5/18/2017 MISSION OF BUDGET PROCESS MADISON COUNTY BOARD OF EDUCATION FY 2017 PROPOSED BUDGET 1 ST PUBLIC HEARING SEPTEMBER 1, 2016

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1 MADISON COUNTY BOARD OF EDUCATION FY 2017 PROPOSED BUDGET 1 ST PUBLIC HEARING SEPTEMBER 1, 2016 MISSION OF BUDGET PROCESS The mission of the budget process is to help decision makers make informed choices about the services and needs of a particular department, activity or local school function. The budget process includes planning resources and prioritizing needs among the school district. And the approval process provides the legal authority to spend money. MADISON COUNTY SCHOOLS FRAMEWORK FOR EXCELLENCE/MISSION STATEMENT The mission of the Madison County School System is to create and support high quality public schools that maximize student achievement, expand student opportunities, and prepare graduates for success in a globally-competitive world. 1

2 BUDGET OVERVIEW» Fiscal year October 1, 2016 through September 30, 2017» Fund Types General State and Local Funds Special Revenue Federal Programs and Local School Public Funds Debt Service State and Local Set Asides for Payments Capital Projects Capital Funds (BRAC Bond)/Local Bond/Fleet Renewal Fiduciary Non Public Local School Funds (Booster Clubs, Etc.)» Expenditure Categories Instruction/Instruction Support, Operations and Maintenance, Transportation, General Administrative, Debt Service (Debt Payments), Transfers to Child Nutrition and Local Schools, and Other (Preschool)» Budget Goals Continue to Operate Schools and District at an Efficient Level Ensure Programs and Services are Effective and can be Measured Provide Accountability for Public Resources (State, Local, and Federal) MADISON COUNTY SCHOOLS ANNUAL BUDGET PROCESS GENERAL OUTLINE March ~ March/April ~ April/May ~ May/June ~ June/July ~ August ~ August/Sept. ~ September ~ Begin pre-staffing/planning based on enrollment (ADM) Staffing meetings (Directors and Principals) Begin budgeting personnel costs as Legislative Session ends Review State LEA allocation report and finish budgeting personnel Meet with department heads to budget non-personnel costs Complete budget meetings to include Federal and State funds Finalize budget and hold first budget hearing (presentation) Second budget hearing / Board approval and submission to State Budgets due SDE by September 15th GENERAL FUND (STATE AND LOCAL FUNDS) 2

3 STATE REVENUES Education Trust Fund (formerly known as Special Education Trust Fund or ASETF now known as ETF ) Created by the Legislature of Alabama in 1927 for educational purposes only for the support, maintenance and development of public education and capital improvements relating to educational facilities MAJOR SOURCES OF REVENUE FOR EDUCATION TRUST FUND State incometax State sales and use tax 4% basic rate State utility tax (levied by the State on the gross sales of electricity, water, gas, telegraph and telephone services) ETF allocation is distributed monthly in 12 equal monthly payments to local school systems. STATE DEPARTMENT OF EDUCATION FY2017 FOUNDATION PROGRAM Madison County (045) FY 2017 FY 2016 Change System ADM 18, , Foundation Program Units Teachers 1, , Principals AssistantPrincipals Counselors Librarians Career Tech Directors Career Tech Counselors TotalUnits 1, ,

