By Trent Moore
With state allocations cut, Cullman City Schools has approved a new budget amendment to come more in line with reduced state funding.
In December, Gov. Bob Riley declared a prorated education budget in the amount of 12.5 percent. The cut was reduced to 9 percent when Riley used $218 million — half of the $437 million Rainy Day Fund — to soften the blow statewide. The cut was due to the sluggish economy and sliding revenue for the state.
Specifically, state funding for CCS was reduced from $13.4 million to $12.3 million — approximately a $1.16 million drop.
Russell Raney, director of finance for CCS, said the updated budget will show some of the changes the system has made to fit the new numbers.
“[The state] wanted to see how we would reflect it,” he said. “That was a big part going in, to show how we plan to deal with proration.”
Minor cuts were made to the technology budget, central office budget, maintenance budget, travel budget, supply budget and other small allocations.
“We looked at any expenditure cuts we would be able to make,” he said. “But, the bulk of our money is tied up in salaries, benefits and debt payments. Like any other school system, we have a lot of fixed costs.”
To help cover personnel costs, the system “flexed” $154,495 in capital outlay money from the Public School Funds (PSF) for salaries.
“That’s normally set aside for capital improvement, but when proration was declared we were able to flex, or move, it,” Raney said. “It wasn’t specifically committed to anything so we shifted it over to help.”
Additional income, such as $96,565 state current unit funds for increased enrollment, were also factored in. The influx was due to a jump in enrollment. The system gained approximately 100 new students this year, up from the average of 25 new students in previous years.
“The state normally bases funding on the previous year’s enrollment numbers,” Raney said. “But, if a system grows significantly in one year, the state has these funds set aside to help bridge the gap.”
With the school year already well underway, Raney said there weren’t many changes that could be made to reduce costs. With the new cuts and additional revenue, Raney said the system was able to shave off approximately $381,898 from its previous budget.
“There’s no way we could completely eliminate enough to account for the full amount,” he said.
With approximately $700,000 remaining to be cut, the system’s reserve funds will have to cover the shortfall.
Raney said the system is in a good position to weather the cuts because of a substantial, three-month operational fund reserve. The large reserve partially comes from a half-cent sales tax the city council enacted years ago to support the system.
“We’d like to not dip into our reserves, but obviously we have them for times like this,” he said.
The $700,000 accounts for approximately one-half of a month’s operating expenses, which will still leave CCS with a reserve well above the required amount.
“The reserves are essentially our rainy day funds,” Raney said.
‰ Trent Moore can be reached by e-mail at email@example.com, or by telephone at 734-2131, ext. 225.
By Trent Moore