By Jim Hardin
Rockwall Independent School District officials, faced with a budget deficit of almost $8 million for the current fiscal year, have their sights set on seeing a surplus — or balanced — budget for 2010-11.
Mike Singleton, the school district’s chief financial officer, presented a “Balancing the Budget” plan to school board members Monday night. And if all goes as planned, the school district could have a budget surplus of $262,247 in 2010-11.
Even though his report was positive and it drew a favorable response from trustees, Singleton stressed that there is “a lot of work, obviously, that still needs to be done.”
After learning of the $7.9 million deficit for the 2009-10 fiscal year, a subcommittee was formed to develop a plan to balance the budget for the 2010-2011 fiscal year. Subcommittee members were school board members Russ Childers, Chris Cuny and Doug Hamilton, Superintendent Gene Burton, Deputy Superintendent Jeff Bailey and Singleton.
All three trustees who served on the subcommittee agreed that their deliberations were “intense.”
The subcommittee’s recommendations include increasing facility usage fees; establishing an after-school program; personnel, health insurance, energy and transportation efficiency measures; and a change in the school district’s fiscal year.
With transportation, school officials are exploring the possibility of implementing a three-tier school schedule. According to Singleton, this plan could make student transportation more efficient and cost-effective by coordinating the start time of schools. By coordinating the start times, a single bus could run three separate routes — one each for elementary, middle and high schools to which it delivers students.
The subcommittee’s plan was broken down into two groups of recommendations — “potential budget revenue and expenditure options” and “major options researched.”
On the revenue side, Singleton addressed tax values and the school district’s tax rate.
Singleton said the school district had seen a period of growth in tax values. But that growth has slowed down dramatically, he said, and will “continue to be an issue with us.”
He added that the school district has not changed the $1.04 tax rate the last three years. The school district can’t go above the $1.04 rate without a tax rate election. But even if the school district went to a maximum rate of $1.17, Singleton said, that tax rate still would not produce sufficient revenue to balance the budget.
He then went through a list of “major options researched” — or specific money-producing or money-saving projects.
Following is a list of those projects. In parenthesis is the projected revenue or cost savings.
• Facility usage rates. This would involve increasing rental rates charged for use of school district facilities. These new fees would not become effective until the next school year. (Projected revenue increase, $122,000)
• After-school program. This program would be for children in kindergarten through the sixth grade. The program also would be established the next school year. Additional research is needed, Singleton said. (Projected revenue, $200,000)
• Personnel efficiency. There is currently a hiring freeze, he said. He added that school officials also will look at attrition -- not replacing certain personnel who are lost due to retirement, resignation or death. (Projected savings, $3,265,300)
• Health insurance efficiency plan. Further research is needed, Singleton said. He said the school district spends $10 million annually for employee health insurance. School officials will explore alternatives that will result in savings and maintain quality health care. (Projected savings, $3.2 million)
• Energy efficiency plan. This would involve renegotiated rates and energy conservation measures. Singleton said school officials already have renegotiated rates with Reliant Energy, resulting in a savings of $200,000 annually over the next five years. (Projected savings, $200,000, renegotiated rates, and $500,000, energy conservation)
• Transportation efficiency plan. This would involve changing to a three-tier school schedule. (Projected cost savings, $650,000)
There was considerable discussion regarding the school district’s unrestricted fund balance, available resources to finance expenditures that are not reserved or designated. According to Singleton, the fund balance is affected when a school district has a deficit budget.
In Rockwall ISD’s case, the school district’s fund balance in the 2008-09 school year was just more than $28 million. The projected fund balance in the 2009-10 budget is about $20.5 million.
A healthy fund balance is important, Singleton said, for cash flow and to give the school district a good bond credit rating.
Rockwall ISD’s fund balance soon with get a significant boost, thanks to the trustees’ recent action to change the school district’s fiscal year. The fiscal year now will begin on July 1 instead of Sept. 1.
That’s a plus for the current financial picture because tax revenue already has been collected, but expenses for July and August will not have an impact on the current fund balance. It also was explained that the school district will have 12 months of revenue, but only 10 months of expenses.
Singleton stressed that this is a “one-time shot into the fund balance.” During a discussion that followed, Singleton added that he didn’t want anybody confused, then repeated that this is a “one-time deal.” He said this action has the “curve going back in the right direction.”
Trustees are scheduled to discuss the health insurance plan in January. Presentations involving the after-school program and three-tier school schedule were listed as “TBD” — to be determined.
The Monday night discussion was considered to be the first talks regarding the 2010-11 budget. Budget workshops are scheduled for March 22 and May 17. On June 21, there will be a public hearing on the budget and tax rate. The board also will receive the proposed budget on that date. Then, on June 28, the board will consider approving the budget.
