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Agar - Blunt - Onida School District. Blunt Elementary. Sully Buttes JH/HS. Onida Elementary. Agar-Blunt-Onida School District 58-3 Community Meeting. District Budget & Finance “present and future”. Funding . School districts receive revenue in five operating Funds: General

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Agar - Blunt - Onida School District

Blunt Elementary

Sully Buttes JH/HS

Onida Elementary


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Agar-Blunt-Onida School District 58-3Community Meeting

District Budget & Finance

“present and future”


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Funding

  • School districts receive revenue in five operating Funds:

  • General

  • Special Education

  • Capital Outlay

  • Pension

  • Bond redemption (if applicable)


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General FundSources of Revenue

  • Local: Primarily property taxes plus other miscellaneous revenue: (ie gross receipt taxes, interest from investments, gate receipts)

  • State: State Aid, state apportionment, bank franchise taxes.

  • County: County Apportionment (state fines)

  • Federal: Title program grants


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General FundExpenditures

  • General operating expenses: salaries and benefits, health insurance, workers compensation.

  • Other operational expenses:

    fuel, utilities, building maintenance and repairs, classroom supplies, workbooks, busing/transportation, property insurance, custodial, and extra-curricular activities.


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General Fund ExpendituresFiscal Year 2009-10

  • Personnel 82%

  • Operation & Maintenance 11%

  • Co-Curricular Activities 6%

  • Transportation 1%

    Staff (salaries/benefits) = 82% GF expenditures;

    (classified, certified, admin., board, coaches/advisors)


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General Fund

  • State Aid Formula:

    2009-2010

    PSA(established $ amount/student)

    StudentsX *$4,804.60 = NEED

    295 X $4,804.60 = $1,417,357.00

    + 295 (SSA formula) X $646.25 = $190,643.00

    ‘State defined’ District Need= $1,608,000.00

  • (Per Student Allocation annual increase = lesser of 3% or CPI)

  • – set annually by Legislature


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General Fund State Aid calculation

District Need - Local Tax Effort = State Aid

(minus)

Local Tax Effort: (property taxes) received in Nov. & May

= District Property Valuations multiplied by set GF tax rates (levy) in each property category. (AG, OO & OTHER)

The State determines the General Fund tax rates and assessed property valuations.

‘District Need’ is based on student enrollment and the ‘per student allocation (PSA), which is determined annually by the legislature. (3% or CPI – whichever is less)


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General FundRevenue Calculation

Our District’s ‘past unique’ funding formula!

REORGANIZATION INCENTIVE

SDCL 13-13-6.1 & 13-13-7.1= (8 year formula)

Calculate need as if “two separate districts”(Agar & Sully Buttes)

(year 1) - example

2002-03ADM X PSA = District Need (-) Local Effort = State Aid

Agar 29 $3,889.00 $112,781.00 $568,442.00 = $ 0

S Buttes 328 $3,889.00 $1,275,592.00 $803,403.00 = $472,189.00

$1,388,373.00 $1,371,845.00

Local Effort + State Aid = $1,844,034.00 (otherwise only $16,528.00 state aid)

(additional State Aid)

Years 1 – 4 100% of ‘incentive funds’

Years 5 – 8 80% – 60% – 40% – 20%


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‘Additional’ State Aid revenue(Reorganization Incentive)

SDCL 13-13-1.6 & 1.7Fiscal Year State Aid % of Benefit

Year 1 FY2003 $472,189 100%

Year 2 FY2004 $457,651 100%

Year 3 FY2005 $438,659 100%

Year 4 FY2006 $458,596 100%

Year 5 FY200 7 $382,961 80%

Year 6 FY2008 $308,715 60%

Year 7 FY2009 $203,126 40%

Year 8 FY2010 $105,000 20%


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State Aid (ABO history)

  • Over the past eight years, the district has been receiving this ‘supplemental’ state aid in addition to the state funding formula.

    For year eight of the 13-13-1.7 reorganization ‘incentive’ statute, the ‘additional’ state aid generated by this formula (at 20%) will be around $100,000.00

    The decision to reorganize districts resulted in this additional funding from state to provide opportunities for our students.

    In fiscal year 2010-11, we move to the ‘regular’ state aid formula where because of our district’s total property valuation and student enrollment, we will receive a very small amount of state aid. The District could become ‘self-funded’, which means all state formula revenue will be through local dollars with no state aid.

