Schools begin discussing $400K budget deficit
Published on December 14th, 2005
STONEHAM, MA - If the region's freezing temperatures continue, the Stoneham Public School system could find itself in the red by year's end.
The School Department presented its year-end projection to the School Committee last Thursday, one of several it offers each budget year to keep the committee informed of the schools' current fiscal picture.
While Business Manager Greg Zammuto attributed the hefty projected deficit of $486,544 largely to rising special education and utility costs, School Superintendent Dr. Joseph Connelly clarified that the projected deficit does not mean that the system is currently operating with a large deficit. Rather, he referred to it as "a worse case scenario" and an "alert" to the Finance Board and Board of Selectmen.
"We will certainly, over the next 6 months, do everything in our power to work down that deficit, but this is just an alert, it's a projection. It's not an actual deficit at this point in time."
Combating the projected shortfall has begun, Zammuto said. Currently, all nonsalary accounts and custodian overtime accounts have been frozen, effective November 10, 2005.
"We feel that doing these two things will help the projected deficit," Zammuto said. His projection illustrates a 170 percent increase in heat and utility costs alone, an alarming figure but one that is still less than the 200 percent average experienced by surrounding school systems.'
"We have a very, very tight forecasting strategy in place. I think Greg's estimates . unfortunately are probably quite accurate."
Some old fashioned conscientiousness on the part of staff, students, parents and other users of the buildings will go a long way in conserving energy use. In addition, Connelly advised that shutting down the schools to the nighttime temperature of 60 degrees at 3:30 p.m. rather than at the conventional time of 11 p.m. is under consideration.
"We really are in an energy crisis so we have to be energy savers as a community.we do have strategies in place.but the deficit is so large, it is quite probable that we will not be able to totally reduce the entire deficit."
Several revolving funds in the school budget, such as the after school child care program, full day Kindergarten program, preschool program and school building rentals have typically yielded balances at year's end that serve as start up money for the next fiscal year.
"If necessary, we will utilize all that existing money to help balance this year's budget," Connelly said.
But the caveat to that method, Connelly said, is that it is risky to offset your current operating budget with revenue you have not yet collected.
Part of the $400,000 deficit includes $30,000 from the school lunch program. This account proves the point that offsetting an operating budget with expected revenue can be a sticky situation. Despite new Food Service Director Susan Lacey's creative, nutritious and cost saving programs, the 75 cent increase in the cost of school lunches this year - which was to have brought in an additional $150,000 in revenue to help balance the budget - has seen a 20 per cent drop in participation. The increase now will likely only bring in about $120,000.
Gone are the days when the school lunch program was self-funding and even equipment repair was taken care of from the revenue generated from the program. Cafeteria employee health insurance rates are also to blame for the shortfall since they were forecasted at an 18.4 percent jump, but actually rose 24 percent.
"In spite of all the good work Sue is doing, we're looking at a $30,000 deficit. The bottom line is if the school lunch program runs a deficit, the school budget has to pick up that deficit," the superintendent said.
"We're in very tough times and we're going to have to do everything we can to make the budget work."
And looking to the fiscal 2007 budget on which budget holders are already hard at work, the current outlook shows a budget increase in three areas alone (heat and utilities, special education, and health insurance, all uncontrollable or mandated expenses) of $1,275,000 over the current year. That does not include any increase in salaries or instructional materials.
Connelly reminded that level funding and even decreasing the instructional materials account year after year will eventually "catch up with you."
"At some point, you're going to have to increase these line times just to give the teachers and students the tools they need to teach and learn."
"It's going to be a very difficult budget process," Connelly stated, but did commit to having draft I of FY2007 budget ready for School Committee presentation at its first meeting in January.
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