School district prepares for the worst
Watching the continuing financial train wrecks at the state level made it clear to Tonganoxie school Superintendent Richard Erickson that the district needed a safety net.
So he recommended to school board members last week that they transfer $34,000 from the 2003 budget into a contingency reserve fund, and the board agreed.
"We just want to prepare for the worst," Erickson said. "We don't want to get in a situation that the state is in, where you're short on money and short on balances."
In the past, the requirements for spending contingency funds were quite strict.
"But because of the financial situation in Topeka, they've opened the lid on the contingency fund and eliminated those restrictions," Erickson said. "So any justifiable need can be funded through that contingency fund. It is a nice safety net for a school district."
Legally, Tonganoxie can hold up to 4 percent of its general fund in contingency. That translates into $316,000. So with the $34,000 transfer, Tonganoxie is well below the 4 percent cap.
Erickson said he believes the district will face a much leaner year next year than this year. That underscores the importance of having an emergency cache of cash.
While the superintendent will recommend to the school board that it hold the line on the mill levy to fund the new budget, the district is facing some additional expenses next year. And even if the mill levy remains fairly constant, increases in property valuation should mean more dollars for the school district.
In the 142-square-mile school district, property valuations increased 10.25 percent from last year to this year -- from $56,639,053 to a projected $62,441,989.
During the coming year, Erickson said, the district anticipates these additional expenses:
- A hike in workers compensation, as well as property and casualty insurance, of about $42,000.
- Bus replacements, costing at least $30,000.
- A dramatic increase in heating costs. "They've told us to plan for an increase of about 40 percent," Erickson said.
- Salary increases of an average of 3.1 percent. Erickson estimates that will mean an additional $200,000 in cost to the district.
The school board on Monday will consider approving a budget for publication. That budget normally is inflated because the district cannot go above it. Erickson devises a second budget, which he calls the working budget, that more clearly reflects what the superintendent thinks will be reality for the coming year.
And it promises to be more bleak than this year.
"With the additional costs, we'll have this coming year, we'll have a much tighter budget," he said.
And the district likely won't grow as much next year as it did during 2002-2003.
"We were up about 49 students last year," Erickson said. "Indications were, at the end of the year, there will be a 10- to 15-student increase next year."
Most of those students, for whom the district receives additional revenue from the state, will enroll at the elementary school.
The upcoming year likely will be a hold-the-line year.
"I don't see us funding any new programs this year, other than what we've funded in the past," Erickson said. "We're in a mode right now of trying to improve our present programs and trying to improve our budget in a way that we're stable enough that we don't have to look at deleting programs in the future.
"That's a major priority of mine -- that we remain fiscally stable in a way that we don't have to look at reducing programs. We're preparing for the worst."