By DAVID GREEN
Morenci school finance director Erica Metcalf has delivered gloomy economic forecasts to board members for several years running as revenue continues to fall.
The board responds by making cuts, and sometimes anticipated funding improves. In the end, the situation doesn’t turn out to be quite as dire as the worst-case scenario she presents.
This year looks different. Even the not-quite-so-bad outcome is truly bad. Recent deficit budgets have been bailed out by the district’s fund balance, but that will soon disappear.
Without a significant cut in spending, Morenci will become a deficit district in the next school year.
The district has done a good job of cutting costs over recent years, said superintendent Michael Osborne, and the teaching staff helped greatly this year with concessions in insurance costs.
“But even with all the things we’ve done, with all the cuts we’ve made and concessions made, we’re still finding that we’re at a very difficult time,” he said.
“Our goal is very simple: We’re going to keep the district out of deficit. There’s nothing good that comes out of being in deficit.
“Part of our goal is to continue having this district the way it is. We don’t want to lose the Morenci Bulldogs. We don’t want to lose the identity that we have as a district or as the community.”
Financial adjustments will be needed to make that happen, he said.
Metcalf explained that last year’s state budget for education trimmed $470 per pupil, resulting in a loss of $547,300 for operations in the current school year. An increase in staff retirement costs is equivalent to an additional $281 per student.
Making up for these losses will bring the district’s fund equity down to $173,000 by the end of the current school year. The balance topped $1 million seven years ago.
The board approved a budget last June showing a deficit of $300,000 and that was balanced by staff insurance concessions, higher than expected enrollment and other savings.
On the other hand, unbudgeted costs reached $105,400 due to the need for an additional teacher, additional paraprofessionals and the Rosetta Stone language program.
The anticipated budget shortfall stands at $432,000 for the current school year and $936,800 for 2012-13. Losses for the 2012-13 year include a projected drop in enrollment, the end of a federal funding program, retirement cost increases, the end of a state program and an expected increase in special education costs.
The district has done a great job of cutting expenditures, Metcalf said. If the state would restore the $470 cut, Morenci would be in good shape.
“Morenci runs the risk of having to deal with a deficit elimination plan and the very real possibility of an emergency financial manager,” she said.
“We need to make some serious cuts and I don’t know where they’re going to come from,” she said, “but I know I can’t have a $936,000 deficit.”
Metcalf anticipates a further decrease in enrollment. Student numbers went down by 20 in the month following the fall count.
“This, by far, is the scariest position I’ve ever seen the district in. Never did I anticipate that Morenci would be the smallest school in Lenawee County. We have serious work do and for once I don’t have the answers.”
Osborne reiterated his goal of holding the district together.
”I want to make it clear that our vision is to maintain this district,” Osborne said. “I believe we can do it. I’m pleased with what we’ve done, but it’s not enough.”
Osborne said he will continue looking at cooperative efforts and additional staff concessions.
“I don’t want to sound like Chicken Little,” Metcalf added, “but the sky is falling.”