BUDGET WORKSHOP

Presented By:Cindy Lesinski, CFO

OUR MISSION:

February 23, 2021

Protection of an excellent education

Protection of an effective workforce

Maintain the fiscal strength of the District

Protection of tax payer interests2

DISTRICT PRIORITIES

A high bar for student learning & excellence

Unsustainable cost structures Declining revenue

Before the pandemic, BPS faced a TRIPLE CHALLENGE

FINANCIAL OVERVIEW

A high bar for student learning & excellence

Unsustainable cost structures

Declining revenue

The pandemic grew our challenges at an exponential rate, as we navigate and plan for uncertainty in SY20-21 and SY21-22

Greater academic and social emotional student need

Greater financial pressure due to drop in sales tax revenue and reduced

student enrollment

Rising recurring costs with little flexibility in spending General Fund

allocations

FINANCIAL OVERVIEW

FY2020-21 IN REVIEW

State held district’s FEFP “harmless” based on 2020-21 projected enrollment

Allowed BPS to maintain critical staffing, programs, services to students, and operating levels

• BPS is an economic driver – No layoffs / No furloughs

Any district with enrollment growth will be funded proportionally by districts that enrollment declined; Brevard’s early projection estimated contribution is approx. $500K – 1.5M

GOOD NEWS FROM FDOE - #EO-7Maintains Financial Continuity for SY2020/21

Hold-harmless expected to sunset at the end of SY2020/21

Security $22.8M

Education Technology $37.6M

Facility Renewal $207.5M

2014 Surtax Program

TOTAL: $267.9M

Security $36M

Education Technology $36M

Facility Renewal $168M

Surtax Renewal Program(estimated)

6-YEAR TOTAL: $276M

Charter School Allocation $36M

POSITIVE BUDGET IMPACTS FROM HALF-CENT SALES SURTAX EXTENSION

Projected Health Insurance Trust Fund shortfall was $25.6M by 12/31/2021. Today, projected shortfall is $9.6M*

* Updated by prior consultant in December 2020 ** Projections as of May 2020 from prior consultant. Updated projections forthcoming from new consultant

POSITIVE STRIDES IN HEALTH CARE

School Board Action: $4.7M recurring contribution $5M one-time contribution into trust fund

Plan Design Changes: Total projected savings/revenue increase to trust fund,

$5.8M**

Employee premium increase on the existing health plan, revenue of $1.7M*Employees were also provided a network plan option with

no premium increase

Here’s What We Did:

District’s Share of ESSER Funding (one-time funds) = $15M

Currently expended/encumbered $8.1M (54%)

Funds available through September 30, 2022

BPS’ priority focus areas:

1. Academic Enhancements: Extended school day in high priority schools, year long

academic support and tutoring in every school, and extended ESE support services

2. Health & Safety Extensive PPE – sanitizer, masks, plexi-glass dividers,

disinfectant misting machines, enhanced HVAC filters, Custodial “Strike Team”

3. Technology Laptop computers and technical support services,

hotspot devices and services

4. Workforce Support Additional custodial staff and extended summer hours

for guidance counselors, 10-month administrators and support staff

Intended for one-time costs and should not align with recurring costs

POSITIVE BUDGET IMPACTS FROM ELEMENTARY & SECONDARY SCHOOL EMERGENCY RELIEF (ESSER)

ADDITIONAL COVID-19 EXPENSES(not funded through ESSER)

Additional Costs of COVID-19

Block Scheduling (SY2020-21) $600,000

Computer Replacements $240,000

Unemployment Claims (CY2020 & ½ of CY2021*) $900,600

Athletic Costs Not Covered by Gate $300,000

Increased COVID Related Health Care Costs $2,100,000

COVID Leave Costs $1,300,000

Increased HVAC Hours $1,900,000

Lost Revenue Due to COVID-19

Brevard Afterschool (Fiscal Years 2020 & 2021) $2,800,000

Facility Rentals (School/District) $142,700

Total $10,283,300

Will need to be addressed by end of FY2020-21

* 4th quarter of CY20 and quarters 1 & 2 of CY21 are estimates. The total represents what we paid, which was 50% of what was billed to the State.

