Fiscal Year 2019-2020 PRELIMINARY GENERAL FUND BUDGET BEAUFORT - PowerPoint PPT Presentation

April 16, 2019 Fiscal Year 2019-2020 PRELIMINARY GENERAL FUND BUDGET BEAUFORT COUNTY SCHOOL DISTRICT Herbert Berg, Ed.D., Interim Superintendent Tonya Crosby, Chief Financial Officer 4/16/19 1

Revenues • Local Revenue Projections • EFA Revenues • Millage Increase Limitations • Options Agenda • Impact on Fund Balance Expenditures • Proposed Expenditures • Summary of Increases/(Decreases) Next Steps 4/16/19 2

Revenues 4/16/19 3

LOCAL TAX COLLECTIONS 4 4/16/19

Local Tax Collections Amount (in millions) Tax Collections through March $129.3 Proj Collections Apr-June $ 6.7 Total Proj Collections $136.0 Budgeted Tax Revenues $143.7 Projected Shortfall in Collections ($ 7.7) 4/16/19 5

House Version FY 2017-2018 FY 2018-2019 FY 2018-2019 Audited Approved Projected Actuals Budget Actual Millage Rate 113.5 104.6 104.6 Local 1 Ad Valorem (Current and Delinquent)-Net of TIFs 141,037,937 143,707,242 136,026,427 2 Penalties and Interest 783,350 900,000 900,000 3 4 Rent 286,708 293,500 293,500 5 Other Local 795,158 240,000 240,000 Total Local Revenue $ 142,903,153 $ 145,140,742 $ 137,459,927 6 State 7 Sales Tax Reimbursement on Owner Occupied 44,741,076 45,550,014 45,441,618 8 PEBA-Retirement Credit 1,207,017 1,200,000 1,200,000 9 10 Fringe Benefits/Retiree Insurance 9,785,673 12,045,509 12,585,477 11 Education Finance Act 11,679,053 16,574,183 15,578,804 12 Reimbursement for Local Property Tax Relief 7,036,261 7,036,261 7,036,261 Other State Property Tax (Homestead/Merchant Inv) 2,377,946 2,487,946 2,487,946 13 Other State Revenue (Bus Driver Salary/Misc) 1,671,753 1,341,397 1,341,397 14 15 Total State Revenue $ 78,498,779 $ 86,235,310 $ 85,671,503 16 Federal 17 Other Federal Sources 1,122,896 680,000 680,000 Total Federal Revenue $ 1,122,896 $ 680,000 $ 680,000 18 Total Revenue $ 222,524,828 $ 232,056,052 $ 223,811,430 19 Other Financing Sources 20 Transfers from Special Revenue 5,512,882 6,653,327 6,883,030 21 22 Transfers from Other Funds 496,218 500,000 500,000 23 Total Other Financing Sources (Uses) $ 6,009,100 $ 7,153,327 $ 7,383,030 Total Revenue and Other Financing Sources $ 228,533,928 $ 239,209,379 $ 231,194,460 24 Expenditures 225,190,158 241,317,106 240,717,106 25 Increase(Decrease) in Fund Balance $ 3,343,770 $ (2,107,727) $ (9,522,646) 26 27 28 Beginning Fund Balance 36,263,129 39,606,899 39,606,899 Ending Fund Balance $ 39,606,899 $ 37,499,172 $ 30,084,253 29 4/16/19 6 % of Next Year's Expenditure or Budget 16.4% 14.7% 11.8% 30

Summary of Current Year (Projected) 2018-19 104.6 Millage $136.0 Projected Tax Revenues Use of Fund Balance* ($ 9.5) Ending Fund Balance $ 30.1 11.8% Fund Balance % *Assumes $600k expenditure savings 4/16/19 7

Reassessment and Act 388 • Reassessment • Goal to Remain Revenue Neutral • Millage Rates • Rolled from 113.5 mills to 104.6 during reassessment • Expected mill value $1,373,874 • Projected actual mill value $1,300,444 • Effects of Act 388 • Shifts from 6% to 4% Properties 4/16/19 8

EFA Revenues Current Year • Actuals are lower than projections by approximately $1M • New state Mandated Pupils in Poverty methodology • State WPU cap, resulting in a $5 reduction in Base Student Cost • EFA funding based on 135-day ADM Next Year ITA WPU • Decrease in ITA ($1.5M increase in EFA 2019-2020) 4/16/19 9

What Do We Need? • To Achieve Revenue Neutrality • Restore the loss of $7.7 M • Restore 2019-2020 millage rate and include growth 4/16/19 10

What Are Our Options? 1. Maintain Current Millage Rate 2. Increase Next Year’s Millage Rate 3. Approve a One-Year Millage Surcharge 4. Combination of #2 and #3 4/16/19 11

Option #1-Flat Millage 2018-19 2019-20 Assumptions: Millage 104.6 104.6 • 2018-19 Revenues are $136M Proj Revenues $136.0 $137.4 • 2018-19 Expenditures are $240.9M • Millage Held Flat in 2019-20 Use of Fund Balance ($ 9.5) ($15.2) • No Millage Surcharge • 1% Growth in Value of Mill Ending Fund Balance $ 30.1 $14.9 • Expenditures of $255M • State Revenues Increase as projected Fund Balance % 11.8% 5.6% Days of Operations 46 days 21 days 4/16/19 12

