BCS BOARD OF EDUCATIONBUDGET WORKSHOP

April 5th 2013

THE NEW NORMAL

• Continued dependence on federal funding to replace reduced state funding

• Reduced staffing in many areas strains the district’s ability to meet expectations

• State unfunded mandates further stresses employees throughout the system

• New program initiatives or enhancements must consider local resources, either with money or volunteers or both

2012-13 FUNDING SOURCES

In 2007 Federal Funding was 7%.

In 2011, it peaked at 13%.

Currently it is at 11%.

Federal11%

Local26%

State64%

PEOPLE!

HumanResources($193 million)

Other($37 million)

84%

16%

Where will our 2013-14$230 million Operating

Budget go?

PERSONNEL REDUCTIONS2009 - 2012

• Central Office 5 positions• Assistant Principals 7 positions• Counselor/Social Workers 3.5 positions• Mentors 2 positions• Classroom Teachers 51 positions • Elementary General Assistants 11.5 positions• Media Assistants 2 positions• Media Specialist 1 position• MS/HS Clerical Assistants 11 positions• Custodians 15 positions• Clerical staff 3 positions• Finance/Personnel 2 positions• Maintenance 4 positions• Technology 20 positions• Transportation 1 position • TOTAL = 139 Positions

Understanding Budget Terms

• Position Allotment: provides a certain number of positions or months of employment no matter what they cost (eg. classroom teachers, principals, instructional support)

• Dollar Allotment: provides a specified dollar amount of support (eg. non-instructional support, CO support including testing, transportation, child nutrition, media, admin etc)

• ABC Transfer: A process by which funds can be moved from a position allotment to a dollar allotment, or between allotment categories

Understanding Budget Terms

• Instructional Assistants:• Four Categories of Instructional Assistants:• (1) K- 3 Classroom• (2) School-wide Support: Remediation, Media,

Computer/Success Maker Lab, General, and In School Suspension at MS/HS level

• (3) Exceptional Children• (4) Title I

Understanding Budget Terms

• Instructional Support: • Includes guidance counselors, school psychologists,

social workers, and media coordinators/specialists; also includes dropout prevention specialists and curriculum specialists at the central office level.

• Non-Instructional Support:• Custodians, clerical staff/office personnel in both the

schools and the central office.• (Note: Local funds may provide other categories like

maintenance and technology staff and non-teaching professionals in areas like finance and personnel.)

Federal Revenue Estimates$4,310,287 less than 2012-13 revenue:EduJobs Funding-gone $2,701,947School Improvement Grant-going $949,240Sequestration (5% loss in 2013-14):• Exceptional Children/IDEA $288,500• Title I (Reading Remediation) $296,000• Title II (Teachers/prof. devel.) $ 44,000• ESL/Migrant $ 15,600• Career Technical Education $ 15,000

Federal Revenue EstimatesImpact from EduJobs loss:•10.5% of overall funding for instructional assistants and non-instructional support

Impact from Sequestration cuts ($659,100):•10 Full-time Special Needs Assistants •17 Half-time Reading Assistants •Professional Development for Teachers•Classroom Materials and Supplies

GOVERNOR’S BUDGET (STATE) 2013-2015

Compared to 2012-13 appropriations:

•50% reduction K-3 TAs - $4,923,545

•Increase in Reversion - $ 313,700

•Instructional Supplies + $ 173,779

•Textbooks + $ 937,485

•Read to Achieve + $ ?

HOW MUCH ARE WE REQUIRED TO REVERT IN TOTAL?

“Reversion” or “Adjustment”: Each year, the State gives us a budget that is not balanced; we have to balance it by deciding which allotments to reduce.

