Preliminary budget paints bleak fiscal picture
GLADSTONE – The Gladstone Area School Board adopted its preliminary budget for the 2013 -2014 14 fiscal year during a special meeting .
The district is anticipating an additional 10 students this year and a $120 per student incentive from the state for an increase in performance.
Because the per pupil foundation allowance will be $6,966, the district expects that the two payments will increase the money coming from the state of Michigan by $250,860.
While the district is expecting the increase in funding per student, changes to state funding designed to offset the cost of the Michigan Public School Employees’ Retirement System have reduced the total gains the district will receive.
“If you shake everything out it comes to about an $80 per student net increase plus a $40 per student (stipend) for student performance,” said Superintendent Jay Kulbertis.
Because a number of teachers retired this year, the cost of providing instruction in the district dropped.
Even with the hiring of a new, part -time special education instructor and salary increases built into contracts the total cost of providing instruction in the district dropped by $99,388.
To offset the rising costs of providing food service and meeting new government lunch requirements, the district has decided to increase the cost of school lunches and breakfasts. Families can expect to pay an additional 35 cents per lunch and 20 cents per breakfast.
“Though I’m sure people won’t be pleased that their hot lunch prices are going up, it’s a necessity,” said Business Manager Mike MacFarlane.
Despite the cost savings in providing instruction, the additional money from the state per pupil, and a drop in the district’s total food service cost caused by the new meal prices, the district still expects to be functioning at a loss – with only $11,835,390 in revenues to pay for $12,024,043 in expenses.
Total expenditures in the general fund have decreased in the last year by more than $50,000 – despite a $25,432 increase in business expenses to cover back taxes – and revenues in the fund have increased by $250,860. Still, the fund will be functioning at a deficit, and only $99,463 is projected to remain in the general fund by June 30, 2014 under the adopted initial budget.
“When you look at the performance for 2014, we’re going to use ($188,653) of the fund balance. We can’t do that again or we’re on the wrong side,” said MacFarlane.
The district does not believe the initial budget adopted by the board will necessarily reflect actual spending or revenues in the 2014 fiscal year.
“We have some things in the works that we can’t count on yet in terms of grants that we’ve applied for that can’t be built into the budget … by and large because the Feds are on a different fiscal year than we are,” said Kulbertis.
The general fund is not the only fund operated by the school that will run at a deficit if changes are not made. The Public Library Fund is projecting a fund balance of only $1,662 by June 30, 2014.
“It’s going to be tricky to keep the library open. I think that last thing that Lori (Wells, public library director) wants to do is reduce hours, but I suppose if that’s absolutely necessary that would have to happen,” said MacFarlane.
The library is expecting $100,665 of revenue to come in during the coming year but predicts expenditures to be around $118,865. To offset the costs the board discussed the influence of funding from penal fines from Masonville Township, which entered into a service agreement with the library in March 2012.
In addition to the penal fines, the board considered fundraisers, additional programing at the library, and utilizing the new partnership with Rapid River Schools to develop a satellite library in an effort to grow more library users.
“One of the things that we’ve done district wide to address the tight economy is to grow programming through it to pull ourselves up out of this spiral rather than trying to cut our way out of it, because then it’s hard to ever grow those programs back,” said Kulbertis.
According to Kulbertis one in 10 Michigan schools was at a deficit, having zero fund balance, at the end of 2013. He also stated that if school districts were pre-audited based on their preliminary budgets for the 2014 year that number would be projected to double to one in five.
“We’re doing the best that we can. We’re doing better than a lot because I think the culture that we’ve adopted is one of not just doing more with less but trying to maximize our efficiency as well as our effectiveness,” said Kulbertis.