Section 20: Budget A. Provide an operating budget covering each year of the requested charter term that contains revenue, expenses, and anticipated fund balances. The budget should be based on the projected student enrollment indicated in Section 2 of the application. A template for the operating budget may be available from the sponsor upon request. See Attachment A for the 100% Operating Budget, Attachment B for the 75% Operating Budget, and Attachment C for the 50% Operating Budget. B. Provide a start-up budget as Attachment Y that contains a balance sheet, revenue projections, including source of revenues, expenses, and anticipated fund balance. The start-up budget must cover any period prior to the beginning of FTE payments in which the school will expend funds on activities necessary for the successful start-up of the school. See Attachments A, B, and C for Detailed Startup Budget Worksheet C. If the budget is contingent upon sources of funding beyond those typically provided by local, state, and federal governments (such as funding from foundations, donors, grants), provide evidence of such funding (e.g. MOU, letters) as Attachment Z. The budget is not contingent upon sources of funding beyond those typically provided by local, state, and federal governments, however if a loan is needed, it can be acquired expediently through Building Hope, an organization specializing in charter school facility financing. (Attachment D Building Hope Letter) Building Hope is an organization that supports high quality charter schools in Florida and other states by providing technical as well as financial assistance for educational facilities. The organization supports the expansion of academically successful schools with the capacity to grow their enrollments. D. Provide a detailed narrative description of the line-item revenue and expenditure assumptions on which the operating and start-up budget are based. The budget narrative should provide sufficient information to fully understand how budgetary figures were determined. The budget is prepared in red book format containing notes to the assumptions of individual expenditures. Detailed narrative description below: Start-Up Budget Revenue: The School has applied for a $525,000 Planning and Implementation Grant, as provided by the federal Charter School Program (CSP) Grant. If awarded, the $25,000 planning portion of the grant will be sufficient to cover the startup costs, which will be incurred prior to the period when the school will begin to receive operational funding from the sponsor. The implementation portion of the grant is spent during the first two years of the charter school. This grant will assist the school with
implementation costs during the first two years of operation. The startup budget consists of hiring a consultant to assist with establishing the curriculum and program of the school, recruiting students, training and basic office equipment to get the school up and running. Startup Budget Expenses: The startup budget expenses as detailed above by object and function are based on the critical expenses for planning and program design. Operating Budget Revenue: The FTE Revenue forecast is based upon data provided by the Florida Department of Education and the sponsoring school district at informational meetings held by sponsors for new charter school applicants. The application includes a detailed Revenue Worksheet, which explains how revenue figures were derived. Yearly Revenue Increases of 1% are anticipated for the budget. In the event the revenue increase is not realized, the school plans to reduce its expenses accordingly (marketing, technology, instructional supplies). The Transportation Reimbursement revenue was based on the assumptions provided in the budget notes therein. It is anticipated that the new charter school will contract for bus transportation with its sister school, Odyssey Charter School (OCS), through an agreement with its Governing Board similar to the Agreement the District provides its charter schools; however, it is anticipated that during the charter school s initial term, the Governing Board plans for OCS to charge the new charter school the actual transportation revenue it receives. The Lunch Program income assumes that 60% of all students will eat lunch every day (for 180 school days) and that the revenue (whether paid for by student or NSLP). Odyssey Charter School will provide satellite service to the new charter school. The Governing Board plans to form a catering agreement between OCS and the new charter school. It is anticipated that the Food Service Program (FSP) will charge the charter school 100% of all revenues collected. The capital outlay revenues forecasted include the amount of revenue that schools with over 250 students would receive from the sponsor s 5% administration fee, since the 5% fee is applicable to only the first 250 students. The remainder is returned to the school for capital outlay purposes as defined by statute. No other amount is assumed or forecast during the first three years. After the first three years, the school may be eligible for additional Capital Outlay distributions from the State. This amount is shown in the budget beginning Year 4. The additional capital outlay funds from the administrative fee are not included in the basic FEFP revenue calculations. This revenue appears on the Capital Outlay portion of the budget.
