HomeMy WebLinkAboutAgenda - 04-27-2010 - Attachment 1A-~}~~n~~~ ~
TO: Orange County Board of Commissioners
FROM: Neil G. Pedersen
Superintendent
RE: CHCCS Board of Education's Budget Request
DATE: Apri120, 2010
We look forward to sharing the Board of Education's Budget Request for 2010-11 with the Board
of County Commissioners on Apri127~'. In recent years it has become increasingly challenging
to prepare a budget request due to the downturn and uncertainties in the economy. The Board of
Education is acutely aware of the financial constraints under which the Commissioners are
working, and for the last two years has submitted requests that are sensitive to the scarcity of
resources. For the 2010-11 school year, we are asking, basically, for the anticipated increase in
fixed costs and the replacement of some lost federal grant funding. We also are requesting that
the Commissioners fund the additional 94 students that we are projected to receive over our 2009-
• 10 budget projection. The bottom line is a request for an increase in the per-pupil appropriation
of $62 or a 2% increase in per-pupil expenditures. This per-pupil appropriation would still be
less than the appropriation that we received two years ago in 2008-09.
The Superintendent already has identified $316,914 in central office savings, which will allow us
to fund an Instructional Resource Teacher (IRT) position in each of our three comprehensive high
schools. Improvement in student achievement at the high school level has been minimal in recent
years, and we believe that these IRT positions are necessary to provide the required attention to
the instructional programs in our comprehensive high schools.
If the County were to provide us with the same amount of funding based on the county per-pupil
appropriation as we received last year, we would need to identify another $1,023,864 in
reductions.
The second year of the state's biennium has two major reductions for K-12 education: an
increase in the discretionary reduction and the elimination of any funding for textbooks. We will
need to identify how to reduce $666,183 from our state budget, and it is assumed that we won't
replace any textbooks.
In addition, the Governor has asked state agencies to develop 3, 5, and 7 percent budget reduction
scenarios. A 3 percent reduction in state funding for our district translates into a $1,680,000
reduction. In the Governor's budget released today, we learned that the overall reduction for K-
12 education is about 4 percent (including the reductions already included in the approved budget
for the second year of the biennium.). If the County were to hold our per-pupil appropriation
funding at last year's level and the state were to institute a 4 percent reduction in funding for
• schools, the Chapel Hill-Carrboro City Schools would have to identify approximately $3.3
million of reductions.
In the last Manager's meeting with the superintendents, the Manager indicated that if schools
were to receive 48.1% of next year's budget, this would result in the loss of another $1.3 million •
in local funds. If this were to occur, the total reduction that we would need to make in our state
and local budget would amount to $4.6 million.
The Manager raised the question of the school districts using capital funds for operational costs
next year. Last year, our Board of Education did not want to pursue this course because of the
limited funding that we currently receive for capital needs. Outside of our operational budget, the
district receives two sources of funding to help maintain our existing facilities and fund our
technology infrastructure. These two sources are the recurring capital budget and the capital
investment plan (CIP).
Our recurring capital budget is the primary source of funding for ongoing maintenance needs
such as HVAC, electrical, and plumbing repairs. It is also the main source of funding for ground
repairs, including ensuring our playground structures meet safety code compliance and repairs to
ball fields. The recurring capital budget also assists schools with a small amount of funding to
replace damaged furniture or to purchase new furniture as enrollment grows. The CIP helps
provide funding for larger non-recurring projects such as roofing projects, HVAC equipment
replacements, and other major maintenance projects. The Board of Education has historically
prioritized health and safety projects first. Typically, funding is exhausted before we complete
our list of recommended health and safety improvements.
Annually, we receive cash flow estimates from the Orange County Budget Office based on
projections in Pay-As-You-Go and Lottery funds. Based on the newest set of projections,
available cash for capital projects over the next ten years has been reduced by $3.5 million from
last year's plan. The reduction is a result of decreased levels in Pay-As-You-Go funds. It should •
be noted that this year's CIP decrease of over $3.5 million follows last year's reduction of over
$6.5 million. This equates to over $10 million being reduced from our ten-year CIP. As a result,
current and future building maintenance projects, infrastructure improvement projects, and
technology projects have all had to be significantly reduced."
