Vermilion Parish School district projects $2.3 million shortfall

Two months into the fiscal year, the Vermilion Parish School District is projecting a $2.3 million shortfall in its $80 million-a year budget.
The projected shortfall is actually $5 million but the school board is using $3.7 million of its oil and gas revenue from 16 Section Land to offset the projected shortfall.
So, even after using the oil and gas revenue, the School Board is still expected to be short $2.3 million at the end of school year.
According to Superintendent Jerome Puyau, “The board will have to decide if it will take $2.3 million out of its reserves, which has $15 million fund balance, to balance the budget.”
Puyau then stated, “In the Spring the board approved $700,000 in cuts to offset the projected loss of MFP funding, however, this was not enough.”
On Aug. 17, the school board will have a committee meeting to discuss Superintendent Puyau’s recommendations of another $600,000 in cuts to the general fund budget.
Puyau explained the reasons for the projected $2.3 million reduction in revenue and how the Vermilion Parish School Board was prepared for it.
Two years ago, the district collected $3.3 million more then the projected $3.7 million in oil and gas revenue for a total of $7 million.
The following year the state reconciles the increases or decreases to all districts local revenues to project the MFP formula for the next year. In short, they want their portion of the money and they take it two years after you collect it.
The Louisiana Department of Education (LDOE) provided us a projected MFP cut of $1.2 million in the Spring, so the school district made cuts during the staffing process. But then, Vermilion learned that it was another decrease in funding due to more then $600,000 of the local and state share of the MFP funding being sent to charter schools and an additional decrease of $600,000 due to our oil revenues two years prior.
On top of the decreases to the MFP dollars, the school board is expecting a decrease in oil revenues of $1.3 million and an increase in health care costs.
Each district receives a different dollar amount from the MFP. After all of the calculations are compiled the Vermilion Parish School Board receives $5,295 to educate each child. Besides the MFP funding, the school board utilizes local and federal funding to set their budget for each year.
Although Vermilion Parish school district does not budget oil and gas revenue each year, it counts on the revenue to pay unexpected financial surprises the budget may encounter.
Puyau said about oil and gas revenue, “It is a false sense of security.”
Meaning, the school district does not budget the oil and gas revenue, but it does count on it each school year.
The good news, if there is any, about the $2.3 million shortfall is that, according to Puyau, the school district was expecting it and prepared for it.
“We were aware of the cuts to our Minimum Foundation Program (MFP) dollars two years ago and prepared for the projected shortfall by building up our reserves from $14 million to $19 million,” said Puyau. “We knew changes to retirement, health care and the volatile oil market could have an adverse affect on our system.”
Puyau continued, “We are not going to panic. No one is getting a pink slip. We are also not lowering our educational standards.”