Superintendent's Budget Message 2003-04

Leadership Focus and Strategic Direction

The Wake County Public School System (WCPSS) budget summarizes our financial plan for fiscal year 2003-2004.

Wake County has been designated as one of the most desirable places for families to live in the United States. WCPSS is a major reason the area received this recognition. Located in the heart of the Research Triangle, WCPSS serves children from some of the most educated families in the nation. Parents are well educated and have very high educational expectations for their children. In addition, business leaders expect a world-class education system to fuel continued economic development. Taxpayers and those elected to represent them want to be sure they are receiving high value for their tax dollars. The mission and strategies of WCPSS respond to this need for accountability.

Our mission is to educate each student to be a responsible and productive citizen who can effectively manage future challenges.

We are committed to academic excellence. We will pursue this mission in the spirit of openness, integrity, and accountability through active communication and collaboration with parents and a demanding and caring community. Student performance is the number one priority in all schools in WCPSS.

In pursuit of this mission, we will:

Our aim for the past five years has been to meet the academic goal of having 95 percent of students tested at or above grade level as measured by the North Carolina End-of-Grade (NC EOG) tests at grades 3 and 8 by 2003. To this end, human and financial resources are allocated in the budget and aligned to achieve the mission and goal of the district. We value student success, excellence, diversity, character (courage, good judgment, integrity, kindness, perseverance, respect, responsibility, and self-discipline), communication and collaboration with all stakeholders, teamwork, and continuous improvement. Available resources have been identified and focused on the attainment of our goal based on our shared values.

Based on attainment of system goals, the board establishes a strategic plan and goals for the superintendent. Student and stakeholder needs, our mission, and our values are the core of the process and guide all stages of strategic planning. The superintendent and senior leaders assess system performance on an annual basis in light of the strategic plan and the superintendent's goals for WCPSS. Strategies to accomplish goals are based on the analysis of gaps between current performance and desired future results. Once strategies have been developed, senior leaders determine how to implement them. This includes identifying and communicating improvement priorities, organizing work systems, and allocating resources to align the work of central-level and school processes to support goal attainment.

Trends/Events/Initiatives

WCPSS is the second largest school district in North Carolina and one of the largest in the nation. Our customers judge the school system's performance by how well our 104,000 students are learning. The system is one of the fastest growing districts in the nation, with roughly 3,300 additional children entering the system each year, about four percent a year over the last seven years.

Chart showing increasing WCPSS enrollment over time

The relocation to Wake County of people from other parts of the country and the world brings new educational expectations and standards for district performance. Managing the demand for school facilities and services created by growth, while meeting high educational expectations, continues to be both a challenge and an opportunity.

For over ten years, the system has compared its performance on selected measures with other school systems as well as to state and national norms. Our principle competitors are a growing number of charter, private, parochial/church schools, and an increasing number of families who choose to home school their children. Charter schools are unique competitors because they decrease the amount of funding available for our schools.

The SAT is a national exam designed to measure a student's chance of success at the college level. In Wake County, 4,278 seniors or 79 percent took the SAT, the same percentage as last year. Statewide, 67 percent of eligible students took the SAT, whereas only 46 percent of eligible students nationally took the test. Nationwide, 1,327,831 students in the 2002 graduating class took the SAT I prior to graduation - a four percent increase from 2001. In Wake County, the number of seniors taking the SAT I rose to 4,278 in 2002 from 4,042 in 2001, a 5.8 percent increase.

The participation rate in WCPSS was calculated by dividing the number of senior students who took the SAT by the size of the 2002 graduating class. Participation rates were near the 75 percent mark for ten years, and rose to 79 percent for the past three years. Participation rates reported by the College Board are based upon estimates of enrollment compiled through national surveys. While the College Board rates are probably accurate at the state and national level, they are not accurate at the district and individual school level. Therefore, participation rates for WCPSS in this report have been calculated from district records.

Charts showing WCPSS SAT scores vs NC and national SAT scores.

Wake County's scores remained substantially higher than the state average of 998 and the national average of 1020. North Carolina's SAT average climbed by six points while the national remained the same. Wake County's average climbed by 13 points. Last year, WCPSS had the fifth highest score of districts across the state. This year WCPSS ranked second. Chapel Hill-Carrboro continues to lead North Carolina districts with an average score of 1177 in 2002. More SAT information is located under the Informational Section of this document.

WCPSS multiple-choice results (NC EOG) for 2001-2002 show increases at all grade levels in both reading and math. Both the percentage of students scoring at or above grade level and average scale scores reached new highs.

Highlights of achievement include:

Existing educational initiatives include the Accelerated Learning Program (ALP). This program includes the development of an individualized learning plan for each student as well as extended learning time.

The district has a five-year technology plan in place which is designed to advance teaching and learning. The plan was a collaborative effort of district administrators, business and community leaders, and teachers who share the vision that technology is a tool to enhance learning not a replacement for academic endeavor. This vision calls for ongoing comprehensive technology training programs for teachers and administrative personnel; providing a networking infrastructure (both voice and data) that will connect classrooms and administrative personnel to each other and to the Internet; and providing the proper "tools" in the way of hardware, software, and an email messaging service. Email is provided to all faculty and staff and rollout of services to students has begun at the secondary level. The district manages both an Internet and Intranet site which are consistently updated with pertinent information. All technology initiatives being utilized should enable the school system to graduate students who are armed with the skills needed to succeed in the global information economy, whether the path leads to higher education or the working world.

