Brandon Twp.- A preliminary review of the school district’s financial standing shows that the $606,543 projected deficit for the 2010-2011 budget (to be made up from the fund balance) has increased to a total deficit of $1,501,706.
The number, if proven accurate, would require more money to be drawn from the fund balance, decreasing it to 7.28 percent. In the past, the school board has expressed discomfort with a ‘rainy day? fund of less than 10 percent and has set a goal of a fund balance that is between 12-15 percent.
‘The district has a fund balance that is $900,000 less than estimated from last June,? said Steve Lenar, acting executive director of fiscal affairs for the Brandon Schools. ‘If you think of just a change of $900,000, it’s a 3 percent error (in a nearly $30 million budget). The problem is, it’s still a big number…There is very little we can do about it at this time in the school year.?
Lenar has been reviewing the budget since he was brought in last month to replace Jamie Cowan, who is on an unexplained leave of absence from the district. Brandon is sharing Lenar’s services with Holly, where he has been finance director for several years.
Lenar presented a Brandon School District general fund update to the school board at their Feb. 14 meeting. The dismal announcement that expenditures are outweighing revenue was slightly offset by news that overall revenue is up roughly $627,000.
Part of the reason for the discrepancy in the expenditures may result from a state-mandated increase in the staff retirement rate from 19.42 percent to 20.66 percent. This change resulted in a nearly $200,000 cost increase to the district, which Lenar said ‘came out of left field? for all the districts in the state. He is unsure where the other $700,000-plus in increased expenditures is coming from.
None of the numbers are concrete yet, as Lenar is still gathering information and examining why the numbers are off from the budget approved in June.
‘We won’t have final numbers until we make a final presentation and recommendation to the board at their first meeting in March,? said Lenar. ‘We’ll confirm (the updated budget) is an accurate budget. The only one on the books is from last June and we know that one is not correct and reliable.?
The next school board meeting is set for 6:30 p.m., March 14, at the central district office, 1025 S. Ortonville Road.