In presenting the Rolla School District’s financial situation, Vicki Gorman, the district’s financial director gave a mixed report.
Five months into the current fiscal year, which began in July, the unrestricted fund balance is projected to be 29.2 percent. The fund is the district’s reserves to pay for things such as teachers’ salaries. It is also a way to measure the district’s financial health.
The fund’s current level was good news, but doubtful future funding is leaving districts’ projections unpromising.
“We don’t know where we are going to be next year in state revenues,” Gorman said. So without any clear indication, the district made some assumptions.
One assumption is the school foundation formula, a mathematical equation used to distribute funds to public schools, does not increase during the next several years.
Other assumptions included assessed valuation increases of $6.5 million annually and Proposition C funds increasing by 3 percent annually — in fiscal year 2010 Prop C funds are 5 percent lower than the previous year.
“Hopefully, at some point, we will see Prop C dollars come back,” Gorman said.
When these assumptions are added to expenditure projections, an annual increases in insurance by 7 percent, retirement benefits increase 5 percent annually, and salary schedule movement of 1.6 percent with no base salary increases, reserves could be much lower in three years.
“We know we are going to be using these balances over the next couple of years,” Gorman said.
By her estimate, the unrestricted fund balance will decline over the next several years, eventually reaching 8 percent in fiscal year 2013.
As Superintendent Dr. Jerry Giger has said in previous meetings, if the unrestricted fund balance falls below 17 percent, the district could start having major financial issues.