    (depends upon student #s, PSA, & total district valuation)


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Other District Funds

For taxes payable 2010:

  • Capital Outlay ($1.60)

  • Special Education ($0.50)

  • Pension ($0.20)

    Total = $2.30 (schools can levy up to $4.70)

    (Payable 2009 was $1.45)

    *This amount for every $1,000.00 valuation


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Capital Outlay

Revenue: Local Property Taxes

Schools can tax @$3.00/$1,000.00 (1.60)

Expenditures:

Equipment, vehicles, buses, computers, printers, buildings, land, major remodeling/renovation and construction, textbooks, instructional software.


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Pension Fund

Revenue:

Local Property Taxes

Schools can tax @ 0.30/$1000 (0.20)

Expenditures:

Mandatory district match (6% total salaries) of South Dakota Retirement System (SDRS) for all employees.


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Special Education

Revenues:

Local Property Taxes

Schools can tax @ $1.40/$1000 (0.50)

Federal Allocations

Expenditures:

Special Education staff salaries, benefits, supplies, travel, contracted or related services (speech, O.T., P.T.), and out-of-district placements.


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Levy History (ABO)Tax amount / $1000.00 of property values


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Levy increases from payable 2009 to 2010

Capital Outlay: $1.20 to $1.60 (^.40)

Using state flexibility option (certain GF expenses)

can only use for 3 years ($140,000 for FY 2009-10)

Special Education: $0.25 to $0.50 (^.25)

Fund Balance must be at sufficient operational level, including the potential for elevated yearly expenditures.

Pension: $0 to $0.20 (^.20)

Have been paying this expenditure out of General Fund for past eight years.

* Total school increase of 0.85/$1000 ($85.00/$100,000.00)


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Student Enrollment

ENROLLMENT (K – 12)

  • 2002-03 303

  • 2003-04 297

  • 2004-05 284

  • 2005-06 295

  • 2006-07 293

  • 2007-08 292

  • 2008-09 295

    Blunt Elem Onida Elem JH-HS Total K-12

    2009-10 48 105 122 275

    (projected)

    2010-11 44 98 124 266

    2011-12 43 92 127 262

    2012-13 41 91 118 250

    2013-14 37 93 123 253

    (Projections based upon ‘verified’ preschool-age children)


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Cost per Student(General Fund only)

2006-07 $8,257.00

2007-08 $9,160.00

2008-09 $9,385.00

2009-10 $7,930.00 (projected)

Higher than state average because of our district’s operating structure and large geographical size.


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Fiscal Challenge

  • Our District Structure & Revenue Sources (schools/staffing, program needs, operational costs, geographics)

  • Student numbers and revenues may decline, but fixed costs do not.

  • Maintaining facilities/fleet/other needs.

  • Providing a quality curriculum and effective programs for all students.

  • Personnel – retaining highly qualified teachers and other employees.


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School Budgets

  • Developed with a vision of the future for our students

  • Focus on priorities of District and Communities What is important? What are our needs and desires?

  • Highly qualified teachers, support staff and providing essential curricular/program offerings.

  • Comply with State & Federal regulations/requirements

  • Strive to ‘balance’ revenues & expenditures

  • Efficient & responsive to taxpayers – good stewardship


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Balancing General Fund Budget

Options:

  • Reduce expenditures to meet revenues, which means ‘further’ cuts/reductions of personnel and programs.

  • Raise revenue, which means an opt-out of the tax limitations to maintain current programs/staffing

  • Combination (if possible)

    For school year 2009-10; 64 of 156 districts (41%) have opted-out of General Fund Levy limitations.

    Not just a small school problem; every district has unique structure/characteristics, revenue sources & operational costs.


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Budget cuts/reductions from 2003 to 2009

Certified Staff FTE: 37.5 to 27.0

Classified Staff FTE: 22.0 to 15.3

2009-10 Reductions/cuts made FTE(positions)

  • Certified: 4.75

  • Administration: 1.0

  • Classified: 1.25

  • Salaries/Benefits/hours Frozen or Reduced

  • Medical Insurance Frozen or Reduced

  • Other areas & programs Reduced


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What has been done

  • 2009-2010 GENERAL FUND

  • District implemented major reductions in all areas at approximately $400,000.00 (17 % of prior year’s budget)

  • Personnel costs are 75-85% of a General Fund Budget

    2009-2010 ‘Projections’

    Revenues = * $2,275,000.00

    Expenditures = $2,200,000.00

    * Includes special/other GF revenues that will be unavailable in 2010-11 or near future: $315,000.00

    (reorganization incentive funds, ARRA stimulus grant, and Cap Outlay flex option

    General Fund Balance ‘estimate’ on 6/30/2010: $900,000.00

    District requires minimum $200,000/month for ‘cash flow’ purposes in GF, therefore must maintain ‘healthy’ fund balance/reserve in between tax receipt months (Nov. & May) in order to operate - pay monthly expenses/bills

    We receive minimal amounts in ‘monthly’ state aid payments


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Our Financial Concerns

  • Our past funding formula (reorganization incentive) and the cessation of current

  • or future revenue sources ($315,000)

  • 2. Declining student enrollment (30+ next 3-4 years = $190,000)

  • 3. District’s operational structure (large geographic area)

  • What are the Options?

