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Administrators predict Prop P will go $1.7 million over revised budget

Mehlville School District administrators predict that recent contract increases and budget overages will cause the Proposition P districtwide building improvement program to go $1,732,579 over its revised budget.

To help Board of Education members evaluate the need for a budget adjustment, Assistant Superintendent of Finance Randy Charles, who also serves as the district's chief financial officer, has prepared a Proposition P budget analysis that was scheduled to be presented Tuesday night — after the Call went to press.

Voters in November 2000 approved Proposition P, a districtwide building improvement

then estimated to cost nearly $68.4 million that would be funded by a 49-cent tax-rate increase. However, the board last September adopted a revised Proposition P budget totaling more than $86.7 million.

Of the 49-cent-voter-approved tax-rate increase, 41.6 cents is being used to retire bond-like certificates of participation, while 7.4 cents is going into the district's capital fund. At an Oversight Committee meeting July 30, Charles said that the 7.4 cents being placed into the district's capital fund would total $13.30 per year for a resident whose home is valued at $100,000.

The 7.4 cents, according to Charles' statements in July, would generate about $1 million each year, but that number changed.

With updated projections released last October, the 7.4 cents has the potential to generate $1.5 million per year, at least $31 million more than is needed to retire the certificates of participation.

To date, the district has spent $58,210,053 of the Proposition P construction budget and $10,079,688 of the district capital fund revenue — totaling $68,289,741.

"Since there is the possibility that we may need to consider revising the Prop P budget, I wanted to hit the highlights for the board because there are a lot of numbers in here," Charles told the Call, referring to a monthly report normally distributed by McCarthy Construction Co., Proposition P's construction manager, that analyzes the status of Proposition P.

Charles now will perform the monthly analysis, he said, which will save the district about $30,000 in clerical labor for Proposition P.

Charles' Proposition P budget analysis indicates that the district will use all of the $72.4 million of Proposition P's construction budget generated by the 41.6 cents, but he also predicts that through 2009 the 7.4 cents of the levy will generate $16,280,894 — $1,955,894 more than what was budgeted for district capital funds last September.

Administrators were not scheduled to submit a Proposition P budget adjustment recommendation to board members Tuesday. But Charles' analysis suggests that the board "may wish to consider a revision to the construction budget" by taking $1,732,579 from the additional funds generated by the 7.4 cents and moving it to the construction budget — leaving an estimated surplus of $223,315 in the capital fund by 2009. The adjustment would be needed to cover two main expenditures that are exceeding the revised budget, according to his analysis.

A recently approved contract with McCarthy Construction increased the budget by about $700,000, according to Charles. About $1 million in unanticipated costs is affecting the construction budget because of higher-than-expected bids for Blades, Beasley and Point elementary schools approved by board members in February, according to Charles.

"When we were going through all of the difficulties of approving the McCarthy contract and getting those (three) projects approved, the issue was: 'Can we afford it?'" Charles said. "And we were confident that we could, but I had to get the precise numbers for the board ..."

Before an official recommendation is submitted by administrators, Charles added, "Right now we want to get the reaction from the board. They're going to tell me whether they want to revise the budget ... Once we get that direction from them, I'm sure (Superintendent) Dr. (Tim) Ricker will work closely with them to come up with a timeframe ..."

If board members agree and eventually approve a $1,732,579 adjustment to the $86.725 million Proposition P budget, it would be increased to $88,457,579 — $20,059,355 more than the original estimated cost of $68,398,224.

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