PEORIA PUBLIC SCHOOLS DISTICT PRELIMINARY DISCUSSION OF FISCAL YEAR 2016 BUDGET. March 23, 2015

Transcription

1 PEORIA PUBLIC SCHOOLS DISTICT 150 PRELIMINARY DISCUSSION OF FISCAL YEAR 2016 BUDGET March 23, 2015

2 Mark Wilcockson, Chief Financial Officer Carla Eman, Director of Budgets and Compliance Michael McKenzie, Comptroller Presenters

3 } Background } Overview of the District s Current Finances } Discuss the Need for Changes in Budget Planning } Preliminary FY2016 Budget Recommendations } Next Steps

4 We must, as a District 150 community, realize that we are in dire financial straits. After discussion and careful consideration, budget amounts are set by the finance department as a guideline. It is important for everyone to stay within their budgets and whenever possible, stay well below the issued budget amounts as a cost saving measure. W

5 Statutory Responsibility to Monitor the Financial Condition of Illinois Public Schools Rank the Financial Condition of Each School District Recognition Review Early Warning Watch District 150 Rankings: Early Warning FY2009, Review from FY2010 to FY2013, FY2014 rankings have not yet been released Monitor/Intervene When Financial Conditions Dictate W

6 } Moody s and Standard and Poor s } Protect the Interest of Bondholders and Support the Market for Bond Transactions } S & P Recently Downgraded PSD150 Bond Ratings Downgrade from A+ to A Outlook from Stable to Negative Due to budget imbalance in the district s general fund and projected deficits and large drawdown in reserves W

7 } Observations Budget Planning Needs to Start Earlier District Priorities Drive the Budget Priority Setting and Budget Decision Making are Inclusive and Collaborative Processes } School Board Directive Bring Initial Budget Planning to the Board in March W

8 March 23 Ini,al Discussion of FY2016 Budget Reduc,on in Force for Teachers Due to Contract/Illinois Law May 26 FY2016 Budget Report to Board June 1-30 Grants Budgets Compiled June 1 - July 1 Conclusion of Illinois General Assembly Spring Session State Grant Funding Known August 24 Preliminary FY2016 Budget to Board September 28 Board approval of FY2016 Budget W

9 Overview of District s Finances

10

11 A 12-month period over which an entity budgets its spending. A fiscal year does not always begin in January and end in December; it may run over any period of 12 months. Illinois school districts have a fiscal year that begins July1 and ends on June 30. C

12 A fund is a self-balancing set of accounts, segregated for specific purposes in accordance with laws and regulations or special restrictions and limitations (e.g., Transportation Fund). Fund accounting is an accounting system emphasizing accountability rather than profitability, used by non-profit organizations and governments. It is mandated by the Governmental Accounting Standards Board and the Illinois State Board of Education. C

13 Each fund has a distinct purpose, ranging from operating expenses to funding the various activities of the organization. Educational Fund 10 The District s general fund. Each transaction not accommodated by another specific fund is accounted for in this fund. Operations & Maintenance Fund 20 Used to record transactions relating to buildings and grounds. Transportation Fund 40 Transportation of students Municipal Retirement and Social Security Fund 50 To pay for contributions to Illinois Municipal Retirement System, Social Security and Medicare. C

14 Debt Service Fund 30 Funds levied to retire bond principal and pay bond interest. Capital Projects Fund 60 Proceeds from bonds or grants to complete capital projects. Working Cash Fund 70 Tax or bond proceeds to support cash flow for the District. Tort Immunity and Judgment Fund 80 Funds levied and expended for safety and lawsuit purposes. Fire Prevention and Safety Fund 90 Fund levied and expended for health life safety of the District buildings. Self Insurance Fund 97 District self funded employee medical insurance C

15 } Operating Results Surplus - The amount of revenue remaining after operating expenses have been recognized. Deficit The amount by which expenditures exceed revenues. Note: For Fiscal Year 2015, the District has operating deficits budgeted in all 4 operating funds and 3 of the 5 non-operating funds. C