WCPSS is strengthening partnerships and building new alliances. The Wake Education Partnership (WEP) has taken a significant leadership role in galvanizing community support. Other alliances, such as the Business Education Leadership Council (BELC), are also increasing their involvement. The district is working closely with the Department of Human Services and other community groups to better align options and opportunities for students.

The opening of new schools and development of new programs have impacted the capacity of some magnet programs to attract students. The magnet programs will begin another continuous improvement cycle to create new program models to increase student and parent interest.

The most significant and far-reaching effort has been the progress of a single, community-driven goal. The goal of having 95 percent of students tested at or above grade level as measured by NC EOG testing at grades 3 and 8 by 2003, has had a dramatic impact on the focus and clarity of our continuous improvement efforts. The district envisions a collaborative journey from being an exemplary school system to a school system that serves as a benchmark for all others in the nation.

Budget Process

Budget development is a year-round process, beginning in the fall and culminating with the adoption of the official budget in June by the Wake County Board of Education. Participation in the process of development includes input from schools and central office departments, as well as other stakeholders. The process of budget development has been focused by our efforts to have 95 percent of students at or above grade level.

The superintendent's management team develops the budget request to be delivered to the board of education. Following review, a public hearing, and action, the board approves a budget request to be delivered to the Wake County Board of Commissioners by May 15. The official budget is adopted following action by the board of commissioners.

The base budget for 2003-2004 closely resembles the budget for 2002-2003. Any increases to the base budget were presented in light of additional expenditures related to growth and inflation and attainment of our goal.

The issues of growth and inflation continue to challenge the school system and the county. As a result, there have been contentious debates between the two boards related to the adequacy of funding for WCPSS to reach our goal, while also addressing the needs presented due to growth and inflation. The county appropriation for the 2002-2003 school year was increased over the amount required by the 1997 mediation agreement, by mutual agreement of the school and county boards. An additional $10 million was appropriated by the county from fund balance and the school system increased fund balance used in the budget to $10 million as well. These actions resulted in a $213 million commitment from both boards.

It was agreed that a Citizens Advisory Committee (CAC), consisting of seven members selected by each board, and two co-chairs, would make recommendations regarding the adequacy of funding to reach Goal 2003, and a factor for addressing growth and inflation to be used in future years. This citizens' group contracted with MGT of America (MGT) to conduct an audit related to these two areas of concern. Recommendations from the CAC were an important part of the decision-making process for this budget.

The Board of Education's Budget Request for 2003-04 aligns with the recommendations made by the CAC as presented to the Wake County Board of Education. Items included in the budget request are as follows:

Total Budget

The total budget for 2003-2004 is $808,124,654. This is composed of current expense, capital outlay, and capital improvement dollars. The current expense budget includes items of a recurring nature covering salaries, services, and supplies. The capital outlay budget includes the purchase of property; the purchase, construction, or renovation of buildings; and the purchase or replacement of furniture, equipment, and vehicles. Capital improvement dollars include local funds identified solely for the building program.

Current Expense

$779,136,388

Capital Outlay

$5,038,486

Operating Budget

$784,174,874

Capital Improvements (building program)

$23,949,780

Total Budget

$808,124,654

Total Budget FY 2003 - 2004

 

Current Expense

Capital Outlay

Total

State

$461,964,913

59%

$0

0%

$461,964,913

57%

County Appropriation

218,701,514

28%

4,998,486

17%

223,700,000

28%

Local Capital Improvements

0

0%

23,949,780

83%

23,949,780

3%

Federal

45,825,829

6%

0

0%

45,825,829

6%

Enterprise Funds

27,006,846

4%

0

0%

27,006,846

3%

Other Local

25,637,286

3%

40,000

0%

25,677,286

3%

Total

$779,136,388

100%

$28,988,266

100%

$808,124,654

100%

Where Do Funds Come From?

Pie charts showing where the WCPSS Operating Budget comes from.

Where Are Funds Spent?

Pie chart showing how WCPSS spends its money.

Note: Other Objects include insurance, membership dues, vending contract, license and title fees, indirect cost, and unbudgeted funds.

State Funding

State allotments are funded on a formula basis. The state funds schools with three basic types of allotments: position allotments, dollar allotments, and categorical allotments. Due to our phenomenal growth rate, we continue to receive additional state funding. The state budget is expected to increase by three percent in 2003-2004.

Ninety-five percent of state funding is spent on salaries and employee benefits. We anticipate 2,929 new months of employment based on growth in student projections:

1,606

Regular Education Teacher months

325

Teacher Assistant months

200

Children with Special Needs Teacher months

200

Vocational Education Teacher months

185

School-Based Clerical months

126

Counselor months

88

Media Specialist months

44

Psychologist months

40

Academically/Intellectually Gifted Teacher months

40

Social Worker months

39

Assistant Principal months

24

Principal months

12

Academically/Intellectually Gifted Lead Teacher months

New state months totaling 2,929 are offset by a decrease of 70 Limited English Proficiency (LEP) months allotted for one-time use in 2002-03 for a net increase in months of 2,859.

