Brandon District in decline
Fund balance sags to 3 percent, after $1.2M in cuts
June 12, 2013
Brandon Twp.- The school district has been losing students and funds at an increasingly alarming rate for the past eight years.
Budget reductions have not stopped a steady depletion of the fund balance, which takes another $600,000 hit with the proposed 2013-2014 budget.
During a public budget hearing June 10, Jan Meek, executive director of business operations, presented to the school board and an audience of five, a proposed budget that has $28,161,632 in expenditures, but only $27,539,842 in revenue. The resulting $621,790 operating deficit will be taken from the district's fund balance, currently at $1,486,637. This action will result in the fund balance decreasing to $864,847 by next year at this time, or just 3.07 percent.
With the "rainy day fund" almost gone and no influx of students or dramatic increase in per-pupil funding from the state on the horizon, what's next?
"In 2015, we're looking at a negative fund balance of $411,291," said Meek. "The board can not legally adopt a negative fund balance. We need to look at ways to increase revenue through increased enrollment, or make additional reductions in expenditures. At this time, I don't know what those would be."
Meek noted that the district reduced expenditures by $1.2 million for the proposed budget through reconfiguration of buildings, reductions in staff, and wage freezes for all employees. While the district received a net state foundation increase of $73 per-pupil, administrators are expecting a decrease of another 91 students for the coming school year. Last year, the district lost 94 students. Brandon is down 510 students since 2006, equating to a loss of $3.5 million in state funding.
The continued budget woes have led to wage concessions from bus drivers, central office staff, and custodians, who ultimately lost their jobs last year when the school board outsourced custodial services to save money. Teachers have had their wages frozen and the most recent proposed budget is based on the assumption wages will remain the same. However, a neutral fact finder appointed by the state recently sided with the district in recommending a 7.5 percent salary reduction for the Brandon Education Association. The BEA and the district are still in negotiations, although if they have not reached an agreement by July 5, the district can impose the 7.5 percent wage cut.
Meek said the wage reduction would absolutely help the district budget, but still might not be enough to stop the slide into an operating deficit in 2015.
"I think the proposed budget is as trim as it can be and Jan has done a good job of finding places to reduce and we are pretty much bare bones," said Superintendent Lorrie McMahon. "I'm very concerned about the loss of enrollment, this area has lost population. At this point in time I can not tell you what we will do to avoid the hole in 2015. The (students) have moved away, they aren't here, the birth rate is really down, the mobile home park is only two-thirds full... We have no control. We are dependent on per-pupil funding and Lansing's good will, if there is any."
The school board will vote on the proposed 2013-14 budget during their next meeting, scheduled for 6:30 p.m., June 17.