• 2010-11 $5,327,936

• 2011-12 $7,407,035

• 2012-13 $6,167,250

• 2013-14 $ 6,480,320

GOVERNOR’S BUDGET (STATE) 2013-2015

What would this level of TA funding mean for us if not supplemented with other funds?•The term of employment for all remaining TA’s would be reduced from 210 days to 205 days.• In addition, K-1 assistants’ hours/day reduced:

Kindergarten assistant-6 hours/day, not 8 hours

1st grade assistant-4 hours/day not 8 hours•No 2nd or 3rd Grade assistants •Only one 6 hour/day Computer lab assistant

POTENTIAL STRATEGIES TO BUFFER K-3 ASSISTANT CUT

1. ABC transfer total $1,111,264 instructional supply/ textbook increase to TA allotment

2. Redirect $ for elementary general instructional assistants (14) to K-3 assistants - $ 422,324

These steps could provide sufficient funding for:•K class assistant – 6 hours/day (same)•1st grade assistant - 6 hours/day (2 hr increase)•2nd/3rd grade assistants provided at 75% of the current 2012-13 staffing level•One 6 hour/day computer lab assistant/school

GOVERNOR’S BUDGET (STATE) 2013-2015

Increases over current 2012-13 costs:•1% across-the-board increase in pay – all staff•1% “Up-Front” Unemployment Compensation •Employer’s Retirement contribution - 14.23% to 14.59%

•Employer-paid health insurance - $5,192 to $5,555

Will the revenue provided by the State cover these costs for State-paid staff? BIG ISSUE

And how will the Local Current Expense Fund be affected?

PROPOSED LEGISLATIONSenate Bill 516 - Public School Reg. ReformSenate Bill 374 – Public Schools Budget FlexibilitySenate Bill 361 – Excellent Public Schools ActHouse Bill 469 – Additional Budget FlexibilityHouse Bill 452 - 2013 School Safety ActHouse Bill 393 – Essential Public School FundingHouse Bill 334 – Buncombe Sales Tax FlexibilityHB 443/SB337 - NC Public Charter School BoardHB 97/SB 119 – Lottery Funds / Digital Learning

POTENTIAL LOCAL IMPACTFunding Gaps from State Actions:• 1% raise for all staff $ 314,927• 1% “up-front” UC premium $ 208,152• Health Insurance rate increase $ 154,798• Retirement Contribution rate $ 87,691 Loss of Federal General Support $ 2,701,947Other Funding Gaps/Unmet Needs• Duke Power Rate Increase $ 161,000• Home Base Product/Support $ 160,000• Technology Support Staff $ 360,000• Other Insurance Increase (max) $ 90,000

WHEN SHOULD WE CONSIDER USING

FUND BALANCE • Fund balance is like a savings account; it

does NOT make sense to use for recurring expenses

• Policy 501 establishes Stabilization Reserve of $4.3 Million

• Multi-Year Revenue Projection Shows Use

of Stabilization Reserve as Last

Resort in 2014-15

Multi-year Projection of Revenue AvailabilityGovernmental Funds excluding Capital Outlay Fund (Amounts are in Millions)

2007-08 2008-09 2009-10 2010-11 2011-122012-13 Budget*

Excludes non-

spendable 2012-132013-14 Change 2013-14

2014-15 Change 2014-15

RevenueState Funding $138.8 $138.3 $129.1 $129.0 $129.4 $135.5 -$2.2 $133.3 $133.3 $133.3Federal Funding $13.4 $14.8 $24.2 $26.8 $21.9 $26.8 -$5.3 $21.5 -$3.7 $17.8 -$0.9 $16.9County appropriation $43.8 $47.0 $46.3 $46.4 $48.6 $48.0 $48.0 $48.0 $48.0Other Local Funding $5.9 $3.7 $4.0 $3.6 $3.4 $3.5 $3.5 $3.5 $3.5

Total Revenue $201.9 $203.8 $203.6 $205.8 $203.3 $213.8 -$7.5 $206.3 -$3.7 $202.6 -$0.9 $201.7

Budgetary Shortage covered by Fund Balance (2012-13 amount is now actual figure): -$3.4 -$7.1 -$8.0

