TRANSYLVANIA COUNTY SCHOOLS

“TEACHING EVERYONE TAKES EVERYONE”

Budget Request Overview

Transylvania County Board of Commissioners

May 7, 2015

CONTENTS

Who We Are .................................................................................... 1 History of Leadership ..................................................................... 3 Ongoing Excellence ....................................................................... 4 Funding ........................................................................................... 5 Our People ...................................................................................... 7 Trends—Student Population .......................................................... 9 Legislative & State Board of Education Issues........................... 11 Additional Issues To Consider ...................................................... 13 Trends—Technology ....................................................................... 14 Operational Needs — Local Current Expense (Fund 2) ............... 15 Operational Needs — Enterprise Funds (Fund 5) ........................ 17 Operational Needs — Designated Local Funds (Fund 8) ............ 19 Capital Infrastructure—Recurring ................................................ 20 Capital Infrastructure—New, Renovation, Repairs ..................... 21 Looking To The Future ................................................................... 26

Transylvania County Schools 225 Rosenwald Lane, Brevard NC 28712

(828) 884-6173 Fax (828) 884-9524 Website: www.tcsnc.org

Facebook: www.facebook.com/transylvania.schools

Twitter: www.twitter.com/TransylvaniaSch Instagram: www.instagram.com/transylvaniaschools

YouTube: www.youtube.com/tcsnc Flickr: www.flickr.com/tcsnc

Who We Are Transylvania County Schools serves approximately 3,561 students in nine schools: four elementary, one alternative middle-high, two middle, and two high schools. Mission: The mission of Transylvania County Schools is to prepare students to become caring and productive citizens in an ever-changing society through the shared responsibility of students, parents, educators, and the community. Vision: Transylvania County Schools provides a bright and promising future for its students; both recruits and retains a professional, caring, and talented workforce; engages with parents, families, and the community at large; drives economic development and opportunity for our citizens; and exists as the central point of pride in our community. Motto: Teaching Everyone Takes Everyone Goals:

• Every Transylvania County Schools student has a personalized education graduating from high school prepared for work, higher education, and citizenship.

• Every Transylvania County Schools student, every day has excellent educators. • Every Transylvania County Schools student is healthy, safe, and responsible.

Values:

• All children can learn; however, they learn differently, and we must value and understand those differences.

• High expectations will result in high achievement. • Through the shared responsibility of students, teachers, parents, and community, we

can reach our goals. • Children are our most important resource. • All children deserve a safe, comfortable, attractive, and inviting atmosphere that

fosters learning. • All educators, students, and parents deserve respect.

1

Board of Education

Tawny McCoy, Chair Cindy Petit, Vice Chair Ron Kiviniemi Marty Griffin Betty M. Scruggs

Central Office Administration

Dr. Jeff McDaris, Superintendent Norris Barger, Business Services Carolyn Barton, Child Nutrition Tammy Bellefeuil, Federal Programs Arleca Chapman, Support Services/CTE Jeremy Gibbs, Human Resources Alan Justice, Transportation/Athletics, Safe Schools Audrey Reneau, Elementary Education Brian Weaver, Middle/Secondary Education Chris Whitlock, Technology

Kevin Smith, Communications Tom Sweet, Testing/Accountability

Our Schools — Centers for 21st Century Learning

Elementary Schools Brevard Elementary Pisgah Forest Elementary Rosman Elementary TC Henderson Elementary

Cathy Credle, Interim Principal Merriman Nichols, Principal Scott Strickler, Principal Tony Meachum, Principal

Middle Schools Brevard Middle Rosman Middle

D. Kerry Putnam, Principal Greg Carter, Principal

Alternative Middle/High Davidson River School

Donna Wilde, Principal

High School Brevard High Rosman High

Jason Ormsby, Principal R. Donivan Edwards, Principal

(L to R): Cindy Petit, Marty Griffin, Betty M. Scruggs, Ron Kiviniemi, Tawny McCoy

2

History of Leadership Transylvania County Schools has long held — and embraces — the role of trailblazer among districts in Western North Carolina and across the state. Since the founding of Transylvania County in 1861, the community’s schools have enhanced the life of Transylvanians and expanded their vision of the future. Through evolution and consolidation, the county’s schools have served as central meeting places and touchstones. Schools and educators in each successive generation have improved the economic and cultural outlook for all Transylvanians. Notable “Firsts” for TCS:

• First Public School System west of Raleigh to go to a longer school year (1925). • First Public School System in North Carolina to integrate its schools. • First Public High School in North Carolina to field integrated teams. • First school system in North Carolina to have a traditional comprehensive high school

recognized as a “NC School of Excellence.” • First Public School System in North Carolina to receive District Accreditation. • Winner of the Trailblazer Award — presented by the NC Association of School

Administrators for innovation in education, by becoming the first school district in NC to implement an accountability policy that ensures student achievement.

