1. MID-YEAR BUDGET REVIEW
School Year
Nancy J Ross

2. 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 once again caused a drastic cut in the current year funding with the expectation of another cut for FY18.
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.
Salaries and benefits typically continue to rise

3. OPERATIONAL FUND

4. 9-Yr History

5. 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, FY17 Budget Analysis

6. 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

7. This graph basically shows that the legislative mandates have increased salaries in all but one year and benefits in all years
Nancy J Ross, FY17 Budget Analysis

8. 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

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

10. 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 fund (Lease allocation)

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

12. Remember Save Harmless
Remember Save Harmless ?? Still there but we haven’t received this additional funding for several years. Small school size adjustment is now at stake !!
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”

13. PAUSE FOR THOUGHT

14. 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

15. Salaries and Benefits costs are 76% of your budget
Consider:
What is the ratio of teachers to students?
What is the ratio of administrators to staffing?
Therefore, is our staffing efficient?
Does the staffing pattern take us closer to our student achievement goals?
Does our staffing meet all needs of the organization?
Are we utilizing grants to cover staffing costs for those programs?
Realize staffing paid from grants does not benefit us for additional funding through the T&E for the Operational fund
Realize that any change in staffing is a recurring change

16. 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 replacement in the subsequent year
The final unit value for FY16 has been set – Loss to Mosaic Academy is $21,682 for current year
Our T & E (Training and Experience) index is reduced for next year’s budget – hypothetically losing $98,191 based on FY17 final funding (demographics and final unit value)

17. Fact “Living within our means” is a common sense approach
In our homes
In our charter school
In our state and nation
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 ensure the cash balance goal will be re-established
Continued control of cash balance is necessary in order to maintain stability
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

18. 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

19. 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?”
Now potentially overridden by the Governor/Legislature
Which also means:
Utilizing “best practices”
Thoughtful decision making at all levels
Long-range planning – even within a given year
Efficient and effective operations

20. Budget Impact for FY17 and FY18

21. 2016 Special Session
Reduction in the unit value reduced our SEG revenue by $21,678 for the current school year
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

22. 2017 Legislative Information Signed by Governor
Publicized impact for school year
“Claw back” of FY16 Audited cash, SB0114 (also HB0007)
Cost to Mosaic Academy, $26,335
At 3% of 2016 Program Cost, the reduction could have been $257,715
Per Moody’s bond rating company, this will impact the bond rating for school districts
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

23. 2017 Legislative Information “Tentative”
Potential impact for school year
Additional decrease estimated at 2% reduction in Program Cost (SEG); for Mosaic, $29,490
Minimum hourly wage for some employee groups, HB0134; for Mosaic, the estimated cost for Mosaic I.A.s, $33,118
SB329 minimum teacher salaries (no salary schedule change)
ERB contributions increase for EMPLOYEE
HB0273, Size Adjustment Units; $10,997 each year for 5 years then……
Governor wants more $$ to education – but usually with some under PED control
This is a 30-day session – which began Tuesday5
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

24. Other 2017 Legislation
HB41 Minimum Administrative salary, $50,000 times a responsibility index
HB130 and SB200 Expanded National Board certified teachers definition to Licensed school employees
HB273 Specific Charter issues
SB35 – Sufficiency funding, through SEG, for FY18
SB89 – PED authority to create a new school district when a district exceeds 40,000 students
SB135 – Federal Impact Aide credit for Charters
SB256 – Length of school day
SB290 – DISTRICT waivers when funding is cut
SB305 – Virtual Charter Schools, SEG limited to 75%
SB313 – Charter buildings, facility requirements and lease allocations
SB383 – Charter Pre-K has first priority for Charter K
SJR2 – Move back to a State Board of Education and State Superintendent
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

25. Other items to consider for FY18
T & E decrease (Training and Experience Index)
Increased salary costs as teachers move to higher levels of licensure
Salaries of employees
Rising insurance costs
Cost of the educational retirement and retiree healthcare benefit;
Cost of repair of equipment and facilities as they age
Cost of permanent facilities and the potential loss of lease assistance funding from PSCOC
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

26. QUESTIONS