11

School Budgets

FY 2011

June 3, 2010Webcast

2

Agenda

FY11 Overview

Budget Reductions

Human Resources

Funding Shifts

Enrollment Growth

Other Changes

33

State of the Budget

• Total budget of $22.8 billion -$306 million greater than our current year budget

• Nondiscretionary expenditures are outpacing this increase, leaving us with an overall funding gap of $750 million, including

• $280 million for pension and other compensation obligations• $140 million mandated instruction for special education students• $80 million for debt service• $40 million to pay for feeding our students and leasing and operating our

buildings• $125 million for charter school enrollment increase of nearly 10,000 students –

an additional cost we would incur whether these students were in a district public school or a charter school

• Another $100 million is needed to cover enrollment growth in DOE schools

• State education aid cut of $500 million

• City funding increases by more than $800 million

4

Where can we cut? Despite its $22 billion budget, DOE’s budget has many restrictions when it comes to budget reductions.

Department of Education Budget $22.296 billionNON-FLEXIBLE $11.972Special Education $4.996PENSIONS $2.397DEBT $1.518Transporation(SE & NYS funds) $0.804ENERGY & LEASES $0.442CHARTERS (NYS sets amount) $0.418FOOD - NYS & Federal Funds $0.411SAFETY $0.290English Language Learners (Est.) $0.250PRE-Kindergarten - state grant $0.231NON PUBLIC SCHOOLS/FOSTER CARE $0.215FLEXIBLE $10.32General Education- DOE SCHOOLS $8.605CENTRAL & FIELD $0.753FACILITIES $0.673Transportation - GE ($NYC) $0.222FOOD $ NYC) $0.071

Amounts shown include fringe costs for personnel

Declines in Effective Fair Student Funding Due to Budget Cuts

5

School Fiscal YearFSF

Entitlement*FSF

AllocationFSF

IncrementFSF Hold Harmless Total FSF

Total FSF Vs Entitlement

School A: Originally Under Formula2008 400,000 380,000 11,000 0 391,000 (9,000) 2010 400,000 285,000 11,000 0 296,000 (104,000)

School B: Originally Over Formula2008 400,000 400,000 0 50,000 450,000 50,000 2010 400,000 300,000 0 50,000 350,000 (50,000)

* For simplicity, FSF entitlement is not adjusted for register or average teacher salary change between 2008 and 2010

• Over 4 years of cuts, FSF has declined by over 25%

• “FSF Increment” and “FSF Hold Harmless” Allocation Categories will continue to reflect historic funding levels

• The values of the FSF Increment and FSF Hold Harmless no longer represent the actual relative position of schools to their FSF “entitlement” (i.e. their full allocation based upon the formula).

FY11 Budget Reductions

Non-School Reductions

• Department is reducing non-school budgets by another $130 million

6

• This includes another $38 million cut from Central administration

• On top of a nearly 20-percent cut to central administrative budgets and a reduction of 550 positions, achieved between 2008 and 2010

• Will take out close to another 300 positions

School Reductions

• Across the Board 4.2% budget cut taken via FSF, C4E and adjustments to ARRA Stabilization

Other Changes in FY11

Changes will include:

• Across the board percentage cut

• Shifting funds for operating capacity

• Enrollment adjustments to properly reflect decline in FSF

• Fully reflect enrollment growth

• Hold schools unable to meet their budget cuts harmless for deficit roll

• Remove shared allocation categories from base budget

7

Goal: Equitable impact within the environment of declining budgets.

8

Agenda

FY11 Overview

Budget Reductions

Human Resources

Funding Shifts

Enrollment Growth

Other Changes

9

Equitable Budget Cut

Total Cut: $313M

Cut Base• After four years of cuts, for the purposes of establishing an

equitable cut base, the following adjustments were made to schools’ FY10 Total Budgets prior to any FY11 changes: Shared allocations were subtracted• Allocations that are “hosted” in a particular school’s budget

but pay for resources shared by multiple schools FY10 Pre-K allocations were subtracted Discontinued FY10 reimbursable allocations were

subtracted• Reading First, Title IV Drug Free, Extended Day Violence

Prevention

Target Cut/Maximum: 4.2%, average 4% to each school’s cut base

10

Equitable Budget Cut

Cut Components• C4E: 6% cut as per Governor’s Executive Budget

“Required to maintain funding for existing C4E programs less the percentage reduction in the Gap Elimination Adjustment”

