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Board amends budget, 2012-13 financial outlook bleak



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November 30, 2011 - Goodrich-The school district will tap into the rainy day fund for $865,918, dropping the fund reserves to $1,884,111 or about 10 percent of the 2011-12 budget. The board of trustees voted 7-0 on Monday night to amend the budget following a presentation from Terese Knag, Genesee Intermediate School District shared services business manager.

The revenues for the district are $16,521,098 with $17,387,016 in expenses. About 81 percent of the budget was attributed to salaries and benefits with about 10 percent in services.

Since approving the budget for the 2011-12 school year, the district has cut seven teaching positions, four and a half other positions and reduced one bus route. The district also reported an enrollment of 2,141, an increase of 43 students over the initial estimates of a decline of 44 students..

Knag also presented a projected budget for the 2012-13 school year which must be approved by June 2012.

"This cliff is out there," said John Fazer, district superintendent. "We can only hope the state is going to help us. The board is caught in the crossfire depending on what direction the state is going. We've reduced costs and have $667,000 in new costs this next year with no new money coming into the district. You just can't run everything on hope."

The staff will receive a 1 percent pay increase, costing the district $88,977. Additionally, step pay increases (about 5.3 percent per year over the first 10 years of service to the district) will incur costs of $166,635, health insurance costs $188,113 more and there will be a cost of $293,567 for retirement this year for a total projected increase in expenses of $667,292.

"Consider these costs will reoccur next year," added Fazer.

The district revenues are also projected to decline by $546,716 in 2012-13. The one time Best Practices revenue of $100 per student received in 2011-12, adding $214,191 to the budget, will not be offered by the state in 2012-13. In addition, an enrollment decrease of 20 students is also estimated, dropping funds by $136,920. The Michigan Public School Employees Retirement System helped offset the costs of increases by $195,608 in 2011-12.

Fazer reported about 320 Schools of Choice students are currently enrolled in the district.

"It's (Schools of Choice) a major factor," he said.

Revenues are expected to decrease and expenses are projected to increase for the 2012-13 school year. Based on a an estimated $15,974,379 in revenues and $18,054,308 in expenses the district could have a projected shortfall of $2,079,929.

Given a current fund balance of $1,884,111 the 2012-13 budget is projected to be $195,818 short.

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