Alexandria City Public Schools Department of Financial Services October 19, 2009 FISCAL FORECAST Operating Budget: Fiscal Years 2011 - 2015 1
AGENDA • The context • Demonstration of the – Population and enrollment forecast model – Capacity • Sample cases – Budget trends – Compensation and benefits • Methodology and revenue assumptions 2
Strategic Plan VISION VISION Set the international standard for educational excellence, where all students achieve their potential and actively contribute to our local and global communities. MISSION MISSION Provide the environment, resources, and commitment to ensure that each and every student succeeds — academically, emotionally, physically, and socially. GOALS GOALS Equity and Excellence: Every student prepared for college, work, and life. Each student, with support for their unique circumstances, will graduate from high school with the knowledge and skills necessary for higher education, multiple career paths and active citizenship. 3
City of City of Al Alexandria: exandria: Population forecast to Population forecast to reach approx. reach approx. 170,000 170,000 by 2030 by 2030 180,000 160,000 140,000 120,000 100,000 80,000 60,000 40,000 20,000 0 1980 1990 2000 2010 2020 2030 4 Sources: City of Alexandria Planning Department, US Census Bureau & MWCOG Cooperative Forecasts
DC Region Population Change • None of the Washington DC region’s population gain over the past 22 years can be attributed to domestic migration. • Over the past two decades, nearly all of the population growth in the Washington DC region was due to international immigration and the higher fertility rates of the foreign-born population . • Households that move into the Washington DC region from other parts of the U.S. tend to be smaller and have lower incomes than households moving out. • People moving into the region tend to be younger, and therefore have smaller household sizes and lower incomes. Out-migrants are more likely to be families and have higher incomes. Source: Center for Regional Analysis, George Mason University School of Public Policy
Population change by age group (1980 – 2020) 14,000 12,000 2020 10,000 2020 2000 8,000 1980 2000 6,000 2020 1980 1980 2020 1980 2000 2000 4,000 2,000 0 0-4 5-9 10-14 15-19 6 Source: US Census Bureau and Virginia Employment Commission
ACPS Enrollment ACPS Enrollment is Increasing is Increasing ACPS Enrollment Trends: Actual and Preliminary Projections 13,800 FY07 to FY10 13,300 up 13.1% 12,800 Number of Students 12,300 FY09 to FY10 up 4.1% 11,800 11,681 11,345 11,274 11,239 11,300 11,225 11,203 10,995 10,921 10,800 FY 11 to FY15 10,521 FY 11 to FY15 10,557 10,300 10,332 up 13.9% up 13.9% 9,800 FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Sept Sept Sept Sept Sept Sept Sept Sept Sept Sept Sept Proj Proj Proj Proj Proj Fiscal Year Actual Projected 7
Economic Constraints • Revenue outlook for • Macro-Economic outlook - Cities - GDP - Counties - Unemployment - Other school divisions - Consumer confidence index - Other states - CPI and Inflation (CPI-Education component) - Budget shortfall • Other factors • Real estate outlook - Income distribution - Residential properties - At risk factors - Commercial properties - Etc. 8
9 Constraints Economic
Strategic Efforts to contain expenditure grow th I nc r nc re a s e a se i e in O n Ope r pe ra t a t ing ng Fund E Fund E x pe ndi x pe ndit ur ure s e s FY FY 2 0 0 4 A 2 0 0 4 Ac t c t ua l ua l t t o FY o FY 2 0 1 0 B 2 0 1 0 Budge t udge t e d e d 15.0% 12.7% 11.6% 10.6% 10.0% 7.5% 7.5% 6.7% 4.8% 5.0% 2.1% -0.1% 0.0% FY05 Actual FY06 Actual FY07 Actual FY08 Actual FY09 Actual FY10 -0.7% -1.5% -5.0% -7.3% -10.0% Operating Fund Annual Increase Per Student Annual Increase 10
Where does the money come from? ACPS Revenue Sources Ope r pe ra t a ting Fund ng Fund Re ve nue Sour nue Sourc e s FY c e s FY 2 0 1 0 2 0 1 0 State Funds 13.7% Beginning Balance 2.2% Local Funds 0.8% Federal Funds City 0.0% Appropriation 83.3% 11
Methodology • Used historical trends • Grouped expenditures (adjusted) for other into several non-personnel items categories and benefits rates • Fully budgeted for all • Collaborated w ith items needed City, state and other (completeness rule) stakeholders • Identified other • Forecasted revenues mandatory increases based on City and • Used data-driven state projections, allocations adjusted for economic outlook 12
