The Board of Education held a 90-minute learning session on the District's budget and school level expenditure reporting on Monday, Nov. 16.
Board president Annette Ashley presided over the meeting at the District Services Center, while other Board members participated remotely. The School Board has been meeting virtually since mid-March.
"I don't think it hurts to go over the foundational work again before we go deeper into the 2021-22 budget process,'' Assistant Superintendent of Operations Lori Ames said.
Ames reviewed the various funds available to school districts and noted in part due to MCPASD's size the District utilizes each fund category. She reminded members that only some funds impact the revenue limit.
Ames then reviewed how the revenue limit, which is the maximum amount a district can raise through tax levies for Fund 10, 38 and 41 as well as general state aid, is determined. She reminded members that the revenue limit does not impact school fees, categorical aid, federal and state grants, gate receipts and tax levies related to approved referendums. The key factors in revenue limit are a 3-year rolling average of student membership, the per student member increase as allowed by state statute and certain revenue limit exemptions, such as transfer of services and recurring referendums.
Districts can't calculate their revenue limit until October when have their Third Friday September enrollment membership, District equalized property valuation and general aid total. However, she noted it is important for districts to accurately predict their revenue limit accurately because the fiscal year starts July 1.
In 2020-21, MCPASD was allowed to increase its revenue limit increase by $4.1 million, with almost half of that due to the successful operational referendum in 2018. Most years, the biggest factors in revenue limit increases are per member increases by the state and enrollment increases.
The District has a revenue limit in 2020-21 of just more than $87 million, with $19.3 million in state aid and $67.9 million in taxes. If a district receives more state aid, Ames noted it means they need to tax less because their revenue limit does not change. She noted 96 percent of MCPASD's revenue in 2020-21 comes from taxes (66.6%) or state aid (29.8%).
Ames also briefly reviewed fund balance, noting it isn't simply cash but a snapshot taken once a year on June 30 and represents total assets minus total liabilities a district has. Districts try to keep an appropriate fund balance to avoid excessive short-term borrowing, accumulate sufficient assets and demonstrate financial stability, which impacts bond rating, she said.
As of June 30, the District's fund balance was about $28.8 million, while the actual cash on hand was less than $17 million. Ames noted expenditures dropped significantly due to COVID from March to June, which positively impacted MCPASD's fund balance.
Ames briefly reviewed the 2020-21 budget and noticed unusual shifts in typical revenue and expenses and a decrease in enrollment had a big impact. The compensation plan that the School Board approved in October resulted in fund deficit of $350,000. The District has enough one-time funds to cover the deficit for this budget it but will need to find revenue for next year.
One challenge with future budget is districts don't know what impact of COVID will have on the next state biennial budget. Education likely to be impacted not just for next two years but beyond, Ames said.
She noted the District had a decrease of 118 students from a year ago. If half of the students who left the District this year re-enroll next year, MCPASD's 3-year enrollment average would result in about an increase of $81,000 in the revenue limit. If the per member increase is $179 that adds another $1.3 million for the District, while transfer of services would provide another $30,000.
All of that would result in $1.43 million revenue limit increase. However, Director of Operations Erin Wheeler noted that 21-22 expenditures -- including inflationary increases of almost $600,000 for health benefits, utilities, substitutes and business insurances along with nearly $2 million to provide a 2.5 percent increase for all employees -- means expenses are significantly more than projected revenue increases.
Wheeler also reviewed the new school level expenditure reporting that the Wisconsin Department of Public Instruction is releasing later this week. The data is from the 2018-19 school year. She said districts will now need to report at the school level rather than just District wide. The reporting is a federal requirement and provides the average amount of money districts and schools are spending per pupil.
She reminded members that DPI has been releasing school report cards since 2012. There is a believe that some will look at what is being spent per pupil and compare with the results of schools within a district or around the state.
Wheeler went through charts showing per pupil spending for each MCPASD school. She also explained diverse student population and staff demographics, such as years of experience, play a big role in what a school spends per pupil. MCPASD resource allocation is based on student needs. She noted no two schools are alike and have different needs so resource allocation will be different.