1963 Brevard High School Football Team

3

Ongoing Excellence Teaching everyone takes everyone, and Transylvania County Schools serves every student of this community. As the community’s schools, TCS provides a full complement of services for every level of need, to offer choice for all students preparing for success after high school. Serving the whole student demands excellence in academics, arts, athletics and extracurricular activities. • Advanced Placement (AP) and Honors offerings • Robust and comprehensive curriculum in English & Language Arts, Mathematics, Science,

Social Studies, Career Technical Education (CTE), Visual & Performing Arts and Music • Wide ranging co-curricular options for students in over 27 student clubs and

organizations, student government, yearbook, newspaper, National Honor Society, National Technical Honor Society, Hunter Safety Shooting team, Cycling

• Broad extra-curricular middle school, junior varsity, and varsity opportunities for both men and women in over 12 different sports

• Regional, State, National, and International award winners in Science, Agriculture, Business, Leadership, Food and Consumer Sciences, and more

• Multiple Grants for expansion of academic opportunities (Golden Leaf, Duke Energy, Burroughs Wellcome, etc.)

Rosman HS FBLA wins multiple state awards at conference in Greensboro, April 2015.

Brevard FFA poultry team wins second out of 77 teams at NC State Fairgrounds in Raleigh, April 2015.

Many Regional Science fair participants from Brevard High School and the TIME 4 Real Science program went on to earn state and national awards, and are now pursuing international awards, February - May 2015.

4

Funding Transylvania County Schools has three types of funds: Governmental funds: Most of the Board’s basic services are included in the governmental funds, which generally focus on two things — how cash and other assets can readily be converted to cash flow in and out, and the balances left at year-end that are available for spending. The Board has several governmental funds:

• General Fund • State Public School Fund • Individual Schools Fund • Capital Outlay Fund • Restricted Grants Fund • Federal Grants Fund

Proprietary funds: Services for which the Board charges a fee are generally reported in the proprietary funds. Transylvania County Schools has one proprietary fund:

• Child Nutrition Fund o An enterprise fund

Fiduciary fund: The fiduciary fund is used to account for resources held for the benefit of parties outside the government. Transylvania County Schools has one fiduciary fund that accounts for five activities:

• Bjerg Scholarship, Lollis Scholarship, New Century Scholarship, and Connestee Falls Scholarship

o Managed for the benefit of graduating Transylvania County Schools students

• Wenzlick Trust o Used to enrich Career and Technical Education programs

5

State $20,396,037 Local * $12,302,639 Federal $2,820,662 Total $35,519,338 *Local includes more than county appropriation.

Salaries and Benefits $27,955,626 Purchased Services $3,406,231 Supplies & Materials $1,947,116 Furniture, Equipment, Capital $1,859,152 Transfers $689,116 Total $35,857,241

6

State 57.4%

Local 34.6%

Federal 7.9%

TRANSYLVANIA COUNTY SCHOOLS FY14 Revenues By Category

State

Local

Federal

Salaries and Benefits 78.0%

Purchased Services 9.5%

Supplies & Materials

5.4% Furniture, Equipment, Capital

5.2%

Transfers 1.9%

TRANSYLVANIA COUNTY SCHOOLS FY14 Expenses By Category

Salaries and Benefits

Purchased Services

Supplies & Materials

Furniture, Equipment,CapitalTransfers

Our People

Staffed with over 500 full-time employees, Transylvania County Schools is the largest employer in Transylvania County and employs a workforce ranging from highly skilled professional educators and administrators to trades and other support staff who serve as logistical support to the district’s core mission as a learning organization. The district operates nine schools in the following configurations or grade level spans: four elementary schools (grades K-5), two middle schools (grades 6-8), two high schools (grades 9-12), and one alternative school (grades 6-12). In addition, the district operates a central office facility where district leadership and support staff are housed, along with a support services complex adjacent to Brevard High School’s campus that contains the bus garage, maintenance shop, and a child nutrition warehouse. The district has seen dramatic changes over the past decade not only in weathering the national recession begun in 2008, but also in coping with a massive shift in the population and local economic development priorities caused by two major manufacturing plant closures which shed nearly 4,000 high-wage manufacturing jobs from the county in 2002. The district faces an increasing problem with certain hard-to-staff areas. While TCS has consistently maintained outstanding numbers of highly qualified teachers as defined by No Child Left Behind, the district must be focused on continuing to bring in talented teachers in traditionally hard-to-staff areas like math, science, and special education. These teaching area specialties are not the only shortage concern for the district, though; an analysis of the past two fiscal years shows that 20 of nearly 30 administrative positions in the district have seen staffing changes, which points to the need for targeted and strategic succession planning to create a fruitful leadership pipeline for the district.

