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Denver Public Schools Financial State of the District 2003 through 2010 Presented to the Board of Ed

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Government Grants Fund = $92.4 million. How Much of the Public's Money is Restricted? ... Special Revenue - non-government grants, tuition-based fee-based programs, ... – PowerPoint PPT presentation

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Title: Denver Public Schools Financial State of the District 2003 through 2010 Presented to the Board of Ed


1
Denver Public SchoolsFinancial State of the
District2003 through 2010Presented to the Board
of EducationApril 6, 2006
2
Presentation Agenda
  • 2005-2006 Accomplishments
  • Whats at Stake?
  • Why is Our Budget Broken?
  • DPS Revenues Where Do We Get Our Money?
  • DPS Expenditures
  • Where Do We Spend the Publics Money?
  • The Real Numbers - Discretionary vs.
    Non-Discretionary Dollars
  • How We Have Historically Addressed The Budget Gap
  • Next Years Budget
  • The Bottom Line
  • What Happens if We Dont Address the Bottom Line?
  • Moving Forward Strategic Alternatives
  • Next Steps

3
2005-2006 Accomplishments
  • Board Adopted Budget Principles
  • Consolidated Budget Staff Budgets
  • Aligned Budget to The Denver Plan
  • Completed Budget/Staffing Calendar four weeks
    earlier than previous years (allowing district to
    compete with suburban districts)
  • Increasing Budget Transparency

4
Whats at Stake?
  • Student Achievement
  • Quality of Education Richness in School
    Environment Curriculum (Number of Teachers and
    Other Staff Class sizes breadth of Elective
    offerings)
  • Competitive Wages for Teachers, Principals, and
    other Employees

5
Why is Our Budget Broken?
  • District Enrollment Declining
  • Retirement Costs Increasing
  • Compensation Increases to Remain Competitive
    Exceed our Revenue Increases
  • Non-Discretionary Costs Increasing Faster than
    Inflation
  • Low Per Pupil Funding Compared To Urban Districts
    Across the Country

6
District Enrollment Declining
School-Age Children is based on data from the
State Department of Local Affairs
7
Excess Capacity in our School Buildings
8
Increasing Retirement Costs
Board actions in January 2005 and March 2005
will set the pension contribution rate at the
actuarial level by July 2008 and level the PCOPs
payments by 2008-2009, respectively
9
Compensation Increases are Over Revenue Increases
Over this 7-year period, the cumulative CPI,
revenue and compensation increases are 14.1,
23.0 and 35.4, respectively.
NOTE 2006-07 thru 2009-10 Compensation Increases
assumes CPI on salary and benefit allowance, plus
steps, educational and longevity increments
10
General Fund Compensation Increases Over Current
Services Budget
Over this 7-year period, the cumulative
salary/benefit allowance and pension increases
are 86.6 million and 37.5 million, respectively.
NOTE Current Services Budget is the current
staffing level before staff cuts to address the
budget gap
11
2005-2006 Full-Time Staff AllocationsAll Funds
(6,817.17 FTEs)
  • Building Administrators Principals Asst
    Principals
  • Other Administrators District Management,
    Business Central Support Administrators
  • Certificated Represented by the DCTA (i.e.,
    teachers, librarians, nurses, psychologists,
    social workers, counselors, ROTC, etc.)
  • Other Includes professional technical, office,
    contract paraprofessionals, transportation,
    facility and custodial, security, warehouse, and
    maintenance personnel
  • Does not include hourly paraprofessionals, bus
    drivers, mechanics, custodians, clerical, etc.
    personnel