A. May increase CPI + Growth B. Lookback of 3 years unused millage C. Millage rate (surcharge) may be imposed with Millage Rate two-thirds vote of the membership of the local governing body for the following purposes: Limitations a. a deficiency of the preceding year b. catastrophic event (natural disaster) State Law Section 6-1-320 c. compliance with court order d. others 4/16/19 13

Projected Millage Cap Actual Allowable Banked Max Millage Increase* Millage Millage (CPI + Growth) 2017 111.5 2.76 0 114.26 2018 113.5 3.49 1.49 116.99 2019 104.6 4.48 5.97 110.57 2020 TBD 4.18 (est) 114.76 * CPI is determined by the SC Department of Revenue and Fiscal Affairs. Growth is determined by the US Census. This estimate assumes a 4% growth factor. Census data is available on April 18 th , 2019. 4/16/19 14

Option #4-Utilize Available Millage 2018-19 2019-20 Assumptions Millage 104.6 114.76 • 2018-19 $8.9M Use of Fund Balance • 5.9 mill surcharge to restore $7.5M One-Time Millage 5.9 use of fund balance • Increase mills to maximum limitation Surcharge including three-year lookback Projected Revenues $136.0 $158.5 (Estimated as a 10 mill increase from 104.6 to 114.76) • Use of Fund Balance ($ 9.5) $ 5.9 1% Growth in Value of the mill • Expenditures of $255.7M • Results in restoring $5.8M of fund Ending Fund Balance $ 30.1 $ 35.9 balance used in 2018-2019 Fund Balance % 11.8% 13.0% Days of Operations 46 days 51 days 4/16/19 15

• Impose One-Year Millage Surcharge of 5.9 mills • Increase Next Year’s Millage Rate Staff • Subject to the limitation of state law Recommendation • Exhausts the 3 year lookback millage • Approximately 10.2 mills are available 4/16/19 16

Option #1 Option #4 House Version FY 2018-2019 FY 2019-2020 FY 2019-2020 Projected Projected Projected Actual Budget Budget Millage Rate 104.6 104.6 114.76+5.9 1 Local 2 Ad Valorem (Current and Delinquent)-Net of TIFs 136,026,427 137,386,691 150,731,326 3 Millage Surcharge 7,749,345 4 Penalties and Interest 900,000 1,050,000 1,050,000 5 Rent 293,500 293,500 293,500 6 Other Local 240,000 175,000 175,000 7 Total Local Revenue $ 137,459,927 $ 138,905,191 $ 159,999,171 8 State 9 Sales Tax Reimbursement on Owner Occupied 45,441,618 46,327,162 46,327,162 10 PEBA-Retirement Credit 1,200,000 1,200,000 1,200,000 11 Fringe Benefits/Retiree Insurance 12,585,477 13,166,789 13,166,789 12 Education Finance Act 15,578,803 17,062,545 17,062,545 13 Reimbursement for Local Property Tax Relief 7,036,261 7,036,261 7,036,261 14 Other State Property Tax (Homestead/Merchant Inv) 2,487,946 2,602,946 2,602,946 15 Other State Revenue (Bus Driver Salary/Misc) 1,341,397 1,175,000 1,175,000 16 State Aid to Classrooms - 4,776,603 4,776,603 17 Total State Revenue $ 85,671,502 $ 93,347,306 $ 93,347,306 18 Federal 19 Other Federal Sources 680,000 690,000 690,000 20 Total Federal Revenue $ 680,000 $ 690,000 $ 690,000 21 Total Revenue $ 223,811,429 $ 232,942,497 $ 254,036,477 22 Other Financing Sources 23 Transfers from Special Revenue 6,883,030 7,018,960 7,018,960 24 Transfers from Other Funds 500,000 500,000 500,000 25 Total Other Financing Sources (Uses) $ 7,383,030 $ 7,518,960 $ 7,518,960 26 Total Revenue and Other Financing Sources $ 231,194,459 $ 240,461,457 $ 261,555,437 27 Expenditures 240,717,106 255,691,981 255,691,981 28 Increase(Decrease) in Fund Balance $ (9,522,647) $ (15,230,524) $ 5,863,456 29 30 Beginning Fund Balance 39,606,899 30,084,252 30,084,252 Ending Fund Balance $ 30,084,252 $ 14,853,728 $ 35,947,708 31 4/16/19 17 % of Next Year's Expenditure or Budget 11.8% 5.6% 13.0% 32

New Fund Balance Policy June 30, 2018 15%-17% 16.4% $39.6M 4/16/19 18

FUND BALANCE 20% 46 days 51 days 18% 16.4% 17% 16.1% 16% 15.6% 15% 13.3% 14% 55 days 13.0% 13% 11.8% 12% 10% 10% 8% 6% 4% 2% 0% FY15 FY16 FY17 FY18 PROJ FY19 PROJ FY20 Board’s goal is 15% to 17% State Minimum=30 days 4/16/19 19 GFOA Recommendation=60 days

Expenditures 4/16/19 20

Proposed Expenditures Proposed Current Budget Percentage Proposed Expenditures 2018-2019 Increase Increase 2019-2020 $241.3M 6% +$14.4M $255.7M 4/16/19 21

Proposed Expenditure Increases/(Decreases) Description Amount Mandatory Increases Teacher Salaries $6.8 Benefits Increases $3.8 Positions for Growth $2.7 Charter School $0.5 Operational/Contractual $1.8 Reductions ($1.2) Total $14.4M 4/16/19 22

Continued Collaboration with County Update Revenue Estimates (as information becomes available) Next Steps Internal Review of Expenditures Present Detailed Expenditures (April 27 th Board Work Session) 4/16/19 23