Frederick County Public Schools is projecting a $2.8 million deficit in its fiscal year 2021 budget for Food and Nutrition Services due to the coronavirus pandemic.
This comes after the school system spent almost three months providing free meals to children across the county due to the COVID19 pandemic.
"The Food and Nutrition Services fund is a self-sustaining fund...and unfortunately without the student meals happening in the schools in a traditional fashion we will not be able to generate the same type of revenue that we typically would," Heather Clabaugh, Budget Officer for FCPS told the Board of Education.
To make up for this deficit, FCPS staff has recommended transferring money from the Other Post-Employment Benefits (OPEB) portion of the FCPS Self-Insurance Fund (SI).
OPEB provides benefits, particularly health insurance, to retired employees.
The OPEB portion of the SI is what FCPS contributes from its reserves in addition to an annual set contribution.
Due to the COVID19 pandemic, these reserve funds are able to be transferred because there were one-time savings seen from a reduction in claims this fiscal year said FCPS Chief Financial Officer Leslie Pellegrino.
But staff are still waiting to see what sort of revenue comes from the state, Clabaugh said, which could affect how much money is actually transferred.
"If we are able to offset [the deficit] through additional sources of funds from the state, federal and local government anything that wouldn't go to Food and Nutrition Services we would then revisit and look at giving to OPEB," Clabaugh said. "We are looking at this as our worst-case scenario but realistically we needed to come to you with a plan...to get through the school year 2021."
Based on budget documents, if this "worst-case scenario" comes to fruition, the OPEB contributions for FY21 will be about $850,000 compared to the FY20 contributions which were approximately $3.6 million.
However, Pellegrino said FCPS retirees would not see any impact on their retirement benefits or premiums.
"This actually helps the OPEB Trust fund as these deposits are not guaranteed and are in addition to the annual $1 million contribution from the General Fund," Pellegrino said in an email.
Board member Michael Bunitsky asked if the Summer Food Service Program would be affected by the deficit. FCPS has traditionally served two free meals a day to children aged 18 and younger during the summer months when school is not in session.
Clabaugh said because the program is federally funded it is not expected to be impacted.
The Board will vote on final approval of the Food and Nutrition Services budget along with the general FY21 Operating Budget at their June 24 meeting.