By Jim Newell
Lake Orion Community Schools are in better shape financially heading into the next fiscal year, and the district is set to approve its annual budget this month.
The Lake Orion Board of Education unanimously approved the 2017-18 tax rate levy and the first reading of the proposed 2017-18 general fund budget at its meeting June 13 after Lake Orion Review press time.
“It’s very much a draft budget at this point,” said John Fitzgerald, assistant superintendent of business and finance.
Fitzgerald will present the school board a budget for approval at the June 28 meeting. The district’s fiscal year is from July 1 through June 30, 2018.
Tax Levy Rate
The district set the General Fund Millage Rate at 19.7497 mills.
“Legally, school districts can only levy up to 18 mills for operating revenue therefore our fiscal year 2018 actual levy will be 18 mills in the July levy,” Fitzgerald said.
There also will be a tax levy of 1.9846 mills for the Building and Site Sinking Fund and a Debt Service Fund(s) millage of 7.491 mills.
One mill of tax levy on a parcel of property with a taxable value of $100,000 produces $100 of tax revenue.
Local municipalities will levy the taxes on the district’s qualifying non-homestead properties for the general fund, and on all properties in the district’s tax base for the Debt Retirement and sinking fund millages.
The estimated revenue for the general fund millage is $7.511 million; $3.639 million for the sinking fund; and $13.737 million for the Debt Service Fund, with a total tax levy revenue of $24.887 million.
2018 Lake Orion Schools budget
The district’s total estimated general fund revenue for 2017-18 is $81.355 million, a slight increase over the previous year’s $81.158 million budget.
General fund revenues include $8.793 million from local sources, $64.525 million from the state, $2.496 million from federal sources, $5.174 million from ISD and Medicaid sources and $365,000 from “other revenues.”
Total expenses for the 2018 budget are $80.848 million, netting the district $507,379 toward its fund balance. The district’s current estimated fund balance for the 2017-18 school year is $7.1 million, or nearly 8.8 percent of the annual operating cost.
“The plan is getting back to our 10 percent fund balance,” Fitzgerald said.
The district has had to dip into its fund balance over the past few years, but generally tries to keep its fund balance at 10 percent of operating costs, or above.
Ginopolis said the school board has made it a priority to increase the district’s fund balance to 10 percent.
“That’s been our goal, to improve our fund balance. The good news is that we’re starting to build it up,” Superintendent Marion Ginopolis said. “We still don’t know what we’re going to get from the state. Their budget hasn’t been finalized. But we’re certainly in a better position now than we were.”
District general fund expenses include $41.878 million for basic instruction, $10.358 million for added needs and $28.273 million for total support services instruction.
The district receives the bulk of its revenue from the state in the form of the foundation allowance. In 2016-17, Lake Orion received $8,123 for each student enrolled.
The district budgeted, conservatively, for a foundation allowance increase of $75 per student from the state, but Fitzgerald said he’s heard Lake Orion could receive an increase of around $87 per student.
Any additional foundation allowance funds would go in the district’s general fund – for unexpected costs or program or cost increases – and then could end up in the fund balance if the school board and administration decide to do so, Fitzgerald said.
“The reality is, I’m going to ask the board to approve the budget based on faith of what we’re going to get from the state,” Fitzgerald said.
By Jim Newell