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Fundamentals of School Finance

Humboldt Unified School District #22

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PRESENTERS

Mrs. Cynthia Windham—HUSD Finance DirectorMs. Mariela Bean—Public Relations Director

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WHY ARE WE HERE?

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Presentation Objectives

Introduce concepts relative to:

• How does a district budget process begin?

• Once the budget is authorized, what are the limits placed by the State on

districts?

• What are the key elements of an Annual District Budget?

• What are traditional district expenses within the budget elements?

• What are the budget funding sources for Humboldt Unified School District?

• What about Bonds & Overrides?

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State Authorizes

Districts to Develop Budget

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Determining Budget LimitsBudget Covers One year-July 1- June 30

Number of Students in classrooms—based on average100-day count in previous fiscal year

# of Students (Group B) requiring special services—i.e. SPED, ELL, etc.

Miles students transported

State Determines Budget Limits

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%Change 4%   9%   8%   3%   .002%

**Basic Student

Level2929.34   3038.51   3172.7   3267.22   3332.56

Total Revenue

$17,427,419.94   $19,792,015.51   $22,276,227.87   $23,737,264.85   $24,263,132.98

New Money

$1,057,371.33   $2,364,595.58   $2,484,212,36   $1,461,036.99   $525,868.13

5949.27

6513.72

7021.227265.28 7280.63

0

1000

2000

3000

4000

5000

6000

7000

8000

FY 04/05 FY 05/06 FY 06/07 FY 07/08 FY 08/09

*Weighted student count = 1.158 for K-8 and 1.268 for Grades 9-12. Additional weights given for students with needs.

**BSL = Dollar amount of money District is funded per pupil.

Impact of Student Attendance(Weighted ADM – Group A Only)

*

****

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Transported . . . 3917 students within a 366 square-mile area

Annual Route Miles . . . 853,740 Corresponding Revenue . . . $2,435,413

Transportation Revenue

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KEY ELEMENTSOF A DISTRICT BUDGET

M&O

CAPITAL

BONDS

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HOW DOES EACH ELEMENT DIFFER?

M&O Spent on PEOPLE (salaries and benefits), supplies, services

Capital Spent on THINGS – examples include textbooks, technology, furniture, equipment, vehicles

BOND New SCHOOLS, improvement of existing BUILDINGS, buses

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--KEY BUDGET ELEMENT--MAINTENANCE & OPERATION

EXPENDITURES

2007-2008: $32,791,869

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07-08 HUSD MAINTENANCE & OPERATION EXPENDITURES

AFR: Annual Financial Report for FY 2007-2008

58.4%Classroom Expenses (includes Substitute Pay)

< 1%State Match-Food Svc. (Required)

1%Athletics / Co-Curricular

7.8%Transportation

12.8%Operations of

Plant

3.8%Central Services

5.4%SchoolAdmin

1.1%General Admin

2.2%Instructional Support

7.5%Student Support

2007-2008 Maintenance & Operating Expenditures$32,791,869

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BUDGET CATEGORY AMOUNT % OF TOTALClassroom Expenses: 58.4% -Teachers/Aides—Salaries & Benefits $18,216,030

-Substitutes $ 629,258 -Other (Supplies/Purchased Svc, etc.) $ 324,525

Student Support: 7.5% -Attendance / Social Work $ 383,837 -Guidance Counselors $ 368,626 -Nursing Services $ 510,375 -Psychologists $ 385,999 -Speech Pathologists $ 504,635 -Occupational / Physical Therapists $ 272,594 -Other Support Svcs $ 22,160

Instructional Services: 2.2% -Instruction / Curriculum Development $ 186,223 -Professional Development / Staff Training* $ 13,977 -Library $ 522,128

General Administration: 1.1% -Governing Board (includes Legal Svcs) $ 19,199 -District Office $ 329,735 *Majority of Professional Growth is Expended Through Prop 301 (CSF)

07-08 ITEMIZED M&O

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BUDGET CATEGORY (cont.) AMOUNT % OF TOTALSchool Administration: 5.4% -Principal’s Office $ 1,757,202

Central Services: 3.8% -Finance / Accounting Office $ 583,027 (Includes: Budgeting, Accounting, Payroll & Purchasing) -Human Resources / Benefits $ 195,754 -Technology Support $ 240,835 -Special Ed Support Svcs $ 145,215 -Other Central Services (Includes: Audit Svc., Adverting, Printing, etc) $ 74,099

Operations of Plant: 12.8% -Maintenance/Custodial/Grounds/Repairs $ 2,034,893 -Utilities (Electricity, Water, Natural Gas, Garbage)* $ 1,676,365 -Liability Insurance $ 397,503 - Security $ 79,191 Transportation** 7.8% -Bus Drivers, Mechanics, Other Staff $ 2,006,526 -Equipment Repair/Parts & Purch Svc $ 53,466 -Gasoline/Supplies $ 477,086 -Other Transportation Svcs $ 11,029 * Expenses for telephone utilities are charged to specific support function**Exceeded transportation revenue by $112,694 primarily due to increased fuel costs

07-08 ITEMIZED M&O-Cont.

