HomeMy WebLinkAboutAgenda Item 1 - FY 2019-20 Budget Work Session with DTCC, OCS, and CHCCS ORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: May 23, 2019
Action Agenda
Item No. 1
SUBJECT: FY2019-20 Budget Work Session with Durham Technical Community College,
Chapel Hill-Carrboro City Schools, and Orange County Schools
DEPARTMENT: County Manager and Finance and Administrative Services
ATTACHMENT(S): INFORMATION CONTACT:
A. North Carolina Association of County Bonnie Hammersley, (919) 245-2300
Commissioners — FY 2018-19 Budget Travis Myren, (919) 245-2308
and Tax Survey Paul Laughton, (919) 245-2152
B. Public School Forum Local School Gary Donaldson, (919) 245-2453
Finance Study
C. NC Public Schools/DPI-Per Pupil
Allocations by County
D. Historical Per Pupil Appropriation
E. Historical CHCCS District Tax
F. School Districts Local Current
Expense Fund Balance Policy
G. Schools Capital Projects Summary
PURPOSE: To review and discuss the Durham Technical Community College, Chapel Hill-
Carrboro City Schools, and Orange County Schools FY2019-20 Operating and Capital
Investment Plan Budgets.
BACKGROUND: The County Manager presented the FY2019-20 recommended budget on May
2, 2019. Since that time, the Board has conducted two public hearings to receive residents'
comments regarding the proposed funding plan. Tonight's work session is the first opportunity
the Board has had to discuss next year's recommended funding plan related to Education
funding.
County Support of Local Boards of Education
The recommended funding level represents a total appropriation for both school districts of
$113.2 million, which is 49.5 percent of General Fund revenues, 1.4 percent above the target of
48.1 percent established by the Board of County Commissioners. This includes funding for
current expense, school related debt service, school health and safety service contracts,
schools deferred maintenance funds, and school equity training funds.
Total Funding for Local School Districts:
2015-16 2016-17 2017-18 2018-19 2019-20*
Original Budget $98,488,469 $102,727,141 $104,274,757 $109,141,519 $113,230,859
*Recommended Budget
Student Enrollment Projections for the Chapel Hill-Carrboro City Schools:
Based on DPI projections, the Chapel Hill-Carrboro City School District enrollment for fiscal year
2019-20 totals 12,355, reflecting a decrease of 119 when compared to the March 2018
projections. The district has a current enrollment, as of March 2019, of 169 charter students,
which represents an increase of 14 students from March 2018. Out of district students are
budgeted at 250, 8 more than budgeted in the current fiscal year. This brings the total district
enrollment to 12,274 for FY 2019-20.
Student Enrollment Projections for the Orange County Schools:
Based on DPI projections, the Orange County School district enrollment for fiscal year 2019-20
totals 7,388, an increase of 43 students from the March 2018 projections. The district continues
to experience a growing number of charter students, with a current enrollment, as of March
2019, of 843 students, which represents an increase of 74 students from March 2018. Out of
district students are budgeted at 97 students; 6 less than budgeted in the current fiscal year.
This brings the total district enrollment to 8,134 for FY 2019-20.
The General Assembly requires school systems to pay a per pupil allotment to support charter
students within their district.
Current Expense
The recommended appropriations for Chapel Hill-Carrboro City and Orange County Schools
increases the current expense funding by $3,613,050 in FY 2019-20. This includes an increase
in per pupil funding from $4,165 to $4,340, a $175 increase for each of the 20,408 students in
the two school systems. This increase is to help cover the cost of both school systems for
mandated increases related to State mandated teacher pay raises and all other locally paid
school employees, and increases in Retirement and Health Insurance for FY 2019-20. Local
Current Expense funding supplements State and Federal funds received by each district for the
day-to-day operation of schools. Examples of expenses paid from these funds include salaries
and benefits for locally paid teachers and utilities. North Carolina statutes mandate boards of
county commissioners to provide local current expense monies to school districts. Counties
having more than one school administrative unit, as is the case in Orange County, are required
to provide equal per pupil appropriations to each system.
2019-20 Enrollment Projections
CHCCS OCS Total
March 2019 Department of Public
Instruction ADM Allotment #s 12,355 7,388 19,743
Less: Out of District 250 97 347
12,105 7,291 19,396
Plus: Budgeted Charter Students
169 843 1,012
Total Budgeted Students 12,274 8,134 20,408
60.14% 39.86%
Recurring Capital
Recurring capital for both School districts remains the same as the prior year appropriation of $3
million dollars. The recommended budget for FY 2019-20 includes $1,804,200 for Chapel Hill-
Carrboro City Schools and $1,195,800 for Orange County Schools. For FY 2019-20, as was the
case in FY 2018-19, debt financing will be utilized, instead of pay-as-you-go funding for
Recurring capital. Recurring capital pays for facility improvements, equipment, furnishings, and
vehicle and bus purchases. State statutes mandate counties to fund recurring capital. However,
the amount of money counties allocate to this function is discretionary and varies from county to
county.
