for information xeboard.acps.k12.va.us/attachments/c4047760-33a3-422c-991... · combined funds...

Date: November 8, 2013 For ACTION For INFORMATION X Board Agenda: Yes X No FROM: Stacey B. Johnson, Chief Financial Officer THROUGH: Alvin L. Crawley, Ed.D., Interim Superintendent of Schools TO: The Honorable Karen A. Graf, Chairman, and Members of the Alexandria City

School Board TOPIC: FY 2015 Fiscal Overview Work Session Materials BACKGROUND: Each year, the School Board provides general budget guidance to the Superintendent and staff for development of the capital and operating budgets. The materials attached are intended to provide a preliminary budget outlook including information about the economic/ fiscal climate, major funding sources, budget drivers and key considerations for FY 2015. This information will be discussed during the November 12, 2013 School Board work session. RECOMMENDATION: Establish budget guidance for FY 2015. CONTACT PERSON: Stacey Johnson, 703-824-6644 ATTACHMENTS:

1. FY 2015 Fiscal Overview Presentation

www.acps.k12.va.us

Fiscal Year 2015 Budget Outlook

School Board Work Session Tuesday, November 12, 2013

www.acps.k12.va.us www.acps.k12.va.us

Purpose To provide the School Board and Alexandria community an

enhanced understanding of key budget drivers and the fiscal conditions that impact ACPS’ budget

To receive the School Board’s guidance regarding:

– Capital Improvement Program (CIP) Budget – Combined Funds Budget – Fund Balance – Compensation (salary adjustments/ benefit contributions) – Budget Policies (budget transfer authority and position

control)

2


Discussion Topics

1. Fiscal Climate and Challenges 2. Capital Improvement Program 3. Combined Funds Budget 4. FY 2015 Budget Drivers 5. Board Budget Policies 6. Key Decisions

3


Federal Fiscal Climate • Sequestration, government shutdown, and debt

ceiling crisis—less federal funding for K-12 public education

• Entitlement grants are obligated for FY 2014, not yet for FY 2015

• Federal grant funds continue to decline year-over-year for ACPS

• The National School Lunch Program, approximately $3.6 million in federal reimbursements, may also be at risk

4


State Fiscal Climate • Virginia economy is showing modest recovery, but

will be significantly impacted by federal funding cuts

• Virginia reported annual revenue growth through September (year-to-date) of 2.8%, however sales tax revenue has declined by 4.5%, well below forecasts

• Governor’s proposed budget is scheduled for December 2013; may include higher VRS rates and modified funding structure

5


Local Fiscal Climate • The City of Alexandria has not yet released revenue projections,

but economic trends suggest revenue may not keep pace with program needs; also concerned with federal sequestration

• Residential Real Estate Tax: – Fairly stable revenue trends/ housing values have grown slightly

over the same period last year • Commercial Real Estate Tax:

– Uncertain revenue trends/ office vacancy rates are increasing, currently at approximately 16.2%

• Local Sales and Use Tax: – Declining revenue trends/ related to the closure of some grocery

stores, down 3% from the same period last year

6


Capital Improvement Program (CIP)

Capital Improvement Plan ($ in millions)

FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 - 2023 Total

ACPS Final CIP $14.1 $19.1 $48.5 $56.7 $73.5 $49.8 $94.6 $356.3

City Approved CIP $14.1 $45.0 $4.8 $36.5 $67.9 $17.6 $41.4 $227.3

Variance, ACPS to City $0.0 $26.0 ($43.7) ($20.2) ($5.6) ($32.1) ($53.3) ($128.9)

7

$0.0

$10.0

$20.0

$30.0

$40.0

$50.0

$60.0

$70.0

$80.0

$90.0

$100.0

FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 - 2023

$ in

mill

ions

Capital Improvement Plan Budget, ACPS and City of Alexandria

ACPS Final CIP City Approved CIP


CIP Challenges • Closing the funding gap for all capacity and non-

capacity projects • Staffing resources to manage all projects—Central

Office Relocation, Jefferson-Houston, Patrick Henry, modular additions, non-capacity projects

• Balancing enrollment growth with capacity, fiscal constraints, and competing City priorities

