The 2018-2019 Proposed Budget is in the second year of the fiscal biennium and based on the Governor’s Budget allocation of $8.2b.  Factors contributing to the budget challenge include increase to PERS rate, continual increases to insurance premiums, uncertain federal dollar allocations, and a biennium budget that was a 50/50 split compared the normal 49/51. Each of these factors causes further decrease in the funds available for the 18-19 year.

Major factors affecting the proposed budget for 2018-19 include the following:

• Enrollment is fairly steady for the first time in two years.
• The purchase of 3 new buses.                                                 
• This year’s kindergarten class is smaller than the last two years.                       
• A reduced ending fund balance for 2017-2018 and continued reliance on EFB       
• A 4.5% increase to the employer's PERS rate.
• We are currently two years behind in the state’s textbook adoption cycle and need to adopt science and health.

The district's general fund expenditures are heavily weighted toward staffing.  Nearly 85% of the district's general fund budget is dedicated to personnel.  The proposed budget has a full school calendar built in.  However, the district has cut 41 days over the past ten years which makes it vitally important to have a full school year.      

The district’s practice has been to provide a COLA to the salary schedule. This proposed budget provides a 2.1% COLA increase to all employee groups.  Layoffs of staff are not anticipated although some vacancies may go unfilled, thus increasing workloads and some class size. 

With the passage of the May 2016 bond, a number of projects are well under way.  The construction of the new Harrison Elementary is about 75% complete. Other projects also underway are safety and security, technology deferred maintenance projects, and the Early Learning Center.  The planning for the Pool modernization project should begin in the fall 2018.  The Deferred Maintenance Transfer to Fund 450 has been decreased, as many items will be handled through the bond fund which has allowed the fund to carryover money each year.

The District reserves or cash balance has been approached the same way as in previous budgets.  The district sets aside $1 million in a contingency fund to be used for catastrophic, unforeseen circumstances.  Anything above $1 million in cash reserves at the end of the school year is figured back into the expenditures of next year's budget.  The amount of funds available in the ending fund balance for 2017-18 is anticipated to be $2.1m.  Although this is not a good, long-term strategy, the district has been able to manage this approach.  The contingency amount of one million is approximately 3.4 percent of the general fund operating budget.  Recommended levels of contingency generally range from 5-10%.  This level is at the low end of recommended percentages by most standards.  The district continues to seek additional outside funding mostly in the way of grants.

It is South Lane School District's mission to have "Children Come First."  This budget continues to live that mission.  South Lane School District will do everything in its power to provide a high quality education for all South Lane students.

I would like to recognize and thank the cabinet staff at the district office for all their help with the budget and a special thanks to chief financial officer Phillip Scrima for his time and effort in putting this document together.            

Sincerely,

Kyle Tucker, Acting Superintendent