LOOKING AHEAD FY2021-22 & BEYOND

BPS FTE GROWTH – BY TYPESchool Year District Gain/Loss Charter Scholarship Total Gain/Loss2010-11 66,797.38 - 3,398.28 1,017.00 71,212.66 - 2011-12 67,416.19 618.81 2,541.10 1,085.00 71,042.29 (170.37) 2012-13 66,780.35 (635.84) 2,503.38 1,245.50 70,529.23 (513.06) 2013-14 65,027.92 (1,752.43) 3,749.80 1,293.00 70,070.72 (458.51) 2014-15 65,536.16 508.24 4,272.50 1,310.65 71,119.31 1,048.59 2015-16 65,292.30 (243.86) 4,972.73 1,368.50 71,633.53 514.22 2016-17 65,681.74 389.44 5,312.52 1,414.00 72,408.26 774.73 2017-18 65,210.75 (470.99) 5,896.54 1,359.50 72,466.79 58.53 2018-19 64,772.03 (438.72) 6,538.71 1,334.95 72,645.69 178.90 2019-20 64,508.63 (263.40) 6,904.35 1,693.14 73,106.12 460.43 2020-21* 64,439.48 (69.15) 7,554.58 1,695.37 73,689.43 583.31 2021-22P** 61,738.41 (2,701.07) 7,575.08 1,978.57 71,292.06 (2,397.37)

All figures from 2010-2020 are from the Final FEFP Calcualtions*2020-21 figures are from the 2nd FEFP Calculation**2021-22P figures are projected

Estimated 2021-22 revenue loss due to enrollment decline is $20.7M

66,797.38 67,416.19

66,780.35

65,027.92 65,536.16 65,292.30 65,681.74

65,210.75 64,772.03 64,508.63

60,560.67 61,738.41

3,398.28 2,541.10 2,503.38

3,749.80 4,272.50

4,972.73 5,312.52 5,896.54

6,538.71 6,904.35 7,401.57 7,575.08

1,017.00 1,085.00 1,245.50 1,293.00 1,310.65 1,368.50 1,414.00 1,359.50 1,334.95 1,693.14 1,932.17 1,978.57 -

2,000

4,000

6,000

8,000

10,000

60,000

62,000

64,000

66,000

68,000

70,000

2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21* 2021-22**

District District Hold Harmless Charter Charter Hold Harmless Scholarship Scholarship Hold Harmless

BPS FTE GROWTH BY TYPE

524,585,924532,256,136

554,598,163

565,927,939

554,447,525

591,244,229

2018 2019 2020 2021 2022 2023

BPS Funding BPS Funding Trend Funding Estimate without Hold Harmless EDR Forecast

In 2020/21 Hold Harmless allowed school districts to keep the entirety of estimated per student funding even if the actual enrollment was down

HOW DO WE MANAGE FUNDING REDUCTIONS?

All models are wrong but some are useful

In 2021/22 Law makers intend to align the per student funding to actual enrollment

↑ COVID HITS ↑ VACCINATIONS BEGIN

Classroom Teacher (40% of 1.0 FTE)

Other Staffing & Fixed Operating Expenses (60% of 1.0 FTE)

NOTE: List above provides some examples, but is not exhaustive and represents approximations

$3,075

$4,605

School-Based Staffing: Media Specialists Guidance Counselors PE, Art, Music, STEAM, Drama, and

Electives Teacher Social Workers School Nurses Instructional Assistants Technology Specialists School Resource Officers Custodians

Transportation Bus Drivers Routers Mechanics Fuel

Utilities Maintenance Services HVAC Electricians Plumbers Carpentry

HOW 1.0 FTE IS ALLOCATED1.0 FTE = $7,680

Loss of FTE

Revenue for 100 Students

Less Loss of FTELoss of

Teacher(s) Expenditures

Revenue Shortfall to be

made up by the District

767,991.00 0.00 767,991.00 0.00(1) 760,311.09 0.00 767,991.00 (7,679.91)

