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01/19/10
Undesignated funds, savings from spending freeze suggested to bridge school funding gap
Use of undesignated fund balance, savings from a freeze on school supplies and capital expenditures, and use of contingency funds are among proposals for offsetting an anticipated curtailment of more than $621,000 state subsidy that the School Board is considering.
At a meeting Jan. 18, 2010, the School Board's Finance Committee reviewed a revised proposal from Suprerintendent Alan Hawkins to meet the revenue shortfall, which is expected to be part of the state's 2010 supplemental budget. Last fall, the state education department announced $38 million in probable reductions in state aid to schools statewide, in an effort to make up for revenue shortfalls at the state level.
The proposal presented Jan. 18 is an update of one presented to the board in November, and identifies savings in these areas:
- Full use of contingency funds $70,000
- Debt service (bond refinancing) $32,572
- Freeze on supplies, books etc. through the end of the school year $125,000
- Freeze on capital improvement spending $70,000
- Special education position not filled $17,000
The School Department is also realizing an additional $73,110 in revenue this year from a premium on bond refinancing. This is offset, however, by $166,500 in additional special-education expenses and $152,000 for staff retirements.
The curtailment and additional expenses, minus identified savings and additional revenues, will leave a gap of $552,258. Hawkins proposes to meet this gap by using $341,899 of the schools' $541,942 undesignated fund balance; and, $210,429 of the $327,489 in Medicaid reimbursements that would have been used for the 2010-2011 budget.
Reimbursements for special-education services eligible for Medicaid funding are typically budgeted two years after they are billed, allowing the schools to use actual reimbursements rather than estimates.
Adopting this proposal would leave $200,113 available in undesignated funds for next year, and $117,060 in Medicaid reimbursements. Annual carry-forward balance from undesignated funds is typically $250,000.
Rebecca Millett, School Board chairman, said the board will talk more about the proposal at the finance committee's next meeting Jan. 26, then vote at the Feb. 9 business meeting. In a telephone interview, Millett said board members were mulling the proposal over. "There were some good questions asked," she said of the Jan. 18 meeting.
The finance committee meeting is scheduled for 6:30 p.m. Tuesday, Jan. 26, in the High School library.
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