The annual budget presents a complete financial plan and includes the following: Important features...

The annual budget presents a complete financial plan and includes the following:

Important features and major changes from the preceding year

Projected revenues and expenditures from all sources with a comparative statement for the two preceding years, itemized by year, fund, source and activity

Interest, amortization and redemption amounts due on debt funds

A general budget summary

April 3, 2008Public Hearing 2

In no event shall the total proposed expenditures

from any fund exceed the estimated revenues to be

received plus any unencumbered balance or less any

deficit estimated for the beginning of the budget

year……..

April 3, 2008Public Hearing 3

The Fiscal Year 2009 budget is marked with several challenges and key issues:

Projected revenue = $320.0 M Local, state, and federal funding down $14.9 M

Projected student enrollment decline of 3,000

Budget gap $24.9M and proposed resolutions

Economic driven concerns Health benefits: +18.5% Utilities: +11% Foreclosures Unemployment Rate Federal Fund Rate

April 3, 2008Public Hearing 4

The Fiscal Year 2009 budget is marked with several challenges and key issues:

Prudent and sustained cost cutting/containment initiatives

• Long range facility planning• Reallocation of resources

Revenue increase options• Tax levy increase 3¢ levy increase generates $1M• Bond issue “No Tax Increase Bond Issue”• Flexible use of DESEG funds

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$ 4.4M decline in local revenue Property taxes Prop C Interest Tuition

$ 7.3M decline in state basic formula funding

$2.9M decline in federal funding Medicaid funding loss

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Used FY08 projected expenditures, $335M, as baseline for FY08-09 budget

• FY08 projected expenditures of $335 includes additional budget cuts at the Central Office of $4M

Build-up of additional expenditures for:• Virtual Schools• Homeless Program• Rising utility prices• Medical benefits increase• Principals’ salary increase• Fill 3 key administrative positions• Workers’ Compensation Deficit Coverage

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Defer DESEG loan payment

Eliminate all non-essential vacant positions

Staffing additions funded by reducing other positions

Previously agreed upon salary increases only (Principals)

Charter enrollment up only 5%

Savings from school reconfigurations ($1M) Closing of Lyon, Mitchell, & Gundlach

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FY07 FY08 FY09

Enrollment 32,694 30,134 27,062

FTE Staffing:Teachers 2,457 2,183 ---Total 4,412 3,985 3,643*

GOB Revenues $353M $335M $320M

* assumes staff reallocation used to cover budget gap

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FY07-08FY08-09

Special Education Budget $ 65.2 M $ 67.3 Mas a %-age of total District Budget ~13.3%

~14.9%

Special Education Enrollment 5,333 5,000

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Align limited resources with academic initiatives

Improve instruction in an efficient and cost effective manner

Balance expenditures with shrinking revenues

Implement student achievement drivers

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Representative of Academics to Speak

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Gifted Education ◦ Add 10th grade to McKinley Classical Leadership Academy◦ Increased enrollment at Kennard Classical Junior Academy

Advanced Placement Program◦ Increase curriculum rigor and relevance◦ Earn college credit in high school◦ Increase scholarship opportunities

Early Childhood Education◦ Meda P. Washington◦ Increase program capacity◦ Attract non-public school student s

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Virtual Schools ◦ FY08 enrollment: 170 part-time, 40 full-time◦ Attract charter and private school students◦ Expand to all grade levels, K-12◦ Expand course offerings

Dropout Recovery Program (Turner Branch)◦ Over 4000 SLPS dropouts◦ Consider Middle College with dual high school diploma

+ associates degree◦ Partner with Community Colleges

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Big Picture Alternative Education Program◦ FY08 enrollment: 190 in 1st - 10th ◦ Add 11th grade◦ Enrollment increase

Other Programs/Opportunities◦ Expand ESOL program◦ Expand use of instructional coordinators◦ Enhance staff professional development◦ Investigate therapeutic classrooms

April 3, 2008Public Hearing 17

FY07-08 General Operating Revenues $ 335 M

FY08-09 Projected Revenues* 320 M

FY 08-09 Revenue Gap $ 15 M

*Projected Charter School Revenue = $61.4 M

April 3, 2008Public Hearing 18

FY08-09 Projected Revenue Gap $ 15.0 M

FY08-09 Expenditures Above FY07-08Academic Initiatives $ 1.0 MHomeless Program 0.6Increase, utility prices 1.0 Increase, medical benefits 5.2 Principals’ salary increase 1.1Fill 3 key administrative positions 0.6 Workers’ Compensation Deficit Coverage 0.4Additional FY08-09 Expenditures $ 9.9

M

TOTAL FY08-09 Budget Gap $ 24.9 M

April 3, 2008Public Hearing 19

Staffing Realignments Attrition/Retirement $ 7.8 M Other Realignments $ 17.7 M

Long Range Facility Planning Average annual cost per school $ 0.4 M 25 schools @ < 60% capacity $ 10.0 M

Consider employee health care benefit participation

3,643 employees X $300/year $ 1.1 M 3,643 employees X $600/year $ 2.2 M 3,643 employees X $900/year $ 3.3 M

April 3, 2008Public Hearing 20

Free-and-Reduced meal participation 100% student participation generates additional $4M

Increase student attendance rate One missed day per student costs >$20 1% increase in student attendance rate will generate

$1.5M

Non-payroll reductions

Investigate refinancing options and funding for capital needs

Reduce GOB burden with other funding programs

April 3, 2008Public Hearing 21

Resolution with Charter Payment Calculation (~ $10M)

Increase local revenue (increase tax rate) Every $.03 increase generates ~ $ 1.0 M

FY09 Governor budget increase recommendations (~$4.5M)

State Foundation Formula Proposition C Parents as Teachers Virtual School (MoVIP) eMINTS classroom technology Early Childhood Special Education Special Education High Needs

April 3, 2008Public Hearing 22

DESE payment negotiations Basic Formula Transportation

DESEG loan forgiveness and settlement flexibility

“Rule of 80” vs. “Rule of 85”

April 3, 2008Public Hearing 23

Funding Equity versus Charter Schools• 2nd preceding year student count

• Desegregation sales tax

• Prop C

• Categorical paymentsa) Exceptional pupil aidb) Gifted educationc) Remedial reading education

April 3, 2008Public Hearing 24

Voluntary Inter-district Choice Corporation (VICC) $5M Special Education

Tax Increment Financing (TIF)

Transportation Reimbursement Regular Magnet Homeless

No ADA for Pre-School

April 3, 2008Public Hearing 25

Organizational Restructuring Qualified Staff Critical Positions Employee Morale

Aging Infrastructure Utility costs/usage spikes Necessary maintenance and repairs

Community Support School closings Accreditation

April 3, 2008Public Hearing 26

Declining Enrollment Declining revenue Fixed costs

Unfunded mandates Funding reserves Deficit spending Desegregation agreement standards

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GOB FUND BALANCE

FY2001 $55 FY2002 $40 FY2003 ($23)FY2004 ($38)FY2005 ($26)FY2006 ($25)FY2007 ($13)FY2008 ($13)

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Projected student enrollment of 24,748 • Down an additional 2,300

Projected revenue of $306.9M• Down an additional $13.3M

Additional charter enrollment• KIPP ‘09

April 3, 2008Public Hearing 33

Fiscal Year 2008/09 Budget BookPublished April 2008

April 3, 2008