Tight BudgetsLeadership and Strategy

Florida School Finance Officers Association

Sanibel Harbor Marriott Resort & SpaFort Myers, FL

June 20, 2017

AGENDA

• Introductions• Defining the Problem (History & Trends)• Financial Condition Ratios• Financial Impact on the District• Key Considerations and Process• Communication• Leadership Traits

• Defining the Problem (History & Trends)• FTE Growth• Funding per FTE (BSA and Total)• Required Local Effort (RLE)• Taxable Assessed Valuation (TAV)• State and Local Funds• 2007/08 vs. 2017/18• Graphs vs. Tables• Dollars vs. Percentages vs. Equivalent Units

• Financial Condition Ratios• Past 5 Years• “Peel the Onion” – hierarchy and obligations

• Recent history• Review and analyze components (GASB 45)• Why we need reserves• School Board policy

• Review Impact of FEFP on District Budget• Compare the Final Conference Report to 4th

Calculation (CY)• Reconcile why the “increase” is really not an increase• Discuss budget impactors for next year and beyond

• Growth / declining enrollment• Medical• Other benefits• Program enhancements• Local issues• Performance pay• Overall financial condition

FY 2015-16 3rd Calculation vs.

FY 2016-17 Final Conference Report

FY 2015-16 3rd Calculation

FY 2016-17Final Conference Report

VariancePercent Variance

FTE 36,122.67 37,350.25 1,227.58 3.40%BSA $4,154.45 $4,160.71 $6.26 0.15%Funds per Student $6,958.86 $7,008.92 $50.06 0.72%

FEFP $193,703,974 $201,290,069 $7,586,095 3.92%Proration to Appropriation $0 $0 $0 0.00%Class-size $38,357,884 $39,774,693 $1,416,809 3.69%School Recognition $2,701,113 $2,704,007 $2,894 0.11%Discretionary Millage $15,809,563 $16,930,707 $1,121,144 7.09%Digital Learning $800,224 $1,085,424 $285,200 35.64%Grand Total $251,372,758 $261,784,900 $10,412,142 4.14%

2016-17 Revenue ReviewFY 2015-16 3rd Calculation

vs.FY 2016-17 Final Conference Report

$10,412,142

Safe Schools ($5,513)

Lead Teacher ($6,368)

Textbooks ($83,608)

Growth ($5,052,953)

ESE Guaranteed Allocation ($1,451,100)

Digital Classroom Allocation ($285,200)

Transportation ($120,092)

Supplemental Academic Instruction ($290,630)

School Recognition ($2,894)

Supplemental Reading Allocation ($35,329)

Net Funds Available $3,078,455

2016-17 Budget Challenges• Self-Insured Medical Plan

• 1% increase equals approx. $400,000• Performance Pay• Loss of IDEA Funding• Utility Costs• Substitute Costs• New School Openings• Overall Financial Condition

2016-17 Budget Challenges

2016-17 Net Funds Available $3,078,455

Medical Insurance ($1,000,000)

Compensation, plus benefits (All employees) ($2,820,000)

Utilitity Increases ($300,000)

Loss of IDEA Funding ($212,000)

3% Reserve Requirement for 2016-17 ($279,288)

Substitute Costs ($300,000)

New School Openings ($750,000)

Final Net Funds Available 2016-17 ($2,582,833)

• Key Considerations• Avoid layoffs• Maintain state required core academics• Maintain class-size requirements• Maximize reduction in recurring expenditures• Restore fund balance to Board Policy• Review programs for cost effectiveness• Maximize organizational efficiencies

• Key Considerations – continued• Prioritize uses of the Capital Outlay Millage

• Maintenance costs at school sites• Equipment purchases (new and replacement)• Computers and other devices• Software systems (ERP)• Vehicles• Property insurance

• Gather input• Staff• Principals and SAC, PTO, etc.

• Use “Role Alikes” for the school input• Cabinet• School Board

• Analyze Current Appropriations

• Realign duties and responsibilities through attrition• Eleven district level employees back to the classroom• Seven departments affected• No replacements for retirements and/or terminations

• Measures to prevent overstaffing• Staffing adjustments (tipping points)

• Associates teachers• Resource teachers• Support positions

• Analyze Current Appropriations - continued

• School formula adjustments• Reduce the number of unfunded/unearned positions

• Consideration for Future Implementation• Instructional materials• Energy savings• Slow roll of new hires

• Process and Timeline• Identify the problem with the Board

• Is it a revenue shortfall• Is it over extended appropriations• Or both

• Use historical trends• Five years worth of history• Current year projections w/o any changes• Show what can happen to the budget

• Produce a target amount – “how much”?

Communication Plan

• Two Main Points to Include• The Four “T”s

• “Tell Them the Truth”• Economy vs. Education Funding (FEFP)

• Tell Everyone Who Will Listen• School faculty meetings• SAC, PTO and other school related groups• Civic Groups

• Rotary, Moose, Elks, etc.• Political Groups

• Stay on Message and Keep the Faith

Leadership Traits

Tough Times Require Gutsy Leadership – Drs. Kevin & Jackie Freiberg

What We Know

• Our financial world has turned upside down and uncertainty distracts and derails us.

Be a Game Changer!

• Are we focusing on things we can control or obsessing over things we cannot?

What We Know

• Panic and fear will hinder rational thinking.

Be a Game Changer!

• Step through the fear!

What We Know

• In the absence of truth, people will make assumptions.

Be a Game Changer!

• Communicate more than you think you should.

What We Know

• People are angry and hurt.

Be a Game Changer!

• Find something or someone to be grateful for.

What We Know

• Attitudes are contagious.

Be a Game Changer!

• Make sure yours is positive and worth catching!

Questions?

Thank you!