1. 2013-14 BUDGET BRADLEY COUNTY SCHOOLS

2. OBJECTIVES TO PROVIDE EVERY CHILD IN BRADLEY COUNTY SCHOOLS WITH THE BEST POSSIBLE EDUCATIONAL OPPORTUNITIES TO MAXIMIZE THE USE OF AVAILABLE RESOURCES 2

3. BUDGET DEVELOPMENT FIVE STEP PROCESS 1.Planning (Begins with Budget Calendar) 2.Preparation (Estimation of Revenues/Expenditures) 3.Adoption (By Board of Education and County Commission) 4.Implementation (Programs & Services) 5.Evaluation (includes monitoring/audits/reviews) 3

4. SOURCES OF REVENUE Local Revenue –Property Tax (city & county schools receive.8435 of $1.792 rate) –Sales Tax (city & county schools receive ½, divided on per pupil basis) State Revenue –BEP Funds  Instructional Components (73.91% State/26.09% Local)  Classroom Components (78.48% State/21.52% Local)  Non-Classroom Components (57.01% State/42.99% Local) –Career Ladder Funds –Other State Grants (CSH, Extended Contract, Driver Ed, Food Svc, etc.) –Pre-K (we amend our budget when we receive the allocation) –State Revenue Sharing (TVA)  Federal Revenue –Adult Education Funds –Other Federal Funds Through the State (IDEA, ROTC) 4

5. Total Revenues 5

6. Local Revenues 6

7. PROPERTY TAX TOTAL ASSESSMENTS (Real, Personal & Public Utility Property) 2,084,419,647 Per $100 20,844,196 School tax rate (.8435) x County Share (.6672) x.5628 11,731,113 Collection Factor x.94 Property Tax Budget – Bradley County Schools 11,025,000 Note: Each.01 generates $196,000 in tax revenue, using 94% collection factor 7

8. STATE BEP REVENUE The BEP formula is strictly a comprehensive funding formula. It is not a spending plan or budget. The BEP formula determines the funding level that each school system earns to provide a basic level of service to all students. The formula is based on student membership. The formula keeps up with the increased cost of education from year to year, using inflation-adjusted cost components. Each school system has flexibility in determining the appropriate use of state funds to best meet the needs of the school system and the applicable requirements of state laws and regulations. 8

9. REVENUE SUMMARY Approximate $ Increase 2013-14 vs 2012-13 Local Revenue +$ 323,000 (+ 1.4%) State Revenue +$2,531,000 (+ 5.9%) Federal/Other Rev +$ 25,000 (+ 6.4%) TOTAL INCREASE IN BUDGETED REVENUE + 2,879,000 (+ 4.4%) 9

10. EQUITIES (RESERVES) What is the appropriate level of “Unassigned” Reserve that should be maintained in the General Purpose School Fund? The answer to this questions varies, depending on whom you consult. For example, the Government Finance Officers Association recommends no less than 8% of operating expenditures. Ron Woody of County Technical Assistance Service recommends 10% as the appropriate level. Bradley County policy requires us to keep at least 5% in the unassigned reserve. My recommendation for an unassigned reserve is to maintain between 6% and 10% of expenditures. If the unassigned reserve approaches 10%, the Board should consider some NON-RECURRING expenditures. If the unassigned reserve approaches 6%, the Board should be more conservative in budgeting and expending funds. 10

11. Expenditures 11

12. Expenditures 12

13. BUDGET FOR EXPENDITURES 2012-132013-14 BUDGETBUDGET% CHANGE Salaries 42,161,15043,110,120 + 2.3% Benefits— Social Security 2,537,775 2,591,900 + 2.1% Retirement 3,878,675 3,970,050 + 2.4% Life Insurance 43,700 44,150 + 1.0% Health Insurance(includes retirees) 5,849,900 6,482,350 + 10.8% Medicare 600,300 607,650 + 1.2% Contracted Services (Bus, Janitorial, etc) 3,172,300 3,181,800 + 0.3% Materials, Supplies, Textbooks 2,277,000 2,209,280 - 3.0% Property/Casualty/Worker Comp/Unemployment 761,000 808,000 + 6.2% Utilities (Electric, Gas, Water,Sewer,Phone) 3,000,000 2,921,000 - 2.6% Trustee Commission 360,000 360,000 + 0.0% Capital Outlay 3,220,000 1,500,000 - 53.4% Other (Equip,Maint of Eq., Travel, Legal/Audit, Dues,Gasoline, etc) 919,200 2,153,700 + 234.3%*** 68,781,000 69,940,000 + 1.7% ***One time state technology investment (619,000) + payment to city (570,000) 13

14. MAJOR IMPROVEMENTS Approximate Cost  Special Education Teachers (4) $ 210,000  One Classroom Teacher--WVHS 50,000  Two Educational Assistants--BCHS 50,000  Bus Contractor Seat Increase 32,000  Salary Increase for Employees 950,000  Two nurses from P.T. to F.T+ inc. in P.T. hourly rate 45,000  One new special education bus 60,000  Non-recurring technology refresh (part of capital budget) 350,000  Non-recurring state investment for technology 619,000 14

15. BUDGET CHALLENGES The Economy Slow growth in sales tax & property tax Retirement (Pension) Costs Medical Insurance Student ADM As stated by the State Board of Education, “student enrollment is the primary driver of funds generated by the BEP”. It also determines the division of local funds between school systems. 15

16. PROPERTY/SALES TAX ANALYSIS Property Tax___ Sales Tax Budget YearBudget Actual Budget Actual 2008-09 10,680,520 10,686,704 7,900,000 7,795,742 2009-10 10,906,494 10,813,805 *9,750,000 *8,965,681 2010-11 11,000,000 10,907,269 8,850,000 9,353,851 2011-12 10,890,000 10,828,794 9,450,000 10,286,604 2012-13 10,860,000 10,950,000(EST) 10,520,000 10,450,000(EST) 2013-14 11,025,000?? 10,660,000 ?? *- Increase primarily due to ½ cent sales tax increase. ** 16

17. RETIREMENT (PENSION) COSTS Retirement budget has increased from 4.4% of entire budget to 5.7% since 2007-08. Pension reform legislation passed this year. – Convert from defined benefit plan to hybrid plan (part defined benefit and part defined contribution) – Limits future liability for pension costs – Ensures long term sustainability of the plan – Only applies to new hires after July 1, 2014 17

18. Medical Insurance 18

19. Medical Insurance Cost Containment Measures Implemented Partnership PPO—all employees must take an interest in their health (Well-being assessment, biometric screening, health coaching for at-risk members) Healthier Tennessee initiative—focus on improving health of plan members through physical activity, healthy eating, tobacco cessation Current Challenges Federal legislation 19

20. BUDGET SUMMARY Invest in our people—our greatest resource— to provide the best education possible for all of our students Submit a balanced, fiscally conservative budget 20