School district budget to be $20M

The Custer School District Board of Education met last Monday in Hermosa and held its annual budget hearing, which began 30 minutes before the regular school board meeting.
Co-business manager Sarah Wedge presented on the changes made to the budget, as well as the addition of some line items, which Wedge explained help to paint a more accurate picture of the district’s finances.
“One thing I know that Sarah [Wedge] and Terry [Reynolds] have tried to do is get our budget and our expenditures more accurate. I think we struggled with that... They’ve added some line items so it’s more specific,” said supt. Mark Naugle.
The budget is organized into five different funds: the General Fund, Capital Outlay Fund, Special Education Fund, Impact Aid Fund and the Debt Service Fund. The total budget represented by the five categories amounts to $20,312,151.
Wedge began the overview of the budget with explaining the general fund expenditures, totalling $10,173,589—a 12 percent increase from last year’s total of $8,834,998. Wedge attributed this rise to increased costs to the district, such as utilities, salaries, new technology and increased enrollments.
“There’s such an increased cost of everything that we’re purchasing. A gallon of milk costs twice what it did last year, and the school district faces those same problems and issues. We have to address the cost of spending while we are addressing taking care of our community. Those things have to go hand-in-hand,” said Wedge.
The capital outlay fund has a budget of $4,001,529. This fund is used for things like buildings and grounds, equipment and software, vehicles, and library books–things Wedge referred to as “more permanent items.” Repairs and upgrades for the district also come from this fund.
One line item, capital construction, is budgeted for $300,000 and will be used to pay for services relating to the new CTE addition to the Jr./Sr. High School. Last year, the capital outlay budget amounted to $3,415,976.
The Special Education Fund expenditures total up to $2,907,03, up from $2,337,666 last year. There were “some significant increases that go beyond what grants cover,” said Wedge. Naugle pointed out one line item for “out of state placements,” which he explained hasn’t been used in at least two years. The fund is there to cover costs for students with special education needs that can’t be met in the district. The funds remain available to cover those costs when they arise again.
The Impact Aid Fund is set for $750,000, which is unchanged from past years.
The debt service fund is used to track the district’s sinking fund at RBC Wealth Management. The fund shows no revenues or expenditures because there is a transfer in from the capital outlay fund in the amount of $166,000, and the same amount will be transferred out each year until 2024, when the full amount of principal used to pay for the recently-constructed Hermosa school will be paid with those funds.
“It was part of the American Recovery and Reinvestment Act during the Obama Administration and it qualified school construction bonds. They were typically paid off in anywhere from 10 to 20 years,” said Jerry Spethman, an investment banker with D.A. Davidson who happened to be in attendance to explain financing options for another possible capital improvement project for the district.
No action was taken on the budget, which will be adopted at the next school board meeting July 17 in Custer.