The state portion of this budget was based upon planning allotments from NC Department of Public Instruction. We assumed the discretionary budget reduction of over $3 million in 2002-03 would recur in 2003-04. Budget adjustments required due to action of the General Assembly will be incorporated after the state budget is finalized. The impact of these items will be recorded in the school system's budget and will be reported to the board in the first quarter of 2003-2004.

State Months of Employment Comparison

 

FY 2001-02

FY 2002-03

FY 2003-04

Increase

Percent

Administration

3,505.36

3,519.36

3,582.36

63.00

2%

Professional Educator

61,830.14

65,423.55

67,613.55

2,190.00

3%

Professional - Other

1,525.70

1,656.82

1,752.82

96.00

6%

Technical

17,494.70

17,205.50

17,530.50

325.00

2%

Office/Clerical

6,450.79

4,143.10

4,328.10

185.00

4%

Crafts/Trades

700.00

924.00

924.00

0

0%

Other

11,762.54

13,312.50

13,312.50

0

0%

Total

103,269.23

106,184.83

109,043.83

2,859.00

3%

Budget 2003-2004

$455,251,834

Budget 2002-2003

$442,463,033

Increase

$12,788,801

County Appropriation

Development of the 2003-2004 budget presented a great challenge. Projections for new student growth for the coming year exceed 3,600. Two new schools and significant expansions are adding a total of over 750,000 square feet of space. Health insurance premiums are projected to increase 22.5 percent; property and liability insurance premiums are also increasing. The school system has utilized resources efficiently and has reallocated available financial and human resources in order to support efforts to reach Goal 2003. As a result, the impact of growth and inflation on budgets has been substantial.

The amount of revenue requested from Wake County for 2003-2004, was $231,000,000. Wake County approved an appropriation to the Board of Education for $223,700,000. The approved budget was based on several assumptions.

(1) Additional expenditures projected for the 2003-2004 school year are based on growth and inflation. The additional expenditures in the budget request include:

 

Increase

Cost per Student

Salary and Benefits

Salaries

$2,773,944

$26

Hospitalization insurance

$1,438,250

$13

subtotal

$4,212,194

$39

Growth Related Increases

Months of employment to maintain current allotment formulas

$2,355,236

$22

30 Buses

$1,968,120

$18

Maintenance and operation dollars for two new schools

$1,948,121

$18

Charter school increases

$1,352,207

$13

Local supplement and dental ins. new state positions

$1,048,979

$10

15 Bus drivers, two mechanics, supplies

$396,021

$4

Dollar allotment increases to maintain current formulas

$392,633

$3

subtotal

$9,461,317

$88

Systemwide Increases

Utilities

$1,118,307

$10

Insurance (property, liability, accident, fidelity)

$364,200

$3

Voice Telecom E-Rate

$322,787

$3

subtotal

$1,805,294

$16

New Programs or Increased Funding for Existing Programs
(supported by substantiation for budget increases)

Salaries

Supplementary pay scale increases for certified staff

$2,000,000

$19

Reinstate performance pay for central office administrators

$327,623

$3

Administrative Services

One courier and one warehouse driver

$50,082

$1

Recruitment strategies (CAC recommendation)

$594,999

$6

Outsource substitute teacher hiring (CAC recommendation)

$1,034,441

$10

Instructional Services

International Baccalaureate Programme (IB) at Garner High and two Garner middle schools

$158,870

$2

Extra-duty coaching supplement for a girls' golf team at each high school to address Title IX requirements

$26,758

$0

Expand Project Achieve to two new schools (CAC recommendation)

$122,000

$1

Continue to fund NovaNet ports in schools at current rate

$104,790

$1

Five Teaching positions at Enloe High School

$247,855

$2

Middle years program coordinator at Broughton High

$25,000

$0

FastForWord

$375,000

$4

Expand special education reading initiative

$200,000

$2

Transition counselors

$254,889

$2

Lead math teacher

$8,400

$0

Southern Assoc. of Colleges and Sec. School accreditation

$16,000

$0

Repurpose funds from North Carolina Museum of Natural Sciences for Grades 5 and 8 science assessments

$40,000

$0

Repurpose funds from Poe Health Center towards development of the physical education program

$31,000

$0

One occupational therapist

$53,148

$1

30 months for foreign language in magnet schools

$150,000

$1

One half-time Instructional Resource Teacher (IRT) per middle school (CAC recommendation)

$700,000

$6

Overtime for testing program

$9,666

$0

Test coordinator travel

$2,300

$0

Travel reimbursement for school psychologists

$6,378

$0

Expand English as a Second Language (ESL) into all schools to serve children in their base school (CAC recommendation)

$620,000

$6

Expand participation in Partnership for Educational Success to 15 schools in Eastern Wake County