4 STATE DEPARTMENT OF EDUCATION FY2017 FOUNDATION PROGRAM Foundation Program (State and Local Funds) FY 2017 FY 2016 Change Salaries (4% Raise) 60,158,25 58,054,9 2,103, Fringe Benefits 23,953, ,205,5 748, Other Curent Expense ($17,021/unit 20,472,43 ($16,281/ 19,577,2 895,192 ) 8 unit) 46 Classroom InstructionalSupport Student Materials ($ /u nit) 487,659 ($ /unit) 449,463 38,196 Technology ($ / unit) 203,678 ($ /unit) 76, ,978 LibraryEnhancement ($ /uni 25,571 ($ ,569 2 t) /unit) Professional Development ($ /u nit) 76,719 ($ /unit) 76, CommonPurchase ($0/unit) 0 ($0/unit) 0 0 CLASSROOM INSTRUCTIONAL SUPPORT (CIS) THEN AND NOW Student Materials $400/unit $373.79/unit $487.66/unit Technology $250/unit $63.79/unit $203.68/unit Library Enhancement $175/unit $21.26/unit $21.26/unit Professional Development $35/unit $63.79/unit $63.79/unit Common Purchases $125/unit $0/unit $0/unit Total CIS $985/unit $522.63/unit $776.39/unit STATE DEPARTMENT OF EDUCATION FY2017 FOUNDATION PROGRAM StateFunds FY2017 FY2016 Change Foundation Program ETF 96,114,889 92,370,231 3,744,658 School NursesProgram 634, ,447 15,180 Salaries 1% per Act TechnologyCoordinator 35,412 34,300 1,112 Transportation TransportationOperations 8,634,169 8,664,476 30,307 Fleet Renewal ($6,382/bus) 995,592 ($6,382/bus) 1,033,945 38,353 Current Units CapitalPurchase 4,891,581 4,977,404 85,823 AtRisk 389, ,883 38,727 Career Tech O andm 112, ,941 1,184 Total StateFunds 111,808, ,161,627 3,646,378 LocalFunds Foundation Program (10Mills) 10,288,390 (10Mills) 10,108, ,780 Capital Purchase ( Mills) 950,163 ( Mills) 1,010,737 60,574 4

5 STATE FUNDS FOUNDATION PROGRAM FY200FY2009 FY FY201 1 Alocation $101, 001,8 95 (11%proration) (7.5%proration)(3%proration) FY201 2 FY201 FY FY201 5 $90,62 $89,43 $97,589,638$96,746,296$98,179,589$99,974,274$102,4 4,530 0,707 07,206 FY201 FY $102, $106,403, ,8 41 AverageDaily Membership(ADM) 18,799 19,196 19,386 19,578 19,6619,548 19,34 19,36319,21118, PerPupil Revenue $5,37 $4,721 $4,613 $4,985 $4, $5,02 2 $5,16 $5,289 $5,33 $5, FOUNDATION PROGRAM 10 MILL MATCH Foundation Program - developed to provide an equitable, basic state funding stream for public K-12 schools throughout the State. The equity is mandated through a 10- mill equivalence in local property tax that each local school system commits to the Foundation Program. (In theory, a poorer school system operating only with funds provided through the Foundation Program would have the same essential elements to offer a solid foundation program). The result of the 10 mill match is equitable State Funding Per Student. MCBOE 10 Mill MatchRequirement $6,878,750 $9,971,050 $10,108,610 $10,288,390 Note: Local property taxes are projected at $20,838,390leaving $10,550,000 for general operations of the school district after the 10 mill match. 5

6 LOCAL REVENUE SOURCES Local revenue is used to supplement the Foundation Programfunding Where applicable, replace funding lost due to State budget cuts Additional teaching units Enhance curriculum programs/computer services/fiscal services Capital improvements Operations/Maintenance/Utilities Administrative Costs Transportation Shortfalls Health Services Pupil Services Legal Fees LOCAL REVENUES Sales Taxes TVA in Lieu of Taxes Ad Valorem Taxes LOCAL REVENUE SOURCES Property Taxes (ad valorem) County-Wide (5.5 mills) District (10.5 Mills) Sales Tax County-Wide (1/2 cent) District (1 cent) TVA in Lieu of Taxes (Percentage of power sales) 6

