East Hartford Public Schools

Transcription

1 East Hartford Public Schools Budget Overview Joint Town/BOE Session November 28, 2018

2 Expectations Matter Effort Matters Competence Matters Solutions Matter Relationships Matter VISION: Schools that are the Pride of our Community MISSION: Results Matter To deliver a high quality learning experience for Every Child, Every Day

3 Presentation Organization 3 Purpose To present the FY20 EHPS Superintendent s Budget to the East Hartford Board of Education and Town Council To communicate current budget drivers for both revenue and expense To earn your support and commitment in the budget process Agenda Part I: The Context of the FY20 Budget Part II: FY20 Budget Proposal Summary Part III: Budget expenditure/revenue factors Part IV: Object Summary Review Part V: Summary/Conclusion Questions/Answer

4 Total budget increase (FY18-FY19) Part I: The Context of the FY20 Budget Reflecting back on the FY19 Budget (Current Year) 4 After presenting a 0% budget increase based on current economic conditions, the TC appropriated $255,000 that ultimately saved 7 remaining positions facing layoff. To achieve this minimal budget the BOE eliminated over 21 positions across all district levels as well as reduced nearly all line accounts at/below previous years actuals. The following numbers below each represent an important part of our FY19 budget story to date..28% $756,000 Pre-Paid Debt Service Obligations 1 st QT Health Claims Report FY19: ($2.5)M $1.2 Net Increase in Alliance Funds FY19 (ECS Phase in Formula Includes Aid monies for Hurricane Maria) $450,450 Transferred to Capital Reserve FY18 $2.5M Health Insurance reserve June 30, 2018 $1.2M Health Insurance reserve October 16, 2018

5 Part I: The Context of the FY20 Budget The Budget Timeline 5 11/19 Release of Superintendent s Budget to BoE 11/28 Joint BoE/Council Budget Workshop 1/4/19 Submission of BoE Budget to Mayor 2/27/19 Presentation of BoE Budget to Town Council 10/19 School Based Budgets Due to Central Office 11/29, 12/5 BoE Budget Workshops 2/20/19 Submission of Mayor s Budget to Town Council East Hartford Board of Education Budget Process 9/27 Budget Released to District Principals 10/19-11/14 Development of Superintendent s Proposal 12/3 Public Hearing for Superintendent s Budget 12/17 Adoption of BoE Proposed Budget 3/19/18 Town Council Adopts Budget

6 Part I: The Context of the FY20 Budget Budget Themes 6 Aligned to EH2020 Vision and priorities Responsive to current state and local budget contexts/challenges Forecasts both expenditures and revenue that will continue to unfold in the budget process $1.5M additional Alliance/ECS funding Includes flat funding SPED/Magnet costs Maintains current services in response to significant personnel cuts required by the FY19 Budget process

7 Part I: The Context of the FY20 Budget District Profile 7 5% Asian 34% Black 46% Hispanic 15% White 100% CEP Schools/ Free and Reduced Lunch $15,782 Income threshold to qualify for free lunch (1 child) 6,866 total students in 15 district schools from 62 Different countries who speak 50 different languages

8 Part I: The Context of the FY20 Budget District Enrollment/Sub-Groups 8 Year Enrollment ,133 5 Year Subgroup Enrollment Trends SPED EL , , , , , Enrollments Since 8/28/ (8%)

9 Part I: The Context of the FY20 Budget Student Achievement in East Hartford 9 89% Class of 2016 graduation rate- EHPS As compared to 87.9% for State of Connecticut SAT 45% Percentage of EHPS students meeting benchmark on SAT EBRW SAT 18% Percentage of EHPS students meeting benchmark on SAT Math 55% AP Performance Students receiving a 3 or better on AP tests as compared to 60% globally 35% Smarter Balanced ELA Increase by 5% points in Smarter Balanced Reading Performance vs 1% growth for State of CT 23% Smarter Balanced Math Increase by 6% points in Smarter Balanced Math Performance vs 1% growth for State of CT

10 Part I: The Context of the FY20 Budget Per Pupil Expenditure Comparison (FY2017) 10 Hartford $19,138 Waterbury $15,460 Meriden $13,967 Bloomfield $20,906 Windsor $17,709 East Hartford $14,277 Wethersfield $15,528 South Windsor $17,114 Manchester $15,835 Glastonbury $16,084 STATE AVERAGE: $16,576 Danbury $12,683 West Haven $13,905 New Haven $17,000 State Ranking EHPS 150 Not yet released Source CT School Finance Project