16 } The District Financial Position is the relationship between Assets (what we own) and Liabilities (what we owe). } Positive Financial Position Assets are Greater than Liabilities } Negative Financial Position Liabilities are Greater than Assets. Note: The District s FY2015 Budget projects Negative Financial Positions in the Education, O & M, Tort and Life Safety Funds c

17 Revenue Expenditures Difference CPI FY2011 Audit $ 157,051,472 $ 147,511,332 $ 9,540, FY2012 Audit 155,210, ,415,274 3,795, FY2013 Audit 152,916, ,778, , FY2014 Audit 147,354, ,993,566 (8,639,398) FY2015 Budget $ 145,522,059 $ 157,039,430 $ (11,517,371) FY2011 to FY2015 % Change - 7.3% 6.5% 7.5% Average % Change - 1.9% 1.6% 1.8% Note: Includes Educa,on, Opera,ons and Maintenance, Transporta,on and IMRF/SS Funds. Excludes Payments on Behalf. M

18 Salaries Benefits Total CPI FY2011 Audit $ 93,923,519 $ 26,250,660 $ 120,174, FY2012 Audit 92,741,025 26,464, ,205, FY2013 Audit 95,404,881 27,500, ,905, FY2014 Audit 96,086,508 28,418, ,505, FY2015 Budget $ 95,971,533 $ 28,485,135 $ 124,456, FY2011 to FY2015 % Change 2.2% 8.5% 3.6% 7.5% Average % Change 0.5% 2.1% 0.9% 1.8% Note: Includes Educa,on, Opera,ons and Maintenance, Transporta,on and IMRF/SS Funds. M

19 ED O&M TRANS IMRF/ SOC SEC TOTAL OPERATING FUNDS Revenues Property Taxes 29,865,948 6,578,403 2,631,361 5,593,577 44,669,289 Replacement Taxes 10,618,512 1,700, ,000 12,508,512 State Grants 8,007,024 4,850,000 12,857,024 General State Aid 44,710,529 44,710,529 Federal Sources 24,414,648 24,414,648 Other 2,220,537 3,837, , ,362,057 "On Behalf of" Payments 19,000,000 19,000,000 Total Revenues 138,837,198 12,116,323 7,784,061 5,784, ,522,059 Expenditures Salaries 83,936,107 7,198,553 4,788,165 95,922,825 Benefits 20,258,032 1,915, ,147 5,953,129 28,525,573 Purchased Services 17,421,364 3,090,816 1,096,000 21,608,180 Supplies and Materials 4,297, ,160 1,844,500 6,932,111 Capital Outlay 2,524, ,949 57,000 2,732,236 Other Objects 1,273,505-1,273,505 Non-Capitalized Assets - 20,000 20,000 Termination Benefits 25,000-25,000 Debt Service transfer - - "On Behalf of" Payments 19,000,000 19,000,000 Total Expenditures 148,735,746 13,165,743 8,184,812 5,953, ,039,430 Revenues over (under) Expenditures (9,898,548) (1,049,420) (400,751) (168,652) (11,517,371) Fund Balance Beg of Yr July 1, ,147,288 (886,318) 3,831,338 1,541,407 10,633,716 End of Yr (projected) (3,751,260) (1,935,738) 3,430,587 1,372,755 (883,655) M

20 Debt Service CAP Projects WORK CASH TORT LIFE SAFETY Revenues Property Taxes $ 14,689,916 $ - $ - $ 6,336,024 $ 657,840 Federal Sources 126,104 Other 14,000 7,000 10, ,000 Total Revenues 14,830,020 7,000 10,000 6,436, ,840 Expenditures Salaries 129,000 2,918,224 Benefits 2,010,447 Purchased Services 37,500 2,235, ,000 Supplies and Materials 62,000 Capital Outlay 4,225, , ,000 Other Objects 16,104, ,500 Total Expenditures 16,104,602 4,391,609-7,427, ,000 Revenues over (under) Expenditures (1,274,582) (4,384,609) 10,000 (991,347) 840 Fund Balance Beg of Yr July 1, ,326,813 6,494,280 37,774,101 (1,807,141) (154,818) End of Yr (projected) $ 10,052,231 $ 2,109,671 $ 37,784,101 $ (2,798,488) $ (153,978) M

