AUGUSTA — City councilors are backing school officials’ proposal to spend down some of a nearly $6 million fund balance to cover both one-time major expenses and more immediate ongoing expenses to help avoid the need to increase taxes to fund schools next year.
But city officials suggested Thursday they still could direct school officials to reduce the amount of money the school budget will require from taxpayers.
Superintendent James Anastasio said if that happens, he’ll recommend to the school board that rather than cutting programming, they take more from the fund balance, or surplus, account to make up the difference.
That exchange was part of city and school officials’ discussion of the $29.6 million school budget approved by the school board in March.
The combined city and school budget is subject to approval by the City Council.
The budget approved by the school board would require about $12.7 million from local taxpayers. That’s the same amount that taxpayers provided for the current school year’s budget.
City Manager William Bridgeo and other city leaders, before the school budget was approved, had asked school officials to reduce the amount of money to come from taxpayers to fund the school budget to $12.4 million. School board members debated that but ultimately approved a budget requiring $12.7 million from taxpayers.
Mayor David Rollins, at the conclusion of Thursday’s council meeting with school officials, said he appreciated school officials explaining the details of their budget but said the current overall city and school budget would require a tax increase, so the city may seek to trim the amount of tax money to be spent on schools to reduce the effect of the combined budget on taxpayers.
“Right now we’re looking at a 4.24 percent tax increase,” Rollins said. “So the council is setting some goals and things are being scrutinized and reviewed. We have some tough decisions to make.”
Spending in the proposed $29.6 million budget is up by nearly $1.8 million over the current year’s budget, a 6.4 percent increase. It is not expected to require a tax increase because of the use of $3.2 million from the fund balance.
About $1 million of that $3.2 million, Anastasio said, would fund one-time capital improvement-type expenses such as repairs to buildings and parking lots, with the remaining more than $2 million funding regular expenses that, without it, would have to be funded from property taxes.
Anastasio said the nearly $6 million fund balance is made up of money budgeted, but unspent, in previous years. He said administrators budgeted conservatively and expenses have come in less than anticipated for multiple years, building up the fund balance.
Ward 2 Councilor Darek Grant said he and most Augusta residents want to make sure enough money is provided to schools to make sure the needs of city students are met. But he said constituents repeatedly have expressed concern to him about the large amount in the schools’ fund balance.
“The sticking point, in town, is that fund balance,” he said.
State law prohibits school systems from keeping balances of more than 3 percent of their annual operating budget in reserve from year to year. Augusta’s $5.5 million in fund balance amounts to about 18.6 percent of this year’s proposed budget. To get to 3 percent of the operating budget, the fund balance ultimately would need to be reduced to about $900,000.
Anastasio said Augusta must spend that fund balance down to 3 percent over the next three years. He noted that will create a financial cliff once the money is spent down, and Augusta will have to find ways to reduce the current reliance on fund balance to cover ongoing expenses.
School board members said addressing that issue will be part of an upcoming strategic planning process.
Keith Edwards — 621-5647
Twitter: @kedwardskj
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