Budget Development 2015-16
S CHO O L B OA R D WO R K S ES S IO N
M A RC H 2 6 , 2 0 1 5
1
Agenda
I.
Compensation
II. Health Insurance
III. Changes to Operating Fund Budget
IV. Changes to Other Fund Budgets
V. Proposed Update to Capital Improvement Plan
2
History of Pay Adjustments
Year
Raise
Bonus
FY06
4.0%
-
FY07
4.0%
-
FY08
3.5%
-
FY09
4.0%
-
FY10
-
$500
FY11
-
-
FY12
-
4.0% (min of $500, max of $2500)
FY13
3%*
-
FY14
-
-
FY15
2.0%
-
FY13 also included a “hold harmless” 5.75% increase for VRS Plan 1 employees which was offset by state mandated
employee share of VRS contribution.
3
Compensation Adjustment
Recommended
• 2% compensation increase funded through the
General Fund to address impact of inflation
• Additional 0.5% increase funded through changes
made to health insurance rate structure
• Align cost differentials with benefit differentials
• Provide employee flexibility in the selection of benefits
• Reinforce consumer driven management of personal health
care
• Total increase in compensation of 2.50%
4
Health Insurance Recommendations
• Retain both KC200 and KC1000 plan choices
• Increase differential between KC200 and KC1000 plan
• Employees choosing lower deductibles pay more
• Employees choosing higher deductibles pay less
• Increase differential for Non-Wellness Plans
• Employees electing not to participate in wellness plans pay
larger share of premiums
5
KC1000 Plan is Good Option for
Employees with low medical costs
• First $500 of medical costs each year paid with HRA account (no cost
to employee)
• Premium for employee only is free
Deductible
First $500 medical costs paid by HRA
Net deductible
Drug copays
$
$
$
1,000
(500)
500
$10/25/40
6
Myth Buster #1 – KC1000 Plan is Good Option
for Employees with high medical costs
Wellness
KC200
KC1000
($50.32 Cost)
Deductible
Less HRA cash available
Net deductible impact
Annual out of pocket limit (net of deductible)
Cost of premiums for year
Estimated maximum paid by employee
(No Cost)
$
200 $
200
3,800
604
1,000
(500)
500
2,500
-
$
4,604 $
3,000
7
Myth Buster #2 –
KC1000 Plan is Good Option for
Employees with medium medical
care needs too
Assumptions used for illustration:
Doctor copay in KC200
$
Doctor at network cost
$
Specialist copay in KC200
$
Specialist at network cost
$
Minor procedure at network cost
$
KC200 copays do not apply to $200 deductible
30.00
100.00
50.00
150.00
500.00
10 doctor visits
5 specialist visits
1 minor procedure
Drug copays
Drug copays
KC200
$10/30/50
KC1000
$10/25/40
Annual cost of premiums paid by employee
Wellness physical exam
Doctor visit #1 (copay)
Doctor visit #2 (copay)
Doctor visit #3 (copay)
Doctor visit #4 (copay)
Doctor visit #5 (copay)
Doctor visit #1 (network cost)
Doctor visit #2 (network cost)
Doctor visit #3 (network cost)
Doctor visit #4 (network cost)
Doctor visit #5 (network cost)
Doctor visit #6 (copay)
Doctor visit #7 (copay)
Doctor visit #8 (copay)
Doctor visit #9 (copay)
Doctor visit #10 (copay)
Doctor visit #6 (network cost)
Doctor visit #7 (network cost)
Doctor visit #8 (network cost)
Doctor visit #9 (network cost)
Doctor visit #10 (network cost)
Specialist doctor #1 (copay)
Specialist doctor #2 (copay)
Specialist doctor #3 (copay)
Specialist doctor #4 (copay)
Specialist doctor #5 (copay)
Specialist doctor #1 (20% coinsurance)
Specialist doctor #2 (20% coinsurance)
Specialist doctor #3 (20% coinsurance)
Specialist doctor #4 (20% coinsurance)
Specialist doctor #5 (20% coinsurance)
Minor procedure (deductible, then 20% coins)
Minor procedure (20% coinsurance)
Employee cost under each plan
KC200
KC1000
EE Pays
EE Pays
$ 603.84 $
$
$
$
30.00
$
30.00
$
30.00
$
30.00
$
30.00
$100 HRA
$100 HRA
$100 HRA
$100 HRA
$100 HRA
$
30.00
$
30.00
$
30.00
$
30.00
$
30.00
$ 100.00
$ 100.00
$ 100.00
$ 100.00
$ 100.00
$
50.00
$
50.00
$
50.00
$
50.00
$
50.00
$
30.00
$
30.00
$
30.00
$
30.00
$
30.00
$ 260.00
$ 100.00
