CMS Budget Development Process Report to the Board of County Commissioners March 27, 2012
CMS Budget Development Process 2
Challenges Timing if only we could go last Hostage to timelines we do not set and that are inconsistent with our budget process timeline State does not have a mandatory deadline for approving a budget it has been as early as mid June (last year) and as late as end of Sept. (57% of our funding in FY 2012) State planning allotments for LEAs prepared by DPI are typically provided Feb./Mar this year we received them from DPI on March 9th (2 business days before the Supt s budget presentation) State statute requires that we submit our budget request to the county no later than May 15 th - at times this is before the county manager has presented his recommendation (28% of our funding in FY 2012) Federal planning allotments for LEAs typically arrive in late Spring Proposed budget is based on the best information we have at the time requiring a series of estimates which cannot be finalized until the state and the county have approved a budget Creates uncertainty that spreads within CMS staff, students and their families and beyond 3
2011-12 Budget Timeline Sep 2 NC Office of State Budget and Management requests budget reduction options of 5%, 10%, and 15% for FY11-13 Nov 19 Board of Education Budget kick-off worksession; Received reduction scenarios from DPI at 5% and 10% Jan 11 Budget reduction recommendation presented to Board of Education Jan 19 Budget reduction recommendation presented to BOCC Feb 17 Governors Budget proposed a 4.4% net reduction in public schools budget (not including cost transfer for tort claims, replacement buses, and workers comp) Mar 8 Joint Appropriations Subcommittee on Education prepared a 19.3% worst case reduction scenario Mar 22 Board of Education Budget worksession Apr 12 Superintendent s Budget Recommendation presentation May 1 Deadline for notifying administrators of superintendent s intent to non-renew contracts May 4 House Budget proposed a 9.6% net reduction in public schools budget May 10 Board of Education's 2011-12 Budget Request approved with $101 million total reductions including an 11% state cut May 15 Deadline for notifying teachers of superintendent s intent to non-renew May 15 Deadline for Board of Education to submit budget request to county May 17 County Manager s Recommended Operating and Capital Budgets presented to BOCC May 24 Board of Education presented budget proposal to BOCC May 31 Senate Budget proposed a 5.8% net reduction in public schools budget June 1 Deadline for notifying administrators of non-renewal June 4 House ratified state budget and presented to Governor June 7 FY2011-12 County Operating Budget and 3-year CIP adopted June 12 Governor vetoed June 15 Deadline for notifying teachers of non-renewal June 15 Veto overridden and state budget finalized including a 5.8% net reduction in public schools budget July 5 DPI to provided allotments to LEA's - CMS now able to compute exact impact 4
Challenges Transparency seeing ALL the moving parts Our best efforts to outline the changes in our budget from one year to the next can cause our audience to ask questions such as: Why do we show the teacher positions that we cut (eg. Zone allocated teacher level positions) and then also show the teacher positions that need to be added to accommodate the 2,000 new students? Why do we show the utility savings that we expect from energy conservation measures to reduce consumption and then also show an increase in utility costs from expected rate increases or expanding square footage? Estimates are just that We are not the only ones making estimates during the process. The state also uses estimates throughout their budget process. Resources needed to address enrollment growth must be estimated early in the process. We based them on the enrollment projections available at the time on a school by school and grade level basis. Slight variations in a grade level estimate can make a difference. 5
Enrollment Projection Estimate- Classroom Teacher Impact State t Enrollment CMS Enrollment Projection Projection Difference Kindergarten 9,000 9,250 250 1st 8,000 8,125 125 2nd 7,000 7,110 110 3rd 8,000 8,000-4th 9,000 8,900 (100) 5th 8,000 7,905 (95) 6th 8,000 7,930 (70) 7th 8,000 8,000-8th 8,000 8,000-9th 9,000 9,100 100 10th 7,000 6,980 (20) 11th 6,000 5,900 (100) 12th 5,000 4,800 (200) TOTAL 100,000 100,000 - Teachers e 4,794 4,802 8 Estimated cost impact of additional teachers $ 480,584 The above shows teacher allocations using state allotment ratios. The total projected enrollment is the same for both scenarios, but the grade level enrollment projections differ. 6
State Allotment Formula Estimates The state allots funds to LEAs in position, dollar and categorical allotments Position and/or dollar allotment formulas based on student enrollment, either in total or by grade level, are still easier to estimate than some categorical allotments Examples of categorical allotment formulas not as simple to estimate include: At-Risk Student Services Limited English Proficiency Transportation 7
