Planned spend-down strategy reflected in Lindbergh budget
By MIKE ANTHONY
An operating budget for the 2003-2004 school year that projects more than $2.4 million in deficit spending as part of a planned spend down of district reserves recently was approved by the Lindbergh Board of Education.
The approved fiscal 2003-2004 budget projects operating expenditures totaling $42,347,817 with anticipated revenue of $39,946,304 — a deficit of $2,401,513. The district will not go into the red, but will dip into its reserves. A revised budget for the 2002-2003 school year adopted last December projected Lindbergh would have an operating fund balance of $22,953,929 at the end of the fiscal year on June 30.
This is the second year of the planned spend down of district reserves, according to Pat Lanane, assistant superintendent for business services.
"... We're in this spend-down state, what I call a planned spend down,'' Lanane told the Call.
The assistant superintendent explained that most school districts obtain voter approval of a tax-rate increase, establish a fund balance and then "spend down'' that balance. Lindbergh voters approved a tax-rate increase in 1990 that was projected to last three years, but has lasted for 13 years.
Among the reasons the district has been able to stretch the 1990 tax-rate increase 13 years are favorable court cases that allowed the district to utilize the Consumer Price Index tax-rate adjustment, the economic upturn of the 1990s, the district's participation in the Voluntary Student Transfer Program and good fiscal stewardship by the board and administration, Lanane said.
But now the district has reached the point where it's in the second year of a planned spend down, which he said in-volves a three-part approach.
"... We really are looking at three things,'' Lanane said. "We're looking at the voluntary rollback, putting some of that on (the tax rate). We're looking at using some of the reserves. As you know, we've been criticized sometimes by people for having such large reserves, but it's like, this is why we did this. We knew the rainy day would come and we're kind of there. And then the third way we are attacking this is through reductions. We're slowing the spending down and we're saying 'no' to lots of things.''
The district's revised fiscal 2002-2003 budget projected operating expenditures of $41,251,158 with revenue of $39,151,054.
The district's current tax rate of $2.77 per $100 of assessed valuation includes a voluntary rollback of 27.4 cents. During the past decade, that voluntary rollback has amounted to an estimated savings of $27.5 million to taxpayers.
When the board establishes the tax rate for the 2003-2004 school year in August, that voluntary rollback could be reduced by as much as 13 cents, Lanane said.
Besides dipping in its reserves by roughly $2.4 million, board members approved slightly more than $2 million in spending reductions for the 2003-2004 school year during a June 17 special meeting and budget workshop. Board members earlier had discussed the budget during a workshop in late May. At that meeting, board members had told the administration they did not want to go beyond using $3 million in reserves, and they did not want to approve reductions that directly impacted the classroom, the assistant superintendent said.
Among the reductions approved by the Board of Education are:
• A $200,000 reduction in the district's early retirement incentive program.
Fewer teachers took advantage of this program this year, allowing the reduction.
"... We had fewer teachers taking advantage of the early retirement program this year. That means I'm going to have a smaller cost. So once we knew that, we were able to reduce last year's budget to only what we're really going to need for this year,'' he said.
• Reducing the district's technology budget by 11.5 percent — $120,000.
Noting the district has a five-year technology plan, Lanane said, "They didn't deviate from what they wanted to buy or how much they were going to buy. Where they deviated was they went to a computer that is a little less expensive — maybe doesn't have quite all the bells and whistles, but it will basically do the job.
"That's exactly what they're going to do. Now do we want to continue to do that indefinitely? Probably not, but for a year or two, we can make those work within what we're doing,'' Lanane said.
• A substantial savings will result from reducing teacher contingency by staffing at the state's most-desirable level.
"Basically, we carry a contingency, not knowing what our numbers are going to be,'' Lanane explained. "This year, we've said: 'We're not going to use any of that contingency.' There's two levels that the state sets in terms of your class size. There's the state-required and then there's most-desirable level. We tend to run above the most-desirable level because we've made that a priority. We think that's something that's very important to get those class sizes as small as possible.
"And so what we've said, to the extent possible, we're going to go from that above and go to the most-desirable level. We're not going to go beyond that. We may have to look at it next year, but we're not going to continue to try to staff above that level when there's an opportunity to make a reduction just to the most desirable. And that saves us quite a bit of money ... Basically, I would categorize it as we kind of said: 'We're not adding any more staff where we typically might of in the past. We're going to let the numbers come to that most-desirable level,'' he said.
However, the board did not accept all of the reductions recommended by the administration, Lanane said.
For example, the board did not eliminate a social worker position or a school resource officer position at the high school.
The question many residents have, Lan-ane said, is when does the district plan to seek a tax-rate increase?
"... Well, we're going to it whenever we're in a position that if we don't do it, we get to a position where we have to borrow money to make it from right now until January, when the money comes in ... From a financial standpoint, you'd like to say before we get to that point and we have to go to the advance funding program, we will encourage taxpayers to increase taxes because we think interest is the worst educational expenditure you can possibly make. I can't imagine a worse one,'' he said.
More reductions also are planned in an effort to delay the need for a tax-rate hike.
"... We predicted there also will be some additional reductions the next two years because we don't want to have to go for this tax increase for a while yet. These are not good times. We think this would be a terrible time to have to go ask taxpayers for a large increase, so we want to stave that off a couple more years ...,'' he said.