12
Where Do We Get Our Money?
Categories of Funds for the 2005-2006 Budget 1.3
Billion
  • in millions



Less than .5
13
How Much of the Publics Money is
Restricted?Starting with the 1.3B of resources,
there are certain funds that are restricted in
their entirety
in Millions
Of this 782.6 million General Fund 690.2
million Government Grants Fund 92.4 million
14
How Much of the Publics Money is Restricted?In
the General Fund , there are 204.5 Million
Restricted Uses
in Millions
15
How Much of the Publics Money is Restricted? In
the Government Grants Fund , there are 72
Million Restricted Uses
in Millions
16
What Money Do We Really Have Discretion
Over?Now to Address the 485.6 million (General)
20.0 (Grants) 505.6 Million
  • Schools expenditures in the schools
  • Special Ed itinerant teachers, paras and
    transportation for special ed students
  • PCOPs pension COP payments
  • Pro-Comp 2005 pro comp funds
  • 98/03 ML other 1998 and 2003 mill levy funds
  • Post-Retire Retiree Health Trust and retiree
    life contributions

505.6 Million x 63 315.0 Million
Less Schools (54) of (268.7) Million Everything
Else (9) 46.3 Million
  • Title III other Title I II funds
  • Util/Fuel utilities, phone/fax and bus fuel
  • Spec/Lvs/Subs nurses, psych, soc.workers, paid
    FMLA leaves and teacher subs

17
Breakdown of Expenses505.6 Million
in Millions
Less than .5

18
What is Everything Else?
in Millions
19
General Operating Fund Causes of Projected
Current Services Budget Gap
in millions
Enrollment Reduction excludes charter, contract
and on-line students
20
How We Have Historically Addressed Our Budget Gap
in Millions
2003-2004 30.7 million
2004-2005 24.6 million
2005-2006 11.8 million
2006-2007 16.4 million
21
Next Years Budget
  • 3.0 Million Recurring Cut in Maintenance
  • 7.5 Million Cut in Administration
  • 5.6 Million Cut to Schools offset by 1.9
    Million in Program Expansions, 1.6 Million in
    teacher allocations to certain Northeast Schools,
    and 3.2 Million increase in available Title I
    dollars
  • .3 Million Other Cuts

22
The Bottom Line
  • We have balanced the budget by cutting services,
    but we have not meaningfully addressed the
    structural flaws in our fiscal condition, with
    the exception of the Districts commitment to
    better manage its retirement costs.

23
What happens if we do not address the Structural
Problems?
in Millions
This does not include any resources to improve
our textbook purchasing to meet national
standards or to make any improvement in class
sizes.
24
What are the Assumptions for the Current Services
Budget Gaps in 2007-2008 thru 2009-2010
  • Revenues
  • School Finance Act Funding Formula and
    Categorical Funding - Average of OSPB and
    Legislative Council CPI projections for calendar
    years 2006 thru 2008 (2.55 2.75 and 2.85)
    1 inflation for FY 2007-2008, 2008-2009 and
    2009-2010
  • Enrollment Projections Use of Plannings
    non-charter/contract enrollment projections for
    Oct 2007, 2008 and 2009 of decrease of 1104, 1005
    and 1047 students, respectively
  • Specific Ownership Taxes Increase of 250,000
    each year (2005-2006 is the first year in many
    that has had any increase from this revenue
    source)
  • Expenditures
  • Current Year Expenditures Assumes that the
    prior years shortfall was addressed with
    recurring expenditure cuts
  • Pension Contribution Rate From 11.14 for
    2006-2007 to 12.81 for 2007-2008 and 14.47
    thereafter, per actuary

25
What are the Assumptions for the Current Services
Budget Gaps in 2007-2008 thru 2009-2010
  • Expenditures (continued)
  • PCOPs Lease Payment Additional 1.45 million
    for 2007-2008 and level thereafter
  • PCOPs Refunding Use of refunding reserves to
    refund 1997 PCOPs in 12/15/07, the redemption
    date
  • Enrollment Changes Decrease to non-charter
    schools at the 2006-2007 variable resource
    allocation per pupil (approximates 50 of School
    Finance Act per pupil funding)
  • Other Compensation CPI for COLA plus, steps,
    longevity and educational increments, plus salary
    tail (impact of prior year compensation increases
    in September and/or January)
  • One-Time Fixes restoration of prior years
    annual maintenance expenditure reduction of 3
    million in 2007-2008
  • Other Expenditure Changes includes such
    expenditures as
  • property/liability insurance premiums (est. 5)
  • utilities and fuel (est. 5)
  • technology license/maintenance contract fees
    (est. 10)
  • fixed costs for new Stapleton K-8 school in
    2008-2009
  • statutory increases in pass-thru per pupil
    funding to charters, facilities, EGOS students
  • facilities students excess costs (est. 5) and
  • annualized employee turnover savings (est. 5.1
    million)

