Derby board votes to exceed revenue-neutral rate amid federal Title funding uncertainty

The Derby Board of Education voted 7-0 July 7 to exceed the revenue-neutral rate and directed district staff to budget using contingency reserves while federal Title program funds remain under review.

Board members approved exceeding the revenue-neutral rate as part of the district's annual mill-levy certification process; Pam Kelly, the district's director of finance, told the board the county certification deadline is July 18 and that the county will mail taxpayer notices after July 20. Kelly said the state will pay for that mailing.

Kelly said the district is facing immediate uncertainty after federal review placed $317,397 in Title funds on hold. She said the district's share of the withheld total is $304,007.37 and that private schools within the district account for about $12,660 of the held funds. The withheld funds include Title II (professional development), Title III (English-learner supports) and Title IV (well-rounded education and instructional technology) allocations, according to Kelly.

"Without a definite timeline on Title funding, I am asking for direction on how to proceed with the budget concerning this reduction," Kelly told the board. She explained two formal options: use contingency reserves or increase the Local Option Budget (LOB) slightly (she estimated about a 0.3% increase to the LOB, roughly a 0.24-mill change), and she described a planned reduction in a special assessment mill levy that would lower that levy by roughly 0.144 mills (about $1.66 annually on a $100,000 house).

Board members debated the trade-offs at length. Several members, including those who identified themselves as concerned about low-income taxpayers, said they preferred using contingency reserves for the current fiscal year and then addressing any recurring shortfall in the budget process next year. At the end of discussion the board took an informal preference vote and the majority indicated support for using contingency reserves to cover the Title-funded expenditures for now; the board chair then confirmed the formal action to exceed the revenue-neutral rate, which passed 7-0.

Kelly told the board the contingency reserve currently falls short of the recommended balance by about $960,000 (the recommendation cited was to hold roughly one month's payroll in reserve). She warned that using contingency would require the district to replenish that reserve over time and that if federal funds are not restored the programs paid from contingency would need to be carried forward into the formal budget process.

Board and staff members listed the types of expenditures typically funded by Title grants: professional learning (trainers and substitutes), curriculum implementation supports, summer programs, interventions tied to needs-assessment goals, and English-learner services. District leadership said most of those activities are recurring and would need a funding plan next year if federal allocations are not reinstated.

Pam Kelly said the district will certify levy amounts with the Sedgwick County clerk on July 18, and that the district can levy up to the certified maximum but may levy less once the budget is finalized.

The district committed to present a final budget built to the board's direction before certification and to move eligible expenditures back to Title funds if the federal review restores funding during the fiscal year.

The board did not adopt a permanent change to the LOB at the July 7 meeting; board members said any permanent increase would be considered through the formal budget process.

Votes and next steps: the board passed the motion to exceed the revenue-neutral rate, 7-0, and staff will build the budget based on the board's direction to use contingency reserves if necessary and will return with final numbers before county certification on July 18.