Using capital funds to fund the operating budget is a shortsighted, partial solution. If the
downturn in revenues were projected to last only another year, it might be something to consider.
However, most financial experts project a very slow recovery in the state and the nation. In
addition, in 2011-12 our district will face a loss of more than $5 million in federal stimulus and
stabilization funds. This drop in federal funding is what public officials across the state refer to
as "the cliff." The best way to prepare for this precipitous drop in funding is to go into the next
year with sound funding for education.
We know that you will be faced with very difficult choices as you prepare a balanced budget for
next year. The quality of education in Orange County has been a major point of pride for its
residents and an economic engine for growth and development in the County. We ask that as
County Commissioners you do all within your power to provide the funding necessary to
maintain the quality of education that the young people of this County deserve.
Lincoln Center, 750 S. P~lerritt Mill Road ®Chapel Hill, NC 27518-2878 • (919) 987-8211 s ~Nww.chccs.kl2.nc.us •
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• Superintendent's 2010-11 Operating Budget Message
As we prepare the 2010-11 operating budget request to the Board of County Commissioners,
we find ourselves in a position similar to where we were last year at this time. The County
Commissioners, once again, are speaking about holding the line on tax rate increases. With
burgeoning capital debt payments, staffmg of new county facilities, and lagging revenue
collections, this translates into the likelihood of the two school systems' per-pupil
appropriation remaining the same or, perhaps, even decreasing as it did last year.
Consequently, for the most part, the budget process this year becomes one characterized by
finding ways to reduce spending more so than proposing how to enhance the quality of
education for our community's children. In the past four years, the school district has made
reductions in expenditures totaling more than $4.3 million in its operating budget. This has
been done to adjust to declining appropriations and to free up funds for other purposes;
whether they be program enhancements or mandated expenditures. After making deep
reductions last year, we find it increasingly difficult to identify further reductions that won't
impact the delivery of instructional services.
Unlike last year, I am proposing that we not take steps to prepare for the worst-case budget
scenario. Although this process worked fairly well last year, it is unsettling to teachers and
other staff to have the threat of losing their positions hanging over their heads. I recommend
that we make decisions regarding the reductions that we now know we'll need to make,
• notify any affected staff, and then monitor budget developments in Raleigh and locally from
that point on. This may mean that a limited number of our staff could be subjected to our
Reduction in Force policy over the summer. It also could mean more severe spending
freezes next year to achieve savings necessitated by last minute decisions in Raleigh.
The basis for our budget is the identification of a continuation budget that would provide
funding to continue the current level of services. As a result of direction that we received
from the Board of Education at its February planning conference, we also are including some
expansion items in our budget that will be offset by reductions in the central office budget.
The result is a total budget request that is less than what our continuation budget would be,
but does require an increase of $62 (2%) per student in the County's per-pupil appropriation.
Local Revenues
This recommended budget is based on the need for local revenues totaling $60,165,493. It
would require a $62 increase in the county per-pupil appropriation next year and funding for
94 additional students, which will increase our state projected enrollment to 11,834 students.
This would provide us with an increase in the county appropriation of $1,023,864. The
County has indicated that the district tax base is projected to be flat next year; no inflationary
increase at all. The total increase from all local revenue sources would be $1,087,077. In
addition, our auditors have advised us to budget reimbursements that we receive from UNC-
Chapel Hill for the Hospital School and reimbursements from the County for nurses as
revenues; however, matching expense increases in our operating budget offsets them. If we
include these revenues, then our projected revenue increase for 2010-11 is $1,761,012.
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Continuation of Services •
In order to continue the current level of services to students, our local budget is projected to
increase by $1,907,950. This includes the expenses for the Hospital School reimbursement
($254,250) and the salaries for nurses for whom we are reimbursed by the County
($419,685). It also includes a $302,534 for Limited English Proficient (LEP) student
programs. A grant supporting immigrant students expired last year that we had used to fund
these programs. This year we used carry-over funds but they must be spent by the end of this
school year. Utility costs are projected to increase by 5% or $153,009. The other large
increases in expenditures are for the increased cost of the employer's share of health
insurance ($294,193) and for the state retirement employer match ($367,850). We have no
control over the costs of these state-run programs.
