Parameters Used To Build 2006-07 Budget Forecast Model

February 14, 2006

The parameters listed below are being utilized within the context of the budget forecast model to project the district's revenue limit and revenue shortfall for the 2006-07 budget.

Current estimates project the revenue shortfall in 2006-07 will be $7.96 million.

Revenue

Revenue Limit Increase per Pupil: Per Statutes, the 2005-06 revenue limit formula per pupil allocation of $9,732.47 will be increased by the percent increase in the CPI from March 31, 2005 to March 31, 2006. An increase of 2.6% is being used for this forecast, which would make next year's allocation $9,987.41, an increase of $254.94 per student. (Per DPI projection).
September Enrollment: The enrollment projection model used by the district indicates a decrease in pre-K thru 12 enrollment of 151 students for 2006-07.
Student Fees: Student fee revenue of all types is assumed to be unchanged for 2006-07.
State Equalization Aid: Equalization Aid is assumed to decrease approximately $3.9 million (6.7%) for 2006-07.
State Categorical Aids: Categorical aids for libraries, transportation and bilingual programs is assumed to be unchanged for 2006-07.
Investment Income: Interest rates are assumed to increase .25% (1/4 of one percent) for 2006-07.
State Special Education Aid: A state reimbursement rate of 28% of eligible special education costs is assumed for 2006-07, (and is expected to decline by an additional 1% each subsequent year).
Other Revenue: Other forms of revenue are assumed to be unchanged for 2006-07.
High Cost EEN Program Aid: The budget includes $500,000 for state aid for high cost / low incidence programs. This aid was received the past two years under authority of the State Superintendent but is now provided by Statute.

Expenditures

Employee Salaries & Benefits: The teacher settlement of 3.98% is being used to project the salary and benefit increases as per the actual salary schedule. Other employee groups are reflected to increase as per their individual settlements. Within the overall projections, health and dental insurance costs are projected to increase 10% and 5% respectively.
Teacher Salary Horizontal Movement: Horizontal movement of teachers on the salary schedule is assumed to be $400,000 each year, based on historical averages.
Temporary Salaries & Benefits (Substitutes, Overtime, Etc.): Temporary salaries are being increased 3% and fringe benefits 5%.
Staffing: Staffing levels have been established per enrollment projections.
Natural Gas, Electricity, Sewer & Water: Based on discussions with representatives of utility suppliers, gas is assumed to increase 15%, electricity 10% and sewer and water 5% in 2006-07. The 2006-07 base is being adjusted by $303,000 to reflect the 2005-06 contingency.
Pupil Transportation: Pupil transportation costs are assumed to increase 7.7% (a base of 3% plus the fuel escalator impact). The cost of City services are expected to increase sub- tantially as well.
Other Non-Salary Objects: All other budget categories having a bearing on the projected revenue shortfall are assumed to increase by 4.1% for 2006-07, based on the November 2005 CPI annualized.
Special Education Costs: Per DPI changes, the portion of school psychologist and social worker time that is spent with REN students will be reclassified from Fund 27 to Fund 10. Also per DPI, the portion of nursing services and adaptive physical education teacher time spent serving EEN students will be reclassified from Fund 10 to Fund 27. The budget for state aid and interfund transfers will be adjusted as necessary.
Salary Savings: The salary savings account will be budgeted at $2,250,000 in 2006-07 and $2,000,000 each subsequent year.
General Fund Contingency: The budgeted contingency of $650,000 has been restored and assumes half of that amount will be absorbed each year by continuing expenses.
Retiring Teachers: It is assumed that 77 teachers will retire each year. The number of teachers and the savings are both based on the average of the previous five years. The cost of the resulting vacancies is based on Step 4 and Lane 4 of the salary schedule.
Open Enrollment: Open enrollment expenses and revenues are being estimated based on maintaining the ratio of incoming to outgoing students in 2005-06.
Maintenance: Maintenance revenue and expenditures reflect amounts authorized by taxpayers in the 2005 referendum.
Fund 80 Reserve: Fund 80 will have an unallocated reserve for continuing programs, with $300,000 being added each year for this purpose.

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