The third work session discussing the 2021-2022 Annual Budget was Tuesday, March 2, 2021.  We reviewed the crossover budget, compensation, other review, and departmental budget request updates.

Crossover Budget

The House of Delegates approved a budget that was $1,861,645 higher than the Governor's budget, while the Senate's budget was $1,507,696 higher.  This was a small difference of $353,949.  Based on the Senate's budget, the increase in the School Division's operating budget from the 2021 fiscal year would be $3,460,807.  Both versions of the crossover budget included a raise rather than a bonus, which was originally promoted by the Governor.  Also, both versions continue to support no loss funding, reduced counselor per student ratios, and increased Virginia Preschool Initiative funding levels. 

Compensation

The Senate budget included funding for a 3% raise and the House budget included funding for a 5% raise.  Subsequently, on February 27, 2021, the General Assembly approved funding for up to an average 5% of raises that were provided during the first year (2020-2021) plus any raises that will be provided in the second year (2021-2022) of the biennium, as long as at least 2% minimum is provided.

Here is what qualifies for our school division:

• The raise provided in December 2020 and made retroactive to July 2020
• Plus any raise provided in the school year 2021-2022 to be effective July 2021
• Minimum of 2% raise and Maximum of 5% raise

Here is a quick look at how much it would cost for the raise and how we hope to meet the qualification for full funding under this plan.

Just a side note: The funding is provided for 36.6% of SOQ positions, local funds pay for the remaining percentage for SOQ positions and for 100% non-SOQ positions. 

Other Revenue

We also reviewed County Revenue.  In addition to the $1,681,342, the County of Roanoke plans to transfer $2,110,780 to the school division for a total increase over the 2020-2021 transfer of $3,792,122.  A reduction of $2,000,000 will occur for the removal of the transfer from the health fund.  As it stands, the operating revenue is estimated to be approximately $5,311,637 based on using the Senate Budget.

Departmental Budget Requests

We reviewed department budget requests that remain unfunded from prior years or were added in the current year.  A few adjustments were made to the lists as information is obtained and are identified in red.  Full lists are available in the PowerPoint Presentation.

 Next Budget Work Session:  Will be scheduled upon receipt of the Final General Assembly Budget from the VDOE.

The second work session discussing the 2021-2022 Annual Budget was Tuesday, February 2, 2021.  We reviewed compensation, benefits, and departmental budget requests.

Compensation

Last year Gallagher performed a classification, job, and compensation study for the school division.  A full presentation was provided on February 7, 2020.  Originally, the current year budget was approved adopting the recommended support classification system, compensation scale, and placing support employees on the scale at the appropriate marketable position.  However, when revenues were reduced due to the economic fallout from COVID-19 stay-at-home orders, this implementation was reversed.

During the work session, we reviewed the costs of paying for the current year raise, implementing the support classification system, compensation scale, and placing support employees on the scale at the appropriate marketable positions, changing all part-time bus drivers and aides to 5-hour contracts, shifting the teacher scale by 0.5%, and providing a 1-step raise to all employees.  The teacher scale shift and the 1-step raise would qualify for the funding associated with the Governor's bonus. 

Benefits

Health Insurance

Roanoke County Public Schools offers a KeyCare 1000 plan through Anthem that is coupled with a Health Reimbursement Account (HRA). We are self-insured which means instead of paying a higher Anthem premium; we design a lower premium rate to cover actual claim costs, administration fees, and the on-site health clinic.  The School Division limits its risk of high dollar claim payments by purchasing stop-loss insurance for claim payments higher than a certain amount.  Last year this was $200,000, however this year we examined the cost-risk analysis and determined we would save money with minimal risk by raising the stop-loss limit to $250,000.  We do not recommend any premium rate change for 2021-2022. 

Dental Insurance

Roanoke County Public Schools purchases dental insurance through Delta Dental and subsidizes part of the premium for full-time employees.  The Vendor has agreed to hold premium rates level for the next year and so we do not recommend any premium rate changes for 2021-2022.  

