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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FY16 Tentative Budget approved – prioritizes spending in the schoolhouse (Part 1)

March 5, 2015

This past Monday the Board of Education passed the $688.2 million FY16 Tentative Budget and the document is a clear and unambiguous indication of the new Administration’s priorities – spending increases will go to the classroom where they will have the most impact on student educational outcomes. In addition, the Administration has taken some steps to “right size” the districts spending on non-classroom activities and has indicated that additional steps will be taken in the future.

For the Administration’s perspective on the budget, see their press release here and the Superintendent’s blog post here.

When the new Superintendent Carstarphen was being introduced to Atlanta last April, she was very clear about establishing the right priorities and then funding them. As she said then,

if you really want to know what is happening in your district, just follow the money. Don’t follow the legends and the myths – just get to the bottom of the money. And then you know what you really believe in and what you have been doing for years. If you can track down the money and the resources, you will see what you believe and then you have to say, “Is this what we want to continue to do? Are we OK with this? Or do we want to change our direction?”

This budget answers the question posed – APS is changing direction in a big way.

It is important to know that the Board and Superintendent Carstarphen spent a great deal of time establishing budget priorities and developing ways to fund them. While many decisions were made in the last Budget Commission meeting (which all Board members attended), there was extensive discussion on the budget in several Board retreats that were devoted to establishing a consensus on priorities and developing the tactical operational plan for next year.

Without question, this Board and Administration have spent far more time on planning than any I have witnessed in the past. They were focused and goal oriented – it has been quite refreshing to watch it evolve and the Administration gets high marks for driving a “priorities based” and comprehensive process.

I will go into much more detail in subsequent posts, but as a starting point, let’s look at the big picture and “follow the money”.

The following chart very clearly tells the story of what the Board’s and Administration’s priorities are (click to enlarge).

FY16 Funding Allocations 030415 v2

As a starting point, the total FY16 spending in the traditional schools is up $9.7 million as compared to FY15. As this is the Superintendent’s first budget, let’s focus on where the increases in funding went.

Without question, the most significant change is the $10.1 million increase in Direct Instruction expenditures which exceeds the total traditional school cost increase of $9.7 million by $400 thousand. The traditional college prep courses increased by $6.2 million – a 2.9% increase as compared to FY15. The specialty programs (special education, remedial programs, vocational and non-traditional programs) increased by $3.9 million or 4.0% as compared to FY15. The bulk of the increase went to special education to bring the program into regulatory compliance.

The message has been sent and delivered – spending in the classroom is a top priority and all other functions need to get behind what is being spent in the classroom.

It is also important to note that Student Services – activities that directly support what his happening in the classroom – has a 22.8% share of the total increase. The FY16 budget has approximately $2.0 million for positive behavior support programs to enhance the learning environment.

However, there is one change that will impact spending in the schoolhouse – the total spent on In-School Administrators (principals, assistant principals, academy leaders, registrars and school secretaries) is decreasing by $4.0 million and is being scaled back to spending levels incurred in FY12. It is important to acknowledge what has happened since FY12 – a number of schools have been closed or merged out of existence. Given the changes, this adjustment is warranted and is part of the Superintendent’s “district right sizing” plan and the reduced spending should have no effect on educational outcomes.

When all schoolhouse activities are combined, over 86% of the spending increases have been directed to funding the education of students and providing additional support to improve educational outcomes.

Central Office School Administration spending also increased by $1.2 million in FY16 as compared to FY15. As part of this category Professional Development increased by $860 thousand. However, in prior years this cost was primarily covered by Federal grants and, due to reduced Federal funding, had to be transferred to the General Fund in FY16.

The Operations group (facilities, custodial, transportation and security) is also getting a $1.9 million share of the increased spending. While cost cutting measures have been taken in many of the departments, there is increased spending for much-needed HVAC maintenance, improved custodial services and the initial funding to bring the security resource officers back in-house (currently provided by the Atlanta Police force). These three areas account for an increase of $2.8 million, but these increases are partially offset by $900 thousand in reductions in other Operations departments.

Another very positive change is the $1.8 million reduction in General & Administrative spending. Finance led the charge with a $1.1 million or an 8.1% reduction. IT spending is coming down by $355 thousand and Human Resources is reducing its cost by $221 thousand. These reductions are a start in the right direction and reverse a three-year trend of increased spending on General & Administrative functions. However, it is also important to note that the General & Administrative function costs have increased by $8.1 million (18.8%) since FY13 and it appears as if there is a lot more “right sizing” work to do here.

The budget is still “tentative” at this time and we may see other changes before the final budget is approved in April.

As the title states, this post represents Part 1 of the FY16 budget review and subsequent posts will get into a far more detailed analysis of the expenditures and cost trends across each major function.  However, I believe that it is important to initially focus on the “big picture” – and as I have noted above, the statement made by this budget is positive and the spending priorities are focused where they belong – in the classroom.

To the Board of Education, Budget Commission Chair Westmoreland, Superintendent Carstarphen and the entire Finance team – a great start and job well done!

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Atlanta Public School Board of Eduction meeting today at 2 p.m. – $682.8 million FY16 Tentative Budget on the Agenda

March 2, 2015

The Atlanta Public School Board of Education will hold its regular meeting today starting at 2 p.m.  The key item on the Agenda is the consideration of the FY16 Tentative Budget. The budget is considered to be “tentative” as it can modified before final approval in April.

The Agenda for the meeting is at BoardDoc’s here.

As usual, the more interesting topics will be covered in the Work Session. Today there are five topics as follows:

  • District Assessment of Performance Standards – presentation by Carlton Jenkins, Chief Academic Officer, Samuel Taylor, District Effectiveness Program Manager, GaDOE and Susan White, District Effectiveness Specialist, GaDOE – see the presentation materials here.
  • Charter System Application and Cluster Planning Update – presentation by Angela Smith, Special Assistant to the Superintendent – see the presentation materials here.
  • Positive Behavior Supports – Tammie Workman, Assistant Superintendent of Student Services – see the presentation materials here.
  • FY16 Tentative Budget & Monthly Financial Update – Chuck Burbridge, Chief Financial Officer – see the presentation materials here and here.

I have been following the budget process closely and have attended several Board retreats as the budget was being developed. I have developed a draft analysis, but the process remains fluid and I want to hear the presentation today before commenting on it further.

There were a couple of interesting items on the Personnel Gains and Loss Report (see here) as follows:

  • Kelly Gunn has been appointed as Assistant Principal for the C.S. King YWLA Middle School
  • Linda Anderson – Assistant Superintendent of Teaching & Learning – has resigned effective at the end of the school year.
  • Chuck Burbridge – Chief Financial Officer – has resigned effective this month. See previous post on new position Chuck will take in Chicago here.

The rest of the Agenda items are primarily contract approvals. I did not see anything there that might be controversial. I will also add that the descriptions they are providing are improving and are much clearer.

See you there.

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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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