We are about two weeks out from finalizing our school budget for the next school year, and I thought it might be interesting to have a look at the components that make up our budget. To see a summary, go to the 'About Us' page of our website and click on the Basic Financial Data tab. The summary document is included as item '2', and the link directly above is the total FY2026 budget presentation. This school budget summary shows 3 years of high level data: what was actually spent in FY2024, what we think we are going to spend in FY2025 (this is considered an estimate because we are still encumbering this fiscal year), and what we have budgeted in FY2026.
Each of these 3 columns are subdivided into numerous funds, the largest of which being the general, or operating fund. In the FY2025 school budget, we are utilizing 8 separate funds while the FY2026 school budget utilizes 7 separate funds. The reason we are using one less is because our high school construction project will be completed. Before we go too far, it is important to understand that, in the majority of cases, revenue from one fund cannot be utilized for expenditures in another. Funds used to purchase school buses, for example, cannot be used to pay employee salaries.
Today I want to zero in on two specific funds that are, for the most part are interchangeable in terms of allowable expenditures. While there are certain caveats, for the purpose of this discussion it isn't necessary to delve into those details. What I want to focus on instead is our facility expenditures, or those specific to our PPEL Fund (Physical Plant and Equipment Levy) which is a property tax levy; and our SAVE Fund, which is our sales tax revenue.
The top half of the table above is like any other budget you might see; it shows the revenue side of the ledger and runs the calculations for determining how much each funding stream will generate. As I mentioned, the PPEL is generated by property tax based on a set tax rate where the sales tax is generated based on, well sales tax revenue. But, it is distributed based on enrollment. At the far left, you will note the operative fiscal year. This illustrates how much was budgeted, where the second column illustrates how much was expended, followed by the remaining budget. Most important is the ending fund balance, which we anticipate will be around $1.38 million at the conclusion of the fiscal year.
Directly to the right, you will see what is budgeted for FY2026, which is the fiscal year that will begin on July 1. It is also important to try and look into the future to see what may happen roughly five years out, which would be the columns to the far right (FY2030). Admittedly, one could argue this is an academic exercise, but it does allow us to see what may be in store down the road, assuming our inputs are accurate. For this, we assume conservative revenue estimates and expenditures.
The color coding serves a purpose as well, as it helps to illustrate the type of expenditures that are being allocated to the fund. As the graphic suggests, anything in yellow is an annual appropriation that grows 2% per annum. The categories are pretty self-explanatory: technology covers hardware expenditures; primarily our Apple Computer lease. The transportation line item assumes we will purchase one school bus and one vehicle for the small feet annually, and maintenance is typically reserved for repairs that exceed $500. The line item 'contingency' is generally where emergency repairs are accounted, or in most recent cases classroom furniture.
Items highlighted in pink are related to our long term debt obligations. Not to be confused with the general obligation bonds, this is debt that is specific to revenue bonds. While this does include some of the high school construction, it also includes the bonds that were sold when we renovated the K-8 building. These costs are considered 'fixed' because they are not prone to an annual increase.
Finally, this leads us to those items highlighted in green. Those are projects that have been posed in previous fiscal years that fall outside the aforementioned categories. Once they are ready for execution, I recommend them for approval and the board can decide whether or not to move them forward. A primarily litmus test for affordability is the impact the project will have on the ending fund balance. My goal is to keep the ending fund balance above $1,000,000. If we can do so, I feel comfortable recommending approval to the school board. So, what are those projects?
Elementary Lockers: At the end of January, in my post, 'Growing Pains', I shared with you the challenges, both seen and unseen the went along with growing enrollment. This is one such area that needs to be addressed. According to our calculations, we are going to be short approximately 25 lockers a year for the next couple of years until we reach full capacity. This project calls for the installation of 100 lockers on the north side of the hallway that contains the elevator. This project was approved for completion over the summer.
Network Replacement: This is all the equipment that makes the internet and intranet work. Without it, we have no ability to communicate with the outside world (or even the inside world). It enables our bells system to function, the clocks to sync up correctly, the intercom system and emergency alert/tornado or fire alarm to work. Because of the rapid pace that technology evolves and internet speeds increase, this equipment is generally obsolete after about five years. This will be our 3rd generation network and it has been approved for replacement this summer as well. The good news is, as a governmental entity, we are eligible for eRate benefits that equate to a 50% discount on eligible expenses. This proposed project will replace all network switches and wireless access points. The project is valued at $128,308 and the district cost is $64,154!
Second Floor Carpet: The staff that live on the second floor have lobbied me for carpet upstairs for several years. My response has always been, maybe next year. It's not so much a comfort issue (although that is certainly part of it) as it is a noise issue. Whenever students move chairs across the floor, you can hear it in the library and 5th grade classrooms that are directly underneath them. This project will make the rooms downstairs quieter and the upstairs rooms more comfortable. The current ‘Little Pirates’ room will also have carpet installed as part of this project as it will become a special education classroom next year. This project will start as soon as school is out for the summer.
Auditorium Sound System: This is more of a 'coda' (see what I did there, music folks?) to the high school project. Last summer, as part of the high school renovation we replaced the lighting system in the auditorium. What was not addressed was the sound system, which is woefully inadequate for modern high school music and theatrical productions. It became even more evident once we experienced the equipment specified for the new gymnasium (sans microphones)! This proposed project will rectify that at a district cost of $45,771.
Kindergarten Restroom Renovation: I've saved the biggest for last! This project is actually scheduled to span two separate fiscal years since it is scheduled to begin right away when school dismisses for the summer and won't be completed until the second week of August. You will see that noted in the green shading under the FY2025 budget. Like the locker project mentioned above, this is related to growing enrollment. The restrooms in the kindergarten wing simply aren't adequate for the class sizes we are now experiencing. This project will relocate the maintenance shop and turn that space into a restroom, and convert the two restrooms across that hall to one large restroom. Once completed, we will double the capacity of the kindergarten restrooms. The project also calls for the replacement of all the floor tile in the kindergarten hallway and the replacement of classroom doors. You may remember, the kindergarten wing was remodeled as part of Phase I of the elementary renovation project. Subsequent phases included door replacement with the idea we would circle back to the kindergarten at some point. That time has arrived!
We'll continue this conversation next week with a peak at the largest fund in the school budget, the general fund. Following that, we'll examine the proposed property tax reform legislation that is currently being discussed in the legislature.
