School District Business Administrator Peter Curro advised the Budget Committee that the year-end surplus is between $925,000 and $975,000, with most of the money going to offset the next year’s tax rate.
At the committee’s Thursday, July 31 meeting, Curro said the surplus will be used to cover the approved Equipment Trust article of $100,000 and to add $100,000 to the district’s Unassigned Fund Balance, with the remaining surplus to offset next year’s tax rate.
He gave the Budget Committee the same report he presented to the School Board last month, as reported previously in the Londonderry Times.
“Revenue came in higher than we thought or projected when we set the tax rate, and expenditures came in lower than budget,” he said. “The combination of both is how we arrive at the $950,000 number. About $500,000 is from the under-budget expenditure side and about $425,000 to $450,000 is revenue,” Curro said.
Most of the income is from Medicaid. “Our Director of Pupil Services (Kim Carpinone) really does a good job making sure that the expenditures for out-of-district placement, for transportation and any other expenses that could be classified for Medicaid is reimbursed, and she does an excellent job of making sure each line is accurate so we get Medicaid reimbursed when it arrives,” he said. “We do the best we can to project it, but when the check arrives, that’s when we recognize it and that’s about $325,000 or thereabouts.”
Curro said that for the adequacy grant, FY 14 was the first year in which no final number was available when the tax rate was set in October.
“The state legislature in their wisdom moved up the calculation to take advantage of the overall decline in enrollment in the state,” Curro said. “So when it came time to set the tax rate, they didn’t have a final number for us and they weren’t going to give it to us until April 1, so we had to hold back a little bit knowing that we were going to get a little bit less than what we thought. It was about $30,000 less than we thought. This year at tax rate time they’ll tell us what the number is and then if there’s any adjustments, they’ll be made up the following year.”
Curro said that on the expenditure side, the district has had “a fair amount of retirements” and resignations of personnel who have been with the district a while, and their replacements are hired at a lower salary. “It comes to about a $300,000 savings,” Curro said.
Committee member Dana Coons asked about a $224,744 overrun. “Was this unexpected? What was it and why was it needed?” Coons asked.
“We tell the board the last few years we pretty much will take all new equipment out of the budget and we say to the board, ‘if there’s monies available through savings and other accounts, we’ll go back and prioritize equipment that was taken out and purchase that equipment.’ This year we went to the board and said we have a chance of getting some new equipment for curriculum needs, technology and other pieces, a math program, and we said we can do it now and accelerate the introduction of these programs,” he said. “The (board’s) answer was yes.”
Coons said if there was a curriculum need and necessary equipment, it should be in the budget.
Curro responded that sometimes curriculum needs are phased in. “This time the board said that if you can get this done, then we’d like you to get it done as quick as you can,” Curro said.
Coons asked for the amount of surplus going back to offset the tax rate. Curro said it would be between $710,000 to $750,000.
“Up until last year the district wasn’t allowed to have an unassigned fund balance, but now we can, so $100,000 will go into that,” Curro said.
Superintendent of Schools Nathan Greenberg said that by having that unassigned trust fund balance, the district was looked upon more favorably by Moody’s. “One of the things that Moody’s kept complaining about when they were reviewing our bond rating was that we didn’t carry a fund balance, and we kept telling them that until last year, legally we couldn’t have a fund balance,” Greenberg said. “So when the law changed, Peter took the initiative and spoke to the board about it and I think that has helped us on our bond ratings.”
Curro said Food Service will fall short about $52,000. He said it had a $125,000 surplus in 2008 but with reduced enrollment, fewer students participating, and more students purchasing a la carte item to go with food brought from home, a shortfall exists.
“In 2008 there was 51 percent participation, in 2014 there was 31 percent participation,” Curro noted. But in spite of reduced numbers, a cook, server and cashier were still required.
“The elementary and middle school use is all right, it’s mostly the high school,” Curro said of the reduced use of Food Service. He noted that some students don’t like what’s being offered as meals and portion sizes were two-thirds smaller than previously.
“When a student is at the school sometimes until 6 p.m. because of practice or band, they will eat two meals to see them through the day and parents are now paying $4.40 instead of $2.20, and that gets expensive,” he added.
Curro said that they had considered dropping out of the school lunch program but the adequacy grant money would then be reduced, so the district remained in the program.
“We did a detailed analysis. We were considering pulling out of the high school only,” Curro said. “The elementaries and middle are fine. We were told up front that we wouldn’t get the federal reimbursements, and we were OK with that. Then they mentioned Title I. We don’t get a whole lot of Title I and we were OK with that. I told Nate, ‘I think we’re going to be able to pull this off,’ and about two days later they called and said in an email, ‘Oh by the way, your adequacy grant will significantly decrease if you go off.’ That tipped the scale.”
Curro said they would lose about $200,000, and the adequacy reduction alone was an additional $175,000 to $200,000.
Coons asked about solar panels on the schools to reduce energy savings and Curro said that had been looked into but would be cost prohibitive, as retrofitting older buildings would be too expensive.