Appleton school district projects $5.5 million surplus, but it came at the cost of staffing challenges
APPLETON - In her first school board meeting as the Appleton Area School District's executive director of finance, Holly Burr was able to bring some good news about the 2021-22 budget — though it came at a cost.
The good news: The district expects to have $5.5 million unspent from the last school year, money that can go to the next school year's budget.
The bad: Most of the savings came from staffing shortages — and even from textbooks the district couldn't buy.
Burr cautioned that the numbers are preliminary, since the district hasn't finalized its financial results for the school year that ended June 3.
The surplus comes from the district's two largest instructional funds, a general fund where the vast majority of revenues and expenses lie, and another for special education. Usually, Burr said, the two funds are presented as a combined total because the general fund can be used to fill any gaps in the other one.
Previous projections for the 2021-22 budget expected the funds to break even or be slightly in the negative. But now, the district is projecting those funds to end with $5.5 million in the positive, Burr said.
"The increase in fund balance is very good news," said board member Jim Bowman during the meeting.
Burr said the anticipated surplus will help the district's finances since it's going into the second year in a row without an increase in its revenue limit — a decision determined by the state’s biennial budget.
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Superintendent Greg Hartjes told The Post-Crescent on Tuesday afternoon that, while funding from the state and from property taxes won't increase in the 2022-23 budget, the district faces the rapidly rising costs of high inflation.
"What that means is that we have to figure out how to pay for all the inflationary increases that we will face this year," he said.
Hartjes said $5.5 million is a bigger surplus than the district would like, since it's best to spend each year's money on that year's students. But he said the money left over can help cover those increases in areas like transportation, cleaning, utilities, maintenance and insurance — which can see 3-5% increases in a typical year.
Staffing struggles are major factor that led to projected surplus
Hartjes echoed Burr in saying the biggest savings came from lower-than-expected staffing costs, primarily through unfilled positions.
"We had a lot of positions that were open, which is good for us financially," Hartjes said. "It's not good for our students educationally."
While unfilled positions save money, they result in fewer teachers and support staff to educate students, some of whom may still be recovering from pandemic-induced learning loss. Openings also strain existing staff that are called on to help fill in.
Similarly, the substitute shortage experienced by Appleton and districts throughout the state saved the district money by having administrators and other staff fill in, rather than paying a sub for a day. So despite an increase in staff absences last winter, there wasn’t an increase in substitute costs, Burr said.
Also, open enrollment didn't have as much of a negative financial impact as the district had budgeted for.
“Coming out of the pandemic last year, we were very unclear at the end of 2020-21 fiscal year what our open enrollment would look like,” Burr said.
In reality, fewer students than expected left Appleton through open enrollment and more students from other districts open-enrolled into Appleton.
The district's two virtual schools, Wisconsin Connections Academy and Appleton eSchool, retained more students than expected last year, Hartjes said.
Burr said at Monday's meeting that there also were fewer special education expenses. And Hartjes said supply chain issues were a factor. For example, the district was unable to make a $1 million purchase on math textbooks it had planned.
With these numbers being preliminary, the district will know more after the 2021-22 budget is audited, which should start in August and usually takes about three months.
The district's proposed 2022-23 budget is expected to be presented in mid- to late-October.
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Reach AnnMarie Hilton at ahilton@gannett.com or 920-370-8045. Follow her on Twitter at @hilton_annmarie.
This article originally appeared on Appleton Post-Crescent: Appleton school district expects budget surplus from staffing shortage