$39M cut equally across all schools from $242M of C4E Discretionary Funds

• FSF: 4.03% cut applied to Preliminary FY11 FSF Total: $186.5M cut from $4.6B

ARRA Stabilization Funds Used to Bring Every School to 4.2% of Cut Base (219 schools have less than 4.2% cut due to mix of funding streams)

Fair Student Funding - Deficit Rollovers

Schools unable to absorb previous year budget reductions, register adjustments, and/or select liabilities, are allowed deferred payment of the balance owed. In most circumstances, payments are made in installments over a four-year period. However, certain liabilities must be paid back in full in the first year.

 Schools with rollover deficit liabilities are defined as those which:• received a TL Mid Year Hold Harmless allocation to offset deficits resulting from

audited register adjustments;• received TL Temporary FY 10 Shortfall funding based on appeal;• had a previously defined rollover deficit payment plan still in effect; or• owe other liabilities defined below as new for FY11, such as:

• School-Funded Copier Costs• FY 2009 “O to Q” Teacher Grievances. • In FY11, schools will be responsible also for uncollected lunch fees.

Refer to School Allocation Memorandum No. 19 for details.

11

Fair Student Funding – Surplus Rollovers

The FY10 Surplus Rollover program allowed schools that had generated surpluses in select allocation categories to transfer these surpluses into their FY11 budgets. All schools which met the eligibility requirements listed below were allowed to participate in the program.

Surplus rollover funds were not reduced as part of the budget reduction.

Ninety percent (90%) of the funds rolled will be added to the school’s initial allocation for FY11. The remaining ten percent (10%) of the rolled funds will be released to schools once the School Budget office staff verifies that schools ended FY10 passing all of the aforementioned financial conditions. If the school fails any of the criteria, the amount of the failed criteria will be deducted from the withheld funds (ten percent held back from the initial allocation).

Where schools had rollover deficit liabilities or charges for FY09 O to Q Teacher Grievances or school-funded copier payments due, those amounts were deducted from the first allotment of the surplus rollover.

 

12

School Budget Reduction Plans

A new tool has been created in Galaxy for schools to enter their budget reduction plans. The FY11 tool is much more streamlined and simple to use than last year’s “Survey”.

The tool will allow principals to enter information on the impact and amount of services or programs that had to be scaled-back or eliminated entirely in order to reduce their budget within allocated levels.

Schools will create reduction plan items similar to how they normally create TO items. School will select the reason that best describes the impact to their school for each reduction plan item.

Where applicable on staffing transactions such as removals and excesses, principals will be prompted to determine if the action should be included in the reduction plan.

The target date for the new tool to be released in Galaxy is next Tuesday, June 8th. Further information and instructions will be disseminated at that time.

13

14

Agenda

FY11 Overview

Budget Reductions

Human Resources

Funding Shifts

Enrollment Growth

Other Changes

Excessing

15

• Schools may need to place staff in excess to create an FY’11 budget.

• It is important that excessed staff be given the appropriate letter so they are aware they are in excess if at all possible prior to the close of the school year. (Excess letters will be available through Galaxy.)

• Schools excess based on the least senior teacher in license in their school. Seniority is reflected in the HR Profile System or can be obtained through your CFN HR Staff.

• As was the case last year, school excesses will be reviewed as part of the overall budget review process.

Hiring Restrictions

Hiring restrictions will remain in place. This policy is necessary to reduce the number of teachers who remain in the ATR pool after the hiring season

16

• Attrition will create vacancies

• Schools may fill vacancies through the Open Market Transfer System

• Teachers in Excess are also available to fill vacancies.

Note: The Open Market closes August 9, 2010 and after that date, vacancies will need to be filled by staff in excess

The only areas not subject to hiring restrictions at this time are: Special Education, Speech and Bilingual Special Education and certain other bilingual subject areas. Other exceptions to hiring restrictions may occur once school budgets are finalized.

1717

Exceptions to Hiring Restrictions

Hiring Permitted Limited Flexibility

- Special Education

- Bilingual Special Education

- Speech

- Certain bilingual subject areas

- New and Phase-In Schools

- Schools in their 1st 2nd or 3rd year of operation are permitted to hire externally for up to 40% of their teaching vacancies.

