Arlington Schools Facing $1.5 Million Deficit

The Arlington School District closed fiscal year 2010 in a $1.5 million deficit, school officials announced Thursday.

The shortfall is due to a revenue gap, according to officials, as the state cut local aid during the economic crisis; grant and other revenue declined; and the district experienced unanticipated costs for out-of-district special education placements.

Earlier projections had the district in a $2.6 million hole at year's end, officials said, but a freeze on less crucial expenses and strict purchase order controls during the year helped the district recoup $1.1 million in expected losses without resorting to mid-year teacher layoffs.

"The volatility of out-of-district special education costs always presents a challenge in any year," Superintendent Kathleen Bodie said in a statement, "but an $800,000 increase in out-of-district costs coupled with $1.8 million in lost revenue created an enormous strain on the school department last year.

"Every measure to save money was taken, short of laying off teachers mid-year, which would not have been in the best interest of children. Going forward, our experience last year underscores the importance of planning for the volatility of special education costs when developing the next multi-year fiscal stability plan."

District officials plan to discuss the situation at a special School Committee meeting at 7 p.m. tonight in the committee's room on the sixth floor at Arlington High School.

School officials did say part of the shortfall is due to payments from grants and other fees coming in after the close of the fiscal year. A Special Town Meeting will, most likely, be required this fall to appropriate these funds, they said.

The rest of the deficit should be made up through savings in the fiscal year 2011 budget, officials said, as conservative estimates were made for grant, fee and credit revenue in the budget and tight financial controls are expected to continue.

The district's chief financial officer, Diane Fisk Johnson, has also been working on a major initiative to improve the tracking of all school district revenues, salaries and other expenses, according to officials.

"We have much better financial monitoring tools in place for fiscal year 2011," Johnson said.