$509,500

$5

Technology

Uninterruptible Power Supply (UPS) annual maintenance

$10,836

$0

Oracle software maintenance

$125,000

$1

Tape library

$250,000

$2

Additional student record storage

$144,000

$1

Instructional Support Technician (IST) training initiative

$60,000

$1

Auxiliary Services

High priority safety projects

$684,452

$6

Restore budget for school painting and floor maintenance

$857,600

$8

Increase pest control services staff

$38,140

$0

Unfunded mandate for annual inspection of backflow prevention devices

$125,000

$1

Operations

Middle school resource officers, security officer Atlantic Avenue, security officer Bugg Elementary, 2 percent increase for LankfordSecurity

$106,133

$1

One security technician, van, tools

$56,797

$1

Superintendent's Office

New area assistant superintendent, staff, and office budget

$167,053

$2

Backup server for system's website and enhance software

$12,511

$0

Accommodate specialty publications and printing demands

$23,901

$0

Expand suspension/expulsion documents in languages other than English

$4,800

$0

Distribution of Annual Report

$1,258

$0

Board of Education food

$4,000

$0

subtotal

$10,340,180

$96

Total

$25,818,985

$239

(2) Substantial reductions in expenditures from the base budget for 2003-2004 were necessary. Services have been significantly reduced or eliminated while attempting to protect core instructional programs and the personnel associated with them. The cuts from the base budget include:

Base Budget Reductions/Adjustments for 2002-03

Increase

Cost per Student

Savings from 2002-03 (net savings reflected on the "over/under" report from 2002-03)

($3,590,332)

($33)

Salary audit cost during 2002-03 that will be eliminated or reduced due to the elimination of installment pay

($1,187,005)

($11)

One-time purchase of buses in 2002-03

($927,840)

($9)

Elimination of capital outlay funds for growth

($780,000)

($7)

One-time cost for snow and ice removal in 2002-03

($666,298)

($6)

One-time cost for 10th day adjustments for teacher, teacher assistant, and clerical months in 2002-03

($470,648)

($4)

Early dollars for new schools for 2002-03

($324,566)

($3)

One-time purchase of Cognos during 2002-03

($300,000)

($3)

One-time special provision allotments during 2002-03

($222,691)

($2)

Streamlined processes in Administrative Services

($190,621)

($2)

Savings due to streamlined processes in Human Resources, reduced cost for Continuous Improvement Conference

($85,000)

($1)

One-time cost for tuition summer school deficit in 2002-03

($83,308)

($1)

One-time cost for print shop deficit in 2002-03

($60,000)

($1)

One-time cost for technology renovations in 2002-03

($53,518)

($1)

Reduction in IST travel school-to-school

($50,000)

($1)

One-time cost for early hires of principals and associate superintendent in 2002-03

($47,172)

($1)

Local supplement and dental insurance on 70 months ESL teachers allotted for one-time purposes in 2002-03

($46,834)

($0)

One-time transfer of funds to Tharrington Smith in 2002-03 to be held in trust

($45,938)

($0)

Discontinue contract with North Carolina Museum of Natural Sciences

($40,000)

($0)

Discontinue contract with Poe Health Center

($31,000)

($0)

One-time cost for ABC bonuses and forfeited vacation pay

($21,297)

($0)

Reduction in costs in Auxiliary Services

($20,734)

($0)

Reduction in cost for voice handset replacement program

($20,004)

($0)

Reduction in cost for fees for wastewater or underground storage tanks

($13,400)

($0)

One-time upgrade of equipment in technology

($8,000)

($0)

SACS dues move to Curriculum and Instruction

($7,500)

($0)

Reduction of contract services in Executive Planning

($5,000)

($0)

Postage savings due to the elimination of installment pay

($4,233)

($0)

Total

($9,302,939)

($86)

(3) WCPSS must use $8.1 million from fund balance to balance the 2003-2004 budget. Beginning budget development projections included no appropriation of fund balance. It quickly became evident that an additional amount must be included in order to maintain people and programs directed toward the attainment of our goal.

The budget development process is based upon a strategic plan to maintain personnel and programs. The focus of the budget has been, and continues to be goal attainment. The use of $8.1 million from fund balance is clearly necessary and represents the strong commitment of WCPSS to focus all available resources on student achievement.

(4) The budget is based on charter school enrollment of 3,571. If charter school enrollment exceeds this amount, then the county manager will request that the Board of Commissioners appropriate additional funds to the school system for the charter school enrollment over 3,571 students. Further, the appropriated budget assumes that the WCPSS will receive $1.5 million additional revenue from "fines and forfeitures and other unrestricted local sources of revenue" than was in the School Board's request. If total revenues from these revenues are less than $7,673,000, then the county manager will request that the Board of Commissioners appropriate additional funds to the school system for the amount that is less than $7,673,000 provided that this request not exceed $1.5 million.

