By Meg Peters
Review Staff Writer
The Lake Orion school district must recover almost $1 million before the start of the next school year.
Although the budget is balanced for the current fiscal year, Assistant Superintendent of Business and Finance John Fitzgerald assessed a coming deficit of more than $800,000 entering into fiscal year 2015/16.
If no steps are taken, the general fund will drop from about $8.4 million to $7.5 million, or 9.2 percent of the district’s total expenditures.
According to the school board policy, the general fund cannot drop below 10 percent.
‘The board cannot approve an unbalanced budget,? Superintendent Marion Ginopolis said.
To top it off, Governor Rick Synder’s first draft of the state budget pushes Lake Orion’s total deficit to almost $1.1 million, Ginopolis said. Numbers will not be finalized until both the state budget and Lake Orion budget undergo intercessions.
The bottom line is, from now until July 1, when the final budget for the 2015/16 school year is approved, school board trustees have to make some very considerable reductions.
Where’s the money?
Almost $480,000 of the $800,000 deficit is tied to an estimated decline in student enrollment, ‘the main crux of the shortfall,? Ginopolis said.
Enrollment has been on the slow decline over the last several years, banking on the new utilization of the Schools of Choice (SOC) program. In 2012, enrollment capped at 7,729 full time equivalent students (FTE), in 2013 it dropped to 7,605 FTE students, in 2014 it dropped further to 7,521 FTE students, and it raised slightly for the current year, due to the SOC program, with 7,573 students.
In 2015/16 the district predicts 60 fewer resident students to enroll in Lake Orion. Since October the district has already lost 47 students in grades kindergarten through twelfth, and at $7,952 per kid in foundation allowance, those numbers rack up quickly.
SOC is expected to bring in 70 students, leaving a net gain of 10, and offsetting the revenue loss by a positive $33,880 if the numbers shake out right.
The district has also lost other steadfast revenue sources, including the $70,000 a year Woodside Bible Church spent to rent Waldon Middle School for weekly services and the removal of insurance reimbursement funds from 2015 totaling $300,000.
A new world language program planned for the 2015/16 year would cost around $215,000.
According to the governor’s budget, Lake Orion would also lose Best Practice money, and a Performance Incentive, funds given per student the district was counting on.
‘On the front page of some of the newspapers they are saying that the governor is giving $75 per kid, but he’s also taking away $90, so for us it’s a ?$15,? Ginopolis said. ‘We were counting on plus $25.?
Increasing costs also affect revenue assumptions, including an increase in healthcare costs, retirement costs, fuel and heating costs, and costs associated with aging buildings.
Something has got to go
For now, thinking caps are on, and all ideas are out on the table to come up with $800,000 before July 1.
During a daylong school board workshop February 11 school board members met to develop plans to come up with an immediate solution.
‘We must preserve what our business is, which is teaching and learning,? Ginopolis said. ‘Everything is on the table.?
The board discussed a number of ideas to raise revenue and decrease costs for the immediate and distant future, including establishing a sinking fund, increasing class size and reducing teaching staff.
‘It’s too early to consider a sinking fund,? trustee Bill Holt said at the meeting. ‘For now we need to increase class sizes.?
Another idea is to find a way to claim a percentage of full time equivalent students (FTEs) from other districts by sharing teachers, similar to what the Brighton School district is doing.
Still, these are only short-term fixes, and Ginopolis encouraged the board to re-imagine what the district might look like in three to five years.
With current district boundaries, Blanche Sims Elementary can host almost 650 students. However with several unoccupied classrooms, their enrollment is almost half of that.
Reshuffling students around and closing a school could save the district about $500,000.
On the other hand, several large developments underway, including Stonegate West and Stonegate South at Squirrel and Dutton, and a Pulte development at Scripps and M-24 have the potential to bring in students over the next several years, with about 698 new building permits.
Most of those students would attend Pine Tree Elementary, according to the current school district boundary, which seems impossible.
‘We really have to look at the district differently’what we are going to look like five years from now, whether that is changing school boundaries’that’s where we need community input,? Ginopolis said.
The next step
With multiple options in front of them, and agreeing they do not want to immediately close a school, the school board will reconvene in early March to make a decision.
The cabinet, consisting of Ginopolis, Fitzgerald, Assistant Superintendent of Human Resources Bill Putney, and Assistant Superintendent of Teaching and Learning Heidi Mercer, will present a short-term budget reduction plan that the school board will base their immediate decision from.
The long-term plan involves the possible creation a group much larger than the school board’a committee of parents and community stakeholders, which would act as a recommending body to the board.
The committee, which would only be advisory, would be given a specific task determined by the board to address current budget issues.
The board agreed it was time to get the community onboard with the district’s inevitably changing face.
‘We owe it to ourselves and we owe it to the community,? Trustee Birgit McQuiston said.