Presented by Mark Mathers Chief Financial Officer Mike Schroeder Budget Director February 27 2018 Agenda Review of Districts Historical Deficits FY19 Budget Process FY19 Budget Recommendations ID: 1027855
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1. Preliminary 2018-19 Budget Workshop Presented by:Mark Mathers, Chief Financial OfficerMike Schroeder, Budget DirectorFebruary 27, 2018
2. AgendaReview of District’s Historical DeficitsFY19 Budget ProcessFY19 Budget RecommendationsReview of Individual Budget Reduction Recommendations (separate handout)
3. Review of District’s Historical DeficitsorHow did we get from there to here?
4. Stages of Financial RecoveryAdapted from GFOA 12-Step Financial Recovery Process
5. WCSD Historical DeficitsActual
6. Per-Pupil Support Has Not Kept Up with Inflation666
7. Neither Have Property Values
8. Changes to Budgeted Expenditures over the Last Three Years (in mil.)8
9. FY19 Budget Process9
10. Budget Process Update August 2017 – Strategic Plan - Best Practices in School Budget – Achieve Structurally Balanced Budget in 3 yearsSeptember 2017 – Budget Policies and Principals, Current Budget OverviewOctober/November 2017 – Budget Updates, Revision of Projections, Discuss Budget SurveyDecember 2017 – Budget Survey Launched, Revision of Projections, Discuss New Budget Methodologies including Priority Based Budgeting (PBB), Work With Departments to Identify ReductionsJanuary/February 2018 – Budget Survey Results, Five Budget Forums, Revision of Projections, Compile Reduction Information10
11. Structural Deficit FY19General Fund (in Millions)FY18 Structural Deficit Carryforward($16.6)Revenue Increases$2.1Employee Salary Increments & Health Ins($9.5)Salary & Benefit Basis Adj$4.9Other Operating Increases($1.8)Special Education Transfer$1.8Structural Deficit Before Rebase/Contras$ (19.1)
12. Addressing the Budget DeficitThe District must file a balanced final budgetMost of the tools and savings used to balance prior year deficits are goneDifficult decisions now need to be madeProactive measures have been implemented to address the challengeFinancial Review CommitteeOngoing review to identify more savings opportunitiesPrioritizing all the pieces to balance the budget 12
13. New Budget MethodologiesRe-basing of department budgets based on historical spending patternsBased on an analysis of 3-year actual expenses, certain areas showed consistent savings annually.Better alignment of budget to actual expensesUse of Contras for Salary SavingsFor areas in which we have seen savings on a fundwide basis, such as vacancy savings, versus in specific departments or resource centers, we will consider “contra” accounts.Benchmarking analysisAcademic Return on Investment (AROI)13
14. Identification of Budget ReductionsFinance team met with all departments in December and January.Chiefs proposed cuts to services and staff.Impacts of these cuts could include service level reductions, process improvements and work-arounds, incorporating a new service delivery model, or in theory strategic divestment of a program.Review of benchmarking data and other data.
15. Scoring of Budget Reductions by Financial Review Committee (FRC)Each reduction received a score of 1-4 from each member. FRC met numerous times to review scoring.1: Minor impact2: Moderate but tolerable impact3-4: Severe impact to an operation where a work-around was not immediately identifiableOnly items receiving a 1 or 2 from each member is recommended at this time.
16. Scoring Criteria for Budget ReductionsAlignment to Strategic PlanDegree of Impact on Direct InstructionRisk Assessment – degree to which reduction would create unsafe conditions or noticeable impact to educational programsFiscal Impact – “bang for the buck”Perceived Results of ProgramAvailability of Alternative Service Delivery16
17. Cost Benchmarking ResultsLower Cost than Peer GroupSource/Peer GroupBusiness and Finance(Controller and Budget)Other Washoe County governments’ finance officesFacilities ManagementWork Order Completion2013 Review by Council Greater of Greater SchoolsCustodial2013 Review by Council Greater of Greater SchoolsOffice of AcademicsGifted and TalentedClark County School DistrictSpecial Education (overall compared to CCSD)Clark County School District
18. Cost Benchmarking ResultsHigh Cost than Peer GroupOffice of AcademicsOffice of Student SupportEnglish Learners 1Counseling 2, 3Speech and Language Pathologists 2Special Ed. Teachers 2Special Ed. Aides and Assistants 2Overall Metrics 3Overall Class SizesLower, compared to CA peer school districtsTotal Staff per 1,000 StudentsHigher, compared to CA peer school districtsSources or Peer Group:1 – Clark County School District2 – GFOA Smarter Spending Tool3 – Peer group of California agencies
19. FY19 Budget Recommendations19
20. Major Budget RecommendationsTotal of $4.6 million of reductions identified, in addition to $9.6 million in base budget reductions and contra accountsDeletion of Positions6.05 positions shifted from General Fund to other funds34.62 positions beginning in FY192.00 positions identified for FY20Reduce District travel budgets by 50%Increase ES and MS walk zones by ¼ mileFurther reductions of operating budgets20
21. Summary of Budget Recommendationsby Office21
22. Summary of FY19 Reductions by Office(Base Budget Cuts + Position Reductions)22
