DFY18 Fund Balance and Preliminary Budget 2017-1-16

2:00 p.m.

Background Information:

FY18 Preliminary General Fund Budget

Revenue

State of Alaska revenue projections for FY18 was created using $5,930 as the Base Student Allocation (BSA) in the State of Alaska Foundation Funding Formula that is reflected in the Governor’s current budget. 

The student enrollment projection of 8,781 for FY18, listed in the Five Year Enrollment Projection document, was used in the Foundation Formula to calculate estimated state revenue.

State revenues include $79,228,895 for Foundation Funding and $286,147 for Quality Schools funding, a total of $79,515,042.    

Administration has budgeted KPB support in the amount of $48,238,432, which is the same amount as the borough had 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, not including the use of fund balance, is estimated to be $137,381,321.

Expenditures

The expenditure budget was developed using the current staffing formulas and the projected enrollment for FY18. Expenditure projections for salaries include step increases for current employees. Adjustments were made to healthcare based on the current number of employees that have selected the HDHP, opted out and recommendations by the District’s Health Care broker. Salaries and benefits comprise approximately 80% of total expenditures.

Adjustments to instructional and custodial budgets were made based on a formula that includes projected enrollment and building size. District office budgets were adjusted based on input from administration.

Included in the primary budget is a transfer to Food Service in the amount of $1,100,000. Which is a reduction of $100,000 from FY17.  The total of all expenditures and transfers for the FY18 Preliminary General Fund budget is $140,833,901.

Use of Fund Balance

The Preliminary FY18 budget has a deficit of $3,452,580. Using one-third of the unassigned fund balance of $1,132,338 would leave a remaining deficit of $2,320,242.

Remaining Deficit Resolution

At the budget work session on January 16, 2017, we will take a closer look at the graphs and financial information provided. We will also discuss the remaining budget deficit and possible increased or decreased funding at the state and local levels, along with possible ramifications to staffing and expenditure reductions.

Administration has been, and continues to develop a plan for the reduction of this deficit. To date, we have identified possible areas for reductions that include, 1FTE district office sped coordinator, 5 FTE previously included and unallocated for enrollment fluctuations and reducing a 12 month position to a 10 month position in finance. Further reductions could occur through certified PTR adjustments and support staffing formula changes. (i.e. Custodial reductions in buildings as previously discussed) These possible reductions are being reviewed and discussed with staff.

As mentioned above, with the increased in assessed taxable valuation, the Borough has the ability to provide additional revenue in the amount of $3,043,762.