The Times
July 3, 2022
0005322154 May 24, 2022 CPSB Budget Work Session Members Present: Jasmine Green, Dr. Terence Vinson, Don Little, Mary Trammel, Barry Rachal, Tony Nations, and John Albritton. Also present were Dr. T. Lamar Goree and Reginald Abrams, legal counsel. President Nations called the CPSB Budget Work Session to order at approximately 2:00 p.m., and he led the Invocation and the Pledge of Allegiance. VISITORS None 2022-2023 CPSB BUDGET DISCUSSION Superintendent Goree announced that today is the first of several budget work sessions to approve a budget for the 2022-2023 school year. Chief Financial Officer Jeff Howard discussed an overview of the 2022-2023 budget timeline. The second budget work session is tentatively scheduled for June 7, 2022, followed by other work sessions the Board deems necessary. The proposed budget would be available to the public on June 1, 2022, as well as published in the official journal. He added the Public Hearing on the proposed budget would be held on June 21, at the CPSB Board Meeting, followed by the vote to adopt the 2022-2023 Consolidated Annual Budget by the Caddo Parish School Board. Mr. Howard reported there is no anticipated growth in ad valorem tax revenue (property taxes), and we have budgeted those flat. He stated the millage has remained the same and will next year, and the sales tax projection is flat. He also announced the MFP amount we receive from the state is expected to decline again because of the decline in student enrollment. He reminded the board until school begins in August/ September we would not know the final number, but staff budgeted for a 1200 student decline. Mr. Howard added over the last two years we have had a 1300 and 1400 student enrollment decline. He gave a summary of the General Fund and an estimated ending undesignated fund balance of $57 million. Mr. Howard reminded the Board when the ESSER Funds are gone in two years there will be $25 million to be made up either by deleting the expenditures or increasing the revenue which is difficult to do in a local government body. Mr. Howard explained the ESSER Fund priorities were: recapturing lost learning, accelerating learning, mitigation efforts, and improving facilities. He stated through the Accelerate Caddo Program (summer programs, grade recovery, additional instructional days in 22-23 school year, data-driven professional development, science of reading professional development, access to technology, resources, and in-person learning for all PreK-8 students), addressing the whole child (expansion of school-based health clinics, additional funding for diverse learners, top-rated curriculum and materials), and teacher quality/effectiveness (incentives to recruit, retain, recognize efforts) we are recapturing lost learning with the use of ESSER Funds. The mitigation efforts included preventative maintenance, additional bottle fillers at schools, and custodial supplies. With the use of ESSER Funds, we have increased air quality in our facilities with preventative maintenance on HVAC systems and HVAC upgrades for facilities that would not be funded through current bond funds. Dr. Goree stated now is the appropriate time to ask questions. Mr. Little asked about the possibility of an external third party evaluating the entire system and making recommendations on what schools should remain open, what schools serve the best interest of the community, or what schools are a liability. Dr. Goree said we will have a presentation in June from a demographic group we have selected to look at the demographic trends and where they see those as we move toward the future. He added staff would work under the direction of the board to assess which schools could and could not go offline. Mr. Albritton asked how are the funds differentiated from expenses funded by ESSER money vs ongoing expenses. Mr. Howard reinforced any expenses funded by ESSER must be approved by the state, and some expenses were moved from the General Fund to ESSER Fund as they met the guidelines. Mr. Nations asked when would the MFP be calculated. Mr. Howard said the MFP calculation would be the October 1 student count and recalculated on February 1 based on the student count. Mr. Rachal stated he was leery when the budget was balanced this past year with ESSER Funds and the potential amount for this year, with only a $4,000 to $5,000 balance in the General Fund. He said we must set the stage now, especially with the 50 additional math teachers, since the ESSER funds would be gone in approximately two years. Mr. Rachal asked how much of the $17.9M would be reoccurring. Mr. Howard noted all would be reoccurring, but obviously, not all would be moved back to the General Fund. He added we have some work to do. Mr. Rachal clarified all $17.9M is reoccurring, and we have 50 math teachers included which is not reoccurring because we did not have them before ESSER funds. Mr. Howard indicated the 50 math teachers would be reoccurring if we kept them. Mr. Rachal asked how much of the $17.9M was in the budget two years ago, before ESSER funds. Mr. Howard stated he could get that information. Mr. Howard noted in two years the budget situation would be unknown; therefore, we cannot say what would be kept based on current knowledge. Mr. Rachal asked what was the projected date for the $57,302.97 ending undesignated fund balance. Mr. Howard said the projection was as of June 30, 2023. Mr. Rachal asked about the current balance of the undesignated fund balance. Mr. Howard stated $44.86M. Mr. Rachal asked if we have a $12M projected increase in the undesignated fund balance, with the budget presented, that would take care of a big part of the $17.9M. Mr. Howard explained we are required by the state to include a column in our budget reflective of an estimate of this year even though the year has not ended; therefore, this estimate would indicate a $12.4M surplus which would increase the fund balance. He added that the fund balance is being carried over to the end of next year. Mr. Rachal noted that Standard and Poor's rating letter stated we needed to improve on projections. Mr. Howard stated the letter read we need to increase our fund balance, and Mr. Rachal disagreed. Mr. Rachal asked Mr. Howard if the $57.3M was his projection for the ending undesignated fund balance