2020-2021 - Roanoke County Public Schools (2024)

Happy Friday!

The 2020-2021 Revised Annual Budget was presented and approved by the School Board on May 14,2020. The presentation is available under Budget Work Sessions. Revisions from the original approved budget were discussed with the School Board during the Work Session on May 5, 2020, and explained in the May 9, 2020 Budget Blog.

This has been an unusual budget year, just like it has been an unusual time for our students, parents, teachers, nutrition staff, and all employees at Roanoke County Public Schools. The highlight of the revised budget is that 2020-2021 salaries and insurance benefits will be level-funded at the current rates.

The 2020-2021 Revised Annual Budget will be presented to the Board of Supervisors of the County of Roanoke on May 26, 2020.

Hello! I hope everyone is doing well as we wind down this unusual school year and gear up for graduation ceremonies. There was a School Board work session Tuesday and we reviewed revisions to the approved 2020-2021 Annual Budget.

Revenue Deficit

In the originally adopted budget, revenue from the State and County of Roanoke was $4.7 million higher than the current year. After the budget was approved, the economy took a swift downturn due to stay-at-home and social distancing orders. The revised revenue from the State and County of Roanoke ended up $3.3 million less than the current year. This was a drastic $8.0 million swing and required deep cuts to preserve positions and current pay levels. A $2.0 million transfer from health insurance reserves helped close this gap.

Expenditure Savings

The original approved budget reported additional funding of $875,500 from personnel savings, including personnel lapse. In the revised budget, another $79,865 savings was identified from returning to baseline Governor School slots and academic and athletic supplements.

Expenditure Fixed Increases

The list of expenditure fixed increases included a transfer to the Technology Replacement Plan. This was able to be funded directly by a State set aside of $954,447 for infrastructure and operations lottery funds restricted to non-recurring expenditures.

Expenditure Deferrals

To balance the budget in the short-term, $2.8 million of current year expenditures were selected for a one-year deferral. The majority of these deferrals include transfers to other funds for technology replacement, fleet replacement, and capital maintenance needs.

Preliminary discussions with County of Roanoke administrators allow for the possible funding of these deferrals using June 30, 2020 surplus.

Superintendent Recommendations

The original budget gave teachers a 1-step increase and 0.5% pay scale shift; placed non-teachers on the new pay scale, as recommended by the compensation study, and a 1-step increase; and expanded contracts for bus drivers, bus aides, and nurses. The revised budget maintains current employment levels at the current year pay scales and expands the nurse's contract due to the need to have full-time nurses in response to the COVID-19 health crisis when schools open in August.

In the original budget, health insurance rates were proposed to increase by 2%. Upon review of the information presented, the School Board chose to keep the current year rates for next year so employees did not see a reduction in pay.

The County of Roanoke calculates the transfer based on budgeted revenue and has not adjusted for actual revenue in the past. However, as we are facing such an unprecedented economic crisis together, they are committed to sharing any upswing in revenues with the Schools, which may allow for mid-year budget appropriations.

The final budget will go before the School Board for approval on May 14, 2020, and then to the Board of Supervisors on May 26, 2020.

HappyFriday!

I hope everyone is doing well and acclimating to our new normal. This unprecedented event has not only had an effect on our daily lifestyle, it has also added additional stressors to the budgeting process.

2019-2020 Budget Update

With the deep recessionary effects felt by everyone due to the stay-at-home order by the Governor, we have begun analyzing the potential impact to the current year revenues and expenditures. One of the largest impacts we expect to see will be a reduction in sales tax of up to potentially 20%. The current year budget is $15,410,000 and we have seen receipts of approximately 7% higher than prior year. In addition, sales tax receipts run two months in arrears of when the consumer pays it, so the actual effect won’t be experienced until May/June. Between both of these factors, we hope we will not see a large decline in the current year, although we do expect a slight dip from budget. Other state revenue is expected to come in slightly below budget as well, not due to the COVID-19 recession, rather due to lower student population than budgeted. Upon the realization of this impending recession, we have stopped excess spending and frozen open positions. It is our expectation these expenditure savings will help ensure we can continue to fully pay out all contracts this year.

