By DAVID GREEN
The Morenci Board of Education passed a deficit budget for the 2011-12 school year, but the expected shortfall isn’t nearly as great as once feared.
School finance director Erica Metcalf presented the board with a spending plan that projects a $300,000 deficit, however, negotiations with teachers—and possible insurance and salary concessions—are still underway. The current contract expires at the end of August.
“We’ve made some awful big assumptions with our general fund,” Metcalf said. “We started with a $1.1 million budget deficit and now I’m projecting a $300,000 budget.”
A year ago Metcalf projected a worse-case scenario of $300,000 under, but she now thinks the fiscal year will end with a deficit closer to $200,000.
“I anticipate it being better than that,” she said, “and I’ve still got two months to work with before it’s final.”
The budget for next year reflects a variety of financial gains and losses:
• staff retirements;
• staff retire/rehires;
• teacher layoffs (although a few were recalled);
• Federal Education Jobs Funds totaling $176,928 (deferred from last year to 2011-12) that can be used for general education purposes;
• A change in the way the state figures enrollment from the fall and spring count days (equal to a loss of five students);
• An anticipated drop of 30 students from fall 2010;
• Revenue decline in local property taxes due to a decrease in property values and an increase in delinquent payments;
• A loan of $640,000 through the Michigan Finance Authority. Last year the district borrowed $700,000. Repayment could become a challenge if savings through salaries and benefits aren’t realized, Metcalf said.
The district could continue to borrow throughout the school year, Metcalf said, but the goal is to avoid any additional loans.
The bottom line, Metcalf said, is for “all the stars to align” and for the staff and community to continue doing what they’ve done in the past.
“Everyone has pulled together in the past and will need to more than ever this year,” she said.
Superintendent of Schools Michael Osborne apologized for the continuing cuts and changes that have been made during tough financial times, but expressed his commitment to making sure the school district still exists in the future.
Metcalf said she and Osborne continue to work toward additional cost savings.
“There’s nothing definite, but we keep brainstorming and re-evaluating,” she said. “It will no doubt be a tough year financially, by far the toughest in my tenure here. I will re-evaluate where we are after my audit numbers. Then we can have a better picture on our fund balance and enrollment and how we are sitting going into the first half of 2011-12.”
Morenci’s 2009-10 budget called for expenditures of $6.85 million. That fell to $6.33 million last year. The budget approved by the board last week shows expenditures of $6.1 million.