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Your District May Be Headed for an Iceberg

Your District May Be Headed for an Iceberg. Don’t Ignore the Warnings. The Story of the Titanic. Image from griid.org. Presenter. Susan Barkley, Assistant Director susan.barkley@education.ky.gov Kentucky Department of Education Division of District Support 502.564.3930.

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Your District May Be Headed for an Iceberg

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  1. Your District May Be Headed for an Iceberg Don’t Ignore the Warnings

  2. The Story of the Titanic Image from griid.org

  3. Presenter Susan Barkley, Assistant Director susan.barkley@education.ky.gov Kentucky Department of Education Division of District Support 502.564.3930

  4. Kentucky School Districts

  5. Photo from accuweather.com

  6. The Warning Signs Fund Balance Revenues compared to expenditures Enrollment and attendance Staffing levels Tax rates Bonding capacity Using “Band Aids” Lack of information

  7. Our Icebergs INSOLVENCY BUDGET CRISIS DEFICIT NO BONDING CAPACITY Photo from cbc.ca

  8. Using Financial Data • Data already collected • Annual Financial Report and Balance Sheet data • Enrollment/attendance data • Staffing data COMPILE, COMBINE, COMPARE!

  9. Fund Balance • General Fund: Committed, Assigned, and Unassigned • Funds over which the Board has control • Amounts remaining after considering current obligations • Includes board-designated funds, outstanding purchase orders • Trend data is important

  10. Gee, that doesn’t look so bad…

  11. Without action, you’ll hit the iceberg in 2013-14 …until you look at 2011-12 compared to the three previous years!

  12. Revenues and Expenditures Is the district spending more than is received during the year? Include transfers Watch other funds! (food service, day care, construction) OVERSPENDING = REDUCTION IN FUND BALANCE

  13. Fund balance is decreasing & becomes deficit Overspending results in a hit to fund balance

  14. Enrollment/Attendance • Legislative funding is directly related to attendance • Attendance = Funding • What is the trend?

  15. ADM is decreasing Consolidation Staffing remained the same, despite a consolidation

  16. Staffing Levels Salaries & Benefits Everything Else! • Certified and Classified • Salaries and benefits are 85% of general fund expenditures (state average) • Legislative funding is directly related to attendance • Staffing level should be responsive to attendance level • Or other expenditures must be reduced

  17. To stay out of trouble, action must be taken

  18. Tax Rates/Assessments • Tax Rate • The rate for this year impacts EVERY future year

  19. Compensating rate produces same level of revenue as PY This doesn’t seem like much for a single year, but…

  20. Bonding Capacity Total principal and interest payments on bonds and leases (including KISTA) Compare debt to fund balance High debt ratio indicates financial weakness

  21. “Band Aids” • Redirecting funds • Capital Funds Request • Beware of soft money • ARRA and other short-lived grants • Pork barrel appropriations • When $ runs out, cuts must be made if no other funding source

  22. Changing Course • Look for ways to increase revenues • Tax rates • Additional grants • Look for ways to decrease expenditures • Efficiencies • Cut unnecessary spending • Are staffing levels appropriate for the enrollment?

  23. Changing Course Immediate action is necessary BUT Results take time State recommendations On-site visit State takeover

  24. Your Good Questions

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