OVERVIEW OF OVERVIEW OF SCHOOL FINANCESCHOOL FINANCE

Charles County Public SchoolsCharles County Public Schools

AgendaAgenda

Funding AuthorityFunding Authority State FundingState FundingCounty FundingCounty Funding

Internal Budget ProcessInternal Budget ProcessData and TrendsData and Trends Future Considerations/ChallengesFuture Considerations/Challenges

Funding AuthorityFunding Authority

State GovernmentState Government

County GovernmentCounty Government

Local Board of Education (BOE)Local Board of Education (BOE)

Summary of Budget ProcessSummary of Budget Process

STATE FUNDINGSTATE FUNDING

Based on Wealth FormulasBased on Wealth Formulas Based on Adequacy Concepts & FormulasBased on Adequacy Concepts & Formulas Separate Formula Allocations forSeparate Formula Allocations for Major Major

State AidState Aid Foundation ProgramFoundation Program TransportationTransportation PovertyPoverty Special EducationSpecial Education Restricted Funds (Federal Programs)Restricted Funds (Federal Programs)

Comparative StatisticsComparative StatisticsCompared to 23 Other Maryland Compared to 23 Other Maryland

JurisdictionsJurisdictions

2424thth

1919thth

99thth

1313thth

88thth

1212thth

1111thth

2020thth

1515thth

1010thth

FY2002 RankingFY2002 Ranking

1313ththCounty Aid Per PupilCounty Aid Per Pupil

2424ththFixed Charges (Benefits)Fixed Charges (Benefits)

1515ththInstructional SalariesInstructional Salaries

1414ththAdministration/MidAdministration/Mid--LevelLevel

1010ththEnrollmentEnrollment

1414ththCost Per PupilCost Per Pupil

1616ththWealth Per PupilWealth Per Pupil

99ththOperations/MaintenanceOperations/Maintenance

99ththTextbooks/MOITextbooks/MOI

1111ththState Aid Per PupilState Aid Per Pupil

FY 2009 RankingFY 2009 RankingDescriptionDescription

Total Charles County Wealth: $9.0 billion

Total Charles County Wealth Per Pupil: $348,341

County FundingCounty Funding Based on negotiations between BOE and County Based on negotiations between BOE and County

Commissioners, subject to minimal Maintenance of Effort Commissioners, subject to minimal Maintenance of Effort (MOE) requirements established by law(MOE) requirements established by law

Allocated By Categories (15) including food servicesAllocated By Categories (15) including food services

Excludes Federal (Restricted) FundsExcludes Federal (Restricted) Funds

Separate process for construction (CIP)Separate process for construction (CIP)

Approval authority for categories in aggregateApproval authority for categories in aggregate

Board of EducationBoard of EducationFunding Proportion of Operating BudgetFunding Proportion of Operating Budget

BOE funding as a BOE funding as a percent of county total percent of county total (50.6% in 2002 to (50.6% in 2002 to 48.8% in 2011).48.8% in 2011).

BOE funding as a BOE funding as a percent of county percent of county undedicated revenues undedicated revenues (55.3% in 2002 to (55.3% in 2002 to 52.4% in 2011).52.4% in 2011).

40.0%42.0%44.0%46.0%48.0%50.0%52.0%54.0%56.0%58.0%60.0%

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

BOE/Total BOE/Undedicated

Funding Sources of Operating Budget/ActualFunding Sources of Operating Budget/Actual2002 to 20112002 to 2011

County Funding as a County Funding as a percent of undedicated percent of undedicated revenue budget is revenue budget is targeted at 52.4%.targeted at 52.4%.

County Funding as a County Funding as a percent of undedicated percent of undedicated actual revenue.actual revenue.

44.4%

50.0%

52.4%

54.1% 53.6%

52.7%

52.41%52.0%51.5%

46.6%

40.0%

42.0%

44.0%

46.0%

48.0%

50.0%

52.0%

54.0%

56.0%

58.0%

60.0%

2002 2003 2004 2005 2006 2007 2008 2009 2010Est.

2011Est.

