Clarkston Community Schools will need about $2.2 million from fund equity to balance the budget for 2004-2005.
The school board on Monday adopted a ‘major funds? budget anticipating $67.4 million in revenue and $69.6 million in spending for the fiscal year beginning July 1.
As is the norm for school budgets, this one is based on income and enrollment projections which will not be firm until at least fall. The projections are conservative, however, at least based on recent experience.
Bruce Beamer, executive director for business and financial services, reviewed the proposed budget at a public hearing attended by only three members of the ‘public? (including trustee-elect Joan Patterson and trustee candidate Diane Weller).
The budget assumes no increase in enrollment from the 2003-2004 school year (officials were surprised by lower-than-expected enrollment last year) and no increase in the state’s ‘per pupil? foundation grant.
With those estimates, ‘We’re not anticipating the state making a cut in state aid in fiscal year 2005,? Beamer said.
Michigan’s fiscal year begins in October, and the governor and legislature continue to debate ways to balance the state budget. Beamer expects to see the full $6,947 per pupil grant promised last year.
The new budget includes the estimated $1.6 million in reductions and ‘revenue enhancements,? which includes a pay-to-participate athletics program and a net reduction in 4 full-time equivalent teaching positions.
The expected deficit, however, will reduce the overall fund equity of about $8 million, or 11.6 percent of the total ‘major funds.? School officials had set a goal of maintaining a 15 percent fund equity.
A number of variables may change, depending on state budget decisions. Last year’s teacher contract, for example, calls for a 2 percent salary increase in 2004-2005 if the state increases the foundation grant. Beamer included adequate funds in the budget to cover that increase, but if state aid stays level teachers will receive only a 1 percent pay raise.
The expected $69.6 million spending is well above the final 2003-2004 budget figure of $67.2 million, but Beamer noted a number of unique line items.
They include payments to employees who took the severance package this past spring, another transfer to the special fund anticipating the opening of new facilities in fall 2005, a 10 percent increase in health coverage premiums and a 10 percent increase in utilities (part of which will including heating of partially completed construction this winter).
Beamer said the district is now required to pay 14.87 percent of retirement benefits, up from 12.99 percent, ‘and no one is thanking us.?
Beamer said the anticipated $1 million in additional revenue comes in part because of a 5.5 percent increase in non-homestead tax revenue. The total taxable value of property in the district is $1.8 billion, with non-homestead taxable value increasing to $391 million, according to the state tax rate request form.
The ‘major funds? include the standard general operating fund, plus community education, local, state and federal grants, new building costs, special education and autistic program.
The district also has ‘special funds? including athletics, food service and childcare, plus the continuing debt service fund.
Beamer said there are possible ways to avoid the 2004-2005 deficit spending, including limiting spending to 98.4 percent of the budget, making additional staffing adjustments or seeing a significant increase in enrollment and/or state aid.
Keeping rein on the bond construction budget is also crucial to the district’s overall bottom line, Beamer said.
‘We must stay on time with our construction schedule,? he said.
Superintendent Al Roberts voiced concern about handling special education expenses. While federal Medicaid reimbursements are supposed to cover about 40 percent of that budget, Roberts said the reality is closer to 17 percent.
‘By today’s rules, we are pretty well directed on what we must provide for special education students,? Roberts said. ‘Any shortfall comes out of our general fund budget.?
When considering all district budgets, including debt service, Beamer said the district is keeping track of $152,030,355 for fiscal year 2005.