Priorities and Observations • Quality educators at all levels are

key to success • Successful economic

development begins with strong public schools

• Need for further leadership development and succession planning

• Growth of Asheville Metro will have an effect on Transylvania County

• Opportunities for growing partnerships with Blue Ridge Community College, Brevard College, and Western Carolina University

• Increased alignment with STEM, Arts & Design, and Advanced Manufacturing opportunities in the region

Challenges • Housing availability and

affordability, including rental units • Cost of living

o Increasing percentage of educational staff live outside our county with 25% of teachers currently living outside of Transylvania County

• Stagnant state teacher salaries and low wages for non-certified support staff

• Somewhat remote location surrounded by larger school districts (Buncombe and Henderson) with competitive pay

• Significant retirements predicted in our workforce over the next five years

7

Major long-term challenges on the horizon range from continuing to adapt instructional programming to regional economic development needs, to sustaining local funding in the face of shifting state education finance policy, and to modernizing antiquated school facilities with a major school capital construction and renovation campaign. Short-term goals related to maintaining high student achievement while also coping with increased complexity, difficult budget challenges, and stagnant teacher pay in the state must be addressed urgently and immediately. Meeting these goals must fit within the long-term goal of the school system to be an economic development engine itself within the Transylvania County community by advancing high student achievement through innovation as well as responsiveness to students, families, and the community at large.

Transylvania County Schools Full-Time Staffing Profile (SS-200 Report)

FY 2015

Classification State Funded

Federal Funded

Local Funded

TOTAL

Officials, Administrators, and Managers 6 1 3 10

Principals 9 0 0 9

Assistant Principals, Non-teaching 4 0 1 5

Elementary Teachers (Grades K-8) 101 23 13 137

Secondary Teachers (Grades 9-12) 59 5 12 76

Other Teachers 35 12 7 54

Guidance Personnel 8 0 1 9

Psychology Personnel 3 0 0 3

Media Coordinators and Audio-Visual Staff 7 0 0 7

Other Professional Staff 12 3 8 23

Teacher Assistants 51 0 20 71

Technicians 1 0 3 4

Clerks/Secretaries 16 2 12 30

Service Workers 3 0 0 3

Skilled Workers/Craftsmen/women 0 0 7 7

Laborers 29 27 2 58

TOTAL 344 73 89 506

8

Trends — Student Population Overview The Transylvania County Board of Education commissioned a study from NC State University’s Operations Research and Education Laboratory (OREd)/Institute for Transportation Research and Education (ITRE) in February 2015 to analyze current community demographics and trends as well as to project student enrollment for the district over the next ten years. The study was completed with data and input obtained from the school system, county government, and state sources. Completed in late April 2015, the study was presented to the Board of Education on May 4, 2015 and will be used for future strategic planning and as relevant data for an ongoing master facilities planning study currently underway, which was also recently commissioned by the Board. If current economic development activity produces no significant change, the study projects a continued increase in population for Transylvania County, but a decrease in the number of school-age persons in Transylvania County from 5326 in 2000 to 5063 in 2019. It further projects a system-wide decline of 229 students over the next ten years, a projected decline of 1.35% per year. The forecast, by level, shows the number of elementary students dipping, because of the decrease in Resident Live Birth (RLB), and then rebounding to only decline by 2 students in ten years. The number of middle schools students, more susceptible to annual changes, declines sharply, rebounds, and then declines again because of the negative cohort from the elementary level due to RLB. A decline of 136 students is forecast. The negative cohort in the elementary schools now creates a smaller dip at the high school level. The effect of the RLB decline is just getting into high schools at the end of this forecast. High schools are projected to lose 91 students over ten years.