- Phase-in Gr. 6-12 schools with 2 or more years to phase-in may hire external candidates for up to 40% of the vacancies in their expansion grade.

- New and phase-in schools exception does not apply to common branches, early child hood, or guidance counselors Exceptions may be considered on a case by case basis.

- Tenure Denial Hiring Exception- External hires may be permitted in the same

license area as a teacher denied tenure.

Certain positions are exempt from hiring restrictions and new schools have some flexibility:

1818

Excessing/Restrictions on Other Titles

• As was the case last year, Assistant Principals will not be permitted to be placed in excess unless the school is closing/phasing out.

• School secretaries, UFT paraprofessionals and school aides will be placed in vacancies to reduce the number of excesses in these titles

• High School Parent Coordinator positions may be eliminated if a school so chooses, but Middle School/Elementary Parent Coordinator positions must not be eliminated.

1919

Hiring SupportResources to assist in screening for teacher vacancies include:

• Open Market System (OMS)• You are encouraged to add detail in OMS regarding the vacancy

• After August 9th, the Excess Staff Selection System replaces OMS

• New Teacher Finder

• Pre-Screened new teacher candidates for consideration for unrestricted vacancies

• Search functionality and full candidate application information can be viewed

• Recruitment Fairs• Internal candidates (transfers & excesses)

• External candidates in exception areas (TRQ Select, Teaching Fellows and other pre-screened candidates)

ATR Subsidy/Provisional Hire Agreement*

20

• The agreement between the DOE and the UFT allowing schools to hire staff placed in excess for a certain period of time and to receive a financial subsidy remains in place for the start of the 2010 school year

• The agreement also allows excessed staff to be hired provisionally for one year only with no subsidy, or to be hired with a salary subsidy

*This agreement only applies to teachers hired by December 1, 2010

21

Agenda

FY11 Overview

Budget Reductions

Human Resources

Funding Shifts

Enrollment Growth

Other Changes

22

Basic Financial Operating Capacity*• FSF is the mechanism to fund basic school operations

• Basic financial operating capacity is the FSF amount determined by the school’s enrollment less academic need (the school-based staff necessary to serve the needs & size of the student population, including Special Education and English Language Learners)

• Taking into account other unrestricted funding sources, we set the minimum threshold for basic operating capacity at 86%

• Percent of Basic Financial Operating Capacity: Calculated as the sum of school’s FSF and current other unrestricted funding sources* compared to the school’s operating threshold

* Please see addendum to FY11 SAM #1 for more details

23

Large Inequities Among Schools’ Financial Operational Capacity

• <1% of Elementary Schools (4 of 642 schools)• 30% of Middle Schools (109 of 407)• 7% of High Schools (31 of 445)

• 34% of Elementary Schools (222 of 642 schools)• 10% of Middle Schools (43 of 407)• 12% of High Schools (52 of 445)• 72% (227 of these 317 schools) incur maximum 7.04% cut

Shifting funds from schools above a minimum level of basic financial operating capacity to those below the minimum level.

10% of schools’ (144 schools) FSF plus other unrestricted funds total less than 80% needed for basic operations

20% of all schools (317 schools) are above 100% of basic operations

24

Funding Shift Methodology

• No school is under 86.1% of basic operations after the reallocation

• No school shifts more than 3% of cut base to reallocation

• 86.1% is the highest attainable minimum under the budget shift cap of 3%

• Schools funded at more than the minimum 86.1% of basic operations shift money to schools below the minimum

• Amount shifted from/to schools based on FY11 FSF and other unrestricted funds (Children First and TL School Support (formerly Early Grade Class Size Reduction funds (unrestricted state funds)) as a percent of basic operations

• The Impact to Schools

• 1,020 schools shift funds in the reallocation (581 Elementary, 196 Middle, and 243 High School)

• 442 schools receive funds (48 Elementary, 207 Middle, and 187 High Schools)

• 32 schools unaffected (13 Elementary, 4 Middle, and 15 High Schools)

