Deming Public Schools sees funding increase despite falling enrollment; board to review operational budget May 15

Deming Public Schools staff told the school board at a budget-input meeting that state formula changes and a higher unit value will raise district revenue this year even as student enrollment declines, and the board will consider the operational budget at its May 15 meeting.

The additional revenue comes from a roughly 3.8% increase in the statewide unit value and an increase in adjusted program units after recent legislative changes, staff said. The district reported that, after applying new formula factors, it had an increase in units and expects higher SEG (state equalization guarantee) revenue despite lower membership counts.

Why it matters: the district must balance mandated personnel cost increases and rising insurance costs against declining membership and limits on how much recurring spending can be supported by one-time cash balances.

Staff cautioned that a state-mandated 4% salary increase for employees will apply districtwide, and that a separate legislative increase raised teacher minimums. "We are doing the 4% for all staff," the budget presenter said. At the same time, health insurance premiums are projected to rise "just shy of 10%," and the district faces a roughly 16% jump in property/liability premiums, which staff estimated at about $350,000.

Those combined forces shrink the district's flexible operating margin. Staff noted that salaries and benefits consume nearly 80% of district spending and that one-time cash previously approved by the board should be reserved for capital and one-time needs rather than recurring costs.

Security and other one-time spending: Board-approved one-time operational money of $8,000,000 (approved at a prior meeting) is earmarked in part for safety and security work, staff said. Planned investments include card-reader access at school doors, security vestibules, additional fencing and cameras, public-address upgrades, ADA bathroom work for an auditorium, practice-field work and scanning/metal-detection equipment under consideration. "We're increasing the security. We're doing card reader access, at all of the schools," the presenter said, describing proximity-card readers that can be turned off instantly if an employee leaves.

Federal programs and cash flow: staff emphasized the difference between recurring SEG revenue and cash balances used to float federal program reimbursements. Federal grants such as Title I are typically reimbursed after district expenditures; staff said the district must maintain cash to cover reimbursements during review cycles. The presenter noted that in prior years reimbursements could be three to six months delayed and that large federal awards (for example ESSER/ARP-era funding) required a sizable cash float.

Enrollment, unit value and formula changes: the presenter summarized recent legislative changes affecting funding: a reweighting for higher grades and CTE-related programs, a revised at-risk calculation using a three-year family income average with a higher multiplier, and a separate English learner (EL) category with its own multiplier. Those changes increased adjusted program units even though the district's raw membership is declining; staff said the unit-value rise combined with adjusted-unit increases produces a net SEG revenue gain.

Survey and priorities: a district budget survey that closed the previous day drew roughly 202 responses split between staff and parents. Respondents ranked school safety and teacher salaries as the top priorities; general education, smaller class sizes and career and technical education (CTE) also rated highly. Staff said CTE funding includes Perkins and a state program referenced by number (27502) and that Nelson Diaz oversees CTE at the high school.

CTE and facilities: staff discussed capacity limits for new CTE offerings that would require classroom/shop space and certified instructors. Early College and several aging school buildings (Bell, Chaparral, Early College were named) are on a state list for potential building work; staff said the district is considering moving portable classrooms but noted high costs for relocation and installation.

Next steps: staff will present a more detailed budget at a board work session next week and the board will consider approval of the operational budget at its May 15 regular meeting. If approved, the district will submit the operational budget to the Public Education Department (PED) for state review. Staff warned that some federal grants and other appropriations may require special board meetings because application windows and reimbursement timelines can be short.

Ending: The presenter summarized the district's position as solvent for the coming year and for some years ahead because of built-up cash balances, but cautioned that the district must balance one-time cash, recurring costs and state expectations for reserve levels.