The finance committee recommended a tentative budget to the Stark County School Board at their August meeting. The budget projects that total expenses will exceed total revenues in the operating funds by $3,251,000 for the 2015 fiscal year.
The budget projects an estimated $5,824,704 in revenues for the education fund with expenditures expected at $6,409,433, $760,240 in building fund revenues and $3,442,290 in expenditures and $486,786 in transportation fund revenues and $520,752 in expenditures.
Klooster explained, “The board has been planning for two years to pay down the Series 2005 bonds in December of this year. By escrowing the monies the board received from the state as part of its 2002 Capital Development Grant, the board’s plan to pay off these bonds early will save local taxpayers about 30 cents per year on their tax rate for several years and will save about $600,000 in interest payments. This one-time payment accounts for about $2.365 million of the projected $3.215 million deficit.
“Separate from the large bond repayment, the Building Fund is still projected to experience a $317,000 deficit this year. The reasons for the deficit are as follows: We received matching grants to pay for the gym lighting project and the boiler replacement project. Although we received the revenue in a previous fiscal year, we will probably incur the expense in this fiscal year. I’ve projected the gym light cost at about $44,000 and the boiler purchase and replacement at about $194,000. Additionally, we are planning to re-tube a boiler this year and we have 10-year HLS (Health Life Safety) work to complete that we may not be able to cover completely from our HLS fund. Finally, as usual, I built in some capital outlay costs for potential problems with buildings that we have not anticipated”.
According to Klooster, the projected Education Fund deficit is a result of increased cost for outside special education services, increased projected costs for technology, a reduction in tuition revenue, reduction in federal grant revenue and a projected decrease of $200,000 in general state aid.
The small anticipated deficit in the transportation fund is dependent on actual transportation fund reimbursement.
Despite the projected deficit, at the end of the year the district should still have total operating fund balances of around $6.8 million.
Klooster said, “Hopefully, this is a worst-case scenario, but trying to put all of the numbers together for this year has been trying. We will, of course, know more and have better insight into actual expenditures and revenues as the year progresses”.
The board voted to approve the recommended budget and place it on public display for the next 30 days. The hearing to adopt the budget is set for the September 22 meeting.