FY 18 Budget Overview St. Louis Language Immersion Schools May 17, 2017
Agenda 1. Understanding your budget priorities 2. Where to focus when reviewing a budget 3. Identifying key indicators of a healthy budget 4. Using the budget throughout the year 5. Thinking strategically beyond next year 2
Understanding Your Budget Priorities
Purpose of a Budget 1. Shows what you value as an organization, and if any of your priorities have changed – “putting your money where your mouth is” 2. Communicates your priorities to key stakeholders (Board, staff, sponsors, funders, families) Serves as a “map” when making financial decisions 3. throughout the year 4
Start with Big, Broad Questions What changes is the school planning for its program next year? How does the budget reflect these changes? How does this impact our long-term plans and direction? 5
Where to Focus When Reviewing a Budget
Focus on: Enrollment Factors That Can Impact Enrollment Internal • Recruiting efforts • Changes to programs • Changes in academic results External • Demographic changes in neighborhood • Nearby schools opening or closing In FY 18, over 78% of SLLIS funding is driven by enrollment – both the overall number and special populations (SpEd, LEP, FRL). 7
Focus on: Staffing Questions to Ask • How does staffing reflect program changes we want to make? • Is staff growing or shrinking? Is this consistent with enrollment? • Is the mix of curricular vs. non-curricular positions changing? Teaching vs. leadership? • How is compensation changing? In FY 18, 60% of SLLIS spending is staff- related. Other large expense items are rent, plant operations, debt service and Special Education, 8
Focus on: Fundraising FY 14 FY 15 FY 16 FY 17 FY 18 Questions to Ask Local Revenue 14% 15% 11% 11% 12.0% • Which private grants have Fundraising 4% 4% 2% 0% 1.2% we assumed we will receive? State Revenue 73% 75% 74% 76% 77.6% Is that realistic? Federal Revenue 13% 9% 15% 13% 10.4% • Is private fundraising expected to increase? As Director of Development position has • What role is the board been restored in the budget, so too has a expected to play in modest fundraising goal. Given the school’s fundraising efforts? unique mission, the school needs to develop a development plan that bring needed • Do we have significant resources into the school to support the assets in restricted funds, continued growth of its educational program, and do we expect to use particularly given the decline in federal them? revenue. 9
Focus on: Federal Revenue Questions to Ask FY 14 FY 15 FY 16 FY 17 FY 18 Title I 482,707 338,277 712,751 524,948 415,000 • How do federal grant Title II 92,187 85,319 182,909 100,319 65,000 allocations compare to prior CSP 250,000 250,000 125,000 - - years? Title Ia - - - 99,830 - • How do we explain year-to- Medicaid - 19,266 28,580 22,500 25,000 year changes? Total 824,894 692,862 1,049,240 747,597 505,000 • Are there any federal grants that are either no longer FY 18 is the first full year of the new Federal available to us or that we education policy, Every Student Succeeds Act. have not yet discovered? ESSA is replacing NCLB. The component of the change that most impacts SLLIS is how allocations • What is long-term strategy are calculated. Previously, SLLIS was ‘held for ensuring school is not harmless,’ meaning it would not be impacted by unduly impacted by allocations given to other schools. With ESSA, the uncertainty surrounding pie is divided every year based on enrollment and federal revenue? demographics. 10
Key Stats in a Healthy Budget
Sanity Check Your Budget R eflective: Does it reflect your priorities and broad goals? R ealistic: Is the budget possible given current year spending and knowledge about future spending and revenue? R atios: How does the budget compare with the broad spending metrics for STL charter schools? 12
Goals for the Budget Net Operating Income: 3-5% of revenue Fund Balance: Over 5%, growing to 10% Cash flow: maintain positive cash flow throughout the year Cash on hand: eventually 3 months , currently at 1 month Long-term sustainability: total net savings should be growing over time Program should drive budget, not vice versa 13
Using the Budget Throughout the Year
Budget vs. Forecast: Definition The budget is set at the beginning of the year The forecast is constantly changing Represents our expectations of how we will end the year Incorporates everything we know currently We are predicting the future as best as we can Budget is to hair follicle as… …forecast is to hair style. 15
