As long as I have been on the school board, finances have been a major concern. As the board looks to approve a long-range facilities plan, I think it important to take a look at the finances of the district.
In November the board received information on school finance. This included a handout on spending authority - ACSD School Board Mtg – 11-07-11 – School Finance Basics – Spending Authority
Regular Program Costs
Even with a 2% allowable growth rate (the increase in per pupil support), the reduction in the number of students results in bringing in $168, 757. The budget guarantee line shows a drop of $643,532. Putting these together, the net impact on the district’s regular program cost is a reduction of $474,775. (pg 6 of report)
Budget Guarantee
At a recent meeting, I asked the district’s CFO about the budget guarantee funds being provided to the district, she confirmed that the district will need to repay these funds. The sum of the two years worth of budget guarantee funds listed is $817,248.
To put that in perspective, using the FY13 projected per student cost of $6, 091, that would be the same as the support for over 134 students.
Unspent Authorized Budget
The board also received an updated Unspent Authorized Budget Report ( ACSD School Board Mtg – 11-07-11 – ACSD Unspent Authorized Budget Report ). The report carries with it a number of assumptions, including fixing the certified enrollment at 4,224.3 for FY13 through FY16, the state providing a 2% allowable growth rate all four years and the district working to pay back the budget guarantee starting in FY14.
With the assumptions in place, the unrestricted unspent authorized budget would be close to -$3,390,191 by FY16. This is not what WILL happen, just the projection if corrective action isn’t taken.
Settlement History
At the school board’s January 9, 2012 meeting, the superintendent presented information on negotiations. On the second page of the exhibit ( ACSD School Board Mtg – 01-09-12 – Exhibit I-3 – Board Learning Session – Negotiations Primer ) was a settlement history going back to the 1981-82 school year. (pg 2)
Over the some 30 years, the average increase in “new” money was 3.05%. One of the reasons the district continually seems to find itself struggling with funds is that the average increase in spending for teachers, support staff and administration all outpaced that growth: teachers: 4.67%, Support staff: 4.41% and administration 3.87%.
Because averaging tends to level things out, let’s look at the last 10 years or so:
| Year | Ames New Money | Ames Teachers % | Ames Support % | Ames Admin % |
| 2011-12 | -1.80% | 2.85% | 2.00% | 2.00% |
| 2010-11 | 2.40% | 3.84% | 3.40% | 2.50% |
| 2009-10 | 3.69% | 3.84% | 3.40% | 2.50% |
| 2008-09 | 4.67% | 4.72% | 4.30% | 4.00% |
| 2007-08 | 3.60% | 4.78% | 3.50% | 3.50% |
| 2006-07 | 2.60% | 4.15% | 3.60% | 3.60% |
| 2005-06 | -0.40% | 3.76% | 3.30% | 3.76% |
| 2004-05 | 1.00% | 3.75% | 5.00% | 2.39% |
| 2003-04 | 0.20% | 4.15% | 4.50% | 3.27% |
| 2002-03 | 0.00% | 3.40% | 4.50% | 2.27% |
| 2001-02 | 2.00% | 4.40% | 4.40% | 4.40% |
| Average | 1.63% | 3.97% | 3.81% | 3.11% |
Since 2001-02, the rate of “new” money is 1.63%. The percentages for all of the three other groups is – teachers: 3.97%, support staff: 3.81% and administration 3.11%. This puts the gap between growth in income and growth in personnel costs at about -2% a year.
This may not seem like a lot, 2% of $37,402,502 (FY10 salary & benefits listed in report) is $748,050. This equates to a little over 120 students at $6,091 per student (FY13 rate).
Closing Thoughts
For those wondering why the district is facing as much as over a million in cuts this coming budget cycle, it is a matter of increasing costs and income that is not keeping pace.
In the longer term, the CFO’s report, the settlement history, inflation for non-personnel costs all suggest the school board will need to keep a tight rein on finances for many years to come.
Dr. Dave
