Maximizing our resources; transcending the new normal through our people

FY 2018 Superintendent’s Proposed Budget January 30, 2017

Together, we prepare our students for their future.

13th largest school division in Virginia

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Together, we prepare our students for their future.

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Together, we prepare our students for their future.

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“Leadership does not begin with a vision. It begins with getting people to confront the

brutal facts and to act on the implications…

…One of the primary ways to de-motivate people is by ignoring the brutal facts of

reality.”

―Jim Collins (Good to Great)

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Persistent Challenges

We have never actually recovered from The Great Recession. State funding as % of general revenue went from 35 – 29%. Local Funding as % of general revenue went from 55 - 49%

State/Basic Aid Funding for Public Schools is primarily based on student enrollment and average daily membership. SCPS enrollment trend continues to be flat or slightly declining, meaning less funding from the state

The past two Local Composite Index adjustments for SCPS have trended upward, meaning less funding from the state

Mandatory cost increases in Health Insurance and VRS are significantly outpacing any increases in state or local funding

There is a growing shortage of qualified and desired candidates for employment in the public education field as noted at both the state and national level. SCPS is competing for human resources within a shrinking pool

Despite the mild decline in overall enrollment, the increased number of students in poverty, with disabilities, and who are English Learners must be effectively and equitably addressed amidst diminishing resources

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Revenue & Funding Trends

FY 2013

FY 2014

FY 2015

FY 2016

FY 2017

Estimated FY 2018

Superintendent Budget GAP

($6.6M)

($8.2M)

($1.9M)

($2.7M)

($12.6M)

($6.5M)

School Board Budget GAP

$0

($3.2M)

($1.9M)

($1.3M)

($12.6M)

TBD

Beginning Budget Deficits/Gap

8

Source FY 2014 Actual

FY 2015 Actual

FY 2016 Actual

FY 2017 Adopted

FY 2018 Recommended

Total/ Average

for period

State $31,580 0.03%

$4,226,309 3.48%

$494,922 0.39%

$6,379,178 5.06%

$2,017,248 1.52%

$13,149,237 2.10%

Federal ($3,689,270) (21.61%)

$800,328 5.98%

$67,510 0.48%

$612,534 4.3%

$727,078 4.89%

$1,481,819 (1.19%)

Local $1,173,634 1.0%

$638,564 0.54%

$379,629 0.32%

$4,405,027 3.7%*

($2,100,000) (1.7%)

$4,496,854 0.77%

5 Year Revenue Variances

9 * For Local Funds, the FY 2016 adopted budget compared to the FY 2017 adopted budget increased by $7,042,568 or 6%.

FY 2008 vs. FY 2017 Adopted Budgeted Revenues

126

,276

,535

7,9

29,4

70

117

,890

,992

1,8

48,3

90

58,

139,

163

129,

944,

685

9,73

6,03

3

122,

345,

837

5,00

1,55

8

23,4

58,6

12

-

20,000,000

40,000,000

60,000,000

80,000,000

100,000,000

120,000,000

140,000,000

SALES TAX & STATE FUNDS FEDERAL FUNDS CITY-COUNTY FUNDS OTHER FUNDS LOANS, BONDS, ETC (CIP)

FY08

FY17

10

11

$100 $105 $110 $115 $120 $125 $130 $135 $140

FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 Projected

Mill

ions

State Local

$100

$105

$110

$115

$120

$125

$130

$135

$140

FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 Projected

State $135,211,197 $122,617,532 $106,403,555 $111,480,669 $120,619,534 $121,068,337 $126,064,037 $127,339,225 $132,444,422 $134,461,670 Local $119,956,934 $113,830,339 $113,830,340 $114,830,340 $115,312,329 $115,580,339 $116,415,339 $116,432,747 $123,475,315 $121,375,315

Mill

ions

Local & State Fund Trends (Adopted Budget)

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“The state is significantly underfunding state-mandated locally-administered programs,

particularly the largest -- K-12 education. The introduced K-12 budget for FY 2017 is no higher in nominal dollars than 2009 and is almost $600 per

pupil less in inflation-adjusted terms.”

