Budget Overview-Process and Discussion July 21, 2020
Enrollment • Estimate 20-21 Enrollment by FTE (full-time equivalency) • Assign basic education students to schools by grade • Estimate ALE (alternative learning education) • Estimate Running Start FTE • Estimate Open Doors/Dropout Reengagement FTE (EdCap) • Estimate the number of students in special programs – special education, career and technical education, English learners, highly capable, etc.
Certificated Instructional Staff (CIS) • Calculate certificated staff needed: • Classroom teachers • Librarians • Music/PE • Counselors/Psychologists • Special Education teachers, Nurses, LAP (learning assistance program), Title I (federal remediation program), Career and Technical Education, Highly Capable, English Learners, etc. Some staff allocations are district-determined based on enrollment and some staff allocations are determined by a collective bargaining agreement The state does not fund the entire cost of a CIS position
Certificated Administrative Staff (CAS) • Principals are generally assigned by student FTE at a school • Other Certificated Administrative Staff include department directors and assistant superintendents • The state does not fund the entire cost of a CAS position
Classified Staff • Some are enrollment driven – office staff, school support staff such as paraeducators • Other classified staffing is driven by facility needs – custodians, grounds, warehouse, maintenance • Food service and transportation are determined by program needs • Other classified staff are determined by functional needs – payroll, accounts payable, office support for CTE, etc. • The state does not fund the entire cost of a classified position and the number of positions funded is significantly less than needed
Wage Changes • Many employees are moved along the salary schedule based on an additional year of experience • Wages increases are applied in the budget if known by early June • If bargaining is not completed by early June, the budget team makes their best assumption • If the legislature has not determined IPD (implicit price deflator), the budget team makes their best assumption • Who is retiring or resigning? Will they be replaced by a newer or more senior employee?
Other Labor Hours • Substitutes • Additional hours • Overtime • Stipends, including coaches • Sick/Vacation cash outs • The state provides approximately 33% of our basic education substitute costs in teaching only. There is no additional funds for classified employees. The state does not provide funding for most other categories listed above.
Benefits • Health benefits assigned by staff full-time equivalency, usually expressed in hours • Substitutes and other part-time workers may be eligible for health benefits • Mandatory benefits (FICA, L&I, unemployment and retirement) are assigned to labor costs • Labor costs and benefits represent 87% of the general fund budget
MSOCs – Materials, Supplies and Operating Costs • The largest components of MSOCs are utilities, insurance, and payment for services, such as running start payments to college – shown as object 7 • Materials budgets are allocated to schools mostly by student FTE • Materials budgets are allocated to departments based on need and type • Half of the travel budget is for miles driven between schools for employees with split assignments • Capital outlay is a small percentage of the budget and the majority is for photocopiers • MSOCs account for 13% of the general fund budget
Revenues • If the legislature has completed their work by June we can estimate expected apportionment increases/(decreases) based on expected enrollment • In a “long” session, the legislature has been known to finish just before midnight on June 30 th . In that situation, estimates need to be made • Federal grant awards are usually known in June • Taxes can be estimated when we have voter authorization and the legislature has not changed the model • State funding, federal funding and property taxes comprise over 96% of expected revenues
Difference Between Revenues and Expenditures • The difference between revenues and expenditures is compared to the “budget impacts” worksheet • The budget impacts worksheet is updated continually until the first draft of the budget is complete • The budget impacts worksheet is based on estimates • Balancing – ensuring that outputs match expectations, evaluating against current year results, matching revenues and expenditures in grant funds, incorporating new data if time permits
Fund Balance • At the same time we’re projecting 20-21 revenues and expenditures, we’re evaluating the future results of 19-20 in order to determine the ending 19-20 fund balance • The estimated ending fund balance for 19-20 becomes the beginning, budgeted fund balance for 20-21 • Actual fund balance for 19-20 won’t be known until the 3 rd week of October • REMINDER: We budgeted ending fund balance for 19-20 to be $1.2M less than ending fund balance for 18-19. Actual ending fund balance at the close of 18-19 was $21,037,080, much higher than originally projected. • As projected expenditures increase, the amount of Unassigned to Minimum Fund Balance Policy should also increase by 4%
What Has Materially Changed Since Last Year’s Budget? • Enrollment is over budget by approximately 120 FTE in basic education and 40 in ALE (alternative learning education) – just under $1.5M • We did not pay a health care premium in December due to the conversion to the School Employees Benefits Board (SEBB) – approximately $2.7M • Property Taxes – After the fall collections, property taxes were lagging by $1.1M compared to the budgeted trend. The April 15 th deadline was moved. Property taxes were coming in over $2M short. On July 17, received notice that June collections came in at nearly $2M. Fund Balance will be revised again in the budget. • Coronavirus – the Great Unknown. Expenditures have decreased at a much faster rate than revenues. • This – and hundreds of smaller items – are contributing to a higher fund balance than planned.
20-21 Budget • Reminder: The budget is fixed as of a point in time. We weigh the impact of new information received compared to the need for budget stability. • We used one-time funding (Kaiser and Premera retention refunds) that are no longer available in 20-21. • We used transportation carryover in 19-20 that is no longer available. Transportation funding has also been significantly reduced. • We won’t have the SEBB “premium holiday.” • Projected property tax collections are increasing after several years of decreases (McCleary impact). • The re-opening school plan is not final. We’re still determining new or additional needs due to Coronavirus. The impact to the budget is difficult to determine. • The state is facing an estimated $8.8B shortfall in the next two biennia and impacts to school districts are unknown.
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