Less Estimated Savings Due to Turnover/Underspending and Eliminated Programs: $2.5 $2.5 $2.5(Note: provided mild winters continue with consequent savings in utilities, would allow RttT initiatives to continue through 2014-15, but not Community High grant activities)

Net Revenue Gap Required to be Bridged by Fund Balance or Additional Cuts: -$0.9 -$4.6 -$5.5

Estimated Fund Balance Available without Tapping Stabilization Reserve: $6.7 $5.8 $1.2

Fund Balance Beyond Stabilization Reserve Remaining after closing Net Revenue Gap $5.8 $1.2 -$4.3

Beginning Balance of Stabilization Reserve $4.3 $4.3 $4.3

Stabilization Reserve at end of Fiscal Year $4.3 $4.3 $0.0

NOTES:*Includes unbudgeted funds to cover July - September 2012 which are in the 2012-13 State fiscal year.

3. The 2013-14 loss of federal funds is loss of current year amount of expiring federal programs (EduJobs funding and School Improvement grant).4. The 2014-15 loss is expiration of Race to the Top (RttT) funding

1. For Apples:Apples comparison, the federal amount necessary to be held unbudgeted for the 3 month "overlap" period is subtracted as well as the anticipated State reversion due to the new restriction of ABC transfers for teacher positions.

Caution: this analysis assumes that all reductions in new federal programs implemented since 2008-09 can be handled by reductions in those same programs AND that federal funding will continue at a level approximately 25% higher than in 2007-08.

HOW MUCH ADDITIONAL FUND BALANCE HAD WE PLANNED TO

APPROPRIATE IN 2013-14?

Answer: a total of $3.7 million more than the initial appropriation to the 2012-13 Budget:

•$2,701,847 to replace EduJobs funding,

and

•Up to $1,000,000 in additional one-time or able-to-be phased-out costs (such as the $208,152 unemployment compensation double premium due during 2013-14)

WHICH OF THE OTHER INCREASES QUALIFIES FOR

USE OF FUND BALANCE?• Duke Power Rate Increase $161,000

(why? – yearly “degree days” vary)• Other Insurance Increase (max) $ 90,000

(why? - experience will improve)

With the $208,162 UC insurance, these add up to $459,162 before considering ADM growth

WHICH OF THE INCREASES ARE NOT A GOOD USE OF

FUND BALANCE UNLESS WE HAVE FUTURE FUNDING?

• 1% raise for all staff $ 314,927• Health Insurance rate increase $ 154,798• Retirement Contribution rate $ 87,691 • Technology Support Staff $ 360,000• Home Base Product/Support $ 160,000These represent $1,080,416 in on-going costs

STRATEGIC PLAN AND RELATED INITIATIVES

Priority I: All students will graduate as high-achieving and globally competitive learners with 21st Century skills.•Initiatives: Technology and Global Education/World Languages

Priority II: All learning environments will be safe, respectful, caring and produce healthy and responsible students.•Initiative: Safe Schools

Priority III: Quality teachers, administrators and staff will provide an innovative and effective educational program for all students.•Initiative: STEM Integration

Priority IV: Systems will be in place to inform, educate and engage the community to build support for schools and ensure accountability.•Initiative: PowerSchool (Home Base)

2013-14 BUDGET PRESENTATION TIMELINE

• AUTHORIZATION TO SUBMIT PRELIMINARY BUDGET TO COMMISSIONERS May 2nd BOE Board Meeting

• PRELIMINARY BUDGET DEADLINE May 15th To County Commissioners • INTERIM BUDGET PRESENTATION June 28th BOE Meeting• FINAL BUDGET ADOPTION August – November (Dependent on Legislative

Action)

Past BCS Priorities

• Classroom Teachers: They come first.

• K-3 Teaching Assistants: They’re vital to giving individualized attention when students need it the most.

• Instructional Support: Counselors and Social Workers provide invaluable basic services in a challenged environment; Media Coordinators facilitate best practices in applied research & technology use.