fy2014-15 budget update

Fiscal Year 2014-15Proposed Budget Update

April 22, 2014

Dorsey E. Hopson, II. Esq., SuperintendentAlicia J. Lindsey, Interim Chief Financial Officer

OVERVIEW

• Financial Update

• Where We Are Today

• Fiscal Year 2014-2015 Proposed Budget

• Questions

2

FINANCIAL UPDATE

Fund Balance as of June 30, 2013

• At June 30, 2013, the school district’s operating fund balance was $158 million or 12.8% of total general fund expenditures.

• Unreserved, Undesignated Fund Balance including BEP reserve for the General Fund was $74.9 million or 6.1% of total general fund expenditures.

Fiscal Year 2013 – 2014

• The District is on track to end Fiscal Year 2013-14 within budget.

Fiscal Year 2014 – 2015

• Planned use of Fund Balance ($19.4M) leaves a projected Unassigned Fund Balance of $62.6M or 6.6% of FY14-15 Proposed General Fund Expenditures.

3

FISCAL YEAR 2014-15PROPOSED BUDGET

GENERAL FUND OVERVIEW

What’s Not Included in the Fiscal Year 2015 Budget?

District Other Post Employment Benefits (OPEB) contribution

Two-bell start times

Additional World Language Teachers

Drivers Education

2% Cost of Living Adjustment (Differentiated Pay Revised to $6.2M)

Blended Learning Devices

4

FISCAL YEAR 2014-15INITIAL BUDGET TO PROPOSED BUDGET

TOTAL SOURCE OF FUNDS RECONCILIATION

$248.3M Reduction in Revenue Before Planned Use of Fund Balance

INITIAL SOURCE OF FUNDS 961,298,645$

Reductions:

Reduction to BEP Estimate (16,449,307)$ (16,449,307)$

Additions:Increase to Shelby County Property Tax Funding 1,523,620$ Increase to Shelby County Sales Tax 553,914 2,077,534

TOTAL PROPOSED SOURCE OF FUNDS 946,926,872$

5


GENERAL FUND REVENUE

Fiscal Year 2013-14 Fiscal Year 2014-15 Variance

Budget % Budget % Budget

Shelby County 390,358,365$ 32.84% 310,184,749$ 32.76% (80,173,616)$ -20.54%State of Tennessee 625,479,800 52.63% 484,841,490 51.19% (140,638,310) -22.48%Federal Government 13,347,550 1.12% 7,984,088 0.84% (5,363,462) -40.18%Local option and state sales tax 139,328,525 11.72% 112,749,495 11.91% (26,579,030) -19.08%Charges for Services 2,974,518 0.25% 2,040,456 0.22% (934,062) -31.40%Other local sources 4,550,166 0.38% 9,647,806 1.02% 5,097,640 112.03%Planned Use of Fund Balance 12,609,414 1.06% 19,478,788 2.06% 6,869,374 54.48%

Total revenues 1,188,648,338$ 100.00% 946,926,872$ 100.00% (241,721,466)$ -20.34%

Percent Change From

Prior Year

Shelby County $310,184,749

State of Tennessee

$484,841,490

State Sales Tax

$112,749,495

Federal Government $7,984,088

Other local sources

$11,688,262

Planned Use of Fund Balance

$19,478,788

$248.6M Reduction in Revenue Before Planned Use of Fund Balance

6


GENERAL FUND EXPENDITURES

$241.7M Net Reduction in Expenditures 4,563.7 General Fund Positions

INITIAL EXPENDITURES / POSITIONS 961,298,645$ 9,855.30

Reductions:Eliminate 2% Cost of Living for Certificated Staff (9,378,908)$ - Increase to Lapse Time Restriction (5,692,059) - Reduction to Blended Learning (4,000,000) - Reduction to Other Potential Uses (3,500,000) - Exceptional Children (2 Homebound Teachers) (152,245) (22,723,212) (2.00)