2020-2021 Budget Update

In the March 30, 2020 Budget Blog we shared the School Board approved budget, which we conveyed to the County in accordance with statutory requirements. Since then, we have had time to begin to digest the economic effects of this recession. In addition, the Governor amended the General Assembly budget to eliminate new funding opportunities for school divisions. Unfortunately, one of the largest effects was the removal of state funding for the anticipated teacher raise. Finally, on the local government side, we have met with Roanoke County government staff to investigate the effects of the recession on their expected revenue, which would ultimately effect the amount of funding the local government provides the school system. During the School Board Work Session this week, we shared some very preliminary revenue numbers with the School Board, which has led us to identify potential budget deferrals rather than having the opportunity to increase spending in needed areas. These are all very important items but represent areas that, under negative budget conditions, can be deferred for a year if needed. Stay tuned as we work through the economic issues and fine tune our budget amounts.

Wellness Initiative Update

In order to qualify for the reduced health insurance rates, employees must complete three steps to wellness. (See the February 28, 2020 Budget Blog) With the abrupt interruption in service and social distancing required by the Governor, this took away the opportunity for employees who had planned to complete their three steps between March 17, 2020 and April 30, 2020. Originally the deadline was extended to June 30, however, with the stay-at-home order going through June 10th and the future still in such uncertainly we are not sure what this will look like. As such, all employees (active and retirees) currently on the wellness program for 2019-2020 will continue to get the wellness premium for 2020-2021. New employees who have completed these steps already will receive the wellness premium beginning July 1, 2020. Everyone else, including any new hires, will receive the non-wellness insurance rates until they are able to complete the three steps and then they will be added to wellness program. This should happen 30 to 60 days from the time they complete the steps.

Updates will be provided as we move through the next phase of the budget process.

HappyMonday!

The 2020-2021 Annual Budget was presented and approved by the School Board Thursday March 26, 2020. Please see thePowerPointfor the specifics.

Virginia Code §15.2-2503 requires “All officers and heads of departments, offices, divisions, boards, commissions, and agencies of every locality shall, on or before the first day of April of each year, prepare and submit to the governing body an estimate of the amount of money needed during the ensuing fiscal year for his department, office, division, board, commission or agency.”

In order to meet this deadline, the budget was prepared with the information known at the time.Due to extenuating circ*mstances surrounding us including the strong possibility that local and state governments may decrease their revenue projections, we do expect to revise this in the near future.

HappyFriday!

The fourth work session discussing the 2020-2021 Annual Budget was Thursday February 27, 2020 and we discussed Benefits and Compensation, along with other updates.

Benefits 101

Health Insurance

Roanoke County Public Schools offers a KeyCare 1000 plan through Anthem that is coupled with a Health Reimbursem*nt Account (HRA). Here are the general provisions of the plan:

• Co-insurance: 80% Anthem / 20% Employee​
• Deductible: $1,000 Individual / $2,000 Family​
• Maximum Out-of-Pocket: $3,500 Individual / $7,000 Family​
• Employer Contribution to HRA: $500 Individual / $1,000 Family​
• Blue View Vision: $15 copay / 35% off retail frames​
• WellDyne Pharmacy: $10/$25/$40 copay

In order to be fiscally responsible, Roanoke County Public Schools is self-insured for its health insurance coverage. This means Anthem bills the School Division for the 80%claim payment. The School Division limits paymentsto large claims bypurchasingreinsurance for claim payments higher than $200,000.

Roanoke County Public School uses the total premium to pay for claims, administration fees, and fund the on-site health clinic.A 2% health insurance premium increase was presented to the School Board Thursday night. Please see2020-2021 Insurance Ratesfor a list of the premiums presented.

WellnessInitiative

Roanoke County Public Schools' Wellness Initiativeis managed through Marathon Healthand includes three steps in orderto help you understand all the factors and influences on your health:

1. Health History and Risk Assessment Questionnaire (HHRA)
2. Biometric Health Screening
3. Comprehensive Health Review (CHR) that is a face-to-face visit with the Marathon Health provider to review results from the HHRA and Biometric Health Screening and to set goals for improved health

Historicallythere was a hard deadline to enroll in the Wellness Initiative in order to qualify for the lower insurance rates the following year. In addition, employees hired during the year could not qualify for the Wellness Initiative until the following year.

