Agenda - 04-26-2012 - Attachment 1

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Chapel Hill-Carrboro City Schools 2012-13 Budget Message Over the past few years,the district has faced a lot of budget uncertainty. A variety of strategies have been used to mitigate the reductions in funding at the federal, state, and local levels. We have also been compensating for millions of dollars in mandated medical and retirement cost increases. These strategies have included maximizing the amount of federal recovery and stimulus funding,utilizing state funding strategically, and making significant reductions to our operating budget at the state and local levels. Over the past few years,we have made reductions to our state and local budgets in excess of $7.6 million. These reductions have touched all aspects of how we do business including the loss of central office positions and resources,teacher and teacher assistant positions, as well as non-personnel reductions; including reductions to supplies, equipment, and athletics. To avoid even more drastic reductions,the Board authorized the use of an additional$2.6 million in fund balance for this year; otherwise an equivalent amount of additional reductions would have been necessary. Our strategy for the development of the 2012-13 budget was aimed at trying to stabilize our budget moving forward, plan for the anticipated increases in retirement and medical insurance premiums,plan for the increase in the state discretionary reduction,build our budget around the priorities of the school district(including the reallocation of resources/positions and the professional development needs to implement the Common Core/State Essential Standards), and to consider providing additional compensation to staff who have not received a pay increase of any kind over the past three years. In February, the Board identified priorities for 2012-13. Included in these priorities are the continued implementation of the Common Core and State Essential Standards, a continued focus on literacy, and additional focus on improving instruction. To meet these priorities will require a significant investment in the professional development of our staff. It requires us to look at our existing structures, staff, and resources to make adjustments to how we do business. Over the next few months, district and school administration will be reviewing and finalizing our professional development plan. We will be reviewing the supports that exist in our buildings and may recommend repurposing or reallocating.existing positions and staff to best meet our needs. As suggested by the Board,we will begin to look at how our teacher supplement funding could be better utilized to ensure we have highly effective teachers in every classroom. Local Revenues and Expenditure Changes The local budget will require revenues totaling $63.6 million. The Board's Requested Budget is based on the district receiving a$67 per pupil appropriation increase. The State has projected a total student enrollment of 12,129 students for 2012-13. This projection is 411 students above the 2011-12 projection of 11,718 students. Unknown at this time is whether a newly approved charter school will affect student enrollment growth and revenue projections for next year. 1