Budget Update
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Transcript of Budget Update
Budget UpdateJanuary 15, 2014
Budget Calendar
October November December January February March April May June
One School Board Meeting - Budget
Update
Two School Board Meetings - Budget
Updates
One School Board Meeting
Two School Board Meetings - Budget Update & Hearing
Two School Board Meetings - Budget
Updates
Two School Board Budget Work
Sessions
One School Board Budget Work
Session
FY14 ADM Count Due to State
Governors Proposed Budget
4 Public Budget Open Houses
School Board Adoption of
Preliminary Budget
State Legislature Adjourns
Borough Budget Deliberations with Possible Adoption
Borough Budget Deliberations with Possible Adoption
FY14 ADM Count Period Ends
FY15 Projection Due to State
Budget Survey School Board Budget Adoption
Borough Sets Minimum Amount to be Available for the
District
One School Board Meeting - Budget
Update
Two School Board Meetings - Work
Session & Budget Update
Joint Assembly & School Board
Meeting
Preliminary Budget Trasmitted to
Borough
TEN YEAR ANALYSISGeneral Fund
Enrollment History
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 12,000
13,000
14,000
15,000
16,000
17,000
18,000
13,
588 1
4,30
4
14,
663
15,
440
15,
847
16,
115
16,
471
16,
653
16,
963
17,
334
Source: Matanuska-Susitna Borough School District Comprehensive Annual Financial Reports
Straight Line Growth Rate Total Salaries & Benefits Per Pupil*
(FY2002-03 Base Year)
*Employee Benefits does not include the on-behalf contributions for TRS & PERS, which began in 2008
Source: Alaska Department of Labor & Workforce Development and Matanuska-Susitna Borough School District Comprehensive Annual Financial Reports
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
35%
40%
0%-3%
6%
14% 14% 14%
22%
32%34%
37%
0% 3%6%
9%12%
17% 18%20%
24%27%
Total Salaries & Benefits Per Pupil
Anchorage CPI-U
Straight Line Growth Rate ComparisonCertificated Salaries Per Pupil
(FY2002-03 Base Year)
Source: Alaska Department of Labor & Workforce Development and Matanuska-Susitna Borough School District Comprehensive Annual Financial Reports
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
0%
-4%
0%2% 3%
9%
14%
20% 19% 20%
0% 3%
6%
9%12%
17%18%
20%24%
27%
Total Certifi-cated Salaries Per Pupil
Anchorage CPI-U
Straight Line Growth Rate ComparisonNon-Certificated Salaries Per Pupil
(FY2002-03 Base Year)
Source: Alaska Department of Labor & Workforce Development and Matanuska-Susitna Borough School District Comprehensive Annual Financial Reports
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
-20%
-10%
0%
10%
20%
30%
40%
0%-4%
3%
9%
-16%
-8%
3%
22%28%
28%
0% 3%6%
9% 12%
17% 18% 20%
24%27%
Non-Certifi-cated Salaries Per Pupil
Anchorage CPI-U
Straight Line Growth Rate ComparisonEmployee Benefits Per Pupil*
(FY2002-03 Base Year)
*Employee Benefits does not include the on-behalf contributions for TRS & PERS, which began in 2008
Source: Alaska Department of Labor & Workforce Development and Matanuska-Susitna Borough School District Comprehensive Annual Financial Reports
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
-20%
0%
20%
40%
60%
80%
100%
0% -1%
25%
51%
65%
44%
57%
73%78%
89%
0%3% 6% 9% 12%
17% 18% 20%24% 27%
Employee Benefits Per Pupil
Anchorage CPI-U
Health Insurance
• The total Health Premium has risen steadily since 2003 with an overall increase of almost 160%
• Through bargaining however, the District has set a priority to attempt to maintain these increases and our costs have increased about 133%
2003200420052006200720082009201020112012 $-
$5,000.00
$10,000.00
$15,000.00
$20,000.00
$25,000.00
District ShareTotal Premium
Source: Matanuska-Susitna Borough School District Department of Human Resources
LONGTERM FORECASTFinancing the Future
Revenue Assumptions• Borough Revenue continues to INCREASE at 3%• Federal Revenue Maintains with ZERO INCREASE or DECREASE• State Energy Relief Funding continues at $100 per Adjusted ADM• Student Safety and Security Grant ends after FY14• ZERO INCREASE or DECREASE in the State Foundation Formula• Intensive Count maintains at 321 students
