Section Contents

ASD Bulletin

 
ASD Bulletin
 
Official Communique from Superintendent C. Russell Mayo, Ed.D.
 
January 23, 2015    
 
The Budget and Fund Balance
 
A school district’s Final Budget is due to the Commonwealth at the end of June, but the process begins in December with the presentation of the Proposed Preliminary Budget. The budget is developed on assumptions of federal, state and local support, and the best assumptions that we can make – with the guidance of outside financial consultants – on expected expenditures.  In creating the Final Budget, we make conservative decisions to ensure that we have enough to cover our costs and meet the needs of our students.
 
I’ve often reflected that creating the school district’s budget is more art than science. This year, through increased revenues and savings, the District has realized an additional $11.6 million in our Fund Balance. So, what was the cause of this one-time extra money? Some of the key factors in this new Fund Balance are:
  • The District received an additional $2.6 million in delinquent real estate funds. The trend over the past several years has seen this income at approximately $4 million. This additional $2.6 million breaks that trend.
  • The District received an additional $3 million PSERS Reimbursement – a far different amount than the State budget indicated when the FY15 Budget was passed.
  • The Group Healthcare Insurance rate was $3 million less than expected.
  • The District allotted $1.1 million of the Budget for Unemployment Compensation in light of furloughs. Nearly all furloughs were called back or found other positions and this money was not needed. Regardless, it had to be budgeted to cover the expense should it be needed.
This totals just over $9.5 million in savings and revenue. With additional savings in areas such as utilities, building expenditures, worker’s compensation and social security costs, it all added up to the $11.6 million. Keep in mind that this overall savings is only about 4.5% of the District’s overall budget.
 
The administrators, teachers, and all of the support staff of the Allentown School District recognize that the goal of academic success for all of ours students is our first priority. This additional money allows the District to reduce taxes and provides a pathway for the improvement of our students’ success. By controlling costs, in the way that we have, I believe we will one day restore services once offered to students that have been eliminated or reduced during the last four years.
 
While all of this is good news, it is important to keep in mind the following:
  • The additional monies will offset the projected shortfall and reduce the anticipated tax increase.
  • The District will be dealing with additional Charter School student costs and lost enrollment next year with the two additional grades at the Executive Education Academy and the possible implementation of the Elementary Arts Charter. These costs could be as much as an additional $5 to $7 million from our budget.
  • The FY16 Preliminary Budget includes a 3% increase in state funding, but with the State looking at a $2 billion deficit and a majority in both houses of the opposite party from the new Governor, this may be overly optimistic.
We’d rather be conservative and have a surplus than have a deficit. This additional money puts us in a better position as we plan the FY16 Budget.