Like many organizations, both public and private, June 30th marks the end of the current fiscal year. We want to regularly share with our stakeholders the financial picture of the school district. Our school district’s priorities are student experiences and growth within a positive school-community. We are unable to achieve positive outcomes in these areas without responsible stewardship of our fiscal, human, and physical resources.
Last month, our treasurer Mr. Aaron Johnson, presented the updated Five-Year Forecast to the Fairbanks Local School District Board of Education. The forecast is a tool used by the state and local school districts to monitor the financial picture of the district. Earlier this year we wrote about the five-year forecast here: Five Year Forecast. Our financial picture has shifted throughout the course of the year. Overall, we continue to sit in a relatively positive position. However, due to the COVID-19 pandemic and subsequent economic downturn, we must closely monitor the changing conditions and adjust accordingly.
In our regular financial cycle, we expected to enter deficit spending during the 2020 or 2021 fiscal years. In anticipation of this financial position, we began to take steps to balance our revenues and expenditures. As with personal finances, we never want our revenues and expenditures to be significantly out of line with each other. Some of the steps taken are listed below:
- Collapse an Instructional Coaching position saving the school district $92,000.
- Continue to share Treasurer Services with Jonathan Alder School District saving roughly $60,000 per year.
- Complete an energy lighting project in the middle and high school that will annually save $13,000 in utility costs.
- Shift to a 6-year replacement cycle of Chromebooks estimated to save $100,000 over the next five years.
- Shift curriculum purchases to include digital textbooks saving about $5000 – $7000 per curriculum adoption.
- Fill open positions with new staff members who have five years of experience or less saving the district $44,000 next fiscal year.
- Phase in of administrative health insurance premiums saving an estimated $28,000 over the next five years.
Heading into March of 2020, our financial picture matched our earlier projections. On March 12, Governor DeWine closed all K-12 schools and the state began to close due to the COVID-19 pandemic. The economic impact felt across our community has had a ripple-effect into our school district. $300 million in state funding reductions to K-12 schools were announced in May. For Fairbanks, this translated to a $266,899 reduction. Since this announcement, our financial projections have changed. The updated Five-Year forecast assumes an additional 10% reduction from the state for FY’21. Currently, we project a $526,000 deficit for the next fiscal year.
Ultimately, we are a human-centered organization. Our staff, including teachers, support staff, and administrators, are our most important resources. We are taking steps in the short-term to ensure the continued quality of education for students, preserve as many full-time positions as possible, and to protect the long-term financial health of the district.
While we do have a healthy cash balance that will allow us to absorb some of this uncertainty, we cannot solely depend on savings to navigate this downturn. Given the uncertainty for distributions of income tax, property tax, and state funding, we have to begin to take steps to reduce this deficit to bring some balance between revenue and expenditures. Below are some of the steps we are recommending and taking for this fiscal year:
- Hiring freeze for vacant positions including a maintenance position saving an estimated $30,000
- Collapsing an aide position due to vacancy saving $18,000
- Recommending a reduction in extended days saving $15,000
- Reducing all department budgets by minimally 20%
- $65,000 in technology and curriculum reductions
In November, we will also have a renewal of the Permanent Improvement Levy on the ballot. The levy is a .25% income tax that provides funding to support the maintenance and improvements of our school buildings. This is a renewal and will not add additional taxes to our community. These funds support projects such as our middle school roof replacement, asbestos abatement, floor replacement, and other projects to help make sure our schools are ready for teaching and learning. We are very thankful for the community’s support of this levy.
This year has been full of uncertainties and change. Our financial landscape also faces uncertainties. Our community expects that the school district will continue to provide diverse student experiences and build a positive school-community, while navigating the financial challenges of the coming year. We will continue to work to balance efficiency and effectiveness in our financial decision making. Thank you for your continued support. If you have questions about our current operations, please do not hesitate to contact me at firstname.lastname@example.org.