Photos by Susie Fitzhugh. Board Budget Work Session October 28, 2015 (Revised)

Transcription

1 Photos by Susie Fitzhugh Board Budget Work Session October 28, 2015 (Revised)

2 Agenda 1. FY14-15 Year-End Close Status Understanding FY15-16 Class Size Information 2. Current year FY15-16 Update Enrollment Budget Status 3. FY16-17 Budget Development Budget Guiding Principles Budget Development Calendar State Legislative Agenda/Biennium State Budget School WSS Formula Central Services Budgeting Process FY16-17 Projected Budget Historical Budget GAPS Three Year Financial Projection/Major Budget Changes List of Unfunded Needs 4. Questions? Appendix List of Future Budget Work Sessions State Not Fullu Funding MSOCs 2

3 1) FY14-15 Year-End Close Status Date Task 8/31/2015 FY14-15 fiscal year ends 10/27/2015 Accounting files draft FY14-15 F196 with Puget Sound ESD 11/2/2015 SAO audit team arrives at District Office 11/15/2015 Accounting files FY AFR F196 with OSPI 11/16/2015 SAO/Supt Nyland kicks-off FY14-15 audit 12/10/2015 Accounting presents unaudited FY15 AFR F196 to A & F Committee 1/20/2016 Per BP 6030, FY15 AFR F196 presented to Board May 2016 June 2016 Complete financial/ federal grant compliance audits Complete accountability audit and hold SAO audit exit conference 3

4 Understanding FY15-16 Class Size Information: Class size is not the same as students per teacher K K-High Poverty 9 to 12 Refer to class size handout. Actual state mandate class size adjusts for teacher planning time. Published Actual Mandate State Funded State only funds 73.9% of class size requirement. Operating levy funds Seattle class size. 4

5 a) Enrollment b) Budget Status 2) FY15-16 Current Year Update 5

6 2a) October Headcount: thru October 1 Headcount - 10-year Comparison 54,000 52,000 50,000 49,701 50,998 52,060 52,324 48,000 48,256 46,000 44,000 45,988 45,365 45,028 45,345 45,697 46,779 42, K-12 Oct 1 Headcount Data for current year from P223 report as submitted, all other years from OSPI report 1251H; Data does not include full-time Running Start students. 6

7 2a) Enrollment Update Prior Yr Current Yr Current Yr Expected Varience Varience Grade Oct 1 Headcount * Projected Oct 1 Actual Oct 1 * Growth from Projected from Prior Yr Band Enrollment (as Adopted) Headcount Prior Yr to Budget Budget (C ) - (A) (A) (B) (C ) (B) - (A) (C ) - (B) (C ) - (A) Kindergarten 4,932 4,981 4, (200) (151) Grades ,650 23,157 23, (149) 358 Grades ,688 10,899 10, (96) 115 Grades ,790 14,053 13, (321) (58) K-12 Totals 52,060 53,090 52,324 1,030 (766) 264 * Prior year Oct 1 Actual Headcount per OSPI published Report 1251H ** Current year Oct 1 Actual Headcount as reported to OSPI on P-223 report Data above does not include full-time Running Start students NOTE: Budget staff monitor impact of February 2015 s enrollment projection drop of 766 versus reported May 2015 enrollment decline of

8 2a) Current Year Enrollment by Grade Band Oct 1 Headcount Comparison, Prior 3 years & 10-Year Previous 25,000 21,076 22,101 22,650 23,008 20,000 18, ,000 10,000 9,857 10,136 10,447 10,688 10,803 14,103 13,473 13,555 13,790 13, ,000 3,927 5,016 4,895 4,932 4,781 - K Gr 1-5 Gr 6-8 Gr 9-12 Data above does not include full-time Running Start students 8

9 2b) FY15-16 Current Year Budget Status Negative budget items: Actual enrollment to budget variance... ($4.3M) SEA labor contract above anticipated budget... ($3.5M) Positive budget items: Potential prior year carryover support...tbd Teacher reassignments for adjusted enrollment....tbd Possible decrease in transportation expenditures..... TBD Issues that need to be resolved: USDOE/OSPI SPED funding holdback status...$3.0m Unfunded needs...($71m +) Note: District Office staffing and spending curtailment goes into affect on November 1. 9

10 3) FY16-17 Budget Development Budget Guiding Principles Budget Development Calendar Legislative Agenda/ State Budget School WSS Formula Update Central Services Budgeting Process Projected FY16-17 Status Historical Budget GAPS Three Year Financial Projections/Major Budget Changes List of Unfunded Needs 10

