After once fearing that their 2009-2010 balance would drop below the state-required 3-percent minimum, Mehlville School District officials now project that the operating-fund balance will be more than 4 percent.
Superintendent Terry Noble said at the Mehlville Board of Education’s June 26 meeting that the district will end the 2009-2010 school year with a 4.11-percent balance if teachers receive a raise.
If the teachers’ salary schedule is not funded, the district is projected to end the 2009-2010 school year with an operating-fund balance of 7.55 percent.
In approving the district’s 2008-2009 budget last week, district officials noted that through a series of cuts, a 9.62-percent operating-fund balance is projected at the end of the 2008-2009 school year. Noble said this is largely due to the fact that the district’s teachers have agreed to a pay freeze for the coming school year.
The 2008-2009 budget includes only “channel changes” for certificated staff. In the certified salary schedule, channels denote a teacher’s level of education. Each channel also includes steps that represent each year a teacher has worked.
Other cost-cutting measures in Mehlville’s 2008-2009 budget include decreasing professional services by $66,300 primarily for expenses related to consulting fees, decreasing technical services by $157,140 primarily because of a reduction in costs for the district’s public-engagement process, decreasing general supplies by $264,045 and decreasing textbooks by $300,000.
In total, the Board of Education voted 7-0 last week to approve a 2008-2009 budget that projects $102,346,006 in revenue and $102,897,834 in expenditures — a deficit of $551,828.
District officials had projected in May a deficit of $1,530,465 for the 2008-2009 budget, but were able to make further cuts.
Despite that $551,828 deficit, the district will not go into the red, but dip into its reserves.
Because of that deficit spending as well as recent recommendations through the district’s public-engagement program, the Board of Education will consider July 31 whether to place two proposed ballot issues on the Nov. 4 ballot.
One proposed ballot measure would transfer 31 cents from the district’s debt-service fund to the operating fund. The transfer would generate roughly $5.7 million annually. Mehlville’s overall tax rate would not increase, but the transfer would extend the district’s bonded indebtedness by 15 years.
A second proposed ballot measure would be a 37-cent tax-rate increase to help fund the long-range plan that incorporates suggestions from public engagement. The proposed 37-cent tax-rate increase would restore the district’s tax rate to its 2006 level as the district’s total tax rate per $100 of assessed valuation would jump to roughly $3.64 from $3.27.
Based on a projected fiscal 2007-2008 fund balance of $20,743,931, an overall fund balance of $20,192,203 is projected on June 30, 2009. Based on a projected balance of $10,048,689, an operating-fund balance of $8,479,054 — 9.62 percent — is projected after a required transfer of $4,443,233 is made to the capital fund. That balance includes food service, activities and athletics.
On the revenue side of the district’s 2008-2009 budget, the district is expected to see a decrease of $182,587 in property-tax collections because the past two years have had “unusually large delinquent tax collections.”
Of the district’s tax levy of $3.27 per $100 of assessed value for the 2007-2008 school year, $1.64 of that levy was spent on teachers, $1.11 was spent on the general fund, 34 cents was spent on debt service and 18.3 cents was spent on building.
Additionally, the district is planning to decrease its transfer-student enrollment by 10 percent, which will result in a loss of $638,000 in desegregation aid.
The district also expects to see a loss of $17,600 on federal-program revenue primarily due to decreased Medicaid funding.
Mehlville is budgeted to see revenue in-creases of $350,000 from the new state-funding formula and $1,853 in Proposition C sales-tax revenue.
As for expenditures, while the district has cut expenses in personnel, professional services, consulting fees, technical services, general supplies and textbooks, some areas will receive more funding in 2008-2009.
The district’s energy supplies/service budget will increase by $102,454 because of the increasing cost of fuel and utilities.
Additionally, the district’s food-supplies budget will increase by $283,149 above the projected 2007-2008 food budget due to increased food prices.
Insurance budgets have increased by $57,679 based on expected increases in premiums.
While board Vice President Micheal Ocello voted in favor of the budget, he was concerned that two consultants hired by the district to review budget development and financial projections had not yet done so.
School-board members voted in May to accept a $3,480 contract with Daniel Jones & Associates of Arnold to review the district’s procedures for budget development and to solicit the services of St. Louis University professor William T. Rebore to review the district’s budget projections at no cost.
Ocello said in light of these commitments, he feels like the board is perhaps “bypassing” them by voting on the budget without hearing these reviews.
“We had a real issue with our budget process,” he said. “And one of the things we agreed to some months ago was to have this review … I’m a little disappointed that we’re going to be asked to vote on it … without having that analysis going forward.
“That kind of defeats the purpose a little bit. And that’s nothing to smear the people who put this together … But we tried to implement a safeguard, and I feel like we’re in the process of bypassing that.”
Noble said both reviews would be presented at the board’s July 31 meeting and that neither Daniel Jones & Associates nor Rebore has given any major concerns in their preliminary reports.
“The reason I think it’s OK is because I only view the budget as a working document,” Noble said. “I think you (Ocello) were concerned about the methods of projections. But had there been anything in the report that you’re going to hear in July that would have been a concern, I can assure you that you would have heard that tonight. It would have been brought to you.
“And there is nothing that we’ve heard that I think is going to be a major concern.”