Other additional continuation budget items include the following:
• $25,000 for additional revenue sharing with charter schools as a result of a recent
State Supreme Court decision;
• $67,429 to reflect the additional cost to employ three full-time, certified athletic
trainers at our comprehensive high schools. Two of these trainers are already in place
at Carrboro High School and at East Chapel Hill High School.
• $24,000 to make up for the loss of grant revenues to support school-based mental
health services.
This budget analysis does not include any provision for salary or step increases. Ultimately,
this decision is made at the state level. The cost to the district if the state were to grant step •
increases to teachers is approximately $400,000. This budget also makes no provision for
salary increases for classified staff or non-building based administrators.
State Reductions
At this time, the only reductions in the second year of the state biennium budget of which we
are certain is a 35% increase in the discretionary reduction, which will be $666,183 for our
school district and the elimination of funding for textbooks. A discretionary reduction
requires local school districts to reduce state appropriations in the areas where they see fit to
do so. Last year, the discretionary reduction of approximately $1.9 million came from
classroom teacher positions. That reduction will remain in place. We do not plan to replace
the funds lost by the elimination of state funding for textbooks. We have some carryover
funding that we will use on an as-needed basis. There will be no district-wide adoption.
After considering a number of different possibilities for a discretionary reduction and
conferring with principals and other administrators, the Superintendent, reluctantly,
recommended that we reduce the allocation of teacher assistants to third grade classes from
one full-time position to a half-time position. This would eliminate approximately 20 teacher
assistant positions across our 10 elementary schools. This allocation would result in K-2
teachers having full-time assistants and teachers in grades 3-5 having half-time positions.
We staff K-3 classrooms at 21 students per teacher and 4-5 classes at 26 students per teacher.
Schools could request waivers to allocate their teacher assistant positions differently. We
anticipate that much of the reduction in positions can be achieved through attrition at each
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• school. If not, each principal will be asked to recommend which teacher assistants will not
return, using performance as the primary criteria.
The Board of Education has not endorsed this recommendation. Later in the budget process,
the Board will consider this possibility along with many others that are under consideration.
Furthermore, with state revenues lagging behind projections by 2-3%, we have been advised
to prepare plans fora 3% reduction in our state budget, which would translate into an
additional $1.7 million reduction.
We also anticipate a reduction in our ESL teacher positions due, primarily, to the loss of a
federal grant. In this recommended budget we do not make any provision for funding or
retaining these ESL teacher positions. The recommended budget would keep the Welcome
and Newcomer Centers open.
It is quite possible that due to revenue shortfalls the state will make further cuts in our
allocation. In this budget analysis we do not make provisions for further reductions. If they
occur, we will have to identify additional areas for reduction.
Expansion Requests
Knowing the economic climate, we did not encourage schools and departments to spend
much time on developing budget requests. We received a request for $140,000 from the IT
Division and school requests totaling $255,241. We also received a plan for expanding the
Blue Ribbon Mentor Advocate Program, but this would be funded through private grants.
• We have included two expansion budget items. The only budget request from schools or
departments that is included in this recommended budget is fora 20 percent increase in
custodial supplies, at a cost of $52,985. For years, schools have been running deficits in this
account. With the many reductions that schools have had to make in their non-personnel
budgets, they can no longer solve this shortfall by transfemng funds from other areas.
We also are recommending the creation of three high school Instructional Resource Teacher
positions; one for each comprehensive high school. The IRTs' sole responsibility will be to
support and enhance the quality of instruction in the high schools and, thereby, raise overall
achievement levels and close the achievement gap. They may not be given any assignments
except those related directly to instruction. Our current level of administrative staffing in our
high schools doesn't provide the time that is needed to work effectively with departments,
PLC teams, assessment, struggling teachers, and implementation of new instructional
programs and effective teaching practices. These positions would be staffed by certified
teachers and paid for 11 months on a teacher salary schedule. The budget for these three
positions is $270,000.
