Rochester school board faces $12.3 million gap

/ 11 June 2012 / jennifer

Matthew Stolle, Rochester Post-Bulletin, June 11, 2012 –

This year, the Rochester public school district’s fiscal picture was sufficiently bright that, for the first time in four years, it was spared from making large-scale budget reductions for the upcoming school year.

It may end up being a temporary reprieve, given the district’s long-range budget projections.

District officials are predicting a $12.3 million gap for the 2013-2014 fiscal year, a prospect that would likely necessitate spending cuts or new revenues or some combination of both.

Officials say a draw-down of its unreserved fund balance, commonly referred as a “rainy-day fund,” would lessen the blow. But allowing the fund balance to absorb the full $12.3 million would take the fund below the 6 percent of general fund expenses that the school board has set as board policy.

To maintain the fund at 6 percent, the district would need to find $3.7 million in spending cuts or new revenue for the 2013-14 school year. But even then, a large gap would continue to exist between recurring revenue and expenses, given that the fund balance is made up of one-time dollars.

Officials thus are talking about cutting anywhere from $3.7 million, which would maintain a 6-percent fund balance, to $12.3 million, which would bring revenue and expenditures into line.

But budget projections are made of a number of moving parts, and Larry Smith, the district’s finance director, noted that 2013-14 is also a funding year for the state Legislature.

“In my experience, there are some years we don’t get any new funding; other years we get some new funding,” Smith said at Tuesday’s board meeting. “I would hope to be able to anticipate at least some level of new funding for ’13-’14 to help reduce that $3.7 million.”

The board will discuss its approach sometime during the next school year. The board also will have to decide whether to form some kind of public committee to offer recommendations on the right approach.

“If we decide to go at this strictly through reductions, what’s the process we want to use?” Rochester superintendent Michael Muñoz said. “I have some suggestions, but I think that’s something we as a group have to have some conversation about.”

At the board meeting there was no explicit reference about asking Rochester voters for more dollars through an override levy referendum, but it was hinted at.

Another factor likely to influence the outcomes is a new strategic plan that the district has developed under Muñoz. That blueprint, once complete, would offer guidance on how the district will spend money in the future.

“I think we will be most successful when the strategic plan comes together,” school board member Breanna Bly said. “We know if we’re heading into a reduction, what areas we need to reduce while still maintaining the focus of that strategic plan? Or is it something we need to go to community and talk about and have some support?”

Board member Terry Throndson said the question for him will be what the district can afford.

“To me, here’s what we want; can we afford it? Not, let’s go for the money,” Throndson said. “I want to have these things, but now can we afford it?”