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Five-Year Financial Forecast and Educational Plan for Fiscal Years 2011 through 2015

Five-Year Financial Forecast and Educational Plan for Fiscal Years 2011 through 2015. Board of Education Meeting June 6, 2011. Funds Included…. General Fund (001) Poverty-Based Assistance Fund (494) School Fiscal Stabilization Fund (532) Education Jobs Fund (504).

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Five-Year Financial Forecast and Educational Plan for Fiscal Years 2011 through 2015

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  1. Five-Year Financial Forecast and Educational Plan for Fiscal Years 2011 through 2015

    Board of Education Meeting June 6, 2011
  2. Funds Included…. General Fund (001) Poverty-Based Assistance Fund (494) School Fiscal Stabilization Fund (532) Education Jobs Fund (504)
  3. Structural Operating Deficit in FY2012 and Beyond

  4. Board and Administration Proactive to Mitigate this Situation…

  5. $5.0 million of expenditure reductions during fiscal years 2004 through 2009 $1.3 million of budget cuts made in March 2009 $1.6 million of budget cuts made in August 2009 Use of federal stimulus funds in fiscal years 2010 and 2011
  6. Passage of 6.9 mill levy by Lakewood voters on May 4, 2010 $4.0 million of budget cuts for fiscal year 2011 (62 staff positions) Use of Education Jobs funds for fiscal years 2011 and 2012 $1.0 million of planned expenditure reductions for fiscal year 2012 (TRIP) $825,000 (estimate) of staffing expenditure reductions for fiscal year 2013 (TRIP)
  7. Points to remember… Eight years between 2010 and 2002 operating levies versus three-year commitment Economic uncertainties facing all districts Lakewood is committed to excellence despite the challenging financial times $12.8M balance at June 30, 2010 + 6.9 mill levy + $4M budget cuts……..$4.8M projected balance at June 30, 2013 Property valuations being challenged, thus reduced … will require more millage to generate same revenue as in past with higher valuations!

  8. Major Revenue Considerations

    Real Estate Taxes Tangible Personal Property Taxes Unrestricted State Aid Restricted State Aid Other (Interest Earnings)
  9. Real Estate Taxes Delinquent Taxes not increasing Decline of 7.3% in Assessed Property Values Decline of $350,000 from 5.03 inside mills Tax Year 2009 values at 2003-2005 levels 2% growth assumed for FY2012 triennial 4% growth assumed for FY2015 reappraisal Estimates assume collections at FY2010 levels with no increase in delinquent taxes and/or no significant losses from tax valuation challenges
  10. Tangible Personal Property Taxes No longer receive on business inventory/assets, only on public utilities’ equipment State has provided “hold harmless” funding – 2004 levels, 100%, 7 years - $2.3 million in FY2011 Governor’s Executive Budget Proposal eliminates phase-out payments for Lakewood after $1 million in FY2012 Governor’s Executive Budget Proposal also eliminates $465,000 in electricity deregulation payments after FY2011
  11. Unrestricted State Aid PASS funding model in FY2010 and 2011, but unknown formula for FY2012 and beyond 7% of state funding from federal stimulus funds for FY2011 No provisions for stimulus funds in FY2012 and beyond Governor’s Executive Budget Proposal estimates used for FY2012 and FY2013, thus reductions of $720,000 and $847,000 from prior forecast
  12. Restricted State Aid Education Jobs funds ($915,333) only available for fiscal years 2011 and 2012 Hired elementary teachers to reduce class sizes for these two school years Other funding source or eliminate positions?? Governor’s Executive Budget proposal eliminates special education catastrophic aid reimbursement in FY2012 ($71,000 - $484,000 in recent years)
  13. Other Revenues (Interest Earnings) Reduced Interest Rates + Reduced Balances to Invest = Reduced Interest Earnings FY2011 Projection = $ 200,000.00 FY2010: $ 410,264.35 FY2009: $ 793,661.59 FY2008: $ 1,657,991.47 FY2007: $ 1,788,600.83 FY2006: $ 1,339,816.02 FY2005: $ 597,825.19 FY2004 $ 278,696.37

  14. State Revenue Losses under Governor’s Executive Budget Proposal and House Modifications

    Losses compared to FY2011 funding for foundation, tangible personal property replacement, and electricity deregulation offset: $2.9 million in FY2012 $3.4 million in FY2013 MAY get some relief on TPP replacement in final budget IF possible changes being discussed to continue current phase-out schedule become law

  15. Major Expenditure Considerations

    Personal Services (Wages) Insurance Benefits/Retirement Purchased Services Supplies/Materials Equipment Other (Audit, tax collection fees, liability insurance, etc.)
  16. Personal Services (Wages) 0% base increase for FY2011 for all staff 62 full-time equivalent positions reduced for 2010-2011 school year Stimulus funds and Education Jobs funds used are one-time funding sources for 1 or 2 years Extended-day Kindergarten largely funded by Title I funds for 2010-2011 school year, then General Fund TRIP and other staffing replacement savings of $1 million (estimate) in FY2012 and additional $825,000 (estimate) in FY2013 (wages and benefits)
  17. Insurance Benefits/Retirement 11.44% increase ($757,000) in Suburban Health Consortium premiums for October 2010 FY2010 - 0%; FY2009 – 4.62% 10% projected increases for FY2012 and beyond Mandatory spousal enrollment for new hires in 2005/2006 school year and after – 15% savings
  18. Purchased Services, Supplies/Materials, Equipment, Other $900,000 of Title VI-B stimulus funds used to offset general fund expenses in FY2010 and FY2011 Textbook budget partially restored in FY2011 ($200,000) and FY2012 ($150,000) Staff development budget partially restored in FY2012 ($20,000) Even with restoration of these items, other budget cuts in instruction, technology, and maintenance are not able to be restored
  19. Our Task: Providing long-term, excellent educational opportunities for Lakewood’s youth while managing the short-term economic crisis
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