21 $24,540,752 $6,493,057 $66,353,069 Property Taxes 40% Replacement Taxes 7% State Grants 8% General State Aid 27% Federal Sources 15% Other 4% $44,710,529 $12,857,024 $12,508,512 M

22 Revenues Audited Audited FY FY2011 Total FY2014 Total Average % Opera,ng Funds Opera,ng Funds Change Property Taxes $ 46,581,173 $ 44,836, % Replacement Taxes 12,438,903 11,827, % State Grants 14,148,140 12,516, % General State Aid 43,706,781 44,578, % Federal Sources 32,519,764 26,194, % Other 7,656,711 7,401, % Total Direct Revenues $ 157,051,472 $ 147,354, % Note: Includes Educa,on, Opera,ons and Maintenance, Transporta,on and IMRF/SS Funds. Excludes Payments on Behalf. M

23 Expenditures Audited Audited FY FY2011 Total FY2014 Total Average % Opera,ng Funds Opera,ng Funds Change Salaries $ 93,923,519 $ 96,084, % Benefits 26,250,660 28,418, % Purchased Services 17,265,522 21,484, % Supplies and Materials 5,084,472 5,917, % Capital Outlay 2,775,962 2,702, % Other Objects 1,931,001 1,308, % Non-Capitalized Assets 42,663 31, % Termination Benefits 237,533 45, % Total Direct Expenditures $ 147,511,332 $ 155,993, % Note: Includes Educa,on, Opera,ons and Maintenance, Transporta,on and IMRF/SS Funds. Excludes Payments on Behalf. M

24 Total TIF Increment Rate Percent of Property Type EAV Values Abated Setting EAV Total Farm 488, , % Residential 890,610,153 (7,679,330) 882,930, % Commercial 441,429,712 (54,306,850) 387,122, % Industrial 34,564,511 (4,282,700) 30,281, % Mineral % State Railroad 2,631,117-2,631, % Local Railroad 17,510 (460) 17, % Total EAV 1,369,741,998 (66,269,340) 1,303,472, % M

25 $1,420 $1,400 $1,380 $1,360 In Millions of Dollars $1,340 $1,320 EAV $1,300 $1,280 $1,260 $1, M

26 M

27 Fiscal Year Foundation Level $ 6,119 $ 6,119 $ 6,119 $ 6,119 $ 6,119 $ 6,119 GSA Entitlement $ 41,526,225 $ 43,190,336 $ 44,145,684 $ 47,558,638 $ 50,001,320 $ 49,986,174 GSA Paid $ 41,271,067 $ 43,187,888 $ 41,956,191 $ 42,419,538 $ 44,360,314 $ 44,543,033 % Funded 99.4% 100.0% 95.0% 89.2% 88.7% 89.1% Unfunded Amount $ (255,158) $ (2,448) $ (2,189,493) $ (5,139,100) $ (5,641,006) $ (5,443,141) Cumulative Unfunded $ (255,158) $ (257,606) $ (2,447,099) $ (7,586,199) $ (13,227,205) $ (18,670,346) M

28 The Need for Changes in Budget Planning

29 } Most local, state and federal revenue sources are stagnant at best while expenditures increase } Temporary State Income Tax Increase Was Not Extended } Salaries/benefits continue to increase due to Contractual Agreements and are the largest District expense category } Budget pressures require that staffing levels continue to be reviewed, prioritized and adjusted W

30 W

31 Revenue Expenditures Difference CPI FY2015 Budget $ 145,522,059 $ 157,039,430 $ (11,517,371) FY2016 Projected 142,466, ,023,179 (17,557,083) FY2017 Projected 139,474, ,063,620 (23,589,312) FY2018 Projected 136,545, ,161,828 (29,616,481) FY2011 to FY2015 % Change - 6.2% 5.8% 5.5% Average % Change - 2.1% 1.9% 1.8% Assump,ons: Decrease Revenue by 2.1% and Increase Expenses by 1.9%. This is the same trend as actual results from FY2011 to FY2014. Note: Includes Educa,on, Opera,ons and Maintenance, Transporta,on and IMRF/SS Funds. Excludes Payments on Behalf. W

