Bedford County Board of Education, which on Monday faced the prospect of an $800,000 gap between the amount of money it could afford to spend and the amount it needed to spend in the 2012-2013 fiscal year, has closed the gap, passing a budget Thursday night with only the slimmest of fund balances.
The $53 million budget, not counting the 3 percent state-mandated fund balance, has only a $32,608 margin for error.
The fund balance is so slim, in fact, that school board members briefly discussed asking the county commission for a property tax increase anyway, just to give the budget a more prudent fund balance.
They dismissed that idea, but instead plan to prepare a long-term funding plan later this year to give to the county commission to plan for future expenses like a badly-needed new building for Cascade High School.
The change between Monday night's dire figures and Thursday night's marginally-passable figures was both a matter of revenue and expenses.
On the revenue side, $200,000 in unspent federal Education Jobs funding will be used in the current fiscal year's budget to fund some teacher salaries.
That money must be used before the end of the state and county fiscal years on June 30. Adding it to this year's budget will increase the ending fund balance of the 2011-12 budget -- money that can be carried forward into the new 2012-13 budget.
The rest of the money will come from budget cuts, worked out this week between School Superintendent Ray Butrum, County Finance Director Robert Daniel and various department heads and supervisors.
Four vacant teaching positions will not be filled. $100,000 in textbooks will not be purchased, and a $200,000 re-roof of Liberty School will be postponed, along with other cuts in equipment, contract services and gasoline which officials felt were safe to make based on this year's spending.
Daniel Kliendienst of the maintenance department said that recent repairs to the Liberty roof should suffice for this year, allowing the complete re-roof project to be postponed.
"I think we're OK to defer it for a year," said Kleindienst.
In the case of a dire capital outlay emergency, at Liberty or anywhere else, money could be taken from the state-mandated 3 percent fund balance, although that money would have to be put back into the budget the following year. That would give the school system time to issue a capital outlay note to finance the work longer-term.
The Education Jobs funding won't be available at this time next year.
"I'm concerned about the following year," said Robert Daniel, "because we won't have that."
But school board members took solace in the fact that $1 million in funds will be freed up a year from now once the school system has finished paying off its portion of debts related to construction of Community High School.
For the past two fiscal years, 2010-11 and 2011-12, the school system has been spending more than it has taken in. The difference came out of the school system's fund balance.
The school system projects that it will end this fiscal year on June 30 having underspent its budget by $1.4 million. The trouble was that the revenue was even farther under budget: $1.8 million.
The current fiscal year budget suffered from lower-than-budgeted revenues -- not local revenues, which are beginning to show signs of a rebound after many months of stagnation, and are performing better than budgeted, but state funding.
School board members commented on the narrow $32,000 fund balance and wondered if it was irresponsible to carry one so small on such a large budget.
School Board Chairman Barry Cooper asked the board whether it might be wise to go ahead and ask for more revenue. He noted that an increase of 5 cents per $100 assessed value on the property tax rate would raise $350,000.
"The day of reckoning is going to come," said Cooper.
School board members decided to pass the revised budget as presented Thursday night, without asking for a tax increase, but will work on developing longer-term plans for the system's future.
The budget now goes to the county commission for consideration. It will also have to be approved by the state education department to see if it meets the "maintenance of effort" law and doesn't represent a cut in local education funding compared to the previous year.
Board members praised Butrum and the supervisors on the revisions made to the budget proposal this week. Butrum, who is coming up on his first anniversary as superintendent, said he and his supervisors now have a better knowledge of the school budget
*Butrum said interviews with four applicants for the Harris Middle School principal position would begin today. He said only one of the four applicants was from within the system. He hopes to announce a decision to the school's faculty by the end of next week.
*Prior to the board meeting, the board held a reception for retiring teachers. Those teachers will be highlighted within a special Honor Roll section in an upcoming issue of the T-G.