School Board Executive Summary Budget Parameters Information Addendum

Transcription

1 Budget Parameters Information Addendum January 28, 2010 Board Worksho p Background Posted with this summary is a 12 page document that provides additional fiscal information related to establishing the Hopkins Public schools budget. This executive summary also provides background to the Budget Parameter document. Page 1, Budget Reconciliation from FY09 to FY10 and Budget Variance Analysis When the original budget was approved in May 2009, expenditures were projected to exceed revenues in the General Fund by approximately $1.3 million, meaning fund balance would be used or spent. However, based upon the current economic environment and after many changes that were implemented to increase financial flexibility (for example, Special Ed Federal stimulus, OPEB bonding, reallocation of Staff Development, and the reallocation of staff to the Down Payment Levy) it is now projected that revenue will exceed expenditures by $1.5, meaning this $1.5 million will be added to the fund balance. The net difference is $2.8 million. When reviewing projected financial information, it is important to understand and evaluate the impact of the audited variance. As you can see, the three and four year audited variances from through have been consistently favorable on a net basis by 1.33% to 1.70%. Pages 2-7, Budget Parameters: This information outlines the budget parameters and provides options to include or exclude each parameter which then links to the Forecasting Model so the Board can not only see the impact of each parameter on a one- year basis, but also on a multi- year basis. These parameters have been numbered 1-6, and the Administration recommendation for each parameter is reflected below. Parameter #1, FTE Reductions for Declining Enrollment (Page 2): Administration recommendation: Make the reductions for declining enrollment.

2 2 School Board Executive Summary Parameter #2, FTE Reductions - - Consequences to Settlement (Page 2-3): This was discussed in depth at the January 14th Board workshop, but we will revisit this showing impacts to class size should the decision be made to make the reductions and not move the equal dollar amount of the reductions over to Targeted Staffing for a one year transition period. Administration recommendation: Make the reductions for Settlement consequences and move an equal dollar amount to Targeted Staffing for one year. Parameter #3, Reallocation of Media Generalists to the Down Payment Levy (Page 3): Administration recommendation: Begin the three- year transition of moving the costs of Media Generalists from the General Fund to the Down Payment (Capital Projects) Levy. Parameter #4, Dollar Reduction for Inflation for Special Education (Page 4): This was discussed at the January 14th Board workshop. This reduction allows Hopkins to still meet the Special Education Maintenance of Effort (MOE) requirements from to Administration recommendation: Make the $300,000 estimated allowable reduction to Special Education which maintains compliance with the MOE requirement. Parameter #5, Other Budget Reductions (Pages 4-6): a. Staffing reduction in Human Resources (Page 4) Administration recommendation: Make the staffing reduction in Human Resources. b. Teaching & Learning (page 4) These options are separated based upon reallocations and reductions. The reallocation amount of $55,000 will move costs over to the Curriculum portion of the Down Payment Levy and the reduction amount of $25,000 will reduce costs in the Teaching and Learning budget package. Administration recommendation: Make the staffing reallocations and reductions in Teaching and Learning. c. Transportation (page 5) Routing efficiencies by joining Regular and Choice Is Yours busing

3 3 Administration recommendation: Allow Transportation to work out these efficiencies. d. Transportation - - Bell- time Analysis (page 5) At the January 14 th Board workshop the School Board preliminarily wanted to proceed with this parameter. An enrollment sensitivity break- even point and district example are given for additional perspective. The savings are relatively minor compared to the potential impact in terms of both potential dollars lost and community dissatisfaction. Administration recommendation: Delay implementation of the bell- time analysis savings. e. Administrative Reductions (page 5) This is a reduction of the scheduler positions at the Junior High and High School, with Assistant/Associate Principal position picking up this duty. Administration recommendation: Make staffing reductions for the scheduler positions. Parameter #6, Allocation for Targeted Staffing (Pages 6-7): This is a section that will be covered in detail at the workshop this Thursday, January 28. Administration recommendation: Allocate a Targeted Staffing budget to the same level as last year with appropriate adjustments for a Total Targeted Staffing budget of $912,606. Page 8, Budget Parameters Summary: This page shows the actual projected dollar reductions for based upon the current administrative recommendations. This currently shows $861,910 in reductions for , but if and Budget Parameters are changed this summary will capture those changes. This DOES NOT include all of the other adjustments that have been included in the Bridge. This ONLY includes the items reflected in the Budget Parameters listed above. Pages 9 and 10, Results of Projected FY10 and Budget Parameters: Pages 9 and 10 illustrate a projected fund balance based upon three scenarios: Scenario X (Best), Scenario Y (Recommended), and Scenario Z (Reasonable Worst). A footnote regarding the differences between the scenarios has been included but basically, Scenario X reflects a $100 per pupil unallotment, Scenario Y reflects a $300 per pupil unallotment, and Scenario Z reflects a $500 per pupil unallotment. All other

