Decatur, GA — In the midst of facing a low reserve fund balance, City Schools of Decatur has been working to find areas to save and cut costs without cutting instructional employees. The school district also wants to give employees a raise.

Chief Financial Officer Lonita Broome and Superintendent Maggie Fehrman presented the preliminary draft fiscal year 2023 budget at the March 8 school board meeting, which reflects $3.8 million in operational budget cuts.

CSD’s current fiscal year, 2022, ends on June 30 and fiscal year 2023 begins on July 1. The next budget will need to be approved by July 1.

The school system’s budget breaks down into four categories — the school nutrition revenue budget, the special revenue budget, the capital projects budget and the general fund budget.

The preliminary FY23 general fund budget anticipates receiving about $85 million in revenue and spending the same amount, reflecting a balanced budget. The district’s fund balance, its reserve fund, is projected to have a beginning balance of $5.6 million and a projected ending balance of $6.1 million.

The fund balance is also looked at in terms of percentage of expenditures in the general fund that come from the reserves and is required to be at least at 4%. The base budget for fiscal year 2023 projected the fund balance to be at $2.1 million and 2.45% of expenditures by the end of the fiscal year. The preliminary FY23 budget projects the fund balance to end at 7.17%.

Salaries and benefits make up the largest expenditures in the general fund. The district is expecting enrollment to decrease by about 143 students, so to reduce the budget, staffing will be affected.

The preliminary budget allocates about $51.7 million for salaries and $24.2 million for benefits. The salary line item will be decreased by about $1.4 million, but all staffing reductions are a result of not filling vacancies from natural attrition. The Wilson Center personnel (central office) budget will also decrease by about $553,000.

“Thanks to Dr. Fehrman’s brain child, the game changer, we are able to eliminate positions and not people and will continue to provide the schools with the level of support they need,” Broome said.

The general fund does consider a one-time $2,000 bonus CSD will give to its full-time employees and $1,000 bonus to part-time employees per Gov. Brian Kemp’s state budget. The state Senate is adding language to the spending bill clarifying the state will provide the bonus to school staff, which will reduce the financial impact on CSD’s budget.

Teachers, bus drivers, school nutrition workers, custodians and nurses will receive this bonus.

“Staff paid on the teacher salary scale will receive the $2,000 increase and a step increase. All other employees will receive a step increase,” Broome said. “With the changes from the Senate to the current amended fiscal year 2022 budget, which allocated supplements to all staff in specified categories and added custodians and nurses categories, the ending fund balance will increase, so this is a conservative fiscal year 23 projection.”

CSD also significantly supplements the College Heights early learning program. Fehrman created a 15% tuition increase that will be implemented over three school years to reduce the amount the district is spending. Tuition will increase 5% each year.

“This increase in tuition will reduce the supplement required from the general fund,” Broome said. “The fiscal impact for fiscal year 23 from increasing tuition by 5% is a savings of $100,768.”

Other areas of savings include the district spending less on AP and IB testing, reallocating money to the capital projects budget, removing one-time budget amendments that were made in fiscal year 2022 and cutting almost all operational budgets by 5%.

“What we did was we take every operational budget, we say ‘you’re cut by 5%’ and then they have to reallocate their funds, except for power,” Fehrman said. “We did not decrease funding for power because we see that energy costs are going to be increasing.”

The preliminary budget for the school nutrition budget totals about $2.8 million. CSD is currently participating in the United States Department of Agriculture program, in which all students eat for free. A decision has not been made on whether the program will be extended into next year. If the program is extended, the school nutrition budget will be revised, Broome said.

“Total expenditures for the school nutrition program is in balance with total revenue,” Broome said. “The two largest expenses for the school nutrition program is staffing at $1.2 million and the purchase of food at $1.26 million.”

The special revenue budget includes grant funds CSD receives from the federal and state governments. These funds typically have restrictions on how they can be used and are spent on a reimbursement basis.

“For fiscal year 23, we are anticipating receiving the same grants that we traditionally receive, which includes the pre-K grant from the state lottery, Title I grant, JROTC and Perkins. We anticipate receiving and spending a little under $2.7 million,” Broome said.

The capital fund budget includes funding the school system receives from the education special purpose local option sales tax.

“ESPLOST is a one penny sales tax that funds buildings, technology and other capital project needs outside of the general fund,” Broome said. “The one-cent sales tax is paid by everyone who shops or stays in DeKalb County, not just residents in the city of Decatur.”

ESPLOST V will expire on June 30 and ESPLOST VI, the most recent sales tax to be approved by DeKalb County voters, will begin on July 1.

CSD will receive about $40.5 million in revenue from the special purpose local option sales tax over a five-year period. In the first year, the district will get $8 million.

The school system anticipates starting the fiscal year with about $10.6 million in its capital fund budget and estimates capital fund expenditures to be about $6.3 million. The largest capital expense will be building acquisition, construction and improvement, in which the district has budgeted about $3.3 million.

The Decatur School Board will meet for a work session on March 22, at 6 p.m. at the Wilson School Support Center, 125 Electric Avenue.

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