2019-20 PROPOSED BUDGET OBJECTIVES Role of the Budget Committee - - PowerPoint PPT Presentation

2019-20 PROPOSED BUDGET

OBJECTIVES

• Role of the Budget Committee
• Organization of the Budget
• Budget Message & Progress Towards 20/20 Vision
• Excellence in Financial Accountability
• Progress of 2016 Capital Projects
• Legislative Update
• Budget Assumptions
• Questions & Deliberations

ROLE OF THE BUDGET COMMITTEE

• Receives the budget document & hears the budget message
• Hears and considers public comment
• Deliberates the budget
• Approves the property taxes (permanent rate, local option rate & the

bond levy)

• Approves the budget (Final authority for programs and services rests

with the School Board, who can make changes after budget committee approval)

ORGANIZATION OF THE BUDGET

• Section 1. Introduction (p. 1-52)
• Budget Message (p. 5-22)
• Section 2. Financial Information (p. 53-60)
• Section 3. General Fund (p. 61-102)
• Section 4. Other Funds (p.103-130)
• Section 5. Supplemental Information (p 131-154

STUDENT OUTCOMES – PROGRESS TOWARDS 20/20 VISION

• K-12 Attendance
• 3rd Grade Literacy
• 5th Grade Math
• 8th Grade Literacy & Math
• Freshman On-Track to Graduate
• Seniors Enrolled in 3+ College Courses
• 4 Year Graduation Rate

82.6 79 84 81 86.4 85.4 85.9 87.0 88.3

70 72 74 76 78 80 82 84 86 88 90 2016-17 Oregon State Average 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 Target 2020 Target

Percent of HRCSD Students Not Chronically Absent

48.0 38.3 38.0 42.0 44.0 46.6 52.2

10 20 30 40 50 60 2017-18 Oregon State Average 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2018-19 Target 2020 Target

HRCSD Oregon State Assessment 3rd Grade Reading

40.0 43.0 41.0 49.0 31.0 52.3 54.9

10 20 30 40 50 60 2017-18 Oregon State Average 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2018-19 Target 2020 Target

HRCSD Oregon State Assessment 8th Grade Math

82.1 80.7 86.1 89.7 88.9 90.6

50 55 60 65 70 75 80 85 90 95 2017-18 Oregon State Average 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2018-19 Target 2020 Target

Percent of HRCSD Freshman On Track

78.7 77.40 81.3 81.4 84.3 81.8 83.4

86.8

87.7 89.0

60 65 70 75 80 85 90 2017-18 Oregon State Average 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2018-19 Target 2020 Target

Percent of HRVHS Students Graduating On Time

EXCELLENCE IN FINANCIAL ACCOUNTABILITY

• District earned its fifth consecutive unmodified opinion from

external auditors with zero findings - the highest commendation possible

• Awarded “Certificate of Excellence in Financial Reporting” by

the Association of School Business Officials (ASBO) for fiscal years ending 2017 & 2018

• S&P Global Ratings raised its underlying rating to AA- from

A+ on the District’s GO Bonds on improved financial position

PROGRESS OF 2016 CAPITAL PROJECTS

• $76.8m resources over the project period beginning 2016
• $57,175,000 General Obligation Bond proceeds approved by

voters

• $8,601,732 Bond Premium (bonds sold for more than par

value)

• $4,499,478 State Match Grant
• $4,272,821 Seismic Improvement Grant awards from Business

Oregon (HRMS, Wy’east MS & Mid Valley Elementary)

• $1,502,365 Interest on investments
• $755,530 Other

PERS Reform

• Gov. Brown recommended reforms that propose to stabilize rates

moving forward

• Requires public employees to contribute to paying down the

Unfunded Accrued Liability

• Rates already set for this year; don’t expect impact this biennium.
• No bill yet connected to Gov.’s Proposal

