Less than a week after the state closed school buildings for the 2019–20 school year, the Board of Trustees discussed the 2020–21 budget.
In a workshop discussion focused on proposed compensation plan recommendations, Trustees considered and discussed the ramifications of the novel coronavirus (COVID-19) global pandemic. The board’s interest in the safety and wellbeing of both students and employees was clearly evident in the discussion. Chief Financial Officer, Elaine Cogburn, and Chief Human Resources Officer, Karie Lynn McSpadden presented a coordinated package of personnel and budget options for the board to consider. Included were scenarios which examined questions the board had previously expressed regarding what might happen if enrollment or property value growth slows, or state funding formulas change significantly during the 2021 legislative session.
District starts compensation plan discussion
The Human Resources team presented a salary and pay rate plan for next school year that keeps Leander ISD as one of the top-paying Austin-area districts for teachers and instructional staff. The recommendation included adjustments to administrative positions to keep pace with record-setting raises the Board approved in the 2019–20, including a more than 7.5% raise for teachers.
A large portion of the discussion revolved around staff raises. Data was presented for an across the board 2% raise for all employees versus a 2% one-time payment made to employees in the Fall. The benefit of the one-time payment is that it provides the board flexibility in future years. The negative for employees is the amount may not be included in their TRS calculation for retirement purposes. Trustee Elexis Grimes expressed her support for staff, urging the administration to explore “ways to show employees that we support them and love them, and appreciate what they’re doing.”
In the compensation adjustment review, the following positions were addressed due to the compression created by the large teacher increases implemented last year:
- operational supervisors and leadership;
- special education licensed professionals;
- informational technology staff;
- campus administrators; and
- district administrators;
The Board also considered increasing substitute teacher pay and bilingual teacher stipends into the budget discussion.
Budget planning enters unknown future
Trustees discussed the unknown factors facing schools, including tax collections, the impacts of changes in local appraisal districts, student enrollment growth, and a potentially slowing state economy that could result in decreased state school funding.
Trustees also considered the impacts of social distancing and remote learning on the current and future year budgets. “We need to get to a model for what the plan for learning is going to look like next year, because it has the ability to dramatically impact our budget,” Board Vice President Aaron Johnson said.
LISD estimates revenue, which is mostly based on student attendance for state funding, on a third-party demographer’s annual report, which projects enrollment growth and trends. For budget planning, the district used PASA’s moderate growth forecasts. The district also presented scenarios for zero enrollment growth and a decline in enrollment of 1%.
“Our teachers and staff have been through a significant challenge this spring,” Gearing said. “Having more people in relation to students in the Fall may be good for staff morale.” This might happen if student enrollment falls and the district continues with current staffing plans. However, “because we’re a fast-growth district and because we’re in great financial shape, we can weather the storm for a year. This could allow us the ability to fix overstaffing the following year through attrition, if we have a budget shortfall.”
Due to the Board’s continued commitment to responsible budget management, the district has a fund balance totaling $150.5 million, which could reach $167.7 million due to savings resulting from a change in the fiscal year and the closure of school buildings during the COVID-19 pandemic. The Board sets a target of three months operating expenses – approximately $100 million – for its fund balance, which serves as the district’s savings account. The fund balance could be used to offset budget shortfalls in a single year, allowing for the district to recalibrate the following year.
Due to the change in the fiscal year from September 1 to July 1, the decision to approve the budget will be in June, with a plan for compensation possibly coming in May.
Benefits plan for 2020-21
Employees want choice, flexibility and the availability of a zero-cost plan, according to customer surveys and focus groups. The proposed 2020–21 compensation plan includes a $1 million district investment into the self-funded employee health plan. The district did not increase health care premiums in the 2019–20 school year thanks to the Board’s support of the fund. The district could be changing its benefits provider for the 2021 year with an announcement coming as early as May.
The workshop ended with the board encouraging the administration to continue working on creating a budget to meet the needs of students and staff while anticipating future economic trends.