Key Points: If current economic development activity produces no significant change: • Student population relatively stable

with small reduction over time • Predicted to drop by 229 students by

2025, a projected decline of 1.35% per year

• High Schools are predicted to lose 91 students by 2025

• Approximately 50 out of county students attend Transylvania County Schools o Out of county numbers could

increase with business growth in Mills River (likely up to 100)

• Projected enrollment numbers should be positively affected by TPED efforts in the long term

Challenges • Increasing percentage of educational

staff live outside our county • Quality educators at all levels are key

to success • Leadership matters • Successful economic development

begins with strong public schools • Growth of Asheville Metro will have an

effect on Transylvania County • Challenges to recruitment and

retention o Housing availability and

affordability, including rental units o Cost of Living o Internal and external conditions

affected by infrastructure

9

By region, the Brevard area loses 51 students in ten years. The Rosman area loses 178 students. By school, the forecast shows some pressure on capacity at Brevard Elementary, Brevard Middle, and Brevard High over the next three to five years. However, the negative cohorts in the middle of the forecast lessen that pressure. Similarly, Rosman Middle and Roman High are projected to be in the 95-100% capacity range in the next three years. These forecasts are based on historical data. That data includes in-migration and out-migration. It includes the shifts from public to private schools and academies and to home schools. Therefore, if the Transylvania Partnership for Economic Development is successful in attracting new employers, the forecast may need to be re-examined.

10

State and Legislative Issues When North Carolina and the rest of the nation entered into 2008-09 recession, our state’s General Assembly cut state funding to education. Not long after, a series of federal stimulus packages (EduJobs, e.g.) plugged the hole of lost state funding, but this came with a price. Strings that bound states came with increased federal money, including Race to the Top (RttT), and those funds are also now running out. However, as with any pothole that’s been patched, the underlying hole has remained. State funding has not been structured to replace cuts from the recession period. Before the recession, state funds accounted for approximately 70% of funding in Transylvania County Schools; now, that number has fallen below 60% and continues to decrease annually. • State Funding

o Despite changes, district still rely for a majority of funding from the state and the US Department of Education (DOE). Different rules are established by the General Assembly (NCGA), State Board of Education (SBE), and DOE.

o Amounts have fluctuated widely over the past 6-7 years o TCS used to receive an allotment formula in the past that was pretty close to

actual; now, however, the “allotment” may be nothing more than a placeholder of what could happen in an eventual budget agreement

o In the last 6 years, districts have experienced changes by legislative action to state budget up until the night the NCGA adjourned.

• Non-Recurring Supplantation o As an example, Teacher Assistant funding in FY15: a portion was put into

non-recurring funds, covered through re-allocating lottery funds o Since the expense is “non-recurring,” it has to be voted on every year and depends

on lottery funds. But the lottery was meant to enhance, not supplant, spending by the state on education. Teacher Assistants are just one example.

• Unfunded Mandates o State Level: Driver’s Education, Special Education, etc. o Federal Level: Child Nutrition is one example. Districts must abide by federal

regulations, but the established rates actually cause districts and states to lose money proportional to the number of plates they serve. Supplemental sales once helped to correct this, but since 2011, there has been a $100M cumulative decrease in supplemental sales statewide.

• Textbooks and Curriculum o Funding cut around the time of the recession continues to reverberate today.

11

• In 2008-09, Buncombe, Henderson, Transylvania, and Polk Counties — on average — received a textbook allocation of $69 per child. In 2013-14, the same four counties received an average of $14.70 per child for textbooks.

• The average cost for a textbook is now $70-80; for an AP science book, the cost is $200. Do digital versions help to reduce costs? No. They cost as much as regular books.

• Textbook makers know that NC districts are not buying new books, so they’ve also stopped making them to align with the state curriculum.

• Districts have flexibility to “take” from other sources to pay for textbooks, which means they are taking from other sources to pay for textbooks. This assumes districts can even find textbooks that align to new standards, which is difficult in NC and around the US.

• Technology • E-Rate cuts are especially hurting proactive LEAs, such as Transylvania County

Schools, that have prepared for 21st century learning; those that have lagged will reap some benefits as the program changes.

• The last of the state’s Race to the Top (RttT) funding is being used this summer for infrastructure, and then it all stops. Updated requirements are far outpacing local ability to pay for services such as communications and data.

• Golden Leaf and RttT helped this district locally. TCS is a known leader in WNC. • Testing increasingly being put online; 1:1 technology becomes critical. • Quality 21st century teaching involves more and more online activity, built into

curriculum and utilized daily. • Fund 8: By local decision, in FY16 TCS has some requests built in to handle the

loss of E-Rate funding, but continuing outlay for these and other programs is not sustainable due to past cuts.

• Over 340 Bills have been filed thus far related to education o Many have monetary ramifications o More than 44 made crossover just in the final week (ending 2:30am, May 1)

• HB 761: Requires local capital funds to be shared with charter schools. • HB 557: Provide for certain types of funds to be included in LCE and

transferred to charters on ADM (Average Daily Membership) basis. • HB 238: Seeks to require duty-free lunch for all teachers. Question: Who

will watch the students? • Online charter bill: Funds follow students even if they never went to school

in a certain district, and never planned to attend local schools. A student could enroll in an online charter and the LEA may have to send funds for that student regardless.

o In the end, districts once again don’t have the state budget yet, and may have to wait until well after local budgets are set.