LEGISLATIVE HAPPENINGS

• Student Success Act, HB 3427; Scheduled Senate Vote May 7
• $2b biennial investment in Oregon Public Pre-K – 12
• Business Activity Tax Increase w/ Personal Income Tax Reduction
• If enacted and survives likely ballot initiative, $ not until after January 2020
• $1b = Student Investment Account
• Lower Class Sizes/More Adults
• Well-Rounded Curriculum
• Health/Safety/Mental Health
• Extended Learning Time
• $600m = Statewide Education Initiatives Account
• Measure 98, 99
• Long Term Care & Treatment
• High Cost Disability
• Nutrition
• $400m = Early Learning Expansion

LEGISLATIVE HAPPENINGS

LEGISLATIVE HAPPENINGS

• State School Fund, HB 5016
• Last week, Ways and Means recommending SSF of $9b
• Was $8.87b
• Now above Governor’s recommendation of $8.97b (this proposed budget)
• SSF = 87.3% of General Fund

ADDITIONAL STAFFING FOR 2019-20 (P.12)

Description FTE Level Classroom Teacher - Reduce Average Elementary Classes by 2 3.00 Elem Elementary Student Support Specialist; full time at CL & PD 1.00 Elem Full time Principal at PD; District Early Learning Leadership 0.40 Elem Elementary Associate Principals at MV, May St and WS 3.00 Elem Teacher - Content Area TBD (HRMS) 1.50 Middle Teacher - Content Area TBD (WYMS) 1.50 Middle Classified 8.0 hrs – Bilingual/Behavior Support (HRMS) 1.00 Middle Classified 8.0 hrs - Bilingual/Behavior Support (WYMS) 1.00 Middle Teacher - Math/Elective – HR Options Academy 0.50 High Teacher - Freshman Success 0.50 High Teacher - Community Works 0.50 High Technology Instructional Coach (partially maintains bond-funded position) 0.50 District C&I - Assessment Coordinator (TOSA) 1.00 District Controller position to support District Business Services 1.00 District Student Services - Instructional Coach (TOSA) 1.00 District Maintenance 1.00 District Total 18.40

PROPOSED BUDGET AND ASSUMPTIONS

• Financial Summary
• Program Changes for 2019-20
• General Fund
• State School Fund
• Enrollment
• Local Option Levy

FINANCIAL SUMMARY (p. 53)

TOTAL FUNDS EXPENSES $93.3M

$53,421,012 $1,880,214 $1,900,000 $1,335,567 $1,448,113 $60,000 $196,206 $7,050,000 $4,425,400 $23,606,627

General Fund 56.0% Food Service Fund 2.0% Student Body Funds 2.0% Community Education 1.4% Biennial Reserve 1.5% Unemployment Fund 0.1% Bus Replacement Fund 0.2% Grant Funds 7.4% Debt Service Fund 4.6% Capital Construction and Improvements 24.8%

GENERAL FUND OPERATING REVENUE $50.7M

$43,180,597 $3,659,368 $2,268,710 $873,900 $680,789 $13,700

State School Fund Resources 85.2% Local Option Resources 7.2% ESD Revenue 4.5% Other Local 1.7% Other State 1.3% Other Federal <1%

STATE SCHOOL FUND

• State School Fund Resources 85.2% of General Fund
• State School Fund Estimated on Governor’s Proposed Budget of $8.972 billion

split 49%/51%

• Local property taxes, Common School Fund, State timber money, Federal

forest fees are all considered resources of the State School Fund

• Student Enrollment (ADM) is the most important factor in projecting SSF

revenue

• Weighted student enrollment drives funding (ADMw)
• Extended ADMw is the greater of the current or prior year’s ADMw

More detailed information is shown on pages 57-60

ENROLLMENT FORECAST

Year Ended ADM ADMw Extended ADMw 2016 4,055.30 5,083.29 5,083.29 2017 4,057.51 5,066.28 5,083.29 2018 3,998.12 4,995.07 5,066.28 2019 3,994.56* 4,990.47* 4,995.18* 2020 3,837.00* 4,800.87* 4,989.61*

LOCAL OPTION LEVY

• Approved Local Option Levy Rate of $1.25/$1,000 TAV
• Proposed budget estimates local option levy resources based on

