Presentation of the Budgets for Salem City Schools FY 2018 To Salem City Council

Transcription

1 Presentation of the Budgets for Salem City Schools FY 2018 To Salem City Council April 24, 2017 Good evening, Mayor Foley and Members of Council, I am pleased to report that, thanks in large part to the support of this community, the City Council, and the City Administration, the Salem City School Division remains one the best school divisions in the Commonwealth and, due to good stewardship of resources, we continue to deliver excellence for less per pupil than the state average expenditure. On behalf of the School Board, I take this opportunity to personally thank the City Council and the City Administration for the polite, collaborative, and productive manner in which we have faced the significant challenges of the Great Recession and the slow rate of recovery in our region. Not only have we worked together to safeguard the children and families we serve, we have identified opportunities in the midst of the challenges and continued to improve as organizations. As leaders, it is important for us to remember and celebrate that both the challenges we have met and the opportunities we have seized are owed to the remarkable employees who serve this City and its children. For this reason, I am pleased that the Board s adopted, balanced budget that I present this evening includes a modest raise for employees. I am here this evening to present the budgets for Fiscal Year (FY) 2018 for the Salem City School division consisting of the School Fund budget in the amount of $41,263,304, the Grant Fund budget in the amount of $1,980,223 and the Cafeteria Fund budget in the amount of $1,700,290 for a total budget of $44,943,817, which was unanimously approved by the School Board on March 28, The FY 18 budget is $842,625 or 1.8% below the current year (FY 17) adopted budget of $45,786,442, due primarily due to an accounting change explained in Attachment A. Comparing apples to apples with last year, the total budget would be $47,011,038 or $1,224,596 (2.7%) above the current year adopted budget.

2 In an effort to make my remarks more of an, Executive Summary, while still providing the level of detail needed to keep you well informed, the following budget highlights and charts are presented for your information. Attachment A: Budget Highlights The first attachment lists the most significant areas of the budget for next year. In terms of revenue, there is an increase in state funding that is allocated for the state s share of a 2% raise (effective February 2018), per pupil lottery funding and adjustments in the VRS account to assist in funding the rate increase in FY 18. There is also a reduction of the City s debt service for the schools (as recommended by the auditor). On the expenditure side, a raise for employees is budgeted and a reduction of the City s debt service for the schools is included as well as a projected increase in local funding of $325,000. As leaders, the School Board and the City Council are responsible both for approval of a budget for the coming year and for monitoring long-term trends. To assist in this regard, we have also prepared: Attachment B: Local Funding History We are very thankful for the history of support, including level local funding during difficult fiscal times. Preserving the establishment of Salem City Schools as an exemplary school division in the Commonwealth and as one of the primary reasons why families report moving to Salem, will require a return to ongoing investment in excellence in the future. The Local Funding Chart and Graphs illustrate both this community s commitment to Salem Schools in difficult times and current trends. We greatly appreciate the increase in local funding of $325,000 for FY 18 to close the budget gap we faced to fund raises for employees. Attachment C: State Revenue Trends The State Revenue Trends Chart and Graph reveal that state support for public education is slowly rebounding, from the nearly $4 M in reductions experienced in FY 10 and FY 11. In Salem, state funding in FY 18 is projected to be $4,710 less than FY 09 and state-wide, K-12 funding is still well below FY 09 levels when controlled for inflation.

3 Attachment D: Competitive Grant History Although the Great Recession presented formidable challenges, the Board and its employees have persisted in its continuous improvement efforts. Attachment D list the over $2.2 M in competitive grants that have been received since 2013 that helped to provide additional income for teachers, to improve safety and security, and to improve teaching and learning for the children and families we serve. In closing, we remain hopeful that economic recovery in our region and the City of Salem is underway, and on behalf of the Salem City School Board and its employees, we sincerely thank you for the local funding and the value you place on the education of our youth. By law, I need to present a balanced budget to you by May 1. I would also like to sincerely thank Ms. Hall, Ms. Jordan, Dr. Seibert and the school division employees for their collaboration and hard work with the Board in developing this budget during continued, difficult economic times. We will be glad to answer any questions you may have. Thank you. Respectfully submitted, David Preston, Chairman Salem City School Board

