Um, that unrestricted capital is also that uh district additional assistance. The override falls into that. Um, and that's a also a budgeted fund. A budgeted fund means that we can't spend more than our budget capacity. So I might have an extra $16 million in that fund balance, but I can in M and capital I can only spend what the budgeted amounts are in that other column. It's all we can spend and we can't go over that. We statutoily cannot go over that amount. That's why we do strategic carry forward planning so we can affect that fund balance. So technically without the dead cash that fund balance should be the dollars that we carried forward from the year before and the way that we carry forward for forward dollars is we don't spend every penny of our budget. Um we ensure fund balance reserves. We set that between that 10 and 20% sliding scale and then we manage our expenditures so that we have funds to carry forward.
Um and then those funds become available to us in the next budget cycle. So instead of having a $32 million budget, if you roll forward 7 million, now you have a $39 million budget capacity. And that allows us to spend more than what our initial budgets are. And this is where I'm going to lose everybody because it's after lunch. But this is the the stuff that goes into budget planning. Um those two funds kind of connected when we talk about cash uh and how we plan for them. that capital cannot be used of to pay salaries and benefits. So people are like, "Well, you got all this money over here. What are you gonna do?" Well, not really that much. >> And that's why it's so good to have a distinction between capital funds and other different funds because each bucket has its own proper amount of money.
And if we ever have questions on those buckets, make sure that you're reaching out because we never want to be conveying the wrong information to community members and them thinking, well, you just passed a $60 million >> plan and why am I only getting paid $16 an hour or whatever the case is, right? There's a lot of misconceptions in that. So, thank you for sharing that, Map Shapiro. >> And if you look at that capital line, that is the line that we would have available to build a school. you can see that it is very insufficient, which is why we do have to go out to our our voters for bonds in order to have enough funding. Um, we get about >> 2 million two $2 million, a little more than $2 million in that capital funding. Um, and then we get about $2.9 million in the override.
So, each year we're getting approximately 5 million in a capital bucket. >> And how much does it take to um rebuild a school mission? >> I don't know. Should I say that number right now? No, I got to lead you guys up to that number. >> Fall out of their chair. >> Start. >> Perfect. Okay, better question. >> Numbing them to the number. Just >> start numbing them. >> Is $4 million enough to meet the needs of the structural issues that we have in this district. >> Maybe in 10 years of co of of saving that money and not doing anything else with that money besides saving that money and uh getting interest. 10 years that bucket may build a school for you. Thank you. >> But 10 years from now, it's going to cost even more. So, probably it won't. >> So, >> thank you.
>> The classroom site fund. This is a really cool fund. Uh this one is specific to teacher pay. Uh there's a slight bit you can pay to to non-defined teachers uh but other certified staff and then some direct uh student support staff. But, uh this is also a budgeted fund. Uh you have to stay within your budget. Um the budget capacity is pretty big. It's very restrictive. Uh it used to be broken into three different areas and we had to account for every single area and each one uh contributed to teacher pay in a different way and it had its own rules. Uh but they took away that in some recentish uh laws change. Um but uh the way we account for these monies it now that they've made that change it makes it easier to apply to teacher pay. So, if you'll notice, there's a fund balance in there.
Um, since I've gotten here, and and because that fund is so restrictive, it's really hard to spend that fund balance down. One of the ways you can do it is to um create a performance-based pay plan that allows you to increase um components uh for teacher base um bonus pay uh and and spend those dollars as opposed to letting them sit into a bucket that nobody can touch. Uh that's one component. Um the other component it is it is a part of teacher pay but you can only use it in teacher pay for new new amounts. So if you give uh teachers a 2% raise you can uh fund a portion of that 2% from these classroom site funds. Again it's very restrictive. It has supplanting meaning that you can't use it to replace something you're already paying. You can only pay for new. And um so that's why we're really excited this year because it is the timing of us restructuring our performance-based pay uh plan and um uh Dr.
Lauren's been working on that uh and uh we might get to talk about that a little bit depending upon the time. Okay. Um and we are redesigning that performance-based pay to have an SOFG alignment. It did not have an alignment uh prior other than it's a teacher um pay and teachers are aligned, they're teaching kids, but now it it is actually uh the proposed plan that we haven't um completely rolled out. We're taking that back to committee does have an SOFG uh component uh when they're meeting those goals. So, instructional improvement, another one that is really tricky to to move around. That's um half of the revenue per statute has to go towards teacher pay and the other half has to go to uh dropout prevention. Dropout prevention is very um structured and they have a little list and it's very hard to meet that requirement.