While the school has been awarded a Charter School Programs grant from the state of Florida, these funds have not been included in our budget. We are currently working with the state to develop a comprehensive budget. The items included in the budget are the essentials, and the CSP grant will allow us to purchase additional materials to support the educational program we provide students. Operating Budget Expenses: As a facility that has been constructed for less than the market rate per square footage and has been awarded the Energy Star Conservation Award, Odyssey Charter School in Palm Bay raised $3.5 million dollars to build one of the State of Florida s most innovative school campuses. With the new leased campus, the school will green the campus over time following the guidelines of the GreenPrint from the National Green Schools Network. Following core practices, it is anticipated that low to no cost measures will improve the school environment through energy conservation practices, non-toxic paints and cleaners, and preservation of natural areas on site. This is reflected in the budget under the normal maintenance cost. In addition, the ESP has established a set of financially stable practices, which will guide the success of the school. Personnel: Costs for educational staff and administrators are forecast using a Board approved Odyssey Charter School, Inc. pay scale. Odyssey Charter School, Inc. uses the school district s salary scale as a guide to determine the school s pay scale. The number of instructional personnel is in line with Class Size Reduction mandates (see Staffing Plan in the budget Attachment X). Teacher Salaries were derived at by using an average salary of $36,000/teacher for Year 1, with a CPI of 1% for every year thereafter. Paraprofessionals are budgeted at an average salary of $14,000/year. Staffing Plan: The charter school will seek out dually certified teachers in elementary/middle as well as PE, Art, Music, and Technology. Substitute teacher cost assumes that substitutes will be hired for 10 days/full-time teacher at a rate of $110/day. Administrative Salaries includes a Principal. A part-time Assistant Principal is added the 3 rd year and will be full-time years 4 & 5. Clerical and Administrative assistant salaries include those for Registrar, Treasurer, Administrative Assistants/Clerical personnel. Contract Services include professional fees paid to entities such as the Services and Support Provider, Speech Therapist, and other ESE service providers. The cost was derived at using an average of $750 per ESE student, which is the formula currently used by other charter schools with similar enrollment figures. As noted in the detailed Revenue Worksheet included in the application, the budget anticipates that 12.7% of students will be classified as ESE (per Odyssey Palm Bay s historical data on its SPAR reports). There is room in the budget to modify the amount paid for ESE services under Budget Surplus and any additional revenue
received, should the rate of contracted services for ESE/ESOL increase due increased enrollment of these populations or due to the various needs of the students once enrolled. Revenue estimates for ESE were calculated per Brevard County guidelines. Employee Benefits come to approximately 25% of all salaries (excluding contracted services). The cost is estimated at 3% for retirement, 7.65% in social security taxes, 1.25% in Worker s Compensation taxes, as well as Unemployment, and group benefits per employee. As noted in the application, for employee insurance and benefits selection, the Governing Board has engaged the services of ADP TotalSource, a professional employer organization that provides human resource services to small and moderate size employers. The use of a professional employer organization allows the staff of the School to enjoy the same level of benefits that are available to employees of large organization such as Fortune 500 companies (including health/dental/vision insurance and Retirement/401k plans). School Operations: Advertisement and Promotion includes costs related to recruiting students and staff (i.e. printing of brochures, website production, and advertisements in local media outlets) Independent Financial Audit cost was derived using amounts paid by schools of similar size to accounting firms that perform the Independent Audit Instructional Materials and textbook costs are calculated at a rate of $225/student. This number assumes that the only revenue that the school will receive is FTE, and is therefore consistent with (and exceeds) the amount allocated to instructional materials under the categorical funding formulas used by the State of Florida. Education Technology includes the purchase of computers and progress monitoring and educational software. This amount assumes that the only funding received is FTE, and does not take into account possible Implementation Grant funds. The amount may be categorized as a one-time expense outright, or as the annual expense paid under a long-term financing agreement (i.e. computer leases, loan payments, etc.). Staff Development covers costs for Montessori Live training. All other workshops and PD activities, including, but not limited to: Data-Driven Decision Making for Teachers and Administrators: Mission and Vision: Improving Individual Student Achievement: Continuous Improvement Process will be provided by the district, in-house or shared with Odyssey Charter School. Telecommunication and Postage is calculated on a per student basis. Transportation costs are detailed in the budget notes. Lunch Program expense is based on current figures found in the affiliated charter schools. If the school does not have a facility with a kitchen that is capable of cooking meals, It is planned that Odyssey Charter School will be the Food Service Provider (FSP) and sponsor the school as a satellite. It is anticipated that the charter school will pay its FSP 100% of all revenues collected. It is assumed that 60% of all students will eat school lunch every day. Odyssey Charter School, Inc., is already an approved provider under the National School Lunch Program and is qualified to receive reimbursements. Since we are uncertain of the precise
