Budget Open House Presentations February 6, 2013 1 Proposed 2013 - - PowerPoint PPT Presentation

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Mat‐Su Borough School District Board of Education

Budget Open House Presentations

February 6, 2013

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Proposed 2013‐2014 Budget Process Timeline

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Chain of Command

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Where Does the Money Come From?

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Breakdown of the Mat‐Su Borough School District Funding by Source

State of Alaska 73% Other Local Revenue & Mat‐Su Borough 26% Federal Revenue 1%

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PROJECTION

Enrollment

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Enrollment Projection: Cohort Survival Method

Beginning with Fiscal Year 2011‐2012, the state redefined the methodology for counting twelfth grade

• students. To prevent an anomaly from occurring with future projections, adjustments were made to

eleventh and twelfth grade enrollments for all high schools. The student count for eleventh grade was reduced by five percent and the student count for twelfth grade was increased by five percent.

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Enrollment History and Forecast

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Actual Enrollment vs Projected Enrollment Accuracy

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Charter School Actual Enrollment vs Projected

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FOUNDATION FORMULA

State Aid

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Recent History of Foundation Formula

• HB 273 Enacted in 2008
• Multi‐Year Funding Plan

Fiscal Year District Cost Factor Intensive Multiplier Base Student Allocation FY2009 50% of ISER X9 $5,480 FY2010 62.5% of ISER X11 $5,580 FY2011 75% of ISER X13 $5,680 FY2012 87.5% of ISER X13 $5,680 FY2013 100% of ISER X13 $5,680

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ADM to Adjusted ADM

• Step 1: School Size Adjustment
• Step 2: District Cost Factors (Area Cost Differential)
• Step 3: Special Needs Funding
• Step 4: Voc Ed Funding Factor
• Step 5: Intensive Services Funding
• Step 6: Correspondence

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Step 1: School Size Adjustment

+ = + =

The appropriate formula from the school size factor table is used to calculate the adjusted ADM for each school.

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Step 2: District Cost Factors

The district’s school size adjusted ADM is multiplied by the district cost factor.

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Step 3: Special Needs Factor

Vocational Education Bilingual Education Special Education The district’s previously adjusted ADM is now multiplied by the Special Needs factor of 1.20 (additional 20%) Gifted / Talented

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Step 4: Voc Ed Funding Factor

Vocational Education The district’s previously adjusted ADM is now multiplied by the Career & Technical Education factor of 1.015 (additional 1.5%)

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Step 5: Intensive Needs Funding

=

The district’s intensive count is added to the previously adjusted ADM.

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Step 6: Correspondence

=

The district’s correspondence count is now added to the previously adjusted ADM to arrive a the Final Adjusted ADM.

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Components of the State Foundation Formula

The graph below illustrates the components of the State Foundation Formula for the fiscal year 2013‐2014. The State Foundation Formula, as authorized by Alaska Statute Title 14, also defines the minimum required local contribution and the maximum allowable contribution by local boroughs and municipalities across the state.

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Breakdown of Projected FY 14 State Foundation Formula

Step 1: AS 14.17.450 applies a school‐size factor adjustment to the district ADM. The Adjusted ADM (AADM) for school size is calculated on a per school basis using the table below. (Correspondence program ADM is excluded from the school‐size adjustment factor and any subsequent adjustments that increase the AADM.) 17,317.00 Projected Enrollment ‐ 1,817.00 Correspondence Count 15,500.00 District Cost Factor AADM 17,728.57 After School Size Adjustment

22 Step 2. AS 14.17.460 provides for a cost of living allowance for schools outside the Anchorage Municipality. The adjustment is referred to as the “District Cost Factor” and increases the adjusted AADM from Step 1 by (0.070). Step 3. AS 14.17.420 provides a Special Needs adjustment for programs that support special education, talented and gifted instruction, vocational education, and English language learner instruction. The adjusted AADM from Step 2 is increased by the “Special Needs Factor” of (0.200).

