July 24, 2012

CMS 2012-13 Proposed Budget

Framework for Budget Development

• Align resources to support Strategic Plan 2014

• Keep strong academic focus coupled with data driven decision making

• Recognize and plan for the impact of the economic environment and employ sound fiscal management

• Acknowledge uncertainty regarding expected funding levels from all sources, but use best information available to prepare plan

• Identify efficiency savings as well as reductions and resource redirections to offset rising costs

• Request funding from County for some sustaining operations cost increases (including cost of living increase and to cover student growth costs)

• Establish flexibility in the budget to allow for various reduction levels

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What were the results of final state & county

budgets?

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Budget Updates

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State Budget• State Budget was finalized on July 3 and final allotments were provided

to each district on July 12

• Reductions were less than expected from the state by $13 million (Reductions projected in our proposed budget were based on the 2nd year of the biennial state budget)

• State provided a 1.2% increase to all state paid employees

• Final state funding for CMS is $696.9 million; an increase of $34.5 million over the prior year

County Budget• County approved their budget on June 5

• Final county funding for CMS is $337.4 million; an increase of $9.1million above the prior year

What were the significant changes since the proposed budget?

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Changes since Proposed Budget

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• County funding increase of $9.1 million approved vs. $27.5 million requested

• $13.0 million – State reductions were less than expected:• Eliminated the planned increase in the discretionary reduction of $6.9

million • Decreased the discretionary reduction by $6.1 million from the 2011-12

level• Planned cuts were not restored, but savings helped cover local cost

increases for growth and sustaining operations

• $ .3 million – Salary and benefit adjustments • State provided a 1.2% increase for all state paid employees; transferred

cost from county to state allowing a shared cost of the 3% salary increase between state funding, additional county funding and CMS redirections

• Retirement rate was adjusted slightly from 14.31% to 14.23%• Market adjustments adjusted to actual

Note: Changes above consistent with estimate shared on June 26

Changes since Proposed Budget

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• $ 1.8 million – decrease in projected Other Local Revenue primarily due to decline in interest rates and indirect cost rates

• $ 1.0 million – decrease in average salary for state position allotments

• $ 5.1 million – net increase in state categorical allotments such as CTE, EC, At Risk as well as carryover funds in School Technology ($3 million)

• $ 6.8 million – net adjustments in federal allotments and carryover funding estimates for specific programs and services -i.e. Title I, EC, EduJobs

Changes since Proposed Budget

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• $ 3.6 million – decrease in fund balance appropriation

• $ .8 million – designated funding for Superintendent’s new initiatives

• $ .6 million – reinstated partial funding of AP and IB exam costs for students

• Maximization of state discretionary reduction (LEA adjustment) enabled the district to offset the decrease in other local revenue and add 78 additional teacher positions

Summary

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County funding increased by $9.1 million over the prior year. However, the proposed county request was funded as follows:

$ 9.1 million - Additional county funding provided by the BOCC

$ 6.5 million - County cost reduced for salary increase (state funded 1.2% for state paid employees)

$ .3 million - County cost reduced for decrease in retirement rate and market adjustment

$13.0 million - State reductions less than expected. Planned cuts were not restored, but savings helped cover costs for growth, sustaining operations and new initiatives

$28.9 million = County funding available for:

$27.5 million - Original County Request $ .8 million - Superintendent new initiatives for the coming year$ .6 million - Reinstate partial funding of AP and IB exam costs for

students

What is our Final Proposed Budget?

