With the Fulton School Board scheduled to start working on approval for fiscal year 2012 budget expenses later this month, Superintendent Jacque Cowherd once again reviewed projections for the 2011-12 school year and offered four different ways of approaching the cuts he said will be necessary to maintain fiscal balance.
"For fiscal year 2011, we're on budget, but when you compare to prior years we're down quite a bit," Cowherd said to start off his presentation during Wednesday night's school board meeting. "A couple of years our operating revenue was approximately $21 million, we're down to $18.7 million this year and we're projecting $16.5 million for next year."
Noting that much of the information has been presented to the board before, Cowherd went on to outline several key assumptions when developing the budget for fiscal year 2012, including: Decreased state funding, decreases in economy-related funding such as Proposition C and state-assessed utilities, level federal funding less the stimulus funds that are set to expire, required contribution increases to the retirement system, an estimated 25 percent utility increase, increased transportation efficiency and maintaining the operating fund balance at 17 percent.
According to FY 2012 revenue estimates provided by Cowherd - which assume the state funds 83 percent of the foundation formula - the district's local revenue will drop from $8.476 million in 2011 to $8.260 million for 2012.
County revenues are projected to remain steady at $324,500. State funding drops from $7.478 million to $6.539 million, while federal funding is estimated to fall from $2.088 million to $1.695 million. That adds up to estimated operating revenues of $16.826 million.
As he prepared to offer four different scenarios for next year's expenditures, Cowherd told board members they had to ask themselves three key questions.
"We've always had as a goal 17 percent balances. Is that written in stone? Can we drop to 16 percent?" Cowherd queried. "Are we confident moving transportation out (starting bus routes at 3.5 miles from school rather than 1 mile)?
Can we operate the teacher salary schedule?"
To start off, Cowherd presented his four options before the proposed cuts included in each plan to help give board members a better idea of where and why those cuts would be made. Option A included a salary freeze and resulted in a preliminary expense projection of $18.354 million - a deficit of $1.529 million.
Options B and C both called for operating the salary schedule, resulting in a preliminary expense projection of $18.524 million - putting deficit spending at $1.698 million. Option D called for operating all salary schedules plus a $100 base increase, resulting in a preliminary expense projection of $18.553 million - a $1.727 million deficit.
Cowherd then outlined the cuts that would be necessary to each option in order to maintain 17 percent, 16 percent and 15 percent operating balance.
For Option A, which freezes salaries:
•To maintain a 17 percent operating balance of $3.12 million, the district would need to cut $617,128.
•To maintain a 16 percent operating balance of $2.937 million, the district would need to cut $433,585.
For Options B and C, which operate all salary schedules:
•To maintain a 17 percent operating balance of $3.149 million, the district would need to cut $815,931.
•To maintain a 16 percent operating balance of $2.964 million, the district would need to cut $630,689.
For Option D, which operates all salary schedules with a $100 base increase:
•To maintain a 17 percent operating balance of $3.154 million, the district would need to cut $849,544.
•To maintain a 16 percent operating balance of $2.968 million, the district would need to cut $664,004.
The final piece of Cowherd's budget presentation Wednesday night included where some of those cuts would be made.
All four options include not replacing two retiring certified staff and eliminating one and a half additional certified positions, cutting two non-certified staff, starting bus routes at 3.5 miles - which eliminates 450-500 students - and additional cuts to long-distance phone services, supplies, overtime reductions and energy and light savings.
For Option A, which freezes salaries and has an aim of maintaining a 17 percent year-end balance, those cuts add up to $645,212.
For Option B, which operates all salary schedules and has an aim of a 16 percent year-end balance, those cuts and the elimination of staff gate duty compensation and elementary reading tutors add up to $696,212.
Option C, which operates all salary schedules and has the aim of a 17 percent year-end balance, adds to the cuts from Option B the elimination of three more certified staff, resulting in $846,212 in cuts.
Option D, which operates all salary schedules plus a $100 base increase and has the aim of a 17 percent year-end balance, has the same amount of reductions as Option C and also results in $846.212 in cuts.
"We've cut down to the bone. We've got supplies about as low as we can get, we've cut utilities about as much as we can," Cowherd said. "It is a given we will move toward a (tax) levy in 2013. I think next year we're going to have to take a surgical reduction of everything."
Asked Thursday whether he was leaning toward recommending any of the four plans in particular for approval by the board, Cowherd said he does not know.
"I'm still up in the air. We're trying to look for ways to continue the salary schedule and we're still going through to see if we can maintain transportation," Cowherd said. "We're still going through the budget again."
The school board has scheduled a special meeting to work on budget expenditures at 7 p.m. on Feb. 24 in the high school library.