Administration seeks ways to improve district’s bank account fund balance

Ellie Bennett, News Editor

The Fenton district’s two percent fund equity balance places it with other districts on the critical list in the eyes of the state. If the balance drops, the state can take over the district. In an attempt to resolve the money issues, Fenton has made cuts. The last 2 years, the district has been improving the fund balance from $272,000 to $800,851 but is still facing a deficit.

“Last year, a law was passed that states if a district’s fund balance drops below five percent that the district will be put on a early warning list,” Executive Director of Finance and Personnel Douglas Busch said. “A fund balance is a savings account for the district, so we have money to take out when it’s needed. If any school drops below zero percent in their accounts,they become a deficit school and the government takes over. But, this is not the case for us. About two years ago the bank account reached below the five percent line. The state requires us to show them what we are going to do to bring us back above that five percent.”

There are a couple of ways the district has planned to fix the issues, but Superintendent Adam Hartley and Busch hope students will not be affected in the classrooms by the changes.

“We are trying to find ways to cut costs in a doable way,” Busch said. “One thing we have done is change to a different insurance plan for the employes that doesn’t cost as much as in previous years. We also have reduced some positions. So, for teachers who have retired, we haven’t necessarily replaced them. We have tried to keep most of the changes quiet from the students. Cutting some of the staff that mows the lawn or the janitorial staff are ways that we saved money. The classroom is the last place that we want to cut cost. The supply budget that the teachers oversee hasn’t been changed.”

Costs are climbing to run a school. This forces the district to come up with solutions to better Fenton’s financial standpoint.

“Costs have gone up considerably for employing people,” Hartley said. “If you look at health care costs, when we were paying for everyone’s health insurance you would see how much more it is then the plan we have now which has the staff paying for some of the cost. Retirement cost are another factor, all employees in public education have a pension plan. Employers pay a certain amount of money into that plan and the percent of money we put in has gone up and continues to climb starting at about 29 percent in 2014 and now is at about 36 percent.”
The district receives a money from the state for each student who is enrolled.

“The biggest money generator for schools is students,” Hartley said. “For each student, we receive $7,511 from the state. We started to see that we were getting fewer students in 2009; we lost about 150 students and with that our biggest money generator started to decrease. We have been facing this issue for a while now. There is no easy way of controlling something like enrollment.”

Fenton is planning for the future. By looking at the birth rate Genesee County is projecting, they can figure out the amount of money the school is going receive and plan ahead for it.

“In Genesee County, we see that the birth rate is decreasing. What that means is that we could predict five or 10 years from now what class sizes are going to look like, “ Hartley said. “We can’t control this, but what we can control is making sure that people know what a quality school district this is; a lot of that has to do with just word of mouth. So if someone knows a family who is looking at schools and they have had a great experience here and tell them that, the new family is going to check us out.”

Another way that the district is looking to reduce costs is by taking smaller-scale items and downsizing them.
“One of the things we have changed isthe credit recovery lab at the high school,” Hartley said. “We are moving away from the portal of classes we have used the last five to seven years and have investigated and found a way to go to another online portal that is just as effective and offers the same courses that help students earn high school credits. This is going to save us $20,000 to $25,000 this year and that is just a drop in the bucket. It’s like nickel and diming.”

The bond of 2014 helped improve district technology, school buses and safety and security but there are still aspects of the financial crisis it can’t help.

“The bond that was passed in the fall of 2014 was a time for us to refinance,” Busch said. “The bond is a loan to the school. So instead of saying to our taxpayers we are going to drop the taxes by $12 a year, we said that we are going to keep them at $12 so that we can take out a loan for $11 million over the next 10 years. When you go out for a bond election the only thing you can use the money for is what you say in the proposal, so the bond proposal was used to help three things: technology, school buses, and safety and security. You can’t take a bond to pay employees or for taxes.”

The district hopes it can decrease the debt and get the fund balance back to where it needs to be and within this process, make sure that it doesn’t affect the students in a negative way.