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BUDGET CATEGORY (cont) AMOUNT % OF TOTAL

Athletics / Co-Curricular: $ 318,617 1% approx.

State Match – Food Service (Required) $ 51,758 < 1%

07-08 ITEMIZED M&O-Cont.

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Primary Budget Funding Sources

State Aid

Primary property taxes

Secondary property taxes

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Example: HUSD Funding Distribution

State Aid = 56%

Local Contribution = 44%

FY 2008-2009

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Grants Bonds Overrides Other—State tax credits, donations, etc.

ADDITIONAL FUNDING SOURCES

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Types

Title I; SPED; TITLE II A; Title IID; Title III (ELL); Reading First; Compensatory Education (ELL/FEP);Immigrant; SEI Reimbursement; Safe Schools, etc.

Key Elements

Very prescriptive and contain spending restrictions

CANNOT SUPPLANT (SUBSTITUTE) M&O & CAPITAL; CAN ONLY SUPPLEMENT!!!

GRANTS

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HUSD SUPPLEMENTAL POSITIONSPAID THROUGH GRANTS

(IF THESE POSITIONS WERE TO BE ELIMINATED, MONEY COULD NOT BE TRANSFERRED TO M&O)

GRANT SOURCE Instructional Specialists 2 FTE Title IIA Elementary Reading Coaches 2 FTE Reading First RF Data Coordinator 1.0 FTE Reading First Data Specialist 1.0 FTE Title IIA ELL Coach 5 hours @ weekTitle III ELL Data Specialist 6.5 hours @ week Title III Compensatory Ed Instructor .5 FTE Compensatory

Education Data Support .2 FTE Title IID Title I teachers and aides 28 FTEs Title I

GRANTS---Continued

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SPECIAL EDUCATION SERVICES ARE

REQUIRED BY LAW. THE ABSENCE OF GRANT FUNDING

FOR SPED POSITIONS WOULD REQUIRE ADDITIONAL DISTRICT M&O DOLLARS

SPECIAL ED GRANTS

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DEFINITION: Obligations sold upon approval of taxpayers during election

• Dollars expended MUST stay within the legal parameters of the bond, as presented to taxpayers

• CANNOT be used for District Maintenance and Operation expenses

BONDS

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DEFINITION: Voter authorization that allows a district to increase its budget up to 10% of its Revenue Control Limits. Special override election for academic achievement in grades K-3 may also be held, allowing an increase of up to 5% of a district’s RCL

CAN be used for M&O: i.e. teacher salaries, class size reduction, instructional programs, art, PE, etc.

PROS: Increased money for above purposes

CONS: Must go back to voters for renewalElection costs money to districtUnlikely to pass during difficult economic conditions

OVERRIDES

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OTHER SOURCES OF REVENUE

EXAMPLES Tax Credits Private Donations District Foundations Volunteer Human Resources Classroom Site Fund (301)—

Fluctuates based on state tax revenues

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OTHER SOURCES OF REVENUE

Authority for Funding Source for Funding

Funding Agency Outside Agencies / Entities

HUSD Voter Approved Secondary Tax

State of AZ State Aid Primary

Tax

GrantsTax Credits

Donations, other

(Capital)K-3 Override (5%)

M&O Override (10%)Capital Outlay Override

General Obligation Bonds

Soft CapitalUnrestricted Capital (CORL)

Maintenance and Operation

(w/o Overrides)

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LOOKING TOWARDSTHE FUTURE

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Times are Good When….

Enrollment grows Programs expand Salaries increase Districts have money to innovate

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Times are Challenging When ….

Enrollment declines-- HUSD projects its enrollment to decline by approx. 150 students in THE CURRENT YEAR--FY 2008-2009

Utilities go up & the revenue stream goes down-- The District utilities have risen 46 % since FY 04/05

-- District square footage has increased in FY 08/09 (More heating/cooling will be required)

State revenues are down-- The State of Arizona is projecting a revenue shortfall of

approximately $3 billion dollars for FY 2009-2010

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What We Know…..

Revenue/Expense Projections: FY 09/10--Loss of Revenue—ADM Decline $600,000 est @ 150 students

--Health Costs Will Rise $400,000 est @ 10%

--Utilities Will Increase &

Chg in Revenue Formula $100,000 minimum est

INITIAL ESTIMATED SHORTFALL TO HUSD $1.1 Million est

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What We Don’t Know…..

FOR 2009-10 Receive 2% from State? $485,000 + Sped/ELL ADM increase? $ +/- ? Teacher Experience Index? $ +/- ?(Last year the District received $394,801 in funding. This amount isrecalculated annually on a statewide average of all teachers in the State—therefore, may be adjusted plus or minus in FY 09/10)

FOR CURRENT YEAR Reduction of Current Budget $604,909(This is a State of Arizona Legislative Budget Limit issue, which mayaffect all districts in the State. Deadline for District notification is March 1, 2009)

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