By Jef Rietsma
It was a surprise to no one at a Vicksburg school board meeting that the district is looking at a grim financial picture for the 2020-21 academic year.
Assistant Superintendent Steve Goss provided an update on the district’s financial picture during the board’s June 8 meeting. It includes the possibility that the district may receive $700 less per pupil from the state.
There was a ray of sunshine a week later as the district received a lower-than-estimated interest rate on a bond issue to finance improvements which will save more than $4 million in principal and interest payments over the 20-year bond issue.
Per-pupil funding from the state comes from a six-mill statewide school property tax and earmarked portions of income, sales and use taxes and other revenues. Tax revenues have been reduced by an estimated $1.2 billion for the 2019-2020 school year and $1.1 billion for the 2020-2021 year. Michigan schools have been advised to plan for a cut in per-pupil funding by between $650 and $700. “We all hope that there is a federal package to backfill those revenues. But at this point, that doesn’t exist.”
Goss said he has made the determination that a budget amendment to the 2019-20 school year and a preliminary budget for 2020-2021 will have to reflect a reduced per-pupil amount of
$700. That amounts to a loss of nearly $1.9 million this school year and carryover to 2020-21. Current per-pupil allocation from the state is $8,111.
“So, when we get more guidance and we figure out what the school year looks like, then there will be adjustments to reflect whatever that reality looks like.”
Goss said the district is assuming enrollment will be flat in 2020-21. Another thorn to the budget is an additional $340,000 in contractual obligations – primarily salary increases and a bump in insurance expenses – set for 2020-21.
Goss said he anticipates about $495,000 in savings through attrition.
“We know we’re going to have to look at all the employee groups and find some way to recoup some savings, and we’ve estimated about $140,000 from other employee groups as well,” he said.
Furthermore, there is about $386,000 in capital outlay in the current budget that will all be deferred, Goss said, adding that the district is hoping to realize about $125,000 in savings through supplies and contracted services as well.
Goss said the 2019-20 fiscal year budget, which concludes June 30, had been projected to have a positive balance of about $45,000.
“When we shut down in mid-March, we quickly tried to capture all the savings we could. We basically went into shut-down mode and that saved some money.” In all, not having school for three months saved the district about $75,000, he estimated.
Finally, he said by potentially reducing the number of full-time-equivalent positions, the district stands to save an additional $400,000.
“If we reduce all of those, we could reduce the projected shortfall to about $225,000,” he said.
“But a lot of it is really going to depend on what guidance we receive on how we have to operate in the fall, what happens if there’s additional funding identified by the state, what is the actual pro-ration that we’re looking at … there’s just too many things up in the air right now to actually implement a lot of these cuts.”
Board members approved amendments to the 2019-20 fiscal year budget and adopted an appropriations resolution for its 2020-21 budget.
Goss reported two bids for partial roofing replacement and the middle school and Tobey Elementary. The total cost of about $280,000 came in less than budgeted, Goss noted.
Nine proposals for two roofing-bid packages were received. Arrow Roofing and Supply of Grand Rapids was the low bidder and approved to do the job at Tobey for $105,570. Quality Roofing Inc. of Livingston County was awarded the middle school contract for its bid of nearly $175,000.
In addition, the board acknowledged the retirements of food service employees Cara Brink (21 years of service) and Leslie Tuttle (13 years), secretary Michelle Fulton (19 years), educator Tammy Lovins (28 years), and teachers Ginny Ruimveld (31 years) and Donna Sink (34 years).
At a later meeting, there was some better financial news as bids for bonds to finance capital improvements came in at an interest rate of just under two percent.
The bond issue was expected to raise $17,215,659 for the construction fund. It raised about $174,000 more than that. Total principal and interest costs over 20 years were expected to be $24.8 million. At the low interest rate, the actual total debt service is $20.65 million, more than $4 million less than original estimates.
