The Sedalia School District 200 Board of Education approved the 2014-15 budget during its meeting Monday after a presentation from Chief Financial Officer Harriet Wolfe.
The budget is for $46,974,146.77, pending any amendments throughout the year, and with numbers that large, trying to understand the budget is important, if a little intimidating. Wolfe sat down with the Democrat on Wednesday to explain some of the more important points in the upcoming budget.
Understanding the basics
School budgets operate under four separate funds: Fund 1 is for daily operations and paying support staff; Fund 2 is for teacher salaries; Fund 3 is for a general obligation bond (Sedalia 200 has never had one); and Fund 4 is for capital projects, such as new buildings or large projects more than $1,000.
“There’s an imaginary line here that you can’t cross with your money,” Wolfe said, referring to a line between Funds 1 and 2 and Funds 3 and 4. “If we had a tornado and all the roofs blew off, I can’t arbitrarily take money out of here and put it over here. It’s illegal to do that. I’m restricted on how much I can move from operating over to Fund 4.
“(Fund 4) is like a savings account. Once you take money out of it, it’s a little bit difficult to get it back in. Now because we have a levy here, we went to the voters in April of 2008 and received permission to build the new high school, we have to set a levy in Fund 4 to make the payments on the new high school.”
The Department of Elementary and Secondary Education allows districts to make one transfer, and DESE sends every district the figure they are not allowed to exceed with that transfer. Sedalia 200 will be making the maximum transfer, about $2.7 million, “because we are engaged in a couple of things,” Wolfe said. “Buying all new equipment for the stadium, finishing the downstairs classroom area (at Smith-Cotton High School), we are asphalting parking lots (at Parkview and Skyline elementaries), we’re fixing roofs. We’ve got a whole list of upkeep items that will have to come out of that, so that’s why we’re taking our maximum.”
Moving that $2.7 million won’t affect Funds 1 and 2 because the district has enough in reserves to sustain the funds after the transfer — in Wolfe’s words, the district has “a nice, healthy cushion.” If a district’s reserves fall below 8 percent, it will be considered a financially endangered district, but Sedalia 200’s reserves are well above the minimum.
“When I came to this district in 2003 our reserves were at 9 percent, so we were getting close,” Wolfe said. “Now they’re at about 50 percent. We’re in a good position that if our assessed valuation should drop for any reason, basically that says what we have in savings that could carry us through a tough time.”
Local revenues depend on the district’s assessed valuation. If the valuation goes down, the tax rate goes up, and vice versa. The district will find out its assessed valuation sometime in July, and Wolfe will soon begin working with the state auditor, who will give her the tax rate ceiling — how high they can go. Then a tax rate hearing will be held in August, so the tax rate can be set by Sept. 1, as required by law.
Planning the next year’s budget can be complicated, as 46 percent of the district’s revenue comes from the state funding formula, and Wolfe said the district may not find out until November how much money they can expect to receive.
“You really have to look at a whole bunch of different factors, and pay close attention to what’s going on with your attendance, as well as your exceptional population and then pay attention to what your final payment is, and we won’t receive it until the 20th or 21st of June,” Wolfe said. “…We’ve never received 100 percent of what we should by the formula, and I’m predicting we’ll receive 95.5 percent. To date we’ve received 93 percent but there may be some withholdings from the governor on this last payment.”
A slightly larger budget
The 2014-15 budget is slightly larger than the 2013-14 budget, but for good reason.
The student population in Sedalia 200 continues to grow, which in turn increases the number of needed teachers and staff. Superintendent Brad Pollitt told the Democrat after Monday’s meeting the district has added 400 students since 2010. Teachers will also be receiving a $900 raise to their base salary, about a 2 percent raise, Wolfe said. The support staff will receive an equivalent raise.
“That would account for the increase, and we’ve also added some staff members as our student population is sort of like a bulge in the python,” Wolfe said. “As it travels through, then we have to adjust teaching staff to accommodate that.
“It would seem the simple thing to do would be to take those teachers and move them along, of course that’s not the way it works, because when the bulge moves from elementary to middle school and junior high and high school, those teachers have different certifications. Particularly we keep an eye on core areas, so when the student population causes those classes to become overcrowded, then we add staff in those areas.”
The district is projecting a slightly smaller kindergarten class this year — just under 400, compared with the more than 400 in the last three classes — which Wolfe said “provides us a little relief.”
The district is also working to constantly work on maintenance projects, as Wolfe mentioned earlier. Those projects can have a big price tag, but they keep district buildings in good shape.
“We have a very proactive maintenance schedule,” Wolfe said. “I think there was a point in this district, before my time, when people felt like some of our buildings were being neglected or nobody was paying much attention to them, and that’s not the case now. We are very proactive about what’s the very next thing that needs to be fixed and let’s fix it. What do we need to do to provide for future expansion and let’s make sure we’re prepared for it.”