1. Preliminary 2018-19 Budget Workshop
Presented by:
Mark Mathers, Chief Financial Officer
Mike Schroeder, Budget Director
February 27, 2018

2. Agenda Review of District’s Historical Deficits FY19 Budget Process
FY19 Budget Recommendations
Review of Individual Budget Reduction Recommendations (separate handout)

3. Review of District’s Historical Deficits or How did we get from there to here?

4. Stages of Financial Recovery
Adapted from GFOA 12-Step Financial Recovery Process

5. WCSD Historical Deficits
Actual

6. Per-Pupil Support Has Not Kept Up with Inflation6 6 6

7. Neither Have Property Values

8. Changes to Budgeted Expenditures over the Last Three Years (in mil.)8

9. FY19 Budget Process 9

10. Budget Process Update
August 2017 – Strategic Plan - Best Practices in School Budget – Achieve Structurally Balanced Budget in 3 years
September 2017 – Budget Policies and Principals, Current Budget Overview
October/November 2017 – Budget Updates, Revision of Projections, Discuss Budget Survey
December 2017 – Budget Survey Launched, Revision of Projections, Discuss New Budget Methodologies including Priority Based Budgeting (PBB), Work With Departments to Identify Reductions
January/February 2018 – Budget Survey Results, Five Budget Forums, Revision of Projections, Compile Reduction Information 10

11. General Fund (in Millions)
Structural Deficit FY19
General Fund (in Millions)
FY18 Structural Deficit Carryforward
($16.6)
Revenue Increases
$2.1
Employee Salary Increments & Health Ins
($9.5)
Salary & Benefit Basis Adj
$4.9
Other Operating Increases
($1.8)
Special Education Transfer
$1.8
Structural Deficit Before Rebase/Contras
$ (19.1)

12. Addressing the Budget Deficit
The District must file a balanced final budget
Most of the tools and savings used to balance prior year deficits are gone
Difficult decisions now need to be made
Proactive measures have been implemented to address the challenge
Financial Review Committee
Ongoing review to identify more savings opportunities
Prioritizing all the pieces to balance the budget 12

13. New Budget Methodologies
Re-basing of department budgets based on historical spending patterns
Based on an analysis of 3-year actual expenses, certain areas showed consistent savings annually.
Better alignment of budget to actual expenses
Use of Contras for Salary Savings
For areas in which we have seen savings on a fundwide basis, such as vacancy savings, versus in specific departments or resource centers, we will consider “contra” accounts.
Benchmarking analysis
Academic Return on Investment (AROI) 13

14. Identification of Budget Reductions
Finance team met with all departments in December and January.
Chiefs proposed cuts to services and staff.
Impacts of these cuts could include service level reductions, process improvements and work-arounds, incorporating a new service delivery model, or in theory strategic divestment of a program.
Review of benchmarking data and other data.

15. Scoring of Budget Reductions by Financial Review Committee (FRC)
Each reduction received a score of 1-4 from each member. FRC met numerous times to review scoring.
1: Minor impact
2: Moderate but tolerable impact
3-4: Severe impact to an operation where a work-around was not immediately identifiable
Only items receiving a 1 or 2 from each member is recommended at this time.

16. Scoring Criteria for Budget Reductions
Alignment to Strategic Plan
Degree of Impact on Direct Instruction
Risk Assessment – degree to which reduction would create unsafe conditions or noticeable impact to educational programs
Fiscal Impact – “bang for the buck”
Perceived Results of Program
Availability of Alternative Service Delivery 16

17. Cost Benchmarking Results
Lower Cost than Peer Group
Source/Peer Group
Business and Finance
(Controller and Budget)
Other Washoe County governments’ finance offices
Facilities Management
Work Order Completion
2013 Review by Council Greater of Greater Schools
Custodial
Office of Academics
Gifted and Talented
Clark County School District
Special Education (overall compared to CCSD)

18. Cost Benchmarking Results
High Cost than Peer Group
Office of Academics
Office of Student Support
English Learners 1
Counseling 2, 3
Speech and Language Pathologists 2
Special Ed. Teachers 2
Special Ed. Aides and Assistants 2
Overall Metrics 3
Overall Class Sizes
Lower, compared to CA peer school districts
Total Staff per 1,000 Students
Higher, compared to CA peer school districts
Sources or Peer Group:
1 – Clark County School District
2 – GFOA Smarter Spending Tool
3 – Peer group of California agencies

19. FY19 Budget Recommendations

20. Major Budget Recommendations
Total of $4.6 million of reductions identified, in addition to $9.6 million in base budget reductions and contra accounts
Deletion of Positions
6.05 positions shifted from General Fund to other funds
34.62 positions beginning in FY19
2.00 positions identified for FY20
Reduce District travel budgets by 50%
Increase ES and MS walk zones by ¼ mile
Further reductions of operating budgets 20

21. Summary of Budget Recommendations by Office21

22. Summary of FY19 Reductions by Office (Base Budget Cuts + Position Reductions)22

23. Summary of Admin./Operations Reductions Compared to Community Survey Results
Qu #
Area
Rank based on Responses
Total
Recommended Reductions
Reductions Needing Further Review
Not Recommended 5
Reduce the number of school administrators/executive management 1
(186,352) - 6
For the next year, defer some purchases of buses and other fleet vehicle to replace aging vehicles 2 4
Reduce/cut central services positions, such as accounting staff and computer programmers, and other central services costs such as replacement of central service computer systems 3
(427,572)
(93,248)
Increase elementary and middle school walk zones by ¼ mile
(550,000) 7
For the next year, defer or reduce maintenance operations such as custodial services and/or minor repairs.
(68,558)
Suspend field trip transportation
Eliminate transportation for high school students
Other
(620,481)
(700,000)
(1,860,073)

