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CHAPEL HILL - CARRBORO CITY SCHOOLS Lincoln Center, Merritt Mill Road Chapel Hill, North Carolina 27516 Telephone: (919) 967 -8211 Neil G. Pedersen Ann Hart, Assistant Superintendent Superintendent For Instructional Services Chester Preyar, Assistant Superintendent For Support Services TO: Board of Education FROM: Neil G. Pedersen Superintendent RE: Recommended Operating and Capital Budgets for 1999 -2000 DATE: June 30, 1999 I am enclosing revenue and expense summary sheets for the 1999 -2000 operating and capital budgets. The operating budget has been reduced by $660,325 from the Board of Education's original request to the County Commissioners and projected revenues, excluding the county appropriation and district tax, have been increased by $270,000. These recommended revisions make up for the $930,3.'.5 shortfall in the Manager's Recommended Budget that the County Commissioners approved. The capital budget summary is identical to what was requested of the County Commissioners. The remainder of this memorandum pertains to the operating budget only. Increases in Revenues Incorporate projected sales tax reimbursements The original budget request did not include a line item for sales tax reimbursement. This is the first year that school districts are eligible for these reimbursements and we were uncertain about how to reflect this item in our budget. The Manager clarified that reimbursements that we can claim for the 1998 -99 year should be shown as revenue in the 1999 -2000 budget. We estimate that we will receive $70,000 in sales tax reimbursement. Appropriate a total of $500,000 from fund balance In our original request, we recommended that $300,000 be appropriated from fund balance. The Manager and County Commissioners have encouraged us to appropriate more fund balance to fund recurring expenses such as the lifting of the salary cap on experienced teachers. We are recommending that an additional $200,000 be appropriated from fund balance, bringing the total to $500,000. Although this will leave us with a fund balance of less than 5.5 %, the guideline cited in your policy, our fund balance should still exceed $1,000,000. This does not cause us an immediate problem. It must be emphasized, however, that we cannot be assured that next year a similar amount will be available to appropriate from fund balance. If this is the case, additional funding will be required from the County Commissioners because we are using fund balance to finance continuing expenses.