FY 2016 Proposed Budget

Transcription

1 FY 2016 Proposed Budget Budget Workshop July 22, 2015 Top-performing urban school district in Florida

2 FY2016 Proposed Budget Adopted FY2015 Amended FY2015 (May 2015) Proposed FY2016 $ Increase/ (Decrease) % Increase/ (Decrease) General Fund $1,654,256,842 $1,660,776,320 $1,713,140,477 $ 52,364, % Debt Service 303,926, ,878, ,848,759 (570,029,246) (67.6%) Capital Project Funds Special Revenue Fund-Food Service Special Revenue Fund Other Less: Transfers & Debt Svc OFS 383,335, ,067, ,888,565 (25,179,033) (6.6%) 107,769, ,769, ,447,800 3,678, % 110,476, ,912, ,865,475 (32,046,901) (22.9%) (244,532,971) (837,168,932) (252,521,830) 584,647,102 (69.8%) Total $2,315,232,281 $2,298,234,448 $2,311,669,246 $ 13,434, % Internal Service Funds $ 241,797,375 $ 241,807,375 $ 239,601,569 ($2,205,806) (0.9%) Total Positions (FTE) 21, , ,446.9 (233.9) (1.1%) 2

3 Positions by Function All Funds Total Operations 21% School Food Service 5% Total FTE 21,446.9 Total Salary and Benefits $1,339,428,422 Operations Financial Mgmt & Other 2% Operation of Plant & Maintenance Student 9% Transportation 5% Governance 1% FTE by Fund General Fund 87.8% SRF - Food Service 4.9% SRF Other 7.1% CPF and ISF 0.2% Academics-Other Support 2% School Administration 6% Instructional Support 10% Instruction 60% Total Academics 78% 3

4 4 General Fund Top-performing urban school district in Florida

5 FY2016 General Fund Budget Highlights FY2016 General Fund Budget Revenue $1,713,140,477 Appropriations $1,713,140,477 Increase in Revenue and Appropriations from May 2015 Amended Budget $ 52,364,157 Net Increase in Revenue FEFP (including.25 Mill Levy) $71,884,107 Spectrum Lease Payment (recurring) 1,380,000 One-time nonrecurring funds (20,200,000) Medicaid Reimbursement (1,800,000) Other Miscellaneous (net) 1,100,050 Net Increase in Revenue $52,364,157 Net Increase in Appropriations Salary Reserve $27,200,000 Annualized Impact of FY15 Salary Increase 12,000,000 Increase to Charter School Pass-through 24,000,000 Increase to Digital Classroom and AP/IB Categorical 4,800,000 Savings from Schools and Departments (16,800,000) Other Miscellaneous (net) 1,364,157 Net Increase in Appropriations $52,364,157 5

6 Florida Education Finance Program (FEFP) FY 2015 FY 2015 FY 2016 Third Fourth Conference Increase/(Decrease) Calculation Calculation Report* Conference Report Line # Description 12/18/2014 4/17/2015 6/16/2015 Over Prior Year 1 K-12 Unweighted FTE's 182, , , , K-12 Weighted FTE's (Funded) 200, , , , State Base Student Alloc (BSA) $ 4,032 $ 4,032 $ 4,154 $ District Cost Differential (DCD) Palm Beach County Schools BSA $4, $4, $4, $ FEFP DETAIL: 6 Base FEFP Funding (WFTExBSAxDCD) 833,121, ,703, ,635,561 42,932,514 7 ESE Guaranteed Allocation 65,204,545 65,204,545 66,043, ,871 8 SAI 34,651,002 34,651,002 35,355, ,375 9 Reading Instruction 8,569,828 8,565,235 8,636,823 71, Safe Schools 4,235,563 4,234,387 4,226,978 (7,409) 11 Instructional Materials 14,733,409 14,705,403 15,010, , Transportation 23,051,524 23,482,167 23,880, , Teacher Lead (Supplies) 3,054,489 3,054,489 3,079,344 24, Digital Classroom Allocation 1,722,101 1,720,807 3,088,857 1,368, Federally Connected Student Supplement 0 0 4,750 4, DJJ Supplemental Funding 311, , ,523 (8,869) 17 Proration to Available State Funds (4,207,636) (7,061,393) 0 7,061, Total FEFP 984,447, ,579,081 1,038,272,828 53,693, Less: Required Local Effort* (732,598,713) (732,598,713) (810,205,252) (77,606,539) 20 GROSS STATE FEFP 251,849, ,980, ,067,576 (23,912,792) 6

