UPDATE: 9:34 a.m. Thursday – Staff and teachers report they will be paid in full as arrangements have made to receive partial state payment.
The spending freeze will remain in effect through at least Jan. 15.
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Winfield schools superintendent Marvin Estes has sent a memo to school district staff and teachers as a warning the district may not be able to fully cover payroll later this month if payments from the state are delayed.
The district is also freezing all budgets until Jan. 15 and requiring school-principal and district-office approval before any district funds are spent.
A funding alltoment from the state for November arrived late and school district officials are concerned the December allotment could be behind as well, according to an e-mail memo obtained by NewsCow. That could potentially leave the district running very low on funds and in danger of not making payroll, Estes said.
December and early January are critical cash flow times for school districts and on-time allotments from the state are crucial during this time.
Estes stressed in the e-mail ? which was sent to staff Wednesday afternoon ? that he was mostly giving a "heads up" and that some options were available for making sure USD 465 staff was paid in full. Huge budget cuts levied by the state have led to district cash flow issues that are the cause for the tight financial situation, he said.
"Supposing the worst case scenario, if we can not make the second payroll in December, we will pay you all we can and then send the rest when we receive the money," Estes said in the e-mail.
He added that he was fairly confident payroll would not be affected but wanted to give staff plenty of warning in case there was a shortfall that affected paychecks.
It is likely the district could receive an early allotment of tax funds either from the county or state to help with a cash shortfall, he said. The county seemed a more viable option since a number of districts are likely to put requests into the state for early payment.
Estes told teachers and other staff that cuts in state funding cost the district $1.2 million last year and at least $700,000 this year. The money crunch depleted district cash reserves, which normally could be used in an emergency to fund payroll checks.
"We will do our best to solve these problems," he said. "But we must all work together to ensure they are resolved satisfactorily. I am freezing all budgets from (Wednesday) until January 15. I understand there are classes and programs that need to replace consumables in order to meet the needs of students. However, all requests for needed district funds must be approved by building principals or supervisors and then by the district office. No district funds are to be spent unless such approval has occurred."
There are funds such as PTO funds, club funds, booster funds, and memorial funds that are not district funds and can be spent with the organization’s approval, he said.
Some teachers who spoke with NewsCow, on the condition they not be identified by name, said supervisors were beginning this week to warn district employees of the spending freeze.
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ESTES MEMO IN ITS ENTIRETY:
Dear Winfield Staff,
We have a situation for the month of December and possibly some of January that requires me to notify you. As you are aware, we have received huge cuts to our budgets (just like other public schools) due to state shortfalls of revenue. Last year, our district lost about 1.2 million dollars due to cuts from last years budget and cuts to this year’s budget. Already this year, we have received information from the state that our budgets for this year will receive additional cuts that to date will total just under $700,000. There may be even more cuts made to this year’s budget depending on what the state legislature does this spring.
So what is happening with December and possibly part of January? Each year, December and June are critical months for a district’s cash flow. This happens because December and June are the ending periods for tax collections. As districts approach those months, we have to be mindful that we have sufficient cash on hand and we depend heavily on the state sending our allotments on time. Since the state has sent our second November allotment just today, we fear that our December allotment may also be late. Because of the cuts to our budgets, our cash reserves have been depleted and if the state allotments are late, it could create a situation where our district MAY not be able to meet payroll the second pay date in December. At this point, it is just a heads up to you that this is a possibility. We believe that we will be able to get the cash needed through an early allotment from either the state or the county. Other districts may be requesting early allotments from the state and the state may not have the funds available to grant them. The county is a better possibility. We feel that we will receive an early allotment from one of them and there will be no problem in either December or January but at this point, we can not say for certain. We will keep you informed.
Supposing the worst case scenario, if we can not make the second payroll in December, we will pay you all we can and then send the rest when we receive the money. We understand that everyone must pay their bills in a timely manner. If the worst happens and we must wait until our allotment arrives, we will act as quickly as possible to get your money to you. Again, we do not believe there will be a problem but we want you to know about the possible threat now instead of later.
Please understand that these cuts and the state’s cash flow problems have not been created by the district. These problems exist due to loss of funding to both our district and the state department of education. We will do our best to solve these problems, but we must all work together to ensure they are resolved satisfactorily. I am freezing all budgets from today until January 15. I understand there are classes and programs that need to replace consumables in order to meet the needs of students. However, ALL requests for needed district funds must be approved by building principals or supervisors and then by the district office. No district funds are to be spent unless such approval has occurred. There are funds such as PTO funds, club funds, booster funds, and memorial funds that are not district funds and can be spent with the organizations approval.
I want to encourage everyone to treat this for what it is, a heads-up that we may have difficulties with cash flow for the month of December and the first half of January. We will, of course, keep everyone informed about the cash flow situation. When it is resolved, we will certainly let you know.
If you have questions, please feel free to contact me anytime.
Marvin