Jim Regimbal, Founder of Fiscal Analytics

State Per Pupil Funding FY 2015

Per Pupil Funding

State Average $11,523

Spotsylvania $10,149

Variance to State Average ($1,374)

Virginia Per Pupil Funding Comparison

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FY 2015 Cost Per Pupil Ranking

Total # of school divisions in Virginia 132

Spotsylvania Rank 85th

Percentage of Districts Below Spotsylvania *SCPS also has the 5th lowest cost per pupil among the 15 largest school divisions in the state

35.6%

Cost Per Pupil

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0.31

0.32

0.33

0.34

0.35

0.36

0.37

2000-02 2002-04 2004-06 2006-08 2008-10 2010-12 2012-14 2014-16 2016-18

0.36

92

0.35

48

0.35

73

0.34

55 0.

3695

0.35

93

0.33

26 0.

3555

0.36

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Note: When the LCI Increases, the division’s State funding is reduced & local funds should increase

Local Composite Index (LCI) Historical Trends

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Student Enrollment Trend (Pre-K- 12)

16

23,

811

24,

186

24,

390

24,

197

24,

216

23,

868

23,

775

23,

725

23,

773

23,

817

23,

678

23,

592

23,

539

23,

610

23,

834

24,

005

18,000

19,000

20,000

21,000

22,000

23,000

24,000

25,000

2005 - 2006

2006 - 2007

2007 - 2008

2008 - 2009

2009 - 2010

2010 - 2011

2011 - 2012

2012 - 2013

2013 - 2014

2014 - 2015

2015 - 2016

2016 - 2017

2017 - 2018

2018 - 2019

2019 - 2020

2020 - 2021

Oct

ober

1 E

nrol

lmen

t

Actual ADM March 31

21,000 21,500 22,000 22,500 23,000 23,500

2011-12

2012-13

2013-14

2014-15

2015-16

2016-17*

2017-18**

23,265

23,264

23,290

23,315

23,094

22,846

22,834

*FY 2017 Estimated ADM **FY 2018 Budgeted ADM 17

Students with Disabilities Trend Data

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2,623 2,683 2,756 2,834 2,881

2.3% 2.7% 2.8% 1.7%

FY 2013 FY2014 FY 2015 FY 2016 FY 2017

Student Enrollment Statistics – Dec 1 Count

Total Number of English Learners (Els)

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Full -Time Equivalent Positions (FTE)

FY08 FTE FY17 FTEAdoptedBudget

Adopted Budget

INSTRUCTION/TECHNOLOGY 2,475 2,385 (90) TRANSPORTATION 410 431 21 ADMINISTRATION 46 44 (2) ATTENDANCE / HEALTH 57 55 (2) MAINTENANCE/CIP 197 137 (60) FOOD SERVICE 112 55 (57) Grand Total 3,297 3,107 (190)

ChangeDepartment

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FY09 FY17 Decline

Teacher FTE 1,892.355 1,760.83 (131.525)

Enrollment 24,197 23,592 (605)

% of Teacher FTE of Enrollment

7.82% 7.46% (0.36%)

Ratio 12.8:1 13.4:1 0.6:1

Teacher FTE versus Enrollment

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Highlighted Investments

FY 2018 Operating Fund ( Less CIP & Debt Service) 87.9% Personnel VS. 12.1% Non-Personnel

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$145.6 58.6%

$72.9 29.3%

$30.1 12.1%

Wages Benefits Non-Comp

Total $248.6 Million

Elementary Pupil/Teacher Ratio

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Secondary Pupil/Teacher Ratio

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Fiscal Year Salary Adjustments 2009 2.5% COLA

2010 & 2011 None 2012 1% COLA & $600 Prorata Bonus 2013 .8 % (EE below director level)

0% (EE director & above) Plus 5% VRS pay raise offset

2014 $900 Prorata Bonus 2015 Step & 1% COLA 2016 3% COLA 2017 2% COLA

2018 Proposed 2% COLA

Salary Increase Trend

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FY 2018 Proposed Investments

Description Related Cost

2% Cost of Living Adjustment (COLA) $3,482,935

Mandatory cost increases in health insurance (10% employer and 5% employee)

$2,918,755

Mandatory cost increase VRS (11%) $2,277,599

Increases in debt service in accordance with the proposed projects in the 2018-2022 CIP

