BENTONVILLE — The School District likely will need about $6 million from its reserve to cover expenses for this fiscal year.
Sterling Ming, district finance director, said this week he projects revenue will be about $3 million less than what the district projected for this fiscal year that ends June 30. Property tax collection hasn’t met expectation, Ming wrote in a memorandum this month to the School Board.
By The Numbers
School District Finances
The Bentonville School District’s preliminary end-of-year budget projections:
w Projected revenue: $127,053,901
Projected expenses: $132,982,242
w Difference: $5,928,341
Source: Staff Report
Expenses have been higher than expected as well, in part to accommodate growth, according to Ming. Expenses included $2.4 million to buy a building for the district’s alternative learning program.
Ming projects the district will end the fiscal year with $20.1 million in reserve. It started the year with $26.8 million in reserve.
The School Board's goal is to keep at least 17 percent of its annual budget in reserve, which this year would equal about $22.1 million.
Travis Riggs, School Board president, said at Monday’s board meeting the district is still in good financial shape.
“To keep it in perspective, a few years ago we would have been happy with a $16 million fund balance,” Riggs said. “We were much lower than that. We can’t continue to have years that take that big of a hit out of our reserve, but we’re still in good shape.”
The School District opened two school — an elementary school and a middle school — in the past year. This fall the district will open a junior high school.
Opening buildings is costly, school officials said. The district now has to figure out where it can trim expenses to balance its budget.
“The term that I use is a horticultural term. That would be ‘prune,’” Ming said at Monday’s meeting. “Sometimes you prune dead wood or other parts of a tree or bush so it can flourish and grow. You do the same thing in budgets. You have to go in on occasion and prune your budget so it can grow. That’s where we are.”
Ming assured the board the district isn't in a crisis situation.
The board will seek voter approval in September of a 2.9-mill tax increase to build a second high school. That request doesn't include money for operational expenses, something Riggs said needs to be considered in the future.
“We’ve not asked for operating mills,” Riggs said. “I think as a district we have to realize we can’t keep doing that. When we open buildings, it costs money. It costs a lot of money.”
The district’s preliminary budget for the 2013-14 school year shows expenditures exceeding revenue by $673,518, Ming said.
“We will go through and reduce some areas of spending to get us to that amount,” Michael Poore, district superintendent, said Friday. “When you look at $700,000 in terms of the overall percentage of the budget, it’s not a huge amount, but it’s still significant.”
Two big factors will affect the next fiscal year’s budget, Poore said. One is the enrollment count in October. The other is the preliminary report from the county on property assessments, which will be issued in December.
“That report will be telling, because we will have seen, I hope, some of the growth that’s going on, and higher assessed values,” Poore said.
Riggs suggested in the future the administration include updates in every board meeting agenda on how recommended expenditures will affect the bottom line.
“I know we always have this discussion, every time we approve an expenditure,” Riggs said. “We look at Dr. Ming and say, ‘Is this going to be OK?’ and then we get the nod. But we still don’t know often how many dollars that really is.”
A deeper understanding of the budget might cause board members to be more conservative, he said.
“I don’t know if there would have been a lot, but there may have been a few things where we said, ‘All right, let’s hold off another year until we’re in a different position,”’ Riggs said.