Board of Education December 11, 2014

2015/2016 BUDGET

Enrollment and Statewide

Funding Update

2014/2015

Enrollment Impact

Membership

Enrollment

FTE

Funded Count

2014 Student Count

13/14 14/15 Change

District-Managed School Membership

78,416 78,487 71

Charter School Membership 7,595 8,084 489

Total District Membership 86,011 86,571 560

2014 Student Membership

• Losing the calculation benefit of averaging for declining enrollment

• Will not see growth in funding equal to growth in membership

Enrollment Impact

2015/2016 Statewide

Funding Update

2015/2016 Statewide Funding Update

All estimates are based on the Governor’s Budget Request for 2015/2016 and the estimated funding impact per CDE.

2014 October count has not been

incorporated into the CDE estimates at this time.

For clarity, the current projection matches CDE’s data release in both funding amounts and the current enrollment estimates being used.

2015/2016 Statewide Funding Update

We do have enrollment increases. Once new enrollment numbers are included, then funding will change.

Most of Jeffco’s enrollment growth is with charter schools.

Funding will be adjusted for growth, but as required, the funding tied to charter school growth will flow through to the charter schools.

2015/2016 Statewide Funding Update

Funding amounts will change throughout the legislative session.

Final funding is typically available in late spring.

2015/2016 Statewide Funding Update

Proposed Increased Statewide Funding for K-12 Education of $480M

Inflation: 2.8% Growth in students: 10,453

The increase is split between one-time funding and ongoing funding

2015/2016 Statewide Funding Update

$480M K-12

Education

Increase in the average statewide per pupil of $475

$480M

ONE TIME

$200M

ONGOING

$280M

2015/2016 Statewide Funding Update

One-time Negative Factor Statewide

The Governor’s Request proposed that the fund balance in the State Education Fund be spent down.

The amount of the negative factor is proposed to improve by $200M from ($894M) to ($694M)

This translates to an improvement from 13.1% to 9.8% that will be deducted from the fully funded total program.

**This reduction in the negative factor is for one year only.

2015/2016 Jeffco

Funding Update

$465 Per

Pupil

Revenues

$37M

2015/2016 Jeffco Funding Update

$37M

ONE TIME

$19.8M

ONGOING

$17.2M

2015/2016 Jeffco Funding Update

Numbers will change once enrollment is updated.

Charter schools have an increase in funded pupils

of ~400 which approximates to an additional $3M.

Amounts in millions Ongoing One-time Total

Governor’s Request 17.2 19.8 37.0

Pass through to charter (1.4) (1.6) (3.0)

General Fund 15.8 18.2 34.0

General Fund Projection

2015/2016 Assumptions

REVENUE Ongoing One time Total

School Finance Act 17,260,000 19,770,000

Flow Through to Charter of state PPR plus 79% of MLO PPR (1,400,000) (1,550,000)

Specific Ownership Tax 1,300,000

Move kindergarten to the General Fund from the Child Care Fund 4,000,000

Investment Earnings, fees, and other (100,000)

Total Change in Revenue 21,060,000 18,220,000 39,280,000

EXPENDITURES

Legislated PERA AED 0.3% 1,215,000

Legislated PERA SAED 0.5% 2,025,000

Estimated Retirement and Turnover Savings (4,000,000)

Affordable Care Act 3,000,000

Move kindergarten to the General Fund 4,000,000

Salary Accrual, Utilities 1,500,000

Increase in GF transfers (Capital Reserve, Transportation, Insurance Reserve) 487,600

General Increase Placeholder TBD 12,000,000 18,000,000

Total Change in Expenditures 20,227,600 18,000,000 38,227,600

Change in General Fund Reserves 832,400 220,000 1,052,400

JEFFCO GF Reserve Balances

General Fund Balance

State Accreditation

Bond Ratings

Sound Financial Management

State Auditor’s Fiscal Health Indicators

TABOR – 3%

Board Policy – 4%

Definitions

Fund Balance – The difference between the assets and liabilities reported

in a governmental fund, similar to the working capital of a private-sector

business. Components of fund balance:

Nonspendable – portion of fund balance assets that will never convert to cash. (e.g. prepaid items and inventories)

Restricted – portion of fund balance that reflects resources subject

to externally enforceable legal restrictions. (e.g. creditors, state laws

and regulations and grantors)

Committed – portion of fund balance that represents resources

whose use is constrained by limitations that the government imposes

upon itself at its highest level of decision making and remain binding unless removed in the same manner.

Assigned – portion of fund balance that reflects a governments intended use of resources. Authority to change assigned balances can be delegated to other officials and does not require formal action to change.

Unassigned – portion of fund balance in excess of other components.

