School district budget leaves funds for reserves

The Newport-Mesa Unified School District trustees adopted a budget Tuesday that projects higher revenues than expenditures and is expected to leave them with a 4% reserve by the end of the upcoming fiscal year.

After the district’s Deputy Supt. and Chief Business Official Paul Reed presented the final 2015-16 spending plan during its meeting, the board unanimously approved it that same night.

The document shows $312.5 million available in their funds and $287.9 million in total expenditures.

The numbers for this year’s budget mark a welcome change in the district’s finances.

Last year, expenses exceeded revenue by approximately $8.3 million and trustees dipped into reserves to make up the difference. Reserve spending was also required in the 2013-14 fiscal year, where expenditures were $6.5 million higher than revenue.

The last time Newport-Mesa’s revenues exceeded expenditures was the 2011-12 school year.

But Reed predicted the district’s finances would even out as long as the board was not wasteful.

After the 2014-15 school year, Newport-Mesa was able meet a 3.8% reserve. While the district is required to meet only a 3% reserve, the board’s goal is to reach 4%.

“We have been incredibly responsible these past years,” he told the board Tuesday night. “In the end, the question becomes ‘Do you have sufficient money for your ending balance to be fiscally stable?’ and you do. We are committed to making a 4% reserve and we’ll make that by 15-16.”

Although the budget is balanced, he also informed the board of a rise in personnel costs.

Employee costs have gone up 13.8% over the past four years, according to Reed.

“That’s pretty significant but not all that has to do with increased compensation,” he said. “Quite frankly, we just have more folks. As we staffed back up after the recession, we had more people and more professional development going on.”

Over 80% of Newport-Mesa budget goes toward personnel costs, including salary and employee benefits. According to the document, the rest of the budget is dedicated to books, supplies and other services and operating expenditures.

However, in the end, Reed assured that the district’s finances will remain steady as long as the board continues to use their funds conservatively.

“We’ve been prudent and stayed within our means,” Reed said. “If everything happens as we expect and if every dollar that’s budgeted gets spent, we’ll continue to do the same thing in 15-16. We continue to be solvent and moving forward.”