 

2002-2003

2003-2004

Increase

%

County Appropriation

 

 

 

 

Current Expense - WCPSS

$192,706,217

211,703,771

18,997,554

10%

Current Expense - Charter Schools

5,894,302

6,997,743

1,103,441

19%

Capital Outlay

4,399,481

4,998,486

599,005

14%

Total

$203,000,0001

223,700,000

20,700,000

10%

Student Membership

 

 

 

 

WCPSS

104,373

108,034

3,661

4%

Charter Schools

3,134

3,571

437

14%

Total

107,507

111,605

4,098

4%

Allocations per student

$1,888

2,004

116

6%

1 The school system increased fund balance used in the budget to $10 million in 2002-03, resulting in a $213 million commitment from both boards.

Local Current Expense Fund

The local current expense budget includes all local revenues of the school system. The largest of these is the county appropriation. Others include fines and forfeitures, interest earned, indirect costs, vending contract, fund balance appropriation, and categorical programs. The "Budget by Funding Source" section of this document shows budget line items by source of funds whether state, federal, enterprise, other local, or county appropriation.

The local current expense budget for 2003-2004 is $251,474,239, which is an increase of $15,567,671 from 2002-2003.

Ongoing, rapid growth and efforts to improve student achievement continue to be the most significant fiscal challenges for our school system. Student membership projections from Wake County total 108,034 students (excluding 3,571 students projected to be enrolled in charter schools). Our net increase in students for 2003-2004 would be 3,661 students or three percent.

WCPSS manages resources in an efficient and effective manner, which has been confirmed by numerous audits and studies by independent citizen groups. When compared to other urban North Carolina districts, WCPSS operates at the lowest per pupil expenditure of any of the North Carolina districts. We are proud of our efficiency, and we continually seek ways to make the best use of every dollar spent. We utilize a purchasing card throughout the system to decrease the time between order and delivery by teachers and other staff, as well as to reduce purchase orders and accounts payable transactions. We utilize a systemwide email system to reduce paper transactions and improve timeliness of communication. During the 2002-03 year, we eliminated option pay from WCPSS processes. The service was privatized and is still available for ten- and eleven- month staff through their financial institutions. There will be savings in the 2003-04 budget as a result of this. Salary audit costs from NCDPI should reduce significantly. We will save processing time, printing costs, and postage. In previous years, four days were scheduled into the payroll process for verification of option pay in July and August. Another five days were scheduled for actual processing of the payrolls. Overtime will be reduced 95 percent in Compensation Services Department. The production gain of nine days plus the overtime for administrators and processing staff totals $63,800.

The workload and efficiency of Accounts Payable justifies the elimination of an Accounts Payable Technician position. The following examples of cost reduction support this proposal. The systemwide implementation of the procurement card caused a reduction of invoices processed in the department for the past one and one half years. Our invoice numbers have decreased from an estimated 110,000 in the mid 1990s to approximately 80,000 per year. The Oracle implementation provides users with easier access to research the database. A support salary study and reclassification has provided more stability and better quality in the remaining positions. Moving to a four-day, ten-hour/day week in Accounts Payable has increased productivity. The employees have less start and stop time and are more focused on their responsibilities. State and local budget restraints have required earlier deadlines for end-of-year transactions and a reduction in volume of transactions. The earlier deadlines cause more stable distribution of workload.

During the year vacancies occur in positions in the school system as employee turnover occurs. Dollar savings occur for each day positions remain vacant and salaries are not paid. Based on historical experience, data generated from our financial system, and the state of the economy, we are able to track where and how often this occurs. In order to gain maximum use of our resources, we include positions in our budget with no assigned costs to be paid from these lapsed dollars. We budget 87 positions to be paid from lapsed salaries, including 17 custodians, ten special education teachers, 17 regular education teachers, 20 clerical positions, 20 teacher assistants, and three central office administrators. This is very aggressive and can vary based on turnover. We constantly monitor these areas throughout the year to make sure we will be within budgeted dollars.

We continually monitor state funding. We shift local costs onto state dollars whenever possible to make the most of state funding.

We charge indirect costs on all enterprise programs to help support the local budget.

Schools process conversions during the year within State ABC transfer policies. This allows schools to move dollars between program codes as defined in legislation in order to meet the needs of that particular school. Funds checking rules have been expanded on the local budget to allow central office departments to gain the use of lapsed salary dollars. These processes allow schools and departments to make the best use of all dollars budgeted.

We allocated fund balance as part of our beginning budget. At the same time, we attempt to maintain a reserve at a level we feel is necessary to support the district in cases of emergency, unusual circumstances, or negative budget variances.

We constantly seek additional sources of revenue. The grants office supports schools and assists with identification of new sources of funding. We entered into a vending agreement in 2001 that will generate revenues over a five-year period in excess of $6.0 million. We have entered into cellular tower agreements. We adjust fees annually as needed for tuition and parking fees.