7 LOCAL REVENUES Ad Valorem Taxes ad valorem Latin, according to the value of A mill is equal to 1/10 of one cent; one mill is equal to ten cents on each $100 of assessed value of taxable property. A single-family owner-occupied home with a fair market value of $100,000 has an assessed valueof $10,000 and, per mill, will produce $10 of tax revenue per year. 1/10 of FOUR CLASSES OF PROPERTY AS SET OUT IN THE CONSTITUTION OF ALABAMA OF 1901 Class Type of Property Assessment Ratio (in termsof fair market Value) Class I Utilities 30% Class II All property not otherwise Classified. Generally; Business, commercial 20% Class III Agricultural, forest and single- Family owner-occupied Residential property Amendment No. 373 allows Agricultural property to be Valued at CURRENT USE not fair market value. 10% HOW ARE PROPERTY TAXES CALCULATED? Start with fair market value x (times) assessment value x(times) millage rate = amount of tax 7

8 AD VALOREM TAXES / PROPERTY TAXES Consider duration issue: Most ad valorem school taxes (particularly those levied by counties) are voted for a specific duration, usually not more than 30 years. MADISON COUNTY: Countywide Ad Valorem 5.5 Mill Tax (Last Levy Date 10/1/2019 for collections on 10/1/2020) 30 years District Regular Ad Valorem 4 Mill Tax (Last Levy Date 10/1/2019 for collections on 10/1/2020) 30 years District Special Ad Valorem 6.5 Mill Tax (Indefinite Must Vote to Terminate) MILLAGE RATES MADISON COUNTY PROPERTY TAXES LOCAL TAXES/REVENUES Countywide taxes are allocated and distributed on Foundation Program ( ADM ) basis; district taxes stay in the district in which collected. 8

9 STATE OF ALABAMA DEPARTMENT OF EDUCATION FY Percentage Distribution Of Countywide School Taxes System System Name Percentage 045 Madison County Huntsville City Madison City TOTAL STATE OF ALABAMA DEPARTMENT OF EDUCATION FY Percentage Distribution Of Countywide School Taxes System System Name Percentage 045 Madison County Huntsville City Madison City TOTAL GENERAL FUND LOCAL REVENUES Actual Actual Projected Budgeted One-Half Cent Sales Tax $9,264,660 $,9,771,278 $ 10,452,324 $10,700,000 One Cent SalesTax 7,363,027 7,604,776 8,363,054 8,600, Mill County-Wide Prop. Tax 8,648,530 8,778,306 9,165,741 9,500, Mill District Prop.Tax 10,614,774 10,802,799 10,998,137 11,338,390 TVA In Lieu of Taxes 4,562,741 4,535,491 4,318,570 4,400,000 Other 4,123,217 3,803,783 3,473,339 3,368,997 (Tobacco Tax, Casual Sales Tax,Interest County Commission Appropriation, and Indirect Cost) TOTAL $44,576,949 $45,296,433 $46,771,165 $47,907,387 9

10 OTHER COMPARISONS LOCAL REVENUE FISCAL YEAR ENDING SEPTEMBER 30, 2015 ADM Local Revenue Local Funding Per Student Madison County Schools 19,211 $43,921,716 $2,286 Huntsville City Schools 22,837 $101,910,358 $4,463 Madison CitySchools 9,907 $29,730,622 $3,001 ADM Average DailyMembership REVENUE COMPARISONS FUNDING SOURCES FISCAL YEAR ENDING SEPTEMBER 30, 2015 Madison County Huntsville City Madison City State Sources 60% 45% 53% Federal Funds 7% 10% 5% Local Revenues 32% 44% 41% Other 1% 1% 1% TOTAL 100% 100% 100% General Fund Expenditures 10

