MID-YEAR BUDGET REVIEW School Year 2017-2018 Nancy J Ross 505-330-3203 nancyross@q.com

GENERAL Revenue is dependent on state funding and, thus, the economy of our State as well as our Nation Though State funding has been restored from its plummet after 2009, the economy of our State has continued to be somewhat volatile Legislative mandates may not be totally funded on the local level because of enrollment and/or demographic changes Additionally, PED continues to request the Legislature to place funding “below the line” to fund PED’s initiatives for education in our state. Though typically a rising expense, salaries and benefits have actually decreased in the last two years.

OPERATIONAL FUND

9-Yr History

Supports we are dependent on State funding for the basic education of our students Otherwise, we are dependent on grants applied for, investment earnings, activity fund raising opportunities and any Foundation donations FY12 – Refund of Council share of FICA – at point existing employees could opt out of FICA FY13 and FY14 – addt’l allocation from PED, Fixed Costs and MOE respectively Nancy J Ross, FY18 Budget Analysis

This graph shows that you are maintaining a stable cash balance – whether $300,000, $200,000 or $100,000, the importance is that you set a goal and remain stable…….until such time as there is a need to change the cash balance goal

This graph basically shows that the legislative mandates have increased salaries in all but one year and benefits in all years Nancy J Ross, FY18 Budget Analysis

PED wants to see 65% in Direct Instruction – though our budget analyst understands that 2100 and 2200 functions are a support service to the 1000 function

So…..combining 1000, 2100 and 2200 – we exceed the 65%

STATUS OF BUDGETED EXPENDITURES This graph includes ALL Operational budget – including the cash balance protection of $214,944 and including increase to budget for Projected vs Actual Cash So, if we obligated no other expenses, our cash balance will drop to $252,940; while, if we spend the remainder of the budget other than the cash balance protection, we will end the year with a cash balance of $214,944 Exception: $28,413 of expenditures will move to 31200 fund (Lease allocation)

STATUS BY TYPE OF EXPENDITURE 54000 - $28,413 is Lease payments that will move to 31200 fund 57000 Property = supply assets

Remember Save Harmless Remember Save Harmless ?? Still there but we haven’t received this additional funding since FY15. Going back to our budget discussions last Spring: We knew our budget was very tight; however, we were hoping to receive save harmless again this year to relieve some of the pressure. We will NOT receive the funding this year !! The difference is in “small school size adjustment” = less students in the “Basic Membership” – more students in SpEd Save Harmless = Look at Grand Total Program Units generated on the 40th day of the current year to the Grand Total Program Units of the Budgeted 910B-5. If the 40th day is higher than what was budgeted, we generate additional funding called “Save Harmless”

PAUSE FOR THOUGHT

This graph supports the increased costs mandated by the Legislature – increased salaries, increased benefits If staffing costs meet the needs of the Charter, then there is only the 26% “other costs” that we can look at to balance our budget; and part of that 26% are fixed costs

Fact Considering the state of the economy, management has been cautious in its efforts to protect Mosaic Academy Cash balance has remained fairly stable as a result of proper management by the Council and Administration. Any decreases in cash were a result of thoughtful consideration for the needs of the students and staff of Mosaic Academy and with a plan for recovery in subsequent year(s) The final unit value for FY18 has not yet been set Our T & E (Training and Experience) index is increased slightly for next year’s budget – hypothetically gaining $2,181 based on beginning FY18 demographics

Fact “Living within our means” is a common sense approach It’s how we manage our personal finances, our Charter and our state and nation Critical to maintain an established cash goal and financial stability Continued review supports resources are spent to improve student achievement and meet other established goals Occasional deficit spending CAN work but only when serious discussions have preceded the decision to do so and when a definitive plan is in place to recover the cash balance lost Continued control of cash balance is necessary in order to maintain stability Continual review of cash balance goal Budget decisions to protect cash balance goal while providing for the classroom Understand the impact of using cash balance for recurring expenses ANTICIPATE THE STATE’S INVOLVEMENT IN CASH BALANCES

This graph is in direct correlation to the cash balance graph – where expenditures exceeded revenue, cash balance decreased 2016, excludes protected cash – if we spend all but the protected cash, deficit spending by $126,370 The best chance you have of controlling this graph is when you are comparing the revenue for a new budget year to the required mandates for expenditure of the new budget year. At this time, you could choose whether to obligate any excess revenue – especially in recurring types of expenditures

Standard Focus for Budgeting Expenditure of resources must clearly reflect the goals of the Charter Every decision made should be based on these questions “What is best for the students in our classrooms?” “Are we living within our means?” “Have we considered our cash balance goal?” Realizing the State may also be looking at cash balances Which also means: Utilizing “best practices” Thoughtful decision making at all levels Long-range planning – even within a given year Efficient and effective operations

Budget Impact for FY19

Other items to consider for FY19 T & E increase, though minimal (Training and Experience Index) Increased salary costs as teachers move to higher levels of licensure Salaries of employees Rising insurance costs (unknown at this time) Cost of the educational retirement and retiree healthcare benefit; Cost of repair of equipment and facilities as they age Cost of permanent facilities Other costs related to the world economy This is a 30-day session – which began Tuesday Governor’s budget proposal for Public Education: An additional $101 million of new revenue, which is 46% of the new revenue available Increase Level I new teacher salary from $34,000 to $36,000 for fixed costs, transportation, instructional materials and other costs just to operate Other “set aside” funding for: NM Reads to Lead 2.0 Pre-K, K-3 and K-3 Plus as well as capital for constructing more bldgs for same Expand new teacher mentorship program and expand district-driven performance pay pilot programs Continue pre-paid debit cards for teachers Provide stipends to help recruit and retain teachers in hard to staff subject areas and locations Offer 66 high-performing college students a $15,000 scholarship to enter college of education and commit to teaching in NM Provide $10,000 stipend to the top 50 teachers in the State, expand State’s teacher loan repayment and expand State’s new teacher education program (for Native American teachers) The FY17 Gov budget built on revenue estimates of December 2015 so the Oil and Gas economy could impact that revenue estimate

QUESTIONS