$286,314

Reinstatement of hourly cafeteria aides at the elementary level as a Pilot Program (Food Service Fund)

$188,000

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High School Athletic Participation Rates

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FY 2018 Proposed Budget Highlights

Description Related Cost Pilot Academic and Athletic Activity Bus Program $227,325

Restoration of Academic and Athletic Stipends by 5%

$55,892

Daily and hourly rate increase in substitute rates of $5

$116,364

Lower the athletic fee from $75 to $60 $51,492 Expansion of the REACH SPED program (funded by CIP funds)

$135,000

Across the board non-compensation reductions ($1,815,273)

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Revenues & Expenditures All Funds

FY 18 Budget by Revenue Source

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State & Sales Tax Funds

$134.5 42.2%

Federal Funds $15.6 4.9%

City-County Funds

$121.4 38.1%

Other Funds $13.2 4.2%

Revenue Gap $6.5 2.0%

Loans & Bonds $27.3 8.6%

Total $318.4M

Variance due to rounding

FY 18 Budget by Category

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Instruction $194.3 61.0%

Administration $5.0 1.6%

Attendance & Health $5.5 1.7%

Transportation $21.0 6.6%

Capital Projects $27.4 8.6%

Maintenance $21.9 6.9%

Technology $8.3 2.6%

Debt Service $25.6 8.0%

Food Service $9.4 3.0%

Total $318.4M

Variance due to rounding

Revenues & Expenditures All Funds (Less CIP)

FY 18 Budget by Revenue Source (Less CIP)

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State & Sales Tax Funds

$134.5 46.2%

Federal Funds $15.6 5.4%

City-County Funds

$121.4 41.7%

Other Funds $13.2 4.5%

Revenue Gap $6.5 2.2%

Total $291.1M

Variance due to rounding

FY 18 Budget by Category (Less CIP)

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Instruction $194.3 66.8%

Administration $5.0 1.7%

Attendance/ Health $5.5 1.9%

Transportation $21.0 7.2%

Maintenance $21.9 7.5%

Technology $8.3 2.9%

Debt Service $25.6 8.8%

Food Service $9.4 3.2%

Total $291.1M

Variance due to rounding

Description FY18

Proposed Budget

Instruction $194.3M Administration $5.0M Attendance & Health $5.5M Transportation/Fleet Services $21.0M Maintenance Services $21.9M School Food Services $9.4M Educational Technology $8.3M Debt Service $25.6M

Grand Total $291.1M

FY 2018 proposed budget less CIP total $291.1M, which represents a $7.6M, or 2.7%, increase over the FY 2017 Adopted Budget.

FY 2018 Proposed Budget by Category (Less CIP)

36

Variance due to rounding

Revenue & Expenditures Operating Fund Only (Less CIP)

Differences due to rounding

Operating Fund Revenues (Less CIP)

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SourceFY 17

Adopted Budget

FY 18 Proposed

Budget

$Variance

%Change

State Total 129,944,685$ 131,977,899$ 2,033,214$ 1.6%

Federal Funds 9,736,033$ 10,380,711$ 644,678$ 6.6%

City-County Funds* 122,345,837$ 120,216,944$ (2,128,893)$ (1.7%)

Other Funds 5,001,558$ 5,096,101$ 94,543$ 1.9%

Revenue Gap -$ 6,475,083$ 6,475,083$ 100.0%

Total Funds 267,028,113$ 274,146,738$ 7,118,625$ 2.7%

* The remaining $1,158,371 is allocated to Governor’s School and Adult Education

Differences due to rounding

Operating Fund Revenues (Less CIP)

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State Total $132.0

48%

Federal Funds $10.4 3.8%

City-County Funds

$120.2 44%

Other Funds $5.1 1.9%

Revenue Gap $6.5 2.4%

Total $274.1M

Differences due to rounding

FY 2018 Operating Fund – Expenditures By Category (Less CIP)

