Brandon Twp.- In recent years, school officials have trimmed the budget as much as possible in order to keep the district in good financial shape. Now, they must look again at making cuts? as much as $1 million worth.
‘We’ve done a lot of cutting in this district already,? said Superintendent Lorrie McMahon. ‘We don’t have a lot left. We have heightened concern, because with the decrease in student population and the current economic condition of the state, our expenses will outpace our revenue next year if we have no internal changes. We are looking at what changes we can make. Everything is on the table and the classroom is our top priority.?
During the April 27 school board study session, Jamie Cowan, executive director of fiscal affairs, painted a grim picture of the district’s financial outlook as the board prepares their next budget, due June 30.
Cowan noted that student enrollment has been on the decline and the district expects a loss of at least another 100 students next school year. Additionally, current projections are for a $59 decrease in per-pupil funding from the state, taking Brandon from its current level of $7,316 per student to $7,257 per student. Brandon is already tied with the Holly School District as the lowest funded districts in Oakland County. Per pupil funding provides 81 percent of the district’s total revenue.
In 2008, the district managed a $413,000 surplus, with total revenue of $30,187,429 and total expenses of $29,773,780. The projected ending fund balance is a healthy $4,256,608, or 14 percent. However, in 2009, the board is expecting expenses of $31,484,302, outpacing projected revenue of $30,370,559 and resulting in a deficit of $1,113,743.
In a worst case scenario, in 2010, the board could be facing $3,119,471 in deficits including the prior deficit, less revenue, and projected increases in expenses including inflation (3 percent); contractual salary steps (3 percent); retirement (.04 percent); energy costs (10 percent); and health costs (8 percent).
‘If we do nothing different and all this comes true, it takes us to a 4 percent fund balance which is not in compliance with your wishes,? noted Cowan in her address to the board. ‘The funding gap is growing.?
To solve the crisis, the district will need to exert control over spending; be fiscally responsible; increase revenue; attract new students; and reduce expenditures.
Those reductions in expenses could be painful for school district employees. Administrators are currently in negotiations with every union, including teachers, food service, custodial, transportation, administration and support staff. Cowan presented a list of possible cuts that included reduction of paraprofessionals, privatization of non-BEA coaches, elimination of the school liaison officer, removal of a bus purchase, reduction of overtime, and an obscure $775,000 in ‘contract concessions.?
Boardmembers seemed to agree they oppose layoffs, but openly discussed the possibility of wage cuts.
‘We want to keep as many people employed as possible,? said Board Member Debbie Schummer. ‘We can take the five (union) contracts and slim them down. Many parents are taking pay cuts…?
Cowan has already given the finance presentation to the Brandon Education Association, representing teachers.
‘There are going to be cuts and they need to understand why it’s coming,? she said. ‘I wish it was better news.?
BEA President and Middle School Teacher Steve Hendershott said he couldn’t comment on whether teachers would be willing to take a wage cut, but said the BEA had agreed to not talk about finances until this fall when the state determines the per-pupil allocation.
‘There is a real good chance we will start the school year without a contract,? said Hendershott, adding that he doesn’t know where the board will make cuts to run the same type of programs they currently have.
‘One of the first things considered (for cuts) are art, music, athletics, band and those are all things that are attractive to students in Brandon and schools of choice, which is very necessary to operate our schools.?
In addition to these challenges, the district faces one more: the operating millage is set to expire Dec. 31. The board is discussing asking voters in November to approve an extension of the 17.9496 mills currently levied on property that was last renewed in May 2005.
‘It is an extension, a continuation of what is already being paid,? Cowan said. ‘We’re not asking for more… There is no additional cost to the voters. Every district in the state does this.?
McMahon said the budget will be discussed in depth again at the May 18 board study session, with the hope of having a balanced budget for approval at the June 8 board meeting.