7 Florida Education Finance Program (FEFP) FY 2015 FY 2015 FY 2016 Third Fourth Conference Increase/(Decrease) Calculation Calculation Report* Conference Report Line # Description 12/18/2014 4/17/2015 6/16/2015 Over Prior Year STATE CATEGORICAL PROGRAMS 21 Class Size Reduction 209,847, ,847, ,576,080 3,728, Discr. Lottery/School Recognition 10,318,526 11,277,034 11,282,899 5,865 Total State Categorical Funding 220,166, ,124, ,858,979 3,734, TOTAL STATE FUNDING 472,015, ,105, ,926,555 (20,178,502) LOCAL FUNDING 24 Required Local Effort* 732,598, ,598, ,205,252 77,606, Discretionary Taxes from Mills* 107,785, ,785, ,620,773 10,834, TOTAL LOCAL FUNDING 840,384, ,384, ,826,025 88,441, TOTAL FEFP FUNDING 1,312,399,966 1,313,489,733 1,381,752,580 68,262, Funding per Unweighted FTE 7,173 7,160 7, % 29 Voter Approved Levy* (.25 Mill FY12-FY19) 36,024,720 36,024,720 39,645,980 3,621, ADJUSTED TOTAL FUNDING 1,348,424,686 1,349,514,453 1,421,398,560 71,884,107 Enrollment Breakdown 31 District Operated Schools 163, , , Charter Schools 19,074 19,074 22,000 2, Total Unweighted FTE 182, , ,423 2,976 Charter School % of Enrollment 10.43% 10.40% 11.80% 34 Charter School FEFP Pass Through 134,751, ,751, ,770,000 24,018, NET DISTRICT FUNDING $ 1,213,672,809 $ 1,214,762,576 $ 1,262,628,560 $ 47,865,984 * July 1 Certified Taxable Values 7

8 Certified School Property Tax Values Certified School Taxable Value (in billions) $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY Projected July 1, 2015 Certified School Property Tax Values were $ billion, representing a 10% increase over the prior year. State funding declined $20.1 million while local funding increased $92.1 million for a net increase of $72.0 million (including.25 mill Voter Approved Levy). FY Certified 8

9 FY2016 General Fund Appropriations Total General Fund Budget of $1,713,140,477 Utilities/Phone/Data 3% Cap. Maint. Transfer 5% Emp. Leave Payouts 1% Contingency Reserve 3% School/County Wide Reserves 2% Non-K12 (VPK, SACC, Adult) 5% Departments 9% Schools - Charter 10% Schools - District Operated 62% Total Schools 72% 9

10 Budget Priorities for FY2016 Provide competitive compensation to all employees Fund remaining cost of FY2015 salary settlement offer (total annualized impact is $18.1 mil.) Establish a salary reserve in FY2016 The FY2016 budget includes: Additional $12.0 million to fund the annualized impact of the FY2015 salary settlement Salary reserve of $27.2 million 10

11 Budget Priorities for FY2016 (continued) Continue to provide programs and services that meet the academic and social emotional needs of students. The FY2016 budget includes: Total school based appropriations of $1,065,589,887 an increase of $24.1 million 11

12 FY2016 General Fund Appropriations Schools-District Operated Total Schools Appropriation $1,065,589,887 or 62% Core Allocation $ 877,002,321 Additional Resources Allocation 91,492,835 Virtual Schools 3,088,274 School Recognition 10,584,702 ESE OTS 38,962,044 Instructional Materials 13,564,271 Teacher Supplies 3,079,344 Salary and Count Day Reserves 27,816,096 FY2016 Appropriation 1,065,589,887 FY2015 Appropriation 1,041,506,701 Increase in School Appropriation $ 24,083,186 School Based Staff (FTE) 15, *Detail of FY2016 School Appropriations by Function and Program is included in the Executive Summary 12

