Keystone Oaks budget presentation shows roughly $4.45 million deficit; millage may rise to 22.7122 mills

Joe, the district budget presenter (speaker S2), told the Keystone Oaks School District board the proposed final General Fund budget projects roughly $50,740,000 in revenues and about $55,200,000 in expenditures for the coming year, leaving an estimated deficit of approximately $4,450,000. He said the numbers remain preliminary and will be revised before the board’s scheduled June vote.

The presenter said the tax index (AFI/index) was set at 3.5% and that raising millage to that index would bring the district’s millage to about 22.7122 mills. Under a 94.5% collection-rate assumption — which S2 described as the district’s current post‑COVID estimate — that 3.5% index increase would generate about $741,438 for the district; S2 noted one mill equates to roughly $283,000 in revenue.

Why it matters: the district’s spending is heavily weighted to personnel. S2 said salaries account for roughly 44% of the budget and benefits about 29%. He flagged several uncertain but large cost drivers: ongoing teacher‑union contract negotiations (contractual salary increases not yet set), an estimated 8.3% rise in health insurance premiums, and a bond payment tied to an elementary‑school capital project.

S2 told the board the bond payment is the single largest factor pushing expenditures above recent levels: the district expects to pay just over $2 million in principal and interest next year related to the new bond. According to S2, if the bond payment were removed for comparison, overall increases would appear closer to historic patterns.

Board members asked for clarification on revenue changes and year‑to‑year comparisons. S2 said projected revenues rose by nearly $1 million from last year while expenditures increased by roughly $3.6 million, and that the bond payment and benefit increases account for most of that difference.

S2 also reviewed other revenue and cost items the board will consider: changes in real‑estate assessed values, a decline in delinquent‑tax collections timing, and ongoing enrollment shifts (including cyber charter enrollment) that could affect state and out‑of‑district revenue. He said the district expects a lower historic collection rate (94.5% versus 96% used earlier) and will monitor tax collections over the next 60 days to refine projections.

The presenter gave a multi‑year fund‑balance outlook: an audited FY2025 ending fund balance near $11.9 million, an expected in‑year reduction to about $10.1 million for the current year, and a projected balance near $5.6 million at the end of next year if the current proposed budget stands. S2 emphasized those figures will be updated as actual revenues and bargaining outcomes become known before the June vote.

Next steps: S2 said he will refine and redistribute updated budget slides and more detailed breakdowns to the board, and that the finance committee will review high‑ticket items in greater detail ahead of the formal vote in June. The board did not take a final vote during the meeting.

Quotes that illustrate the discussion:

"This current proposed final budget is showing a tax increase to that index, which would bring up to 22.7122 mils," S2 said. "Projected revenues are around $50,740,000 while projected expenditures are around $55,200,000 which is going to result in a deficit of about $4,450,000 next year."

S2 also noted: "One of the main items and questions in this budget is that we are currently in negotiations with our teacher union. So those numbers are currently unknown and just have to be projected until we can get a contract."

Ending: The board will receive updated budget materials and review detailed line items at the finance committee before a formal vote in June. The presenter said he expects some numbers to change once open‑enrollment choices and final contract settlements are known.