Proposed Budget Fiscal Year 2017

Proposed Budget Fiscal Year 2017 David S. Cline Associate Superintendent for Finance and Support Services February 3, 2016

Budget Process and Virginia Law Virginia Code 22.1-92: Superintendent required to develop a Proposed Budget which meets the needs of the School Division School Board reviews, revises, approves, and submits a budget to the County which meets the needs of the School Division Board of County Supervisors (BOCS) is responsible for funding the School Division upon request of the School Board: BOCS is responsible for setting tax rates BOCS does not have line item authority and may only budget by lump-sum appropriation or broad state category 2

Operating Fund & Debt Service Fund Proposed Fiscal Year 2017 FY 2016 FY 2017 Change Percent County $509,145,966 $536,565,070 $27,419,104 5.4% State $460,831,640 $477,661,545 $16,829,905 3.7% Federal $37,492,999 $37,530,438 $37,439 0.1% Other $14,299,976 $15,685,212 $1,385,236 9.7% Beginning Balance $18,011,314 $12,681,949 ($5,329,365) -29.6% Total $1,039,781,895 $1,080,124,214 $40,342,319 3.9% By Fund: Debt Service $82,061,299 $88,351,647 $6,290,348 7.7% Operating $957,720,596 $991,772,567 $34,051,971 3.6% 3

Funding Issues County Revenue Maintains FY 2016-2020 Five-Year Revenue Plan State Biennial Rebenchmarking No restoration of previous year reductions No pay raise for FY 2017 Incentive funding for Instructional Positions/At-Risk Virginia Retirement System (VRS) Adjustments Federal Changes in Grants Other Beginning Balance 4

FY 2016 Cost per Pupil Comparison 20,000 18,000 16,000 14,000 12,000 10,000 8,000 6,000 5

Cost per Pupil Change Over Time (Adjusted for inflation) 11,000 10,600 10,200 9,800 9,400 9,000 8,600 8,200 7,800 10,776 10,724 10,429 10,383 10,378 10,163 10,365 9,810 9,852 10,158 9,374 9,775 9,577 9,460 9,299 9,081 8,939 8,520 8,538 8,740 8,315 8,380 8,380 6

County Funding Prince William County (PWC) funds 49.67% of the combined Operating and Debt Service Funds PWC taxes are approximately 30% less than our neighbors in northern Virginia. 7

State Funding The Commonwealth of Virginia funds approximately 44.23% of the combined Operating and Debt Service Funds Since 2009 the General Assembly has made major reductions in biennial funding to School Divisions including: Cap Funding for Support Positions -$754M Adjust Health Care Participation Rates -$269M Remove Expenditures for Certain Equipment, Travel -$244M Eliminate Support for School Construction -$122M Eliminate Non-personal Inflation -$109M K-3 Class Size Changes; Enrollment Loss Assistance -$79M Include $0 Values in Linear Weighted Avg. Calculation -$79M Eliminate COCA for NoVA Support Positions -$50M Extend School Bus Replacement Cycle -$19M Total: -$1,725M 8

Growth in Student Membership Past Five Years All Students Special Education 10.3% 11.5% English Lang Learners 1.3% Free/Reduced Lunch 22.3% 0.0% 15.0% 30.0% 45.0% 9

Enrollment Trends 98,000 97,188 96,000 94,691 96,122 94,000 93,057 94,286 92,000 91,496 92,687 90,000 88,000 87,500 88,777 88,216 90,064 89,381 91,196 86,000 87,253 84,000 82,000 2016 2017 2018 2019 2020 2021 2022 FY 2015 Projected FY 2016 Projected 10

