The Little Rock School District sent to the state this week a 2015-16 budget that anticipates revenue of $324.9 million, expenses of $317.6 million and a year-end balance, or contingency fund, of $43.5 million.
In a change from the past, the budget for the state's largest school district went to the Arkansas Department of Education without a locally elected school board's involvement and endorsement.
The Arkansas Board of Education removed the district's board on Jan. 28 when it assumed control of the district for having six state-labeled academically distressed schools. Arkansas Education Commissioner Johnny Key serves in lieu of a school board for the district. The district's state-appointed superintendent, Baker Kurrus, reports to Key.
Kelsey Bailey, the Little Rock district's chief financial officer, oversaw the preparation of the budget but did so without the usual financial presentations at school board work sessions.
"We are still in an efficiency mode, trying to get as lean and efficient as possible," Bailey said Friday. "We still have a ways to go toward the $37 million or $40 million in reductions that we need to realize."
Those reductions are intended to offset the eventual loss of millions of dollars in state desegregation aid to the district beginning in the 2018-19 school year.
The terms of a January 2014 federal court-approved financial settlement in a long-running school desegregation lawsuit permit the state to end its annual aid payment of $37,347,429 after the 2017-18 school year.
The budget reflects 234 fewer full-time certified and noncertified employees this school year over last school year, according to Bailey's figures.
The district is projected to employ the equivalent of 3,424 full-time employees this school year. Of that number, there are 2,122 full-time, state-licensed educators employed as compared with 2,280 last year.
"We're continuing to look at personnel and benefits -- that's a big part," Bailey said.
The staffing cuts to date are partly the result of reducing middle school elective courses and instituting a seven-period class day at the middle schools and at three of the five high schools, he said. That's a change from the previous college-style block schedule in which students took a total of eight courses, four each on alternating days. The block schedule required more staff.
Additionally, administrative-secretary positions, security-officer jobs and maintenance-worker positions have been cut.
This year's budget does include a 3 percent step pay increase awarded to eligible employees for their additional year of work experience. Those employees who have reached the top of their salary schedules are ineligible for the step increase.
The budget at this point does not appear to include an across-the-board pay raise for all employees.
District leaders and representatives of the Little Rock Education Association, which is the contract bargaining union for teachers and other employee groups, are continuing to negotiate a successor agreement to the 90-plus-page 2012-15 teacher contract that will expire at the end of October.
Earlier this year, Kurrus proposed a bare-bones contract of about five pages, most of which dealt with a grievance procedure and left blank entries for health insurance premium contributions and raises.
Cathy Koehler, president of the association, said Friday that negotiators met earlier this week.
"From all accounts, it was exceedingly positive and collegial, and it looks very promising," she said. "It's not easy because none of us have ever been in this situation," she said, referring to the state takeover of the district.
She said Kurrus has communicated broadly that he values teachers.
"He's of the mind that, 'Yes, we are going to change how we are doing things, but that doesn't mean we have to throw everything out,'" she said. "He sees the parts [of a negotiated agreement] that have a positive impact on students and our role in that."
In regard to potential financial terms in any agreement, Koehler said she is confident that the district will continue to fund its contribution to health insurance premiums for employees in this school year.
"I have full faith that is going to remain," she said, adding that the the district contribution is extremely important to the employees. She said continuing that decades-old commitment to the health-care coverage is a show of respect for the employees.
The district's projected revenue of $324.9 million is an increase over the $319.4 million received in the 2014-15 school year. The revenue projection includes a 2.4 percent increase, or $3.5 million more, in local revenue. That local revenue -- made up largely of property tax collections -- is projected to total $152.65 million.
State aid to the district, on the other hand, is projected to decline by 1.5 percent, or $2.1 million, from $139.5 million to $137.4 million, Bailey said.
Part of that is the result of a decline in funding for alternative learning environments for students who are not successful in traditional school settings.
If revenue and expenditures meet projections, the district will end the school year in June 2016 with as much as $44.7 million in unspent balances, including $43.5 million that would be considered "unrestricted" -- not tied to any bond obligations.
That $43.5 million would be an increase of about $8 million in unrestricted balances from the current $35.4 million.
The $8 million amounts to the district's savings to offset the forthcoming loss of the state desegregation aid, Bailey said Friday.
"We've got to get to a point where we can live without the $37 million ... we've been saying about $40 million. This year will have about $8 million in savings that will go toward that," he said.
On another front related to finances, the Little Rock district is seeking state Department of Education approval to refinance its debt on past bond issues as a way to generate savings of between $5.5 million to $6.5 million.
The savings generated by paying a lower interest rate on the debt would be used for district maintenance and repair projects, Bailey said.
Metro on 09/26/2015