Schools
South Lake Board Adopts Deficit-Elimination Plan
District works to reduce a $3-million deficit brought on by cuts in state funding and a reduction in student population.
Like many other districts in the state, South Lake Schools has been struggling recently with financial challenges.
Repeated cuts in state funding and a reduction in student population have resulted in a deficit of approximately $3 million for South Lake, said Matthew Dishman, director of business and operations.
Compounding South Lake’s financial woes is the recent elimination of 20J funding, which has resulted in a loss of $600,000 for the district. The 20J funding was provided to districts that were adversely impacted by the enactment of Proposal A, which shifted the source of school funding from property taxes to the state sales tax.
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“This problem didn’t happen overnight. We’ve had consistent cuts in state aid, a loss in students, and then our 20J funding was cut,” Dishman said. “And now, if the current school funding proposals take effect, they are going to have a negative impact on all districts in the state of Michigan.”
Last June, the Board of Education adopted a deficit budget for the 2010-11 school year. The state of Michigan requires all districts with a deficit to develop a deficit-elimination plan. Following that requirement, the South Lake Board of Education recently adopted a five-year deficit-elimination plan.
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Since the beginning of the school year, South Lake has taken several steps to cut costs, which has reduced expenditures by $600,000, Dishman said.
The savings were achieved by downsizing staff, using more substitutes instead of hiring permanent employees and requiring all employees to pay a portion of their health insurance costs.
In addition, the district recently negotiated new contract terms with the union representing the maintenance and custodial employees, food service and transportation employees.
The revisions included a change in the employees' health insurance provider, as well as reductions in wages and leave and vacation time, according to Ted Von Hiltmayer, director of human resources and transportation.
There is still a possibility that South Lake will finish the school year without a budget deficit, Dishman said.
District officials are contemplating weather to use their fund balance, or savings, of $2.3 million to offset this year’s deficit.
