SCHOOL BOARD MEETING Monday, February 18, 2019 Fauquier High School, 6:00pm

SCHOOL BOARD MEETING Monday, February 18, 2019 Fauquier High School, 6:00pm

FY 2020 Superintendent's Proposed Budget SCHOOL BOARD MEETING Monday, February 18, 2019 Fauquier High School, 6:00pm Work Session 7:00pm Regular Meeting

SUPERINTENDENT'S PROPOSED BUDGET AGENDA I. Proposed Budget Overview, Process, and Objective II. Summary of School Board Biennium Budget Goals III. Our School Division: Accomplishments and Outlook IV. FY 2020 Revenue Summary V. We Love Our People Plan VI. FY 2020 Expenditure Summary VII. Biennium Overview and Summary VIII. FY 2020 Budget Calendar and Next Steps IX. Closing Statements 3

Dr. David Jeck I. PROPOSED BUDGET OVERVIEW, PROCESS, AND OBJECTIVE 4

I. Proposed Budget Overview, Process, and Objective Budget Process and Virginia Law 1. Superintendent is required to develop a Proposed Budget to meet the needs of the School Division (VA 22.1-92). 2. School Board reviews, revises, approves, and *submits a budget to the County which meets the needs of the School Division. *Public Hearing Required. Board of Supervisors (BOS) holds authority for funding the School Division 1. BOS is responsible for setting local tax rates. 2. BOS does not have line item authority and may only budget by lump-sum appropriation or broad state categories. 5

I. Proposed Budget Overview, Process, and Objective The budget process begins with the vision of the School Board. 1. On November 3 rd, 2018, the School Board held a retreat to review, discuss, and provide staff with updated guidance on the priorities for the FY 2019-20 Biennium Budget. The School Board reviewed and discussed Strategic Plan goals and outcomes (Aspirations 2.1). 2. The School Board continued support of the FY 2019-20 Biennium Goals with an increased focus on compensation and market adjustment in the teacher s scale. 3. The School Board approved a compensation study at the September 10 th meeting and reviewed the FY 2020 budget calendar on November 12 th. 6

I. Proposed Budget Overview, Process, and Objective: Development of the Superintendent's Proposed Budget 1. The process includes input from various stakeholders and guidance from the school board. 2. Staff investigated the factors in implementation (i.e. capacity, risk), estimated the total cost of ownership, and prioritized based on desired outcomes. 3. This year, the budget process was centered around teacher compensation and the VASS Study approved by the School Board. 7

I. Proposed Budget Overview, Process, and Objective The Superintendent s proposed budget represents many concerns, priorities, interests, and factors proposed by the stakeholders of public education in our community. This year s focus has been on teacher compression and needed market adjustments. SCHOOL BOARD Teacher Compression Equity and Access Safety and Security Student Learning Building Maintenance & Capital Improvements Technology Gifted and Special Ed. State and Federal Policy Constituent Concerns Etc OTHER INPUT Teacher, HR & VASS School Needs Department Needs Parent and Student Input Best Practices in 21 st Century Learning Equity and Access Concerns Legal and Operational Risks Local/State/Federal Environment Region IV, VASBO, and Other Recommendations Other 8

Teacher Compression & Market Adjustment I. Equity and Access for 21 st Century Learners A. Removing Barriers in a. Instruction b. Student Supports c. Technology B. Investment in services and support through: a. Workforce investment b. Market competitiveness II. Safety, Security and Support Services A. Focus on Physical Infrastructure a. Comprehensive Maintenance Plan (CMP) b. Cash CIP c. Capital equipment d. School capacity B. Improve Business Services and Support C. Cultivating growth with training & development to: a. Grow Our Own Teachers b. Build Capacity in Services and Support II. SUMMARY OF SCHOOL BOARD BIENNIUM BUDGET GOALS 9

