Geneva schools seek to cut budget by $1 million

Geneva school administrators concerned about cash flow are working on cutting the 2009-10 fiscal year operating budget by $1 million.

School principals and department heads have been asked to keep down spending for the remaining five months of this fiscal year.

The plan was announced at Monday's school board meeting, as the superintendent reported about how a late state reimbursement for transportation, school lunches and a few grants forced the district to tap into its reserves.

"The challenges that we face in our budget, and especially this year, they have been made even larger with the uncertainty in state payments," Superintendent Kent Mutchler said.

The state was due to send the district $1.4 million in August, but didn't send the check until the end of December.

"The reserves are there to get you through hard times," Mutchler said.

If the reserve fund didn't have enough money, the district could've taken a loan from its working cash fund.

The state recommends district keep an amount equal to 28 percent of operating budget in cash reserves.

The Geneva district has a policy of retaining 35 percent, adopted as it fought its way out of deficit spending in the early 2000s.

That policy helped the district get lower interest rates and avoid paying bond insurance when it borrowed money for construction in 2007 and 2008.

However, given the shaky state of the economy, and in order to decrease spending without cutting staff, the board should consider dropping that amount to 30 percent and spending some of the reserve, Mutchler recommended.

The district budgeted $73.3 million this fiscal year for operations, including $49 million in the education fund. That fund pays the staff. It does not include spending on construction, bonds and interest, tort insurance or retirement fund contributions.

The proposed cut amounts to 1.3 percent.

Trustee Tim Moran again called for the formation of a finance committee, with private citizens serving on it, to review the district's budget and spending.

Trustee Susan Shivers was disappointed that school principals and department heads were not given a target number of dollars or a percentage for the remaining five months of this year.

Moran agreed. "People tend to respond more to concrete ... directives," he said.

Business services assistant superintendent Donna Oberg noted that year-to-date spending is under budget.

The school district's budget year starts July 1.