Financial Planning and Budget Reductions for LPA
Recent staff reductions and Board meeting discussions have triggered staff and community discussions related to the financial condition of the District. I would like to accomplish three goals today. First, I hope to alleviate any concern that the District is in poor financial condition. Secondly, I want to explain the rationale for cost reductions, and finally I want to summarize the major steps Board members and administrators have taken to reduce costs.
The Lake Park Audubon School District has experienced financial deficits in its Operating Budget over the past three years. The Operating Budget deficit amount for 2016-17 was $18,358, $68,913 for 2015-2016, and $35,425 for 2014-2015. Even though the deficits are less than 1% for each year on an $8,000,000 budget; the Board, administrators, and department heads evaluated expenditures in an effort to eliminate the deficits.
The District does have a current fund balance of $453,705 that is available for use to cover deficits or unexpected expenditures. For financial security, the District should maintain a balance of at least that amount because there are factors that determine revenue that the District cannot control. The two most critical factors affecting school district revenue are State revenue levels and local enrollment.
For the current biennium, the State’s basic revenue formula provides increases of approximately $96,000 and $98,000 over the two-year period. That is only 1.2% of the District’s Operating Budget and there is no guarantee that increases will be provided in the next biennium.
Lake Park Audubon experienced recent enrollment growth that began in 2010 and revenue increased for the District due to that growth. However, we have not experienced the same level of enrollment growth over the last two years. During the years of enrollment growth, additional staff members were added to maintain low class sizes and provide additional services to our students. As our K-12 enrollment has stabilized, we need to evaluate class sizes and services.
Principals and department heads offered ideas for cost reduction and several have been implemented to curtail expenses. These cost saving efforts will have a favorable financial impact on the current year but larger reductions will be necessary for the District to remain stable in the future, especially since future State revenue and enrollment are uncertain.
Unfortunately, the reductions that will make a significant future impact to reducing costs involve the reduction of staff. After months of discussion and careful consideration, the Board has agreed to eliminate the Student Success Coordinator position and a Math teaching position at the high school. At the elementary, the 1st Grade (43 current Kindergarten students) will be reduced from three sections to two sections for 2018-19, a non-licensed staff member will be used to manage the Elementary Media Center and some reading interventions will be eliminated. Preschool reductions will include decreasing the ECFE/Pre-school Coordinator position from a full-time position to a .8 FTE position, eliminating the six hour/week coordinator’s assistant, and ECFE parent classes will be reduced from three classes to two.
These were difficult decisions to make. It is recognized that some workloads will become a little heavier and some services will be reduced or eliminated. However, the Board and administrators are confident that LPA will continue to offer great educational opportunities for the students in the future, just as they have done in the past.
(LCC – Budget Reductions – 4 2 18)