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2012-13 Proposed Budget 1,202,538,670$

2011-12 Adopted Budget 1,169,398,626$

Increase 33,140,044$

% Change 2.8%

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2012-13 Proposed Budget vs 2011-12 Adopted Budget

* Operating Budget only – does not include Capital or Enterprise Funds

2012-13 Proposed Budget*

SOURCES

$696.9M - 58%$144.3M - 12%

$337.4M - 28%

$23.9M - 2%

StateFederal/Special RevenueCountyOther Local

* Operating Budget only – does not include Capital or Enterprise Funds

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2012-13 Proposed Budget*

USES

$739.7M - 62% $250.9M - 21%

$124.3M - 10%

$65.9M - 5%

$1.5M - <1%

$20.2M - 2%

Salaries Benefits Purchased Services

Supplies and Materials Furniture and Equipment Other

* Operating Budget only – does not include Capital or Enterprise Funds

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Sources of Revenue Trend

35.0% 31.9% 30.9% 29.1% 29.4% 27.8% 26.3% 28.1% 28.1%

58.9%58.3% 59.0% 59.9% 60.2%

55.7% 55.2% 56.6% 57.9%

5.0% 7.9% 7.7% 8.2% 8.5%14.6% 16.1% 13.7% 12.0%

1.1% 1.9% 2.4% 2.8% 1.9% 1.9% 2.4% 1.6% 2.0%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

01-02 03-04 05-06 07-08 08-09 09-10 10-11 11-12 12-13

Recent Trend

County State Federal and Other Grants Other and Special Revenue

HistoryProposed

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Per Pupil Expenditure Trend

$2,418 $2,327 $2,234 $2,354 $2,451 $2,581 $2,621 $2,374 $2,228 $2,379 $2,410

$4,257 $4,250 $4,472 $4,500$4,835

$5,314 $5,360$4,756 $4,680 $4,799 $4,977

$503 $574 $651 $586$604

$726 $758$1,241 $1,370 $1,163 $1,030

$80 $116 $137 $141$186

$258 $247$173 $202 $132 $172

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

02-03 03-04 04-05 05-06 06-07 07-08 08-09 09-10 10-11 11-12 12-13

County State Federal and Other Grants Other and Special Revenue

Total Per Pupil:

Proposed

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Note: Reflects budgeted per pupil expenditure

7,294$ 7,288$ 7,498$ 7,626$ 8,148$ 8,868$ 8,912$ 8,533$ 8,480$ 8,473$ 8,589$

2012-13 Proposed Current Expense Budget

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State County Federal and Other Grants

Other and Special

Revenue Total

2011-2012 ADOPTED BUDGET 662,331,403$ 328,339,101$ 160,473,882$ 18,254,240$ 1,169,398,626$

REVISIONS TO 2011-2012 ADOPTED BUDGETA. Revisions to Base Budget* 1,143,323 - (30,562,299) (5,229,089) (34,648,065)

Sub-Total 1,143,323 - (30,562,299) (5,229,089) (34,648,065)

2011-2012 BASE BUDGET 663,474,726 328,339,101 129,911,583 13,025,151 1,134,750,561

I. REDIRECTIONS/REDUCTIONSA. Redirection of Funds to Alternative Uses - (23,294,643) - - (23,294,643)

Sub-Total - (23,294,643) - (23,294,643)

II. SUSTAINING OPERATIONSA. Salaries and Benefits 14,783,762 22,022,518 3,307,937 33,045 40,147,262 B. Program Continuation 4,153,184 6,069,116 11,029,474 A 10,941,420 B 32,193,194 C. Decrease to Prior Year LEA Adjustment 6,153,815 (6,153,815) - - -

Sub-Total 25,090,761 21,937,819 14,337,411 10,974,465 72,340,456

III. STUDENT GROWTHA. Enrollment Increases 8,291,909 4,301,430 - - 12,593,339

Sub-Total 8,291,909 4,301,430 - - 12,593,339

IV. PROGRAM EXPANSION AND NEW INITIATIVESA. Attracting/Retaining High Performers - 125,000 - - 125,000 B. Truancy Court Expansion - 75,000 - - 75,000 C. High School Class Size Adjustment - 9th Grade - 3,023,430 - - 3,023,430 D. Instructional Technology Positions for High Schools - 1,322,500 - - 1,322,500 E. Multimedia Support - 215,000 - - 215,000 F. Superintendent New Initiatives - 818,027 - - 818,027 G. Reinstate Partial Funding for AP and IB Exams - 570,000 - - 570,000