REVENUES BY SOURCE

INCREASE/DECREASE

 

2002-2003

2003-2004

Dollars

Percent

County Appropriation

$198,600,519

$218,701,514

$20,100,995

10%

Fund Balance Appropriated

15,306,841

8,127,366

(7,179,475)

(47%)

Local Sources-Unrestricted

7,873,000

9,173,000

1,300,000

17%

State (Grants)

4,776,786

6,713,079

1,936,293

41%

Local Sources-Restricted

4,328,358

4,311,993

(16,365)

0%

Operating Transfers In

3,806,392

3,309,327

(497,065)

(13%)

Local Sources - Tuition/Fees

691,533

715,600

24,067

3%

Federal (Impact Area Grants, ROTC)

523,139

422,360

(100,779)

(19%)

Total

$235,906,568

$251,474,239

$15,567,671

7%

Local Months of Employment Comparison

 

FY 2001-02

FY 2002-03

FY 2003-04

Increase

Percent

Administration

2,877.39

2,959.29

3,031.29

72.00

2%

Professional Educator

6,651.50

6,876.25

7,795.25

919.00

13%

Professional - Other

714.50

756.80

861.80

105.00

10%

Technical

2,356.80

3,055.35

3,226.35

171.00

6%

Office/Clerical

3,272.27

5,809.26

5,831.26

22.00

0%

Crafts/Trades

1,380.00

1,476.00

1,656.00

180.00

12%

Other

4,119.70

2,460.70

2,634.70

174.00

7%

Total

21,372.16

23,393.65

25,036.65

1,643.00

7%

Federal Funding

The federal funding budget for 2003-2004 is $35,663,195, which is a decrease of $9,084,846 or 20 percent from 2002-2003.

The federal budget included in the Official Budget was built based on grant awards from 2002-03, excluding carryover balances. Federal grants typically have different fiscal years than those of the school district. Therefore, carryover funds will occur. We do not estimate the amount of carryover. We record the actual carryover in early July. These figures are reported to the board in the first quarterly budget report. As we receive more specific information, the federal grants will be adjusted to reflect a better estimate of funding for 2003-2004. We have not received planning allotments from North Carolina Department of Public Instruction (NCDPI) for federal grants in time to include those estimates in this document.

Federal Months of Employment Comparison

 

FY 2001-02

FY 2002-03

FY 2002-04

Increase

Percent

Administration

141.60

133.60

133.60

0.00

0%

Professional Educator

3,474.50

3,873.70

4,082.70

209.00

10%

Professional - Other

326.00

320.28

332.28

12.00

4%

Technical

551.00

582.00

962.00

380.00

65%

Office/Clerical

134.30

80.25

80.25

0.00

0%

Crafts/Trades

0.00

0.00

0.00

0.00

0%

Other

18.00

12.00

12.00

0.00

0%

Total

4,645.40

5,001.83

5,602.83

601.00

12%

A review of the increase in the December childcount over the last five years (Dec. 1997 - Dec. 2002) shows that the average special education growth per year over the five-year period is approximately 820 students. Using a projected ratio of one teacher per 16 students, 52 teachers will be required to meet the needs of the additional students. Of this number, only 27 teacher positions can be funded from projected increases in state and federal funds. Ten teachers positions are requested to be added to local funding. Fifteen teacher positions (150 months) will be funded from federal carryover funds.

Of the average per year growth of 820 students, approximately 25 percent of these students will be served in full-time programs that require a teacher assistant and some students may need a teacher assistant to meet their individual needs. A total of 17 teacher assistants will be required to meet the needs of the additional students. Also, the Occupational Course of Study (OCS), one of the four pathways leading to a diploma, requires field-based training and employment experiences (600 hours/student). One job coach per 12 students is needed. Currently the 309 OCS students require 26 job coaches. Of the total number of teacher assistants/job coaches needed (43), only 11 teacher assistant positions can be funded from projected increases in state and federal funds. Thirty-two (32) teacher assistants/job coaches (320 months) will be funded from federal carryover dollars.

Positions funded with federal carryover dollars for the 2003-04 school year are recurring costs to the system and will require local support for subsequent years.

Budget 2003-2004

$35,663,195

Budget 2002-2003

$44,748,041

Decrease

($9,084,846)

Multiple Enterprise

The multiple enterprise fund includes the Child Nutrition program and other self-supporting programs such as Before- and After-School Care, Tuition Summer School, Summer Camp, and Preschool Programs. Tuition or fees solely support these programs. We charge indirect costs at the unrestricted maximum rate of 14.365 percent on all these programs.

The multiple enterprise funding budget for 2003-2004 is $36,747,120, a decrease of $1,653,702 or four percent from 2002-2003. The budget includes $29,294,058 for the Child Nutrition program and $7,453,062 in tuition and fee-supported programs.

The Child Nutrition budget includes anticipated salary increases of two percent and health insurance increase of 22.5 percent as well as inflationary increases for food and supplies. Any reduction of federal funds for this program will require us to implement one or more of the following: reduce costs where possible, increase meal prices, and implement more satellite meal programs. Any reduction in state funds will require elimination of the free kindergarten breakfast programs. There is no increase in breakfast or lunch prices for 2003-2004.

BREAKFAST

2001-02

2002-03

2003-04

Inc./Dec.

Student Full-Paid K-5

$0.80

$0.80

$0.80

$0.00

Student Full-Paid 6-8

$0.90

$0.90

$0.90

$0.00

Student Full-Paid 9-12

$1.00

$1.00

$1.00

$0.00

Student Reduced

$0.30

$0.30

$0.30

$0.00

Adult

A la carte

A la carte

A la carte

N/A

LUNCH

2001-02

2002-03

2003-04

Inc./ Dec.