11 3a) Budget Guiding Principles Although the biennium Washington State budget reversed the trend of diminishing State funding for K-12, it did not replace the accumulated reductions of the prior 6 years. The severity of the accumulated shortfall continues to damage programs, infrastructure and student achievement, and extraordinary measures are required to achieve a balanced and sustainable district budget. We will work thoughtfully, diligently and transparently to achieve the best outcomes possible for SPS students, while acknowledging that these budget cuts are not in the best interest of our students. Student achievement and academic instruction are at the core of our work a sustainable level of funding for our schools is essential to success and to allow flexibility and innovation. 11

12 3a) Budget Guiding Principles, Cont. To accomplish our core work, student achievement and academic instruction, we must look for structural change that will Focus on budget sectors out of alignment with State and National spending per student benchmarks; Invite all labor partners to work with us to address continuing budget shortfalls; Align job descriptions and expectations with the current needs of today s and tomorrow s students; and Identify and prioritize opportunities to improve operational efficiency including the identification of externally provided services that can be renegotiated. Continue to evaluate strategic initiatives, programs and functions to determine if they have produced desired results while shifting investment to proven and promising ideas that align to our strategic objectives. Implementing the Strategic Plan will require the reallocation of resources. Ensure a lean infrastructure exists to support instruction, employees and organization decision making while remaining legally compliant. Continue the governance investments required to ensure compliance to Board policies, to verify fiscal controls, and to create a culture of ethical behavior in Seattle Public Schools. 12

13 3b) FY Budget Development Calendar October 28, Guiding Principles October 28 to May 25, Board Budget Work Sessions (see Appendix) November 12 to June 9, Audit & Finance Committee Meetings November 16, Central Office Budget Instructions December 15, School Funding Model Recommendations Finalized December 18, Governor s Budget January 11 to March 10, State Legislative Session February 17, Budget Instructions to Schools March 10, Washington State Budget Adoption April 18, Final Balancing June 15, Introduce Budget to Board June 22, 2016 Required Public Hearing July 6, Board Action to adopt FY budget 13

14 3c) State Legislative Agenda/ Biennium State Budget November 4 elections: Potential changes in legislative make-up in Washington DC and Olympia Initiative 1351 class size reduction will need funding Legislative Agenda: 1. Fully Fund McCleary including Regional salaries 2. Address capacity needs in Seattle 3. Close opportunity gaps If not funding McCleary: Extend levy lid authority, Fully fund 24 credit high school curriculum, and Fully fund common core requirements 14

15 3d) School WSS Formula Update Need to incorporate McCleary class size for high poverty schools 50% or greater October 1, 2015 K-3 only Desire to stabilize assistant principal/counselor assignment factor Review/potentially adjust non-staff and Free and Reduced lunch basic education rates No enhanced funding currently identified 15

16 3e) Central Services Budgeting Process Through 1:1 meetings with Department Managers, reviewing their planning worksheet submissions, and a careful prioritization process, we anticipate we will be able to: 1 Surface strategic needs and issues that otherwise would not be identified 2 3 Understand core business needs that impact the sustainability, efficiency and quality of services provided to stakeholders Engage the board and senior leadership in productive conversations around where gaps exist Fund core strategies in a strategic and coordinated way that allows investments to build on each other year after year to achieve vision Better awareness and transparency within the Central Office around business needs, and promotion to raise the bar for strong stewardship and efficient use of resources Have the least harmful impact if services/staff need to be reduced or eliminated to address a budget shortfall 16

17 3e) Timeline and Process Update Oct Nov Dec Jan Feb Mar Activity Start End 10/12 10/26 11/9 11/23 12/7 12/21 1/4 1/18 2/1 2/15 3/1 Budget balancing / reconciliation with all Central Office Departments Led by Budget Team Planning Kick-Off 10/14 11/23 1/30 Departments Complete Planning Exercise to identify stakeholders, define great service, assess current service levels, and understand gaps Review submissions for completeness and followup for late submissions Department Managers meet with Leadership (Deputy Superintendent, Asst. Superintendents / Exec. Director to talk through needs / concerns Asks / Needs summarized and analyzed Additional iterations on worksheets as needed Division level Prioritization with Assistant Superintendents and their respective teams Prioritization Full Day Workshops + Ongoing decision-making (incl. community involvement Process outcomes shared with Central Office Managers; Process concludes Funded / Approved priorities added to appropriate budgets Led by Budget Team 10/14 11/20 11/23 11/30 12/7 1/15 12/7 1/31 2/8 2/14 2/8 3/7 3/8 3/15 Winter Break 17

