Five-Year Forecast Five-Year Forecast Greg Grootendorst, Chief Economist at Hampton Roads Planning District Commission David Bradley, Director of Budget and Management Services Farrell Hanzaker, Chief Financial Officer at VBC Public Schools Greg Grootendorst, Chief Economist at Hampton Roads Planning District Commission David Bradley, Director of Budget and Management Services Farrell Hanzaker, Chief Financial Officer at VBC Public Schools
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Presentation FY 2019-2023 Five-Year Forecast 11-21-2017 · Peak Months Since Peak Employment U.S. Virginia Hampton Roads Source: Bureau of Labor Statistics, HRPDC Presentation to
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Five-Year ForecastFive-Year Forecast
Greg Grootendorst, Chief Economist at Hampton Roads Planning District Commission
David Bradley, Director of Budget and Management Services
Farrell Hanzaker, Chief Financial Officer at VBC Public Schools
Greg Grootendorst, Chief Economist at Hampton Roads Planning District Commission
David Bradley, Director of Budget and Management Services
Farrell Hanzaker, Chief Financial Officer at VBC Public Schools
2012 REGIONAL FORECAST
Presented to:the City of
Virginia Beach
Greg GrootendorstChief EconomistNovember 21, 2017
Hampton RoadsEconomic Briefing
% Who Worked Outside County of Residence
1 35
% of People Who Have a Bachelor's Degree
1 35
Median Age 1 35
Gini Coefficient (Measure of Income Equality) 1 35
% of Renter’s Spending >30% of Income on Housing
1 35
Per Capita Income 1 35
% of Veterans in the Civilian Population
1 35
Highest Value Lowest Value
15.9 %
47.7%
26.3%
$31,622
.44
35.9
31.4%
3
1
19
5
29
25
33
HR Rank in the Comparable Metro Areas
2016 American Community Survey Data for Hampton Roads
Hampton Roads Regional Benchmarking StudyPresentation to Virginia Beach
2% salary increase per year from FY 2018-19 to FY 2022-23 2% inflation 1% increase in VRS every 2 years beginning in FY 2018-19 Healthcare cost increasing by 3% from FY 2018-19 to FY 2022-23 City CIP and Operating Budget commitments Debt based on current debt schedules and projected issuances
2% salary increase per year from FY 2018-19 to FY 2022-23 2% inflation 1% increase in VRS every 2 years beginning in FY 2018-19 Healthcare cost increasing by 3% from FY 2018-19 to FY 2022-23 City CIP and Operating Budget commitments Debt based on current debt schedules and projected issuances
Expenses and Revenue Five Year ForecastExpenses and Revenue Five Year Forecast
Anticipate reducing the reliance on reversion funding by $2 million each year of the forecast period until this revenue source is no longer needed to balance the School Operating budget by FY 2022-23
Other Revenue Sources
Anticipate reducing the reliance on reversion funding by $2 million each year of the forecast period until this revenue source is no longer needed to balance the School Operating budget by FY 2022-23
REVENUE HIGHLIGHTS
2018-19 2019-20 2020-21 2021-22 2022-23
State Shared Sales Tax +2.5% +2.5% +3.0% +3.0% +3.0%
Other State Revenue +2.0% +2.5% +3.0% +3.0% +3.0%
Local Revenue (RSF) +1.97% +2.03% +2.01% +2.03% +1.96%
Federal Revenue - - - - -
Local, State and Federal Revenue This forecast reflects increases in revenue at the state and local levels and continues
to reverse the impact of significant cuts VBCPS has sustained since 2008.
All non-personnel budget line items impacted by inflation are expected to increase by approximately 2% each year of the forecast period
Capital outlay expenditures are expected to increase by approximately $450,000 to purchase five additional replacement school buses each year from FY 2018-19 to FY 2022-23
Non-Personnel Expenses
All non-personnel budget line items impacted by inflation are expected to increase by approximately 2% each year of the forecast period
Capital outlay expenditures are expected to increase by approximately $450,000 to purchase five additional replacement school buses each year from FY 2018-19 to FY 2022-23
EXPENDITURE HIGHLIGHTS
Personnel Services and Fringe Benefits Each year of the forecast period includes a 2% salary increase
The current Virginia Retirement System (VRS) rate of 16.32% is expected to drop by 0.64% in FY 2018-19 to 15.68% and remain flat at that rate from FY 2019-20 through FY 2022-23
VBCPS’ Budgetary Goals and ChallengesVBCPS’ Budgetary Goals and Challenges
Programmatic Priorities - expansion of existing programs or adding new programs (e.g. expansion of preschool and full-day kindergarten)
Technology - 1:1 technology initiative (access for all students)
Employee Benefits - costs associated with healthcare (pending outcome of federal legislation)
State and Federal Mandates - new financial transparency provision in the Every Student Succeeds Act of 2015 (ESSA)
The following list highlights examples of factors that place considerable pressure on the School Operating budget.
VBCPS’ Budgetary Goals and ChallengesVBCPS’ Budgetary Goals and Challenges
Lagging State Funding - state budget allocates nine percent less on K-12 instruction than it did in 2005
Life Cycle Needs - school buses, white fleet vehicles, copiers/multifunction devices and replacement technology equipment
Structurally Flawed Operating budget strategy - FY 2017/18 marks the eighth consecutive year VBCPS is relying on one-time reversion funds for ongoing expenses ($8.8 million)
Enrollment and demographics - slow decline in student enrollment projected to continue
Lagging State Funding - state budget allocates nine percent less on K-12 instruction than it did in 2005
Life Cycle Needs - school buses, white fleet vehicles, copiers/multifunction devices and replacement technology equipment
Structurally Flawed Operating budget strategy - FY 2017/18 marks the eighth consecutive year VBCPS is relying on one-time reversion funds for ongoing expenses ($8.8 million)
Enrollment and demographics - slow decline in student enrollment projected to continue
VBCPS’ Forecasted Revenues and ExpendituresVBCPS’ Forecasted Revenues and Expenditures
FY 2017-18Adopted
FY 2018-19Forecast
FY 2019-20Forecast
FY 2020-21Forecast
FY 2021-22Forecast
FY 2022-23Forecast
Revenue Sharing Formula* 427,710,350 436,149,554 444,983,377 453,926,729 463,125,190 472,179,891 Schools Use of Sandbridge TIF 409,000 409,000 - - - - From the Use of Money and Property 477,000 477,000 477,000 477,000 477,000 477,000 Charges for Services 2,816,638 2,816,638 2,816,638 2,816,638 2,816,638 2,816,638 Miscellaneous Revenue 224,703 224,703 224,703 224,703 224,703 224,703 State Shared Sales Tax 73,718,340 75,561,299 77,450,331 79,773,841 82,167,056 84,632,068 Other State Revenue 273,443,481 278,912,351 285,885,159 294,461,714 303,295,566 312,394,433 Federal Revenue 12,200,000 12,200,000 12,200,000 12,200,000 12,200,000 12,200,000 School Reversion/Fund Balance 8,803,897 6,800,000 4,800,000 2,800,000 800,000 -