Brandon Twp.- The school board approved by a 6-0 vote a budget for the 2011-2012 school year on June 30, squeaking in just hours under the state deadline of July 1 and avoiding a shutdown of the district.
The vote, while unanimous, did not come easily or without dissatisfaction. The day before, following a public hearing, a motion to pass the budget failed as Secretary Debbie Brady and Treasurer Greg Allar voted yes and Trustees Rob Privette and Le Anne Schmidt voted no. President Debbie Schummer, Vice-President Luke Frye, and Trustee Kevin McClellan were absent.
On June 30, all board members were present, with the exception of Frye. Steve Lenar, executive director of fiscal affairs, brought before the board a budget revised from the evening before, with general fund revenues of $29,126,406 and expenses of $29,861,478. The operating deficit of $735,072 will be made up from the district’s fund balance, drawing it down to an estimated 6.51 percent by the end of the 2012 fiscal year.
‘The budget we settled on still requires us to take some money from savings and that’s not the way it should be,? said Schmidt. ‘I voted yes because I felt it was the best they could do at this time, but next year is a different story. We can’t spend money that we’re not taking in. My children don’t graduate until many years from now and I don’t want to sabotage their future.?
The fund balance has been the biggest point of contention since Lenar presented the school board with the finished budget on June 28. Several boardmembers were expecting a minimum fund balance of 7 percent and rejected the original proposed budget for its failure to meet that standard, with a 5.61 percent fund balance.
Schummer said that since Oct. 11, 2010, in several closed sessions on the topics of negotiations and budgets, the board had communicated the desire to keep a fund balance at or near 10 percent.
‘Even at 10 percent, we knew we might have to wiggle to nine and were willing to go to eight if it would preserve jobs,? she said. ‘Nowhere did anyone to agree to 5.61 percent, that is dangerous when we look ahead and know what is coming in the next two years? the end of federal funding.?
The district’s fund balance is half of what it was in 2007, when a fund equity account had roughly $4 million, or 13 percent.
While Lenar did not achieve the desired minimum fund balance with his revisions (‘adding $64,683 in revenues and $191,349 in adjustments to lower expenses?) the board approved the budget on the second try.
‘This is a good budget,? said Lenar. ‘Our main goal was to minimize the effect on the classroom and I feel that we have accomplished it.?
Lenar said he had no plans for further cuts to achieve a higher fund balance.
Schummer said she regrets her approval of the 6.51 percent fund balance.
‘I’m so flabbergasted with the whole thing, I allowed my emotions to get the best of me,? she said. ‘I wanted to support Steve Lenar, because he is working hard. In hindsight, I regret many supportive votes and this one in particular. Ultimately, we have to manage risk. Effective leadership doesn’t put their business in a position where they can’t cover costs for a couple months.?
Schummer, Privette and Schmidt were also upset to learn that a payout to all district employee groups is expected to occur in September and will reduce the fund balance. In a recently negotiated contract with the Brandon Education Association, a provision states that if the district’s audited fund balance exceeds expectations all employees may receive a one time off-schedule payment. This would include all employee groups, not just teachers. Schummer expects the payout to be around $146,000.
The boardmembers thought any payout would take effect in 2012 if applicable.
‘My understanding was that the payout was tied to per-pupil funding in 2012 and there was no discussion of a payout in three months to the full board,? Schummer said. ‘It’s probably a communication issue. Boardmembers will now work to get more things in writing. The fund balance should have been used to invest in strategies to develop revenue for the district. We have no money left to invest in the district, it’s all been put in operations to plug holes.?
She doesn’t blame Lenar, who the district hired as a contract employee this year to replace former finance director Jamie Cowan who was placed on a leave of absence after ‘discrepancies in the budget were found? and subsequently resigned.
Brandon shares Lenar’s services with the Holly School District. Sharing services is a cost-saving measure that has been encouraged by the state.
Lenar believes he is capable of serving both districts.
‘The end of the year is always a difficult time with deadlines to close out one year while beginning a new one,? he said. ‘Things are settling down and I feel that I will be able to meet the needs of the district and provide guidance in our financial matters,? he said. ‘Our (financial) condition is just like many around the state? changes have been made to staffing due to decreased enrollments and funding cuts. Staff have responded by working with the district to restructure healthcare plans while taking on a larger share of the premiums. We are struggling to keep up with the rapid changes coming from Lansing while at the same time continuing to provide a solid educational program for our community.?