At-Risk Student Services Each LEA is allotted dollars for a School Safety Officer (SSO) based on the number of high schools in the LEA that receive a principal allotment 50% of the remaining funds are distributed based on the number of poverty children per the Title I Low Income poverty data The remaining 50% of the funds are distributed based on allotted ADM. Each LEA receives a minimum of the dollar equivalent of two teachers and two instructional support personnel (including benefits) 8
Limited English Proficiency Calculate 3-Year Average Headcount - Most current years available weighted twice (50%) - Two previous years weighted once (25%) Base Allocation - Each eligible LEA/charter school receives the minimum of 1 teacher assistant position 50% of the funds (after calculating the base) will be distributed based on the concentration of Limited English Proficient students within the LEA 50% of the funds (after calculating the base) will be distributed based on the weighted 3-year average headcount 9
Transportation Allotted based on a "budget rating" funding formula using the following factors: pupils transported; total eligible operating expenditures (local and state funds); number of buses operated The final allotment will be allotted within available funds by December 1. This adjustment is derived from establishing a final budget rating calculated annually from the three key factors outlined in the first bullet plus any other legislative adjustments. 10
Challenges Dependence on state, local and federal funding sources no taxing authority Lack of consistency or predictability in county funding State estimates valid based on funding formulas, but certainly subject to modification by the General Assembly Utilize information from the fiscal research division on state revenue outlook, but recognize it is only an early indicator before the April tax deadline (i.e. last Feb. the budget gap was projected at $2.8 billion or approx. a 15% gap) Impossible to predict how statewide gaps will impact K-12 Public Education specifically may not spread the pain evenly in all areas of the state budget Obligation to provide services to all students regardless of funding levels 11
Budget Assumptions for 2012-13 State Revenue Second year of the 2011-13 Biennial Budget is a reasonable indicator of state funding available Plan for the reductions specified in the biennial budget - increase in LEA Adjustment (LEA Discretionary Reduction meaning LEA must determine where to take the cuts) State will provide funding for enrollment growth in accordance with their allotment formulas County Revenue Growth revenue $35 million is expected for 2012-13 County will give careful consideration to our budget request if we: Demonstrate positive ROI (including positive student outcomes) Make a compelling case for the funding required to address growth and other needs Exercise fiscal discipline and identify some reductions and redirections within our budget to offset our rising costs and/or any new initiatives planned 12
Budget Assumptions for 2012-13 Other Revenue Federal entitlement grants will remain stable Our only ability to raise revenue is via competitive grants which we continue to seek aggressively somewhat limited and almost always linked to a specific strategy, population, etc Enrollment Growth Projected K-12 enrollment for next year is 140,010 an increase of 1,998 students Charter school enrollment is projected at 9,204 an increase of 995 students t 13
Budget Assumptions for 2012-13 Federal funding cliff has been addressed so no additional cuts needed to cover the expiration of ARRA (EduJobs) funding Plan for state mandated cost increases as defined in the 2nd year of the biennial state budget such as health and retirement Identify operational cost increases that are unavoidable such as utilities and fuel cost Plan to maintain current service level in terms of allocations to schools no change in staffing formulas No Reduction in Force (RIF) if at all possible Priority for a portion of the redirections and any new funding available is to provide a cost of living increase for our employees Budget should be developed within the framework established with leadership team and reviewed with the Board of Education Continue to align resources to support the district s Theory of Action, Core Beliefs, and the Strategic Plan 2014 14
Budget Development Process November - December 2011 Confirm Board of Education/Superintendent Goals and Priorities Cabinet members review Strategic t Plan 2014 progress and identify priorities for funding in 2012-13 Hold budget kick-off meetings with fund owners Department heads submit budget recommendations aligned to Strategic Plan 2014 to their executive staff member Evaluate performance against KPIs and budgetary impact Review programs for deletion, reduction or increase required Review budget line items Department heads review budget recommendations with executive staff members for approval Professional organizations submit budget request 15
