BPS FINANCIAL CONTEXT AND FY17 PLANNING 1
Reminder of the why Do more of what works for kids. 2
Topics for discussion Background and context Historic trends in the BPS budget Preliminary planning for FY17 3
City of Boston: General Fund Support for All Education For the past five years, General Fund Spending for Education, including BPS and Charter Schools, has grown rapidly, at an average rate of 6% a year. 4
City of Boston: Revenue to Support Boston Education Stagnant State Education Funding At the same time, State Revenue to support Education has been stagnant: Boston s Chapter 70 Revenue has grown by <1% per year. The Commonwealth has not fulfilled its obligation to fund Charter School Reimbursement, to the tune of $30M in lost revenue for Boston over the past 2 years. This has led to a 7.6% average annual growth in the City s Contribution (net State Education Funding) to Education in Boston. 5
City of Boston: Education as a portion of Boston s Budget General Fund FY16 Spending BPS has traditionally accounted for 35% of Boston s Budget. With the growth of Charter Schools, Education now accounts for 40% of Boston s budget. 6
We face a structural deficit, where expenses consistently go up faster than revenues $ Expenses Level service costs up (e.g. salary, benefits, contractual step-up s, student need) Do more (e.g. more K1, ELT) Do better (e.g. HC strategy, increased support for level 4 and 5 schools) Revenue Loss of entitlement funds (shifting population) State Chapter 70 Education funding has been growing <1% per year for the last 5 years Time 7
And our annual budget cuts don t solve the long term problem $ Expenses Annual cuts to align costs to revenues Revenue Time A long term financial plan means stepping back and identifying the bold, multi-year changes that reverse our structural deficit and allow us to reinvest in what works best for kids. 8
We are proactively taking steps to improve our financial picture for future years Facilities Master Plan Collective bargaining Revenue strategy Operations work group SPED work group Financial strategy Existing process New process 9
Topics for discussion Background and context Historic trends in the BPS budget Preliminary planning for FY17 10
We think about our budget in five broad categories Schools School Services Budgeted Centrally Central Expenses within a school s budget, as well as funds held centrally that are disbursed to schools throughout the year. Teachers Support staff Aides Programs/services for schools that are budgeted centrally. Special education Facilities and maintenance (including custodians and utilities) Programs such as safety services and psychological services Funds used for leadership and institutional support for the district. Central office departments (i.e., Office of Human Capital, Finance) Programs that support schools (i.e., professional development, curriculum design) Benefits Funds used for employee benefits. Health insurance Medicare Unemployment compensation Workers compensation Transportation Funds used for transportation for students. Yellow bus services MBTA Transportation for special education students, homeless students, and after school programs 11
BPS spends $1.01B per year of general funds, with almost all going towards schools and school services 100% 90% FY16 Budget (General Fund only) $62,289,573 6% $109,455,202 11% 80% 70% 60% 50% 40% 30% 20% 10% $132,740,088 13% $171,711,378 17% $537,304,226 53% Central Office Transportation Benefits School Services Budgeted Centrally Schools 0% Note: FY16 budget accurate as of 11/10/15 Dollars % of Total 12
This spending supports the key functions and cost items for the district FY16 Budget by Service Area and Function (General Fund) 100% 80 60 $537M Subs Non-personnel Aides Administrators and secretarial staff Support Staff $172M General Administration Regular Education Student / School Support Facilities and Maintenance $133M Benefits $109M Transportation $62M Total = $1.01B Finance Instructional Support Student Support S ervices ELL Expanded LearningTime Other Data and Accountability Special Education Leadership OHC Professional Learning/TLTs Note: Central includes both personnel and non-personnel costs 40 Teachers Strategy (Other) OIIT 20 Special Education Operations 0 Schools School Services Budgeted Centrally Benefits Transportation Central To read this chart: The full rectangle = the total FY16 general funds budget (excludes grants). The area of each rectangle corresponds to the size of the budget for that specific category (like a two dimensional a pie chart) Note: FY16 budget accurate as of 11/10/15 13