$ 1,413.84 $ 750.00
8
FY16 Health Rates – KC1000 Plan
Renewal 2015-16
Subscriber Only
Subscriber + 1 minor
Employee + Spouse
Family
Married School & County Couple
Renewal 2015-16
Subscriber Only
Subscriber + 1 minor
Employee + Spouse
Family
Married School & County Couple
•
•
454.64
615.46
929.66
1,102.14
1,102.14
Key Care 1000 Plan - WELLNESS
412.96
41.68
0.00
378.16
83.34
153.96
576.46
83.34
269.86
693.64
83.34
325.16
879.98
83.34
138.82
Key Care 1000 Plan - NO WELLNESS
536.32
428.16
41.68
66.48
738.80
421.50
83.34
233.96
1,053.00
619.80
83.34
349.86
1,225.48
736.98
83.34
405.16
1,225.48
923.32
83.34
218.82
0%
25%
29%
30%
13%
Increase (Decrease)
Employee
$
$
$
$
$
-
12%
32%
33%
33%
18%
Increase (Decrease)
Employee
$
40.00
$
40.00
$
40.00
$
40.00
$
40.00
Wellness – no change in premium
Non-Wellness - $40 increase in premium ($480 per year – replaces wellness credit)
9
FY16 Health Rates – KC200 Plan
Renewal 2015-16
Subscriber Only
Subscriber + 1 minor
Employee + Spouse
Family
Married School & County Couple
Renewal 2015-16
Subscriber Only
Subscriber + 1 minor
Employee + Spouse
Family
Married School & County Couple
•
•
545.16
769.60
1,117.56
1,308.58
1,308.58
585.16
809.60
1,157.56
1,348.58
1,348.58
Key Care 200 Plan - WELLNESS
494.84
n/a
50.32
524.84
n/a
244.76
718.14
n/a
399.42
830.32
n/a
478.26
1,016.66
n/a
291.92
Key Care 200 Plan - NO WELLNESS
439.84
n/a
145.32
464.84
n/a
344.76
653.14
n/a
504.42
760.32
n/a
588.26
946.66
n/a
401.92
9%
32%
36%
37%
22%
25%
43%
44%
44%
30%
Increase (Decrease)
Employee
$
15.00
$
20.00
$
25.00
$
30.00
$
30.00
Increase (Decrease)
Employee
$
70.00
$
80.00
$
90.00
$
100.00
$
100.00
Wellness – 2.5% increase in premiums
Non-Wellness - $70 increase in cost sharing for employees opting out of wellness program
10
Employee Options to Avoid KC200
Non-Wellness Increase
Rate changes from $75.32 to $145.32 to stay on Non-Wellness KC200 plan
Options (all 3 save money over the current year rates):
#1: Stay on KC200 and participate in Wellness Plan - $145.32 to $50.32
Saves employee $1,140 per year
#2: Move to KC1000 and not participate in Wellness - $145.32 to $66.48
Saves employee $946 per year
#3: Move to KC1000 and participate in Wellness Plan - $145.32 to $0.00
Saves employee $1,744 per year
Wellness Plan Requirements: Obtain FREE annual physical exam from your doctor and either 1) not use
tobacco products or 2) enroll in a tobacco cessation program recommended by your doctor
11
Net % Salary Change for Lowest Pay Grade
Assumes:
◦ 2.5% Across-the-Board pay adjustment
◦ Subscriber only health insurance with FY15-16 rates
◦ Employee may keep extra 0.5% salary increase as additional pay or use toward higher level
coverage
Net Salary Change for Average Salary on Grade 12
of Pay Plan (lowest grade)
3.0%
2.5%
2.0%
1.5%
1.0%
0.0%
-0.2%
-1.0%
-2.0%
-2.3%
-3.0%
KC1000 Well
KC200 Well
KC1000 No Well
KC200 No Well
12
Changes to Superintendent’s
Recommended Budget
•Increase employee share of health insurance for employees electing to
Not Participate in the Wellness Program
•Provide additional 0.5% salary increase to employees as additional pay
(or employee may use to buy down health insurance deductibles)
•Total increase in salary is 2.50%
•Add funding for future School Board development in anticipation of four
new board members in November 2015
•Increase bus transfer by $108,219 (instead of $250,000)
•Eliminate new funding for roof replacements and include in capital
financing plan update
13
Transfer from the County – updated 3/25/15
•
•
County Transfer calculated
using adopted Revenue
Sharing Agreement with
the Board of Supervisors
County reduced tax rate
for machinery & tools and
added South Peak
economic development
incentive payment
14
Revised Budget for FY15-16
See attached Budget Summary spreadsheet with comparison of budget
proposal on March 9th and revisions presented at this work session
15
