Although a recent audit of Chippewa Valley Schools’ 2010-11 finances shows the district on the plus side, district administrators such as Assistant Superintendent for Business & Operations Scott Sederlund believe this snapshot can be misleading.
“Last year we got federal EduJobs money, about $3.5 million, but that was one-time money,” Sederlund said. “We do not have that money for this year. Our revenues typically exceed our expenditures by only a few thousand dollars. We would just break even.”
Finishing the 2010-11 school year with total revenue just over $135 million and total expenditures just over $131 million, the district was able to deposit around $3.7 million into its rainy day fund. However, much of this extra $3.7 million was the federal EduJobs money, a boost the district won’t see this year.
Last year, the district received approximately $7.1 million in federal ARRA and EduJobs funding and more than $18 million in federal and state aid. However, with ARRA and EduJobs expiring and federal and state aid being reduced, the district is looking at significantly less revenue in 2011-12.
The loss of the ARRA and EduJobs funding will mean a loss of almost $40 million for all Macomb County’s districts in 2011-12, according to Plante Moran.
“We’ll see a reduction from the state, a reduction in federal aid, and you will see growth in the red. That’s the big issue right now,” Sederlund said. “Expenditures are exceeding revenue. That’s what puts us in such a squeeze.”
In 2010-11, the district spent approximately $104 million on instruction and instruction support services, or roughly 79 percent of the district’s total expenditures, according to the audit. This number is 7 percent more than what other Michigan districts are believed to spend on classroom instruction, according to data from the 2009-10 Bulletin 1011.
“What we’re spending in instruction is more,” Sederlund said. “The smaller pieces are the support services, school and general administration, businesses services, etc. We are good stewards of the funding we receive from the state. We maximize the amount we spend on the classroom.”
As of June 30, 2011, the district’s general fund balance, or rainy day fund, is $16.9 million, according to the audit. However, even if the district meets the budget passed for 2011-12, money will still have to be taken from this fund, leaving it at $12.7 million at the end of this school year.
“,” Sederlund said. “We signed agreements with all labor groups, and each gave an average $7.5-8 million in concessions. This past school year saw reductions in many areas, and increases in some revenues, but we will still have expenditures exceed revenues by roughly $4 million.”
Anytime the district exceeds its revenues, money is taken from the general fund to make the difference.
While cuts will continue to be made, Sederlund said increasing costs will make it near impossible to break even year after year without taking from the general fund. And with no excess revenue going into the general fund, that fund will be depleted sooner rather than later.
For Sederlund, there is one last possibility.
“The one big variable is this ” he said. “It could help all Macomb County districts, and could help us by tune of $3.3 million a year. This is a big variable for us that would definitely help us significantly with our budget situation.”