PRINCE EDWARD – Folders with a wealth of figures were handed out to school board members in their first budget work session January 23.

“There's not good news in it,” Division Superintendent Dr. David Smith highlighted. “It's all a big challenge.”

It's easy to understand the assessment.

Student numbers are down.

Federal stimulus monies are drawing to an end.

The state's composite index-a formula that calculates a portion of state versus local funding-changed to shift more of the funding burden to the locality.

The state's retirement system has a healthy projected rate increase.

And, depending on whether the General Assembly is on board with the Governor's budget proposal, it appears there will be a lot less state dollars to educate Prince Edward County children.

In all, mixing projected funding reductions, proposed expenditure increases and confirmed expenditure reductions, school officials have projected a net budget shortfall of $2,249,399 for the coming year.

Preliminary budget challenges looking at the Governor's proposed budget-factoring an Average Daily Membership (ADM) of 2,240-projects $862,999 less in state funds. In addition, federal funds will be reduced $904,751-translating into $1,767,750 in funding reductions.

Further on the negative side, the Virginia Retirement System (VRS) rate increase is expected to translate into $876,000 more in expenditures and, factoring a ten percent trend, school officials are looking at the possibility of a ten percent increase in heath insurance premium costs, or $170,400.

Also, school officials are also looking at a two percent salary increase, or $340,000.

The total funding reductions, factored with proposed expenditure increases, comes in at $3,154,150. Perhaps a silver lining is that though federal funds are decreasing, a chunk of that funding went to specific short-term expenditures-meaning they can be trimmed from the revenue and expenditure side of the ledger. So the net shortfall is projected at $2,249,399.

Ms. Wahrman also offered that it is “not a pretty picture” and that they will have some challenges and decisions to be made as to how they will meet the revenue shortfall.

Declining Numbers

School board members were presented with an in-depth analysis on a wide range of issues including that of student numbers.

The 2011-12 budget is based on an average daily membership (ADM) of 2,372, with current school figures at 2,290. Fewer students mean fewer state dollars-even in the current budget. Prince Edward is facing $433,000 less in state funds this year and has taken steps to address the reduction of funds projected from the enrollment loss.

School officials have moved to shore up the budget in several areas to reach the $433,000 total including not filling unfilled positions and savings in fringe benefits due to attrition.

Other savings include administration health fringe benefits, savings in fuel budget ($65,007.90), factoring usage and a fixed rate, $41,053.35 in savings from the Principal's office and the balance in other benefits and unemployment ($98,026.98).

Collectively, some of the cuts may carry over as savings into next year.

March 31 is the target date that locks in the school's ADM and Ms. Wahrman cited that every month they will be looking at the numbers, see where they are and recalculate and adjust accordingly.

They will also look to revenues for grants and for other things that may help if they receive more than budgeted.

Board member Harriett Fentress noted that they did several things last year to try to increase their attendance on March 31. She asked if it worked.

“You know, it did not work at the time. It was a springboard, though, for all the creative energy that's gone into all of the other kinds of incentives…especially at the high school, there's been a constant trial and error…trying to find something that will work and provide some motivation,” Division Superintendent Dr. David Smith said. “And, as you heard Mr. Reed talk at the last meeting, there has been an increase overall in attendance.”

The superintendent offered that he did not think there was a single thing that you can point to to say that's what did it, but that it's a collective effort and constant attention and little incentives that are having maybe more of an impact. (He also cited a plea to parents to put out the extra effort to get their child to school.)

Plans For 2012-13

Ms. Wahrman reported that the composite index is going from .3043 to .3265, or a .0222 increase, reducing state revenues and meaning the locality can contribute an additional two cents on the dollar. (In many instances regarding state funds, there is a local match based on the composite index. The two-cent change is a shift meaning the county's share increases.)

The state chipped in some funds to ease the transition last year in the change of the composite index-funds not budgeted (but that could change depending on General Assembly action).

School officials-at this point-are factoring a budget based on 2,240 students, or 50 students less than the current 2,290.

A reduction in federal monies means the elimination of ARRA Title I funds, $150,000 for professional development for math and reading, and Education Jobs Funds-or $631,159 used for four tutors at the elementary school and four at the middle school, a bus driver, elementary receptionist and VRS benefits. (Tutors hired for specific needs and the need for the positions could be reassessed and they could possibly be hired through Title I funding.) Some areas federal funds target may continue through different avenues.

Several options were presented along with their impact on class size reductions were discussed for the coming year including keeping the number of teachers the same, which would range the pupil-teacher ratio from a low of 16.2 at the elementary school in the third grade, to a high of 18.9 in the second grade and a low of 14.5 for the eighth grade at the middle school a high of 25.4 in the sixth grade. (Ratios were factored minus resource teachers. Factoring those teachers would further lower the teacher to pupil ratio.)

One alternate would reduce the number of teachers by two at the elementary and by one at the middle school, leaving the highest pupil-teacher ratio at 19.5 percent at the fourth grade and 22.6 for the sixth grade at the middle school.

Yet another option would reduce the number of teachers at the elementary school by three, with the highest pupil-teacher ratio in the third grade at 19.8, and two fewer teachers at the middle school, with the highest pupil-teacher ratio at 22.6 at the sixth grade level.

“…These are just an idea. The next step that we'll be taking is to have a meeting with the principals and the directors and the supervisors,” Ms. Wahrman said. “So this information has not been shared with the principals yet. It's to give you an idea of where we are and possibly where we could go to help meet our revenue shortfall. Of course, our first priority is always through attrition.”

Information was also presented on how Prince Edward compares in bus driver and teacher salaries with surrounding localities.

Prince Edward's minimum salary of $34,845 for teachers ranks behind Amelia, Appomattox, Brunswick, Buckingham, Charlotte, Greensville, Lunenburg and Nottoway counties (with Amelia at $37,853 the highest.) Only Cumberland and Mecklenburg among the area counties ranked behind Prince Edward. (Teachers may also receive an additional supplement for additional course work.)

The salary table also highlighted that six of the area school divisions were higher for teacher salaries for those with five years ($36,931), four higher at 15 years (41,506), four higher at 20 years ($45,494) and two higher at 30 years ($53,846).