Agenda
• The Role of County Commissioners in Public Education
• Legally mandated public education funding
• Overview of the Manager’s review of CMS budget request
• Provide examples of education funding scenarios
• Discuss potential pros and cons
60
157
MecklenburgCountyNC.Gov
The Role of County Commissioners in
Public Education
Source: UNC School of Government
County Mandated Funding
•
County must provide funding to purchase, construct, and/or
maintain adequate school facilities
•
County must provide enough operational funding such that when
it is added to all other funding the school unit receives it is
sufficient for the school unit to meet minimum constitutional
requirements for providing a sound basic education
62
158
MecklenburgCountyNC.Gov
County Commissioners’ Role
• Provide funding
• Approve certain contracts
• Conduct special school elections
• Approve expenditure for school sites
• Compel school unit mergers
• Construct school facilities
63
MecklenburgCountyNC.Gov
County Supplemental Funding
County may provide additional funding to schools for operating expenses to fund programs/activities/personnel above the constitutional minimum requirements
64
159
MecklenburgCountyNC.Gov
Charter Schools
• Direct Funding
 Counties have no authority to directly fund charter schools
 Counties have no authority to donate real property (or sell it at
less than fair market value) to charter schools
 Counties may donate personal property (or sell at less than fair
market value) to charter schools
• Indirect Funding
 Local school units must provide proportional share of most
county operating funding to charter schools
65
MecklenburgCountyNC.Gov
The Role of County Commissioners in
Public Education
Source: UNC School of Government
160
Legally Mandated
Public Education Funding
Legally Mandated Funding to CMS
Approved FY2016 Budget
County Funding Requirement 2016 Amended Budget
Function
Approved
12/01/2015
Budget
Regular Instructional
Special Populations
Alternative Programs
School Leadership Services
Co-Curricular
School-Based Support
Support and Development
Special Population Support and Development
Alternative Programs Support and Development
Technology Support
Operational Support
Financial and Human Resource Services
Accountability
System-wide Pupil Support
Policy, Leadership and Public Relations
Nutrition Services
Payments to Charter Schools
Debt Service
Total
$ 154,684,814
10,269,781
10,912,562
37,368,193
4,016,894
20,411,806
5,900,871
2,020,602
1,508,201
12,831,636
69,290,888
16,137,894
4,172,677
3,641,694
12,096,090
721,207
37,717,470
582,736
$ 404,286,016
Maintenance
& Repair of
School
Buildings
Supplies for
School
Buildings
School
Furniture &
Apparatus
$ 11,690,709 $
621,067
279,691
159,975
14,400
742,880
Garage &
Maintenance
Equipment for
School Buses
8,799,755
25,244
169,227
21,032
58,871,101
125,996
582,736
$ 59,579,833 $ 13,508,722
68
161
$
9,015,258
$
-
Total
Percent
Mandated
$ 20,490,464
621,067
304,935
159,975
183,627
763,912
58,871,101
125,996
582,736
$ 82,103,813
MecklenburgCountyNC.Gov
13%
6%
3%
0%
5%
4%
0%
0%
0%
0%
85%
1%
0%
0%
0%
0%
0%
100%
20%
Manager’s review of
CMS Budget Request
Charlotte‐Mecklenburg Schools
Budget Request Review Process
•
Manager meet with Superintendent to review and discuss funding request
(request subject to change pending BOE approval)
•
County staff analyze and meet with CMS staff to discuss funding request
•
BOE submit approved CMS request to BOCC
•
Superintendent presents BOE approved request to BOCC at budget workshop
•
Manager present funding recommendation as part of Recommended Budget
presentation to the BOCC in May
•
BOCC submit questions to County staff & CMS for review
•
CMS funding is deliberated by the BOCC during June budget workshops
70
162
MecklenburgCountyNC.Gov
Development of Manager’s CMS Funding Recommendation •
Superintendent submits a funding request that is formatted by categories
•
Manager identifies items in the request that are the responsibility of the State
•
Manager considers funding items that are responsibility of the County
•
Manager identifies one‐time expenses that could be funded with fund balance
•
Manager assess the ROI for funding new initiatives and programs
•
Manager considers the funding needs of County agencies & business partners
•
Affordability: Manager factors growth revenue as part of funding decision
71
MecklenburgCountyNC.Gov
Example of CMS Funding Request
72
163
MecklenburgCountyNC.Gov
Manager’s CMS Funding Recommendation
73