11 PROPOSED GENERAL FUND BUDGET FY2017 Projected 2017 Fiscal Year 2016 Beginning Fund Balance $ 12,500,000 $ 13,000,000 Revenues (State and Local) $155,084,049 $150,609,925 Expenditures Instruction/Instructional Support (73.2%) $113,503,549 $110,381,682 Operations/Maintenance /Capital Outlay (8.5%) 13,187,990 12,995,013 Transportation (6.5%) 10,063,310 10,232,227 General Administrative (2.3%) 3,492,080 3,221,143 Debt Service/Transfers (5.0%) 7,708,459 7,468,491 Transfers to CNP/Local Schools (4.1%) 6,423,680 5,154,016 Other/Preschool Program (.4%) 704,981 2,157,353 Total Expenditures $155,084,049 $151,609,925 Ending Fund Balance $12,500,000 $12,000,000 Salaries & Fringes FY2017 $128,433,515 83% Salaries & Fringes FY2016 $126,342,056 83% FRINGE BENEFITS FICA 6.2% 6.2% 6.2% 6.2% 6.2% MEDICARE 1.45% 1.45% 1.45% 1.45% 1.45% RETIREMENT 10.08% 11.71% 11.71% 11.94% 12.01% UNEMPLOYMENT.15%.10%.06%.05%.04% HEALTH INSURANCE $8, $8, $9, $9, $9, (PER MONTH) ($714.00) ($714.00) ($780.00) ($780.00) ($800.00) LIFE INSURANCE ($2.10 PER MONTH) $25.20 $25.20 $25.20 $25.20 $25.20 INDIRECT COST % 1.96% 1.30%.71% FISCAL YEAR 2017 HIGHLIGHTED EXPENDITURE REQUIREMENTS (LOCAL FUNDS) State Mandated 4% Raise (For Locally Funded Salaries) $425,000 Health Services School Nurses/Contracts (Local Support Up $125,500 fromfy2016) $1,465,000 Reading Coaches ARI (Local Support 5 Reading Coaches out of a Total of 14) $370,000 Transportation Services (Local Support - $400,000 for buses/$185,000 for traffic duty & $46,500 all other) $631,500 11

12 FISCAL YEAR 2017 HIGHLIGHTED EXPENDITURES CONTINUED Madison County Schools Proposed Annual Licenses / Support Computer Services: INow Annual Support / Chalkable 50, F i l e W a v e ( B y D e v i c e ) 25, Veritas (Backup software) Annual Renewal 30, Solar (Manage Switches) - IMC 2, School Messenger 35, Samanage Work OrderProgram 12, Ad Manager 1, N e t T r e k k e r - I n t e g r a t e d w i t h C a n v a s 32, W e b S i t e - E d l i o 16, Library Software Package (All Schools) 17, File Maker Pro (DIMS Support) 5, ExchangeServer (Windows Server) 20, S e c u r i t y C e r t i f i c a t e s 5, Anti-Virus C D W G Paid for 3 years Canvas 114, Edmentum - Virtual School 49, C o s t s h a r e d w i t h T i t l e I STAR 100, C o s t s h a r e d w i t h A t R i s k DIMS 25, Turnitin 20, C o s t s h a r e d w i t h l o c a l s c hools Text to Read 2, NextGen 47, A E S O P - S u b s t i t u t e P l a c e m e n t 27, Kronos 150, C o s t s h a r e d w i t h r ebate from A/P Searchsoft - Personnel 13, School Dude - Maintenance Work Orders 8, R o u t i n g S o f t w a r e - T r a n s p o r t a t i o n 8, Zonar - Transportation 50, S t a t e F unds Total - FY , GENERAL FUND EXPENDITURES CONTINUED Instruction/Instructional Support: Personnel Cost; Classroom Instructional Supplies, Software and Chrome Books; Textbooks; Lab Upgrades; Counselor & Registrar Supplies; ELL Services; Drivers Education Vehicles (3); ARI services; Testing Services; Health Services; Attendance Services; and Computer Services Operations and Maintenance: Personnel Cost; Utilities and Telephone; Insurance; Maintenance and Custodial Supplies; District Wide Special Projects; Security Resource Officers; Service Vehicles and Repairs and Maintenance; Land and Building Repairs; and Other Purchased Services (Deputies, Uniform Rentals, Environmental Permits & Renewals). GENERAL FUND EXPENDITURES CONTINUED Transportation: Personnel Cost; Fuel; Insurance; Tires/Parts/Repairs; Professional Services/Drug Tests; Supplies/Software; Local & In-State Travel NOTE: The Majority of Operation Costs arefunded by the State ($8,634,169) with Local Funds Picking Up $231,500 12

