Derby board votes to exceed revenue-neutral rate as federal Title funding is frozen

The Derby Board of Education voted 7-0 July 7 to exceed the district's revenue-neutral rate as district leaders confront an unexpected hold on federal Title funds.

Pam Kelly, Derby Public Schools director of finance, told trustees that "the total amount of funding, on hold is $317,397," and that "the funding that's on hold is $304,007.37" for the district. Kelly said the U.S. Department of Education's review has no public timeline and that the district was instructed by the Kansas State Department of Education to budget as if the funds will be received but cannot spend them until the federal review is resolved.

The revenue-neutral presentation explained the district's levy structure, noting the general fund mill is exempt and that capital outlay projects were approved assuming an 8-mill capital outlay levy. Trustees discussed two options to cover the Title shortfall: use contingency reserves or slightly increase the local option budget (LOB). Kelly estimated an LOB increase of about 0.3 percentage points, roughly a 0.24-mill increase, and said that raising the LOB would shift roughly $305,000 of local cost-sharing onto taxpayers.

Board members weighed taxpayer impacts against program continuity. One trustee said voters have already shouldered substantial tax increases over recent years and urged caution about adding to that burden. Others stressed the instructional consequences if professional development and intervention programs were delayed.

After debate the board approved a motion "to exceed the revenue neutral rate" on a 7-0 voice vote. Following that formal vote trustees took an informal straw poll on how to cover the Title shortfall; by majority they indicated a preference to use contingency reserves rather than raise the LOB. Superintendent Heather Bohati and Kelly said staff would build the budget around that direction for certification with Sedgwick County on July 18 and would move expenditures back to Title grants if federal funding is restored.

Kelly warned the contingency balance is below recommended levels and said the district's contingency reserve is roughly $960,000 short of the one-month payroll benchmark used in prior planning. She also cautioned that federal funds are reimbursed on a draw-down basis and that a restored award would allow the district to reclassify eligible expenditures.

The board recorded that if federal funding is not restored, the recurring costs currently supported by Title grants would need to be addressed in the regular budget process.

Trustees did not adopt a formal budget amendment at the July 7 meeting; Kelly said the district will certify the mill levy on July 18 and finalize budget details before the county mailing of taxpayer notices.