A proposed budget for the 2019-20 school year in the School District of Fort Atkinson was forwarded to the annual meeting by the board of education Thursday night.

Also, a levy to fund the spending plan will be submitted to electors for their approval at the annual meeting on Thursday, Aug. 15.

During their regular monthly meeting, board members heard Director of Business Services Jason Demerath outline the second draft of the 2019-20 School District of Fort Atkinson preliminary budget.

He said the process used to develop budgetary changes this year was meant to continue laying the groundwork for implementing the principles of the Smarter School Spending model from the Government Finance Officers Association, or GFOA.

“Our work within this model will continue well into the future with the hope of making the best utilization of our financial resources for many years to come,” Demerath informed the board.

He said the administrative team began the budgeting process in December and spent nearly six months considering the long-range financial projection, developing budget principles, the impact of the strategic plan, and researching and developing budget proposals and recommendations to bring forward for board of education consideration at the April meeting.

“Throughout that process, the team also looked at reallocation opportunities and how those recommendations would impact the long-range finances of the district,” Demerath said.

The director next looked at the projected 2019-20 revenue and the sources of those funds for the district. The district’s revenue, he said, is limited by the state-imposed revenue limit.

“Over the past several years, the state has allowed little to no increase to that revenue limit other than by a local district seeking approval to increase it through a referendum, as we did for the start of the 2017-18 school year,” Demerath said. “In lieu of revenue limit increases, the state shifted its philosophy to granting per-pupil state aid increases.

“Over the past few years, the state has granted a minimal revenue increase,” he added. “This area, along with the impact to overall revenue, is the only change from the presentation that you (board members) received last month.”

Since last month, the director said, the Legislature forwarded the biennial budget to Governor Tony Evers, who issued several line-item vetoes and then approved the budget.

“One of those vetoes increased the per-pupil categorical aid amount from the $25 increase proposed by the Legislature to an $88 increase for this coming year,” Demerath said. “This results in an approximately $174,000 revenue increase over what was presented last month. At this point, this is the only major impact of the new biennial budget that has been factored in, as further study is needed to determine what other minor impacts there might be of what ultimately was adopted.”

Looking at sources of revenue, he said, almost 93.5 percent of the district’s revenue comes from two main sources: state aid in its various forms and local taxes. Outside of that, he said, are open-enrollment payments from other districts, and other minor sources like grants and fees.

On the expense side of the budget, the business director briefly discussed some of the major factors influencing changes from the prior year’s budget, and how the revenue the district receives is spent.

In April, he said, the board of education made several decisions impacting the upcoming year’s budget.

“These included salary and wage increases as well as new positions and programs, and some one-time expenditures,” Demerath noted. “The salary and wage increases are included in the proposed budget as well as an overall 1 percent increase in health insurance premiums as a result of adding the new HSA (Health Savings Account) plan.”

Also, in April, he said, the board approved the addition of several positions in order to meet current student needs and implement the strategic plan.

“These included an elementary schedule change; a communications and community engagement specialist, and operational costs associated with that position; two part-time bilingual aides; an increase in behavioral and mental health counseling; a middle school special education teacher; a high school Family and Consumer Education teacher, and continued expansion of our compensation system through enhanced market value,” Demerath indicated. “Along with these personnel changes, the board approved the purchase of a universal screening software and data management software so staff will have access to high quality data to inform their educational practices. Also included in the budget were some staff reductions to partially offset these changes.”

The director said there also were a few one-time expenditures approved that are included in the 2019-20 proposed budget including equity training for staff, radon testing at the school buildings and a fixed asset onsite evaluation.

“In looking at the proposed expenses for the upcoming year, in our general operational fund, almost 70 percent is salaries and benefits, and when we add in the transfer to special education to cover salaries and benefits for those staff members, we reach almost 82 percent of our expenses,” Demerath pointed out. “Outside of that, the next-largest expenses are classified as purchased services which includes utilities, transportation, tuition and open enrollment, and maintenance. The remaining 4.5 percent of the budget is supplies, equipment, insurance, dues, fees and other miscellaneous expenses.”

