Cape Girardeau School Board approves balanced $42M budget

The Cape Girardeau School District's budget for the upcoming fiscal year is a document of give and take, an operating plan of offsetting revenue sources and rising costs canceled out by improved contract terms.

Ultimately, the 2011-2012 budget is balanced, and it comes with considerably less fiscal pain than the district faced this time last year.

The Cape Girardeau School Board on Monday unanimously approved a $42.17 million operating budget, an increase of about $1.3 million from the 2010-2011 school year, not including debt service and bond money for the districtwide renovation project. Two members, Luther Bonds and Tony Smee, were not in attendance.

Superintendent Jim Welker said the district was able to balance the budget, which takes effect July 1, while offering $1.27 million combined in employee raises and increased benefits.

In May, the board approved a 2.5 percent salary increase for teachers, a nearly 2.4 percent bump for administrators and raises as high as 2.5 percent for classified positions.

A significant amount of the $1 million-plus increase in revenue was marked for salary increases, district officials said.

"That's where it should go, in my opinion," Phil Moore said to fellow board member Kyle McDonald during a work session before Monday's regular board meeting. Personnel costs make up the bulk of expenditures.

The budget figures were a dramatic change from the 2010-2011 document, when the district was forced to freeze salaries, eliminate 26 positions and 30 stipends, confront a 50 percent reduction in state transportation funding, and a 10 percent cut in services, materials and supplies.

Thanks to effectively flat state funding -- a Missouri public education budget of about $3 billion -- and improved assessed valuation figures and student counts, the big sources of revenue and expenses seemed to even out.

"It's kind of a wash," Misty Clifton, the district's chief financial officer, said of the offsetting revenue declines and increases built into the new budget.

The district is expected to take a $571,000 hit in state revenue, with the reduction in the state foundation funding formula from 96 percent to 92 percent, but the loss will be more than offset by $675,000 in revenue tied to an average daily attendance increase of 166 students.

Assessed valuation is expected to rise 2.5 percent to $575,747,000, significantly higher than in 2010-2011, when values rose 0.4 percent.

Sewer bills in the school district are projected to increase by $90,000 due to the city's wastewater tax, prompted by the planned construction of a $70 million wastewater treatment plant. That cost, officials said, could have been much higher without voter approval of the rate increase. Electric bills are projected to climb by 5 percent in the upcoming school year, Clifton said, but not as steep as they could have been without energy savings beginning to be realized in the district's updated facilities.

Employee health insurance will climb 8 percent, but a competitive bid process late last year significantly cut the cost of medical benefits.

The budget includes $90,000 for classroom furniture replacements, which works out to about two classrooms per school, and $130,000 to upgrade as many as five computer labs districtwide.

Board member Paul Nenninger wondered if the replacement schedule was keeping up with need, so that the district doesn't hit a situation like the 2010 $40 million bond issue, where deferring maintenance proved costly.

"How do we stay ahead of this as needs define?" Nenninger asked.

Welker said the budget items are recurring expenses, prioritized by need but not expended without justification.

"We tried to be a little more realistic in terms of basing it on the highest priorities and needs," he said.

After Gov. Jay Nixon had replenished some of the transportation cuts in recent months, he announced last week that he was forced to trim $8 million out of the state transportation budget, money needed in part to cover the escalating costs of the tornado in Joplin and the Southeast Missouri floods.

Again, there are offsetting costs. While the district stands to lose $19,000 in state transportation funds, the loss is more than offset by improved contract terms with bus service provider First Student, contract figures not seen in eight years, according to one district official.

mkittle@semissourian.com

388-3627

Pertinent address:

301 N. Clark Ave. Cape Girardeau, MO