4 Attachment A Budget Highlights Revenues: The FY 18 School Fund budget is funded with 47% state funds, 5% federal funds, 45% local funds and 3% other funds. (In the FY17 adopted budget, these ratios were 44% state, 5% federal, 48% local (included debt service) and 3% other). Local revenue from Salem City currently reflects an increase of $325,000 for operations. The budget for debt service is removed, per auditor recommendation, which shows the local funding amount decreased by a significant amount. If that were not factored into the total, the total local appropriation would be $21,700,457 (a net increase of $306,459 that includes a $55,981 reduction in the debt service payment, an increase of $37,440 to cover waste management migration expenses and the additional $325,000). State Revenue has a net increase of $882,490 due to funds allocated for the state s share of a 2% raise (effective February 2018), per pupil lottery funding and adjustments in accounts based on participation levels and VRS rate changes. Federal revenue has a net decrease of $108,967 due largely to the anticipated reductions in the Adult Basic Education grant and the Title II grant. The Cafeteria Fund revenue has an increase of $105,028 due in part to an increase in participation that coincides with our increase in enrollment but also a required increase in lunch prices. The Healthy Hunger Free Kids Act of 2010 requires that school lunch prices be evaluated annually until the price charged for a full pay student reaches the difference in what the federal lunch program reimburses for a free lunch and what they reimburse for a full pay lunch. In FY18, to comply with this federal mandate, we will be increasing student and adult lunches by no more than 10 cents. The non-resident tuition increase and associated pricing tiers established for FY 17 are continued for FY 18 (the current plan is to evaluate non-resident tuition each biennium). The possible negative budget impact of the changes projected for FY 17 were not realized, so based on actual revenues received in FY 17, the budget includes a conservative increase of $23,400 for non-resident tuition for FY 18. In FY 17 we received $33,190 more than budgeted/anticipated. Budgeting $115,000 rather than the full amount received in the previous year ($124,740) provides a buffer of approximately $10,000 in the event that our non-resident population doesn t reach the current year levels.

5 Expenditures: Continued funding for the Distinguished Scholar Program ($22,000) and the International Baccalaureate program ($66,890) Funding for a possible 5% increase in health insurance and funding for GASB 45 Postemployment Benefits liability Continuation of the Retirement: Extended Work Incentive program (REWIP) at the reduced level implemented for FY 16 Continuation of the Virginia Pre-School Initiative (VPI) available state funding (based on the number of economically disadvantaged children) for annual/recurring funding on a per eligible-pupil basis for a preschool class at East Salem Budgeting for all remaining locally funded positions Continued support of National Board Certification for teachers Funding for an average 2.5% raise for employees: o A step increase for employees not on the teacher scale and; o The continued implementation of another 1/3 of the teacher salary scale fix recommended by the Salary Study Consultant. (A complete fix of the teacher scale this year would require an additional $340,000.)

6 Attachment B: Local Funding History for School Operations (FY ) Salem City Schools History of City Funding for School Operations FY Annual Local Annual Annual Subsidy % change in Subsidy as a Average Annual Average Annual Average Annual Subsidy for Increase Over Annual Adopted School % of Adopted Increase-Last 5 Increase-Last 10 Increase Last 15 Fiscal Year Operations Prior Year Subsidy Fund Budget Budget Years Years years FY 1992 $ 8,040,000 NA NA $ 17,293, % FY 1993 $ 9,028,334 $ 988, % $ 18,345, % FY 1994 $ 9,728,334 $ 700, % $ 19,239, % FY 1995 $ 10,228,200 $ 499, % $ 20,167, % FY 1996 $ 10,878,200 $ 650, % $ 21,382, % FY 1997 $ 11,478,200 $ 600, % $ 23,566, % FY 1998 $ 12,162,200 $ 684, % $ 24,729, % FY 1999 $ 12,712,200 $ 550, % $ 25,668, % FY 2000 $ 13,450,147 $ 737, % $ 27,642, % FY 2001 $ 14,120,000 $ 669, % $ 29,483, % FY 2002 $ 14,720,000 $ 600, % $ 30,016, % FY 2003 $ 15,020,000 $ 300, % $ 31,025, % FY 2004 $ 15,595,000 $ 575, % $ 31,839, % FY 2005 $ 15,895,000 $ 300, % $ 32,512, % FY 2006 $ 16,545,000 $ 650, % $ 36,922, % FY 2007 $ 17,095,000 $ 550, % $ 39,726, % FY 2008 $ 17,995,000 $ 900, % $ 40,986, % FY 2009 $ 18,420,000 $ 425, % $ 43,067, % FY 2010 $ 18,420,000 $ - 0.0% $ 42,607, % FY 2011 $ 18,420,000 $ - 0.0% $ 40,401, % FY 2012 $ 18,420,000 $ - 0.0% $ 41,396, % FY 2013 $ 18,919,494 $ 499, % $ 42,427, % FY 2014 $ 18,919,494 $ - 0.0% $ 43,324, % FY 2015 $ 18,805,881 $ (113,613) -0.6% $ 44,257, % FY 2016 $ 19,270,796 $ 464, % $ 44,519, % FY 2017 $ 19,270,796 $ - 0.0% $ 44,191, % FY 2018 $ 19,633,236 $ 362, % $ 45,310, % $ 141,799 $ 247,800 $ 321,925 Notes: 1 - FY 2005 budget is shown net of one time debt service balloon payment for better comparability. The School fund budget that year was $38,086, FY 2015 reflects an increase of $461,000 for raises, a reduction of a shared position, and a reduction of $500,000 local funding returned to the City 3 - FY 2018 reflects the increase of Waste Management Migration costs of $37,440 (increase in expenditures also) and a $325,000 local increase 4 - FY 2018 reflects inclusion of the debt service amount for the schools for comparison purposes, but it is not included in the actual adopted school fund budget Local funding history 1992 to Present - FY18 Budget.xls

