1. NHCS 2017-18 Budget Work Session
April 18, 2017

2. State Budget Update

3. State Budget Updates K-3 Class Size Restrictions
Without legislative action, several changes in allotment formulas will be necessary in order to use K-3 positions as intended for class size reduction.
This will result in less enhancement positions and more classroom teachers.
13 schools do not have space for 30 of the additional 48 K-3 classrooms to be added

4. K-3 Teacher Formula Summary
Grade
Current Local Formula
State Formula
Position Changes
Cost
Kindergarten
1:20
1:18
+ 10
$ 670,000
1st Grade
1:16
+ 13
$ 871,000
2nd and 3rd Grade
1:19
1:17
+ 25
$ 1,675,000
+ 48
$3,216,000
This slide shows the $3.2 million dollar impact of the k3 issue. Historically the State has allotted teachers by grade level teacher: pupil ratio and then limited LEA class size averages to 3 above the formula and set individual class size maximums at 6 above the formula. During the years of budget cuts, class size restrictions were eliminated for grades 4-12 to give LEA’s maximum flexibility. Over the last few years as the state reduced k-3 class size, the class size averages and maximums remained unchanged with an LEA average for all k-3 grades of 21 and an individual max of 24.
NHCS continued to reduce our formulas as k-3 positions were added, but some LEA’s used the allowable flexibility to use the positions in higher grades. Current NHCS formulas in the second column are 2 above the state formula, and the differential was used to support 48 of our 72 elementary art, music and physical education enhancement positions. Additionally, we used state instructional support and at-risk funding to add Literacy Coaches to all elementary schools.
In order to allot k-3 teachers by the state formula we will need to add 48 K-3 Teachers.

5. Proposed Formula Changes to Offset K-3 Restrictions
Position
Current Formula
Revised
Position Reduction
Elementary Literacy Coaches
1 per elementary school (24)
Eliminate
-24
AIG Teachers
1 per elementary school
Eliminate 10 positions and share at smaller schools
-10
Elementary Enhancement
(Art, Music and PE)
3 per school
Eliminate 11 positions and share at smaller schools
-11
Assistant Principals
1 per elementary school and 2 per middle school
Eliminate 3 and share at smaller schools -3
Subtotal
-48

6. State Budget Updates State Raises:
The local portion of estimated state raises for local employees exceeds $2.4 million.
Amounts included in this proposal are estimated based on available information and are subject to change with legislative action on the budget.
Estimates based on the schedule published in last year’s State Budget.

7. State Raises – School Administrators
Senate proposal (S.B.234) includes new compensation structure for Principals and Assistant Principals to be funded from Lottery Revenue.
Principals:
Increases current average allotted principal salaries by 7%
Lump sum allotment without a salary schedule with compensation to be determined at the discretion of the Superintendent.
Last year the Board approved a local schedule which resulted in average supplement of about 25%, so we could apply that increase toward the cost of our local schedule, including the 1.7% step increase.
Assistant Principals:
The proposed AP schedule is 13% higher than Base Teacher Schedule.
With Master’s Teacher Pay already 10% higher, and National Boards another 12%, for many AP’s this would not result in an increase.
Estimated AP raises at same average increase as teachers.

8. State Raises – Other State Employees
Estimated 2% State Raise for Other Employees
Governor’s proposal is higher of 2% or $800.
This would result in a higher, yet inconsistent percentage increase for salaries under $40,000.
Based local budget estimates on 2% without flat rate.
Local proposal uses state raise to help fund local step increases on various local pay schedules.

9. Local Operating Budget Priorities

10. Prioritization Process
All Requests were prioritized as follows:
Imperative (Must Do)
Non-discretionary items based on state or federal mandates, Board Commitments, or unavoidable cost increases
Essential (Should Do)
Requests considered to be essential to instructional program or support
Important (Could Do)
Requests to be supported if funding is available

11. Local Budget Priorities – Must Do (Imperative)
Salaries and Benefits:
Local estimate totals $3,051,900
$2.4 million based on state raises subject to change depending on legislative action
Employer Retirement Contribution and Health Insurance increases based on rates included in Governor’s Budget

12. Local Pay Schedule Proposals
Non-Certified Salary Schedule Adjustment:
Step Increase and Salary Schedule Adjustment (Year 2 of 5). Reduces number of flat steps from 5 to 4, with a 2% increase for steps 1-5, and 3% for steps 4-30.
Final schedule recommendation will be dependent on actual state raise.
Bus Drivers
2% State Raise would be applied to the whole schedule, with local funds used to fund banded step.
CO Administrators
The state raise would be applied to the whole schedule with the 1.7% step increase funded locally.
Contracted Senior staff at Average Teacher Increase
Board of Education
Proposed 3% Increase

13. New Child Nutrition Schedule
Child Nutrition Helpers
Propose new banded schedule with similar format as Bus Drivers, with 2% step increases at each banded level.
Only group of permanent part-time employees not currently paid on a scale tied to state ranges.
The bus step increases are much higher at 8% and 9% because that schedule was designed to recruit more drivers by allowing employees to move more quickly to the top of the state scale.
Estimated Cost of $70,000 includes 2% State Raise