13 GENERAL FUND EXPENDITURES CONTINUED General Administrative: Superintendent and Board Members; Professional Services (Attorney Fees, Audit, and Bank/Fiscal Agent Charges); Accounting and Personnel Services; Purchasing Services; Warehouse Services; and Office Supplies/Travel/Telephone. Operating Transfers and Other: Tranfers to Debt Service Funds for Bond Payments; Transfers to CNP for State Mandated Salary Increases and ALL Fringe Benefits; TVA Transfer to Local Schools; Other Local School Allocations (CIS Funds; TVA & Custodial Allocations); and Preschool Local Support. SPECIAL REVENUE (FEDERAL PROGRAMS AND LOCAL SCHOOL PUBLIC FUNDS) FISCAL YEAR 2017 FEDERAL FUNDS/ALLOCATIONS AND STATE OFFICE OF SCHOOL READINESS (OSR) GRANTS FY2015 FY2016 FY2017 IDEA-B $3,588,186 $3,592,629 $3,615,624 Preschool PartB 47,960 47,770 59,358 Title I, Part A 2,181,295 2,179,581 2,711,696 Title II, Part A - Class Size Reduction 432, , ,571 Title III ELL 26,629 24,950 30,428 Vocational and Technical Education 180, , ,592 Indian Education 222, , ,210 DODEA LAUNCH (5 Year Grant) 0 204, ,219 DODEA LAUNCH K-3 (5 Year Grant) ,000 Preparing for Tomorrow (3 Year Grant) 256, ,737 0 Title I Part D 44,093 46,674 0 Homeless (Applied For) 14,000 14,000 68,474 OSR Pre-K General Fund (State Funds) 251,100 1,423,200 1,871,400 13

14 CHILD NUTRITION PROGRAM Projected Projected FY 2017 FY 2016 Beginning Fund Balance: $ 3,500,000 $ 3,500,000 Revenues: Federal USDAReimbursement $ 4,231,500 $4,319,500 Federal USDA Donated Commodities 430, ,000 Daily Sales/Rebates/Other Revenue 4,897,600 4,941,250 Transfers In from General Fund 3,623,159 3,742,857 $13,182,259 $13,465,607 Expenditures: Salaries andbenefits $ 6,549,654 $6,656,163 Utilities/Telephone/Maintenance /Generators 833, ,132 Purchased Food/Processing Supplies 4,902,000 4,918,700 Office Supplies/Software Agreements/Bank Charges/ Travel (Local & In-State) 125,100 59,498 Equipment (AsAttached) 38,210 87,000 Indirect Cost 653, ,087 $13,101,945 $13,238,580 Ending Fund Balance: $ 3,580,314 $ 3,727,027 CNP/EQUIPMENT PURCHASES School Name Equipment Item Total Cost Sparkman High School Pass Thru Warmers (2) $16, Sparkman High School Pass Thru Cooler 8, Sparkman High School PCS Vending Machine 16, Buckhorn High School Pass ThruWarmer 9, Hazel Green Elementary Reach-In Cooler 8, Lynn Fanning Elementary Reach-In Cooler 8, Lynn Fanning Elementary 40 gal. Steam Kettle-Tilting 21, TOTAL $87, CHILD NUTRITION PROGRAM M P L H Yearly Avg. Participation Schools N H I G H 74.69% B U C K H O R B U C K H O R N M I D D L E % C E N T R A L E L E M E N T A R Y % H A R V E S T E L E M E N T A R Y % H A Z E L G R E E N E L E M % H A Z E L G R E E N H I G H % M A D I S O N C O. E L E M % M A D I S O N C O. H I G H % M A D I S O N C R O S S R O A D S % M E R I D I A N V I L L E M I D D L E % M O N R O V I A M I D D L E % M O N R O V I A E L E M E N T A R Y % L Y N N F A N N I N G E L E M % M T. C A R M E L E L E M % N E W H O P E H I G H % N E W H O P E E L E M E N T A R Y % N E W M A R K E T E L E M % O W E N S C R O S S R O A D S % R I V E R T O N I N T E R M E D I A T E % R I V E R T O N E L E M E N T A R Y % L E G A C Y E L E M E N T A R Y % S P A R K M A N H I G H % S P A R K M A N N I N T H % S P A R K M A N M I D D L E % W A L N U T G R O V E % M O O R E S M I L L I N T E R M E D % E N D E A V O R E L E M E N T A R Y % Y E A R L Y A V E R A G E % 14