III. OUR SCHOOL DIVISION: A SUMMARY OF ACCOMPLISHMENTS AND OUTLOOK 10

III. Our School Division: A Macro Level of Accomplishments Student LEARNING Student SAFETY 19/19 Schools Fully Accredited Equity and Inclusion Academies: Environmental Science istem Cyber Security Expansion of CTE Offerings Expanded Community Engagement BOB the bus Flash-grub Graham-Bland Center One Team :: One Mission 400+ Staff Trained in Youth Mental Health First Aid ESCO SSO / SRO Officers Bus Safety Cameras / Enforcement Extended stop arms Building Safety Cameras Entryways Building Signage 11

III. Our School Division: A Macro Level of Accomplishments Graduation rates tell the collective story of our kids journey through our schools. It is one key macro level data point that most reflects the success of those experiences. This measurement is reflective of the collaborative effort that occurs in K-12 for a student to reach such an important milestone. 96.1% Graduation Rate All time high. Exceeds state rate of 91.6% Graduation rate for black students increased to 95.5% Graduation rate for students with disabilities 95% Focus on Equity and Post-Secondary Plans for all students 11

III. Our School Division: Key Indicators for State Funding ARLINGTON 0.8000 GOOCHLAND 0.8000 ALEXANDRIA 0.8000 WLLMSBRG 0.7703 ALBEMARLE 0.6780 CHRLTTSVLL 0.6772 FAIRFAX CO 0.6754 FRDRCKSBRG 0.6210 FAUQUIER 0.6114 LOUDOUN 0.5383 RICHMOND 0.4925 HANOVER 0.4468 WARREN 0.4333 HENRICO 0.4183 VA BEACH 0.4046 ORANGE 0.4025 FREDERICK 0.3898 PNCE WILLIAM 0.3783 SPTSLVN 0.3627 CULPEPER 0.3573 CHSTRFLD 0.3522 State Funding Indicators FY 2013-14 FY 2015-16 FY 2017-18 FY 2019-20 Trend True value of real property (50%) $ 11,942,754,221 $ 12,278,132,244 $ 13,771,384,560 $ 14,418,202,056 Adjusted gross income (40%) $ 2,306,956,870 $ 2,517,404,577 $ 2,641,102,891 $ 3,197,576,358 Taxable retail sales (10%) $ 587,631,303 $ 614,320,194 $ 694,006,725 $ 744,459,400 Total population 64,497 65,780 66,573 67,898 13

III. Our School Division: Future Enrollment Projections If the current indicators hold steadfast (i.e. birth rates, development, etc.) FCPS will need to begin planning for growth in: Miller Pierce Greenville Ritchie Taylor Liberty 14

IV. FY 2020 REVENUE SUMMARY 15

IV. FY 2020 Proposed Revenue Summary School Operating Fund (205 Operating & 203 Restricted) FY 2018 FY 2019 FY 2020 % % of Change Revenue Summary Adopted Adopted Proposed Increase Total Other Local Revenue $ 1,375,500 $ 1,824,500 $ 2,575,408 $ 750,908 41.2% 1.7% State Revenue Sales Tax $ 12,513,883 $ 12,691,073 $ 13,512,553 $ 821,480 6.5% 9.0% Basic Aid 21,128,094 21,263,295 20,825,211 (438,084) -2.1% 13.9% Special Education 3,037,117 3,066,065 3,030,234 (35,831) -1.2% 2.0% Retirement 2,978,711 2,842,139 2,830,205 (11,934) -0.4% 1.9% Lottery Funded Programs 2,257,173 2,277,810 2,667,921 390,111 17.1% 1.8% Regional SPED Program - - 503,340 503,340 0.3% Technology 570,000 570,000 570,000-0.0% 0.4% Other State Revenue 3,305,042 3,079,638 4,573,675 1,494,037 48.5% 3.1% Total State Revenue $ 45,790,020 $ 45,790,020 $ 48,513,139 $ 2,723,119 5.9% 32.4% Federal Revenue Title I $ 985,529 $ 839,234 $ 839,234 $ - 0.0% 0.6% Title VI-B 2,348,714 2,290,300 2,590,300 300,000 13.1% 1.7% Other Federal Revenue 757,337 771,940 871,940 100,000 13.0% 0.6% Total Federal Revenue $ 4,091,580 $ 3,901,474 $ 4,301,474 $ 400,000 10.3% 2.9% Local Transfer for Public Education Total Local Revenue $ 86,086,173 $ 89,255,351 $ 94,225,652 $ 4,970,301 5.6% 63.0% Total Revenue $ 137,343,273 $ 140,771,345 $ 149,615,673 $ 8,844,328 6.3% 100.0% Local government is the largest investor for public education in Fauquier County. Summary of FY 2020 Local Request $2.17 M included in FY 2020 Plan $0.44 M for School Security (9.0 FTE added this year) $2.36 M additional for Compression/Market 16

