1. South Kitsap School District 2013-2014 Preliminary Budget July 17, 2013 Sandra Rotella SFO CPA Assistant Superintendent Business Operations

2. 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 - 2013-14 Preliminary Budget

3. 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 2012-13 enrollment lower than budgeted- about 116 FTE for the year ($594K) DRAFT - 2013-14 Preliminary Budget

4. Leadership Budget Team Sixteen member team formed in December to recommend 2013-14 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 - 2013-14 Preliminary Budget

5. 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 - 2013-14 Preliminary Budget

6. 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 - 2013-14 Preliminary Budget

7. Enrollment (Continued) DRAFT - 2013-14 Preliminary Budget

8. Actual vs. Budgeted Enrollment DRAFT - 2013-14 Preliminary Budget

9. Student Enrollment Forecast (125 Fewer FTE for 2013-14) Grade 2012-13 Budget 2012-13 (Actual) 2013-14 (Budget) K 313330324 1-64,3474,3194,175 7-92,1782,1622,189 10-122,3122,2432,242 Running Start 178158157 Total9,328*9,212*9,087* DRAFT - 2013-14 Preliminary Budget *Average Annual FTE

10. 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 3.088 classified FTE were reduced to cover revenue shortfall. DRAFT - 2013-14 Preliminary Budget

11. State Budget Highlights Certificated Instructional Allocation in High Poverty Schools K-1 student teacher ratio reduced From 24.1 to 20.85 (2013-14) and 20.30 (2014-15) Grade 2-3 ratio remains the same at 24.10 Two schools qualify East Port Orchard Elementary Orchard Heights Elementary DRAFT - 2013-14 Preliminary Budget

12. State Budget Highlights (continued) Salaries 1.9% salary cut restored to the Certificated Instructional Staff Salary Table for 2013-14 1.9% 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 - 2013-14 Preliminary Budget

13. 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 2013-14 DRAFT - 2013-14 Preliminary Budget

14. State Budget Highlights (continued) Material, Supplies and Operating Costs (MSOC Allocations) $737.02/student increased from $554.57/student ($182.45/student) 13-14 $781.72/student increased from $737.02/student ($44.70/student) 14-15 CTE MSOC $1,399.30/student increased from $1,354.26/student ($45.04/student) 13-14 CTE MSOC $1,420.29/student increased from $1,399.30/student ($20.99/student) 14-15 DRAFT - 2013-14 Preliminary Budget

15. 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 1.5156 hours to 2.3975 hours per week DRAFT - 2013-14 Preliminary Budget

16. SKSD Fund Balance Forecast 2011-12 Actual 2012-13 Estimated Actual 2013-14 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 - 2013-14 Preliminary Budget * The Beginning Fund Balance is actual and matches the Ending Fund Balance from 2011-12

17. 2013-2014 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$4,406,101 2013-14 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 100,000 168,440 Total Ending Reserves$3,577,361 DRAFT - 2013-14 Preliminary Budget

18. Estimated Revenue by Source Preliminary Budget 2013-14 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 - 2013-14 Preliminary Budget

19. Changes in Revenue – Estimate Budget Revenue 2012-13 to Preliminary Budget 2013-14 By Source 2012-13 Budget compared to 2013-14 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 2012-13 to 2013-14$5,533,330 DRAFT - 2013-14 Preliminary Budget

20. Estimated Expenditures – by Program Preliminary Budget 2013-14 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 20,582,957 129,458 1,221,373 Total Estimated Expenditures96,625,341 DRAFT - 2013-14 Preliminary Budget

21. Program 2012-13 Budget Compared to 2013-14 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 2012-13 to 2013-14$ 3,184,968 Changes in Expenditures – Estimate Budgeted 2012-13 Expenditures to Preliminary Budget 2013-14

22. Other Funds

23. 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 1,315,000 20 208,500 463,500 Transfers in General Fund Capital Transfer Out0 129,458 271,013 1,221,373 0 (271,013) 000000 Expenditures 1,490,000 400,471 1,283,530 779,537 End Fund Balance$ 554,633$ 1,502$ 987,838$ 32,339 DRAFT - 2013-14 Preliminary Budget

24. 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 - 2013-14 Preliminary Budget

25. Questions?

26. 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 - 2013-14 Preliminary Budget