Jackson County ISD Initial Budget Considerations 2015-16FY Review with Local School Boards March 24, 2015
JCISD 2015-16FY Budget Timeline • January 16 th : State Consensus Revenue Estimating Conference • February 10 th : ISD Budget Amendment #1 for 2014-15FY • February 11 th : Governor delivered Executive Budget proposal • February – May: Michigan Legislature develops budget proposals • March – April: Jackson County Revenue Committee meetings • March 24 th : Initial Budget presentation to Local Districts • April 28 th : ISD Board approves Preliminary 2015-16FY ISD Budget • May 5 th : Michigan Road Funding / sales tax ballot proposal • May: Local Boards review, comment & approve ISD preliminary budget • May: Final figures available on county property values • June 1 st : Target date for state approval of final School Aid Fund budget for 2015-16FY • June 23 rd : ISD Board adopts 2015-16FY Budget 2 3/24/2015
Fund Balance Targets The ISD starts its budget process looking at our fund balance outlook -- projected ending fund balances relative to our fund balance targets . . . • The ISD’s fund balance outlook for the end of the 2014 -15FY is as follows: GENERAL SPECIAL ED CTE COMBINED - - - - ($000) - - - - Beginning Fund Balance 2,698 2,347 3,919 8,964 2014-15FY Surplus/(Deficit) (261) (558) (916) (1,735) Ending Fund Balance -- $ 2,437 1,789 3,003 7,229 -- % 13.4% 3.8% 24.6% 9.4% Board Approved Target Range 15-20% 4-6% 20-25% • Both the General Fund and the Special Ed Fund are projected to end the 2014-15FY below the target ranges – Consequently, in 2014-15FY revenues should exceed expenses in order to increase fund balance and move closer to the target ranges • All 3 funds are projected to be in a deficit position for the 2014-15FY – For 2013-14FY the General Fund was breakeven, Special Ed was in deficit, and CTE in surplus 3 3/24/2015
ISD Wide Budget Initiatives for 15-16 • Better Balance of Expenditures to Revenues for each fund • Get all funds back within Fund Balance target ranges • Evaluate current services provided to local districts and potential future areas of need • Continue roll-out of ACA (Obamacare) • Continued presence in community initiatives on behalf of all school districts • Set aside funds for major maintenance & facility needs – We utilize a Capital Projects Fund – Do not think we can ask tax payers to approve additional mills for a bond issue or sinking fund – Since our facilities are 30-40 years old too, this means almost every year we have a couple “major” projects 4 3/24/2015
CTE Budget Initiatives for 15-16 • Continue expansion of Early/Middle College Concept • Continued support of College and Career Access Center (CCAC) • Continued support of unbundled initiatives • EMT • Adult Education • New roof membrane on Career Center 5 3/24/2015
Special Ed Budget Initiatives for 15-16 • Leadership Transition • HCISD Special Education • Capital Project Needs • CI Classroom Curriculum • Transition to Work Initiative • NWEA testing • Compliance Standard Trainings • RTI/MTSS Collaboration 6 3/24/2015
General Fund Budget Initiatives for 15-16 • School Improvement Consortium Development • Continue to develop and expand early childhood programs • Priority and Focus School Work • Mental Health Grant • Truancy (UW Partnership) • Continued Improvement of Operational Service Work (Tech, Finance, Student Data Reporting, Legal Services, Etc.) • Connected Community Schools 7 3/24/2015
Key Drivers Once we understand the initiatives & programs that need to be funded and what needs to be accomplished with fund balances, we evaluate what is expected to happen with our “key drivers” that historically have driven most of the variation in our budget • The JCISD’s Key Drivers are: – Revenue » Jackson County Property Values » State Aid » Federal Funds – Expenditures » Salaries » Benefits – particularly Health Insurance & State Retirement system costs (MPSERS) » Special Ed Reimbursement to local districts 8 3/24/2015
JCISD’s 2014 -15 Revenue Sources Local Property Taxes ISD Total Revenue Sources Local Service Revenue • 50% of the ISD’s revenue comes Other Local Revenue from local property taxes State Revenue – For Special Ed & CTE combined, Federal Revenue property taxes represent 60% 6.2% – For General Fund less than 10% 0.5% • 29% of the ISD’s revenue comes from State Aid 49.8% – This is increasing due to GSRP • 14% of the ISD’s revenue comes from Federal sources 29.4% • 6% of the ISD’s revenue comes from Services provided Note: The beginning fund balance is not revenue; we do not treat it as available to appropriate nor do we consider it when 14.1% balancing expenditures to revenues $72 Million 9 3/24/2015