Best Practices - GFOA

For governments that compare “unassigned fund

balance” to revenues:

A minimum balance of no less than 5–15 percent

of regular general fund operating revenues.

For governments that compare “unassigned fund

balance” to expenditures:

A minimum balance of no less than 8–17 percent

(one to two months) of regular general fund operating

expenditures.

June 30, 2014 Reserves

Reserve Category Amount %

Exp Best

Practice

TABOR Reserve $ 16,494,681

Board of Education Policy Reserves (plus other Unassigned) $ 32,260,251 5% 8%-17%

School Carryforward Reserves $ 9,600,000

Utility Reserve $ 2,000,000

Nonspendable $ 942,951

Total Year End Reserve Balance $ 61,297,883

Perspective and Context

2014/2015 planned ending total reserves

$64M total – 36 days of operations

$35M unassigned – 20 days of operation

*Numbers rounded for simplicity

(total budget/365 days = $1.7M/day)

Perspective and Context

Fund Balance/Reserves

are just one piece

of Strategic Budget

Development and

Budget Management.

Fund Balance decisions

should be strategically considered

as part of the overall budget process.

Recommendations

Staff Recommendations

Positive Undesignated Fund Balance

Do not use reserves for on-going expenditures (compensation, operations, etc.)

$71M – 40 days of operations

Recommendations

Financial Oversight Committee (FOC) Recommendations Incorporate strategic priorities into reserve policies

including:

• preservation of bond ratings

• reserve levels adequate to mitigate impacts

of unanticipated financial crisis

• include GFOA best practices as target ranges

for unassigned reserve balances

Do not consider pledging district buildings in place

of TABOR cash reserves.

Timeline

Aug 2014

•23rd – Board Retreat

•Preliminary Direction on Budget Development Process

•High Level presentation on Student Based Budgeting (SBB)

Sept 2014

•Board Study Session

•Student Based Budgeting (SBB)

•Comprehensive Direction on Budget Development Process

•Community Outreach Framework

•Financial Oversight Committee

•SBB

•Reserves

Oct 2014

•Board Study Session

•Early BOE direction on compensation placeholders, charter funding, fees, etc.

•SPAC

•SBB

•Budget Development Process

•SAC

•SBB

•Budget Development Process

Nov 2014

•6th - Board Regular Meeting

•Staff Recommendations Department Budgets based on service/program review and prioritization

Dec 2014

•11th - Board Study Session

•Early Budget Forecast

•BOE Direction on budget

•October Count & Gov Budget Proposal

•SPAC

•Early Budget Forecast

•October Count & Gov Budget Proposal

Timeline

Jan 2015

•Board Community Forums

•SAC/DAC

•School level accountability groups meet

•District level accountability group meets

•Open Citizen Budget tool for two weeks

Feb 2015

•Board Study Session

•SAC/DAC/ FOC, Community input presented to BOE

•BOE Direction on budget

Mar 2015

•19th - Board Regular Meeting

•Final BOE direction on 2015/2016 Proposed Budget before Spring Break

Apr 2015

•4 weeks to develop Proposed Budget for May 7 BOE meeting

May 2015

•7th - Board Study Session

•Presentation of Proposed Budget 1st Public Hearing (will include a revised forecast if any legislation is final.)

•Proposed budget must be presented to the BOE no later than June 1 per C.R.S. 22-44-108(1)

•BOE Final Revisions to Proposed Budget

•June 11th - Board Regular Meeting

•2nd Public Hearing

•Budget Adoption

Timeline

December

Projection #1 based on Governor’s Budget Request and CDE’s data run

BOE direction on any priorities or placeholders

Timeline

January

All forms of feedback will be provided to the Board including: School Accountability Committee’s (SAC) priorities Strategic Planning and Advisory summary of SAC

priorities Feedback from community budget forums Results from community engagement survey,

if available Reports from Center for Priority Based Budgeting

(CPBB) Leadership priority recommendations for:

• New funding

• Any priorities that can be addressed by repurposing

funds identified through the CPBB process.

Timeline

February

BOE budget discussion about all feedback provided BOE requests for additional information BOE priorities including direction for placeholders

or identified items to be funded Budget office will incorporate all BOE direction

into a revised projection to be presented in March March

BOE meeting March 19, 2015 present Projection #2 inclusive of BOE direction on priorities and placeholders

Timeline

April

Budget office builds the proposed budget May

BOE meeting May 7, 2014, first public hearing to present the 2015/2016 Proposed Budget including Projection #3

BOE direction on any revisions to be incorporated into the adopted budget

June

BOE meeting June 11, 2014, for second public hearing for 2015/2016 budget adoption

Board Direction

Board direction on priorities for proposed budget development and/or budgetary placeholders