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HomeMy WebLinkAbout032718wsHarnett County Board of Commissioners Work Session Tuesday, March 27, 2018 9:00 am 9:00 am Meeting with the Board of Education 9:15 am Closed session 10:00 am Harnett County Schools Funding 10:15 am Harnett County Debt Capacity 10:30 am State School Construction Bonds — HB866/SB542 10:45 am 2018-19 Priorities for new construction/renovations/maintenance 11:15 am Old Benhaven Elementary School 11:30 am County Manager's Report: - April 2, 2018 Regular Meeting Agenda Review - Invitations and upcoming meetings 11:45 am Closed Session 1:00 pm Adjourn HARNETT COUNTY BOARD OF COMMISSIONERS March 27, 2018 CLOSED SESSION MOTION I move that the Board go into closed session for the following purpose(s): (1) To assist in the formulation of plans by the Harnett County Board of Education relating to the emergency response to incidents of school violence; and (2) To discuss and instruct the County staff concerning the position to be taken by the County in negotiating the material terms of a proposed contract for the acquisition of real property This motion is made pursuant to N. C. General Statute Section 143-318.11 (a) (8) & (5) Education Capital Funding Funding Formula Proposals Introduction: The County has an approved formula that calculates current expense funding but not capital. This formula is based upon the most recently known 2nd month average daily membership (ADM) count of students within the Harnett County Public School System, times the most recent known three-year average of approppriations per ADM for Harnett County as determined by the NC Department of Public Instruction. Background: The funding of capital and capital maintenance items for schools in the past was based on available funding. This method was inconsistent and was amended throughout the year. A funding formula would allow consistency and enable the schools to better plan the upcoming year . It would also eliminate unnecessary the "back and forth" required by staff and board members in addressing these types of items. The table below reflects prior years' activity . Fiscal Year Adjusted Fund Original Budget Budget Activity 2013 110 $ $ $ 2014 110 2015 110 - 308* 1,300,000 1,300,000 278,389 2016 110 255,707 280,707 280,707 308* - 1,039,787 2017 110 - 122,625 122,625 229** 972,126 972,126 929,737 308* 9,334 2018 110 750,000 1,884,630 1,112,106 Avg Original Avg. Adjusted Average Budget Budget Activity Fiscal Years 2015 - 2017 $ 421,306 $ 445,910 $ 443,430 * CP1501 School Projects (Article 46). When the local option sales tax was approved by the voters, the schools requested that they be allowed to use $1.3 million for maintenance and repairs in various schools. This project was approved on 1/14/2015 and the final funds were spent on 9/21/2016. ** Fund 229 represents the. sales tax expansion funds ($3,800,000) that are restricted for Education, Community College and Economic Development uses. On July 1, 2017, the schools were allocated $972,126 for capital and maintenance needs. At the end of the year, $42,389 of the allocation remained unspent and was reappropriated for use in this fiscal year. C:\Users\gwheeler\AppData\Local\Microsoft\Windows\INetCache\Content.Outlook\TPTEQCLV\Education - Capital Funding Formula Proposal Proposed Solution: Establish a tunding tormula based upon a percentage of the prior tiscal years net Article 39 (General Fund) sales tax collections. By using the net sales tax, the funding will remain more consistent than in prior years and should enable the schools to better plan for these items. Note: The Sales Tax Expansion ($3.8 million) is not proposed for use in the capital funding formula. The portion of these funds that represent education will be used toward the current expense funding of the $1,500 teacher supplement. For FY 2018, this amount was projected at $2,199,000. Using the table below, the FY 2018-2019 capital appropriation to the schools would be $896,881. 2014 2015 2016 2017 Article 39 Sales Tax $ 5,469,096 $ 6,061,497 $ 6,993,302 $ 7,232,427 Less: City Hold Harmless (847,576) (932,445) (993,361) (1,075,170) Schools Hold Harmless (1,398,432) (1,549,804) (1,568,663) (1,672,850) Article 39, net $ 3,223,088 $ 3,579,248 $ 4,431,278 $ 4,484,407 Allocation Based upon selected percentage 15% $ 483,463.20 $ 536,887.20 $ 664,691.70 $ 672,661.05 20% * $ 644,617.60 $ 715,849.60 $ 886,255.60 $ 896,881.40 21% 22% 23% 24% 25% 676,848.48 $ 709,079.36 $ 741,310.24 $ 773,541.12 $ 805,772.00 $ 751,642.08 $ 930,568.38 $ 941,725.47 787,434.56 $ 974,881.16 $ 986,569.54 823,227.04 $ 1,019,193.94 $ 1,031,413.61 859,019.52 $ 1,063,506.72 $ 1,076,257.68 894,812.00 $ 1,107,819.50 $ 1,121,101.75 * At the budget work session on February 27, 2018 the Board expressed an interest in setting the funding percentage at 20% C:\Users\gwheeler\AppData\Local\Microsoft\Windows\INetCache\Content.Outlook\TPTEQCLV\Education - Capital Funding Formula Proposal Current Expense Funding History Funding Revision Introduction: The County has an approved formula that calculates current expense funding. This formula is based upon the most recently known 2nd month average daily membership (ADM) count of students within the Harnett County Public School System, times the most recent known three-year average of approppriations per ADM for Harnett County as determined by the NC Department of Public Instruction. 