The St. Clair R-XIII School District finished the 2011-2012 school year well in the black and was able to build up its reserves a little in the process.
Superintendent Mike Murphy reported to board of education members last Thursday during the group’s July meeting that revenue basically outpaced expenses by more than $550,000.
“We came out very good this year in terms of revenue received, and we were very cautious about our expenditures,” Murphy told The Missourian in explaining the surplus.
During 2011-2012, the R-XIII district spent about $22.344 million and brought in about $22.904 million.
Debt Service Fund
The district operates with four funds — operations, teachers, debt service and capital projects. The debt service fund was left out of the budget balancing figures for the fiscal year that ended June 30 because earlier this year school board members opted to refinance the district’s 2007 and 2009 bonds.
The resolution approved by the board of education in January authorized the sale of $8.415 million in general obligation bonds in that Fund 3 at an average interest rate of about 1.67 percent compared to the Series 2007 and Series 2009 refunded bonds which carried a combined interest rate of about 3.95 percent.
Through the refunding, the district reduced its future interest expense by about $1.064 million.
According to a summary included with the resolution that was passed in January, the approved proposal refunds $7.6 million of the Series 2007 bonds maturing in 2013 through 2022 and $815,000 of the Series 2009 bonds maturing in 2013 through 2016.
If Fund 3 would be included in the overall figures, the revenue versus expense would show a budget deficit of more than $7 million because of the $7.6 million refunding of the Series 2007 bonds.
“We’re basically pulling $7 million off the books through refunding of those bonds,” Murphy said. “It’s just an accounting procedure. Basically, we have to pull it off the books even though it wasn’t really there in the first place.”
The surplus allowed the St. Clair school district to increase its Funds 1 and 2 reserves by about $362,000 and its Fund 4 reserve by about $195,000. The operations fund now stands at about $4.223 million, or about 20 percent of the current budget amount. The capital project fund now contains $850,000.
In explaining the numbers to board of education members on Thursday, Murphy said revenue came in higher than expected locally, from the county and from the federal government while state funding came up short.
“Our financial situation is very solid,” he said. “We now have a threshold of flexibility.”
Murphy said Fund 1 provides the financial flexibility for the district as money can be taken out and put back in as needed. The percentage of money in that fund has increased from about 15 percent in 2007-2008 to the current 20 percent.
“With the uncertainty in how we’re going to be funded, we’ve tried to build that fund back up a little,” the superintendent said.
He said the uncertainty is most concerning from state and federal sources.
In 2006-2007, statistics showed the percent of balance in Funds 1 and 2 at almost 21 percent. However, Murphy said due to an auditing process involving the Franklin County Cooperative, $400,000 had to be removed from the R-XIII fund balance because it was discovered that amount of money was “commingled” with the co-op. St. Clair is responsible for the co-op’s operations, but budgets can be separate.
“So, we had to remove that money from our (operations) fund,” Murphy said, adding that dropped the percent of balance to the 15 percent for the 2007-2008 academic year.
“The plan from that point was to gradually progress back to 20 percent.”
Fund 2, the teachers’ fund, always gets “zeroed out” so revenue versus expense is zero. Any needed money also is taken out of Fund 1 to balance Fund 4, or capital projects. The remaining money in Fund 1 is regarded as the surplus.
In determining projected revenue a year ago, the board voted to keep the current tax levy the same at $3.37 per every $100 of assessed valuation. Board members every August have the option to raise the debt service portion of the levy to offset potential declines in revenue elsewhere. However, that levy has remained unchanged at 62 cents since 2001-2002.
The other tax levy amounts are $2.05 in operations and 70 cents in the teachers fund.
The new 2012-2013 budget approved by the board of education in June keeps that tax levy the same at $3.37. The newly approved budget totals about $22.54 million.