Budget

The 2019-20 Proposed Budget is for the first year of the new fiscal biennium (2019-21). The District’s proposed budget is based on a State School Fund (SSF) appropriation of $9.0 billion in House Bill 5016. The $9.0 billion SSF does not adequately fund the District’s current service level (programs and services) and the needed investments in our future, including additional staffing and curriculum adoptions.

Major factors contributing to the budget development include an increase to PERS rates, continual increases to insurance premiums and COLA, uncertain or diminished Federal program allocations (IDEA, Title 1), and a decrease in other grant funded programs (Physical Education, Early Learning). Each of these factors may impact the District’s capacity to maintain and improve the quality of our teaching and learning.

Current challenges to the proposed budget for 2019-20 include the following:               

• Declining K-5 enrollment over the past five years, which may significantly affect future SSF allocations
• Increased numbers of students who are English Language Learners                
• Continued purchase of new buses to meet Federal requirements
• Continued reliance on the ending fund balance (EFB)
• Increased need for Special Education services and behavioral supports
• Continued investment in professional development for teachers and staff
• Postponed science, health and social studies textbook adoptions (the District is currently three/four years behind in the state's textbook adoption cycle)

The District's general fund expenditures are heavily weighted toward staffing.  Nearly 81% of the general fund budget is dedicated to personnel. The proposed budget has a full school calendar for students and staff. The District’s practice has been to provide a COLA to the salary schedule. This proposed budget would add a COLA for License staff based on the negotiated agreement, 2.5% for Classified, and similar increases to other employee groups.  Aside from the transfers and staff reductions due to the closure of Latham Elementary School, no further staff reductions are anticipated. 

With the passage of the May 2016 bond, a number of projects have been completed or are under way, including safety and security projects, technology upgrades, and deferred maintenance across the district.  The construction of the new Harrison Elementary and the remodel of the Early Learning Center were completed in August, 2018 and the buildings opened for the 2018-19 school year. The $6.3 million Warren H. Daugherty Aquatic Center modernization project began in October, 2018 with the addition of a $450,000 Warm Water Recreation Pool funded by local donations and the City of Cottage Grove. The Aquatic Center is expected to be completed in September, 2019.

The renovation of Lincoln Middle School’s vestibule and seismic project will begin in June, after the end of the school year, and will be completed in August. In addition, the Board of Directors voted to sell the old Harrison property in May, 2019 which may add to the funds available to consider additional bond priorities, such as a new HVAC system for Bohemia Elementary.

The District’s reserve 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 available for expenditures in next year's budget. The amount of funds available in the ending fund balance for 2018-19 is anticipated to be $2.1 million. 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 3.2% of the general fund operating budget. Recommended levels of contingency generally range from 5-8%. This level is at the low end of recommended percentages by most standards.      

“Children Come First” has been the heart of the District’s mission for years, and guides every decision, activity and investment in our students’ learning. The 2019-20 Proposed Budget reflects that investment and will continue to provide exceptional learning and quality teaching in our schools.

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

Sincerely, 

Larry Sullivan, PhD

Superintendent