FY15 Preliminary Budget Recommendation

1. FY15 Preliminary Budget Recommendation Finance Update Presentation to School Committee February 5, 2014

2. BOSTON PUBLIC SCHOOLS Finance Summary • Thanks to the City of Boston, our general fund target appropriation for FY15 rose $35.9 million to $973.3 million, a 3.8% increase compared to FY14 • This comes at a time when other City departments are being asked to submit lower budgets than in FY14 • However, we continue to face a challenging budget situation in FY15 due to rising costs and a drop in federal and state funding, and we are unable to present a fully balanced budget at this point • We have increased by $5 million the resources allocated to schools through Weighted Student Funding (WSF) • The central office budget is not yet finalized, and addressing the remaining challenge will require changes in central office services • Our efforts to fully balance the budget will continue over the next few weeks as teams of school-based and centrally based staff examine the budget proposal and recommend cost reductions

3. BOSTON PUBLIC SCHOOLS Finance Agenda • What this budget accomplishes • School funding overview • Budget challenges • How we have begun to meet the financial challenge • Budget timeline

4. BOSTON PUBLIC SCHOOLS Finance We are introducing a new school choice process… • We are moving forward deliberately to implement the new process of student assignment, including the recommendations from the External Advisory Committee: • More K-8 pathways • More inclusive and dual language program options • Overlays for English Language Learners (ELLs) and Special Education to provide services closer to home • The associated costs of these changes – some anticipated, some not – are built into the school funding process through enrollment projections and start-up costs for new classrooms • We are also working toward producing a Facilities Master Plan • General fund costs for the facilities changes approved in November and December 2013 add up to approximately $1.6 million in FY15

5. BOSTON PUBLIC SCHOOLS Finance …preparing to implement the Common Core standards and PARCC assessments… • $1 million in equipment and another $1 million in upgrades to technology infrastructure in preparation for the online PARCC assessments* …renewing our investments in technology to support teachers, families, and students… • $1.2 million to support Laptops for Learning • $675,000 for continued use of the Student Information System * PARCC: Partnership for Assessment of Readiness for College and Careers

6. BOSTON PUBLIC SCHOOLS Finance …extending hiring autonomy to all schools to hire qualified, diverse candidates early… • $6.1 million to make our early hiring initiative a success • $400,000 to support hiring diversity …investing in upgrades to our facilities… • an increase of $1 million to meet deferred maintenance needs

7. BOSTON PUBLIC SCHOOLS Finance …supporting Extended Learning Time (ELT) in schools across the district… • $2.75 million for ELT at current and former turnaround schools and $3.5 million for ELT at other BPS schools • $1.4 million for Acceleration Academies during school vacations …and making additional investments in services for some of our highest-need students. • $3.2 million for students with Emotional Impairment • $5 million for English Language Learners in grades 6-12 • $1.5 million for inclusion specialists in 26 schools

8. BOSTON PUBLIC SCHOOLS Finance Agenda • What this budget accomplishes • School funding overview • Budget challenges • How we have begun to meet the financial challenge • Budget timeline

9. BOSTON PUBLIC SCHOOLS Finance Sources of school funding • Weighted Student Funding $452M • Special programs (non-WSF) $28M • Title I funding $14M • Standard allocations built into school budgets $22M (nurses, special education coordinators, and food services staff) • Rules-based soft landings $5M • Buybacks for Autonomous Schools $2M • Additional adjustments1 $4M Total: $528M 1Additional adjustments include EEC/ELC supplements and other non-rules-based allocations Notes: These figures do not include the school services that are budgeted centrally. All figures are current as of January 31st and may change as the budgeting process continues.

