During Edmond’s school board meeting Monday, Oct. 7, Chief Financial Officer Lori Smith presented board members with a preliminary budget for 2019-20. The budget runs from July 1, 2019, to June 30, 2020. The final budget will be approved by board members next month.
There are three funds — General Fund, Building Fund, and Child Nutrition fund. They are all separate funds, and the preliminary budget includes revenues and expenditures in all three funds. Child Nutrition costs are paid from revenue brought in from the sale of student meals, federal dollars, and interest from the monies in the fund balance reserve.
As of Oct. 1, enrollment for Edmond Public Schools totaled 25,620 students, Supt. Bret Towne said. This is up 339 students from last year, he added.
“We are seeing a little bit of a downward trend in student population growth,” Towne said.
Following the meeting Towne credited the district’s new Residency and Attendance Officer Mark Andrus for helping find non-resident students.
“About 100 of the students who showed up for classes were not legal residents,” Towne said.
“The appropriated general fund budget for 2019-20 is $200,675,108, the legal appropriation set by the Estimate of Needs. Revenue may change with a mid-year adjustment, but our overall spending authority will not,” CFO Smith said. The 2018-19 budget was $189,602,637, and the 2017-18 budget was $163,256,697.
“New revenue collections are projected to increase from local and county sources totaling $3,590,000, and increase from state and federal sources by $4,093,000 and $411,000, respectively,” Smith said. “Reimbursements are projected to decrease $348,000. The result is an overall projected revenue increase of $7,746,000.”
Local and county increases are essentially due to increased property taxes, Smith said. “The net valuation of the taxable property in the district increased $102 million or 5.1% to a taxable valuation of $2.097 billion,” Smith added.
The largest state revenue source is the Foundation and Salary Incentive Aid (“state aid”) which is projected using the preliminary state aid factor of $3,582.74 per weighted student and an estimated Weighted Average Daily Membership (WADM) of 38,442.76 based on an increase of 339 students.
Oct.1 is the “official audit day” for determining student counts which drive the district’s revenue for many of the state and federal programs.
This year a change in procedure by the State Department of Education will prevent EPS from including students with carryover free/reduced lunch applications from the prior year in the district’s economically disadvantaged student count. This will cause a significant decrease to WADM for funding.
Oct. 1 is also the date used when determining the employee count for the state flexible benefit health insurance allocation. The Flexible Benefit Allowance (FBA) will have a premium increase in January from $594.90 to $615.90 per month — a 3% increase.
Employee wages and benefits continue to comprise the largest portion of the expenditure budget. Total 2018-19 payroll cost was $159 million, 95% of the district’s total general fund expenditures. Total payroll cost for 2019-20 is projected to be $172.1 million (8.2% increase), and the percentage of payroll related costs to total expenditures is projected at 95.3%.
Last year, first-year teachers in Edmond earned $40,000. Combining the state funding for $1,220 teacher pay raise, plus additional funds allocated by the district for another $525, the district added $1,745 to the starting pay for first-year teachers, pushing it to $41,745. The minimum starting salary on the state schedule for 2019-2020 is unchanged at $36,601.
In addition to increasing the starting base pay, through agreement with EACT, the district will implement the following measures in 2019-20 to increase compensation for teachers:
• Augment the legislatively funded pay raise for certified staff who work more days than the standard 181-day contract;
• Provide the entire legislatively funded pay raise as base pay and add employee’s teacher retirement contributions as a district-paid benefit;
• Offer a step raise and other salary schedule adjustments;
• Increase credit for out-of-state-experience; and
• Remove step limit for retired teachers returning to teaching, allowing placement on the salary schedule at the step they were on when they retired.
The total cost of the certified compensation package over and above the funded pay increase is $1,976,000. The district also pays the entire retirement contribution for all of its employees.
During negotiations with the Support Employees of Edmond (SEE), the district added 25¢/hour raise for all support employees in addition to step advancement and other various salary adjustments. The total cost of the support compensation package is $1,220,000.
In all, the district provided an additional $3.2 million in employee compensation from operational funds during the summer negotiation process with both EACT and SEE. The district is able to add to employee compensation this year (of which the district did earlier in the yea) due to what they say is a solid fund balance, projected operational funding increases based on an increase in the state aid formula funding factor, enrollment growth, and continued conservative spending practices.
In addition to pay raises, the district approved 132.6 new positions at a projected cost of $5.6 million. New teaching positions include 40.3 elementary positions, 13.1 middle school positions, and 10.5 high school positions, as well as additional duties for a total of $3.4 million for teachers.
The building fund budget will be set at $17,595,656 for 2019-20.
“Revenue collections for 2019-20 are projected to be up $318,000, primarily from increased tax collections based on the 5.1% increase in property valuations,” Smith said. “Based on the trends in interest rates, there will likely be decreases in investment earnings from the prior year. Based on current rates, we are budgeting a 20% decrease in interest earnings in all funds, including the sinking fund interest which is transferred to the building fund.”
The 2019-20 budget includes a beginning fund balance of $6.4 million and an ending fund balance of $6.6 million (56.3%).
Changes to the building fund budget for 2019-20 include a $25,000 increase in custodial and $214,000 increase in maintenance budgets. The budgets in these areas have not kept pace with the additional district facilities in recent years; rather they were cut in several years in order for the building fund to assume costs that were previously paid in the general fund. There is also a $460,000 increase in insurance based on current premiums and a reserve for deductibles. The largest budget increase is $828,000 in utilities.
CHILD NUTRITION FUND
The child nutrition budget is set at $10,324,552. The child nutrition fund is expected to see revenue growth of $457,000 in 2019-20 over the prior year. In addition to the anticipation of five more serving days (which were short last year due to snow days), we also project increases due to the increase in breakfast and lunch prices. Overall, local revenue is projected to increase $246,000. Increases in federal reimbursement rates are expected to increase federal reimbursements by $196,000. Should there be snow days, the decrease in revenues will be offset partially by a decrease in expenditures.
The main categories of expense and their percentages of the child nutrition budget are: Food/Milk (37.3%), Payroll (51.0%), and Other Operating Expenses (11.7%). Payroll expense has become a larger percentage of total expenditures due to state mandated and district pay raises in the last two years.