Long Range Capital
The County plans and programs long-range school capital funding through the County's Capital
Investment Plan (CIP). The recommended budget for FY 2019-20 includes $2,412,896 for
Chapel Hill-Carrboro City Schools and $1,599,236 for Orange County Schools, for a total of
$4,012,132, which represents an increase of $78,669 from FY 2018-19. A 2% annual growth
rate is included throughout the years of the CIP related to Long Range Capital. For FY 2019-20,
as was the case in FY 2018-19, debt financing will be utilized, instead of pay-as-you-go funds
for Long Range Capital projects. Similar to Local Current Expense funding, the amount of
money counties allocate to long-range capital expenditures is discretionary and varies from
county to county.
School Debt Service
The recommended budget provides for $17,770,542 in School Related Debt Service, which
represents repayment of principal and interest on School related debt, including general
obligation bonds and private placement loans. North Carolina statutes require counties to pay
for school related capital items, such as acquisition and construction of facilities. In instances
where counties borrow funds to pay for such items, the State mandates counties to repay the
debt. The amount of money counties borrow for school related projects is discretionary and
varies from county to county.
Health and Safety Service Contracts
The recommended budget includes $3,629,597 for the Health and Safety Service Contracts for
both school districts to cover the costs of School Resource Officers in every middle and high
school, and a School Health Nurse in every elementary, middle, and high school in both school
systems.
Deferred Maintenance Funds for School Capital Projects
The recommended budget includes $3,000,000 allocated by ADM towards deferred
maintenance needs as addressed in both school districts' assessment of older facilities in the
following amounts: Chapel Hill-Carrboro City Schools appropriation of $1,804,200, and Orange
County Schools appropriation of $1,195,800.
School Equity Training
The recommended budget also includes $260,000 towards Foundational Equity Training which
consists of the following: REI-Ground Water training will provide an historical context related to
racism and its fundamental impacts on organizations; and Beyond Diversity training which will
provide an in-depth analysis of systemic issues as they relate directly to schools and their
communities. It will allow participants to practice their learning in the context of their work in
schools.
School Districts Budget Requests
Both School Districts requested increases in per pupil funding for FY 2019-20.
Chapel Hill-Carrboro City Schools requested an increase of $485.00. This requested increase
in the local per pupil allocation for current expenses would increase the per pupil allocation to
$4,650. This funding level would represent an increase of $5,530,872 in the current expense for
Chapel Hill-Carrboro City Schools.
Orange County Schools requested an increase of $273.00. This requested increase in the local
per pupil allocation for current expenses would increase the per pupil allocation to $4,438. This
funding level would represent an increase in the current expense for Orange County Schools of
$2,729,117.
County Support of Orange County Campus of Durham Technical Community College
The recommended funding for the Orange County Campus of Durham Technical Community
College, located at the Waterstone Development in Hillsborough, provides current expense
funding of $723,256, recurring capital of $75,000, and debt service payments of $242,108. In
addition, the recommended budget includes $200,000 for 200 scholarships (student tuition for
Orange County Residents), which will be paid from Article 46 Sales Tax proceeds instead of
through Current Expenses.
As with local school districts, counties in North Carolina are responsible for supplementing state
and federal appropriations to community colleges. For the most part, counties are responsible
for day-to-day operating costs such as utilities, security and custodial services. The Counties
are not responsible for funding of teaching staff.
Capital Investment Plan
The FY 2019-24 Manager Recommended Capital Investment Plan includes funding of
$8,689,391 in FY 2019-20, and a 5-Year total of $39,903,779, for Chapel Hill-Carrboro City
Schools; and funding of $25,823,215 in FY 2019-20, and a 5-Year total of $56,604,739 for
Orange County Schools. Note: these amounts have been revised from the Original
Recommended Capital Investment Plan to reflect the revised ADM%, as included in the FY
2019-20 Manager Recommended Operating Budget.
The Manager Recommended Capital Investment Plan includes funding of $26,547,911 for a
new Academic Building and parking in Years 6-10 for Durham Technical Community College —
Orange County Campus.
Details regarding recommended funding levels for local school districts and Durham Technical
Community College are located in the Education section of the budget document, beginning on
Page 148.
During tonight's work session, Commissioners will have the opportunity to dialogue with the
Durham Technical Community College, Chapel Hill-Carrboro City Schools, and Orange County
Schools about county funding and anticipated State funding for schools next year. Attachments
A, B, and C provide additional information of how Orange County compares with other counties
within North Carolina related to Current Expense funding per pupil and other educational related
funding issues; Attachment D provides a history of the Per Pupil Appropriation; Attachment E
provides a history of the Chapel Hill-Carrboro City Schools District Tax, Attachment F
represents the School Districts Local Current Expense Fund Balance Policy, and Attachment G
represents the Capital Investment Plan Schools Projects Summary.
FINANCIAL IMPACT: Included in the Background Section.
SOCIAL JUSTICE IMPACT: There are no Social Justice Goal impacts associated with this
item.
RECOMMENDATION(S): The Manager recommends that the Board discuss the topics noted
and provide direction to staff, as appropriate.