Agenda - 05-19-20; 8-a - Minutes

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26 1 economic climate and the excepted downturn, some of these costs will remain like the increase 2 in matching employer benefit costs, salary increase for Orange County's Living Wage Rate, and 3 operational costs. 4 5 Total Continuation Requests: 6 Certified Salary & Benefits $2,563,960 7 Classified Salary & Benefits $844,040 8 Operational Costs $78,000 9 10 Benefit Increases 11 The Board of Education recommended budget includes amounts for anticipated State salary 12 increases for teachers and other public-school employees, as well as increases to costs related 13 to matching employer benefits, such as Social Security and Medicare, State retirement 14 employer, and health insurance premiums. 15 16 There will be an increase in the employer State retirement matching from 19.70% to 21.44% 17 (based on guidance from NCDPI). The 1.74% increase must be applied to all covered local 18 operating fund employees; therefore, the incurred cost will be about $905,000. Furthermore, 19 there will be a 5.4% increase to the employer-paid health insurance premium, increasing it from 20 $6,306 to $6,647. This will incur a cost of$279,500 for all locally funded employees participating 21 in the State Health Plan. 22 23 Potential State Salary Increases 24 We have collaborated with peers from surrounding districts to gain the best estimates of the 25 budget drivers in this request. We anticipate a 5% increase in certified staff and a 2% increase 26 in classified salaries. An increase in salary results in increased locally paid supplement costs. 27 Due to the salary increases, the employer matching Social Security, Medicare, and retirement 28 associated costs increases. The anticipated impact is provided in the table below. 29 30 We realize any pay increases could be subject to change based on COVID-19 and the 31 economic implications for the 2020-2021 school year. 32 33 Orange County's Living Wage Rate 34 Additionally, we have included $230,000 to fund increases in salaries currently below Orange 35 County's Living Wage Rate updated rate. This additional request will ensure all District 36 employees will comply with the updated Orange County Living Wage Rate of$14.90. 37 38 In total, between the salary increases, the resulting increases to matching employer benefit 39 costs, and state-mandated increases in the retirement rate and health insurance premiums, and 40 cost to move employees currently earning less than $14.90 to the updated Orange County's 41 Living Wage Rate, is estimated to be about $3.638 million. 42 43 Operational Costs 44 The Board of Education recommended budget also includes costs for the additional square 45 footage that will be added to Chapel Hill High School once the new building is operational. The 46 additional square footage added will be 23,967 ft2, for a total building space of 278,508 ft2. 47 48 Facility upkeep for the old CHHS buildings was approximately $1.77/ft2. We anticipate a similar 49 cost for the new facility. Utility costs for CHHS average $1.43/ft2. We anticipate a similar utility 50 cost for the new facility. The total increased operational costs incurred from the additional 51 square footage equals $78,000.