Community Budget Forum FY 2015 Budget Development Dr. Patrick K. Murphy, Superintendent Deirdra McLaughlin, Assistant Superintendent, Finance & Management.

Community Budget ForumFY 2015 Budget Development

Dr. Patrick K. Murphy, SuperintendentDeirdra McLaughlin, Assistant Superintendent, Finance & Management ServicesLeslie Peterson, Budget Director

February 3, 2014

School Board’s Budget Guidance

Present a budget that is consistent with APS’ Mission, Vision, Core Values and Strategic Plan

Present a balanced budget Set aside funding from FY 2013 closeout for one-

time expenses in FY 2015 Close the budget gap, at least in part, by cost

savings and the use of reserves to offset one-time costs. Options for cost savings should include consideration of efficiencies, service reductions, and personnel cost savings. All cost savings proposals should include an impact assessment that provides an analysis of the effect of the proposed reduction on achievement of the APS Strategic Plan goals 1

School Board’s Budget Guidance (cont’d)

Reflect the School Board’s priority to provide consistent instructional time at the elementary school level

Consider other enhancements that are consistent with the Strategic Plan, including compensation

Ensure that the budget provides for long-term financial sustainability, using the updated three-year forecasts of revenues and expenditures

Ensure that APS complies with all federal, state and local laws

Ensure that fiscal, human, and physical resources are used effectively, efficiently and responsibly

2

APS Revenue Outlook

State10.7%

County Transfer 81.2%

Local Fees3.2%

Federal2.6%

Carry Forward2.3%

Arlington County funds more than 80% of APS’ budget

APS’ revenue reflects the county’s revenue outlook3

County Funding for APS

Fall projection was a 3% increase

January projection is a 5.8% increase APS will receive an additional $19.6 million

APS share of local tax revenue is 45.6%◦ County Board’s budget guidance does not provide

additional revenue for enrollment increase

4

FY 2015 Revenue Pressures

Federal Funding◦ Steady decrease over past 4 years

Almost $4.4 million or 26% since FY 2011

State Aid◦ New biennial budget◦ VRS contribution rate increase◦ Additional state mandates

5

Where We Are Today

◦Overall revenue growth = 3.2%

◦Projected expenditure growth = 3.4%

◦Projected Shortfall = $1 million

The shortfall does not include compensation or any new or expanded programs or services.

7

APS – Enrollment GrowthClass Size by Grade (2013-14)

P-4 P-3 P-2 P-1 K 1st 2nd 3rd 4th 5th 6th 7th 8th 9th 10th 11th 12th E-1 E-2 E-3 E-40

250

500

750

1,000

1,250

1,500

1,750

2,000

2,250

2,500

2261 22212274

2174 21392182

1935 1962

1830

1705

1598 1592

1486 1501 1487 14511408 1379

1436 1418

1308

8

APS – Enrollment Growth Projections

19

61

19

63

19

65

19

67

19

69

19

71

19

73

19

75

19

77

19

79

19

81

19

83

19

85

19

87

19

89

19

91

19

93

19

95

19

97

19

99

20

01

20

03

20

05

20

07

20

09

20

11

20

13

20

15

20

17

20

19

20

21

20

23

0

5000

10000

15000

20000

25000

30000

35000

Total K-12 and PreK-12 Enrollment (September 30th), 1961-2023

K-12 Enrollment

PreK-12 Enrollment

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APS – Impact of Enrollment Growth

Growing Enrollment◦ 26% increase since FY 2008◦ 3.6% increase projected for FY15

837 additional students

Capacity Issues◦ Elementary at 105.6% and climbing◦ Overall projected at 102.8% for FY15◦ As new building space comes on board, additional

operational costs are incurred

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APS – Expenditures Required for Additional Students

Cost of Enrollment◦ School staffing◦ Instructional materials and technology◦ Relocatables◦ Average annual cost past 4 years = $9.5 million◦ Projected cost for FY15 = $9.8 million

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APS – Expenditure Pressures

Compensation◦ VRS contribution rate will increase by nearly 25%

or $7.5 million

◦ An additional $3.4 million for increased health care costs

$9.8 million to fund enrollment growth

Before funding a salary increase or additional instructional time, APS must first cover these additional costs of $20.7 million.

6

APS – Expenditure Pressures

Increased instructional time Eliminate early release Wednesdays

Approximately $500,000 per school

Remain competitive and able to attract and retain high quality staff Step increase = $8 million 1% COLA = $3.5 million

Focus on early literacy

Begin implementation of a 1:1 initiative

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Options for Expenditure Changes

Compensation◦ Examine options to reduce the cost of benefits (dependent audit)◦ Contract length reductions/furloughs◦ Decrease/eliminate TSA match◦ Reduce extra days◦ Reduce creditable compensation for VRS

Program adjustments and/or changes in service delivery models◦ Redesign library services delivery model◦ Reduce field trips◦ Explore options to provide adult education services

Reduce staffing◦ Custodians – increase square footage from 21,000 to 22,000◦ Clerical – at both schools and central departments◦ Assistants – adhere to planning factors

13

Options for Expenditure Changes, continued

Consider selected increases in class size

Increase fees

Set aside funding from FY 2013 closeout to carry forward to FY 2015 to fund one-time costs

Request additional funding

14

15

Reaching Out to the Community

Joint county/schools budget forum

Community budget forums

Online Budget Tool

Online Budget Survey

School Board Advisory Groups

Principals and Employee Advisory

Groups

APS – Next Steps

February 5 (snow date for January 22)◦ Community Budget Forum (Education Center)

February 27◦ Budget Release Date

March 20◦ Public Hearing on Superintendent’s Proposed budget

April 24◦ Public Hearing on School Board’s Proposed budget

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Community Budget ForumFY 2015 Budget Development

Dr. Patrick K. Murphy, SuperintendentDeirdra McLaughlin, Assistant Superintendent, Finance & Management ServicesLeslie Peterson, Budget Director

February 3, 2014