4 4 School Board Executive Summary assumptions remain the same with the exception of the audited variance. For assumption purposes we have reflected a variance of 1.25% which is relatively close to the four- year average. Scenario Y (Recommended) assumes no variance, Scenario X assumes a 1.25% net favorable variance; and Scenario Z assumes a 1.25% net unfavorable variance. Based upon the assumptions selected, the projected EOY undesignated fund balance for could range from 19.58% to 10.34%. In an effort to provide multi- year perspective, on page 10, there is a graph that looks at the projected undesignated fund balance % for years through based upon the budget parameter assumptions made in for all three scenarios. As this part of the part of the Forecasting Model, this graph is dynamic, meaning that changes in any of the scenarios will automatically change the graph for years through Page 11, Bridge Projections through : The Fiscal Bridge has been included for informational purposes, so you can see based upon the recommended assumptions how these numbers look moving forward through fiscal year The Fiscal Bridge tracks changes from the Original Financial Planning Model used for and shows the changes to revenue and expense that are incorporated into the Revised FPM A. It is dynamic and can be changed by making changes in the What if Fiscal tab of the Forecasting Model or in the Budget Parameters tab of the current year Budget Module, also located in the Forecasting Model. Page 12, Bridge Projections from January 14 th Board workshop: This illustrates the budgeted revenues and expenses assumptions as we adjourned the Board workshop on January 14 th. It is provided as information only, as some of the parameters have been changed, however, we can go through what has been changed if Board members have questions. Reference Points: Board Chair Selcer requested the following information. This section provides page numbers for each of the requested items. Page numbers are in bold next to the request. See Page 2: 1) As administration is proposing a budget that maintains class size for , what are the average class sizes at the elementary and secondary level now? (we got this in Oct, I believe, but board members have indicated that a recap would be helpful. The figures provided at that time would be fine. If you plan on providing this info verbally at the workshop, that is also fine. These

5 5 figures do need to be made available to board members at the workshop or before.) See Page 11: 2) To provide context: What is the total dollar amount projected to be spent in the general fund in the budget administration is bringing forward for ? What do we project our revenues to be if the government honors its current budget commitments to education? Thank you for the fiscal information in this area you provided going back several years and including this school year. The request is to extend that information by projecting expenditures and revenue for ) The dollar amounts of the following, per the FPM mode (model): See Page 1: A) our current fund balance See Page 9: B) 6% of our current fund balance See Page 9: C) 10% of our current fund balance See Page 9: D) amount of the fund balance designations for a potential DPL deficit, curriculum rewrite and staff development in the event of a change to the secondary level and OPEB obligations (I think these were the three elements included in the FPM; John Toop could correct me if I am mistaken.) See Page 9: E) the projected excess of fund balance over 10% after C and D above are subtracted from our current fund balance. See Page 4: 4) quantification (if possible) in FTE equivalents of $300,000 special education proposed reduction. I know that there were some questions about whether this is possible at this time. See Page 9 and 10:5) Projected effect of unallotment, interest lost I know this is another moving target, but it would be helpful to board members to see a chart showing the interest lost if the final dollar amount permanently unallotted were $300, $200, $100. See Page 3 above for brief written summary: 6) I understand that the Fiscal Bridge information has many moving parts, and can be reviewed again on our presentation screens in the workshop. However, even a brief written summary of its purpose and components provided ahead of time would be helpful to provide context for the proposed budget to new and even old board members. This written summary would be helpful background as the bridge is presented at the board table utilizing the FPM.