Atlanta Public School Budget Commission reviews FY16 Preliminary Budget – choices will be difficult

February 20, 2015

The Atlanta Public School Budget Commission met yesterday to review the FY16 Preliminary Budget (see prior post here). The information provided by the Administration was at summary level and the specific change in spending for all departments was not fully disclosed..

The Commission is now focusing on establishing the revenue estimate for FY16. Currently the revenue for the General Fund is estimated at $668.8 million. However, there are a number of other priorities that the Board and Administration wants to fund and, if the decision is made to do so, the funding source must be established.

The Commission will meet next Tuesday to consider the following funding sources:

  • Raise property taxes –each one point increase in the millage rate would generate an additional $18 million.
  • Use the General Fund reserves – APS policy states that the General Fund reserve will not go lower than 7.5% of expenditures which places the floor on the General Fund reserve at approximately $50 million. The current projection is that the General Fund balance will be at approximately $62-66 million at the end of FY15 – and the $12-16 million over the $50 million threshold could be used to fund additional activities in FY16.
  • Reallocate the proposed spending plan – the Board could request that the proposed spending plan be reallocated to fund other Board priorities by making additional cuts in other programs.
  • Include the $13.5 million Beltline payment – the current budget proposal does not include any payments that are due from the Beltline (and the City of Atlanta) as the amount due is under dispute. Inclusion of this amount in the budgeted revenues would cover a substantial portion of the other priorities under consideration but yet unfunded.
  • Generate some savings from the Pension Liability payment by restructuring the debt – this alternative could generate some incremental cash flow, however the timing and the amount of the savings cannot be determined as the Pension Committee Task Force has not yet reached a conclusion or provided a recommendation to the Board.

The decision to include additional resources in the FY16 budget is a tough one – raise taxes, reduce other costs, use the General Fund reserve or rely on potential resources that may not materialize during FY16.

On the expenditure side, the Board and Administration have four priorities that it would like to fund, but cannot do so until a decision on the revenue side is made. The four priorities are as follows:

  • It is estimated that it will cost approximately $13.0 million to address the “pay parity” issue that will bring APS employees affected by the pay freeze instituted in 2010 to the same salary level of employees hired subsequently.
  • $5.0 million in additional resources for the 10 clusters in APS – these resources would be provided to school leaders who would then have the flexibility to use the funds to address specific issues they are encountering in their schools.
  • The Board has indicated a desire to expand the Pre-K program by eliminating the current waiting list and improving employee quality and retention by increasing compensation. The cost of the expansion and compensation increases is approximately $2.6 million.
  • Increased spending on extracurricular activities and enrichment programs – the approximate cost of the incremental spending was not disclosed in the meeting.

Budget Commission Chair Matt Westmorland indicated that he wanted more time for all Board members to consider the issues they face and a meeting to consider the alternatives shown above has been scheduled for Wednesday, February 25th at 9:00 a.m.

I will add that the Board now finds itself in an interesting position. The Administration has taken certain steps to reduce the cost of the administrative functions by a total of approximately $7.7 million; however these savings have been used to fund State and other mandates (Special Education, increase in pension costs, etc.)  The reallocation of cost begins to fulfill one of the major campaign promises from last year’s election. However, except for the mandates noted above, the budget does not actually increase the number of staffing resources in direct instruction or address prior inequities in compensation practices.  If the Board intends to fund additional changes, it will have to make some very tough decisions.

On a technical note regarding the information provided by the Administration on the FY16 Preliminary Budget – while some specifics were included in the presentation, approximately 30% of the spending was grouped in an “Other” category and the specific expenditures for Program included in “Other” was not shown. Additionally, the FY15 Amended Budget – which was used for comparison to the FY16 Preliminary Budget – has changed substantially from the information released in December and again, it is unclear how the FY15 projected expenditures will look by Program.

The Board did request that additional detail at the Program level be provided in advance of the next Commission meeting – the Administration indicated that it would comply with the request.

I would add that until more comprehensive information is in the hands of the Board and the public, it is impossible to come to any conclusions on the FY16 Preliminary Budget. The Administration does get credit for generating the initial budget on a very timely basis and for using the FY15 Amended Budget as a comparison to next years spending levels. My understanding is that Finance is working hard to generate better expenditure forecasts and the information they are providing is far more relevant than the FY15 Original Budget that has been transformed by the new Administration.

In addition, it is very clear that the Administration is making every effort to produce an accurate representation of the FY16 spending and wants to be very open with the disclosure of any contingency funds included in the budget. This is a refreshing change from prior budgets that were chock full of hidden budget cushions.