• Prioritizing the projects deferred to FY 2017 and FY 2018

• Establishing an appropriate level of funding for emergencies, project planning, bus/ vehicle replacement cycles, infrastructure systems

8


Combined Funds Budget Overview

• Operating Fund FY 2014 Final Budget - $226.6 million, a 4.0% increase over FY 2013 Final Budget

• Grants and Special Projects FY 2014 Final Budget - $10.7 million, a 25.1% decrease compared to FY 2013 Final Budget

• School Nutrition Fund FY 2014 Final Budget - $7.1 million, a 2.2% increase over FY 2013

9


Combined Funds Expenditure Summary

10

$0

$50

$100

$150

$200

$250

FY 2010 Actual FY 2011 Actual FY 2012 Actual FY 2013 Final Budget

FY 2014 Final Budget

$130 $136 $144 $150 $154

$47 $45 $47

$53 $53 $34 $38

$39 $35 $38

Dol

lars

, in

mill

ions

ACPS Combined Funds Expenditures FY 2010 - FY 2014

Non-personnel Benefits Salaries


$17

,247

$13

,963

$31

,592

$16

,342

$17

,343

$14

,084

$33

,190

$16

,418

$18

,033

$14

,478

$35

,951

$17

,837

$17

,693

$14

,267

$36

,374

$17

,729

$17

,328

$13

,782

$32

,661

$17

,511

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$35,000

$40,000

Average All Students General Education Special Education English language learner

ACPS Cost Per Pupil

FY 2010 Actual FY 2011 Actual FY 2012 Actual FY 2013 Final Budget FY 2014 Final Budget

11


City Appropriation • FY 2014 appropriation totals $185.6 million, an increase

of 3.4% over FY 2013; approximately 80 - 85% of the total operating budget

• The budget guidance for FY 2014 was an appropriation equal to the amount approved by City Council for FY 2013, except to address anticipated changes in student enrollment or changes resulting from cost saving measures employed by ACPS

• City Council Budget guidance for FY 2015 is expected to be approved at the second legislative meeting in November

12


City Appropriation Per Student

13

$15,179

$14,962

$14,161 $14,002

$14,115

$14,025

$13,556

13,000

13,500

14,000

14,500

15,000

15,500

110.0

120.0

130.0

140.0

150.0

160.0

170.0

180.0

190.0

FY 2008 Actual

FY 2009 Actual

FY 2010 Actual

FY 2011 Actual

FY 2012 Actual

FY 2013 Final

Budget

FY 2014 Final

Budget

City

App

ropr

iatio

n M

illion

s

City Appropriation City Appropriation per Student


City Appropriation Growth

14

With projected FY 2015 enrollment of 14,171, the city appropriation needs to increase by 4% to maintain the FY 2014 appropriation per student or by 8% to return to prior year levels.

The value of each one-cent on the real property tax rate is approximately $3.46 million and costs homeowners an additional $47 per year, on average.

FY 2014 185,611,472$ 13,556$ Percent Change Dollar Growth Per Student

-2% (3,712,229)$ 12,836$ -1% (1,856,115)$ 12,967$ 0% -$ 13,098$ 1% 1,856,115$ 13,229$ 2% 3,712,229$ 13,360$ 3% 5,568,344$ 13,491$ 4% 7,424,459$ 13,622$ 5% 9,280,574$ 13,753$ 6% 11,136,688$ 13,884$ 7% 12,992,803$ 14,015$ 8% 14,848,918$ 14,146$ 9% 16,705,032$ 14,277$ 10% 18,561,147$ 14,408$

www.acps.k12.va.us www.acps.k12.va.us 15

$1.038 $1.085

$1.128

$1.230 $1.278

$0.800

$0.900

$1.000

$1.100

$1.200

$1.300

$1.400

Alexandria Fairfax Arlington Loudoun Prince William

FY 2014 Real Estate Tax Rate (Approved) Cents Per $100 of Assessed Value


49.3% 47.9%

46.0%

41.4%

32.4% 29.7%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

50.0%

55.0%

60.0%

Falls Church City Fairfax County Loudoun County Prince William County

Arlington County

Alexandria City

Percentage of Governing Body's General Fund Revenues to Schools

FY 2009

FY 2010

FY 2011

FY 2012

FY 2013

FY 2014

LCIFalls Church City 0.8000Arlington County 0.8000Alexandria City 0.8000Fairfax County 0.6789

