FY 2009-2010 Budget Overview

  • FY08-09 FY09-10

    Property Tax $  102.89 $            - $   102.89
    Sales Tax 108.60 - 108.60
    State Funding:
       BEP 143.40 5.24 148.64
       Other 7.49 (1.70) 5.79
    Miscellaneous 4.72 0.71 5.43
    Fund Balance 2.20 (0.25) 2.65
    TOTAL REVENUE $  370.00 $      4.00 $    374.00
    Property Tax - regular collections, delinquent axes, interest and penalties

    Sales Tax - local option portion of sales tax collections

    State Funding  BEP, career ladder, allocations from mixed drink taxes, driver ed funding

    Miscellaneous - wheel taxes, administrative and 
                           workers comp charges to food 
                           service, indirect cost 
                           reimbursements, rental of school
                           facilities, driver education fees,
                           ROTC federal reimbursements, etc.

  • General Purpose Fund FY09-10 Budget Overview
    EXPENDITURES REQUEST   (in millions)
    Base Budget (FY08-09 Adopted Level) $370.00
    Estimated Fixed Increases
    a Step Increases ($3.85m):
    Certified Employees 2.95
    Classified Employees 0.90
    b Salary Increase (from FY08-09) 2.75
    c Retirement (closed Defined Benefit Plan) 1.00
    d Health Insurance (increase in participants) 1.40
    e Utilities 1.50
    f Debt Retirement Subsidy 1.53
    g Miscellaneous 0.37 12.40
    Implementation of Staffing Ratios (see p.5)
    h Elementary School Reductions (1.15)
    i Middle School Reductions (1.10)
    j High School Reductions (1.32)
    k Other (0.34) (3.91)
    l Potential BEP Positions (held in reserve) 0.80

    Central Office/System-wide Reductions (see p.6)
    m Personal Services/Employee Benefits ($2.71m):
    Custodial - 38 positions (0.93)
    Maintenance - 10 positions (0.41)
    Clerical - 10 positions (0.36)
    Data Processing - 6 positions (0.35)
    Supervisors - 4 positions (0.30)
    Other (0.36)
    n Contracted Services ($1.46m):
    Transportation - high school start times (0.70)
    Transportation - other (0.19)
    Project GRAD (0.24)
    Other (0.33)
    o Supplies/Materials ($0.74m):
    Operations and Maintenance (0.37)
    Other (0.37)
    p Other Charges ($0.28m):
    E-rate Contribution (0.25)
    Other (0.03)
    q Capital Outlay ($0.10m) (0.10) (5.29)
    Total FY09-10 Expenditure Request $374.00


    REVENUE ASSUMPTIONS (in millions, rounded to the nearest $10 thousand)

    Property Tax $102.89m
    This assumes a level consistent with the FY08-09 budget.

    Sales Tax $108.60m
    This assumes a level consistent with the FY08-09 budget.

    State $154.43m
    State funding consists primarily of $148.64 million of BEP revenue (based on unofficial estimates). Typically, the State issues official BEP estimates beginning sometime in April. Other funding components consist of $1.64 million of State Pre-K grant pass-through funds. An amount of $4.15 million includes anticipated revenue for the career ladder program, driver education funds, and mixed drink taxes.

    Other Miscellaneous Revenue $5.43m
    Other miscellaneous includes revenue from the wheel tax, ROTC federal reimbursements, jamboree gate sales, driver education fees, rental of school facilities, revenue received for administrative services related to federal grants (indirect cost), and reimbursements from the KCS Child Nutrition Program for administrative services and workers compensation premiums.

    Fund Balance Appropriations $2.65m
    A preliminary amount of $2.65 million is projected to be utilized to balance the FY09-10 budget, though this amount is subject to change. As of June 30, 2008, KCS had a fund balance of $31.62 million. During the FY08-09 budget process, the Board utilized $2.90 million of fund balance appropriations to balance the budget. Additionally, $7.93 million was designated to fund textbooks, technology initiatives, transportation expenditures related in part to fuel costs, signing bonuses, tuition assistance for employees, equipment, and maintenance related items. Approximately $4.35 million of the fund balance is reserved as encumbered funds, prepaid assets, and inventories. Thus, approximately $16.44 million of unreserved, undesignated fund balance remains. Roughly $10.87 million of this amount is dedicated toward the State’s 3% threshold, leaving an expected net available balance of $5.57.

