March 15, 2016 Superintendent’s Proposed Operating Budget

Superintendent’s Proposed Operating Budget Background on Operating Budget Overview of Superintendent’s Proposed Budget Risk Factors Orientation to Budget document Board’s Proposed Budget development timeline & next steps

Superintendent’s Proposed Operating Budget Background on Operating Budget Nationally, over 90% Local Board’s of Education are fiscally independent NC School Boards are all fiscally dependent on: Federal Funding State Funding Local County Appropriation

Superintendent’s Proposed Operating Budget Background on Operating Budget

Superintendent’s Proposed Operating Budget Background on Operating Budget Development begins late Fall of prior year Presentation to Board in Spring BOE must present Proposed budget by May 15 BOE must adopt Budget by June 30…….. ………… & begin operating schools July 1… …….usually without knowing its funding……. ….fiscally dependent…………

Superintendent’s Proposed Operating Budget Background on Operating Budget State Funding & County Appropriation represent 88% State of State……….

Superintendent’s Proposed Operating Budget State Economy is growing Index of NC’s Leading Economic Indictors continues to indicate pre-great recession levels & support continuing growth for NC into 2016* *Dr. Michael Walden, NCSU

Superintendent’s Proposed Operating Budget State Economy is growing NC General Assembly Fiscal Research Division outlook positive: *Fiscal Research Division of NC Legislature, Quarterly General Fund Revenue Report, January 2016

Superintendent’s Proposed Operating Budget State Economy is growing NC General Assembly Fiscal Research Division outlook positive: *Fiscal Research Division of NC Legislature, Quarterly General Fund Revenue Report, January 2016

Superintendent’s Proposed Operating Budget State Economy is growing NC General Assembly Fiscal Research Division outlook positive: *Fiscal Research Division of NC Legislature, Quarterly General Fund Revenue Report, January 2016

Superintendent’s Proposed Operating Budget Unemployment supports growing economy *Fiscal Research Division of NC Legislature, Quarterly General Fund Revenue Report, January 2016

Superintendent’s Proposed Operating Budget Operating Budget $1.5 billion operating budget

Superintendent’s Proposed Operating Budget Operating Budget $1.5 billion operating budget Assumes no state funding reductions Assumes no new state allotment formula changes Assumes state fully funds growth

Superintendent’s Proposed Operating Budget Operating Budget Developed through the lens of the Strategic Plan Requests $35.7 m additional local funding No local funding requested for change to teacher supplement formula Expectation state will legislate increases No local funding requested to change non-certified compensation base Expectation state will legislate increases Student growth continues to drive needs

Superintendent’s Proposed Operating Budget Operating Budget Student growth continues to drive needs

Superintendent’s Proposed Operating Budget Operating Budget Student growth continues to drive needs

Superintendent’s Proposed Operating Budget Operating Budget Student growth continues to drive needs ($12.2 m local) Student growth continues  increased student based costs School Allotment Formulas Locally based Teacher Supplement Special Education Teachers & TA’s Instructional Supplies Safety Assistants Other 5 new schools on-line in  increased local operating costs Utilities Custodial Maintenance Grounds keeping Transportation

Superintendent’s Proposed Operating Budget Operating Budget Program Continuity ($3.7 m local) Year 2 implementation of revised schedule for performance pay for extra duty Positions previously funded by Title II  Teacher Professional Development Customer Service Platform

Superintendent’s Proposed Operating Budget Operating Budget Legislative Impact ($12.6 m local) Increase in charter students  increased transfers to charters Estimated increases to employer health insurance & retirement contribution rates Increased cost to deliver summer Read to Achieve Estimated 3% State legislated compensation increase

Superintendent’s Proposed Operating Budget Operating Budget New or Expanding Programs ($3.7 m local) East Wake High School Redesign (page 125) Flex Academy (page 126) Middle School Visual & Performing Arts (page 129) Instructional Technology Facilitator phase in (page 127) Magnet new school & theme alignment (page 128)

Superintendent’s Proposed Operating Budget Operating Budget Unassigned Fund Balance (UFB) Board Policy Directs reserve target of 6% of County Appropriation June 30, 2015 UFB is 3.7% of County Appropriation or 1.1% of Operating Budget Goal to remove use of UFB to balance Operating Budget