Arecommended change is to allow enrollment in the Wellness Initiativeto occur continually. Once an employee enrolls in the health insurance plan she or he may complete the three steps and will be eligible for the lowered insurance rates as soon as the reporting can be completed.

Crossover Budget

Compensation

The Governor included funding for a 3% salary increase, but not until July 1, 2021. A total of a 3% increase must be provided by the school division during the 2021-2022 biennium, either in the first year or in the second year or through a combination of the two years. If a school division does this, then they will be eligible to receive funding to cover a portion of the raise in the second year of the biennium (2021-2022).

TheHouse of Delegates included funding for a 2% salary increase as of July 1, 2020 and then another 2% as of July 1, 2021.

The Senate includedfunding a 4% salary increase in the exact same manner as the Governor. In addition, the Senate included a one-time 3% bonus. This would cost Roanoke County Public Schools $2.9 million for an estimated $1.4 million in revenues. The revenues would not be received if a bonus was not paid. A bonus of this amount would compete withtheCompensation Study implementation, would not be considered reportable income to the VRS, and would not result in movement on the pay scale.

This is the second step of the process. Now we are in a waiting game until the House of Delegates and the Senate arrive at a consensus between the two versions and publish the final General Assembly budget. We expect that to occur in early March with the adjournment of the General Assembly slated for March 7, 2020.

Other updates can be reviewed in thePowerPoint.

Next Budget Work Session:March 17, 2020Superintendent's Budget

HappyFriday!

The third work session discussing the 2020-2021 Annual Budget was Tuesday February 4, 2020 and we discussedthe Compensation Study Results and the budgetary impact it could have.

Compensation Study Results

Mr. Mark Goldberg from Gallagher gave a presentation reviewing the process they took to complete the compensation study and provided results and recommendations.

Process

• Classification Study- They reviewed our current pay grades, analyzed every job description, and met withemployees to discuss current job duties and responsibilities.
• Job Evaluation Study- Based on the data collected during the Classification Study, they analyzed each positionfor placement in their method of classification. Their method, called the Decision Band Method (DBM) assigns a position to a "band" based on the decisions a position makes.
• Compensation Study- They sent a compensation survey to 37 school divisions and 15 municipalities in order to identify the current market rates for salaries. 18 school divisions and 11 municipalities responded. With a 55.7% response rate, they collected enough information for valid recommendations. However, in certain cases if they did not have enough respondents, they turned towards other market research such as published salary surveys.

Results

• Overall, we were found to be a highly competitive employer, coming in over the market median by 1.6%. Somepositions were paid below market and Gallagher adjusted the recommended pay medians accordingly.

Recommendations

Classification System - Phase I

1. Implement the DBM Job Structure as provided.
2. Maintain the structural integrity of the DBM Job Structure as provided.
3. RCPS should complete the full DBM Analysis for any position in the future that may change or be added.

Compensation System - Phase I

1. Implement a 30-step non-teacher scale that aligns with the DBM Job Structure.
2. Base the midpoint of the non-teacher scale on the provided medians as calculated using the analysis resulting from the market data collected.

Compensation System - Phase II

1. Implement a 30-step teacher scale that aligns with the DBM Job Structure.
2. Base the midpoint of the teacher scale on the provided medians as calculated using the analysis resulting from the market data collected.

Compensation Study Costing

Recommended Job Structure

Gallagher's Decision Band Model groups employees within 6 overall bands and then further by grade and subgrade. The total number of different combinations is 23. The current classification system has 33 grades. This means more positions are grouped together and there are fewer pay bands (number of rows in the pay scale) in the recommended job structure.

Recommended Pay Scale

The recommended non-teacher pay scale increases the number of steps from 24 to 30 (number of columns in the pay scale). The pay scale isbuilt by ensuring the middle step is equivalent to the median market rates. As a result, there are more steps before a position reaches the top step. A part of the recommendation is to utilize "phantom bands"to mark out steps that will not be used for certain positions. This achieves the ability to raise the minimum for a position at a higher pay rate to attract quality applicants, while maintaining the integrity of the full scale.