Loudoun County 0.5666Prince William County 0.3787


State Revenue • State revenue is projected to remain flat or

slightly decline for FY 2015, even with increasing enrollment, due to sales tax trends and federal funding risks

• The operating budget includes approximately $32.6 million from State revenue – Sales tax represents 42% of State total, or

approximately 13.6 million

17


Federal Grant Awards • New federal awards totaled approximately

– $11.3 million in FY 2012 – $8.5 million in FY 2013 – $7.0 million in FY 2014 – Given these trends and the government economic

landscape, projecting 20% reduction for FY 2015 • Reductions to Titles I, II, III and Perkins grants will reduce

services available to serve students. • Reductions to IDEA (special education) will necessitate a

shift of required expenditures to the operating fund.

18


Federal Grant Awards • Title I provides funding support for high poverty

schools, specifically 17.35 positions that support instruction, including math and reading support, school improvement coaches, interventionists and ELL teachers. In addition, Title I funds the extended day program at Jefferson-Houston, adding an additional 1.65 FTE, instructional supplies, and staff development.

• Title II funds professional development efforts by funding a 1.00 FTE Coordinator, the Teachers College Reading and Writing Program and the creation of Master Teacher vignettes.

19


Federal Grant Awards • Title III supports English language learners, with a 1.00 FTE

Division-Wide Parent Liaison and a 1.00 SIOP (Sheltered Instruction Observation Protocol) Instructional Leader, as well as staff development for ELL staff.

• IDEA provides support for special education students and staff, including preschool, specifically 22.50 positions, including autism and inclusion specialists, staff development services and instructional supplies.

• The Carl Perkins grant provides career and technical education support, including software, technology hardware, equipment and staff development.

20


Maintenance of Effort • As a requirement for federal funding, all school divisions

must meet the local educational agency (LEA) maintenance of effort (“MOE”) requirement as specified in the following: – § 1120(a) and 9521 of the Elementary and Secondary Education Act

(ESEA) state divisions must expend at least 90 percent of the preceding year’s effort from local and state expenditures, including sales tax, either on a total expenditure basis or per pupil expenditure basis.

– §300.203 Individuals with Disabilities Education Act (IDEA) requires school divisions to spend at least the same amount of local or local plus state dollars for a current school year on the delivery of special education and related services, as were spent the previous year.

21


Local Revenue • Other local revenue is projected to remain flat or

slightly decline for FY 2015 and includes – fees for community use of school facilities – adult education tuition – indirect cost recovery (contingent on State-

derived IDC rate and levels of federal funding)

22


Fund Balance

23

$4.5 million is available for use in FY 2015; School Board may designate all or part of this funding for a separate, future use or continue past practice of carry-forward to cover general fund expenditures

Fiscal Year Budgeted

Use of Fund Balance

FY 2010 4,355,938 FY 2011 6,647,199 FY 2012 6,985,475 FY 2013 6,778,835 FY 2014 6,669,465 FY 2015 TBD


FY 2015 Budget Drivers

24

Projected Enrollment ~ 14,171 students, +548 students, +4.0% growth

Enrollment-driven Staffing • Compensation • Implementation of Board Budget Priorities • Infrastructure and Risk Management • Loss of federal funding and maintenance of effort • Textbook adoption, musical instruments

replacements, and technology/hardware


Division Average Oct. 31,

2009 Oct. 31,

2010 Oct. 31,

2011 Oct. 31,

2012 Oct. 31 2013

54% 52% 56% 56% 59.6%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

Lyles-Crouch Douglas MacArthur

Charles Barrett George Mason Matthew Maury

George Washington 1 George Washington 2

Mount Vernon T.C. Williams - Minnie Howard

T.C. Williams Samuel W. Tucker

James K. Polk John Adams

Francis C. Hammond 2 Francis C. Hammond 3 Francis C. Hammond 1

Jefferson-Houston Patrick Henry

Cora Kelly William Ramsay

Free and Reduced-Price Meal Eligibility as a Percentage of School Membership October 31, 2013

