Board of Education of Charles County

Fiscal Year 2020Superintendent’sProposed Operating Budget

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OBJECTIVES

Student Achievement

Compensation Financial Support

Student Achievement• Maintain core programs

and progress.• Add new programs to

meet student needs.• Comply with Every

Student Succeeds Act (ESSA) requirements.

Compensation• Funding for salary

increases.• Provide a competitive

teacher salary.

Financial Support• Reduce the reliance on

fund balance.• Maintain employment

and avoid furloughs or layoffs.

• Student enrollment growth.

• Billingsley Elementary2

• CCPS 2018 student graduation rate was 95.7%, which was the third highest in the state.

• CCPS graduating students are projected to have additional lifetime earnings which will generate income tax in the future.

•Student AchievementGraduation Highlights

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Note: The statement of student earnings is from the 2016 Beacon Report.

75%

80%

85%

90%

95%

100%

CCPS Graduation Rates for FY17 and FY18

School Year 16-17 School Year 17-18

• Trends in Full-time Equivalent (FTE) Student Enrollment

For FY 2020, preliminary estimates for student enrollment are expected to reach 26,508, an increase of .7 percent (193.5 students more than the previous year).

FISCAL

YEAR

FULL-TIME

EQUIVALENT CHANGE %

2009 25,860.5 17.3 0.1%

2010 25,896.8 36.3 0.1%

2011 25,954.5 57.8 0.2%

2012 25,869.5 (85.0) -0.3%

2013 25,717.0 (152.5) -0.6%

2014 25,524.0 (193.0) -0.8%

2015 25,413.0 (111.0) -0.4%

2016 25,470.8 57.8 0.2%

2017 25,521.3 50.5 0.2%

2018 26,085.0 563.8 2.2%

2019 26,314.5 229.5 0.9%

2020 Budget 26,508.0 193.5 0.7%

(300.0)

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(100.0)

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Student EnrollmentChange in Full-Time Equivalent (FTE)

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36%

12%3%

49%

FY 201926,314.5 FTE

FARMS Sped. Ed. ELL Gen. Ed.

•Student Enrollment Special Populations

24%

9%

1%66%

FY 200925,860 FTE

FARMS Spec Ed. ELL Gen. Ed.

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In terms of enrollment growth, CCPS is ranked fourth in the state forEnglish Language Learners (ELL) and fifth in the state for total FTEstudent enrollment.

•State Funding

• State revenues are based on changes in enrollment, county wealth and free-and-reduced meals program eligibility relative to all other counties.

• FTE enrollments increased from the previous fiscal year by 229.5 students, or .88 percent.

• State Compensatory Aid is based on eligible free-and-reduced-price meal students (FARMS). FARMS student enrollment for FY 2019 is 9130 students. The total FARMS rate is 36.2 percent.

• State Funding will change based on the legislative budget process which ends on April 8, 2019.

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$5.0 million increase

($5.0)

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State Incremental Funding$ in Millions

Note: FY 2012 reflects federal ARRA and Ed jobs funding.

The total county funding request is a 9.9 percent increase from the current fiscal year.

State Law (Article 5-202) requires the minimum Maintenance of Effort (MOE) funding level to be no less than the prior year’s per pupil funding amount, adjusted by the change in enrollment. The County MOE funding requirement is $1.6 million more than FY 2019.

County incremental funding does not include allocations to support the teachers’ pension contribution in accordance with the Budget Reconciliation and Financing Act of 2012 (Senate Bill 1301/House Bill 1801).

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•County Funding $17.9 Million Increase

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County Incremental Funding$ in Millions

Note: 2013 includes state retirement2014 include $2.0M one-time funding.

Total use of fund balance will be reduced to $2.2 million for general fund operations to reflect current reserves.

If there is no budget surplus in FY 2019, the reserves for best practices will be jeopardized.

Fund balance is primarily managed via employee lapsed salary savings and other non-personnel items.

