The Escambia County School System has been able to hold its own and stay afloat through three costly prorations that forced the system to dig deep into its fund balance to the tune of $4.6 million over the past two years.

Chief School Financial Officer Julie Madden presented the FY2011 budget to board members Thursday afternoon during the final budget hearing shedding light on the efforts made to maintain a healthy fund balance through the economic decline. The budget reflected that $43,749,402 in state, federal and local revenues is expected, while expenses total $44,720,818. With more being spent than brought in, it forces the system to pull $688,790 from its fund balance after some additional funding sources are factored in.

When all is said and done, Madden said the system’s ending fund balance on Sept. 30, 2011, the close of the next fiscal year, should be $5,238,701. But she reminded board members that it is uncertain whether proration will once again impact the amount of funds issued to schools statewide.

“At this time, the school systems have not been made aware if there will be a proration or not,” Madden said Friday. “It certainly is a possibility. When you have three prorations in two fiscal years, it’s certainly a possibility.”

The system first dealt with proration in 2009, not once, but twice. With proration of 9 percent and 2 percent, the county lost $3 million in funding. Proration struck again last year at 7.5 percent costing the county $1.6 million.

Madden credited many additional revenue sources for aiding the system in staying in the black, most graciously the county’s property tax.

“Thanks to the $10 mil property tax increase that was voted in several years ago, the board of education is not having to rely on lines of credit or take out loans to make payroll,” Madden said. “We’ve been able to sustain a healthy fund balance. It’s not where it could be without proration, but we’ve been able to hold our own and survive through proration.”

Without the prorations, Madden said the fund balance could have been nearly $10 million at the end of the next fiscal year. The ending fund balance as of July 2010 was $7.6 million, more than $2.5 million more than is expected at the conclusion of FY2011.

In addition to the property tax, Madden also acknowledged some federal funding that kept the county from having to spend even more of its fund balance.

“One thing that did help in 2010 was that was the first year that we had the ARRA (American Recovery and Reinvestment Act) funds made available that we had never had before,” Madden said. “They were available for fiscal year 2010 and they will end Sept. 30, 2011. One thing that has helped us maintain the fund balance that we are projecting is the fact that we have had these federal funds to use instead of just using our fund balance.”

ARRA funds were used throughout the budget, but most prominently through the Fiscal Stabilization Fund, which paid $1,149,668 toward the expense for custodians countywide. The Education Jobs Fund, which is also made available through ARRA funding for FY2011 only, also made available $958,126 for local funded teachers and aids and the staff at Turtle Point Environmental Center. Without the ARRA funds, Madden said the ending fund balance would have been projected much lower.

In addition, the system budgeted 10 times more for an increase in unemployment compensation from $4,000 per month in FY2010 to $40,000 per month in FY2011. Madden said the increase is a direct reflect of the current economic situation.

As for teachers and students used to calculate the budget, it reflected 313.5 teacher units with 275.19 being paid through Foundation Funds or state funding, 11.26 being funded through other state funding such as the Alabama Reading Initiative, 2.5 locally funded units and 24.52 federally funded units.

Transportation expenses in the upcoming fiscal year will total $507,125, which makes up the cost of salaries for all staff including mechanics and supervisors, and around $200,000 in fuel expenses.

Madden added that this year will be the last for ARRA funding including Title 1, IDEA, IDEA Preschool and Technology and JOBS and State Fiscal Stabilization funding.

At the conclusion of the budget hearing, the board entered into its monthly board meeting, approving the budget as its first item.

See Wednesday’s Atmore Advance for other items approved by the school board.