26
What Happens if we do not address the Structural
Problems?
in Millions
By 2009-10, the annual textbook budget will be 8
million over 2006-07 levels to be comparable to
our peers and class sizes will be 3 less 2006-07
levelssome still view as above optimum
27
What are Some Additional Needs?We Have Heard
that There are Other Needs
in Millions
  • The following are some of the other needs we have
    heard, which if added, will further exacerbate
    the budget gap (these are annual costs)
  • Full-Day Kindergarten assuming school buildings
    can accommodate, schools would need an additional
    6.5m
  • ECE Services to all 4-Year Olds the cost for
    approximately 2200 4-year olds that are not
    currently served but are projected to enter
    kindergarten is 4m
  • Intervention Teachers based on the Denver Plan,
    the cost would be 1m
  • Librarians - 3.4m is the cost to add a .5
    librarian to each elementary, K8, middle and high
    school
  • Social Workers - 3.4m is the cost to add a .5
    social worker to each elementary, K8, middle and
    high school
  • School Nurses - 2.6m would buy us a .5 nurse for
    each of the 91 elementary and K8 schools
  • Counselors - 1.6m is the cost to add 1 counselor
    to each middle and high school
  • K8 MS Athletics 1st year cost for the 10 K-8
    schools not participating is .5m

28
2007-2008 Hypothetical Ways to address Budget
Gap of 17.5 Million
in Millions
  • 17.5m cut in everything else or 37.8 of the
    2005-06 level of 46.3m in everything else (as an
    example, 17.5m adds up to all non-special ed
    transportation plus all technology services plus
    all general administration plus part of
    security!)
  • 17.5m reduction in compensation eliminate
    projected increase of 12.9m and cut current
    level by 4.6m (this could wipe out all efforts
    to be competitive with the marketplace)
  • 17.5m increase in class sizes based on
    projected enrollment, this would translate into
    an average increase of 4.5 students per class
    (elimination of 308 teachers!) .
  • 17.5m net available resource increase from
    increased enrollment assuming 50 of per pupil
    funding is needed for incremental costs, we would
    need 5,173 more students attending our DPS
    schools, or a 7.8 increase over the 9/30/05
    level.

29
2008-2009 Hypothetical Ways to address Budget
Gap of 12.1 Million
in Millions
  • 12.1m cut in everything else for the two
    years, the cumulative cut of 29.6m would be
    63.9 of the 2005-06 level of 46.3m in
    everything else (as an example, 12.1m adds up to
    all facilities costs plus all central business
    support!)
  • 12.1m reduction in compensation eliminate
    12.1m of 12.9m projected increase (this could
    wipe out all efforts to be competitive with the
    marketplace)
  • 12.1m increase in class sizes based on
    projected enrollment, this would translate into
    an average increase of 3.0 students per class
    (elimination of 212 teachers!) .
  • 12.1m net available resource increase from
    increased enrollment assuming 50 of per pupil
    funding is need for incremental costs, we would
    need 3,447 more students attending our DPS
    schools, or a 5.2 increase over the 9/30/05
    level.

30
2009-2010 Hypothetical Ways to address Budget
Gap of 12.6 Million
in Millions
  • 12.6m cut in everything else for the three
    years, the cumulative cut of 42.2m would be
    91.1 of the 2005-06 level of 46.3m in
    everything else (as an example, this additional
    12.6m adds up to all academic support plus all
    half of human resources leaving only part of
    security and part of human resources and nothing
    else!)
  • 12.6m reduction in compensation eliminate
    12.6m of 13.8m projected increase (this could
    wipe out all efforts to be competitive with the
    marketplace)
  • 12.6m increase in class sizes based on
    projected enrollment, this would translate into
    an average increase of 3.2 students per class
    (elimination of 221 teachers!) .
  • 12.6m net available resource increase from
    increased enrollment assuming 50 of per pupil
    funding is need for incremental costs, we would
    need 3,457 more students attending our DPS
    schools, or a 5.2 increase over the 9/30/05
    level.

