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Posted: 09/19/12

Romeo could be looking
at 'cliff year' for budget

by KIMBERLY SCHERER
Observer Special Writer

      The Romeo Community School District will have to make some tough decisions in order to avoid a potential deficit in the future.
       David Massoglia, the district's executive director of business services, presented updated budget projections to the Board of Education during its Monday meeting. The projections reflect a scenario if no action was taken.
       Massoglia said the district could lose 113 students for next year, which at $7,500 per student, could mean a loss of almost $850,000.
       "That makes the situation very difficult," he said, adding the fund balance goes pretty quick when a district starts to lose students.
       Some funding went away this year, which didn't do the district any favors. Massoglia said there were some teacher savings to the tune of about $200,000 and many teachers opted out of the district's health care, which was another big savings. Many more teachers have opted to take a spouse's insurance, for example, a number that went from 24 teachers to 40.
       "Most districts are facing the same cliff," Massoglia said of their situation, explaining that the 2011-2012 school year is a "cliff year" for many districts.
       In about 18 months, if no action is taken, it's projected that the school will run out of money. If that was to happen, Massoglia said the district would be required to put together a 2- or 4-year plan detailing how it will get out of its deficit. If nothing is done for a few years, that could lead to an emergency manager coming in to straighten out the situation.
       Board President Anita Banach had a more positive outlook. She said last year, while many other districts were hitting the cliff, Romeo was able to grow its fund equity. They did this by trying to keep revenues and expenditures in place.
       "We're sitting at the end of `11-'12 still with a 10 percent fund equity. That's way higher than the majority," she said. "I don't want the public to think we're the first ones to hit a wall."
       "I don't think anybody sitting on this board has any plans to get this district into a financial situation. We're going to have tough decisions to make," she said, adding that they've already been very conservative and responsible in terms of being proactive.
       "We're still sitting in a solid place," Banach said.