DOUBLE SPRINGS - The Winston County Board of Education is projecting an increase in revenue for fiscal year 2020.
The board held the first of two planned hearings regarding the FY 2020 budget Tuesday, Aug. 27, at the board office in Double Springs. Chief School Financial Officer Andy McKay began his presentation by stating that the school system is in a much better financial position now that it was eight years ago when he made his first presentation as CSFO.
McKay noted that Alabama Code requires the school system to hold two public budget hearings prior to the school board adopting the budget.
"The purpose of our hearings is two-fold. First, they assist in our communication of financial information to the public. We want to be sure that before our budget is approved that we communicate certain information about the budget to the public. Second, we ask for input from the public into the budgeting process. A public school system is accountable to the people for how we utilize our financial resources, so it makes sense that the public is invited to be a part of this process," McKay said.
McKay's presentation shows that the Winston County school system is anticipating its revenue for FY 20 to be $28,487,545. This includes a significant increase of approximately 62 percent in state funding, which is anticipated to comprise $17,613,348 of the total revenue. McKay noted that the majority of this increase is due to a four percent raise teachers will receive in October. Other increases in the state portion of revenue will be found when it comes to transporation, in both operations and fleet renewal.
Federal revenues are anticipated to be $2,554,013. This amount will be approximately $7,500 less than in FY19, McKay noted. Most of the federal dollars come in the form of grants and are used to pay for not only some of the teachers within the system, but also a portion of some aides, assistants and administrators' salaries.
Local funding for the school system is anticipated to be $8,261,684, up approximately 29 percent from last year. Much of this funding comes through local taxes such as sales tax and ad valorem taxes.
The average daily membership for the school system, which equals an average of the number of students enrolled was 2,297.35 for FY19. This number is anticipated to be down for FY20 by at least 13 students. However, there is a concern that the ADM taken 20 days after Labor Day, which will determine the amount of money the state receives from the Foundation Program through the state, will be sigificantly lower, possibly as high as 62. Average daily membership numbers are important because they help determine budget projections for the next fiscal year, so any downturn in enrollment can affect a school system's budget adversely.
"Our budget for personnel will probably have to shrink for next year because of that," McKay said.
McKay noted that the Winston County School System has four First Class Pre-K classrooms - two in Addison, one in Meek and one in Lynn. These classrooms are funded through a grant totaling $355,912, which pays for four teachers and 2.63 aides. The rest of the aides' salaries come from the school system's general fund.
A new item the system is introducing for this school year, McKay noted, was classroom supply money loaded onto a card for teachers to use. With teachers receiving $600/unit, they can use the card to make purchases of classroom supplies now instead of having to submit paper purchase orders.
Switching to anticipated expenditures for FY20, McKay first reflected on some of the system's most significant costs. One of those is a pass-thru of funding from the system's general fund to the Child Nutrition Program to cover the cost of employee benefits and past raises. The FY20 anticipated pass-thru amount is $668,129.13.
Another expenditure many do not think about is the cost for substitutes when a faculty or staff member is absent. For FY19, the school system spent $188,000 to pay for substitutes, an amount that was down from FY18. Another expense is coaching and band supplements, anticipated at $226,000 for FY20.
The cost for water and electricity continue to increase for the school system. In FY18, the system budgeted for $657,226. For FY19, that amount increased to $663,686. For FY20, the system is budgeting these expenses at $697,000.
McKay noted that the three significant factors affecting the FY20 budget are the four percent raise that goes into effect Oct. 1. McKay explained that when the Alabama Legislature approved the raise, it only affected teachers paid through the the state's Foundation Program, which covers the majority of teachers within the system. However, for other teachers, as well as staff members such as maids, janitors, secretaries and bookkeepers, the system has to make up the difference so all teachers receive the raise. Declining enrollment is another factor. as is a stagnant local economy which is not seeing significant growth in taxes, which help support the system.
Expenditures for FY20 are anticipated to be at $28,206,497.27,with most of this coming from the four percent teacher raise. This is an increase of $887,556.60 over last year's budgeted expenditures.
On a bright note, McKay stated that the school system is anticipated to have $2,890,590.97 in its general fund on Sept. 30, 2020, which equals 1.63 months of operating expenditures in reserve. Under state law, school systems are required to have operating reserves of 1 month on hand at all times, as well as 2 months operating reserve for the Child Nutrition Program.
"Even though we are a small school system with limited financial resources, I am proud of what we have been able to accomplish," McKay said. He noted that every student in the system has a Google ChromeBook and improvements have been made to the system's bus fleet and facilities.
"I am confident that we will continue to achieve good things in the years despite our limited financial resources," McKay said.
McKay noted that the system's employees are the source of a lot of its pride.
"We could have all the financial resources in the world and still fail if it wasn't for our good employees who care about the job they do," McKay said.
The second budget hearing for the FY20 year will be Friday, Aug. 30, at 8 a.m. at the Winston County Board of Education office in Double Springs. To see the slides breaking down the proposed FY20 budget, click here.
See complete story in the Northwest Alabamian.