FIT members concerned about school district fund balance

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OCEAN CITY — In sharing a report concerning the school district at a Feb. 2 Fairness in Taxes meeting, member Vic Staniec said he was concerned about the size of the school district’s fund balance.

The surplus, $6.8 million, he said, is “more than what the city has.”

“That’s a lot of money floating around,” he said.

School district officials have been working on the budget for the 2012-2013 school year for several months. The process began to go public at a Board of Education finance committee meeting on Feb. 22 at Ocean City High School.

Though the school board voted last month to move the school election to November, the budget process remains tied to the school’s fiscal year. The budget will be voted on as usual in the spring; the law permitting the district to move the election to November, which will save the district about $18,000, means Ocean City taxpayers will not have a say in the process as long as the increase in the amount of money raised by taxation stays within the state-mandated 2-percent cap.

School District business administrator Tom Grossi said school district officials have been going over the budget with a fine-tooth comb in search of efficiencies.

“We’re looking at every expenditure; we’re looking for ways to save money,” Grossi said.

“We’ve looked at every purchase order; we’re analyzing everything, every expense. We put the budget together about nine months before the school year begins, just because it’s been budgeted doesn’t mean it gets spent. If we don’t need it, we don’t buy it. We are continually looking for ways to save money.”

Grossi defended the $6.8 million surplus fund.

“There is money in there that’s already budgeted for next year, it rolls over year after year,” he said.  “Through our cost saving measures we are able to save funds and use them to offset the amount that is funded by the taxpayer in the budget.”

For the 2012-2013 school year, $1,222,946 is designated; $1,554,712 is designated for the subsequent year’s fund balance.

Three of the school district’s unions are presently in negotiations: faculty, support staff and administrators. Grossi said the fund balance would not be utilized to cover any increase that may come out of the negotiating process.

“Any raise would come from the operating budget for this year,” he said.

He said currently there was no money budgeted for an increase in any contract.

Staniec met with Grossi and was presented with the same figures he provided The Gazette (see chart).

“There’s a lot of money in the surplus accounts,” Staniec said. “Yes, we have an explanation, but there is a lot of money. How would you go about passing a bonding issue with all that money in the accounts?

“There is $1 million in there for tuition reserve; Ocean City owes Upper Township $782,000,” he said. “There’s extra money in there, and all of the money that they have gotten for the school choice program is not in the budget.

“It’s a bad situation for the taxpayer,” he said. “The surplus money is what you don’t need in the operating budget. Why are they holding on to all of this money? This is money that should be in the taxpayer’s pocket, not the school district’s surplus fund.

“It’s a bad situation,” he said. “They moved the election to November and now we don’t even have a say on the budget if they keep the increase under 2 percent.”

 

BOX: Ocean City School District analysis of fund balance

 

$1,310,000 in Capital Reserve - Funds to be allocated for capital projects included in the district’s Long Range Facility Plan. The primary school needs replacement of the roof, HVAC, windows and exterior doors. This fund could help fund this project while minimizing the cost to the taxpayer

 

$561,684 in Maintenance Reserve - This fund is to be utilized for maintaining facilities, for items that fall outside the regular maintenance budget, such as repair to sewer lines that are over 50 years old at the Intermediate School.

 

$1,000,000 in Tuition Reserve - This fund sets aside money for funding of possible tuition adjustments with Ocean City’s three sending districts, Sea Isle City, Upper Township and Corbin City.

 

$351,000 in Emergency Reserve - These are funds to be used for emergency situations outside the control of the school district that impact on the safety of the students, such as damage from a coastal storm. Withdrawals from this account require approval from the Commissioner of Education.

 

$132,732 in Year-end Encumbrances - These are encumbrances that have not been paid at the end of one school year that flow into the next year’s budget.

 

$689,972 in Unassigned Fund Balance - The district is allowed to keep up to 2 percent of their budget in fund balance.


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