Schools to return $750,000 to plug county budget hole

Board of education to use part of $13.1 million fund balance

Friday, Oct. 16, 2009

The money will be returned to the county commissioners, at their request, to help address a lower than projected amount of revenue from the state to the local government.

Superintendent Michael Martirano and Greg Nourse, the school system's fiscal services director, presented three options this week to address the cut. Each school board member said the first option — filling the hole using the school system's fund balance — was the best.

"We are in a rainy day right now ... We're not in the storm, the gale and the tsunami right now, but that could come," said Mary Washington, school board member.

The school board's surplus, which now totals $13.1 million, has drawn questions and criticism recently. The St. Mary's school board for the last several years has been allowed to hold on to money not spent each year in the form of its fund balance. "That money was strategically put in there to get us through these very difficult times," Martirano said. The money came from a variety of cost-saving measures over the last year or more, including a partial hiring freeze, reductions in energy usage and refunds to the school system's health insurance.

Board member Marilyn Crosby asked if the county could legally take back the money it had already approved for the school system's budget this year.

"The technical legal piece we could question, we could challenge," Martirano said. He added that the board needed to work together civilly with the commissioners and state elected officials during the economically challenging times.

According to a Maryland attorney general's opinion from 1991, no provision in state law gives a county authority to change a school board's budget once it is approved.

"Different counties handle it different ways," John Savich, St. Mary's County administrator, said Thursday. Some counties in the state do want a school board to give back extra money and not keep a fund balance.

Savich said that there is no simple answer, but the fact that the school and county officials are working together during the tough economic times should make things better in the long run. "Everybody focusing and trying to manage their own areas is what's really helping us right now," Savich said.

"We were prudent in doing the fund balance," school board chair Bill Mattingly said. "We will do what we have to do to maintain St. Mary's County public schools at a high level and we will work with our funding sources."

Board member Sal Raspa asked for Martirano's recommendation. "We have this for a reason," Martirano said of the fund balance, which he recommended using to address the $750,000 cut.

Raspa and the other members agreed. Raspa said it would be "devastating" to cut into classroom programs but warned "cuts are going to be made, probably, with the next go round, the next budget."

Martirano assured the school board the most important result of the decision is "our classrooms continue to be protected."

Nourse also outlined two other strategies to address the cut. He said the board could vote to take the sum out of fixed charges in a one-time adjustment, including drawing from the $1 million health care reserve.

Approving this option is "further placing increased risk into our already risk-developed budget," Martirano said. A third option to address the cut would be to cut into existing programs funds. This would involve cutting and trimming throughout the budget, and would be the most likely option to directly impact classrooms.

Along with the option to address the $750,000 revenue cut from the county, the school board will also make about 30 revenue adjustments to address grants and reorganization adjustments. Once approved at the school board's next meeting at the end of October, the changes will be forwarded to the county commissioners for their blessings.

"It's going to be very dynamic for the next two years" as the school system works to adjust to changing revenues, Nourse said.

jyeatman@somdnews.com