25

Pre-Allocation: % of Basic Operations

0

20

40

60

80

100

120

140

160

Nu

mb

er

of

Sc

ho

ols

% of Basic Operations

EL MS HS

26

Post-Reallocation: % of Basic Operations

0

50

100

150

200

250

300

350

Nu

mb

er

of

Sc

ho

ols

% of Basic Operations

EL MS HS

27

Reallocation: Example Schools

School A• Elementary School• FY11 Projected Register: 489• Poverty Percentage: 82.6*• Before reallocation: 115% of basic operations• Percent of budget lost in reallocation: -3.0%• After reallocation: 110% of basic operations

School B• Middle School• FY11 Projected Register: 476• Poverty Percentage: 94.9%*• Before reallocation: 78.4% of basic operations• Percent of budget gained in reallocation: 5.3%• After reallocation: 86.1% of basic operations

*Per FY10 SAM #10

28

Agenda

FY11 Overview

Budget Reductions

Human Resources

Funding Shifts

Enrollment Growth

Other Changes

29

Enrollment: Overall Projected Changes

• Projected 18,617 system-wide net student gain• Double FY10 growth, first time growth in over 10 years• Does not include projected 9,341 student increase in Charter

Schools

• General Ed = 11,092 student, 89% of projected gain is in Elementary schools

• Special Education= 6,007 student, 43% of projected gain is in Elementary schools

Note: Gen Ed and Special Ed do not equal total system-wide projected gain

30

Enrollment: Plan for FY11

• Given unusual growth patterns, our goal is to: • Ensure principals have sufficient funds to hire teachers for expected enrollment increases• Mitigate risk of hiring more teachers than necessary in event enrollment increase does not

materialize

• Funding Policy• Schools will be fully funded for the general ed register growth; appears in galaxy budget

NOW• Only 50% of the growth funds are initially accessible• Remaining 50% of funds will be released when enrollment materializes or evidence is

provided • Note that schools have sufficient funding to fully staff up even before all funds are

released, if they if they schedule PS first and delay a portion of OTPS scheduling until after registration materializes

• Only applies to open schools (not new or phase outs)• Accessible funds capped at citywide average of 4.6%

• Register Adjustments

• Adjustments for projected versus actual registers will be conducted in early AND late fall

• Schools that experience an enrollment decline below projections, funding will be decreased by the effective FSF per capita rather than the full FSF weight

• Note: Any school that experienced FY10 register growth above projections was fully funded in FY11

31

Agenda

FY11 Overview

Budget Reductions

Human Resources

Funding Shifts

Enrollment Growth

Other Changes

TL School Support & Title IIA Support

• In previous years federal Title IIA and New York State funds designated for class size reduction were consolidated as the Early Grade Class Size Reduction (EGCSR)

• In FY08 New York State no longer restricted fund usage to class size reduction

• In FY11, EGCSR will remain in existing schools but will be broken into two separate allocation categories:

• School support supplement – May be used to retain classes formerly funded with state EGCSR allocations as well as to support other instructional priorities as needed

• Title IIA supplemental – Must be used to reduce or maintain lower class sizes or PTR: may not fund a teacher required by contract

 

32

• Collaboratively develop the school’s CEP concurrent with the school based budget (SBB)

• New this year: As required by the Governance Law, superintendents must verify the alignment of the school budget with CEP goals.

• All schools will be required to submit their draft CEP goals, action plans and scheduled budgets to their superintendents in mid-June. (May be submitted via I-Plan or upload: further instructions provided soon.)

• If SLT disagreement with the principal, then follow the superintendent resolution process:

• SLT submits their justification within 10 days; Superintendent responds within 10 days cites evidence

• Revision of SSB and CEP according to Superintendent determination

Verifying Alignment of School Budget with CEP Goals

Please Note: CEP must be regularly updated to reflect modifications to the educational program or budget.

33

Contracts for Excellence (C4E) – Fiscal Constraints

34 

The 2010-11 State budget does not provide a year-over-year increase in Foundation Aid funding. (See SAM No.1).

The Governor's 2010-11 Executive Budget states that school districts with Contracts for Excellence funding are "required to maintain funding for existing Contract for Excellence programs less the percentage reduction in the Gap Elimination Adjustment", which is 6% for New York City.

This allows New York City to reduce FY11 C4E by $39 million based on a total C4E amount of $643 million. These funds will be taken via an across-the-board cut to the C4E discretionary dollars first allocated to schools in FY09 as well as cuts to district-wide initiatives.