(10) 691,191.90 0.00 767,991.00 (76,799.10)(20) 614,392.80 (61,478.55) 706,512.45 (92,119.65)(40) 460,794.60 (122,957.10) 645,033.90 (184,239.30)(60) 307,196.40 (184,435.65) 583,555.35 (276,358.95)(80) 153,598.20 (245,914.20) 522,076.80 (368,478.60)

(100) 0.00 (307,392.75) 460,598.25 (460,598.25)

Aligning staffing with enrollment makes up only 40% of the projected loss

RELATIONSHIP OF REVENUE/EXPENDITURESExample of a Reduction of 100 Students (FTE)

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

(1) (10) (20) (40) (60) (80) (100)

Revenue ExpendituresNote: Reductions in Intervals of 20 students = 1 classroom does not automatically presume the reduction of a classroom teacher

Enrollment Stability

FRS Increase

Employee Compensation (compression)

State Budget Uncertainty

Self-Insured Medical Plan

Additional COVID-19 Expenses not funded by ESSER

Overall Financial Condition

2020-21 BUDGET CHALLENGES

These challenges will continue into FY2021-22 and the State budget remains uncertain

Recurring CostsHealth Care $5,700,000FRS Contribution $2,200,000SRO’s $360,000$10 Min Wage for 2022 $87,000Grant-Style Expenditures $1,000,000Total $9,347,000Non-Recurring CostsHealth Care $7,000,000Textbook Adoption $10,000,000Total $17,000,000

The full impact of enrollment decline is uncertain

Increased health care costs – based on preliminary projections $5.7M (recurring) contribution

$7M one-time contribution to meet reserve requirements

Increase in Florida Retirement System contribution -$2.2M (recurring)

Increased (recurring) costs in services

SROs - $360K $10 min wage for 2022 - $87K Grant-style funded positions & athletic subsidy - $1M

Underfunded textbook adoption – early estimate $10M (non-recurring)

WHAT WE KNOW... 2022 WILL BE CHALLENGING

Continued increases in FRS

Textbook adoption

Rising Health Care costs

Enrollment

FY23 & BEYOND BUDGET CHALLENGES

Estimated increase in minimum wage (not cumulative): FY22 - $10 on 9/30/21 – $ 87K FY23 - $11 on 9/30/22 – $ 57K FY24 - $12 on 9/30/23 – $127K FY25 - $13 on 9/30/24 – $988K FY26 - $14 on 9/30/25 – $2.5M FY27 - $15 on 9/30/26 – $ 3.6M

Current Budget analysis for reductions and/or cuts

Fund Balance analysis to meet one-time expenses

NEXT STEPS/PREPARATIONS Developing ongoing academic support

and acceleration plans

Enrollment recovery efforts

Enrollment marketing plan

Protection of an excellent education

Protection of an effective workforce

Maintain the fiscal strength of the District

Protection of tax payer interests21

DISTRICT PRIORITIES

Senate and House indicating the lack of revenue to fund the Governors budget

Governor’s Budget serves as a guide to his fiscal priorities

Teacher Pay Allocation - $550M…increase of $50M to continue raising the minimum K-12 teacher salary to $47.5K

Mental Health - $110M …increase of $10M over current year funding

Per Student funding – increases by $243

FRS Employer Rate Increase

2020-21 BUDGET ADOPTION TIMELINE March 23, 2021 – Capital Outlay Workshop

April 13, 2021 - Budget Update Workshop

June 8, 2021 – Budget Update Workshop (Tentative)

July 24, 2021 – Advertisement of 2021-22 Tentative Budget

July 29, 2021 – 1st Public Hearing on Budget

September 9, 2021 – Final Public Hearing on Budget

THANK YOU