BEA will use some reserves
Everyone knows the financial outlook across the state is not good. Cities, counties and schools are being forced to tighten their belts, with state financial aid in question.
The Blue Earth Area School Board received an update on their financial condition at their last school board meeting.
Alan Wilhelmi, fiscal services coordinator, presented a revised 2010 budget to the board.
That new budget still shows the district taking a pretty large ‘hit’ to their fund balances.
The new budget has estimated revenues to the district of $13.18 million during the year, but expenditures will be at $13.76 million.
That translates into a net operating loss of $575,627.
Where will the district make up over a half million dollar loss this year? According to the revised budget, it will be coming out of the fund balances.
The total of all funds at the end of June 2009 was $4.98 million for Blue Earth Area Schools. It is projected to be $4.41 million by the end of June 2010.Wilhelmi told the BEA board that there were five important factors which have impacted school finances this past year.
The first was that the state reduced their education funding by 8.7 percent. They accomplished this feat by replacing state money earmarked for schools, with federal stimulus money.
“What this meant to us (getting federal dollars) was a delay in getting our funding, and a lot more paperwork,” Wilhelmi says.
The good news is that the school district gets the money when they file the necessary reports.
“This year so far we have gotten $505,000 of the $758,000 in stimulus money we will be getting,” he reports.
Wilhelmi’s second point had to do with getting federal Title money. The amount has been increased by $166,000 over a two year period.
Plus, the district gets other Title money from the feds, but some of it, such as $117,000 for the Elmore Academy, just funnels through the BEA district.
“The third impact on our finances was the passing of the excess levy referendum last November,” Wilhelmi says. “It will mean an extra $650 per pupil unit, or $920,000.”
The fourth impact comes from the state pro-rationing their aid allotments. In the past, the state has paid 90 percent of the funds right away, and held back 10 percent until later in the year.
Now, they are paying 73 percent right away, and holding back 27 percent.
“They are holding onto their money longer, before giving it to us,” Wilhelmi says. “This can have a negative impact on some school districts, but not here at BEA. We will be OK.”
The school district will also be able to handle the fifth item on Wilhelmi’s list. This has to do with another withholding of funds from the state.
This time the state is not making their scheduled March and April payments until May. For the Blue Earth Area District, this means withholding $1.1 million which had been scheduled to be paid next month.
Again, Wilhelmi says the district has enough in reserves to meet their expenses and pay the bills, until the money shows up in May.
Wilhelmi says the district will have to make decisions in the future.
“I don’t anticipate any new funding sources coming along,” he says. “Plus, our student enrollment is decreasing, and that translates to fewer dollars coming in.”
That means the district, like many others, will need to either spend from reserves, or do some budget cutting. At a meeting in January, the board had passed their annual resolution instructing the administration to prepare a list of possible cuts.
Earlier in the February meeting, Superintendent Dale Brandsoy reported that enrollment at BEA was down 28 students from the start of the school year last September.
“About 25 of those losses in student numbers were due to migrant families,” Brandsoy says. “We have this every year, where the migrant families have their children in school in September, but then pull them out before the end of the calendar year.”
The enrollment at the start of the 2009-2010 school year was 1,210. As of Jan. 1, it was down to 1182.