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Home My WebLink About2007-03-12 . FY 2007/2008 RECOMMENDED OPERATING BUDGET Monday, March 12,2007 ALBEMARLE COUNTY FINANCIAL PLAN Budget Work Session Overview . Today . Historical Budget Trends . Five Year Forecast and Tax Rate Options . Budget Drivers . Budget Details 1 General Government Budget by Expenditure Type o o o Avg. annual increase - 7% 0 o AIIQ. annual Increase - 8% . Avg. annue..........t" What if Department Operations Grew at the Rate of Inflation? 30.0 25.0 20.0 15.0 10.0 5.0 0.0 FY02 (5.0) 0.8 2.0 1.9 FY03 FY04 FY05 FY06 FY07 IOWhat If OActual1 4 . . FY 07 j08 General Fund Recommended Expenditures FY07 FY08 $ Diff % Diff Salaries $30.3 $32.5 $2.2 7.4% Benefits 10.6 11 .1 0.6 5.3% Operating 13.1 13.4 0.3 2.0% Agencies 15.6 17.7 2.1 13.2% Initiatives 0.0 2.4 2.4 Other 0.9 0.9 0.0 0.0% Transfer to Schools 91.2 100.0 8.9 9.7% Transfer to Capital 24.2 26.4 2.2 9.1% Other Transfers 3.1 3.7 0.6 20.4% Revenue Sharing 10.1 13.2 3.1 30.4% Reserves 1 .5 4.5 3.0 193.0% TOTAL GF BUDGET $200.6 $225.9 $25.3 12.6% Five Year Forecast 5 Revenue Assumptions . Reassessment Rate . 14.9% for tax year 2007 . 5% annually for tax years 2008 - 2011 . New Construction - 4% annually . No new revenue sources in any year Expenditure Assumptions . Splits new local tax revenues with the schools 60/40 . Annual compensation increase - 5% in FY08, 4.75% in out years . Health Insurance . FY08 - 7% increase . FY09-FY1 2 - 1 0% increase . Other Benefits maintain current rates 6 Expenditure Assumptions . Operations . Hold increases to base operations at 2% . Agency Increases . Public Safety Agencies - 19.8% in FY08, 8% in out years . Other Agencies - 8.4% in FY08, 6% in out years . Continues to fund 4 new police officers annually . Allocates 2 cents to capital and debt each year . Includes all initiatives funded in the FY 07 j08 Recommended Budget for all 5 years . Does NOT include initiatives in the out years . Includes operating impact of capital projects General Government Net Revenues 72 Cents 7 General Government Net Revenues - 71 Cents FY08 Impact to Schools and Capital - 71 Cents o FY07 Budget DFY08 Recommended 071 Cents 8 General Government Net Revenue - 70 Cents FY08 Impact to Schools and Capital - 70 Cents o FY07 Budget DFY08 Recommended 0 70 Cents 9 General Government Net Revenue - 68 Cents FY08 Impact to Schools and Capital - 68 Cents o FY07 Budget DFY08 Recommended 068 Cents 10 I I Options and Impacts for Balancing Government Operations Potential O~tions to Address Shortfal s FY08 - FY1 2 . Utilize Board's Reserve . Eliminate Strategic Initiatives . Generate Additional Revenues such as EMS billing . Delay Hiring Staff for the Pantops Fire Rescue Station . Defer Implementation of Police Staffing Standard 11 1 I Budget Goals Under All Options . Maintain market salary policy . Fund mandates . Maintain current funding policies . Capital transfer remains at 2 cents of the tax rate . Continues providing equivalent of 1 cent to the ACE program . Splits new local tax revenue with schools 60/40 Balancing Strategies at 71 Cent Tax Rate . Assume EMS billing beginning in October 2008 . FY09 - $1.125 million . FY 1 1 - FY 1 2 - $ 1 . 5 mill ion . Delay hiring of Pantops firefighters until January 2009 . Keep all other initiatives as recommended . May not fully fund school market increases under the current 60/40 split 12 Revised Net Revenues - 71 Cents Total Budget Increases Over Current Year - 71 Cents Recomm 71 Cents General Government 9.9% 9.3% School Division 5.7% 5.3% School Self-Sustaining 3.6% 3.6% Special Revenue 2.3% 2.3% Debt Service 6.8% 6.8% SUBTOTAL - OPERATIONS 6.7% 6.3% Capital -17.3% - 1 7.7% Revenue Sharing 30.4% 30.4% TOTAL BUDGET 5.6% 4.0% 13 Balancing Strategies at 70 Cent Tax Rate . Assume EMS billing beginning in October 2008 . Delay hiring of Pantops firefighters until January 2009 . Eliminate the following initiatives: . Performance Management Program . Master Plan Implementation . Rural Area Support . CIP Project Manager . Recreation Program Expansion . All other initiatives are funded . May not