Holden: Budget Challenges Will Mean Pain for Saline Schools Employees

The financial outlook has gone from bad to worse for the district and one school board member says the decisions necessary to maintain the district’s high standing will cause pain for school employees.

Tuesday night, the district’s Board of Education passed an amended budget that reduces the projected June 30 fund balance from $1,452,023 to $1,159,526.

After a presentation from Finance Director Janice Warner, Trustee Dave Holden, chairman of the board’s finance committee, called the report “sobering.”

“We’re going to have to prioritize. It’s not going to be easy on the employees of the district because we are going to ask them to do things that, frankly, are going to be painful,” Holden said. “We’re going to do that because we want to preserve the district as one of the elite districts in the state. That’s our balancing act. We’re up on the tight rope and there is no safety net underneath us anymore.”

The district’s contracts with administrators, teachers and support staff workers expire June 30.

The leader of the Saline Education Association said he was frustrated by school board’s lack of response. Juan Lauchu said he felt that talks between the SEA and school district had been positive until the new board was seated in January.

“Since the transition to the new board, everything has come to a complete halt,” said Lauchu. “We made a request to continue negotiating, whether it be with the superintendent or the school board’s designated official.”

The district has hired attorney Gary J. Collins.

 School board President Lisa Slawson directed questions about the negotiations to Collins.

Saline’s financial picture looks a little worse because it spent more money than it budgeted as it took in less than expected. The projected general fund revenue has fallen from $50,130,833 to $49,977,098.

Warner told the board that the district projected a loss of 25 students this year. It was closer to 50, causing a loss of $314,000 in state funding. Additionally, the district took in less money than expected in extended day kindergarten tuition and federal grants.

Projected spending is up from $51,430,713 to $51,569,476, even with $100,000 in savings due to the mild winter and concessions in health insurance costs. The increased spending is due mainly to the addition of the Dean of Students positions at the middle school and high school, special education staff and two information technology assistants.

As a result, the district’s projected revenue shortfall, masked by the fund balance, has increased from $1,299,880 to $1,592,377.

If the numbers hold, the fund balance, which sat at $,2751,903 on June 30, 2011, would fall to $1,159,526, or 2.25 percent of expenditures. Board policy requires a fund balance of 5 percent.

Superintendent Scot Graden said district was able to get through this year using a “three-legged stool” of concessions, staff reductions and borrowing from the fund balance.  But that stool no longer works because the structural deficit ($1,569,476) now exceeds the fund balance ($1,159,256).

The numbers could look worse next year, as the district expects to have about 120 less kindergarten students than the number of seniors who will graduate. That could add approximately $800,000 to the deficit, according to Graden, brining it to $2.3 million. That doesn’t take into account increasing retirement costs, replenishing the fund balance or any other initiatives, such as reducing class sizes.