Developing four years of budget projections in October is “cruel and unusual punishment of your CFO,” Chief Financial Officer Mike Addison joked at Wednesday’s Board of Education work session.
Despite lacking state and local revenue information, Addison offered an initial prediction for fiscal 2013 of a $72.2 million shortfall in an $890 million budget. That prediction includes the transfer of $20.4 million from the SPLOST II contingency fund.
Addison said a $34 million reduction in reserve revenues from fiscal 2011, which ended June 30, caused the largest hole in the budget forecast. He also predicted a $4.4 million decrease in local revenues from fiscal 2012 to fiscal 2013 and an approximately $40 million increase in expenditures. They include:
- Increase in health insurance for classified employees, $11.7 million.
- Annual step increase for certified employees, $10.1 million.
- Restoration of two furlough days, $5.7 million.
- Increase in Teacher Retirement System rate from 10.28 percent to 11.41 percent, $5.9 million.
- Restoration of half-year annual step increases for teachers, $4.9 million.
Addison, however, said the district could save $3.5 million in charter school payments mainly from the closing of . The board .
Addison said his “very early projections … will definitely change in the coming months as we obtain new information.”
“We have some hard decisions before us because with these deficits we know that we’re going to have some really big cuts somewhere,” board member Lynnda Crowder-Eagle of West Cobb’s Post 1 said. “We’ll have to start looking in that direction to see where we’re going to have to make those.”
In March, Addison predicted a budget shortfall of up to $50 million for fiscal 2012, which began July 1. By April, the , thanks to property values decreasing less than expected and higher state revenue collections.
In 2010, the district cut 734 positions to close a $137 million budget deficit.
Addison said 90 percent of the district’s budget covers the costs of 14,049 employees.
Board member Scott Sweeney of East Cobb’s Post 6 said it’s better to inform people early about possible bad news than to deliver bad news late.
“It’s an important part of establishing realistic expectations,” Sweeney told Patch after the meeting. “Certainly our hope is that we will see improvement with these forecasts, and we will not have more information until we hear from the state legislators and from our local tax digest.”
Addison, in his fourth year as CFO, said this was the earliest he provided a budget forecast to the board. Last year he supplied his first one in January, and in 2010 he delivered his initial projection in March or April, he said.
Addison also is predicting shortfalls of $83 million in fiscal 2014, $70 million in fiscal 2015 and $53 million in fiscal 2016.
“If we make cuts in FY 2013, then that will carry over to subsequent years,” Addison said, explaining that the future deficits will shrink if the fiscal 2013 budget is cut.
Elsewhere, improving infrastructure, cutting maintenance costs, increasing parking space and improving driver safety are some of the reasons the transportation department wants to spend $1.1 million to pave its Sanders Road bus shop off Powder Springs Road in Marietta.
The project’s cost grew by $400,000 when its scope increased to add 50 bus parking spots, which would require clearing the tree-lined lot and moving dirt to flatten the proposed back lot, said Doug Shepard, the chief administrative officer for the district’s SPLOST projects.
If the board decides to pave only the existing gravel parking lot, the project will be $108 under budget, Shepard told Patch.
District Transportation Director Rick Grisham explained the need for the full paving project.
“We have very few (buses) parking at school locations, and we have an increased volume of vandalism, even parking on our school lots,” Grisham said. “We feel like the more buses we get on our (secured) lots, the better the security over our equipment.”
He said the lines to fuel the buses create congestion on Sanders Road because “we just don’t have places to go with vehicles. ... It’s very important if we could increase the size of that lot to accommodate our current traffic.”
The facility’s supervisor, Terry Kerr, said the dusty lot frequently develops foot-deep holes and requires new gravel to be spread over it at least four times a year. He said buses often suck gravel and dust into the engines, costing $3,000 to replace the diesel fuel injectors.
But Shepard told board members the district’s SPLOST contingency fund has only $500,000 after the district allocated, mostly to technology-related projects, the $10 million saved in construction costs this year. Paying for the full bus shop project would leave only $100,000.
Board member Kathleen Angelucci of North Cobb’s Post 4 said that draining the contingency fund is a “huge concern” because it would eliminate the district’s flexibility if future projects came in over budget.
Board members David Banks of Northeast and East Cobb’s Post 5 and Tim Stultz of Smyrna’s Post 2 suggested tabling the project, possibly until the spring.
Lynnda Crowder-Eagle of West Cobb’s Post 1 suggested adding and paving the 50 new spaces to deal with the space problem but not paving the rest of the property, which houses 230 of the district’s 1,200 buses.
The item was moved to the discussion agenda for the board’s Oct. 27 regular meeting.
Also on the discussion agenda will be the purchase and installation of resilient athletic flooring at 15 elementary and middle schools.
Also during Wednesday’s meeting:
- The board backed South Cobb board member David Morgan’s suggestions to require annual reporting by charter schools and governance training for their boards. The administration will go over Morgan’s initiatives and bring written policies to the Nov. 9 work session for the board to peruse.
- The board set legislative priorities that focus on unfunded mandates. The board plans to meet with the Cobb County legislative delegation from 8:15 a.m. to 9:30 a.m. Nov. 14 at .
- Chief Academic Officer Judi Jones went over short- and long-term steps for raising student achievement. Developing a results-based accountability system, exploring a school’s effectiveness and ensuring a rigorous curriculum with defined growth milestones are the top three steps.
- Georgia School Boards Association representative Zenda Bowie talked with the board members for two hours about communication with one another and the media and about their roles and responsibilities.
The board voted unanimously to approve a personnel report that includes three key departures and four recommendations:
- Chief Human Resources Officer Donald Dunnigan is retiring Oct. 31. He told Patch he wants to pursue some new opportunities presented to him.
- Jan Holley is retiring as the Human Resources Support Services and Evaluation Systems director, effective Nov. 1.
- Kevin Sherman, the human resources compensation manager, resigned effective Oct. 12.
- Shallowford Falls Elementary School Principal Doreen Griffeth was named Area 3 assistant superintendent.
- Debra Wilson was called out of retirement to serve as interim principal at Shallowford Falls.
- Principal Darryl York was named director of policy development in the Office of the Chief of Staff.
- James Snell was called out of retirement to become interim principal at Griffin.
Banks and Stultz also filled recent vacancies on the school district’s Facilities & Technology Committee. Banks appointed Angie Delvin-Brown, and Stultz picked Curt Johnston.