Placement on the Pay Scale

All non-teacher employees were placed on the closest step above theircurrent step within the recommended band. In some instances, they were placed higher in order to remove current inequities, as recommended by Gallagher. The cost to place non-teacher employees on the recommended pay scale would be about $567,000. The cost for a 1-step increase over their placement would beabout $635,000.

Teachers would remain on their same scale and the cost for a 1-step increase would beabout $938,000.

Summary

There are additional analyses on specific positions in the work session presentation, along with the recommended job structure and pay scale.

Additional considerations regarding certain positions, along with an implementation plan, are still being worked through. All of this information will be considered as the budget is being developed.

Next Budget Work Session:February 27, 2020Compensation& Benefits

(Note this meeting is rescheduled from February 18, 2020)

Happy Friday!

The second work session discussing the 2020-2021 Annual Budget was Thursday January 23, 2020 and we discussedthe Other Funds and Replacement Schedules.

Budgeting 102:Fund Accounting

The school system uses fund accounting, which is different from how a business operates. In fund accounting, a fund is created to collect revenue and spend it for the specific purpose of the fund. Each fund is stand-alone, although funds may receive transfers from other funds.

In Roanoke County Public Schools, we have a main operating fund called the General Fund for most of the costs of the School Division. In accordance with our policy and the County budget ordinance, any excess balance (net difference between revenues and expenditures) remaining at the end of the yearmay be retained by the School Division but must be used in subsequent years for specific purposes.

There are also other funds, which are able to carry the excess balance for use in later years. Although these funds have their own revenue stream, some of them rely ontransfersfrom the General Fund. The following are the School Division's other funds, all of which were discussed during this work session:

• Instructional Resources Fund- This fundis used toaccount for the purchase of textbooks and other electronic resources that are standard in every classroom in the School Division. Historically the largest revenue was from the VDOE. Due to the limited state revenue, we have not been able to purchase textbooks in the year they were adopted. As such, in the current year,an increase in the transfer from the General Fund was proposed in order to bring the purchase of textbooks closer in alignment with the adoption.
• Fleet Replacement Fund-This fund is used to set aside money on a consistent annual basis in order to replace vehicles when necessary. The largest revenue in this fund is a transfer from the General Fund. In the current year an increase in the transfer from the General Fund was proposed in order to incorporate funding forvehicles other than just buses. In prior years only buses were included in this plan.
• Technology Replacement Fund-This fund is used to set aside money on a consistent annual basis in order to replace technology needs when necessary. The largest revenue in this fund is a transfer from the General Fund. Other revenue sources include State and Federal funding. In the current year,an increase in the transfer from the General Fund was proposed in order to incorporate funding for additional needs.
• Grant Fund- This fund is used to account for all of the federal, state, and local grants the School Division receives.
• Capital Projects Fund- This is the fund used to account for specific capital projects, including but not limited to the CIP plan and CMP plans (discussed below).
• Nutrition Fund-This fund is used to account for procurement, preparation, and serving of student breakfasts, snacks, and lunches. Revenues are primarily from food sales and subsidies from federal and state breakfast and lunch programs.
• Student Activity Fund- This is a new fund this year that will account for the money at the individual schools. In the past we have always issued a separate audited financialreport for schools, however, new accounting rules will require that we include this fund in with all the other funds in our School Division Financial Statements.

Replacement Schedules

Each of theseschedulesdirectly relate to one of the funds mentioned above. Thereplacement schedule lays outanticipatedbuilding and/or equipment replacement costs in order to methodicallyplan for futurefunding. This allows the School Division to prudently set aside steady funds to pay for the replacements needs, rather than face large fluctuations yearly.