Impact of 1,000 Additional Students Space annual CIP costs of $36 million 49% of an Elementary School - $14.7 million (approximately 20 trailers) 23% of a Middle School - $12 million (approximately 14 trailers) 12% of a High School - $15 million (approximately 20 trailers) Staffing 43 ES teachers or 60 HS teachers (if all at one school) School administrative - Principals, Assistant Principals Support staff custodial, clerical, security Instructional supplies, materials, equipment, textbooks Non-instructional supplies, equipment Transportation of 700 students 10 buses - $1.1 million 10 drivers 0.6 mechanics/support staff Operating costs (fuel); bus maintenance Central Support Student Learning, Professional Learning, Special Education, Student Services, Accountability, Human Resources, Financial Services, Facilities Services, Risk Management & Security, Information Technology, 1,000 students = $10,724,000 in additional Operating Costs = $4,170,000 in additional Debt Service Costs 11

Programs Not Required by State and Federal Law Are not discretionary, but reflect programs which support the School Board s Strategic Plan Superintendent supports all of these Strategic Programs; list of programs not required by State and Federal law has been developed at direction of School Board - examples: Full Day Kindergarten Specialty Schools & Specialty Transportation Costs Middle & High School Sports ES Strings Program Building Maintenance Paying for AP/IB/PSAT Tests Deferral of Capital Improvements Projects (CIP) 12

Critical Unmet Needs Approval of a budget and Five-Year Plan each year does not mean everything is OK/funded School Board in FY 2016 directed development of a list of Critical Unmet Needs including: 215 Trailers being utilized daily Overcrowded classrooms (Class Size) Need to restore Instructional budget cuts Maintenance Infrastructure under-funded Technology Infrastructure under-funded No funding to replace student classroom technology Supplies/Materials/Equipment 13

Critical Unmet Needs The listing of Critical Unmet Needs was reviewed, updated, and critical areas prioritized. The following items were considered most important for consideration in the FY 2017 budget out of a list of 119 (not listed in priority order): Provide support to schools with significant student achievement challenges with instructional coaching services Fred Lynn MS Response to VDOE Class size reduction for elementary schools with economically disadvantaged K-5 students Provide flexible English Learner Program Instruction for Non-Traditional Schools based on Student Need Retention of Records Restoration of Economically Disadvantaged funds to 2007 Level ITS Budgeting for Results Budget Plan (ZBB) - Identified Critical Needs Fund Additional Attendants for VPI Plus Program Provide AP for ES schools under 600 Provide a math coach in each middle school Web-Based Applicant Tracking Employee Evaluation and Records Management System Behavior Specialists - 4.0 FTE 14

FY 2017 Proposed Budget FY 2016 Approved Budget (Operating & Debt Service) $1,039,781,895 Expenditure Changes for FY 2017 Baseline Adjustments $730,377 Baseline Adjustments -$1,625,660 Adjustment for Supplies, Materials, Services (2.0%) $1,174,633 Net Adjustment for Replacement Buses & Vehicles $85,800 County/Schools Class Size Reduction Grant $2,000,000 Speech Teacher 2.6 FTE $157,220 Sign Language Interpreter 1.0 FTE $86,067 Adjustments in Grants & Self-Supporting Programs -$1,147,683 15

Expenditure Changes for FY 2017 FY 2017 Proposed Budget Compensation $19,550,561 Step Increase (average 2.8%) $18,562,447 Pay Plan Adjustment (1% PPA) $0 Pay Plan Adjustment for VRS (1% required by State) $6,650,289 Slippage/Salary Vacancy Factors -$8,423,623 Virginia Retirement System (VRS) Rate Adjustments -$1,753,787 State Group Life Insurance (GLI) Rate $641,739 Health Insurance Cost (5.91% Rate Increase) $3,873,496 16

Expenditure Changes for FY 2017 FY 2017 Proposed Budget New Students & Schools $14,660,620 Funding for New Students (Funding for 716, but +963) $6,928,589 Startup Costs for Ferlazzo Site Elementary School (ES) -$434,000 Fixed Allocation for Ferlazzo Site ES $737,660 Startup Costs for Potomac Shores ES $434,000 Startup Costs for Colgan High School (HS) & Aquatics Center -$1,888,000 Fixed Allocation for Colgan HS & Aquatics Center $2,560,913 Thomas Jefferson HS - Facilities Renovation Cost Share $31,110 Net Change in Debt Service Costs (Mortgage) $6,290,348 School Repairs & Renewals $500,000 Repair and Renewal Projects $0 Technology Improvement Projects (TIP) Increase $500,000 17