13 FY2016 General Fund Appropriations Schools-District Operated (continued) Salary and benefits represent approximately $1.01 billion or 95% of the total school based allocation. The increase in appropriations of $24.1 million is primarily due to the FY2016 salary reserve and the additional annualized impact of the FY2015 salary settlement. 13

14 FY2016 General Fund Department Budgets Total Department Appropriation $147,407,566 or 9% (excluding Capital Maintenance Transfer) Salary and benefits represent approximately $135.7 million or 93% of the total department budget allocation. Department budget reductions in FY2016 totaled approximately $2.0 million. Departments have made reductions over the past several years and in preparation for FY2017 budget will focus on aligning staff with district initiatives and eliminating redundancy. Academic Division - Reduced $39.2 million across all funds from FY2008 to FY2015. Operations Division - Reduced $32.4 million across all funds from FY2008 to FY

15 FY2016 General Fund Appropriations School/Countywide Reserves Total School/County-wide Appropriation $44,313,547 or 2% School Based Reserves $ 30,808,764 Proration to State Funds 3,000,000 Insurance 2,822,850 Spectrum One-time Upfront Payment 2,700,000 Claims and Judgments 1,300,000 Miscellaneous 3,681,933 Total School/County-wide Reserves $ 44,313,547 School Based reserves - Includes restricted school based categorical and carryover funds that will be allocated after the close of FY2015 such as AP/IB/Industry Certifications, Digital Classroom Categorical, School Improvement, CRRP and Summer School. Proration to State Funds Estimated amount of local revenue that will be reallocated to other districts. In FY2015, the final prorated holdback was $7.1 million. Miscellaneous Reassignment Pool, Value Adjustment Board Cost, Mutual Use, ADA, and

16 FY2016 General Fund Appropriations School/Countywide Reserves (continued) Spectrum One-time Upfront Payment total upfront payment received was $4.5 million Increased Board Contingency Reserve by $1.8 million to $50 million to comply with Board Policy This maintains reserve at 3% for FY16. Allocated $500,000 for marketing efforts. Allocated $200,000 for Television Education Network (TEN) equipment needs. Budgeted $2 million in assigned reserve. 16

17 ESE Expenditures Continue to Significantly Exceed Revenue $160,000,000 $140,000,000 $120,000,000 $100,000,000 $80,000,000 $60,000,000 $40,000,000 $20,000,000 $- FY2012 FY2013 FY2014 FY2015-Projected ESE Revenue (net of charter schools) $68,001,359 $66,989,267 $63,768,049 $63,703,406 ESE Expenditures* $125,432,493 $133,482,216 $147,354,234 $151,965,934 *Excludes psychologists and gifted Over the past four years, ESE FTE for District Operated Schools has increased 6% (the increase is in those students classified in the ESE Guarantee, while 254 and 255 FTE declined), expenditures increased 21.2%, and revenue decreased 6.3%. Expenditures are more than double the revenue received. 17

18 Palm Beach County Historical and Projected Enrollment Trend 225, , , , , ,000 75,000 50,000 25,000 - FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 Projected FY2017 Projected FY2018 Projected FY2019 Projected FY2020 Projected District Operated Schools In FY13, charter schools represented 4.6%* of all public schools nationally and 7.7%* in Florida. Palm Beach was below the state average at 6.7%, Broward and Miami-Dade averaged about the same at 13.3%. *Source: The National Alliance for Public Charter Schools Charter Schools In FY15, charter schools represent 10.4% of total district enrollment in Palm Beach. Broward and Miami-Dade averaged about the same at approximately 15.5%. Even though charter schools are growing, the impact in Palm Beach trails neighboring districts. 18

19 General Fund Appropriations Recap The FY2016 budget is balanced and includes: Total revenue and appropriations of $1.7 billion, an increase of $52.4 million. Student growth of 2,976 FTE Additional $12.0 million to fund the annualized impact of the FY2015 salary settlement Salary reserve of $27.2 million 3% Board Contingency Reserve ($50 mil.) Marketing Budget ($0.5 mil.) Assigned Reserve from Sprint Spectrum Lease ($2 mil.) 19

