The Great Falls Public Schools board budget committee unanimously voted during their March 16 meeting to recommend to the full school board that the district forgo an operational levy this year.

The committee will make the recommendation at the March 28 full school board meeting.

The district is projecting, for the first time in roughly a decade, to have a small surplus in funds for the next budget year, which begins July 1.

The surplus is due to a slight increase in enrollment and the inflationary factor from the state, according to Brain Patrick, GFPS’ director of business operations.

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The district also has large chunks of federal COVID relief funds, but those are one time funds with deadlines by which they must be spent and Patrick cautioned against hiring staff or reestablishing programs or creating new ones since they’ll run out in the next few years.

Patrick said that the district will likely be in okay financial shape for the next two budget cycles, but he’s concerned about the following budget years as costs continue to increase but the state education funding remains steady.

Kim Skornogoski, chair of the budget committee, said that forgoing the levy now makes sense, but “we know costs are increasing.”

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Patrick walked the committee and the public who attended the March 16 budget townhall through the history and mechanics of school funding in Montana.

The state formula, which has existed since the 1980s, has the state fund 80 percent of a district’s operational budget and leaves the other 20 percent up to local taxpayers to fund through levies.

The Legislature sets and adjust the formula for school funding that is primarily based on enrollment.

Patrick said that for the last decade or so, enrollment numbers have been steady. In 2008, the GFPS enrollment was 10,410 students and in 2021, that number was 10,431 students, he said.

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That means state funding for the district has been equally stable while costs for the district have been increasing.

Going into the budget for this school year, Patrick said there was a degree of uncertainty with COVID, enrollment counts and other factors and the district “went in a little bit with a hope and prayer.”

The district was looking at a $1.17 million shortfall going into the current budget year, but once the enrollment counts came in and the dust settled, the district made up that difference with state and federal funds.

To determine enrollment counts, districts count students in October and February and average the number to determine their budgets.

Patrick said there was a decline in enrollment due to COVID, but the state recognized that and adjusted for it but looking at October to October counts.

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Over the last four years, Patrick said, on average the district has been looking at about a $965,000 shortfall annually.

For the upcoming budget year, the district is projecting an additional $2 million in state funding and the district’s contractual obligations are about $2 million, so the district is looking at a surplus of about $10,000, which Patrick said is essentially a balanced budget.

That surplus “can disappear in a day,” Patrick said, depending on changes in funding sources, expenses and other factors.

He said that after eight to nine years of having to make budget cuts, “this is like Christmas to me” to have a fairly even budget projection.

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But after the one-time COVID funds run out, he said he’s worried about the district’s financial position and forecasts that they’ll be back to scrimping for basics or needing to ask voters to approve a levy.

If the district were to consider a levy this year, the maximum amount it could request is $989,730, he said.

He said that some Montana districts ask for a little bit of money via levies but for GFPS, “generally we’re in a situation where we don’t ask for money unless we need it.”

Without levy approvals, Patrick said the district has to make cuts over the years.

The district also has options for permissive levies that do not need voter approval and Patrick said those are projected to decrease this year, lowering the tax bill for property owners.

Superintendent Tom Moore said it’s the first time in about 15 years he’s seen a green line in the district’s budget projections, meaning there wasn’t a shortfall.

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Moore said that while this year’s projections are positive, the district is cautious knowing the continued needs and that the one-time COVID funds will run out.

Patrick said that this year’s budget also had some savings because they couldn’t fill some positions and the district’s staffing shortage is continuing.

“That’s not anywhere we’ve ever been before and that’s scary,” Patrick said.

Lance Boyd, the district’s director of student services, walked the budget committee through the federal COVID funds that the district has received.

There have been three rounds of those funds, each with different requirements.

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The district has received three rounds of federal COVID relief funds, called Elementary and Secondary School Emergency Relief, or ESSER.

The first round of funds rolled out in September 2020 and the district received about $2.3 million. Those funds went to the state first and local education agencies had to apply through the state.

Those funds were primarily for responding to the pandemic for things like cleaning, disinfecting and personal protective equipment.

The first round also helped the quick shift to mobile learning in terms of technology purchases and supplies for meal distribution, as well as childcare for first responders.

Boyd said that the process for the first round of funds wasn’t easy.

He said that the process improved with the second and third round of ESSER funds.

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Boyd said that of the first round of ESSER funds, about $500,000 went toward meal distribution, 11 percent went to childcare for first responders and 47 percent, or about $1 million went to purchases for student achievement, such as mobile learning platforms, Chromebooks, wifi and hotspots, and teacher training for mobile learning.

The first round of funds had to be spent within a year and Boyd said the district expenses went through auditing at both the GFPS and Montana Office of Public Instruction level and received positive feedback.

For the second round of ESSER, the district received $8,820,796. Those funds opened in July 2021 and have to be used by Sept. 30, 2023.

This round of funding came with more requirements, Boyd said, and they don’t want to create a fiscal cliff by hiring a lot of people with one-time limited funds.

The district did do some targeted hiring with these funds for behavioralists and intervention teachers, Boyd said. The staff hired with these funds are on one or two-year contracts though as staffing levels change some have applied for and been hired into permanent positions.

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The third round of ESSER funds opened in July 2021 and have to be used by September 2024. The district received $22,056,111 in this round that has specific requirements for use.

A minimum of 20 percent of these funds have to be used to address learning loss; a minimum of 10 percent has to be used for special education and affected subgroups and the funds come with more reporting requirements.

For these funds, any expenditure over $5,000 needs prior approval from OPI.

This round of funds can also be used to address facilities under specific criteria for things like air handling, ventilation, windows and social distancing.

The district has recently approved several air handling, ventilation and window projects at several schools.

To date, 83 percent of ESSER funds have gone directly to support student health, learning and purchase of materials to address and improve learning loss; 12 percent to employee assistance during COVID; and 5 percent to facility health improvements, Boyd said.

“The district is enormously benefiting from these funds and they’re in very target areas that are helping student achievement,” Boyd said.

The district used ESSER 3 funds to hire five counselors to help address mental health issues caused by the pandemic, Boyd said.

“Student mental health is one of my number one priorities,” he said. “Our kids need it to be successful and buildings are asking for it more and more.”

The district is also working through changes in state law to how it provides mental health services to students through the Comprehensive School and Community Treatment program.

Boyd said that program had been the standard for years, but last year the Legislature moved it from the Montana Department of Public Health and Human Services to OPI.

In the change, “things have gotten a lot muddier in regards to process, access and how and why resources can be used,” he said.

Before there was an intergovernmental transfer process that allowed for in-kind offerings from the district for providers to work in the schools. That meant, for example, the district would provide space and utilities and the provider handles the billing, insurance, etc.

The new law, HB 671, requires the district to provide a 35 percent match for the services and pay it with non-federal funds within 30 days of the service occurring.

The new law creates more paperwork and cost for the district, but Boyd said they’re still working with OPI to address the process and ensure services are available for students.