Mehlville budget projections reflect planned spend down

District in good fiscal shape, according to superintendent

By Kari Williams

Though projections show the Mehlville School District dipping below the Board of Education’s goal of maintaining 13 percent in reserve funds in 2016, Superintendent Eric Knost said the district is in good financial standing.

Chief Financial Officer Noel Knobloch projects district reserves will be at 11.62 percent, or roughly $11 million, by the end of fiscal 2016. Fiscal 2012 reserves currently are at 22.66 percent, or nearly $20 million.

Knost told the board at its Oct. 17 meeting the numbers Knobloch projected include $500,000 per year for technology through 2016 because “things have been favorable.”

When Knost originally asked the board to approve the technology plan, which currently consists of the one-to-one open source pilot program, as part of the district’s five-year plan, the $500,000 was only budgeted for two years.

If all of Knobloch’s assumptions remain the same, the district would “slightly dip below” 13 percent, according to Knost.

“We need to keep in mind that’s a conscious decision that is made,” Knost said. “We can change that at any time if we feel that shouldn’t be supported, but all of this is good news … We’re in good shape.

“These are planned decisions made by the administration, accepted by the board …”

Other assumptions Knobloch used include:

• An increase of 350 full-time kindergarten students, which would increase weighted average daily attendance, or WADA, from 9,540 students to 9,890. WADA “is used to project state revenue for 2014 to 2017,” according to information Knobloch provided to the board.

• No increase in local tax revenue.

• An increase in Proposition C sales-tax receipts “as the economy improves” and due to “the additional ADA (average daily attendance),” which would be offset due to losing tuition “from current kindergarten students and the continued wind-down of the VICC (Voluntary Interdistrict Choice Corp.) program,” Knobloch wrote.

• Proration for the foundation formula increasing 1 percent per year, making it 96 percent for 2017.

• No hiring of additional staff, except for additional full-day kindergarten teachers.

• Net salary increases from 1.5 percent to 2 percent.

• No increase in retirement contribution rates, and “increases in the annual expenditures will be limited to costs associated with higher overall salaries.”

• An 8-percent increase in medical costs.

• Capital expenditures, which “will be allocated based upon priorities outlined in the facilities plan,” Knobloch stated.

The projections, according to Knobloch, show the district is in “very good financial shape for the next two or three years.”

Though “something could pop up” to change the projections, Knobloch said since he has been in the district, expenses are usually less than projected and revenues are usually more than projected.

“In all likelihood, those numbers will probably be better than that, but you try to look at what the worst-case scenario would be based upon what you know today,” he said.

Board Vice President Elaine Powers said she would be interested in seeing what projections would look like assuming bus repair and returning to a three-tier bus system.

Knost said there is the possibility of leasing buses as opposed to new purchases.

“There’s some creative ways that we can put that into that long-range plan that doesn’t necessarily have a significant impact on the bottom line,” Knost said.

Knobloch said with leasing the cost can be spread over five or seven years.

Powers also said depending on whether tuition-free, full-day kindergarten is possible after seeing enrollment numbers, she would “be willing to look at some investment of budget dollars, if necessary, to make this happen.”

Knobloch said if Mehlville gains an additional 350 children, the district receives about $2 million more from the state, loses about $600,000 and spends about $1.2 million or $1.3 million on new staff, plus benefits.

“You add about $300,000 of cushion there,” Knobloch said.

If district officials do not feel good about the numbers and Knost does not make a recommendation for tuition-free, full-day kindergarten in December, the superintendent said the same process will occur next year.

“I think it becomes something annual that we have to visit and we can factor into that consideration …,” Knost said.