Dr. Roark Horn, AEA 267 Chief Administrator
Last spring, in meetings on the impact of the state budget cuts to our AEA, I promised to update you with final information regarding the cummulative effect of the 2011-12 $20 million reduction, along with any new information that I could provide regarding the result of the additional $20 million reduction for the 2012-13 school year. At the time, I only had estimates on numbers, and although we have not certified through our auditors that the numbers I will provide you below are absolutely correct, they are going to very close. Thus, I did not want you to have to wait for another two months before getting an update. If anything changes significantly during or after the audit, I will send out another update, but I feel very confident that the information below is where it will all end up!
Fiscal Year 2011-2012
A reminder that the total loss of revenue for AEA 267 in 2011-12 due to the reduction of state aid to the AEA system was $3,850,902. We began the year with an unrestricted balance of $5,832,795, which represented about 12% of our yearly operational budget of $47.5 million. I estimated that $2.5 million of that reserve would have to be used to meet expenses, with the additional use of $1 million of federal special education Part B money.
It ended up a bit better than expected, as the actual use of reserves was $2,157,377. In addition, we only had to use $500,000 of federal special education Part B money instead of the projected $1 million. When I visited with you last spring, this was the best case scenario that we could have hoped for.
Fiscal Year 2012-2013
We begin the 2012-13 year with an unrestricted balance of $3,675,418, or about 8% of the fiscal year budget. Because we did not use the projected amount of Part B money last year, we also have $500,000 more of that money to start with. Another piece of good news is that we have been told by the Federal Department of Education that federal sequestration will not affect us this year, so the worry of a mid-year cut of about $1 million to our AEA is mitigated. We have also reduced expenses, mainly through the attrition of personnel.
However, all of that does not eliminate the fact that we have another cut in state aid to AEA 267 of $3,850,902. Between our balances, federal Part B money, 2% allowable growth (revenue of about $450,000) and reduction of expenses, it is likely that we will finish this year with a small balance of funds, barring any unexpected major expenses.
Absent another state aid reduction, and if the specter of federal sequestration is lifted, working together we will have weathered two very difficult years, although our operational balance will be greatly compromised. However, if the state continues to cut aid to the AEAs and/or if 10% of federal money is cut due to sequestration at the end of this year, we will need to continue to work in tandem to figure out how to continue to provide the outstanding service that you provide with continued depletion of funds.
Phew! That’s a lot of information but I want you to have the facts and the most current information about our situation. If you have any questions, please feel free to contact me directly.
As always, thank you for everything you do to support the children, families and educators we serve!