Funds

Fox C-6 reserve funds up for now | Local News

Fox C-6 School District started the 2022-2023 fiscal year with more money than it has in decades, chief financial officer John Stewart said.

He said the district began the fiscal year, which started July 1 and runs through June 30, 2023, with $26.2 million in reserve funds.

The Fox district started the 2021-2022 school year with $21,217,840 in its reserve funds and $16,286,450 at the start of the 2020-2021 fiscal year, district records show.

“Our fund balances are better than they have been in years. That is always a good thing when you are looking at the budget,” Superintendent Paul Fregeau said.

However, according to the budget the Board of Education approved in June, the district is projected to spend $3,987,372 more than it brings in this fiscal year, which means the district’s reserve funds would shrink to $22,212,628 by the start of the 2023-2024 school year, Stewart said.

He said he expects more deficit spending over the next couple of school years, which would deplete the funds further and put Fox at risk of becoming financially stressed.

He said if a district’s fund balance falls below 3 percent of its operating budget it is considered in financial stress and could be unaccredited and taken over by the state.

In January, Stewart told the board he projected that the district’s reserve fund balance would fall to $2,448,964, or about 1.89 percent of operating budget, by the end of the 2023-2024 budget cycle.

On Aug. 29, however, he said the district’s reserves would not fall to that level so soon, but he stressed that the district’s reserves will continue to shrink, putting it at risk of becoming financially stressed, if Fox does not secure a new revenue source.

“In the long run, a tax increase is necessary,” Stewart said. “The last tax increase occurred 18 years ago in February 2004.”

The largest portion of the district’s operating cost for this school year will go toward paying the district’s approximately 1,850 employees.

Last school year, board members voted to give all employees raises, and according to the new budget, teacher salaries increased by an average of 6.53 percent, and administrative and professional staff members got an average 1.38 percent pay raise.

Support staff employees, like custodians, cafeteria workers and bus drivers, received pay increases of $1.30 an hour, which took effect Jan. 1.

Stewart said Fox will spend $84,714,022 on salaries during the 2022-2023 fiscal year after spending $79,369,300 on salaries the previous fiscal year.

Salary costs will continue to rise as teacher salaries are scheduled to increase by an average of 2.35 percent for the 2023-2024 school year and 2.17 percent for the 2024-2025 school year, Stewart said.

Support staff employees are scheduled to receive an 85-cent raise on July 1, 2023, according to board documents.

Overall, Fox is expected to spend $43,898,210 more than it collects in revenue during the 2022-2023 fiscal year, with the district bringing in $143,306,791 and spending $187,205,001, according to the budget.

This fiscal year, the district will pay for the bulk of the Prop P improvement projects around the district, which are being funded with revenue from a $40 million bond issue voters passed in June 2020.

The expenditures for those projects will contribute to a large chunk of this year’s deficit spending, Stewart said.

The district also is projected to spend more than $10 million on capital improvement projects that will not be covered by Prop P funds.

Some of those capital improvement projects include $2.8 million for lease payments, $2,880,000 for HVAC replacements, $1,733,000 for buses, $722,500 for technology equipment, $600,000 for repairs to the Fox High School track that was damaged by water-drainage issues this year, $387,000 on food service equipment, $316,500 on maintenance equipment and $170,000 on roof repairs. He also said the district has $402,000 in unallocated funds to be spent on unforeseen needs.

“We are in a stronger position on June 30, 2022, than we have been in years, but we are also looking at serious budget challenges with both revenues and expenditures in the next few years that will quickly deplete those fund balances,” Stewart said.

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