School Board to Discuss Budget Deficit Monday, June 22nd

The Manchester Community Schools District Board will meet Monday, June 22, 2015 for their June meeting to discuss, among other things, the 2015-2016 school budget. There will be a Budget Workshop at 6:00pm that is opened to the public. The School Board meeting will follow at 7:00pm. The public is welcome.

The budget workshop is of particular interest this year as an analysis of the financial information publicly available on the school website shows that the school has been operating under a budget deficit since at least 2013. If a bill currently being considered in the state senate passes, this budget deficit may put Manchester Schools at risk of being assigned an Emergency Financial Manager by the state in the future.

Our schools get money from a variety of sources. As a general matter, they get about $1.3 million from local revenue, $8 million from the state, about $400,000 from the federal government and another $1 million from other sources.

They also have a bank account called “The Fund Balance”.

Since at least 2013 (which is the earliest financial data available on the website), the school has been spending more money than it receives from its funding sources. The primary reason for this deficit, according to the 2013-2014 annual audit, is due to declining enrollment. Over the last few years the school system has shrunk by more than 100 students. This has resulted in declining revenue from the state.

At the end of 2013, the district had $1,825,848 in the bank. The School Board projected they would have a budget deficit of $927,892, but by the end of 2014, that budget deficit shrank all the way down to $193,941.

They started 2014-2015 with $1,631,907 in the bank. At the beginning of the year, the school board projected a budget deficit of $502,237. At this stage, they think the budget deficit may be more like $367,348, which will bring the account down to $1,264,559.

If the budget deficit remains the same next year (and it almost doubled over the last two years, but if it remains the same) then by the end of next year (Summer 2016) the district’s account balance will be $897,211 (which is 7.7% of the overall operating budget. This year, the fund balance is 10.8%).

At the current budget deficit, the Fund Balance will be empty by the 2018-2019 school year.

Spending in the budget seems to have remained essentially flat at just over $11.5 million since 2013.

According to reporting in Crane’s Business, the state House has passed a new financial reporting bill that would require schools to submit more detailed financial information to the state when their Fund Balance drops below 8% of their budget. Manchester Community Schools would meet that threshold this coming school year. The bill under question has not yet passed the Senate, and is not law. Once we hit the 8% threshold, we would be (according to the sponsor of the bill, Rep. Earl Poleski [R — Jackson]) one of about 300 school districts in the state deemed most at risk. There are 900 school districts total in the state.

The bill has been designed so that lawmakers can identify schools which will likely need an Emergency Financial Manager some time in the near future.

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by Fritz Swanson

Fritz Swanson has written for The Believer, the Christian Science Monitor, Print Magazine, McSweeney's, Esopus, LSA Magazine, and The Mid-American Review. He serves as a trustee on the Manchester District Library Board. He's the designer and publisher of The Manchester Mirror.

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