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•Use of Fund Balance$1 Million Decrease

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Teacher Attrition Compared to the Unemployment Rate

Percent Attrition Percent Unemployment

Source Data: 2018 US Department of Labor and Statistics; Annual Washington-Baltimore-Arlington Metropolitan Area (Not Seasonally Adjusted)

The Healthy, Hunger-Free Kids Act of 2010 Requires the school system to set meal prices equal to (or above) the Federal reimbursement rate for free-and-reduced meals. The law limits the amount of the increase to $0.10 in any one-year period.

Meal Price IncreasesMeal prices for paying students for the 2019 – 2020 school year will increase by $0.05 each to: ElementaryBreakfast $1.30 Lunch $2.70SecondaryBreakfast $1.45 Lunch $2.95

FOOD NUTRITION SERVICE

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•Revenue Schedule

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Amount $

FY 2019 General Fund Revenue Budget 369,597,861

Requested incremental changes:

County funding additional base 16,518,900

County funding - MOE - 229.5 student increase 1,601,100

County funding (one-time) (166,500)

Total county funding request - 9.9 percent increase 17,953,500

State funding 5,000,000

Fund balance transfer (1,000,000)

Total requested revenue incremental change 21,953,500

FY 2020 General Fund Revenue Budget 391,551,361

Percent increase 5.9%

-5,000

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Fiscal Year

Contract Assumptions

Mandatory Cost

Revenues

• Mandatory costs include cost elements that are vital to the operations of the school system.

• Since FY 2014, staffing has been reduced by 122 full time equivalent positions (cost of $7.3 million) to help balance the operating budget.

• In FY 2010, a STEP/LEVEL increase was granted during the fiscal year while revenues reflect sunset funding from the Bridge to Excellence (BTE) initiative.

•Historical Incremental Funding Trends

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•FY 2019 BudgetOperating Cost Per Pupil = $13,923

(An increase of $433.00 from the previous fiscal year)

Instruction(Classroom)

Central Administration

Maintenance, Operations& Capital

Outlay

$0.12

Student Transportation

$0.08$0.67

$0.03

Student & Community Services

$0.01 $0.09

School Administration

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•FY 2019 Budget by Object $369.6 Million

Supplies & Materials, Equipment

3%

Contracted Services

12%

Other (Utilities, Transfers etc.)

4%

Salaries & Wages

60%

Employee Benefits

21%

Compensation81%

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EXPENDITURE INCREASES

Collective BargainingReserve estimate for

collective bargaining

Health Care CostsFollowing industry trends

Student Transportation36 bus replacements6 program/enrollment growth routes

Contracts & MandatesTeachers’ pensionMABE insurance Nurses’ contract Security OfficeBillingsley Elementary

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Instructional NeedsTeachers for Enrollment

GrowthMental Health InitiativeElementary Alternative

School Program

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•Collective Bargaining Assumptions• This request is to set aside funding

for FY 2020 collective bargaining including STEP/LEVEL increases for the Education Association of Charles County (EACC) and the American Federation of State, County and Municipal Employees (AFSCME).

• The system is behind one STEP/LEVEL increase for FY 2015.

• The chart includes data based on the current scales and salary grades prior to collective bargaining, which can change how salaries are distributed.

Description Estimate $

Reserve estimate for Collective Bargaining

$9,503,100

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•Billingsley ElementaryNet Increase $4,939,000

• Planned opening August 2019. • Operations budget is based on the projected enrollment

of 677 students. • Staffing:

• Net staffing request is 66.6.• Assumes transfers of 16 teachers from other schools.• Staffing is based on 25 students per class.

• Salaries are based on STEP/LEVEL 5 and include all employee benefits.

• Requested funds shown do not include operating budgets for food nutrition services or nursing services.

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•Health Care Insurance CostsIncrease $2,000,000

• The budget includes a cost increase of $2.0 million, or 5 percent over the FY 2019 budget.

• Funding would provide for anticipated industry trend cost increases.

• An ongoing insurance committee is reviewing health care costs. The potential impact of changes to the Affordable Care Act is also under review.

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General Fund Actual Expenditures($ in Millions)

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•Student TransportationIncrease $2,712,400

• The school system’s operational bus fleet is 365 (358 contractual and seven owned by CCPS).

