AFY19 budget and FY20 budget 2019-2-11

Background Information:

FY19 Budget

On May 12, 2018, the State Legislature passed SB142 that was signed into law by Governor Walker on June 22, 2018 approving a one-time increase to our funding in the estimated amount of $1,405,152.

On January 29, 2019 Governor Dunleavy’s FY19 Supplemental Budget adjustment was introduced, which included the elimination of the $20M one-time state funding that was approved and signed into law.

As you know, the budget process usually starts in January with our preliminary estimates of revenues and expenditures. A recap of the timeline, provided below, for the development and passage of the FY19 budget.

January 15, 2018 Board Work session

February 5, 2018 Board Work session

March 2, 2018 Finance committee. Reviewed Budget reduction scenarios and use of unassigned fund balance.

March 5, 2018 Board Work session. Presented Preliminary FY19 Budget. Status quo funding from the State of Alaska and maximum allowable from KPB.

April 2, 2018 Board Work Session

April 2, 2018 Board Meeting. The FY19 preliminary budget was approved by the BOE.

May 7, 2018 Board work session. The funding levels from the State and KPB were still undecided at this time.

June 4, 2018 Board Work Session. Discussed the impact on the budget reductions after the State of Alaska legislature provided one-time money. With the additional funding from the State of Alaska, cuts that would have directly affected the classroom are being recommended to remain in the budget. Included was 11.5 FTE teaching positions and 3 days for some support personnel.

July 9, 2018 Board Work Session. Reviewed several budget items in reference to FY19 Budget, including one-time funding from the State.

August 6, 2018 Board Work Session. Reviewed impact of one-time money, KPB funding and budget reductions.

August 6, 2018 Board Meeting. Passed the revised FY19 General Fund, that included the one-time funding from the State of Alaska.

At the January 14, 2019 board meeting, the FY19 budget revision reflected updated revenue and expenditure estimates. This revision included an adjustment to the amount we expected to receive in one-time funding based on the FY19 20 day count of $1,398,898. As a result of updated revenues and expenditures the estimated use of fund balance was lowered to $674,755, resulting in an Adjusted Unassigned fund balance $2,425,685. If Governor Dunleavy’s SB39 is passed by the legislature, that would eliminate the one-time funding from the State in the amount of $1,398,898 which will result in a change of the use of fund balance to $2,074,653.This action would lower the Unassigned Fund Balance to $1,026,787.

As discussed at the January 14, 2019 Board Work Session the FY19 budget revision had not taken into account any changes due to negotiations. Arbitration scheduled for February 26 and 27, 2019. Since part of the conversations with the bargaining units included using the DC forfeitures amounts, we did not include that in the revision. Since actions by Governor Dunleavy regarding the one-time funding, the DC forfeiture funds may not be a source of funding for negotiations.

FY20 Budget

The Preliminary FY20 Budget discussions began at the January 14, 2019 Work Session.

The preliminary revenue for FY20 includes one-time money. With Governor Dunleavy proposing SB39, supplemental budget amendment, removing the FY19 one-time funding, we anticipate that the FY20 funding may be eliminated as well. The estimated amount for KPBSD for FY20 is $2,100,012.

The potential change in revenue would result in a ($1,883,185) budget deficit. The anticipated unassigned fund balance would be $1,026,787, based on the FY19 scenario, leaving $856,398 of expenditures with no fund balance to offset.