Vision Insurance

Roanoke County Public Schools contracts with UniCare offer a Uniview Vision insurance plan that is offered to and fully funded by contracted employees who chose it.  The Vendor has agreed to hold premium rates level for the next year and so we do not recommend any premium rate changes for 2021-2022.  

Departmental Budget Requests

We reviewed department budget requests that remain unfunded from prior years or were added in the current year.  Full lists are available in the PowerPoint Presentation.

 Next Budget Work Session:  March 2, 2021, Crossover Update

The first work session discussing the 2021-2022 Annual Budget was Tuesday, January 5, 2021.  We reviewed student enrollment, the Governor's Budget, replacement plans, and anticipated budget obligations.

Student Enrollment

Projecting student enrollment is important because most of the state revenue is based on our March 31 ADM. If we estimate ADM too low, we miss the opportunity to spend the funds in a purposeful and meaningful manner.  However, if we estimate ADM too high, we cannot afford our planned spending. Due to the current health pandemic, school divisions across the Commonwealth have seen an average enrollment reduction of 3.5%.  Here at Roanoke County, we have seen a reduction of 2.9%.  2020-2021 budgeted ADM was 13,576, however, VDOE estimates our ADM will be 13,198.  December's enrollment was actually 13,179.  Due to the uncertainly still facing us, the staff is recommending the adoption of the VDOE ADM estimate of 13,087 for the 2021-20221 budget year.

Governor's Budget

This is the second year of the Governor's biennium budget.  Several key initiatives include:

• Funding for a 2% bonus for 2022.  To qualify for the bonus funds it must be paid between July 2021 and September 2021.  We cannot apply the raise provided by the School Board in December towards the eligibility of these funds.
• No Loss Funding of $1,314,207 for 2020-2021 and $1,109,745 for 2021-2022.  This will help offset the Basic Aid decrease due to the lower enrollment trends.
• Additional funding for both school counselors to reduce the number of teachers per pupil to 325-to-1 ratios in all schools.
• Increasing the per-pupil funding of the Virginia Preschool Initiative Program students by 21%.

The Governor's Budget is the first stepping stone of this process.  The General Assembly convenes on January 13, 2021, at which time the House of Delegates and Senate will develop their own budgets to be exchanged on February 9, 2021, at the crossover (the midpoint of the session).

Replacement Plans

The replacement schedules layout future spending forecasts to methodically plan for future funding.  This allows the School Division to set aside funds at a steady level rate to fund periodic large dollar needs, rather than face large fluctuations year.

• Textbook Adoption Plan - A 7-year plan addressing the need to replace textbooks and other electronic resources for the classroom following VDOE guidelines. This will ensure classroom materials remain current and relevant.
• Fleet Replacement Plan - A 15-year plan addressing the need to replace school buses and other vehicles on a useful life schedule. This will ensure the fleet does not age to a point where the cost to maintain the fleet exceeds the replacement cost of the fleet vehicles. 
• Technology Replacement Plan - A 6-year plan addressing the need to continually replace technology infrastructure and equipment that require a significant amount of resources.  This will help avoid costly service outages and keep the School Division up to date with technology needs.
• Capital Improvement Plan (CIP) - A planning tool used to identify funding and allocate resources for large ongoing capital needs exclusive of large routine maintenance needs. Projects on the CIP are typically greater than $500,000 in value and may be funded by cash or by the sale of bonds.
• Capital Maintenance Plan (CMP) - A 10-year plan for preventative maintenance projects to maintain the condition and longevity of school-owned buildings.  This will ensure we keep the buildings in good shape for longer life.

Anticipated Budget Obligations

We have begun to accumulate budget obligations.  The list includes transfers to fund replacement plans, which were mostly removed from the 2020-2021 baseline budget.  There are other operating one-time deferrals from the 2020-2021 budget.  The 2020-2021 pay raise is included in the list since it was not originally budgeted.  And finally, every year we have certain fixed contractual increases, which are on the list as well.  A full list of items accumulated to date is included in the work session presentation on the website.

Next Budget Work Session:  February 2, 2021 Compensation, Benefits, and Departmental Budgets