20 20 Capital Budget Top-performing urban school district in Florida

21 FY87 FY89 FY91 FY93 FY95 FY97 FY99 FY01 FY03 FY05 FY07 FY09 FY11 FY13 FY15 Capital Budget Beginning in 2001, the District undertook a major building program to address rapid student growth, replace aged facilities, and accommodate State Class Size Reduction requirements. The District was growing at a pace of more than 4,000 students per year. 190,000 Schools were overcrowded and in need of renovation. Hurricanes in 2004 and 2005 brought an end to the rapid student enrollment growth in Palm Beach County. While student population growth has resumed in our county, albeit at a slower pace, a significant number of students have opted for charter schools. 170, , , ,000 90,000 70,000 50,000 Charter FTE District FTE 21

22 Capital Budget Legislation also impacted the construction program The District, the County and 26 municipalities, adopted an interlocal agreement on concurrency. The agreement required the District to build new schools for student growth and replace older schools to provide equitable facilities throughout the county. Concurrency capped enrollment at 110% of capacity Voters approved a constitutional amendment limiting class sizes New building code rules required school buildings to be constructed as hurricane shelters. Working with Palm Beach County, the District was able to limit the requirement to only new or replacement high schools % 128.0% 126.0% 124.0% 122.0% 120.0% 118.0% 116.0% 114.0% 2001 Average Enrollment Based on School Capacity Elem Mid High 22

23 Construction Program From 2001 through 2014, the District spent $2.9 billion to build new and replacement schools, add classrooms and expand core spaces within schools, and expand choice and career academies. Projects 42 New Schools ($871 million) 52 Modernized Schools ($1.472 billion) 79 School Additions ($583 million) Funding Sources State Sources 10% or $290 million Local (property & ½ penny sales tax) 29% or $844 million Debt Issues (COPs) 61% or $1.792 billion 23

24 Non-Construction Projects Prior to 2010, the capital budget was developed under a simple premise. 50% of the local capital millage levy (1.000 mill) was dedicated to construction and the associated debt service payments. The remaining 50% (1.000 mill) was used for nonconstruction needs. Some examples of non-construction projects are Portable replacement with concretables Minor facility improvements Proactive maintenance of facilities New HR/Financial System Security System Improvements Environmental improvements Roof & HVAC Replacements Planned technology replacements School Bus and District Vehicle Purchases for growth and to replace aging fleet 24

25 Impact of Capital Millage Reduction (2.00 to 1.50 Mills) The great recession impacted the School District in many ways, including a dramatic reduction in capital revenues. Property Values dropped 22% between 2008 and Taxing authority was reduced by 25% As we expected, property values have begun to recover, but the taxing authority has not been reinstated. Capital millage revenues are not expected to return to the 2008 level until

26 Capital Revenues (in millions) Comparison of Capital Tax Revenues $700 $600 $500 $400 $300 $200 $100 Fiscal Year Actual Tax Revenue Tax Revenue with 2 mils Tax revenue with 2 mils, no growth 26

27 Lost Capital Revenue Millage Property Value Tax Revenue ,229,136, ,435, ,237,902, ,695, ,448,533, ,964, ,698,183, ,965, ,258,526, ,452, ,036,112, ,572, ,661,344, ,672, ,103,001, ,148, ,191,584, ,875,881 Total Cumulative Loss in Revenue $ 865,136,996 27

28 Short-term Measures to Address Capital Shortfall Since 2009, the capital budget has been balanced by Use of one-time reserves Budget reductions across all areas Delay of projects and maintenance, funding primarily life/safety projects and legally required functions. Reduced CSIR (comprehensive safety inspection report) citations from more than 47,000 in 2001 to less than 1,400 in Reducing costs by renegotiating contracts and finding new ways to do things more efficiently and less expensively. Increased bandwidth for internet access with no cost increase. Moved to google at a significant cost savings. Short term financing to purchase school buses These are temporary, not long-term solutions to the capital budget shortfall. 28

