Presberg, Smith, Smola vote to use reserves to balance budget
The Fayette County Board of Education Tuesday night gave preliminary approval to the 2012-2013 budget that totals $177.34 million by using the entire $15 million fund balance from the current year that ends June 30.
The vote was split 3-to-2, with board members Marion Key and Bob Todd opposed. Chairman Leonard Presberg and members Terri Smith and Janet Smola voted in favor of the proposed budget. The final vote will come on June 18.
Comptroller Laura Brock at the May 31 budget workshop said the revenue projections for the 2012-2013 school year have not changed. Those revenues are expected to total $163.14 million, with $78.9 million coming from local ad valorem taxes, $81.39 million from the state and approximately $2.8 million from other revenue sources.
Expenditures in the proposed budget total $177.34 million. That represents $14.2 million in expenses over revenues for the 2012-2013 school year that begins in July. With a projected fund balance of $803,000 as of June 30, 2013 that leaves the school board with less than $1 million to offset the $14.2 million shortfall this time next year. Superintendent Jeff Bearden has noted on past occasions that it will likely take reducing staff to make up the difference.
If approved as it stands, the budget will be balanced by using the estimated $15 million fund balance expected to be available on June 30.
Having been discussed on May 31, the meeting Monday included essentially no discussion on the budget and went forward with a motion to give preliminary approval. It was in the run-up to the 3-2 vote that brought some discussion between board members.
Stating several reasons, Todd noted that he would not vote in favor of the proposed budget. Todd said preliminary information on the budget had been requested in November to give the board adequate time to study the proposal and respond to recommendations.
“We will spend all of our ($15 million) fund balance (adopting the proposed 2012-2013 budget) and there won’t be anything left for next year,” Todd said. “We don’t have preliminary projections on what it will take to make up the $14 million shortfall. I hope we can work on the process after July 1 so people will be informed.”
Todd also referenced the consensus agreement from the May 31 meeting to eliminate the school system’s contribution to employees’ life insurance and long-term disability policies. Those, along with the recent decision to eliminate other benefit supplements to employees as a cost-saving measure, amount to shifting the burden for a balanced budget on lower paid employees who are least able to afford those reductions, Todd said.
Key followed, also noting concerns that preceded her vote in opposition to the budget approval. The current proposal contains no school closures, no cost-cutting, no reserve fund and no projected plans for 2013-2014, she said.
Presburg disagreed, saying that Bearden, “Has been making suggestions all along,” adding that the board had gone through a six-month process of hearing issues. “I would have thought I would have heard something specific (from Todd and Key) before tonight.”
Bearden entered in the discussion at that point, referencing $6 million that had been added to the fund balance during the past year through measures such as not filling vacated staff positions.
“That strategy will continue over the next year,” Bearden said.
Bearden also noted other cost-saving measures impacting the 2013-2014 school year such as the upcoming decision over the closure of up to five schools and the possible outsourcing of custodial and transportation services. The largest cost-saving measure of them all, as Bearden has mentioned but has not elaborated on, is the elimination of a number of current staff positions.
“Our budget is 91 percent people. There’s no question that we’ll have to look at staffing across the board and tuitioning students (from other school systems),” Bearden said.
Bearden also referenced the reduction of approximately 80 staff for the upcoming school year while avoiding a reduction in force and the significant cuts in benefits.
“I believe the budget proposed in front of you is the way to go,” Bearden said.
Board member Janet Smola entered the discussion, saying, “We’ve been talking about this budget since last August.” Her comment was echoed by Presburg who said the board had been talking about the budget for months.
Key responded, saying the information pertaining to the budget had been provided in a piecemeal fashion.