11 Part I: The Context of the FY20 Budget Percent Increase Comparison (FY18 to FY19) 11 Bloomfield 2.72% Windsor 2.37% South Windsor 3.96% Vernon.87% Wethersfield 2.06% Bristol 1.06% East Hartford.28% Meriden 0.9% Manchester 4.2% Glastonbury 1.9% Stamford 1.13% Stratford Norwalk 0% 3.48%

12 Part II: FY20 Budget Proposal Summary Total Proposed EHBOE Budget 12 The total operating budget for FY20 includes multiple proposals for funding sources totally over $126M. For the purposes of this presentation, the Superintendent s Budget Proposal focuses on Town Appropriation that includes over $52M of Proposed Tax Payer Contributions as well as $41M in Education Cost Sharing (ECS) grant dollars. Grants, $16,970,160, 13% Funding Sources, $6,045,260, 5% Total Proposed Budget: $126,872,898 Alliance Funding, $9,774,859, 8% Proposed Tax Payer Contribution, $52,371,802, 41% ECS Funding, $41,710,817, 33% Superintendent Proposed Budget, $94,082,619, 75%

13 Part II: FY20 Budget Proposal Summary EHBOE Budget History 13 Over the past six years, the EHPS Budget reflects a minimal and conservative growth trend that is the result of wise and responsible stewardship of district resources as well as a significant and growing reliance on grant making and management. EHBOE Budget History $87,266,419 $88,266,419 $89,266,419 $90,436,419 $90,691,419 $94,082, Proposed 2020

14 Part II: FY20 Budget Proposal Summary Budget Proposal Comparisons 14 The FY20 Superintendent s Budget Proposal of 3.7% represents the highest request made at the administrative level in the last four years. It should be noted that based on fiscal constraints the Board cut over 21 positions from the budget to achieve a.28% increase in FY Proposed Superintendent s Proposed Budget 5.5% 5.7% 3.7% 3.0% 1.3% 0% 3.7% BOE Proposed Budget Council Approved Budget 5.5% 3.7% 3.3% 3.0% 1.3% 0% 1.7% 0.0% 1.2% 1.1% 1.3%.28%

15 Part II: FY20 Budget Proposal Summary Federal/State/Foundation Grant Expenditure History 15 Historically, EHPS has been able to supplement the Town budget appropriation with significant grant funding from a variety of Federal/State and Foundation sources. The proposed 2020 budget includes $1.5M in projected Alliance dollars. EHPS has been widely recognized for its innovative practices and willingness to engage funders in projects yielding strong, evidence based outcomes. Grants have been fully leveraged against the general budget and fund over 377 positions (or 28%) across the district. $21,816,862 EHPS Grant Funding $22,654,206 $25,245, Grant Funded Positions $24,334,499 $26,745,019 $11,773,479 $13,998,784 $15,227,410 Administrative 5.5 Certified 130 Non-Certified 242 Total 378 *Current year estimate **Includes FY2018 estimate and projected increases in State Alliance funds *

16 Part II: FY20 Budget Proposal Summary Status of Major State Grants/ History of Reductions 16 Due to the heavy reliance on state aid, EHPS carefully monitors several state grants for their significant impact on the budget overall. While all grants are important, the grants listed below each play a major part is successfully closing the FY20 budget. Grant FY2018 FY2019 FY2020 (Projection) Diff. -/+ FY19-FY20 Status Alliance District Grant $7,364,339 $8,274,859 $9,774,859 $1.5M In the 2018 Legislative Session, the General Assembly voted to support an ECS formula that included a phase in process to through For FY20, this phase in process was projected to include a $2,288,459 increase for EHPS. However, due to current state deficit status and changing leadership in both executive and legislative offices, this bipartisan commitment is now in question. Commissioner s Network O Brien (expended) $365,000 $325,000 $0 ($325,000) The Commissioner Network Grant at O Brien School totaled nearly $1.8M over 5 years. As the program comes to an end, positions have been eliminated or absorbed in the Alliance Grant. Commissioner s Network EHMS (Y5) $750,000 $835,000 TBD 7% Magnet Cap $915,000 TBD TBD EHMS is currently in the application for a 5 th year of network funding. This proposal has gone through the SBOE Support and Accountability Committee and is intended to be with the full SBOE for approval for Jan Current legislative action will be needed to continue standing language providing relief for EHPS magnet tuitions.

