Janesville school budget headed for red
The district estimates it could be as much as $600,000 over budget for the fiscal year that ends June 30.
The district has the resources to cover the overage. The money would come out of the Fund 10 balance. The fund balance, as it is known, is an undesignated reserve. The fund balance had more than $30.5 million in it when it was last audited one year ago.
"That's exactly what fund balance is for. It's for those unforeseen circumstances," district comptroller Lauri Clifton said Monday.
Clifton said an overage has not happened since she started working for the district 17 years ago.
The exact amount of the overage won't be known until the annual audit is completed in August.
Spending exceeded budget estimates because of several unusual events, according to a memo to Superintendent Karen Schulte from Business Services Director Doug Bunton. They include:
-- Health claims will be about $300,000 more than budgeted. The district's employee health insurance is self-funded.
-- Interest earnings will be about $365,000 less than budgeted.
-- The upgrading of the district's computer network in the wake of a devastating virus attack cost about $207,000.
-- The cost to move and store high school furnishings and equipment during the renovations exceeded budgets by nearly $75,000.
"In any budget year, there will be some accounts that go over budget and some that come in under budget, such that when budget transfers and amendments are made in June, the net of the changes has left the budget in a positive position at the end of the fiscal year," Bunton wrote. "That may not be the case this year."
The overage is on the agenda for Tuesday's school board meeting. Also on the agenda are continued discussions on setting aside portions of the fund balance for specific purposes.
One proposal is to set aside $3.56 million to cover health-care overages.
Another proposal is to make a $500,000 payment to a new trust fund that would pay for early-retirement benefits. Those benefits are called Other Post Employment Benefits, or OPEB. Funding OPEB would help the district maintain its favorable bond rating.
School board member Kevin Murray has argued repeatedly that instead of funding OPEB, the board should pay off its liability to the Wisconsin Retirement System.
The Employee Trust Funds Board last week raised the amount that has to be paid into the WRS to the equivalent of 11 percent of employee salaries. For the current year, that amount is 10.4 percent. The district pays the entire contribution to the fund.
The district had a WRS liability of $16.5 million in 2008 and was scheduled to pay in about $800,000. If the interest rate and scheduled payments remained the same, the district's liability would continue to increase, and it would owe $21 million by 2029.