12

Additional Issues To Consider

• Reauthorization of Federal ESEA (Elementary and Secondary Education Act) o This has huge ramifications on testing and other curriculum requirements. It

could have NC revisiting everything from School Performance Grades and Report Cards, to where certain monies are allocated statewide.

• NCHSAA (North Carolina High School Athletic Association) o Realignment, depending on the next conference assignments made for

Brevard and Rosman Middle and High Schools, could change travel and the sports offered by each school significantly.

o Travel may increase, and as rivalries are redrawn or eliminated, gates often suffer. As one example, a Brevard-Pisgah game is always going to be a bigger draw than Brevard-Mountain Heritage.

• Aging buildings and infrastructure o School buildings and infrastructure are well into their expected life cycle. o For example, Our Rosenwald buildings and Rosman Middle School were built in

the 1940’s, Brevard High was built in 1959, and Rosman High was built in 1973 over a foundation from the 1920’s. Several schools were built in 1974.

o All these have been significantly expanded and/or remodeled over time. • Increased media costs

o In a climate where non-profit foundations and businesses are competing for students across the state, TCS continues to put renewed emphasis on not just engaging the community, but also marketing and reinforcing enrollment decisions using traditional marketing techniques. This has not always been the province of public education, but success in this area will significantly affect TCS planning for future infrastructure, staffing, and curriculum needs.

• Federal National School Lunch Program o Ever since the implementation of the “Healthy, Hungry, Free Kids Act” nutrition

program, costs have gone up 71 cents per plate in Transylvania County. This is dealt with more completely below, but it changes how the entire Child Nutrition program is structured in each school system to offset the rising costs.

• Operating costs o Food, fuel, and materials from paper to cleaning supplies, continue to rise for

TCS as they do for all consumers. • External competition for teachers, administrators, and school staff

o Other counties try to match or exceed our local supplement, and there are simply fewer teachers being produced by the UNC system. The end of the Teaching Fellows program and other discouragements affecting future teachers has diminished the pool of applicants, making competition keener and more costly.

13

Trends — Technology “Almost one-third of American students attend schools in rural areas. Almost half of our school districts are rural. The success of our children in those areas is critical in our work to educate our way to a better economy. — Arne Duncan, US Secretary of Education, 2010 National Rural Education Summit

• Technology is critical to teaching, learning, and economic success. • Technology is expanding exponentially more rapidly. • Technology requires aggressive and constant attention and upgrade. • IT infrastructure, support, and upgrades are crucial for success. • Computers are now doubling their capabilities every 12 months or less. • In five years technological advancement will be 32 times more advanced. • In ten years it will be 1000 times more advanced.

In an ocean of technology, Transylvania County Schools makes big waves for students. By providing a device for each student for grades 4-12, we have fulfilled our goal of a 1:1 environment with plans to expand the initiative into our lower grades. Technology provides access to a world of information and allows TCS to differentiate instruction, meeting each student’s needs and providing a personalized education. TCS provides technology and infrastructure for core curriculum classes, and other industry-level career pathways such as: Drafting, Graphic Design, Microsoft Academy, Visual and Performing Arts. A primary focus is to continue the expansion and support of Advanced Manufacturing and Mechatronics within our schools. Integrating technology within the curriculum is vital to prepare students for post-secondary opportunities. Technology is always changing and evolving, and TCS is committed to placing the best available technology in the hands of teachers and students. Within a fast changing environment, we understand the importance of providing professional development and technical support for stakeholders. A goal in our technology plan is to prioritize and strategically update infrastructure to ensure we provide the best services possible.

14

Operational Needs — Local Current Expense (Fund 2) The Board of Education is requesting items in Fund 2 to meet operational needs and remove the potential for default or severe budget cuts.

The total increase requested in Local Current Expense for FY 2016 is

$958,773.

