Superintendent says YCS will look to capital funds for some expenditures

During a Yelm Community Schools (YCS) Board of Directors meeting on Thursday, Jan. 22, Chris Woods, superintendent of YCS, told board members and those in attendance that the district will be looking to pay for some expenditures with money from its capital fund in order to stay on track, financially, in its general fund.

Woods, during the meeting, said that the district has continued to meet with the Educational Service District (ESD) and the Office of Superintendent of Public Instruction (OSPI) amidst financial troubles in YCS. He noted some of the meetings are formal check-ins on the district’s binding conditions, while others are informal meetings “in between.”

“A couple things we are going to do financially to help offset the deficit that we have this year, and also the deficit we have to account for next year — we have expenditures every year that could be expenditures paid for out of capital funds. Things typically around technology,” Woods said. “Now, the reason you wouldn’t do that on a regular basis is because capital funds don’t have revenue coming in on a regular basis. You have interest that comes in on the capital funds side, and then when you run a bond, you’ll have money come in there — maybe impact fees from building in the community. But typically you won’t do recurring expenditures from capital funds because it’s kind of like a savings account. When it’s spent, it’s gone.”

Woods added that YCS has roughly $340,000 in expenditures in subscriptions for technology and hardware and that it would usually be paid for out of the general fund. He noted it could be paid for by capital funds in order to free up the general fund balance to offset the district’s financial deficit.

“That’s something we’re doing right now,” Woods said. “We’re going through all of our expenditures, so far for this school year, and then looking through the rest of the school year and what other expenditures can qualify to be paid for out of capital funds. That’s something we’ll continue to do.”

Woods also took some time to speak about accruing interest from capital funds, and noted that districts will often use that interest to replace turf fields every nine to 12 years. Additionally, that interest is also used for field maintenance and emergencies.

The superintendent noted that interest would be earmarked from each year, specifically, for a purpose that revolves around facilities.

“However, a resolution also can be made to move the interest from capital over to the general fund,” Woods said. “What I’ll be bringing next month is a resolution to you to bring the interest, dating back to 2015 to now, to move that over to the general fund for us again to use that to offset the deficit. That’s $1.1 million over the 10 years that has accrued in interest. That, legally, can be moved over to be used. That’s one time. That’s a one time expense and then that interest is gone.”

Once the interest is gone after the one time expense, Woods said YCS would return to receiving interest next year.

“This is another thing that we can do to help offset the deficit we are facing. It puts us in a better position, financially, to start next year in the positive rather than starting in the negative and having to cut even more,” Woods said. “In February, I’ll be bringing a resolution for you to approve those dollars to be transferred over to general funds to be used for general fund purposes.”

The superintendent recommended that YCS create a policy and procedures that specifically earmarks the interest on the capital funds for maintenance and replacement of facilities within the district.

“You can get as specific as you want. It’s not uncommon for districts to have policy around specific dollars going to a specific purpose,” Woods said. “We’ve talked about that. It would be good for us to have a very specific plan for the replacement and any work that needs to be done.”