3 -?7-)8 N� ,hoc gok kY S Background: Because Harnett County is a Low Wealth County, funds that are not given as capital are identified as "current expense". Particular care should be given in appropriating new funds because those funds cannot be stopped without potentially jeopardizing the low wealth formula. Simply stated, the County cannot give less than the "per pupil amount" of the preceding year. The table below reflects the past five years of current expense funding. 2017 2017 2018 2018 Original Adjusted Original Adjusted 2014 2015 2016 Budget Budget Budget Budget Current Expense: Current Expense $20,523,700 $21,523,700 $21,267,993 $21,230,016 $21,420,138 $21,068,027 $20,168,027 Additional Positions 0 0 0 0 72,542 200,000 524,195 Teacher Supplement 0 0 0 1,252,000 2,199,000 1,776,084 K-3 0 0 0 0 1,055,200 920,000 0 Total current expense $20,523,700 $21,523,700 $21,267,993 21,230,016 $23,799,880 24,387,027 $22,468,306 C:\Users\gwheeler\AppData\Local\Microsoft\Windows\INetCache\Content.Outlook\TPTEQCLV\Education - Current Expense - Proposal Proposed Solution: For budget year 2019, include all "current expense" items listed for the 2018 adjusted budget in one current expense account that will be paid each month on a 1/12 basis. For teacher supplements, it has been the desire of the Harnett County Board of Commissioners to remain abreast of the number and type of school staffing personnel. To continue tracking the school personnel count, the budget ordinance will be modified. The Public School Personnel Summary count will remain but the paragraph will be modified as shown below: (request additional input from the Harnett County Board of Commissioners) Teacher's Supplement: (current) Harnett County will budget a classroom teacher supplement for all teachers employed for at least one year as of September 1st of the current fiscal year, based upon the latest known Public School Personnel Summary as provided by the NC Department of Public Instruction. Teacher's Supplement: (proposed) The current expense appropriation includes an approximated $1,500 supplement for classroom teachers employed for at least one year as of September 1st of the current fiscal year, based upon the latest known Public School Personnel Summary as provided by the NC Department of Public Instruction. Article 44 Restricted Sales Tax Expansion Funds will be used to offset this appropriation. For the fiscal year 2017-2018 budget year, this amount has been estimated as follows: Elementary Teachers 622 Secondary Teachers 170 Other Teachers 468 Subtotal Teachers 1260 Guidance 54 Psychological 8 Librarian, audio 26 Consultant supervisor. 46 Other 72 Subtotal Professional 206 Total 1,466 1,466 x $1,500 = $2,199,000 C:\Users\gwheeler\AppData\Local\Microsoft\Windows\INetCache\Content.Outlook\TPTEQCLV\Education - Current Expense - Proposal Discussion Materi Harnett County, North Carolina c2 0 04r Member NYSE 1 FINRAI SIPC Debt Affordability Analysis a) O a) co U) U co 0 E 0. 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N i Q `i o c > 3 3 ate+ a} N. CO Lco x N N N N .4- N N N y N 'o «i W W U Z Z Z FO- 1- 0-} Q} Q} i- O N O N N N0 N0 N0 N 1- LLL. Q Z N M a LO CO 1- 00 O O <--1 N M 7 O CO N- CO O O c-1 N M.7 0 O 1` CO 0 0 <-1 N M V e"1 <-1 .--1 .--1 r -I ,'-1 r-1 ,1 <-I N N N N N N N N N N M M M M M 1 Harnett County, NC February 27, 2018 Harnett County, NC February 27, 2018 Case 1: Debt Affordability Analysis W V m Q O n O m 01 m N N� 0.0 .0i m'N' 10 0 01 `"m0 N N c0 m N e m N N ce N 0 H M0 0 0 m N Q O m. 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L C .00 G p c .°). c>0 .c 7-Ea._o 3; 1-3° ra° 32 7-h«°° ro o n 0 Version 1.13.14 CH 1 MB 1 TC C) Harnett County, NC February 27, 2018 NC Students Need H866/ S542 School Capital Bond The Public School Building Bond Act (HB 866/SB 542) would place a $1.9 billion school construction bond on the ballot in November 2018. • Counties urgently need a bond to address over $8.1 billion in needs for new facilities and renovations at public schools throughout North Carolina. • Historically, statewide school bonds have boosted construction every ten years, but the last one was in 1996 - over twenty years ago. • Between 2011 and 2015, nearly 75% of the lottery funds allocated to counties were spent to pay off capital debt rather than for new construction or renovations. • Public school capital needs will continue to soar as school districts implement the new mandate to lower class sizes in grades kindergarten through third grade over the next four years. • The last statewide bond approved in 2016 - Connect NC - didn't provide any funds for public school construction. North Carolina Association of County Commissioners 353 East Six Forks Road, Raleigh NC 27609 www.ncacc.org I (919) 715-2893 • Now is the time to act because interest rates are low and North Carolina currently has the debt capacity to support a $1.9 billion bond. • Delaying school construction projects will only make the problem more expensive later. • The school construction bond can help modernize school facilities to support the state's transition to digital learning, ensuring that North Carolina students have the tools to compete in the workforce of the future. • All counties have limited options to raise revenue to pay for school construction. Many counties have no room to raise property taxes and are seeing no growth in their sales and property tax bases. • Passage of the Public School Building Bond Act builds on the General Assembly's recent progress toward addressing unmet school capital needs and helps counties fund urgent projects that aren't eligible for the new Needs - Based grant program. To learn more or to join the effort visit www.ncschoolbond.com North Carolina Association of County Commissioners 353 East Six Forks Road, Raleigh NC 27609 www.ncacc.org I (919) 715-2893