  • 1. Make further/deeper Budget cuts:

  • Close one elementary school/staff ($300,000)

  • Reduce additional secondary staff ($100,000)

  • Reduce additional classified staff ($50,000)

  • Reduce extra-curricular/academic programs ($50,000)

  • 2. Opt-Out of GF tax limitations (local decision)

  • If a school district cannot operate on that revenue generated by local effort

  • for general fund and revenue from state aid, the district

  • may “opt out” of general fund levy limitations.

  • Opting out is additional funds generated by increasing the local effort

  • over and above state-set tax limitations.


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General Opt-Out information.Funding/Calendar/Taxes Payable

  • Taxes based on a ‘calendar’ year: Jan 1st to Dec 31st

  • School district ‘fiscal’ calendar year: July 1 to June 30

    • 2010-2011 School Year is funded by 2nd half 2009-10 taxes and 1st half 2010-11 taxes.

    • Opt-out amount is for a year ‘forward’ (2011)

  • If applied, would receive one-half of an opt-out total amount during the 2010-2011 School Year (May/2011)

    @ $500,000.00, the District would receive only $250,000 for the 2010-11 fiscal School Year


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Additional Opt-Out information

  • District does not need to request that maximum amount each year. Depends upon annual need of budget

  • Opt-out funds are ‘locally generated’ and the state cannot penalize/take these dollars for excess fund balance purposes (^25%).

  • School Board determines the amount and length of years (1-10).

    Option: balancing effect with capital outlay by reducing this tax levy.


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General Fund opt-out calculations @ payable2010 valuations & levies

Do not yet know 2011 property valuations – receive notice in October of each year.


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School Board/District option

  • LowerCapital Outlay Levy ($1.60 to $1.00) to somewhat ‘balance’ the levy increase for General Fund Opt-Out.

    Additional tax increase from

    2010 to 2011 for $100,000 property @ $500,000

    (IF C.O. reduced by 0.60)

    Ag Land $19.00

    Homes $64.11 Businesses $205.00

    * cannot guarantee this will remain constant over time as future facilities and other major Capital Outlay needs will be necessary.


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If no opt-out

If we close one elementary school, could we still see a significant loss in our total student numbers?

* Keep in mind, schools are funded (through state formula) by the total student population. If district were to lose more kids, we would then be required to make further staff and program reductions. (revenue = expenditures)

A majority of the General Fund budget are ‘people costs’.

Schools are the largest employers within our communities (economic effects).


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Our product

  • The Agar-Blunt-Onida school district has received ‘Distinguished District’ recognition for the past five consecutive years based upon student achievement in annual state assessments of NCLB.

  • Significantly score above state averages on Dakota STEP scores. ACT scores at or above state averages.

    Blue Ribbon school recipient at Blunt Elementary

    Successful extra-curricular programs (sports and fine arts)

    Have achieved Adequate Yearly Progress since implementation of NCLB requirements.

    Have achieved both state and national accreditation status


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Our purposeThe Children!


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Conclusion

  • In order to maintain present educational standards and programs, an Opt-Out is necessary.

  • Board’s options (resolution) & levy balancing effect.

  • The district is committed to keeping operational costs minimal and effective. We strive to provide the best education for students at the lowest reasonable costs. Each year, the district would re-assess how much of the opt-out total would be necessary for annual and future fiscal stability.

  • What is our most important resource – the kids!


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Appendix

  • Other data & Information


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State Aid to DistrictsBoth districts have 300 students = same operational $ Need based upon state formula

  • District A

    Low property valuation

    = low ‘local effort’ from local property taxes.

    The revenue that cannot be raised locally for district ‘Need’

    = remainder is State Aid

    (sent to schools on a monthly proportioned basis)

  • District B(ABO)

    High property valuation

    = high ‘local effort’ from local property taxes.

    The district receives small amount of State Aid.

    *This district would receive a majority of operating revenue (local tax effort) only twice per year (May & Nov.)

    (Cash-Flow concerns)