Guilford County SchoolsBudget Update

Board of Education RetreatSeptember 24, 2011

Presented bySharon Ozment, CFO

2011-12 BUDGET

2 2011-12 Budget Resolution = $659,554,304

Funding sources: State ($370.6M) Local ($183.0M) Federal ($45.1M) Capital Outlay ($4.0M) Enterprise Funds: Child Nutrition ($31.4M) ACES (After School Care Enrichment Services) ($6.4M) Special Revenue ($19.0M)

2011-12 BUDGET

3

2011-12 BUDGET

4

2011-12 BUDGET

5

BUDGET REDUCTIONS/REDIRECTIONS

6 How we designate operating budget between schools and administrative support services provided to schools Obviously there are many ways one might go about this task We opt to use a conservative approach based on the Uniform Chart of Accounts (COA) established by NC Department of Public Instruction (NCDPI) The COA classifies expenditures into the following 5 purposes: 5000 = Instructional ServicesIncludes the costs of salaries and benefits for teachers, instructional assistants, instructional leadership and support staff, as well as contracted instructional services, instructional supplies, materials, and equipment, professional development, and any other cost related to direct instruction of students.

BUDGET REDUCTIONS/REDIRECTIONS

7

BUDGET REDUCTIONS/REDIRECTIONS

8 COA purpose codes (continued): 7000 = Ancillary Services Community/nutrition services 8000 = Non-Programmed Charges Unbudgeted funds Indirect costs Transfers to charter schools 9000 = Capital Outlay Expenditures for acquiring fixed assets, including land or existing buildings, improvements of grounds, initial equipment, additional equipment, and replacement of equipment . We designate expenditures coded to a 5000 series purpose code as schools and all other expenditures as being administrative support services provided to schools with one exception, custodians (6540 purpose) are included in schools.

2011-12 BUDGET

9

BUDGET REDUCTIONS/REDIRECTIONS

10 2009-10 = $21.9M Losses in State funding = $20.7M Increase in employers hosp ins rate = $569K 2008-09 = $4,157/Full-Time Equivalent (FTE) 2009-10 = $4,527/FTE Increase in employers retirement rate = $585K 2008-09 = 8.14% 2009-10 = 8.75%

BUDGET REDUCTIONS/REDIRECTIONS

11 2010-11 = $17.7M (in addition to 2009-10 reductions/redirections) Losses in State funding = $10.4M Increase in employers hosp ins rate = $1.5M 2009-10 = $4,527/FTE 2010-11 = $4,929/FTE Increase in employers retirement rate = $682K 2009-10 = 8.75% 2010-11 = 10.51% Strategic plan implementation/magnet revisioning = $892K Increase in sustaining operations costs = $475K Established a $3.7M reserve for operational expenses Hold for possible addl 1% state reversion in January 2011 or Bank for 2011-12 budget

BUDGET REDUCTIONS/REDIRECTIONS

12 2011-12 = $24.3M (in addition to 2009-10 and 2010-11 reductions/redirections) Losses in State funding = $10.6M Increase in employers hosp ins rate = $3,225 2010-11 = $4,929/FTE 2011-12 = $4,931/FTE Increase in employers retirement rate = $2.7M 2010-11 = 10.51% 2011-12 = 13.12% Increase in sustaining operations costs = $4.0M Established a $10.7M reserve for operational expenses $3.7M of the $10.7M is from 2010-11 reserve Hold for possible 2011-12 state reversions and/or Bank for 2012-13 budget

BUDGET REDUCTIONS/REDIRECTIONS

13 2011-12 (continued): Identified $35.6M in potential reductions/redirections Used $17.4M to address: Losses in State funding Increases in employers hosp ins & retirement rates Increases in sustaining operations costs Gave $4.7M back to schools: +$3M in Weighted Student Formula (WSF) funds (allocated WSF $ @ 75% in 2011-12 versus 69% in 2010-11) +$1.7M from teacher allotment/class size adjustment (did not increase class size by 0.25 students in grades K-12) Reserved $10.7M for operational expenses Removed $2.9M salary reduction from consideration (-2 days pay for all GCS employees earning >=$35K)

LOCAL FUNDS

14

STATE FUNDS

15

2012-13 BUDGET DEVELOPMENT PHILOSOPHY16Maintain approach used in three previous fiscal years:

Use Board of Educations Mission, Core Values and Strategic Plan Achieving Educational Excellence to guide budget development process

Reflect current and projected economic conditions and plan for various potential funding scenarios

Fund strategic plan initiatives through budget reductions and/or redirections or by seeking outside funding

Limit request for additional funds from County Commissioners to sustaining operations cost increases not covered by other significant reductions or redirections

Limit impact of budget reductions on the employment of existing personnel

2012-13 STATE BUDGET OUTLOOK17

CAPITAL OUTLAY FUNDS

18

2012-13 BUDGET DEVELOPMENT19

Questions, Answers and Next Steps

*********