1. Assembly-Board Joint Worksession- KPBSD’s FY14 Budget
Dr. Steve Atwater, Superintendent
March 19, 2013

2. KPBSD’s FY14 Budget
Purpose of today’s worksession is to provide the Assembly with an overview of the District’s finances and specifically review FY14 budget considerations. Finally, District wants to review previous three years of fund balance.
District’s goal for FY14 is to maintain the whole. We want to keep existing programs and staffing levels.

3. Main Points to Consider for KPBSD’s FY14 Budget
KPBSD’s FY14 Budget has been introduced to school board- public meetings in February
Enrollment
FY13 8,892 (October count) up slightly from FY13 projection (8,871)
FY14 projected enrollment is 8,873, increase of 113 from today’s enrollment
FY14 Budgeted Revenue
Includes Governor’s one time funding increase ($1,741,904)
Includes no increase from the borough ($43,000,000)
Includes using $1,710,000 of health care fund balance
Staffing for FY14 is in motion- tenured contracts issued in March. Most non-tenured contracts on hold until funding levels are clear.
District would like the Assembly to commit a funding level to district sooner rather than later. Request to increase Borough’s contribution to $44,500,000 made in February

4. All Governmental Revenues and Expenditures
FY14 Preliminary Budget
Revenue:
General Fund
$ ,825,204
Includes Gov’s
increase
Other Special Revenue
8,455,000
Pupil Transportation
6,750,000
Food Service Fund
3,750,000
Total Governmental Funds Revenue:
$ ,780,204

5. Kenai Peninsula Borough School District
FY14 Preliminary General Fund Budget
Revenue
Local Effort
$43,000,000
29.29%
State Revenue
98,197,300
66.87%
State Revenue - One Time
1,741,904
1.19%
Federal Revenue
450,000
0.31%
Other Revenue
(Investment Earnings, E Rate, Rent)
1,726,000
1.18%
Allocation of Fund Balance - Self Insurance
1,710,000
1.16%
Allocation of Fund Balance - General
0.00%
Total Revenue Budget
$ 146,825,204
100.00%

6. FY14 Budgeted General Fund Revenue

7. The FY14 Preliminary General Fund Budget reflects:
Revenue
$145,115,204
(includes proposed $1,741,904 one-time funds)
Expenditures
149,391,564
(includes additional $541,489 in salaries/benefits)
Difference
(4,276,360)
Use of Fund Balance - Self Insurance
1,710,000
Remaining Deficit
($2,566,360)
Expenditure
FY14
% Of
FY13
FY12
Category
Budget
Total
Actual
Salaries and Benefits
$ 122,165,636
81.78%
$ 119,051,676
80.27%
$ 107,868,572
77.61%
Utilities
6,667,160
4.46%
5,976,385
4.03%
6,207,041
4.47%
In-Kind Services
9,193,414
6.15%
6.20%
9,492,737
6.83%
Discretionary Accounts
11,365,354
7.61%
14,099,193
9.51%
15,427,640
11.10%
$ 149,391,564
100.00%
$ 148,320,668
$ 138,995,990

9. Information on FY14 Budget Provided
FY14 Summary Info - KPBSD Board 1/14/13
FY14 Detailed Info - KPBSD Board 2/11/13
KPB Assembly & KPBSD Board 3/19/13
Board Approves Balanced Budget 4/1/13

10. FY14 General Fund Budget Assumptions
Expenditures
Existing staffing formulas used (Programmatic Staffing)
One Step on existing salary schedule
10% increase to employer share of health care
PRS & TRS On-Behalf payment increases
No transfer of funds to Transportation Fund
Retention of existing programs
Revenues
Enrollment projected conservatively
Final change to District Cost Factor implemented in FY13
No increase to Base Student Allocation
Including Governor’s one-time funding
Flat revenue from Borough

11. FY14 General Fund Budget Assumptions (continued)
Revenue & use of health fund balance $146,825,204
Expenditures & Transfers $149,391,564
Existing deficit ($2,566,360)
Board authorized maximum use of $1 million from Fund Balance

12. FY14 General Fund Budget What is still unknown?
Revenue
State- will there be more $ beyond Governor’s one time money ?
Borough- requested $1.5 million more, what will final amount be?
Expenditures
Negotiations -tentative agreement is reached
Amount of salary and benefit impact estimated, but not fully known at this time
At end of April, known numbers will determine what action needs to be taken

13. Four year history of Borough’s appropriation and in-kind totals

14. Trend of Sales Tax and Property Tax Funding for Schools
FY09
FY10
FY11
FY12
FY13 projected
FY14 requested
From Sales Tax
28,585,036
25,950,998
27,798,976
28,385,150
30,064,593
31,064,593
From Property Tax
12,561,909
17,032,378
14,789,159
14,865,985
12,935,407
13,435,407
Total Local Funds
41,146,945
42,983,376
42,588,135
43,251,135
43,000,000
44,500,000

15. KPB’s Local Contribution to Schools, Where Does It Come From?
FY06
FY07
FY08
FY09
FY10
FY11
FY12 estimated
FY13 projected
FY14 requested
Funding From Sales Tax
16,755,426
18,321,611
23,801,181
28,585,036
25,950,998
27,798,976
29,188,925
30,064,593
31,064,593
Funding From Property Tax
18,218,256
19,620,065
13,899,936
12,561,909
17,032,378
14,789,159
14,062,210
12,935,407
13,435,407

16. Fund Balance
Revenues received less expenditures and transfers equal fund balance usage or accumulation for a fiscal year.

17. Why is there a variance in the projected fund balance usage?
Budget is our best estimate 18 months before next fiscal year ends
Variances are expected
Budget is in motion until closed out at end of fiscal year
Example
KPBSD’s FY13 General Fund Budget was revised at the July 9, 2013 Board meeting to equal $146,637,793. Estimated use of fund balance $2,762,120
A 1% variance in expected revenues would equal a difference of $1,466,378.
A 2% variance in actual expenditures would result in the difference of $2,932,756.
At year-end, the combined effect of the actual revenue and expenditure changes determines if a usage or accumulation occurred for the fiscal year.

18. FY10 b. $1,235,796 less in utilities usage than budgeted
Predicted FB Usage = ($4,524,843)
Actual FB decrease = ($161,302)
Difference = $4,363,541
Reasons for Variance
a. $931,986 Interest Revenue in excess of budget
b. $1,235,796 less in utilities usage than budgeted
c. $1,396,941 less in salary/wages than budgeted
d. $495,880 less in salary related benefits
$4,060,603 total in big ticket variances

19. FY11 Predicted FB Usage = ($4,923,931) Actual FB increase = $2,355,677
Difference = $7,279,608
Reasons for Variance
a. $2,953,600 Intensive Needs funding increase
b. $889,250 Health cost accounting change
c. $1,468,811 Salary/Benefits Unfilled positions
d. $364,466 Curriculum orders not received
e. $1,167,804 Prof-Tech Contracted and Purchased Services

20. FY12 Predicted FB Usage = ($3,524,030)
Actual FB decrease = ($2,994,764)
Difference = $529,266
Reasons for Variance
a. $741,534 in unexpected Transportation funding from the State of Alaska

21. Questions?