Danville Public Schools Multi-Year Financial Planning January 23, - - PowerPoint PPT Presentation

Danville Public Schools Multi-Year Financial Planning

January 23, 2019

1

Introduction

2

• The National Resource Network, a core

component of the federal government’s Strong Cities, Strong Communities initiative, develops and delivers innovative solutions for American cities to help them address their toughest economic challenges.

• Since its launch in 2013, the Network

has worked with or is currently working in 50 cities nationally. Cities apply to the Network for assistance, the Network conducts an assessment to determine key challenges and opportunities, and cities and the Network work together to identify direct assistance.

• In 2017, the work of the Network was

continued with a $4 million grant from the Laura and John Arnold Foundation, with a focus on supporting the Network’s efforts to assist economically challenged cities by developing multi-year financial plans.

The National Resource Network

• In 2017, the City of Danville applied to the

National Resource Network for assistance with multi-year financial planning.

• The City’s Plan was presented in mid-July.

The three priority areas in the City’s plan included: – Reduction in violent crime – Improving education in City schools – Growing Danville

• The City’s Plan also included a multi-year

financial projection and a menu of gap- filling initiatives.

• In April 2018, the City requested that the

scope of the project be amended to include assistance with multi-year financial planning for Danville Public Schools.

3

What is Multi-Year Financial Planning?

• A

A base seline ne projection n which is like the diagnosis your doctor gives you after a physical. It reflects the DPS’s current condition, absent significant changes.

– For revenues, this means no assumed changes in local taxes, and growth in state funding based on current formulas and historical trends. – For expenditures, this means no assumed new hiring, layoffs, or wage increases that deviate from recent trends, and inflationary growth in most costs.

• In response to this diagnosis, a multi-year financial plan will include a

menu of in init itiat

• atives. Like treatment options or corrective actions, these

initiatives are designed to change DPS’s anticipated financial trajectory.

• A

A dyna namic easy sy-to-update budget model that will help decision-makers to balance policy and operational goals in future years, even when finance staffing is limited. A multi-year financial plan helps school leaders think through budget position, structural position, and community goals in a quantified, analytical, logical way, and communicate their thoughts and priorities to different audiences. It includes:

4

Why Do a Multi–Year Financial Plan?

• Pins down creative ideas and innovative best practices that will help local

government entities address fiscal challenges (immediate & long term) and align spending with strategic goals. – Define the problem – Assess opportunities – Determine priorities for future investment

• Sidesteps the traps of budgeting one year at a time, such as:

– Missing out on strategic opportunities that take more than one year – The “wait ‘til next year” approach to investment

• Typically, no sacred cows in the process – everything is on the table.
• There is a fiscal imperative for governments to “do more with less” and

“think outside of the box.” – Do what you do differently – Do different things

5

A Plan for Danville Public Schools

• In 2018, the City of Danville amended their project scope with

the National Resource Network to assist Danville Public Schools with multi-year financial planning. The Network agreed based on the financial relationship between the City and the DPS and the City Council’s commitment and goal to improve public education.

• Furthermore, the City recognizes that their growth and

success hinges on the quality of the Danville Public Schools.

• The key to a great school system is community investment.

City y growth: a attrac acting ing resid idents an and busi sinesse sses Hig High-qual uality y sch chool syste tem Commun unity f y fina nanc ncial inves estm tment a t and support t

• f t
• f the

he s scho chool system Economic s c succe cess

6

A Plan for Danville Public Schools

• The Network recommended that the DPS develop a five-year financial plan

aligned with the City’s plan to give City and Division leaders the tools to make sound, coordinated decisions.

• To frame the plan, the Network focused on areas identified as priorities to

address going forward including: – Provide and maintain top-of-the-line facilities – Attract and retain highly effective teachers/staff – Align education initiatives with workforce development needs

• Network assistance emphasized a need to think strategically on how to

affect change in the above focus areas while maintaining/increasing the level of services and support to DPS staff, students, and families.

• The multi-year financial plan and associated budget model tool will allow

DPS to project revenues and expenditures to better understand how discrete budget decisions may impact available resources and outcomes in the future.

• The multi-year financial plan will also support the City in securing the

necessary resources for DPS over a five-year period.

7

Our Assignment

• Develop a baseli

line proje jection for DPS: A financial baseline reflects the Division’s current and future condition, absent significant changes.

– For revenues, this means no assumed changes in revenue structures, or no new grants with the exception of historical growth in state aid. – For expenditures, this means no assumed new hiring, layoffs, or wage increases that deviate from recent trends. – The team presented a version of this baseline to the Board in August.

