Cherry Creek School District sees ‘multi-year impact’ on budget from COVID-19

Enrollment drop, deficit was expected even before pandemic

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For the first time in recent history, Cherry Creek School District officials faced a possible decline in student enrollment, creeping closer and expected soon.

Fueling growth in the district’s east side, new homes were still being built in the east Centennial and far-southeast Aurora areas — a sea of houses and plains that can seem a world away from most metro suburbs — but enrollment had been dropping in the district’s west side and other pockets.

Meanwhile, the district saw increasing costs associated with programs for mental health, special education, gifted and talented students, and other initiatives.

Add to that what the district says is inadequate funding from the state, and it found itself projecting a $50 million budget deficit in the coming years.

And that was before the advent of COVID-19, wreaking havoc on Colorado’s economy and forcing state lawmakers to consider cutting about $3.3 billion in spending over the next year or so.

For the Cherry Creek district, that could result in an additional shortfall of up to $60 million for next year, said Superintendent Scott Siegfried.

“This means that in the most difficult time in the 70-year history of the district, we will be required to implement unprecedented plans with millions less in funding,” Siegfried told the Cherry Creek community in a mid-May video.

The added shortfall “will have a direct impact on our ability to keep all staff employed, to pay them a meaningful wage and our ability to deliver the same high-quality programs you expect,” Siegfried said.

To ensure students are kept a safe distance apart amid coronavirus concerns, the district could implement an alternating in-person, at-home schedule — an “A day, B day” system — this fall. And if state or local officials decide in-person classes can’t yet resume, the district is prepared to keep relying on online-only learning, Siegfried has said.

Cherry Creek officials say they will provide training for teachers, students and parents this summer to ensure everyone can effectively use the online platforms.

Siegfried hopes state lawmakers can shape a budget that supports educators as best they can, but he knows the district’s situation is dire no matter what.

“To contemplate physically distancing schools while we’re having to make significant cuts in people and programs and technology doesn’t make sense — at some point, the system will crash,” Siegfried told Colorado Community Media in mid-May.

To slow the bleeding, the district plans to implement a district-wide salary freeze starting July 1 and a 15% reduction to all department budgets — without cuts to school budgets, at least for now — and eliminated most travel and consultants for next year, said Abbe Smith, district spokeswoman. Another measure is the implementation of a new health savings account (HSA) health plan for the new school year that will save the district money.

“Moving into next year, we’ll have to think about furlough days” and possibly laying off certain personnel, Siegfried said.

Asked what staff positions and how many personnel the district anticipates having to cut, Smith couldn’t say for sure. It’s also unclear whether layoffs would affect more of the non-teaching workforce, such as bus drivers and custodians, compared with teachers and administrators.

“This is a speculative question,” Smith said. “In a worst-case scenario with budget cuts, we would have to consider significant cost-cutting measures, including a possible reduction in staff.”

Speaking about COVID-19’s weighing on budget revenue, Siegfried said in the video: “More than likely, this will become a multi-year impact.”

Bond, mill levy election possible

The district traditionally has seen “robust year-to-year growth” in student enrollment in recent decades, but the expected enrollment slowdown contributed to the district’s expected shortfalls, according to Smith.

Over the past year, the district engaged with parent groups, community task forces and the Council of Chairs — parents, staff and community members representing different groups throughout the district — about how Cherry Creek can meet mounting budget challenges, according to a May district newsletter.

Before COVID-19, the district was preparing to implement the community’s recommendations for cutting costs, finding new sources of revenue and considering a bond and budget election in fall 2020, the newsletter said.

A bond is the issuance of a debt to investors that the district eventually will pay back with interest. School districts often use bonds for projects such as construction and building maintenance.

The election also could include a mill levy — a property tax increase. Mill levies pay for salaries, programs and items related to classroom instruction.

“An election is one option as we consider how to address catastrophic state budget cuts that would severely limit our ability to deliver a high-quality education to 55,000-plus students in our district,” Smith said.

The board has not yet called for an election and has not set an amount for a bond, and the amount for a mill levy is not clear yet either, Smith said.

“However, the Budget Task Force and Council of Chairs identified $750 million of needs for bond projects. District leadership narrowed that figure down to $300 million in district needs,” Smith said. “Now, as the district considers whether to move forward with an election in the fall, we are working to reduce that number even lower.”

The district’s needs include continued maintenance of buildings — items such as new roofs and renovations — along with safety and security improvements, Smith said. Also considered is investment in “innovation across the district,” Smith added, including expanding the Cherry Creek Innovation Campus.

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