Uh becauseraton has been utilizing the same process for over a decade. Uh we're actually um utilizing those funds for dropout prevention in our sports programs. It goes to paying uh coaching stipens and a portion of the um assistant principal pay as they oversight those uh sports events. Um it's real hard to to put any more into that uh because the dropout prevention programs that are eligible aren't things that elementary kids use. So it's not just we think this is dropout prevention. you have to actually utilize one of these resources that the state um gave along with the bucket of money and said use these things again restrictions that make it hard for us to spend the money. What's really nice though is half of that money gets to go to uh increasing teacher pay. We do that by taking half of those revenues and you can see the revenues coming in.
They're not that much. They're what are they instructional improvement 377,000. So about um we take half of that which is a drop in the bucket and we put that towards medical costs for teachers. Meaning we don't put that cost towards teachers and in turn we're that's pay that they're getting that would have had to go towards medical cost. So that's how we manage that fund. It's a um we do the best we can. Again sometimes it comes down to pennies. uh onetime monies. When we were talking about fund strategies and we're talking about these onetime monies, indirect cost, that's an allowable charge in grant funding that includes the food service um dollars. We charge an indirect cost to all of those grant funds and then we we have uh access to those dollars to pay for those things that are hard to track. So, an example of that is um if your grants uh if one of your finance people is doing a journal entry for grants, she's on the computer, I got electricity, we got the computer time, that's not the whole part of her job or her day.
That's just one journal entry. How do I account for the cost of that? Uh because that portion of it is entirely in grants, but she's doing all sorts of other finance things for the rest of the day. It's an indirect cost. It's hard to determine what it is. The way that we actually then use those dollars is we take a portion of the people who manage grants and we pay their salaries with that. Um but also this is an incredibly flexible fund. Um this is the fund that we accumulate fund balance in in order to mitigate the federal impacts to grant funding. So, when we talk about how are we going to handle the grants, I've been actively um keeping these one-time dollars in this bucket in case uh we see the fruition of the things that we've been being threatened with for quite a few years now.
Um so, two years ago it was like maybe even three, uh we're going to lose at least 20% of grant funding and it's going away and we're not going to have it. And we're like, uhoh. uh and it didn't happen. Uh the next year we're going to lose at least 20%, we're going to cut grants and it was a big in the news and lots of programs were um stopped and kids were very impacted in Kraton. We said no, no matter what these programs are important to our kids and we have some funding to help us along the way if those monies are cut. So we're not going to make the choice to cut those programs. We're going to continue them. We were able to do this because we have dollars in this bucket to support those programs. Guess what? The funds were not cut.
So, we continued our programs appropriately and if they were to be cut, we have money to support those programs temporarily because these are one-time dollars. Once they're gone, they can't support an ongoing process. But what it does do is it allows us the time and the space to have the good conversations and determine the best choices for our students moving forward when we do get impacted by these types of situations that we have no control over. So, it's not that the monies are or are not cut. It's do we have the funding uh reserves to be able to have an entire year to cover it and then make good decisions before we eliminate our strategic abandonment. Um, I think sometimes that's what your reserves are really for. They're an ability to have time to make good decisions versus wake up tomorrow and say we have to close four schools.
And that's something I have actively work on is to ensure that we have reserves. This is the conservative part of my budget planning. And those reserves are strategically placed in funding sources that are flexible that can be used in an emergency as needed without a lot of restrictions. So that's what that indirect cost bucket does for us. Medicaid is very similar. How we get the money in is is you know got a lot of rules and guidelines and structures but it is also one-time monies. Um where we are looking to lean in on our Medicaid dollars is we have had a dramatic increase in contracted teacher cost um especially in the special needs area. Those staff tend to be pretty expensive. We did some analysis for our meet and confer. Um, what we can see is, uh, and Dr. Lauren did a great, uh, I actually want to bring that up.