• Develop a

a menu of in init itiat ativ ives for DPS PS: A menu of initiatives is a list of revenue and expenditure options or corrective actions designed to change the anticipated financial trajectory of the Division.

• Develop a

a multi-year f fin inan ancial al plan lan for DPS PS: The multi-year financial plan will provide a summary of the baseline projection, the short- and long-term challenges and goals of the Division, and potential initiatives to ensure spending is aligned with the strategic goals and financial plans of both the DPS and the City.

• A

A dyna namic, easy sy-to-upda date e budge dget mode del that will help decision-makers to balance policy and operations goals in future years, even when finance staffing is limited.

8

Project Timeline

• The Network team, the City, and the DPS jointly agreed to a

project scope and timeline to align multi-year financial planning with the City’s budget process. – The Network team conducted interviews with key DPS staff and completed research on Division operations and comparable jurisdictions to better understand pressures on DPS resources and effectiveness. – The Network team spent two days touring all school campuses to better understand the Division’s capital needs and capacity. – A five-year baseline projection was created to model the DPS’s structural deficit in the absence of policy changes. – Specific initiatives were analyzed using information and recommendations from DPS staff, the Network team’s

• bservations, and best practices research.

9

DPS Project Timeline

Preliminary Review of City Documents Grading RFA Two-day site visit Assessment Report

City Amends Scope Ap April il 2 2018 Data Request May Project Kick-Off Visit (Task I) May Baseline Presentation to School Board (Task II) Au August Consider Initiatives (Task III) September – October Present Final Plan (Task V) Janua nuary 2 y 2019 Provide Training and Support to DPS

• n use of Model

Tool Incorporate Initiatives into Projection (Task IV) October - December

10

Plan Summary

• Danville Public Schools has faced multiple challenges over the

last several years, including increased poverty, state aid growing more slowly as enrollment has declined, and a state funding structure based primarily on enrollment rather than need.

• While DPS doubled the number of fully accredited schools this

year, additional resources are needed to improve programs and serve its increasingly economically disadvantaged pupils.

• The City of Danville has committed to more financial help for

DPS, as part of its own efforts to balance its budget and grow Danville.

• The City and DPS agree that keeping existing families in Danville

and attracting new residents and jobs are priorities. Quality schools are critical to creating positive outcomes for the City and the school division.

• However, the City faces its own fiscal challenges. The Network’s

Plan for the City holds the City contribution to DPS constant and does not account for any additional future capital debt.

11

Plan Summary, cont’d.

• The baseline financial projection in this report shows DPS with a

cumulative deficit of $41.4 million over the five-year projection period if no corrective action is taken.

• However, DPS has a path to fiscal stability and continued

academic improvement that will benefit the City and the schools. This report seeks to provide specific alternatives for a financial turnaround that can be accompanied by academic growth.

• There are exciting aspects to this plan, including a focus on

improving student engagement and expanding access to innovative programming and enhanced Career and Technical Education (CTE) offerings.

• However, even with more aid from the City, DPS will have to make

hard choices. The City does not have unlimited funds and the Division has a long-term budget gap. This plan seeks to phase in additional City aid, but also targets DPS spending to the most critical areas while suggesting selected reductions in others.

12

Plan Summary, cont’d.

There ar are two k key ele lements to the DPS PS plan an: 1. A formal Education Compact between the City and DPS encompassing the City’s ongoing financial commitment and the School Division’s performance goals and metrics that will benefit kids and the City.

• Examples of similar compacts in Virginia and other states are included

in this report.

2. An intense focus on halting the decline in enrollment to preserve state funding and better serve students. The decline, recently around 100 students per year, must be limited to 50 students in 2019-20 and eliminated completely thereafter.

• Enrollment stabilization has three parts:
• Increasing enrollment in precision machining and other CTE

programs at the high school level.

• Adding a middle school IB program to provide an important option

for DPS students and serve as a feeder for Galileo High School.

• A plan by DPS, the City, and other stakeholders to build on recent

DPS efforts to lower truancy rates, reduce suspensions, and cut the dropout rate.

13

Plan Summary, cont’d.

• Moving DPS toward stable finances using the Compact for funding and

performance accountability, a focus on retaining children struggling in the current system, and improving IB and career and technical education (CTE) offerings will require DPS to make some difficult financial and programmatic decisions.

• The Network team has proposed one potential path to financial stability

with the following elements. DPS and the City can adjust these options through the Compact to reach a solution that works for Danville.