Budget vs. Forecast: Uses We constantly compare our budget to our forecast to: Understand what changed Learn lessons for better budgeting in the future: • What did we get right? • What did we get wrong? • What can we improve? We are always striving to better predict the future so we can plan for it 16
Budget vs. Forecast: Application STATEMENT OF ACTIVITIES YTD FY17 ACTUAL BUDGET FORECAST BUDGET VARIANCE REVENUE 5100 · Local Revenue 868,308 841,352 1,019,452 1,009,622 9,830 5300 · State Revenue 5,606,760 5,236,478 6,753,981 6,283,773 470,208 5400 · Federal Revenue 859,770 955,557 1,124,446 1,194,446 (70,000) TOTAL REVENUE 7,334,838 7,033,386 8,897,879 8,487,841 410,038 EXPENSES 6100 · Salaries 3,254,577 3,311,175 3,930,903 3,973,410 (42,507) 6200 · Benefits 996,482 1,063,363 1,222,274 1,276,035 (53,761) 6300 · Purchased Services 2,501,122 2,080,381 2,980,701 2,525,025 455,676 6400 · Supplies & Materials 370,321 352,962 441,572 423,554 18,018 6500 · Equipment - - - - - 6600 · Debt Service and Other 215,663 224,878 269,853 269,853 - TOTAL EXPENSE 7,338,166 7,032,758 8,845,303 8,467,877 377,426 NET CHANGE IN ASSETS (3,327) 628 52,576 19,964 32,612 17
Budget vs. Forecast: Application FORECAST BUDGETED VARIANCE Enrollment 743 733 10.00 Regular Term ADA 627.00 610.00 17.00 Summer ADA - FRL 57.46 64.21 (6.75) LEP 38.38 22.76 15.62 Total Wada 722.84 696.97 25.87 Per Wada Payment 8,268 8,150 118.00 Regular Term D1 ADA 80 79 1.00 Summer Term D1 ADA - - - Per Wada Payment 7,244 7,220 24.00 State Revenue Projection 6,599,622 6,156,925 442,696 18
April Snapshot • 759 K booked in April, with 3-month average at 748K • Local Revenue at 84K, 14K below 3 month trend Revenue • State Revenue paid 546K • 131K in federal revenue, large draw from SPED received • YTD revenue at 82% of forecast, or right on track • April expenditures at 625K; overall ytd tracking well to forecast • 3 month spending trend at 708K-forecast allocates 750K/month Expenditures for last two months • Purchased Services remain the key to overall budget performance going forward, as these costs have exceeded original budget allocation by 420K ytd • School currently running at a 3k deficit • Now forecasting 52K surplus, which would bring cash to 600K, Where Things and fund balance to 7.5% • Pending final review of attendance data, may be more upside in Stand state revenue 19
Thinking Beyond Next Year
Focus on Long-Term Goals With leadership and enrollment stability, a school reorg and strategic planning process underway, financial paradigm can at last shift from near-term to long-term. The time has come to marry a bold academic vision with a strong financial plan that can guide the school over the next 3-5 years. Renovate Facility Open a new campus Alter academic model 21
Opportunities for Long-Term Efficiency Pain Points What the Future Might Hold Leases end in FY 19. 2 of 4 loans paid off by 12/31/17; pay off LOC; refinance remaining Facilities and Debt Service IFF debt; identify modern facility with newer systems so to avoid high repair and maintenance costs School moves into median range of cost/ADA Transportation for STL charters, and/or figures out alternative way for families to access school Development plan facilitates addition of much Administrative Support needed admin support positions, which in turn, helps avoid burnout and turnover 22
On to the numbers! Let’s pause for questions before taking look at FY 18 budget.
FY 18 Budget for Board Approval
St. Louis Language Immersion School FY 18 Budget for Board Approval Budget Year SY16-17 SY17-18 Current Future Students 766 770 Attedence % 95% 95% Attrition % 4% 5% ADA 706 712 FRL 57 57 ELL 37 37 WADA 802 806 $/WADA 8,267 8,250 Revenue 5100 · Local Revenue 1,019,452 1,018,507 5300 · State Revenue 6,753,981 6,604,620 5400 · Federal Revenu 1,124,446 886,408 Total Revenue 8,897,879 8,509,535 Operating Expense 6100 · Salaries 3,930,903 3,937,494 6200 · Benefits 1,222,274 1,196,682 6300 · Purchased Serv 2,980,701 2,865,909 6400 · Supplies and M 441,572 328,300 6500 · Debt Service 269,853 181,151 Total Operating Expense 8,845,303 8,509,535 Net Operating Income 52,576 0 Starting Cash July 1 557,600 610,176 Ending Cash July 30 610,176 610,176 Fund Balance % 7.12% 7.33%
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