Saline Schools Amended Budget Shows Surplus, But Financial Good News May Be Short-lived
The COVID-19 pandemic was supposed to wreak financial havoc on school districts.
For now, at least, the opposite has happened. It appears that for the second straight year, the Saline Area Schools district's fund balance will grow. School officials, however, warn that more challenging days lay ahead.
At Tuesday's Board of Education meeting, Miranda Owsley, Saline Area Schools Assistant Superintendent for Finance, presented an amended budget to the board.
This summer, the board adopted a $63.8 million budget that included a $1,169,087 deficit. But revenues are up by $2,050,000 - mostly due to $1,886,100 in one-time COVID-19 money from the federal government. Expenditures were also down about $225,000, despite a nearly $600,000 increase in maintenance and operations. The result is an amended budget that now shows a $1.2 million surplus instead of a $1.2 million deficit. So the fund balance would rise to $4,147,000 - or 8.4 percent of total general fund expenditures.
Owsley said without concrete information, the district budgeted cautiously.
"We had a lot of unknowns at that time. The state had not given us any indication of where they were going predicting shortfalls in the millions and the billions at the state level," Owsley said.
As it turned out, per-pupil funding from the state remained the same, at $8,133. The state also changed its enrollment formula, so that 75 percent of the count was based on last year's enrollment, protecting districts from COVID-19-related withdrawals.
Despite the $2.4 million budget swing, Owsley cautioned things may change.
"We're coming into the winter months and we're still pretty early in terms of spending," Owsley said. "We really need to get through this winter."
Owsley pointed to utility bills, current contract negotiations, potential rollbacks to virtual learning as factors that could impact the budget. It's also not quite clear exactly how much cleaning and disinfecting will add to the district's budget.
The board adopted the amended budget by a 7-0 vote.
Superintendent Scot Graden commended the board for adopting a tough budget when so much was unknown. He also praised the teachers and support staff unions for being ready to offer concessions if they were required to get the school year started. Ultimately, Graden said, the concessions weren't needed.
"I don't want it to get lost that we worked together in that moment when we most needed it, so that we did not make reductions that would have further harmed our students. We were able to work together and there was a level trust that allowed us to have that opportunity...and allowed us to get today, when we're building a foundation to deal with what will probably be a much larger problem down the road," Graden said.
Trustee Dennis Valenti, of head of the board's finance committee, suggested there will likely be larger problems down the road.
"We got 1.9 million dollars in the current fiscal year budget that are one-time dollars - federal COVID relief fund dollars. If we take that money out, we're going to have a deficit of somewhere around $700,000," Valenti said. "We're not gonna get this 1.9 million dollar year after year. We don't want to fool ourselves into thinking we've got this great surplus here when reality is we have a deficit from ongoing operations."
Valenti also referred to a Wall Street Journal article suggesting states are facing the biggest cash crisis since the Great Depression. The article suggested Michigan will face a $2 billion shortfall in the next fiscal year.