10. BOSTON PUBLIC SCHOOLS Finance Our starting point is to fund the needs of students through Weighted Student Funding (WSF) • Students receive a per-pupil allocation that is weighted based on certain characteristics: • Grade level • Program (e.g., English Language Learners, Special Education, Vocational Education) • Student characteristics (e.g., poverty) • Academic performance (e.g., high risk) • Schools receive a minimal foundation budget plus the sum of the allocation for each student Example weights:

11. BOSTON PUBLIC SCHOOLS Finance We have reviewed and updated these weights to best reflect student needs Reduced weights for students with disabilities in early childhood classes and PTC classes to reflect appropriate staffing models Total amount: $452,142,838 Reduced weight for Emotional Impairment (EI) due to change in funding model (overall funding for EI is increasing) Increased weights for ELLs at ELD levels 1-3 in grades 6-8 and 9-12

12. BOSTON PUBLIC SCHOOLS Finance WSF reflects our principles as a district

13. BOSTON PUBLIC SCHOOLS Finance Our current enrollment is close to last year’s enrollment, but lower than we had projected • This variance is particularly driven by a leveling off of our early childhood enrollment • We were prepared to welcome 1,024 new students in grades K0-2 this year, in line with the increases we have seen since FY11 • Instead, we have seen an increase of 382 students in these grades (as of Dec. 2013) Projected Enrollment: 58,284 Actual Enrollment (as of Dec. 2013): 56,735 District Enrollment Variance : 1,549 (-2.66%) Enrollment Changes in K0-2, FY11-FY13

14. BOSTON PUBLIC SCHOOLS Finance There was a great deal of variation in projections between schools in FY14 Some schools actually enrolled significantly more students than projected $13.3M over allocation to schools beyond a 5% variance

15. BOSTON PUBLIC SCHOOLS Finance Under-enrolled classes place pressure on a school’s budget • Example: full vs. under-enrolled 6th grade class • The cost of empty seats places particular pressure on small schools with fewer classrooms • Larger schools have more of an opportunity to make up for under-enrollment in some classes with full enrollment in others

16. BOSTON PUBLIC SCHOOLS Finance A number of factors contributed to changes in enrollment projections in FY15 Key Factors: • Corrections to FY14 enrollment projections • Home Based school choice plan • SPED and ELL overlays • K-8 expansions • Roll-out of inclusive programs

17. BOSTON PUBLIC SCHOOLS Finance We have worked with school leaders to address budget challenges based on lower projections • In January, representatives from multiple departments met with school leaders to review their budgets • These “budget collaboratives” included representatives from: • Academics (Network Superintendents) • Budget • Office of English Language Learners • Office of Human Capital • Office of Special Education and Student Services • Budget collaboratives helped school leaders meet their students’ needs within their given WSF allocations

18. BOSTON PUBLIC SCHOOLS Finance What is a soft landing? • In general, we expect schools to meet their needs using their WSF allocations • In some cases, however, schools may require additional allocations because of extraordinary circumstances • In these cases, the district may provide a “soft landing” (one-time funding) • Guiding principles on soft landings: • This funding is a temporarymeasure to address particular challenges, not a permanent allocation • The situations that may require soft landings change from year to yearas the context changes • All soft landings are rules-based, and rules are applied uniformly across all schools

19. BOSTON PUBLIC SCHOOLS Finance Soft landings in FY15 For FY15, $5 million in rules-based soft landings have been issued to schools in 6 categories: • Supports for under-enrolled classrooms due to district priorities (SPED and ELL Overlays, inclusion rollout, programs being phased out) • Clinical/administrative supports for substantially separate classes for emotional impairment • Supports for Primary Transition Classes (PTC classes) being phased out • Supports for under-enrolled classes for Students with Interrupted Formal Education (SIFE students) • Supports for inclusion start-up for schools implementing formal K2 inclusion for the first time • English as a Second Language (ESL) supports for English Language Learners in general education seats [currently in progress]

20. BOSTON PUBLIC SCHOOLS BOSTON PUBLIC SCHOOLS Finance We continue to send more resources to schools through WSF than many other large urban districts • We are increasing our total WSF allocations to schools by over $5 million in FY15 compared to FY14 • 53% of the FY14 general fund budget is going directly to schools % of School Department Budget (General Fund + Grants) Source: Georgetown University, Edunomics Lab, Nov. 2013

21. BOSTON PUBLIC SCHOOLS Finance Agenda • What this budget accomplishes • School funding overview • Budget challenges • How we have begun to meet the financial challenge • Budget timeline