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Instruction $190.5 69.5%

Administration $5.0 1.8%

Attendance/ Health $5.5 2.0%

Transportation $18.2 6.6%

Maintenance $21.1 7.7%

Technology $8.2 3.0%

Debt Service $25.6 9.4%

Total $274.1M

Differences due to rounding 41

Object DescriptionFY 17

Adopted Budget

FY 18 Proposed

Budget

$Variance

%Change

Salaries/Wages 143,736,865$ 145,553,773$ 1,816,908$ 1.3%

Employee Benefits 67,005,772$ 72,890,085$ 5,884,313$ 8.8%

Purchase Services 13,391,897$ 13,402,593$ 10,696$ 0.1%

Other Charges 10,007,604$ 9,405,403$ (602,201)$ (6.0%)

Materials & Supplies 7,492,694$ 7,309,182$ (183,512)$ (2.4%)

Debt Service/Capital Outlay

25,393,281$ 25,585,702$ 192,421$ 0.8%

Total 267,028,113$ 274,146,738$ 7,118,625$ 2.7%

Operating Fund – Expenditures By Object (Less CIP)

Budget Efficiencies & Investments

How Has the Division Balanced Prior Year Budgets 2013 – 2017?

New State/ Local Funds

Deferred CIP

Purchases

Bond Refinancing by County

Central Office

Restructuring

Use of Health

Reserve

Early Retirement Program

Across the Board

Non-comp Cuts

Lapse Personnel

Dollars

43

Outsourcing Food Services

Outsourcing Custodial Services

Joint Fleet Maintenance Operation

Joint Health Insurance Contract

Use of Interest Earned Versus Borrowing

Refinancing CIP Debt with Assistance of County

LED Lighting

Renovations/Expansions Versus New Construction

10 Year Cost Containment Implementations

44

Preliminary Budget Gap

Budget Amount

Preliminary Revenues $267,671,655

Projected Expenditures $274,146,738

Preliminary Budget Gap ($6,475,083)

FY 2018 Operating Budget Fund Gap (Less CIP)

46

Budget Gap

Description Revenue Gap 2% COLA Increase (2,349,942)$ Health Insurance Increase (2,515,893) VRS Increase (1,385,501) Lower Athletic Fee from $75 to $60 (51,492)

Increase Substitute rates by $5 per day (116,364)

Restore Stipends by 5% (55,892)

Total (6,475,083)$

Preliminary Budget Gap

47

Maximizing Investments

The Stockdale Paradox

Retain faith that you will prevail in the end, regardless of the difficulties.

Confront the most brutal facts of your current reality, whatever they might be.

AND at the same time

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“Focus on Quality first and everything else will follow.”

Edwards Deming

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Leaders that go from good to great start not with “where” but with “who”. … first the people, then the direction.

Jim Collins

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Despite concerning funding trends and continued budget uncertainty, we can and should remain

confident regarding the future. SCPS staff, students, community and leaders continue to exemplify our

mission, propelling us forward as evidenced by continuous improvement efforts and results.

In this new normal of annual fiscal uncertainty and

annual budget shortfalls, we should remain steadfast in our commitment to valuing, honoring, celebrating and

rewarding the ever-challenging work of people delivering the services

52

How does our school division maximize already strained resources in an attempt to

transcend fiscal challenges?

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Mission Together, we prepare our students for their future.

55

Living the Mission

56

Living the Mission

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VISION SCPS is a leading school division

that inspires and empowers all

students to become creative

thinkers, problem solvers

and effective communicators.

Our Students • 52% Male, 48% Female • 58% White, 18% Black, 15% Hispanic, 2% Asian, 7% Other • 12% receiving Special Education

services • 38% receiving Free/Reduced Price

Meals • 11% in Gifted Education services • 5.5% are English Learners • 62 Languages spoken

58

Personalized Learning Centers

STEM/Engineering

Humanities

Fine and Performing Arts

STEM/Agriculture

Career and Technical Expansion

Virtual School

AP Capstone/IB

Business

Governor’s School

JROTC VISION SCPS is a leading school division

that inspires and empowers all students to

become creative thinkers,

problem solvers and effective

communicators.

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SCPS Core Values Student-Centered Leadership Accountability Cultural Proficiency Excellence Effective Communication Teamwork Citizenship

Our Staff • 1346 Administrators and Support

Staff • 1761 Teachers • 55% of Teaching Staff holds

Advanced Degrees • Average years of Teaching

Experience is 13 • 46 National Board Certified

Teachers • 71% of Staff resides within

Spotsylvania County

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Teaching & Learning Prepare all students to be college and career ready.

