Having implemented more than $2 million in reductions, the Mehlville School District’s preliminary 2011-2012 budget projects a “slight deficit” and a 14.5-percent to 15-percent operating reserve by the end of next school year, according to the district’s chief financial officer.
The Board of Education received preliminary budget figures last week and will consider approval of the final 2011-2012 budget when it meets on Tuesday, June 28.
The district is projected to end the current school year with a “break-even” budget, said Chief Financial Officer Noel Knobloch, who is forecasting 2010-2011 revenues of $102,025,000 and expenditures of $101,893,000 — resulting in a $132,000 surplus.
For next year, Knobloch currently is anticipating a 2.4-percent decrease in total revenues and a 2-percent decrease in total revenues and a 2-percent decrease in expenditures.
The preliminary 2011-2012 Mehlville budget puts revenues at $99,630,000 and expenditures at $99,740,000 — a deficit of $110,000.
“What you have in front of you shows a slight deficit next year, well within the range we talked about before of about $110,000,” Knobloch told the board at its May 19 meeting. “That could go up or down depending upon what we find out before the next meeting.”
The preliminary budget reduces expenditures by $2.1 million from the previous year. Among the reductions is $1.3 million in savings related to personnel, including a salary freeze.
“Revenues are down a couple million dollars, and then we cut expenses by well over $2 million …,” Knobloch said. “Part of that wasn’t actually cuts but was reductions or increases which weren’t granted in relation to anticipated raises and salary increases.”
The final number of employees and their placement on the salary schedule will not be known until early next month, but the preliminary budget was prepared based on the elimination of three administrative positions, 10 certified teaching positions through an early retirement program and 13 classified positions by switching to a four-tier transportation system, Knobloch said.
But those reductions will be offset by an estimated 4-percent to 6-percent increase in health insurance premiums, as well as the district’s contributions to the Public School Retirement System and Public Education Employee Retirement System increasing by 0.5 percent and 0.23 percent, respectively, Knobloch said.
In all, the district is projected to spend $76,036,000 on salaries and benefits in 2011-2012, according to the preliminary budget — a 1.2-percent decrease from the projected $76,962,000 that will be spent on salaries and benefits in 2010-2011.
Additional reductions for 2011-2012 include an 8-percent decrease in purchased services, such as copying, and a 34-percent decrease in capital expenses.
Other than a $150,000 cafeteria renovation at Buerkle Middle School, which will be funded with restricted food service moneys, most capital projects for the next school year have been deferred, Knobloch said.
“We did get as skinny as we could in the facilities area. We cut that down to the bare minimum next year with regard to what we’re going to do in the areas of parking lots and other areas that need to be looked at — maybe we can get away without it for a couple years, but eventually it will come back to haunt us,” he said.
On the revenue side, preliminary local assessed valuations have declined by 2.5 percent, meaning Mehlville likely will be able to roll up its property-tax rate to collect the same amount of tax revenue as the previous year, roughly $60 million, Knobloch said.
The district will no longer benefit from a one-time recoupment of $750,000 it received in 2010-2011 due to a glitch in the 2009 reassessment, he noted.
State and federal revenues are projected at roughly $18 million for 2011-2012, a 5.2-percent decrease from the roughly $19 million the district anticipates for the current school year.
Regarding state revenues, Knobloch wrote in his preliminary budget message, “The state budget still contains funds left over from the federal stimulus program which will need to be replaced in 2013 through revenue growth. The state budget does contain the same level of funding for K-12 education that was present for 2010 and 2011. However, this is approximately $250,000,000 below the amount required to fully fund the formula.”
The district is projected to end the 2010-2011 school year with an operating reserve of roughly $12.8 million, or 14.8 percent of expenditures, well above the state-required minimum of 3-percent.
Knobloch anticipates the fund balance will remain at that level through the end of next school year.
In other business last week, the board:
Voted unanimously to adopt a board policy regarding fund balances from the Government Accounting Standards Board.
The policy “establishes guidelines to be used during the preparation and execution of the annual budget to ensure that sufficient reserves are maintained for unanticipated expenditures or revenue shortfalls.”
The policy, which the board can amend if needed, states in part that the district “will strive to maintain a minimum undesignated balance in its operating funds equal to a range of 13 percent to 18 percent of its prior year operating expenditures.”
Voted 5-1 to table a board policy amendment to reduce the district’s local and state travel reimbursement rate to 25 cents per mile from 50 cents per mile, the current Internal Revenue Service allowable rate.
Board member Mark Stoner was opposed. He had made a motion to approve the mileage rate reduction, a topic the board discussed last year when the district was forming a contingency plan.
While officials estimate the proposal would save the district $25,000 a year, some board members expressed concern that the rate reduction would be difficult to absorb for employees who frequently travel, such as Parents as Teachers personnel and literacy coaches.
Voted unanimously to approve a contract with Messenger Printing to print and mail the district’s Mehlville Messenger newsletter during the 2011-2012 school year.
Messenger Printing submitted the lowest bid out of the eight received. It will charge $19,556 to print and mail the newsletter four times a year for every resident and business in the district.
With postage, the total cost will be $33,156 for four issues.
The district currently spends $5,800 per issue to print 37,500 newsletters. The new contract will reduce that amount by $1,000 to $4,800 per issue.