As Superintendent Carstarphen stated as she was being introduced to the community last spring – “if you want to know the district’s priorities. follow the money”. By presenting a true estimate of next years spending by Program, she is providing the Board and the public with a clear roadmap to the district’s priorities.

My sense is that by presenting an open, detailed and honest budget for FY16, it will go far in moving the needle on establishing the integrity of this new Administration – and doing so is consistent with a component of the new APS mission that calls for “the community has trust in the district”.

While there are many components to this, an open and honest budget that truly reflects the direction this Administration is a great start.

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Atlanta Public Schools to release FY16 Preliminary Budget proposal today – General Fund revenues at record levels

February 19, 2015

The Budget Commission of the Atlanta Public Schools will convene this morning at 9:00 a.m. and will review the FY16 Preliminary Budget proposal that will be presented by Superintendent Carstarphen. Initial indications are that General Fund revenues will be $668.8 million or $11.2 million higher than the previous years $657.6 million in budgeted revenues and $14.8 million higher than the currently forecasted $654.0 million in actual revenues for FY15.

The $668.8 million in projected General Fund revenues for FY16 are at record levels and exceed the $657.5 million peak in General Fund revenues in 2009. However, Special Revenues – that include Federal and other grants – will be lower than in previous years and total revenues (excluding SPLOST revenues that are used for capital projects) will be approximately $20 million lower than the total peak of $743.2 million reached in 2009 prior to the recession.

All indications are that the proposed expenditures will be equal to the projected revenues for FY16 and no General Fund reserves will be used in the budget proposal. If this holds, this will be the first budget in many years that will be balanced without the use of reserves. Superintendent Carstarphen has a track record of presenting balanced budgets and her first budget submission will be consistent with her record in previous districts.

Even with near record level revenues, there are State mandates and other requirements that are consuming all the incremental resources.  These mandatory increases in spending include:

  • The Special Education program will see a $4.8 million increase to bring the program into compliance with Federal and State regulations.
  • The required contribution to the Teachers Retirement System (TRS) will increase from 12.18% to 13.15% of eligible employee’s salaries (almost all full-time APS employees are participants) and will increase employee benefit costs by at least $3.4 million.
  • The Elementary PE program will be brought into compliance with State regulations and will see a $0.8 million increase.
  • Projected enrollment is increasing in the district by 923 students with the charter school enrollment increasing by 1,220 and the traditional schools enrollment dropping by 297 students. As a result of the shift towards charters schools – by statute, the charter schools share of the resources will increase by $21.2 million to $92.2 million. It is estimated that the charter school enrollment will be approximately 16.1% of the district.
  • The City Pension Liability payment will increase by $1.4 million to $50.4 million.

In total, the above increases in expenditures amount to $31.0 million, which leaves $416.9 million for all other expenditures in FY16 as compared to $438.4 million for all the other programs in FY15. As a result of the lower level of resources available to fund the rest of the district priorities, Carstarphen is undertaking a program of “right-sizing” the districts cost structure to conform with the changing enrollment patterns as more students are choosing to attend charter schools.

The “right-sizing” expenditure initiative likely will result in expenditure cuts to the Central Office School Administration and to the General Administration. The budget proposal is expected to include a total of approximately $7.7 million reductions in these two functions.

Additionally, there are a number of other initiatives that the Board and the Administration would like to pursue, but due to resource limitations, the following initiative are not included in the initial budget proposal:

  • It is estimated that it will cost approximately $13.0 million to address the “pay parity” issue that will bring APS employees affected by the pay freeze instituted in 2010 to the same salary level of employees hired subsequently.
  • $5.0 million in additional resources for the 10 clusters in APS – these resources would be provided to school leaders who would then have the flexibility to use the funds to address specific issues they are encountering in their schools.
  • The Student Support Team (SST) and RTI programs that was implemented at a cost of $4.1 million is not funded in the FY16 draft budget. Carstarphen has noted that the results for these program are mixed.
  • The Board has indicated a desire to expand the Pre-K program by eliminating the current waiting list and improving employee quality and retention by increasing compensation. The cost of the expansion and compensation increases is approximately $2.6 million.
  • There is a proposal to improve the service levels provided by custodians with a cost of approximately $2.5 million.
  • A new program for 3 year olds with a cost of approximately $3.9 million is also under consideration.

