June 8, 2021 at 6:30 PM - Budget Committee

Description:  The purpose of this agenda item is to review the projected end of the year balance. Attached you will find an updated report from ForeCast5 that estimates the end of the year balance. The projected end of the year balance through March 31, 2021 was $2,738,984. The project end of the year balance through April 30, 2021 is $2,132,983.

Administration would like to discuss the topic of the annual Fund 73 contribution. Fund 73 is the Employee Benefit Trust Fund. We have held off on making the payment for 2020-2021 until the end of the fiscal year. The main reason for holding off the payment was to determine whether or not these funds would be needed for school reopening expenses. We would need to make this payment by July 31, 2021. Administration is seeking feedback from the committee on making this payment. There is a separate agenda item to review the updated actuarial report in conjunction with the annual Fund 73 contribution.

Description:  The purpose of this agenda item is to review the formal budget change process that will be presented to the School Board for approval in June. The budget change document is attached. 

All budget revisions are entered into the Skyward Financial System using the Skyward Budget Revision process. The budget revisions for 20-21 include: 

* pay increases approved after the budget was adopted at the end of October
* changes in grant allocations (both Fund 10 and 27)
* changes to the State of Wisconsin Library Aid (Fund 10)
* the Athletic Department, to reflect reduced gate receipts
* removal of in-person fee, which was eliminated after the November Referendum was approved
* the November 2020 Operational Referendum funds, to reflect the proper accounting functions where the funds were spent
* to move scholarship payments from Fund 72 to Fund 21
* to reflect Ripp Park Tennis Court payments approved by the School Board in May
* Fund 41 Capital Projects Fund to reflect the transfer of HVAC and plumbing costs from Fund 41 to the November 2020 Operational Referendum funds


All budget revisions will be presented to the School Board for approval at the June 14th School Board Meeting. 

Description:  The purpose of this agenda item is to discuss the topic of carryover funds for the buildings/departments. During the 2019-20 school year, buildings/departments were not allowed to carryover funds for activities that did not take place because of the school closure (i.e. transportation, spring sports, etc.). During the 2020-21 school year, many events/activities did not take place due to COVID19. At the April Budget Committee meeting, the Committee requested information from each building/department regarding potential use of carryover funds. This information was shared at the May Budget Committee meeting (see attached), and the Committee requested a recommendation on this topic from Administration for the June Budget Committee meeting. 

The average percentage of funds that was returned to the District during 2019-20 was 40%. Administration has provided examples of a 40% and 50% return as of April 30, 2021. Please note that the dollar amounts will be reduced due to expenditures for the months of May and June. Administration is recommending the 40% return option to be consistent with the prior fiscal year. Administration is seeking feedback from the Committee on this topic.

Description:  The purpose of this agenda item is to review the fund balance classifications. The School Board is annually required to approve fund balance accounts prior to the close of the fiscal year. I have attached the fund balance accounts that are currently being used.  Please let me know if you have any questions on the fund balance classifications.

Description:  The purpose of this agenda item is to discuss the next steps in the 2021-2022 budget process. Attached please find the budget timeline. Please note that the Second Draft of the Budget will be presented at the regular June Board Meeting.

Description:  The purpose of this agenda item is to provide an update on the legislative process for the 2021-23 State Budget. Administration will provide the most recent information at the meeting and will review how this information correlates to our 2021-22 budget planning process.

Description:  The purpose of this agenda item is to review the second draft of the budget for the 21-22 school year. I have attached the second draft of the budget for your review. Please note that the second draft of the budget is based on the following:
1. The $0/student increase in the per pupil categorical aid, with a $150/student increase in the revenue limit formula
2. An increase in the percentage of State Special Education Categorical Aid to 35%
3. The personnel cost line includes a salary increase of 3.06%, a 0% increase in dental insurance rates, and a 0% increase for health insurance rates
4. The capital maintenance projects are funded from Fund 41
5. The second draft includes an increase of .315 FTE approved at the May School Board meeting, as outlined on page 13 of the document. The second draft also includes an additional position for the English Language Learner program, which will be mostly funded from transfer of service funds. 
6. The second draft includes an update on the operational referendum funds, based on the positions/costs approved by the School Board at the May School Board meeting. 
7. All of the remaining budget requests have been placed on hold at this time

The changes between the first and second draft of the budget have been highlighted in yellow, and these changes will be reviewed by the administration at the meeting. 

