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LRSD finance director warns operating fund shrinking; board hears shortfall and one-time costs
Summary
Chief finance presenter Mr. Bailey told the board the operating fund is shrinking and reported a near-term tax revenue shortfall and several one-time or timing-related expenses, including a $1.7 million security billing catch-up and reimbursements timing for federal grants.
The Little Rock School District’s finance briefing on March 19 flagged near-term pressure on the operating fund and several timing-related or one-off costs that staff said will compress fund balances before spring tax receipts arrive.
Finance presenter Mr. Bailey told the board the district budgeted just over $111 million in property tax revenue for the first period and had collected roughly $111 million as of the end of February, a collection rate he described as about 98 percent and “a little bit short on that projection about $2.3 million.” He noted most tax receipts arrive in April and May and that federal grant reimbursements can also create temporary negative federal fund balances because those grants are reimbursable.
Bailey outlined specific expenditure pressures: a $1.7 million catch-up invoice from the city for security services, about $662,000 in outsourced occupational/physical/speech therapy costs, and student-transportation incumbrances that left that line about $383,000 “in the red” mainly because of extra service days tied to snow events. He also noted salaries and benefits were trending under budget by about $3.5 million, partially offsetting other overages.
On overall liquidity, Bailey said the operating (general) fund balance was $37.9 million as of the end of February and the capital improvement fund about $42 million, but he warned the budget is projected to be drawn down over the next months until spring tax revenues arrive. "You're jeopardizing making payroll" if the district were to reach a point without reserves, Bailey said, urging conservative projections and continued monitoring.
Board members asked for follow-up details on items such as how encumbrances affect year-to-date balances, the mechanics of federal drawdowns, and specific staff vacation/payout changes tied to schedule adjustments for 12-month employees moving to shorter schedules. Administration agreed to provide further detail in upcoming financial packets.