Budget TargetActual

Board of EducationBoard of EducationFunding Sources of Operating BudgetFunding Sources of Operating Budget

The proportion of state The proportion of state funding has increased from funding has increased from 43.2 % in 2002 to 49.0 % 43.2 % in 2002 to 49.0 % in 2011.in 2011.

The proportion of local The proportion of local funding has decreased from funding has decreased from 55.5 % in 2002 to 49.3% in 55.5 % in 2002 to 49.3% in 2011.2011.

Other sources have slightly Other sources have slightly increased from 1.3 % in increased from 1.3 % in 2002 to 1.7 % in 2011.2002 to 1.7 % in 2011.

40.0%42.0%44.0%46.0%48.0%50.0%52.0%54.0%56.0%58.0%60.0%

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Local State

History of State and County FundingHistory of State and County Funding2002 to 20112002 to 2011

-4.00%

-2.00%

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

2002 2004 2006 2008 2010

State County

--0.20.2289.6289.6145.3145.3144.3144.320112011

--6.26.2289.8289.8145.4145.4144.4144.420102010

16.616.6296.0296.0145.3145.3150.7150.720092009

28.428.4279.4279.4135.8135.8143.6143.620082008

27.327.3251.0251.0124.0124.0127.0127.020072007

25.025.0223.7223.7112.2112.2111.5111.520062006

18.518.5198.7198.7101.8101.896.996.920052005

16.616.6180.2180.294.694.685.685.620042004

11.211.2163.6163.691.791.771.971.920032003

$ 10.7$ 10.7$ 152.4$ 152.4$ 85.7$ 85.7$ 66.7$ 66.720022002

Change Change $$

Total Total $$

County County $$

State State $$

Fiscal Fiscal YearYear

Charles County Public SchoolsCharles County Public SchoolsBudget Reductions FY2009 Budget Reductions FY2009 –– FY2011FY2011

2,500,0002,500,000FY2009 Fund Balance Reduction (Technology, Maintenance)FY2009 Fund Balance Reduction (Technology, Maintenance)

$12,885,000$12,885,000GRAND TOTALGRAND TOTAL

1,600,0001,600,000FY2010 Eliminate Central Office Positions (28)FY2010 Eliminate Central Office Positions (28)

1,200,0001,200,000FY2010 Reduce Funding for Major Technology ProjectsFY2010 Reduce Funding for Major Technology Projects

976,000976,000FY2010 Reduce School Allocations & Textbook ReplacementsFY2010 Reduce School Allocations & Textbook Replacements

650,000650,000FY2010 Reduce Capital Projects Funding (from $1.3M)FY2010 Reduce Capital Projects Funding (from $1.3M)

425,000425,000FY2010 Reduce Funding for Technology Upgrades (from $800K)FY2010 Reduce Funding for Technology Upgrades (from $800K)

250,000250,000FY2010 Reduce AfterFY2010 Reduce After--school Activity Bus Routesschool Activity Bus Routes

375,000375,000FY2009 Reduce Transportation BudgetFY2009 Reduce Transportation Budget

475,000475,000FY2009 Eliminate Fund Balance Reserves (Special Projects)FY2009 Eliminate Fund Balance Reserves (Special Projects)

600,000600,000FY2009 Eliminate Fund Balance Reserves (Digital Classroom)FY2009 Eliminate Fund Balance Reserves (Digital Classroom)

1,300,0001,300,000FY2009 Eliminate Fund Balance Reserves (OPEB)FY2009 Eliminate Fund Balance Reserves (OPEB)

1,600,0001,600,000FY2009 Hiring Freeze (Central Office Positions and Other)FY2009 Hiring Freeze (Central Office Positions and Other)

321,000321,000

613,000613,000

Expenditure $Expenditure $

FY2011 Technology EquipmentFY2011 Technology Equipment

FY2011 Capital Projects (NonFY2011 Capital Projects (Non--CIP)CIP)

DescriptionDescription

BOE Budget Internal ProcessBOE Budget Internal Process

Combination of formula, centralized allocations Combination of formula, centralized allocations (top down) and individual school requests(top down) and individual school requests

Internal process to review and approve school Internal process to review and approve school level requestslevel requests

Tied to the objectives of the Master PlanTied to the objectives of the Master Plan