15 DEBT SERVICE FUNDS DEBT SERVICE FUNDS This fund type reflects the annual debt payments (principal and interest) of the Madison County Board of Education on its outstanding debt as of October 1, 2016, excluding the capital leases for buses. (See Capital Projects Funds Fleet Renewal) Debt Payment FY 2017 WARRANT PRINCIPAL INTEREST TOTAL Series $ 32, $ 32, $ A Series 810, , ,099, B Series 410, , , A Series 1,012, ,012, B Series 908, , A Series 240, , , Series 490, , , BRAC 350, ,124, ,474, Series 2,065, , ,757, Series 170, ,746, ,916, SUB TOTAL 4,535, ,310, ,846, $ $ $ Schneider Phase I $ 440, $ 475, $ 915, Schneider Phase II 342, , ,037, SUB TOTAL $ 782, ,170, ,952, $ $ TOTAL DEBT FY2017 $5,318, $ 7, 480, $ 12,799, LOCAL SCHOOL BANK LOANS PUBLIC FUNDS/BOARD APPROVED Current Year Use of Loan Principal Interest Approved School Funds Amount Balance Rate 2007 NewHopeHigh Basebal Lights $ 40,000 $ 10, % 2012 NewHopeHigh AthleticFacilities $ 400,000 $ 323, % 2013 Buckhorn High AthleticFacilities $ 450,000 $ 379, % (Negotiable in2018) 2013 Sparkman High AthleticFacilities $ 250,000 $ 168, % (Negotiable in2018) Renewed 2016 Hazel Green High AthleticFacilities $ 636,940 $ 636, % (4/1/2022 Maturity) Renewed 2016 Madison County High AthleticFacilities $ 325,364 $ 325, % (11/1/2021 Maturity) TOTALOUTSTANDING $ 1,844,302 15

16 CAPITAL PROJECTS FUNDS CAPITAL PROJECTS FUNDS Fleet Renewal State Allocation (Debt Service on 3 Capital Leases for Buses $652,776 Leases Payoff in Feb. 2017, March 2019, and Oct. 2019) and $611,205 to Purchase 7 Buses) Public School Fund State Allocation (Debt Payments on Local Bonds) BRAC Bond Issue Balance Brought Forward October 1, 2016 (High School) Local Warrant Balance Brought Forward October 1, 2016 (Capital Plan Maintenance and Improvements) $995,592 $4,891,581 $42,701,773 $3,514,875 TRANSPORTATION FLEET RENEWAL Fleet Renewal (Buses): MCBOE Fleet 219 Buses (188 regular route and 31 special needs) 2016 Buses Eligible for Fleet Renewal (10 years old or less) 150 (Not Funded for 69) Funding is currently $6,382 per bus over 10 year period or $63,820. The average bus cost is $88,

17 BRAC BONDS STATE ISSUE DATED JUNE 2013 Project Madison County Elementary (Completed) $9,766,840 Project Monrovia Area High School (Budgeted) $46,000,000 Expenditures to Date: Land/Architect Fees/Other Professional Services ($3,298,227) Balance Held on Behalf of Madison County $42,701,773 FIDUCIARY NON-PUBLIC LOCAL SCHOOL FUNDS Booster Clubs/School Affiliated Organizations $2,011,011 (27 local schools plus Career Tech) Questions? 2 nd PublicHearing September 13, 2016 Karen C. O Bannon, CSFO kobannon@mcssk12.org 17