CUMBERLAND — A presentation at the regular meeting of the Allegany County Board of Education on Tuesday revealed that the recent level of expenditures over income is expected to cause the board’s general fund to decline by more than 50 percent.
The board’s general fund, which is basically a savings account it has discretion over, is expected to decrease from $12.6 million as of June 30, 2012, to $5 million for fiscal year 2014.
The result is a $7.6 million hit to the board’s bottom line.
“This is the first time (this has occurred) I can think of in the last 10 years,” said Randall Bittinger, the chief business officer for the board.
Since changes in the budget must be approved by an amendment voted on by the BOE, a presentation of the figures was made at the meeting.
The $7.6 deficit is caused by a $3.1 million rise in expenses over income for 2013 and an anticipated $3.6 in costs over revenues for FY 2014, combined with a $1 million expense for the demolition of the former Sacred Heart Hospital.
Allegany County is also contributing $1 million to raze the former hospital, which is being demolished to construct a new Allegany High School on the site.
The board, in conjunction with the Huber Michaels Co., is currently having its annual audit completed.
The good news is that the decrease in the general fund is expected to drop by less than earlier projections had predicted.
“We were expecting a larger decrease,” said Bittinger.
Bittinger said they had projected a $4.8 million loss for FY 2013.
The board will now consider the changes and vote on approval of the budget amendment in an upcoming meeting.
The BOE has been operating during a time of decreased funding. The state’s contribution to the BOE has fallen by a total of $11 million over the last four years.
The decrease in state funding has been due to falling enrollment and real estate values in Allegany County.
The county has maintained more stable real estate values in comparison to many other parts of the state that took larger loses in the wake of the severe economic recession that occurred in 2008.
Stable real estate values in Allegany County made state funding based on wealth less a priority for the county.
The expenses for the BOE that exceeded revenues were made up of a variety of costs from fuel and utilities to supplies, security initiatives and health care.
“I don’t want to make it seem like we are in financial trouble,” said Bittinger. Bittinger warned that the board could not stay on the current course. If the general fund continues to be used to cover expenses, it could result in a negative balance and possible state intervention.
Bittinger said that the factors involved in the budget are constantly changing and did not see the decrease as an ongoing trend.
An update was also given at the meeting on the progress on the demolition of the hospital and the plans for the new Allegany.
Vince Montana, director of facilities, told the board that asbestos removal continues to prepare the site for demolition.
“We are finishing the kitchen and second floor. Next will be the ground floor,” said Montana.
Higher levels of asbestos were discovered at the site that had originally been thought to exist.
Montana said they hope all asbestos abatement will be done by February and that demolition could begin then.
“The overall timetable for the project has not been delayed,” said Montana.
The new Allegany High, which Bittinger expects to cost between $30 and $40 million, is expected to open its doors in the fall of 2017.
Greg Larry can be contacted at firstname.lastname@example.org.