• Other Local Receipts maintains with ZERO INCREASE or DECREASE
Expense Assumptions• Certificated Salaries are maintained with an average annual step
INCREASE of 1.8%• Non-Certificated Salaries are maintained with an average annual step
INCREASE of 3.2%• Health and Life insurance INCREASE at an annual rate of 8% with the
INCREASE split 50/50 between employee's and the District (Overall INCREASE to District costs equal 4%)
• All other deduction factors are maintained with any INCREASE due to INCREASE in Salary factors
• Utilities INCREASE at an annual rate of 10% • Insurance Bonds & Premiums INCREASE at an annual rate of 1.5%• Indirect rate is maintained at 5.58% annually and amounts are based on
Grant projections included in the FY14 Budget Book• All other Non-Personnel accounts are maintained with ZERO INCREASE or
DECREASE
Long Term ForecastFY 2011-2012
Actuals (A)
FY 2012-2013Budget
(C)
FY 2013-2014Projection
(E)
FY 2014-2015Projection
(F)
% Change(F) - (E)
FY 2015-2016Projection
(G)
% Change(G) - (F)
FY 2016-17Projection
(H)Enrollment 17,338 17,247 17,317 17,446 0.74% 17,482 0.21% 17,572
Federal Revenue 1,989,092$ 1,837,000$ 1,910,679$ 1,800,000$ -5.79% 1,800,000$ 0.00% 1,800,000$ State Foundation 139,579,127$ 141,742,098$ 138,299,622$ 139,316,720$ 0.74% 139,614,123$ 0.21% 140,148,754$ State Energy Relief Funds 2,361,367$ 2,929,851$ 2,864,272$ 2,891,010$ 0.93% 2,896,231$ 0.18% 2,905,617$ Student Safety & Security -$ -$ 2,410,327$ -$ -100.00% -$ -$ Borough Support 48,048,419$ 49,797,786$ 51,291,720$ 52,830,472$ 3.00% 54,415,386$ 3.00% 56,047,848$ Other Local Reciepts - student & user fees 1,660,677$ 147,500$ 200,000$ 200,000$ 0.00% 200,000$ 0.00% 200,000$
Sub-Total Revenue 193,638,682$ 196,454,235$ 196,976,620$ 197,038,202$ 198,925,740$ 201,102,219$ State On-behalf for Emp. Retirement Systems 28,752,528$ 36,616,844$ 38,317,531$ 38,317,531$ 0.00% 38,317,531$ 0.00% 38,317,531$
Total Revenue 222,391,210$ 233,071,079$ 235,294,151$ 235,355,733$ 237,243,271$ 239,419,750$ Use of Fund Balance 1,400,935$ 1,699,886$ 1,334,970$ -$ -100.00% -$ 0.00% -$
Total Projectected Revenue & Fund Balance 223,792,145$ 234,770,965$ 236,629,121$ 235,355,733$ -0.54% 237,243,271$ 0.80% 239,419,750$
Personnel CostsSalaries 107,622,808$ 112,752,770$ 111,747,522$ 114,316,361$ 2.30% 116,947,262$ 2.30% 119,641,807$ Benefits 48,498,867$ 50,541,448$ 51,975,228$ 54,340,997$ 4.55% 56,878,692$ 4.67% 59,495,240$ State On-behalf for Emp. Retirement Systems 28,752,528$ 36,616,844$ 38,317,531$ 38,317,531$ 0.00% 38,317,531$ 0.00% 38,317,531$
Non-Personnel CostsUtilities 5,767,579$ 6,378,969$ 7,111,464$ 7,822,610$ 10.00% 8,604,871$ 10.00% 9,465,358$ Non-Personnel Costs 23,164,264$ 27,717,227$ 25,902,376$ 25,856,464$ -0.18% 26,038,169$ 0.70% 26,204,233$
Total Expenditures 213,806,046$ 234,007,258$ 235,054,121$ 240,653,963$ 246,786,525$ 253,124,169$ 7,123,916$ 225,000$ 1,575,000$ 1,575,000$ 1,575,000$ -$
Total Expenditures 220,929,962$ 234,232,258$ 236,629,121$ 242,228,963$ 2.37% 248,361,525$ 2.53% 253,124,169$ Net Ending Unassigned Fund Balnce (Deficit) 1,699,886$ 538,707$ -$ (6,873,230)$ (11,118,254)$ (13,704,419)$
REVENUE
EXPENSES
Transfers to Other Funds, including Food Service,
Three Year Projection
FY 2011-2012 Actual
FY 2012-2013 Budget
FY 2013-2014 Projection
FY 2014-2015 Projection
FY 2015-2016 Projection
FY 2016-2017 Projection
$200,000,000
$210,000,000
$220,000,000
$230,000,000
$240,000,000
$250,000,000
$260,000,000
17,000
17,100
17,200
17,300
17,400
17,500
17,600
17,700
REVENUE EXPENSE ENROLLMENT
Structural Deficit
FY 2011-2012 Ac-tual
FY 2012-2013 Budget
FY 2013-2014 Projection
FY 2014-2015 Projection
FY 2015-2016 Projection
FY 2016-2017 Projection
$200,000,000
$210,000,000
$220,000,000
$230,000,000
$240,000,000
$250,000,000
$260,000,000
$223,792,145
$234,770,965
$236,629,121 $235,355,733 $237,243,271
$239,419,750
$220,929,962
$234,232,258
$236,629,121
$242,228,963
$248,361,525 $253,124,169
REVENUE EXPENSE
Structural Deficit
HAY GROUP STUDY
State Managed Group Health Insurance Program for Alaska Public School Employees
Purpose
• Conduct and provide an analysis of the current health benefit plans for each of the 53 school districts in Alaska.