Mandated FY16 Anticipated Fund 2 Budget Changes

• Health insurance 3% increase ($5,378 to $5,540)* $17,820 • Retirement rate increase (15.21% to 15.75%)* $29,152 • 1 step certified increase + minimum certified pay to $35K* $85,636

$132,608

These items prepare TCS to deal with required personnel cost increases that are expected to be produced by the final state budget. While the state process is not yet close to resolution, these projections are based on tentative information that is very reliable provided by the NC Department of Public Instruction in consultation with legislative staff. These items account for 13.8% of the increase requested under Local Current Expense, and are mandated by the state. These costs are being shouldered by every county and school system in North Carolina. All districts pay the same health insurance and retirement rates, and follow the same certified pay scale. Operational Shortfall

• Operational Deficit $786,657 Without an increase in appropriation of $786,657 for local current expense for FY 2016, Transylvania County Schools will either be in default or be forced to make cuts to personnel, supplies, materials, and other operational components in the school system. Approximately 76% of the total system budget covers personnel costs; therefore, any budget cuts will likely have direct impact on staffing, potentially at every level throughout the district. TCS was able to use federal stimulus dollars to mitigate years of cuts to state education funding and avoid requesting local funds. Knowing that the availability of federal funds would end, TCS began conserving local dollars as soon as stimulus funds began in 2009, to avoid shifting the burden to county government as long as possible. At its peak in FY12, TCS held an unassigned fund balance of approximately $1.83 million, which is now being drawn down to an estimated $29,000 at the close of FY15. This creates a severe cash flow problem for the school system but is unavoidable.

15

TCS Local Current Expense Fund Balance FY12 to FY15

Educator Local Salary Supplement

• Educator supplement increase from 8.5% to 9.0% $112,708 The Board of Education seeks to increase the local salary supplement for educators from 8.5% to 9.0% at a cost of $112,708. We are very appreciative of Commissioners’ ongoing support for the salary supplement, which helps TCS compete for talented educators by offsetting costs associated with living in or commuting to Transylvania County. The Board of Education continues to strive toward its established target of a 10% supplement, and this budget will move one step closer toward that goal, delayed for some time by prevailing economic conditions. Savings

• Savings (amount not requested) ($73,200) TCS continues to look for opportunities to become more efficient and to cut costs wherever possible without negatively impacting our core mission of supporting student learning. Below we list just two measures we are already taking for next fall as cost-saving measures. By taking such measures wherever possible when we can still protect our classrooms, we lower the amount of money that we must seek from the county to support our operations.

• Discontinue/contract afterschool care (37,200) • Combine BHS Distance Learning/ISS positions (36,000)

Total Savings of $73,200

$0$200,000$400,000$600,000$800,000

$1,000,000$1,200,000$1,400,000$1,600,000$1,800,000$2,000,000

FY12 FY13 FY14 FY15

Remaining FundBalance

FY12 $1,829,822 FY13 $1,549,722 FY14 $678,882 FY15 Estimated $28,882

16

Operational Needs — Enterprise Funds (Fund 5) TCS is again requesting $250,000 in FY16 for Child Nutrition, equal to the amount requested in FY15. FY16 Anticipated Fund 5 Budget Request

• National School Lunch Program (Child Nutrition) $250,000 Child Nutrition Programs in North Carolina and across the Nation are at a critical juncture and unless immediate action is taken to restructure reimbursement rates and relax program regulations most programs will continue to lose money, and suffer continued participation decline. TCS Child Nutrition lost $97,223 in FY 14, and anticipates a somewhat smaller loss in FY15. Plate Cost for the School Nutrition Program in Transylvania County has gone up $0.71 per plate since the implementation of the Healthy Hungry Free Kids Act. However, federal reimbursement has only gone up by $0.36 per plate. Factors contributing to total plate cost are:

• Changes in standards, meal pattern requirements, and participation levels brought about by the Act

• Increases in food prices • State components (primarily employee related expenses)

TCS Child Nutrition receives a commodity allowance for each lunch plate served. Although CN is grateful for the commodities, they represent 10% of total food costs and cannot be added penny for penny to offset plate cost. Food cost is only one of the factors that goes into calculating “plate cost.” The National School Nutrition Association has requested that Congress increase the per plate reimbursement for Lunch and Breakfast by 35 cents each. Though the increase isn’t likely, this can be taken as an important indicator that many programs are in financial trouble or losing money outright. Adding to the difficulty, reimbursement rates are not generally published or released before July 1st. This creates a situation where estimates are all that remain available for creating budgets to address the coming year.

17

Negative Factors • Federal policy places responsibility on state and local governments to pick up extra

costs. North Carolina is unlike many in the nation, and does not provide any state funding.

• If neither side budges, local government will continue to take a financial burden and many hungry children will continue to be worse off.

Positive Factors:

• Officials have intimated that there may be easing of some regulations, potentially decreasing cost and recovering lost participation. As an example, whole grain waivers were pushed through at a rapid pace, and TCS has already received its approval.

