Transcript Slide 1

FY 2011
Budget Briefing
August 2010
Agenda
Welcome and Introductions
Deficit Reduction Update
FY2011 Budget Overview & Priorities
What to Expect: Budget Book
FY2011 Budget
Deficit Reduction
FY 2011 Budget Deficit Evolution
$1 Billion
$300 M
$400 M
Additional
State Cuts
Legislative
Pension
Relief
$700 M.
$600 M.
CPS FY11
Deficit
Initial
Projections
January
$600 M
Reduced
State
Funding
CPS
Operational
Increases
Pension Relief
Law Passed
April
School-based
budgets
distributed
May
$370 M
Reduced State
Funding
CPS
Operational
Increases
Budget Book
Draft
August
What made up the $370M deficit?
• Contractual Increases in Compensation
• 4% COLA
• Healthcare
• “Step/Lane” Increases for union members
$169 M
• Increased Operational/
Construction Expenses
• Decreased State Funding*
$133 M
$70M
* Not including State budget updates as of August 3rd
How did we close the deficit?
In closing the deficit, the objective remained to
minimize the impact on students
School-Based
Reductions:
$104M
Central Office /
City-wide,
Administrative
Reductions:
$266M
Specifics on the Deficit Reductions
$104M in School Based reductions:
Class Size in High School
Bilingual Programming as a direct result of State cuts
Positions not supported by enrollment formulas
Supplemental positions in Magnet programming
Charter tuition
$266M in Central Office/City-wide reductions:
Administrative Reductions
Transportation Efficiencies
Administrative Furlough
Supplemental Security
Reduced Enrichment Programming
Delayed Capital Plan; Draw Reserves
Closing the Deficit – School Based
28% of reductions are at schools.
$340
($24)
$316
($19)
$297
($16)
$281
Dollars in Millions
$370
($30)
($15)
$266
($266)
Remaining
Deficit
Beginning
Deficit
Class Size
Slight differences in totals due to rounding
Bilingual
Programming
Positions not
supported by
Enrollment
Formulas
Supplemental
positions in
Magnet
Programming
Charter Tuition
Reduction
Closing the Deficit- CO/CW Reductions
72% of reductions are administrative, Central Office
and City-Wide.
$266
($45)
Dollars in Millions
$221
($10)
$211
($6)
($2)
($2)
$205 $203 $200
($200)
$0
Remaining Administrative Transportation Administrative Supplemental Enrichment
Program
Deficit
Reductions
Efficiencies
Furlough
Security
Reductions
after
School
Reductions
Slight differences in totals due to rounding
Delayed
Capital Plan &
Draw
Reserves
Details of CO/CW Reduction of $45M
$45M reductions have been made to Central Office /
City-wide and administration
Contributing to these cost reductions was the reduction
of over 100 FTE’s
$45M in Central Office and City-Wide
Reductions
Programmatic
Efficiencies
9%
Facilities and
Maintenance
Efficiencies
24%
Administrative
Reductions and
Efficiencies
67%
Commitment to reduce 1000+ FTE’s
FY2011 budget will reflect a net reduction of 1,250 nonclassroom FTE’s since February 2009
Complete position file will be posted once Board
approves the FY2011 budget.
February
2009
FY11
Original
Change #
Change %
Central Office Units
1,625.6
1,231.2
(394.4)
-24%
Citywide Units
3,363.0
2,694.2
(668.8)
-20%
202.2
305.4
103.2
+51%
5,040.0
4,750.0
(290.0)
-6%
10,230.8
8,980.8
(1,250.0)
-12%
Area Offices
Facilities & Food Services Operations
Total
Use of Reserve Balances Budget
CPS has relied on reserves to support operations
pending receipt of state payments
CPS’s reserves will be completely depleted in FY 11;
$190M is used to balance the budget
$311M
($121M)
$190M
($190M)
$0
FY2009
Reserve
Balance
FY2010 est
Reserve Balance
FY2011 est
Reserve Balance
(Depleted due to late FY10 State Payments)
(Drawn to Balance FY 11 Budget)
Why Maintain a Fund Balance?
CPS maintains a fund balance to support operations
when there is a delay in revenue collection
State owes CPS $236M of payments from FY2010
CPS’s Board Policy requires maintenance of a minimum
fund balance equal to 5% of the annual budget
CPS will restore fund balance with additional revenue
received:
State payments caught up
State passes Income Tax increase
One-time additional Federal revenue
TIF surplus
CPS will implement a line of credit* to mitigate cash
flow fluctuations in FY 11 pending restoration of fund
balance
*Line of credit must be repaid within one year and cannot legally be used to close the budget deficit.
