Fiscal Year 2016 Superintendent’s Proposed

Operating Budget Board of Education of Charles County

Public Schools January 13, 2015

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Agenda

• Objectives

• Revenue Increases

• Requested Cost Increases

• Financial Overview

• Future Financial Considerations

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Objectives • Submit a budget that reflects the basic needs of the system and

avoids program or personnel reductions.

• Keep the focus on student achievement and maintain funding for the classroom. Address State mandated testing requirements.

• Maintain core programs and progress.

• Provide Phase II base funding for St. Charles High School.

• Request base funding for salary increases so employees are placed on proper longevity STEPS/LEVELS.

• Utilize fund balance to address deferred maintenance.

• Maintain employment and avoid furloughs or layoffs. 3

REVENUE INCREASES

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State Funding $1.6 Million Increase

($5.0)

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$5.0

$10.0

$15.0

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State Incremental Funding $ in Millions

Note: FY 2012 reflects federal ARRA and Ed jobs funding.

Total increase in State revenue is based on preliminary estimates of $1.6 million, or 1.0 percent.

State revenues are based on changes in enrollment, county wealth, and free-and-reduced-meals program eligibility relative to all other counties.

• Full-time equivalent enrollments decreased from the previous fiscal year by 111.75 students, or 0.4 percent.

• State Compensatory Aid is based on eligible Free and Reduced-Price Meal Students (FARMS). Enrollments increased 281 students or 3.1 percent from last fiscal year. The total FARMS rate is 35.0 percent.

• Geographic Cost of Education Index (GCEI) funding base is $2.2 million.

State funding will change based on the legislative budget process, which ends mid-April.

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County Funding $22.7 Million Increase

($1.0)

$4.0

$9.0

$14.0

$19.0

$24.0

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County Incremental Funding $ in Millions

Note: 2013 includes state retirement 2014 include $2.0M one-time funding.

Total County funding request is an increase of $22.7 million or 14.0 percent.

State Law (Article 5-202) requires the minimum Maintenance of Effort (MOE) funding level to be no less than the prior year’s per pupil funding amount, adjusted by the change in enrollments. The County MOE funding requirement is $684,234 less than FY2015.

County funding also includes required allocations to support the teachers’ pension in accordance with the Budget Reconciliation and Financing Act of 2012 (Senate Bill 1301/House Bill 1801).

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Other Revenues • Fund Balance Transfer – $2.0 Million

– Total use of fund balance is $5.2 million; $3.2 million for general fund operations and $2.0 million for deferred maintenance projects.

– The fund balance obligation will be reduced, to the extent possible, from savings related to employee turnover and retirements.

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Other Revenues • Food Service Meal Price Increase

– The Healthy, Hunger-Free Kids Act of 2010 requires the school system to set meal prices equal to (or above) the Federal reimbursement rate for Free and Reduced Meals.

– The law limits the amount of the increase to $0.10 in any one-year period.

– This required increase would raise lunch prices for the 2015 – 2016 school year to $2.55 for elementary students and $2.80 for secondary students.

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REQUESTED COST INCREASES

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Health Care Costs Insurance $6.0 Million

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$20.0

$25.0

$30.0

$35.0

$40.0

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…

General Fund Actual Expenditures

($ in Millions) The budget includes a cost increase of $6.0 million, or 21.0 percent over the FY2015 budget.

Funding would provide for FY 2015 base budget shortfalls in addition to anticipated industry trend cost increases for FY 2016.

An ongoing insurance committee is reviewing health care costs. The potential impact of the Affordable Care Act is under review.

Changes in benefits are subject to union negotiations and directly impact overall compensation.

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St. Charles High School Recurring Cost: Phase Two - $1.6 Million

Recurring operating funds are requested for the new high school based on additional enrollments and maintaining class size:

• Expected FY2016 enrollment of 1,370 students

• 24 new staff positions related to 392 additional students

Total amount requested is $1.6 million

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Description FTE Amount $*

Teachers 16 1,169,563

Instructional Assistants

3 93,725

Building Service Personnel, Pool Manager

3 129,120

Vice Principal and Guidance Counselor

2 206,069

Total Compensation

24 1,598,477

Supplies and Materials

30,723

Total Request $1,629,200

*Note: Includes employee benefits

Teachers’ Pension $955,800

The budget increase required by the Budget Reconciliation and Financing Act of 2012 (BRFA [Senate Bill 1301/House Bill 1801]) to support the teachers’ pension is $955,800 more than last fiscal year.

The following chart shows the expected funding streams from county government for fiscal years 2013 through 2016.

The funding streams are in addition to the required MOE amount calculated under the Education Article 5-202.

In FY2016, this cost will be offset by a county revenue increase of $948,300. The net impact on the operating budget is $7,500.

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2013 2014 2015 2016

Pension Funding Requirements

$ in Millions

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Bus Contracts - $780,000

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$30.0

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Student Transportation Actual Contractual Expenditures

The school system’s operational bus fleet is 340 (331 contractual and 9 owned by CCPS).

This request will provide funds to replace 17 buses beyond the 15-year limitation, and four additional special education buses to accommodate 100 new special education students.

State transportation funding represents 41 percent of transportation expenditures.

In FY 2011, Charles County ranked 5th in the state out of 24 counties in cost per pupil attending ($929.46). 13

Project Lead The Way – Technology Education - $324,200 Description Amount $

Materials of Instruction (consumable materials for all programs)

186,600

Student and Teacher Laptops (55 total laptops)

59,600

Core Teacher Training (37 teachers)

78,000

Total Request $324,200

Funds would support STEM programs including Gateway to Technology, Pathway to Engineering and Biomedical Sciences.