because the Board would need that information to make budget decisions for the next year. Mr. Howard stated that was his best estimate as of right now because we have two months of sales tax revenue to receive and we are currently receiving property taxes for the year; therefore, this is the best estimate. Mr. Howard explained there could be plus/minus variances depending on when the revenue comes in at the end of the year. Mr. Rachal asked if major cuts were in the future. Dr. Goree stated if we continue to lose population, without new funding sources, we would possibly have to make hard decisions. Mr. Rachal asked for an explanation of the disbursement of state pay raises. Mr. Howard explained the state gave pay raises to both certified and classified for the past two years. He stated the first year certified employees received $1,000.00, and the second year $800.00 for a total of $1800.00. This year we gave $900.00 (1/2) in September, and the other $900.00 (1/2) was added to the holiday supplement ($500) received the Friday before Thanksgiving. According to the state, the money should be added to the salary schedule. Mr. Howard added out of the $1800.00, $1300.00 would be added to the salary schedule, and $500.00 added to the holiday supplement. The holiday supplement would now be a total of $1000.00. Mr. Rachal asked about the potential state pay raise of $1500.00 for certified employees, and Mr. Howard said if approved that money would be added to the salary schedule. Mr. Rachal asked what were the guidelines from the state regarding the funds being disbursed as a supplement. Mr. Howard said the state indicated they want the funds moved to the salary schedule, but we could add to the holiday supplement since it is guidance and not a statute. Mr. Howard reminded the board the holiday supplement was included in the salary schedule. Mr. Rachal asked could we leave the holiday supplement like it is being it is a suggestion from the state. Mr. Howard said it is a strong suggestion from the state. He added for processes and efficiency, we need to have this in the salary schedule. Dr. Goree added in several audits this had been noted, and our employees have grown to become accustomed to receiving the supplement during the holidays. He reminded the Board this is not a bonus, but part of the employee's salary. Dr. Vinson thanked Mr. Howard for the hard work. Dr. Vinson stated employees have expressed to him they would like the money upfront. He asked could we work to make that happen. Mr. Howard stated employees who return to work for the additional five days would be paid on September 2nd, which would be approximately $1600 for a certified employee. He reminded the Board that the second portion of the hero supplement would be paid on June 3rd. Dr. Vinson noted he reviewed the Standard and Poor's letter, which gave us several recommendations. Dr. Vinson asked should we move to a sustainable model now knowing big changes are forthcoming. Dr. Goree stated our largest cost is "people" and we must continue to be very strategic with our hiring. He added our next cost is the rising costs of fuel/supplies and inflation. We will need to be very fiscally conservative in those areas on our operation side. Dr. Goree said it is a reality that we must look at how many schools and how we operate facilities. At some point, as we move forward, we must look at operations and people. Dr. Vinson stated we have 58 schools with the approximate cost to operate a school being $1,000,000.00, so closing schools is not the complete answer. Dr. Goree said there were lots of factors involved with people being our greatest expense, which is 87% of our costs. Dr. Vinson asked with "choice" how would it be determined which schools would remain open. Dr. Goree said that would not be an easy task, but with sufficient information, the board would come up with recommendations. He added conversations took place earlier this year around consolidations, but that did not happen. He explained staff is working hard to come up with creative ways to continue to operate with the number of schools we have, but there is no easy answer. Dr. Goree explained the redistricting data indicated Mr. Rachal's district in Southeast Shreveport lost 5,000 people, and from the perspective of the number of students living in that community vs schools, there should be seven schools and there is one. He said we would deal with a shift in the population where we do not have schools where we need them which is a problem. Mr. Little asked if we have looked at our costs relative to other school districts. Mr. Howard stated we have in certain areas, but not as a complete system. Mr. Abrams noted every year for several years board members wanted to give a bonus to employees. He added a bonus cannot be given, so the Board voted to give an additional check from the employee's salary as a supplement the Friday before Thanksgiving. Mr. Albritton noted in the budget a 58% increase in supplies. Mr. Howard explained approximately $1M of expenses would be moved from ESSER back to the General Fund for the 2022-2023 year. Mr. Albritton said the budget showed a drop in teacher headcount by 41, and he asked what particular area was affected. Mr. Howard said approximately 30 of those positions were in high school. Mr. Albritton asked why are we adding 2 aide positions. Mr. Howard stated the positions were bilingual aides. Mr. Rachal asked could the $1400 continue to be the supplement in November. Dr. Goree said staff would look and would have a recommendation. Dr. Vinson asked could we give the supplement in one lump sum. Mr. Howard stated that would not be financially responsible because we have not received all of the MFP money; therefore, we would be fronting the money. Mr. Howard said we must recoup the money if the employee left the district after receiving the supplement if the last paycheck was not sufficient. Dr. Vinson asked Mr. Howard to look into this situation. Mr. Abrams stated it would be harder to recover a larger amount if the employee left, and the district could incur legal fees to collect. ADJOURNMENT Ms. Trammel moved, seconded by Ms. Green to adjourn the CPSB Budget Work Session. Vote on the motion carried. Meeting adjourned at 3:20 p.m. 7/3/2022
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