29 FY2016 Capital Revenues Total Capital Revenues: $358,888,565 Carryforward, 26% State Other, 1% State Charter School, 2% Local Other, 1% 2015 Bus Lease, 4% Type Area Revenues Local 2015 Bus Lease $ 14,235,296 Local Carryforward 91,464,342 Local Impact Fees 3,972,083 Local Interest 750,000 Local Millage (1.5 mil) 237,875,881 Local Total $ 348,297,602 State Carryforward $ 503,483 State Charter School 5,470,110 State CO&DS 1,212,173 State PECO 3,405,197 State Total $ 10,590,963 Grand Total $ 358,888,565 Local Millage (1.5 mil), 66% 29

30 FY2016 Capital Appropriations Total Capital Appropriations: $358,888,565 Transportation, 8% Debt Payments, 43% Equipment, 2% Maintenance, 19% Construction 4% Site Acquisition 0% Category Project Type Budget Debt Payments Bus Lease Payments $ 7,331,643 COP Payments 147,000,000 Equipment Equipment 7,901,535 Facilities Construction 12,631,343 Maintenance 67,035,892 Site Acquisition 942,855 Reserves Capital Contingecy 19,252,313 Restricted Reserves 15,158,247 Security Security 12,139,897 Technology Education Technology 3,750,972 Information Technology 25,241,178 Transfers Charter School Capital Outlay 5,470,110 Property and Flood Insurance 8,270,000 Transportation Transportation 26,762,580 Grand Total $ 358,888,565 Property and Flood Insurance, 2% Charter School Capital Outlay, 2% Information Technology, 7% Education Technology, 1% Capital Contingency, 5% Restricted Reserves, 4% Security, 3% 30

31 FY2016 Capital Budget Summary Forecasted Needs Balanced Budget New Projects $ 371,203,717 $ 288,472,659 Ongoing Projects 70,415,906 70,415,906 Total 441,619, ,888,565 Shortfall $ (82,731,058) $ - 31

32 FY Capital Plan Expand the Required Five Year Capital Plan to a Ten Year Plan in the future to better project capital needs Address deferred maintenance of facilities Proactive Maintenance Planned Facility Renewal Facility Improvements Student Growth in pockets within the county Security Projects Vehicle replacements Classroom Technology Technology Infrastructure Furniture and equipment replacements Preparation of the Ten Year Capital Plan will require a Comprehensive Facility Condition Assessment to verify the needs and estimate the associated project budgets. 32

33 Putting it into Perspective The School District of Palm Beach County 31 million square feet; 29 million square feet under air 177 educational facilities and 28 ancillary facilities 1,381 buildings, 753 portables and 941 modular classrooms Over 2 million square feet of covered walkways 107,000 computers and 17,000 wireless access points 20,000 phones million s sent or received in the last 6 months 854 school buses and 970 district vehicles 6 transportation facilities and 8 fueling stations. 58,000 students transported daily via 630 daily routes and 18,600 bus stops 13 million miles driven annually covering 2,386 square miles 33

34 $ Millions Debt The largest component of the FY 2016 capital budget is for debt service payments. 43% of the FY 2016 capital budget or 62% of the capital tax revenues will be used for COP debt service payments COPs Debt Service Coverage (50% of 1.5 mils) Active debt management, with advice from the Finance Committee, has reduced the total debt service by more than $100 million since All debt will be retired by Value of 1.5 Mils Total Interest Total Principal 50% of 1.5 Mils 34

35 Facilities - Needs Over $645 million of maintenance projects have been deferred for many years due to budgetary constraints. The amount should not be surprising since revenues have been reduced by $865 million. Patching roofs instead of replacing and repairing HVAC systems long past their useful life Only projects necessary to maintain a safe learning environment have been funded for the last several years. When maintenance is deferred, the life of the building is reduced and operating costs are increased. Repairs are always more costly than proactive maintenance. Facility Improvements, beyond basic maintenance, have also been deferred. Examples include replacement of bleachers, playgrounds, stage curtains, appliances as well as classroom furniture and equipment. Security improvements have been included to allow for a single point of entry, increasing the security of facility. 35

36 Facilities Facility Renewal Facilities require planned, periodic updating or replacement of components such as roofs, HVAC, and lighting These projects extend the useful life of the building. Facility Renewal can be accomplished in two ways A comprehensive project addressing all the needs of a building at once Component projects addressing each need as necessary Needs will be determined through a comprehensive facility assessment that has been included in the FY 2016 capital budget. 36

