FY22 Budget Information

  • The City Schools of Decatur Board wants to ensure that everyone has the opportunity to understand the fiscal stewardship of the district. We’re attempting here to offer a transparent, accessible view of a complex process -- from revenue and exemptions to expenses, budgeting and integrity. We welcome more detailed questions. 



    Fiscal Year 2021 (current year) Financial Challenges and Expenses

    • For FY 2020-21, teachers and staff received additional compensation despite the initial 10% budget cut from the state in QBE funds. CSD followed through on the pay increases that had been promised to our teachers and staff through Cost of Living Adjustments (COLA) and STEP increases. Additionally, all teacher salary schedules increased by $2,000 at every step. Increases of 15%-20% on average were made to the lowest salary schedules to help ensure more fair and livable salaries. The total cost to provide these salary increases to our employees was $2,944,083. 
    • The establishment of a financial aid fund for students was also funded for fiscal year 2021 along with additional funding allocated to equity programs and training. Behavioral health services/staff and special education support staff were funded and additional funds were allocated to nursing, school counseling, equity and other operational and instructional areas. 
    • The district allocated over $2.4 million for school personnel staff in fiscal year 2021.
    • Wilson School Support Center (Central Office): Every year since 2015, CSD has maintained a ratio of one or fewer central office leaders per 350 students. Since the 2008-2009 school year, the earliest date for which we have reliable data, enrollment has increased 112 percent while the number of central office administrators has increased only 23 percent. The ratio of school support center administrators per 350 students has decreased 42 percent over that time period. Going forward Dr. Fehrman is committed to reviewing the organizational structure at the Wilson Center to ensure we are operating effectively and efficiently with the current team of district leaders and will closely examine all vacancies to determine if filling these positions is necessary.
    • Budget cuts -State funds were initially cut by 10% which equated to an approximately $3.3 million reduction in state funds for CSD. Of the 10% cut in state funds, 60% were later restored which left a remaining reduction in state funds of approximately $1.3 million.  
    • Pandemic: Over the course of this year, CSD spent more than $4,000,000 in COVID-related expenses. In October 2020 (http://bit.ly/CSD-BOE-Oct-13-COVID), an initial budget adjustment used fund balance to cover COVID-related expenses such as learning pods ($75,000), school nutrition program losses ($634,702), early childhood program losses ($290,348), reduced earnings on investments ($78,118), and COVID-related supplies and equipment ($1,288,000). In January 2021 (http://bit.ly/CSD-BOE-Jan-12-COVID), a second budget adjustment used fund balance to cover additional COVID-related expenses, including budgeting for 16 additional teachers ($620,639), learning pods ($108,000), and overtime costs for nurses ($19,800). A third budget adjustment in February 2021 (http://bit.ly/CSD-BOE-Feb-9-COVID), used fund balance for learning pods ($322,950), additional school health aides ($66,024), and COVID testing ($50,000). The effects of the pandemic will continue to impact district finances in the coming years. 

     

    Senior Exemption

    • Qualifying seniors age 65 and over were fully exempt from school property taxes for fiscal year 2021. This exemption expires at sunset on December 30, 2021. The last calculated cost to the district for the exemption was approximately $5.7 million.

     

    Revenue

    • The two major sources from which the district receives revenue for its main operating budget (general fund) are property tax and state revenue [Quality Basic Education (QBE) funding]. The district receives additional funds from student tuition and other miscellaneous sources such as state grants.
    • QBE funding is state revenue the district receives based mainly on the total number of enrolled students. QBE is the second largest source of revenue for the general fund. 
    • Property tax is the major source of revenue for the district and is projected based on the expenses required to meet the district and students’ needs. Revenue for property taxes is generated by taking 50% of the market value of property to obtain the assessed value.  The assessed value is then multiplied by the millage rate to determine the annual school taxes prior to any qualifying exemptions. The district utilizes a study by Georgia State University to determine the estimated projection of property value. 
    • The school board policy states that the minimum fund balance shall be 4%. If additional funds are required to maintain the Board of Education minimum fund balance, the district must look for ways to reduce expenses and consider increasing the millage rate to generate additional revenue.
    • In the last 10 years, the district’s millage rate has ranged from 18.66 to 20.90.  The millage rate for the current and last fiscal year has been 20.25.  

