Kyrene study session lays out revenue assumptions for special-revenue, debt-service and internal-service funds

Associate Superintendent Chris Herman told the Kyrene Governing Board at a study session that the district's projections for special revenue, debt service and internal service funds remain estimates through the summer but outline the staff'recommended assumptions for next year.

Herman said the Classroom Site Fund, known as Proposition 301, is set at $883 per pupil for next year, up from $842, and that change represents "just over $12.2 million in total revenue for the upcoming year." He said recent legislative changes expanded allowable uses beyond classroom instruction to include certain student support services.

Herman emphasized the difference between revenue collections and discretionary spending, noting many special revenue accounts are restricted to program costs. "An asterisk that you see on this table indicates where there might be significant expenditures associated with administering the programs," he said, adding that about $17.3 million of special-revenue line items are largely offset by direct program expenses.

On community education (before'and'after school, preschool and enrichment), Herman said Kyrene operates one of the largest programs in the state and that pre'COVID annual profits ranged "between two and a half and $3 million." He said the program incurred net losses during the pandemic but projects a profit of about $1.9 million for the coming year after cost reductions and enrollment recovery.

Herman called out several notable variances in the special revenue group: a projected $1.1 million drop in food service revenue tied to lower student enrollment; an approximately $560,000 increase in federal-projects revenue (largely Title I/IDEA) due to growing special-education populations; and about an $850,000 decrease in state project funding compared with the previous year because a one'time Safe School award reduced that line in the current budget.

He described the debt service fund as restricted to bond principal and interest payments funded by secondary property taxes collected by Maricopa County and estimated next year's debt-service revenues at about $25.3 million. On proprietary/internal service funds, Herman said the Kyrene Employee Benefits Trust (KEBT) is the largest item in that category with estimated revenues of roughly $13.5 million and that about 80% of plan contributions are paid by the district.

Board members pressed staff on assumptions and visuals. "I'm correct in that many of these numbers aren't final because we don't have the information yet, right?" asked Member Bunny Davis. Herman confirmed the figures are estimates and explained the chart colors: "The blue bar would represent the revenue amounts... the orange bar would represent the amount of income or loss," meaning revenue collections versus net impact after expenses.

On athletics, Herman said middle-school participation shortfalls have left the program structurally in deficit: estimated revenues of about $525,000 versus expenditures around $760,000, producing a projected net loss of roughly $253,000 that is covered from maintenance and operations. He told the board breaking even would require either raising tuition or reducing program costs such as stipends and field rentals.

Herman closed by noting state and federal grant awards remain subject to timing differences in fiscal calendars and that the projected numbers will be updated before the board considers consolidated revenue and expenditure totals in June. The board is scheduled to vote on the proposed budget on June 23 and to adopt the budget on July 11.