    (in millions, rounded to the nearest $10 thousand)


    a.    Step Increases $3.85m
    The estimated cost of step increases for eligible certified and classified employees amounts to approximately $2.95 million and $0.90 million, respectively.
    b.    2% Salary Increase $2.75m
    A 2% salary increase was approved in FY08-09 for all employees at mid-year and budgeted accordingly. This item represents the additional amount that must be programmed into the FY09-10 budget in order to reflect the full year.
    c.      Retirement Contribution $1.00m
    The Knox County Retirement Board informed the Board of Education that employer contributions to the old Defined Benefit Pension Plan must be increased approximately $2 million due to poor economic conditions. This retirement plan relates to covered certified teachers who became employees of the Knox County Schools as a result of the abolition of the Knoxville City Schools. To mitigate the negative impact to the FY09-10 budget, half of the increase could possibly be funded from existing fund balance sources. Thus, $1 million will be programmed into the FY09-10 budget.
    d.    Health Insurance $1.40m
    It appears that poor economic conditions have contributed to an increased participation rate in health insurance coverage, resulting in an increased employer cost to the Board.
    e.    Utilities $1.50m
    The Knox County Schools has implemented energy management initiatives such as contracting with Trane and hiring in-house energy managers, allowing budgetary savings to be invested in equipment upgrades. Nevertheless, an increase of $1.50 million will be programmed into the FY09-10 utility budget in an effort to safeguard against increased utility costs.
    f.    Debt Subsidy $1.53m
    The annual KCS debt service requirement for FY08-09 is $24.93 million. Approximately $5.13 million of this amount is subsidized by the General Purpose budget. Based on approved appropriation levels in the Capital Improvement Plan, FY09-10 annual debt is expected to increase to $26.46 million. This estimate is based on existing debt plus $15 million of FY09-10 capital initiatives. As a result, the amount subsidized by the General Purpose budget for FY09-10 is estimated to be approximately $6.66 million, representing an increase of $1.53 million. The amount of the subsidy could potentially decrease if existing bonds are re-financed at lower interest rates and/or additional sales tax dollars are budgeted into the School Construction Fund effective FY09-10.

    g.    Miscellaneous $0.37m
    Increases are needed in the areas of security, operations/maintenance, and fee waiver allocations. An amount of $0.10 million in security relates to an expected increase for communications costs and three security guard positions added from FY08-09 security enhancement funds.  An additional $0.15 million is programmed into the FY09-10 budget for waste management services in operations and maintenance. Fee waiver allocations account for $0.12 million of budgetary increases.


    Implementation of Staffing Ratios

    h.    Elementary Schools ($1.15m reduction)
    Twenty-two (22) positions will be eliminated at the elementary school level resulting from the implementation of the staffing formula. The reductions consist of a net reduction of 20 elementary school teaching positions and two (2) assistant principal positions. However, a reallocation of resources will allow for the implementation of parallel block scheduling at all of our elementary schools.
    i.    Middle Schools ($1.10m reduction)
    Twenty-four (24) positions will be eliminated at the middle school level resulting from the implementation of the staffing formula. The reductions consist of a net reduction of 20 middle school teaching positions and four (4) clerical positions.
    j.      High Schools ($1.32m reduction)
    Thirty (30) positions will be eliminated at the high school level resulting from the implementation of the staffing formula. The reductions consist of a net reduction of 23 high school teaching positions and seven (7) clerical positions.
    k.    Other ($0.34m reduction)
    Seven (7) other positions will be eliminated at the school level. The reductions consist of four (4) TAG teaching positions, two (2) positions in the alternative schools (Ridgedale and Yoakley), and a CTE educational assistant.
    l.    BEP Positions $0.80m
    An amount will be retained within the budget in the event that BEP requirements would necessitate the hiring of additional teachers. The amount reserved would be sufficient to fund approximately 16 teaching positions. To the extent that additional positions are not needed, the amount not utilized would be unspent and thus close into fund balance at year-end.

    Central Office / System-wide Reductions

    m.    Personal Services / Employee Benefits ($2.71m reduction)
    Seventy-one (71) positions will be eliminated at the central office and district wide level. The reductions will occur in the following areas: 38 custodians, 10 clerks/secretaries, 10 maintenance positions, six (6) data processors, four (4) supervisors, one (1) nurse (administrative), one (1) truck driver, and one (1) position in facilities.
    n.    Contracted Services ($1.46m reduction)
    Reductions to contracted services include such areas as $0.89 million in transportation contracts ($0.70 million related to change in school start times at some of the high schools), $0.24 million in Project GRAD, $0.13 million in Board of Education, $0.06 in Office of the Superintendent, and $0.04 million in Operations/Maintenance, and $0.03 in Public Affairs.
    o.    Supplies/Materials ($0.74m reduction)
    Reductions to supplies, materials, and minor equipment occur throughout the budget and include areas such as $0.37 million in operations/maintenance (gasoline, construction supplies, repair parts), $0.05 million in general school allocations, $0.06 million in libraries/audio-visual and materials center, $0.04 million in CTE and Business Education, $0.04 million in basic elementary support, $0.03 million in fiscal services, $0.03 million in transportation, $0.03 million in Project GRAD, $0.02 million in athletics, and $0.02 million in health services.
    p.    Other Charges ($0.28m reduction)
    The E-rate contribution has been reduced $0.25 million, accounting for most of the reduction in this area.
    q.    Capital Outlay ($0.10m reduction)
    This item represents a reduction of $0.04 million in instructional/data processing equipment in the general school allocations account, a $0.02 million reduction in equipment in fiscal services, a $0.02 million reduction in the security vehicles account, and a $0.02 million reduction to equipment in public affairs.