Sunday, February 4, 2018

Fiscal Year 2019 Budget Development Update

Good afternoon everyone!  I hope you are all enjoying preparations for this afternoon's big game - GO PATS!  

I wanted to take just a moment to give you all a brief update on where we are with our FY 19 budget development processes which are far from completed!  As usual, this conversation is never "simple" and involves a lot of moving parts. .. but I'll do my best to give you all a general sense of where we are, what is in the current proposed budget, what steps remain in the process and generally what challenges we see moving forward.  This work is constantly moving - so please understand that what I share now as a summary will most definitely CHANGE IN THE COMING WEEKS as the work continues and as information becomes more refined.  I will plan on periodically updating everyone as we continue to move through this process towards an approved and fully supported FY 19 School Budget in Gorham.

The FY 19 proposed budget has been "in the works" by district leadership team (DLT) members since October.  Back in October, we began the process by talking about upcoming challenges, needs for the district, and what we saw as an attempt to forecast fiscal environments for the coming year.  We worked together with the School Committee to establish TWO major areas of priority for the coming budget development process.  Those were:

1.  Addressing our increasing enrollments and 
2.  Strengthening our Student Support Services for our most needy students (Special Ed., 504, Nurses, etc.)

With those "marching orders" DLT members then began the arduous process of compiling school and program level budget requests together with help from all of our staff.  Those school/program level initial budgets were then sent to my office in mid-December.  During the course of December and January, each program director and Principal met with myself, Business Manager Hollis Cobb, and Assistant Superintendent Chris Record to conduct an in depth review of each proposed budget line by line.  Through this deep questioning process, adjustments were made to requests both in the form of added funding and in the form of reductions to original proposals.  

As these budgets were being compiled, the District Leadership team also began work on the creation of its "New Initaitives" list.  This is where principals and program directors suggest additions to the budget to address emerging issues in our district. As a team, and with our priorities in mind, we then work through the list and adjust, sometimes cutting entire requests, sometimes modifying them, etc. until we have a fully agreed upon list in order of priority.  These new initiatives are then included in the overall proposed FY 19 budget that is given to the School Committee.

We have just completed that first look at our overall FY 19 proposed budget that includes these new initiatives.  This is where we are in the process.  This proposed budget will then be sent to the School Committee who will review all of its contents, discuss important implications, and make adjustments to the proposed budget that will then be sent on to the Town Council for approval (and possible further adjustment) and then on to voters in June for final approval.  I'll include a timeline of those events at the end of this email.  But for now, I thought you might all like to know what is being included in our proposed budget for new initiatives - keeping in mind that these are subject to change by the School Committee:

*  Three Additional K-5 teachers (1 GF, 2 Village) - $210,000.00 - to address increasing enrollments
*  1/5 GHS ELA teacher - $19,000.00 - to address increasing enrollment
*  1/10 GHS Mandarin teacher - $10,000.00 - to address increasing enrollment
*  Portable Classrooms (1 at Village, 1 at GHS) - $52,000.00 - to address increasing enrollment
*  Three Autism Program Ed. Tech III's - $105,000.00 - to address student support needs
*  1/2 Psychologist - $40,000.00 - to address student support needs
*  2/5 Occupational Therapist - $36,000.00 - to address student support needs
*  Special Services Assistant Director - $120,000.00 - to address student support needs
*  District 504 Strategist - $70,000.00 - to address student support needs
*  1/2 Licensed School Nurse (LPN) - $25,000.00 - to address student support needs
*  Gifted and Talented Ed. Tech. III (GHS Focus) - $35,000.00 - to address student support needs
*  GMS Math Textbooks - $56,300.00 - to replace outdated consumables
*  Great Falls Wireless Network - $50,000.00 - to replace outdated system
*  Grades 2-3 Chromebooks (2:1) - $55,200.00 - to replace outdated (9 year old) macbooks
*  Field Manager Position - $48,000.00 - to improve conditions in our "outdoor classrooms"
*  GHS Desktop Computer Replacements (STEM) - $12,000.00 - to strengthen STEM learning programs at GHS.

The total for all these "new initiatives" is $943,500.00

At this time, the proposed budget as will be presented to the School Committee represents an overall increase of $2,802,999.00 over last year's budget.  This is a proposed increase of 7.45%.  I will be honest, this is high and there is a strong likelihood that the School Committee will want to work to reduce this proposed increase.

I think it is also imperative to give everyone a "high altitude" view of the revenue side of the picture because as you all know from your own personal budgets. .. there are ALWAYS two sides to the equation of budgeting - expenditures and revenues!

Unfortunately, the revenue side of the picture presents an equal set of challenges to this year's budget development process.  As you may have heard there were several changes to the EPS funding formula this year, and changes to local conditions that impact the formula.  The formula itself is an 8 page document. . . so rather than try to be too detailed here, I thought I'd just provide an overview of where we lost state funding and why:

1.  Reduction in percentage of Disadvantaged populations (we moved from 23% to 22% - LOSS of $295,000.00
2.  Loss of CTE funding due to new model.  We will also see a corresponding decrease in expenditures, but it will not be a complete "wash" - $414,000.00
3.  Loss in Special Ed. Allocation (we believe here is an error here on part of MDOE so we are working to mitigate this and will hopefully get monies added back in - . .. but stay tuned) - LOSS of $652,000.00
4.  Reduction of Debt Service (with corresponding decrease in expenditures so this is a "wash") - $63,600.00
5.  Change from 3 years avg. property valuation to 2 year average - LOSS of $295,651.00
6.  Change from 8.19 min. mil requirement by state to new requirement of 8.51 mils for locals = LOSS of $503,064.00

So what does all this mean?  It means that when you compare to last year's budget (not what we actually got) we are DOWN in state subsidy by a little over $500,000.00.  The biggest driver for this is our increasing property values at the local level.  We went up in property value as a community from $1,476,650,000.00 in FY 18 to $1,572,075,000.00 in FY 19.  This increasing property value decreases state subsidy as they determine we have more of an ability to pay based upon the min. mil expectation.

Bottom line is with our current proposed FY 19 budget, we are looking at an increase of expenditures of almost $3 million while our revenues are decreasing by about half a million - a "hole" of almost $3.5 million.

As you can see - there is still MUCH WORK TO BE DONE - but I believe we have our priorities in the right places, and that ultimately through the process we will arrive at an approved budget that enables us to balance the needs of our ever-growing student population (Primarily at K-5 level) with the ability of our local taxpayers to support our schools.

Next steps in the process include:

*  Presentation of the budget to School Committee (SC) - Feb. 14 (we'll have videos for all Principal/Program director budgets that will be posted online I'll share when they are ready).
*  Full day SC budget workshop  - Saturday, March 3
*  Follow up SC budget workshop meetings scheduled (AS NEEDED) for:  March 12, March 19, March 26, April 2.
*  School Committee vote to approve proposed budget - April 11
*  Proposed budget delivered to Town Council - April 19
*  Joint budget workshop meeting with Town Council - May 15
*  Town Council vote on proposed budget - June 5
*  Public referendum validation of proposed budget - June 12

In closing - I hope you have found this overview helpful in better understanding where we are in the budget development process, what the current implications of our proposed budget are, and what next steps will be to arrive at an approved FY 19 Budget that both meets the needs of our students and the needs of our community as a whole.  Once again - if you have any questions, please do not hesitate to ask!  I will continue to do my best to keep everyone informed as we continue to move through this important process.