The 2015-2016 budget report provided better figures than expected, explained Heather Martin, Executive Director of Business Services, as some items that were budgeted for were not needed. Martin explained one area which provided some relief to the budget was gas prices, which were lower than the previous school year. An annual transfer to the general fund budget of up to $5.3 million also helped, bringing an ending balance that is 2.21% more than the amount budgeted.
Florida Blue, which is the contracted health insurance provider, has awarded $500,000 to the wellness program of Hernando County Schools, as well as $1 million in profit sharing. The $1.5 million check was expected to be sent to the district by the end of June. Because of this, the budget will actually have a better ending balance, even though the money from Florida Blue is earmarked for a specific purpose.
Numbers for the 2016-2017 budget are just being projected and will be based in part on anticipated property values of $159 million. Those good faith estimates only help the district make plans until the actual figures are provided by the property assessor’s office. Next year’s budget will still include the $5.3 million transfer, which Martin hopes will decrease in successive years.
Kendra Sitting, Director of Budget, discussed the forecast budget for next year, beginning with the $4.9 million that will carry over from this year. Combined with the estimated tax revenue and the $5.3 million transfer, the estimated budget will be $169.6 million. Salaries and expected expenditures will use up to $162.3 million, leaving a balance of just over $7 million. After setting aside the required reserve level of 3% , the balance is only $2.4 million.
Florida Statute requires certain expenditures from every school district, taking an additional $2.8 million from the budget, and leaving a deficit of $412,976. Martin stated last year’s budget projected a deficit of $12 million, and with all the ground gained, the finance department looked closely at areas where they could make changes.
Two major areas offered possible solutions. The first was in the 60 day waiting period for new employees to access health insurance. Since there will be approximately 150 new employees, the district will not need to pay premiums for the first 60 days of their employment, saving approximately $165,000.
Savings were also found in terminal pay for employees who retire. Unused accrued sick leave/vacation time is paid to employees who retire, and according to Martin, there may be approximately 75% fewer employees retiring next year, as opposed to this year. That represents a savings to the district of about $247,000. Those two items are anticipated to total $412,000.
Martin was excited that the proposed budget will be the first time in 11 or 12 years that the district will break even. By having a balanced budget, Martin expects that they will not need to call for additional staff reductions.
The goal is to get to a minimum 5% fund balance, but Martin explained that takes time and it has required them to “hold the line” this year when it came to expenditures. She hopes to reach that goal in the next three years. Martin regrets that some essential things have had to be eliminated or put on hold, and she would like to see them reinstated.
Monthly budget statements and quarterly financial statements that are sent to the HCSB will continue, but Martin intends to keep the Board informed quarterly rather than at the end of the year to present both the old and new budgets. Among other plans, Martin states they will be looking at a quarterly substitute budget.
The HCSB will discuss the budget again at the 6/28/16 hearing. The finance department is expected to get the certified figures from the property assessor’s office by 07/18/16, and will adjust the budget with the confirmed numbers before presenting the final budget at hearings on 07/19/16 and 09/13/16.