C4E – Effects of Fiscal Constraints

• There are no “new” C4E dollars available to districts in 2010-11. • New schools opening in FY 11 will not receive C4E funds• New York City schools that received C4E dollars in 2009-10 will

continue to receive funds in order to support C4E allowable programs, as approved by the Commissioner.

• Schools may choose to initiate a new program or expand an existing program using these funds.

• Any program effort funded with C4E dollars – maintenance of effort or new/expanded – must comply with guidelines on:

Program Code Descriptions

Required Documentation

Note: All Programs are also subject to SED monitoring

Fiscal constraints will affect Contracts for Excellence in a few ways:

C4E– New Galaxy Program Descriptions

36

There are three additional Galaxy drop-downs for Class Size Reduction that have been added for FY11

Program Strategy Galaxy Program Description

Class Size Reduction

New Class Room/Reduce Overall Class Size Reduce Class SizeAdditional Teacher in Existing Classroom Reduce PTRMaintain FY10 class size reductions: Successfully reduced class size at the aggregate school level in SY10, and continue to fund a teacher(s) necessary to maintain a similar class size in SY11.

Note: This option is only applicable to schools that demonstrated a real class size reduction in SY10.

Maintain Class Size

New FY11!

Maintain FY10 Pupil Teacher Ratio reductions: Successfully reduced PTR at the aggregate school level in SY10 and continue to fund a teacher(s) necessary to maintain a similar PTR in SY11.

Note: This option is only applicable to schools that demonstrated a real PTR reduction in SY10.

Maintain PTR

New FY11!

Minimize growth of class size in FY11 - fund a teacher to minimize the growth in class size that the school would have otherwise experienced given budget cuts.

Note: School must demonstrate that these positions would have been cut in FY11. Teachers must be supplemental to the number required by contract.

Minimize Class Size growth

New FY11!

C4E – Required Documentation

Schools will not be required to complete a new version of CEP Appendix 8 this year. Please note the following requirements:

37

• Schools that opt to reallocate 2009-10 funds to pay for new or expanded programs in 2010-11 are required to formally document changes between their FY10 and FY11 CFE budgets.

• Schools will need to work with their CFN budget liaison to complete this form and keep it on record.

• Schools will be required to utilize the Comment field in Galaxy to provide a brief but clear narrative explanation of how the proposed use of funds meets the Contracts for Excellence provisions. Insert

• All schools that commit funds to Class Size Reduction – Minimize Class Size Growth in 2010-11 will be required to complete a survey demonstrating that the positions or programs funded in FY 10 would have been cut in FY11, if not for C4E funding.

C4E – Supplement vs. Supplant

C4E funds are supplemental and generally may not be used to cover

the costs of programs and personnel previously funded with tax levy

dollars.

Except: Where the school can document and demonstrate that, due

to cuts in tax levy funding, the programs or personnel would have

been cut, if not for the availability of C4E dollars.

Note: Even in this "if not for" situation, the expenditure still must meet

all of the programmatic requirements of C4E.

Conceptual Consolidation - Greater Flexibility for School Budgeting

39

Title I school-wide program schools may now opt into Conceptual Consolidation, which offers many benefits:

• Integrate services and programs to upgrade the school’s entire educational program

• Combine most federal, state and local funds

• Ease the requirements for accounting, statutory and regulatory requirements (e.g., semi-annual time and effort reporting)

• Details regarding the implementation of this program will soon be available on the Principals Portal

40

Conceptual Consolidation – Opting In

• Which programs are included in its consolidation; and• The amount each program contributes to the consolidated School-wide pool• Additionally, the school plan must document that it has met the intent and

purposes of each program whose funds are consolidated.

To be eligible for the flexibility consolidation of Federal funds enables, a School-wide Program school must identify in its Schoolwide plan (CEP):

• By indicating “YES” to ALL fund sources listed on the chart from which the school receives an allocation (including Title I, Part A; Title II, Title III, Title IV, IDEA, and FSF Tax Levy), the school can include these listed funds in its conceptual consolidation. Note: Schools that receive Title I, Neglected & Delinquent may add a row to the chart to list this funding.

• In the column titled “Amount Contributed to Schoolwide Pool,” the school should indicate the entire amount of funding from each source reported on Galaxy, except in the case of Title I funding, which must reflect the total allocation amount less the required set-asides for parent involvement, HQT, and PD.

