The Fulton City School District ended the 2008-2009 school year a half million dollars in the black thanks largely to a one-time windfall.
“Our goal every year is to stay under budget and we did,” said Superintendent Bill Lynch.
It’s the second year in a row that the district has spent less than it budgeted and the seventh in the last eight years that it spent less than it took in in revenues.
“The threat of midyear budget cuts caused greater attention to cost savings, which avoided cuts”, said Lynch.
The district spent about $500,000 less than it budgeted and $1.5 million less than it received in taxes and other revenues.
The big difference was a one-time, $766,000 refund from BOCES of money BOCES had budgeted for health insurance but did not spend.
The district’s financial official, Kathy Nichols, explained that the excess funds went into one of six reserve funds that can be used to lower tax increases, pay bills that will eventually be reimbursed by the state or federal governments, reduce borowing, or pay unexpected increases in certain areas. $800,000 was put into a fund balance account to “increase what we give back to taxpayers,” said Nichols.
The funds carry $10.2 million in total reserves, about one-sixth of the district’s $8.4 million budget for the past school year. “That’s not a bad place to be,” given the economy, said Lynch.
The district’s unappropriated fund balance rose during the school year to its legal limit — 4% of next year’s budget, $2.3 million.
Nichols asked the Board of Education to set up a seventh reserve fund, to cover expected increases in what the district will have to pay as its share of the state retirement fund for retired non-teaching staff. The funds invest what its members and schools contribute. Investments have lost large amounts of money because of the economic recession. Districts know they will have to pay more, soon. The current rate of 7% of payroll is expected to hit double-digits in the next year or two.
The board approved Nichols’ plan to take $518,000 of excess revenues and put it into the new retirement reserve fund.
“That’s a lot of money,” said board member Robbin Griffin, “but if what they’re talking about happens, it won’t begin to even cover it.”
Board member Brian Hotaling noted that the district’s spending continues to rise. “Somehow, this has got to level off,” he said.
Nichols explained that nearly all of the increase in spending in recent years is due to mandates from Albany and Washington to improve district test scores. She said the district was forced to spend $3 million to meet those mandates. “There’s your budget increase right there,” she said.
Increases, said Hotaling, “are a slippery, slippery slope and hopefully we’re not on it in the next couple of years.”