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Cuts to central administration offset increased expenses, send more money to schools

This Just In: Additional $1.3 M being reallocated to secondary schools, $700,000 added to support highly impacted schools - total $2 million more to schools

CASTLE ROCK – On Tuesday night, during the Board of Education meeting, district leaders provided an update on school funding. According to Interim Superintendent Erin Kane, the Douglas County School District is sending $8.65 M more to schools* in 2017-2018 than it had in 2016-2017, despite a bleak funding picture.

*Additional information available in the Board Presentation on Slide 14

As previously reported, the district has been working to navigate funding challenges caused by a number of factors including increasing costs, decreasing enrollment at its elementary schools and flat state funding.

Our central departments have worked very hard determining their actual needs and my team and I are reviewing every dollar. This process is well underway and will be completed by the time the budget goes to the board for approval this spring,” Kane said. "We know some of our schools are still struggling, due to decreasing enrollment and increasing needs. We are committed to continuing to support those school communities."

RELATED STORIES: DCSD is navigating Funding Challenges

Below is an updated listing of the increased costs projected for the 2017-2018 school year:

Projected Cost Increases - total of $15.6  M

  • PERA - $1.4M (.5% increase in rate to 19.94%)
  • Medical – up to $2.5 M (8% increase)
  • Special Education - $2.2 M
  • Mental Health – $1.1 M
  • Nurses - $0.45 M
  • Highly Impacted – $2.35 M (more on top of existing .750 M for a total of $3.1 M
  • Elementary AP Allocation - $0.30 M
  • Teacher Pay Range Change Increases - $1.0 M
  • Device Refresh - $3M of additional ongoing budget ($1 M current)
  • Increase in secondary school SBBPA - $1.3 M

A change was also made to school-based budgeting process to help lessen the impact of decreasing enrollment facing DCSD elementary schools. Instead of all schools paying the same average amount for a teacher during the budgeting process, now elementary, middle and high school levels will be differentiated, just as DCSD does for other job categories. This matches the reality that secondary teachers also generally earn more than elementary teachers.

The result was that elementary schools realized an effective increase in budget capacity, because their teachers now cost less. High schools, however, on average, now have roughly $200,000 less in purchasing power than they would have had without the change. As explained below, this gap has largely been filled by money reallocated from central administration.

Zero based budget results in savings, money reallocated to schools
Over the past several weeks, district and department leaders have been analyzing central administration budgets looking for places to cut.

"We are committed to ensuring every dollar possible is in the classroom, which is why we have fundamentally shifted the way we budget. We are basically starting by looking at requirements rather than just carrying over prior budgets," Kane said.

The result has meant more money is being sent back to schools.

“Knowing how constrained our secondary schools are feeling, we have made a decision to add an additional $1.3 M to schools into their SBBPA,” said DCSD Chief Financial Officer, Bonnie Betz.  “That will equate to about $60 per student more at high schools and $40 per student more at middle schools.”

Additionally, during the board meeting, she said that an additional $700,000 would be used to support highly-impacted schools.

The Budget department is working to update the budget sheets for each school. The work is expected to be completed by this Friday, which will have a positive impact for schools during the hiring season

School Budget Allocation Changes (Equaling $8.65 M of monies reallocated from central administration)

  • Estimated 1.55 M allocated to secondary schools:
    • Additional $40/student for middle schools
    • Additional $60/student for high schools
  • Special education allocations increased $2.2 M
  • Highly impacted allocations to $3.1 M (includes new $700,000)
  • Mental health and nursing increased by $1.5 M
  • Assistant Principal formula increased by $0.300 M
  • Average teacher salary changed to average by school level as consistent with other positions

“In total, we’ve reallocated central administration resources to our schools to the tune of about $8.65 M,” Betz said.

Additionally, the district had already increased SBBPA at all schools by $60 per student, reflecting the increase in cost for staff year-over-year.

Below is a table reflecting the efforts to cut costs in central administration:

FY 2017 SAVINGS TO OFFSET PROJECTED BUDGET DEFICIT




Source

One-Time

On-Going

Cabinet Reorganization

$0.525M

$0.700 M

WCE/PD Reorganization

0.425 M

1.500 M

Department Carry Over

2.000 M

-

Medicaid

1.400M

0.750 M

Contingency

4.000 M

*2.000 M

Additional Responsibility Pay

5.500 M

2.200 M

Utilities

0.800M

0.525 M

Other Non-Discretionary Savings

TBD

1.000 M

Total

$14.650M

$8.675 M

* Requires change to Board policy
 
"It has been wonderful to see our staff and community come together to discuss our funding challenges," Kane said. "Working together, I am confident we can weather the storm. It continues to be my goal to make sure we are using the money we have as wisely as possible, with our priority always being our students."

State funding to be announced in April
The DCSD Budget department is monitoring the most current information from the Governor’s office and state legislature and will continue to provide updates regarding the state’s budget.

The legislature does not finalize the budget until about mid-April.

The combined impact of TABOR and Gallagher Amendments is causing serious funding issues at the state level. Below is what funding could look like. Again, the chart below includes the device refresh, which is an additional $3 M need for ongoing monies.

Below is a chart showing potential funding scenarios at DCSD neighborhood schools.
 

Potential Funding Scenarios (FY2017-2018)





 

Worst Case

Possible

Best Case

Change to PPR

($15)

$100

$175

Impact to DCSD Funding

($0.765 M)

$5.1 M

$9.0 M

Cost Increases

$13.6 M

$13.6 M

13.6 M

DCSD Funding Gap*

($14.4 M)

($8.5 M)

($4.6 M)

 

To date, DCSD leadership has identified savings that are available to offset even the worst case scenario

“The information we have to date is that it will be somewhere in the middle - we are hopeful that the “Possible” scenario above will be the final legislative result receiving about $5.1 M in additional revenues from the School Finance Act.  

WATCH: Board of Education FY 2016-2017 2nd Quarter Financial Report and 2017-2018 Budget Update Presentation

February 23, 2017 | By rmbarber | Category: Board of Education, Financial Services

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