WASHINGTON COUNTY — The county school system's chief financial officer gave the school board some good news Tuesday: the shortfall for the next budget year is expected to be only $420,000.
But it appears the Washington County Board of Education has already covered that shortfall by changing the funding source to replace several school buses.
After a presentation Monday morning about Schools Superintendent Elizabeth Morgan's proposed budget for the fiscal year that starts July 1, school board member Justin Hartings noted that the way the $1.74 million for the replacement buses was listed could be interpreted as the school system reassuming those costs in its general fund budget.
Historically, the county has paid for replacing buses, but did so by not including that expense in its annual maintenance of effort, or its obligated funding to the school system, Hartings said.
Hartings suggested the board ask the Washington County Commissioners to again fund the buses outside of the maintenance of effort for the next fiscal year, realizing they might say no. If the county rejects the request, then Hartings suggested paying for the buses out of the fund balance rather than the general fund. The fund balance is the accumulation of budget surpluses.
Most of the board members agreed with Harting's proposal through an informal raising of hands. Board Vice President W. Edward Forrest was absent during the public portion of the budget meeting held at the school system's central office off Commonwealth Avenue in Hagerstown.
Hartings said he hoped that, as the county's financial outlook improves, it could pick up the cost of the buses again in the future.
During the budget presentation, Chris South, the school system's chief financial officer, cautioned the school board that it is early in the state budget process and the amount of state money the school system is proposed to receive could change.
Last year, state operating revenue for the school system fluctuated by about $3 million — down — from the beginning to the end of the budget process, South said.
If the financial picture remains constant, South said he was, at worst, expecting "reductions" in employment and, at best, anticipating some employees to be reassigned based on enrollment needs.
After the budget meeting, School Board President Wayne Ridenour said he was hopeful there would be no layoffs for the next fiscal year. But that could depend on final state funding.
The budget presentation included new information received late Monday so the total for the proposed budget had not been recalculated yet, South said during a telephone interview Tuesday.
The school system's budget for the current fiscal year is $230,883,713, he said.
The school board is tentatively scheduled to present its budget to the commissioners on March 29, South said.
The school board might have further meetings to discuss the budget before voting on a draft to take to a public hearing. The hearing is tentatively scheduled for 7 p.m. on March 8 at the central office.
School board members also spent almost an hour at the start of the work session in a closed meeting discussing how negotiations with employee groups would affect the proposed budget.
Whether employees receive raises will depend on funding and negotiations, Ridenour said.
"In my mind, we have to have negotiations done before the end of the fiscal year," Ridenour said. That includes talks with the nonunion Washington County Association of Supervisors and Administrators, he said.
School system officials are negotiating a new contract with the teachers union and will negotiate issues, including wages, for the final year of the contract with support personnel. The support personnel contract is effective through June 30, 2012.
In December, South presented different budget scenarios to the school board, including two that included a midyear pay increase of either a step or 2 percent cost-of-living raise for employees.
Ridenour said Tuesday that those were discussed as possibilities if the funding is available, but right now he didn't think the money would be. But anything is possible with negotiations, he said.
Losing some funding
A major revenue question in December was whether Gov. Martin O'Malley would restore $2.59 million in state funding that was supplanted by federal stimulus money during fiscal 2010 and fiscal 2011. Those funds, known as State Fiscal Stabilization Funds, expire June 30.
Locally, the school system used that money to pay for private placements for several special education students, South said. With the end of the stabilization funds, that $2.59 million has to come out of the school board's general fund for the next fiscal year, he said.
The school system also is expecting $400,000 less in state funding for those private placements, South said. The state has increased the amount per pupil for which the school system is responsible before the state begins providing its share of the cost.
The state's share will go from 80 percent this fiscal year to 70 percent next fiscal year, South said.
The initial per pupil amount the school system is responsible for, before the shared cost formula kicks in, increased from $17,000 to $22,000 during the last two years, South said.
The school board is expecting a $1.07 million increase in maintenance of effort funds from the county, according to South's presentation.
The governor's proposed budget projects a $6.98 million increase in state funds for the school system, South said.
On the expense side, South said there is a move afoot in Annapolis to have local school systems reimburse the Maryland Department of Juvenile Services for the educational expenses for youths in certain juvenile facilities, South said. That would cost the school system an estimated $500,000.
Other expenses in the proposed budget include:
- The anticipated cost of covering underfunding of pension and retirement plans for educational support personnel decreased from a preliminary estimate of $300,000 to an actual $20,000, South said.
- The school system expects to save $500,000 in employee turnover, as many retiring employees are replaced with people with lower salaries, South said.
- The budget still contains a 15 percent or $3.72 million increase in health insurance premiums.
- The budget still includes replacing six lift buses and 11 standard buses for $1.74 million.