Superintendent’s Proposed Operating Budget Operating Budget Growth ($12.2 m local) Legislative Impact ($12.6 m local) Program Continuity ($3.7 m local) New / Expanding Programs ($3.7 m local) Other reductions, costs, adjustments ($3.5 m local) Funding New / Expanding Programs limited by funding sustained growth 80% of local increase requested 10% of local increase requested

Superintendent’s Proposed Operating Budget Operating Budget BOE Work-Session on February 2 to gain input on focus areas Comprehensive input Most could be categorized New / Expanding Programs Funding New / Expanding Programs limited by funding sustained growth

Superintendent’s Proposed Operating Budget Operating Budget Board of Education Focus Areas for the Operating Budget Academics:  Foreign language instruction in elementary grades  Alternative programs  Programs for academically at-risk students (LEP, SWD, ED)  Programs for AIG students  Expansion of Pre-K (Ready to Learn Centers)  Flex Academy/alternative learning center for suspended students  More choice models in and around central Wake  Reformulate and enhance the arts  Reduce testing  Redesign and enhance CMAPP Differentiated resourcing:  ESM Schools: professional development, staffing strong teachers and more incentives  Directing more resources toward equity efforts with proven results  A middle school emphasis on literacy, social services, support, electives, arts, textbooks, salaries and incentives  Full-time social worker and smaller class sizes in schools with greater than 60% of students considered low-income. Professional Development:  An emphasis on Human Capital needs  An emphasis on recruitment and retention  Leadership development: creating a pipeline of teachers, leaders and AP’s Technology/Supplies:  Tech Support for instructional staff  Tech device plan  Supplies for classrooms Administration:  Equity Study  Improve Customer Service Communication

Superintendent’s Proposed Operating Budget Operating Budget Deferred needs list (pages 17-18) Alignment with staff & board focus areas New / Expanding Programs Funding New / Expanding Programs limited by funding sustained growth

Superintendent’s Proposed Operating Budget Potential Risks Senate Bill 744 – growth no longer funded in state continuation budget Will the state fund statewide student growth? Will other state reductions be required to fund the growth? 2 nd year of Biennial budget funds growth….. Utility rate increases? State legislated compensation increases beyond estimates State employer benefit rate increases beyond estimates Drivers Ed Training funded through Fines & Forfeitures  Changes? Beyond ? Teaching Assistant funding changes? Charter School funding changes  Unpredictable impact Read to Achieve Camp costs beyond funding provided?

Superintendent’s Proposed Operating Budget Budget Document Budget document now posted at PDF available to view or download All budget documents posted on-line: Superintendent’s Proposed Budget Board’s Proposed Budget Board’s Adopted Budget

Superintendent’s Proposed Operating Budget Budget Document Orientation Page 2 – Table of Contents

Superintendent’s Proposed Operating Budget Budget Document Orientation Pages 4-8 – Budget at a Glance

Superintendent’s Proposed Operating Budget Budget Document Orientation Pages 9-12 – Budget Development

Superintendent’s Proposed Operating Budget Budget Document Orientation Page 16 – Budget Changes by Category

Superintendent’s Proposed Operating Budget Budget Document Orientation Pages – Summary of Business Cases

Superintendent’s Proposed Operating Budget Budget Document Orientation Pages – Organization Section Board Member Information Strategic Plan Organizational Structure Fiscal Policy sdafasdfasdfasdfasdfasdfas dfasdfdsfaasdf Board of Education District Map

Superintendent’s Proposed Operating Budget Budget Document Orientation Pages – Financial Section Revenues Budget by Object Code Staff Budget Changes in Staff

Superintendent’s Proposed Operating Budget Budget Document Orientation Pages – Business Cases Growth Program Continuity Legislative Impact Removal of prior year one-time costs Program Elimination / Reduction New / Expanding Program Changes to Grants, Donations, Fees

Superintendent’s Proposed Operating Budget Board Time-Line Public Hearing – April 5, 2016 Board Work-Session – April 5, 2016 Additional Work-Sessions as required Board approves Proposed Budget – Target May 3, 2016 Board’s Proposed Budget to County – by Friday May 13, 2016

Superintendent’s Proposed Operating Budget Board Work-Sessions Opportunity for Board to discuss the budget and direct Superintendent & Staff to make changes Direct questions by March 28, 2016 to Terri Kimzey, Senior Director of Budget at Questions & responses reviewed at Work-Sessions & posted on-line

Superintendent’s Proposed Operating Budget Closely monitor legislative short-session for state budget adjustments Budget document posted for public at

March 15, 2016 Superintendent’s Proposed Operating Budget