FY2011 Budget
Overview
FY11 vs. FY10 Budget
The FY2011 budget is $400M less than FY2010
In FY2011 CPS will serve 410,000 students – an increase
of 1,400 vs. FY2010
Dollars in Millions
-$228 M Capital Budget
-$23 M Debt Service
-$151 M Operating Budget
-$400 M = Total Reduction (6%)
Capital vs. Operating Budget
Operating Budget
Salaries and benefits
Pension
School programs
and supplies
Maintenance
Utilities
Transportation and
food service
Capital Budget
Long-Term Physical
Assets only
TIF funds are used for
capital projects
FY 11 Total Revenue: $6.461 B
Federal Revenue
State Revenue
ARRA
Funding
Local Revenues
State Funding Failures
State funding has historically increased each year, however
both GSA and categorical funding will decrease in FY11
Note: For comparison purposes, considering federal state fiscal stabilization funds in lieu of GSA and categoricals in previous fiscal
years as state revenue.
State Funding 49th in Country
Illinois ranked 49th in the percent of funding
provided to public education
0.0
Vermont
Hawaii3
New Mexico
Idaho
Alaska
Minnesota
North Carolina
Washington
Delaware
California
Alabama
West Virginia
Michigan
Kansas
Kentucky
Arkansas
Utah
Mississippi
Oklahoma
Indiana
Wyoming
Oregon
Arizona
South Carolina
Wisconsin
Montana
Iowa
Tennessee
Ohio
Georgia
Maine
Louisiana
New York
Texas
Colorado
Maryland
New Jersey
Massachusetts
Virginia
Rhode Island
Connecticut
Florida
New Hampshire
Pennsylvania
North Dakota
South Dakota
Missouri
Nebraska
Illinois
Nevada
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
90.0
Illinois provided
31.2% of local
public education
funding.
% of public Funding
Source: U.S. Department of Education, National Center for Education Statistics, "National Public Education Financial Survey (NPEFS)
http://nces.ed.gov/edfin/graph_topic.asp?INDEX=6
100.0
One-time drivers in FY 11 Budget
In FY 11 CPS will benefit from one time drivers to
revenue and short-term deficit relief:
CPS received $400M in Pension relief for FY 11
CPS will utilize $302 in ARRA stimulus funding
CPS will draw fund balance of $190
FY2011 Total Expenditures: $6.461 B
The FY2011 Operating Budget totals $5,177M, which is a
decrease of over $151 vs. FY2010.
69% of the Operating Budget is for salaries and benefits.
Dollars in Millions
$5,177
FY 11 Operating Budget Details
Dollars in Millions
$5,177
Other Charges
Non-Personnel
ARRA Funding Details
CPS expects to receive $302M in ARRA funding
in FY2011:
$184M is appropriated to specific Title I eligible programs
outlined below
$63M funds Special Education teachers and aides
$50M+ is expected from competitive ARRA grants
FY2011 ARRA Title I Appropriations by Program (in Millions)
Early Childhood and Kindergarten
$ 62
Culture of Calm
$40
Area Office School Improvement Funds
$24
Additional Learning Opportunities
$15
Data Inquiry, Assessment and Performance Management
$13.8
Turnaround and School Improvement
$10.5
Bilingual Support and Language Programs
$10
Mandated Private School Proportionate Share
$5.8
Mandated Parent Involvement
$1.6
Small Programs
$1.3
Total
Note:
$184
Title I ARRA funds can only be used to support supplemental programs at Title I eligible schools.
ARRA funds cannot legally be used to reduce class size.
Pushing Resources to Schools
School-Based
School Funding
Central Office/
City-Wide Services
CO/CW Funding
CPS continues to allocate a larger percentage of funds to schools
and Areas while reducing Central Office and City-Wide spending
Central Office/
City-Wide Services
Central Office/ City-Wide
Services spending
decreases 22% ($396M)
School-Based
School-Based funding
increases 5.4% ($186M)
Highlights of CPS Student Demographics
CPS is the third largest school district in the
nation serving 410,000 students
Special Education Funding Gap
13% of CPS Students are Special Education eligible
In FY2011 the gap between state and federal support
and the actual cost to CPS is projected to be $212M
Gap = $212.4M
This gap will grow in FY12 as $63M of ARRA IDEA revenue expires
Note: Appropriation reflects special education column in district-wide report in budget book less counselor-related costs.
Fed/State Revenue reflects state block grants; federal IDEA; and ARRA IDEA funds.
Highlights of Funded Initiatives
Maintaining and enhancing classroom resources
Maintained elementary school class size
Special education
Providing instructional options & enrichment opportunities
Early childhood
World language, IB and gifted programs
Sports programs
Arts programs, after school programs, college readiness
Ensuring the safety of all CPS students
Culture of Calm programs
Safe Passage
Measuring the performance of all programs
Assessments
Performance Management
Budget Book
Commitment to Transparency
Additions to the FY2011 Budget Book include:
District Funding Highlights
Demographics Information
School Snapshots
Including Charters and Contract Schools
Schools at a Glance
Performance Data
Department Planning Summaries
Contractual Services break out
Administrative Reorganization and Unit Budget
Details
ARRA Details
Budget Outlook
Without new revenues, CPS’ structural deficit grows
every year
Cost drivers include:
Increased
Operational/
Construction
Expenses
COLA
“Step/Lane” Increases
for union members
Healthcare
Funding Cliff:
One-time draw on reserves in FY2011
ARRA funding ends in FY2012
Pension relief ends in FY2014
FY 2011
Budget Briefing
August 2010