PCSSD board approves 2025–26 budget after multi-year deficit warning

Little Rock — The Pulaski County Special School District (PCSSD) board voted Sept. 25 to approve the district’s fiscal year 2025–26 budget after staff presented Cycle 1 financial reports and an itemized board budget report. The presentation showed a proposed budget that staff say would produce a modest positive legal fund balance if collection rates meet assumptions; the presentation stated the district budgeted revenue at 98% collection and projects an ending legal-balance increase of roughly $700,000 if the budget is followed. Why it matters: District staff warned the board the district has experienced multiple years of declining operating reserves and that the Arkansas Department of Education had flagged the district for a declining balance. The board and staff framed the adopted budget as a step to halt that decline and avoid possible state financial actions. The budget presentation was made by finance staff (identified in the meeting as Miss Guess). Staff explained Cycle 1 reports are uncertified until final submission and that the Cycle 1 and the board-budget report are the same analyses presented at different levels of detail. The board report breaks fund-level totals into specific fund-source lines and shows beginning balances, revenues, expenditures and projected ending balances by fund source. Key financial items and assumptions from the presentation include: staff budgeted revenue at 98% of expected collections; federal funds were reported at roughly $14 million for the current year; the operating fund includes classified salaries and benefits and carries the largest share of staff costs; five school buses and three cars were included as budgeted capital purchases; technology costs shifted back into the 2000 (operating) fund for items previously budgeted in Fund 5; and reserved capital balances include roughly $830,000 held for Chromebook replacement cycles. Staff told the board two grants that supported one-time costs in prior years — cited as $360,000 and $300,000 in the presentation — will not be available this year and that some special funding uses have been reduced. On capital projects, staff explained that bond proceeds from the recent bond issuance are included in Fund 3 revenue and that construction payments are recognized in the year checks are cut, which can span multiple fiscal years. For example, the Robinson expansion showed a $20 million beginning balance, $9 million in revenue expected to be spent this fiscal year and a continued ending balance because the project completion extends beyond the fiscal year. College Station’s projected multi‑year spending pattern was presented similarly; Mills Arena payments were described as mostly complete though some payments fall across fiscal years. Staff and the board discussed staffing allocations. The presentation noted the district’s allocation relative to state staffing formulas and said the district is roughly 26 assistant principals over state allocation (a point staff attributed to the state allocation rule that typically assigns one assistant principal per ~500 students). Staff said the district will examine staffing and salary schedules for 2026–27 to reduce cost pressures but did not announce specific reductions for 2025–26. Food service and activity funds were reviewed as part of the budget packet. Staff said Fund 8 (food service) began the year around $1.7 million, added $6.7 million in revenue, spent $7.2 million, and estimates an ending balance near $1.1 million. Staff noted a $150,000 line for bad‑debt/charge off in the food service budget (staff described this as lower than recent recognized charges but said the figure will be monitored monthly). The district reported the new food-service vendor, Chartwells, has contributed to improved operations. Separately, the district said it will centralize activity accounts (Fund 7) at central office by Oct. 1, moving approval and payment processing through the business office. Staff said principals will retain approval authority for building activity accounts but bookkeepers will no longer write checks at the building level; the business office plans to issue Sam’s/Walmart/Amazon procurement cards for building use to streamline purchases. State contact and compliance: staff said the Arkansas Department of Education notified the district in August that PCSSD had a declining fund balance over two years and that state officials indicated they would work with the district; staff warned continued decline could prompt more severe state intervention. The board heard that correcting the trend requires either program or staff reductions or conservative management to restore legal fund balance. Motion and vote: Board member Miss Maynard moved to approve the fiscal year 2025–26 budget; Miss Potter seconded. The motion passed on a voice vote. What’s next: Staff said they will finalize Cycle 1 submission and return more detailed salary‑schedule proposals and staffing analyses for board review. Staff emphasized encumbrance controls (a March 20 cut‑off for encumbrances to obtain a truer ending balance) and said the business office will pursue tighter requisition timing and a goal of faster purchase‑order turnaround.