PERU — Peru Central School District anticipates facing a $2.9 million gap in its 2013-14 budget.
At a recent public budget meeting, district Business Administrator Randolph Sapp told the School Board that the estimated deficit is the result of negotiated salaries and significant benefit-related increases, combined with only modest increases in revenue.
In the upcoming academic year, Sapp said, the district estimates its Teacher Retirement System expenditures will increase by $556,093; Employee Retirement System contributions by $200,000; health-insurance costs by $384,758; salaries by $572,108; and other costs by $301,759.
In addition, he noted, Peru Central anticipates the need to use $926,706 in reserves in order to balance its spending plan for the current academic year, a measure planned with the crafting of the 2012-13 budget.
The district is also projecting a decrease of approximately $20,000 in state aid in 2013-14.
In an effort to bridge the gap, Sapp proposed that the district allocate $1,352,197 of fund balance to the 2013-14 spending plan and reduce expenditures by $1.3 million.
Doing so, he noted, would leave the district with about $3.2 million in reserve funds for future years.
The board gave Sapp and School Superintendent Dr. Patrick Brimstein the go-ahead to derive a budget outline based on those parameters.
However, board members noted, given the cuts the district has made in recent years — including just over $1 million in reductions for 2012-13 — finding another $1.3 million in expenditures to eliminate would be extremely difficult.
”It’s been painful,” School Board member Lisa Crosby said at the meeting. “This year is going to be devastatingly painful.”
Brimstein told the board that student programming would inevitably be affected by a reduction in expenditures of that size.
“The bottom line is we’re cutting into programs this year,” he said. “We’re going to be doing that, (and) the less that we cut, the quicker the fund balance is gone.”
Still, he noted, the district should look for ways to make cuts without eliminating programs in their entirety.
In addition, board member Cynthia Mills expressed a desire to make reductions in a way that maintains equity among the district’s school buildings.
What is not bridged through fund balance and reductions would be covered by an increase in revenues, primarily from taxpayers. However, School Board President Donna LaRocque advised district leaders to construct a budget outline that carries a tax-levy increase within the state-mandated tax cap.
“You can assume we’re going to go at (the cap),” she said.
The board also discussed other options for reducing costs, including freezing all non-essential spending for the remaining academic year, offering a local retirement incentive, implementing shared courses with other area schools via the Internet, establishing a foundation for PCSD alumni to make tax-free donations to the district, and investing in sustainable energy sources.
Brimstein told the board he has already begun exploring some of those concepts and will continue to do so.
“We have to hit this on all fronts,” he said.
The Peru Central Budget Advisory Committee is scheduled to meet at 6 p.m. Wednesday in the High School community room. It is expected the group will begin the process of preparing budget recommendations for the School Board. The meeting is open to the public.
Email Ashleigh Livingston: firstname.lastname@example.org