$1.20/$1,000 TAV imposed

• With District’s financial position, we propose reducing the imposed local
• ption levy rate and assumed lower resources from both the levy and the

local option equalization grant More information is shown on pages 46-48

GENERAL FUND OPERATING EXPENSES $53.4M

$32,627,835 $20,149,657 $263,443 $380,078

Instruction 61.1% Support Services 37.7% Debt Service 0.5% Contingency 0.7%

GENERAL FUND EXPENSE BY OBJECT $53.4M

$27,361,941 $17,906,504 $4,454,144 $2,541,442 $54,492 $722,410 $380,078

Salaries 51.2%

• Assoc. Payroll Costs 33.5%

Purchased Services 8.3% Supplies & Materials 4.8% Capital Outlay 0.1% Other Goods & Services 1.4% Contingency 0.7%

STAFFING & BUDGET ASSUMPTIONS

• Total staffing of 522.2 FTE (full-time equivalent)
• 450.39 FTE General Fund
• 20.31 FTE Food Service Fund
• 13.85 Community Education Fund
• 37.65 Grant Funds
• Staffing allocation based on projected enrollment of 3,837 students

More information is shown on page 37

BUDGET ASSUMPTIONS - PERS

Employee Membership Tier 2017-19 Current Rate 2019-21 Adopted Rate Change to Contribution Rate Percentage Increase Tier 1/Tier 2 16.03% 20.03% 4.00% 25% OPSRP 10.70% 14.58% 3.88% 36.3%

29.29% 26.76% 31.53% 35.53% 27.29% 22.07% 26.20% 30.08% 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 35.00% 40.00% 2013-15 2015-17 2017-19 2019-21

District Total PERS Rates as a Percent of Salary includes employer contribution rate, pickup & pension bond rate

Total Tier 1/2 Total OPSRP

OTHER BUDGET ASSUMPTIONS

• Collective bargaining agreements in place through the end of 2019-20
• Other employment agreements in place through the end of 2019-20
• District contributions for health insurance costs estimated using best

available information

• PERS exact rates used for filled positions. OPSRP rates used for

vacancies.

• No change assumed in workers’ compensation premium rates
• Current Social security, Medicare, unemployment and workers’

benefit fund assessment rates were assumed

OTHER BUDGET ASSUMPTIONS

• Lowered contingency reserve to 0.75% of operating

revenue

• Board policy sets minimum of 0.50%
• General Fund ending fund balance is projected at 8.0% of
• perating revenue equal to $4.1m
• Board policy sets minimum of 5.0% with current Board goal of 8.0%
• Biennial Reserve Fund ending fund balance projected at

5.1% of operating revenue (after a transfer to the General Fund of 2.9% of $1.4m)

Other Funds (section 5)

• Food Service Fund appropriation

$1,880,214

• Unappropriated ending fund balance $184,996
• Student Body Fund appropriation

$1,900,000

• Community Education Fund appropriation

$1,335,567

• Biennial Reserve Fund appropriation

$1,448,113

• Unappropriated ending fund balance $2,567,134
• Unemployment Reserve Fund appropriation

$60,000

• Unappropriated ending fund balance $262,181
• Bus Replacement appropriation

$196,206

• Grant Fund appropriation

$7,050,000

• Debt Service Fund

$4,425,400

• Capital Construction Fund

$23,606,627

Property Tax Levies

• Voter-approved 5-year Local Option Levy limit up to

$1.25/$1,000 Taxable Assessed Value (TAV)

• Proposed budget includes resources from levy set at $1.20/$1,000

TAV

• Permanent Tax Rate of $4.8119/$1,000 TAV for operations
• Tax for Bonded Indebtedness for the Debt Service Fund
• $4,503,482 for repayment of general obligation bonds
• Required approvals:
• The Budget Committee approves a local option rate to impose for 2019-20,

approves the permanent tax rate, and approves the amount of tax for bonds

• The School Board then considers and adopts the tax levies in June

QUESTIONS & DELIBERATIONS