31
2007-2008, 2008-2009 and 2009-2010 Cumulative
Hypothetical Effect to address Budget Gap
Assuming the entire budget gap was accomplished
by one of these strategies
  • Everything Else - 42.2m cut from the 46.3m
    level in 2005-2006, or 91.1 everything else
    becomes nothing else
  • Compensation assuming other school districts
    granted traditional comp increases, we would be
    42.2m below everybody else
  • Class Sizes to cut 42.2m, we would need to
    increase class sizes on average by 10.7, or
    eliminate 741 teachers
  • Increase Enrollment to increase net available
    resources by 42.2m, we would need to add 12,077
    students, or 18.2 more than the 9/30/05 level of
    students attending our DPS schools

32
Presentation Summary
  • To address the structural flaws in our financial
    flaws in our fiscal condition, we could either
    take the
  • Traditional Paths to reducing our budget gaps
    through cuts in

Compensation making us utterly non-competitive
in the market place
School Resources degrading our schools and
repelling students and parents
Erase Everything Else eliminating all
operational support and accountability
  • OR
  • Systematic Reform Paths to reducing our budget
    gaps through

Increase revenues with increased enrollment we
have available capacity and competitive offerings
Consolidate and strengthen our academic offerings
into fewer, better schools
33
Increase Revenue by Increasing Enrollment
  • Market our existing competitive programs in our
    schools
  • Create schools and academic programs that are
    compelling educational choices for parents and
    students
  • Work with school communities to ensure
    neighborhood school choices reflect both high
    academic expectations and community interests
  • Support schools to better tell their stories in
    their respective communities
  • Reward schools that attract and retain students
  • Reward and recognize schools that achieve
    distinguished academic results
  • Provide innovation grants to schools that submit
    meritorious proposals that promise to improve
    their academic results and increase student
    enrollment
  • NEXT STEPS Convene a work group by mid-May to
    conduct market research and develop strategy for
    attracting and retaining students in DPS schools

34
Examine the Districts Fixed Costs
  • Consolidate and strengthen our academic offerings
    into fewer better schools
  • Address the Districts fixed costs to serve the
    academic needs of our 21st century student
    population in our new, competitive environment
  • Evaluate our buildings based on current
    performance, quality of physical plant, current
    use, potential enrollment (now and in the
    future), etc.
  • NEXT STEPS Convene a broad-based blue ribbon
    citizens committee by mid-May to address
    district facilities and recommend where to
    consolidate some of our buildings and create a
    richer academic environment

35
DEFINITIONS AND ASSUMPTIONS
36
Definitions of Types of Expenditures
  • Salaries/Benefits gross salaries for full-time
    and part-time employees plus the Districts
    payment of pension contributions PCOPs, benefit
    allowances, unemployment and workers
    compensation claims, social security and Medicare
    taxes, accrued sick leave upon retirement, and
    contributions to post-retiree health and life
    insurance
  • Purchased Services independent contractor
    services and other services contracted out or
    purchased by the District e.g., tax collection
    fees, water and sewer fees, tuition payments,
    property and liability insurance, and payments to
    charter and contract schools
  • Supplies consumable materials, such as
    textbooks, paper and office supplies, custodial
    supplies, maintenance parts, fuel for vehicles,
    electricity, natural gas and the like
  • Property amounts paid for acquisition and
    construction of fixed assets, land and real
    property
  • Interfunds/Indirect/Other transfers between
    funds (e.g., General Fund to Capital Reserve
    Fund) indirect cost reimbursements from the
    Colorado Preschool Program and federal grants to
    the General Fund and other expenses such as
    registration fees
  • Debt annual principal and interest payments on
    outstanding general obligation bonds and capital
    certificates of participation
  • Reserves reserves held for bond redemption,
    food service operations, capital programs, TABOR
    compliance, contingencies, trust and mill levy
    designated purposes