The third draft of the budget in July will include:
1. Grant allocations
2. Staffing updates based on additional schedule changes, reallocation proposals or new positions
3. Updates to the Community Services budget (Fund 80)
4. Updates to the New Teacher program budget (Fund 99)
Please let me know if you have any questions on the second draft of the budget.

Description:  The first payroll of the 2021-22 fiscal year is July 15th. The employee groups receiving paychecks on July 15th include: Administrators/Admin Support, Administrative Assistants and Custodial/Maintenance. The School Board approved pay increases for all of these groups at the May Board meeting. Attached please find a pay increase document with both a $600 teacher point option and a $900 teacher point option. Both options result in a total salary and benefit increase that is higher than the funds that are currently allocated. Administration is recommending reallocating $143,442 from post employee benefits to salary increases. The $143,442 is a result of a decrease in the District's required contribution to our Fund 73. Please see the separate agenda item on this topic.

Administration will be requesting approval of the teacher points option at the July regular School Board meeting, so that the teacher salary can be finalized before their first payroll of the 2021-22 fiscal year. No action is required at this time. Administration is seeking feedback from the Budget Committee on the topic of reallocation of funds and the potential of reallocating additional funds for salary increases.

Description:  The purpose of this agenda item is to review the District's updated actuarial report and to request School Board feedback regarding the 2020-21 contribution to Fund 73, the post-employment benefit trust fund. Attached please find the updated actuarial report.

Great news! The District's net OPEB liability has changed from $4,613,712 to $3,759,765. The District's actuarially determined contribution changes from an annual payment of $587,108 to $443,666. Considering the projected end of the year balance in Fund 10, Administration is recommending a payment of $443,666 into the Fund 73 fund for the 2020-21 school year. Administration is also recommending reducing the 2021-22 budget from $587,108 to $443,666 and to reallocate these funds to teacher points increases.

Description:  The purpose of this agenda item is to review the Moody's credit report that was issued April 16, 2021. Moody's downgraded the District's credit rating from A1 to Aa2, which is a drop of 2 credit ratings. The two major reasons for the downgrade were the District's fund balance and cash flow. The School Board has purposely decreased the Fund 10 fund balance while increasing the Fund 41 fund balance. Attached please find the Moody's credit rating, the School Board policy on Fund 41, and a Fund 10/41 fund balance spreadsheet.

Administration is seeking feedback from the Budget Committee regarding a response to the Moody's credit rating. Our response could range from making no changes, all the way to eliminating the District Fund 41 account. As an example, the District could levy the Fund 41 funds into Fund 10 to build back the Fund 10 fund balance while expending the funds that we have accumulated in Fund 41. As another example, the District could decide to no longer front the cash for any facility projects like we did for both Warrior Stadium and the Soccer Stadium.

Description:  The Waunakee community approved an Operational Referendum in November of 2020 in the amount of $2,127,502. This Operational Referendum was a non-recurring referendum, for the years 2020-21 through 2025-26.  A non-recurring referendum means that the funds do not continue past 2025-26, unless a subsequent referendum is approved by the public.

Please see page 13 of the Second Draft of the Budget regarding the allocated and unallocated funds from the Operational Referendum. The allocated funds are a result of the School Board motions from the May Board meeting.

Description:  The purpose of this agenda item is to review the lease agreements for the 21-22 school year. I have attached the lease agreements for your review. 

The district currently has leases with the Wisconsin Youth Company (K-4 after-school program for school year), Dane County (1 office at Heritage Elementary School), and the New Teacher Project (office space at Heritage Elementary School). We are recommending approval of a summer lease for the Wisconsin Youth Company this summer.
 
The administrative recommendation is to approve all four leases at the current rates with the Wisconsin Youth Company lease changing from $2,600 to $2,700 per building as well for summer school, the Dane County lease continuing at $75 per month, and the New Teacher Project lease continuing at $300 per month. 

Description:  The purpose of this agenda item is to seek feedback from the Budget Committee regarding the draft Banking Request for Proposal. School Board Policy requires the distribution of a banking services RFP every five years. Attached you will find a draft of the Request for Proposal and a list of the banking institutions who will receive the Request for Proposal. Page 2 shares the timeline for the RFP process. Administration is seeking feedback from the Budget Committee prior to releasing the Request for Proposal.

Description:  The Budget Committee requested an update on the fundraising on Warrior Stadium and the Soccer Stadium. Attached please find a financial report on both projects. At the bottom of each report you can see the remaining balance owed by the fundraising groups. We have requested that WAEF provide the checking account balances for both fundraising groups to the District. The WAEF balance for football is $24,025.74 and the balance for soccer is $40,366.76. 

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