The Park City School District released an annual audit of the past fiscal year online this week, all evidence of what the school district has been going through to get its financial house in order.
The 58-page document outlined the nuts and bolts of where the school district spent tax dollars over the past fiscal year.
And one point came forward: the financial health of the Park City School District is on the mend.
Last year, the local Board of Education faced serious concerns about a looming deficit. Original projections estimated a $4 million shortfall. When Business Administrator Todd Hauber was brought on to the school district staff, he estimated a shortfall closer to $2.7 million.
At the end of the fiscal year in June, between budgetary cuts and an influx of incoming property taxes, the school district ended the fiscal year with a $1.7 million shortfall from a roughly $45 million operating budget, which the school district will be able to compensate for.
"Before I started, there was a great concern there would be a financial deficiency," Hauber said, "and that is would be so large that the next fiscal year would have challenges in balancing books, that there would be such a huge, burdensome deficit that something would have to happen."
"We have corrected the picture," he added. "There is no longer a deficiency, we are not using our reserve funding and the district then has sustainable revenue source for next four to five years."
The school board used two measures to restore the financial health of the school district: they cut the operating budget by $3 million and raised local taxes by $4 million. Between the two actions, the board will be able to bring expenditures and revenues back into line. The increase in property taxes is anticipated to cover the district's budget needs for the next five years, generating $4 million in extra revenue.
"We are trying to keep as close an eye as possible on the property taxes," said Moe Hickey, the Board of Education president. "We are staying in touch with the county and have a good grasp on that.
"I think we have felt more confident about the budget since we implemented the tax increase," he added. "For the first time since I have been on the board, we are looking at a five-year budget plan so that we will have a strong analysis where we would be in a few years This way we are really looking at a nice, long-term approach, and not annual Band-Aid."
The school district will be using the incoming property taxes to build up a stronger reserve fund, money allocated specifically in case of an emergency or some type of financial hardship.
"We have set a 16.8 percent target, basically two months of our operating budget, and set that money aside for any terrible thing that could financially happen to a district it's money just for the unknown."
The local tax increase was approved at the start of the school year in August, shortly after the end of the fiscal year in June.
With property taxes due this week, residents are paying the higher rate this year. Primary homeowners in the school district which includes Park City and the Snyderville Basin are to be taxed 55 percent of their property value. For a Park City home with an estimated value of $500,000, property value taxes would increase by $111. That primary homeowner who paid $1,243 last year now pays $1,354 in taxes, according to the school district. Second homeowners and businesses pay property taxes based on the total assessed value. For a second home or business valued at the same amount of $500,000, the property tax increased by $202, from $2,260 to $2,462 per year.
The school district anticipated very little growth in the coming years that would impact the revenues from the property tax increase, a major source of incoming money for the local schools. As cost of operating the district increases, the board has decided to save incoming taxes to compensate with a declining amount of taxes coupled with an increased cost for items such as teacher salaries, fuel and even classroom supplies.
"The school district needs to maintain the budget as it looks forward," Hickey said, "and that is an art as much a science there will be time to make adjustments if needed."