MMSD

2020-2021 Budget

Development Sept 14, 2020Operations Work Group

Meeting Objectives

• Revisit timeline for the budget work, inc. State

Budget Repair Bill

• Assumption updates to the June 2020-21

Preliminary Budget

• Review Passing Referendum Budget possibilities

• Review preliminary Fund Assignment: COVID-19

Educational Equity Policy 9001

...As a system committed to equity, MMSD seeks to disrupt societal and historical inequities and eliminate disparities based on race and

socioeconomic status so that our entire learning community, including all staff and all students, benefit and thrive. Schools will be excellent only when all students in the DISTRICT are achieving or exceeding

universally high goals…

As such, it is the policy of the BOARD to promote educational equity amongst all DISTRICT students through the budgeting process, the

allocation of resources and development of BOARD policies in order to realize the DISTRICT’S vision that every school will be a thriving

school that prepares every student to graduate from high school ready for college, career and community...

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Core ValuesGoal 1Every child is on track to graduate ready for college, career and community.

Goal 2The district and every school in it is a place where children, staff and families thrive.

Goal 3African American children and youth excel in school.

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Phase 3: 2020-21 Budget Timeline

Sept

Start Community Feedback Phase on Draft BudgetDiscuss State COVID impacts

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April Preliminary Budget Proposal (April 27) released

May

Updated State budget informationUpdate budget assumptions, passing and non-passingRe- balance where necessary

OctoberFinalize enrollment countsReceive State general/equalization aid and equalized property valuesFinalize all estimates, re- balance where necessary

June

Community input updateContinue discussion on COVID impact on assumptionsRegular Board meeting vote on Preliminary Budget (June 29th)

Our Approach

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The budget development process followed a sequence that started as early as September of last year:

• Establish budget goals and guiding principles

• Create revenue forecast, assumptions and

projected enrollment

• Determine total compensation strategy

• Develop baseline staffing plan needed

• Fund District strategic priority actions

• Finalize health care and benefit negotiations

• Provide for expected increases, such as retiree benefits

*MMSD 2020-21 Preliminary Budget*

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The K4-12th grade enrollment. The year to year change is is listed above the enrollment.

MMSD “Students In Seat”Pre-COVID projections <1% students, while Post COVID between -1% and -3% students

Pre-COVID enrollment loss projections

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Revenue ForecastPublic education funding has been unstable for 10+ years.

20/21 Total: $179 per pupil

• 2019-21 State Budget approved– $179 per pupil revenue limit ($4.8 million)

• Special Education Reimbursement Aid– 4% increase ($2.8 million)

• Local Factors– $0 no new Operating Referendum – “Students-in-Seats” enrollment count is slightly declining

due to low birth rates pre-COVID

= Total new Revenue: $7.6 millionBudget increase 1% (inflation 1.8%) = $8M Budget Cuts

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Revenue Forecast March/April

• 2019-21 State Budget approved– $179 per pupil revenue limit ($4.8 million)– Budgeted: $0

• Special Education Reimbursement Aid– 4% increase ($2.8 million)– Budgeted: $0

• Local Factors– $0 no new Operating Referendum – No changes in assumptions in enrollment

= Total new Revenue: $0 million & $16M Revenue Gap

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Revenue Forecast June

Revenue Forecast OctoberWithout a State Budget Repair Bill, we need to make assumptions

April Budget

Best Case

Scenario A Updated

Scenario B (June) Scenario C

Revenue Limit Per Pupil Change $179/pupil $179/pupil $0/pupil $179/pupil

Per Pupil Categorical Aid Change $0/pupil $0/pupil $0/pupil -$179/pupil

Special Ed Reimbursement Rate Chg $2.8M $0M $0M $0M

Savings: Health Care & Interest $1.5M $1.5M $0M $0M

Total Revenue Assumed $9.1M $6.3M $0M $0M

Mill rate (levy) impact:(Aid : -15%; 5% Val Growth) $0.00 to -$0.13 per $1,00011

20-21 Expenditure Decisions Non-passingWith $6.3M in assumed revenues, new expenditure decisions will follow

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Note: Assumes lane movement is funded in all scenarios

New Revenue Expenditures Scenario

A (June)Scenario

BScenario

CScenario

D

Step Schedule Movement $0 $0 $2.5M

(2nd Semester) $5M

Base Wage Range (0%; 1.8%; 1%; .25%) $0M $4.5M $2.5M $625K

Total Compensation $0M $4.5M $5.0M $5.625M

Available for Unknowns: Budget Repair Bill, COVID Response: i.e.Facility Improvements, Air Quality, etc.

