The Madison County School Board on Thursday night approved the district's working budget 4-0. Board member Chris Hager was absent.
The working budget reflects most of the same numbers presented in May’s tentative budget, but the board has a “better knowledge of revenues and expenditures” since the tax rate was determined and student enrollment and staffing needs are known, said Mona Isaacs, board chair.
One item not included in the working budget was bus purchases, said Debbie Frazier, the district’s chief financial officer.
However, school bus purchases are “something we are going to have to very seriously look at in the future with our fleet,” she said. “It’s imperative that we replace about 10 buses a year to stay on the depreciation schedule.”
Later in the meeting, board member Becky Coyle asked how the district would fund bus purchases.
The district’s finance team will present the board with some options around mid-year, said Superintendent Tommy Floyd.
“We have to keep our bus fleet up. I know you expect that,” he said.
The district started the year with a $5.67 million unreserved balance, carried over from last school year, Frazier said. The amount is similar to the previous two years, she said, which were started with $5.68 million and $5.72 million.
The district also begins with a $5 million capital outlay “cushion” that has been accumulating since 2007, Floyd said.
Capital outlay money is a portion of state funding originally slated to offset costs of construction, renovations or emergencies. However, if a district does not use the money and can “live within its means,” the money can be used in the general fund, Floyd said.
The board may be asked to add the $1 million in capital outlay money (available for this year) to the general fund to offset the shortfalls that were predicted in January, the superintendent said.
Since January, the district’s finance team has “whittled down” the projected shortfall from $3 million to around $1.6 million.
Although this budget does not reflect the use of the $1 million capital outlay, “it would be a reasonable thing for us to anticipate doing that in the current year,” Frazier said.
Excluding the use of $1 million capital outlay money, the ending balance for the current fiscal year is projected to be $4 million, which is the beginning balance minus the $1.6 million shortfall.
The general property tax will produce about $16.6 million, which is up from $15.8 million last year. The revenues reflect a 94.5-percent collection rate, Frazier said.
Although the board voted in August to keep its tax rate the same (58.3 cents per $100 assessed value), additional revenue will be generated by an increase in property assessments.
Only $10,000 in revenue was budgeted from interest on investments, compared to $143,000 and $46,000 in previous years.
Historically, the district would generate close to $500,000 on investments a year, Frazier said. But, “the bottom’s just dropped out (of interest rates). This has been a real difficult area for us to overcome.”
The working budget estimated $38 million in SEEK funding from the state, which is less than what was projected in May’s tentative budget.
Frazier said the district expects to lose around $800,000 in SEEK because property assessments are up in Madison County. Higher local property values means less state funding, she said.
“You’ll probably recall a couple years ago, we weren’t even paying teacher retirement out of the general fund. That was completely funded by the state,” Frazier said to the board.
The first year the district was required to pay benefits, they paid 0.25 percent. Last year, it paid 0.5 percent. This year, it will pay 1 percent, adding $400,000 to the budget, she said.
“We have to be cognizant of the fact that in about three years, it will be up to three percent,” Frazier said. “That will be about $1.2 million based on current staffing.”
The cost of additional staff – three teachers and five para-educators – was included in the working budget.
The budget also includes about $1.8 million in salaries of those who were paid by the Edujobs federal grant last year.
The previous two years, state and federal funds covered a portion of personnel salaries. However, there are no such funds this year, Frazier said.
The cost of school nurses has increased.
The budget item was $329,000 last year and is $450,000 this year.
However, CSEPP (Chemical Stockpile Emergency Preparedness Program) will contribute $150,000 to the nursing program.
Student transportation expenses have increased.
The district has gone from spending $503,000 in the 2009-10 school year to $868,000 in 2011-12. This year $900,000 was budgeted.
“We are not seeing any dips in the cost of diesel fuel,” Frazier said. “Hopefully $900,000 will be sufficient. If not, we’ll be looking at that again in January or May.”
Crystal Wylie can be reached at email@example.com or 623-1669, Ext. 6696.