We are going to reallocate some of our state funds in the budget for at-risk students (Program
69). As a result of using the cost-saving model implemented last year to hold down the costs
of summer school, we are allocating $210,000 for the comprehensive high schools to use to
transition rising ninth graders to their schools ($80,000 for CHHS, $80,000 for ECHHS, and
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$50,000 for Carrboro High school). Another $40,000 will be allocated to Phoenix Academy •
High School for expansion of hours and/or services.
Potential Reductions or Savings
We gave the entire district staff an opportunity to suggest areas for reducing our budget.
Their suggestions were shared with the Board of Education at its annual planning conference
in February.
We recommend not increasing the utility line items, thereby saving $153,009. The utility
lines have been slightly under-spent in recent years and we are taking energy conservation
measures that are intended to allow us to hold the line on utility expenses.
In addition, as part of our budget review process and knowing that reductions were
inevitable, the administration identified potential central office savings of $316,914. A
detailed accounting of these reductions has been shared with the Board.
Budget Uncertainties
It's still very early in the budget process. This budget that I'm recommending to the Board
of Education is a "best case scenario." The state is experiencing a shortfall in revenues for
the 2009-10 fiscal year; therefore, it's quite possible that the state budget for the second year
of the biennium will be reduced further. Recently, superintendents were advised to plan for
an additional 3 percent reduction in our state allocations, which would translate into an
additional $1.7 million reduction in our state budget.
Informall we have heard from the Count Manager and County Commissioners that we •
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should anticipate receiving approximately the same county appropriation next year that we
received this year. This budget that we are submitting to the Manager is based upon a
request to increase the per-pupil funding by $62 per student, or a 2% increase, and funding
for the 94 additional students whom we are expected to receive. Last year, per-pupil funding
was decreased by $144; therefore, this increase would still leave us well short of funding
levels in 2008-09.
Below we have indicated the financial repercussions of receiving less funding than requested:
If the per-pupil appropriation is not increased, we will need to make an additional
$732,840 in reductions.
If we receive the same dollar amount as last year from the county appropriation, we
will need to make an additional $1,023,864 in reductions.
Although we're advocating fora "best case" scenario budget, the worst case budget would
require further reductions amounting to almost $3.4 million:
Increase in state discretionary reductions $666,183
3% overall reduction in state funding 1,680,000
Same dollar allocation from the County 1,023,864
TOTAL $3,370,047
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• The administration will be prepared to recommend further reductions if that should become
necessary, although the worst-case scenario reductions would be catastrophic. They would
come on the heels of reductions of a similar magnitude made last year. If the County
Commissioners can restore $62 of the $144 reduction in per-pupil funding that we
experienced last year and fully fund the additional 94 students who are projected to enroll in
our school district, it will help greatly as we prepare a budget that would continue the level of
educational excellence that this community expects. Even under this best-case scenario, we
would be identifying $666,183 for reductions in our state budget and reducing the central
office budget by $316,914.
Respectfully submitted,
Neil G. Pedersen
Superintendent
Revised: March 30, 2010
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CHAPEL
HILL - CARRBORO CITY SCHOOLS
PAST FOUR YEARS' LOCAL FUND BUDGET REDUCTIONS _--
7. CENTRAL OFFICE REDUCTIONS vv~~GJ
Central Office Salary and/or Position Reductions (est. 3 FTE)
Non-personnel reductions
Professional Development Services provided to Teachers
Professional Development provided to School Administrators
Professional Development Allocation for School Administrators
Professional Development School Allocations ($50 state & $50 local per tea
Professional Development ISD
Professional Development IT (includes to tech specialists and assistants)
Professional Development Superintendent
Professional Development Leadership Team
Professional Development Support Services
Professional Development Community Relations
Classified Staff Development
Curriculum Development
~ Surveys (would delay Harris interactive survey req. for Strategic Plan)
Local Assessments (would drop SRI testing)
Teacher Recruitment
Signing.Bonuses for Teachers in Hard to Fill Areas
Publications
1P Telephony (Dependent upon lease purchase of equipment)
Reduce telephone budget and replace with federal telecommunications funds
Savings Associated with Contracted Services
Permanent Substitutes (9 FTEs)
Staff Development Substitutes
National Board Cert. Support
Eliminate Contingency Fund
Human Resources advertising budget
Reduction in teacher vouchers
Reduce copier lease budget -new lease agreement
Maintenance -Electrical/Building positions
Technology
TOTAL
200, 000
198, 752
8,619
2,895
6,000
5,000
6 411
5,619
380
1,140
942
860
5,000
31,000
000
5,000
50.000
40, 000
21,400
5,000
5,000
<a,~uu 37,100 261,352
25,000 142,640 176,259
2,895
6,000
36,453 005, p
42 68 4
5,619
380
1,140
2,261
942
860
31,000
8,000
9,000.
