Budget 101 and Beyond – January 8, 2014

Budget 101 and Beyond – January 8, 2014

Tonight’s Goals

 Explain District funding sources  Provide overview of State School Fund  Discuss the budget drivers  Outline the budget process  Respond to questions and concerns  Discuss next steps

RSD Vision A relentless commitment to academic achievement and personal growth for every student.

Redmond School District Graduates are fully prepared for the demands and responsibilities of adult life. Each solidly grounded in the knowledge and skills essential for success as a student, as an employee and as a citizen of the 21 st Century.

Mission Statement A commitment to rigorous and relevant instruction which leads to mastery and development of productive citizens.

Each team member within the Redmond School District is dedicated to the growth and full development of every Redmond student. As a team, we unrelentingly seek continuous improvement for self and for students. We value collaborative response and expect rigorous student performance that is solidly grounded in relevant real world applications.

Elevate Student Achievement RSD Strategic Priorities Every student graduates college-prepared and/or career ready.

Support and Develop Our Human Resources Sustain Safe and Vibrant School Communities Balance Resources to Maximize Student Achievement A highly effective and professional team that prioritizes student growth, values collaboration and seeks continuous growth and improvement. Personalized supports that nurture stakeholder engagement, student success, and safe and effective school environments.

Wise, transparent stewardship of district resources that are prioritized for student achievement.

2013-14 Adopted Budget

All Funds $96,505,200

Asset Replacement Funds 4,8% Debt Service Fund 10.6% Planned Reserve 8,1% Fee Supported Funds 2,2% Capital Project Funds 2,3% Grant Program Funds 4,6% Другой 17,1% General Fund 59,4% Nutrition Services Fund 2,0% Insurance & PERS Reserve Funds 3,5% Unappropriated Reserve 2,4%

General Fund Resources 2013-14 Projection Beginning Fund Balance 9.2% Local Property Taxes 28.6% State Formula Revenue 60.3%

State Formula Revenue - $36,335,700 Beginning Fund Balance - $5,565,200 Other Local Sources - $919,800 Local Property Taxes - $17,195,700 Federal Sources - $125,900 Investment Income - $81,000

Budget 101 and Beyond – January 8, 2014

History of School Funding

 Measure 5 o Passed in 1990 o Capped property tax rate to $5 per $1,000 of assessed value for public education o Required State to cover any local revenue losses to public education

Budget 101 and Beyond – January 8, 2014

History of School Funding

 Measures 47 and 50 o Passed in 1996 and 1997 respectively o Switched to permanent rates o Cut assessed property values o Capped growth of assessed property values to 3% a year

Budget 101 and Beyond – January 8, 2014

History of School Funding

School Funding post Measures 5, 47, and 50:  30% Local Revenue (property taxes)  60% State Revenue (income taxes)  10% Federal Revenue

Budget 101 and Beyond – January 8, 2014

History of School Funding

Consequences of Measures 5, 47, and 50:  Increased volatility of school funding o Shifted funding from property to income tax  Made state primary source of school funding  Equalized funding across districts

Education’s Share of State Budget

70% 60% 50% 40% 30% 20% 10% 0% 59% 45% 2003-05 56% 43% 2005-07 55% 42% 51% 39% 51% 39% Total Education 52% 40% 2007-09 2009-11 2011-13 2013-15

1 0 3 2 6 5 4

K-12 Funding 1990-91 through 2014-15

Total Funding State Funding Local Funding

Budget 101 and Beyond – January 8, 2014

Goals of School Funding Formula

 Equalize funding across all districts  Equalize funding between districts and education service districts (ESDs)  Define equity according to student and district characteristics (weights)

Budget 101 and Beyond – January 8, 2014

Distribution Principles

    Equalize district funding: o o Distribute all state funding Account for all local revenue Equalize District and ESD funding: o o Districts receive 95.5% ESDs receive 4.5% District Equity: o More weights receive more funding Local Control: o Districts control spending decisions unless Legislature states otherwise

EQUALIZATION FORMULA GENERAL FORMAT

STATE REVENUE + LOCAL REVENUE STUDENTS EQUALS X BASE FUNDING PER STUDENT X COST FACTORS

EQUALIZATION FORMULA

STATE REVENUE + LOCAL REVENUE General Purpose Grant + EQUALS Transportation Grant + Facility Grant

