BUFFALO FISCAL STABILITY AUTHORITY Board Meeting May 20, 2020 Buffalo City School District Third Quarter Review 1
Review of the Buffalo City School District’s Third Quarter Report (FY 20 19-20 ) COVID-19 Pandemic All District schools closed March 13, 2020 as a result of the Coronavirus Pandemic On May 1, 2020, the Governor extended the order for the remainder of the academic year All employee groups with the exception of Substitute Teachers are currently receiving regular compensation and benefits Substitute Teachers are currently receiving unemployment insurance All other employee groups are currently working remotely Bus aides are not working but receive weekly salary based on an average workday’s pay 2
Review of the Buffalo City School District’s Third Quarter Report (FY 20 19-20 ) 03.31.2020 FYE 2019-20 Projected FYE Projected FYE General Fund Variance to Modified Budget at 12.31.2019 at 03.31.2020 Budget $ in Millions Revenues $917.4 $914.3 $913.1 ($4.3) Expenditures 927.4 916.9 883.1 (44.3) Surplus (Deficit) ($10.0) ($2.6) $30.0 $40.0 * Note: the Adopted Budget was modified to include $3.7 M of carryover encumbrances (not reflected above) 3
Buffalo City School District Revenues 2019-20 3rd Quarter Update 03.31.2020 Projected FYE Projected FYE FYE Modified Budget at 12.31.2019 at 03.31.2020 Variance to Budget $ in Millions Real Property Tax $70.8 $70.8 $70.8 $0.0 Erie County Sales Tax 47.0 48.5 45.5 (1.5) Federal Medicaid Reimbursement 2.6 3.2 3.1 0.5 New York State Aid 784.4 779.2 781.1 (3.3) Miscellaneous (Tuition, Interest Earnings, Interfund Revenues, 12.6 12.6 12.6 0.0 earnings on Debt Service Reserve Fund) $917.4 $914.3 $913.1 4 Total General Fund Revenues ($4.3)
Buffalo City School District Expenditures 2019-20 3rd Quarter Update 03.31.2020 Projected Projected Modified FYE General Fund Expenditures FYE at FYE at Budget Variance 12.31.2019 03.31.2020 to Budget $ in Millions Total Employee Compensation $324.5 $319.1 $313.8 $10.7 Total Employee Benefits 190.3 187.3 176.3 14.0 Payments to Charter Schools 132.8 131.9 131.4 1.4 Debt Service 114.9 113.0 114.9 0.0 Transportation 50.9 51.5 35.7 15.2 All Other Expenditures 114.0 114.1 111.0 3.0 Total General Fund Expenditures $927.4 $916.9 $883.1 $44.3 5
FY 2019-20 3rd Quarter Employee Count Comparison All Funds General Funds FY 2019-20 Actual at FY 2019-20 Actual at Employee Group Variance Variance Adopted Budget 3/31/2020 Adopted Budget 3/31/2020 3,698.7 3,655.0 (43.7) 3,218.0 3,197.0 21.0 Teachers 264.7 260.0 (4.7) 229.0 230.0 (1.0) Administrators Professional, Clerical, & 494.4 448.0 (46.4) 381.0 354.0 27.0 Technical Employees Assoc. (White Collar) 95.0 84.0 (11.0) 65.0 60.0 5.0 Local 264 - (Blue Collar) Teacher Aides/ Teaching 954.3 911.0 (43.3) 806.0 766.0 40.0 Assistants 137.6 123.0 (14.6) 134.0 121.0 13.0 All Other Employees Total FTEs 5,644.7 5,481.0 (237.5) 4,833.0 4,728.0 (105.0) 6
Review of the Buffalo City School District’s Third Quarter Report (FY 20 19-20 ) Summary The projected results for the 2019-20 year varies substantially from the original budgeted appropriation of $10.0 M of fund balance due to the implications of the Coronavirus pandemic The District is projecting a $30.0 M surplus at FYE which will roll forward into next year’s budget The pandemic has had a substantive impact on the District Erie County Sales Tax receipts are forecast at a $1.5 M unfavorable budgetary variance Transportation expenditures are forecast to be favorable by $15.2 M Total healthcare expenditures are forecast to be significantly less than budget by $12.5 million, with a significant portion of these expenditures are anticipated to be deferred into FY 2020-21 and FY 2021-22 7 7
Review of the Buffalo City School District’s Third Quarter Report (FY 20 19-20 ) Summary The District had a substantial vacancy rate of 2.2% at March 31, 2020 The District is now forecasting significant, favorable budgetary variances within various Employee Compensation and Employee Benefit lines Overall fiscal year-end projections are conservative 8
BUFFALO FISCAL STABILITY AUTHORITY Board Meeting May 20, 2020 Review of the Buffalo City School District’s FY 2020-21 Recom m ended Budget and FY 2021-24 Financial Plan 9
Buffalo City School District 2020-21 Recom m ended Budget & 2021-2024 Financial Plan Introduction The 2019-20 Recommended Budget and 2020-2024 Financial Plan was submitted to the BFSA on May 1, 2020 The District plans to review the Recommended Budget and Financial Plan on May 20, 2020 A deficit of $50.0 M is reflected in the Recommended Budget A budget gap has been projected for each year of the Financial Plan with a cumulative four-year budget gap of $219.9 M 10