17 Part III: Budget Expenditure/Revenue Factors 17 The FY20 Superintendent s Budget Proposal represents the financial exercise of attempting to balance projected revenues by projected expenditures. The following factors played a significant role in the development of this proposal. Budget Expenditure Factors -Increased Health Benefit Costs -Increased Contractual Salaries -Increased Transportation Costs -Partial Debt Service payment -Increased Utility Costs FY Adopted Budget $89,266,419 Budget Revenue Factors -Included projected increase of Alliance monies -Increased Woodland/SPED Services Revenues -Pre-Paid Debt Service FY20 Proposed Budget $94,082,619 ($3,391,200, 3.7%) -Increased assorted revenues (E-Rate, Medicaid, Misc)

18 Budget Reductions Part III: Budget Expenditure/Revenue Factors Alliance/ECS Grant 18 In the 2018 Legislative Session, the General Assembly voted to support an ECS formula that included a phase in process through For FY20, this phase in process reflected a $2,288,459 increase for EHPS. However, due to changing political leadership and the state deficit status, this bipartisan commitment is currently in question. Additional information regarding the status of this increase will become available following the January transitions and the release of State Revenue reports. The FY20 budget includes a projection of $1.5M increased funding for EHPS. Alliance Funding $6,067,500 $7,100,359 $7,852,667 $7,364,339 $7,364,339 $8,274,859 $9,774, Proposed 2020

19 Budget Reductions Part III: Budget Expenditure/Revenue Factors External Placements 19 Forecasting the funding sources obtained from the Woodland School is extremely difficult at this point of the fiscal year based on the volatility of student tuitions as well as growing concerns regarding the development of a competitive market place. Despite these concerns, the FY20 budget includes a projected increase of $300,000 in funding sources in an effort to offset costs. Woodland and SPED Services (Actuals) $5,799,105 $5,608,626 $6,230,506 $5,998,

20 Budget Reductions Part III: Budget Expenditure/Revenue Factors Pre-Pay Debt Service 20 As a budget mitigation strategy, this proposal commits to pre-paying recurring debt service requirements as in previous years. The Johnson Control Energy Conservation project represents a decade-old joint town and board initiative to install energy efficient systems across district schools. This obligation continues through FY Based on the fact that this cost will be prepaid in the current year (FY19) the FY20 does not reflect the obligation of $760,062. In addition, this budget includes a partial payment of $337,275. Including this expenditure will allow EHPS to begin to build this fixed cost into the General Budget and provide a pathway to fully meet this long term obligation.

21 Budget Increases Part III: Budget Expenditure/Revenue Factors Increased Health Insurance Costs (Projection) 21 Current 1 st Quarter trends project a $2.5M shortage in health benefits based on excessively high claims. As a mitigation strategy, the budgeted $1.67M originally designated for OPEB have been applied to cover this shortfall. Accordingly, these increased health benefit costs are reflected in the FY20 Budget as well as maintaining OPEB pension contributions at previously adopted levels. OBEB Pension/ Health Insurance 2019 Adopted 2019 Amended 2020 Proposed $11,010,482 $9,340,482 $11,840,902 $1,670,000 $0 $1,670,000 OBEB Pension Health Insurance

22 Budget Increases Part III: Budget Expenditure/Revenue Factors Contractual Salary Increases 22 EHBOE has worked diligently at the negotiating table with employee groups to achieve contracts in alignment with the town pro-forma while retaining high quality staff. Despite this work, contractual salary increases add an additional $1,171,707 in costs to the FY20 budget. Group Administrators (approved by Town Council) Teachers (SY20-23 achieved via stipulated arbitration agreement) 1.2% plus step 2.25% no step 1.2% plus step 2.25% no step 1.2% plus step 2% no step Paraprofessionals 2.0% plus step 3.0% plus step 1.0% plus step Nurses 2.0% plus step 2.5% plus step 1.0% plus step Supervisors 2.0% no step 2.0% no step Negotiations Non-Bargaining Unit/Directors 2.0% no step 2.0% no step 2% no step Secretarial/ Security/IT 2.0% plus step 2.0% plus step.5% plus step Behavior Managers 2.0% plus step 1.5% plus step 1.0% plus step Custodians 2.0% plus step 1.5% plus step 1.0% plus step

23 Budget Increases Part III: Budget Expenditure/Revenue Factors Increased Transportation Costs 23 In an effort to preserve costs, the district has performed a complete audit of all transportation routes and actively seeks efficiencies wherever possible. Currently the fleet consists of 46 Type I buses, 20 Type II buses, 6 wheelchair buses, and 1 passenger van. Current contractual obligations of 3.5% increase in addition to adding 1 Type II bus added $250,000 to the FY20 budget. Student Transportation $5,497,831 $5,611,996 $5,686,690 $5,761,099 $6,286,276 $4,571, Proposed 2020

