a number of expenditures from school buses to roof repairs and other general maintenance for the district.

"To keep our programs going we continue peeling money from the contingency fund," Weir said.

The district has seen some increase in state funding, but none of the increases have brought the district to the levels it was at per student in 2008.

"We saw a big reduction in 2008 when the state cut 6.4 percent from our per student funding," Weir said. "We lost $470 per student in that cut. We have saw minimal increases in 2013 and 2014, but we are still treading water."

The district will hold a facilities study among other future planning to look at ways to bring fund back up, but there is nothing set in stone.

"We are looking at options in the future," Weir said "We still are in the planning stages of what we could do."

Morley Stanwood Community Schools Superintendent Roger Cole said he won't have an exact figure until the district has their upcoming audit completed. He estimated the rainy day fund is about 6.5 percent of the operating budget or between $675,000 and $700,000.

While the MSCS board of education has not made a formal proclamation as have other districts, Cole said the unofficial goal would be to have the rainy day fund be set at 10 percent.

"I think the old days of having 15 percent have gone the way of the dodo bird, but 10 percent would be far more comfortable," Cole said. "I can say that our rainy day fund hasn't gone backward in the past few years, but you couldn't get any tighter."

Pioneer staff writers Lonnie Allen, Karin Armbruster, Emily Grove-Davis and Mary Mattingly contributed to this article.