8/14/11 Schools won’t need to tap reserves
Schools won’t need to tap reserves
System budget in better-than-expected shape for 2011-12
By Mike Wilder The Times-News 8/14/11
Reprinted with permission.
The Alamance-Burlington Board of Education had planned to spend nearly half, or $7 million, of its $14.3 million in reserves during 2011-12.
Board members learned during a work session last week the money won’t be needed to meet expenses outlined in the budget.
Sandra Tinsley, the system’s executive director of finance, gave multiple reasons for the fund balance staying in place with no reduction:
Cuts in state funding of the system were not as severe as originally projected.
The system’s freeze on non-essential spending during 2010-11 achieved budget savings.
The reduction in force in which 14 central office employees were laid off.
Board members were told it’s possible the fund balance rose significantly above the $14.3 million level by the end of 2010-11, though that won’t be known until an audit of the system’s finances for the year is complete.
Board member Patsy Simpson said after the meeting she was “shocked” to learn the system may have increased its reserves while laying off employees for budget reasons.
Simpson said she would not have voted to lay off the central office employees as a cost-saving measure had she known reserves would not have been needed to cover expenses in other areas. The board, she said, was told the layoffs “were for budget reasons.”
Beyond what has already happened, the board is discussing a balance between potentially spending reserve money this year and saving it for future years.
“Next year is going to be much worse” has become a mantra of sorts for school board members and system administrators during this year’s budget discussions.
That’s partly because the system held on to more than $4 million in federal stimulus money for use during 2011-12. The money had to be spent no later than this fiscal year, so won’t be available during 2012-13.
Part of the concern had been that spending $7 million of the system’s reserves would have cut it roughly in half with the budget situation uncertain for the next few years. The board had penciled in plans to spend $4 million of the reserves in 2012-13 and $3 million in 2013-14.
Without partially replenishing the reserve, that would have left only $300,000. At various points during budget discussions, that prompted concerns by both school board members and the county commissioners that the system would lack the money to address emergencies.
On the other hand, County Manager Craig Honeycutt and some commissioners have raised questions about the school system building its fund balance during difficult economic times when the schools and county departments have been asked to work with the county’s leadership to identify budget savings.
Board member Tony Rose said he’s concerned about the school system having shared plans with the county to spend $7 million in reserves.With the reserves potentially growing instead, that may not go over well with the county, he said.
He and others said the board will likely look for a balanced approach. Board member Brad Evans said he favors meeting significant needs when possible while looking toward one or more years tougher than this one. Both he and Simpson mentioned maintenance needs throughout the system.
Board members plan to talk more about the subject with school system administrators.