Fayettevill School Board Approves Mid-Year Budget Revision

FAYETTEVILLE -- A mid-year revision using reserve money to balance the budget, was approved Thursday by the School Board with little discussion.

The board also dealt with other money issues, approved the 2012-13 audit report, refinanced three bonds to save an estimated $1 million and authorized selling $13.8 million in new bonds for the high school renovation project.

At A Glance

Early Retirees

A total of 86 administrators, teachers and support personnel have accepted the School District’s offer of early retirement, Greg Mones, human resources director, told the School Board Thursday. The savings to the district is projected at $6.9 million over the next eight years if the district hires only 90 percent of the retiring 55 teachers and 24 support employees and all seven administrators who have accepted the buyout.

Source: Staff Report

Lisa Morstad, chief financial officer, said the district has lost about $60,000 in anticipated revenue due to a drop in the number of building rentals this current fiscal year and another $60,000 due to declining interest rates and a drop in the amount the district has to invest.

The district received an additional $995,681 in state growth money because it enrolled 297 new students at the beginning of the school year.

However, the district has had unanticipated expenses that weren't budgeted nearly a year ago and approved by the board in June. The fiscal year began July 1 and ends June 30.

When the budget was first developed, about $1.1 million in the district's reserve, designated as "uncommitted carry forward," was transferred to the general budget to keep the spending plan balanced. Morstad said $414,958 was transferred from the property tax reserve to balance the budget after the additional expenditures were posted.

Money added to the budget from reserve is used for general expenses taken as a whole and not designated for specific expenditures, she said.

An additional $58,000 was added to salaries and fringe benefits for staff members hired because of the growth in enrollment, Morstad said.

A major purchase, totalling $549,432, was added to the budget for the curriculum and instruction department for math textbooks, she said. That purchase wasn't included in the budget approved in June.

The district could recoup some of the decline in revenue with the addition of new apartments to the tax roll. That will happen next fiscal year, which starts July 1, Morstad said.

Also, the local property tax revenue, projected at $60.5 million, could increase as taxes are paid late in the last months of the fiscal year.

"We won't know until the end of the fiscal year," Morstad told board members.

During the discussion, board member Susan Heil asked what changed since the last report when the budget picture looked better.

"We haven't seen the property tax revenue increase," Morstad said.

In other financial action, the board approved refinancing three small bond issues sold in 2009, totalling $22.3 million.

Refinancing could result in savings to the district between $800,000 and $1 million, said Dennis Hunt of Stephens Inc., the district's fiscal agent. The savings is realized because of lower interest rates compared to when the bonds were sold five years ago. Most of the savings will show up in the budget in the debt service account, he said.

Hunt said the refinancing doesn't extend the maturity date of the bonds. The refinancing involves paying off the bonds and then issuing new bonds at a lower interest rate.

The board also approved issuing $13.6 million in bonds for the high school project. Hunt said the amount represents the balance of bonded debt approved by voters in 2010. An application for the bond sale must be approved by the Arkansas Department of Education.

The board also heard from Cory Molina of Hudson-Cisne and Co. on the audit for fiscal 2012-13. He said there were no findings, or problems, in the audit.

"We present to you a clean audit," Molina said.

NW News on 02/28/2014

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