The Franklin Regional school board adopted a proposed $61.5 million budget for the 2020-21 school year that includes a 2.54 mill tax hike.
The budget includes a nearly $3 million funding gap that will be plugged, for now, with money from the district’s various fund balances, some of which are earmarked to help offset rising costs such as the district’s contribution to the state pension fund and payments on bonds issued for the Sloan elementary campus project.
Nearly half of the budget gap, about $1.44 million, is proposed to be filled using the district’s unassigned fund balance.
“I know nobody is happy with this budget the way it looks right now,” financial services Director Jon Perry said. “We’ll continue to update it with the help of the finance committee and work to reduce the expenditures and reduce the need on the unassigned fund balance.”
The proposed final budget was adopted by a 6-3 vote Monday. School directors Bill Yant, Ed Mittereder and Gary English voted no.
“You can talk about this fund and that fund, but ultimately our reserve balances are going to be where that money comes from, because there’s nowhere else,” Yant said. “I’m just concerned that if we’re taking somewhere between a third and a quarter of our fund balances to pay the budget this year, that we’re going to regret that in the future.”
Perry said more than $1.5 million will come from funds designed to cushion the impact of rising retirement and construction costs, and projected that the district’s general fund would stand at $9.5 million at the end of the coming school year.
The biggest chunk of that is $4.5 million, currently in escrow earmarked for the Sloan construction project. That funding is “something new, and it’ll be released from escrow as site work continues to progress on the Sloan project,” Perry said.
Once those funds are released, they will be placed in the district’s unassigned fund balance, he said.
English and Mittereder wanted to table the budget discussion and wait to see what happens with two bills introduced in the legislature, which propose a freeze on school tax hikes.
“It would make what we’re doing here a very moot point if they decide to say across the board that no one is allowed to do anything,” Mittereder said.
The board voted on the proposed final budget at a special meeting, so that it can be available to the public for the required 30 days prior to its full adoption in June.
Resident Walter Cebulak said the proposed budget “confirms the coming school-district financial implosion.”
“Current operations and growing debt payments are producing massive deficits that will consume all assigned and unassigned general funds within four years, even with annual maximum (state) tax increases,” Cebulak wrote in a letter submitted to the board.
Resident Dick Kearns called the budget a maximum tax increase with minimum planning.
“The continuance of maximum allowed millage increases plus the need to raid existing funds, that were established to escrow funds for specific needs, illustrates lack of financial planning,” Kearns wrote in his comments. “The refusal to demonstrate to the public how other district needs are to be met, in addition to (the) Sloan project, illustrates no financial planning.”
Board member Gregg Neavin said he viewed the budget as taking the necessary steps amid “unprecedented events, like 100-year events, that are going on right now,” and pointed to the past six years in which spending was held at or below budgeted expenditures.
“We are not planning to take $1.4 million out of the fund balance and start stroking checks,” Neavin said. “We’re going to live frugally, and we’re probably not going to spend all the money we’ve budgeted, as we traditionally haven’t.”
The budget is expected to be adopted at the board’s June voting meeting. The board’s next meeting is scheduled for 7:30 p.m. May 18, livestreamed on the district’s YouTube channel.
