By LINDA LOBECK
IRON MOUNTAIN - Less students than projected this year equated to less state aid for the Iron Mountain Public Schools. And although things were tight, they did not expect to be in deficit spending this year.
Jennifer Huotari, finance director, gave the board a report on the revenues, expenditures and student count from last year, where they had originally projected they would be when the original budget was adopted this year, and the amended budget that would be approved at Monday's meeting.
No more cushion - fund balance remains - and Huotari said that she would be meeting with the administration team, finance committee and board as they move forward to come up with a plan to deal with the $252,000 deficit now expected at the end of this fiscal year.
Last school year, the school district had just under $800,000 in the fund balance at the beginning of the year with $8.3 million in revenue and $8.8 million in expenditures bringing the fund balance to $247,000 for the current fiscal year.
The projected 2013-14 budget adopted in June included just under $8 million in revenue, expenditures of just under $8 million and an expected fund balance at the end of the school year of $118,000 based on a student count of 941 (full time equivalents).
Since the start of the school year, the fall student count was lower than expected - at 888 FTEs with a decrease in revenue of $387,000, expenditures were also pared down some, but there is now an anticipated $252,000 deficit at the end of the fiscal year.
"We have no more fund balance and have reached deficit spending. We have a 30-day window to come up with a plan to the state showing how we will get out of this deficit," Huotari told the board.
Once the plan has been submitted to the state, Supt. Tom Jayne said, a school district has three years to work out of a deficit.
The decrease in revenue of $387,000 is directly related to the student count dipping down to 888 from the projected 941 that was used when the budget was adopted on June 30 - a loss of 53 students.
Huotari showed the board a graph of each of these elements - student count, revenue and expenditures - from 2008-09. The student count went from 1,175 in 2008-09 to 888, which is where the 2013-14 fall count came in.
Revenues in 2008-09 were at $9.5 million, compared to the current revenues of $7.4, a drop of $2.1 million in six years. Over the years, the district has been serious about reeling in the expenditures. At $9.8 million in the 2008-09 budget, expenditures have continued to be cut from the $7.9 million in the budget adopted in June.
Huotari said that the district has cut more than $927,000 from expenditures this year.
Board member Steve Brooks said that with the fall count lower than expected and the revenues a lot lower, the budget that they had to put together in June is no longer valid.
School districts must have their fiscal year budgets adopted by June 30, but the revenues from the state are based on the fall student count, which is taken in October.
"We experienced a big precipitous drop in our foundation allowance from the state in 2010-11, and we've been chasing after it ever since. We're chasing revenue that keeps dropping and trying to catch up with it," Brooks said.
In coming up with the foundation allowance, the state in past years has taken 10 percent of that amount from the prior February student count and 90 percent from the fall count. This year, they have changed the foundation grant again with 90 percent coming out the October count and 10 percent out of the same year's February count, which is unknown.
"We've been trying to get ahead of this, but just can't," said Board member Jeff Michaud.
Board member Rob Langsford agreed.
"We've cut $1.3 million out of the budget in the last two years, but, it's not been enough," Langsford said. "We've been funded with less foundation allowance since 2008-09."
Board President Marv Harry said that adding to that was the change in the pro-ration by the state this year with the blending of both counts this year rather than from two different years. "It's something we didn't see coming."
After adopting the budget, Brooks said they are moving now into discussions on how to cut the deficit.
"We have a 30-day clock to put together a deficit elimination plan and present it to the state," Brooks said.
Linda Lobeck's e-mail address is firstname.lastname@example.org.