Additions:Revision to staffing formula 4,013,075$ 81.00 Increase to transportation for school closures and re-zoning 1,899,924 - Additional plant managers for school buidling support 1,008,640 20.00 Additional funding for school start-up and year-end activities 300,000 - Harmonize Middle School Althetics 300,000 - Band and Strings Teacher Correction 296,240 4.00 Increase CTE Teacher positions by four 260,000 4.00 Attendance & Discipline (3 Homebound Teachers) 212,548 3.00 Increase to Trustee Commission 36,012 - STEM MOU with Fairview 25,000 8,351,439 110.0

TOTAL PROPOSED EXPENDITURES 946,926,872$ 9,965.30

7


GENERAL FUND EXPENDITURES BY STATE FUNCTION

Fiscal Year 2013-14 Fiscal Year 2014-15 VarianceExpenditures


Instruction 700,429,184$ 58.92% 521,744,830$ 55.11% (178,684,354)$ -25.51%Instructional support 48,447,404 4.08% 38,851,413 4.10% (9,595,990) -19.81%Student support 63,004,716 5.30% 48,259,079 5.10% (14,745,637) -23.40%Office of principal 81,639,516 6.87% 60,082,482 6.34% (21,557,034) -26.41%General administration 51,945,531 4.37% 43,835,373 4.63% (8,110,158) -15.61%Fiscal services 6,209,204 0.52% 5,785,868 0.61% (423,336) -6.82%Other support services 7,118,411 0.60% 2,670,365 0.28% (4,448,046) -62.49%Student transportation 30,468,204 2.56% 28,616,005 3.02% (1,852,199) -6.08%Plant services 101,488,145 8.54% 87,594,733 9.25% (13,893,412) -13.69%Community service 1,262,251 0.11% 1,423,383 0.15% 161,132 12.77%Charter schools 67,406,809 5.67% 77,974,431 8.23% 10,567,622 15.68%Retiree benefits 28,636,084 2.41% 29,429,970 3.11% 793,886 2.77%

Debt Service: - Principal 592,879 0.05% 658,940 0.07% 66,061 11.14%Interest - 0.00% - 0.00% - -

Capital Outlay - 0.00% - 0.00% - - Total expenditures 1,188,648,338$ 100.00% 946,926,872$ 100.00% (241,721,466)$ -20.34%

Percent Change From Prior Year

$241.7M Net Reduction in Expenditures

8


GENERAL FUND EXPENDITURES BY MAJOR OBJECTS

Fiscal Year 2013-14 Fiscal Year 2014-15 Variance


ExpendituresSalaries 720,711,003$ 60.63% 550,219,632$ 58.10% (170,491,370)$ -23.66%Benefits 232,114,792 19.53% 177,948,238 18.79% (54,166,554) -23.34%Professional services 13,923,512 1.21% 26,097,509 2.76% 12,173,997 87.43%Property maintenance services 12,298,313 1.03% 10,468,626 1.11% (1,829,687) -14.88%Contracted services 49,466,216 4.16% 43,258,170 4.57% (6,208,046) -12.55%Supplies & materials 58,999,173 4.96% 38,828,164 4.10% (20,171,009) -34.19%Travel 2,203,634 0.14% 2,444,122 0.26% 240,488 10.91%Furniture & equipment 7,689,088 0.65% 5,549,444 0.59% (2,139,644) -27.83%Other objects 23,242,920 1.96% 13,479,596 1.42% (9,763,324) -42.01%Debt Service 592,879 0.05% 658,940 0.07% 66,061 11.14%Charter schools 67,406,809 5.67% 77,974,431 8.23% 10,567,622 15.68%

Total expenditures 1,188,648,338$ 100.00% 946,926,872$ 100.00% (241,721,466)$ -20.34%

Percent Change From

Prior Year

Salaries58.10%

Employee benefits18.79%

Contracted services8.44%

Supplies & materials

4.10%

Other charges1.68%

Debt Service0.07%

Capital Outlay0.59% Charter schools

8.23%

$241.7M Net Reduction in Expenditures

9


OTHER FUNDS OVERVIEW

Capital Improvement Program Fund 7 $6.4M• Roofing projects $2.9M• ADA improvements $1.7M• School demolitions $200K• Mechanical boilers & air conditioners $300K