The district also has $139M in grant funding, for a grand total of $1.15B FY16 Budget by Service Area and Function (All Funds) 100% 80 $571M Grants Subs Non-personnel Aides Administrators and secretarial staff $244M Grants $146M Grants $109M Transportation Staff SPED Out of District $83M Total = $1.15B Grants 60 40 20 Support Staff Teachers General Administration Regular Education Student / School Support Facilities and Maintenance Benefits SPED In District Regular Education Finance Instructional Support Student Support Services ELL Expanded Learning Time Other Data and A ccountability S pecial E ducation Leadership OHC Professional Learning/TLTs Strategy (Other) OIIT Special Education Operations 0 Schools School Services Budgeted Centrally Benefits Transportation Central To read this chart: The full rectangle = the total FY16 general funds budget (excludes grants). The area of each rectangle corresponds to the size of the budget for that specific category (like a two dimensional a pie chart) Note: FY16 budget accurate as of 11/10/15 14
Millions BOSTON PUBLIC SCHOOLS Total expenditures have been increasing 3.1% annually, with the highest growth seen in transportation, school services, and schools Expenditures by Service Area, FY11-FY16B (All Funds) $1,400M $1,200M $1,000M $800M $600M $400M $200M Note: The work to understand the drivers of these changes is ongoing and in-process $80M $83M $76M $81M $137M $133M $200M $191M $85M $91M $86M $108M $134M $134M $86M $103M $135M $201M $208M $218M $83M $109M $146M $244M $498M $501M $518M $529M $545M $571M Central Office Transportation Benefits School Services Budgeted Centrally Schools % Annual Growth % Change FY11-16 $ Change FY11-16 0.8% 4% $3.1M 7.5% 44% $33.4M 1.3% 7% $9.0M 4.0% 22% $43.7M 2.8% 15% $73.1M Total 3.1% 16% $162.4M $0M FY11 FY12 FY13 FY14 FY15 FY16B Note: FY09-FY15 represent actual expenditures. FY16 represents budgeted amounts accurate as of 11/10/15. These cost combine both the increasing costs of service, and BPS s efforts to control costs 15
Millions BOSTON PUBLIC SCHOOLS Of the $33M increase in transportation, $22M has come from SPED-related costs, both in district and out of district $120 FY11-FY16B Transportation Expenses (All Funds) % Annual Growth Rate: 7.5% $100 $80 $60 $2 $- $7 $28 $2 $- $8 $30 $2 $- $9 $33 $2 $- $11 $40 $2 $0 $2 $0 $14 $12 $37 $42 Athletics: n/a Transportation Staff: 8.5% SPED Out of District: 15.1% SPED In District: 8.5% $40 Regular Education: 5.1% $20 $40 $41 $47 $54 $52 $51 $- FY11 FY12 FY13 FY14 FY15 FY16B 16
Millions BOSTON PUBLIC SCHOOLS Within schools budgets and school services budgeted centrally, ELL and SPED account for 62% of increased spending 900 800 700 600 500 400 300 200 100 0 School and School Service Spending, FY11-FY16B $20 $22 $12 $54 $17 $21 $11 $25 $11 $58 $16 $12 $14 $12 $73 $57 $58 $55 $54 $64 $48 $59 $62 $55 $88 $81 $75 $79 $82 $80 $194 $241 $189 $199 $207 $217 $298 $289 $294 $298 $307 $315 FY11 FY12 FY13 FY14 FY15 FY16B Other General Administration Physical Plant Bilingual / SEI Student / School Support Special Education Regular Education $72M, or 62%, of the increase from FY11-FY16 has gone towards services for SPED or ELL % Annual Growth % Change FY11-16 $ Change FY11-16 11.9% 75.6% $9M 6.8% 38.8% $6M -0.1% -0.7% $0M 8.9% 53.3% $25M 3.3% 17.4% $13M 4.4% 24.2% $47M 1.1% 5.6% $17M Total 3.1% 16.8% $117M 17
Over time, the number of FTEs in BPS has been relatively constant, with slight declines in recent years 100% 90% 80% 70% 60% FY16B FTEs 2.6% 5.9% 13.7% 12,000 10,000 8,000 210 210 589 633 1,203 1,172 FY11-FY16B FTEs by Service Area (All Funds) % Annual Growth: 0.4% 218 238 239 240 701 685 615 554 1,258 1,279 1,286 1,280 Transportation 2.8% 50% 40% 30% 77.8% 6,000 4,000 7,168 7,053 7,267 7,327 7,312 7,280 Central -1.2% School Services Budgeted Centrally 1.2% Schools 0.3% 20% 10% 2,000 0% FY16B - FY11 FY12 FY13 FY14 FY15 FY16B Note: These FTE counts are not adjusted for some part time positions, such as bus monitors and food service workers, which are coded as a full FTEs though the positions are part time The increase in central after FY11 was driven by +30 FTEs in SPED and +10 in operations. Going into FY13, the increase was driven by +25 in welcome centers and +20 in engagement 18