V. WE LOVE OUR PEOPLE PLAN 17

Salary Compression and Market Competition Proposal Fauquier County must move towards 100% comp ratio in all steps and scales in order to attract and retain highly qualified instructional positions in our market. The market included: Albemarle, Culpeper, Frederick, Loudoun, Prince William, Spotsylvania, Stafford and Warren. Proposed Cost Policy Impact Teacher 93%-100% Market/Compression 6,124,886 Licensed Professionals Market/Compression 291,146 Nurses to BA Scale 170,759 Instructional Assistants Market & Compression 179,303 Principal and A. Principal Market/Compression 239,845 1. Range is 2% to 15% increases for market/compression 2. Scale range in each step is 93% to 100% of market 3. Average increase is 8% 4. The long-term goal is for all employees to be at 100% of our market 5. Includes market adjustments to 90% of market for SLP, Psychologist, Therapist, Social Workers 6. Moves nurses to BA Scale 7. 2% Increase and Market/Compression for Instructional Assistants 8. 2% Increase and Market/Compression for Principals and Assistant Principals ONLY Example Job Class Grade/Rank Step/Level Current 93%-100% $Change %Change 1 TEACHER MA30 17 $54,404 $62,542 $8,138 15.0% 2 TEACHER MA30 12 $51,868 $57,487 $5,619 10.8% 3 TEACHER MA15 7 $49,384 $52,012 $2,628 5.3% 4 TEACHER MA 23 $59,373 $66,863 $7,490 12.6% 5 TEACHER MA 15 $51,809 $57,792 $5,983 11.5% 6 TEACHER MA 12 $50,662 $55,268 $4,606 9.1% 7 TEACHER MA 10 $49,910 $53,646 $3,736 7.5% 8 TEACHER BA15 13 $48,916 $54,493 $5,577 11.4% 9 TEACHER BA15 20 $54,284 $61,076 $6,792 12.5% 10 TEACHER BA 22 $58,724 $64,848 $6,124 10.4% 11 TEACHER BA 21 $57,572 $63,732 $6,160 10.7% 12 TEACHER BA 20 $53,704 $59,742 $6,038 11.2% 13 TEACHER BA 15 $49,341 $54,914 $5,573 11.3% 14 TEACHER BA 2 $43,870 $45,475 $1,605 3.7% 18

Salary: Teacher Scale (BA & MA Only) 19

Non-Traditional Compensation Individual and Family Sick Leave Bank: This coverage will now allow employees to access sick leave to care for a spouse, child or parent. The sick leave bank policy allows employees to access sick leave for up to 55 days. Beyond 55 days, additional paid/unpaid leave is at the discretion of the superintendent. Paid Time Off: Revision to sick and personal leave policies for 10 and 11 month certified staff. The policies will be combined into one paid time off accrual. For example, new teachers would start with 13 days of leave. Loyalty Appreciation: Financial recognition for employees based on longevity of service with FCPS1. 20