SWP schools must respond to the following information requested on the chart in Section II of Appendix 4 in the 2010-11 CEP template:

41

Conceptual Consolidation - Exclusions and Limitations

• Title I Basic: 1% for parent involvement; 5% for HQT; and10% for PD• Title I ARRA: 1% for parent involvement (Note: For Title I ARRA, the

HQT and PD required set-asides have been waived for for FY’11.)

The following required Title I set-asides CAN NOT be included in the consolidation and must be used for the specific intended purposes:

Tax Levy: All Tax Levy funds included in the school’s Fair Student Funding (FSF) allocation CAN be included in the consolidation; other Tax Levy funding (not included in FSF) CAN NOT be included this year.

Contracts For Excellence (C4E): Schools CAN NOT include C4E funds in their conceptual consolidation this year because of strict reporting requirements for the use of these funds.

ARRA - Maintain Supporting Documentation

Budget Modifications and Journal Entries Document reasoning for budget modification in the Galaxy comment field (ARRA “if not but for”). Document explanation for journal entries (date of the entry, what is the nature, and the reason

for entry).

Split-Funded Positions Generate Time and Effort reports (signed by Principal) to document certification of time (see

attached) Title I Targeted Assistance schools generate report monthly Title I School-Wide Programs schools generate report biannually (Recommended Dates:

January 15 and June 15)

Per Session Payments Advertisement – documenting posting date, start/end dates of assignment, no. of hours to be

worked, work description (retain at school for three (3) years) Application (OP175) Waiver (OP175W) – if needed Time Clock must be used Timecard Hourly Professional Time Report (must be approved by individuals supervisor)

42

Increased monitoring will continue in FY11, and schools should continue rigorous record-keeping

ARRA - Maintain Supporting DocumentationInventory records

Inventory records should be maintained and include the following fields: (description, model and serial number, date of purchase, funding source, and location, etc.).

Inventory records should be updated when new equipment is received and/or relocated within the school building.

Annual physical inventory should be performed and completed by April 15th; inventory records should be updated, and discrepancies should be reported to the principal.

A “Request for Off-Site Equipment Utilization” form should be prepared for equipment taken out of the school building.

OTPS purchases

Contracted vendors should be utilized first. Purchase Order Invoice (maintained by DFO) Packing Slip (maintained at school) Certification of Delivery (on-line) Logs/agendas/participants list – if needed Bidding documents – if needed

43

ARRA – Title I Questionnaire

Title I ARRA questionnaires have been rolled over for all PS items funded with Title I ARRA SWP or Title I ARRA Targeted Assistance dollars.

As part of the initial schedule development process, principals will need to confirm that the rolled-over answers to the questionnaire are still valid for FY 2011.

If the situation described in the existing questionnaire is not the case for FY 2011, the principal will need to complete a new questionnaire.

Items requiring this action will be indicated in the infoLink and will be noted by the red question mark ? icon to the left of the item on the TO.

Initial schedules will not be considered to be complete until all rolled over questionnaires have been acted upon.

As in FY 2010, any newly created items will require the completion of the questionnaire.

44

ARRA - Title I Questionnaire: Not Supplanting

This should be done by indicating either that the service is new, or, if the service is not new, that there was a demonstrable shortfall in their tax levy budget that prevented them from funding the item except with Title I ARRA funds.

This tool can be used by auditors to assist in verifying that any expenditure and any journal entry of expenditures charged to Title I ARRA meets the ‘supplement, not supplant’ criteria of Title I funding.

For items newly funded with Title I ARRA in FY 2011:

If the service was funded in FY 2010 with non-Federal funds, and moved to Title I ARRA for FY 2011, schools must explain what “new” shortfall occurred in their non-Federal funding that would have required the school to cut the item if not for Title I ARRA.

The FY 2011 budget reductions are considered a new shortfall.

45

Schools must continue to demonstrate that they are not supplanting

Timeline & Support Resources

46

Timeline• Schools Complete budget July 2• Field Review : July 6 – July 19• Central Review: July 20 – July 30• Open Market System closes August 9th

Resources• For more information, please contact your CFN

representative • Visit the FY11 Budget Planning Resources section on the

Principals’ Portal.• Watch for updates in P-Weekly