24 Budget Increases Part III: Budget Expenditure/Revenue Factors Increased Utility Costs 24 Utility accounts have historically been funded below actual costs and have not kept up with rate increases/changes in consumption patterns. For example, MDC Water rates have increased 28% from 2014 to These changes have resulted in an $266,607 increase for the FY20 Budget or 3% over 2018 actuals. Utility Costs - Budget vs Actual Budget Actual $2,468,540 $2,534,451 $2,327,312 $2,263,996 $2,243,961 $2,267, Proposed 2020

25 Part IV: Budget Summary Proposed Expenditures 25 Transportation $6,286,276 6% SPED Tuition $3,600,000 4% Magnet School Tuition $2,181,245 2% Utilities $2,534,452 2% Supplies/Textbooks/Periodicals $972,295 1% Other $2,879,787 3% Plant/Maintenance $2,012,649 2% Insurance (Non-Benefit) $697,800 1% Employee Benefits $16,563,905, 17% Staff Salaries $61,509,724, 61% Equipment $552,471 1% Debt Service $337,275 0% FY20 Superintendent Expenditures Total Budget - $100,127,879 Funding Sources - $6,045,260 Net Budget - $94,082,619

26 Part IV: Object Summary Review 26

27 Part V: Summary/Conclusion Critical Factors in Budget Mitigation Strategies 27 The following chart represents several strategies that could further mitigate the increase stated in this budget proposal. These strategies will be review/executed over the next 6 months in the budget process. Strategy Description Implementation Plan Concern Refine/ Mitigate Health Insurance Costs Receive additional increase in Alliance Funding (Bi-partisan Formula October 2017) Accumulate Year End Savings Forego OPEB Contribution for FY20 Current 1 st Quarter Health Insurance costs reflect an increase in 16 high claim employees for BOE/Town from FY19. According to the Bi-partisan ECS Formula, EH was slated to receive an additional $2.2M additional funding as Alliance ECS dollars. Based on the uncertain nature of this funding, $1.5M were included in this budget proposal. As in previous years, EHPS enacted a budget freeze (11/2) on all hiring/operational spending in an effort to accumulate a year end fund balance and provide the opportunity to mitigate costs. The current proposal reflects a $1.67M contribution for OPEB. Further investigate current claims, plan structure and stop loss credits to identify if current projection can be further refined. EHPS will use any additional Alliance funding to mitigate the current increase that this budget proposal represents. This mitigation plan will need SDE approval as a part of the Alliance plan. Year end savings will be used to pre-pay Johnson Debt Control, re-supply health insurance reserves and fund the 1% Capital reserve account. Following a strategy enacted in FY19, payments to the OPEB reserve would be moved to close the Health Benefit deficit. This would require council approval for FY20. This strategy would reduce the current budget increase to 1.8%. Most recent claims reviews further support current projection for FY19 and suggest little relief from costs for FY20. Based on current uncertainties in state political leadership and budget deficit, the status of this projected formula phase-in must be monitored over the next 6 months. Year end savings are contingent on budget implementation and subject to unforeseen costs. In addition, based on the deficit status of health benefits, there may be little opportunity to develop a year end balance. If enacted, this would be the second year of foregoing the OPEB obligation.

28 May Apr Mar Feb Jan Dec Nov Oct Part V: Summary/ Conclusion BOE, Town and State Budget Timeline 28 BOE/Town Process -10/22 Town Leadership Summit -11/14 Superintendent s Budget Released -11/28 Joint BOE/Council Workshop -12/17 BOE Adoption -January development of Mayor s Budget State Process -11/6 Gubernatorial/Legislative Election -1/9 First Day of Legislative Session -Q2 Consensus Revenues -2/20 Mayor s Budget Released -2/28 BOE Town Council -Governor s Budget Release -Appropriations Com. Raised bull deadline -3/19 Council Adoption -Dem./Rep. Budget Release(s) -Public Hearings -5/1 Statutory Mandate for letters of nonrenewal -7/1 New Fiscal Year -OPM/OFA released Consensus Revenues -Budget Adoption -Session Closure

29 Summary/ Conclusion Key Take-Aways 29 Contingent on following projections: Health Benefit expenditures ($2.5M) Alliance grant revenues ($1.5M) SPED/Magnet costs (Flat-funded) Revenue adjustments ($390K) Maintains current services that will support delivery of needed programs and services Process will continue to respond to unfolding state and town budget deliberations

30 30 Questions and Thanks