BOE waives fund balance minimum

CENTREVILLE — Faced with budget challenges for this year and subsequent years, Queen Anne’s County Board of Education approved waiving the district’s fund balance minimum requirements in order to balance the current FY24 budget May 1.

The district’s Policy 305 states, “The target range established for the general fund unassigned fund balance should not be less than one percent of annual operation expenditures for the subsequent fiscal year budget and should not exceed five percent of the total budget for the subsequent year.”

Because the district is in such a bind financially, the waiver will allow dipping into savings to cover costs.

For this current school year, the district underestimated its insurance but other factors contributed to the budget challenges, including multiple maintenance projects costing a “significant amount of money” such as elevator and boiler repair, Superintendent Patricia Saelens said.

“There have been several of those unique situations that have put us into this situation that will need to utilize those fund balances to be able to balance the budget for the current year,” she said.

Discrepancies, dual enrollment skyrocketing and unreimbursed mandates have also negatively impacted the budget, she said.

The district typically budgets $60,0000 a year for dual enrollment and this year the district doubled that to $120,000, knowing it would go up and assuming it would be a reasonable amount, Saelens said.

Now the district is estimating a whopping $360,000 for dual enrollment, according to Saelens.

Restoring monies in the subsequent years will be challenging going into such a tight budget year, but plans are in the pipeline to build savings back up, Saelens said.

The district is estimating changes to food services will see a savings range of about $300,000-$400,000, she said.

QACPS will be saving money with its blended virtual programming as changed requirements going forward will only serve a selected group of students, according to Saelens.

QACPS’ contract with Synergistics Inc. is saving about 20% overall on utilities, she said.

The district’s one-time $500,000 cut on textbooks will also be going toward the subsequent year.

Next year also has the potential for salary lapse due to administrators retiring, she said.

“We will do everything that we can to make a plan of action to start to rebuild that fund balance, but unfortunately it’s going to be necessary this year to utilize that to balance the budget,” Saelens said.

“One percent on our budget is a little over a million dollars,” said board member Richard Smith, who noted the purpose of having savings available was exactly for situations like this, but that QACPS was still a company and it was prudent to build the savings back up as soon as possible.

“To put the next board in a position not to have any [savings] is not a good one either,” he said.

“So much can happen. It might be a warm year, it might be a cold year, ” he said, noting costs of fuel could effect funds relevant to transportation.

The QACPS current fund balance for the fiscal year ending June 30 is $2.1 million and has no effect on next year.

“It’d be very irresponsible for this board to use a fund balance that’s a recurring cost because it’s not a recurring income,” Smith said.