May 22, 2020 Operational Excellence Safety | Partnerships | - PowerPoint PPT Presentation

Board of Education Meeting May 22, 2020

Operational Excellence Safety | Partnerships | Communication • Physical and psychological safety : We will invest in programs and services to ensure our students and staff feel safe and supported with an emphasis on building resilience, addressing bullying and substance abuse and reducing self-harm. • Stakeholder Partnerships : We will build and strengthen the relationships with stakeholders in order to create and enhance resources for our students, families and staff to build robust school communities. • Communication : We will work to improve communication across our school community by broadening our audience reach, creating opportunities for meaningful dialogue and lifting the voices of all stakeholders, especially Black, Brown and Indigenous people. 2

Agenda ➢ Where we were heading before COVID-19 ➢ November 2019 Governor's Budget ➢ Review Recommendations of Budget Task Force ➢ Current Revenue Outlook – Uncertainty at the State Level ➢ FY2020-21 Budget Impacts ➢ Timeline and Next Steps 3

PRIOR TO COVID » FY2020- 21 Governor’s State Budget Request Status Prior to COVID ➢ +$52M to reduce Budget Stabilization Factor to 6.3% of Total Program Funding ➢ The request will fund a forecasted increase of 1,132 pupils (0.13%) and inflationary factor of 1.9% based on the January 2020 Forecast ➢ Projections for CCSD when the Governor’s State Budget Request released anticipated an increase $227 per pupil - $12M revenue increase 4

PRIOR TO COVID 5

PRIOR TO COVID Budget Task Force – Budget Reduction Recommendations Implement the budget reductions for the FY2020-21 school year SY 2020-2021 Operating Budget ➢ Operate with a stabilized budget going forward ➢ Limit compensation increases for all employees to a maximum of $9 Million ➢ Centralized hiring freeze effective January 1, 2020 ➢ Hold Election for Operating and Capital needs 6

PRIOR TO COVID » At A Glance Projections Projections as of June 2019 General Fund ($ in millions) FY2019-20 FY2020-21 FY2021-22 FY2022-23 Revenue $631.35 $645.56 $659.08 $673.29 Expenditures 654.32 674.51 697.85 721.80 Revenue over (under) Expenditures ($22.97) ($28.95) ($38.77) ($48.51) Projected Ending General Fund Balance $61.50 $32.55 ($6.22) ($54.73) With $9M of salary increases FY2020-2021 General Fund ($ in millions) FY2019-20 FY2020-21 FY2021-22 FY2022-23 Revenue $633.34 $649.03 $654.38 $660.91 Expenditures 654.32 663.91 676.63 688.59 Revenue over (under) Expenditures ($20.98) ($14.88) ($22.25) ($27.68) Projected Ending General Fund Balance $64.72 $49.84 $27.59 ($0.09) 7

Current State Revenue Outlook May Forecast ➢ The speed of the economic contraction is unprecedented and the path to recovery remains uncertain ➢ General Fund revenue forecasts were revised significantly downward from March ➢ FY 2019-20 ($1.1 Billion) ➢ FY 2020-21 ($2.4 Billion) ➢ FY 2021-22 ($2.0 Billion) ➢ FY2020- 21 Budget will need to be $3.4 billion less that Governor’s request – including FY2019-20 impacts carried over Source: May 12,2020 OSPB presentation to CSFP 8

CARES Act Funding and Impact on CCSD ➢ The Coronavirus Aid, Relief, and Economic Security (CARES) Act was passed by Congress on March 27th, 2020 ➢ The CARES Act provides fast and direct economic assistance due to the unforeseen financial impact related to COVID-19 ➢ Two sources of funding for Cherry Creek School District: ➢ Direct allocation to Cherry Creek School District based upon Title I funding formula ➢ $3.4M ESSER Grant Funding for Cherry Creek Schools ➢ The State of Colorado has received $1.67B from the Coronavirus Relief Fund as part of the CARES Act ➢ $510M for school districts and charter schools ➢ $28.5M for Cherry Creek Schools 9

CARES Act Funding and Impact on CCSD ➢ One-time in nature ➢ Allowable uses remain unclear: It is not intended to back fill for State revenue losses ➢ This funding is not included in the financials on the subsequent slides as the focus will be the School Finance Act / Cherry Creek Schools General Fund ➢ Our structural budget issues before COVID still exist ➢ Will this lead to increased Budget Stabilization (Negative Factor) in FY2020-21 due to revenue being pushed into FY2019-20? ➢ Potential School Finance Changes: Reducing Cost of Living Factor and requiring that local voter- approved Mill Levy Overrides (MLO) to be used as Local Share ➢ 2021-2022: this could be the worst year of funding because there is likely to be no federal dollars to backfill state cuts 10

