2018-19 Proposed Budget

2018-19 Proposed Budget

Presented by:

Brett Johnson, Chief Financial Officer

Division of Finance

May 1, 2018

Every Student Shapes a Successful Future 1


Presentation Purpose

• Why is this topic on the board agenda?– Per board policy, including policy DBG, the administration is presenting a

budget proposal for the board’s consideration

• What are we asking the board to do with this information?– Review the budgeting assumptions and provide feedback and direction on

the continuing budget work for the upcoming fiscal year

• How is this linked to the Strategic Plan, Vision, Mission, goals & core beliefs?– The budget aligns fiscal resources to the APS 2020 Strategic Plan while

balancing the budget given the district’s financial constraints


Budget Calendar Review

Current Fiscal Year (2017/18)Next Fiscal Year (2018/19)

July 2017 August 2017

October 2017• October pupil

enrollment count day

November 2017• Governor’s Preliminary

2018-2019 Proposed Budget

• Finalize October Pupil Count Data

December 2017• Prepare readopted

budget for leadership team review

• BOE certifies mill levy

September 2017


Budget Calendar Review

Current Fiscal Year (2017/18)Next Fiscal Year (2018/19)

January 2018• BOE readopted budget approval• BOE: Enrollment projections

presentation• Refine preliminary budget

assumptions with JBC, economic forecasts, Governor's proposal

• 1st draft of all division budgets for leadership review

February 2018• BOE: Budget planning

presentation• Principals receive budget

workbooks• Finance works with all

schools and EIL to provide training and guidance

March 2018• All budget workbooks

due• Finance consolidates

budgets for leadership review

April 2018• Leadership approves proposed

budget• Budget presented to District

Accountability Advisory Committee

May 2018• Colorado Legislature adjourns

May 9 (w/School Finance and Long Bill approved)

• BOE reviews proposed budget

June 2018• BOE final budget

approval

Budget Philosophy

Budget Philosophy:

• Focused: Prioritize and align high-impact student success

• Responsive: Must account for declining scale and reduced state funding

• Strategic: Flexibility and focus on long term financial health

5Every Student Shapes a Successful Future 5

Budget Priorities

6Every Student Shapes a Successful Future

Budget Priorities:

• Human Capital: The work to recruit, retain, identify and develop a highly effective staff

• Teaching and learning resources: The work to support high-impact classroom

• Equity: The work to build upon our efforts to engage students in ways that are relevant to their lived experiences and identify and address inequities in our teaching and learning environments

• Support wraparound needs: The work to support the social, emotional and behavioral needs of our students in recognition of those needs as 21st

century workforce skills

• Maintain Momentum: The work to build upon the systems and structures which have supported our trends for improved student outcomes

• Improve services to students with diverse academic needs: The work to provide better supports for students who thrive in non-traditional classroom environments

6

Review – Impacts of Declining Enrollment


APS Student Count Only (no charters or ASCENT)

Actual Count 5 Year Average Change

2013/14 33,956

2014/15 34,604

2015/16 34,534

2016/17 33,864

2017/18 32,351 33,861.80

2018/19 31,038 33,278.20 (583.60)

2019/20 31,038 32,565.00 (713.20)

2020/21 31,038 31,865.80 (699.20)

2021/22 31,038 31,300.60 (565.20)

Review – FY 2017-18 Readopted Budget


Readopted Budget

July 1, 2017 - June 30, 2018

Beginning Balance $37,580,583

Revenues $358,281,687

Transfers ($21,543,279)

Expenditures $338,130,419

Ending Balance $36,458,842*

*Unassigned fund balance is projected to be $18.7 million


2018-19 Beginning Fund Balance2017-18 End of Year Forecast

• The beginning unassigned fund balance is the starting point for the 2018-19 budget

• Together with revenue, fund balance represents the total resources available to budget for the 2018-19 fiscal year

• Ending unassigned fund balance of $19.5 million

Subsequent Adjustments 2017-18 Budget

Revenue $ .3 million shortfall (building rental, state rescission)

Expenditures Savings of $1.1 million (benefits)

Unassigned fund balance increase $ .8 million


Budget Background – Global Summary

Revenue Impacts - $7.8m• $3m State 3% inflation increase• ($3m) funded pupil decrease• $7m increase – State $150m