22. BOSTON PUBLIC SCHOOLS Finance Budget challenge ~$36M ~$13M ~$32M ~$55M ~$60M Remaining challenge ~$14M Despite a 3.8% increase in the General Fund appropriation and identified cost reductions, the budget challenge caused by increased costs and new initiatives remains at ~$14M DRAFT_2.4.14

23. BOSTON PUBLIC SCHOOLS Finance State requirements on funding for charters have led to decreases in net Chapter 70 for BPS… Total Chapter 70 aid for Boston Net state aid for BPS $ (Millions) * *FY15 figures are estimates based on the Governor’s budget proposal

24. BOSTON PUBLIC SCHOOLS Finance …and the portion of BPS’s General Fund budget covered by net Chapter 70 has declined With the reduction in state funding, the City has been responsible for funding an increasing percentage of the BPS budget 11%* * *FY15 figures are estimates based on the Governor’s budget proposal

25. BOSTON PUBLIC SCHOOLS Finance We also project a decline of approximately $32 million in external funds

26. BOSTON PUBLIC SCHOOLS Finance Staffing for our higher projected enrollment contributed to our costs in FY14

27. BOSTON PUBLIC SCHOOLS Finance The rising costs of contracts for staff also contribute to our cost increases • Since FY09, average salaries for general education teachers have risen by 16% • Increases to compensation and benefits will cost the district ~$37 million in FY15 $88,682 $76,751

28. BOSTON PUBLIC SCHOOLS Finance Despite these challenges, our budget invests in a number of new key priorities • Early hiring: $6.1M • Facilities Master Plan: ~$1.6M • School technology infrastructure: $1M • Increase in deferred maintenance: $1M • PARCC: ~$1M • Building an accountability system for school quality: $500K • Superintendent search process: $125K

29. BOSTON PUBLIC SCHOOLS Finance Agenda • What this budget accomplishes • School funding overview • Budget challenges • How we have begun to meet the financial challenge • Budget timeline

30. BOSTON PUBLIC SCHOOLS Finance Our strategic approach • Our budget challenge provides the opportunity to realign our work to best support schools • Approximately $55 million of cost reductions have been identified • The identified reductions fall largely into seven categories: • (~$16.6M) Central office reorganization, consolidation, and reduction of services • (~11M) Adjustments to enrollment projections • (~$10M) Changes to transportation services and delivery • (~$5.7M) Reductions in non-direct services for Special Education • (~5M) Decrease in health insurance premiums • (~4M) Strategic reductions in grant-funded services • (~$1.6M) Consolidation of program offerings to match projected student enrollment

31. BOSTON PUBLIC SCHOOLS Finance Despite these strategic reductions, we are still facing a $14 million budget challenge • We have been engaging in deep discussions on how to increase efficiency and reduce costs • Addressing the remaining challenge will require changes in central office services • School budgets have already been set through WSF and will not be reduced • We will convene budget teams of school-based and central office staff to continue identifying opportunities for cost savings and reductions in services • We will present these recommendations at an upcoming meeting

32. BOSTON PUBLIC SCHOOLS Finance Agenda • What this budget accomplishes • School funding overview • Budget challenges • How we have begun to meet the financial challenge • Budget timeline

33. BOSTON PUBLIC SCHOOLS Finance We look forward to discussing the budget with you in a variety of forums Dec 13 School budgets released Jan 8 - 17 Budget collaboratives with schools Jan 20 - 31 Probable Org Feb 5 Superintendent’s recommended budget to School Committee Feb 26 School Committee meeting Mar 4 Budget hearing (6 pm) Mar 12 Budget hearing (5 pm) and School Committee meeting (6 pm) Mar 18 Budget hearing (6 pm) Mar 26 School Committee votes on BPS budget

34. BOSTON PUBLIC SCHOOLS Finance For more information A number of documents are already available on our website: • Budget Presentation • FY15 Budget Memo • FY15 Allocations • FY15 WSF School-by-School comparison • WSF Templates for all schools Website:bostonpublicschools.org/budget Email:budget@bostonpublicschools.org Twitter:#bpsbudget