South Kitsap School District Preliminary Budget July 17, 2013 Sandra Rotella SFO CPA Assistant Superintendent Business Operations

Budget Development Timeline November 2012: prior year financial status and enrollment impact on budget reviewed January-May: Citizen Budget Review Committee budget study and made recommendations to Board March: Collective bargaining began April: Leadership Budget Team made budget recommendations (affecting staffing) to Cabinet May 15: RIF notifications sent June 30: Governor signs State budget July 17: Preliminary budget presented to the Board DRAFT Preliminary Budget

The Process Begins Developing a budget is a year-round process November – Review the prior year final financial reports and current year events – Enrollment o District Budgeted $6.35 million for beginning reserves. $2.11 million was undesignated and planned to be spent as follows: –$1.6 million to meet on-going operating needs –$500K moved to Board Designated Reserve to restore reserve levels back to 3.0% o enrollment lower than budgeted- about 116 FTE for the year ($594K) DRAFT Preliminary Budget

Leadership Budget Team Sixteen member team formed in December to recommend budget expenditure reductions of $1.6M to $2.5M. The loss of revenue from declining student enrollment was not part of the work of this group. DRAFT Preliminary Budget

CBRC Budget Team Citizens Budget Review Committee (CBRC) studied one-third of the District’s budget 10 member committee focused on Transportation, District Support, Career & Technical Education, Curriculum, Instruction and Assessment Recommendations presented to Board May, 2013 DRAFT Preliminary Budget

Enrollment Enrollment projections are calculated by the demographer GreenGasaway Demographer’s data based on a single snapshot in time - October Data is converted to a ten-month average South Kitsap School District continues to have declining enrollment DRAFT Preliminary Budget

Enrollment (Continued) DRAFT Preliminary Budget

Actual vs. Budgeted Enrollment DRAFT Preliminary Budget

Student Enrollment Forecast (125 Fewer FTE for ) Grade Budget (Actual) (Budget) K ,3474,3194, ,1782,1622, ,3122,2432,242 Running Start Total9,328*9,212*9,087* DRAFT Preliminary Budget *Average Annual FTE

Impact of Recommendations and Enrollment Projections Staffing based on student enrollment projections and preferred staffing levels per negotiated contract o Previously, SKSD staffed at higher levels using reserves and local funds to enhance student learning. This is no longer feasible. o Approximately 34.7 certificated FTE were reduced due to decline in student enrollment. o Approximately 26.6 certificated Teacher FTE, 4.30 Administrative FTE and classified FTE were reduced to cover revenue shortfall. DRAFT Preliminary Budget

State Budget Highlights Certificated Instructional Allocation in High Poverty Schools K-1 student teacher ratio reduced From 24.1 to ( ) and ( ) Grade 2-3 ratio remains the same at Two schools qualify East Port Orchard Elementary Orchard Heights Elementary DRAFT Preliminary Budget

State Budget Highlights (continued) Salaries 1.9% salary cut restored to the Certificated Instructional Staff Salary Table for % and 3% funding cut restored to Classified and Administrative Certificated Staff models respectively $34,048 increased from $33,401 – Classified $59,419 increased from $57,636 – Administrative Certificated DRAFT Preliminary Budget

State Budget Highlights (continued) Fringe Benefits Employer Pension Contributions TRS – 10.39% increased from 8.05% ($129,940) PERS – 9.21% increased from 7.21% ($610) SERS – 9.82% increased from 7.59% ($22,650) Health Insurance Allocations $768/month DRAFT Preliminary Budget

State Budget Highlights (continued) Material, Supplies and Operating Costs (MSOC Allocations) $737.02/student increased from $554.57/student ($182.45/student) $781.72/student increased from $737.02/student ($44.70/student) CTE MSOC $1,399.30/student increased from $1,354.26/student ($45.04/student) CTE MSOC $1,420.29/student increased from $1,399.30/student ($20.99/student) DRAFT Preliminary Budget

State Budget Highlights (continued) Voluntary Full Day Kindergarten Program- fully funds 43.75% of WA highest poverty schools. None of the South Kitsap Schools are currently in this category. Transportation funding increases Continued bonus payments for National Board Certifications $5,090/year – no change Increase Learning Assistance Program funding hours to hours per week DRAFT Preliminary Budget

