2018–19 budget development · »harvey impact estimated at $97.7 million »future new growth will...

2018–19

BUDGET DEVELOPMENT

2018–19BUDGET

DEVELOPMENTApril 9, 2018Board Update

2018–19

BUDGET DEVELOPMENT

Agenda• Hurricane Harvey Recovery Status• Interim Legislative Update• Budget Forecast and Development

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2018–19

BUDGET DEVELOPMENT

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2018–19

BUDGET DEVELOPMENT

Hurricane Harvey Recovery Update• Current estimate of total losses = $14.1M • Recovery options (in order)» Insurance»FEMA»State»District

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FBISD Risk Management

FEMA / TEA

Insurance

2018–19

BUDGET DEVELOPMENT

FEMA Categories & Common Eligible WorkA B C D E F G

Debris Removal

Emergency Protective Measures Roads & Bridges

Water Control Facilities

Buildings & Equipment Utilities

Parks, Recreation, & Other

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• Search & Rescue• Security• Emergency Pumping

• Sandbagging• Detour & Warning• Signs• EOC Activation• Emergency & Temporary Repairs

• Overhead Power Lines

• Emergency Medical Facilities

• Emergency Evacuations

• Activities undertaken before, during and following a disaster to save lives, protect improved property

• Buildings• Structural Components

• Interior Systems‐ Electrical‐ Mechanical‐ Contents

194 ProjectsSubmitted

• PlaygroundEquipment

• Swimming Pools• Bath Houses• Tennis Courts• Bat Docks• Piers• Picnic Tables• Golf Courses• Fish Hatcheries• Mass Transit• Facilities

Playgrounds

• Damns and Reservoirs

• Levees• Engineered Drainage Channels

• Canals• Aqueducts• Sediment Basins• Shore Protective Devices

• Irrigation Facilities• Pumping Facilities

2018–19

BUDGET DEVELOPMENT

Estimated Losses & Expected Reimbursements

Losses Insurance FEMA TEA

Cat B: Shelters KHS, MHS $100,425 $0 $90,383 $10,043

Cat D: Mercer Bern 724,900 518,583 185,685 20,632

Cat E: Buildings & Contents 12,975,100 11,000,000 1,777,590 197,510

Cate G: Playgrounds 300,000 0 270,000 30,000

Totals $14,100,425 $11,518,583 $2,581,842 $258,184

6* Current Estimate

Expected Recovery

2018–19

BUDGET DEVELOPMENT

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•Repair costs• Internal costs for repair work• Environmental Review• Location aggregate costs relative to deductible

Property

• Locations that met claims threshold• Furniture, supplies replacement costs• Reconcile with Principals, where possible, that all losses accounted for

Contents

Insurance Recovery to Date

$5,127,910 Received to Date

$6,390,373 Expected to be Paid

* Current Estimate

2018–19

BUDGET DEVELOPMENT

Hurricane Harvey – State Aid• TEA application for disaster assistance

» Texas Education Code (TEC), §41.0931» Texas Administrative Code (TAC) §61.1014» Eligible districts can apply for aid to cover disaster costs paid by the district

» The disaster must have occurred within the current biennium

» Relief payments offset by aid from federal government, other state aid, or other sources

• ADA Hold Harmless (in place)• Property Value Hold Harmless (TBD)

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2018–19

BUDGET DEVELOPMENT

Property Reappraisals•Met with Chief Appraiser February 20

9* Current Estimate

EstimateDamaged Properties 2,980Estimated Loss in Value $98.7 M

2018–19

BUDGET DEVELOPMENT

Interim Legislative UpdateYear‐To‐Date in Numbers

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2018–19

BUDGET DEVELOPMENT

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SALES TAX REVENUE GROWTH

2018–19

BUDGET DEVELOPMENT

State Revenue Performance FY18

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Biennial Revenue Estimate Projected

GrowthActual Growth

to DateSales Tax 5.50% 10.00%Motor Vehicle Tax 10.27% 8.05%Natural Gas Tax ‐9.53% 55.59%Oil Production Tax 9.85% 45.49%Alcoholic Beverage Tax 4.63% 5.16%Cigarette and Tobacco ‐7.72% ‐7.35%Motor Fuels Taxes 1.61% 4.65%

