Atlanta Public School Board of Education unanimously passes $685.6 million FY16 Budget – direct education spending up & administration spending down

April 21, 2015

In a specially called meeting, the Atlanta Public School Board of Education unanimously passed a $685.6 million FY16 Budget. Over the course of the last several months, the Administration worked closely with the Board to establish spending priorities and ways to fund them. The close collaboration resulted in reaching an agreement that, for the first time in six years, all Board members supported.

As the AJC reports,

Nancy Meister, vice chairwoman of the board, attributed that to the work put into the document and a willingness from all sides to work together. “I’m proud of this work,” she said. “And I’ve told that to the community members who have asked me about it.

And while the budget establishes the $685.6 million expenditure authorization, some details are likely to change between now and the start of the fiscal year in July. Superintendent Carstarphen stated in her blog post,

APS will continue to fine-tune this budget as we finalize cluster programming needs, firm up staffing allocations, and develop more options for rethinking current resource allocations.

Let’s start at the top of the budget and work our way down.

FY16 Revenues 042115

Revenues are projected to be up $50.2 million or 11.8% over FY15. However, total available resources increased by only $28.0 million as the prior year included the use of $25.0 million of General Fund reserves. The current budget limits the use of General Fund reserves to $2.8 million.

The revenue projection also includes $14.0 million in payments owed to APS by the Beltline, but the timing of when this amount would be collected is in doubt due to a dispute between the City of Atlanta and APS regarding the actual amount due.

Overall, spending is up by $28.0 million as compared to FY15 and up $90.2 million or 15.1% as compared to FY14. The chart below presents the major spending components for the actual results in FY14, the amended budget for FY15 and the FY6 Approved Budget (click to enlarge). The Administration’s detailed presentation by department is here.

FY16 Expenditures 042115

The following are some highlights of the changes in spending by major category:

College Prep – Spending in this category (regular instruction, arts, world languages and PE) is up $12.9 million as compared to FY15 and $19.3 million as compared to FY14. As part of the run-up to converting to a charter system operating model, the Administration allocated the increases in funding to “cluster flexibility” in which each school and cluster was provided a certain level of funding and then given the authority to allocate them to best meet their individual school needs. In addition, the increased funding included $5.0 million for cluster planning which can be used to expand existing programs (IB) or develop new educational programs for a cluster

Specialty Programs – This category includes Special Education, Remedial Education Programs, Gifted & Talented, Vocational Education and Alternative Education. In total, these programs saw a $2.6 million increase in FY16 and a $9.3 million increase over two years.

The entire FY16 increase was directed toward the Special Education programs that saw a $3.1 million increase in FY16 and a $6.4 million increase over two years. There has been a slight increase in students qualifying for Special Education services in FY15 and, based on the enrollment (with a one-year lag) the spending per qualifying student has increased from $21.7 thousand to $22.7 thousand in the General Fund.

In addition, the funding for the Remedial Education programs remained flat as compared to FY15, but has increased by $2.4 million over two years.

Student Services – Social Workers, Nurses, Psychologists, Counselors and Student Support Teams departments increased by $1.7 million in FY16 and $8.2 million over the last two years. The primary driver of the cost increase is related to the Student Support Teams implemented in FY15 and expanded with additional administrative resources in FY16.

In-School Administration – Expenditures for In-School Administration – principals, assistant principals, graduation coaches, registrars and school secretaries – came down by $3.8 million as compared to FY15. A total of 37.5 positions were cut as the “small schools” initiatives have been closed down. Included in the positions cut were 18 principles and academy leaders, six assistant prinicpals and 11 graduation coaches.

Operations & Maintenance – The Operations functions – with an $86.9 million budget – saw a $1.6 million decrease in FY16. Spending on maintenance and operations administration decreased by $600 thousand, utilities decreased by $500 thousand, custodial operations decreased by $734 thousand, and transportation decreased by $659 thousand. These decreased were offset by an $897 thousand increase in the Safety and Security departments

Central Office School Administration – This function increased by $600 thousand over FY16. The primary driver of the cost increase was the transfer of costs from the Special Revenue Fund to the General Fund for professional development over the course of the last two years. It is also clear from the many other increases and decreases in specific departments that the administration is making changes in this area and there may be more reallocation of resources from this function as time passes.