Changes to Other Fund Budgets
•Bus Fund
•Capital Fund
16
School Bus Fund
Increase bus fund transfer based on final balancing of school operating
fund (reduced in FY12-13 budget due to revenue reductions)
Actuals
2011-12
Revenues:
Interest Income
$
Sale of Machinery & Equipment
Insurance Adjust & Refund
Transfer from Capital Fund
Transfer from General Fund
Total Revenues
Expenditures:
School bus replacements
Support vehicle replacements
Total Expenditures
3,720 $
29,089
257,375
910,000
Actuals
2012-13
Actuals
2013-14
Budget
2014-15
Budget
2015-16
Increase
(Decrease)
2,674 $
24,264
325,000
2,067 $
34,382
12,150
1,225,000
$
325,000
$
433,219
108,219
1,200,184
351,938
1,273,599
325,000
433,219
108,219
971,804
113,068
741,650
172,531
793,374
-
325,000
-
433,219
-
108,219
-
1,084,872
914,181
793,374
325,000
433,219
108,219
17
School Capital Improvement Plan
18
CIP – last adopted in 2012
School Project
Cave Spring Middle Renovation (in process)
Burlington Elementary Addition (in process)
Glenvar High School Renovation
Cave Spring High Renovation
BCAT Renovation
Est Costs
Total Project
FY12-13
28,313,803
2,200,000
TBD
TBD
TBD
$ 30,513,803
FY13-14
FY14-15
FY15-16
FY16-17
FY17-18
Funded
Funded
TBD
$
-
$
-
$
-
$
-
$
-
$
-
Funding Sources:
Annual CIP debt issuances (Joint BOS & SB plan)
Major Reserve allocated to Glenvar project (pending SB approval)
Funds Available by year
Surplus (Deficit)
10,000,000 County Only
4,879,320
10,000,000
10,000,000 County Only
10,000,000
14,879,320
10,000,000
10,000,000
10,000,000
24,879,320
34,879,320
14,879,320
14,879,320
Glenvar Hgh project
34,879,320
Rollover
depends on
final GHS
budget
44,879,320
Hold for CSHS
19
School Board Review of CIP - 2015
•Glenvar High renovation slated for completion in Summer 2015
•2 projects remaining on CIP adopted in 2012
Next Project – Cave Spring High School Renovation
•FY15-16 – Appropriate $500,000 cash reserves for scope analysis
•FY16-17 – Plan for $1,500,000 in cash reserves for A&E
•FY17-18 – Capacity to borrow up to $20M for construction
20
Proposed School CIP
Sources of Funds
Funding Source
Bond issue - Schools
Major Capital
Debt Fund - Schools
2015 VPSA Refunding
Total Funding Sources
FY15-16
**
500,000
500,000
FY16-17
1,500,000
-
FY17-18
**
20,000,000
2,815,837
3,672,506
163,560
FY18-19
**
10,000,000
640,880
70,913
1,500,000
26,651,903
10,711,793
FY17-18
FY18-19
TBD
TBD
FY19-20
647,167
70,513
FY20-21
**
10,000,000
653,455
110,888
FY21-22
**
10,000,000
670,692
113,513
FY22-23
605,164
114,138
FY23-24
**
10,000,000
640,703
114,806
FY24-25
**
10,000,000
676,244
112,556
717,680
10,764,343
10,784,205
719,302
10,755,509
10,788,800
FY20-21
FY21-22
FY22-23
FY23-24
FY24-25
TBD
TBD
Total
FY16-25
70,000,000
4,815,837
8,206,811
870,887
83,893,535
Use of Funds
School Project
Cave Spring High
Burton Center for Arts/Tech
TBD
Total Expenditures
FY15-16
500,000
FY16-17
1,500,000
FY19-20
500,000
1,500,000
TBD
500,000
1,500,000
-
-
500,000
1,500,000
-
-
Total
FY16-25
2,000,000
2,000,000
4,000,000
TBD
-
-
The School Board intends to proceed with the Cave Spring High School Renovation project in the following manner:
FY15-16 - Conduct Scope Analysis to identify the parameters of the needed renovation
FY16-17 - Procure A&E design services to produce specification documents and estimate total project costs
FY17-18 - Begin construction with approved but not yet borrowed bond proceeds and cash reserves
21
School Capital Fund
Add Major Capital Cash Reserves as funding source for Scope Analysis of
next project on School CIP - $500,000 to be funded in FY16
Major Capital Cash Reserves
Cave Spring HS - Scope Analysis
Actuals
2011-12
Actuals
2012-13
15,765,602
8,333,796
-
-
Actuals
2013-14
7,728,091
-
Budget
2014-15
Budget
2015-16
Increase
(Decrease)
-
500,000
500,000
-
500,000
500,000
22
Next Steps
March 30th
Adoption of School Budget
April 1st
Submission of approved budget to BOS
23