PUBLIC INFORMATION - SCHOOL BOARD Community Update on the School Divisions Budget Process for FY 2014-2015; City Council Must Approve Budget By May 15 As Virginia Beach City Public Schools (VBCPS) moves forward in the budget development process for FY 2014-15, the division keeps stakeholders and the public updated along the way. As a reminder, the process continues through mid-May, concluding after City Council approves a municipal budget that includes an expenditure plan for public schools. The division publicly discloses School Board discussions and decisions as well as pertinent funding issues that may arise in coming weeks at the City Council and Virginia General Assembly levels. Feb. 27, 2014: The School Board held a budget workshop Tuesday, Feb. 25. Following is a brief summary of that meeting: On Compensation •Chief Financial Officer Farrell Hanzaker noted that city revenue projections indicate the school system will receive an additional $7.2 million through the city-schools revenue sharing policy. These additional funds are the result of a projected increase in tax collections. •Mr. Hanzaker recommended that the additional monies be allocated toward improving the 1.34 percent employee salary increase that was originally recommended in the Superintendent’s Estimate of Needs. Specifically, he recommended that all eligible employees receive a 2.79 percent salary increase (which includes the original 1.34 percent proposed). As a reminder, 1 percent of the 1.34 percent recommendation would be allocated toward the employees’ share of the required contribution to the Virginia Retirement System (VRS). This is the third year in which employees are required to pay an additional 1 percent of their base salaries into VRS. The state has required that employees pay 5 percent of their base salaries into VRS by the 2016-17 fiscal year. Virginia Beach City Public Schools has been phasing in that requirement at the level of an additional 1 percent per year. •In other compensation news, Hanzaker informed the board he had set aside almost $900,000 to be applied toward making equity adjustments on the unified scale. This money will help address adjustments for approximately 1,699 of the 4,807 employees on this scale. An equity adjustment represents the monetary difference (increase in pay) needed to correct a pay disparity between employees on the same grade with the same comparable years of experience. •The School Board and administration also agreed to set aside $197,000 to institute a reclassification of school bus drivers, moving them up from a grade 8 on the scale to a grade 9. On Project X-CD The School Board spent considerable time discussing the possible sunset of Project X-CD. This program has an annual cost of about $1.6 million. At a previous School Board workshop, Board members had posed some additional questions about the possible sunset and subsequent reallocation. In response, Assistant Superintendent for Planning, Innovation and Accountability Dr. Donald Robertson presented a brief summary of academic performance results for Project X-CD. Among his points were: •The results for the Project X-CD students were compared with the results of a matched group of non-Project X-CD students who had similar academic histories •A total of 28 comparisons were made on course performance, SOL test performance and SRI performance in middle school. •Fifty percent of those comparisons indicated the Project X-CD students performed better than those not in the program. •When looking only at the standardized assessments in middle school such as the SOL and SRI assessments, 31 percent of the comparisons favored Project X-CD students, whereas the students not in the program outperformed Project X-CD students in 69 percent of those comparisons •In looking at high school data, higher percentages of non-Project X-CD students enrolled in honors English. Further, there was also evidence that non-Project X-CD students were more likely to be enrolled in more advanced math course sequences. •Based on 37 specific comparisons of high school performance levels, the Project X-CD grade 9 students performed better than the comparison group 52 percent of the time. At grade 10, 50 percent of the comparisons favored Project X-CD students. Overall, across both grades, 51 percent of the comparisons favored Project X-CD students. Dr. Robertson noted in his presentation that administration would have expected Project X-CD students to perform better on a higher percentage of comparisons if the program were having a systematic effect on student outcomes. In addition, Executive Director for Differentiated Academic Programs and Professional Learning Dr. Veleka Gatling noted that the current budget proposal recommends reallocating those funds from three Project X-CD middle schools (Plaza, Corporate Landing and Larkspur) in a broader manner. New strategies would include implementing AVID at Corporate Landing Middle, Larkspur Middle and a school yet to be named (Plaza has an AVID program); adding a .5 reading teacher to each middle school (except Kemps Landing Magnet and Renaissance Academy); providing literacy professional development for 21 middle school reading teachers; providing a pool of substitute days for collaboration and professional development centered around math and literacy; adding one full-time math coach creating full-time positions at all three X-CD schools; providing a summer reading program for rising first and second grade students at 12 non-Title I schools; and providing professional development for 300 K-2 classroom teachers in research-based instructional strategies for effectively teaching struggling readers. In Other Action: The School Board agreed to earmark an additional $1.9 million to help lower the cost of employee healthcare. In actuality, the total additional cost of the health care subsidy for employees will be $3.8 million on a full year basis. It was noted the School Board and City Council will participate in a joint discussion on new