Disclosing District Finances at the Bargaining Table

1. Disclosing District Finances at the Bargaining Table Florida Education Negotiators 38thAnnual Conference Double Tree at Universal Orlando, FL May 16, 2018

2. AGENDA • Introductions • Why Is This Important • Review History / Trends • Review Legislative Process • Impact of FEFP on District Budget • Overall Financial Condition • Communication Plan

3. Why is it important for the Chief Negotiator to work very closely with the Chief Financial Officer in your district?

4. Why is it important for the Chief Negotiator to work very closely with the Chief Financial Officer in your district?

5. Review History and Trends • FTE trends • Funds per FTE • Taxable Assessed Valuation (TAV) • Required Local Effort (RLE) • Financial condition ratio • Average salaries and/or raises for the units • FDOE documents and analyses • Graphs vs. Tables • Dollars vs. Percentages vs. Equivalent Units

6. Review of Recent History • 2018-19 is 3rd year in a row of reduced RLE state-wide • 2016-17 = (0.290) • 2017-18 = (0.322) • 2018-19 = (0.217) • 2018-19 is first year that per FTE is greater than it was in 2007-08 • 2007-08 = $7,202 • 2018-19 = $7,331 (current year = $7,158) • Does not account for inflation nor increases in categoricals • 2016-17 the Board approved $3.1 million in budget cuts • Very modest increases due to lack of funding • New positions only as a result of growth • Teachers • Bus operators • 2017-18 is fourth year of recalibration

7. Review Legislative Budget Process • Timeline • March – April • Final Conference Report in May • Budgets are already setup or in process for next year • Be ready to explain the disparity of the economy in general versus the FEFP funding formula

8. Review Impact of FEFP on District Budget • Compare the Final Conference Report (a.k.a. - 1st Calculation) vs. current year 4th Calculation • Reconcile why the “increase” is really not an increase • Discuss budget impactors for next year and beyond • Growth / declining enrollment • Medical • Other benefits • Program enhancements • Local issues • Performance pay • Unfunded / underfunded mandates • Overall financial condition

9. FY 2017-18 3rd Calculation vs. FY 2018-19 Final Conference Report

10. 2018-19 Revenue Review

11. 2018-19 Budget Challenges • Growth of Schools • Safe Schools • Mental Health • EBD Unit Reconfiguration • Additional Transportation • Hazardous Walking Conditions • Self-Insured Medical Plan • 1% increase equals approx. $400,000 • FRS Increase • Reserve Requirements • Overall Financial Condition

12. 2018-19 Budget Challenges Notes: 1) This analysis does not include any projected / estimated costs for additional costs of SROs or other security personnel beyond the amount of increased Safe Schools allocation.

13. FY 2007-08 Final Conference Report vs. FY 2018-19 Final Conference Report

14. Review District’s Financial Condition • Recent history of fund balance performance • Review the components of fund balance (GASB 45) • Analyze current fund balance and its impact on the budget • Why do we need reserves?

15. OverallFinancial Condition

16. OverallFinancial Condition

17. Fund Balance Analysis General Fund Note – June 30, 2017 is estimated and unaudited as of today’s date

18. Fund Balance Analysis General Fund - Restricted Note – June 30, 2017 is estimated and unaudited as of today’s date

19. Fund Balance Analysis General Fund - Committed Note – June 30, 2017 is estimated and unaudited as of today’s date

20. Fund Balance Analysis General Fund – Assigned and Unassigned Note – June 30, 2017 is estimated and unaudited as of today’s date

22. Why Do We Need Reserves? • Florida law requires school districts to maintain a minimum unrestricted fund balance of 3 percent, which is also outlined in School Board Policy (F.S. 1011.051 and School Board Policy 7.01) • In the event that amount falls below 2 percent, the State could declare a financial emergency and possibly take over the district financial operations • Reserves are always necessary to cover: • Unforeseen emergencies • Revenue shortfalls • Unfunded mandates • Maintain credit ratings

23. Review Budget Reduction Initiatives • Who / What • Where • When • Why • How much it will save • Recap • Never be afraid to prognosticate • $1.3B state deficit in 2018-19 • $1.9B state deficit in 2019-20 • Growth / Declining enrollment • Charter schools • Medical costs • SROs • Mental health

24. State Education Funding Trends • Total state budget increased by $17 billion, or 24% • Education’s portion increased by $ 2.8 billion, or 12% • Education’s 2018-19 slice is only 28% when it used to be 32% in 2010-11 • Education is getting a smaller piece of a larger pie

25. Communication Plan • Two Main Points to Include • “The Four Ts” • “Tell Them the Truth” • Economy vs. FEFP Funding • Go Tell Everyone Else Who Will Listen • School Faculty Meetings • SAC, PTO and other school related organizations • Civic Groups • Rotary, Moose, Elks, etc. • Political Groups • County Commission • Executive committees • Stay on Message and Keep the Faith

26. Thank You! • Questions?