1. Business & Finance FY 2017 Budget Planning Thomas Harper, CFO

2. FY 2016 Recap Governor’s proposal: – 1.25% SSA Legislative compromise: – 1.25% SSA + $56M for one-time funding Governor’s veto, July 4, 2015: $56M Issue everyone talked about: School Start Date

3. FY 2017 Overview & Major Issues Spending Authority within the General Fund Supplemental State Aid Total Compensation & Staffing – Labor Agreements Issue everyone is talking about: Statewide Penny Funding

4. General Fund Largest fund in the district. – Accounts for approximately 82% of all money in DMPS – Anything that does not have to be accounted for in another fund is accounted for in the General Fund Two key, distinct (complementary) issues: – Fund Balance (Cash) – Spending Authority (Limit on Spending)

5. Spending Authority State controls maximum amount each district can spend. – It is illegal for a school district to exceed its total Spending Authority. Limit on spending is the amount of Spending Authority a district has, not the amount of cash or fund balance. Spending Authority is directly tied to student enrollment, e.g., Cost Per Pupil.

6. Cost Per Pupil The Cost Per Pupil is fixed the dollar amount set by the State that will be funded (through both State and local sources) for every student. Allowable Growth provision is the mechanism to increase the State Cost Per Pupil; this provision is known as Supplemental State Aid. – FY 2016 SSA was set at: 1.25% The District Cost Per Pupil is specific to each school district and is calculated annually at the rate of growth of the SCPP. – FY 2016 District CPP : $6,514

7. Calculating Spending Authority Previous Year Student Enrollment xCurrent Year District Cost Per Pupil =Current Year Regular Program District CPP +Adjustments (including weighting, teacher salary supplement, professional development…) +Preschool Foundation Aid +Instructional Support Authority +Other Miscellaneous Income =Current Year Spending Authority +Previous Year Unspent Spending Authority (Example: FY15 Total Spending Authority – FY15 Expenses = FY15Unspent Spending Authority) =TOTAL SPENDING AUTHORITY

8. FY 2016 Spending Authority 32,3962014-15 Student Enrollment x$6,514FY 2016 District CPP =$211,000,000FY 2016 Regular Program District CPP +$103,000,000Adjustments +$5,000,000Preschool Foundation Aid +$13,000,000Instructional Support Authority +≈$50,000,000Other Miscellaneous Income =$367,000,000FY 2016 Spending Authority +$54,000,000FY 2015 Unspent Spending Authority =$435,000,000TOTAL SPENDING AUTHORITY

9. Growth in Spending Authority Three ways: – Increase in Supplemental State Aid – Increase in Student Enrollment – Increase in Miscellaneous Income

10. Growth in Spending Authority Three ways: – Increase in Student Enrollment We do not anticipate tremendous growth – Increase in Supplemental State Aid – Increase in Miscellaneous Income

11. Enrollment

12. Growth in Spending Authority Three ways: – Increase in Student Enrollment We do not anticipate tremendous growth – Increase in Supplemental State Aid We do not anticipate tremendous growth – Increase in Miscellaneous Income

13. Supplemental State Aid Governor suggested 2.45% SSA increase for FY 2017 Will not plan for SSA to be ANY higher than 2.45% Planning assumption: 1% increase for SSA – Compared to a conservative, potential state-wide compensation settlement of 2-3%

14. History of SSA

15. SSA – Last Decade

16. SSA v. Settlement

17. Growth in Spending Authority Three ways: – Increase in Student Enrollment We do not anticipate tremendous growth – Increase in Supplemental State Aid We do not anticipate tremendous growth – Increase in Miscellaneous Income We do not anticipate growth

18. Compensation & Staffing Compensation / Staffing is the single largest expense the district incurs. – Staffing costs are ongoing and increasing Eight year goal to reduce compensation seven percentage points to 75% of General Fund costs. – Each percentage point decrease represents $2.5M The district must work with labor agreements. FY 16FY 17FY 18FY 19FY 20FY 21FY 22FY 23 82%81%80%79%78%77%76%75%

19. Unspent Spending Authority Target: 15%

20. Solvency

21. Property Tax

22. FY 2017 Board Budget Parameters Meet and stay within Board Management Limitations. Maintain financial heath; provide a balanced budget. Keep District Student Expectations and Board Beliefs at the forefront. Review status of all levies; make strategic adjustments as needed. Seek input from the Citizens’ Budget Advisory Committee (CBAC) on budget issues. Seek input from the Employees’ Budget Advisory Committee (EBAC) on budget issues.

23. 2017 Budget Parameters, cont. Continue to seek operational efficiencies and improve operational effectiveness. Continue to focus on drop-out prevention and graduation rate improvement strategies. Focus on strategies to close the achievement gap. Improve English Language Learners (ELL) programming. Continue to assess needs and evaluate programming to: – Create innovative programs to meet unmet needs. – Maintain or grow programs that are demonstrating success. – Strategically abandon programs that do not demonstrate value. – Assess and address curriculum needs and program delivery as needed to stay ahead of advances in technology and digital content. Improve Parent and Student Engagement

24. DMPS 2016 Legislative Priorities Change the At-Risk and Drop-Out Prevention funding to a needs-driven formula. Change ELL weighted-funding from 5 years to 7 years, with additional weighting for poverty status. Increase funding for four-year-old preschool for students in need. Create an option for DMPS to retain AEA flow- through dollars from which the district does not benefit.

25. Statewide Penny Started out as local option sales tax in early 1990’s By 2004, all counties had passed Converted to “State Penny for School Infrastructure” July 1, 2008 Currently set to sunset in 2029 Governor’s proposal

26. Budget Calendar (Approved 11/03/15) EventTimeline Adopt Board Budget Parameters:November 17, 2015 Board work sessions:November – February as needed CBAC & EBAC meetings:November – February; Presentations: March 8, 2016 Board Meeting Publication of Proposed Budget:March 25, 2016 Public Forums (3):March – April Adoption & Certification: Special Board Meetings: April 5, 2016 April 6-13, if needed Statutory Deadline to Certify:April 15, 2016