USDA recently surveyed of NC Child Nutrition Directors (TCS was one of four systems surveyed), and has now requested a report from the NC DPI-Section Chief for School Nutrition on the state of CN Programs in North Carolina. We may have this report as early as May 1st. This report is expected to confirm that our region has high costs, most programs are losing money, and many more are moving forward into difficult operations because of the challenges noted above.

18

Operational Needs — Designated Local Funds (Fund 8) TCS is requesting $139,812 in Designated Local Funds to launch JROTC, while removing the after-school program to eliminate an annual Fund 8 request for roughly $13,000 associated with scholarships for that program. FY16 Anticipated Fund 8 Budget Changes

• Rosman & Brevard HS Marine JROTC Program $139,812 o This covers salaries and benefits for two instructors. The Marine Corps will

contribute over $200,000 to this program for equipment and materials. Changes In E-Rate Funding for FY16 and forward This list does not contain budget requests, but is provided for information about future challenges. Lost E-Rate reimbursements will be covered this year by appropriated fund balance in Fund 8.

Service Change in Reimbursement Amount

FY15 Charge

FY16 Charge

Web hosting (10 sites) from 78% to 0% $2,200 $10,000

Student web hosting (MyVRSpot) from 78% to 0% $1,760 $8,000

Student email filtering (Gaggle) from 78% to 0% $2,200 $9,990

MiFi/Hot Spots from 78% to 0% $0 $6,840

Landline + Local/Long Distance from 78% (decreasing 20% yearly) to 0% in FY19 $20,020 $40,040

Voice/Data Plans– data no longer E-rate eligible

from 60% of voice/data to 60% of voice only $11,537 $21,674

WAN (Wide Area Network) 80% (no change) $18,216 $18,216

19

Capital Infrastructure — Recurring TCS is requesting a county appropriation of $1,015,892 in FY 16 for recurring capital infrastructure expenses. The items listed here are projected for the same amount requested in FY17.

o Schools — ADM Allotment — Furniture and Equipment $86,112 An additional allotment for furniture and equipment is needed to compensate for cuts in prior years. This is the second year of a 2-year “catch up.” In the future, 3 schools per year would double their budget to put the system on a 4-year cycle.

o Cultural Arts Equipment $4,000

o BMS, BHS, RHS o Band Equipment $13,845

o BMS, BHS, RMS, RHS o Athletic Equipment $73,550

o BMS, BHS, RMS, RHS • System - Furniture and Equipment $3,000 • System - Bus cameras $4,000 • System - Plant Operations and Bus Garage Equipment $13,200 • System - Campus cameras $8,000 • System - Science equipment and Media Equipment $23,650 • System - Roof Maintenance $12,000 • System - Custodial Equipment $16,000 • System - CTE Furniture and Equipment $21,550 • System - Payment on QSCB bonds $61,985 • System - Capital Repairs $290,000 • System - Computer Equipment $385,000

20

Capital Infrastructure — New, Renovation, Repairs TCS is requesting a county appropriation of $1,094,932 in FY16 for new capital infrastructure expenses, including renovations and repairs. A separate prioritized list exists for projected FY17 expenses. In addition to this county appropriation, TCS plans to use approximately $294,600, which includes lottery proceeds, donations, sales tax rebates, and other sources, to spend a total of $1,389,532. BHS JROTC Start-up costs (equipment room, minor renovations) $10,000

Minor renovations to office and classroom space to accommodate 2 instructors and $200,000 worth of equipment provided by the Marine Corps for the Marine JROTC program.

BHS Football field lighting upgrade and retrofit $33,537

Payment on BHS football field lighting retrofit

SYS Financial software $89,000 Current accounting software is at end of life with support and upgrades. Funds would purchase Windows-based, web-enabled payroll, general accounting, and fixed assets software, possibly with human resources and child nutrition modules. An RFP has been issued to 2 vendors with selection of software scheduled for June. Budget includes cost of software, conversion, training, and hardware upgrades.

BMS HVAC repair and renovation $225,000

The entire distribution system and most of the air handlers and boilers are original to the 1974 main building and 1989 addition. Built with an open classroom concept, the distribution system was not altered to accommodate the enclosing of classrooms in 1989, resulting in improper and problematic air flow. In addition, the original equipment operates at 75-80% efficiency, compared to today's equipment that operates at 90-95% efficiency. Rooftop chillers are relatively new and in good condition and would remain.

21

RHS Security Intercom for Art Room entrance $2,500 Rear entrance of the high school has video surveillance but no intercom to request admission to the school. This would allow visitors to announce themselves and be admitted.

RMS Security Intercom for bell tower entrance $2,500

The belltower entrance has video surveillance but no intercom to request admission to the school. The main middle and high school entrances from the road are not ADA compliant. This would allow ADA access to the front of the building.