Expenditure Changes for FY 2017 FY 2017 Proposed Budget New Resources $10,849,122 K-3 Class Size Reduction Adjustments $802,201 VA Federal Preschool Initiative (2 Additional Classes?) $0 Colgan HS Additional Teacher Assistants 3.0 FTE $101,793 Fred Lynn MS Response to VDOE 1.0 FTE $89,103 VA Funding for ES Instructional Positions (59 Schools) $3,072,184 Increased Insurance Costs (Workers Compensation, Liability) $500,000 Additional Nurses 1.5 FTE $129,255 English Language Learners (ELL) Funding (K-12) $97,100 Adjust Funding for ELL Program at 4 Schools $17,128 Class Size Reduction at 8 th Grade 16.0 FTE $1,388,560 Social Worker 1.0 FTE $79,540 Speech Teacher 1.0 FTE $87,649 Teacher Vision Impaired 1.0 FTE $89,730 Teacher Hearing Impaired 1.0 FTE $87,304 Gifted Education Funding (K-12) $126,010 Economically Disadvantaged At-Risk Funding (K-12) $1,072,670 18

FY 2017 Proposed Budget Expenditure Changes for FY 2017 New Resources (Continued) Student Learning Student Activities Support 0.4 FTE $53,165 Information Technology (IT) Records Retention Analysis $20,000 IT Additional E-Rate (Federal Program) Funding $1,642,000 IT Office Funding for Zero Based Budget Recommendation $1,204,197 IT PWCS Stakeholder Notification System (ZBB) $189,533 Reductions -$5,948,361 Bus/Vehicle Fuel Price Reduction -$1,501,279 Utility Price Reduction -$500,000 Additional Adjustment for Slippage in Compensation -$2,197,082 Reduction in General Reserve -$1,000,000 Reduction in Holdback Allocation -$750,000 FY 2017 Projected Expenditures $1,080,124,214 FY 2017 Projected Revenues (Operating & Debt Service) $1,080,124,214 Estimated FY 2017 Surplus/Deficit $0 19

Capital Improvements Program (CIP) FY 2017 Highlights Highlights/changes new schools/additions (partial): Kilby ES Replacement Fall 2017 Potomac Shores ES Fall 2017 Additions Fall 2017 Belmont, Henderson, Neabsco PACE East Replacement/Alternative School Fall 2018 Pattie ES Addition Revised to Fall 2018 and includes consolidation of KG-1 from Washington-Reid PW Parkway ES & Lake Ridge Area ES Fall 2019 13 th HS delayed one year to Fall 2021 14 th HS delayed one year to Fall 2023 Numerous adjustments associated with the shifting of the high schools due to funding in 2019 through 2024 Site acquisition 20

Capital Improvements Program (CIP) FY 2017 Highlights Renewals & Repairs Phase 1: Antietam ES, McAuliffe ES, Mullen ES, Westridge ES, Lake Ridge MS, Saunders MS Roof repairs/replacements Gar-Field HS, Hylton HS HVAC upgrades/repairs, roof repairs/replacements, kitchen upgrades, asphalt improvements, Title IX Technology Improvements Plan VoIP/LAN/WLAN School Upgrades/Replacements Data Center/School Upgrades/Replacements Network/Infrastructure/Bandwidth Upgrades/Replacements Begin Required Replacement of Student Information System 21

Five-Year CIP Summary FY 2017-2021 Projected Growth in Students 7,033 New School Facilities 8 New Elementary Schools 4 New Middle Schools 1 New High Schools 1 Replacements - Kilby Elementary, PACE East 2 School Additions (Classrooms) 72 Elementary School Additions (5 Schools) 42 Middle School Additions (2 Schools) 30 High School Additions --- Support Facilities Renewal (New Dominion ) 0 Support Facilities (Transportation Center West) 1 New School Facilities (FY2017-21) $387,277,000 Classroom Additions (FY2017-21) $ 77,014,880 Renewals (FY2017-21) $255,818,000 Current Student Capacity 86,681 Proposed Capacity to be Constructed 9,361 Existing Portable Classrooms 215 22

