Shen finances solid despite pandemic
Budgeting for expenses during the COVID pandemic has proven challenging for the Shenendehowa School District but officials remain confident the district will once again be able to retain funds for future needs come year’s end.
The good news was presented to the Board of Education last week by Assistant Director of Finance Kathy Chase. The mid-year projections and three-year forecast is the formal start of the budgeting process for the 2021-2022 school year.
“We’ve seen some savings in some areas and excessive expenditure lines in others; they seem to have evened themselves out so that we’re not seeing significant differences from prior years,” she told board members at the Feb. 9 meeting. “But what makes up those differences is different from what we’ve seen in the past. There are a lot of moving parts.”
Salaries and benefits are the major expenses of any public school budget and in a budget year that included six months of dealing with a pandemic Shen is projecting it will reduce instructional salaries by $1.3 million, administrative salaries by $100,000 and noninstructional salaries by $507,000.
Chase attributed the instructional savings to such items as 137 leaves of absence, 37 positions going unpaid or filled by staff at lower salary levels, six resignations, and one mid-year retirement.
There were also a number of people hired; some were hired to fill open positions while others were the direct result of the learning arrangements due to the pandemic.
The situation was similar though not as large with non-instructional staff where there were 350 leaves of absence, 22 resignations 32 retirements and 54 new hires.
Despite the potential for year-end savings, Shen Superintendent L. Oliver Robinson said that the district expects to spend 99 percent of the budget line allotted for instructional salaries. Chase added that the district will pay more in salaries overall due to a federal requirement that the district pay for leaves above and beyond what the current contracts contains.
Additionally, the leave bank or surplus fund from which the leave money is drawn must eventually be made whole.
“So we are incurring some additional costs above and beyond what we typically would,” Chase said. “It’s very difficult to estimate. It will be interesting to see how much of those costs for COVID we figure into next year.”
Some savings are projected to be found in budget lines for contracts such as utilities, attorney fees, equipment maintenance, utility contracts, text books, library books, supplies, and employee benefits.
“With the benefits line we estimate very conservatively we have about $2 million in savings there and I can tell you about 60 percent of that comes from health insurance,” Chase said. “However, I am told that next year they are expecting double digits (increases), between 10 and 15 percent. It would appear that the carriers may try to make up for losses that I can only imagine occurred this year.”
Chase said one surprise so far this year in benefit expenses was in the draw on the district’s unemployment fund. A normal year usually has a draw between $35,000 and $40,000. This year’s first quarter amount, July to September, was $258,000. She does not expect the other three quarters to be as large.
Another area that took an unexpected hit financially was in food service. That department took a hit because the district continued to pay its workers last spring once school closed down, and because all breakfasts and lunch programs are free for everyone this school year.
The loss, Chase said, was about $600,000 which used all the food service department’s surplus and $250,000 from the general fund. The federal government reimburses the district for some of the breakfast and lunch costs but not all of it.
The total amount the district is projecting to save in expenses on paper is $4.8 million.
Chase said the district is projecting to expend 97.3 percent of its adopted budget for the 2020-2021 school year, an increase of about 1 percent in expenses from a normal year.
The revenue side of the mid-year projections was quite stable but did show a reduction in state aid of $300,000. Chase said much of that amount is due to expenses the district incurred in transportation costs after the March 13 closure which were not aidable.
Total revenue intake is expected to be 99.5 percent; a figure Chase said was a bit less that what is normally projected for the revenue side.
Figures provided by the district show that it is projecting an unreserved unappropriated fund balance total of $7.3 million or 3.90 percent of the budget at the end of school year in June. School districts are capped at a maximum of 4 percent of their budget as surplus.
“Even with the variations due to COVID, these projections are still on target to be where we want to be,” Superintendent Robinson told the board. “We project that we’ll end where we (originally) targeted. The challenge has been everything in the middle.”