To look at the expenses another way, he said, nearly half the budget is direct instruction.

“And when we include 4K (four-year-old kindergarten) payments, the special education transfer, pupil services, instructional staff services and school building administration, over three-quarters of our expenses are related to direct instruction and services in support of that instruction,” Demerath stated. “The next-largest expense category is general and business administration which again includes utilities, transportation, maintenance and facilities management, and district level administration.”

Combining the revenue and expense sides of the budget, the director then reviewed the overall summary and tax impact of the proposed 2019-20 school district budget. He said the district’s general fund, or fund 10, is its general operational fund.

“There are other funds for specific purposes, such as debt service, community service and food service, but the general fund is for all of our general operational activities,” Demerath explained. “In looking at our general fund budget, you can see that in 2018-19 we budgeted for a deficit of $631,660. In 2019-20 we are currently budgeting for a deficit of $844,899.”

This is a smaller deficit than the $1 million-plus presented last month due to the governor’s veto that increased per-pupil aid.

“Even with the additional positions to move our strategic plan forward, this budgeted deficit is nearly $1 million better than the almost $1.8 million deficit that was projected when we planned the current operational referendum,” Demerath pointed out.

In looking at the tax levy impact, the general fund tax levy is proposed to essentially stay the same, he said.

“As a result, it is being recommended to increase the debt service levy to defease, or pre-pay, debt,” Demerath noted. “This would save interest costs for the taxpayers and provide the district added flexibility in determining future tax levies.”

This recommendation, he said, was being made based on the projected levy rate for next year.

“In taking a closer look at the levy rate history and the projection for next year, even with the increase in the tax levy for debt payments it would be the same levy rate as 2018-19 and near our 10-year low,” Demerath said. “Keep in mind, though, that this tax levy is based on certain assumptions at this point and the factors that could increase or decrease these numbers are yet to be known.

“The major factors that could influence taxes are the amount of state aid we receive, our student count, the change in local property values and any increase in private school voucher payments for next year,” he added. “Depending on how the final tax levy plays out in October, the board could consider adjusting the proposed debt levy to manage the overall tax levy and levy rate accordingly.”

Lastly, the business director looked at the upcoming timeline as it relates to the School District of Fort Atkinson’s budget.

On Aug. 15, he said, the budget approved by the board Thursday evening will be presented to the electors at the annual meeting. On Sept. 20, the district will count its students for state aid and revenue limit purposes.

A month later, on Oct. 15, the state will certify the aid the district will receive for 2019-20.

“As a result of that state aid certification and the state-imposed revenue limit, the board can then determine the tax levy and must approve it on or before Nov. 1,” Demerath said. “Finally, that tax levy is then sent to each of our nine municipalities by Nov. 10, finalizing the annual budget process for 2019-20.”

Also Thursday, the board:

• Approved the agreement of a 2.44-percent Consumer Price Index pay increase with the Fort Atkinson Education Association for the 2019-20 contract year, contingent upon FEA ratification.

• Accepted the resignation request from David Kroeze, full-time Fort Atkinson High School mathematics teacher.

• Approved the appointment of Susan Goudreau, full-time high school Family and Consumer Science teacher.

• Approved the appointment of Carol Congdon for a limited-term full-time grade one position at Luther Elementary School, effective at the beginning of the coming school year through March 20, 2020 (end of the third quarter) with potential for extension through the end of the 2019-20 school year.

• Pursuant to state statutes, placed in effect the following academic standards in the School District of Fort Atkinson for the 2019-20 school year: Mathematics: Wisconsin Standards for Mathematics; Science: Wisconsin Standards for Science; Reading and Writing: Wisconsin Standards for English Language Arts; Geography and History: Wisconsin Standards for Social Studies.

• Adopted the textbook “Calculus for AP” for use in AP Calculus.

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