Cost includes:

• the cost of required teacher training (registration fees, stipends, travel and lodging),

• materials of instruction (instructional supplies and equipment)

• Technology.

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Other Mandatory Costs • Maryland Association of Board of Education Insurance

Premium - $260,500

– This budget request reflects an insurance premium increase for workers’ compensation (10.0 percent) and an increase for property / liability insurance (5.0 percent).

• Nurses’ Contract - $138,000

– Contract increases of 4.4 percent, for benefits.

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CONTRACT ASSUMPTIONS Reserve for Negotiations $13.2 Million

This request is to set aside funding for FY 2016 contract negotiations including STEP/LEVEL increases and salary scale compression with the Education Association of Charles County (EACC) and the American Federation of State, County and Municipal Employees (AFSCME).

In addition to FY 2016, the system needs to provide two additional STEP/LEVEL increases for FY 2011 and FY 2015.

The chart includes data based on the current scales and salary grades prior to negotiations, which can change how salaries are distributed. There is no COLA provision included in this proposal.

Description Estimate $ Comment

EACC LEVEL 3,135,000 One Level = 3.1 % avg.

Average LEVEL 1,927 65 percent affected

EACC 1% COLA 1,662,000

AFSCME STEP 653,000 One STEP = 1.6% avg.

Average STEP 576 88 percent affected

AFSCME 1% COLA 486,000

Reserve for Grade Increases

612,000

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

Trends in Cost-of-Living Adjustment (EACC)

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Other Cost Increases • Positive Alternative to School Suspension (PASS) - $637,000

– The PASS program will be designed to help each high school to meet the criteria outlined by Maryland State Department of Education (MSDE).

– The request provides funds for one teacher and one instructional assistant at each high school.

• Computer Analyst Positions (9 positions) - $359,500 – Provide support for PARCC testing and instruction at the

elementary and middle school levels.

• Maintenance Projects - $2,000,000 – Provide funds for asphalt, infrastructure and roof

repairs.

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FINANCIAL OVERVIEW

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Trends in Full-time Equivalent (FTE) Student Enrollments

(300.0)

(200.0)

(100.0)

-

100.0

200.0

300.0

400.0

500.0

600.0

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Student Enrollment Change in Full-Time

Equivalent (FTE) For FY2016, preliminary estimates for

student enrollment are expected to reach 25,501, an increase of 0.4 percent (89 students more than the previous year).

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Fiscal Year FTE Change Percent 2004 24,451 992 4.2%

2005 25,012 562 2.3%

2006 25,479 467 1.9%

2007 25,797 318 1.2%

2008 25,843 46 0.2%

2009 25,861 17 0.1%

2010 25,897 36 0.1%

2011 25,955 58 0.2%

2012 25,870 (85) -0.3%

2013 25,717 (153) -0.6%

2014 25,524 (193) -0.8%

2015 25,412 (112) -0.4%

2016 Est. 25,501 89 0.4%

FY2015 Budget Operating Cost Per Pupil = $12,774

(An increase of $321.00 from the previous fiscal year)

Instruction (Classroom)

Central Administration

Maintenance, Operations & Capital

Outlay

$0.12

Student Transportation

$0.08

$0.67

$0.03

Student & Community Services

$0.01 $0.09

School Administration

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FY2015 Budget By Object $327 Million

Supplies & Materials, Equipment

3%

Contracted Services

12%

Other (Utilities, Transfers etc.)

4%

Salaries & Wages

61%

Employee Benefits

20%

Compensation 81%

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Revenue Schedule Description Amount $

FY2015 Revenue Budget 327,336,800

Incremental Changes:

Local Revenues

Teachers’ Pension (SB1301) 948,348

Maintenance of Effort (MOE, 111.8 student decline) (684,234)

Additional Base Funding Request 22,435,585

Total Local Revenues (14.0 percent increase) 22,699,700

State Revenues (Preliminary 1.0 percent increase) 1,584,500

Fund Balance Transfer (Total of $5.2 million) 2,000,000

Total Incremental Changes 26,284,200

FY2016 Revenue Budget 353,621,000

Percent Increase 8.0 percent

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Expenditure Schedule Description Amount $

FY2015 Expenditure Budget 327,336,800

Requested Cost Changes:

Health Insurance 6,000,000

St. Charles High School Recurring Cost (Phase two of two) 1,629,200

Teachers’ Pension (SB1301) 955,800

Bus Contracts (replace 17 buses, add 4 special education routes) 780,000

Project Lead The Way – Technology Education 324,200

MABE Insurance Premium 260,500

Nurses’ Contract (Estimate) 138,000

Reserve Negotiations (Estimate three STEP/LEVEL cost) 13,200,000

PASS Program and Computer Analyst Positions 996,500

Maintenance Projects 2,000,000

Total Requested Cost Changes 26,284,200

FY2016 Expenditure Budget 353,621,000

Percent Increase 8.0 percent

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Future Financial and Program Considerations

• Funding OPEB (Other Post-Employment Benefits) Requirement ($35.3 million ARC)

• Funding Partnership for Assessment of Readiness for College and Careers (PARCC) testing requirements

• Financial Impact of the Affordable Care Act Requirements and managing health care costs.

• Unmet Requirements (Supplemental Budget Request, deferred maintenance projects, GWWO study, technology)

• Funding STEP/LEVEL increases and cost-of-living adjustments. Address starting teacher salaries.

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Next Steps

• BOE work-session – January 26, 2015

• BOE final approval – February 10, 2015

• BOE budget submission to the county – February 27, 2015

• Negotiations with unions – Mid April 2015

• End of legislative session – Mid April 2015

• County government public hearing – April 22, 2015

• Board adopts final budget based on final cost estimates, funding levels and contract ratifications – June 9, 2015

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