All of these could be topics of conversation in the Budget Commission meeting this morning. However, my sense is that the two most likely issues that will be debated are the $5.0 million incremental resources for the clusters (a parent “hot button” issue) and the $13.0 million needed to reach “pay parity”.

I think it is also important to note that, unlike in prior administrations,  Carstarphen is deeply involved in the numbers and appears to be running a tight ship in the budget development process. As an example, the budget requests made by the division chiefs amounted to $725 million or $36 million more than the available resources. Carstarphen pushed back hard on these requests and to her credit is presenting a balanced budget.

As the Board considers its next steps, it has three alternatives for funding the incremental priorities noted above – cut costs in other areas, use the $12 million of available General Fund reserves or raise taxes.

It should be an interesting meeting. See you there.

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APS Board of Education drafts Mission and Vision for APS

August 19, 2014

The Atlanta Public School Board of Education Board Development Committee, which is chaired by Nancy Meister, met yesterday and drafted a preliminary Mission and Vision for the APS district. The discussion on both items was extensive and very thorough as each statement will drive numerous decisions in the future. Each statement is still in draft form and subject to further editing and, as of yesterday, the following statements were selected:

 Mission

The mission statement is a short and succinct statement of the districts primary job. The prior mission statement was:

The mission of Atlanta Public Schools is to educate all students through academic excellence, preparing them for success in life, service and leadership.

This statement was revised and the new draft mission statement is:

Through a caring culture of trust and collaboration, every student will be ready for college and career.

The discussion on the revision was extensive and Board members and the Superintendent wanted a statement that was fully inclusive of all students and represented a clear direction that would guide the employees of the district on a daily basis. The focus of the statement is a combination of caring for students while getting them ready for the next stage in their lives. Another key component of the new mission statement is that it is measurable and is focused on the time that students are in the care of the district. This is in contrast to the prior statement as “success in life, service and leadership” could not be easily measured at the time students completed their educations in the district.

Vision

 The vision is simply a statement of what the district is trying to achieve. The prior vision statement was:

The vision of Atlanta Public Schools is to be a student-centered, high-performing urban school district where all students become successful life-long learners and leaders.

The vision statement was also revised to the following:

A high-performing school district where students love to learn, educators work to inspire, parents are engaged and the community has trust in the district.

Again, the discussion on the revisions was extensive. Board members immediately dropped the word “urban” as the term placed the district in a category that might place limits on performance. Additionally, the vision now includes all the critical constituencies – student, educators, parents and the community.

The Board was extremely thoughtful in their deliberations and clearly wanted to develop clear and strong statements of purpose and outcomes. I think they were very successful in doing just that. Expect to hear both of these communicated to the public on a very regular basis and then be used as justification for making tough decisions as the Board and the Superintendent move forward with transforming the Atlanta Public Schools.

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Atlanta Public School Board of Education holds Board Development Committee meeting today [Update]

August 18, 2014

UPDATE – the posted address for the meeting site was incorrect in the notice – the correct street address is 241 Ralph McGill Blvd., NE.

The Atlanta Public School Board of Education Board Development Committee, which is chaired by Nancy Meister, will meet today from 9 a.m. to 4:30 p.m. The agenda for the meeting is as follows:

  • Board/Superintendent Roles
  • Board Norms
  • Mission, Vision, and Core Values
  • Superintendent – Initial Academic and Operating Goals and Priorities for Budget Parameters

The meeting will be hosted by the Georgia Power Corporation and will be held at the James K. Davis Conference Center, Conference Room 1, 760 241 Ralph McGill Blvd., NE Atlanta, Georgia 30308 and will be facilitated by Dr. Cathy Mincberg from the Center for the Reform of School Systems.

The first two items on the agenda have been previously discussed and are likely to move towards as final agreement. The Board Norms policy – which was read for the first time at the last BOE meeting can be seen here.

The most interesting part of the meeting is the presentation by the Superintendent of the initial academic and operating goals and priorities for budget parameters. These goals and objectives should establish the baseline for many decisions that will be made in the future. It will be interesting to see if the goals and objectives are for just this year or for multiple years as part of forming a longer term operating plan.

It is likely that I will be in and out of the meeting throughout the day and will update this post as new or interesting information comes to light.

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APS Board of Education’s Policy Review Committee recap

July 25, 2014

The Atlanta Public School Board of Education’s Policy Review Committee met yesterday and considered a series of policy changes. In addition, the most important action taken was to agree that the Committee would review all policies on a regularly scheduled basis and that, to do so, the Committee would meet on a monthly basis prior to the regularly scheduled Board Meeting.