Non-Federal Special Revenue Fund 8 $53M• Teacher & Leader Effectiveness Initiative $29M• Voluntary Pre-K $9.8M• After-School Childcare $7M

Food Service $73.3M

Federal Grants Fund 12 $116M• Title I $55.9M• IDEA, Part B $22.6M• Race To The Top $7.8M

10


SUMMARY OF ALL GOVERNMENTAL FUNDS

CAPITALGENERAL IMPROVEMENT NON-FEDERAL FEDERAL NUTRITIONPURPOSE PROGRAM PROGRAMS PROGRAMS SERVICES

REVENUES / SOURCE OF FUNDSState 484,841,490 -$ 13,209,347$ -$ 2,755,184$ Federal 7,984,088 - 6,316,704 116,092,272 62,858,237 County 310,184,749 - - - - Charges for Services 2,040,456 - - - 7,781,508 Local Option Sales Tax 112,749,495 - - - - Other Local Sources 9,647,806 346,224 31,762,109 - - Planned Use of Fund Balance 19,478,788 6,146,066 1,307,671 - - TOTAL SOURCE OF FUNDS 946,926,872$ 6,492,290$ 52,595,831$ 116,092,272$ 73,394,929$

EXPENDITURESInstruction $521,744,830 -$ 528,220$ 63,742,435$ -$ Instructional support 38,851,413 - 282,343 34,238,321 - Student support 48,259,079 - 144,639 14,495,380 - Office of principal 60,082,482 - 276,310 97,836 - General administration 43,835,373 - 28,783,924 156,184 - Fiscal Services 5,785,868 - - - - Other support services 2,670,365 - - - 71,132,337 Student transportation 28,616,005 - - 244,533 - Plant services 86,073,063 - 1,125,036 - - Community service 1,423,383 - 21,455,359 112,570 - Charter schools 77,974,431 - - 3,005,013 2,262,592 Retiree benefits 29,429,970 - - - -

Debt servicePrincipal 658,940 - - - - Interest - - - - -

Capital outlay 1,521,670 6,492,290 - - - TOTAL EXPENDITURES 946,926,872$ 6,492,290$ 52,595,831$ 116,092,272$ 73,394,929$

11


SUMMARY OF ALL FUNDSALIGNED TO THE DISTRICT’S GOALS AND PRIORITIES

General % of Capital % of Special % of Internal % of Total All % of Fund Budget Fund Budget Revenue Budget Service Budget Funds Total Budget

Goal 1: Accelerate Student Achievement 719,572,070$ 75.99% -$ - 135,076,624$ 55.80% 1,901,826$ 33.34% 856,550,520$ 71.31%1A-Focus on Pre-K - 3 Literacy 169,261,196 17.87% - - 12,860,484 - - - 182,121,680 15.16%1B-Develop, Recruit, and Retain Effective Teachers, Leaders and Staff 196,155,838 20.71% - - 9,413,116 3.89% 648,504 11.37% 206,217,458 17.17%1C-Improve Low-Performing Schools 331,191,280 34.98% - - 86,834,618 35.87% 65,122 1.14% 418,091,019 34.81%1D-Expand Opportunities for High Achievers 22,963,757 2.43% - - 25,968,406 10.73% 1,188,200 20.83% 50,120,363 4.17%

Goal 2: Design Effective Business Operations 127,319,011 13.45% 4,785,197 73.71% 106,342,217 43.93% 2,590,090 45.41% 241,036,515 20.07%2A-Emphasize Project Management and Fiscal Efficiency 551,777 0.06% - - 1,455,089 0.60% - - 2,006,866 0.17%2B-Create Culture of Transparency and Accountability 25,010,405 2.64% - - 1,418,522 0.59% - - 26,428,927 2.20%2C-Ensure Data-Driven Decision Making 8,399,993 0.89% 4,785,197 73.71% 76,948 0.03% - - 13,262,138 1.10%2D-Enact Sustainable Processes and Procedures 93,356,836 9.86% - - 103,391,658 42.71% 2,590,090 45.41% 199,338,584 16.59%

