Higher trends for medical and dental claims payments are one concern, however, with the district having become self-insured
As Sarasota County Schools Superintendent Lori White prepares to present her tentative budget for the 2017 fiscal year on July 19, the School Board is expected to have more revenue in its unassigned fund balance — or “rainy day fund” — than it originally anticipated.
As Deputy Chief Financial Officer Al Weidner put it recently, “This year, we are going to end in the black.”
“Even blacker than [when] we started,” School Board Chair Shirley Brown pointed out.
Weidner originally had anticipated having to draw $1.5 million from the unassigned fund balance to fill in a revenue gap in the current budget, he reminded the board during its May 17 workshop. However, based on expenditure trends through April 30, he said, the unassigned fund balance should be $37,682,537 at the end of the current fiscal year, representing 9.17 percent of the district’s operating funds. Policy requires the School Board to keep an unassigned fund balance of at least 7.5 percent.
As for next year, one factor that has led to a decrease in projected expenditures is the retirement of teachers, Weidner and Chief Financial Officer Mitsi Corcoran told the board. Last year, Corcoran said, 250 educators retired, and newer teachers replacing them had lower salaries. Over the past two years, Corcoran noted, 480 teachers have retired.
“Our overall average [salary] is going down,” Weidner concurred, reminding the board that a change in policy also dictated that the district no longer provide longevity pay to any teacher hired after July 1, 2011.
Yet another factor related to lower projected expenditures in the next fiscal year, he pointed out, is the change in salaries reflected in the current budget as a result of the district’s negotiated agreement on Feb. 26 with the Sarasota Classified/Teachers Association (SC/TA).
One factor that staff is monitoring closely, Corcoran explained, is payout of medical and dental benefits. For the first three months of this year, she said, the district trend of payments on medical claims indicated about 86 percent of premiums would be spent by year’s end; at the same point last year, the trend put the figure at 76 percent. The dental claims were trending at the 90-percent mark for the first three months of this year, she added.
Weidner pointed out that the district is in its first year of being self-insured.
“We’re just going to keep monitoring it closely,” Corcoran added, noting that staff’s financial planning staff would ensure the district had a sufficient cushion to cover the claims.
The current budget
In his review of details relating to the current fiscal year budget, Weidner noted that the state is expected to provide the district an extra $286,026, because of the 142 extra students the district counted during its fourth calculation of enrollment for state finance purposes, which was in February.
Brown pointed out that the district recorded 484 more students at the opening of the school year than it had in August 2014, but the December count showed just 267 more. The latest count — taken on May 5 — recorded 466 more students than the district had last year, she added, asking Weidner whether those fluctuations were unusual.
“Right now, our trends are not showing what we have had in the past,” Weidner replied. Fore example, he continued, “It was surprising to see our incoming kindergarten [enrollment this school year] less than what it was in the prior year.” Conversely, he said, students from Charlotte and Manatee counties are continuing to enroll in Sarasota County schools, if space permits.
Still, he said, “I didn’t anticipate our February count to go up.”
In regard to the 2016-17 school year budget, Weidner explained that with the state projecting a property tax increase of slightly more than 7 percent, he has estimated the district’s property value to be $54,256,641,853. However, the preliminary estimate released last week by the Sarasota County Property Appraiser’s Office showed that value slightly higher: $54,381,405,211. (See the related story in this issue.)
Weidner reminded the board that the final property value number is due by July 1, though the June estimate “is pretty close” to the final figure each year.
Based on his estimate, Weidner projected that the Required Local Effort millage rate set by the state would decline by .293 for the district. The total millage rate for this year was 7.763.
Weidner also explained that during their conference committee work on the state budget in March, the Florida House and Senate set the base student allocation at $4,160, an increase of only $6 from the current figure.
Prior to the budget conference, he added, the House had put its number at $4,258, while the Senate had settled on $4,236 for the 2017 fiscal year. “We didn’t anticipate them coming in with a lower number [after the conference],” he added.
“They made a big show [of their plans for a $100 increase],” Brown responded.
“Correct,” Weidner told her, adding that the legislators did not seem to take the Consumer Price Index (CPI) into account when they set the base allocation, or if they did, they offered no explanation about how they factored it into the final number.
Weidner also explained that he had not built any salary increases into the FY17 budget for teachers and classified personnel, except for funds for performance-based payments required by the state.
The next round of negotiations with the SC/TA probably will begin in September, he said, after the new school year has begun and district staff has its first enrollment counts.
On one further note, Weidner pointed out that the district is expected to receive $52 million for its FY17 budget from the extra 1 mill tax that voters last approved in 2014. At its highest level — in 2006-07 — that tax brought in about $60 million, he said. In 2014-15, the figure was about $45 million.
Weidner pointed to the latest projection showing the district ending up with $443,206 in revenue at the end of the 2016-17 fiscal year after all expenses have been paid. The primary reason for is the revenue from that extra tax county voters have supported since 2002, he added.
The board will vote on the FY17 tentative budget after a public hearing on July 26, Weidner noted.