1. 2014-15 PRELIMINARY BUDGET MARCH 25, 2014

2. Where Do We Stand?  TOTAL LOCAL BUDGET REQUESTS AFTER INITIAL REVIEW PROCESS (Includes Local Current Expense Fund, Capital Outlay Fund, and Special Revenue Fund) $124,530,375

3. Where Do We Stand?  TOTAL REVENUE SOURCES AVAILABLE OTHER THAN THE COUNTY APPROPRIATION $8,215,345

4. Where Do We Stand?  PRELIMINARY NEED FOR COUNTY APPROPRIATION FUNDING $116,315,030

5. Where Do We Stand?  PRELIMINARY COUNTY APPROPRIATION NEEDED FOR 2014-15 $116,315,030  CURRENT YEAR COUNTY APPROPRIATION $112,722,753  POTENTIAL INCREASE NEEDED $3,592,277 3.19%

6. Preliminary Funding Info  First correspondence from the County indicated a potential REDUCTION in funding of $2.6 million  Part of the reduction is the “hold-harmless” amount added to the formula for 2013-14  Part of the reduction is a preliminary assessment that County sales tax revenues are declining  We are awaiting “better” information

7. Budget Highlights  Request includes funds to match a potential 3% across-the-board pay increase for local-paid base salaries and for all local supplements $1,645,900  Request includes an already-adopted increase in health insurance costs $123,000

8. Budget Highlights  We are losing the ability to transfer 400 CTE months of employment for other state needs for 2014-15 and are scheduled to lose the ability to transfer another 400 months the following year. This ability “saved” us $520,000 this year.  These last two slides account for 64% of the needed county funding increase

9. Budget Highlights  The Board originally budgeted $4.1 million of fund balance for 2013-14, primarily to make up for state teacher assistant funding losses  Current estimates are that we will need to use $2.7 million of local fund balance  That will leave us with local fund balance= $12,750,000

10. Budget Highlights  We are proposing to eliminate 95-100 Teacher Assistant/Primary Reading Teacher positions due to the expected permanent loss of $4.5 million of state funding  That leaves our formula at:  One for each K-1 classroom  One for every two 2 nd grade classrooms

11. Budget Highlights  The teacher assistant position loss would have been higher had the Board not already reduced their work days to 208 and were we not using almost 30% of these positions as half-time primary reading teachers (a half-time teacher costs approximately $7,000 less than a full- time assistant)

12. Budget Highlights  Due to turnover since last year, almost half of the positions proposed to be lost are filled with people already aware that they likely will not be employed next year.  Primary reading teachers are year-to-year employees by the nature of their half-time roles (many are “double-dipping” retirees)  There could be other opportunities available for some who lose their TA jobs

13. Budget Highlights  A few new positions are proposed:  Two classified data manager positions  Media coordinator position at Kennedy  Assistant principal position at Atkins  One day per week of AIG teaching support for 11 elementary schools  Intern position in Research/Evaluation  2 facility management positions, expected to pay for themselves rather quickly

14. Budget Highlights  Other initiatives:  Postpone 3 rd grade “Imagine It” and use $200,000 toward K-3 reading materials  Centrally fund activity bus repairs so that school allotments can be focused on meeting the needs of students ($75,000)  Pay IB membership/exam fees ($78,300)  New standards-based resources ($92,000)

15. Budget Highlights  “Required” Increases  Utilities ($330,000*)  Workers’ Compensation and Dental claims experience ($153,700)  Payments to Charter Schools ($100,000)  SRO contract increases ($35,000) * A large percentage of this increase involves a switch to contracting with the City for solid waste pick-up in the County – initial cost, but saves the replacement of a truck and allows for repurposing the driver

16. Budget Highlights  Other “no cost” (we hope!) initiatives:  Elementary classified testing/technology facilitators, freeing up curriculum coordinators from testing duties  Elementary specialists to restore five-day specials rotation (currently six-day)  Full-time (from current half-time) study skills positions at Equity+ middle schools

17. Budget Highlights  Other “no cost” (we hope!) initiatives:  An extra release period for high school athletic directors  “Freeing up” $625,000 per year of federal Title II funds for staff development  A two-week Title 1 summer reading program in July/August (no cost to the local budget)  Refocus Title 1 bonuses into training stipends and pay for additional student remediation

18. Other Information  Textbook replacements will continue to be delayed due to expected lack of state funding (planning allotment is only $765,000) and due to uncertainty surrounding North Carolina standards  Increased supplies and materials school allotment is proposed from local fund balance to help teachers acquire additional resources

19. Other Information  The 119-day contract employment of new classified employee hires continues to hold down costs, save management time and effort, and ensure quality hires  We continue to outsource housekeeping services school-by-school as we incur turnover in staffing  ACA is not impacting the budget for 2014- 15, but could for 2015-16

20. Contingencies  The state 2013 Budget Bill proposed to restore $1.3 million in funding for teachers and teacher assistants in 2014-15  We fear those funds will be “hijacked” for teacher and state employee pay raises  We need to keep the pressure on the General Assembly to provide more textbook funding

21. Contingencies  Our County Appropriation is still less than it was in 2009-10, and our student population is up by over 2,000 since then  We should suggest that the 2013-14 level of funding become the new base for the operation of the formula (locking in place the “hold-harmless”, since the Commissioners reduced the net property tax rate despite our continuing level of needs and increasing student enrollment)

22. Contingencies  Even if we continue at a hold-harmless level of County funding, our needs far outpace that funding level  It would be extremely difficult to reduce the budget another $3.6 million on top of eliminating 95-100 teacher assistant positions  The Governor’s teacher pay plan would severely impact our local budget needs

23. Contingencies  Fund balance is available to pick up some/all of the $3.6 million in needs for at least one year  We can spend that year evaluating long- term budget savings strategies  There is some chance of additional one- time funding opportunities that could reduce some of our current operating budget lines

24. Summary  $3,592,277 needed increase in County Appropriation  81% of that increase is due to factors beyond the control of the Board (pay/benefits increases, rate increases by other agencies, charter enrollments)  After five years of constant budget cutting, “low impact” budget cutting strategies are no longer available