Lake Oswego School District will operate its schools next year on a $59.2 million general fund budget, which is $500,000 more than last year.
The general fund includes most staff salaries, transportation, materials and maintenance. The school board Monday night approved the budget, which will spend about $2.8 million of its reserves to balance a budget in which rising expenses will outspend incoming revenues.
Finance Director Stuart Ketzler gave a brief presentation Monday night to explain the reserves, which have been built up to $8.7 million at the close of this fiscal year on June 30. Some have cast scrutiny on the school district for such a high balance after it accepted $2 million in assistance from the city of Lake Oswego. Originally the projected balance from the prior year was only $4.9 million.
The school district received about $1.65 million in revenue beyond what was projected in both the end of fiscal year 2011 and throughout the 2011-12 school year. The extra revenue included: additional state formula and local revenues, including an unexpected workers' compensation dividend, PERS credits and late collection of funds from one school, as well as the final federal stimulus payment.
Additionally, the school district had better-than-expected savings from expenses in both the 2011 and 2012 fiscal years - about $2.15 million.
The savings are the result of cost-reduction measures enacted two years ago; lower health benefit expenses, likely caused by employees opted differently because of an insurance increase; reduced PERS costs from when employees agreed to be paid in one summer payment in June before rates increased; and lower payroll at the end of the school year.
The school district has also practiced a strategy that saves one-time revenues when it can, assuming that the effects of the recession, which started in 2008, are still not over.