Student Full-Paid K-5

$1.60

$1.75

$1.75

$0.00

Student Full-Paid 6-8

$1.70

$1.85

$1.85

$0.00

Student Full-Paid 9-12

$1.85

$2.00

$2.00

$0.00

Student Reduced

$0.40

$0.40

$0.40

$0.00

Adult

A la carte

A la carte

A la carte

N/A

Multiple Enterprise Months of Employment Comparison

 

FY 2001-02

FY 2002-03

FY 2003-04

Increase

Percent

Administration

156.00

174.00

186.00

12.00

7%

Professional Educator

20.00

20.00

25.00

5.00

25%

Professional - Other

12.00

12.00

12.00

0.00

0%

Technical

42.00

78.00

78.00

0.00

0%

Office/Clerical

174.00

174.00

186.00

12.00

7%

Crafts/Trades

826.00

972.00

982.00

10.00

1%

Other

5,610.60

5,717.10

5,809.10

92.00

2%

Total

6,840.60

7,147.10

7,278.10

131.00

2%

Budget 2003-2004

$36,747,120

Budget 2002-2003

$38,400,822

Decrease

($1,653,702)

Capital Outlay

The capital outlay budget for 2003-2004 totals $28,988,266. The budget includes $14,000 interest earned, $26,000 sale of property, $4,998,486 county appropriation, and $23,949,780 in building program funds.

Developing the budget based on the Board of Education's 2003 Goal requires focusing on classroom improvements and coordinating the needs of several departments. Our staff and support personnel provide the services to power the education of our children.

The development of the long-term strategic plan of any department's operation helps the group prioritize expenditures and resources. Improving maintenance services to the school and the classroom is critical. By identifying the long-term plan of district needs, the resources are effectively applied.

The recent report to the Board of Education and Board of Commissioners, titled "Strategies to Optimize the Planning, Design, Construction, Repair and Maintenance of School and County Facilities" identified thirty-six recommendations. Some can be addressed immediately, and others are long-term strategies that will require additional funding or directive.

Major efforts for the coming year include expanding clustered maintenance teams, which have shown through a three-year pilot study to improve the quality of maintenance, decrease response time, and increase the number of work orders performed on the school campus. Another change is the reorganization of the maintenance and operations department to support clustered maintenance, project planning, and safety.

Wake County is divided into five regional maintenance areas. Each region contains four or five maintenance clusters. A cluster consists of five maintenance personnel that perform daily maintenance for five to seven schools. The personnel are located at one of the schools. Personnel travel time is greatly reduced, facility familiarity is increased, customer relations are stronger and facility ownership is again an important factor.

Fortunately, the support and voter approval of building program funding over the last 15 years has helped Wake County Schools address the impact of student growth and reduce the deferred maintenance of our existing facilities. PLAN 2000 dedicates over half of the funds to existing school renovations and replacement of equipment. Developing long-term needs of every building is vital to create the needs of a capital project budget versus the costs associated with the operating budget.

The operating budget addresses the maintenance and repair of the existing facility; including items such as housekeeping, general repair, and grounds maintenance. There is a small component dedicated to minor renovations or changes of space. The capital budget addresses larger projects - those with a budget of $100,000 or more.

The current capital budget plan contains funds for the minor improvements that will need to be made in the schools and administrative area. The major portion of the capital budget is for mobile unit relocations or leases.

The replacement of roofs, carpet, mechanical, electrical, and computer network systems are being covered in the bond-funded building program. It is critical that as the proportion of bond-funded replacement projects decrease, the capital budget increases. Otherwise, Wake County Public Schools starts the cycle of "deferred" maintenance again. The planned replacement of infrastructure is critical to maintain and extend the useful life of a facility. Our community expects us to keep our facilities clean and useful for many generations. The capital fund should cover the scheduled replacement of building systems, and the operating fund provides for the maintenance and repair of the building.

Major capital spending results in additional facility and grounds square footage requiring maintenance and utilities. The maintenance consists of custodial, preventive maintenance, mowing, landscaping, storm water drainage, solid waste management, energy management/scheduling (rental of school property, after-hour usage, etc.), audiovisual support, vehicle maintenance, pest management, and minimal unscheduled maintenance. The utilities consist of electrical, gas, water, sewage, and fuels.

These functions require additional manpower, supplies, phones, computerized maintenance management, and vehicle support. If adequate resources are not provided for maintenance, the facility life is dramatically reduced, unscheduled work will increase, facility maintenance efficiency will be reduced, and energy costs will increase.

Major capital expenditures for deferred maintenance and replacement can save the school system operating dollars. Permanent fixes to long-term maintenance problems result in a reduction of the deferred maintenance backlog. An improvement in mechanical systems or structural integrity increases each part's life expectancy and reduces energy costs.

By reducing the inefficiency caused by unscheduled maintenance calls, the workforce can concentrate on scheduled work such as preventive and routine maintenance. These savings will be short-lived if adequate resources for preventive maintenance are not provided.