Breakdown of Projected FY 14 State Foundation Formula

17,728.57 AADM from Step 1 X .070 District Cost Factor 1,241.00 District Cost Factor AADM 17,728.57 + 1,241.00 = 18,969.57 AADM 18,969.57 AADM from Step 2 x .20 Special Needs Factor 3793.91 Special Needs Factor AADM 18,969.57 + 3,793.91 = 22,763.48 AADM

23 Step 4. AS 14.17.420 provides for additional funding to support vocational education in grades 7 through 12. The adjusted AADM from Step 3 is increased by the “Voc Ed Factor” of (0.015). Step 5. AS 14.17.430 funds all correspondence students at 80% of the ADM for these students. Correspondence students have been excluded from all adjustments in the Foundation Formula that provide increases to the AADM. This adjusted AADM is added to the AADM from Step 4.

Breakdown of Projected FY 14 State Foundation Formula

22,763.48 AADM from Step 3 X .015 Voc Ed Factor 341.45 Voc Ed Factor AADM 22,763.48 + 341.45 = 23,104.94 AADM 1,817.00 Correspondence AADM x .80 Correspondence Factor 1,453.60 Correspondence adjusted AADM 23,104.94 + 1,453.60 = 24,558.54 AADM

24 Step 6. AS 14.17.420 provides for additional funding to support intensive needs students. An Intensive Needs Student is defined as a child who is medically fragile, has significant developmental disabilities, and/or may have substance abuse issues. The intensive needs AADM on the last day of the count period is multiplied by the Intensive Needs Factor and then added to the AADM from Step 5.

Breakdown of Projected FY 14 State Foundation Formula

321.00 Intensive Needs AADM X 13.00 Intensive Needs Factor 4,173.00 Intensive Needs adjusted AADM 24,558.54 + 4,173.00 = 28,731.54 AADM

25 Step 7. AS 14.17.470 defines the Basic Need for education funding in school districts as the Base Student Allocation multiplied by the district total AADM resulting from Steps 1 through 6. This is the amount that the state has determined to be the funding for education in a district, but this is not the amount that the district will receive from the state.

Breakdown of Projected FY 14 State Foundation Formula

28,731.54 District’s Total AADM x$ 5,680.00 Base Student Allocation $163,195,125.26 Basic Need

26 Step 8. AS 14.17.410 prescribes a reduction to the Basic Need for education for districts and municipalities. This reduction is defined as the “Minimum Required Local Contribution” and is defined as the lesser of 45% of prior year (PY) Basic Need or 2.65 tax base for the borough or municipality for the prior year (PY). For our district this would be the 2.65 mil tax levy of $25,355,209.00.

Breakdown of Projected FY 14 State Foundation Formula

The Lesser of: $165,434,487.00 PY Basic Need X .45 $ 74,445,519.00 45% of PY Basic Need

• r

$9,568,003,300.00 Tax Base (2012) X 0.00265 Mil Rate Factor $ 25,355,209.00 2.65 Mil Tax Levy

27 Step 9 (continued). AS 14.17.410 prescribes a reduction to the Basic Need for education for districts and

• municipalities. This reduction is defined as

the “Minimum Required Local Contribution” and is defined as the lesser

• f 45% of prior year (PY) Basic Need or

2.65 mils of the tax base for the borough

• r municipality for the prior year (PY). For
• ur district this would be the 2.65 mil tax

levy of $25,355,209.00.

Breakdown of Projected FY 14 State Foundation Formula

$163,195,125.00 Basic Need (Step 8) ‐ $ 25,355,209.00 Min. Required Local $137,839,916.00 Net Basic Need $163,195,125.00 Basic Need (Step 8) ‐ $ 25,355,209.00 Min. Required Local $137,839,916.00 Net Basic Need

28 Step 10. AS 14.17.410, Quality Schools Funding, was a grant that was incorporated into the Foundation Formula in 1998. Prior to 1998, Quality Schools Funding was a separate grant that was intended to improve student learning and was aligned with state standards. The Quality Schools Funding is calculated using the total adjusted ADM for the district multiplied by the Quality Schools factor of $16.00. The Quality Schools Funding is then added to the net Basic Need from Step 9.