24. Summary of Instruction Reductions Compared to Community Survey Results
Qu #
Area
Rank based on Responses
Total Recommended Reductions
Reductions
Needing
Further Review 5
Reduce the frequency and type of academic assessment of students to the extent allowed by law 1 - 4
Reduce/cut teachers and principals on special assignment, which assist new teachers in implementing curricula and in professional development 2
(370,328)
(2,363,637) 9
Reduce teacher professional development and training 3
(611,205)
Reduce/cut Gifted and Talented Education (GATE) programs
(443,958) 12
Defer purchase of textbooks and computers in the classroom 11
Increase class sizes in Grades 4-12 by 1-2 students per classroom 6
Reduce/cut English Language Learning (ELL) programs that assist students who speak a language other than English at home 7
(682,764)

25. Summary of Instruction Reductions Compared to Community Survey Results
Qu #
Area
Rank based on Responses
Total Recommended Reductions
Reductions
Needing
Further Review 10
Reduce student support services such as the number of counselors and other non-teaching staff to the extent allowed by law 8
(503,711) -
Reduce Career and Technical Education (such as health care, auto shop) 9 7
Reduce library services 6
Reduce extracurricular activities (athletics, music, elective courses beyond state minimum requirements) 11
(10,000) 1
Reduce/cut special education programs for students with disabilities to the extent allowed by law 12
(103,800)
Total
(2,725,766)
(2,363,637)

26. Structural Budget Deficit FY19 (in millions)
General Fund
Revenue
$ M
Expenditures (before rebase/contras)
($481.3)M
Structural Budget Deficit (before rebase/contras)
($ 19.1 M)
Budget Rebase and Use of Contras
$ 9.6 M
Structural Budget Deficit before Reductions
($ 9.5)M
Recommended Reductions
$ 4.6 M
Deficit (before Additions)
($ 5.0)M

27. Transition Plan for Deleted Positions
The preliminary budget identifies positions that are proposed to be eliminated by Fiscal Year   Some of these flagged positions are currently occupied by an employee(s).  For incumbents in these positions, below is a summary of the process that is recommended to the Board:
Professional-Technical and Educational Support Professional Positions
For Pro-Tech and ESP employees in one of these flagged positions, if that position or a comparable positon becomes vacant prior to FY , the position would be eliminated and negotiated agreements would be followed.
Human Resources and Labor Relations will assist employees to find other positions.
If there are no vacancies in a flagged position by FY , there would be a reduction in force in FY following the negotiated agreements.

28. Transition Plan for Deleted Positions
Certified Positions
Certified staff in one of these flagged positions would go through the regular transfer and overage process for open positions as outlined in the negotiated agreement.
Historically, the high turnover rates of certified positions for the District has allowed teachers to fill positions that have been vacated because of retirements and separations.

29. Budget Deficit – FY18 to FY19
$1.3 million represents proposed budget additions.

30. Items for Further Analysis
For Follow-up with the Board in March
Review the possible reduction of up to 24.3 Teachers on Special Assignments, Implementation Specialists, and Consulting Teachers
Possible cost reductions, subject to through labor negotiations

31. Additional Budget Requests31

32. Budget Process Moving Forward
Must File a Balanced Budget
Identify Additional Reductions or Additional Sources of Revenue
Offset By Use of Fund Balance
Public Input
Budget Timeline
Board Direction 32

33. FY18-19 Budget Timeline March thru June, 2018 February-March
Board Budget Work Sessions
April
Last Opportunity for Board Approval of Tentative Budget (due April 15)
May
Public Hearing on Tentative Budget
Last Opportunity for Board Approval of Final Budget (due June 8)
June
6/27/17 Last Opportunity for Board Approval of Amended Final Budget (due July 5)
March thru June, 2018
Continued Budget Review, Alignment with Priorities and Initiatives, Ongoing Review and Prioritization of Budget Offsets
Workshop and Town Hall Meeting
Department of Taxation Final Revenue Projections
File Tentative, Final and Amended Final Budgets 33

34. Further Analysis for FY20 and FY21
Alternative approaches to providing School Police coverage
English Learners reconfiguration of services, including use of itinerant teachers
Review of Gifted & Talented programs in high schools
Alternative approaches to providing professional development to teachers
Consolidate Special Education self-contained programs
Alternative approaches to 1:1 Special Education aides and assistants
Growing online enrollment for North Star Online School
Enrollment task force team to find ways to increase District enrollment

35. Further Analysis for FY20 and FY21 (Cont’d.)
Business Plus implementation of Applitracks to automate hiring process procedures
Review of athletic fees to help offset athletics transportation costs
Review allocations of personnel to bond programs based on actual time spent in bond and non-bond areas
Analyze Priority-Based Budgeting results for cost reduction ideas

36. Review of Individual Budget Reduction Recommendations and Budget Additions

37. Budgets By Executive Cabinet Member
Summary Pages
Individual EC Member Pages
Budget Summary
Benchmarking Data
Budget Reduction Submission Forms