Opp budget includes proration cushion

Published 11:38 am Wednesday, September 10, 2008

A slight decrease in enrollment and the pending vote on a current district 5 mil ad valorem tax could mean decreased funding for the Opp City School system in 2009, but the budget presented during an open meeting Tuesday afternoon contains a substantial buffer to compensate in the event of proration.

Linda Banks, OCS chief financial officer, said the budget was designed to allow for any possible changes in funding.

“The 2009 budget is a basic, conservative budget focusing on classroom instruction and the completion of the new elementary school,” Banks said. “We should begin the new year with $7 million in reserves for the new school construction and a general fund reserve balance of $2.1 million.”

OCS superintendent Michael Smithart said the budget was completed with the expectation that proration would occur.

“We anticipate proration,” he said. “There is no need to build a budget that does not anticipate at least a three percent proration.”

According to Banks a special district 5 mil ad valorem tax that contributes to the OCS general fund will be up for renewal this year and if the tax is not renewed then the school would lose approximately $175,000 in 2009.

“If it was not approved, then it would impact the general fund,” she said. “There would most likely be another cut to the classroom instructional money. They could also cut transportation funding.”

Banks said the county would most likely implement additional mils to help cover the gap in funding, but the school system would lose approximately $50,000.

According to Banks the state funding for the proposed 2009 annual budget was based upon state funding for a system average daily membership of 1,401.5 and the drop in system wide enrollment to 1,367 this year will impact funding for next year.

Smithart said the budget was prepared to account for possible changes in funding and to hopefully allow reserves to be transferred to the following year’s budget.

“You have to look at the number of increases, as far as expenditures for fuel and supplies, paired with decreased funding, and the fact that we were still able to remain within the 85 percent mark,” he said. “That allows us flexibility in the event of proration. We are not budgeted at 100 percent and we did have room to move. This is a great budget. We have been able to maintain the current level of services with decreased state funding and without dipping into reserves. A lot of credit goes to the people who put this budget together.”

Banks said the proposed budget will hopefully allow for a $3.7 million ending fund balance for September 2009.

“Two areas with major impact are the increase in fuel cost and utility costs,” she said. “We have budgeted a 30 percent increase in fuel and utility costs. Our goal of budgeting no more than 85 percent of the expected revenue in the general fund for expenses has been achieved again. In the event of proration, the budget would be reviewed to possibly reduce cost by eliminating travel, maintenance projects and classroom materials and supplies.”

A second open meeting will be held Friday at 8:30 a.m. to discuss the proposed budget and a called meeting of the Opp Board of Education will follow to approve the budget.