JCISD Revenue Sources by Fund 51.9% 77.6% 1.0% Special Ed Fund ($46M) • Strong local funding 4.5% • Supplemented by State and 0.9% Federal funding for special needs population 0.3% 0.2% 26.5% 14.2% 26.2% 10.9% 2.8% 9.8% CTE Fund ($11M) General Fund ($15M) • Local funding is clear driver to • Revenue from services provided enable offering such a large • State and Federal funding, most 55.5% and comprehensive vocational restricted for specific programs education program • Minimal discretionary funds 17.8% Local Property Taxes Local Service Revenue Other Local Revenue State Revenue Federal Revenue 10 3/24/2015
JCISD General Fund Revenue 38.0% • Most State revenue and all Federal Revenue in the General Fund is restricted for specific programs / purposes 13.9% • Local Service Revenue simply covers a portion of the cost to provide those services 24.7% 1.0% • Leaves less than 25% of total General Fund Revenue available to 10.9% 9.8% meet discretionary purposes (approx. $3.6M) Half of this goes toward subsidizing the Tech 26.5% Consortium and is distributed Local Property Taxes as “data processing” support Other Local Revenue Discretionary Much of the remainder goes to State Revenue - Section 81 subsidize Business Services, State Revenue - All Other Student Data Reporting, PD’s Restricted Federal Revenue and other Learning Services Local Service Revenue support 11 3/24/2015
JCISD’s 2014 -15 Expenditures Salaries ISD Expenditures Benefits • Purchased Services & Supplies Salaries & Benefits are 65% of Transfers to Local Districts total spending All Other Excluding transfers to all local districts) salaries & 26.3% benefits total 82% • Purchased Services & Supplies 38.5% include the cost of substitutes, maintenance, transportation & utilities as well as “supplies” • We work hard to control 10.9% purchases but our real control levers are staffing (which in turn impact salaries & benefits) 3.5% 20.8% and transfers to local districts $73 Million 12 3/24/2015
Key Assumptions – mid March Revenues • Local property tax revenue up 1.5% • State Funds at carryover levels – Small increase in Foundation Allowance likely for Local Districts, but not ISD’s, and will come from adjusting categoricals. Increase in state’s overall spending on schools will be used to pay down unfunded retirement liabilities • Federal Funds at carryover levels Expenses • Salary increase of 1% for all employee groups plus steps and lanes for those eligible • Health care increase of 4% – Hard dollar caps increasing 2.3% for medical benefit plan coverage years beginning on or after January 1, 2015 – Economic increase on our self-insured portion (one medical plan plus dental and vision plans) – Increased cost of ACA compliance • MPSERS Retirement rate essentially flat – Net expense rate essentially flat (Basic/MIP with Premium Subsidy rate constant at 25.78%) – Additional funding to pay down unfunded liabilities will be “in & out” • Special Ed Reimbursement to LEA’s in 2015 -16 – Total pool of funds based on maintaining ISD Special Ed fund balance within its target range – Reimbursement then allocated on a pro rata basis based on each district’s eligible reimbursable Special Ed costs (based on SE-4096) adjusted for staffing additions or reductions, less State Aid received for Special Ed in 2015-16FY – Projected reimbursement to local districts for 2015-16 is flat (meaning no change) from the current year’s reimbursement 13 3/24/2015
JCISD 2015-16FY Budget Overview GENERAL SPECIAL ED CTE COMBINED - - - - ($000) - - - - Local Revenue 5,587 27,735 9,491 42,814 State Sources 8,010 12,828 1,598 22,436 Federal Sources 675 6,620 321 7,616 Internal Transfers In 3,550 150 - 3,700 TOTAL ALL SOURCES 17,822 47,334 11,410 76,565 Salaries 4,958 19,171 4,715 28,844 Fringe Benefits 3,391 13,182 3,364 19,937 Purchased Services 3,335 1,967 940 6,242 Supplies 347 1,124 598 2,069 Capital Outlay 632 306 310 1,248 Other 117 310 114 541 Transfers 5,545 11,572 2,016 19,133 TOTAL ALL USES 18,325 47,632 12,057 78,015 SURPLUS/(DEFICIT) (504) (298) (647) (1,449) Beginning Fund Balance 2,437 1,789 3,003 7,229 ENDING FUND BALANCE -- $ 1,933 1,491 2,356 5,780 -- % 10.6% 3.1% 19.5% 7.5% Memo: Target Range 15-20% 4-6% 20-25% 14 3/24/2015
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