Budget Meeting Notes – Capital Budget, Five-Year Plan, and Charter School Funding

Overview and context

The discussion centers on annual budget review, with emphasis on capital vs operating funds, and the five-year (and twenty-five-year) planning horizon.
Emphasis on updating estimates each year; numbers shift as projects are refined or estimated differently year to year: “That’s why it kinda goes up a little here … we don’t know what that’s exactly right.”
The process involves going through the spreadsheet in detail and then sharing results with leadership (Pat, etc.).
They acknowledge that estimates for “out to the right” may fluctuate for projects, with best estimates but often without solid dollars yet.

Revenue sources, fund structure, and transfers

Departments provide five-year expenditure estimates (maintenance, technology, curriculum); the district forces a forward-looking, future-oriented budgeting approach so dollar amounts can be populated.
Equipment transfer to general fund; the team notes a state-provided demo each year showing what can be moved from operating to capital: "we’re moving as much as possible that we can from operating to capital."
Transfer line and debt management: the explanation includes temporary/transitionary transfers related to funding streams.
Temporary sales tax bonds: last payment expected in October; future status is that bonds will be capital.
COPs (Certificates of Participation) outstanding: around 4{,}600{,}000 per year in debt service for several years; ongoing obligation into multiple years.
The line items around transfer illustrate a broader strategy to shift spending from operating to capital where permissible.

Final numbers and fund balance targets (years 24-25 and 25-26)

Ending capital fund balance (based on the current dollars): 9{,}600{,}000.
Hurricane reserve target: also 9{,}600{,}000 (or the same level in dollars as the ending fund balance).
Ideal fund balance target: roughly 16{,}000{,}000 (10% of revenues is not enough on its own; hurricane reserve is additional).
In the near term, even with higher projections (e.g., 0.6 in the current year), the fund balance remains around 9{,}600{,}000, but the board emphasizes aiming toward 16{,}000{,}000 in the longer term.
The presentation notes that the calculator/model shows a negative balance in year 2025 (a historical dip they call out as a past issue): “the negative balance there … twenty years” (i.e., a historical trend, not a current projection).
Final numbers for 24-25 are being prepared with auditors; 25-26 will align with the budget book once audited and agreed.

Debt service, reserves, and reporting

COPs remain a concern: the district must continue payments; the COP debt is a multi-year liability.
There is an external discussion about whether certain debt service items count against other obligations (e.g., a state consortium rule about debt service dating to 2019 and whether it counts against something else); this is an ongoing policy/debt accounting conversation.
A state report on outstanding debt is completed (Austin completed it); this report informs calculations and the state’s calculations used in intergovernmental funding/allocations.

Capital projects prioritization and project status

Top three capital projects are currently in progress; the rest are phased out over five years.
A new placeholder line (Line 33: Marathon baseball project) was added as a discussion placeholder due to a recent request, though the exact cost is not expected to be that number; some scope may be addressed piecemeal.
There was an update on Coral Shores project costs; no adjustments were made to the Coral Shores line yet based on ongoing discussions.
A key decision point: whether to proceed with a multipurpose building, with a board presentation on October 7 outlining options, including possibly not proceeding.
The group recognizes that with ad valorem taxes potentially changing, cash flow remains tight; prioritization of capital projects is essential given uncertain revenue streams.
There is ongoing consideration of pre-planning for Coral Shores field in 25-26 (the timeline is balanced against Sigsby middle school timing and potential delays).
The group discusses turfing multiple athletic fields to obtain bulk pricing; however, this requires readiness with construction documents and alignment of project timelines.
Founders Park backyard project and the field/turf discussion impact other capital planning decisions; some conversations center on whether money allocated to Founders should be redirected if Founders delays or changes scope.
There is an understanding that the district does not “own” decision-making entirely; the village/community must authorize field changes and funding allocations.

Charter schools funding and intergovernmental considerations

A question arises: do charter schools receive funds directly, or does the district pass through funds to them?
In practice, Nancy handles charter school payments (e.g., Montessori); some increases in rent or new funding amounts require verification.
There is a request to check whether the district can withhold or adjust payments if charter schools have rent increases; consensus is to verify and consult legal guidance.
It is noted that charter schools have been paying rent, and the district has been paying the revised rent amount; the exact new amount requires confirmation.
The district does not automatically share the half-cent sales tax (local option) with charter schools; the transfer and allocations are subject to legal and policy considerations.
A discussion suggests that for transparency, it may be useful to present charter school allocations prominently when communicating budget priorities to the public.

