Anoka-Hennepin School District board members adopted a nearly half-billion dollar budget at their June 24 meeting.
The fiscal year 2014 budget (money used for the 2013-14 school year) lists $493,895,579 in expenditures and $484,741,065 in revenue. Those numbers represent a 3 percent increase both in revenues and in expenditures, said Chief Financial Officer Michelle Vargas when she presented the budget.
The $9 million gap would be closed fund by fund (see below), since each fund is separate and do not cover each other, Vargas said.
The general fund budget shows expenditures of $430,075,532 and revenues of $422,858,534.
The revenue summary in the general fund shows slight increases in property taxes, state and other local revenues and no change in federal revenues.
“The state revenue is a combination of a $1.6 million general education revenue increase, $4.5 million compensatory increase, $1.3 million in other categorical increase and an increase of $7.3 million in Q Comp aid,” Vargas said.
In expenditures, the FY14 budget shows increases in salaries and benefits, a slight increase in purchased services, no change in supplies and a decrease in capital and other expenditures.
“Salaries include $8.3 million for Q Comp and $5.6 million in salary improvements,” Vargas said. Benefits include $1 million in trade readjustment allowances, a legislative addition of $1.6 million in Q Comp benefits and $6.1 million in benefit cost increases.
In the general fund, there is a $7.2 million gap of which $2.2 million is planned spend-down of dollars set aside for the board-approved strategic investments.
For the other $5 million in the shortfall, Vargas said that going into the legislative session, school board members decided “to risk a portion of our unassigned fund balance to preserve programs rather than going through a budget reduction process without knowing our funding.”
Back in January, the projected deficit was $12 million; that deficit ended at $5 million, Vargas said.
“We will reduce our unassigned fund balance to $38 million, or 8.9 percent of expenditures – well within board policy to maintain 5 percent,” she said.
The budget line item for capital and other expenditures includes a $2.5 million reduction for alternative facilities and $1.7 million in one-time capital strategic investments that will not reoccur, Vargas said.
In the general fund, there is a $7.2 million which includes $5 million in the “unassigned” line item and $2.2 million in “assigned, strategic investments.”
There is no change in the operating balance for all other line items in the general fund.
The food service fund has “a healthy balance” of $5.3 million, said Vargas, and there will be no meal price increases.
There is a $984,000 planned gap to spend the fund balance on capital improvements to Anoka-Hennepin’s serving areas.
“The food service fund will maintain a healthy fund balance at 29 percent of expenditures,” Vargas said.
The community service fund reflects a “very stable program” at $4.1 million and the capital projects fund is “still operating healthy” at $407,582, she said.
There is a $309,000 planned gap to spend fund balance to increase programming.
Planned projects in the capital projects fund for FY14 include replacing windows at Sandburg, completing a ventilation project at the Educational Service Center, resurfacing tennis courts and replacing 1960s-era cabinets at Coon Rapids High School.
“The 10-year plan totals $121 million that is prioritized for critical projects. We do keep our buildings in very good shape,” said Vargas.
In the debt service fund, revenue is increasing by $397,000 because of a debt excess reduction and a $60,000 increase in principal and interest payments.
That increase in payments, of course, means expenditures are increased and the debt service fund balance is projected to be $4.8 million.
Finally, Vargas said that revenue in the trust fund is projected to remain stable at $1.2 million for FY14.
Expenditures in that fund are expected to decrease by $160,000 due to reduced benefit payments. The fund balance is decreasing by $820,000 to $28.3 million.
The $820,000 gap in the trust fund is a spend down of the Other Post Employment Benefit (OPEB) Trust to offset the implicit rate subsidy in the operational funds – primarily the general fund.
Bonds were issued specifically, and by statute, to cover this expense, according to Vargas.
The projected balance of the trust fund at the end of FY14 is $25.4 million. The bonds were issued in the fall of 2009 and invested. The original bond amount invested was just over $26 million, Vargas said.
Although Vargas’ presentation and the board’s adoption of the FY14 budget was finished in just a matter of moments at the June 24 board meeting, board member Dr. Scott Wenzel assured the public, “We’ve been engaged in the budget process for many weeks, we’ve spent countless hours reviewing and examining the numbers. We take it very seriously.”
The full 122-page budget, complete with notations, information, comparisons, and background is available on the school district’s website at www.anoka.k12.mn.us.