BOE GOAl 1 - Let's Look at Our Revenues

    On January 28, the Council Grove Republican ran a headline article regarding the report that I provided at the USD 417 BOE work session on January 27.This report covered primarily three topics.First was a report from the Kansas Association of School Boards that provided a five-year enrollment projection for the district.The second report focused on the state of the district Capital Outlay fund.The third report focused on expenditures for the 2012-13 school year.This included a detailed look at the general fund, supplemental general fund (LOB), and our food service fund.All of this data, and the reports given to the BOE at the December BOE meeting, can be found on the district website come the week of February 3.I would encourage all patrons to review this information so you are informed of our district’s finances.

            These reports are all part of a process to address BOE Goal 1.It is a review of our district’s fiscal situation.As most of you know, starting in 2008-09, state funding for public education was significantly reduced over a multi-year time frame.This reduction has remained in place even though the “Great Recession” ended a couple of years ago.And while the state is set to increase Base State Aid Per Pupil by $14 in 2014-15, this is little compensation for USD 417 considering the amount of aid cut by the state since 2008.The report given to the BOE in December focused not on what has been cut since 2008, but rather what has happened in our district since 2010.

            The report given in December focused on a review of revenue and enrollment.On the surface, at the time, the district budget would have shown everything to be fine. However, as you will see, there was a significant decline in enrollment that took place over two years for which the district is just now being impacted.Here is a review of the actual enrollment FTE for USD 417.

            There is a rule in school funding that you should understand because it impacts us right now.The rule, designed to allow for preparation for a declining enrollment, is that a school district can claim a Full Time Equivalency (FTE and used to count students enrollment) based on the current year FTE estimate, the prior year’s FTE, or a three-year average of FTE.So, in 2011-12, student FTE grew by 12 students.This was a false sign as the district’s FTE has been in a slow decline or holding steady for several years.As you see, looking at the above table, this increase allowed for an inflated FTE count for a two-year period of time.

            2012-13 saw a decline in student enrollment of 42 students yet, due to the rule regarding which figure to use for the FTE budget calculation, the budgeted FTE used was 745.So, as the 2013-14 school year came around, the protection of the rules in the funding formula for declining enrollment was such that we started to feel the declining enrollment of the prior year.We used the average FTE figure, which is a decline of 29 students.The actual decline is 41.4 students.So, we will feel more of this decline in the 2014-15 as well. The difference between the 2012-13 and 2013-14 budgets, in terms of dollars and including the district LOB, is as follows (this figure does not include special education state aide as this is pass through money):

    Our projection for loss of revenue for the 2014-15 school year is estimated to be between $51,000 and $70,000.So, over a two-year period of time, the loss to our budget stands to be between $259,000 and $278,000.By the way, the 2014-15-budget year estimated loss includes the state aide increasing by $14 per FTE.

    One last thing to keep in mind, this loss of revenue comes at a time when the district has seen increases in costs for property insurance, worker’ compensation insurance, Internet access charges, and soon the Affordable Care Act as health insurance laws change this year.All told, the loss of revenue for our district budget is substantial.So, use this as the basis for considering the information that you will read in part 2 of this series of on-going articles.

This information and more can be found on the district website at http://www.usd417.net