Declining enrollment could force the Germantown School District to make some tough decisions as it works toward a 2014-15 budget.
The board on Monday, April 28, reviewed a preliminary draft of the budget, which Director of Business and Auxiliary Services Ric Ericksen said includes a structural deficit of as much as $1.5 million.
Currently the proposed budget does not account for the impact of the Affordable Care Act and any possible staffing changes being considered by the board's personnel committee.
"It's definitely still a work in progress," Ericksen said of the proposed budget, which includes a 2.5 percent increase year over year from the 2013-14 budget, in addition to a decrease of state-incurred revenue from state aid or property taxes of as much as $271,384.
It is the first time Ericksen could recall the district to be in a declining enrollment situation, which he said is definitely a concern as the board works toward a balanced budget.
For formula calculation purposes, Ericksen said the district lost 18 students in 2011-12, and 80 students in 2012-13. Projections for 2014-15 include a declne of as many as 51 students.
Given what Erickson calls a conservative, worst-case scenario, he also reviewed with the board how the $8.7 million projected fund balance at year-end could be affected should the board opt to dip into it to account for the projected shortfall.
"What we run into is spacing issues," said board President Bob Soderberg. "We are looking at what we can do as a district to restructure ... how we do enrollment and what we are able to provide for students."
The general fund will be reduced by the board's decision last month to use $400,000 of to improve safety in schools through compartmentalization, plus possibly covering the $1.5 million deficit.
But Ericksen the remaining $6.8 million still exceeds the board's targeted fund balance by 3.6 percent.
That idea was met with disdain by Soderberg, who said he would rather focus on cutting expenses than take anything additional from the fund balance.
"I recognize these are very challenging times, but I completely disagree with (taking that amount out of fund balance)," he said.
According to Superintendent Jeff Holmes, expenses are indeed being examined.
"It was important to me for the board to get a heads up as to where we are headed," Holmes said. "Under current trends, the board needs to see those numbers."
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