Budget 101 and Beyond – January 8, 2014

Formula

Is

Not

 A general cost reimbursement  A revenue entitlement per student  An assurance of funding stability or adequacy  A measure of student outcomes  An accountability system

Current State and Local Revenue

Local Revenue, 32.7% State Revenue, 67.3% State Revenue Local Revenue

2013-15 Biennium

State Revenue ($6.65 B)

Lottery Funds, 4.9% Other Funds, 0.01% General Fund, 95.1%

2013-15 Biennium Includes $100 million from September 30 Special Session

Common School Fund; 2,9%

Local Revenue

Federal Forest Fees; 0,4% Other; 0,8% State Timber; 0,8% Property Tax; 95,0%

Estimated for 2013-15 biennium

School Finance Presentation – July 17, 2013

District and ESD Revenue

 Of the $6.65 billion in state revenue o o 95.5% goes to Districts 4.5% goes to ESDs  All local revenue stays with the school district or ESD where collected

Budget 101 and Beyond – January 8, 2014

State School Fund Components

 Carve outs o Money set aside for specific purposes and grants  Weights o Variables used to determine each district and ESD’s share of state school fund

Budget 101 and Beyond – January 8, 2014

State School Fund: Specific Programs

    Talented and Gifted Education o $350,000 per biennium Speech Pathology Program o $150,000 per biennium Long Term Care and Treatment and Oregon School for the Deaf o Approximately $22 million per biennium Oregon Virtual School District o $1.6 million per biennium

Budget 101 and Beyond – January 8, 2014

State School Fund: Sub-Grants

   Small High School Grant o Provides additional funds to small high schools o $2.5 million per year (ends June 30, 2015) High Cost Disability Grant o Reimburses districts for costs over $30,000 per IEP student o $18 million per year Facility Grant o o Pays up to 8% of construction costs for new classroom furnishings $20 million per biennium

Budget 101 and Beyond – January 8, 2014

State School Fund: Sub-Grants

  Transportation Grant o Reimburses eligible transportation costs o o Reimbursement rates set by costs per ADMr Reimburse at 70%, 80% or 90% of eligible costs Network of Quality Teaching and Learning (NQTL) o o Supports implementation of Educator Effectiveness (SB 290) and CCSS to improve educator practices $45 million for the 2013-15 biennium

Budget 101 and Beyond – January 8, 2014

Student Weights

    Average Daily Membership (resident) o Up to 1.0 weight Students eligible for Special Education o 1.0 weight up to 11% ADMr Special Education Students above 11% o Variable ESL students o 0.5 weight

Budget 101 and Beyond – January 8, 2014

Student Weights

    Pregnant and Parenting Students o 1.0 weight Students in Poverty o 0.25 weight Students in Foster care o 0.25 weight Students in Neglected/Delinquent Programs o 0.25 weight

Budget 101 and Beyond – January 8, 2014

School Weights

 Remote Small Elementary School correction o 8 miles from nearest elementary school in same district o No more than 28 students per grade  Small High School Correction o No more than 350 students for 4 grades o No more than 267 students for 3 grades

Weights

Category

IEP ESL Pregnant and Parenting Poverty Foster Care Neglected/Delinquent Students

Additional Weight

1.0

0.5

1.0

0.25

0.25

0.25

Budget 101 and Beyond – January 8, 2014

Formula Student Counts

 ADM - Average daily membership  ADMr - ADM with kindergarten half-weighted  ADMw - ADMr adjusted by student cost weights  Extended ADMw - Higher of current or prior year ADMw  HB 3417 – Extended ADMw calculated separately for charter and non-charter schools

Budget 101 and Beyond – January 8, 2014

Teacher Experience

 Recognizes that more experienced teachers may have increased costs  Calculation (District Average – State Average)  Teacher Experience Factor may be positive or negative value

Budget 101 and Beyond – January 8, 2014

District Formula

 (District ADMw * ($4,500 + [$25 * (teacher experience difference]) * funding ratio) – Local Revenue o o o District ADMw: District Weights $4,500: minimum funding Funding Ratio completely distributes all State School Funds

FORMULA EXAMPLE

STATE REVENUE + LOCAL REVENUE EQUALS Student ADMw Extended X $4,500 adjusted by teacher experience + and to total funds 70% of Transport Costs + Up to 8% of Const. Costs [7,893.12 x ( $4,500 + ($25 x 0.14)) x 1.45] + [70% x $2,890,700] + 0 = $51,511,228 + $2,023,490 + 0 = $53,534,718 OR $6,782 Per Extended ADMw

School Finance Presentation – July 17, 2013

Pause …. Questions on State School Fund?

