Coronavirus Potential Budget Amendments

School Board Presentation April 14, 2020

Deborah White, CFO

Coronavirus- Impact of Federal legislation

Phase 1 - no direct impact for schools

Phase 2 - Families First Coronavirus Response Act - gave Emergency FMLA and Paid Sick Leave effective 4/1/20 - 12/31/20. As a public entity, we must provide the benefit but receive no tax credit to offset the cost (anticipate minimal expense); provided flexibility for cafeteria staff to provide meals in community

Phase 3 - CARES Act - $13.5 B K-12 Stimulus funds - estimated $282,605 for GCPS based on Title I allocation. Some flexibility on federal requirements, extra Head Start funding, some hotspot funding.

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Economic impact of Coronavirus on State Revenue

• State Secretary of Finance: expect $1B loss in state revenue over each of the next two years, state “cuts of some kind” are coming. First projection with real downward trend data won’t be available until mid-May (John Layman phone call, 3/31/2020)
• Difficult to model for this unprecedented sudden stop of economic activity
• Governor didn’t sign GA approved Caboose & biennial budgets. GA to take up Governor’s amendments starting 4/22/2020.
• Probable state SOQ cuts for FY 2021; may be safe for FY 2020

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Economic impact of Coronavirus on State revenue

• No loss expected in Lottery funding in FY 2020. Any lottery revenue loss would be reflected in FY 2021 or later. (VA Lottery DOF email, 4/2/2020)
• Significant sales tax cuts for all school divisions
• $2,340,347 actually received through March
• $294,717 expected for April (for February, state announced 8.8% increase over January on March 11)
• Need $815,968 to meet budget - project only $400K recd May - August (March - June sales tax) - expected to be short $416,000 FY 2020 (Chief economist Layman concurs, 3/31/20)
• Assume FY 2021 equal to FY 2015 sales tax revenue? (9% decline from FY 2019 actual sales tax receipts)

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Economic impact of Coronavirus on local revenue

• Lower interest on investments/bank stock tax
• Lower local sales tax revenue and building permit revenues
• Unpaid real and personal property tax bills
• Discussed at 4/7/2020 BOS meeting and based on BOS approval 4/21/2020:

County proposes to reduce funding for FY 2020 by $150,000 with Schools allowed to carry over any additional savings into FY 2021. FY 2021 appropriation for operating budget: level-funded with FY 2020 ($950,000 less than originally presented). FY 2021 CIP budget includes RES parking lot expansion ONLY.

Expanded Unemployment Insurance

Federal: Families First CR Act - gives state some relief for expanded state unemployment insurance.

Federal: CARES Act opens up who gets benefits, gives states ability to add $600/week for most recipients

State (VEC) - no waiting period, online applications, no job searches, 3 months of benefits (ie, April - June), max $378/week depends on weekly pay (about 48%). Addl $600/week under CARES and to more wage earners (substitutes?) - can make weekly pay whole for some staff; only available through July 30, 2020.

Expanded Unemployment Insurance - potential impact for GCPS

GCPS is “reimbursable employer” - pay back dollar for dollar any state money paid in claims or portion of “subsequent employer” termination -- budget $5,000/year for this, we will go over budget in FY 2021

Furlough some staff? What is the impact to employees?

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*VEC will evaluate each employee individually based on their own pay history; this analysis assumes they have had no LWOP

FY 2020 Budget Changes - Operation Fund Revenue

Loss due to lower student enrollment* -$138,000

Anticipated Loss due to Lower Sales Tax Revenue* - 416,000

Net increases due to GA Caboose budget* + 20,000

Change in Goochland County Local Revenue** - 150,000

Net decreases due to local charges for service - 30,000

-$714,000

*All subject to change with General Assembly state budget amendment process starting 4/22

**Subject to BOS approval

FY 2020 Budget Changes - Operating Fund Expenses

Cancelled school bus purchases -$285,000

Lower electricity/water & sewer costs/heat - 93,000

Lower fuel, transportation stipends - 262,500

Other expenditure reductions - 247,500

Savings if all but payroll cut for FY 2020 -$888,000

-->$174,000 available for needed expenses AT THIS TIME - March overtime, invoices/Bank of America yet to be paid, June restart expenses, “room for error” in projections, some operating expenses could be shifted to the federal grant fund

FY 2021 Budget Changes - Revenue

County transfer reduction (FY 2020 level funding)* -$950,000

Anticipated State Sales Tax Revenue (2015 level)* - 538,700

State SOQ budget* (unknown, offset stimulus?)* - 280,000

Federal CARES Act stimulus (estimate) + 280,000

Estimated net revenue loss -$1,488,700

*All subject to change with Board of Supervisor decisions, General Assembly state budget amendment process starting 4/22/2020

FY 2021 Budget Changes - Expenses

FY 2021 Goal 1 initiatives removed* -$295,969

FY 2021 Goal 2 initiatives removed* -944,698

FY 2021 Goal 3 initiatives removed* - 21,567

Only 1 bus purchased - 190,000

Misc. cuts to Goal 3 areas - 36,466

Total expense reductions -$1,488,700

*See subsequent slides for details

Red-boxed items - removed from FY 2021 budget

Green-boxed items - still funded in FY 2021 budget

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Red-boxed items - removed from FY 2021 budget

Green-boxed items - still funded in FY 2021 budget

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**NO CHANGE IN HEALTH INSURANCE PREMIUMS**

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Red-boxed items - removed from FY 2021 budget

Green-boxed items - still funded in FY 2021 budget

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FY2020-21 CIP Priorities:

New GES reserves/engineering/rezoning - delay project by at least 1 year

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RES Parking Lot Expansion - receive additional FY 2021 $859,818

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Possible future projects to be paid with remaining FY 2020 CIP funds:

Building Automation System/HVAC replacements

GHS Capital Roof Projects

C-143 Acoustic - temporary fix

Promethean Board replacements (FY 2021 project)

HS Auditorium/library carpet replacements (FY 2021 project)

General maintenance replacement pool (FY 2021 project)

FY 2021 Budget Changes - Future decisions

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• Any additional compensation in FY2021 is not VRS-eligible (bonus only) if County appropriates more funds
• Keep an eye on attrition as an opportunity to re-shuffle staff (may be in economic downturn for two years)
• Recommend leaving one position vacant for FY 21 to fund School Social Worker position

Coronavirus impact on students

Real or perceived family health/death concerns

Parents have lost jobs/more poverty - more socio-emotional needs, transfers, doubling up/homeless

Potentially more students enrolling (can’t afford private schools)

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