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Date: April 19, 2011 <br />To: Bernadette Pelissier, Chair of the Board of Orange County Commissioners <br />Frank Clifton, Orange County Manager <br />From: Jamezetta. Bedford, Chair of the Chapel Hill - Carrboro City Schools Board <br />Neil Pedersen, Superintendent Chapel Hill - Carrboro City Schools <br />Re: CHCCS Board of Education's Budget Request <br />We are looking forward to presenting an overview of the Board of Education's budget request on <br />April 26, 2011. We know that the fiscal realities of recent times continue to create' difficulties <br />and hamper your abilities to fund all the needed services of the residents of Orange County. We <br />are also appreciative of the great support that we have received for education, especially in light <br />of the economic downturn. <br />As you know, for the past two years our budget challenges were cushioned by additional federal <br />stabilization and stimulus funds. Unfortunately this funding was only provided through the end <br />of fiscal year 2010 -2011 and this will result in the loss of $4.6 million in federal dollars next <br />year. In addition, despite the availability of this federal funding, over the past five years we have <br />still reduced $5 million in expenses from our operating budget in order to fund mandated fixed <br />cost increases or priorities to meet new needs: <br />Fortunately, we have been taking actions to help buffer the loss of federal funding. As we have <br />reported to you, through conservative spending efforts, sound financial practices, and after the <br />receipt of $2.3 million in EduJobs funds from the federal government, we estimate that by the <br />end of the 2010 -11 fiscal year, the district will have $6 million in unappropriated fund balance. <br />As part of our budget strategy for 2011 -12 and perhaps future budget years, we plan to utilize <br />significant amounts of fund balance to support our local budget until the economy improves. <br />At the state level, the Governor has presented her budget. We also have received a proposed <br />House budget from the North Carolina General Assembly. Each proposed budget significantly <br />reduces state funding to the district and will greatly affect how we do business next year. There <br />are many significant differences between the two proposed budgets and due to these differences <br />and uncertainties, it is extremely difficult to develop a local budget request that will take the <br />impact of the state budget into consideration. Consequently, the local budget request that we <br />have submitted reflects federal reductions that we already know about, increased costs to <br />maintain current service levels, reductions that we recommend making in our local budget at this <br />