MecklenburgCountyNC.Gov
Manager’s Education & Literacy Investment Recommendation
74
164
MecklenburgCountyNC.Gov
Manager’s review of
CMS Budget Request
Methodology for Funding Scenarios
• Based on County Dollar budget


Excludes revenue such as fees and state and federal funding
Excludes 1x fund balance
• Adjustment between Charlotte‐Mecklenburg Schools
(CMS) & Central Piedmont Community College (CPCC)
allocated on percentage share of current budget
• Applies 3% annual revenue growth
76
165
MecklenburgCountyNC.Gov
Scenario #1:
50/50 share of County Revenue:
Operating Budget Only
County Dollar 50/50 Education Funding Scenario
Budget Estimate with 3% growth FY2016
50/50 Formula Adjustment
FY2017
FY2018
$458,347,695
‐$12,385,697
$445,961,998
$459,340,858
$473,121,084
CMS Operating
399,902,352
11,423,755
411,326,107
423,665,890
436,375,867
CPCC Operating
33,673,949
961,942
34,635,891
35,674,968
36,745,217
433,576,301
12,385,697
County Operating
Education Operating
Total $ 891,923,996
445,961,998
459,340,858
473,121,084
$ 891,923,996
$ 918,681,716
$ 946,242,168
County Dollar budget does not include one-time funding, WTVI payments,
Debt Service or Capital
78
166
MecklenburgCountyNC.Gov
Pros
Simplified budget decision making process
• Schools could have a better sense of funding
• Formula would not require Budget amendments related to State
salary changes
79
MecklenburgCountyNC.Gov
Cons
$12.3 million reduction to County’s base budget for FY2017
• Would required reductions to existing County Services
• Any growth in FY2017, would be required for annualized operating
expenses
80
167
MecklenburgCountyNC.Gov
Possible Reductions
• Community Service Grants ‐ $4 million
• Economic Development ‐ $10 million
• Criminal Justice Services ‐ $9 million
• Library operating hours
• Park and recreation operating hours
81
MecklenburgCountyNC.Gov
Cons Continued
Funding is not based on need
• If revenue growth outpaces enrollment, schools could be
overfunded
• If enrollment outpaces revenue growth, schools could be
underfunded
• 50% of any future tax increase would go to schools operating
regardless of need
82
168
MecklenburgCountyNC.Gov
Funding Trend
83
MecklenburgCountyNC.Gov
Funding Trend
84
169
MecklenburgCountyNC.Gov
Cons Continued
• Limits the County’s flexibility to respond in the future
 Economic downturns
 Shifts in service demand
 Unfunded mandates
County revenues may be effected by other entities
 Increases in City or Town tax rates reduces the County
share of sales tax
 State Legislature could alter sales tax or other revenue
streams
85
MecklenburgCountyNC.Gov
Scenario #2:
50/50 share of County Revenue:
Education & Literacy
170
County Dollar 50/50 Education and Literacy Scenario
Budget Estimate with 3% growth FY2016
County Operating
Education CSGs
Library
50/50 Formula Adjustment
FY2017
FY2018
$426,058,753
$19,903,245
$445,961,998
$459,340,858
$473,121,084
1,968,000
‐84,079
1,883,921
1,940,438
436,375,867
30,320,942
‐1,295,407
29,025,535
29,896,301
36,745,217
CMS Operating
399,902,352
‐ 17,085,100
382,817,252
394,301,769
406,130,822
CPCC Operating
33,673,949
‐1,438,658
32,235,291
33,202,350
34,198,420
465,865,243
‐$19,903,245
Education and Literacy
Total $ 891,923,996
445,961,998
459,340,858
473,121,084
$ 891,923,996
$ 918,681,716
$ 946,242,167
County Dollar budget does not include one-time funding, WTVI
payments, Debt Service or Capital
87
MecklenburgCountyNC.Gov
Pros
• Recognizes all investments in education and literacy
• The County retains some flexibility to how education &
literacy is addressed
 Libraries
 CSGs
 Schools
88
171
MecklenburgCountyNC.Gov
Cons
• Large reduction to Education and Literacy is required in
the first year
 County would have to arbitrate between winners and losers
• Funding is not based on need
• Limits the County’s flexibility to respond in the future
• County revenues may be effected by other entities
89
MecklenburgCountyNC.Gov
Scenario #3A:
50/50 share of County Revenue:
Operating & Debt Service
172
County Dollar 50/50 Operating and Debt Service
Budget Estimate with 3% growth FY2016
County Operating
County Debt Service
$ 458,789,481
50/50 Formula Adjustment
144,538,383
148,874,534
153,340,771
582,072,261
599,534,428
617,520,462
419,285,390
431,863,951
444,819,870
144,538,383
County
603,327,864
CMS Operating
399,902,352
19,383,038
4,960,000
240,408
CMS Debt Service
CPCC Operating
CPCC Debt Service
Education
Total 111,915,413
33,673,949
1,632,157
10,364,944
560,816,658
FY2018
$ 437,533,878