Buffalo City School District 2020-21 Recom m ended Budget & 2021-2024 Financial Plan Introduction New York State’s finances have been deeply impacted by the COVID-19 pandemic and the resulting Coronavirus Recession The New York State (NYS) 2020-21 Enacted Budget included a “Pandemic Adjustment” Reduction in NYS aid payments to each school district equivalent to the federal stimulus provided under the U.S. Coronavirus Aid, Relief, and Economic Security (CARES) Act The total level of NYS aid included in the SFY 2020-21 Enacted Budget is $26.27 B, slightly less than the SFY 2019-20 appropriation of $27.3 B A cumulative federal CARES Act Restoration of $1.13 B brings the total New York State aid to $27.4 B, slightly higher than the PFY’s authorized appropriation 11
Buffalo City School District 2020-21 Recom m ended Budget & 2021-2024 Financial Plan Introduction The level of NYS aid may be reduced further from that already provided for within the NYS Enacted Budget The NYS Director of the Budget is authorized to determine whether the NYS Enacted Budget is balanced during three “measurement periods”: April 1 through April 30, May 1 through June 30, and July 1 through December 31 If a general fund imbalance has occurred during any measurement period, the Director of the Budget is empowered to “adjust or reduce any general fund and/or NYS special revenue fund appropriation and related cash disbursement by any amount needed to maintain a balanced budget • Revised spending plan expected to include $8.2 B in reductions to aid to localities The District has quantified an additional, potential reduction in • NYS aid of $110.0 M (Equivalent to a 20% reduction) 12
Buffalo City School District 2020-21 Recom m ended Budget & 2021-2024 Financial Plan Introduction The Financial Plan includes deficit closing and cost savings initiatives (Gap Closing Plan) to address the budget gaps projected over the outyears Includes various areas for savings through efficiencies, increased revenues, and increased reliance on fund balance Additionally demonstrates potential methods available to close the projected out-year budgetary gaps in the event additional revenues and/or savings from efficiencies are inadequate to address the budget gaps Several actions have been implemented or are slated to be implemented in FY 2020-21 Such savings have been integrated in the Financial Plan 13
Buffalo City School District 2020-21 Recom m ended Budget & 2021-2024 Financial Plan Key Observations General Fund revenues increase at a compound annual growth rate of 0.8% over the Financial Plan General Fund expenditures increase at a CAGR of 0.6% General Fund expenditures exceed General Fund revenues in each year of the Financial Plan General Fund revenues includes a NYS Pandemic Adjustment of $29.6 M in FY 2020-21 This decrease is offset with $29.6 M in Federal CARES Restoration in FY 2020-21 Each outyear includes an annual Pandemic Adjustment Based on past experience • NYS aid was reduced through a Gap Elimination Adjustment from FY 2008-09 through FY 2015-16 as a result of the 2007-2009 Great Recession 14
Buffalo City School District 2020-21 Recom m ended Budget & 2021-2024 Financial Plan Key Observations The District has budgeted the appropriation of $50.0 M of fund balance in FY 2020-21 The total four-year deficit of $219.9 M is reduced to $169.9 M following the appropriation of fund balance The Gap Closing Plan included within the Financial Plan demonstrates the District’s strategic plan to address these outyear deficits through various deficit closing and cost savings initiatives 15
Buffalo City School District 2020-21 Recom m ended Budget & 2021-2024 Financial Plan Key Observations All collective bargaining units have labor agreements that either are expired or are scheduled to expire in the next several years Several of the main cost drivers for the District have reduced rates of increase over the Financial Plan including health insurance for both active employees and retirees and pension payments The implementation and continuation of various efficiency initiatives along with additionally available fund balance will begin to address projected out-year budget gaps but will be insufficient to fully close the gap Various cost reduction actions including program and staffing cuts are reflected to close the remaining budget gaps 16
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