Sub-Total - 6,148,957 - - 6,148,957

TOTAL 2012-2013 PROPOSEDCURRENT EXPENSE BUDGET 696,857,396$ 337,432,664$ 144,248,994$ 23,999,616$ 1,202,538,670$

* Includes state revisions, reduction for prior year one-time fund balance appropriation and anticipated revenue adjustments to 2011-12 Adopted Budget.A Includes $4 million in funding from Project L.I.F.T. that will pass through CMS in 2012-13, primarily as reimbursement for staff salaries, bonuses and

stipends as part of the Project L.I.F.T. initiatives. Also includes $6.8 million in adjustments in Federal allotments and carryover funds for specific programs and services - i.e. Title I, EC, and EduJobs.

B Includes a one-time increase in fund balance appropriation of $10.9 million, deferred maintenance projects ($7.2m) and Common Core support ($3.7m).

2012-13 Total Proposed Budget

Proposed Budget % of TotalState of North Carolina 696,857,396$ 57.9%

Mecklenburg County 337,432,664 28.1%

Federal and Other Grants 144,248,994 12.0%

Other and Special Revenue 23,999,616 2.0%

TOTAL OPERATING BUDGET 1,202,538,670$ 100.0%

Capital Replacement 4,960,000

Enterprise Funds:Child Nutrition 64,400,741

After School Enrichment Program 14,389,658

TOTAL PROPOSED BUDGET 1,286,289,069$

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Key Highlights

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• We continue to optimize resources and identify efficiency savings for budget cuts and redirections ($23.3 million for 2012-13) to help cover rising costs.

• State reductions were $13 million lower than expected in the biennial budget –these planned cuts were not restored, but savings helped cover local cost increases for growth and sustaining operations

• The BOCC approved an allocation to CMS totaling $337.4 million - an increase in funding of $9.1 million over the prior year.

• Funding for the full 3% salary increase for all employees is being provided by the state (via the 1.2% increase for state paid employees), additional county funding ($9.1 million) and CMS redirections (reallocation of existing funds).

• We utilized all available funding from various sources to do what we had initially planned (as outlined in our proposed budget) including adding high school teacher positions and technology facilitators. We made two additions to our plan: Superintendent’s new initiatives and AP/IB exams ($1.4 million).

Key Highlights (cont)

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• The total budget increased by $33.1 million over the prior year adopted budget which includes an increase of $34.5 million from the state, an increase of $9.1 million from the county and a net decrease of $10.5 million in federal grants and other revenue. This equates to an overall 2.8% increase over the prior year.

• We are expecting total student enrollment of more than 140,000 students for this year.

• The 2012-13 total budgeted per pupil amount is $8589 compared to $8473 for 2011-12 – an increase of $116 per pupil over the prior year. The 2012-13 county budgeted per pupil of $2410 increased $31 per pupil over the prior year.

• As a point of reference, the 2012-13 proposed state funding of $696.9 million is $21.7 million less than our state funding for 2008-09 ($718.6 million) – a 3% decrease. The county funding of $337.4 million is $14 million less than the county funding received in 2008-09 ($351.4 million) - a 4% decrease. We have added almost 6000 new students since 2008-09 (a 4.4% increase).

Key Highlights (cont)

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• CMS will continue to align our resources with the Board of Education’s Theory of Action, Core Beliefs, and Strategic Plan 2014 goals including those strategies that have helped us increase academic achievement, close the gap and improve the graduation rate.

• The 2012-13 Proposed Budget as presented is fiscally sound and achieves the goals outlined in the budget development framework.

Review Budget Resolution Packet

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Conclusion

• Closing remarks• Q & A

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