Rapid City Area Schools Reserves/Budget Explained

Rapid City Area Schools Reserves/Budget Explained

The Rapid City Area School District Administration and Board of Education believe transparency is of utmost importance. This document is a brief overview of some of the 2016-2017 budget highlights with an emphasis on the district’s reserves. If you should have any questions, please contact Public Information Manager Katy Urban at (605)394-4091 or through email at .

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Rapid City Area Schools Reserves/Budget Explained

In the next month, the Board and administration will take a closer look at our reserves in each of our ten funds. It is important to note that some of the funds available have already been earmarked for future projects or expenses. It’s also important to point out that at least 12 percent of our General Fund reserve dollars need to stay in the bank in case of an emergency. The district also uses General Fund reserves to pay for various expenses that are due before we receive money from our revenue sources. Here’s an example: If payroll is due on the 10th, but we don’t receive a property tax payment from the County until the 12th, reserve fund dollars would be used to pay our employees until we get reimbursed from the County.

So, what do we have for reserves in each fund? Here is a rundown:

General Fund $15,246,460

Capital Outlay $29,366,897

Special Education $3,993,171

Food Service $2,190,686

Pension $2,074,420

Health Insurance $14,410,322

Capital Outlay Debt Service Fund $1,733,950

Preschool Enterprise $8,998

Unemployment Insurance $53,543

WDT – Post secondary $36,11,289

How much is already allocated?

Reserve dollars in every fund, except for the General Fund and the Capital Outlay Fund, must be used for nothing other than expenses pertaining to the particular fund. So, Special Education Fund reserves can only be used to pay for special education related expenses.

In our General Fund, we currently have a 16 percent or a $15 million fund balance. Experts say we should keep at least 12 percent of our overall General Fund budget dollars in the fund at all times. This past year, the legislature eliminated our pension fund, however we still have that expense. Therefore, we will likely need the extra $3 to $4 million in General Fund reserve dollars to pay for pensions and severance packages. Based on our current situation and budget forecasting, we will fall below the 12 percent fund balance in 2018-2019 school-year.

In our Capital Outlay Fund, we have around $29 million in reserves, however approximately $8 million of that has already been allocated to pay for a number of projects.

After those expenses are paid, we have around $21 million left.

In September of 2016, the facility committee will be presented with the 5-year capital projects plan. Currently, we are estimating costs for various items. The top 5 priorities are in line with the facility study to address safety concerns first:

1. Asbestos abatement: We have discovered that many locations that had been listed as

abated were not. We will propose to abate all asbestos district wide.

2. District wide playground upgrades: We conducted a study last year to upgrade all

playgrounds to meet ADA compliance, find a more suitable surface, and update the

equipment.

3. Complete keyless entry district wide

4. Resurface district parking lots

5. District wide Air conditioning/HVAC upgrades

*On a side note, this past spring, the Board of Education made it clear that they did not want to use Capital Outlay dollars to support new construction. If we do build new buildings, the Board has indicated they would like the construction financed through a bond approved by voters.

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Our reserve funds are a small, but important part of our overall budget. Most of our General Fund dollars, about 85 percent, go toward salaries and benefits for the more than 1,700 people who work in our district. The rest of the money in that account (besides reserves) is used for things like utilities and supplies.

Our Capital Outlay fund is used for facilities projects, technology purchases or leases, curriculum, flexibility (salaries), transportation costs and equipment.

Below is a list of the other funds and what expenses come out of them.

* Special Education: Special Revenue account for programming for students with disabilities

* Post-Secondary: Special Revenue account for Western Dakota Tech operations

* Food Service: Enterprise fund for the district food service program

* Pension: Special Revenue Account to fund the districts severance and pension obligations (the levy was eliminated by the SD Legislature this year however the fund stays in place until 2020)

* Pre-School: Enterprise fund for the birth to 3 program

* Health Insurance: Holding account for district and employee premiums to fund claims in the district health and dental benefits

* Unemployment Insurance: Holding account to fund unemployment claims

* Debt Service Fund: Holding account to retire single maturity construction bonds

Once again, if you have any questions regarding this document, please feel free to reach out to Public Information Manager Katy Urban at (605)394-4091.