Negative Factor buy-down• $844k increase to mill levy revenues

Expenditure Savings – ($15.4m)• ($2.9m) Enrollment savings• (7.3m) One-time expenditures• ($2.7m) Division budget savings• ($2.5m) One time net transfers

decrease

“Have To” Cost Increases - $7.5m• $3.8m annualized salary increases• $500k PERA (2010 legislation)• $1.5m health benefit increases• $1.75m increases to ESS

Budget Priorities-Based Cost Increases - $18.5m• $10.7m 4.05% compensation increase• $1.06m Teaching Partners made whole• $478k Preschool increase• $200k Translation services • $500k APS Avenues• $500k Mental Health Affective Needs• $477k UVA support for principals• $2.5m HB1375 net increase• $2.1m PERA employer increase


Budget Appropriation SummaryChanges in All Funds

Appropriation

2017-18 Readopted

Budget

2018-19 Proposed

Budget

Increase/

(Decrease)

General Fund $374,589,261 $387,114,618 $12,525,357

Special Programs 7,227,064 7,134,290 ($92,774)

Risk 6,310,614 7,915,000 $1,604,386

Colorado Preschool Program 7,852,517 7,250,957 ($601,560)

Grants 36,486,655 31,643,504 ($4,843,151)

Nutrition Services 21,279,217 21,294,763 $15,546

Athletic 812,879 795,832 ($17,047)

Medicaid 10,320,860 8,816,000 ($1,504,860)

Pickens Post Secondary 6,741,083 7,436,165 $695,082

Bond Redemption 106,473,051 110,865,232 $4,392,181

Building 198,333,145 148,719,186 ($49,613,959)

Capital Reserve 7,797,567 7,825,150 $27,583

Total Appropriation $784,223,913 $746,810,697 ($37,413,216)


General FundRevenue Assumptions

• State-wide negative factor decreases by $150 million; APS proportional share is approximately 4.8%

• Per-pupil total program funding of $8,447; incorporates 3% inflation rate

• District-wide pupil enrollment decrease of 1,290; funded pupil count translation decreases funded pupil count by 281 (five year averaging)

• Net assessed valuation change of 1%

• State categorical program revenue increasing by 7% accounting for current program funding levels and 3% inflation increase

• Total revenue increase of $6.7 million (1.8%)

Appropriation

2017-18 Readopted

Budget

2018-19 Proposed

Budget

Increase/

(Decrease)

General Fund $358.3 $365.0 $6.7


General FundExpenditure Assumptions

• Expenditure increase of 2.13%– ($2.9) million reductions due to enrollment (savings)

– ($2.7) million reduction in division budgets (savings)

– ($7.3) million reduction one-time expenditures in FY 2017 (savings)

– ($2.5) million One time net transfers decrease (savings)

– $4.3 million annualize January 2017 salary and PERA changes (increase)

– $14.8 million for projected salary (4.05%), PERA and Health benefit increases (increase)

– $2.4 million for special education caseload increases (increase)

– $1.06 million for Teaching Partners to be made whole (loss of federal funding)

– $200k for Translation services

– $2.5 million in net additional Mill Levy transfers (HB17-1375)

– $500k for Avenues program (formerly APS online)

– $500k Expand UVA training to additional principals

Appropriation

2017-18 Readopted

Budget

2018-19 Proposed

Budget

Increase/

(Decrease)

General Fund $338.1 $351.1 $13.0


General FundFund Balance Assumptions

• Fiscal management represents a 4.5% reserve less the constitutionally mandated TABOR emergency reserve of 3%

• The restricted and committed reserves relate to charter school and contractual agreements

• Unassigned fund balance levels mitigate current and future expenditure and revenue risks

2017-18 Readopted

Budget

2018-19 Proposed

Budget

Increase/

(Decrease)

TABOR $10.5 $11.1 $0.6

Fiscal Management $5.2 $5.5 $0.3

Non-spendable, restricted,

and committed reserves $2.2 $2.1 ($0.1)

Unassigned $18.9 $16.4 ($2.4)

Total $36.7 $35.1 ($1.6)


Special Programs

• Program funding and expenditures are projected to remain relatively flat

• Special Programs funding includes:– Kids Tech at Pickens

– Aquatics fees

– Before and after school daycare

– Facility rentals

– Pickens revenue generators (cosmetology, horticulture, book store

Appropriation

2017-18

Readopted Budget

2018-19 Proposed

Budget

Increase/

(Decrease)

Special Programs 7,227,064 7,134,290 (92,774)


Risk

• Increase in budget is due primarily to increased fund balance.