Other Benefits Retiree Health Insurance Credit: This proposal includes a post-employment benefit for all school employees with 20 consecutive years of service who are eligible for retirement with VRS. This benefit would offer to provide a health care credit capped at $500 total to employees until the age of 65. After that, the benefit would continue at a reduced rate. 20 years of consecutive service Participation on an FCPS1 health plan for at least the five years immediately preceding retirement. Eligible for retirement from VRS A combined supplement up to $500 for qualifying employees until the age of 65 Requires an annual actuarially determined contribution to the OPEB trust 21

Workforce Investment and FY 2021-22 Plan Future Objectives for Compensation Step 1: Achieve 100% market for all positions. Reviewing annually for variances. Step 2: Implement policy and practice of providing an annual step and cost of living adjustment for all staff. This will keep us competitive in the market place. Year End Fund Planning: This proposal recommends a plan for using carryover funds for unfunded liabilities and needs: 1. CSA Payment (30%), 2. Loyalty Appreciation (15%), 3. Capital Reserve (15%), 4. Emergency Reserve (10%), 5. Technology Plan (25%), 6. Other Needs (5%). *If the percentage recommended needs to be changed, staff will provide explanation for change at the time of request. 22

VI. FY 2020 PROPOSED EXPENDITURE SUMMARY 23

VI. FY 2020 Proposed Expenditure Summary Expenditures by Category FY 2019 FY 2020 Amount % % Expenditures Category Adopted Proposed Change Chg of Total Instruction $ 106,571,755 $ 112,093,524 $ 5,521,769 5.2% 74.9% Admin, Attendance & Health 6,786,073 7,320,961 534,888 7.9% 4.9% Pupil Transportation 9,468,000 9,600,046 132,046 1.4% 6.4% Operations and Maintenance 10,720,873 11,876,659 1,155,786 10.8% 7.9% Technology 4,695,737 4,788,331 92,594 2.0% 3.2% Fund Transfers & OPEB 2,528,907 3,936,152 1,407,245 55.6% 2.6% Total: $ 140,771,345 $ 149,615,673 $ 8,844,328 6.3% 100.0% 89% of the budget is to provide the highly talented workforce that provides instructional services and support for public education in Fauquier County, VA. Expenditures Summary by Type FY 2019 FY 2020 Amount % % Expenditure Type Adopted Proposed Change Chg of Total Salaries and Benefits $ 125,055,648 $ 133,113,836 $ 8,058,188 6.4% 89.0% Operating $ 13,092,062 13,073,838 (18,224) -0.1% 8.7% Capital Outlay $ 94,728 94,728-0.0% 0.1% Transfers $ 2,528,907 3,333,271 804,364 31.8% 2.2% Total: $ 140,771,345 $ 149,615,673 $ 8,844,328 6.3% 100.0% 24

VI. FY 2020 Proposed Expenditure Summary Proposed FY 2020 Budget Expenditures Description Other Local Funds State Revenue Federal Revenue County Request Total FTE FY 2020 Supplemental Increase: $ 750,908 $ 2,723,119 $ 400,000 $ 4,970,301 $ 8,844,328 - Expenditure Reductions Budget-Actual Salary Breakage (508,355) (508,355) Minimal Class Size Increase (3.0 HS + 5.0 MS) (577,817) (577,817) (8.00) Partial Hiring Freeze (2.0 FTE) (159,232) (159,232) Admin/Central Reductions (4.0 FTE) (424,211) (424,211) (4.00) Temporary Cash CIP Reduction (2-Yr.) (400,000) (400,000) Comp. Maintenance Plan Reduction (50,000) (50,000) Base Budget Adjustments (Prog. Restructuring) (192,460) (192,460) Health Plan -- Employee Cost (128,000) (128,000) Utility Reduction for ESCO (Project Cash) (500,466) (500,466) Subtotal: $ - $ - $ - $ (2,940,541) $ (2,940,541) (12.00) $2.94 M Expenditure Reductions: The proposed budget increases class sizes slightly, shares the cost of health insurance with employees for the first time in more than 6 years, reduces/reorganizes administrative/central support personnel, and makes a temporary reduction for facility maintenance (CMP and Cash CIP) in order to reduce the request for local support for public education needs. These reductions are being proposed because the gap in the market cost and scale compression has created an emergency for attracting and retaining highly qualified instructional staff. 25

