The following was submitted to Radnor Patch for publication by Bruce Lenthall, Radnor resident and Democratic candidate for School Board.
At a time of so many national conversations about budget deficits, it is perhaps unsurprising that Radnor’s school budget surplus takes some explanation. To clarify the facts surrounding the budget surplus, it is worth taking a moment to explain what the surplus is, where it comes from, and why Radnor benefits from our school district saving for the future.
First, there has been some confusion about the amount of the 2012-13 budget surplus. The reason for this is that accountants have a variety of ways of defining a surplus. Depending on which definition you pick, the district’s auditor explained recently, you get a different figure. If we take into account all the sources of money coming into and going out from the district – across all of the district’s various funds – the 2013-13 surplus was right around $3.2 million.
However you define it, this surplus represents a windfall for the district. The source of the surplus can best be explained by looking at this year’s unexpected sources of savings and revenues. For instance, Radnor was able to save on expenses by refinancing our public bonds and by joining a health-care consortium to reduce the district’s insurance costs this year. And the district had a one-time revenue boost as it collected an unusually large sum in payments for non-resident students who have attended Radnor schools.
Finally and most important for Radnor, this surplus contributes to the district’s strong fund balance – essentially the savings account that allows the district to plan for future expenses. This fund balance is vital because we know those future expenses are coming: state-mandated pension payments and needed improvements to our school buildings will require significant outlays in coming years. The district will be able to pay for them without cutting programs because the district has planned and saved for them.
Radnor benefits from the district’s fund balance in another way as well. Remember those savings the district secured by refinancing its bonds at a lower rate? The district qualified for that lower rate – and the savings it delivered to Radnor schools – chiefly because creditors rated the district’s fund balance as excellent.
What does this mean for all of us in Radnor going forward? It means our district is in a financial position that enables us to focus our attention on the education that we want for our students, that we want for our community. And that’s what our schools are truly about.