Millions Thousands BOSTON PUBLIC SCHOOLS While total FTEs have been relatively flat, we are spending $87M more on salaries vs FY12 as average salaries have risen, including an 11% increase in average teacher salaries $800 $700 $600 $500 Overall Salary Expenses and Average Salary, FY12-FY16B $86.4 $88.1 $90.0 $698 $711 $81.4 $82.3 $675 $648 $624 90 80 70 60 $400 $300 $200 $100 50 40 30 20 10 $- FY2012 FY2013 FY2014 FY2015 FY2016B 0 Salary Avg Salary (teachers) 19
Millions BOSTON PUBLIC SCHOOLS In past budget cycles, BPS has focused cuts on central administration to protect schools $80 $70 $60 $50 $40 $30 $20 $10 $- Proposed Cost Reductions, FY15 & FY16 $1 $4 $5 $6 $11 $11 $34 Only $3.8M of $100M+ reductions in the past two years have been from school budgets $3 $4 $4 $10 $16 FY 2015 FY 2016 Adult Ed School services School budgets Grant changes Food and nutrition services Health insurance SPED changes Enrollment adjustments Transportation services Central office reductions FY 2015 $71.4M Reductions: $33.8M: Central office reductions (including 126.6 FTE reduction) $11M: Enrollment adjustments $11M: Transportation services $5.5M: SPED changes $5M: Health insurance $4M: Grant changes $1.1M: Adult Ed FY 2016 $36.1M Reductions: $15.5M Central office reductions (including 134 FTE reduction) $9.8M Transportation services $4M Food and nutrition services $3.8M School budgets $2.9M School Services 20
As a result, the majority of FTE changes have been to the central office FY15 to FY16B FTE Changes by Service Area (All Funds) 20 2.0% 0 0.0% -20-2.0% -40-4.0% -60-6.0% -80-8.0% -100-10.0% -120 Schools School Services Budgeted Centrally Central Transportation Grand Total # Change in FTEs -31-6 -61 2-98 % Change FY15-FY16-0.4% -0.5% -10.0% 0.6% -1.0% # Change in FTEs % Change FY15-FY16 Note: These FTE counts are adjusted for some part time positions, such as bus monitors which are coded as a full FTE though the work is part time. Additionally, the FTE for food service workers has be reclassified as schools though the budget team is in the process of re-allocating those FTEs to the school budget codes -12.0% 21
Topics for discussion Background and context Historic trends in the BPS budget Preliminary planning for FY17 22
As we contemplate tradeoffs for FY17 and beyond, our decision-making is guided by our core values 23
Preliminary FY17 overview $50 $45 ~$7- $14M* $12- $17M $40 $35 $30 ~$36M ~$8M ~$28M ~$6M ~$10M $25 $20 $15 Includes $21M increase in salary & benefits ~$14M $10 $5 ~$5M $- * Strategic priorities will only be funded pending success in achieving efficiencies 24
What s driving up costs for BPS in FY17? Rising cost of salaries and benefits for existing employees Adjusting where we are running over-budget today (transportation, custodians, early hiring) Inflation / general cost-of-doing business for nonpersonnel expenses Slightly off-set by small decline in overall enrollment projection 25
What are some of the potential FY17 investments? Basic Operations and Past Commitments Deferred maintenance to support health and safety in our schools Turnaround supports ACC move Classroom expansions Strategic Investments Extended Learning Time, Cohort 2 Supports for Special Education transitions to new service models Expansion of K1 seats 100 Day Plan 26
The following changes were included in WSF school budgets released this Monday High school staffing assumptions Special education weights Projections reconciliation (adjusting funding based on actual enrollment) Putting guardrails on the costs of our early hiring initiative 27
We are still early in the budget process with important steps ahead of us Partnering with schools to navigate changes to their budgets Continuing to partner with central departments to identify possible efficiencies or reductions in service Engaging with our community and the School Committee for feedback and to iterate on our plans 28