Lawrence school district could see up to $9M more next year from cuts, state money and taxes, but expenses are on the rise

photo by: USD 497 screengrab

The Lawrence school board convenes for its meeting on June 12, 2023, at district offices, 110 McDonald Dr. Board member GR Gordon-Ross participated virtually.

The Lawrence school district will have about $7.8 million more in funding for the upcoming school year — about half from budget cuts and half from additional state funding — with the possibility of adding another $1.2 million to that figure. Coming months will see just how district leadership will spend those new funds.

The Lawrence school board received an update on district finances as part of its meeting Monday in preparation for its upcoming budget process, where board leaders will decide how to divide the additional funds among employee raises, anticipated cost increases and the district’s contingency or savings funds.

Cynde Frick, the district’s executive director of finance, said the additional state funding, which is equal to $4 million, represented a notable increase.

“This is a 5% increase over last year’s base amount,” Frick said. “Just for comparison, the two years before that were 3%, so that is a pretty good increase.”

Frick said the increase in state funding is associated with the ruling made in the school funding lawsuit Gannon v. Kansas, which calls for base funding amounts to be adjusted by the average percentage increase in the Consumer Price Index for all urban consumers in the Midwest region during the three preceding school years.

As far as savings from recently approved budget cuts, the district anticipates it will save $3.81 million total, including $3.12 million from the reduction of 48 secondary teaching positions and $693,000 from closing Pinckney and Broken Arrow elementary schools. Combined with the increase of $4 million in state funding, the district has $7.813 million more in funding for the 2023-2024 school year.

In addition, Frick said a change in another funding calculation would allow the district to levy another $1.2 million in taxes for cost-of-living increases, but the decision whether to do so would ultimately be up to the school board. She said the district qualifies to levy the additional funds, and has done so historically, because property valuations exceed the state average by a certain amount, but the change in calculation would mean more money would be generated than in the past.

“So Lawrence has done that historically, the change being that the calculation is different now and it increases the amount that the district could assess,” Frick said. “It’s strictly a tax increase; it does not have any state aid associated with it.”

Frick then went through various expenses that the approximately $7.8 million to $9 million in additional funding could go toward, and also looked ahead to anticipated expenses for upcoming years. She noted that the district previously identified three budget priorities: improving staff wages, allocating funds for annual cost increase, and increasing the district’s cash balances.

At least $5.58 million is anticipated to go to raises for district teachers and staff. As the Journal-World has reported, representatives for the district and the Personnel Association of Lawrence-Communication Workers of America, the union representing the district’s staff, agreed on Thursday to a proposal that would provide $2.58 million toward wage increases for district classified staff. In addition, on June 1, representatives for the district and the Lawrence Education Association, the union representing teachers and other certified staff, agreed to a proposal that would provide at least $3 million to increase teacher pay; however, that amount could potentially increase, as the teachers union has proposed another $500,000 and contract negotiations are ongoing.

Apart from wages, the biggest cost increase the district anticipates is from rising health insurance premiums. Frick also went through increases in unpaid school and meal fees, some of which the district plans to offset with general fund dollars.

Frick said while there is currently a cap in place to keep health insurance costs down for the upcoming year, the district anticipates costs could go up in 2024-2025. Based on what other districts are paying, Frick said the district is anticipating it could need to pay up to $3 million more toward the district’s health insurance costs in 2024-2025, and the district would “need to plan ahead for that.” She said the district already planned for about a $270,000 increase in property and liability costs going into the 2023-2024, but that the district was just informed earlier in the day that expense is going to be $50,000 or $60,000 more than anticipated.

School board President Shannon Kimball said the property and liability insurance premium has increased from about $300,000 to $1.3 million over roughly five years, and that those costs were particularly difficult for school districts to manage because there is not a competitive market for the coverage districts need. School board member Kelly Jones, who is on the district’s fringe benefits committee, said the district was also seeing a decrease in competition when it came to the health insurance market.

“It’s getting more and more challenging to negotiate a premium that’s affordable,” Jones said.

As far as unpaid fees for the 2022-2023 school year, the district currently has about $528,000 across all fee types — including school fees, sports participation fees, program participation fees and device fees — that remain outstanding. That’s an increase from the approximately $486,000 the district sent to collections last year. While Frick said that number is not final, as the district is still collecting payments, she expressed concern about a potential increase.

“We’re concerned about the increase in unpaid fees and we’re looking at different ways to potentially handle that,” Frick said.

Board member GR Gordon-Ross asked what category of fees tend to go unpaid, and Frick said she didn’t have that information but could look at the data and bring that information back to the board. Frick did say that the district does not require payments to be made before students participate in sports and activities.

The district also currently has about $98,000 in unpaid school meal balances for 2022-2023, and Frick said up to $75,000 will need to be reimbursed from the district’s general fund to the food service fund based on the district’s debt policy and federal food service regulations. Like the school fees, she said the unpaid meal fees were also much higher than the district has seen before, noting that during the COVID-19 pandemic school meals were provided for free.

“So we’re not collecting fees as well, we’re not getting meals paid for as well,” Frick said. “Of course we did just come off of two years of free meals, and so I’m sure that has been quite an adjustment for families to deal with that again.”

She said the district would also be sending unpaid meal fees to collections this month, which she said she believed was a first for the district, at least in recent history. Board members asked about whether district policies regarding reimbursement levels and collections could change, and district administration said changes were possible and could be discussed.

Lastly, Frick presented a table that gave annual figures for the district’s various cash balance funds from 2010 to 2022. In 2022, the district had about $5.35 million across all those funds, some of which require that a certain percentage of expenses be maintained. The district’s goal is to bring that amount to $11.47 million.

The district will continue to work on issues related to the budget throughout the summer. The board will review the budget, including whether to levy the additional $1.2 million, on Aug. 14, ahead of required legal publications. The budget hearing will take place Sept. 11.

In other business, the board:

•Met in executive session to discuss contract negotiations with the district’s teacher and staff unions. The board did not take any action following the session. District representatives are scheduled to meet again with LEA representative on Wednesday.

•Received an update on the district’s Farm to School program, which includes school gardens and procurement of local produce for school meals. Pantaleon Florez, experiential learning specialist for the district, gave an update on the program, including that with a reboot of the garden at the juvenile detention center, there were now gardens at all school buildings.


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