Budget forecast: Bedford schools report small revenue shortfall, major long‑term funding risk tied to LCI change
Summary
Finance staff told the Jan. 8 school board that revenues are roughly $342,000 below projection and recommended three supplemental appropriations; staff warned of a projected $10.3M funding shift tied to local composite index changes in 2028–29 and outlined plans to set aside $8.7M to soften the impact.
Bedford County Public Schools staff presented a second‑quarter financial forecast at the Jan. 8 meeting that showed a modest shortfall in projected revenue but a larger long‑term fiscal risk tied to changes in the local composite index (LCI) that affect state funding calculations.
Finance staff said overall revenues were projected about $342,000 below earlier projections and summarized three supplemental appropriations that will be brought back for board action next month: a $164,000 state security grant, roughly $11,003.57 for teacher licensure, and a reappropriation of approximately $1.6 million in prior state ‘all‑in’ COVID‑era funds that must be spent down. Staff said the district is on target to spend those carryforward funds this year.
On expenditures, staff projected the district would come in under budget in many categories, leaving a small projected balance (about $500,000) for the current fiscal year. Staff noted a governor’s proposal that included a 2% pay increase for school employees in the next biennium; if adopted, the state share would not fully cover the local cost and Bedford would face a remaining local obligation.
A larger fiscal challenge discussed was the district’s long‑term exposure from a local composite index (LCI) arrangement that favored Bedford City at its reversion years earlier. Staff estimated a potential shift that could reduce state aid by about $10.3 million in the referenced future year. The district is already setting aside recurring funds (estimated $8.7 million planned) to offset part of that change, but staff warned the plan will require ongoing adjustments and could drain maintenance reserves if not managed carefully.
Staff also presented fund‑specific notes: the nutrition program showed a mid‑year loss of about $100,000 (an improvement over earlier years), textbook adoption balances are being built for a large history adoption, and maintenance reserves are earmarked heavily for upcoming HVAC projects at Liberty High School and Stanton River High School. Staff said the health insurance fund is self‑insured and reserves have fallen from $2.6 million to about $1.8 million, so premiums are expected to rise.
The board did not take final budget action at the meeting; staff will return next month with supplemental appropriation requests for formal approval before forwarding to the Board of Supervisors.
