A budget of more than $100 million for the 2010-2011 school year was approved last week by the Mehlville Board of Education.
Board members voted 6-0 June 28 to approve the new budget, which projects $100,457,000 in revenue and $101,849,000 in expenditures next year. Board member Erin Weber was absent from last week’s regular meeting.
The district was expected to break even at the close of the 2009-2010 school year with $99,996,557 in revenues and $100,066,296 in expenditures, with reserves totaling $21,869,615. But Chief Financial Officer Noel Knobloch told board members last week that the district likely will add roughly $600,000 to its bottom line because of cost savings in operations.
“Most of that is the result of having put some cost freezes in back in February when we became aware of the issues that were coming down from the state and the local economy,” Knobloch said. “We were fortunate in some of our budget areas where we had some excess budgeting because we had built in some cushions for rate increases in utilities and fuel cost increases. And as you know it’s been fairly stable this year so we’ve had some savings there.”
That roughly $600,000 will boost the district’s operating reserves to about 15 percent of expenditures from a projected 14.23 percent. The Department of Elementary and Secondary Education requires school districts to keep their operating reserves at a minimum of 3 percent of expenditures.
As part of recently announced cuts to the state’s 2011 budget, Mehlville will receive $350,000 less for transportation in 2010-2011, Knobloch said. That amount is not yet reflected in the 2010-2011 budget, but the CFO said the district would be able to absorb the cut and still have operating reserves at 12 percent to 13 percent of expenditures at the end of the next school year.
The 2010-2011 budget projects a $1.5 million jump in local revenue as the district will recoup property tax moneys that were not collected last year because of underestimated tax rates that were set before final assessed valuations were available.
Since 2010 is a non-reassessment year, the district’s only new revenue will come from new construction. Knobloch expects that revenue to be offset by decreases in personal property values.
In addition, the new budget projects:
No significant increase in Proposition C sales tax revenue, which has decreased by 5 percent each of the last two years, Knobloch said.
Less than 1 percent interest rates on in-vestments.
At least a 3-percent drop in state funding.
District enrollment is projected to remain flat, which means state funding will not increase significantly in future years, Knobloch wrote in his budget message. In addition, the state funding formula for education was not fully funded in 2009-2010 and likely won’t be funded for the next three years, Knobloch stated.
“The formula funding also includes an optimistic projection for gaming receipts, which if not realized would result in additional withholdings,” he wrote.
A decrease in federal funding, as the amount of American Recovery and Reinvestment Act, or stimulus, funds received in the program’s second year have declined.
Under district expenditures, the budget includes:
Three-percent salary increases for certified and classified employees.
Increases to employer contributions to the state retirement system and to employee medical insurance.
A 4.9-percent decrease in funds budgeted for purchased services.
A 6.2-percent decrease in the district’s supply budget. Supply budgets at each building were reduced by roughly 10 percent.
A slight decrease in capital expenses. The items budgeted are recurring projects, such as asphalt and roof repairs, and funds are allocated on an as-needed basis.
“The economic downturn which has been experienced during the least 18 to 24 months and the uncertainty as to when the economy will rebound has created a very uncertain environment with regard to revenue projections,” Knobloch wrote. “With the majority of revenues derived from local sources, future revenue growth is dependent on increases in assessed valuations or tax-levy increases.”