Budget process begins amid enrollment concern - SanTan Sun News SanTan Sun News

Budget process begins amid enrollment concern

March 13th, 2022 development
Budget process begins amid enrollment concern

By Ken Sain
Staff Writer

The Chandler Unified Governing Board last week began its annual process for formulating a budget for the next school year on an ominous note as both the superintendent and the district’s fiscal chief expressed concern about a downward trend in enrollment.

Chief Financial Officer Lana Berry told the district is approaching its apex in enrollment and that it would likely level off for a couple years before officials start to see a decline.

Berry said that while enrollment at high schools and junior highs is up, seeing a decline in elementary school students is emerging.

She pointed out birth rates are in decline and that the cost of housing has increased significantly, making it harder for young families to move into the area. Similar concerns have been expressed in several of the district’s neighbors, notably Kyrene and Tempe Union, where enrollment has fallen off by 10% in the last five years.

“We really feel like our ADM (average daily membership) has leveled off and will eventually decrease,” she said.

The decline is a major concern because it impacts district finances since the state decides how much money to give each school district based on its ADM.

While this is happening, the district also faces increasing competition for students from charter and private schools.

Superintendent Frank Narducci said the district faces increasing competition from charter and private schools and other districts. He said to help attract more students, it needs to reach out to the community.

The district administration has proposed a maintenance and operations budget of  $341 million, though the numbers are still in flux and the final amount won’t be determined until after this month. The district’s current budget is about $333 million.

The Governing Board adopted a recommended budget plan from its Budget and Super Q committees, which are composed of teachers, staff, administrators and members of the community.

Some of the recommendations adopted last week include:

  • A 4% salary increase for classified staff
  • A 2% salary increase for certified and administrative staff
  • A $400 wellness incentive for employees who qualify
  • A $1,000 retention stipend next school year (pro-rated for time of service)
  • Shifting $2,500 of the annual $3,200 pay for performance bonus to base salary
  • Continue the pro-rated $600 Journey 2025 stipend (Journey 2025 is the district’s 10-year plan for improvement)
  • Stipends paid to coaches will increase to current market levels
  • Stipends for dual enrollment and special education teachers
  • Reducing the wait time for new hires to qualify for insurance from 60 to 30 days

The budget process starts at the end of the previous year when top administrators and all principals are asked to list any new projects they would like that would cost $5,000 or more.

The governor presents his budget in January and that is the first time district officials get a sense of how much money they can expect. Berry said that number rarely changes too much.

This year Gov. Doug Ducey recommended an extra 2% for inflation, even though Berry said inflation is a lot higher than that.

On a bright note, the district expects to pay about $624,000 less into the Arizona State Retirement System.

“We are excited that it’s going down” Berry said. “It’s been going up, and up, and up since I’ve been in education, and this is my 23rd year.”

That savings paid for most of the increase in health insurance for employees, which will increase about 3%, or $670,694.

The recommended budget has the district paying that costs for all employees, so the amount taken out of their paychecks will not increase. However, employees will have to pay the 3% increase for any dependents in their coverage.

About $37 million was asked for new projects of $5,000 or more. The committees recommended approving about $23 million.

That breaks down to $8.6 million for ongoing projects and $7.5 million for one-time expense; $2.6 million for capital projects; $2.2 million for bond projects that are not part of the ones approved by voters in November; and $2 million in other projects.

Most of the money in the maintenance and operations budget ($10.8 million) would go to paying employees, either with salary increases or one-time stipends.

One issue on the list that may be challenged later this year is a recommendation to spend $500,000 for marketing. Board member Joel Wirth said he does not believe the district can afford that, but said he would wait until they get a study session on the issue in April.

Any of the numbers in the recommendations passed this week can be revised by the time the final budget is adopted in July.

Board member Jason Olive objected to a proposed $200,000 for enhanced security at one of the district’s schools that would offer secure access through the front office.

Noting that the school has an open campus with multiple entry points, he said installing an expensive security system in the office while most of the campus remains open would be a waste of money.

District officials told him they are evaluating all their schools right now to see where security systems make sense and how they can improve security.

Board member Lara Bruner praised the proposed stipends for special education teachers. She also encouraged district officials to see if there was a way they could split the wellness incentive being offered. Currently, it would all be deposited in the employee’s health savings account, which limits how it could be spent.

Bruner said she would like to give employees the option of using some of it to pay for preventative measures, such as gym memberships, which helps them stay healthy instead of just reacting to being sick.