18 3f) Projected FY16-17 Budget FY16-17 Major Budget Changes (Dollars in Millions) Surplus/ GAP 1 Materials, Supplies, Operating Costs (MSOCS) $1.3 2 Operations Levy $ drop in per pupil inflator to 1.09% ($6.1) 4 Onetime Funds to balance FY15-16 ($10.8) 5 COLA 1.8% ($2.7) 6 K-3 class size reduction ($2.4) 7 State funded Full-Day Kindergarten $2.1 8 Strategic Initiatives / Grant backfill ($5.0) 9 Weighted Staffing Standard Staff costs above enrollment revenue ($3.0) 10 Reset Budget Development Reserve to $5M ($5.0) 11 Collective Bargaining Agreement final agreement to SEA included ($12.7) 12 Transfer of software cost increases from Capital Fund BEX to General Fund ($1.3) 13 Items < $1.0M ($2.3) FY16-17 Budget GAP ($33.0) 18

19 Potential Solutions for FY16-17 FY16-17 Anticipated Funding GAP as of 10/14/15 ($33.0M) Possible Solutions by Risk factor Low Medium High 1 Get Legislators to restore per pupil inflator to 4.27% $6.1 2 FY15-16 salary savings $7.0M $7.0 3 Reduce school mitigation fund to FY14-15 level ($2.8M) $2.0 $2.0M $2.0 4 Use FY15-16 reserves to fund Textbooks $5.0 $5.0M $5.0 5 Eliminate Strategic Initiatives / Grant backfill funds $5.0 $5.0M $5.0 6 Eliminate McCleary resources distributed above formula need (26 teachers) $2.5 $2.5M $2.5 7 Reduce Budget Reserve to $4M $1.0 $1.0M $1.0 8 Find other Capital Fund source to cover software license increases $1.3 $1.3M $1.3 9 Savings from FY14-15??? 10 Additional/expanded revenue options??? 11 Central Budget Reductions??? Balance of GAP after solutions ($16.2) ($9.2) ($3.1) All numbers in millions 19

20 3g) Historical Budget Gaps (Dollars in Millions) $45.0 $35.0 $31.0 $23.5 $13.4 $7.5 $10.8 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 20

21 Historical Budget Gaps (Dollars in Millions) $35.0 $31.0 $45.0 $23.5 FY10 Climate & Major Solutions: Closed 4 Schools Cut WSS Central cuts Consolidated kitchens Elem. school based Instr. coaches ARRA funds $3.6M $5.1M $3.1M $0.6M $2.4M $13.4 $7.5 $10.8 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 21

22 Historical Budget Gaps (Dollars in Millions) $35.0 $31.0 $45.0 FY11 Climate & Major Solutions: Prior year hiring/spending freeze Postponed Instr. Mat. & Prof Dev Central cuts 85 positions ARRA funds $7.7M $6.0M $6.6M $23.5 $13.4 $7.5 $10.8 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 22

23 Historical Budget Gaps (Dollars in Millions) $35.0 $31.0 $45.0 $23.5 FY12 Climate & Major Solutions Employee Furloughs Central cuts WSS reductions -Eliminated Elem Counselors Levy authority inc. / Supl. Levy ARRA funds $3.0M $8.2M $5.8M $18.6M $13.4 $7.5 $10.8 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 23

24 Historical Budget Gaps (Dollars in Millions) $35.0 $31.0 $45.0 FY13 Climate & Major Solutions Employee Furloughs Central cuts Underspends Budget Dev. Contingency $3.1M $1.2M $9.7M $7.0M $23.5 $13.4 $7.5 $10.8 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 24

25 Historical Budget Gaps (Dollars in Millions) $35.0 $31.0 $45.0 FY14 Climate & Major Solutions Revenue Increase - MSOCs $9.7M $23.5 $13.4 $7.5 $10.8 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 25

26 Historical Budget Gaps (Dollars in Millions) $35.0 $31.0 $45.0 $23.5 FY15 Climate & Major Solutions Revenue Increase MSOCS Revenue Increase Transportation Additions: School and Operation Investments $8.4M $9.0M $4.6M $13.4 $7.5 $10.8 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 26

27 Historical Budget Gaps (Dollars in Millions) $45.0 FY16 Climate & Major Solutions Revenue Increase MSOCS $19.8M $35.0 $31.0 Additions: School and Operation Investments $15.4M $23.5 $13.4 $7.5 $10.8 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 27