37
District Fund Definitions
  • Sixteen individual funds (General Funds includes
    4 sub-funds) State budget law self-balancing
  • General Operating Fund sub-fund of the General
    Fund that is used for general operations. This
    Fund is the Focus of the Presentation other
    funds are restricted as to use.
  • 1998 Mill Levy Override Fund sub-fund of the
    General Fund November 1998 voter-approved mill
    levy override for student literacy, computers in
    schools and deferred building maintenance
  • 2003 Mill Levy Override Fund - sub-fund of the
    General Fund November 2003 voter-approved mill
    levy override for arts/music teachers in all
    elementary schools, textbooks, repairs and
    maintenance, all-day kindergarten and early
    education, improve high school graduation rates,
    and improve academic achievement in
    under-performing schools
  • 2005 Mill Levy Override Fund sub-fund of the
    General Fund November 2005 voter-approved mill
    levy override for the professional compensation
    system for teachers
  • Government Designated Purpose Grants - local,
    state federal grants EGOS

38
District Fund Definitions
  • Special Revenue - non-government grants,
    tuition-based fee-based programs, federal
    e-rate and local enterprise activities
  • Pupil Activity - high school athletics gate
    receipts pay-to-play GF support
  • Bond Redemption - separate mill levy for general
    obligation bond (GOB) debt
  • Building - GOB proceeds earnings for capital
    projects (ballot question)
  • Capital Reserve - 1996 COP lease payments,
    vehicle large equipment acquisition, equipment
    building maintenance, DURA funded schools, 2003
    COP proceeds for northeast school buildings
    improvements
  • Food Services - student breakfast lunch
    programs funded by federal government food
    sales
  • Self-Insurance - property liability insurance
    worker's comp premiums claims within
    deductibles and risk management services
    purchased by other District funds
  • Warehouse/Reproduction Internal Service - class
    max digi-pro services purchased by schools
    departments

39
District Fund Definitions
  • DoTS Service Bureau Internal Service -
    reimbursable enterprise activities
  • Maintenance Internal Service - reimbursable
    services for schools and departments
  • Custodial Internal Service - floater staff to
    address school vacancies
  • Private Purpose (Trust) - funds not for DPS
    benefit individuals or other organizations
    (COBRA, retiree health and life subsidies, DCTA
    Paraprofessionals education trusts)
  • Government Permanent - endowed funds restricted
    use of earnings
  • Student Activity - school sponsored activities
    (student clubs, etc.)

40
Everything Else Definitions
  • Facilities Building Maintenance- facility
    services, maintenance, districtwide custodial
    support , facility construction services
  • Other Transportation all pupil transportation
    excluding special education
  • Safety Security all building-based security,
    24/7 patrols, dispatch and investigative services
  • Central Business Support budget finance,
    disbursing, accounting, payroll, fixed assets,
    purchasing, warehouse, digipro services, central
    ROTC services and grants management
  • Chief Academic Officer Support CAO Office,
    misc. School support, curriculum and instruction.
    planning/assessment and research, Balarat, CTE
    Office, English language acquisition, GT Office,
    community partnerships, area offices and student
    services
  • Human Resources personnel services and employee
    benefits office
  • Technology Services all districtwide technology
    services excluding software/hardware licenses,
    fax and telephone services, and federal E-Rate
    match
  • General Administration Superintendents Office,
    legal services and communications office

41
Estimated Savings from Closing Schools
  • For the smaller schools in the following levels,
    the estimated annual savings from moth-balling
    a school is
  • Elementary School - 350,000
  • Middle School - 890,000
  • High School - 1,300,000
  • The above savings include, depending upon the
    school level, the cost of the following
  • types of staff principal, assistant principal,
    incremental supplemental teacher and
    paraprofessional, incremental student service
    day, GT support, librarian, counselor/student
    advisor, secretarial/clerical staff, facility
    manager, custodial and
  • types of other costs custodial supplies,
    counselor extra pay, and utilities
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