UCS fund reserves dwindle in newly balanced budget

By: Eric Czarnik | C&G Newspapers | Published June 26, 2015

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STERLING HEIGHTS/UTICA — School officials agreed to deeply tap their stash of fund reserves and lay off some teachers to balance the budget June 22.

The Utica Community Schools Board of Education unanimously approved the district’s 2015-16 budget at a meeting last month.

School districts are legally required to approve balanced budgets by June 30. Superintendent Christine Johns said the budget will fund district services and learning opportunities for 28,100 students.

However, she said the district is facing a continual structural deficit, adding that the new budget is only balanced thanks in large part to an estimated $16.6 million of fund equity.

“We will not be able to use fund equity in the future,” Johns said. “It will be gone.”

The 2015-16 budget shows about $262 million in revenue and about $278.6 million in spending. The $16.6 million in fund balance required to fill the gap means that the overall fund balance is expected to drop from $22.4 million to $5.8 million, or about 2.1 percent of the district’s operating budget.

School officials said UCS receives 82 percent of its revenue from the state, and factors such as the per-pupil foundation allowance, student enrollment, and employees’ salaries and benefits play key roles in the district’s fiscal future. District officials plan to lay off 34 teachers.

Officials blamed falling county birth rates for the dip in the student count. Although the Schools of Choice program may blunt the damage somewhat by bringing in students who reside outside the district, UCS still projects a reduction of about 200 students for the next school year.

According to UCS Assistant Superintendent for Business and Finance Stephanie Eagen, the district expects its per-pupil foundation allowance to climb by $131 to $7,572, but it also expects to lose out on other past sources of per-pupil funding. Furthermore, employee retirement costs have increased, as well, according to Eagen.

Eagen said the district will even need to rely on cash flow borrowing until the next infusion of state money, which is expected to come in the fall.

School officials said the new budget will maintain instructional programs and services. School board President Carol Klenow said the school board has done what it can to balance the budget while preserving quality and student programs, but she also said the district is looking at a very serious problem ahead in the 2016-17 fiscal year.

“We are going into, I would say, uncharted territory for our school district,” Klenow said. “There was a time when our fund balance was $40 million. … The smartest thing we ever did was be frugal, be thoughtful and spend that slowly. We’ve been spending it for about 12 years.”

Hundreds of teachers representing the Utica Education Association and the Utica Federation of Teachers attended the meeting wearing red T-shirts, some carrying signs demanding that the school district refuse to make privatization a solution to its budget woes.

Some people in the audience who spoke during public comment also protested any proposal that would privatize staff, or outsource or lay off teachers, particularly for the AdvancePath Academy alternative school.

UCS spokesman Tim McAvoy said the budget includes an estimated $1 million in savings for restructuring alternative education. However, McAvoy said no proposal to restructure alternative education programs was formally presented in the budget presentation to the school board, and the board has taken no action on any such proposal.

“We’re having collaborative discussions with the (UEA) association leadership,” he said.

UEA President Liza Parkinson said a contract was in the board packet to enter into an agreement between the district and the education company AdvancePath Academics. She said that contract would have replaced existing UCS teachers with the company’s own technology, curriculum and staff. 

“My understanding is that the item was removed from the agenda,” Parkinson said. “I’m hopeful that the hundreds of postcards that we sent them, and the emails and the personal contacts, made the Board of Education members aware that the union is willing to work for a solution that is good for our students, and that the community wants UCS teachers for UCS kids.”

Learn more about Utica Community Schools by visiting www.uticak12.org or by calling (586) 797-1000.

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