The Little Rock School Board very late Thursday night unanimously approved a budget for this 2014-15 school year that anticipates total revenue -- including federal funds -- of almost $319 million, total expenditures of $320.6 million and an ending fund balance, or reserves, of $34.1 million.
The new budget, due to the Arkansas Department of Education next week, is distinguished by the elimination of about $10 million in magnet school money from both the revenue and expense sides of the budget, Chief Financial Officer Kelsey Bailey said.
That is the result of a January settlement agreement in the long-running school desegregation lawsuit. The settlement phases out the interdistrict student transfer component of six special-program magnet schools. As a result, the Little Rock district will no longer transfer $10 million of its operating revenue -- an expense -- to a special magnet school fund -- a revenue source.
"It's a wash," Bailey said.
The district's total revenue is about $9 million less than the $328,004,757 budgeted for the 2013-14 year that just ended. The district's total anticipated expenses are projected to be about $12 million less than the $332,019,597 budgeted last year.
Bailey said the reduction in projected expenses this year includes the result of eliminating five certified positions and 16 noncertified positions, including some administrative jobs, for this school year.
The Little Rock district's total balances show a projected decline, from $35.7 million to $34.1 million. That $1.6 million is the result of carrying over unspent federal grant funds from past years to spend in schools this coming year, Bailey said.
The district last year dipped into its then-$40 million in reserves to help offset the cost of land purchases and a 3 percent across-the-board raise for all employees, except the superintendent. That raise, approved by the School Board, was recommended by a federal mediator as a resolution to a salary dispute between the district and the Little Rock Education Association union of teachers and support staff.
Bailey said Thursday that there is no anticipated draw on the operating fund balance this year. The reserves in the district's operating budget -- made up of just state and local money and excluding federal and other specific funds -- is projected to increase this year by about $51,000 to $32,826,255.
The balances in a district's operating budget are monitored by the Arkansas Department of Education for symptoms of a district in fiscal distress. Districts that routinely draw from the reserves to meet expenses are being classified as academically distressed and subject to state restrictions on spending or even a state takeover.
The Little Rock district's newly approved budget does include a desegregation settlement line item of $37,347,429 in revenue. That is money the state will pay annually for this year and each of the next three years as a result of the January settlement agreement. The money will be discontinued in the 2018-19 school year.
With an eye toward having to adjust for the eventual loss of that special state aid, the School Board on Thursday approved the formation of the Budget Efficiency Advisory Committee to counsel district leaders on budget strategies and priorities. The advisory committee will also be asked to help communicate information about the district's budget to the the public.
The district is seeking applications from community members -- including financial professionals, civic leaders, business leaders, elected officials, parents and parent organization representatives, and school employees and employee organization representatives to serve on the committee.
The application deadline is Oct. 16. Applications are available by contacting the superintendent's office, (501) 447-1002.
Metro on 09/27/2014