Over the past several months, the executive team and I have received and

reviewed budget requests from the school administrators and supervisors .

We have examined our 5-year trend data as a team and with the Board in an

attempt to identify the true needs of the system. We held Town Halls in each

area of the county to solicit input from the community. With that information

we have formulated a budget, which will be submitted to you today, and with

your approval to the county in the upcoming weeks.

One of the primary roles of the Superintendent is to identify the needs of the

school system and communicate them to the Board of Education and the

public.

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Mr. Farley will be negotiating with our administrators, teachers and support

groups over the next several months.

The cost of a Step increase for all eligible employees is ~$1.2M, but remember

26% of our staff is not eligible for a step increase.

The cost of a 1% COLA is ~$600,000

And the cost of a 1% increase for those 26% not eligible for a step would be

~$170,000.

Although we have included a “placeholder” in this budget for salaries, until the

process of negotiations is concluded the true figure will not be known.

At the current time we have projected and included a 2% increase for healthcare

premiums. In addition we have made the necessary adjustments for changes in

enrollment types (ie. Employee changing from individual to subscriber & spouse,

or from parent &child to family).

Retiree costs have also been adjusted for increase in the number of retirees

covered.

We should have the final rates in late April.

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Initially the requests from our school administrators exceeded 50 positions, with a

cost of well over $3.5M.

Included in this budget are 4.75 additional positions.

We are requesting 2.0 – half-time teachers for Pre-Kindergarten, 1.0 Special

Education teacher for KIES, 1.0 Paraprofessional for MES’ pre-K program, and 1.0

Paraprofessional for KIES special education program. The other two partial

positions we are requesting are current staff who are funded through sources that

will no longer cover the full value of their salaries.

As we continue to evaluate class sizes and the current use of our resources we

anticipate we will be able to accommodate additional requests for staff by shifting

staff from other locations where there may be an excess.

As we reviewed requests and evaluated our five year trend data, we observed

several areas that required increases in funding, Legal fees were one of these

areas. While it is difficult to determine the need for legal representation

from year to year, our trend data indicated that the amount currently

budgeted was in adequate to cover our costs. The same held true for

maintenance contracts, for elevators, fire alarms systems, fire suppressions

systems, etc.

The largest increase under contractual obligations is for bus contracts. As you

recall earlier this year we had to transfer $290,000 to cover the current year

of the contract agreed upon. As part of that contract an annual adjustment

was agreed upon based on the increase in the CPI-U over a twelve month

period, from January to January, that increase is 1.7%, which equates to a

little more than $100,000.

In addition, a number of minor corrections were made throughout the

budget document both increases and decreases that resulted in a overall

increase to contracted services in the amount of $5,900.

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Based on our 5 year trend data custodial supplies have been over the current

budget allocation in each of the 5 years. Green cleaning, which is now a state

regulation, is more expensive.

The increase in computer supplies is justified by the larger number of one to one

devices available to students and the repair costs associated with them, aging

computers, printers, scanners, and the replacement keyboards, mice, network

and fiber optic cables. Included in the supplies budget is the replacement cost of

laptop batteries.

The cost for repairs to buildings is based on our trend data. Costs are rising and

we continue to do more in-house work rather than contracting out.

Bus and Fleet vehicle operations are being reduced based on our trend data and

the continued lower than normal cost of fuel.

Other reductions in the supplies area include minor adjustments for general and

office supplies in several areas of the budget.

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Water & Sewer costs have continued on the rise. Town of Centreville has

increased rates in the current fiscal year. Last year Sudlersville adjusted the

number of EDU’s we were being charged.

The increase in insurance costs are based on the projections received from MABE

group insurance pool.

Employee Benefits/Payroll Taxes are calculated based on the Salaries and Wages

included in the budget.

Once again, the other category reflects the aggregate of a number of minor

adjustments both increases and decreases throughout the budget document, all

based on the 5 year trend data.

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Based on the trend data, and the current year expenditures for replacing vacuum

cleaners and other floor cleaning machines we have increased the allocation for

custodial equipment.

The line item in the budget to purchase maintenance vehicles on a lease has

been removed from the budget as the County allocated funds to purchase 2

maintenance vehicles in the current years Capital budget.

Transfers:

Based on the costs associated with Out of County Living/Kinship Care placements

we needed to increase this line item in the budget.

The Mid-Shore Special Education Consortium’s FY2018 budget proposal included

a reduction from the current amount allocated for this continued service.

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This is the summary of the last five slides. The total overall increase to our

budget is $3,325,563. The sub-categories are list as prescribed by the MSDE

Financial Reporting Manual.

Salary increases take into account the remainder of the 1% raise for certificated

staff that will be given in May of the current year, the additional staff listed in an

earlier slide and a “placeholder” for salaries yet to be negotiated.

Contracted Services are largely to cover the cost of the bus contract.

Other Charges are mostly the cost of Health Insurance changes.

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The overall increase in our budget is $3,325,563, we are receiving an

additional $355,982 from the state and have adjusted our projections for

Other local sources by $34,000. Which requires us to increase our

request for county fund by $3,003,581.

Of that $3,003,581 the county has a required Maintenance of Effort

obligation of $1,307,968. Leaving an addition request over MOE of

$1,695,613.

This table shows the original requests as submitted to county

government over the past 15 years. It also shows the increase in terms

of dollars of those requests and then the percentage increase over prior

years. Please note the percentage increase for this FY2018 budget

request is the 3rd smallest over that 15 year period of time.

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This slide represents all capital projects that we are seeking funding for in

FY2018. Those listed with State funding have been approved by the state through

the IAC process.

In previous meetings with the county these projects have been discussed. The

only new project on this list is the Band Uniforms for QACHS.

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As we begin to close this presentation for the FY 18 Recommended Budget, I believe

it is critical to share some important items we are already planning for the FY 19

Budget. As the Executive Staff and myself have been analyzing our budgeting

process and spending allocations we have identified several areas that need

additional exploration to ensure we are aligning all of our resources for maximum

effectiveness. Therefore, we will be preparing to implement a zero-based budget

process as well as a curriculum-based budgeting process based on our recent

curriculum management audit report. In addition, we are planning to create a 5

year operation budget in FY 19 to project future costs in the coming years. This will

allow us to work even more closely with our county government to overlay and

align our future spending projections with that of the county’s future projections.

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Above is the counties budget schedule according to their website.

We will likely be asked to present our budget during one of the Work

Sessions. They are currently scheduled for March 21st, 28th, 30th, and

April 4th.

April 11th is currently the date the County Commissioners will release

their budget. While May 23rd is date for adoption of the final budget and

the tax rates.

Please note the dates April 24th, 25th, and 26th are the scheduled public

hearings for the Countys’ Budget.

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Reverend Taylor and Board members, as I said at the beginning of my

remarks, one of the primary roles of the Superintendent is to identify the

needs of the school system and communicate them to the Board and

the public. I think this budget begins to do just that. We have identified

the needs and we have communicated them to you today and in our

prior work sessions.

We will be seeking your approval of this budget or a modification of this

budget to submit to the County. We may have to give a formal

presentation to the Commissioners but at this time there is nothing

scheduled.

We will need to support our budget proposal at the county budget

hearings.

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