health care recommendations March 4. The School Board is also scheduled to adopt the 2014-15 operating budget and capital improvement program budget that same day. City Council will vote on a municipal budget, which will include a schools’ expenditure plan, on or before May 15. Feb. 21, 2014: School Board continues to deliberate on FY 2014-15 proposed operating budget; also discusses new health care options The School Board, in both its Feb. 11 and Feb. 18 budget workshops, discussed alternate approaches to health care recommendations for the 2015 plan year. As a reminder, recommendations were originally presented to the School Board and City Council in December 2013 and details were outlined for employees and participating retirees in a Jan. 9 Benefits e-Bulletin. Employees may want to revisit this information as a basis of comparison with the new options. In the ensuing months, the School Board and City Council have received considerable feedback from individuals and employee groups. As a result of that feedback, the Benefits Executive Committee (BEC), which shaped the original recommendations, was asked to develop options that would help mitigate the financial impact on employees. Chief Financial Officer Farrell Hanzaker, who chairs the BEC, and Director of Consolidated Benefits Linda Matkins made a presentation in the Feb. 11 workshop. While both cautioned that specific details will need to be resolved, highlights of possible changes were shared. These included: •Lower deductibles in two of the three plans. For the PPO Plus Plan and the PPO plan, the new deductibles would be $1,000 (individual)/$2,000 (family) and $1,500 (individual)/$3,000 (family), respectively. In comparison the original recommendations were $1,500/$3,000 and $3,000/$6,000. The POS plan would remain as recommended: $500/$1,500. •Lower out-of-pocket maximum amounts. The highest amount an individual subscriber would pay under the new plan would be $3,500 or $7,000 on the family plan. The previous recommendation had set those limits at $5,000 per individual and $10,000 per family. •Lower monthly premiums in two of the three plans. Employees can access a chart on these estimated monthly rates here. However, please note that these rates have not been finalized and are subject to some change. •The $750 additional cost for not participating in Wellness for Life is recommended to be lowered to $500. •Effective Jan. 1. 2015, spouses would not be allowed to enroll in the school system’s health plan if they have access to group insurance through their employers.•The recommendation to increase the years of service required to 30 for eligibility for health care in retirement was revisited. Twenty-five years would continue to be the benchmark for providing employees with eligibility and a school system contribution to the retiree health plan. •New employees hired on or after July 1, 2014 would not be eligible for a school system contribution toward their health care upon retirement. Employees hired on or after July 1, 2014 with at least 15 years of service may stay on the school system’s health plan upon retirement but would be required to pay 100 percent of the cost of the premiums. •All plans will cover chiropractic, hearing aids and routine eye care. •None of the plans will cover acupuncture, cosmetic surgery, non-emergencies outside the U.S., private duty nursing, infertility treatments, bariatric surgery or child dependent obstetrics (dental and long-term care available through separate plans) What is the next step? When will employees know what changes are going to take place on health care plans? Recommendations will be formally presented to City Council and the School Board during a joint meeting scheduled for March 4. From there, a more definitive time line for implementation will be determined and communicated. In other budget workshop action: Chief Human Resources Officer John Mirra gave an update on compensation issues. He outlined how the 1.34 percent recommended salary increase would affect the instructional pay scale and the unified pays scale. He noted that the entry level salary for teachers would increase .67 percent to $40,624 while other experience steps would increase 1.34 percent (based on current funding). For example, this would add another experience step to the instructional salary scale, making the top of the salary scale $69,835.The recommended FY 2014-15 budget sets aside $900,000 for experience-based equity adjustments for the unified scale. Mirra said that 1,706 employees have been identified as eligible. He also noted it would take $7 million to complete an equity adjustment of the entire scale. The School Board also received a proposal that would reallocate $1.6 million in Project X-Cd funds that are currently targeted for three middle schools (Corporate Landing Middle, Larkspur Middle and Plaza) in a broader manner. Recommended programmatic changes include:•Allocating $386,766 toward the implementation of AVID at Corporate Landing Middle, Larkspur Middle and a third school yet to be named (Plaza is already implementing AVID) •Adding a .5 reading teacher to each middle school (excluding Kemps Landing Magnet and Renaissance Academy); estimated cost, $503,524 •Providing literacy professional development for 21 middle school reading teachers through the University of Virginia’s Struggling Readers Academy; estimated cost, $21,000 •Providing a pool of substitute days for collaboration and professional development centered around math and literacy; estimated cost, $16,778 •Adding one full-time math coach position for the three current Project X-CD schools; estimated cost, $72,000 •Provide a summer reading program for rising first and second grade students at 12 non-Title 1 schools; estimated cost, $300,000 •Providing professional development for 300 K-2 classroom teachersin research-based instructional strategies for effectively teaching struggling readers; estimated cost, $300,000 Feb. 6, 2014: School Board to begin considering proposed