Goal 3: Build Employee and Community Confidence in the Unified District 3,731,363 0.39% - - 407,692 0.17% - - 4,139,055 0.34%3A-Broaden Stakeholder Interaction, Awareness and Advocacy 315,946 0.03% - - - - - - 315,946 0.03%3B-Establish High Standards of Customer Service 2,616,388 0.28% - - - - - - 2,616,388 0.22%3C-Advance Accurate and Fair Information About the District 764,424 0.08% - - 407,692 0.17% - - 1,172,116 0.10%3D-Strengthen Two-Way Exchange of Input and Information 34,605 0.00% - - - - - 34,605 0.00%

Goal 4: Ensure Schools are Safe, Clean and Well-Prepared for Learning 96,304,427 10.17% 1,707,093 26.29% 256,500 0.11% 1,212,343 21.25% 99,480,363 8.28%4A-Reinforce School Security and Discipline 13,499,939 1.43% 1,707,093 26.29% 256,500 0.11% 70,949 1.24% 15,534,481 1.29%4B-Increase On-Time Attendance 26,900,816 2.84% - - - - - - 26,900,816 2.24%4C-Upgrade School Cleanliness 48,105,705 5.08% - - - - 1,141,394 20.01% 49,247,099 4.10%4D-Boost Student Health and Nutrition 7,797,967 0.82% - - - - - - 7,797,967 0.65%

Total 946,926,872$ 100.00% 6,492,290$ 100.00% 242,083,032$ 100.00% 5,704,259$ 100.00% 1,201,206,453$ 100.00%

12

IMPORTANT DATES

Item DateProposed Budget Approved by Board Members April 22, 2014

Deliver Proposed Budget Document to ShelbyCounty Board of Education / Shelby County Board of Commissioners

April 30, 2014

General Fund Hearing / Tentative Approval May 7, 2014 / June 2, 2014

Submit Budget to State of Tennessee August 1, 2014

13

RESOLUTION APPROVING THE SHELBY COUNTY BOARD OF EDUCATION’SFISCAL YEAR 2014-15 BUDGET

NOW THEREFORE BE IT RESOLVED that the Board of Education approves the Fiscal Year2014-15 Proposed General Fund Budget in the amount of $946,926,872.00 for submission to theShelby County Board of Commissioners.

BE IT FURTHER RESOLVED that the Board of Education approves the use of Planned Use ofFund Balance in the amount of $19,478,788.00 to balance the Fiscal Year 2014-15 ProposedGeneral Fund Budget.

BE IT FURTHER RESOLVED that the Board of Education approves the Fiscal Year 2014-15Proposed Capital Projects Fund Budget in the amount of $6,492,290.00.

BE IT FURTHER RESOLVED that the Board of Education approves the use of Planned Use ofFund Balance in the amount of $6,146,066.00 to balance the Fiscal Year 2014-15 Proposed CapitalProjects Fund Budget.

BE IT FURTHER RESOLVED that the Board of Education approves the Fiscal Year 2014-15Proposed Non-Federal Programs Fund Budget in the amount of $52,595,831.00.

BE IT FURTHER RESOLVED that the Board of Education approves the use of Planned Use ofFund Balance in the amount of $1,307,671.00 to balance the Fiscal Year 2014-15 Proposed Non-Federal Programs Budget.

BE IT FURTHER RESOLVED that the Board of Education approves the Fiscal Year 2014-15Proposed Federal Programs Fund Budget in the amount of $116,092,272.00.

BE IT FURTHER RESOLVED that the Board of Education approves the Fiscal Year 2014-15Proposed Nutrition Services Fund Programs Fund Budget in the amount of $73,394,929.00.

BE IT FURTHER RESOLVED that the Board of Education approves the Shelby CountySchools’ Proposed Operating Budget for all other funds for Fiscal Year 2014-15 as recommended bystaff.

On this _____________ day of ____ 2014. 14

Questions

15

fy2014-15 budget update

Documents