     

    Fiscal Year 2022 proposed Tentative Budget

    • The financial challenges related to increases for COVID-related expenditures and reduction in QBE funding resulted in a decrease in the fund balance which has had a negative financial impact on the fiscal year 2022 budget.     
    • A careful review of expenditures resulted in a 5% reduction in operating expenses.
    • The ending fund balance for FY21 was initially projected to be $8.2 million; however, after reductions in state funding and COVID-related unbudgeted expenditures for FY21, the ending fund balance projection was reduced to $7.7 million. Additionally, the $1.3 million for QBE reduction remains in the FY2022 budget.
    • The proposed fiscal year 2022 budget includes extensive remediation efforts as well as the addition of a Decatur Virtual Academy. Additional staffing and programming are expected to cost approximately $1,536,620. 
    • The proposed fiscal year 2022 budget includes a STEP increase for all employees and compensates for an increase for the Teachers Retirement System (TRS) at a cost of approximately $1.3 million.
    • Additional increases in the FY2022 budget of approximately $300,000 includes the addition of a teacher, accounting specialist, nurse aide, and operational upgrades are offset by $266,588 from a 5% reduction in operating expenses. 
    • To ensure appropriate funding for a balanced budget and a required fund balance of 4%, the fiscal year 2022 proposed tentative millage rate is 21.00. 
    • An example of the impact of a 21.00 millage rate on property with a market value of $600,000 as detailed below would be an annual increase in school property tax of $225 before any homestead exemptions.

     

     

    Current  FY2021 Millage Rate

    Proposed FY2022 Millage Rate

    Preliminary millage rate: 

    20.25

    21.00

    Market value

    $600,000

    $ 600,000

    Assessed Value                     (50% of Market Value)

    $300,000

    $300,000

    Multiply millage rate

    0.02025

    0.02100

    School taxes per year                    (Before exemptions)

    $6,075

    $6,300

    Annual Increase/(decrease)

     

    $225

     

    Proposed Senior Exemption

    • Qualifying seniors are either partially or fully exempt from paying property taxes. The School Board committed to studying the cost of the Senior Tax Exemption which will sunset at the end of 2021 after five years. In its place, the School Board has proposed two carefully studied exemptions that will control the cost to taxpayers while focusing the tax exemption on the most vulnerable seniors. 
      • Tax relief will be provided to seniors by providing an exemption of $200,000 of assessed home value (400,000 of appraised value) for seniors aged 65-69, if their combined household income does not exceed $53,000 (80 percent of the Area Median Income (AMI) for the Atlanta area).  
      • Seniors aged 70 and above will receive the same exemption on $200,000 of assessed home value ($400,000 of appraised value) but without an income cap.

    These proposed exemptions were approved by the legislature to include a two-year sunset. Assuming the Governor signs the exemptions they will appear on the ballot Nov. 2021 for the community to vote on.

     

    Budgeting Process

    • The planning and budgeting process is ongoing and focuses on optimizing student achievement with available resources.  
    • The process starts with gathering information on academic performance and cost structure, and establishing principles and policies to guide the budget process. 
    • Planning and preparing involves a collaborative process with instructional and departmental leaders; an understanding of the Board of Education priorities and a communication strategy to inform participants, stakeholders, and the general public on the budget process. 
    • The budget is rooted in the priorities of the district and involves considering and comparing different options for achieving the district goals against one another to focus on those with the greatest potential for student achievement impact. 
    • Current resources and expenditures are thoroughly analyzed to evaluate and prioritize resources to enact the instructional priorities.
    • After determining the projected revenue from the general fund revenue sources, the district compares it to the projected expenditures and determines if there will be a surplus or deficit of funds.  Surplus of funds increases the general fund balance/reserves.  Deficit of funds decreases the general fund balance/reserves.
    • Fund Balance or district reserves board policy sets a minimum fund balance of 4% or approximately $3.2 million. The fund balance should not exceed 15 percent because money that is collected in taxes is intended to be used, not saved, other than a small balance for contingencies. 
    • If there is a deficit, the district must ensure a balanced budget and sustainability by either reducing expenditures or increasing revenue or both.  

     

    Responsible Budgeting/Financial Integrity

    • Audit: CSD undergoes an annual financial audit by an independent auditing firm. The system recently received an exemplary report with no findings, as it typically does each year.



    Additional Funding

     

    CSD receives additional funding from SPLOST for Capital Purchases, State and Federal Grants for specified purposes, and funds allocated specifically for the School Nutrition Program.  All of these funds have restrictions and guidelines on how the funds can be expended.  

     

    Additionally, the district received federal stimulus (CARES) funds to minimize the negative financial impact of the COVID pandemic on K-12 education. The district has received approximately $4.7 million in CARES funds and has allocated those funds to cover COVID-related expenditures, intervention programs, virtual academy, bonuses, nurses, and CTAE programs. Over 1.2 million of the CARES funds were restricted to specified services such as nurses, bonuses, CTAE, and COVID-related expenditures. All other expenditures were allocated to intervention and the virtual academy. CARES funds are one-time payments.