FY14-15 Budget Update Finance Update Presentation to School Committee December 4,

BOSTON PUBLIC SCHOOLS Finance Overview: FY13-FY15 FY13 FY15 FY14  Fiscal year ended on June 30, 2013  BPS ended the year within budget for the 23 rd consecutive year  Current fiscal year, running through June 30, 2014  We are currently facing unanticipated expenditures, and we are taking action in response to these budget pressures  Fiscal year beginning July 1, 2014 and running through SY14-15  We project that rising costs and decreases in external funding will present a challenge 2

FY2014 Budget Investments Our FY14 budget funds investments to close gaps and ensure all students are college & career ready  Sustains extended days in Turnaround Schools  Sends $30 million new dollars directly into schools through Weighted student Funding  Invests in schools with high concentrations of poverty  Prepares for new Dual Language, Innovation, and In-District Charter Schools  Supports conversion of two schools to fully inclusive programs  Strengthens support for and development of great teachers and school leaders BOSTON PUBLIC SCHOOLS Finance 3

Our current enrollment is close to last year’s enrollment, but lower than we had projected Projected Enrollment: 58,284 Actual Enrollment: 56,735 District Enrollment Variance : 1,549 (-2.66%) Projected Enrollment: 58,284 Actual Enrollment: 56,735 District Enrollment Variance : 1,549 (-2.66%)  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, so far we have seen an increase of 382 students in these grades Enrollment Changes in K0-2, FY11-FY13 4

BOSTON PUBLIC SCHOOLS Finance There was a great deal of variation in projections between and within schools Some schools actually enrolled significantly more students than projected 5

BOSTON PUBLIC SCHOOLS Finance We currently anticipate a shortfall of approximately $10 million in FY14  As of October 31, our anticipated shortfall is $10.3 million  Major contributing factors include:  Cost of opening classrooms beyond what was initially projected for this school year and additional funding to maintain existing programming  Cost to implement new hiring process, including training for teachers and School Site Councils  Interventions at Madison Park to address staffing, textbook, and equipment needs  Turnaround interventions at English High and E. Greenwood  Continued growth in requirements for therapeutic services for students with disabilities  Transportation costs, including for homeless students, additional bus monitors, and students with private placements 6

BOSTON PUBLIC SCHOOLS Finance We are taking action to address our budget pressures in FY14  Implemented a special review process for the hiring of all non-classroom positions in the district  Any request for exception will be reviewed and considered by a subgroup of the Superintendent’s cabinet  Will analyze current spending patterns and make adjustments where appropriate  Working with Veolia to identify opportunities to minimize unanticipated transportation costs  Reviewing the possibility of using external funds to cover any and all expenditures 7

 We will face approximately $50-60 million in projected cost increases  Major cost components include:  Employee step increases: $11.8 million  Health insurance and other benefits: $7.6 million  Collective bargaining: $17.2 million  Investments in Madison Park: $1.3 million  Special education out-of-district placements: $0.5 million  Increase in bus monitors: $0.6 million  We are working collaboratively with the City of Boston finance team to refine our total estimate BOSTON PUBLIC SCHOOLS Finance We anticipate a challenging budget environment in FY15 8

 Other challenges will include:  Preparing for Common Core standards and online PARCC assessments (PARCC: Partnership for Assessment of Readiness for College and Careers)  Costs associated with introducing hiring flexibility in all schools  Expanding inclusive practices to more schools and classrooms  Updating our early literacy curriculum  Providing transportation for homeless students BOSTON PUBLIC SCHOOLS Finance We anticipate a challenging budget environment in FY15 9

BOSTON PUBLIC SCHOOLS Finance We also project a decline of approximately $31.1 million in external funds 10

In addition, state Chapter 70 funding provides a declining share of our budget 11 BOSTON PUBLIC SCHOOLS Finance

BPS FY15 Budget Timeline (tentative) BOSTON PUBLIC SCHOOLS Finance Mid-Nov. Enrollment projections to schools for review Develop guidance to schools regarding academic strategy Dec. 13Budget allocations provided to schools Dec. – Jan.Review of Central Office budgets Jan. 3School budgets due back to Budget Office Jan. 9 – 13Budget Reviews Jan. 13 – Feb.Probable Org Feb. 5 Superintendent’s recommended budget to School Committee Feb. – Mar.Budget hearings Mar. 26School Committee votes on BPS budget 12

We will once again fund schools using Weighted Student Funding BOSTON PUBLIC SCHOOLS Finance PrincipleDescription Student focusedProvides resources based on students, not on buildings, adults, or programs EquityAllocate similar funding levels to students with similar characteristics, regardless of which school they attend TransparencyEasily understood by all stakeholders Differentiation based on need Allocate resources through a comprehensive framework that is based on student needs PredictabilitySchool allocation process is predictable and is structured to minimize school-level disruption School empowerment Empowers school-based decision-making to effectively use resources Alignment with district strategy Supports the Acceleration Agenda, our five-year strategic plan 13

BOSTON PUBLIC SCHOOLS Boston ranks #2 among large urban districts that use weighted student funding in directing resources to schools Source: Geogetown University, Edunomics Lab 14 BOSTON PUBLIC SCHOOLS Finance % of School Department Budget (General Fund + Grants)

BOSTON PUBLIC SCHOOLS We are looking closely at enrollment projections and weights as we develop school budget allocations for FY15 15 BOSTON PUBLIC SCHOOLS Finance  Allocations will reflect projected enrollment and programmatic needs of schools  We are taking this year’s enrollment trends into account as we plan for next year  We continue to review the weights assigned to different student populations to ensure that the weights reflect student needs

BOSTON PUBLIC SCHOOLS Questions? 16 BOSTON PUBLIC SCHOOLS Finance For more information, join the Georgetown University Edunomics Lab for a webinar on Weighted Student Funding How allocation models work Why districts use student- based allocation What formulas look like Tuesday, December 10 th 1:00 p.m. Register at edunomicslab.org edunomicslab.org