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Dr. Gregory E. ThorntonCEO, Baltimore City Public Schools

FY16 Budget UpdateCommunity Budget ForumMergenthaler High School

March 12, 2015

Donald Kennedy, Chief Financial Officer

Agenda2

• Executive Summary

• Key Investments

• Budget Challenges

• How we are addressing the challenge

• Budget Timeline

World Class K-12 School Systems Success Drivers

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Driver 1. Early learning - focus on well-being of all children beginning well before kindergarten and throughout grades K-4

Driver 2. Pathways for success - creating a system where factors of race, gender, and socioeconomic status are not barriers to student educational and career success

Driver 3. Teacher selectivity, quality, and growth - prepare and mentor high-performing classroom practitioners

World Class K-12 School Systems Success Drivers

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Driver 4. Focus on learning – place the learner and learning at the center of the system, focusing on experiential, participatory, imaginative, and connected learning

Driver 5. Education linked to economic development – produce graduates who have the right knowledge and skills to succeed

Driver 6. Cultural expectation of value – create a system where students, parents, employers, and citizens are confident of the system to deliver

Executive Summary5

1. Costs are rising faster than revenue and therefore we are continuing to work on strategies to balance the budget

2. Currently, the proposed state budget reduces City Schools’ funding by $35.6M

3. Without considering new priorities, the beginning budget gap was $108M

4. To date, we have identified $63.7M in budget solutions

5. We will align available resources that best allows the district to improve student outcomes

Agenda6

• Executive Summary

• Key Investments

• Budget Challenges

• How we are addressing the challenge

• Budget Timeline

Proposed Key Investments in Schools

• Standard of Care

o Fine Arts Initiative: 45 Minutes of Art instruction

for all students in grades 2 - 5; increased

investment of ~$2.8M)

o Middle School Athletics

Increased investment for intramural sports of

~650k

Establish basketball and track and field at 39

middle school programs

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Proposed Key Investments in Schools

• Tiered Supports

o Individualized approach to supporting schools with

the greatest need

• Continue to support established academic programs

o International Baccalaureate Programs (3 schools),

Ingenuity Project, UMBC STEM program

partnership, Additional instruction at Baltimore

School for the Arts

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• Continue to offer Full Day Pre-k

o 217 pre-k classrooms with the capacity to serve

4,991 students (max of 23 students per

classroom)

• Increased ESOL services

o 15% increase in ESOL students

o $2M increased investment in school based staff

Proposed Key Investments in Schools

• Increase CTE allocation to launch new Advanced Manufacturing and Computer Science pathways

o Advanced Manufacturing program began at Carver

HS in SY 2014-2015

o Computer Science/Code.Org pathway began in SY

2014-2015 at Digital Harbor, Coppin Academy and

Poly; will expand to Reginald F. Lewis and REACH

in SY2015-16

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Proposed Key Investments in Schools

• Multiple Pathways to Graduation

o Differentiated supports and programming to meet

the needs of individual students and increase

opportunities for re-engagement and crisis

transition

• $5M investment in technology to engage our students in current methods of learning

• Provide interim foundation support for small schoolso $2.2M distributed to 19 schools with an average

base enrollment of 212 students

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Proposed Key Investments in Schools

Agenda12

• Executive Summary

• Key Investments

• Budget Challenges

• How we are addressing the challenge

• Budget Timeline

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Salaries and Wages53%

Fringe20%

Contractual Services

12%

Materials4%

Utilities & Other Charges

3%

Equipment1%

Transfers5%

Principal & Interest2%

Contingency Reserve

0%

FY15 CITY SCHOOLS’BUDGET

BYCOST OBJECT

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-

100

200

300

400

500

600

700

800

Salaries and Wages

Fringe Contractual Services

Materials Utilities & Other Charges

Equipment Transfers Principal & Interest

Mill

ions

FY13 Actual FY14 Adopted FY15 Proposed

CITY SCHOOLS’ MAJOR COST ELEMENTSCHANGE OVER THREE YEARS

$32M increase in sa lar ies & wages

$31M increase in f r inge benefi ts

State Revenue Recurring and Additional Pressures

Foundation (4,351,357) Direct School Support (24,357,710) GCEI (11,409,696) 21st Century Bldgs. & Maint. (13,000,000) Compensatory (9,863,189) Non-Recurring Revenue (Fund Balance) (27,526,157) Limited English Proficient 1,863,211 Fixed Cost Increases (Fringe) (3,827,274) Special Education (3,130,677) Continuation of Full Day Pre-K (4,014,611) Transportation 336,788 Guaranteed Tax Base (7,236,865) (72,725,752)