23. Summary of Admin./Operations Reductions Compared to Community Survey ResultsQu #AreaRank based on ResponsesTotal Recommended Reductions Reductions Needing Further Review Not Recommended5Reduce the number of school administrators/executive management1 (186,352) - - 6For the next year, defer some purchases of buses and other fleet vehicle to replace aging vehicles2 - - - 4Reduce/cut central services positions, such as accounting staff and computer programmers, and other central services costs such as replacement of central service computer systems3 (427,572) - (93,248)1Increase elementary and middle school walk zones by ¼ mile4 (550,000) - - 7For the next year, defer or reduce maintenance operations such as custodial services and/or minor repairs.5 (68,558) - - 3Suspend field trip transportation6 - - - 2Eliminate transportation for high school students7 - - - Other (620,481) (700,000) - Total (1,860,073) (700,000) (93,248)
24. Summary of Instruction Reductions Compared to Community Survey ResultsQu #AreaRank based on Responses Total Recommended Reductions Reductions Needing Further Review 5Reduce the frequency and type of academic assessment of students to the extent allowed by law1 - - 4Reduce/cut teachers and principals on special assignment, which assist new teachers in implementing curricula and in professional development2 (370,328)(2,363,637)9Reduce teacher professional development and training3 (611,205) - 2Reduce/cut Gifted and Talented Education (GATE) programs4 (443,958) - 12Defer purchase of textbooks and computers in the classroom5 - - 11Increase class sizes in Grades 4-12 by 1-2 students per classroom6 - - 3Reduce/cut English Language Learning (ELL) programs that assist students who speak a language other than English at home7 (682,764) -
25. Summary of Instruction Reductions Compared to Community Survey ResultsQu #AreaRank based on Responses Total Recommended Reductions Reductions NeedingFurther Review 10Reduce student support services such as the number of counselors and other non-teaching staff to the extent allowed by law8 (503,711) - 8Reduce Career and Technical Education (such as health care, auto shop)9 - - 7Reduce library services10 - - 6Reduce extracurricular activities (athletics, music, elective courses beyond state minimum requirements)11 (10,000) - 1Reduce/cut special education programs for students with disabilities to the extent allowed by law12 (103,800) - Total (2,725,766) (2,363,637)
26. Structural Budget Deficit FY19 (in millions)General FundRevenue$ 462.1 MExpenditures (before rebase/contras)($481.3)MStructural Budget Deficit (before rebase/contras) ($ 19.1 M)Budget Rebase and Use of Contras $ 9.6 MStructural Budget Deficit before Reductions($ 9.5)MRecommended Reductions $ 4.6 MDeficit (before Additions)($ 5.0)M
27. Transition Plan for Deleted PositionsThe preliminary budget identifies positions that are proposed to be eliminated by Fiscal Year 2020-21. Some of these flagged positions are currently occupied by an employee(s). For incumbents in these positions, below is a summary of the process that is recommended to the Board:Professional-Technical and Educational Support Professional PositionsFor Pro-Tech and ESP employees in one of these flagged positions, if that position or a comparable positon becomes vacant prior to FY 2020-21, the position would be eliminated and negotiated agreements would be followed. Human Resources and Labor Relations will assist employees to find other positions.If there are no vacancies in a flagged position by FY2020-21, there would be a reduction in force in FY2020-21 following the negotiated agreements.
28. Transition Plan for Deleted PositionsCertified PositionsCertified staff in one of these flagged positions would go through the regular transfer and overage process for open positions as outlined in the negotiated agreement. Historically, the high turnover rates of certified positions for the District has allowed teachers to fill positions that have been vacated because of retirements and separations.
29. Budget Deficit – FY18 to FY1929$1.3 million represents proposed budget additions.
30. Items for Further AnalysisFor Follow-up with the Board in MarchReview the possible reduction of up to 24.3 Teachers on Special Assignments, Implementation Specialists, and Consulting TeachersPossible cost reductions, subject to through labor negotiations
31. Additional Budget Requests31
32. Budget Process Moving ForwardMust File a Balanced BudgetIdentify Additional Reductions or Additional Sources of RevenueOffset By Use of Fund BalancePublic InputBudget TimelineBoard Direction32
33. FY18-19 Budget TimelineMarch thru June, 2018Workshop and Town Hall MeetingContinued Budget Review, Alignment with Priorities and Initiatives, Ongoing Review and Prioritization of Budget OffsetsDepartment of Taxation Final Revenue ProjectionsFile Tentative, Final and Amended Final Budgets33
34. Further Analysis for FY20 and FY21Alternative approaches to providing School Police coverageEnglish Learners reconfiguration of services, including use of itinerant teachersReview of Gifted & Talented programs in high schoolsAlternative approaches to providing professional development to teachersConsolidate Special Education self-contained programsAlternative approaches to 1:1 Special Education aides and assistantsGrowing online enrollment for North Star Online SchoolEnrollment task force team to find ways to increase District enrollment
35. Further Analysis for FY20 and FY21 (Cont’d.)Business Plus implementation of Applitracks to automate hiring process proceduresReview of athletic fees to help offset athletics transportation costsReview allocations of personnel to bond programs based on actual time spent in bond and non-bond areasAnalyze Priority-Based Budgeting results for cost reduction ideas
36. Review of Individual Budget Reduction Recommendations and Budget Additions
37. Budgets By Executive Cabinet MemberSummary PagesIndividual EC Member Pages Budget SummaryBenchmarking DataBudget Reduction Submission Forms