28 Historical Budget Gaps (Dollars in Millions) $45.0 Collective Bargaining (CBAs) $12.7M FY16 use of one-time funds $10.8M Levy base inflator decrease $6.1M $68.2 $35.0 $31.0 $33.0 $23.5 $6.1 $13.4 $7.5 $10.8 $26.9 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 28

29 Historical Budget Gaps (Dollars in Millions) $45.0 Levy Cliff $26.0M CBA Additional $19.1M FY17 use of 1-time funds $7.0M Strategic Initiatives $5.0M $68.2 $31.8 $35.0 $31.0 $23.5 $33.0 $6.1 $13.4 $7.5 $10.8 $26.9 $36.4 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 29

30 Historical Budget Gaps (Dollars in Millions) Ops Levy (scale begins at $100M) FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY

31 $80.0 $70.0 $60.0 $50.0 $40.0 $30.0 $20.0 $10.0 $ $ Historical Budget Gaps (Dollars in Millions) One Time Resources Ops Levy (scale begins at $100M) 31.0 $ $ $ $ $ $ $ $183.9 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 $220.0 $200.0 $180.0 $160.0 $140.0 $120.0 $

32 3h) Three Year Financial Projection/ Major Budget Changes FY16-17 FY17-18 FY18-19 Materials, Supplies, Operating Costs (MSOCS) $1.2 $1.3 $1.3 Operations Levy $14.9 $17.3 $ drop in per pupil inflator to 1.09% ($6.1) ($5.8) $0.0 - ghosting and levy base authority increase expires $0.0 ($26.0) ($24.8) Onetime use of prior year underspend ($10.8) ($7.0) ($7.0) Potential Employment costs ($12.7) ($19.1) ($7.6) Strategic Initiatives ($5.0) ($5.0) ($5.0) Enrollment ($3.0) ($3.0) ($3.0) Pension $0.0 ($2.4) $0.0 COLA (Consumer Price Index CPI) ($2.7) ($3.5) ($3.5) - one-biennium COLA $0.0 ($4.8) $0.0 Reset Budget Development Reserve to $5M/$4M ($5.0) ($4.0) ($4.0) K-3 class size reduction ($2.4) ($3.0) $0.0 State funded Full-Day Kindergarten $2.1 $0.0 $0.0 Transfer from BEX IV for capital eligible software ($1.3) ($1.2) $0.0 Items < $1.0M ($2.2) ($2.0) ($1.1) Surplus/Gap Estimate ($33.0) ($68.2) ($36.9) *Dollars in millions 32

33 3i) List of Unfunded Needs District level Add 5 minutes to lunch/recess Bell Time shift African American Initiative Close Opportunity GAP Special Education / ELL Program Expansion Start of School Process Improvements International Baccalaureate funding School Funding model enhancements Restoration of pre-recession central operations support October 20, 2015 estimated costs - $71 million plus 33

34 4) Questions? NOTE: The public can always send questions and comments regarding the budget through out the budget development process to: 34

35 Appendix: Future Board Work Sessions January 27 Budget FY15-16 status update Governor s budget impact Central Budget priorities School funding formula March 30 Budget FY16-17 Budget update Legislative Update Capital Fund budget May 25 Budget FY16-17 proposed budget Potential Topics: Strategic Plan alignment Enrollment Projections SPED/ELL Technology Plan Transportation Food Service Grants/Restricted Budgets: Title 1/LAP Allocations Family & Education Levy Program Placement Decisions Associated Student Body Budget 35

36 State not fully funding MSOC A look at Seattle Public School FY15-16 SPS FY15-16 FY15-16 MSOC MSOC Formula SPS MSOC funding FY Per Student 48,699 Budget 1/ Difference Technology (SEE CAPITAL SPEND) $ $6,193,052 $3,761,389 $2,431,663 Utility & Insurance $ $16,827,939 $13,942,000 $2,885,939 Curriculum & Texbooks $ $6,649,361 $8,327,976 -$1,678,615 Other supplies/services & Library Materials $ $14,116,866 $21,934,964 -$7,818,098 Instructional PD for Cert. & Class staff $21.12 $1,028,523 $1,350,892 -$322,369 Facility Improvements (SEE CAPITAL SPEND) $ $8,336,782 $6,371,081 $1,965,701 Central Office & Security $ $5,775,701 $8,074,763 -$2,299,062 Total $1, $58,928,225 $63,763,065 -$4,834,840 Non-employee related cost budget totals FY Capital Eligible Expenditures Technology Facilities /Map Testing/STEM/Ongoing Support $6,144,907 Technology Software $2,500,000 Capital Eligible Preventative Maintenance $5,950,823 $14,595,730 Total underfunding of MSOC is $19 Million. 36