• In addition to the Compact and enrollment stabilization, the Network’s

scenario includes: – Limiting future salary growth to 2.0 percent for all employees. – Modestly adjusting class sizes to 23 students in grades 4-8. – Moving and expanding the IB program; close the Galileo building. – Providing $500,000 per year in targeted spending to improve student engagement by enhancing innovative instructional programming (IB Programme, CTE, New Tech, etc.). – Phasing in additional City contributions of $2.0 million per year in 2019-20, 2020-21 and 2021-22.

14

Plan Summary, cont’d.

• Halting enrollment decline, improving programing, and increasing City

funding will turn around the negative budget trend, but long-term financial stability will require additional actions on the part of the City and DPS.

• The Network recommends that, as part of their Compact, DPS and the City

agree to additional actions, including but not limited to: – Focusing limited capital funds on ensuring that remaining DPS buildings have basic integrity, including secure roofs and reliable HVAC.

• Borrowing without voter approval is capped at $6.0 million per year.
• The City and the DPS should collaborate on a capital needs analysis

and resulting prioritized capital plan. – Adjust the DPS budget to acknowledge an annual vacancy rate of 2.0 percent, and budget the funds needed to fill any substitute teacher positions. – Review other spending control and revenue initiatives included in this Plan to see if they may provide savings or new funds to direct to the remaining fiscal gap or any desired new programs.

15

City and Division Overview

16

City of Danville: Demographics

• Total Population:

– Danville: 41,911 in 2017, down 2.7 percent from 43,055 in 2010. – Pittsylvania County: 61,970 in 2017, down 2.4 percent from 63,506 in 2010.

• Race and Ethnicity in Danville:

– White: 20,142 (47.5 percent) in 2016; 21,620 (49.4 percent) in 2010 – African American: 21,512 (50.8 percent) in 2016; 21,177 (48.3 percent) in 2010 – Hispanic: 1,519 (3.6 percent) in 2016; 1,152 (2.6 percent) in 2010

Source: American Community Survey

17

City of Danville: Demographics, cont’d.

• Population under the age of 5:

– Danville: 2,630 in 2017; 2,639 in 2010. – Pittsylvania County: 2,728 in 2017; down 20 percent from 3,280 in 2010.

Source: American Community Survey

• Family Households in Danville:

– 58.1 percent in 2017; down from 60.5 percent in 2010.

• Family Households with Children

under 18 in Danville:

– 25.0 percent in 2017; down from 28.8 percent in 2010.

• Of all family households in Danville,

29.8 percent were headed by a single parent in 2017.

18

City of Danville: Demographics, cont’d.

• Population below the Poverty Level:

– Danville: 21.5 percent in 2017. – Pittsylvania County: 14.7 percent in 2017.

• People under the age of 18 years below the Poverty Level:

– Danville: 31.1 percent in 2017. – Pittsylvania County: 22.1 percent in 2017.

• Children under the age of 5 years below the Poverty Level:

– Danville: 33.1 percent in 2017. – Pittsylvania County: 29.9 percent in 2017.

Source: American Community Survey

19

Danville Public Schools: Demographics

• Race and Ethnicity: 2017-18 Fall Membership:

Source: VA Department of Education

– Danville Public Schools:

• African American: 68.7 percent
• White: 19.3 percent
• Hispanic: 7.3 percent

– Pittsylvania County Schools

• African American: 22.8 percent
• White: 69.3 percent
• Hispanic: 4.6 percent
• English Language Learners

– Danville Public Schools: 326 students – Pittsylvania County Schools: 260

20

DPS: Demographics, cont’d.

• Poverty: Fall 2017-18:

– Danville Public Schools qualifies for the Community Eligibility Provision (CEP); 100 percent of students receive free/reduced price lunches. – Identified Student Percentage (ISP); 66.7 percent meets USDA poverty standard (April 2018).

• Pittsylvania County Public Schools: 43.4 percent.

Source: VA Department of Education

21

DPS: Demographics, cont’d.

• Students with Disabilities:

– Danville reported 901 students (December 2016) or 15.1 percent of students enrolled (State: 13.1 percent)

• Danville enrollment makes up 0.46 percent of total enrollment of the

State but enrolls 0.53 percent of students with disabilities (0.46 percent would be 780 students).

– Disabilities by Type

• Specific Learning Disability: 244
• Other Health Impairment: 210
• Speech/Language Impairment: 184
• Autism: 85
• Intellectual Disability: 54
• Developmental Delay: 48
• Emotional Disturbance: 45
• Multiple Disabilities: 11
• Orthopedic Impairment: 10
• Other Disabilities: 10

Source: VA Department of Education

22

DPS: Enrollment Trends

• Average Daily Membership has declined by 16 percent from 2006-07 to

2017-18.

– This represents a negative 1.6 percent CAGR (Compound Annual Growth Rate) over the period.