operating and capital budgets At the Tuesday, Feb. 4 School Board meeting, Superintendent Sheila Magula and Chief Financial Officer Farrell Hanzaker presented the proposed operating budget for 2014-15 known as the Superintendent’s Estimate of Needs (SEON). Below is an overview of that proposal: About the Proposed 2014-15 Operating Budget The proposal stands at $697.8 million, which is $12.9 million more than the current operating budget. However, this additional funding will be needed to address higher Virginia Retirement System (VRS) costs and health care costs as well as increased personnel costs. These increased personnel costs are associated with adding positions to cover increases in student enrollment and increased building square footage. •To ensure adequate funding in this budget proposal, the superintendent recommended the transfer of $16 million from the special school reserve fund and $2 million from the Sandbridge TIF into the operating budget. •The VRS increase is projected at $6 million and the health care plan increase is projected at $1.3 million. •The proposal recommends a 1.34 percent salary increase for all eligible employees. This increase will help offset the additional 1 percent VRS contribution employees must pay next year. As a reminder, the state mandated three years ago that school divisions and municipalities begin requiring employees to contribute 5 percent of their base salaries into VRS. However, the state allowed localities and school systems to choose their implementation methodology for employees. They could either require the 5 percent contribution in one year or address it through a phased approach. The school system has been phasing this requirement in at 1 percent annually, until the contribution reaches the required 5 percent in fiscal year 2016-17. •The gross cost of the 1.34 percent employee raise to the school system is more than $6.5 million. However, the school system’s net cost for this raise is reduced by $4.3 million. This reduction in cost is possible because employees must pay another 1 percent into VRS next fiscal year. In addition, $900,000 is being set aside to address equity issues on the unified pay scale. •Cuts recommended to address projected expenditures include: Allowing Project X-CD to sunset, thus saving $1.6 million, and trimming the baseline budget by $9 million. Adjustments to that baseline were made by recouping savings from turnover and the subsequent hiring of personnel who, for the most part, have salaries that are lower than the individuals they are replacing. •Dr. Magula noted progress will be maintained by strategic replacement of monies within resources. For example, $1 million has been set aside to provide a pool of funds for all middle schools to address the needs of students who are struggling with literacy. One important aspect of that plan will be to provide 13 schools with a .5 reading specialist (excluding Kemps Landing Magnet and Renaissance Academy). This funding will allow an expansion of literacy strategies beyond the current three Project X-CD schools. •The budget proposal also allocates $600,000 for two other literacy programs at the elementary level. Three hundred kindergarten through second grade teachers are recommended to receive extensive professional development in instructional strategies for meeting the needs of struggling readers. In addition, a summer reading program would be developed to serve the 12 neediest, non-Title I schools. •Dr. Magula noted the city’s time line for submission of the SEON means that the proposal is due prior to the state’s determination of the revenues schools will receive next fiscal year. In addition, the City of Virginia Beach will not have finalized revenues due to the school system under the revenue-sharing agreement. Consequently, there is a possibility that more funding may become available than what is being addressed in the SEON now. •Dr. Magula told the board there were a number of important projects or initiatives that could not be accommodated in the 2014-15 proposal. These run the gamut from major infrastructure replacements to class size reduction efforts. About the Proposed 2014-15 Capital Improvement Budget Mr. Hanzaker presented details of the proposed six-year Capital Improvement Program (CIP) to the School Board. Below are highlights of that presentation: •The CIP has one project under design – a consolidated Old Donation Center/Kemps Landing Magnet. •The proposed modernization of John B. Dey Elementary School has been delayed from a 2018 completion to 2019. This school was originally proposed for a modernization that would have accommodated a 2016 opening. •Thoroughgood Elementary School also has been delayed from 2017 to 2020. •Full funding for Princess Anne High School has been delayed beyond the six-year CIP. •The school system approaches its modernizations in the framework of a Long-Range Facilities Master Plan that was adopted by the School Board in 2007. Phase I of the plan addressed nine schools. Projects completed/started to date in that first phase are: College Park Elementary School, Kellam High School and Old Donation Center/Kemps Landing Magnet School. •The proposed six-year CIP is $316 million, which is less than half of the approved $635 million total five years ago. •The proposed CIP for 2014-15 is $35 million. This proposal marks the fifth consecutive year the school system has not had the benefit of state capital funding. In addition, it has been unable to provide PAYGO funds for the CIP. PAYGO funds are monies that are transferred into the CIP from the School Board Approved Operating Budget. Schedule for Adoption of These Budgets The School Board must adopt operating and capital budgets by March 4 and submit them to City Council. City Council will approve a final municipal spending plan, which includes funding for schools, no later than May 15. (Information courtesy of VBCPS.)
Posted on: Tue, 04 Mar 2014 12:33:27 +0000
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