• Fleet Replacement Plan- A 15-year plan addressing the need to replace school buses and other vehicles on a useful life schedule. This will ensure the fleet does not age to a point where the cost to maintain the fleet exceeds the replacement cost of the fleet vehicles.
• Technology Replacement Plan- A6-year plan addressing the need to continually replace technology infrastructure and equipment that require a significant amount of resources. This will help avoidcostlyservice outages and keep the School Division up to date with technology needs.
• Capital Improvement Plan (CIP)- A planning tool used to identify funding and allocate resources for large ongoing capital needs exclusive of large routine maintenance needs. Projects on the CIP are typically greater than $500,000 in value and may be funded by cash or by the sale of bonds.
• Capital Maintenance Plan (CMP)-A10-year plan for preventative maintenance projects to maintain the condition and longevity of school-owned buildings. This will ensure we keep the buildings in good shape for a longer life.

County Revenue

After the initial budget estimates, the County expects to provide an additional $1.9 million to the schools through the revenue sharing agreement. The revenue sharing agreement is a very complex formula used to calculate School Funding. This was discussed in detail induring theJanuary 10, 2020 work session, and the presentation has a breakdown of the current year's formula.

Next Budget Work Session: February 4, 2020CompensationStudy Results

Happy Friday!

The first work session discussing the 2020-2021 Annual Budget was Tuesday January 7, 2020 and we discussed student enrollment, the Governor's Budget, and preliminary expenditure items.

Student Enrollment

Projecting student enrollment is important because most of the state revenue is based on our March 31 ADM. If we estimate ADM too low, we end up receiving extra money that could have been used in a purposeful and meaningful manner. However, if we estimate ADM too high, we cannot pay for the expenditures we planned and may need to freeze spending before the end of the year. The 2019-2020 budgeted ADM was 13,610 and as of December the year-to-date ADM was 13,590. Based on applying grade progression to the current enrollment, staff recommended, and the School Board approved adopting an ADM of 13,483 for 2020-2021 budget year.

Governor's Budget

This is the first year of the Governor's biennium budget. In addition to adjusting the basic allocation, which the state calls "rebenchmarking" the Governor included several key initiatives:

• Funding for a 3% salary increase, but not until July 1, 2021. A total of a 3% increase must be provided by the school division during the 2021-2022 biennium, either in the first year or in the second year or through a combination of the two years. If a school division does this, then they will be eligible to receive funding to cover a portion of the raise in the second year of the biennium (2021-2022).
• Expansion of preschool opportunities for those who would qualify for the Virginia Preschool Initiative Program.
• Additional funding for both school counselors and English as a second language teachers to reduce the number of teachers per pupil.
• To reduce or eliminate the cost of school breakfast and lunch for students eligible for reduced price meals under the National School Lunch Program and School Breakfast Program.

The Governor's Budget is the first stepping stone of this process. Now we are in a waiting game until crossover, when the House of Delegates and the Senate publish their budgets and begin to review each other’s budget. We expect that to occur in early February.

Preliminary Expenditure Items

We have begun to accumulate requests for funding. As always, we do strive to provide at least a 1-step increase for all employees, which would cost approximately$1.4 million, if this is possible. In addition, we are working through a Compensation Study to help ensure we have all positions accurately funded at competitive market rates. Another benefit increase this year is the rate change for VRS, with the increase in the employer rate for teachers from 15.68% to 16.62% and for non-professionals from 1.92% to 2.09%. We estimate this will cost approximately $1 million. A full list of items accumulated to date is included in the work session presentation on the website.

Next Budget Work Session:January 23, 2020Other Funds and Replacement Schedules

(Note this meeting is rescheduled from Janauary 21, 2020)

Happy New Year!

Believe it or not, it is time to start planning for2020-2021 school year budget. I will continue to use the Budget Blog as a means of sharing information as we move through this process. I hope you find the blog to be informative, factual, timely, and a reliable source to learn about the annual school budget, which impacts all our employeesand programs offered to students. We value your feedback and encourage you to contact the Finance Department when you have questions or would like for us to consider addressing a specific budget topic in a future blog update.

Iwould like tobeginwitha very high-level Budget 101 introduction to the process. For many of you this will sound familiar, however, for those of you who arenew to our school division this may be a new process.

Budgeting 101: An Introduction to Roanoke County Public Schools' Budgeting Process

School Board Policy 4.02 Annual Budget

Budget Cycle

The budget cycle is divided into a five-step process that includes planning, preparation, adoption, implementation, and evaluation.