• This request provides funds to replace 36 buses beyond the 15-year limitation and six additional bus routes to accommodate student needs.

• State transportation funding represents about 39 percent of transportation expenditures.

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Student Transportation Actual Contractual Expenditures ($ in Millions)

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•Teachers’ PensionIncrease $895,200

The budget increase required by the

Budget Reconciliation and Financing Act

of 2012 (BRFA [Senate Bill 1301/House

Bill 1801]) to support the teachers’

pension is $895,200 more than last fiscal

year.

The teachers’ pension cost was shared

between the county and the Board of

Education between fiscal years 2013

through 2016.

Starting with FY 2017, the responsibility

for the incremental ‘normal cost’ for

teachers’ pension falls to the Board of

Education.

The FY 2020 cost is expected to be $9.85

million.

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2013 2014 2015 2016 2017 2018 2019Budget

2020Budget

Pension Funding Incremental Requirements$ in Millions

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• Security Office - $378,600

This budget includes the costs of an additional investigator, background checks and other expenses of the newly-created school security department

• Maryland Association of Boards of Education (MABE) insurance premium - $317,600This budget request reflects an insurance premium increase for workers’ compensation liability and property insurance (a 10 percent increase).

• Nurses’ contract - $103,700Contract increases of 3.2 percent, for benefits and wages.

•Other Mandatory Cost Increases

• Teachers for Enrollment Growth - $596,000

Based on a 25-to-1 student-to-teacher ratio, the enrollment increase of 193.5 students equals eight additional teachers for the budget.

• Elementary Alternative Program - $452,200

Add one behavioral specialist, three teachers, three instructional assistants, and one secretary for a new elementary alternative program.

• Mental Health Initiative - $222,200

Add two additional school psychologists for the elementary

level.

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•Other Cost Increases

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Communications - $166,500

This amount represents an allocation for communications equipment for FY 2019. This one-time allocation under COMAR 13A.02.05.03(2) was for upgrades of the broadcast recording and television programming equipment, and was a non-recurring cost exclusion from the maintenance of effort calculations.

•Budget Reductions

•Expenditure Schedule

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Amount $

FY 2019 General Fund Expenditure Budget 369,597,861

Requested cost changes:

Collective bargaining assumptions 9,503,100

Billingsley Elementary School 4,939,000

Bus contracts (36 bus replacements, six program routes) 2,712,400

Health care costs 2,000,000

Teachers' pension (SB1301) 895,200

Teachers for enrollment growth 596,000

Elementary Alternative Program 452,200

Mental Health Initiative 222,200

Security Office 378,600

MABE insurance premium increase (workers' compensation 10.0 percent) 317,600

Nurses' contract 103,700

Budget reduction: Communications Television equipment (166,500)

Total requested cost changes 21,953,500

FY 2020 General Fund Expenditure Budget 391,551,361

Percent increase 5.9%

•Future Financial and Program Considerations

• Funding OPEB (Other Post-Employment Benefits) - funding the

actuarially-determined ARC (Annual Contribution Rate) would cost about $35.4 million each fiscal year. The budget is currently $4 million.

• Kirwan Commission - The Commission on Innovation and Excellence in Education (Kirwan Commission) has recommended a $4.4 billion increase in public education spending statewide. Those costs would be shared by state and local governments, with cost sharing allocations still to be determined by the Maryland legislature.

• Financial impact of the Affordable Care Act (ACA) - the requirements for managing employee and retiree health care costs.

• Unmet requirements - These include supplemental budget requests, deferred maintenance projects, the GWWO capital

improvement study and increased technology needs.

• Funding STEP/LEVEL increases and COLAs (cost of living adjustments).

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•Next Steps

• BOE budget work session – January 28, 2019

• BOE final approval – February 12, 2019

• BOE budget due to the county – February 28, 2019

• Collective bargaining – Mid-March 2019

• End of legislative session – April 8, 2019

• County government public hearing – April 9, 2019

• Board adopts final budget based on finalcost estimates, funding levels and contract ratifications – June 11, 2019