The Meramec Valley R-III School District approved a preliminary budget for the 2012-13 school year that includes deficit spending to avoid freezing wages or cutting staff.
The district will use unrestricted funds to make up the shortfall.
The budget is preliminary because it was set prior to the close of the school year and prior to receiving final assessed valuations from Franklin, Jefferson and St. Louis counties.
School board members approved the $45,512,536.41 spending plan at their June 20 meeting. Revenue for next year is projected at $32,305,617.83.
The beginning operating fund balance is possible thanks to a two-year financial strategy where changes were made to district expenditure categories, according to the budget message that Joel Cracchiolo, district business manager, presented.
“This is a good faith effort to provide staff with the revenue for wages, benefits and operations,” Cracchiolo said. “The board of education will choose to deficit spend for one year so wages and benefits will not be frozen. Available unrestricted fund balance dollars will be used.”
The school district has been planning for the need for unrestricted funds, which protect districts in times of need.
Foresight of a slow economic recovery from the 2008-2009 economic downturn led district administrators and the school board to create a plan to increase fund balances over a two-year period. This plan was put in place so a one-time spend down of the funds could occur in 2012-13, in hopes staff wages would not have to be frozen or positions cut.
Four expenditure sources account for the district’s operating expenditures:
• Wages and benefits, 77 percent;
• Purchased services, 7 percent;
• Supplies, 13 percent; and
• Capital outlay, 3 percent.
Four revenue sources make up the district’s operating budget:
• State, 35 percent;
• Local, 55 percent;
• County, 3 percent; and
• Federal, 5 percent.
Student enrollment in the district has declined over the past 10 years from 3,743 in 2002 to 3,149 in 2011.
Due to the uncertainty in the future of school transportation funding, the amount budgeted for transporting students to and from school and to and from public accredited vocational courses will be near the same as last year. The transportation line item in the spending plan is $1,981,949.80, compared with $1,916,261.50.
The budget process is comprised of four phases, which are planning, preparation, implementation and evaluation, said Cracchiolo, in her budget message.
The budget is a working document. Increases and decreases to the budget line items occur throughout the year.
If substantial changes to the budget are required during the course of the year, amendments will be submitted to the board of education as required, Cracchiolo said.
