NEWBERRY — Does prudent fiscal policy for the Newberry County School District include additional millage, the contingency plan/tool of fund balance spending or a combination of both?
That question underscored the school board’s public hearing and first reading for its proposed 2014-15 budget Monday night.
Superintendent Bennie Bennett reminded the board what auditor Kevin Madden told the district concerning state retirement.
“Kevin Madden our auditor expressed great concern about retirement changes and state obligations,” he said.
Bennett asked school board members to consider the possibility that retirement system obligations could increase as they considered whether to increase millage.
Susan Dowd, chief financial officer for the district, presented a budget with total proposed expenditures of $47,723,618, a 5.4 increase over 2013-14. Proposed revenue under the new budget is $47,289,184, a difference of $434,434.
However if the board elected to increase millage within the amount capped by state law, an additional 2.73 mils would result in total proposed revenue of $47,488,193, a difference of $235,425.
As of June 30, 2013 the district’s audited fund balance is $11,895,477.
In recent years, the budget has relied more on fund balance to account for emergency spending and, in some cases, for operation expenses.
Board member Lee Attaway said he was not in favor of adding millage but “it’s been quite a few years since (it has been done) and the past three years there have been mils available the county has not taken.”
Dowd reminded the board that fund balance spending was using one-time money but that mils would be recurring revenue for the district.
“This would be something you want to consider before we go into second reading, maybe as a new direction for us before we get there,” Dowd said.
An increase of 2.73 mils would be about $10 increase tax on a $100,000 home. The current millage is 186.8, which means the tax bill on a $100,000 home would be $1,120.
Though a final millage amount will not be available until later in the fall when the county completes its reassessment, the proposed budget anticipates a 6.28 percent increase in revenue as well as a 5.4 percent increase in expenditures.1
“The auditor’s (perspective long term was) these dollars are going to need to be there (in a budget) and the millage is going to need to be there that we cannot ever go back and get it (in anticipation of the retirement changes),” Dowd said.
When considering how other districts have approached the retirement funding issue, Dowd said adding about $200,000 to the retirement funding will keep the district in a solid position.
Board member Ike Bledsoe expressed concern over the handling of the state retirement system and school district’s being placed under a greater burden to contribute.
Board chair Jody Hamm expressed concern about the state retirement system because the number of people paying into the pool is smaller.
“More people are living longer which pulls money out,” he said. “Either we would be ready (for potential changes) or we won’t. I would like to see us do something different. I hate to go up on millage but think we should strongly (consider the matter).”
In other financial news:
• Dowd reported the base student cost would increase by $19 in 2014-15, which brings in an additional $1,543,871 based on state approved budget projections approved last week.
• Total state revenue should increase by $2,145,600, according to state estimates.
• Dowd said a 4 percent increase in benefits came from higher insurance premiums. She said about $100,000 was added to retirement funding by the proposed 2014-15 budget.
• Though a technology stipend per school was eliminated from the budget, the district wide technology coach remains.
• Seven additional certified positions are being added at a $350,000 cost.
• One computer technician is added at $40,000.
• $50,000 is budgeted for STEM initiatives.
• Six reading coaches require total matching funds of $84,0000.
• Due to a loss of Sig funding Newberry High School must fund an administrative position, budgeted at $75,000
• There is a $50,000 net change of two classified positions whereby three full-time educators are moved from Medicaid funding into general fund and one additional position is eliminated.
• Additional $41,950 in repairs and maintenance is projected for technology and $234,300 is budgeted for mobile devices (laptop carts) for students in grades 6-12.
• State mandated step pay increases total $515,000 for the district.
• The board met in executive session prior to the budget work session and re-entered executive session after the work session to discuss a contractual matter involving child nutrition services. No action was taken following either executive session.
Second reading and adoption of the board’s 2014-15 budget will take place at the June 23 meeting at 7 p.m.