Warsaw Schools Looks at 2014 Budget
July 28, 2016 at 4:25 p.m.
By David [email protected]
The $71,022,013 budget is 0.31 percent more than the adopted 2013 budget of $70,800,618.
At Monday’s regular monthly meeting, the board will be asked for permission to advertise the 2014 proposed budget. It then will be published in the Times-Union Tuesday and Sept. 3.
The budget’s public hearing is scheduled for noon Sept. 6 at the central office, with the official adoption set for Sept. 30 during the regular board meeting, Chief Financial Officer Kevin Scott told the board.
“We advertise conservatively to protect the district,” Scott assured. “The (Department of Local Government Finance) reviews and adjusts the final budget amounts. We do have an opportunity to respond and disagree with their calculations.”
The budget includes seven different funds – general, capital projects, debt service, pension debt, rainy day, transportation and bus replacement. Scott said the debt and pension debt funds are need-based and impacted by the property tax caps. The general, transportation and bus replacement funds are levy-based.
The transportation and bus replacement funds also are limited by a growth factor that is annually determined by the state. Scott said he was told that can be up to 5 percent. For this year, the growth factor was around 2.6 percent.
The CPF is a rate-capped fund.
To develop the budget, Scott said the current year’s budget is his starting point.
“Each year I capture 12 month actual experience as an additional reference point,” he said. “... To that, you incorporate any changes and new assumptions that you’re aware of.”
Another interesting thing about the process, he said, is, “if you inadvertently advertise low, too low of a tax rate, and you could have had higher, whatever you advertise in the newspaper, that’s what they’re going to hold you to when they look at your budget.”
That’s why, he said, he budgets conservatively on the higher end of a reasonable range. “And to make sure we advertise high enough tax rate, we use 85 percent of the current year’s certified assessed valuation, which for Warsaw Schools is 2 billion, 32 million and some odd dollars.”
Scott then reviewed each of the separate funds.
The proposed 2014 general fund is $48,374,371, an increase of 3.76 percent over the adopted 2013 budget of $46,621,761.
There are significant changes in funding this year, Scott said. New this year is that the state legislature tied the funding cycle to a fiscal year, July to June.
“When I look now at the funding formula online that the state puts out there for us to tinker with it, to try different scenarios, it only goes through June 2014. So, not only do we have to make some assumptions about what’s going to happen this school year, but what’s going to happen next school year. That’s a significant change,” Scott explained.
The funding per student in the general fund for Warsaw Community Schools also will increase from $5,480 to $5,706. Full-day kindergarten is now a component of the general fund and is estimated at $1,248,000.
The general fund includes employee salaries and benefits.
Staffing changes for the school corporation include shared costs with the Army for two JROTC instructors; adding preschool sections at Claypool and Leesburg elementaries; districtwide security services; a Performing Arts Center director and a human resources director.
Retirement costs include the teachers retirement rate and remains at 7.5 percent; there’s an increase in the number of retired teachers that are paid by WCS rather than the state ($350,000); and the Public Employee Retirement Fund rate has moved from 8.5 percent in 2012 to 11.2 percent in 2014. Prior to 1995, Scott said the state paid for teachers’ retirement, but since then the corporations are responsible.
Scott said health insurance will increase approximately $319,500, of which $200,000 is due to the Affordable Care Act. Board member Dan Metzger asked what that was as a percentage of what WCS pays now.
When Scott said it was 6 percent, Metzger said from his personal experience operating a business, “I think you’ll see that number a lot, lot higher.”
Scott asked Metzger if that should be bumped up, and Metzger responded, “I really do. I think you’re going to be shocked.”
As for utilities paid out of general fund, Scott said electric, water and sewer are up slightly, but gas is still down.
The 2014 capital projects fund is being proposed at $8,120,350, down 12.33 percent from the adopted 2013 CPF of $9,262,630.
The CPF includes $3,266,000 in technology; $1,206,562 in utilities; and $3,647,000 in all other areas such as maintenance, building general improvements, rentals and non-computer equipment purchases.
The proposed 2014 debt service is $8,652,310, down 1.49 percent from the adopted 2013 fund of $8,782,570; while the proposed 2014 pension debt is $542,735, down 0.69 percent from the adopted 2013 fund of $546,495.
Transportation fund for 2014 is being proposed at $3,365,011, up 7.61 percent from the adopted 2013 budget of $3,127,162. The 2014 budget includes increases for medical cost assumptions, wage increase assumptions, sub driver and aide costs and increases in PERF and Social Security.
Bus fuel is 22 percent of the transportation budget. It remains unchanged for 2014 at $750,000. The 2013 actual expense projection as of Scott’s figures for the meeting is $670,000.
The bus replacement fund for 2014 is being advertised at $667,416, down 30.48 percent from the adopted 2013 budget of $960,000. Scott said WCS will advertise to replace six conventional 66-passenger buses next year.
The rainy day fund for 2014 is being proposed at $1.3 million, down 13.33 percent from the adopted 2013 budget of $1.5 million.
After Scott reviewed the budget with the board, Superintendent Dr. Craig Hintz commented, “I want to thank Kevin for doing really a wonderful job year in and year out of protecting the fiscal integrity of the system. Knowing that one of the best things we have going for us right now is our increase in enrollment and that has really helped us on the revenue side of the house. The new programs that we have offered over the past few years, I think, have really helped us attract new families as Warsaw being their choice. I just know that we’re in such a much better position than many other school corporations in the state. There are a hundred other school corporations in the state that will not receive any new funding based on their particular situation. The funding formula generates no new money for them, so I want to thank Kevin.”[[In-content Ad]]
The $71,022,013 budget is 0.31 percent more than the adopted 2013 budget of $70,800,618.