Breakdown of Projected FY 14 State Foundation Formula

28,732.54 Total Adjusted ADM X$ 16.00 Quality Schools Factor $ 459,704.58 Quality Schools Funding $137,839,916.52 Net Basic Need +$ 459,704.58 Quality Schools Funding $138,299,621.00 Net Foundation Funding

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Breakdown of Projected FY 14 State Foundation Formula

Step 11. AS 14.17.410 provides an

• pportunity

for borough and municipalities to contribute to education in their district at a level higher than the “Minimum Required Local Contribution.” Defined as the “Maximum Allowable Local Contribution,” this level of funding is determined by the prior year adjusted assessed valuation of all property within the borough or municipality and is the greater of 2 mils tax levy or 23% of projected Basic Need added to the Minimum Required Local Contribution. For our district, Maximum Allowable Local Contribution would be $61,667,111.00. The greater of: $9,568,003,300.00 Assessed Valuation X .002 Mil Rate Factor $ 19,136,007.00 2 Mil Tax Levy

• r

$ 165,434,487.00 Prior Year Basic Need X .23 $ 38,049,932.00 23% of Basic Need + 25,355,209.00 Min. Req’d. Local $ 63,405,141.00 23% Basic Need plus Min.Req’d. Local

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LOCAL CONTRIBUTION

Matanuska‐Susitna Borough

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Historic Funding Comparison:

State vs Mat‐Su Borough

$‐ $20,000,000 $40,000,000 $60,000,000 $80,000,000 $100,000,000 $120,000,000 $140,000,000 $160,000,000 $180,000,000 FY 2005‐06 FY 2006‐07 FY 2007‐08 FY 2008‐09 FY 2009‐10 FY 2010‐11 FY 2011‐12 FY 2012‐13 FY 2013‐14 FY 2014‐15 FY 2015‐16

State Borough

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Borough Contribution Comparison:

Maximum & Minimum vs Actual Contributions

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Historic Change in Borough Funding:

Total Contributions and Per Student Allocations

Recommend that the Borough establish a more consistent funding pattern. Recommend that the Borough increase local support to education by 3% a year until MSBSD reaches the mid point between Anchorage and Fairbanks per pupil funding. Request current year plus 2 future years funding commitment.

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Cumulative % Change from Base Year FY 2000‐01

0.00% 20.00% 40.00% 60.00% 80.00% 100.00% 120.00% 140.00% 160.00% 180.00% FY 2001‐02 FY 2002‐03 FY 2003‐04 FY 2004‐05 FY 2005‐06 FY 2006‐07 FY 2007‐08 FY 2008‐09 FY 2009‐10 FY 2010‐11 FY 2011‐12 % Change from Base Year FY 2000‐01

Full Tax Value Determination MSB Per Student Funding

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Historical Per Pupil Funding Comparison

$3,686 $3,897 $3,936 $4,020 $4,128 $2,672 $2,638 $2,850 $2,789 $2,887 $3,127 $3,009 $3,270 $3,313 $3,368 $4,921 $5,251 $5,234 $5,303 $4,794 $8,235 $8,404 $9,165 $9,516 $10,701

$‐ $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 FY 2008‐09 FY 2009‐10 FY 2010‐11 FY 2011‐12 FY 2012‐13

Anchorage Mat‐Su Fairbanks Kenai Juneau

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ANALYSIS

Fund Balance

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Fund Balance and Lapse to the Borough

$‐ $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 $7,000,000 2001‐2002 2002‐2003 2003‐2004 2004‐2005 2005‐2006 2006‐2007 2007‐2008 2008‐2009 2009‐2010 2010‐2011 2011‐2012

Lapse to Borough Unassigned Committed and Nonspendable

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Fund Balance: Recommended vs Actual

In 2011 the GFOA , due to the change in the financial climate, revised their fund balance recommendation. In Best Practice: Replenishing Fund Balance in the General Fund (2011) it is now recommended that governmental bodies should “incorporate in its financial policies that unrestricted [unassigned] fund balance in their general fund be no less than two months of regular general fund operating revenues or regular general fund operating expenditures.”

