Agenda Attachment B - Chapel Hill - Carrboro City Schools Board of Education FY2019-20 Operating Budget Request and CIP

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6 CHCCS Superintendent’s Budget Request 2019-2020 State Funds Revenues The state of North Carolina is in the first year of the next biennium budget cycle. We have no concrete data at this time; however, we do anticipate continued work towards increasing teacher pay towards the state goal to be the top in the Southeast region over the next several years. Currently we have included a projected average increase is 5% (last year teacher average increase was 6.5%). The state also continues to have real shortfalls in funds available for retirement and hospitalization. We are using the projected rates based on recent history that reflect an increase to the employer’s portion for hospitalization to increase by 4% to $6,354 ($250) per employee and the retirement rate to increase to 19.34%, which is also a 1.5% increase from 18.86% this year. These benefit increases will impact our purchasing power in our federal grant funds, child nutrition services, community schools and local funds. 93% of our State funds are used for personnel costs. The remainder is used for classroom supplies and materials, transportation and other supporting services. With state revenues being the primary support for staffing, the district will be paying close attention to any legislative changes that could impact our staffing and service delivery in order to compensate for potential loss of state fund revenue. Our school staffing is based on formulas to ensure fair and equitable distribution of staff and support across all our schools and we will be focused on the alignment of those staffing resources with our strategic plan and goals while providing some flexibility for schools to create the individual environments required that will best meet our students needs and help them achieve success. Local Funds Revenues– FY 2019-20 We continue to evaluate all aspects of district operations as we align resources to ensure we continue to provide the students we serve with the best possible instructional programming possible. As you are aware, the district offers a wide variety of opportunities for our students and parents from dual- language programming, fine arts opportunities, rigorous academic coursework aimed to challenge and engage all students. The funding requested will enable the district to continue its mission and investment in the future of our students. In addition our work in aligning our resources with our strategic plan will help solidify the investment of resources towards continued improvement of our equity efforts and instructional programs. This budget request reflects our needs and the funding we feel are necessary to continuing our existing instructional operations and success. We are fully committed to our partnership with Orange County Living Wage to create a more just and sustainable local economy. As a Living Wage Certified Employer, we are required to certify eligibility every two years. Our most recent certification is valid through January 4, 2020. The hourly rate in place at the year of certification applies for two consecutive years. Although the Orange County Living Wage annual living wage increase for re- certification in 2020 has not yet been determined; the living wage for 2019 is $14.25, or $12.75 with employer-provided health insurance. After a thoughtful analysis of our current wages and other employer compensation, we are confident that the proposed three-percent increase for classified and other staff contained in our continuation funding request will be adequate for our re-certification. In addition to the county appropriation, Chapel Hill-Carrboro City Public Schools will receive approximately $882 thousand from several other sources such as Fines & Forfeitures, tax revenues (sales & ABC), indirect cost and miscellaneous. We are also proposing that the Board allocate $1.5 million of fund balance so as to decrease the balance currently maintained to be closer to the target requested by the county commissioners. It should be noted however that the use of those funds would leave the district with only 1 month operating cash should any emergencies arise. Given recent events