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Janesville School Board eyes reserves to balance budget

JANESVILLE — The Janesville School Board is likely to change one of its policies so it can dip deeper into its budget reserves.

The move would allow the board to balance the 2012-13 budget.

The board is scheduled to set the property tax levy and finalize the budget when it meets Tuesday.

The board has yet to deal with a budget shortfall of about $3.6 million, or about 3 percent of its operating budget.

All signs point to use of the operating budget reserves, known as the fund balance.

The board’s finance committee voted Tuesday to do just that. The committee’s vote includes a recommendation that the board go ahead with a plan originally suggested by the board’s president, Bill Sodemann.

Board policy restricts the uses of most of the fund balance. Portions are set aside for specific purposes and can’t be used for other purposes.

The fund balance was at about $26.7 million on June 30, but because of the set-asides, not enough money is available to plug this year’s funding gap.

The fund balance was projected to have enough money to cover the gap, but the state announced Monday that Janesville’s school aid is about $611,000 less than an earlier estimate. Now, the fund balance won’t be enough to cover the difference unless the policy is changed.

At Tuesday’s committee meeting, board member Peter D. Severson at first suggested spending cuts to bridge the gap.

Cuts would have to add up to about $1 million, district Chief Financial Officer Keith Pennington told the committee.

Cutting that amount now, more than a quarter of the way into the fiscal year, would be difficult. So Severson backed away from spending cuts and went to the Sodemann plan.

Sodemann recently noted that the fund-balance policy sets aside money to be used in case the district’s self-funded health insurance runs into trouble, but it sets that money aside twice.

The policy is very conservative in that respect, Pennington said.

“Accountants would say you’re wearing a belt and suspenders at the same time,” he said.

Sodemann suggested removing the suspenders. Pennington told the committee that doing so would yield enough unrestricted money to cover the shortfall with $3 million left over.

“Good bookkeeping?” asked board member Karl Dommershausen.

“Mm-hm,” Pennington assented.

“And it makes sense?” Dommershausen continued.

“Mm-hm.”

The committee voted 3-0 to recommend the change to the full board.

As for property taxes, Pennington projected a decrease, as previously reported. If the board doesn’t add spending, cut taxes further or make any other budget changes, the school tax levy will be $36.07 million, about 1.89 percent less than last year.

Watch the meeting

The Janesville School Board meets at 6:30 p.m. Tuesday at the Educational Services Center, 527 S. Franklin St.

The meeting will be carried live on Janesville cable channels 96 and 993.

The board meeting also can be viewed on the district’s on-demand Web channel at janesville.pegcentral.com.

The meeting will be shown again on the cable channels at midnight, 3 a.m., 6 a.m., 9 a.m., noon, 3 p.m., 6 p.m., and 9 p.m. on Thursday, Saturday and Sunday.