32 Beginning Cash Available Revenue Expenses Month End Cash Available: March 2015 $23,976,000 9,839,000 (14,450,000) $19,365,000 April 2015 $19,365,000 15,521,000 (14,267,000) $20,619,000 May 2015 $20,619,000 8,340,000 (15,490,000) $13,469,000 June 2015 $13,469,000 31,456,000 (15,402,000) $29,523,000 July 2015 $29,523,000 11,806,000 (14,052,000) $27,277,000 August 2015 $27,277,000 7,121,000 (14,276,000) $20,122,000 September 2015 $20,122,000 24,740,000 (12,880,000) $31,982,000 October 2015 $31,982,000 11,970,000 (18,257,000) $25,695,000 November 2015 $25,695,000 6,614,000 (15,663,000) $16,646,000 December 2015 $16,646,000 12,224,000 (15,820,000) $13,050,000 January 2016 $13,050,000 11,810,000 (12,994,000) $11,866,000 February 2016 $11,866,000 8,522,000 (11,606,000) $8,782,000 March 2016 $8,782,000 9,839,000 (14,450,000) $4,171,000 April 2016 $4,171,000 15,521,000 (14,267,000) $5,425,000 May 2016 $5,425,000 8,340,000 (16,490,000) ($2,725,000) June 2016 ($2,725,000) 31,456,000 (15,402,000) $13,329,000 Salary and Benefits average $10,800,000 per month In May 2016, the District will be in a negative cash position, requiring borrowing to meet payroll. W

33 INITIAL FY2016 BUDGET RECOMMENDATIONS

34 } Involved staff from curriculum, finance, technology, student services, building/ maintenance, transportation, research, security } Focused on two areas: programmatic needs and staffing requirements } Collaborative process among Superintendent s Cabinet in developing and vetting Initial Recommendations W

35 } Recognize that the FY2015 budget included a planned deficit to implement high educational priorities } Eliminating the gap between revenues and expenditures will be one of the highest priorities in FY2016 and beyond } District budget planning will be more inclusive and start much earlier than prior year budget planning W

36 } } } } Plan for the worst and hope for the best Expenditures are increasingly exceeding revenues Revenues Local Tax Revenue stagnant EAV and tax revenue State Funding State revenue shortfall/expired temporary income tax increase GSA and categoricals funding decreases/lower prorations Pension shift Expenditures Increases in spending at rate of inflation Staffing levels are increasing with stable enrollments and decreasing revenues W

37 FISCAL YEAR 2016 BUDGET DEVELOPMENT SUMMARY OF EDUCATION FUND AREAS FOR INITIAL FY2016 BUDGET REDUCTIONS Program Staffing Areas Identified for Reduction Reductions Reductions Total Administration $ 303,155 $ 778,939 $ 1,082,094 Instruction 2,185,427 1,891,533 4,076,960 Curriculum and Training 478, , ,916 Other Support 72, , ,105 Subtotal $ 3,039,679 $ 3,644,396 $ 6,684,075 Additional Options for Reduction Instruction $ 2,407,000 - $ 2,407,000 Subtotal $ 2,407,000 - $ 2,407,000 Total $ 5,446,679 $ 3,644,396 $ 9,091,075 W

38 ADMINISTRATION Program Staffing Program Description Reductions Staffing Description Reductions Fine Arts - Program Costs/.5 Coordinator $ 63,982 Administrators $ 525,460 Marketing/PR 39,173 Curriculum Facilitators/Reg. Tech 232,953 Directed Enhancement Funds 200,000 Clerical 20,526 Total $ 303,155 $ 778,939 C

39 DIRECT INSTRUCTION Program Staffing Program Description Reductions Staffing Description Reductions Accelerated Reader $ 67,000 Teachers' Aides $ 345,576 ELEVATE (on- line tutoring) 198,000 14@ $24,684 Paxton Labs - labs and training 181,300 Rosetta Stone 10,000 Additional K- 8 Teachers (190,598) Illinois Virtual School (3,425) $42,355 Woodruff - Career Exploration 180,092 Field Trips 36,000 Class Size Adjustment (K- 1 to 27) 635,325 Summer Programs (athletics) 30,000 $42,355 Eliminate Longer School Day (Franklin, Northmoor, Rolling Acres) 102,960 Teaching Positions 1,101,230 Textbooks 1,000,000 $42,355 Technology 383,500 Total $ 2,185,427 $ 1,891,533 C