SKSD Fund Balance Forecast Actual Estimated Actual Preliminary Budget Beginning Fund Balance$ 7.76M$ 5.72M*$ 4.40M Revenue $ 87.97M$ 88.16M$ 95.80M Expenditures & Transfers $ 90.01M$ 89.48M$ 96.62M Ending Fund Balance$5.72M$ 4.40M$ 3.58M DRAFT Preliminary Budget * The Beginning Fund Balance is actual and matches the Ending Fund Balance from

General Fund Preliminary Budget - Estimate Beginning Reserves Carryover for Restricted Purposes (Grants, FNS)$200,000 Reserve for Inventory (value of items in warehouse)435,000 Assigned to Other Purposes (building carryover, etc.)1,398,596 Designated Board Reserve 2.5%2,204,065 Unassigned Fund Balance 168,440 Total Beginning Reserves$4,406, Activity Total Revenues, including $2M contingency95,796,601 Total Expenditures, including $2M contingency(95,274,510) Transfer to Debt Service Transfer to Capital Projects (129,458) (1,221,373) Excess/(Deficit) Revenue over Expenditures(828,740) Ending Reserves Reserve for Inventory (value of items in warehouse)$435,000 Designated Board Reserve 3.0%2,873,921 Assigned to Other Purposes (CBRC recommendation) Unassigned Fund Balance 100, ,440 Total Ending Reserves$3,577,361 DRAFT Preliminary Budget

Estimated Revenue by Source Preliminary Budget By SourceAmount Local Taxes (Property Taxes)$20,173,961 Local Support – Non Tax2,363,950 State – General Purpose (BEA)51,537,922 State – Special Purpose (Grants)13,191,307 Federal – Grants (Includes $2 Million contingency)8,524,461 Other Revenue5,000 Total Revenue$95,796,601 DRAFT Preliminary Budget

Changes in Revenue – Estimate Budget Revenue to Preliminary Budget By Source Budget compared to Local Taxes (Property Taxes)$1,652,354 Local Support Revenue (Fees)(134,624) State General (BEA, LEA)2,520,464 State – Special Purpose (Grants)2,049,004 Federal – Grants(553,868) Other Revenue0 Net Changes from to $5,533,330 DRAFT Preliminary Budget

Estimated Expenditures – by Program Preliminary Budget ProgramAmount Regular Instruction$49,672,961 Special Education13,409,433 Vocational Education – Instruction4,393,997 Skills Center – Instruction68,000 Compensatory Education – Instruction4,256,467 Other Instructional Programs (includes $2 Million contingency)2,221,366 Community Services Support Services Transfer to Debt Service Transfer to Capital Projects 669,329 20,582, ,458 1,221,373 Total Estimated Expenditures96,625,341 DRAFT Preliminary Budget

Program Budget Compared to Budget Regular Instruction$ 288,144 Special Education928,281 Vocational Education – Instruction170,719 Skills Center – Instruction68,000 Compensatory Education – Instruction385,576 Other Instructional Programs(371) Community Services Support Services Transfer to Debt Service Transfer to Capital Projects 138,102 15,248 (30,104) 1,221,373 Net Change from to $ 3,184,968 Changes in Expenditures – Estimate Budgeted Expenditures to Preliminary Budget

Other Funds

ASB Student Extra- Curricular Activities Debt Service Bond/Debt Payments Capital Projects Construction Land Transportation Vehicle Bus Purchase Beginning Fund Balance$ 729,633$ 1,482$1,112,508$ 348,376 Revenue 1,315, , ,500 Transfers in General Fund Capital Transfer Out0 129, ,013 1,221,373 0 (271,013) Expenditures 1,490, ,471 1,283, ,537 End Fund Balance$ 554,633$ 1,502$ 987,838$ 32,339 DRAFT Preliminary Budget

Continued Budget Development Refine detailed budget prior to adoption on August 28, 2013 o Community and District stakeholder meetings o Meet with Union Leadership o Independent review o Public Hearing on August 14, 2013 (tentative) DRAFT Preliminary Budget

Questions?

Thank You! Many people contribute to the budget development process. Human Resources Staff Leadership Team Cabinet Special Thanks TO Kelly Hawkins, Director of Business Services Amy Miller, Communications Specialist DRAFT Preliminary Budget