General & Administration – Expenditures budgeted for the General Administration functions – Board, Superintendent, Deputy Superintendent, Finance, Audit, Legal, Human Resources and Information Technology – decreased by $3.6 million or 6.5%. Nearly all the departments reduced their spending with Finance again leading the way with a $1.4 million reduction and IT with a $1.0 million reduction. In addition, there were some savings found in certain district-wide employee benefit accounts in this category.

Charter Schools – Charter school spending is up substantially over FY15 and FY14 due primarily to both increasing local property tax revenues and continued increases in enrollment. It is estimated that the FY16 enrollment in the charter schools will be approximately 16.2%.

As in all budgeting negotiations, there has to be compromise within the boundaries of limited resources. The Board and Administration worked hard to make the necessary compromises and reach a unanimous agreement on the next year’s budget. As such, there are a number of items that were identified as priorities by both the Board and the Administration that did not get funded. However, my sense is that additional adjustments are still to come and it is likely that additional unfunded priorities will find a place in the budget before it is complete.

I will follow-up on this post with more detail regarding specific departmental expenditures and departmental and functional staffing.

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APS Budget Commission forwards $685.2 million budget to Board for approval – no tax increase [Updated]

April 17, 2015

On Wednesday the Atlanta Public School Budget Commission tentatively approved a $685.2 million FY16 Budget on an 8-1 vote. The Commission considered raising property taxes to fund a $700.8 million budget – which included the full list of  expenditures considered – but then reached a consensus to accept an increase in funding for additional classroom and programmatic expenditures and for implementing additional positive behavior support programs.

Revenues are projected to be $682.8 million and the remaining $2.4 million deficit will be funded out of General Fund reserves.

The Board will formally act on the proposal in a Special Meeting scheduled for Monday, April 20 at 6 p.m.

Byron Amos voted against the $685.2 million budget and indicated that he was in favor of raising property taxes to fund the full $700.8 million budget which funded most of the priorities considered by the Board over the course of its deliberations.

The Commission participants (all Board members were in attendance) appeared to be generally in favor of funding all the priorities that had been identified. However, they were constrained from doing so as the $14 million Beltline payment from the City of Atlanta remains in dispute and the timing of collecting the moneys remains unknown.

The Commission included the $14 million payment in the revenues, but believed it needed to maintain an adequate level of General Fund reserves to cover expenditures in the event the Beltline payment was not received in FY16. Under the Board’s policies, the General Fund reserve must be maintained at no less than 7.5% of expenditures.

FY16 Proposed Budget 041515

At the beginning of the budget deliberations, the Board established a $668.8 million expenditure baseline and then considered other funding sources to increase the expenditure total. Among the items considered were raising property taxes by one millage point ($18.0 million), using additional General Fund reserves (up to $12.2 million) and including the $14.0 million Beltline payment. As noted above, only the latter was adopted.

With the $668.8 million starting point, the following additional expenditures were included:

  • $9.1 million for school flexibility. This expenditure added back teaching resources that had initially been cut. The amount has been allocated to each school in APS and the principals have the flexibility to direct the allocated expenditure in a manner that they believe will best impact their school.
  • $1.0 million to recalibrate teachers at elementary schools. The initial budget allocation for teaching resources was considered to be inadequate to fund specific issues faced by the elementary schools. The additional funding is intended to redress these issues. [Update – the $1.0 million is in addition to $1.9 million included in the $668.8 million baseline budget]
  • $5.0 million for additional cluster flexibility. This amount will be added to the $9.1 million noted above and can be used by the principals to fund additional teaching resources or the cost of programmatic changes.
  • $1.3 million for “Positive Behavior Supports. The this line item includes expenditures for positive behavior supports (see BOE presentation on this topic here) and includes social and emotional learning implementation, screeners and dashboard information.