The following is a brief recap of the Committee proceedings:

BC – Board Meetings Policy – this policy had its first reading on July 14th (see proposed changes here) and incorporated a number of changes to the conduct of the Community Meeting. Many community members objected to the proposed limitations and the Committee decided to remove the limitations imposed. In addition there was a clarifying change to establish that the Board agenda and final attachments would be publicly disclosed at least three business days in advance of the meeting except in the case of emergency.

[Comment – the initial proposed changes were developed to further streamline the lengthy Board Meetings. However, the proposed restrictions would have limited the community viewpoints that could be presented to the Board during the Community Meeting. Additionally, the proposal to limit community member’s statements to agenda items only would have further restricted input from the community. In my view, leaving the Community Meeting rules as they are now makes sense.]

BBBA Board Statement of Policy (see unrevised policy here) – this policy will be amended to incorporate the Board Norms statement as presented in the July 14th Board meeting. The first draft was presented to the Committee and the administration indicated that it would reformat the Policy to aggregate items under subheadings. The revised draft will likely be reviewed at the next Committee meeting in advance of the next regularly scheduled Board meeting in August.

DC Annual Operating Budget Policy – at the last-minute, the administration proposed amending the budget policy by removing the limitations on the superintendent’s authority to move funds between departments and divisions without Board approval. In the June regular Board meeting, Superintendent Davis had complained that the provision in the policy was too limiting and was a burden on the administration. While the Committee did not disagree with the retired superintendent’s assessment, the Committee was not in favor of removing the limitation without implementing a different mechanism that could achieve the intended result of the current policy.

Family Engagement Policy – the administration indicated that it was still researching alternatives prior to presenting a recommendation and believed that a policy draft could be brought to the Committee in August.

New Items – the administration recommended that the policy on use of the APS or school name by related organizations (PTA’s, Foundations, Alumni, etc.) be reviewed.

Quite honestly, it was refreshing to see this Committee in action. It is taking its work very seriously and is being responsive to community input. And the decision to hold a monthly meeting to review all policies on a regular basis is a great step forward in not only updating old policies, but making the policies relevant to the existing needs of the organization.

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Atlanta Public School Board of Education’s Policy Review Committee meeting today at 9 a.m.

July 24, 2014

The Atlanta Public School Board of Education’s Policy Review Committee will hold a meeting this morning at 9:00 a.m. at the downtown CLL office. The notice of meeting did not specify an agenda other than to state that the Committee would “discuss potential board policy revisions/additions”.

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Atlanta Public School Audit Committee meets to review Equity Audit

July 9, 2014

Atlanta Public School Board of Education member Byron Amos convened a meeting of the Audit Committee to review the recently released Equity Audit. The report was prepared by Dr. C. Kevin Fortner who is an Assistant Professor of Research Measurement and Statistics at Georgia State University.

A summary of the Audit is here and the entire 1,400 page report is here.

Dr. Rubye Sullivan, APS Director of Research and Evaluation, made a presentation summarizing the results of the Audit. Her presentation was articulate and she is very knowledgeable about the topics discussed. During her presentation, she cautioned the Audit Committee that the report was a “snapshot in time” and additional work would be necessary to evaluate the extensive amount of data presented in the report. Additionally, she indicated that all of the data found in the report was aggregated from various APS systems or other APS sources, but that APS did not have a mechanism to pull the data together in one place to evaluate more current information.

Dr. Fortner was asked about the validity of the $15,000 per student spending on charter school students. He indicated that the graph presented (page 23 of the report) was based on an allocation methodology he had selected and that there were alternative allocation methodologies that could be used. When pressed by certain Board members, he agreed to provide the Committee with a revised version of the graph that did not allocate any central administration costs to the charter schools since the charter schools are responsible for funding their own administrative costs. As noted in yesterday’s post (see here), the spending per student for charter schools will likely decrease by approximately $5,000 and the amount will be reallocated to the traditional school per student spending presented in the graph.

The Audit Committee did not take any action on the report, but noted that it was receiving public comments and that other Board committees were also evaluating the information presented in the report. Chairman of the Board English also noted that the Board would be holding future work sessions to better define the Board’s goals to reduce resource and other inequities in the district.

I would also caution readers of the report to not jump to any conclusions from the data presented. The report contains little or no evaluation of the data presented and there is a need for extensive additional analysis prior to developing policy initiatives to reduce inequities in the system. Additionally, the reports presentation on financial resource allocations across the district is wholly inadequate and a much more extensive assessment should be prepared prior to reaching any conclusions.

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