fully fund school market increases under the 60/40 split Revised Net Revenue - 70 Cents 14 Revised Net Revenue - 68 Cents Total Budget Increases Over Current Year - 68 Cents Recomm 68 Cents General Government 9.9% 4.1% School Division 5.7% 4.7% School Self-Sustaining 3.6% 3.6% Special Revenue 2.3% 2.3% Debt Service 6.8% 6.8% SUBTOTAL - OPERATIONS 6.7% 4.5% Capital -1 7.3% -18.8% Revenue Sharing 30.4% 30.4% TOTAL BUDGET 5.6% 2.3% 16 I I . . Budget Goals Under All Options . Maintain market salary policy . Fund mandates . Maintain current funding policies . Capital transfer remains at 2 cents of the tax rate . Continues providing equivalent of 1 cent to the ACE program . Splits new local tax revenue with schools 60/40 Impact on Current Year Budget . FY07 Budget Impact . 72 Cents - $1.6 million . 71 Cents - $2.5 million . 70 Cents - $3.3 million . 68 Cents - $4.9 million . Potential Strategies · Use projected FY07 revenue surplus of approx $2 million · Use FY06 revenue surplus of approx $9 million, which is currently programmed in the C1P · Reduce current year expenditures (only 3 months left) I 17 CIP Reserve Chart C IP Rese rv e Ba la nee ~ i ! .. .. -~~~~ 2008 200. 2010 2011 2012 2013 2014 2015 2016 2017 Flscsl Vur I__Recommended ___72 cent 71 cent 70 cent ___68 cont I 18 1 2 3 '"'F ...... ~.~...... : 01 .... ! !: -'_~ I ~ 40 ~ C 20 I g 0 2005 2006 lL 2004 R.adlng Black ., 63 73 4 5 6 7 8 9 10 11 12 13 51l'1781 Lnf;02ll)rr~n~es in 0: <:r<ll:'Jl1:l1 EK~~rl(litur~ ~~'i_{ 706 ArJd.t~:)n81 FIJ1din~ for I_'l#y lint" Item~ $~e_080 Mil~.J~ R~lm~JtIf5eIl1p.n1 f;')!n InuEo(tS{; $ 15 J\ 1 t.k,~"FjkJ nr:;ii Srr<ti _~ (:fj~ 1:1@!f'e""'0 :-::ch'(l: AtJ:'~ill'; A"i1~;(!,,!r :;f'P'NliOIi<l. <lId Frt P1f J; CO~lS k>/ 5coo.:,_ .A,(i.ji~i(.(l5' 3 2~ ~TE B<l~lin.,lnCfe-J501c Schoo, (\f:€'dIlOI1i1 Eill.j!Jqt~ SL.&6! T E:ilCt~r (_if~l,.."Jl - (I 4 FTE $h060 14 15 . ... T .~ .-----? i\lbelnarle County Public Schools Budget Update March 13,2007 On Wed., March 14, 2007, the Albemarle County School Board will present its Funding Request for the 2007-08 School Year to the Albemarle County Board of Supervisors. The Board of Supervisors is in the process of developing its budget for the 2007-08 Fiscal Year. Impacts of Proposed Property Tax Cut At its Budget Work Session March 12, the Board of Supervisors directed the County Executive to prepare a budget option based on a six-cent cut to the real estate tax. The current tax rate is 74 cents per $100 assessed value. With a six-cent cut, the tax rate would drop to 68 cents per $100 assessed value. With the majority of School Division funding coming from local sources, primarily the real estate tax, a cut in the tax rate would have significant impact on School Division funding this school year and next school year. Tax Rate Cut to 2006-07 Schools Funding $2.95 million $2.46 million $1.97 million $1.48 million $984,000 $492,000 o Cut to 2007-08 Schools Funding $5.20 million $4.31 million $3.41 million $2.52 million $1.62 million . $664,000 o Total Cut to Schools Funding $8.15 million $ 6.77 million $ 5.38 million $ 4 million $2.6 million $1.16 million o 68 cents 69 cents 70 cents 71 cents 72 cents 73 cents 74 cents A tax cut would impact this school year's funding due to the process and timing of property tax collections. Albemarle County collects property taxes two times each fiscal year, in December and June. The projected property tax revenue to be collected in June already is included in the local government and School Division's current budgets. Should the Board of Supervisors vote to cut the tax rate, the cut would take effect in June, lowering the level of revenue the county receives this fiscal year and causing the need for proportionate cuts. Timeline and Public Input Opportunities The timeline for the Board of Supervisors budget development process is listed below. Public input can be submitted to the Board of Supervisors by e-mail.in writing, by phone or by speaking during a public comment section of a regular meeting or public hearing. Key dates are listed below. · Wed., March 14: Board of Supervisors Budget Work Session at 1 