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|Paynesville Press - May 30, 2001|
Extent of district deficit in question
The question isn't whether the school district's general fund is hurting; the question is how much.|
Reluctantly, the Paynesville Area School Board approved a revised budget projection for the current school year at their meeting on Tuesday, May 22. When revised in March, the budget put the general fund deficit at $1.17 million for the 2000-01 school year. The new budget cuts that projected deficit by $100,000, but still leaves a potential shortfall of more than $1 million.
School board chairman Pat Flanders questioned how accurate the revised budget was. He said he had a problem voting on a new budget when he questioned its accuracy.
"Do you believe in your heart that the audit will reflect that (deficit)?" he asked superintendent Howard Caldwell while pointing at the revised budget.
"We should be pretty accurate," said Caldwell, but when Flanders continued to ask how accurate Caldwell made no guarantees.
Caldwell said the district office could accurately predict expenses like salaries, but not all the other expenses. "We've got it budgeted," he said of the expenses. "We're just not sure what the exact cost is. We're hoping that they will come in less than budgeted."
Flanders and Caldwell agreed that the district needed to have its audit completed as soon as possible to know its actual financial position. Caldwell said purchasing was mostly completed already, and a more accurate accounting would be available in July as soon as this school year ends.
Last year, the district's projections were for a $222,000 deficit at the end of the fiscal year in June, but the audit put the general fund balance at $560,000, an improvement of more than three-quarters of a million dollars.
The major change in the newest revised budget was the general fund expenditures, which are down a little over $100,000 from what was expected in March.
Food service expenses are down $25,000 but revenue is projected to be down $29,000. For the year, the food service program is projected to run at a $16,000 deficit. Caldwell said this program will need to be made self-sufficient, which could be done with price increases or by expenditure reductions. One option is to not replace a retiree in the kitchen staff.
"We can't afford to subsidize (the food service program) with the general fund," said Caldwell. "There's no money there."
This year will be the fourth that the school district has run in the red. This winter, the school board approved $500,000 in cuts from its 2001-02 budget to try to get the district's finances in balance.
But more cuts may be necessary. Caldwell and Flanders attended a meeting with the Department of Children, Families, and Learning, on statutory operating debt. "At the end of this year, we will more than likely be there," said Caldwell.
If the district's general fund is in the red by 2.5 percent of the budget, or approximately $225,000, the district will have to make a plan - which needs state approval - on how it will get out of debt.
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