Rockwood board gets good news, bad news about its budget

Rockwood’s chief financial officer warned the board that despite a positive fund balance in 2012, projected budget shortages may create “some need for serious looks at local revenue,” and that could include another look at a tax referendum.

Chief Financial Officer Shirley Broz gave the board a financial update at its meeting Feb. 2. She said that using zero-based budgeting for the first time had proved effective in producing a $2.4 million savings for the 2012 fiscal year.

According to BusinessDictionary.com, zero-based budgeting differs from traditional budgeting because it forces department managers to start with zero rather than with the previous year’s dollar commitment. Managers must justify the cost of every line item, not just any changes to the cost.

“We were going to have a third year in a row of deficit spending,” Broz said. “Once we brought the $2.4 million forward we will actually have a positive year-end fund balance.”

In spite of that news, Broz said the situation would not be the same by the end of 2013.

“The reductions that we have done for FY12 are not sustainable into 2013,” Broz said.

According to Broz, budget plans for 2013 do not include any cuts in staff, salaries or benefits; and that will create a deficit which will be even larger in 2014.

“This does, of course, bring up the discussion of local revenue change,” Broz said.

After the meeting Broz explained what those changes might mean.

“The board of education postponed looking at the tax referendum. They postponed it. They didn’t say they wouldn’t look at it. I think these kind of numbers just point out that they have some serious considerations to look at in the future,” Broz said.

Last October the board had decided to drop its plans to put a tax increase and a bond issue on the upcoming April ballot. But in January the board reversed itself and decided to go ahead with putting a bond issue on the ballot. On April 3 Rockwood residents will be voting on Proposition R, a $43.2 million bond issue for maintenance and construction of buildings, technology improvements and safety measures.