Source: Moak Casey & Associates

2018–19

BUDGET DEVELOPMENT

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1‐Year Moving Average Monthly Sales Tax Collections

$2,100.0

$2,150.0

$2,200.0

$2,250.0

$2,300.0

$2,350.0

$2,400.0

$2,450.0

$2,500.0

$2,550.0

$2,600.0

January March May July September November

2014

2015

2016

2017

2018


2018–19

BUDGET DEVELOPMENT

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$0.00

$10.00

$20.00

$30.00

$40.00

$50.00

$60.00

$70.00

$80.00

$90.00

$100.00

Price of Oil per Barrel ‐ Last 42 Months

$50.00*

Oil Prices Stabilizing


2018–19

BUDGET DEVELOPMENT

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POTENTIAL BUDGET SHORTFALL FOR 2020‐21 BIENNIUM

2018–19

BUDGET DEVELOPMENT

State Budget Challenges

• $2.5 billion shortfall for Medicaid

• Hurricane Harvey

• Sales tax diversion to Highway Fund

• Deferrals and repayments from last session

• Texas Tomorrow Fund shortfall

• Continued TRSCare issues

16Source: Moak Casey & Associates

2018–19

BUDGET DEVELOPMENT

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AMOUNT IN RAINY DAY FUND

2018–19

BUDGET DEVELOPMENT

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State Rainy Day Fund


2018–19

BUDGET DEVELOPMENT

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GOV. ABBOTT’S PROPERTY

TAX RELIEF PLAN

2018–19

BUDGET DEVELOPMENT

Governor Abbott’s Tax Relief Plan• Revenue cap of 2.5% per year for cities, counties, and school districts» Voter approval required for any revenue increase above 2.5%

» Increases in excess of cap are also limited to specific purposes (compensation for teachers, instructional personnel, classrooms)

» 2/3rds vote required» Even with voter approval, increases may not exceed statewide population and inflation growth

• Two‐thirds supermajority to authorize new debt with 33% of qualified registered voters in the district voting


2018–19

BUDGET DEVELOPMENT

Potential Revenue Loss

$(60.00)

$(50.00)

$(40.00)

$(30.00)

$(20.00)

$(10.00)

$‐2018‐19 2019‐20 2020‐21 2021‐22 2022‐23

Millions

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Estimated cumulative loss of $171.7 M over five years

Assumes growth of 5% vs. 2.5% for CAD and CPTD.

2018–19

BUDGET DEVELOPMENT

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Summary of Debt with Tax Cap

$‐

$15

$30

$45

$60

$75

$90

$105

$120

$135

$150

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

2032

2033

2034

2035

2036

2037

2038

2039

2040

2041

2042

2043

2044

2045

2046

2047

2048

Millions

Period Ending August 31

Existing Debt Service Remaining 2014 Debt Potential 2018 Bond Property Tax Collections

Tax collections with $0.26 tax rate

2018–19

BUDGET DEVELOPMENT

13 membersAppointed to Texas Commission

on School Finance

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2018–19

BUDGET DEVELOPMENT

Members of the Commission• Commission composed of thirteen members

»Four members appointed by the Governor

»Four members appointed by the Lt. Governor

»Four members appointed by the Speaker of the House of Representatives

»One member appointed by the Chair of the SBOE


2018–19

BUDGET DEVELOPMENT

Gov. Abbott’s GoalsLetter to the Commission:

1. “Redesign a system” that prioritizes “spending that is proven to improve student outcomes”

2. “Create a system that fosters innovation” learn from successful schools and “replicate their success statewide”

3. “Explore alternatives to the burdensome and inefficient property tax”


2018–19

BUDGET DEVELOPMENT

0Recommendations issued from

2009 Select Committee

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2018–19

BUDGET DEVELOPMENT

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FIRST DAY OF 86TH

LEGISLATIVE SESSION

2018–19

BUDGET DEVELOPMENT

2018‐19 Outlook

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2018–19

BUDGET DEVELOPMENT

Background on Local Values• Met with Chief Appraiser on February 20• Received preliminary estimates for property values

» Harvey impact estimated at $97.7 million» Future new growth will be impacted by reconstruction» Large number of exemptions expected prior to April