40 CURRICULUM AND TRAINING Program Staffing Program Description Reductions Staffing Description Reductions IB Training $ 18,675 Interventionists (6.5) $ 275,310 AP Programs (798) AVID - training and supplies 50,000 Testing (54,771) Literacy Strategies Consultant (Rainer) 35,000 Kagan 30,000 PinPoint 100,000 95% Group (Literacy/Lang Art consulting) 40,000 Math Forward 73,000 Curriculum (training stipends, printing, equip) 187,500 Total $ 478,606 $ 275,310 C

41 OTHER SUPPORT Program Staffing Program Description Reductions Staffing Description Reductions Center for Prevention Abuse $ 8,000 Counselors $ 99,802 Elite 425,000 Dean 59,890 Old Bradley Community (now Family Core) 34,120 Extra Duty 284,522 Health Centers (increase in funding) (13,000) Building Monitors 191,400 Quest (increase in funding) (728,629) Family Liaison 63,000 Family Core (one- half reduction) 247,000 Legal Fees 100,000 Total $ 72,491 $ 698,614 C

42 ADDITIONAL OPTIONS FOR REDUCTION Program Staffing Program Description Reductions Staffing Description Reductions Woodruff - Safe School 488,000 Woodruff - Contemporary School 1,369,000 Knoxville Center 550,000 Total $ 2,407,000 $ - C

43 Operations and Maintenance Capital Projects Life/Safety FY2015 FY2016 FY2015 FY2016 FY2015 FY2016 Revenues Property Taxes $ 6,578,403 $ 6,578,403 $ - $ - $ 657,840 $ 657,840 Replacement Taxes 1,700,000 1,700, Other 3,837,920 3,637,920 6,615,732 2,343,294-5,000,000 Sale of Property 500, ,000 Energy Rebates 114, ,452 Rentals 38,000 38,000 PBC Maintenance 3,299,920 3,299,920 Other Bond Proceeds 5,000,000 Estimated Beginning Balance 6,494,280 2,221,842 Other 7,000 7,000 Total Revenue $ 12,116,323 $ 11,916,323 $ 6,615,732 $ 2,343,294 $ 657,840 $ 5,657,840 M

44 Operations and Maintenance Capital Projects Life/Safety FY2015 FY2016 FY2015 FY2016 FY2015 FY2016 Expenditures 15,145,628 15,145,628 4,393,890 4,393, , ,000 Salaries and Benefits 9,113,818 9,113, , , Purchased Services 3,069,801 3,069,801 37,500 37, , ,000 Supplies and Materials 856, , Capital Outlay 184, ,202 4,227,390 4,227, , ,000 Non- capitalized Assets 6,100 6, Budget Expenditure Adjustments - (1,325,818) - (2,727,390) - 5,368,000 Staffing Reductions (1,010,000) Supplies/Services Reductions (200,000) Eliminate O& M Bldg. Improve. (115,818) Reduce Bld Imprve. to $1.0 million (3,227,390) Issue Bond to Fund $5m Projects 5,000,000 Establish $500,000 Contingency 500, ,000 Reduce Bldg Improve to $400k (132,000) Total Expenditures $ 13,230,363 $ 11,904,544 $ 4,393,890 $ 1,666,500 $ 657,000 $ 6,025,000 Revenue/Expenditures $ (1,114,040) $ 11,779 $ 2,221,842 $ 676,794 $ 840 $ (367,160) Beginning Fund Balance $ (886,318) $ (2,000,358) $ 6,494,280 $ 2,221,842 $ (154,818) $ (153,978) Ending Fund Balance $ (2,000,358) $ (1,988,579) $ 2,221,842 $ 676,794 $ (153,978) $ (521,138) M

45 Staffing Average Savings Total Personnel Reductions Reduction Per Staff Savings Total Staffing Reduction $ 53,529 $ 910,000 Other Adjustments Close One High School Pool Custodian 0.50 $ 50,000 $ 25,000 Supplies/Utilities $ 25,000 Staff Scheduling Improvements $ 50,000 FY2016 Total Buildings and Grounds Budget Adjustment $ 1,010,000 M

