The Fredonia Board of Education will be fighting finances on two fronts as it prepares the 2010-2011 budget - state aid reductions and general budgetary increases.
District Business Manager John Forbes presented the Board with the first draft of the budget last week with a focus on expenditures only.
Under the first draft budget the district is looking at a $1,773,540 increase, or 6.46 percent, in expenditures between salary and benefit increases ($994,654), equipment/maintenance and supplies ($102,070), and contractual expenses and BOCES ($686,311).
"I am positive when I say to you that this is going to be a very difficult budget for us to put together. There are going to be programs that will be affected, there will be staff that will be affected, and of course there is this discussion of Wheelock," Forbes said.
"All of those things are not things isolated to Fredonia. If you do any reading on the Internet in the last three to four weeks there are literally school districts across the state that are dealing with closing of buildings, cutting of staff, and there's a significant reduction in staff throughout Erie 2 BOCES," he added.
If there was any good news to report to the board, Forbes said, it was that the draft budget was padded as a worst case scenario and that there are still several unknowns that could have an impact on the budget.
A few budget lines stand out as large increases in the expenditures line, including, the New York State employee retirement system line which is going up by $106,000, or 42 percent; the New York State teachers retirement line is expected to increase by $200,000 or 18.6 percent; and contractual expenses with BOCES services, up $686,000 or 11 percent.
"This is before anything is sent back to instructors in some cases, the principals, the athletic department, before asking if there is anything we can possible shave out of this," superintendent Paul DiFonzo told the board. "To get down $1.77 million, we made that clear, that will take a lot of effort looking at staffing and programming. Obviously, we want to meet the needs of our students."
The draft budget only includes staffing reductions from one retirement, which will not be filled, and does not include any possible layoffs or personnel changes if students are moved from Wheelock onto the Main Street campus.
The budget goal for the board will be to first target the expected $1.7 million increase in expenditures as a starting point for any possible cuts and reductions.
"We have our work cut out for us. The $1.7 million we're trying to reduce will be a titanic struggle," DiFonzo said. "Currently, the governor's proposal puts out district at a 12.91 percent decrease in state aid, which equates into roughly a 13 percent increase in our taxes alone. So even if we cut the $1.7 million out and get down to the caps needed for the contingent budget, unless the legislators take some action to restore the aid cut out in the gap elimination, our taxpayers are still going to be looking at a 13 percent tax increase. And that's being as fiscally responsible as we can in this very difficult time."
Forbes said the district will try its best to keep programs together, but being up in budget lines, they are where they really have little control over what will make for a tough starting point.
"Our goal is to try and get our spending to a minimal amount,' he said. "It will probably be that any increases we get will be directly reflected to the amount of aid we lost. If the governor's proposal goes through as is we're looking at sizable changes to this budget in order to get to that point."
Should the budget be defeated twice, the district could find itself in uncharted territory, due to the fact that the district would be in a negative consumer price index percentage leaving pending legislation at the state level as the determining factor.
"In the event that the district budget is defeated twice, there are two caps we'll need to comply with. The first is the administrative cap where we cannot exceed the administrative portion more than the prior years budget, that is 12.65 percent, and I have not put in the draft where we stand on that yet," Forbes said. "We'll have to conform to that 12.65 percent for sure, and if we're defeated twice, we'll need to meet the overall budget cap and typically this is a positive number, but in the current financial situation the CPI (consumer price index) was actually a negative .26 percent from last year and 120 percent of that is a negative .3 percent. As the law stands right now it does not address what to do if the CPI is negative. There is legislation in the governor's proposal but it has not been passed as of today and that would create a law where a negative year simply becomes zero."
Forbes noted that since 2003, the district has tried to save money in costly lines such as health insurance by adding a lower cost plan option through Community Blue, and by also added a second choice for Independent Health with lower premium amount in co-pays. The HMO plan offered by the Chautauqua County School District Medical Health Plan, the lowest cost plan, was also negotiated so that new employees had to take that plan for their first five years.
Savings could also come if other districts join the Central Business Office through BOCES. The costs would be spread out over more districts, lessening the burden of those currently in the program.
"We will work on this budget up until the last possible moment. Unless the state legislators come through with a finished product then we are going to take every second of every day to get to a final number because we know it will be a very difficult budget year," DiFonzo said. "This will be more than a one year problem. In 2011-2012 we're projected to lose the $798,000 of federal stimulus money that is being completely used to pay for staffing here. This is not a one year issue, this is a two or three year issue and hopefully not more than that, but it could go out beyond that based on the state's predicament."
The board will spend the next six to eight weeks refining the budget, which began Saturday during the board retreat where board members reviewed several items including staffing, programs, fund balance/reserves, tax strategies, board concerns and the possible Wheelock move and items pertaining to concerns from staff and parents, proposed campus maps and projected cost savings and revenue.
The final budget is due before the board by May 18.
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