• Initial estimate for 2018 is $36.8 billion» Growth of 2.9% over 2017 certified values

• As expected, local growth is less than prior year CPTD growth, negatively impacting state collections

29Source: Fort Bend CAD and FBISD Staff

2018–19

BUDGET DEVELOPMENT

Change in CPTD Property Values13.1% 12.9%

2.9%

0.1%0.4%

2.4%

7.0%

9.7%

10.8%

9.7%

6.8%

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

11%

12%

13%

14%

2008‐09 2009‐10 2010‐11 2011‐12 2012‐13 2013‐14 2014‐15 2015‐16 2016‐17 2017‐18 2018‐19FISCAL YEAR

30Source: TEA

2018–19

BUDGET DEVELOPMENT

Change in Certified Net Taxable Value

31Source: Fort Bend CAD and FBISD Finance

12.7%

2.6%

‐1.3%

‐0.1%

1.9%

6.3%

9.1%

11.2%

9.9%

6.3%

2.9%

‐2.00%

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 est.TAX YEAR

CPTD to CAD loss

≈$7 million

2018–19

BUDGET DEVELOPMENT

New Value from Growth

69.12% 69.27% 69.65%

63.01%

41.38%

30.88% 30.73% 30.35% 36.99% 58.62%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2014 2015 2016 2017 2018 est.

Existing Value New Value

32Source: Fort Bend CAD and FBISD Finance

2018–19

BUDGET DEVELOPMENT

Enrollment Growth

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69,37468,948 69,233 69,591

70,931

72,15273,115

74,146

75,28175,909

64,000

66,000

68,000

70,000

72,000

74,000

76,000

78,000

2009‐10 2010‐11 2011‐12 2012‐13 2013‐14 2014‐15 2015‐16 2016‐17 2017‐18 2018‐19 EST .

PEIMS SNAPSHOT (OCTOBER)

Source: OnSuite and PASA

2018–19

BUDGET DEVELOPMENT

2017‐18 Positive Revenue Developments• Local Revenues

» Higher than anticipated interest earnings‐ Revenue estimated $1.0 million higher than budgeted‐ Additional recurring revenue of $1.0 million annually

• State Revenues» CPTD Adjustment

‐ One‐time payment of $1.0 million in 2017‐18» Weighted Average Daily Attendance: 90,658 (2.6% increase)» Free & reduced: 39% of enrollment (1.4% increase over est.)

• SHARS» Catch up payment of $1.5 million in 2017‐18» Additional Recurring revenue of $1.0 million annually

34Source: FBISD Finance

2018–19

BUDGET DEVELOPMENT

Expenditure Outlook• Using forecasted numbers from 2017‐18 forecast as starting point

• Strategic adjustments made based on work completed by BCC and Leadership Town Hall

• Includes key investments to:» Attract and retain competitive teaching staff» Create programs that advance board goals and objectives


2018–19

BUDGET DEVELOPMENT

2018‐19 Budget AssumptionsAverage daily membership: 75,909Average daily attendance: 96.5%Property value growth: 3% CADCPTD value growth: 6.8% CPTDWADA growth: 0.9%Free and reduced count: 32,717 (43%)Teacher step increases: $2.6 MThornton MS staffing: $2.50 M (46 FTEs)


2018–19

BUDGET DEVELOPMENT

Budget Efficiencies Work• Initiated in September 2017 with BCC and Leadership Town Hall

• Initial list of ideas developed• Ideas shared organization‐wide with feedback provided through “Let’s Talk”

• Assistant superintendent led task forces» Campus staffing guidelines (elementary and secondary)» Consolidation of bilingual and pre‐k programs

• Potential to review other ideas on the list in 2018‐19» Possible consolidation and repurposing of campuses based on outcome of facilities master plan


2018–19

BUDGET DEVELOPMENT

Budget Efficiencies


Efficiencies Estimated SavingsEnergy savings (rate change and behavior) $2,645,500Central Office budget reductions 2,608,227Electronic report cards 215,219Hiring review for central admin positions 735,000Bilingual consolidation 897,341Pre‐K consolidation 317,800Redirect AP interns to classrooms 310,082Centralize educational assistants 750,000Fee and program adjustments 192,000