Budget 101 and Beyond – January 8, 2014

Budget Drivers - Revenue

 2014-15 State K-12 Education Budget o $3.44 Billion o *51%* of $6.55 Billion + $100 million from Special Session  Enrollment Estimate o District-wide flat enrollment o Slight decrease in RPA estimate o 1.5% growth due to in-migration o Offset by declining KG enrollment

Education’s Share of State Budget

70% 60% 50% 40% 30% 20% 10% 0% 59% 45% 2003-05 56% 43% 2005-07 55% 42% 51% 39% 2007-09 2009-11 51% 39% Total Education 52% 40% 2011-13 2013-15

State School Fund (SSF) Per ADMw

$7 250 $7 000 $6 750 $6 500 $6 250 $6 000 $5 750 $5 500 $5 801 2006-07 Basic School Support… $6 161 2007-08 $5 968 2008-09 $6 051 2009-10 $5 922 2010-11 $6 129 2011-12 $6 264 2012-13 $6 782 $7 122 2013-14 2014-15 Estimate*

* Assumes no changes in local revenues from 2013-14.

October 1

st

Enrollment – 2006-07 to 2014-15

9 000 8 000 7 000 6 000 5 000 4 000 3 000 2 000 1 000 0 3,2% 3,9% 2006-07 2007-08

Non Charter

1,5% -4,1% 2008-09 2009-10

Charter In-District

-2,8% -2,8% -1,8% 1,3% 0,0% 5,0% 0,0% 2010-11 2011-12

Charter Out-of-District

2012-13 2013-14

% Change Non Charter

2014-15 -5,0%

Budget 101 and Beyond – January 8, 2014

Budget Drivers - Expenditures

 Staffing - Related o Enrollment o Class Size Ratios Kindergarten 23 Grade 1 24 Grade 2 Grade 3 26 28 Grades 4-5 Middle School 30 32 High School 32 - 34 Redmond K-12 75

Budget 101 and Beyond – January 8, 2014

Budget Drivers - Expenditures

 Salary - Related o Contract Days o Horizontal & vertical salary schedule movement o COLA  Related Payroll Costs o PERS rates o Health Insurance Cap – currently $1,145 o Other Contractual Employee Benefits

RSD Average PERS Rates

30,0% 25,0% 20,0% 15,0% 10,0% 5,0% 16,5%

Base Rate Net Rate without Reform Net Rate with Reform Net Rate with Reform and Reserves

13,5% 14,4% 13,1% 0,0% 2007-09 Excludes 6% member contributions Includes Tier One/Tier Two and OPSRP 2009-11 19,0% 17,7% 2011-13 26,1% 26,2% 21,8% 18.8% 2013-15

Budget 101 and Beyond – January 8, 2014

Budget Unknowns



Poverty weights resolution



Potential new grants



Contract negotiations

Budget Process and Roles

District Staff

Timeline:

Jan – June

Budget Version:

Proposed Responsibilities: -Prepare Long Range Financial Plan -Convene & conduct Work Sessions with Budget Task Force, Board and Budget Committee -Determine staffing levels and prepare budget aligned to Board goals and Strategic Plan Budget Committee Apr – May Approved -Review budget for accuracy & alignment to Strategic Plan Board Feb – June Adopted -Gives direction to budget process -Sets financial goals -Receive Public Comment -Appoint Budget Committee members -Approve budget and tax levies -Members of Budget Committee -Budget Hearing -Adopt budget, set appropriations and approve tax levies

Budget 101 and Beyond – January 8, 2014

Next Steps

 Budget Committee Work Session – February 12 

Budget Development

 First Budget Committee Meeting – April 30  Second Budget Committee Meeting & Public Input – May 7  Last Budget Committee Meeting & Public Input – May 21  Budget Hearing – School Board Adoption – June 25