Board OKs preliminary ’12-13 budget

Includes transfer of $2.145M from 2 funds into general fund

By ERIK SANDIN – Stillwater Gazette

The Independent School District 834 Board approved a 2012-13 preliminary budget Thursday that includes the transfer of $2.145 million from two separate funds into the district’s general fund.

Figures provided the board by Assistant Superintendent for Finance and Business Ray Queener show projected ’12-’13 revenue of more than $106.2 million and expenses of more than $110.6 million. District revenue sources include more than $93.1 million in operating funds and slightly more than $13 million in non-operating funds. District expenses are more than $97.8 million in operating funds and more than $12.7 million in non-operating funds.

Operating funds include the general, food service and community service funds. Non-operating funds are the building construction, debt service and trust funds.

Queener told the board the district’s projected fund balance goes from more than $37.1 million as of Saturday to more than $32.7 million by June 30, 2013. He added that about $20 million of the ’13 fund balance is from withholding bond proceeds.

"When you drill down to the unassigned fund balance, it’s $7.3 million," he said.

Queener said the district received no public comments when the ’12-’13 preliminary budget projections were posted on the district’s website. He added that most of the district’s budget work occurs later in the year after the board approves the preliminary figures by July 1.

"The big project of developing a district budget happens later in the year when we have people (in schools)," he said.

Besides approving the ’12-’13 preliminary budget, board members also approved two resolutions: one transferring $2 million from the Capital Improvement fund, the other transferring $145,000 from the Safe Schools funds into the unassigned fund balance.

The transfers were in response to a law passed by the 2012 Legislature allowing school districts to move money between fund balances, Queener said. The measure lets school boards determine their needs and move funds accordingly without seeking special legislation to do so.

However, Queener said school boards must ensure funds moved from Capital Improvement balances do not affect either capital projects or student needs.

"Moving this ($2 million) from the capital fund will not affect our capital account and will not impact students’ instructional needs," he said.

Queener said the transfer of the $145,000 from the Safe Schools Fund comes after the district paid for security system installation.

Superintendent Corey Lunn warned the board that approving the transfers could leave the district having to replace the transferred funds in the future.

"This is a one-time transfer," he said about the capital fund move. "Next year at this time, we’ll have a hole to fill."

In a report to the board, Queener said some assumptions are made during a budgeting cycle. They include:

n Projected enrollment on Oct. 1. Enrollment has been declining in the district and another enrollment decline is expected this October.

n Staff allocated to district schools on a Minnesota Department of Education student-to-staff ratio.

n Non-salary budgets for purposes other than employee salary and benefits based on MDE allocation formulas. The report shows the supply-material and library-media allocations have dropped 10 percent from 2011-12 levels under board parameters, with a 2.5 percent hold back. "An adjustment will be made on Oct. 1, based on enrollment at that time," the report said.

n Staff development funds are allocated to buildings based on the number of full-time equivalent employees compared to total district FTE. But in ’12-’13, the district is not reserving a designated amount for staff development.

n Budget adjustments of $6.4 million made in early March, with cuts of $2 million from the 2011-12 budget and $4.4 million from the 12-13 preliminary budget.

"It is also important to note that the adjustments and reductions are real and have a real impact," the report said. "Several staff members throughout the district were released from their positions. Programs were reduced. Fees were increased. Transportation services were reduced. All of these adjustments have a real impact."