While the Commission accepted the items above, other identified priorities costing approximately $15.6 million were deferred due to lack of funding sources. The deferred items included $7.6 million for enhancing the educational environment, $0.9 million for additional cluster flexibility, $1.5 million for incremental bus maintenance, $1.0 million for Pre-K compensation parity adjustments, $1.0 million for college readiness programs, $1.0 million for career readiness programs, $300 thousand for the transition to the charter system operating model and $2.3 million in additional funding for the District’s charter schools.

It would not surprise me if the Administration reviewed the current budget allocations and made additional changes that might ultimately fund some of the unfunded items noted above.

In prior years, the budget process had often been contentious and full of mistrust between the Board and the Administration. This year it has been very different.

Budget Commission Chair Westmoreland and Superintendent Carstarphen led a very open and thorough process of identifying the District’s needs, establishing priorities and then funding what it could within the constraint of limited resources.

Nicely done!

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APS Board of Education meeting today – are you ready for a property tax increase?

April 13, 2015

The Atlanta Public School Board of Education will meet today at 2 p.m. and will consider a number of FY16 Budget alternatives. One of the alternatives includes a one point increase in the millage rate that would raise an additional $18 million for use by the District.

The following chart shows the progression of budgeted revenues and expenditures since the first meeting of the Budget Commission on February 2.

FY16 Budget Progression 041315

Up until after the February 25th meeting all appeared to be moving forward cautiously and in a fiscally conservative manner. While there were many unfunded priorities (adding teachers in areas with large class sizes was not one of them), the self-imposed policy of maintaining a fund balance at 7.5% of expenditures seemed to restrain both the Administration and the Board from adding expenditures without a revenue source to cover them.

As background, in the February 25th meeting, the Budget Commission agreed to put the $14 million BeltLine (IGA) payment into the budget as a resource. However, it prudently recognized that the payment was in doubt due to the dispute between the City of Atlanta and APS and indicated that it would maintain its excess General Fund reserve (amount over 7.5% of expenditures) as a back up in case the BeltLine funds were not received. This action left the proposed budget balanced and, in the event the payment was not received from the Beltline, the General Fund reserve policy would be adhered to.

But then something changed – the Administration continued to push to recognize additional funding resources and the budget began to shift to a precarious position. At the April 2 meeting, the Administration proposed that in addition to including the BeltLine funds (which remain in doubt), the General Fund reserve of $12.2 million would also be used. Revenues would stay the same at $682.8 million, but expenditures would be increased to $695.0 million leaving a deficit of $12.2 million. The proposal pushed the General Fund reserve down to 7.1% of expenditures and below the Board imposed target of 7.5%.

It is also important to note that if the BeltLine payment is not received (and there is no indication that the City’s position on this has changed) the General Fund reserve would go down to $35.1 million or 5.1% of expenditures. In either case, it is likely that APS will have to borrow short-term money to cover operations during the first part of the fiscal year.

And today we are seeing a new proposal which would increase property taxes by one millage point or $18 million. With the additional property tax funds, the total revenue would increase to $700.8 million or nearly $14 thousand per student. Just last year it was closer to $13 thousand per student. In total, the increase over FY15 would be $42.8 million or 6.5%. Over two years, the increase is over $105 million.

Under the new proposal, the increased tax revenue would result in no General Fund balance being used in FY16 if – and only if – the $14 million in BeltLine funds are received. If not, then $14 million in General Fund reserves will have to be used and bring the reserve down to 6.7% of expenditures – which again is below the Board policy level.

Do you support a tax increase?

Some Board members have already indicated that they do.

If you disagree with the tax increase, it is important that you let the Board members know now.

If you disagree with spending the General Fund reserve down to levels below the prudent and fiscally conservative policy previously established by the Board, you should let them know that as well.

See you at the meeting.

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