Oh, it's going to mess up my whole thing. Um, no, I don't. In those list of documents, it's it's in there. It's a contracted teacher. Maybe it is. I'll make sure it's in there. Um what it does is it looks at if we hired the staff member how much would they cost and compared to how much we're paying for the contracted teachers staff. It's also pair of professionals, special ed teachers, regular ed teachers. Our contracted costs have significantly gone up. Um so that's something that like there's not really a good strategy to to plan for that. But some of the ideas that we have floating around is we're spending the dollars anyways. Sometimes people have a sticker shock. They say, "Well, we're spending $5 million on contracted uh staff." Well, we'd be paying $4 million if it was our staff, right? So, really, there's only a $1 million increase.
What would I do with a million dollars? One of the strategies that we're looking at taking to meet and confer is if we took half of that million dollars and put it into our schedules for those staff that are affected, would that bring in more? We're spending it anyways. we might as well try to get half of the savings of the million dollars and bring in employees and staff that we hire on our own. And maybe it will reduce the contracted teacher um needs. Maybe it won't. If we put it in the schedule, it only gets used if it gets used. So, we're already spending the million dollars. It's a net zero decision. And it could save us money by bringing in uh employees to save us half of the million if that makes sense. Those are some of the strategies we talk about, but Medicaid is the the funding source that's going to help um support us while we figure out what to do about that problem because it is a problem.
It's not built into the ongoing budget. It's not a good ongoing cost um and it's an increase. So, we were trying to look at ways to mitigate it. We have a year to talk about it, make some plans. We have another year to see if those plans actually work. So, that's when we talk about planning forward. We give ourselves space to try some of those things and as you had said earlier Sophia about sometimes you need to try something and see if it's but you don't just keep on keeping on and when it's failing. Uh, so these are some of the strategies that we're using and these are the funding sources so that we're not hitting our main M bucket, right? >> Isn't that a common thing happening across districts though? I mean, >> um, because I know that it happens in my district where we contract most of those people out because there just aren't >> enough people, but you have to have those people.
>> You have to in special ed. There's no you just have to. That's not a Yeah. So, we're looking at ways to navigate it. It's it's a have to cost. How do we make it a little cheaper and more affordable and where do we fund it from? Those are the conversations that we're having. >> But it is affecting all districts. Like it's probably the number one conversation that comes attendance get together. >> Yeah, I'm sure it is cuz I mean >> I do want to show you uh something really quick as to why um I know that it's a a big factor here in Kraton. Uh let's take a look at my All right. Here's my magic sheet. Here's the here's behind the curtain, guys. Here's where all the magic happens. All right. So, this is the um historic M budget and expenditure analysis that I use for projections and to kind of keep my pulse on things.
Um but I want to show you column, let's see. So, it goes back to 1516. This is the student. Oh, let me get rid of this. Let's get rid of this. Here we go. Okay. So, you can see the um I have the student ADM and that's different from enrollment and how much we decline. I have a calculation here just giving me a regular raw number that sometimes when I'm looking at averages, this is when we switch to current year funding. Uh there's a reason why I have that marked out. And then you can take a look and see this is the percentage of decrease in ADM which is correlative but not completely matched to enrollment. And then we have enrollment at 100 day our enrollment decline. But here's what I want to show you over here. Sped percentage of enrollment. You can see that over time that percentage has grown year after year after year to now at 12%.
12% of our enrollment are students receiving sped category support. We do not get a sufficient funding amount for our sped students. >> Public schools educate all students. We don't get to turn them away. So, not that we would, but charters and privates, they don't have that same obligation. So what's happening you can see as they're being picky who and student and student counts are going down and now there's a smaller population of kids who's getting the special needs public schools are. This is a really big target we need to be discussing and creating solutions for. So as I'm managing the budget these are the types of things that I have to really keep an eye on. And this is why this spreadsheet exists. So I can see these trends. And I know that we talk about well trends isn't everything. Trends is a lot when it comes to planning and and knowing what is pushing those dollars.
Why do we have the contracted teachers? Well, because our population's bigger. But what I can tell you is as our enrollment goes down and we have great strategies right now for um attrition planned reductions in staffing. um the fewer staff we have, if we invest in ourselves and we invest in our staffing, what that will do as we increase those salary schedules and those around us are not and they are closing schools and there's more and more staff out there in the market. We will then be in a position if we continue to focus over and over to invest in ourselves as we move down the path of declining enrollment and increased special needs. We will have the ability to pick and choose from the most highly qualified staff because we will be paying more than those around us. People are going to want to work for us because we have an efficient SOFG resource aligned, productive and performing district.