At Monday’s regular monthly meeting, the board will be asked for permission to advertise the 2014 proposed budget. It then will be published in the Times-Union Tuesday and Sept. 3.
The budget’s public hearing is scheduled for noon Sept. 6 at the central office, with the official adoption set for Sept. 30 during the regular board meeting, Chief Financial Officer Kevin Scott told the board.
“We advertise conservatively to protect the district,” Scott assured. “The (Department of Local Government Finance) reviews and adjusts the final budget amounts. We do have an opportunity to respond and disagree with their calculations.”
The budget includes seven different funds – general, capital projects, debt service, pension debt, rainy day, transportation and bus replacement. Scott said the debt and pension debt funds are need-based and impacted by the property tax caps. The general, transportation and bus replacement funds are levy-based.
The transportation and bus replacement funds also are limited by a growth factor that is annually determined by the state. Scott said he was told that can be up to 5 percent. For this year, the growth factor was around 2.6 percent.
The CPF is a rate-capped fund.
To develop the budget, Scott said the current year’s budget is his starting point.
“Each year I capture 12 month actual experience as an additional reference point,” he said. “... To that, you incorporate any changes and new assumptions that you’re aware of.”
Another interesting thing about the process, he said, is, “if you inadvertently advertise low, too low of a tax rate, and you could have had higher, whatever you advertise in the newspaper, that’s what they’re going to hold you to when they look at your budget.”
That’s why, he said, he budgets conservatively on the higher end of a reasonable range. “And to make sure we advertise high enough tax rate, we use 85 percent of the current year’s certified assessed valuation, which for Warsaw Schools is 2 billion, 32 million and some odd dollars.”
Scott then reviewed each of the separate funds.
The proposed 2014 general fund is $48,374,371, an increase of 3.76 percent over the adopted 2013 budget of $46,621,761.
There are significant changes in funding this year, Scott said. New this year is that the state legislature tied the funding cycle to a fiscal year, July to June.
“When I look now at the funding formula online that the state puts out there for us to tinker with it, to try different scenarios, it only goes through June 2014. So, not only do we have to make some assumptions about what’s going to happen this school year, but what’s going to happen next school year. That’s a significant change,” Scott explained.
The funding per student in the general fund for Warsaw Community Schools also will increase from $5,480 to $5,706. Full-day kindergarten is now a component of the general fund and is estimated at $1,248,000.
The general fund includes employee salaries and benefits.
Staffing changes for the school corporation include shared costs with the Army for two JROTC instructors; adding preschool sections at Claypool and Leesburg elementaries; districtwide security services; a Performing Arts Center director and a human resources director.
Retirement costs include the teachers retirement rate and remains at 7.5 percent; there’s an increase in the number of retired teachers that are paid by WCS rather than the state ($350,000); and the Public Employee Retirement Fund rate has moved from 8.5 percent in 2012 to 11.2 percent in 2014. Prior to 1995, Scott said the state paid for teachers’ retirement, but since then the corporations are responsible.
Scott said health insurance will increase approximately $319,500, of which $200,000 is due to the Affordable Care Act. Board member Dan Metzger asked what that was as a percentage of what WCS pays now.
When Scott said it was 6 percent, Metzger said from his personal experience operating a business, “I think you’ll see that number a lot, lot higher.”
Scott asked Metzger if that should be bumped up, and Metzger responded, “I really do. I think you’re going to be shocked.”
As for utilities paid out of general fund, Scott said electric, water and sewer are up slightly, but gas is still down.
The 2014 capital projects fund is being proposed at $8,120,350, down 12.33 percent from the adopted 2013 CPF of $9,262,630.
The CPF includes $3,266,000 in technology; $1,206,562 in utilities; and $3,647,000 in all other areas such as maintenance, building general improvements, rentals and non-computer equipment purchases.
The proposed 2014 debt service is $8,652,310, down 1.49 percent from the adopted 2013 fund of $8,782,570; while the proposed 2014 pension debt is $542,735, down 0.69 percent from the adopted 2013 fund of $546,495.
Transportation fund for 2014 is being proposed at $3,365,011, up 7.61 percent from the adopted 2013 budget of $3,127,162. The 2014 budget includes increases for medical cost assumptions, wage increase assumptions, sub driver and aide costs and increases in PERF and Social Security.
Bus fuel is 22 percent of the transportation budget. It remains unchanged for 2014 at $750,000. The 2013 actual expense projection as of Scott’s figures for the meeting is $670,000.
The bus replacement fund for 2014 is being advertised at $667,416, down 30.48 percent from the adopted 2013 budget of $960,000. Scott said WCS will advertise to replace six conventional 66-passenger buses next year.
The rainy day fund for 2014 is being proposed at $1.3 million, down 13.33 percent from the adopted 2013 budget of $1.5 million.
After Scott reviewed the budget with the board, Superintendent Dr. Craig Hintz commented, “I want to thank Kevin for doing really a wonderful job year in and year out of protecting the fiscal integrity of the system. Knowing that one of the best things we have going for us right now is our increase in enrollment and that has really helped us on the revenue side of the house. The new programs that we have offered over the past few years, I think, have really helped us attract new families as Warsaw being their choice. I just know that we’re in such a much better position than many other school corporations in the state. There are a hundred other school corporations in the state that will not receive any new funding based on their particular situation. The funding formula generates no new money for them, so I want to thank Kevin.”[[In-content Ad]]
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