At its special session meeting on Thursday, the Marshfield R-I School Board addressed its 2019-2020 budget.
Marshfield R-I superintendent David Steward gave a review of the 2018-19 budget. The approved 18-19 budget had a planned deficit of $111,196. Steward said as they estimated the month of June, revenue exceeded projections by approximately $1,143,109. He added part of that was the extra half million dollars in bond refinancing. These two factors combined, according to Steward, mean that the district is about $600,000 ahead in revenue.
Expenditures were over expectations by $249,805, which was related to the refinancing of bonds. The payment on bonds and interests was $427,000 over what was budgeted, according to Steward, who explained that excess in expenditure is due to bond refinancing. Taking that piece out, he said they would be over a quarter of a million dollars under expectations on the actual expenditures.
According to Steward, the actual revenue versus expenses for 2018-19 were $582,108 in the black, which does not include bond expenditures from the April 2018 bond issue. Steward noted the district spent $4,528,069 in bond projects. He said they budgeted $3.6 million, but they amended it upwards some time in the middle of the year, so $4.5 million was what they actually spent this year.
Steward showed estimated fund balance changes (before capital projects fund transfer). He explained they started with a general fund of $6,942,421. Based on everything that he could project, he said they would end up with a balance of $8.3 Steward noted while that seems high, they want to consider a fund transfer to cover expenses for capital projects fund that is not taken out of the general operating fund. With the teachers, Steward said they usually have to transfer a little bit from the general fund to the teachers’ fund. Because of the half million dollars in additional revenue and tax anticipation notes they are doing, Steward noted the balance in debt service should rise this year. With capital projects where the bond money is, the school district started the year with $9,562,329 in balances. Steward said he included the real estate contract the school board approved in closed session, leaving a balance of $4.5 million, and the district is budgeted next year for $3.9 million in bond projects. That balance of actual money that is not bond money is getting low, but the district will perform a transfer. Steward said he wanted to wait until he could get accurate numbers before asking the school board to approve general operating fund and capital projects fund transfers.
According to Steward, last year, the district transferred $900,000 and the year before that $1.2 million. In addition to the maximum transfer, he said they put around $600,000 to $800,000 of budget money that flows in there. Steward said they can transfer up to $1.3 million, based on a formula that the Missouri Department of Elementary and Secondary Education puts out.
On the capital projects fund transfer and reserve percentage, Steward explained they started with a fund balance of 26.9% with a balance of $6.9 million in general funds. He said capital projects (with all of the bond money in it) sits at $9.5 million. If they do not transfer anything, Steward said the reserve percentage grows to 30.3%. The max transfer is $1.3 million, which brings the reserve percentage to 25.5% and puts the reserve and capital projects balance to $5.8 million. He noted the projected recommendation number is between the $900,000 and the $1.3 million once they get final expenses in. The target goal is to get that reserve percentage somewhere between 23% and 25% and hold it there. Steward explained they are trying to move some of that money over to capital projects, so that they will have it for building needs in the future.
Regarding the 2019-2020 revenue, Steward explained the local, county, state and federal revenues. On local revenue, he said he budgeted approximately a 1.9% increase in actual receipts from 2018-19. He has not considered new construction yet because he has not talked to the Webster County Assessor’s office regarding estimates. On the county, Steward explained it is a very limited budget and is less than half a million dollars, but he did see some increases in county revenue this year. He added he budgeted an increase of approximately $50,000. With state funding, Steward increased that approximately $200,000 over what was budgeted last year because of the state increase in the SAT and expectations for the Classroom Trust Fund. In the 2019-20 year, Steward said he is projecting $6,375 per weighted ADA, stating they are roughly at $3,000. Steward explained he has been much more conservative with Proposition C money and Classroom Trust Fund money because it is the most volatile of the state funds.
On the federal level, Steward said is projecting a decrease of about $100,000 from the 2018-19 actual, which is primarily due to the Perkins funds being sent directly to Ozarks Technical Community College for career center attendance. He noted many of the funds generated here are earmarked for specific, federally approved expenditures.
For the 2019-20 expenditures, Steward said there was about $120,000 decrease in the supply budget. This year, the district budgeted $175,000 in supplies split between the Marshfield Junior High School and Marshfield High School in career vocational money because it could not send students to OTC. Most of that money is being rolled out to meet textbook needs. For increases, Steward explained all that was done on salaries is one additional step, 35 cents per hour increase to classified, $750 increase to base teacher schedule and increase of 1 FTE, which causes salaries to go up about $600,000 across the district. Benefits are budgeted to go up about $400,000, due to the 5.3% increase in health insurance and increased retirement, social security and medicare costs due to increases in salary, according to Steward. In addition, he said they have a $200,000 increase in tuition for students to attend OTC.
Steward also went over instructional budget comparisons, departmental budget comparisons and maintenance and projects comparisons.