WELCOME Community Budget Meeting Monday, February 9, 2015 5:30-7:00 Trustee Johnny Walker, Board Budget Committee Chairperson
THANK YOU FOR BEING HERE! Please join us for future meetings: Thursday, February 19, 2015: • State & Federal Revenue Projections • Estimates of Cost Increases & Earmarks • Thursday, March 5, 2015: • Legislative Update • Thursday, March 19, 2015: • Budget Recommendations & Proposal • ALL 5:30-7:00, PGEC
TONIGHT’S AGENDA Reserve Presentation Brian Patrick, Director of Business Operations Questions and/or Comments Community Members Macro Budget Presentations: • District Level Budgetary Expenditures Brian Patrick, Director of Business Operations • K-8 Budgetary Expenditures Ruth Uecker, Asst. Supt. K-6 • 9-12 Budgetary Expenditures Tom Moore, Asst. Supt. 7-12 Questions and/or Comments Community Members Closing Remarks Trustee Johnny Walker, Board Budget Committee Chairperson
Understanding Reserves Presented by Brian Patrick February 9, 2015 Community Budget Meeting
Concepts and Applications
General Personal Expenses House Utilities Updates Loan Vehicles Insurance Taxes Children Clothing Food Technology Entertainment
School vs. Personal School Personal
School Funding Rules Budgeted Funds Transportation Retirement 4.36% Technology General Adult 11.14% 1.48% Fund Education 81.28% 0.77% Tuition .23% Flexibility .39% Building Reserve .36%
End of Fiscal Year • School – Governmental Accounting Requirements – Inventories converted to cash (Technology, Food, Warehouse) – Student Funds (Student Council, FFA, etc.) – Cooperative Agreements – Inter-local Technology Account – Encumbrances – money held to pay for an item that has been ordered, but has not arrived – Scholarship Funds – Endowment funds that are designated to only spend the interest generated
What are “Reserves”? (or ending Fund Balances) • A variety of funds or accounts that are outside the General Fund. • GFPS has 19 specific funds. (One less than last year)
General Fund Budget Reserve Amount • For cash flow purposes (Checkbook balance at the end of the month) • School does not receive revenue in July • General Fund Reserve Amount at the end of the year reduce taxes for the upcoming year. • Available uses under MCA 20-9-161 – Unanticipated Enrollment Increase – Destruction or impairment of school property by fire, flood, storm, riot, insurrection or act of God which renders property unfit for use – Judgment against the district issued by a court after the adoption of the budget
Reserves are categorized by law The reserve funds are categorized by the Governmental Accounting Standards Board (GASB) into 5 categories: – Non-spendable: Resources are not in spendable form or are legally required to remain intact • Examples: inventories - purchased food in freezers, warehouse items, technology items – Restricted : There are constraints on the fund that are EXTERNALLY imposed by Flexibility in Spending • A 3 rd party (grantor, contributor); • The State Constitution; or • Other enabling legislation – Committed : There are constraints on the fund that are INTERNALLY imposed by the highest level of authority (School Board) • General Fund Reserve approved by Board – Assigned: There are constraints on the fund as an INTERNAL expression of intent by the governing body or authorized official – Unassigned: No constraints • General Fund budget money at the end of the year that goes back to reduce taxes for the next budget year. Discussion tonight will focus on restricted and assigned reserves.
