06/02/2014 – Proposed Budget FY2015

DeKalb County School District Proposed Budget for 2014-2015 (FY2015)
Presented by: Dr. Michael J. Bell, Chief Financial Officer, Division of Finance
The administration delivered a proposed budget on May 5th.  The next step is pass a tentative budget.  The “Tentative Consolidated Budget FY2015” lays out the various funds of the school district.  The first column is the General Operating Budget which is where we spend most of our time.  The other funds also require you to examine and pass them.
Summary of Funds
The Tentative Consolidated Budget FY2015″ shows anticipated revenue for the general operating budget as $801.5M excluding the $20M fund balance.  The $20M fund balance will not be appropriated.  Bottom of the first column indicates budgeted general fund balance expenditures of $800.1M.
An adequate fund balance for an $800M budget is about $66M.
The total allocation of all funds is $1.35B.
The Special Revenue funds are primarily the grant funds.  The debt service fund [is mostly servicing the textbook lease].  Capital Outlay is primarily SPLOST.  School Nutrition & Athletics.  Trust & Agency carries a lot of benefit components, medicare, FICA, retirement, and disability.
Revenue – Page 1
This Tentative Consolidated Budget FY2015 is a summary sheet of the funds.  The “FY2015 Proposed General Fund Budget (As proposed on 05/05/14)” is what we have been calling the T-Sheet.  It’s starts with the first midyear adjustment we did.  We expect to exceed the beginning fund balance of $20M by about $5M.
The anticipated collections are made up of local and state revenue.  We are expecting a 3% local tax digest growth.  Local revenue is expected to be $403M.  The state revenue is under that.  The state has notified us that the QBE growth is about $15.9M.  FTE Student weighted growth is $3M.  Total state revenue expected: $398M
Appropriations – Page 1
33% Reduction of Legal Expenses from $4,550,000 to $3,050,000.  There are some school safety enhancements totaling about $2M.
Page 2
$2.7M – RT3 Additional Appropriations for Furlough Reduction Day
$6.0M – Furlough Day Reduction (2 days)
$3.0M – Additional Furlough Day Reduction (1 day)
$8.0M – Class Size Reduction -Increase of 100 Teachers, Media Specialists, and Other School-Based Personnel Based on School Allotments
$5.3M – Continued Funding of $5.3 Million for Textbooks (C & I)
School-Based Personnel Based on School Allotments
Traditionally we have over spent in salaries.  Finance would budget salaries by the jobs file.  Dr. Preston would work on allotments.  Often times the two didn’t match up.  This year we compared allotments with the jobs file first.  What came out of it was the potential need for an additional $8M.  That has been added to the budget.  It could accommodate up to 100 additional teachers.
The school based enhancements total $23.3M
$5.8M – 1% Cost of Living Adjustment (COLA) for all Employees.  

Board Discussion
1. We see the breakout of the enhancements.  I would like to see how these enhancements will improve academic achievement.
2. How do the other divisions’ budgets align with the goals of those divisions and how do they obtain greater efficiencies and improve academic achievement.
3. How are we mitigating the challenges in getting the board the documentation they need.  Can we get a high skilled resource for the board?
We are on a razor thin margin adding only about $1M to the fund balance.  QBE comes from the state, can you tell us how you came to these local revenue numbers?  What remediation will we have if revenue starts coming in low?
There’s been a substantial reduction in local revenue since 2008 despite the 1 mil increase.  This budget projects a 3% increase in the tax digest.  All indications point to that the 3% growth will be exceeded, but no promises.  We will come back at midyear with any necessary adjustments.
Once the budget is passed it would be nice to see the administration bring something forward to formalize the midyear budget process in board policy.
Everyone needs to understand the diminished value of a mil over the past 5 years.  On the flip side, if things continue to go well, we should look into providing tax relief.  We need to let the public know they are the beneficiaries of a great school system at a reasonable tax rate.
To Mayfield’s point, I am ill equipped to say what the impact is of various expenses like school nurses in middle and high schools.  Many people don’t know that we don’t have school nurses in middle and high school and I’d like to know what the financial impact of implementing that.
We don’t have the tools to figure things like that out.  How do we get that without over burdening the staff?
Please explain the credit and debit of $2.7M for the furlough days charged to RT3 on the T-Sheet.
We are using RT3 grant money to pay for the furlough day reduction by bringing the employees in for training.
One of the questions I’ve received from SACS is, “How well are we doing?”  To Mr. Mayfield’s point, how do we know how well various expenditures are working?
I requested from the beginning to have a board administrator.  I agree that we should have many of these things, but it’s in the 11th hour now.  Mr. Orson asked about the nurses months ago, but it was never followed up on.  The board puts a question forward and asks for a response, it’s not going to happen.
