Choice Foundation, which runs the Esperanza Charter, Lafayette Academy, and McDonogh 42 schools, held its 2012-2013 budget hearing in addition to its monthly board meeting on May 30.
The initial 2012-2013 budget is $18,562,980, a 41 percent increase from last year. Most of the increase comes from the addition of McDonogh 42 under the foundation’s management umbrella. The school also allocated $1.4 million to pay for the use of its new headquarters.
At Lafayette, the initial total budget is $8,229,404, which is about five percent less than last year’s revised operating budget of $8,690,360.
The decrease in Lafayette’s year-over-year budget is a result of expenditures in last year’s budget that are not expected to be repeated in the 2012-2013 school year. Lafayette spent $100,000 more in food service expenses last year than was planned. In addition, kitchen equipment was replaced, water main repairs were made, and a computer server crash had to be managed. Choice will also put its Charter Management Operator (CMO) fee revenue for Lafayette, at $500 per student, totaling $402,750, towards its central office budget.
The addition of 70 eighth-graders will bring the student count at Lafayette up to 895. The projected Minimum Foundation Program (MFP) contribution is $6,810,990, which is an increase of five percent over last year. This contribution is computed on a per-pupil basis at $7,966 per student.
Salaries are expected to remain flat, while benefit expenditures are expected to increase, which reflects mainly a 15 percent increase in health insurance costs, an extra $70,000. Construction loan repayments will cost $90,582, and renting and leasing charges will be up about $90,000 from last year, reflecting the cost of holding pre-k and kindergarten classes at off-site locations.
James Fulton, Choice CFO, told the LENS that salary increases and bonuses for next year are expected to total $250,000 for Lafayette. That money will come mostly from last year’s school fund balance, which was left at around $180,000.
The total operating expenses for 2012-2013 are projected at $8,107,983. The school anticipates a revenue balance of $120,000.
Esperanza’s total operating revenues for 2012-2013 are $4,224,620. This budget accounts for 452 students at a per-pupil rate of $7,787. The MFP contribution is $3,309,836 for the year, 78 percent of revenues. The school will also receive a supplemental $200,000 from a Public Charter School Program (PCSP) startup grant, a federal grant help position charter schools for long-term success.
And like Lafayette, Esperanza will contribute its CMO revenue, $191,250, to the central office.
Salaries and benefits will account for almost 70 percent of all expenses. Increases in health insurance costs add up to nearly $33,000; while salaries and benefits are listed as $2.3 million and $471,000 respectively.
Total operating expenses for Esperanza during the 2012-2013 school year are $4,077,367. The end-of-year balance is expected to be $147,254.
The expected budget for McDonogh 42, Choice’s newest charter school, are incomplete at this time and are expected to change as more information is made available to the board, according to Fulton. The decision to delay the proposed move to New Orleans East will help cut expenses, but uncertainty around student registration still clouds final budget figures.
Total operating revenues are $4,680,956. Expected MFP contributions average $7380 per pupil, which when multiplied by an enrollment of 520 totals $3,542,741.
McDonogh principal-elect Fran Trujillo said she expects enrollment to drop just below 500. The school has received a $250,000 Walton Family Foundation grant for next year and an initial PCSP start-up grant of $53,000.
Salary costs at McDonogh are expected to be $2,606,000 for the year, and benefit costs are expected to total $456,566. Together, these costs account for almost 70 percent of expenses. Other notable expenses include $150,00 for building and facilities management, $100,000 for teaching supplies and $60,000 for special education services.
Total operating expenses for McDonogh are budgeted at $4,508,125 with an expected revenue balance of $172,831.
The Choice Foundation budget hearing lasted 15 minutes. No parents or community members were present.