FLINT TWP. — Carman-Ainsworth officials are dipping deeper into their dwindling fund balance than was projected in June when the 2012-13 budget was passed.
Both revenues and expenditures increased in an amended budget approved Dec. 4 by the board of education.
Total expenditures of $49.2 million in the amended budget are up from the $48.2 million budget originally approved.
The revenue picture improved from a projected $49.3 million in June to $49.8 in the amended budget – including a general fund balance increase from $2.5 million to a little over $3 million. But to balance the budget, the district must use an additional $200,000 more than anticipated from the fund balance, which will leave about $630,000 at the end of the school year.
Two significant factors in the budget amendment hinge on declining student enrollment and unrealized savings from labor concession agreements with employees, said Superintendent Steve Tunnicliff.
“We budgeted to have flat enrollment (no change) this school year,” he said. “Unfortunately, we are down 20 students, blended count from last year.”
That amounts to a more than $200,000 decrease in revenues for this year’s budget, he said.
Another budget assumption anticipated about $1.2 million in savings through employee concessions and contracted services. Concessions added up to about $600,000 that paired with a projected $800,000 savings from a capped retirement rate (amount set aside for benefit plan) would have exceeded the $1.2 million.
But the legislature passed a reform bill for the Michigan Public School Employees Retirement System (MPSERS) that increased instead of capping the retirement rate slated for this year. Passage of the retirement rate reform bill has been delayed and a rate increase cost the district about $220,000 more than budgeted for.
Those two items alone – fewer students and rising retirement rate – add up to nearly a half- million dollars in increased expenses that had to be addressed in the budget amendment, said assistant superintendent Russ Parks, who oversees the budget.
Carman-Ainsworth is losing students at a higher rate – about 200 a year in recent years, causing a steady decline in state aid, he said. About five years ago, when the student enrollment was about 5,200, C-A’s fund balance was about $7 million. That surplus has been nearly depleted as more was needed each year to meet expenses.
Spending more than it is taking in has not left the district in sound financial shape, Parks said.
Last summer, district officials took a serious look at outsourcing bus driver and janitorial services to save money but retained them after concessions.
Parks decline to comment on what budget cuts might lie ahead for the district. Superintendent Tunnicliff will likely address issues in coming months, he said.