By BOB OLIVER
DEARBORN — With the new fiscal year beginning on July 1, Dearborn Public Schools is preparing to make adjustments to its expenditures to balance the budget for next year to save the district from having to tap further into its fund balance.
At the June 10 DPS P-12 meeting, Executive Director of Business and Operations Samuel Barna told the board that the district hopes to balance its revenues and expenditures for next year with a targeted figure of $170.5 million. This would allow the district to keep its fund balance at $7.4 million, a reduction from the 2011-12 total of $10.3 million.
Barna said the district could accomplish this goal by a reduction of district-wide operational budgets and staffing. He also said administration costs would be reduced due to 33 retirements and that revenue increase from the state of Michigan due to an expected addition of 50 students to the district would offset the reduction in both current and prior year tax revenues.
Barna added that the district needed to closely monitor its spending and purchases, pay strict attention to reform proposals being discussed by the state government and how it would affect the district and work toward getting the SMART bond passed in the November election.
Supt. Brian Whiston said the district is looking for ways to tighten up on expenditures.
“We had talked to the board about a potential $6 million in cuts, but when all is said and done the final number is closer to $8.6 million,” Whiston said. “We did get an increase from the state in some areas, but we also got some cuts in other funding and tax collections are going down.”
Whiston also reorganized the management structure of the district which could save the schools $630,000. These savings will come through retirements, the reorganizing of departments, the elimination of positions and by flattening out the administrative structure.
“Even though we are making additional reductions in order to address serious budgetary issues, this restructuring plan will allow us to operate even more efficiently and continue to provide a high level of service to our students and parents,” Whiston said.
Barna said that because of the shortfall, budget cuts will have to be made throughout the district.
“These are cuts that are necessary, but they’re not easy for us,” Barna said. “It’s a difficult situation but we need to remain solvent as a district.”
The district began the fiscal year 2012-13 with a $10.3 million fund balance but took a hit of $2.9 million due to a budget shortfall of $5.2 million, deferred revenues payments from the previous year that had to be paid ($1.4 million), retirement allowance ($500,000) and expenses such as legal and dual enrollment costs ($1 million) that were not budgeted for.
Some of these costs were combated by revenue increases due to higher student enrollment ($1.2 million due to 145 new students), best practice revenue ($1 million) and mid-year expense reductions ($1.1 million), but despite them there is still a net deficit to the fund balance for the district of nearly $3 million.
Barna said he hopes the general fund balance on July 1, 2014 will be either the same or an improvement on the projected $7.4 million for July 1, 2013.
Board President Pam Adams said the numbers are not good, but she was glad that the fund balance would not be reduced any further.
(Bob Oliver can be reached at [email protected])