A revised operating budget for the current school year that projects a deficit of more than $5.1 million was approved last week by the Lindbergh Board of Education.
While the original operating budget for the 2009-2010 school year projected a $3 million deficit, the revised budget unanimously approved Dec. 8 by the school board anticipates nearly $2.1 million less in revenue, increasing the deficit to more than $5.1 million.
The revised budget projects $55,705,910 in revenue with anticipated expenditures of $60,814,120 — a deficit of $5,108,210. The district will not go into the red, but instead will dip into its reserves, which total roughly $24.6 million.
While the original 2009-2010 budget adhered to the district’s long-range financial plan that calls for a planned spend down of those reserves with a deficit-spending cap of $3 million per year, the revised budget exceeds that cap by nearly $2.1 million.
In a presentation to the board, Chief Financial Officer Pat Lanane said that while operating expenditures increased $7,605 from the original budget, operating revenue decreased by $2,085,605, primarily the result of a decline in the district’s assessed valuation and successful appeals by taxpayers to the county Board of Equalization.
“… So you can see on property tax alone, we’re down $1,754,000 from the original June budget, a tremendous hit. We’ve never seen that kind of change in that number,” Lanane told the board.
A $204,000 drop in Proposition C sales-tax revenue and a nearly $400,000 decline in reimbursement from the Voluntary Interdistrict Choice Corp. as a result of declining VICC enrollment also contributed to the decrease in operating revenue, Lanane said.
Of the nearly $2.1 million decrease in operating revenue, Lanane said, “That’s a severe loss in our world and it’s going to have a huge effect on the district …”
Cognizant of the financial difficulty residents and businesses are experiencing as a result of the current recession, district officials pledged in November 2008 not to seek a tax-rate increase for at least 24 months. Though Lindbergh also faces financial challenges as a result of the current economic recession, the district’s reserves of roughly $24.6 million are the reason why the situation is not a crisis at this point.
“… We had a great financial plan in terms of spending down our reserves …,” Lanane said, noting that for the 2008-2009 school year the district hit the $3 million deficit-spending cap “almost to the penny.”
He told the board, “… This year with those changes that I just talked about on the revenue, we’re now looking at instead of a $3 million deficit for this year, we’re looking at $5.1 (million). And again, the real hurt of those changes in assessed values has to do with the timing. They all come after all our major expenditures have been contracted, and so there’s very little we can do about that in the middle of the (school) year …”
The projected operating deficit of $5.1 million will reduce the district’s reserves to $19.5 million at the end of the current school year.
“… It also means then going into the next year, to get back to that $3 million number, we have to do some reductions. And we know it’s already $2.1 (million) and we don’t have all our expenditures known for next year ..,” Lanane said. “We’re going to have to get our plan back on track to keep hitting these milestones so that we have the money to take us through the recession and keep the district from having to borrow money just to meet payroll. That is not a healthy sign when districts have to begin doing that. It’s usually kind of the very last straw, saying you are in a much more desperate situation than it might appear …”
While the projected deficit for the current school year is $5.1 million, that amount could increase by $480,000 if state aid is reduced.
Board member Mark Rudoff said, “Pat, that $5.1 million (deficit) presumes that there are no further cuts in funding from the state. Is that correct?”
Lanane said, “It does presume that.”
Rudoff said, “Right. And is that a fair assumption and presumption based upon things we’ve heard from Jefferson City?”
Lanane said, “The latest we’ve heard is more doom and gloom, as much as a 15-percent decrease in state funding, which in this school district is $480,000. And the fact that we have company doesn’t make me feel any better whatsoever and it doesn’t help the kids of this school district.”
Rudoff said, “So I guess the point I’m trying to raise … is that that number realistically could be as much as $5.6 million at the end of the school year if the threatened 15-percent cut (occurs) …”
Lanane said, “Absolutely. Absolutely. The only reason it’s not in there now is it hasn’t happened yet.”
Rudoff said, “But we haven’t received our money yet, either.”
In other business Dec. 8, the board:
Heard two district teachers who are members of the Missouri State Teachers Association request “a seat at the negotiations table” in future contract talks.
The Lindbergh National Education Association is the official bargaining group for the district’s teachers. Teachers and MSTA members Patty Wood and Mary McCartney both told the board they could not vote on the recently adopted teacher contract because they are not LNEA members.
“I’m here tonight on behalf of the members of the Lindbergh MSTA to ask for a seat at the negotiations table for the contract for the Lindbergh teachers,” Wood said. “We have a petition with over 100 signatures on it of Lindbergh teachers in the district that believe that the Lindbergh School District needs to adopt a policy and a process by which all teachers are represented in the contract negotiations because the current teacher group that’s representing the teachers does not allow all teachers to vote on any contract.
“And the teachers in the Lindbergh district have not had a choice in representation since the 1980s … The language of the Missouri Constitution plainly states: Employees shall have the right to organize and bargain collectively through representatives of their own choosing. Please note that the word representatives is plural, not singular,” Wood said.
Board members took no action on the request.
Voted unanimously to establish a committee to review two proposed policies — one that would establish guidelines for dealing with controversial speakers and a second for teaching about controversial issues.
Both proposed policies were drafted as a result of Superintendent Jim Simpson’s decision not to show President Barack Obama’s live nationwide education speech to district students in early September.