MONROE — The school district received an unexpected windfall in the form of a larger-than-expected budget surplus, which will be used to refresh the district’s capital reserves, address continued enrollment growth and to reduce the tax levy.
According to Business Administrator Michael Gorski, the surplus, which totals more than $6 million and represents a $2 million dollar increase from the previous year, was due to the results of negotiations with Verizon and healthcare provider Horizon, a purchase order freeze on non-essential orders since January, and the district’s receipt of the full amount of anticipated state aid.
Last year, the district received $3.7 million in state aid, according to the 2015 – 2016 budget. Following employee healthcare contribution negotiations, the district’s tab for health insurance grew 2.9 percent, Gorski said.
“If we were ever to prepare a budget where revenues were tightly matched to appropriations for the next year we could be in a very precarious situation next year because, more than once, the state has not paid us the full state aid award,” Gorski said at the Sept. 16 Board of Education meeting.
He added that failing to account for that potential loss in revenue could lead to a “mid-year [reduction in force]” of teachers and cutting of programs. “It pays to have flexibility in your budget.”
In the past, Gorski said, the state announced they would not be fulfilling their stated obligation to the district, at one time withholding $1.8 million in expected funding.
“This budget did not have more appropriations than deemed prudent. It’s due to the board’s oversight of the budget through the administration in place,” Gorski said.
Kathy Kolupanowich, chair of the board’s finance committee, said the excess surplus of $2,193,237, would be used for three purposes.
She said the district would transfer $975,000 to capital reserves, and the remaining $1.2 million would be split between lowering the district’s tax levy and the operating budget to address the district’s needs in relation to the ever-growing student population.
There were 6,361 students enrolled in the Monroe Township School District for 2014-15. By the 2017-18 school year, the district is expected to eclipse 7,000 students and gain more than 150 pupils every year through 2020.
“It was recommended to the committee that we restore the capital reserve account with $975,000, which then can be used to fund any capital project in our five-year facilities plan, or it could be used for a bond referendum pre-installment plan,” Kolupanowich said.
“It was then recommended that the remaining surplus … go toward meeting the appropriation needs of the district … and the other half would go toward a reduction in the tax levy, which would bring the 2016 – 17 below cap.”
Previously, she said, the budget was projected to come in above the state’s two percent tax levy cap at a three percent increase, meaning the district would have had to utilize its cap bank to meet the needs of the budget. The reduction in the levy will prevent that.
“The excess surplus shows that we are conservatively structuring a budget and aggressively managing it during the year to save every dollar we can to give back to the taxpayer,” Kolupanowich said.
Board member Lew Kaufman said he isn’t convinced that returning such a small portion of the surplus to the taxpayer would make a significant impact.
“Given the fact that the state isn’t really good at giving us money … I personally think $600,000 would go a longer way to meeting the needs of the district,” Kaufman said.
According to Gorski, the administration wants to address the needs of taxpayers while still allocating money toward facilities and expanding the operating budget to address the constant upward tick in enrollment. The administration has identified $7 million in additional appropriations over the $115.7 million budget for 2015 – 16.
“Never would [the administration] shortchange the district in the budget process and put our names on that budget,” Gorski said. “We are very sensitive to the fact that 85 cents of every $1 raised for education in Monroe comes from the taxpayers. It’s extraordinarily burdensome.
“When we confirmed this surplus — which we knew was going to be good, but would have been premature to discuss … in August – when that number came in … we actually thought that we could satisfy both sides,” Gorski said, meaning the district’s needs and limiting the impact on the taxpayers.