population (and number of free and reduced lunch meals to be served) we are unable to provide a more precise budgeted structure for food service. However, all USDA reimbursements and cash payments by students will be collected and benefit exclusively the Food Service Provider (Odyssey Charter School). Facilities Operations: The ESP has established a set of financially stable practices, which will guide the success of the school. Utilities: The fee included is comparable to the average annual amounts paid by other charter schools with similar enrollment numbers Lease of Facilities: The amount assumes an average cost per student station in the budget. This amount is comparable to that paid by several other charter schools which have opened recently. It is the intent of this proposed school to try to negotiate under similar terms when entering into new leases. Insurance cost forecast is based on the current average annual amounts paid by other charter schools with similar enrollment numbers. This includes Errors and Omissions, Officers and Directors Liability, Fidelity Bonds, Commercial General Liability Insurance, Automobile Liability Insurance Employer s Liability Insurance, Fire, Property & Casualty - Bldg. & Equipment) Repairs/Maintenance/Janitorial/Security: Amount listed is comparable to the average annual amounts paid by other charter schools with similar enrollment numbers. Furniture, Fixtures & Equipment is calculated per student station basis. This amount is an amortized amount, as the school will have longer-term financing agreements for these purchases (such as leases and loan/line of credit payments). E. Discuss the school s contingency approach and plan to meet financial needs if anticipated revenues are not received or are lower than estimated. This may include budgets for 75% and 50% of revenue projections or a budget for whatever percentage the applicant considers the minimum percentage at which they could operate the educational plan presented. The school s governing board is committed to operating in a fiscally feasible method to ensure that the school is successful. As such, we have gone through an exercise of developing budgets at only 50 percent (232 students) and 75 percent (348 students) enrollment. This exercise assisted allowed the school to develop contingencies in unlikely event that the school is not able to attract the number of students anticipated. The chart below indicates the changes which were required at each level of budgeting: 75 Percent Of Enrollment 348 Students 50 Percent of Enrollment 232 Students
Changing the enrollment and corresponding teacher loads left the school with a $39,100 surplus, no additional changes were necessary. Changing the enrollment and corresponding teacher loads left the school with a $185,976 deficit which we would resolve by: Utilize already approved CSP grant to pay for textbooks, computer equipment, classroom equipment, half of the academic supplies, library materials and professional development costs. (Increases revenue by ~$127,360) Reduce the number of specialists required (for Art, Music, PE etc.) from 2 to 1 teacher. (Saving ~$45,168) Eliminate media specialist. (Savings $~24,816) Reduce the office assistant to half time. (Savings ~$15,990) After all of the per-student calculations are completed, as well as the changes listed above, it would leave the school with a surplus of $16,584. F. Explain in detail the year one cash flow contingency plan, in the event that revenue projections are not met (or not met on time). The school will closely monitor and evaluate the cash flow balance of the school. The ESP the school is working with has extensive experience managing charter schools and managing cash flow to ensure the continued success of charter schools. Provided with our budget is a monthly cash flow for the first year of operation. The school has carefully developed a budget which is based on student enrollment, and the school will be cautious in hiring practices to only hire teachers once enough students have enrolled at the school to support the additional teacher on the payroll, thus protecting the school from over hiring. The school will not begin paying the vast majority of its instructional payroll until the second pay period in August, meaning that first and a majority of the second payments from the district will be dedicated to purchasing supplies and equipment, while at the same time ensuring a cash balance to help sustain the school for the remainder of the year. In the event that cash flow issues do occur, the school intends to work with Building Hope to provide assistance with the management of the school s funds, and they have provided short term financing solutions to assist with short term cash flow needs. G. Provide monthly cash flow projections for the school s start-up period (i.e. from the date on which the application is approved to the beginning of the first fiscal year of operation) through the first year of operation. See Attachment X - Monthly Cash Flow
Section 22: Start-Up Plan A. Present a projected timetable for the school s start-up, including but not limited to the following key activities: i. Applying for and securing appropriate legal status (e.g. status as a state corporation, federal non-profit) ii. Identifying and securing facility iii. Recruiting and hiring staff (leaders, teachers, and other staff) iv. Staff training v. Finalizing curriculum and other instructional materials vi. Governing board training vii. Policy adoption by Board (if necessary) viii. Recruiting students ix. Enrollment lottery, if necessary x. Establishing financial procedures xi. Securing contracted services xii. Fundraising, if applicable xiii. Finalizing transportation and food service plans xiv. Procuring furniture, fixtures and equipment xv. Procuring instructional materials The activities included should align with the start-up budget described earlier in the application. If an activity will be paid for by a source of funding not included in the start-up budget, it should be clearly indicated. (This timetable is a projection and is not meant to be binding on the school or sponsor. A formal timeline may be negotiated in the charter agreement) Timetable for Initial School start-up: **The Board of Directors of Odyssey Charter School, Inc. has established and adopted policies, and has received Board member training pursuant to F.S. 1002.33. June 2000: August 1, 2015: October 2015: June 2016: OCS, Inc. established as a non-profit corporation Policies and financial procedures adopted and revised as necessary Submission of charter school application proposal to School Board of Brevard County Approval of charter application Execution of Charter Contract February 2017: Deferral of opening granted to open August 2018 August to Nov. 2017: Jan/Feb 2018: March 2018 The Board will award a contract for ESP and ADP TotalSource Identify and secure facility Board approval and execution of facility lease
March to June 2018: April 1, 2018: April 2 to May 1, 2018: April to August 2018: On or before August 1, 2018: August 2018: Marketing/Student Recruiting Selection and hiring of Principal, teachers and staff Initial student application and registration period Students who have applied will be officially enrolled, unless the number of applicants exceeds capacity, a lottery will be conducted Second Registration Period Begins. If number of applicants exceeds capacity, a lottery will be conducted Staff planning/training, purchasing of curriculum, furniture, fixtures, technology, etc., preparation of facilities, including all health, safety, and fire inspections, transportation and food service plans finalized Principal, Board Members, Teachers, and staff fingerprinting and background checks completed Teacher orientation Workshops, Security Action Plan Training, Classes commence as per Board adopted district school calendar After the initial school opening, the School will follow the Odyssey Charter School, Inc. Board approved admissions policy.