Salaries and benefits subject to union negotiationsSalaries and benefits subject to union negotiations

BOE Budget Internal ProcessBOE Budget Internal Process(continued)(continued)

Development:Development:1)1) Determine revenuesDetermine revenues2)2) Identify mandatory costsIdentify mandatory costs

a.a. Salary step/insurance/retirementSalary step/insurance/retirementb.b. TransportationTransportationc.c. New school start up costsNew school start up costsd.d. Unfunded mandatesUnfunded mandatese.e. Restricted grant supplementsRestricted grant supplements

3)3) Incorporate negotiated cost of livingIncorporate negotiated cost of living4)4) Teachers for growth or new schoolsTeachers for growth or new schools5)5) School and departmental requestsSchool and departmental requests6)6) Supplemental requestsSupplemental requests

BOE Budget Internal ProcessBOE Budget Internal Process(continued)(continued)

Execution:Execution:1)1) Monitor new hires/separations and retireesMonitor new hires/separations and retirees2)2) Determine salary savings (October) and Determine salary savings (October) and

contingency listcontingency list3)3) Develop and maintain yearDevelop and maintain year--end forecast end forecast

(January(January--June) and release contingencyJune) and release contingency4)4) Revise multiRevise multi--year financial planyear financial plan5)5) Audit and review processAudit and review process

FY2011 BudgetFY2011 BudgetOperating Cost Per Pupil = $11,216Operating Cost Per Pupil = $11,216

Instruction(Classroom)

CentralAdministration

Maintenance, Operations& Capital

Outlay

$0.12

Student Transportation

$0.08

$0.67

$0.03

Student & Community Services

$0.01 $0.09

School Administration

FY2011 Budget by ObjectFY2011 Budget by Object$294.8 Million$294.8 Million

Contracted Services

11%

Other Charges4%

Supplies/Equip.3%

Transfers1%

Salaries65%

Benefits16%

Compensation81%

Future Financial and Program Future Financial and Program ConsiderationsConsiderations

Impact of the state and local economy on education Impact of the state and local economy on education

Impact of budget reductions made in prior years and the ability Impact of budget reductions made in prior years and the ability to to make additional cutsmake additional cuts

Impact of funding reductions on staffing, class size, test scoreImpact of funding reductions on staffing, class size, test scores and s and the ability to continue programs and servicesthe ability to continue programs and services

Implications of no enhancements or new program initiatives on Implications of no enhancements or new program initiatives on accountabilityaccountability

Loss of funding related to federal and state restricted programsLoss of funding related to federal and state restricted programs and and the ability to continue or maintain themthe ability to continue or maintain them

Ability to address costAbility to address cost--ofof--living increases, classified pension plans living increases, classified pension plans and OPEB trust fundingand OPEB trust funding

Future Financial and Program Future Financial and Program Considerations Considerations

(continued)(continued)•• Loss of ARRA funding Loss of ARRA funding

($8.5 Million)($8.5 Million)

•• Required funding and startRequired funding and start--up costs for new schools up costs for new schools ($18 Million estimate)($18 Million estimate)

•• Continuation of federal and state restricted grantsContinuation of federal and state restricted grants

•• Federal and state accountability, including testing initiativeFederal and state accountability, including testing initiatives and s and unfunded mandatesunfunded mandates($696 Thousand for programs; $6.8 Million for infrastructure cos($696 Thousand for programs; $6.8 Million for infrastructure cost)t)

•• Ability to continue Race to the Top initiatives Ability to continue Race to the Top initiatives ($1.2 Million for programs)($1.2 Million for programs)

•• Make up lost compensation and benefits (OPEB) funding Make up lost compensation and benefits (OPEB) funding ($24 Million annual funding gap)($24 Million annual funding gap)

Future Financial and Program Future Financial and Program Considerations Considerations

(continued)(continued)

• County funding levels related to benchmarks

• Technology renewal projects and enhancements

• Providing funding for the Master Plan

Summary Conclusions Summary Conclusions

• Major shortfalls to address for the next several years

• Need to reach consensus with Commissioners and Unions over future funding

• Need to maintain flexibility with budget changes and contingencies

•Reduce reliance on the use of fund balance to avoid budget shortfalls