Reserves are “budgeted” or “not budgeted” • Budgeted funds: A budget for the fund is presented annually to the Board in August and the Board votes on those budgets. • The General Fund budget is also voted on at that time. • GFPS has 6 Board adopted reserve funds: • State sets % limits on all budgeted funds. 1. Transportation (20%) (Elem 20% HS 20%) 2. Retirement (20%) (Elem 12.83% HS 18.54%) County 3. Adult Education (35%) (Elem 35% HS 31.83%) 4. Technology (N/A) Fund Balance Re-appropriated 5. Flexibility Fund (N/A) Fund Balance Re-appropriated 6. Building Reserve (N/A) Fund Balance Re-appropriated
What role do they have in budgeting? • Designated reserve fund accounts play a critical role in sound financial management because, by law, school districts budget their costs one year at a time. – Budgeted funds provide funding for foreseeable obligations: • Examples: transportation, food service, pension and health care costs, etc. – Reserve funds provide funding for unforeseeable expenses • Examples: facility issues, drastic enrollment changes, etc. – Reserve funds provide funding for cash flow given the revenue mechanisms of school districts. They prevent the need to borrow money. (Timing of when the district receives the revenue) – Reserve funds are not recommended to be spent for on-going costs unless there is certainty that they will be replenished
General Fund Budget Cash Flow Revenue by Month 12000 10000 8000 6000 4000 2000 0 July Aug Sept Oct Nov Dec Jan Feb Mar April May June
General Fund Budget Cash Flow Expenditures by Month 10000 9000 8000 7000 6000 5000 4000 3000 2000 1000 0 July Aug Sept Oct Nov Dec Jan Feb Mar April May June
General Fund Budget Cash Flow Revenues and Expenditures by Month 12000 10000 8000 6000 4000 2000 0 July Aug Sept Oct Nov Dec Jan Feb Mar April May June
Federal Funds Operational Change • Change from request then spend • Now Spend then request (Cash flow)
19 Major District Funds: 1.Transportation 12. Traffic Education 2.Retirement 13. Inter-local Agreement 3.Adult Education 14. K-12 Data Systems 4.Technology 15. Rate Stabilization Reserve 5.Flexibility 16. Medicaid 6.Building Reserve 17. Indirect Cost 7.Impact Aid 18. RIDE 8.Food Service 19. Kindergarten (OTO) 9.Building 20. Athletic Revenue 10.Capital Improvement Enhancement (OTO) 11.Compensated Absence
Transportation • Budgeted = Board Adopted • Restricted = There are constraints on the fund that are EXTERNALLY imposed by legislation • Used to pay for transportation of students to and from school • Funded by a permissive levy set by the Board – 2014-2015 budget = $3,612,554 • Maximum reserve allowed by law = 20% – GFPS reserve = 20% • Fund balance on June 30, 2014 = $1,668,270 • Impacted by: fuel prices, contract increases, # of routes, homeless students
Retirement • Budgeted = Board Adopted • Restricted = There are constraints on the fund that are EXTERNALLY imposed by the state constitution and legislation • Used to pay GFPS share of social security, Medicare, TRS, PERS, & state unemployment tax • Funded by a permissive levy set by the Board. – 2014-2015 budget = $9,240,000 • Maximum reserve allowed by law = 20% – GFPS reserve = Elem 12.83% HS 18.54% – Not “swept” by the state • Fund balance on June 30, 2014 = $1,370,572 • Impacted by: # and kind of retirees and TRS/PERS contribution changes
AA Districts
Adult Education • Budgeted = Board Adopted • Restricted = There are constraints on the fund that are EXTERNALLY imposed by legislation • Used for providing education to adults. (MCA 20-7-702) An adult education program may provide both basic and secondary general education, career and technical education, vocational-technical education, American citizenship education, including courses in the English language and American history and government, or any other areas of instruction approved by the trustees. • Funded by a permissive levy set by the Board – 2014-2015 budget = $635,625 • Maximum reserve allowed by law = 35% – GFPS reserve = Elem 35% HS 31.83% • Fund balance on June 30, 2014 = $365,374 • Other: carried over to next year if not spent
Technology • Budgeted = Board Adopted • Restricted = There are constraints on the fund that are EXTERNALLY imposed by legislation • Used for the purchase, repair and maintenance of tech equipment & networks • Funded by a voted perpetual levy of $225,000 annually and E-Rate contributions. • Fund balance on June 30, 2014 = $1,049,493 • New law passed in 2013.
Technology Law Changes Current Levy New Levy • • Levies approved after July 1, 2013 Levies approved prior to July 1, • 2013 May not exceed 10 years • Can be based on all allowable costs • · Can be permanent or durational listed in the statute (equipment, • · Annual levy cannot exceed 20% cloud storage, training, etc.) of the original cost of equipment • Districts with an existing perpetual owned by the district levy can • – Ask for an increase in the amount of · Amount levied over time cannot the levy to cover cloud computing exceed 150% of the original cost and training, and/or of the equipment – Seek relief from tracking depreciation under existing levy • · $$ can be used for equipment, – Can propose a duration for each, not network access and training of to exceed 10 years school personnel
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