School district faces budget cliffs

Stimulus money only a one-time deal; PSD’s enrollment numbers low

Nate Hulings

of the Gateway

Funding cliffs were the topic of discussion at last week’s Peninsula School District board of directors’ meeting.

One of the highest cliffs the district faces is the forecast of declining enrollment. Updated figures show the district will have 330 fewer students than last year, resulting in a $2.1 million loss.

Revenues for 2008-09 were $130,000 more than expected, which PSD Deputy Superintendent Chuck Cuzzetto attributes to special needs services and an unexpected increase in bus ridership.

However, the district expects a revenue loss of $4.7 million for 2009-10, mainly fueled by declining enrollment and slashing in student-achievement funds.

Another cliff that the district is dealing with is the growing budget crisis at the state level. Cuzzetto expressed concern that if the state deficit continues in a downward spiral, funding cuts could follow.

Cuts in Initiative 728 funding will decrease PSD revenue next school year by $2.95 million, Cuzzetto said.

Projected expenditures also are in the red by $550,000 — most of which comes through salary and health care obligations.

The PSD’s revenue and expenditure losses result in the forecast $5.2 million budget deficit.

Cuzzetto also released a preliminary budget for the upcoming school year in which all numbers are lower than last year’s budget, except for the end fund balance.

Revenues run about $4 million less than the 2008-09 budget, sitting at about $80 million projected. Expenditures also are down about $5 million.

With those preliminary numbers, Cuzzetto said the district could expect an end fund balance of $1.85 million and an unreserved fund of $2.27 million.

Those figures could easily have been negative if the district’s budget deficit hadn’t been resolved, Cuzzetto said.

The projected ending fund balance for 2008-09 is $5.48 million, or about 3.8 percent of the unreserved and budgeted expenditures.

With a goal to have 4 percent in reserves, Cuzzetto said the district would have to continue its halt of adding money to the field reserve fund. The $5.48 million field project will add FieldTurf to multiple district fields.

A third major funding cliff comes through the one-time federal stimulus dollars. Federal stimulus money is on its way to the district, but that money isn’t going to last, Cuzzetto warned.

“By the time we get to 2012, we have no stimulus dollars,” Cuzzetto said. “We’re not looking at very easy times.”

Part of the American Recovery and Reinvestment Act (ARRA) channels money into school districts.

The district will receive $200,000 in Title 1 ARRA funding. About $1.9 million also is coming through IDEA ARRA money for special education.

Terry Bouck, Peninsula School District superintendent, said the district started a “stimulus group” to start prioritizing how best to spend the one-time funding. He said that retaining counselors are very high on the list, and more information on the group meeting will soon be made available.

The district’s maintenance department has begun discussions with district administrators to work out a plan to save a mechanic’s job.

Cuzzetto said the department has suggested taking up to 20 days furlough each to save a bus mechanic position. The position was cut and the employee was demoted to a fueler.

The move will not save the employee who was laid off as fueler, but it could potentially bring back the full-time mechanic position.

The district will soon sit down with the employee’s union to hammer out the details.