Budget Update and 2016-2017 Operating Budget Board of Education August 9, 2016
2016-2017 Budget Update CMS budget consists of three primary sources of funding: • State • County • Federal/Other Budget timeline is a challenge: April 12 May 10 June 21 July 14 July 18 August 9 Superintendent BOE BOCC State DPI BOE approves presents approves approves approved released final budget budget budget allocation budget LEA proposal request allocation 2
What were the results of the final county and state approved budgets and the impact on our proposed budget? 3
2016-2017 Budget Update County Funding Update Since Proposal Approved in May County funding request vs. BOCC approved allocation increase: Sustaining Operations ( School Resource Officer contract, transportation $ 3,404,844 model, teacher supplement for first-grade class size initiative) Investing In Our Employees (salary and benefits) 9,885,016 Student Growth And Additional Space (CMS and charter growth) 9,610,655 2016-2017 County Requested Increase $ 22,900,515 2016-2017 Approved Increase in County Allocation 11,291,441 COUNTY FUNDING GAP $ 11,609,074 4
2016-2017 Budget Update County Funding Changes Since Proposal Impact on Proposed Budget Adjustments to Proposed Budget Request • Revision to Program Continuation Eliminated school resource officer contract increase ($ .2M) • Adjustment to Salaries and Benefits – ( Proposed 3% increase for all staff) Adjusted salary increase – Avg. 4.7% for teachers and other certified staff; 3.0% plus step for school-based administrators; 3% for non-certified $ 1.5M Added state approved one-time bonus - . 5% for non-certified staff and school-based administrators $ .4M Adjusted retirement rate – proposed -15.32%; actual - average 16.33% $ 1.3M • Changes to Charter School Pass-Through Adjustment to charter funding estimate based on less than requested funding and two new charters not opening as planned ($ 3.3M) Total Net Change to Budget Request (.3M) 5
2016-2017 Budget Update Closing the Funding Gap Impact on Proposed Budget County Reductions to Base Budget Redirects to State or Other Funding Sources Redirect digital tools/resources (contracts) to state using increase in digital materials funding $ (2,470,760) Redirect supplies to state using increase in instructional supplies state funding (248,250) Redirect pre-K snacks to state NC Pre-K funding (285,779) TOTAL $ (3,004,789) Central Office and Efficiency Reductions Reduce funding for utilities due to efficiency savings $ (1,101,189) Reduce funding for self-insurance contribution (895,492) Reduce funding for maintenance overtime, hiring freeze, mileage, child nutrition A/R obligations and other department expenses (1,622,463) TOTAL $ (3,619,144) Reduced Direct Services to Students and Schools Reduce summer school options offered $ (1,684,133) Reduce funding for K-5 literacy training (582,880) Reduce funding for technology devices (1,200,000) Reduce funding for Teach to One contract (268,750) Reduce funding for extended employment for the opening of new schools (227,103) Reduce funding for custodial overtime (727,011) TOTAL $ (4,689,877) Total County Reductions to Base Budget $ (11,313,810) 6
2016-2017 Budget Update Key State Budget Changes Since Proposal Impact on Proposed Budget • Additional State Reductions – Transportation (lower fuel cost) ($ .2M) Central Office ($ .1M) • Key Adjustments to State Categorical Allotments – Digital Materials/Textbooks $ 1.2M Instructional Supplies $ .2M • Adjustments to Estimates in Proposal Longevity $ 3.2M At-Risk Student Services Carryover $ 1.5M Summer Reading Camp Carryover $ 3.3M • Adjustment to Salaries and Benefits Since Proposal - Salaries: Teachers and Other Certified Staff - Avg. 4.7% increase School Based Admin. - 1.5% + step (if eligible); . 5% one-time bonus Non-Certified Staff - 1.5% increase; . 5% one-time bonus; merit bonus (TBD) $ 1.9M Teacher bonus pilot based on student performance- 3 rd grade reading, AP/IB, CTE TBD Retirement Rate - Proposed – 15.65%; Actual – average 16.33% $ 3.5M 7
2016-2017 Budget Update Federal/Grants/Other/Special Revenue Funding Update Since Proposal Impact on Proposed Budget • Fund Balance adjustment - Appropriation for technology devices $ 1.2M Appropriation for movement/purchase of mobile units $ 3.0M Appropriation for capital projects/school options facility needs $ 2.0M Appropriation for cultural proficiency training $ .5M • Federal/Grants/Other/Special Revenue - Net adjustments to grant carryover estimates $ 1.6M (primarily Title I and EC categories) 8
2016-2017 Final Proposed Budget 9
2016-2017 Total Proposed Budget REVENUES Proposed Budget % of Total State of North Carolina $ 806,479,514 58.5% Mecklenburg County $ 413,493,792 30.0% Federal and Other Grants 137,785,489 10.0% Other and Special Revenue 20,115,000 1.5% TOTAL OPERATING BUDGET $ 1,377,873,795 100% Capital Replacement 4,960,000 Special Project Capital Funding 18,000,000 Enterprise Funds: Child Nutrition Program 69,258,172 After School Enrichment Program 13,710,226 TOTAL PROPOSED BUDGET $ 1,483,802,193 10
2016-2017 Proposed Operating Budget vs. 2015-2016 Adopted Operating Budget 2016-2017 Proposed Budget $ 1,377,873,795 2015-2016 Adopted Budget $ 1,346,730,237 Increase $ 31,143,558 % Change Over Prior Year 2.3% * Operating Budget only – does not include Capital or Enterprise Funds 11
Significant Changes from Prior Year Overall the budget increased by $31.1 million, 2.3% over the prior year - • $2.8 million attributable to enrollment growth and new space costs • $5.2 million will cover charter school pass-through funding increase • $24.3 million will cover sustaining operation costs (i.e., class size reduction, summer reading camp, mobiles, technology devices and longevity) • $49.5 million for salary and benefit increases (as described on pg. 5) • ($39.1) million in revisions to the base budget (i.e., state revisions, state average salary adjustment for state paid positions, reversal of one-time bonus and fund balance appropriation, and grant adjustments) • ($11.6) million in reductions and redirections to close the funding gap 12
Key Budget Highlights • CMS continues to focus on optimizing resources from all sources as well as identifying efficiency savings and budget redirections to offset rising costs. The 2016-2017 budget includes over $11.6 million in reductions and redirections. • Key positive points in the state budget: • Salary increases for all staff • 1 st grade class size reduction to 1:16 teacher:student allocation ratio • Increase in instructional supplies • Increase in digital materials/textbook funding • Concerns to monitor at the state level: • Restrictions on class size limits • Continued increase in retirement and health benefit rates • County request for operating budget was an increase of $22.9 million – BOCC approved increase of $11.3 million – gap of $11.6 million has been addressed • Investment in more competitive salaries will help retain and attract the best teachers and support staff for our students 13
Key Budget Highlights • Total CMS projected student enrollment of 146,644 students this year – 504 more than last year • Since 2008-2009, the overall per pupil amount increased by about $484 per pupil (5.4%) while the enrollment has increased by more than 12,580 (9.4%) • County funding per pupil for CMS has decreased by $8 since 2008-2009 when including the charter students of Mecklenburg County • CMS will continue to align to the district’s strategic plan including those strategies that have helped us increase academic achievement and improve the graduation rate • The 2016-2017 Operating Budget, as presented, is fiscally sound and reflects the priorities of the district for this year. 14
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