1. Planning- During the planning phase the budget calendar is prepared and adopted. The budget calendar provides the roadmap for when the myriad pieces of the budget will be reviewed with the School Board and stakeholders.
2. Preparation-Preparation of the school budget includes input from each school, employees at all management levels, and other stakeholder committees.There is one public hearing and several work sessions involving the superintendent, School Board, and budget committees.
3. Adoption- The final budget must be approved by the School Board and submitted to the Board of Supervisors of the County of Roanoke by April 1, 2020. During May 2020 theBoard of Supervisors of the County of Roanoke will adopt both the School Board and County budgets into law via several ordinances.
4. Implementation- The budgeted funds will be available on July 1, 2020 for spending byDepartment heads. Monthly summary financial reports are provided to the School Board via BoardDocs / Consent Agenda / Financial Reports.
5. Evaluation- The Finance Department reports the Annual Budget in a self-contained publication. This publication is submitted toThe Association of School Business Officials International (ASBO) for consideration of the Meritorious Budget Award (MBA). This awardis only conferred upon school systems that have met or exceeded the standards of the program which promote excellence in school budget presentation. The School Division received the MBA Award for the 14th consecutive year for its 2019-2020 Annual Budget. In addition, the results of operation for the fiscal year are reported annually in the School Board’s Comprehensive Annual Financial Report (CAFR), which is audited by a certified public accounting firm.

Common Terms

• Biennium- A period of two years. The Commonwealth of Virginia adopts a budget that covers a two-year period.
• Budget– A financial plan for a given period, usually a fiscal year, containing an estimate of proposed expenditures and a proposed means of financing them.
• Budget Calendar– A schedule of activities, responsibilities, and deadlines related to budget development and adoption.
• Capital Improvement Plan (CIP)– Planning tool used to identify funding and allocate resources for large ongoing capital needs exclusive of large routine maintenance needs. Projects on the CIP are typically greater than $500,000 in value and may be funded by cash or by the sale of bonds.
• Capital Improvement Program– Entire program encompassing all four of the planning tools used to fund and allocate future resources for the following plans: Capital Improvement Plan, Capital Maintenance Plan, Technology Replacement Plan, and Fleet Replacement Plan.
• Expenditure– The cost of goods received or services rendered whether payment for such goods and services has been made or not.
• Fund– An independent accounting entity with a self-balancing set of accounts, which are segregated for the purpose of carrying on specific activities in accordance with special regulations, restrictions, or limitations. This is also one of the required financial dimensions in the chart of accounts. The main operating fund is called the General Fund.
• Local Composite Index (LCI)– The relative wealth index used by the State to equalize state aid to localities.
• Revenue– A term used to represent income to a specific fund.

Components

In the current year's General Fund budget, revenue is mainly derived from the Commonwealth of Virginia (56.7%) and County of Roanoke (42.4%).

In the current year's General Fund budget, 83.3% of expenditureswere forpayroll and benefits. Annually weconsiderthese components of payroll and benefits:

• Progression along the pay scales
• Adjustments to the pay scales
• VRS contribution rates
• Health insurance plans
• Dental insurance plans
• Vision insurance plans
• Staffing needs
• Retiree program and costs

Other non-payroll expenditure requests include departmental needs to fund instructional resources and programs, technology, specific student accommodations, facility maintenance, transportation, construction, nutrition, and overall business operations.

So, as you can see there is a lot to review and consider as we have limited funds and want to strive to ensure each student, in each school, in each classroom receives the same high level of education experience.

2020-2021 Budget: First Glance

Calendar

The budget calendar was adopted by the School Board at the December 12, 2019 School Board meeting. You are invited and encouraged to attend any of these meetings to learn more about the budget process.Here is a quick summary of the next three months:

Governor's Budget

This is the first year of the biennium and a long work session for the General Assembly.

Last monththe Governor released his budget proposal. Thereare some items that appear favorable to school divisions in the Commonwealth. One item isa 3% raise for teachers, funding for which is planned for the second year of the biennium (our 2021-2022 budget year).

We will provide a full review of the details of the Governor's budget at the January 7 School Board Work Session.