Appropriation

2017-18

Readopted Budget

2018-19 Proposed

Budget

Increase/

(Decrease)

Risk 6,310,614 7,915,000 1,604,386


Colorado Preschool Program

• CPP funding from the state is fixed, and funded program seats have not been increased by the state

• Increases to Preschool Program over the last four years include:

– Increasing ESS and wraparound costs

– Expansion of program based on 2012 mill levy proposal to fund and expand ECE

– Sharing CPP funds with charter schools (which does not increase state’s allocation)

• 50% of 2012 mill levy dollars allocated for ECE are used for kindergarten para’s

• Fund balance has been entirely spent down in last three fiscal years to fund the gap

• A combination of a general fund increase and reductions to staff will be made to help close funding gap

Appropriation

2017-18 Readopted

Budget

2018-19 Proposed

Budget

Increase/

(Decrease)

Colorado Preschool Program 7,852,517 7,250,957 (601,560)


Grants

• Utilizes currently known allocations from state and federal sources – actual allocations will be known later in the year

• Reductions due largely to using base amounts for federal programs pending actual allocations

Appropriation

2017-18

Readopted Budget

2018-19 Proposed

Budget

Increase/

(Decrease)

Grants 36,486,655 31,643,504 (4,843,151)


Nutrition Services

• Program revenues and expenditures are projected to remain relatively stable

Appropriation

2017-18 Readopted

Budget

2018-19 Proposed

Budget

Increase/

(Decrease)

Nutrition Services 21,279,217 21,294,763 15,546


Athletic

• Revenue, transfers and expenditures remain relatively stable

• Fund balance has decreased over multiple years

• Newly adopted fees not yet incorporated into the amounts above

Appropriation

2017-18

Readopted Budget

2018-19 Proposed

Budget

Increase/

(Decrease)

Athletics 812,879 795,832 (17,047)


Medicaid

• Expenditures are projected to decline based on reduced fund balance

Appropriation

2017-18

Readopted Budget

2018-19 Proposed

Budget

Increase/

(Decrease)

Medicaid 10,320,860 8,816,000 (1,504,860)


Pickens Post-Secondary

• Revenues and expenditures increase due to tuition/fee increases and increased fund balance

Appropriation

2017-18

Readopted Budget

2018-19 Proposed

Budget

Increase/

(Decrease)

Pickens Post Secondary 6,741,083 7,436,165 695,082


Bond Redemption

• Budgeted mill levy rate remains constant at 23.000

• Increased assessed value within the district results in a favorable fund balance which should mitigate rate increases for the short term

Appropriation

2017-18

Readopted Budget

2018-19 Proposed

Budget

Increase/

(Decrease)

Bond Redemption 106,473,051 110,865,232 4,392,181


Building

• Represents unspent bond proceeds from 2008 & newly issued 2017 bond proceeds

• Continue to spend down proceeds on appropriate projects LRFAC

Appropriation

2017-18

Readopted Budget

2018-19 Proposed

Budget

Increase/

(Decrease)

Building 198,333,145 148,719,186 (49,613,959)


Capital Reserve

• Accounts for the capital projects (moved from General Fund to Capital Reserve in 2017-18)

• Source of funding is a transfer from the General Fund and JPMorgan Bus Lease proceeds

Appropriation

2017-18 Readopted

Budget

2018-19 Proposed

Budget

Increase/

(Decrease)

Captial Projects 7,797,567 7,825,150 27,583


Budget Timeline

• April 23 – DAAC meeting to receive input of budget priorities

• May 1 – Proposed budget as information item

• June 5 Budget Hearing - Information items

– 2017-18 Supplemental budget, if necessary

– 2018-19 Adopted budget

– 2018-19 Use of a portion of beginning fund balance

• June 19 Budget Hearing – Budget Adoption

– 2017-18 Supplemental budget, if necessary

– 2018-19 Adopted budget

– 2018-19 Use of a portion of beginning fund balance

*The events in blue provide opportunities for public discussion, and are announced in the Aurora Sentinel (right). Proposed budget may be accessed online and may also be reviewed in the Superintendent’s office.

Documents

2018-19 Proposed Budget