Deficit projections from Thursday's fiver-year plan presentation

Early figures show that Albemarle County Public Schools are projecting a $6.5 million deficit for the 2015 fiscal year.

Schools officials briefed the Board of Supervisors and School Board in a joint budget meeting Thursday, where they identified that new revenues are not keeping pace with current expenditures and increasing state mandates.

“These are very preliminary numbers,” School Board Chair Steve Koleszar said. “We don’t have a Governor’s proposed budget yet, much less what the [General Assembly] will do with the budget.”

The most significant unknown is a possible mandatory increase to contributions into the Virginia Retirement System, which, Schools officials say, has been underfunded for years.

Jackson Zimmerman, Albemarle’s Executive Director of Fiscal Services, said that the division is using a 2.84 percent VRS rate increase as a figure for planning purposes. This translates into a $2.6 million jump in costs to the division.

“That’s one of the huge variables that’s out there, and it’s unlikely that it will go away,” Zimmerman said. “It’s possible that it could be reduced, but it’s also possible that it could be increased.”

Figures also show a $2.4 million decrease in the division’s fund balance, from $3.6 million in fiscal year 2014, to $1.22 million in fiscal year 2015. An additional $740,000 cut is made to the fund balance in fiscal years 2016 to 2019, projections show.

The fund balance represents monies appropriated to the school division, but not spent in a given fiscal year. While the financial projections show deficits, both the school division and local government are required by law to ultimately approve balanced budgets.

Of additional concern, Koleszar said, is the division’s increasing enrollment paired with state funding levels.

Due to large kindergarten numbers, Albemarle is predicting an enrollment increase of about 550 students in the next five years. About twenty new full-time teachers are expected to be hired in the next two fiscal years, and about 14 in the three years thereafter, projections show.

Additionally, the plan assumes a two percent salary increase for teachers and classified staff in fiscal year 2015, and an eight percent increase in health insurance contributions over the next five years.

The five-year plan does not contain funding for any new instructional initiatives.

Since 2008, Albemarle has seen its contribution from the state decline.

In 2008-9, about 31 percent of the County Schools’ budget came in state aid. That figure has fallen to nearly 28 percent in 2013-14. This represents a nearly $3 million drop over five years.

The projections shared Thursday show state and local revenues increasing in each of the next five years, but Schools officials say those increases don’t cover the division’s existing expenditures.

Albemarle has also seen its numbers of students who receive free and reduced lunch rise to about 28 percent of the student body.

While figures project the amount of free and reduced lunch students to remain flat, Koleszar said high numbers of this student population drive costs up because of the County’s staffing formula.

“We more generously staff schools based on the number of free and reduced lunch students that they have, so that can be a significant driver of additional staff,” Koleszar said. “With that change, even if our enrollment weren’t growing, our formula would say that we need more staff to accommodate the change in free and reduced lunch students.”

Zimmerman said that the staffing formula has recently been updated, but is yet to be implemented.

The County is now awaiting Governor Bob McDonnell’s budget.