001Hello everybody. My name is Matt Clark. I am the director of business and finance for the Sun Prairie Area School District. And tonight I want to walk you through how the district budget actually works at a high level. Um specifically we're going to be talking about which costs in our budget are fixed, which are reasonably fixed, and which are non-fixed costs. These are presentations that have been presented to the board in the past and wanted to resurface them um to give you a better understanding of how our budget works. So, we grouped the budget into three broad buckets. Um and for this presentation, those buckets are fully fixed costs, reasonably fixed costs, and non-fixed costs. This presentation um just to note is is focused on our general fund or fund 10 and our special education
002fund fund 27. The reason behind that is because that's where most of the district spending happens. And these categories are going to help explain why budget decisions can oftentimes feel constrained. So first we'll start with fully fixed costs. These are the items we have little to no control over and really the least control in any part of our budget. Fixed costs are expenses that the district really can't adjust um or again has no control over. They're set by either federal state or federal law or driven by external systems. So even if we wanted to reduce them, we generally can't do so in the short term. These fully fixed costs include things like our utilities, um, retirement payments, social security contributions, um, district insurance for property liability, workers comp, etc. Um, and other required payments to,
003um, items like our 4K partners, um, any students who open and roll out, we pay those districts that they open enroll to, and then voucher charter schools. So, these costs happen regardless of our internal priorities. To put dollar values to these costs, um, as you can see here, um, there's some big dollar amounts and putting together specifically a retirement and social security alone total over $13 million each year. utilities, district insurance, and those required payments for open enrollment 4K and vouchers also add up really quickly. Um, and these numbers will move. Um, some of them mostly due to inflation. Um, for our pieces like district insurance and utilities, but then enrollment has a big impact on on these as well. um we we can't control who open enrolls out, who attends voucher or charter schools,
004and which 4K provider they go to. It's not a a district level decision, but either way, these numbers have to be in our budget or fully fixed. So, in total, fully fixed costs are about $23.7 million, which represents roughly 15% of our entire budget. And importantly, many of these costs have grown significantly over the past few years due to enrollment, inflation, and other market conditions. Next are reasonably fixed costs. These are the ones that sound flexible on paper, but are hard to change in practice. These costs are driven by how we as a district operate and the level of service that we provide to our families. Reductions here usually mean real impacts to students or staff, and they also aren't easy to adjust within a single budget year. It's generally a conversation that you're having
005over multiple years. These costs include things like busing, substitutes, summer school, our Jedi program, and then items like facilities and grounds, athletics, um all of our technology software and hardware and the device replacement cycles to be able to fuel all of what we're doing in the classroom. Um, so cutting any of these things, while they're not legally fixed, the community has expectations around them and cut cutting them often changes the student experience directly. In dollar terms, busing and substitutes are two of the biggest drivers here. Um, facilities, athletics, and technology are also significant operational costs. And these costs tend to increase over time um due to wages, cost of fuel, for example, different repairs and replacement cycles. And the total of all of these costs um amount to about $21.6 million, which is another 14%
006of our budget. And like fixed costs, these have also seen inflationary pressure in recent years. So salaries and benefits, um, we kind of separated that because salaries and benefits make up the largest portion of not only our budget, but every school district's budget in the state of Wisconsin. Um, $108 million and about 67%. That number does not include substitutes, retirement or social security because those were listed in prior slides. really when you lump those in there as well. Salaries and benefits make up about 75% to 80% of our budget each and every year. I always like to say that we're in the people business and our budget reflects that. And really the driver of our salaries and benefits um are due to staffing levels and and those staffing levels are driven by class- size guidelines,
007case loads, and other required services. So, while staffing can change over time, it's not something that can be quickly or easily adjusted. This brings us to non-fixed costs. These costs are generally what people often think of as discretionary. Um, and the district does have more decision-making authority over these dollars. Um, really these dollars are used to support board and district priorities. Um, and our non-fixed cost does not mean that they're optional. It does not mean that they're not needed. Just means that they're more flexible. These non-fixed costs include our really our school and department budgets. It's really what makes up our non-fixed costs. Within these budgets are things like classroom supplies, different trainings, equipment, and other basic services. We have association dues that um occur every year, postage, uh furniture, and then other professional development.
008These funds keep day-to-day operations running. And to put all the non-fixed costs together, it really combines to about $6.4 million, which is only 4% of the entire budget. Um so I have an example on the the bottom slide. um for something like soap and paper towel. While those costs are not included in fixed or reasonably fixed um we need them in order to operate and those dollars are found in the facilities and grounds uh department level budget. So again even here many expenses are necessary um but are not in the fixed or reasonably fixed category. So pulling it all together um when we add everything up about 96% of the budget is committed before discretionary decisions are even made and only about 4% is is truly flexible and even then a lot of those costs
009um are committed for day-to-day operations. This is why budget adjustments or conversations often feel limited and difficult. And I will say that that 96% number is not unique to some prairie. That is a number that you would see um in every district um within the state. Um so to conclude this presentation, budget flexibility is very limited. Most costs are either fixed or difficult to adjust without real impacts to students and families. And much of the budget depends on factors outside of the district control like enrollment and like state and federal funding. So with that, um, thank you for listening to this screencast. I'm happy to answer any questions that you have um, and happy to dig deeper into any of these areas. So feel free to reach out via email or telephone. I'd love to
010talk more. Thank you.