14. Local Budget Priorities – Must Do (Imperative)
Other Imperative Needs -$994,000
SEA Tech Operating Costs
4 Teachers, 1 Support Associate and 1 Counselor
State funding will cover program coordinator and 1 CTE teacher
Board Scholarship Fund
Year 3 of 4 year Implementation
Operating Cost Increases
Includes Workers Compensation, Utilities, Technology Support, and Leases

15. Local Budget Priorities – Must Do (Imperative)
One-Time Imperative Requests - $429,000
State Bonuses for Locally Paid Employees
Contracted Enrollment Forecasting Services and Software
Sea Tech Principal (Year 1 only)
State & Federal Special Education - $302,000
2 Psychologists, 1 Speech Therapist and 1 Occupational Therapist needed to meet state caseload requirements
To be funded with available Medicaid Reimbursements

16. Local Budget Priorities – Should Do (Essential)
Essential Recurring Requests - $365,771
JC Roe Positions
Assistant Principal and additional HS Transition Teacher
Local funding for Head Start Nurse
Grant funding insufficient to absorb raises and continue nursing services
Custodial Months of Employment
Phase I of 3-year plan to convert full-time 10 month and part-time 12 month custodial positions back to full-time 12 month positions - 189,100
Recommendations to be funded with Fund Balance Appropriation:
One-Time Essential Funding Needs - $313,600
Recurring Essential Needs - $306,400

17. Local Budget Priorities – Could Do (Important)
Important Recurring Requests – $362,600
These items would not be funded in recommended budget unless final state approved salary increases are less than anticipated
5 Position Requests
Head Start Program Counselor
McKinney Vento Local Liaison (Social Worker)
Technical Software Specialist
Plumbing Technician II
HVAC Technician II
Other Requests:
Arts Supplies
Board Meeting Software
Digital Services for Human Resources
Extra Duty for Instructional Services
Wellness Liaison Stipends

18. Allotment Formula Changes to Offset Budget Increases
Certified Positions:
Eliminate 12 Secondary In-School Suspension Teachers:
Replace with Non-Certified TA’s
Increase Secondary Class Size:
Current formula 2 lower than state
Increase grades 9-10 by 1 and grades by 2
Reduction of 17 positions
Non-Certified Positions:
Eliminate non-certified HS Graduation Coaches (4)
Eliminate Technology Assistants over 2 years, starting with smallest schools, and replace with system wide Area Technical Coordinators

19. Proposed County Operating Request

20. Local Budget Priorities Cost Summary
Total
Imperative (Must Do)
$4,050,900
Essential (Should Do)
648,500
Important (Could Do)
581,100
Requested Operating Increase
$5,280,500

21. Recommended Increase in Continuation Budget
Total
Imperative (Must Do)
$4,046,500
Essential (Should Do)
365,771
Requested Operating Increase
$4,412,271
County Increase to $2,750 per pupil
$3,188,271
Net Savings from Formula changes
1,224,000
Estimated Revenue

22. Recommended Increase in Fund Balance Appropriation
Total
Imperative (Must Do)
$429,000
Essential (Should Do)
620,000
Important (Could Do)
315,000
Requested Operating Increase
$1,364,000

23. Proposed County Request
Restoration of $2,700 per pupil funding has been goal for several years
Revised goal of $2,750 to cover estimated raises and other high priority requests
Increase of $50 per pupil ($1.4 Million with Charters) would cover Imperative and Essential Costs.

24. Separate Pre-K Expansion Request
Special County Request for Pre-K Expansion
Add 3 additional Pre-K Classes at Mosley
Continuation Request - $372,600
3 Teachers
3 Teacher Assistants
1 Family Specialist
Supplies and Contracted Services
One-Time Capital Funding - $100,000
Start-Up Furniture and Equipment
Playground and Facility Upgrades
Adds $14 per pupil to County Funding Request

25. Capital Outlay Recommendations

26. Capital Project Priority Process
Priority I: Imperative (Must Do)
Projects that cannot be reasonably postponed in order to avoid harmful or otherwise undesirable consequences.
Priority II: Essential (Should Do)
Projects that address clearly demonstrated needs or objectives.
Priority III: Important (Could Do)
Projects that benefit the district, but may be delayed without detrimental effects to required services.