Total Efficiencies $8,671,169

2018–19

BUDGET DEVELOPMENT

Other Identified Potential SavingsOther Savings Estimated SavingsAdjustment to extra planning periods $2,108,260Instructional materials allotment 1,545,170Grandfathered bus routes 306,000Telecom audit 250,000Total Other Savings 4,296,170

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Budget Efficiencies 8,671,169Total Identified Savings $12,967,339

2018–19

BUDGET DEVELOPMENT

Other Expenditure AdjustmentsOther Expenditures Estimated CostEarly Literacy Center (initial estimate) $3,880,061EDGE stipends 186,376Campus budget adjustments 123,554Portable moves (2019) 1,600,000Health fund contribution ($36 PEPM) 3,000,000Totals $4,909,930


2018–19

BUDGET DEVELOPMENT

Growth in SPED Enrollment

41Source: Forecast 5 and FBISD SPED Department

1.0%

2.3%

9.1%

15.9%

10.0%

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

16.00%

18.00%

2014‐15 2015‐16 2016‐17 2017‐18 (as of 3/1) 2018‐19 est.

2018–19

BUDGET DEVELOPMENT

Potential Special Education Staffing• Additional staff needed based on 10% growth: 84 FTEs @ $4.26 M

• State reimbursement is NOT equal to local expenditures

• Currently NOT included in forecast

• Potential state revenue: $2.46 M Local Share State Share

42%

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2018–19

BUDGET DEVELOPMENT

2018‐19 Initial Outlook

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($ Millions)2016-17 Actuals

2017-18 Budget

2017-18 Estimate

2018-19 Initial

Operating Revenues 596.91$ 619.89$ 631.79$ 623.50$ Operating Expenditures 595.01 633.35 637.58 630.39 Other Sources/(Uses) 0.89 1.50 1.60 1.50 Use of Economic Stabilization - 11.96 4.18 - Surplus/(Deficit) 2.79 - - (5.39)

Fund Balance - Beginning 182.46 185.26 185.26 181.07 Use of Economic Stabilization - (11.96) (4.18) - Fund Balance - Ending 185.26$ 173.30$ 181.07$ 175.68$

Source: FBISD Finance

2018–19

BUDGET DEVELOPMENT

Fund Balance HistoryYE 2016‐17 YE 2017‐18 YE 2018‐19

Committed Fund Balance $35.29 M $25.48 M $18.90 MState Revenue Stabilization 49.40 M 52.80 M 53.10 MUnassigned Fund Balance 100.57 M 102.79 M 103.68 MTotal Fund Balance $185.26 M $181.07 M $175.68 M90 Day Reserve $148.16 M 158.40 M $157.50 MReserve as % of Expenses 25% 25% 25%Reserve in Days of Exps 92 Days 90 Days 90 Days


2018–19

BUDGET DEVELOPMENT

Upcoming Actions

April

• Talent draft• Budget update• Non‐campus staffing approval

• Preliminary CAD values

May

• Renewal/non‐renewal approvals

• Call date for budget hearing

• Chapter 41 choice selection

June

• Budget adoption• Final amendment• Fund balance resolution

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2018–19

BUDGET DEVELOPMENT

QUESTIONS?

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2018–19

BUDGET DEVELOPMENT

Anticipated Staffing NeedsStaffing FTEs EstimateEarly Literacy Center 49 $3.88 MSpecial Education 84 4.26 MELL Teachers and Aides 9 0.51 MFine Arts Teachers 5 0.34 MFacilities and Maintenance 55 2.28 MTotal 202 $11.27 M


2018–19

BUDGET DEVELOPMENT

Fund Balance StrategiesYE 2016‐17 YE 2017‐18 YE 2018‐19

Non‐spendable $2.96 M $4.38 M $3.00 MMajor maintenance 6.40 M 6.40 M 6.40 MInstructional materials 2.70 M ‐ M ‐ MNew instructional facilities 4.50 M 2.50 M 4.50 MEconomic stabilization 14.00 M 6.50 M ‐ MAssigned fund balance 4.72 M 5.70 M 5.00 MCommitted and Assigned $35.29 M $25.48 M $18.90 M


2018–19 budget development · »harvey impact estimated at $97.7 million »future new growth will...

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