Despite deficit, Cassopolis schools feel they are in good shape
CASSOPOLIS — The Cassopolis Board of Education found out at its annual budget hearing Monday night that it will finish the 2019-20 school year in a deficit due to the uncertainties with state aid.
The news came via Zoom, as the school board continues to practice its social distancing measures set for by the state.
Cassopolis officials feel the district remains in good financial shape despite the $268,000 deficit. That figure was based on losing $300 per pupil in state aid.
“At the beginning of the year, the state told everyone that if they continued employing everybody and paying them that we would get our state aid for the whole year,” said Cassopolis Business Manager Geri Vlasicak. “With the shutdown, the revenues have been really low for the state of Michigan, so we are unsure we are going to actually receive all the state aid we are supposed to for this school year.”
Vlasicak added that she is showing a loss because she does not know how much funding the district will actually receive. She said the district was able to save money due to reduced costs in utilities, fewer substitute teachers to pay and a principal who left the district but was not replaced.
Additionally, the district was able to move costs into food services, which has much higher revenues, according to Vlasicak, due to the breakfast and lunches the district has been serving seven days a week.
“We were able to absorb some of the transportation wages for our bus drivers and food services, so that allowed for some of those line items to be lower for the year,” Vlasicak said.
Food services will be finished in the black for the school year due to serving more meals and generating more revenue from that.
All the debt services have been paid in full, according to Vlasicak. As for the sinking fund, most of the projects that the district had planned were postponed.
The sinking fund will be at 16 percent, despite the losses.
School Board President Scott Ward was glad to hear that number, as the district will be penalized by the state if it drops below 13 percent.
“So, we can eat some next year too, correct?” Ward said. “If we are above 13 percent, we are not going to be dinged by the state at all, and if we are still above 11 percent, we are still good, correct?”
Vlasicak also presented the board its 2020-21 preliminary budget, which also shows a deficit due to the unknowns in funding from the state.
“It is just really hard to come up with a budget when we really do not know what school is going to look like,” she said. “We do not know if we are going to have in-school, e-learning or distance learning. There are so many factors that it’s difficult to come up with actuals when we do not have all the answers. They are talking August before we are going to know anything about what our budget is going to look like for next year.”
Ward told Vlasicak to put together what she has, and if the district has to revise the budget multiple times as the state provides more answers, then so be it.
Vlasicak is currently showing a deficit of $428,000 for next year. She said that number was conservative.
After the board adjourned its hearing, it went into its regular monthly meeting to discuss the 2019-20 final budget, the 2020-21 preliminary budget and its 2020-21 state aid borrowing resolution.
During the discussion, board members found out that the district would be borrowing $1.35 million this year to get the district through the beginning of the school year until the state funding arrives in the fall.
This is something the district does annually and is only slightly higher than last year.
“We are going to borrow about $40,000 more than last year,” Vlasicak said. “Just because of the unknowns. We can only borrow so much based on our state aid in general. I feel like this is a safe number, and that is our plan right at the moment.”
The board then approved the following items by a 6-0 vote:
• 2019-20 final budget
• 2020-21 preliminary budget
• 2020-21 preliminary Debt Services Fund budget
• 2020-21 Sinking Fund budget
• 2020-21 Food Services Fund budget
• 2020-21 Special Revenue Fund
• 2020-21 state aid borrowing resolution