‐21,255,603
CMS Capital
FY2017
‐ $21,255,603
21,255,603
$ 1,164,144,522
$ 450,659,894
$ 464,179,691
5,200,408
5,356,421
5,517,113
111,915,413
115,272,875
118,731,062
35,306,106
36,365,289
37,456,248
10,364,944
10,675,892
10,996,169
582,072,261
599,534,428
617,520,462
$ 1,164,144,522
$ 1,199,068,856
$ 1,235,040,924
County Dollar budget does not include one‐time funding, WTVI payments, Debt Service or Capital
91
MecklenburgCountyNC.Gov
Cons
• $21.3 million reduction to County’s base budget for FY2017
 Would require reductions to existing County Services
 Unlikely to realize any County Revenue Growth in FY2017
• Fluctuations in Debt Service would cause funding scenario to
conflict with Debt Service Policy
• Would destabilize capital plan by allowing debt funding to be
allocated to operating during cycles of lower debt
92
173
MecklenburgCountyNC.Gov
Cons Continued
• Funding is not based on need
• Limits the County’s flexibility to respond in the future
93
MecklenburgCountyNC.Gov
Scenario #3B:
50/50 share of County Revenue:
Operating & Debt Service
174
County Dollar 50/50 Operating and Debt Service
Budget Estimate with 3% growth FY2016
County Operating
County Debt Service*
$458,789,481
50/50 Formula Adjustment
56,093,629
57,776,438
59,509,731
553,985,381
570,604,942
378,958,893
390,327,660
402,037,490
514,883,110
CMS Operating
399,902,352
‐20,943,459
4,960,000
‐256,762
CPCC Operating
CPCC Debt Service
Education
Total 111,915,413
33,673,949
‐ 1,763,553
10,364,944
560,816,658
511,095,211
537,849,884
56,093,629
County
CMS Debt Service
FY2018
496,208,943
$481,756,255
22,966,774
CMS Capital
FY2017
$22,966,774
‐22,966,774
$ 1,075,699,768
4,700,238
4,841,245
4,986,482
111,915,413
115,272,875
118,731,062
31,910,396
32,867,708
33,853,739
10,364,944
10,675,892
10,996,169
537,849,884
553,985,381
570,604,942
$ 1,075,699,768
$ 1,107,970,762
$ 1,141,209,884
County Dollar budget does not include one‐time funding, WTVI payments, Debt Service or Capital
*Excludes County funding for Pay‐go ($35,110,860) and Budgeted Fund Balance ($53,333,894) 95
MecklenburgCountyNC.Gov
Cons
• $23 Million reduction to schools in FY2017
 County would have to arbitrate between winners and losers
• Funding is not based on need
• Limits the County’s flexibility to respond in the future
• Fluctuations in Debt Service would cause funding
scenario to conflict with Debt Service Policy
96
175
MecklenburgCountyNC.Gov
Cons Continued
• Would destabilize capital plan by allowing debt
funding to be allocated to operating during cycles of
lower debt
• Funding is not based on need
• Limits the County’s flexibility to respond in the future
97
MecklenburgCountyNC.Gov
County Dollar Allocated based on a Per‐Pupil
Budget estimate with 3% growth and average enrollment FY2016
County Operating
CMS Operating
CPCC Operating
FY2017
FY2018
$ 458,789,481
$ 478,698,247
$ 499,719,622
399,902,352
405,500,985
411,177,999
33,673,949
34,482,484
35,344,546
Education
$433,576,301
$ 439,983,469
$ 446,522,545
Total $ 891,923,996
$ 918,681,716
$ 946,242,167
146,140
148,186
150,261
CMS Enrollment*
CMS Per‐ Pupil Operating
CPCC Enrollment**
CPCC Per‐Pupil Operating
2,736
2,736
2,736
81,654
83,695
85,788
412
412
412
*Based on 20th day enrollment
*CMS Average enrollment growth (2013 to 2016) is 1.4% annually
98
** CPCC Average enrollment growth (2014 to 2016) is 2.25%. CPCC realized a 5.9% decline in enrollment in 2013. MecklenburgCountyNC.Gov
176
Enrollment Trend
99
MecklenburgCountyNC.Gov
Change in Enrollment
100
177
MecklenburgCountyNC.Gov
Pros
• Simplified decision making process
• No major swings in funding for Schools or the County
• Provides certainty to CMS budget process
101
MecklenburgCountyNC.Gov
Cons
• Does not factor inflationary cost for education
• Enrollment estimates could skew funding
• Does not account for shifts in student needs
102
178
MecklenburgCountyNC.Gov
Per‐Pupil Alternative
• Joint staff committee develops enrollment estimate
• Recommended funding is based on current per‐pupil
plus…
 Specific Initiatives
 Operating for new schools
 Board decision to increase the base per‐pupil
• All local salary funding is up to the school district to
manage
103
MecklenburgCountyNC.Gov
Pros
• Shared understanding of enrollment figures
• Encourages more strategic approach
 Specific initiative to address need
 Initiative should define measurable outcomes
• School is responsible for managing local salary funds
 No amendments based on State decisions
104
179
MecklenburgCountyNC.Gov
180