Liberty Elementary District approves FY25–26 budget revision, adopts conservative FY26–27 projections and trims employee HSA incentive

The Liberty Elementary District Governing Board approved its second revision to the fiscal 2025–26 expenditure budget at its May 11 meeting and heard staff projections used to shape the proposed FY2026–27 budget.

Budget director Kevin Heggerty told the board the revision adds about $109,000 in capacity, reflecting a higher average daily membership (ADM) and roughly $34,000 in one‑time state allocations. "We are adding $109,000 in capacity to the current year budget," Heggerty said, and outlined a timeline for the coming budget cycle: a proposed budget in June and final adoption no later than July 15.

Board members pressed staff on the sources and risks behind the revision. Board member Zimmerman noted the district’s ADM gains appeared to be driven primarily by newly classified special education students and questioned whether the state’s formula fully covers the higher cost of those students. "When your SPED population increases faster than your regular ed population, you typically have to go after other revenues or other places in the budget to be able to provide those supports," Heggerty said. He cautioned that higher ADM tied to special education can raise actual costs beyond formula revenue.

Zimmerman also asked why salary encumbrances dropped by about $416,000 from the December revision to the May revision while purchase‑of‑service costs rose; staff said the pattern often reflects open positions covered temporarily by outside contractors, which increases purchase‑services costs.

Looking to FY2026–27, Heggerty presented conservative projections that assume a statutory 2% base funding increase, a modest ADM gain (a weighted estimate of +41 ADM), and classroom site fund changes that together produce roughly $611,000 in incremental ongoing revenue. He also identified potential one‑time recoveries — including reclassified interest posting and an APS donation tied to the district’s energy project — that could provide additional capacity as a safety net. Heggerty cautioned final figures depend on the state budget and on completing technical accounting adjustments before June 30.

At the meeting the board also debated employee benefit choices. After discussion the board voted to eliminate a supplemental $750 health‑savings‑account incentive that had been used in previous open‑enrollment cycles to encourage employees to select high‑deductible plans. Administration clarified that the change removes the extra one‑time incentive; the district will continue its base HSA and employer health contributions. The motion to eliminate the supplemental HSA payment passed 3–0.

Other fiscal actions at the meeting included approval of the corrected support‑staff wage schedule for FY26–27, tabling award of a cleaning contract pending attorney revisions, and adoption of the FY25–26 budget revision. Heggerty emphasized that staff agreements and the schedule for monthly, year‑to‑date budget reports will be important to provide the board greater clarity going forward.

The board adopted the revised FY25–26 budget and directed staff to continue monthly financial reporting and to complete the FY26–27 proposed budget on the timeline discussed. The district will present the proposed FY26–27 budget for adoption in June/July as required by state law.