An organization focused on Douglas County schools issues says the district is hoarding money better used in classrooms.

The district, meanwhile, says it is managing finances prudently, and putting any excess back into the classroom.

An independent report lends some validity to both viewpoints.

Credit-rating agency Fitch gives Douglas County high marks for its fiscal practices.

“The district’s financial cushion has improved significantly in each of the last two fiscal years, driven by large operating surpluses and conservative financial management,” reads the Jan. 28 report. 

Fitch, which lists the district’s unrestricted fund balance at $86.7 million, praised DCSD for conservative budgeting that increased revenues and reduced reliance on funding from voter-approved tax measures. Douglas County voters rejected such measures in 2008 and 2012.

But the volunteer Strong Schools Coalition doesn’t share Fitch’s enthusiasm about those healthy reserves, saying they could have prevented this year’s $3.6 million cut to area high schools.

Strong Schools questions many aspects of the budget, including a district policy of allocating funds to individual departments to use as they see fit. That includes saving the money and carrying it over from one year to the next, a practice Strong Schools says pads the fund balance and sells students short.

“It’s not a for-profit organization,” said Susan Meek, Strong Schools’ vice president. “They’re holding too much, and we are not serving those kids.”

Not so, said school board member Kevin Larsen. The school board aims to keep 4 percent of its operating budget in the unassigned fund balance at all times. For the 2011-12 school year, the amount not earmarked for other uses was about $18 million, he said.

“Anytime we’re above that line, we’re putting that money into some effort that’s going to support the classroom in the next year,” he said.

The district made the decision to cut the high schools’ budgets in mid-2012, when the economy still was floundering and the state revenue forecast was gloomy. To address the budget cuts, large class sizes and potential loss of electives, high schools shifted to a block schedule.

In September, DCSD got an influx of property tax revenue, utility savings and other unanticipated funds. It put $125 per student in those one-time funds back into the schools. It was too little, too late, says Strong Schools.

“Although the district returned money to the schools in the fall, principals, who finalize their budgets in the spring, were unable to make the best building decisions possible because they were unaware these funds would be available,” said Laura Mutton, the group’s president.

At the high school level, officials say the problems were not just financial.

“It didn’t matter if we were going to cut or not,” said Dan McMinimee, assistant superintendent of secondary education. “Programming was unsatisfactory. We had to change the schedule. We had to do something to drive down class sizes.”

The district also couldn’t have predicted September’s $6.6 million influx of tax and other revenue, he said, and couldn’t budget with money that wasn’t yet in its coffers.

“I wish we would have known last spring,” Chief Financial Officer Bonnie Betz said. “Absolutely that would have made things better. But we didn’t.”

Strong Schools questions the district’s ability to forecast, or find the money to bridge the funding gap it believes already was within its budget.

“Bottom line, we took unnecessary cuts to the classroom,” Meek said.

Now, Mutton says, “We are simply asking them to correct the problem and restore funding to our schools."

That may be what happens in 2013-14. DCSD already has announced no additional budget cuts, and if the current strong revenue projections hold true, officials say they will direct more money to the classrooms.

High school principals then can decide how to use that money. That could include hiring additional staff to take the burden off teachers who added classes in 2012-13, or shifting away from the block schedule.