Finance committee hears FY27 budget briefing; state proposals could reduce county request

The Frederick County School Board finance committee received an information-only briefing on March 5 about the division’s FY27 budget outlook, including possible changes tied to the state budget and several fund-level updates.

Ms. Anderson, who led the presentation, told the committee that both House and Senate versions of the state budget include additional funding for special education and programs for at-risk students. She said the Senate proposal includes a 3% compensation initiative while the governor’s introduced budget included a 2% compensation initiative. "If the Senate version were to be approved, that would provide us about $750,000 more state revenue towards our compensation initiative," Ms. Anderson said. She also noted the presenter’s calculation that the Senate draft would yield about $1.8 million more in state funds than the governor’s version overall.

The presentation emphasized timing: Ms. Anderson said the General Assembly is scheduled to conclude work March 14 and the Virginia Department of Education typically issues final entitlement figures shortly thereafter. That state guidance, she said, will allow staff to reconcile entitlements with the division’s budget request the board is forwarding to county staff.

On baseline adjustments for FY27, Ms. Anderson said staff identified approximately $2.1 million in reductions (including savings from one-time software implementation costs, budget alignment across account managers and personnel attrition, plus a modest reduction in the Virginia Retirement System contribution rate) that would be offset by roughly $2.8 million in increases (driven by higher utilities and contributions to regional programs). "To continue to offer the same health insurance benefit to our employees and their dependents, it would require $7,100,000 more for next year," she told the committee.

Staff also reviewed major fund-level items. The school nutrition fund is projected at about $12.7 million and Ms. Anderson said roughly 32% of students take breakfast and 60% take lunch daily, with the division projecting nearly 13,000 meals served each day. The nutrition program is funded predominantly with federal dollars and is subsidized by the operating fund by about $1.1 million; the proposed budget includes 1.3 additional full-time-equivalent positions contingent on productivity targets and community eligibility participation.

Other funds discussed included the textbook fund (supported by state SOQ dollars with a local match); the debt service fund (staff said the division will need roughly $1.1 million more from the county next year because of increased borrowing for active construction projects); and capital projects and construction funds, where staff cited active projects and an application for a Jordan Springs high school project of about $28 million.

Ms. Seibert summarized the division’s private purpose fund and scholarship activity, noting Bright Futures receives donations and county support for three FTEs; she said donations appear to be reducing the division’s ongoing subsidy. On health insurance, Ms. Seibert said the division is self-funded, has about 75% staff participation and operates an on-site clinic in partnership with Valley Health; clinic costs are built into the premiums.

On grant-funded work, staff said the multiyear "All in Virginia" funds (for high-intensity tutoring, Virginia Literacy Act initiatives and chronic-absenteeism efforts) are set to sunset June 30. Committee members and staff said positive outcomes from tutoring and literacy work motivated continuing local funding for select components but staff added programs without demonstrated improvement would not be continued.

The Northwestern Regional Educational Program (NREPP), shared with Winchester and Clarke, was also reviewed; Ms. Anderson said Frederick is fiscal agent and provides payroll and benefits for NREPP staff, and that the three localities are evaluating positions and possible contribution changes that could lower Frederick County’s share.

Committee members asked several clarifying questions about the state bonus proposals, including whether a partial local match would be allowed; staff said the governor’s draft requires the local match as written and partial matches are not provided for in that proposal. Ms. Anderson said the local match for a 2% current-year bonus would be roughly $1.9 million and that the General Assembly was also considering a flat $1,500 bonus option; she said staff would provide additional detail as the state clarifies the amounts and requirements.

No policy votes were taken; the committee approved the meeting agenda and later adjourned by voice vote on routine motions.

What’s next: staff said they will update the committee after the General Assembly and Virginia Department of Education provide final entitlement figures and as the county budget process progresses.