Founders Park, Port Shores, and Marathon baseball project specifics

Founders (Port Shores/Founders Park) funding and the backyard: discussions revolve around whether to move money within the capital fund if Founders needs shift or if the project is delayed.
There is concern about the balance between Founders backyard improvements and other district needs, including Sugarloaf renovations and Key West High infrastructure.
Marathon baseball improvements are discussed as a priority item with a potential re-sequencing to appear higher on the list, given the relative feasibility and shorter timeline compared to larger building projects.
The conversation acknowledges community lobbying and narrative challenges around prioritization, including concerns that village decisions influence district capital priorities.
A potential public-friendly narrative is suggested: the district is building for its students; if the village cannot finalize a project, the district could reallocate funds to support students in other ways.
There is emphasis on communicating that school needs drive priorities, while the village/city must ultimately approve field projects and funding.

Facility condition, 25-year planning, and maintenance cycles

Key West High and HOB (high school facilities) have major infrastructure needs identified on a 25-year planning horizon; this includes roofs, HVAC, floors, windows, doors, etc.
Sugarloaf renovations: windows and doors on older buildings were not replaced during earlier construction; these updates are anticipated as part of a longer-term, 25-year plan.
The district maintains a running tab on roof and HVAC replacements and uses a 25-year perspective to time major infrastructure upgrades.
The group discusses how different buildings will have different renewal timelines; some newer buildings may require extents of replacement sooner than others depending on condition.

Enrollment trends and implications for planning

Enrollment projections show 181 students in a district-wide context, with kindergarten birth rate trends impacting enrollment.
There is a discussion about kindergarten being non-mandatory in some contexts, affecting enrollment and funding strategies; districts push families to enroll to utilize funding and vouchers.
The district monitors enrollment to inform budget planning and capital needs.

State planning processes and reporting quirks

The 5-year plan vs 25-year plan distinction: the 5-year plan is used for state applications; some jurisdictions refer to it as a 25-year plan due to evolving state processes.
The current year’s planning data is most precise; future years are projections and may be revised by the state’s submission format.
The district will submit the 25-year plan (for the next cycle) as required by the state; changes in state requirements may occur, but the district will adapt to current rules.

Tax considerations and political context

There is an explicit acknowledgment of political sensitivity around property taxes; discussions recognize that property taxes and district funding are scrutinized in the political arena.
The district considers potential shifts in ad valorem tax revenue; there is concern about how revenue changes could affect capital planning.
The narrative challenge: how to communicate to the public that funding decisions are school-driven rather than district-driven; the school board seeks to present a clear rationale for allocations.
A broader point: the district cannot rely solely on state funding; local revenue sources and tax policy will significantly influence capital planning.

Roles, governance, and next steps

Key participants mentioned: Pat, Austin, Nancy, Greg, Sue, and Tom Morrison; collaboration with auditors and board members is ongoing.
Immediate actions and next steps:
- Finalize 24-25 numbers with auditors; obtain board approval for 25-26 budget book alignment.
- Decide on October 7 whether to proceed with the multipurpose building; present options to the board.
- Confirm charter school rent amounts and discuss any potential adjustments; consult legal for direction.
- Consider reordering capital project priorities in the narrative presented to the public (e.g., push charter school allocations higher; place baseball improvements earlier).
- Monitor Sigsby Middle School timing and Coral Shores readiness; consider preplanning for Coral Shores field in 25-26 depending on project readiness.
- Investigate bulk turf discounts and timing; ensure construction documents are ready for bidding; align timelines with field readiness.
- Revisit Founders/BACKYARD funding allocations if Founders progress delays; ensure the district’s approach remains transparent and centered on student needs.
Closing notes: board discussions emphasize fiscal responsibility, transparency, and balancing competing demands from schools, communities, and taxpayers. The group acknowledges the need to communicate clearly and to adjust plans if revenue conditions change.