Maintenance and Operations cost are compared on a continuous basis with industry standards/averages, benchmarked school systems and local government agencies. Maintenance funding remains at half the industry standard. Modest increase were provided to cover over 700,000 square feet in new construction, mandated code changes, and one time funding to cover potential safety issues identified during a facility assessment. An incremental increase ($3.7 million) was requested to reach the industry standard in five years. It was deferred for the third year in a row. Funding provided for new square footage was provided at the same rate of half the industry standard. Normal facility deterioration is estimated at two to four percent per year. A facility with deferred maintenance or maintenance backlog has a deterioration rate of four to eight percent. At current funding levels facilities new or old will continue to deteriorate at higher than normal rates. This pattern will increase the size of future Capital programs.

PLAN 2000, the current school building program, is the fifth in a series of building phases that began in 1985. Despite building 51 new schools and expanding dozens of existing school facilities since 1986, the system needs more space to accommodate the influx of more than 3,000 new students each year and funding to address its aging facilities.

The PLAN 2000 (2001-2004) school building program, provides 14 new schools to accommodate more than 10,400 new students expected in our schools by 2004. Additionally, 35 schools will receive major renovations and expansions, and another 61 schools will get much needed maintenance and repair. A $500 million bond referendum to finance this plan was supported by a special citizens commission and approved by voters on November 7, 2000. Another $50 million is being provided by Wake County government from general revenues. No tax increase is required to pay for this building program.

In 2000-2001, the county passed a resolution for $370.6 million for PLAN 2000. In 2001-2002, the county approved resolutions totaling $59.8 million for PLAN 2000 and is scheduled to approve $95.6 million of resolutions in 2002-2003. PLAN 2000 appropriations through 2002-2003 will equal $526.0 million, and we anticipate spending $230.0 million by the end of 2002-2003; leaving a rollover balance of approximately $296.0 million for 2003-2004.

Budget 2003-2004

$28,988,266

Budget 2002-2003

$471,114,137

Decrease

($442,125,871)

Competitive Factors

The school system has faced many challenges over the past ten years. During this time, we have successfully managed a building program, which is one of the largest in the nation. We have received an "unqualified" audit opinion each of the last thirteen years.

For the past twelve years, we have received the Certificate of Excellence in Financial Reporting from both the American School Business Officials (ASBO) and the Government Finance Officers Association (GFOA). We have also received the Distinguished Budget Presentation Award from the GFOA the past ten years. This award is the highest form of recognition in governmental budgeting. We have received the Meritorious Budget Award from the ASBO for three years. In 1998, our school system was the only one in North Carolina to receive the Advancement Award of the North Carolina Quality Leadership Foundation - a process similar to the Malcolm Baldrige award criteria. We have aggressively managed our budget and wisely invested available resources. These accomplishments are the result of a dedicated and competent staff, a supportive board, and a caring and supportive community. The end result of all this has been continued improvement of programs and outcomes for our students.

Conclusion

Challenging times require exemplary leadership. As we face uncertainty and attempt to respond to the issues we face at all levels, from local and state to international, we tend to center ourselves on those things that can provide stability. Schools traditionally serve as integral parts of our community that have a centering effect. WCPSS is fortunate to have strong leaders at all levels, from the classroom to the boardroom. Strong leaders maintain a focus on the mission of the organization - in our case, the needs of all students.

The Official Budget for 2003-2004 continues to address increases in student population and our strong effort to make certain that student achievement is at the forefront. Recognizing the state of the economy in Wake County and in North Carolina, we have made substantial budget reductions based on a stringent review process, in order to address systemwide needs related to growth and our commitment to academic achievement for all students. In addition, we have incorporated a number of recommendations from the CAC related to employee recruitment and retention, and program initiatives directly related to student achievement. Also, incorporated in the budget development process are recommendations from previous audits and independent studies of the budget.

Federal legislation has now moved the bar to the highest level. No Child Left Behind (NCLB) is a comprehensive mandate that requires a level of student achievement for all groups that will result in proficiency in skills and core subjects for all students in our nation. WCPSS has taken gigantic steps toward this goal through our effort to have 95 percent of students in Grades 3 and 8 achieve proficiency in reading and math. As we have addressed this goal, not only have those students previously not proficient made substantial progress, but our highest achieving students have also made substantial gains. The percent of students at the highest levels of achievement continues to grow each year while the percent of students who are not proficient decreases. We are now poised to adopt our next goal - beyond 2003.

In order to continue this progress and to meet needs of more than 3,000 additional students who will enter our schools next year, and to achieve our next goal, additional resources are needed. In a time when public funds are stretched, our leaders at the building and the central levels have streamlined processes and utilized strategies to most effectively and efficiently use financial and human resources in meeting our goals.

I am proud of the focus on students that our employees maintain, and the outstanding results they have generated in the form of continued improvement in student achievement. Our progress as a school system is due in large part to strong leadership consistently demonstrated by classroom teachers, principals, board of education members, and the community that supports them. As we look to the future and the uncertainty that we may face, it is clear that a strong school system, led by focused leaders supported by our entire community makes economically good sense and will provide strength to our county, state, and our nation.

Bill McNeal, Superintendent