It could be said that the budget is a waiting game for the Scott County (USD 466) school district.
There have been no cuts in teaching staff and no programs eliminated.
And the total levy has even been reduced by .799 mills - from 63.066 mills a year ago to 62.267 in the proposed budget.
So what could go wrong?
State funding, which accounts for $6.1 million of the district’s $13.4 million budget, is still subject to money available to the Kansas Legislature. And, if current revenue trends don’t change, the legislature won’t have the money it anticipated when the budget was adopted last spring.
“We’ve been told to expect a cut (in state funding) at mid-year,” says Scott County Supt. Don Wells. “The question is how much?”
It could also be asked whether the state funding cuts will end with a single swing of the budget ax.
Until that time, the school district is sitting in sound financial position with nearly $3 million in various reserve funds to start the 2010-11 school year.
The lion’s share of those reserves - $1,342,000 - are held in the bond and interest fund which is earmarked for payments on the district’s building projects.
“This is money we don’t touch. When your (bond) payments are due, you want this money available,” emphasizes Wells. “Besides, you can’t use it for anything else.”
Next on the list is $544,482 being held in the contingency reserve fund - or savings account. This is an account which the state has allowed districts to establish in order to see them through the tough economy.
“We’ve been told by our auditor that we’re in a very enviable position compared to many districts,” Supt. Wells informed his board.
The board of education has made a commitment not to touch this fund except in the event of an emergency. The 2010-11 budget does not include any expenditure from the contingency reserve, which increased by $47,617 during the 2009-10 school year.
Depending on what the legislature does during the upcoming year, the contingency reserve could be used to cover cuts in state aid which would normally go towards salaries, utilities and “basically whatever it takes to keep our district operating,” Wells says.
The reserve guarantees the district won’t have to take any drastic action, such as teacher layoffs or other major budget cutting moves.
Local Option Budget
Likewise, the Local Option Budget (LOB), had a carryover of $258,000 at the conclusion of the 2009-10 budget year. The LOB is a local tax assessment meant to “supplement” funding received from the state. That’s why it is also referred to as the supplemental general fund.
The local assessment is 21.349 mills, which is down slightly from 22.144 mills a year ago. That can be attributed, in part, to an increase in the district’s valuation that climbed by nearly $4 million.
Unlike the general fund assessment of 20 mills, which goes to the state and is redistributed to Kansas school districts, the LOB remains within the local district. The maximum amount of money that can be generated through the LOB is 30 percent of the general fund without requiring a special election.
Like the majority of school districts in Kansas, the Scott County district has reached its maximum LOB assessment.
How crucial is the LOB to the district’s operations? The supplemental general line item in the 2010-11 budget amounts to just over $2 million.
Capital Outlay
The capital outlay fund has a carryover of almost $381,000 coming into the current school year. However, this is also one of those funds where there are restrictions on how the money can be spent.
Funds cannot be transferred from capital outlay for general expenditures such as salaries or utilities. They are restricted to building improvements, new construction, vehicles, etc.
This year’s capital outlay budget of $689,604 includes proposed purchases of a new bus and a Suburban to replace aging vehicles in the fleet.
Other expenses in this year’s budget include bleachers for the high school gym and tuck-pointing of the old section at SCHS.
In addition, one mill from the capital outlay - or about $80,000 - is dedicated for the purchase of computers.
“We’re also trying to increase our wireless capacity between buildings,” says Wells.
He said Netbooks - a small laptop computer - are about half the cost of a laptop and are popular with students. The district is looking at purchasing Netbooks and making them available to students.
District Expenses
Of course, when it comes to preparing the budget the item which grabs the spotlight year after year is salaries. Teacher salaries in the district amount to $5.979 million - or 52 percent of the $11.48 million budget.
Add $642,232 in salaries for student and instructional support staff (librarians, school nurse, para-professionals, teacher aides) and the overall expenditure increases another $642,000 - accounting for 58 percent of the budget.
After seeing an overall increase in salaries of 1.57 percent last year, teachers are waiting to see what the board will do this year. Wells offered no hint as to what the board has budgeted for salary increases, but did hope to have contract negotiations completed by Aug. 18.
Benefits are another big ticket item.
The district has budgeted $312,000 for health insurance this year, which is actually a slight reduction from last year. Blue Cross/Blue Shield has assured the district that the premium for a single plan for each of their employees will increase by just $1 per month.
The overall cost of health insurance has been reduced because of a couple of resignations and those positions not being filled.
Even though the district got a repreive on the rates this year, Wells knows that isn’t likely to be repeated. The trend is for health insurance costs to continue rising.
“The board has visited about capping our costs, and setting a limit on what we will pay for insurance,” says Wells. “The district has to control its costs in some manner.”
More At-Risk Students
The economy is being reflected in the number of at-risk students enrolled in the district. To be considered “at-risk” by the state, family income cannot exceed a certain level as determined by the state. That figure is “confidential” according to Scott City Elementary School Principal Shawn Roberts.
However, parents are informed at the time of enrollment should they inquire. The Federal Poverty Guideline (FPL) in 2008 for a family of four was $21,200.
Last year, the school district had 148 students who qualified for the free lunch program and were considered at-risk. The budget for at-risk programs is $603,726 in 2010-11 - an increase of nearly $100,000 from last year.
According to Wells, 38 percent of the students in this district are considered at-risk.
“I don’t see that the state has the money to continue funding at-risk programs at this level,” notes Wells.
He said the additional state funding a district receives because of at-risk students can only be used for programs that directly benefit those students.
“Essentially, it takes money out of the general fund that can benefit all students,” Well says.
Virtual Education
A new item appearing in the budget is $100,000 for “virtual education.” This is not additional spending, but money for the Scott County Learning Center which has been transferred from the general fund.
However, it could eventually lead to the establishment of a virtual school through the district that would be open to students other than those who meet guidelines for the Learning Center.
A few schools in the state are offering virtual classes for students who would prefer working from a computer in their home. Of course, that also opens up questions about eligibility for extra-curricular activities.
“We’ve been told there are two or three students in our district who are taking virtual classes being offered through another district,” says Wells. “It’s something we need to look at. Once size doesn’t fit all.”