Savings to offset $600K error
Lower salary and health insurance costs to make up for less revenue
ANTRIM — Savings in the salary and health insurance costs during the current school year should enable the ConVal School District to offset a $600,000 error in estimating revenues for the 2013-2014 budget year, according to ConVal Business Administrator Marian Alese. But the district may not have enough unreserved funds at the end of the year to get a jump on proposed facility upgrades.
Revenue projections submitted with the 2013-2014 budget at the district’s Deliberative Session in February called for $1.25 million in building aid from the state. Shortly before voters went to the polls on March 12, Alese notified the board that she had mistakenly included $307,000 for a payment that had already been made and that $294,000 would not be coming in because the state had not adjusted expected reimbursements to reflect actual expenditures.
Building aid revenue, which is state reimbursement of 55 cents on the dollar for money that has already been spent on qualified projects, comes in over a number of years as projects are completed and expenses documented.
At a School Board meeting Wednesday at Great Brook School, Alese told the board that $213,414 is available in unexpected funds for salaries and $378,402 has not been spent on health insurance.
“These balances are the result of staffing changes and premium rates that are lower than projected by our insurance carrier,” Alese said.
On Friday, Alese told the Ledger-Transcript that the insurance budget line in the 2012-2013 budget had been calculated based on a 12 percent increase — the guaranteed maximum rate from the Local Government Center, the district’s insurance carrier. The actual rates are not in yet, she said, but should average about 5 percent. The district offers seven different insurance plans to employees, she said, and the actual rate increase will vary slightly from plan to plan.
The salary savings occur when longtime teachers retire and are usually replaced by less-highly paid teachers.
The $591,000 from those budget lines should be available at the end of the district’s fiscal year as part of the district’s unreserved fund balance. Alese said other line items might also result in surpluses at the end of the year.
The unreserved fund balance makes up part of the revenue that is used to determine the district assessment — the amount that must be raised by taxation. In past years, Alese said, School Board members have voted at the end of the school year to use some of the fund balance for projects like heating, ventilation and air conditioning upgrades and parking lot improvements. That might not be possible this year, Alese told the board.
“Our recommendation is to use the money left on the insurance and salary lines to mitigate the error in building aid,” she said. “This is with the understanding that if this happens, we wouldn’t be able to move forward to accelerate facility upgrades.”
The amount of unreserved fund balance that is used to reduce the district assessment varies considerably from year to year. For the 2012-2013 year, $116,559 was used and district assessment was $30.1 million. In 2011-2012, the amount was $625,059 and district assessment was $29.56 million. In 2010-2011, it was just $1,701 and the district assessment was just over $30 million.
Alese said the final tax rates won’t be set until October.
Dave Anderson can be reached at 924-7172, ext. 233 or email@example.com. He’s on Twitter at @DaveAndersonMLT.