27. Summary of Capital Requests by Priority
Category
Priority I IMPERATIVE (Must Do)
Priority II ESSENTIAL (Should Do)
Priority III Important (Could Do)
Total
Repairs & Renovations
$ 6,780,730
$ 6,788,986
$ 6,443,465
$20,013,181
Technology
172,000
5,415,400
428,400
6,015,800
Furniture & Equipment
45,000
447,527
161,580
654,107
Vehicles
80,900
58,200 -
139,100
$ 7,078,630
$ 12,710,113
7,033,455
$26,822,188

28. Recommended Capital Projects By Priority
Category
Priority I IMPERATIVE (Must Do)
Priority II ESSENTIAL (Should Do)
Priority III Important (Could Do)
Total
Repairs & Renovations
$ 3,653,000 $ $
Technology -
3,048,300
Furniture & Equipment
45,000
233,800
278,800
Vehicles
80,900
$ 3,778,900
$ 3,282,100 $
$ 7,061,000

29. Funding Recommendation by Source
Category
State Lottery
State Equipment Reserve
County Capital Outlay Appropriation
General Fund
Other Revenue
Total
Repairs & Renovations
$ 2,368,000
$  
$ 1,135,000
$  
$ 150,000
$3,653,000
Technology
400,000
2,284,100
124,200
240,000
3,048,300
Furniture & Equipment
278,800
Vehicles
80,900
$ 400,000
$ 3,500,000
$ 403,000
$ 390,000
$7,061,000
General Fund includes $137,000 transfer of project savings from Roe project and Fund Balance Appropriation of $266,000.
Other Revenue includes $80,000 estimated from County Sales Tax Refund, $70,000 for NHCS Sales Tax Refund, and $240,000 from current year project savings.

30. Current Budget Summary

31. Current Operating Budget - $256.5 Million
By Purpose
By Source
You are familiar with this slide in which we can see our operating budget (funds 1, 2, 3 and 8) by source and purpose.

32. Comparison of State and General Fund
General Fund By Purpose
State Fund By Purpose
These charts compare state and local funds by source and purpose, and you can see that 88% of state funds go toward instruction, with only 12% for support cost, most of which are transportation and custodial costs. Local funds significant support the instructional program and substantially fund facility and other support costs. Charter School Transfers represent 3% of the General Fund Budget.

33. Current Operating Budget - Positions by Fund
State
General
Federal
Other Restricted
Total
Administrators 77 4 1
152
Teachers
1,467
236 47 35
1,755
Certified Instructional Support
166 99 20
284
Non-Certified Instructional Support
330 70
222
629
Other Support & Trades
468
229 5
742
2,508
711
297
107
3,623
This chart shows operating positions by fund so you can see that about half of the General Fund positions are impacted by the more significant increases in certified salaries. This is updated from the chart presented in March based on any mid-year changes.

34. Enrollment Growth
This chart shows enrollment trends for the past 4 years (Best 1 of 2) with estimated growth for next year of 1.2% (289).

35. County Per Pupil Funding Analysis
NHCS
NHC Charters
Virtual Charters
Total
1st Month Enrollment
26,287
1,068 47
27,402
Per Pupil Funding
$2,662
$790
Projected Growth for
318 80 -
398
Projected growth %
1.2%
7.5%
0.0%
1.5%
Projected Enrollment for
26,605
1,148
27,800
County Per Pupil Funding Allotted per 1st Month Membership, which is slightly less than our best 1 of 2 for current year. We use first month to allocate county funds between NHCS and charter schools. And our county request also must include estimated growth for the charter. Total enrollment for NHCS to projected to be about 26,600, and the total with charter at 27,800.

36. Recommended County Request

37. County Revenue Summary
NHCS
NHC Charters
Virtual Charters
Total
Current County Appropriation
Allotted based on 1st Month Membership
$ 69,975,479
$ 2,842,995
$ ,130
$ 72,855,604
Projected Growth at current Per Pupil Rate
846,516 -
$88 per pupil increase using Projected Enrollment
2,341,755
94,005
2,435,760
Requested Increase at $2,750
$ 3,188,271
$ ,005 $
$ 3,282,276
Projected Funding Increase %
4.6%
3.3%
0.0%
4.5%
Total Request at $2,750 Per Pupil
$ 73,163,750
$ 2,937,000
$ 76,137,880
Using the enrollment information we just reviewed, the first row shows the County appropriation of $2,662 per pupil spread between NHCS and the charters. The second is the estimated funding increase for growth the current rate, and the 3rd is the estimate funding increase if pp increased to $ The overall increase would be 2.7% for us and 2.9% overall.

38. Requested Approval of Base County Budget Recommendation
Total Operating Request - $76,137,880
$2,750 per pupil
Total Increase of $3,319,406
NHCS - $3,188,271
Charters - $94,005
Total Capital Request - $3,500,000

39. Requested Approval County Budget Recommendation with Pre-K Expansion
Total Operating Request - $76,137,880
Pre-K Expansion Request - $387,422
Total Capital Request with Pre-K - $3,600,000

40. Projected County funding for NHCS Bond Debt
Principal on Bonded Debt
$16,319,117
Interest on Bonded Debt
    6,239,367
Bond Service Charges
          57,892
Installment Lease Agreement
        480,909
Total NHCS Debt
$23,097,285
Federal Subsidy QSECB (Revenue)
($142,001)

41. NEXT STEPS May 2nd Board Meeting June Budget Work Session
Budget Hearing
Vote on Recommended County Request
June Budget Work Session
Date to be determined subsequent to County and State Budget Approval
July 11th Board Meeting
Approval of Budget Resolution