DRS Carpeting 1/2 of 1st floor (4,800 sf @ $2,50) $12,000

Carpeting in the classrooms has not been replaced in 12 years and is past due given the daily traffic and usage.

SYS Education Center HVAC replacement $77,771

2nd half of a project scheduled for FY15 but postponed due to emergency heating system needs at Brevard High School. An energy efficient natural gas/electric HVAC unit with energy management controls would replace several inefficient window A/C units and a 1989 heating unit with original piping.

ADM Allotment – Furniture and Equipment — Multiple Schools $61,224

An additional allotment for furniture and equipment is needed to compensate for cuts in prior years. This is the second year of a 2 year “catch up.” In the future 3 schools per year would double their budget to put the system on a 4 year cycle.

RHS A/C boost for server room $5,200

DVR's for the camera surveillance system have had to be replaced several times because of extreme heat generated by the equipment in the server room. This would add needed cooling and temperature control to the space.

BHS Roof repairs $155,000

Coatings for several areas that would reduce leaks and extend the roof life by 5-7 years until a permanent repair can be designed and installed.

22

RMS Rear new gym parking drainage and sidewalk improvements $38,000 Water collects in several areas near rear RMS entrance and becomes hazardous, especially in winter. Also a pedestrian walkway is needed from the upper parking lot so students and visitors don’t have to walk in the street.

SYS Education Center window replacement $62,000

Inefficient, single pane windows are original to the building. New windows would increase comfort and give the new HVAC system the opportunity to work at maximum efficiency. The 2 projects would result in considerable energy savings.

TCHES Replace front doors $15,000

Front doors are warped and rusted, and cannot be repaired further. The condition makes the functioning of the access control door contacts problematic, thus creating security problems.

PFES Paint sidewalk canopy $14,000

The part of the exterior that is in the worst condition. Part of a larger long-term project to paint all non-masonry surfaces on the entire exterior of the building.

BES Repave rear drive $68,000

Condition of rear bus access is such that a complete tear-up and repaving is necessary.

23

BES Repave/improve front drive and parking $131,000 Condition of front vehicle access is such that a complete tear-up and repaving is necessary, with possible reconfiguration to accommodate heavy traffic in the afternoons.

BES Surface drainage improvements $35,000

As part of the larger repaving project, this would include additional drainage for play areas in the rear of the building, and the area between the main building and the kindergarten wing.

BES Repave hard surface play area $22,000

In need of drainage improvements and resurfacing. Tear-up at this time is not necessary but will be within 3 years if not resurfaced.

BHS Old gym/new gym lobby doors $28,000

Old gym/new gym lobby doors are warped and rusted, and will not allow access control devices to work properly, posing a security risk.

SYS Plumbing van (Ford Transit 150) $23,500

Current van is a 1989 model with 153k miles. It has had numerous mechanical problems recently.

24

DRS Security - Cameras- C-Stop and Rebound $2,500 Additional cameras needed in high risk areas.

RES Improved stage lighting and portable sound system $15,000

Needed for performances and assemblies so performers and speakers may be seen and heard more clearly.

RHS Repave stadium parking $28,000

In need of resurfacing. Tear-up at this time is not necessary but will be within 3 years if not resurfaced.

SYS Activity bus (w/ locks and racks) $86,800

Last of 4 scheduled activity buses to modernize the fleet. These have replaced several 1980's model activity buses.

RES Repave parking and connect emergency entrance $147,000

RES has no secondary emergency exit from its campus. Duke Energy has granted an easement to provide an exit at the far side of the property. Extension of the road and paving is needed to allow buses, other vehicles, or pedestrian exit. This would also include resurfacing the current parking lot.

25

Looking To The Future Options being reviewed for Transylvania County Schools: Note: Any options considered here require input before any final decision by the Board of Education.

• TC Henderson becoming a K-8 Magnet school with STEM/STEAM focus • BES, BMS, and PFES converted to K-8 Schools • RES converted to K-6 or K-8 School; renovate RMS for improved Arts capabilities • Increased STEM/STEAM inclusion at all schools • New building on BHS campus for Davidson River School (which remains separate) • Current DRS building renovated for online academy • College style scheduling for both high schools • Expanded partnership with BRCC, Brevard College, Western Carolina University • Expanded use of new and emerging technology; Virtual Days • New program options in Career Technical Education

Our Vision

Transylvania County Schools provides a bright and promising future for its students;

both recruits and retains a professional, caring, and talented workforce; engages with parents, families, and the community at large;

drives economic development and opportunity for our citizens; and exists as the central point of pride in our community.

26