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Sterling Heights, Troy, Warren

WCS board approves general fund budget 6-1

Fund equity will make up shortfall

June 20, 2013

WARREN — Warren Consolidated Schools parents and students won’t have to pay to participate in athletics next year.

“This budget tonight eliminates the activity fee all together,” Superintendent Robert Livernois said at the June 19 school board meeting. “Our decision to eliminate this is a demonstration we have sincerely listened to our parents.”

That announcement came the same evening the school board approved the general fund budget 6-1 for the 2013-2014 school year. School board Trustee Ben Lazarus was the dissenting vote. The new fiscal year runs July 1, 2013 through June 30, 2014.

WCS Chief Financial Officer Robert Carlesso presented the general fund budget. Next year’s revenues are projected at $163,058,000 with expenditures projected at $168,658.000, leaving the district with a $5.6 million shortfall.

Because WCS will spend more money than it will take in next year, school officials will use the district’s fund equity to make up the difference. The 2013-2014 general fund budget is projected to leave the district with a 1.2 percent fund equity at the end of the fiscal year. According to the general fund budget, there will be approximately $6.7 million in fund equity at the end of the 2013-2014 fiscal year. Fund equity acts like a savings account and is tapped into in emergencies.

“We are using fund equity to absorb our deficit,” Carlesso said. “We manage to reduce our expenses every year but we have no control on the revenue side.” According to school officials, it’s ideal to have 12 percent of the overall budget in fund equity.

Revenue includes local, state and federal sources, grants, inter-district and fund transfers. Expenditures include salaries and benefits, community services and fund transfers. The majority of the expenditures is from employee salaries and benefits. 

Carlesso reminded the school board and audience members the general fund presented at the meeting was “based on a number of assumptions which may or may not occur.”

Enrollment numbers, state aid dollars and the number of employees who retire can always change, thus altering the budget. For instance, the prediction is that WCS 50 teachers will retire by the new school year, which could be a cost savings. That gives the district the opportunity to replace the retiring teachers “at the high end of the (pay) scale” and bring in “a new teacher at the low end of the scale,” Carlesso said. But the number 50 could change.

The district has been working to cut expenses for the past several years. Because of the state’s economic downturn, less per pupil funding — also known as state aid — has been made available although there have been increases in district expenses, including that of utility, supply and employee retirement costs. WCS is in the same boat as districts throughout the state. Over the years, many districts have cut staff and programs in order to balance their budgets.

Prior to general fund budget presentation, Livernois gave a public statement regarding the budget. He said the district has lost “over $600 since 2010” in per pupil funding.

“Warren Consolidated Schools has no control of how money is spent putting (us) at the mercy of the state and Legislature each year,” the superintendent said. He added the district’s future depends on receiving more money from the state or through attracting new students via advertising.

“All employees of the district have taken pay cuts and pay freezes and now pay 20 percent of their health care,” Livernois said, adding staff members began contributing to their health insurance in 2010. “With no new money they’ve had to deal with buckets and buckets of bureaucracy from the state. Students and families have had to pay for athletics and large class sizes.

“Our number one goal is our children and their education,” Livernois continued. Livernois mentioned extracurricular activities such as music and sports are important because “many students do well in school because of these extras.”    


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