FFY18 Preliminary General Fund Budget 2017-3-6

3;15 p.m.

Background Information:

The detailed FY18 Preliminary Budget document is presented for review by all interested parties. Administration has made many changes from prior year budgets.  Cuts to expenditures have been made in all areas of the district.  However, if state funding for education is reduced from current levels, more cuts will likely be necessary. Board action on a balanced budget (where General Fund revenue and expenditure budgets equal each other) is scheduled for the April 3, 2017 board meeting. The following information is provided to help facilitate the understanding of the FY18 Preliminary General Fund budget.

Enrollment Projection

The process used to project the FY18 enrollment is based on a straight-line method for most schools as of October 28, 2016. The steps involved in arriving  at the projection of 8,781 students included:

• Students at school sites were moved ahead one grade level, with some variance based on school administrator input.
• Charter school enrollment projections are in concert with the contractual agreement between each charter school and the district.
• Staffing for Homer Flex, Kenai Alternative and Marathon school locations are set according to amounts stated in Board AR 6183C.
• Kindergarten enrollment based on the average actual enrollment for FY15, FY16 and FY17, with some modifications based on additional information from school administrators.

Sites affected by feeder schools were adjusted according to anticipated student movement.

The District was required to submit the FY18 enrollment projection to the State of Alaska Department of Education and Early Development by November 4, 2016.

Revenue

State of Alaska revenue projections for FY17 is based on the Base Student Allocation (BSA) of $5,930 of the State of Alaska Foundation Funding Formula that is reflected in the Governor’s current budget.  State revenues include $79,228,895 for Foundation Funding and $286,147 for Quality Schools funding, a total of $79,515,042. 

Administration has, for demonstrative purposes, budgeted KPB support in the amount of $48,238,432, which is the same amount as the borough provided in FY16 and FY17.  This budgeted KPB revenue amount is $3,043,762 less than the projected maximum allowable local contribution for FY18 of $51,282,194.  

Total General Fund Revenue available for FY18 from all sources, not including the use of fund balance, is estimated to be $136,747,518.

Expenditures

Expenditures in the FY18 Preliminary General Fund Budget total $136,747,904.  Additionally, there is a transfer to Food Service scheduled in the amount of $1,100,000.  The total of all expenditures and transfers for the FY18 Preliminary General Fund Budget is $137,847,904. 

Reductions to FY18 status quo expenditures totaling $2,452,749 included:

• 5.0 FTE Unallocated for Class Size adjustment
• 1.0 FTE Pupil Services Coordinator
• 1.0 FTE Accounting Specialist position
• Extra-Curricular safety funds
• English Language Learners (ELL) Tutors
• Custodial Hourly Reductions
• 6.50 FTE from High Schools with an increase of +2 PTR

Administration is evaluating current support staffing formulas and all future openings to identify any additional areas for expenditure reductions.   

The difference between revenues and expenditures is a deficit of $1,100,386.

State of Alaska,  Teachers Retirement System (TRS)  and Public Employees Retirement System (PERS) On-behalf payments

In FY17 the District budgeted $8,247,847 for the TRS and PERS on-behalf payments. In developing the FY18 preliminary budget, we remained at status quo based on the FY17 budget.   In the FY18 Preliminary budget document, the revenue and expenditures budgets have been adjusted to the rate set for FY18. The FY18 TRS On-behalf budget is $ 7,059,734 and PERS in $554,310 totaling $7,614,044 which is less than the FY17 amount by $633,803.

Use of Fund Balance

Revenue from all sources for the FY18 Preliminary General Fund Budget totals $136,747,518 and since expenditures and transfers total $137,847,904, it is necessary to use fund balance in the amount of $1,100,386, as previously discussed by the Board.