Mehlville officials confident of solving fund balance shortfall
That much of a shortfall, which does not meet the state-mandated requirement of operating fund balances of three-percent, could result in being designated a "distressed district" by the state.
But Deputy Superintendent Dr. Eric Knost said the chances of the district having "only $14,000 (in the fund balances) at the end of the 2009-10 fiscal year is just not feasible.""This is not a crisis situation," Knost said. "Some want to call it a crisis, but's not a crisis because it's not immediate. Our projected balances this year are just fine and right in line with what we expected and our projected balances for next year (2008-09) are fine and very close to what was originally projected. The concern is the 2009-10 fiscal year balances and the $14,000 figure that has been put out there."
A Community Leadership Summit has been scheduled from 9 a.m. to 10:30 a.m. Saturday, April 19 at Mehlville High School library, 3200 Lemay Ferry Road, to discuss the shortfall and some solutions.
The summit, originally scheduled for April 3, was postponed because Superintendent Terry Noble fell ill and was scheduled for abdominal surgery last week.
When the 2007-08 fiscal year budget was approved 2007 fund balances were forecast to be about $3.9 million for 2007-08, almost $1.8 million in 2008-09 and $2.3 million in 2009-10.
Superintendent Terry Noble, in a statement released just before he took his medical leave, said the shortfall was discovered while revised budget projections were being formulated this year to reflect the administration's current knowledge about expenditures and economic trends.
"Fortunately, current Superintendent Terry Noble brought this situation to our attention soon enough for the board of education and administration to take the necessary steps to address the budget situation," School Board President Tom Diehl said. "I want to emphasize these are projections for fiscal year 2009-10. This gives our community and board time to find solutions for this challenge."
Diehl estimated the fund balances for 2009-10 to be in a range between $14,000 to $800,000, and more likely $800,000.
Diehl also said the district may be able to pick up most of the projected 2009-10 fund balance shortfall through savings in insurance premiums and salary adjustments from teacher retirements and hiring new teaches at lower salaries. Diehl puts the savings in salaries alone at about $1.5 million.
Knost said there is plenty of time to come up with an action plan.
"It's only going to become a crisis if we sit on our hands and do nothing about it," he said. "Our former superintendent (Jerry Chambers) was very interested (during 2007-08 budget preparations) in giving six percent raises to our teachers. Well deserved raises - no one would argue that - and the motive was right. But unfortunately, the projected balances that were given to the board to support those raises were not accurate."
Chambers, no longer employed by the district, was interim superintendent at the time the budget was presented last year. The recent fund balance disclosures, however, also resulted in former Chief Financial Officer Brett Bell being demoted to running the district's accounting office and taking a $20,000 pay cut for what Diehl called his role in the budget shortfall.
Despite the demotion, Diehl said "Brent is a long-time, valued employee with a ten-year track record of serving the district."
Knost said the six percent raises were funded from general and surplus fund balances and "when you pay for raises in that manner you are, in essence, deficit spending."
"The surpluses are not one-time funds, they're repeating funds that are not in the budget every year, " Knost said. "Mehlville has never been a school district that has maintained high balances, it's always been between six and nine percent. But because of some (cost) cutting that was done by previous superintendents our balances creeped up a little higher, over the 10 percent mark, and it was basically determined (in 2007) that it was an opportunity to give the teachers a well-deserved raise."
"Initially those projections showed we would be above what the state describes as a distressed district, which is at three percent," Knost said. "When we looked closer this year, obviously, if we do nothing and just let the budget sit the way it is and make no adjustments then the shortfall will be an issue."