VI. FY 2020 Proposed Expenditure Summary Proposed FY 2020 Budget Expenditures Description Other Local Funds State Revenue Federal Revenue County Request Total FTE FY 2020 Supplemental Increase: $ 750,908 $ 2,723,119 $ 400,000 $ 4,970,301 $ 8,844,328 - Restricted Funds Local and Other Anticipated Donations 400,000 400,000 FRESH Program 150,000 150,000 Title IV Increase 50,000 50,000 Local Revenue Programs (82,200) (82,200) Community Engagement Program 112,577 112,577 Other Grant Fund Transfers 170,531 170,531 Title VI-B Increase 350,000 350,000 Regional SPED School 503,340 503,340 State Programs Adjustments 15,635 15,635 School Security Officers 437,456 437,456 9.00 Utility Transfer for ESCO (Asset Fund) 500,466 500,466 Subtotal: $ 750,908 $ 518,975 $ 400,000 $ 937,922 $ 2,607,805 9.00 $2.61 M Restricted Funds: These funds are restricted for specific programs as determined by local, state, or federal guidelines. These funds include grants from local partners such as the Path Foundation, federal title programs, funds for specific state programs, and local programs approved by School Board for school security (BOS added funding for 9.0 FTE in FY 2019) and the ESCO Project ($11.3 million) for school facility infrastructure. 26

VI. FY 2020 Proposed Expenditure Summary Proposed FY 2020 Budget Expenditures Description Other Local Funds State Revenue Federal Revenue County Request Total FTE FY 2020 Supplemental Increase: $ 750,908 $ 2,723,119 $ 400,000 $ 4,970,301 $ 8,844,328 - Required Benefit Increases VRS (15.68%) No increase - VRS NonProf (4.72% to 6.28%) *Correction 109,716 109,716 RHCC (1.20%) No increase - Group Life (1.31%) No increase - Workers Comp rate changes 28,467 28,467 Health Insurance increase 5.0% (Operating Fund) 641,466 641,466 Subtotal: $ - $ - $ - $ 779,649 $ 779,649 - $0.78 M for Required Benefits: There is actually no change in the VRS rates, a correction is being made in FY 2020 due to a data entry error at the time of budget adoption. Health Insurance: This proposal is planning for a 5% health insurance increase, of which $128,000 of the increase will be shared with employees. Prior to the adopted budget, if a vendor can secure a reduction in costs, this increase to employees will be reevaluated. 27

VI. FY 2020 Proposed Expenditure Summary Proposed FY 2020 Budget Expenditures Description Other Local Funds State Revenue Federal Revenue County Request Total FTE FY 2020 Supplemental Increase: $ 750,908 $ 2,723,119 $ 400,000 $ 4,970,301 $ 8,844,328 - Workforce Investment Teacher 93%-100% Market/Compression 1,473,604 4,651,282 6,124,886 Licensed Professionals Market/Compression 63,765 227,381 291,146 Nurses to BA Scale - 170,759 170,759 Instructional Assistants Market & Compression 109,636 69,667 179,303 Principal and Asst. Principal Market/Compression 105,389 134,456 239,845 Retiree Health Care Credit 53,670 549,211 602,881 Loyalty Appreciation - 200,000 200,000 Grow your own / Capacity Building - - - Subtotal: $ - $ 1,806,064 $ - $ 6,002,756 $ 7,808,820 - $7.81 M for Workforce Investment: Teachers 93%-100% Market/Compression (Includes State 5% over biennium...$6,124,886 Other Instructional Support $ 881,053 Health Credit....$ 602,881 Employee Retention Strategy...$ 200,000 Summary Teacher adjustments range from 2% to 15% The average increase for teachers is approximately 8% 28

