Royal OakJune 19, 2013
Royal Oak schools predicts $2.1 million deficit for next school year
By Robert Guttersohn
C & G Staff Writer
ROYAL OAK — The school district’s first projection for the 2013-14 school year shows a $2.1 million deficit, a gap that school officials say is partly created by conservative budget assumptions.
Rick West, the district’s executive director of business services and finance, said during a presentation to the Board of Education June 13 that the gap is caused by, among other things, an increase in personnel costs and a projected decrease in student enrollment.
The district is projecting a 45-student decrease, equating to a loss of $388,000 in per-pupil funding, but West said they expect enrollment to increase throughout the summer.
Superintendent Shawn Lewis-Lakin said he is never comfortable presenting a board with a budget deficit but feels it is a deficit that will shrink throughout the year.
He said the projected personnel costs do not account for money saved through the hiring of new staff to take the place of retired staff at a lower cost.
“It’s never comfortable seeing red up there when you look at a preliminary budget adoption,” Lewis-Lakin said, referring to the deficit. “As you noted, there’s revenue that we are anticipating, but we just aren’t comfortable counting on it until we get there.”
West added that the district is withholding from the forecast an additional $630,000 of state best-practices and performance funding.
“We have to make sure that we understand the legislation and what the requirements are to meet those best practices and performance funding (standards) prior to putting that in the budget,” he said. “This is a practice we implemented last year and that we are comfortable with.”
When the district feels they have met those standards, West said they will apply for the money and add it to the budget.
If the deficit were to remain, the district could borrow from its $10.8 million rainy-day fund.
Throughout next school year, school officials will have the opportunity to amend the budget three times, West said.
West is to present a more detailed 2013-14 budget to the board at 7 p.m. June 27 at the Board of Education office, 1500 Lexington Blvd.
Board adopts 2013 millage rates
While the district will be adding to this year’s taxes a 1-mill, sinking-fund levy approved by voters in November, the district is completely offsetting the increase by reducing other millage rates.
Altogether, Royal Oak taxpayers will be paying 7.73 mills in 2013, the same as the 2012 tax year.
“We’re happy to bring that recommendation to you,” West said to the board. “It’s definitely a benefit to taxpayers.”
The taxes will be collected this summer.
The Board of Education approved the new rate with a 4-0 vote.
Board of Education President Gary Briggs and Secretary Marty Cardamone and Trustee Michael Hartman were absent from the meeting.