Supplemental Grant - Other (Stipends) (1,832,136) Non - Public -

Total State Revenue (35,623,921)

Unpriced Solutions: Central Office Impacts Implemented SolutionsContract Review Vacancy Savings (Reduction in Surplus) 14,946,576 Labor changes (contracts, postions) Enrollment Normalization of Traditional Schools 14,810,604 Health Care Changes Level Funding 9,998,720 Reduction of Temporary workers Direct Supports for Schools 6,283,163 District Reorganization Foundation Funding for Small Schools 847,000

Central Office spending analyses Closing Schools 863,484 Transportation improvements Encumbrance Reduction 1,000,000

Strategic Budget Analysis Teams Prioritized Spending 15,000,000

63,749,547

Priorities

Lead Teachers (763,173) Fine Arts Build Out (1,690,337) Middle School Athletics (650,633) Replenish Fund Balance (1,000,000) Limited Summer School (1,900,000) Academic Technology Strategies (5,000,000) Maintain Operations Service Level (3,420,430)

(14,424,573)

Remaining Deficit (59,024,699)

Total Beginning Deficit (108,349,673)

Total Solutions 63,749,547

Priorities (14,424,573)

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FY16 Budget Development SnapshotAs of March 6, 2015

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CITY SCHOOLS’ FY16 BUDGET CHALLENGE

$32.8

$16.0

$14.9

$44.6

$35.6

$27.5

$28.2

$13.0$4.0

-

20

40

60

80

100

120B

udge

t C

hallen

geM

illi

ons

New Investment Priorities17

Agenda18

• Executive Summary

• Key Investments

• Budget Challenges

• How we are addressing the challenge

• Budget Timeline

Our challenge: how do we invest in our students in light of budget

pressures? 19

Blended model of solutions

1. Prioritized spending

2. Improved efficiencies in processes

3. Cost analysis of major cost drivers

4. Analysis of use of contracts

5. Staff adjustments

FY16 Budget Solutions20

Strategic Budgeting Process Flow3/2/2015

Cabinet

• Establish District Goals and Board Priorities• Drive District Goals and Board Priorities• Inquiries/Questions• Decision Making Body• Review Recommendations and proposed

solutions• Build Central Offi ce Budgets

Strategy Team

• Brainstorm Solutions/Responses• Define further information needed• Review data analyses and

recommendations from the project team

• Recommendations and solutions to cabinet

• Board Priorities and District Goal Alignment

Project Team

• Deep Dive in to Cabinet & Strategy Team inquiries• Brainstorm Solutions/Responses• Identify key metrics to define data needs• Analysis on core functions (ROI)• Understanding existing processes• Logistically execute centralized budgets• Think through solutions/approaches for 31 cost savings• Provide Action Team with data parameters for analysis• Provide recommendations and data analyses to strategy

team• Monitor project timeline and information work flow

STRATEGICBUDGET

SOLUTIONS

Action Team

• Pull Data• Consolidate & Manipulate Data• Identify which data systems and data

sets to pull to provide analysis• Potential solutions and

recommendations

FY17 Cost Reduction Initiatives21

1. Reduce health care and benefit costs

2. Determine best model for providing student transportation

3. Implement an early retirement incentive

4. Accelerate school closures

5. Leverage best practices to ensure revenues balance expenses

Agenda22

• Executive Summary

• Key Investments

• Budget Challenges

• How we are addressing the challenge

• Budget Timeline

Timeline23

• March 11: Student Dialogue• Baltimore Design School• 5:30 pm

• March 12: Public Forum• Mergenthaler• 5:30 pm

• March 14: Public Forum• Carver High School• 10:00 am

• April 28: Board Vote

Comments or Questions?

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Donald Kennedy, Chief Financial OfficerDkennedy@bcps.k12.md.us

410-396-8810

Ryan Hemminger, Director – Budgetrehemminger@bcps.k12.md.us

443-984-2054

Board of School CommissionersShanaysha Sauls, ChairDavid Stone, Vice-ChairLisa AkchinCheryl CascianiLinda ChinniaMarnell CooperTina Hike-HubbardMartha James-HassanPeter KannamEddie Hawkins Jr., Student Commissioner

Senior Management TeamGregory Thornton, Chief Executive OfficerNaomi Gubernick, Chief Of StaffTheresa Jones, Interim Achievement and Accountability OfficerLinda Chen, Chief Academic OfficerLisa Grillo, Human Capital OfficerDonald Kennedy, Chief Financial OfficerKeith Scroggins, Operations OfficerKenneth Thompson, Chief Technology OfficerTammy Turner, Chief Legal Counsel

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