VI. FY 2020 Proposed Expenditure Summary Proposed FY 2020 Budget Expenditures Description Other Local Funds State Revenue Federal Revenue County Request Total FTE FY 2020 Supplemental Increase: $ 750,908 $ 2,723,119 $ 400,000 $ 4,970,301 $ 8,844,328 - Instruction, Technology, Safety and Security School Counselors (Req. by State Budget) 398,080 398,080 5.00 MVGS - Requested Increase 50,515 50,515 Technology Plan Bus Lease (8 Additional) 140,000 140,000 Subtotal: $ - $ 398,080 $ - $ 190,515 $ 588,595 5.00 $0.59 M for Other Instructional Service Needs: the proposed budget includes a required increase for counselors to maintain compliance with new state guidelines, includes the required increase to support partnership in the regional governor s school, and includes an increase for leasing an additional 8 buses. An increase for technology needs has been deferred until the first year of the next biennium. 29

THEFINALINNING VII. BIENNIUM OVERVIEW AND SUMMARY VIII. FY 2020 BUDGET CALENDAR AND NEXT STEPS IX. CLOSING STATEMENTS 30

VII. Biennium Overview and Summary By Fund Type Summary of All School Division Funds -- FY 2020 Proposed Budget School Division Funds FY 2019 Budget FY 2020 Budget Increase/ % Adopted Proposed Decrease Change School Division Operating $ 140,771,345 $ 143,061,091 $ 2,289,746 1.6% School Grant/Donation $ - $ 6,554,582 $ 6,554,582 100.0% School Nutrition $ 5,593,855 $ 5,714,034 $ 120,179 2.1% School Textbook $ 1,115,796 $ 1,102,757 $ (13,039) -1.2% School Asset Replacement $ 3,499,069 $ 3,709,535 $ 210,466 6.0% Regional Governor's School $ 1,561,050 $ 1,683,866 $ 122,816 7.9% All Funds Total: $ 152,541,115 $ 161,825,865 $ 9,284,750 6.1% 31

FY 2020 Budget Calendar Approval of compensation study (10/08) School Board (SB) Retreat (11/03) Staff presentations, school board goals & strategic plan priorities. SB review school operational and capital needs. SB Work Session (11/12) FY 2020 draft budget calendar. 10-Year enrollment projections (Based on Sept. 30, 2018). Schools & Departments Proposed 2-year needs for services and support in Nov of FY 2019. Governor s proposed budget (12/21) SB ESCO Project SB work session (01/07) Final IGA project review and approval (01/14) Superintendent s Proposed Budget (02/18) School Board Debt CIP Adoption (TBD) County Administrator Presents Proposed Budget and CIP (02/21) School Board FY 2020 budget public hearing and budget work session (02/25) BOS adopts and appropriates FY 2020 budget, CIP, and tax rates (03/21) School Board Adopts Final Budget (TBD) One Team :: One Mission Oct/2018 Dec/2018 Feb/2019 Apr/2019 Nov/2018 Jan/2019 Mar/2019 Jul/2019 Budget Development Process Position control and base budget adjustments. Cost-benefit-risk analysis of budget needs. Resource allocations, market, and benefits analysis. Alignment of strategic goals & instructional vision. Prioritization of needs with stakeholders. Development of proposed budget book and presentation. School Board Debt CIP Plan (TBD) SB reviews and provides guidance on debt CIP Plan. Joint liaison meeting and/or work sessions with BOS. SB Debt CIP Plan Adoption. VASS Compensation Study (01/18) Finalization of Superintendent s Proposed Budget. School Board approves FY 2020 budget (03/11) BOS budget work sessions (03/05, 03/07, 03,12) BOS budget public hearing (03/12 @ 7pm Fauquier HS) Joint SB/BOS meeting (03/14) BOS markup/markdown (03/19) New fiscal year begins (07/01) FY 2020 Adopted Budget published online (07/01) 32

IX. Closing Statements 33