FY2020-21 PRELIMINARY ASSUMPTIONS FY2020-21 Budget Development • $0 No FY2020-21 projected increase in Funded Pupil Count 54,540 FTE Revenue • ($23M) 5% PPR reduction - $8,041 PPR. Decrease of ($423) per student • $2M increase in MLO funding tied to 25% of Total Program • ($0.9) No Facility Rentals for FY2020-21 • Salary Freeze (cost avoidance of $9M from Budget Task Force Recommendations) Expenditure • ($5M) Capital Reserve transfer reduction • ($4M) Move of Nurses to Medicaid Grant • ($2.6M) Unfilled positions from central office hiring freeze • ($2.5M) Teacher ratio increase .25 at 19.0:1, continues at .25 increase per year • ($2.4M) 15% reduction of Decentralized budgets for departments • ($2M) FY2020-21 Health Insurance change – High deductible/H.S.A • $2M .5% employer PERA rate change due to automatic trigger 11

PRELIMINARY ASSUMPTIONS YEARS FY2022 to FY2023 FY2022 TO FY2023 Budget Development FY2022-23 FY2021-22 • • No projected increase in Funded Pupil Count 54,540 FTE No projected increase in Funded Pupil Count 54,540 FTE Revenue • • ($34M) 7% PPR reduction FY22 - $7,478 PPR. Decrease of $0 FLAT PPR reduction FY23 - $7,478 PPR. Decrease of ($563) per student ($0) per student • • $3.9M in MLO funding tied to 25% of Total Program $1.2 M in MLO funding tied to 25% of Total Program ✓ Changes to other revenues Property and Specific Ownership ✓ Changes to other revenues Property and Specific Ownership tax, investment earnings, etc. tax, investment earnings, etc. • • $0.9 Facility Rentals resume $0.9 Facility Rentals resume • • ($2.5M) Teacher ratio increase .25 at 19.25:1, continues at ($2.5M) Teacher ratio increase .25 at 19.50:1, continues at Expenditure .25 increase per year .25 increase per year • • Salary Freeze Salary Freeze • • Capital Reserve transfer constant Capital Reserve transfer constant • • $0 increase of Decentralized budgets for departments $0 increase of Decentralized budgets for departments • • $2M .5% employer PERA rate change due to automatic $2M .5% employer PERA rate change due to automatic trigger trigger 12

» At A Glance – Funding Progressions Projections as of June 2019 General Fund ($ in millions) FY2019-20 FY2020-21 FY2021-22 FY2022-23 PRIOR TO COVID Revenue $631.35 $645.56 $659.08 $673.29 Expenditures 654.32 674.51 697.85 721.80 Revenue over (under) Expenditures ($22.97) ($28.95) ($38.77) ($48.51) Projected Ending General Fund Balance $61.50 $32.55 ($6.22) ($54.73) Budget Task Force Recommendations With $9M of salary increases FY2020-21 General Fund ($ in millions) FY2019-20 FY2020-21 FY2021-22 FY2022-23 BUDGET TASK FORCE Revenue $633.34 $649.03 $654.38 $660.91 Expenditures 654.32 663.91 676.63 688.59 Revenue over (under) Expenditures ($20.98) ($14.88) ($22.25) ($27.68) Projected Ending General Fund Balance $64.72 $49.84 $27.59 ($0.09) Forecasted FY2020-21 Budget (5%) PPR, FY2022 (7%) PPR, FY2023 Flat PPR (Projected FY2020 YE) General Fund ($ in millions) FY2019-20 FY2020-21 FY2021-22 FY2022-23 CURRENT STATE Revenue $633.34 $610.42 $582.57 $583.97 Expenditures 644.55 639.30 640.70 640.95 Revenue over (under) Expenditures ($11.21) ($28.88) ($58.13) ($56.98) Note: these numbers will be updated as clarity is provided regarding CARES funding Projected Ending General Fund Balance $74.49 $45.61 ($12.52) ($69.49) and the School Finance Act is finalized 13

Timeline and Next Steps May 22 May 29 June 5 June 12 June 19 June 26 June 29 Updates on State Finalize any FY2020-21 Updates on State Review current Updates on State Legislation remaining Proposed Budget Legislation issues known; Legislation FY2020-21 Budget budget items State revenue Adoption Expenditure Other Funds Revenue Deep and Budget Further Deep Dive Dive assumptions discussion of options and draft of cost savings 14

Ensuring Financial Sustainability while Maintaining Excellence 15