Math Proficiency (with retests) Math Proficiency* 2008-09 2009-10 2010-11 Change 08-09 to 10-11 Change 09-10 to 10-11 Grade 3 80 82 80 0-2 Grade 4 80 83 85 +5 +2 Grade 5 81 83 83 +2 0 Grade 6 76 79 79 +3 0 Grade 7 75 79 79 +4 0 Grade 8 80 84 85 +5 +1 Composite 79 82 82 +3 0 The change between 08-09 and 10-11 indicates that all comparisons except 3 rd grade increased proficiency between 2 5 percentage points. The change between 09-10 and 10-11 indicates only 2 positive increases between 1 to 2 percentage points. *Percentage of scores at Levels III and IV 16
Reading Proficiency (with retests) Reading Proficiency* 2008-09 2009-10 2010-11 Change 08-09 to 10-11 Change 09-10 to 10-11 Grade 3 66 68 67 +1-1 Grade 4 70 71 71 +1 0 Grade 5 69 72 72 +3 0 Grade 6 70 74 74 +4 0 Grade 7 63 66 67 +4 +1 Grade 8 66 69 70 +4 +1 Composite 67 70 70 +3 0 The change between 08-09 and 10-11 indicates that at all grade levels increased proficiency between 1 4 percentage points. The change between 09-10 and 10-11 indicates only 2 positive increases at 1 percentage point. *Percentage of scores at Levels III and IV 17
End-of-Course Proficiency (with retests) 2009-10* 2010-11 Change Algebra I 84 79-5 Algebra II 85 79-6 Biology 85 83-2 Civics & Economics 83 82-1 English I 85 81-4 Physical Science 71 71 0 US History 89 86-3 Composite 84 81-3 *2009-10 was the first year that EOC scores were reported with retests. *Percentage of scores at Levels III and IV 18
High Academic Achievement Goal: Eighty percent of schools will make expected or high growth on ABCs. Percentage of Schools Making Expected or High Growth* 2006-07 07 66.7% 2007-08 77.4% 2008-09 89.6% 2009-10 94.7% 2010-1111 89.0% *Schools identified by the state as No Status are excluded from these counts 19
Strategic Plan 2014: Increasing the Graduation Rate Measurement: Increase the number of students who graduate in four years from 66 percent to 90 percent by 2014. CMS Graduation Cohort Rate 76.0% 74.0% 73.5% 72.0% 70.0% 0% 69.9% 68.0% 66.0% 66.1% 64.0% 62.0% 2008-09 2009-10 2010-11 20
Operations- Examples of Key Performance Indicators Transportation Key Performance Indicator Avg./Standard Actual Measure Percent of eligible Pre-K students 49% 65% transported Daily bus runs per route 3.8 5.2 Cost per student $1,116 $683 Cost per mile $4.15 $2.81 Storage and Distribution Key Performance Indicator Avg./Standard Actual Measure Child Nutrition inventory >98% 99.30% Textbook inventory >98% 97.25% Maintenance Warehouse inventory >98% 100.00% 00% Transportation Warehouse inventory >98% 97.68% Maintenance Services Key Performance Indicator Avg./Standard Actual Measure Respond to operational emergencies 2hrs 98% 98% Respond to urgent requests in 48 hrs 85% 79% 21
Budget Development Process January 2012 Executive staff members review budget recommendations with budget staff including funding needs and proposed reductions/redirections Executive staff members and budget staff review budget recommendations with superintendent and CFO Departmental budget recommendations finalized and aligned with Strategic Plan 2014 Budget staff computes initial cost estimate for cost of living and benefit increases, sustaining operations, growth and new initiatives Budget work sessions with the BOE begin - superintendent and staff present recommendations for needs identified to continue progress in achieving the goals and objectives in the Strategic Plan 2014 22
Budget Development Process February - March 2012 Enrollment growth estimates confirmed by grade level by school key driver for staffing needs at each school Budget staff computes final cost estimates t for cost of living i and benefit increases, sustaining operations, growth and new initiatives Budget work sessions with the Board of Education continue - Superintendent t and staff present budget recommendations including proposed reductions and redirections of resources Our estimated state funding verified with actual state planning allotment t Superintendent and executive staff finalize budget recommendation Budget recommendation document prepared Superintendent presents budget recommendation to Board of Education 23
Budget Development Process April - May 2012 Board of Education reviews budget recommendation Budget work sessions with the Board of Education continue - Superintendent and staff present requested information Board of Education holds public hearing on the budget recommendation Board of Education finalizes budget request and submits to Board of County Commissioners 24
Budget Development Process June - September 2012 Board of County Commissioners adopts county budget, including appropriation to the school district State Legislature passes budget bill Superintendent recommends final budget to the Board of Education based on approved funding from county and state, and estimated federal sources Board of Education adopts a budget resolution approving the operating budget Adopted budget document prepared 25
Conclusion Closing remarks Q & A 26