The Anoka-Hennepin School District will be a half-billion dollar organization in 2014-2015.
The school board is set to approve next year’s budget at its meeting June 30.
Chief Financial Officer Michelle Vargas crunched the numbers with the board in late May.
Revenues are projected to increase $27 million to $511.7 million, and expenditures will rise $19.2 million to $513.1 million.
A deficit requires dipping into the fund balance for nearly $1.4 million, leaving $154.8 million untouched.
Both revenues and expenditures in the general fund will increase, but expenditures less so with $7.5 million in board-approved cuts announced this January.
More than half of the necessary cuts were found in budget contingency monies. To make up $2 million, the district will lose 30 positions, mostly teachers on special assignment and teaching and learning specialists.
Superintendent Dennis Carlson sees this budget as a “low-water mark” and hopes the board will return money when it can, he said before the cuts were approved this winter.
Despite declining enrollment – the district forecasts the loss of 220 students next year – a $103 increase per pupil unit leaves Anoka-Hennepin with a $4.2 million increase in basic general education revenue, Vargas said. The district will receive $5,831 per pupil unit next year.
Anoka-Hennepin’s reliance on state funding increased 2 percent with the shift of $11 million from local levy to state aid.
“[It’s] revenue neutral to us, but not revenue neutral, or tax neutral, to our taxpayers,” Vargas said.
The board finalized the 2014 property tax levy Dec. 9.
The levy is set at just over $92 million, which is $6.5 million less than the property tax levy was in 2013.
Taxpayers might have seen even more savings had the alternative facilities levy not increased from $600,000 to more than $8 million. The funding is required to build additions on six elementary schools in preparation for all-day, everyday kindergarten.
All-day K will require adjustment in various district accounts, but overall, all-day, everyday kindergarten will be relatively cost neutral, Vargas said.
On average, salaries are up 2.5 percent, and health insurance costs have soared 10 percent, Vargas said.
Food service fund
With anticipated participation increases from both all-day, everyday kindergarten students and adults this fall, food service revenues and expenditures are projected to increase.
Revenues will increase 12 percent to nearly $19.4 million, and expenditures will increase 7 percent to almost $19.3 million.
Meal prices will not change, Vargas said.
Though state revenue brings in only 5 percent of the total revenue for the food service fund – almost half comes from local sales and 46 percent comes from the federal government – child nutrition will see a 42 percent increase in state support this year. The state will reimburse the district $.40 for each student who qualifies for a reduced-price lunch and dines at school. Those students will no longer be charged for their lunch, so savings for the district will be passed along to the kids, Vargas said.
Passed this Legislative session, kindergartners will be able to eat breakfast free of charge, but the district isn’t sure how many will do so and what the financial implications will be, Vargas said. Because the Legislation passed at the tail end of the session, it is not reflected in the budget going before the school board June 30. If each kindergartner ate breakfast every day, revenues could be close to $170,000, Vargas said.
Kitchen remodeling projects at two Coon Rapids schools, Morris Bye Elementary School and Coon Rapids Middle School, and a $370,000 increase in food purchasing account for most of the 7 percent expenditure increase.
Community service fund
Unlike other funds, the community service fund will see revenues and expenditures decrease with the loss of all-day, everyday kindergarten under its umbrella.
The community service budget is approximately $19 million.
The fund will lose $241,426 in revenue. Approximately $918,000 lost from all-day K fees will be offset by anticipated increases in Adventures Plus enrollment and increased funding for School Readiness programming.
At this time, the budget doesn’t include increased dollars out of the Legislative session for Early Childhood Family Education and School Readiness.
Expenditures are down $408,915, primarily because of the loss of all-day K.
Capital projects fund
A revenue transfer from the general fund will see an added $7.5 million, a 623 percent increase in revenue.
The spike will finance 10,000-12,000 square-foot additions at Franklin and Lincoln elementary schools in Anoka; Adams, Eisenhower and Sand Creek elementary schools in Coon Rapids; and Jefferson Elementary School in Blaine.
Construction is underway and is expected to conclude before school starts in the fall.
The capital projects fund balance will sit unchanged at nearly $1.2 million.
Debt service and trust funds
Anoka-Hennepin’s debt is disappearing.
Bond payments will dip $2.2 million from $22.7 million to $20.5 million.
“We’re very low debt, and we’ll be even lower next year when about $9 million drops off,” Vargas said.
In the trust fund, revenue will remain at $1.2 million with a projected market value increase of the OPEB trust account, according to Vargas.
Expenditures will decrease $750,000 to just under $1.3 million with reductions from retiree subsidies.
The balance of the OPEB trust will sit at $28.3 million, the district estimates.
“For all practical purposes in a budget this size, we are balanced – pretty close,” Board Chairman Tom Heidemann said.
By law, the board must approve a 2014-2015 budget by June 30.
Olivia Koester is at [email protected]