Revenue Assumptions: FY2011 compared to FY2010 • City appropriation: -2% to +2% change • State sales tax: 5% decrease • State basic aid is enrollment-driven • ARRA funding: SFSF (State Fiscal Stabilization Fund) may no longer be available • Beginning fund balance: an increase of $1.2 million compared to beginning balance for FY 2010 budget (see FY2009 year-end fund balance report) 13
5-Year Revenue Assumptions City Appropriation City Appropriation State sales tax revenue State sales tax revenue Sales tax accounts for City appropriation accounts about 4.7% of ACPS for about 83% of ACPS operating revenue operating revenue FY 11 -5.0% FY 11 2.0% FY 12 -1.0% FY 12 2.5% FY 13 +1.0% FY 13 3.0% FY 14 +1.5% FY 14 3.5% FY 15 +1.5% FY 15 4.0% State basic aid revenue (9% of ACPS operating revenue) State basic aid revenue (9% of ACPS operating revenue) Change is based on enrollment. No modifications to state legislature approved funding formulas are assumed. 14
Expenditure Assumptions (Preliminary subject to change) • Student grow th: based on • Strategic plan implementation preliminary budget projections. might require reallocation or The key variable here is redirection of resources “absorptive capacity”, the number of students w ho can be • ARRA (SFSF) expenditures absorbed w ith existing staffing. expected to come off of ARRA funding and returned to the The preliminary forecast assumes operating fund in FY 2012 20% absorption rate. • 17.91% 17.91% VRS co VRS contrib ntributio tion rate, rate, • Modified zero-based budgeting compar compared to 13.81% in FY ed to 13.81% in FY 2010 2010 • Data-driven resource allocations • ACPS supplemental retirement: 2.70% compared to 2.25% in FY 2.70% • Step: the preliminary forecast 2010 includes the cost of step. • Student-teacher ratio: staff is • 13% 13% annual annual healt health insurance h insurance review ing best use of capacity increase based on the history of increase based on the history of and w ill report results to the paid claims. paid claims. Board in November 15
5-Year Projected Budget Gap Impact on five-year budget forecast FY FY 2011 - 2011 - FY FY 2015 For 015 Forecas ecast 265,000,000 255,000,000 245,000,000 235,000,000 225,000,000 215,000,000 205,000,000 195,000,000 185,000,000 175,000,000 FY 10 FY11 Forecast FY12 Forecast FY13 Forecast FY14 Forecast FY15 Forecast 16 Revenue Expenditures: Case 1
17 Demonstration The forecast model
Forecasted Funding Gap Funding Gap Based on a 2% Increase to the City Appropriation FY11 Forecast FY12 Forecast FY13 Forecast FY14 Forecast FY15 Forecast Funding Gap (10,925,306) (7,002,581) (4,334,358) (3,834,360) (3,190,495) 18
Impact on Cost per Student Impact of Five Year Forecast on Cost per Student Assumes 2% Increase in City Appropriation in FY 201 1 $20,000 $1 8,000 $1 6,000 $1 4,000 FY09 FY1 0 FY1 1 19
Other Cost Variables • $11 million gap represents almost 100% of the total budget for utilities, leases, educational supplies, and textbooks • $11 million gap equals also to 77% of the employer’s share of health care benefit • $11 million is also the equivalent of: – 254 FTE’s on Support Scale (35% of all support employees) or – 116 FTE’s on Teacher Scale (9% of all teachers) or – 76 FTE’s on Administrator Scale (79% of all administrators) 20
Other Revenue Variables • Value of one-cent on the real property tax rate: approx. $3.0 million • 1% change in City appropriation: $1.6 million • 1% change in state sales tax: approx. $0.1 million • 1% change in state aid: approx. $0.17 million. 21
Summary Our Challenges • Closing the “A B C Gap” – Achievement – Budget – Capacity • Educating More students • Greater pressure on school facilities due to population grow th • Revenue constraints and uncertain economic environment • Expenditure: cost drivers and cost structure 22
ACPS Commitment Our Commitment • To meet the division goal of higher achievement for each and every student • To attract and retain the best and highest performing employees • To think creatively about how to reach our goals • To be careful stew ards of the public funds • To w ork collaboratively w ith the City, Board, staff, state, and all other organizations and stakeholders. 23
Next Steps? • November 1, Sunday: School Board retreat • November 3, Tuesday: CIP long-range plan • November 7, Saturday: City budget retreat 24
25 Your Questions ?
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