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PROJECTION

FY 2013‐2014

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Assumptions

• Projection of intensive funding is based on 90% of FY 2012‐2013 funding.
• State energy relief funding is based off of $100 per total Adjusted ADM.
• Borough funding increases by 3%.
• Local revenue increases by $25,000 to $200,000 or 14.29%.
• Salary expenditures assume no Cost of Living (COLA) increase.
• Salary expenditures assume a grade and step increase with an average increase of

2.46%.

• Reductions of salary expenses gained by strict hiring review in FY 2012‐2013

remain in place for FY 2013‐2014 with the following exceptions:

• APEX stipends funded from General Fund.
• STEM stipends funded from General Fund.
• 3 Custodians positions maintained.
• 2 IT positions maintained.
• Total benefit cost increase by 5.16%, and includes additional 6% percent increase

for Health Insurance over expected FY 2012‐2013 increase.

• 50/50 Split on Premium Increases

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Assumptions

• Utilities assume a 10 % increase.
• Non‐Personnel cost increase only 1.5%.
• State does not address Transportation funding shortfall requiring the District to

expend $1,500,000 to subsidize Transportation operations.

• No subsidy is required for Food Service operations.
• State Legislative Grant Funding continues for the following programs OR

instructional program reductions are made equal to the cost of these programs:

• Alaska Middle College School
• iTech/Apex Cyber Centers
• Wasilla Air Force JROTC (or Federal Funding Obtained)
• STEM & STEAM

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General Fund Revenue Comparison

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General Fund Expenditure Comparison

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Historic Ratios & Metrics

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Proposed Ratios & Metrics with Comparison

Notes: * Pupil to Teacher Ratio (PTR) applies to core area schools regular education instruction ** Elementary Specials include Music, Physical Education, and Library *** Accelerated learning funds apply to core area high schools.

• FY 2012 through FY 2014: allocated on a per student basis.
• FY 2008 through FY2011: Colony HS, Palmer HS, & Wasilla HS received $62,000; Houston HS received $15,000

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Difficulty in Reducing Class Size District Wide

10 20 30 40 50 60 1 2 3 4 5 Teachers Required to Reduce Class Size Reduction to Class Size

Average Class Size Reduction Number of Teachers Required to Reduce Class Size

It takes 12.25 Teachers to Reduce Class Size by 0.5 Students to a 25.5 *PTR It takes 24.75 Teachers to Reduce Class Size by 1.0 Students to a 25 *PTR It takes 37.75 Teachers to Reduce Class Size by 1.5 Students to a 24.5 *PTR It takes 51.50 Teachers to Reduce Class Size by 2 Students to a 24.0 *PTR

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FORECAST

Projection

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Assumptions

• Utilizing cohort survival methodology for enrollment projections.
• Projection of intensive funding maintains with no increase or decrease.
• State energy relief funding is based off of $100 per total Adjusted ADM.
• Borough funding continues to increase by 3%.
• Local revenue maintains with no increase or decrease.
• Salary expenditures assume no Cost of Living (COLA) increase.
• Salary expenditures continue to assume a grade and step increase with an

average increase of 2.5%.

• Total benefit cost continue to increase by 5%, and includes an adjustment for

Health Insurance over expected FY 2012‐2013 increase.

• Utilities assume a 10 % increase.
• Non‐Personnel cost are maintained at a flat rate.
• State does not address Transportation funding shortfall.
• No subsidy is required for Food Service operations.

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Forecast

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Thank You!