The Edmond Sun

Education

November 12, 2012

Schools look at grim 2013 budget forecast

EDMOND — Edmond Board of Education members were told during their November meeting the district will be hitting a funding cliff from July 1, 2013, to June 30, 2015, as federal and state funds decrease.

“During this 24-month period we will either have to have revenue or absorb the loss. Without additional revenue expenditures are going to exceed the revenue we have,” said David Fraser, Edmond schools chief financial officer.

“2012 was a very good year,” Fraser said during the Monday night school board meeting.

With a beginning fund balance of $18.6 million, revenue coming to the district was $128 million, Fraser said. The approved budget (legal budget from Estimate of Needs) was $142.1 million and the Fund Balance Reserve/Contingency (the portion of the legal budget set aside for unanticipated expenditures and carryover fund balance) of $6.06 million with Expenditures Reserve (remaining available budget not spent or encumbered) $2.72 million. The ending fund balance is $13.16 million or 10.3 percent less than what the district started with.

District Financial Information

Fraser told board members that 2012-13 payroll compensation cost is projected at $126.5 million, an increase of $6.5 million above the 2011-12 payroll compensation cost of $120 million.

“Teachers’ salaries are roughly 95 percent of the district’s budget,” Fraser said.

Major increases in compensation include new personnel, $2.7 million; Workers’ Compensation, $284,000 and salary increases of $4.2 million.

Student enrollment as of Oct. 1, 2012, is 22,501 students, up 506 students from last year.

Full-day kindergarten added at six elementary schools in 2012-13 resulted in hiring 39 teachers at a cost of $1.8 million with the total cost of classroom materials and equipment $680,000. Department budget increases for 2012-13 were $425,000.

Key issues impacting Edmond Public Schools include training for a new Teacher Leader Effectiveness System, loss of federal funds of $4.3 million and Sequestration in 2014 will include a potential loss of $595,350. Sequestration is the cancellation of budgetary resources — an “automatic” form of spending cutback to deal with a federal budget deficit.

With the passage of State Question 758 and 766, Edmond schools will see a financial loss in coming years.

“SQ 758 lowers the cap on property valuation increases from 5 percent per year to 3 percent,” Fraser said. “The change will restrict growth of revenue collections within the General and Building fund and impact the district’s bonding capacity.

“State Question 766 would make all intangible property exempt from sales tax. If passed, the immediate loss would be $50 million in tax revenue to schools, career tech and county government.”  

With the passage of State Question No. 758, Fraser told board members  the district will be losing about $1 million in revenue during 2013.

Fraser said, “We need every penny because our funding is flat and we are looking at the possibility of federal funding being taken away.”

During the 2011-12 school year Fraser said 95.52 percent of money coming to the district went to salaries.

The Edmond Schools’ administrative cost for 2011 was 2.06 percent.

Based on 2011 financial data, Edmond Public Schools rank 502 out of 524 public schools based on per capita revenue (Total General Fund Revenue divided by Average Daily Membership).  

EPS is the 23rd worst funded district in Oklahoma. The per capita revenue for Edmond based on average daily student population of 21,248 is $5,728. The state average is $6,885.

“If Edmond was funded on the state average, the additional revenue to the district would be $24.6 million,” Fraser said.

Fraser said there is a substantial shift to local revenue because of a decline in state revenue.

“The budget is tight and payroll projections have to be spot on,” he added.

There is a little more than $5 million in the building fund and from that fund the district pays utilities, maintenance, custodial costs and assessment fees for property.

Fraser told board members the Child Nutrition fund is financially sound and they pay all of their bills through funds generated by the Child Nutrition program.

In 2011-12 $304,676 in severance benefits were paid to the 180 retiring teachers.

Superintendent David Goin said in the past four years the district’s student population has increased by 2,200 students.

“I am concerned that our salaries are not compatible with other salaries out of sate. We must invest in beginning salaries for our incoming teachers. Our best and brightest can get $10,000 to $15,000 more in the surrounding states,” Goin said. “Funding is not sufficient. Something must be done with teacher salaries. We are going the wrong way.”

In the Special Education program, Nancy Goosen reported the district employs 215 teacher assistants.

“Federal funding has never reached the 40 percent that was promised,” Goosen said. “The federal law to provide services for special education children has never come to pass and the district has had to fund the Individuals with Disabilities Education Act.

On a positive note, Fraser said the maintenance for the swimming pool is estimated to be about $50,000 per year instead of the $150,000 it was first estimated to be.

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