• Establish an actuarial value of the various benefit plans offered
• Estimate the projected premiums and costs of consolidating public school employees in Alaska under a state-managed plan
Hay Groups Study
• Surveyed all 53 school districts – 100% participation
• NEA Alaska Health Plan• Aetna, Premera, TPAs• Dept. of Administration• Dept. of Education and Early Development• Unions – Teamsters, Local 71
Health Insurance in Alaska’s School Districts
• Enrollment by district size• There are approximately 19,000
employees total, 17% opt out of coverage
Health Insurance in Alaska’s School Districts
• Costs by district size
Health Insurance in Alaska’s School Districts
• Plan offerings currently available in Alaska’s school districts
Health Insurance in Alaska’s School Districts
• 21 district’s have 0% employee cost share• 32 district’s have some cost share the average
being 13%• Public sector national average is 15%
Health Plan Cost Drivers
• Three key drivers of a plan’s costs1. The extent to which plan pays for the costs
of care. 2. The utilization of those benefits by plan
members. 3. The non-benefit costs that are required to
administer the plan.
Plan Costs Broken Down
• The argument for self insurance/pooling
Saving through Pooling
Cost savings for a consolidated pool can be broken down to four main areas
– Provider Networks– Overhead– Plan Design– Cost Sharing
Consolidation OutcomesPositive Outcomes Negative OutcomesImproves vendor contract terms Reduces district staff administration
Increase in compliance Eliminates district decision-making
Reduces annual volatility in costs
Consistent benefits offering to all districtsReduces duplicative resources
Efficient health management
Options
1. Optimize Program Performance2. Leverage AlaskaCare Plans3. Centrally Managed School District Program
with Standard Health Plan Options and Cost Sharing
4. Centrally Manage School District Program with Standard Health Plan Options Only
5. Bring all School District Plans under State management
1. Optimize Program Performance
• Savings achieved through provider networks and overhead $17.1M - $28.8M
Positive Outcomes Negative OutcomesCost savings with same level of benefits
Increases State administration
Simplifies bargaining
Districts allowed to set contributions
2. Leverage AlaskaCare
• Consolidate all health care coverage under the existing AlaskaCare plans increase of $8.7M – savings of $34.9M
Positive Outcomes Negative OutcomesCost savings but different benefits
Disruption in plan design
Districts allowed to set contributions
Bargaining restricted
Leverages State resources already in place
3. District Pool with Standard Plan and Cost Share
• Provides an independent pool for school districts with three standard plan options and a standard cost share savings of $22.6M – $33.7M
Positive Outcomes Negative OutcomesCost savings but different benefits
Disruption in plan design
All Districts have same contributions
Bargaining restricted
4. District Pool with Standard Plan
• Provides an independent pool for school districts with three standard plan options $9.4M – $64.9M
Positive Outcomes Negative OutcomesCost savings but different benefits
Disruption in plan design
Districts allowed to set contributions
Bargaining restricted
Recommendations
• State pursue pooling as described in option 3– Significant savings through optimization of
plan performance, plan design consolidation and standardized cost sharing.
• To achieve maximum benefit and savings the transition would need to be mandatory