Five-Year Budget Plan FY 2017 FY 2021 Description FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 Student Membership 88,216 89,381 91,196 92,687 94,286 Student Increase 716 1,165 1,815 1,491 1,599 New Schools Open 2 2 1 2 1 Current Programs $1,033.5 $1,065.4 $1,092.1 $1,105.6 $1,132.4 New Students $5.8 $17.2 $33.7 $46.9 $61.8 Repairs & Renewals $30.9 $31.2 $51.0 $64.4 $80.1 New Schools $9.9 $12.9 $8.7 $15.1 $15.5 Total Expenditures $1,080.1 $1,126.7 $1,185.5 $1,232.0 $1,289.8 Non-County Revenues $543.5 $569.1 $603.4 $624.1 $654.7 County Transfer $536.6 $557.6 $582.1 $607.9 $635.1 Total Revenue $1,080.1 $1,126.7 $1,185.5 $1,232.0 $1,289.8 Surplus/Deficit $0.0 $0.0 $0.0 $0.0 $0.0 Five-Year Plan Balanced In Accordance With School Board Guidance of September 19, 2012 23

Annual Debt Service (Debt Payment on School Bonds The Mortgage ) $113.0 Debt Service in Millions $107.0 $101.0 5.5% annual growth rate $104.4 $108.4 $95.0 $89.0 $83.0 $77.0 $71.0 $74.7 $77.2 $83.2 $88.4 $95.9 $97.9 $65.0 2014 2015 2016 2017 2018 2019 2020 2021 Debt Service 24

Health Insurance Annual Rate Review 12.00% 10.00% 8.00% 6.00% 4.00% 2.00% 0.00% 6.10% 4.50% 5.00% 2.90% 6.50% 9.80% 9.00% 6.85% 10.00% 9.80% 5.00% 8.80% 4.00% 9.00% 6.80% 8.00% 0.00% 0.00% 5.91% 9.00% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 PWCS National Calendar Year PWCS Proposed 25

FY 2016 - EOY Funding Recommendations Projected Balance $9,582,394 Recommendations: Salary Analysis/Reclassification $405,000 Central Office Staffing Study $250,000 Land Acquisition $2,895,836 Student Information System Fund $2,500,000 Time/Leave System Implementation $1,531,558 Additional $1M from Food Services TIP ($2.5M in 2017 budget) $2,000,000 26

In Summary The School Board develops the budget within the funding amounts provided by the County and State This budget attempts to meet needs for programs and services essential to a quality education We are not meeting the need to reduce class sizes, to provide enough additional permanent building space, provide competitive salaries/benefits, or restore previous cuts Impact on student performance will always be in hindsight As one of the Nation s 100 Best Communities for Young People, we remain committed to Providing A World-Class Education and doing what is best for the more than 88,000 children we expect to educate and serve. PWCS return on investment has been recognized as the highest in Northern Virginia and among the best in the Commonwealth 27

FY 2017 Budget Timeline 02/03/2016 Presentation of Proposed Budget/CIP 02/08/2016 Public Meeting on Budget/CIP at Kelly Leadership Center 02/17/2016 Budget Work Session (after regular SB Meeting) 03/02/2016 Budget Work Session (after regular SB Meeting) 03/09/2016 Budget Work Session Mark-Up 03/16/2016 Public Hearing, School Board approves Budget/CIP 04/05/2016 School Board Budget Presentation to Prince William Board of County Supervisors (BOCS) 04/30/2016 Final Date for BOCS Budget Approval 28

Proposed Budget Fiscal Year 2017 David S. Cline Associate Superintendent for Finance and Support Services February 3, 2016