New Hanover County Schools Budget Update Fiscal Year 2016-17 July 12, 2016

State Budget Updates Teacher Salaries: Revised Salary Schedule and step increases with average 4.7% Top of the scale increased $1,000 with no bonuses Salary schedule for 2018-19: Starts at $35,000 with $1,000 per year through step 15 ($50,000 at step 15 and $51,000 at step 25); Initial increase of 9.5% Average step of new scale 1.5

State Budget Updates Teacher Pilot Programs: 3rd Grade Teacher Bonuses (2-year pilot) For scores in the top 25% of the state and top 25% of each LEA Advanced Placement and International Baccalaureate Bonuses (2-year pilot) $50 for each student that receiving certain grades CTE Teacher Bonuses (2-year pilot) $25 or $50 per students completing CTE class and passing exams leading to industry certifications or credentials Teacher Compensation and Advanced Teaching Roles (3-year competitive pilot) LEA’s can apply to participate in pilot to supplement compensation for teachers in advanced teaching roles

State Budget Updates School Administrators 1.5% annual increase, .5% nonrecurring bonus and a step increase Non-Certified and Central Office 1.5% annual increase, .5% nonrecurring bonus $300,000 estimated funding for one-time merit based bonuses for non-educators

State Budget Updates Benefits: Employer’s Retirement Contribution Increased rate by 5.2% from 15.32% to 16.12% Employer’s Health Insurance Contribution Increased maximum employer contribution from budgeted rate by 3.5% from $5,471 to $5,659. Final rate change for January 1, 2017 to be determined by State Budget Director.

State Budget Updates Other State Changes: Reducing class size in grade 1 by 1 K-3 Class Size Ratios must not exceed allotment ratio beginning 7/1/17: Kindergarten One teacher per 18 students First Grade One teacher per 16 students Second Grade One teacher per 17 students Third Grade

State Budget Updates Other State Changes: Eliminated sunset for Driver Education funding 6% increase in funding for Instructional Supplies 20% increase in Textbooks and Digital Materials 4% reduction in funding for Central Office Administration Offset by $45,000 added to local budget .5% reduction in Transportation funding based on lower projected fuel costs

State Budget Updates CTE Grant: $1,000,000 grant awarded by the State for the purpose of planning a new Career and Technical Education High School Funds may be used for planning and implementation

New Hanover County Appropriation   2015/16 Increase/ (Decrease) 2016/17 Operating for NHCS $68,357,447 $2,020,833 $70,378,280 Operating for Charters $2,252,653 $224,671 $2,477,324 Capital for NHCS $3,000,000 ($985,000) $2,015,000 Total $73,610,100 $1,260,504 $74,870,604 Here is an updated summary of county funding. On the next few slides we will show the changes made in our final budget recommendations based on final state and county funding amounts. $2,660 per pupil Estimated K-12 Enrollment: NHCS: 26,458 Charter Schools: 968

Fund Balance Appropriation Proposed fund balance appropriation of $7,399,260 $3,100,000 for recurring items based on projected vacancy savings and salary lag $4,299,260 of one-time funding Leaving undesignated reserve of approximately 7.1%

Salaries and Benefits Local funding for state pay schedules for Teachers, Instructional Support, Contracted Central Office Administration and the Board of Education Local cost for increases in employer paid Health Insurance and Retirement Contribution Revised pay schedules for Principals, Non- Certified, and Central Office Administration To improve equity and make schedules more competitive. Targeted School Supplements: Teacher Supplements increased by 6% $500 ($50/month) Supplement for Non-Certified Staff To enhance recruitment for the best teachers and improve employee retention The next few slides summarize the changes made to salary schedules. Using a combination of state and local funding we are able to recommend improved pay schedules that make great strides in improving compensation for all employees, with a new focus on recruitment and retention at Targeted Schools.

Local Salary Schedule Changes New Principal Pay Schedules: 3 new schedules by school level 30 Steps with 1.7% step increases 1.5% higher than original proposal to include state raise Differential between new schedules and state represents local supplement averaging 23% higher than state Average Increase of 9.4%, with minimum increase of 1.5% Also receive .5% one-time state bonus

Local Salary Schedule Changes Non-Certified: New schedules starting 4% above state 30 Steps with 1.5% step increases Still flat at bottom of scale for 1-5 years, but gap reduced from 7 to 4 years Plan to reduce gap by 1 year for next 4 years Average Increase of 3.4%, ranging from 1.5% to 9% Also receive .5% one-time state bonus

Local Salary Schedule Changes Central Office Administration: New schedules starting 2% above state 30 Steps with 1.7% step increases Average Increase of 4.3%, ranging from 1.5% to 10% Those above scale grandfathered with 1.5% State increase Also receive .5% one-time state bonus

Local Salary Schedule Changes Bus Drivers: Increased all steps by state increase of 1.5% Catch up step so scale is fully funded 30 Steps with 1.7% step increases Also receive .5% one-time state bonus

Other Position Changes 23.5 New Positions: 15.5 positions funded locally 8 funded with state growth 10.5 Positions to address increased student support needs with the opening of JC Roe Center 2 High School Counselors and 2 Social Workers increasing formula to 5 counselors and 2 social workers per traditional High School 7 Special Education Teachers to be funded with state growth 1 Network Engineer and 1 Electronics Technician

Other Position Changes Increase Athletic Trainers from 10 to 12 months Add 1 extra week of employment for Elementary Technology Assistants Positions Deferred until 2017-18: 4 Secondary Area Technical Coordinators 1 Technical Software Specialist 1 Public Relations Support Associate 1 Purchasing/Warehouse Inventory Associate

Funding Priorities Non-Salary Continuation Additions: Year 2 of 4 – Board Scholarship Implementation Utilities – Offset reduction of e-rate discount Nurses – Cover increase in contract rate and reduction of Medicaid Revenue Property Insurance – Covered anticipated rate increases with savings from Liability Insurance

Funding Priorities Capital Outlay includes: Completion of projects at Sidbury Road & Lakeside Added remaining cost of computer replacement to Local using additional fund balance appropriation and reductions of other non-recurring recommendations Deferred projects to 2017-18: Cooler replacement at Johnson Replacement of data/voice cabling at Bellamy Replacement of 4 Maintenance/Transportation Vehicles

Funding Priorities One-Time Items funded as per original proposal: AIG Curriculum and Student Math Materials for grades 4-5 Transportation increase to support JC Roe Universal Screening Assessment Tool Technology Warranty Service Technology – Includes original proposal plus items cut from capital outlay Bonus Pay .5 % State Bonus for locally funded staff

Funding Priorities One-Time Items reduced to offset Technology Increase: Electronic Records Scanning (reduced by ½) Furniture (reduced by ½) Contracted Maintenance Painting Services (reduced by ½) Maintenance Small Projects Fund (reduced by 1/3) Furniture Contingency and Blind Replacement (reduced by ¼)

Changes included in Proposed Budget Resolution