District 26 faces deficit, mulls cuts
Cary Elementary School District 26 is in the same boat as a lot of school districts in the state - only District 26 has been in that boat longer.
Whereas other area school districts will have to come to terms with lower property taxes and uncertain state funding next year, District 26's budget has been out of whack for several years.
"The past four years, our budgets have all had a deficit built in," finance committee Chairman Chris Jenner said. "I have voted against every budget that's been presented because every budget that's been presented has had a deficit."
District officials project they will face a deficit of $1.8 million at the end of the 2009-10 school year, forcing administrators to contemplate significant cuts.
Among the cost-saving proposals district officials are considering for the 2010-11 school year are closing a school, concentrating grade levels in one or two buildings and outsourcing custodial work. Officials also expect to save on staff costs because of declining enrollment.
"Our goal is to put everything out on the table," Superintendent Brian Coleman said. "Layoffs have not been contemplated."
Raising new taxes doesn't appear to be an option. Voters rejected tax increases in 2004 and this April, when they shot down a request for $17 million in bonds. The board enacted a policy this month that requires the district to get voter approval before issuing bonds or raising tax rates.
For the 2009-10 school year, district officials will deficit spend, most likely taking out short-term, interest-bearing loans to cover expenses - as they have done for several years.
Coleman said the district took out about $9 million in such loans this year and pays about $130,000 in interest on the loans each year - indicating a severe cash flow problem.
District leaders have already taken a small step to hold down costs next year, freezing administrator salaries and eliminating bonuses, Coleman said.
But the move will only save the district about $80,000, necessitating the more severe cuts school officials are contemplating.
The finance committee will review next year's budget at its July 13 meeting before the board votes to put the budget on public display.