Posted: 2/26/04
By Barbara Brown
Should the state continue its trend of no new money to school districts in the coming bi-annual budget, the North Branch school district could face $3.2 million in cuts in the 2005-2006 budget.
In addition to ìcuts of opportunityî where the district would not hire for open positions, the district is facing possible layoffs and severe cuts to programming if it cannot get more money for the coming years.
The 2003-2004 budget has a large deficit, $3 million, that drew down the fund balance of the district by $1.3 million and caused $1.7 million in cuts to get the district through the school year.
Last fall, the district asked to tax property owners for an additional $2.5 million annually to help operate the schools.
That referendum, and the three prior to that, failed.
District Finance Director Randi Johnson said the district historically ends the year with a buffer in the budget which allows the board to cut less than it expects at the time the budget is adopted.
For example, in the 2003-2004 budget, the district will have a buffer of $600,000 that it will not have to cut.
However, should the budget hold firm and all assumptions that the state will not give more money to schools hold true, the district could have to draw down its fund balance by $1.8 million to close out the 2004-2005 school year.
That would drop the districtís fund balance to $1.377 million ñ or exactly 5 percent of the operating budget; something Johnson thinks is not good enough.
ìFive percent is not a reasonable level,î Johnson told the board. ìIt doesnít leave us in a situation where we could deal with the unexpected. We would never want to get down that far.î
An eight percent fund balance would fund the district for one month.
Using the districtís reserves to cover the gap would only delay the cuts until the following year, Johnson told the board.
Fund balance is similar to using equity on a home to extend a loan, Johnson explained. Not all of it is money in the bank because it is money owed to the district from the state. It can only be used one time because it has to be replenished over years.
Johnson said a projected drop in enrollment and the unknowns associated with state decisions on school budgeting, the district could have about $28 million in revenues that need to pay for $31 million in expenses in the 2004-2005 school year. That would mean $3.2 million in budget cuts for the 2005-2006 school year, when Sunrise River School opens.
She said the district could stand to pull $1.8 million from its fund balance, but the rest would have to come from program cuts. That would present a two-year total of $4.3 million in cuts from 2004 through 2006.
School district staff is expected to present the board with cut recommendations before the end of March.
A public hearing would be held at the end of March with the board making its final cuts at the April 8 meeting.
Also at the meeting, Community Education Director Jeanne Leland recommended that the Stacy Family Center be closed due to lack of enrollment and severe cut to Community Education programs from the state.
The center, opened in 1992 in rented space in a building owned by a private citizen, was supposed to be used as a satellite campus for early childhood and other family programs through the district.
Leland said Community Education marketed the programs to Stacy especially because of the location of the center, next to Sunrise Market on the west side of I-35.
Since the elimination of family collaborative grants from the state, Community Education no longer can afford to keep the center open. Enrollment has not been high enough to support the programs, Leland said.
Gradually, over the years, the public health nurse and one session each of afternoon and evening school readiness, preschool and Head Start have been eliminated. Six families are registered for early childhood education at the Stacy center, two of which donít live in the district.
Twenty pre-schoolers are enrolled, including 11 from Stacy and nine from North Branch. Nine children are enrolled in the school readiness program ñ two from Stacy and seven from North Branch.
During the winter, seven youths were registered for the Super Saturday Club. Leland said she had hoped for 30 and that the classes were aimed at students who live in the Stacy Trailer Court. The 8-week session was $8.
Leland said four youths were from Stacy, one was from North Branch and two were from Harris. Closing the center could save the district more than $20,000 per year.
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