37 Transportation The District utilized shortterm financing to purchase buses in 2014 and the 120 additional buses to be ordered in FY History of School Bus Purchases Ongoing, planned replacement of buses and other vehicles is needed

38 Technology In Classrooms Continue to update or replace the teacher s computer, install audio enhancement, digital white boards and new projectors. Develop a planned replacement schedule for all technology as the needs will continue to grow with the demands of multimedia educational programs and testing. Infrastructure Continue to improve infrastructure was improved to support digital learning and testing. Other future initiatives include Universal ID Student Information System (SIS) BYOD (Bring Your Own Device) MDM (Mobile Device Management) 38

39 ESCO Funding ESCO (energy savings companies) were explored to provide funding for needed facility improvements. State law requires that ESCO projects pay for themselves meaning the cost of the project cannot exceed the energy savings achieved over a specific payback period. The payback period required for the large projects, such as HVAC replacements, are shortened by adding other work, such as lighting replacements, that have a shorter payback period. However, the payback period often exceed the useful life of the improvements. Projects financed by an ESCO would have a significantly higher interest rates than those financed by the District. 39

40 ESCO Funding Feedback from other government agencies: Palm Beach County recently cancelled ESCO agreement after the energy audit. The County determined they could implement the projects on their own less expensively and plan to include the cost of the work in a future referendum. FAU cautioned the contracts are very complex. ESCO vendors recommend longer paybacks than they were comfortable with. School Districts all ESCO projects were financed by districts in the capital budget rather than obligate the operating budget. School Districts Often did not complete the measurement and verification process, which validates the savings, beyond the first three years. The M&V process was considered time consuming, often contentious, and always expensive. 40

41 ESCO Funding The District has experience reducing energy costs. Energy conservation has resulted in a 21% decrease in kilowatt hours per sq ft from FY08 to FY14. The District also has experience managing facility improvement projects. District funded projects could be financed with a short-term lease, similar to the structure used to purchase school buses, with very low interest cost (2015 Bus Lease interest cost %). This eliminates the need to obligate the operating budget. Recommendation regarding ESCO projects Utilize short term financing to fund the replacement of chillers at 18 facilities in FY 2016, competing work as required by Board policy. 41

42 Capital Budget Highlights The FY 2016 budget is balanced Funded projects include: Maintenance of existing facilities and equipment ADA, Life Safety Technology Infrastructure Bus Maintenance Replacement of 18 chillers Comprehensive Facility Condition Assessment 120 New School Buses Security Projects Student Information System 42

43 Capital Budget Highlights Reductions of $82 million needed to balance the budget Reductions include: Facilities Projects ($26 million) Facility Renewal Projects, Facility Demolitions Education Technology Projects ($6 million) Technology Projects ($20 million) Transportation Projects ($29 million) Other ($1 million) 43

44 Budget Challenges Ahead The District needs additional revenues or financing options to address capital budget demands. Reinstatement of full 2.00 mills would address future needs, but is unlikely to occur in current political climate. Additional funding is needed to address backlog of postponed projects and deferred maintenance. Potential alternative revenue sources include: General Obligation Bonds appropriate for school construction (projects with a useful life or 20 years or more) Sales Tax pay as you go and short-term financing appropriate for school improvements such as roof and HVAC replacements Leasing short term financing for purchase of buses and equipment, energy projects. Other options should be considered to reduce costs: Combine under enrolled schools, sell vacant property, etc. 44

45 Budget Challenges Continued Aligning our limited resources to the District s anticipated new strategic plan. Allocating resources equitably to meet the needs of ALL students. Compliance with unfunded state mandates, including teacher and school administrator performance pay. Ensuring budget allocations are responsive to student enrollment fluctuations. 45

46 46 Next Steps July 29, 2015 Public Hearing to adopt FY2016 Tentative Millage Rates and Budget Time: 5:05 p.m. September 9, 2015 Adoption of the Five Year Capital Plan and Capital Workplan Public Hearing to adopt FY2016 Final Budget Time: 5:05 p.m. Top-performing urban school district in Florida

47 47 Discussion Top-performing urban school district in Florida