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Teaching & Learning Prepare all students to be college and career ready.

Evidence of Continuous Improvement 5% rise in On-Time Graduation Rate

since 2012

7% rise in Math Performance and 5% rise in Reading Performance since 2014

3% rise in Science and 2% rise in

Social Studies performance since 2014

2-11% rise in Reading and Math Performance, closing achievement gaps among minority, ECD, Hispanic, and SWD

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Teaching & Learning Prepare all students to be college and career ready.

Evidence of Continuous Improvement 9% rise in Reading Performance and

8% rise in Math Performance at the Elementary School Level since 2014

8% rise at Middle School Level and 5% rise at High School Level in Math Performance since 2014

Improving Trends in Advanced Placement, SAT, ACT, and CTE participation and performance

63

Community Engagement &

Partnerships Goal

Family, students, staff and the entire

community actively engage to seek

resources and to develop opportunities

that meet future educational challenges and workforce needs.

64

SCPS Partners In Education

427 Partners In Education

Community Engagement & Partnerships

Goal

Family, students, staff and the entire

community actively engage to seek

resources and to develop opportunities

that meet future educational challenges and workforce needs.

65

Organizational Climate &

School Safety Goal

The learning and working

environment is safe, caring, healthy and

values diversity.

Evidence of Continuous Improvement PBIS training and effective

implementation

Structural enhancements to building entrances

Enhanced visitor protocols

Decline in disciplinary incidents, suspension rates

66

Setting/Keeping Pace

CTE Completers

68

CTE Industry Certifications

69

CTE Graduation Rates Compared to the State

70

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72

73

74

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Accreditation Status for Largest 15 Virginia School Divisions

State of Virginia 1490/1828 schools 82%

Arlington 32/32 schools 100%

Hanover 23/23 schools 100%

Stafford 30/30 schools 100%

Loudon 84/87 schools 97%

Virginia Beach 77/82 schools 94%

Fairfax 183/194 schools 94%

Chesterfield 57/61 schools 93%

Spotsylvania 26/29 schools 90%

Prince William 79/90 schools 88%

Chesapeake 34/45 schools 76%

Henrico 48/67 schools 72%

Hampton 17/29 schools 59%

Newport News 20/38 schools 53%

Norfolk 23/45 schools 51%

Richmond City 17/45 schools 38% 76

Spotsylvania County Public Schools STRATEGIC PLANNING GOALS

CORE VALUES

MISSION STATEMENT: Together, we prepare our students for their future.

Community Engagement and Partnerships

Cultural Proficiency Excellence

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Next Steps

Increased Local Revenues and/or State Revenues

Lower VRS Rate Increase

Refinance Debt Modernize Health Plans

Non-Comp Budget

Reductions

Reduce/Cut Comp Proposed

FTE Budget Reductions

Lower Health Insurance Rate

Increase

Budget Gap Closing Options

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Critical FY18 Budget Dates

Date and Time Budget Meeting/Topic

Wed, Feb 1 (6:30 p.m.) School Board Budget Work Session

Tues, Feb 7 (7:00 p.m.) School Board Budget Work Session and Budget Public Hearing

Mon, Feb 13 (6:30 p.m.) School Board Approves – FY18 Operating Budget and 2018-2022 CIP

Tues, Feb 14 (4:30 p.m.) County Administrator Presents Recommended Budget to BOS

Tues, Feb 28 (6:00 p.m.) School Board Presents FY18 Budget to BOS

Tues, March 7 (6:00 p.m.) Joint Budget Work Session

Tues, March 14 (4:30 p.m.) Board of Supervisors (BOS) Approves Advertised Tax Rate

Tues, March 28 (6:30 p.m.) BOS Public Budget Hearing at Courtland High School

Tues, April 11 (4:30 p.m.) BOS Adopts FY18 Budget and Current Year Tax Rates

Wed, April 12 (6:30 p.m.) School Board Budget Work Session

Mon, May 1 (6:30 p.m.) School Board Adopts – FY18 Operating Budget and 2018-2022 CIP

80