7 Attachment B: Local Funding History for School Operations (FY ) $22,000,000 Local Annual Subsidy for Operations $20,000,000 $18,000,000 $16,000,000 $14,000,000 $12,000,000 $10,000,000 $8,000,000 FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY ƒ Annual Subsidy as a % of Adopted Budget 52.0% 50.0% 48.0% 46.0% 44.0% 42.0% 40.0% 38.0% Local funding history 1992 to Present - FY18 Budget.xls

8 Attachment C: State Revenue Trends Budgeted State Revenue Trends Amount Increased/Decreased Based Fiscal Year Amount Budgeted on Prior Year Notes FY 2001 $12,565,626 FY 2002 $12,357,184 ($208,442) FY 2003 $15,045,277 $2,688,093 FY 2004 $12,965,583 ($2,079,694) FY 2005 $14,931,945 $1,966,362 FY 2006 $15,926,347 $994,402 FY 2007 $17,908,306 $1,981,959 FY 2008 $18,442,550 $534,244 FY 2009 $20,112,893 $1,670,343 Federal ARRA funding received FY 2010 $18,227,097 ($1,885,796) ARRA funding phase out; Jobs Bill funding received FY 2011 $16,127,988 ($2,099,109) All Fedeal Stimulus Funding Eliminated FY 2012 $17,160,392 $1,032,404 FY 2013 $18,308,006 $1,147,614 VRS Cost Shift of 5% FY 2014 $18,197,757 ($110,249) FY 2015 $18,963,743 $765,986 VRS rate increase from 11.66% to 14.5% FY 2016 $19,075,683 $111, % Compensation Supplement FY 2017 $19,225,693 $150,010 2% Compensation Supplement FY 2018 $20,108,183 $882,490 2% Compensation Supplement & Per Pupil Lottery Funding $21,000,000 $20,000,000 $19,000,000 $18,000,000 $17,000,000 $16,000,000 State Revenue Trends $15,000,000 $14,000,000 Amount Budgeted $13,000,000 $12,000,000

9 SMOO 2017 Session State Per Pupil K-12 Direct Aid Funding Nominal and ln11ation-adjusted (CPI $2005) $5,274 S5.271 $5,028 $5,075 ss.ooo $5,000 $4,868 $4,804 $4,862 $5,466 $4,382,562 $4,$13 84,546,48 1 HOOO s~.o8~,942 $3,000 $2,000 SI.OOO $ l

10 Attachment D: Competitive Grants Received Since 2013 New Grants Funded since 2013 Safe Routes to Schools Grant $ 13, PEP Grant $ 921, Strategic Compensation Grant $ 850, School Security Grant $ 71, Early Childhood Special Education Supplement $ 9, Parent Resource Center Grant $ 4, HS Program Innovation Planning Grant $ 50, Chinese Educator Grant $ 52, PluggedIn VA (ABE) Grant $ 35, School Security Grant $ 63, VA Preschool Initiative Startup Grant $ 38, School Security Grant $ 93, Health Profession Opportunity Grant $ 30, HS Program Innovation Implementation Grant $ 50, $ 2,282,140.00