$6.3M $1.7M $1.3M $675K

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FY21 $6M

Total Compensation (.25%-.75%) $625K - $1.9M

Priority Investments:

Early Literacy Focus:

- Reading Materials, incl. Explicit/Structured Phonics $600K (+$400K budgeted)

- Literacy Science of Reading Professional Learning; strengthen 4K/5K Transitions

$100K-$150K

- Increase highly qualified staff - Reading Certification. $200K-$300K

- Full Day 4K Pilot budgeted

Special Ed Transitions Project $250K

At Risk Youth: Microschools, etc. $300K

ES & MS Facility/Maintenance $500K

BOE Options: Increase current projects, focus on COVID 19 Needs, and/or Underlevy

$1.9M

20-21 Expenditure Decisions Passing

Other Funding UpdatesDue to increased 2x charter enrollment, increased private / parochial school vouchers / enrollment and overall poverty changes, federal funding has predominantly decreased. Final allocation amounts are:

Title I: $5,829,230 ($408,438 reduction)Title II: $ 842,615 ($38,438 reduction)Title III: $ 720,732 ($87,000 increase)Title IV: $ 451,913 (No significant change)Title ID/Jail: $ 14,811 (No significant change)Title ID/Detention: $ 91,969 ($23,580 reduction*)

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*Reduction was expected based on lower student counts in detention

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COVID 19 CARES Act FundingFederal funds do not solve structural COVID concerns: hallway

crowding, school air quality, adding days into the school year, etc.

Total Funding:Federal Resources (less private school allotment):

$5M (ESSERS) & $3.9M (GEER) = $8.9MMMSD Fund Balance COVID Assigned: $1M

Other 20-21 Preliminary Budget Updates

• Fund 50 (Food Service): Projected loss approx. $1.5M:– Freezing vacant positions and reducing expenditures– Use ESSER’s funding & Fund 50 fund balance– Goal: Avoid Fund 10 balance

• Fund 80 (Community Service): Child care expenses $1.5M:– Reduced summer seasonal staff, potential to 0% levy increase.– Use ESSER’s funding & Fund 80 fund balance

• Assigned Fund Balance: Deferred/carry-over 19/20 expenses (Policy 6071):– COVID 19: $1,000,000– Safety & Security: $84,746 (F10) / $177,650 (F41)– TID 25 Project Schedule: $1,827,133– TID sources for Holtzman remodel: $678,560– Building Carryover: $1,355,716

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Next Steps

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Sept 15: Operation Work GroupRevisit and update assumptionsDiscuss passing referendum budget

Week of Sept 21: Start compensation negotiationsClosed Session with Board - TBDNegotiations with MTI - Week of 9/28

October 12: Operation Work Group RebalanceFinalize Enrollment Counts & Aid EstimatesFinalize passing referendum budget

October 26: Regular Board MeetingRe-balance and approved final 20-21 Budget

Discussion

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Are there any questions or concerns for the budgeting work moving forward?

2020-21 Budget GoalsIn line with these Board approved policies, the budget development process will focus on these major goals:

• Distribute equitable use of resources to support students with highest needs

• Reduce the number of sections below minimum of the Board’s class size policy, thus allowing for more targeted resource allocation

• Utilize the Board’s Educational Equity Tool for decision making outside of already approved Board policies (i.e. past and future Strategic Equity Project investments)

• Invest in a focused set of priorities aimed at multi-year investments to meet persistent equity needs in the schools

• Provide total compensation (steps + base wage) to employees equal to or greater than estimated cost of living (COLA) @ 1.8%

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2020-21 Guiding Principles • Build two budgets, both in consideration of November 2020

potential referendum results (HOLD)• Allocate resources in line with District core values and aimed at

greatest impact on District’s Strategic Framework goals• Commit to a multi-year, long range perspective on both

revenue sources and uses to sustain momentum on academic outcomes

• Maximize efficiencies and use of taxpayer approved revenue authority to ensure stability in schools

• Build on previous practices that are showing promise for the future

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