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You are Viewing an Archived IssuePosted: 06/27/12
Fund equity used to
balance RCS budget
by CHRIS GRAYRomeo Community Schools will spend $2.6 million to balance its budget for the 2012-13 school year.
Observer Staff Writer
The Board of Education voted 6-0 to finalize its 2012-13 budget with expenditures at $49 million and revenue at $46 million. Trustee Terry Davis was not present at the June 18 meeting.
Following the meeting, David Massoglia, executive director of business affairs, said the district's fund balance will drop to roughly $1.5 million after covering the gap.
"It's not a deficit," he said. "We're spending fund balance to cover the budget gap when expenditures exceed revenues."
Massoglia said the amount spent out of the fund balance could go down depending on whether the state lowers the retirement rate. As of now, the rate increase will cost the district $750,000 by jumping from 24.5 percent to 27.4 percent.
He said the budget also depends on any concessions that can be made during negotiations with employee groups. For instance, he said the district could tie in fund balance percentages to union contracts.
"We're looking to resolve issues in that manner," Massoglia said. "If that doesn't work, we'll continue to look at other cuts and reductions."
Superintendent Nancy Campbell said spending out of fund balance will need to be reduced if the district hopes to be in good financial shape.
"If you continue to use your savings account to maintain your daily lifestyle, eventually you will not have any savings and you will have to cut," she said.
Campbell said previous budgets have included federal and state funding to help cover the $470 per-pupil cut districts received, but there are fewer of these payments to cover it.
"That's a big, sizable amount of money that is gone and we've been told it is not coming back," she said. "The message from the state is `live within your means.'"
Reductions in this year's budget included the elimination of four teacher positions and cuts to textbook funding and office supplies.
Contributing to the savings this year was the board voting 6-0 to switching to 80/20 health care coverage, meaning all employees will contribute to 20 percent of health premium costs. Massoglia said this will save the district roughly $1 million.
Campbell said looking at what the district would net with the 80/20 when compared to keeping a hard cap, it was a $673,000 difference.
"It begins at the end of your contract year, so for some of (the employee groups) it may begin July 1, and for other units Sept. 1," she said.
She said the district will decide every year on whether to maintain the 80/20 split or go to a hard cap.
Unfortunately, the future isn't looking too bright. If nothing changes in 2013-14, Romeo schools is facing $3.3 million in expenses over revenue with only $1.5 million in savings.
"We will definitely be able to maintain this full year," she said. "When looking at `13-14, if everything were to stay the same we would be running into major problems."