?5,000
100,000 50,OpC
100, 000
40,000
21,400
150,000 5,000
50
000 150,000
,
11,000 50,000
11,000
175,000 15,000 15,000
175,000
85,000 85,000
25,000
547,953 50,000
329,740 50,000
1.345.4~~
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CHAPEL HILL - CARRBORO CITY SCHOOLS _____
PAST FOUR YEARS' LOCAL FUND BUDGET REDUCTIO NS
CATEGORIES 2009-2010 2008-2009 2007-2008 2006-2007 Total
3. INCREASE IN WORK LOAD OF STAFF
(WITH NON-RENEWAL OF SOME STAFF)
340
74
Eliminate driver/clerical position in middle schools 74,340 - ,
343
206
Elementary Art and Music Allocations (Reduce to 1 per school, 3 FTE) 206,343 ,
Reduce World Language positions 30,000
000
39 30,000
39,000
Proficiency ,
000
10 000
10
Arts Education , ,
000
16 000
16
Character Education , ,
871
68
High School Media Center Staffing 68,871 ,
799
95
High School CIC Allocation 95,799 000
160 '
188
261
Elementary Teacher Assistants -Reduction of 5 work days 101,188 , ,
000
250
Reduce the Use of Substitutes 50,000 200,000 ,
000
50 000
150
Reduce substitutes for teacher assistants 1
, ,
899
179 000
75 254,899
Reduce day custodian positions and/or contract out services , ,
532
59 532
59
Reduce .5 school clerical positions @ 3 elementaries (2 positions restored) , ,
TOTAL 596,541 - 529,899 389,532 1,515,972
4. REDUCTION IN INSTRUCTIONAL SERVICES/PROGRAMS
(WITH NON-RENEWAL OF SOME STAFF)
343
206
Limit Elementary World Language to Grades 1-5 (6 FTE) 206,343 ,
Reduce Gifted Specialists from 1.5 to 1 per School (5 FTE) 68,781 68,781
Reduce Scope of Summer School (Provided to non-proficient students k-8) 105,000 105,000
High School Reform Funds - 60,000 60,000
000
20
Middle College High School 20,000 ,
000
50
Academies 50,000 ,
528
62
Student Assistance Counselors (Reduce 3 to 1 FTE) 62,528 ,
Reduce Local funds in At Risk -replace with State 72 150,000 150,000
Reduce .5 Famuly specialist position 31,264 31,264
264
31
Reduce .5 504 position 31,264 272
18 ,
18,272
Reduce SIT funds to $1,000 per school , 802
20
Middle School Athletics 20,802 ,
49
500 21,350 70,850
High School Athletics , 600
33 33,600
Field Trips
Textbooks, Supplementary Materials, Media 144,000 ~ ,
90,244 234,244
District Translation Services 16,036 16,036
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CHAPEL HILL - CARRBORO CITY SCHOOLS
PAST FOUR YEARS' LOCAL FUND BUDGET REDUCTIONS
CATEGORIES 2009-2010 2008-2009 2007-2008 2006-2007 Total
4. REDUCTION IN INSTRUCTIONAL SERVICES/PROGRAMS
(WITH NON-RENEWAL OF SOME STAFF) -continued
Charge participants for optional Saturday testing 11,000 11,000
School Travel and Supplies 12,900 12,900
Eliminate local funding for Carrboro Elem. 21 st Century After-School 108,000 108,000
TOTAL 744,482 121,036 432,466 12,900 1,310,884
TOTALS 1,984,302 146,036 1,510,318 732,172 4,172,828
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