p.m. in County Office Building - McIntire. School Board presents Funding Request from 1 to 2 p.m. No public comment. · Wed., March 14: Board of Supervisors Regular Meeting at 6 p.m. at COB- McIntire. Last opportunity for public input prior to setting of the tax rate. · Mon., March 19: Board of Supervisors Budget Work Session on the Capital Improvement Program (CIP) at 1 p.m. in COB-McIntire. This session may complete the Board of Supervisors budget process. · Tues., March 20: School Board Emergency Budget Meeting, time and location TBA. · Wed., March 21: Tentative Board of Supervisors Budget Work Session at 1 p.m. in COB-McIntire. · Thurs., March 22: School Board Budget Work Session, 6 p.m., COB- McIntire. · Wed., April 4: Board of Supervisors Public Hearing on Tax Rate proposal. At this point, the tax rate cannot be raised, only lowered. (Spring Break) · Wed., April 11: Board of Supervisors adopts budget. · Thurs., April 19: School Board Budget Work Session, 6 p.m., COB- McIntire. · Tues., April 24: School Board Work Session, 6 p.m., COB-McIntire. Precautionary Steps Taken by School Division The School Division had taken steps to prepare for a possible two cent tax reduction when the Board of Supervisors began publicly discussing the cut in recent weeks. With the possibility of the proposal increasing to a six-cent cut, the School Division has taken the following steps: · Hiring freeze: For classified, non-teaching positions · Retaining "Holdback" funds: Annually, every school and the central office are required to reserve 7 percent of operating budgets as a contingency. Typically, the School Board begins releasing Holdback funds in spring. The Holdback for this school year is $730,000. · Spending review: All purchases will undergo additional review to determine those that are critical and essential · Budget reductions: All central office departments and schools have been notified that they may be required to redtve current operating budgets I , . .~ . School Division Budget ellt Preparation The School Division has begun developing possible strategies for additional budget cuts for the 2007-08 school year. The planning is in the preliminary stage and details are not yet available. The School Division is limited in flexibility when reviewing possible cuts as 82.5 percent of its expenditures are tied to personnel. As planning for reductions continues, details will be shared with employees through their principals or central office directors. Any cuts would require the review and approval of the School Board, following a process of study and public input. Preliminary budget cut strategies are included in the tab Ie below. School Division Possible Budget Cut Strategies 72 cent tax rate 70 cent tax rate 68 cent tax rate (in addition to cuts (in addition to cuts listed in left column) listed in columns at left) Elim' nate or reduce most new Increase class size for grades 4-12 Reduce teacher salaries initia ives in the School Board (K-3 not included due to restrictions Fund 'ng Request including: for state funding) . New instructional staff New teaching positions due to Reduce funding for textbooks positions to support new enrollment growth I and other instructional programs materials . Increased funding for Operational funding increases due Reduce additional teaching Interven tion/Preven tion to enrollment growth positions Services staff Reduce non-SOQ teacher staffing Reduce assistant principal . Increased funding for . positions from 12 to 11 months professional development Reduce K-3 Teacher Assistant Reduce funding for computer . Increased funding for staffing equipment replacement technology Decrease staff development funding Reduce pre-K services Reduce classified staff, including Reduce the School Board Central Office positions Reserve Reduce operational costs in Reduce an additional $1 Building Services million through cuts to be I Eliminate some new, proposed I determined; consider fee- Cut Of erational funds programs I based athletics and extra- ! I ! curricular programs, and I transportation for regular I I I I J ~- ________~d ucation students ! I