Free Meal Reduced-Price Meal

Division Average


-

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

FY 2011 Actual FY 2012 Actual FY 2013 Actual FY 2014 Projection

English Language Learner Enrollment by LEP Level

Kindergarten LEP Level 1 LEP Level 2 LEP Level 3 LEP Level 4 LEP Level 5

FY 2011 FY 2012 FY 2013 FY 2014

ELL Teachers Added by Formula

7.00 FTE 10.00 FTE 0.00 FTE 16.50 FTE


0

200

400

600

800

1000

1200

1400

1600

1800

FY 2009 December

FY 2010 December

FY 2011 December

FY 2012 December

FY 2013 December

FY 2014 Projection

923 963 1195 1116

1352 1448

788 696 333 345

286 296

Special Education Level of Service

Level 1, < 50% service time Level 2, > 50% service time

27


Compensation • FY 2014 - Full step increase awarded halfway

through the contract year • FY 2015 – Carry-forward of FY 2014 step increase

~ $2.5 million • FY 2015 – Full step, first day ~ $5.0 million • Healthcare premiums and employer/ employee

cost sharing structure • Supplemental Retirement Plan and employer/

employee contribution structure

28


Other Considerations

• Staffing formulas need to be evaluated to ensure they result in adequate service levels and meet SOQ requirements

• Departments are reviewing high-risk areas and will include recommendations to address deficiencies

• Evaluation of classroom textbooks, musical instruments, and technology/hardware replacement cycles

• Division-wide professional learning is necessary to achieve student outcomes

29


New

Initiatives New programs or positions

specifically focused on improving student and division outcomes

Continuing Enhancements Existing programs that were

implemented to improve instruction and support student growth

Core/ Required Services and Targeted Intervention

Items that are necessary to run a school division, required by law (SOQ), or essential for student achievement

30

Budget Composition Framework


Board Budget Policies • Budget Transfers: Policy DA – Management of funds/ Policy FEG –

Supervision of construction – Staff authorized to transfer funds up to $15,000 for operating,

grants, and school nutrition (combined funds budget) – Superintendent authorized to transfer funds without limit for

combined funds and up to $50,000 for CIP capital projects; – School Board approval required for budget transfers greater than

$50,000 for CIP capital projects

• Grants Management: Grant applications do not require School Board approval. However, specific grantors may require School Board approval for the initial application, such as the federal entitlement grants. Modifications are approved by the Superintendent or designee and the grantor.

31


Board Budget Policies • Position Control: A position is defined as the authorization to hire an

employee eligible for benefits, at a whole or partial full-time equivalent (FTE). Approval of the annual budget by the School Board establishes the maximum number of FTEs and associated expenses, subject to the following permissible changes: – Schools and departments are permitted to change budgeted positions, subject

to Superintendent approval. – All continuing position changes are reported as part of the budget cycle,

through the presentation and approval of the subsequent fiscal year’s proposed budget.

– Staffing reserves are approved as a part of the annual budget cycle, uses of reserve for instructional positions are approved by the Superintendent. Uses of reserve for non-instructional positions require School Board approval.

– Grant–funded positions may be added or modified during the year when additional funding or program changes occur outside of the budget cycle.

32


Key Decisions/ Actions 1. Provide Capital Improvement Program (CIP)

budget guidance—defer to Nov 14 2. Establish guidance and direction regarding the

Combined Funds budget 3. Assign the use of fund balance for the purpose of

FY 2015 budget development 4. Share philosophy regarding compensation (salary

adjustments/ benefit contributions) 5. Confirm understanding of budget policies

(position control and budget transfer authority)

33

www.acps.k12.va.us Interim Superintendent School Board

Karen A. Graf, Chairman Kelly C. Booz Ronnie Campbell William E. Campbell Patricia Ann Hennig

Stephanie A. Kapsis Christopher J. Lewis Marc Williams Justin Keating, Vice Chairman

Dr. Alvin L. Crawley

Comments or Questions www. acps.k12.va.us/budgets

Stacey B. Johnson

Chief Financial Officer [email protected]

703-824-6644

mailto:[email protected]�

for information xeboard.acps.k12.va.us/attachments/c4047760-33a3-422c-991... · combined funds...

Documents