It’s hard to go back now in the budget process and do this.
We also have to realize when talking about measuring effectiveness, we are talking about human beings and talking about people.  People don’t change just like that.  Growth is incremental and doesn’t happen over night.  There are many influences and impacts on student achievement and growth.  A Universal Screener won’t be the only thing.  If you try to hold just what’s going on in the class room as an indication of student achievement, student success and student growth, we’re going to be disappointed.
When you have a project, you have to have short term studies and longitudinal studies [… yada yada yada …]
Unless we want to spend the money on getting this research done, we need to be cautious about what we are asking for.
We’ve been touting the universal screener as one of the great purchases of the year.  People want to see benchmarks.  At some point, we are going to have to have a collection of data.  What is the timeline to wait and get that data?
Is it too late to include a resource for the board?
At the end of the day we are judged by growth and achievement.  The state offers to excellent assessments, the CRCT and the EOCT … and it’s your graduation rates.  The good news is, the future is now.  The new scores are being evaluated as we speak.
The Universal Screener has only been in place a few months.  It’s too soon to judge the affects of that, but we can determine if we are growing and improving.  At the Superintendent’s report this evening, Dr. Beasley will be able to provide you with a timeline as to what has occurred since January.  And I believe he is going to say we are encouraged by what we have already seen.
We don’t need to create new data.  We need to understand the data that currently exists.  We will have the most up to date data over the next few weeks.
Regarding enhancements, having money to spend is a new phenomena in DeKalb.  The enhancements have been evaluated and considered throughout the school year.  We’ve done a lot of research on the nurses and associated costs.  It’s too big a number to put a nurse in every school.  We are looking into contracting with a health care provider for nursing services.
The resource is the board’s decision.  The resource would have to ask Dr. Bell for the information.  They can’t get the information themselves.  Ms. Margaret might also need some help.
I’m encouraged about the nurses.  Regarding the board resource, there is not a clear mechanism for getting information.
Can we get an update on the SRO cars.
The SRO vehicles money is being used elsewhere.
Metrics.  We can’t see an instantaneous response, but we need to put metrics into our proposals so we can set expectations.
A while back we asked the superintendent to align all programs to the budget.  As the programs are aligned to the budget, they are assessed and evaluated.
We are still doing that.  I heard from the board that we want to improve growth and achievement.  We want to improve our graduation rates and be better stewards of the taxpayers’ dollars.  We are doing exactly that.  Those are the ultimate metrics.
Thank you for including everybody in your efforts to remove furlough days.  I’ll address Mr. Mayfield’s question about an additional board resource at the end.
I have a high hurdle rate for adding an expense not in the classroom.  I’d like to see the scope and job description of this position.  I believe the ROI would offset the cost.
This is a preliminary budget and I’m proposing that we reserve $250K for a board resource, or staff services or tools.  Respecting our boundaries we could have access to that data directly so the resource could get the data without having to make the request.
Great idea, but the board has only one employee.  This employee would be supervised by the superintendent.
I’m saying that the resource would be dedicated to provide board services to alleviate some of the issues we’ve had with getting data.
I disagree.  We have been very timely responding to requests.  If we get responses the day of the board meeting, we can’t respond to them.
I’m not referring to those.  I’m referring to requests made over the year where we’ve had challenges getting the information.
With all respect, I haven’t received anything from board members complaining about not getting information.  In fact, I have received comments of appreciation for staff work.  If I’ve missed something, I apologize for it.
That doesn’t negate the fact that the board can hire another resource.  I don’t want it to appear that we are not responding in a timely manner.  Some of the requests require a lot of time from the staff.  We’re trying to run a district here.  When we respond to those requests, we never hear anything else from them again.  That’s insulting and unfair.
Like Coleman said, I’d like to see the metrics for your expectations for this employee because it goes against everything I’ve heard from the board about spending money in the classroom.
I have to reiterate about why we are here.  We have to stop waiting until the 11th hour to make suggestions.  If there is a request, it must be timely and fit the needs.  Instead of hiring somebody else, I’d like to see us look at ourselves and ask ourselves “Why am I asking this question”.  If we want a research person, we have a research team.  But if we are going to take every little piece and look at every nit picky thing every time we have a board meeting, we can hire a research firm. I’m not one […] who are we trying to impress?  We are not here to be impressive […] Every month we come up with these 11th hour questions that drag these meetings on.
A possible solution would be for the board members to look over their notes and see if there are any requests that have not been responded to and completed.  We’ll compile a list and submit it to the superintendent.
We proposed the tentative budget.  We request that you pass the tentative budget document.   Between now and June 26th consider that document for the passage of the final budget on June 25th.