Revised Lindbergh budget projects deficit of $4.4 million

Original budget had projected a roughly $3.3 million deficit


A revised operating budget for the 2006-2007 school year that projects a deficit of roughly $4.4 million was adopted last week by the Lindbergh Board of Education.

Board members voted 5-0 Dec. 12 to adopt the revised 2006-2007 budget. Board President Mark Rudoff and board member Bob Foerstel were absent.

The revised budget incorporates revenues and expenditures for Proposition R, which district administrators describe as a no-tax-rate-increase $32 million bond issue.

The district’s debt-service tax rate will remain unchanged at 38 cents per $100 of assessed valuation, but it will be extended for a six-year period. The tax-rate extension from Proposition R will end in 2026.

Including Proposition R, the revised operating budget projects expenditures of $80,714,494 with anticipated revenue of $76,283,068 — a deficit of $4,431,426.

The district will not go into the red, but instead will dip into its reserves. Based on an operating fund balance of roughly $26.5 million on June 30, 2006, a fund balance of roughly $22 million is projected on June 30, 2007.

The Board of Education voted in June to adopt the original budget for the 2006-2007 school year.

At that time, operating expenditures of $47,666,054 were projected with anticipated revenue of $44,325,296 — a deficit of $3,340,758.

In his message for the revised 2006-2007 budget, Pat Lanane, assistant superintendent for finance and the district’s chief financial officer, wrote, “The revised budget includes revenue increases to reflect assessed value increases — post Board of Equalization — decreases in county insurance revenue and state and federal grants, and an increase resultant from the passage of Proposition R.

“Expenditures reflect decreases from actual salaries being calculated and increases to reflect Board-of-Education-approved budget adjustments and the approval of delayed budget requests,” Lanane wrote.

Noting the board annually adopts a revised budget, Lanane said at the Dec. 12 meeting, “… By this time of the year, certain revenues are absolutely known at this point in time, so it’s a good idea to have those reflected in a revised budget. I think the single most important numbers that you get are the ’05-’06 numbers. Those are always included — the previous year. Now you have audited, actual numbers for that year. So now you have that last track in the sand to really use as a benchmark against where we are currently this year. So I think those are very important numbers to have.

“All the other changes that you see in there are really not surprises. We’ve had some budget adjustments … The board wanted to go to the process where we kind of do those as we go every month and that’s a great process. I think it’s a good change, but so the other changes that are in here, you’re pretty much aware of. But now we actually put them into the budget to reflect what you’ve already done,” he said.

“There’s really two really huge changes — one huge one and one kind of huge. ECE (Early Child Education) now has been moved into this budget. It wasn’t in there originally in June, and we’ve now moved all their revenues and all their expenditures, which is about $2.5 million, into this budget now. So it kind of inflates it a little bit. By taking over the fiscal agency, we have to do that,” Lanane said. “And then, Prop R is now in the budget. So that’s a $32 million difference from the original budget and that’s a very positive change, as far as I’m concerned, to it.”

Among the expenditures that have taken place since the original budget was adopted in June was a payment of roughly $260,000 to the Special School District, he told the board.

“We had some things like the Special School District, we’ve been holding on that payment. We had it in our reserves. We earmarked it, but we were waiting on some technical approvals through their board and we finally got those approvals. So we then released that money. So we’ve been holding that for a couple years,” he said.

Another expenditure not included in the original budget was the purchase of two properties adjacent to Sappington Elementary School.

Those properties cost roughly $420,000, Lanane told the Call. A partial building replacement, estimated at $8.55 million, is planned at Sappington Elementary School as part of Proposition R. The district will focus on 2007, 2008 and 2009 to complete the renovation and repair projects it has planned as part of Proposition R.

Of the purchase of the properties adjacent to Sappington Elementary, Lanane said, “We’ve always said that some of the money that’s sitting there in our reserves is there for that very purpose. And so we did use reserves for that, but that had always been intended, and we think it really, really helps the project. We’re thrilled to have that opportunity …”

On the revenue side, Lanane told the Call that the district did not receive an insurance tax payment it had anticipated, resulting in a negative revenue adjustment of $645,000.

“On that side of the ledger, that was by far the biggest hit,” Lanane said.

Furthermore, the district again received less revenue from the federal government, according to the assistant superintendent.

“One of the things that strikes me when I look at the budget and I see some increases are the increases as a result of the No Child Left Behind,” he told the Call. “Wow. I mean, it’s major. I was looking at our per-pupil expenditure and it had jumped over $400, and a lot of that has to do with the fact that now we have to have reading coaches. We’re looking at math coaches.

“We’re looking at after-school instruction teachers with these kids who are struggling. And this is all good and wonderful stuff we’re doing, but nobody gave us any additional money for that …,” he said.

Noting that Lindbergh voters in April 2005 rejected a proposed 65-cent tax-rate increase that would have been phased in over a five-year period, Lanane told the Call, “… We’re on a different plan now. We tried Prop A and the voters in their wisdom said no and so I can’t really challenge that.

“So you go to Plan B. Plan B was basically take advantage of reassessment. Unfortunately, this year is not a reassessment year and so there was nothing to take ad-vantage of. But last year was (a reassessment year), and because of that, we finished the year with $1.2 million in additional revenues.

“So the board said we’ll use that money from ’05-’06 for ’06-’07. So that’s one of the reasons that they were a little more comfortable adopting a budget that had a shortfall from revenues to expenditures,” he added.

At the Dec. 12 board meeting, Vice President Ken Fey said, “I just want to point out that we are showing that the expenditures are over the revenue, correct?”

Lanane replied, “They certainly are, and we had some things that were one-time situations. We did have the ability to help ourselves at Sappington on some situations on that site. And so I think that was a very good move. It’s a one-time (expenditure). It’s not one of these reoccurring (expenditures), which I think is a big difference as opposed to some reoccurring (ones).

“And even the items we had on hold in the budget, those, for the most part, were one time like computer labs. We’re just going to buy it this year. We’re not going to buy it every year …,” he continued.

“And the final numbers from last year did show that we had some additional money to be able to spend from last year as we ended the year. So I think it’s a very prudent and deliberate process, and there’s really no surprises at all in the numbers that I see here,” Lanane said.

Board member Robert Bader’s motion to approve the revised budget, which was seconded by Treasurer Katie Wesselschmidt, was approved 5-0.