46 Staffing Savings per Total Personnel Reductions Reduction Staff Savings Position Notes Manual Academy 1.00 $ 50,000 $ 50,000 Custodian Staffing to 8 Peoria High ,000 25,000 Custodian Staffing to 9 Richwoods ,000 50,000 Custodian Staffing to 9 Lincoln ,000 50,000 Custodian Staffing to 5 Lindbergh ,000 12,500 Custodian Staffing to 2 Roosevelt ,000 25,000 Custodian Staffing to 4 Charter Oak ,000 12,500 Custodian Staffing to 2 Harrison ,000 25,000 Custodian Staffing to 4.5 Hines ,000 25,000 Custodian Staffing to 2 Northmoor ,000 25,000 Custodian Staffing to 2 Jamieson ,000 25,000 Custodian Staffing to 1 Knoxville Center ,000 25,000 Custodian Staffing to 1 Sterling ,000 25,000 Custodian Staffing to 2 Admin Building ,000 25,000 Custodian Staffing to 1.5 Stadium ,000 50,000 Swing Cust. Indefinite Custodian ,000 50,000 Custodian Stadium and Warehouse , ,000 Gen. Maint. Technology ,000 60,000 Spec. Maint. Trades , ,000 Trades Knoxville Closure ,000 50,000 Custodian To Be Determined ,000 50,000 Total $ 910,000 M

47 FY2015 Budget * FY2016 Budget Revenues Property Taxes $ 2,631,361 $ 2,631,361 State Grants 4,850,000 4,850,000 Other 302, ,700 Total Revenues 7,784,061 7,784,061 Expenditures Salaries 4,788,165 4,788,165 Benefits 399, ,147 Purchased Services 1,096, ,000 Supplies and Materials 1,844,500 1,844,500 Capital Outlay 57,000 57,000 Additional Buses * 903, ,000 Total Expenditures 9,088,467 8,284,812 Revenues over (under) Expenditures (1,304,406) (500,751) Fund Balances Beg of Yr July 1, ,831,338 2,526,932 End of Yr (projected) $ 2,526,932 $ 2,026,181 * Revised to reflect purchase of buses } FY2015 Budget adjusted to include purchases of new buses } FY2016 Budget using same revenue assumptions plus minimal new bus purchases } No staffing reductions additional District staff reduce cost of contacted staff. W

48 } There are two overarching goals of these initial budget recommendations: Bring projected expenditures in line with the financial resources provided to the District primarily from the State of Illinois and Local Property Taxes Protect as much as possible direct classroom instruction and student support services W

49 } Larger class sizes } Fewer District employees } Less professional development for teaching staff } Decreases in student support services } Fewer new textbooks and replacements } Increases in deferred maintenance of the District s aging facilities } Increase in local property taxes to fund state mandated Health, Life and Safety facility issues W

50 NEXT STEPS

51 March 23 Ini,al Discussion of FY2016 Budget Reduc,on in Force for Teachers Due to Contract/Illinois Law May 26 FY2016 Budget Report to Board June 1-30 Grants Budgets Compiled June 1 - July 1 Conclusion of Illinois General Assembly Spring Session State Grant Funding Known August 24 Preliminary FY2016 Budget to Board September 28 Board approval of FY2016 Budget W

52 } Continue to integrate budget development and financial planning with instructional program planning } New and current district priorities must be identified, supported and enhanced } Lesser district priorities must be assessed and evaluated for reduction or elimination W

53 } The annual budget planning cycle should be developed and adopted with planning beginning in the fall prior to the following fiscal year } Revenue sources must be further analyzed to maximize revenue generation } Staffing levels should be monitored and be appropriate for high priority program needs and student enrollments and adjusted when necessary } The responsibility for budgetary control and financial management should be delegated and assigned to program and area administrators W

54 } State Level SB1 (SB16) revised General State Aid formula Funding of mandated categoricals (e.g., transportation) Statewide capital improvement program } Local/District Level County wide school facilities sales tax Increase grant funding Increase funding for Health, Life, Safety projects W