6,589 5,519

3,500 4,000 4,500 5,000 5,500 6,000 6,500 7,000 Actual 2006-07 Actual 2007-08 Actual 2008-09 Actual 2009-10 Actual 2010-11 Actual 2011-12 Actual 2012-13 Actual 2013-14 Actual 2014-15 Actual 2015-16 Actual 2016-17 Actual 2017-18

Actual and Budgeted Average Daily Membership, 2006-07 through 2017-18

23

DPS: Economically Disadvantaged Trends

• A student is considered to be Economically Disadvantaged if s/he meets any one
• f the following criteria:

– Eligible for free/reduced price meals. – Receives TANF. – Eligible for Medicaid. – Identified as either migrant or experiencing homelessness.

• Between 2011 and 2014, about three-quarters of DPS students were considered

Economically Disadvantaged.

• In Fall 2018, 55.6 percent of students are considered Economically

Disadvantaged.

4,291 91 4,690 690 4,630 630 4,61 619 4,77 773 3,043 043 2,81 811 2, 2,44 447 3,161 61 2,125 125 1, 1,640 40 1, 1,732 732 1, 1,695 695 1, 1,542 542 3,206 206 3,1 ,145 3,381 81 2,525 525

1,000 2,000 3,000 4,000 5,000 6,000 7,000 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19

Fall M ll Membe bership

Economically Disadvantaged Not Economically Disadvantaged

Source: VA Department of Education

24

DPS: Performance Trends - Assessments

• Academics: Pass Rates

– Reading/English Language Arts: Grades 3-8 and High School Reading/English EOC. – Writing: 8th Grade and High School EOC. – Math: Grades 3-8 and Algebra I, Algebra II, and Geometry EOC.

25 50 75 100 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18

Pass R ss Rates - All G l Grad ade L Levels T Tested

Reading/ELA Writing Math

Source: VA Department of Education

25

DPS: Performance Trends – Econ. Disadv.

• All Students: DPS performs below the State average in all

subjects.

• Economically Disadvantaged students: DPS performs below

the State average in all subjects.

Source: VA Department of Education

Reading 2015-16 2016-17 2017-18 DPS State DPS State DPS State All Students 64 80 58 80 56 79 Economically Disadvantaged 56 66 51 67 49 66 Writing 2015-16 2016-17 2017-18 DPS State DPS State DPS State All Students 64 79 64 79 61 78 Economically Disadvantaged 55 63 52 64 54 64 Math 2015-16 2016-17 2017-18 DPS State DPS State DPS State All Students 63 80 54 79 48 77 Economically Disadvantaged 55 69 47 68 42 66

26

DPS: Performance Trends – AP and IB

• Advanced program participation and outcomes:

– Senior IB enrollment peaked with the Class of 2012. – The number of students in Dual Enrollment peaked during the 2013-14 school year.

Source: VA Department of Education

Senior

• rs

Awarded IB Diploma mas Senior IB IB Enrollm llment Stud udent nts t taking ng 1 or

• r m

mor

• re AP

Co Cour urses Stud udent nts t taking ng 1 or

• r m

mor

• re AP

Exams ams Stu tudents ta taking 1 1

• r more Dua

Dual Enr nrollment Co Cour urses 2010-11 107 37 323 2011-12 14 120 99 333 2012-13 7 18 266 105 271 2013-14 3 11 187 64 512 2014-15 1 1 140 69 369 2015-16 5 5 80 37 389 2016-17 42 26 364 2017-18 2 2 38 25 309

27

DPS: Performance Trends - CTE

• Career and Technical Education (CTE):

– Virginia offers 16 career clusters; each career cluster has multiple pathways that represent academic, technical, and employability skills and can lead to industry-recognized credentials. – DPS offers nine CTE opportunities:

• Auto Body Technology.
• Automotive Technology.
• Business and Information Technology.
• Criminal Justice.
• Family and Consumer Sciences.
• Health Careers Academy.
• Precision Machining Technology.
• Technology.
• Welding.

28

DPS: Performance Trends – CTE cont’d.

• Career and Technical Education outcomes:

– Percentage of CTE students who pass CTE competency test is steady and high (over 95%). – Percentage of CTE students earning industry-recognized credential has grown (90% in 2016-17 compared to 40% in 2010-11). – Percentage of students earning credential and advanced diploma has grown (46% in 2016-17 compared to 15% in 2010-11).

Source: VA Department of Education

201 010-11 11 201 011-12 12 20 2012 12-13 13 201 013-14 14 201 014-15 15 201 015-16 2016 016-17 Number of CTE Students 116 136 173 146 151 160 145 Passed Competency Test 111 134 170 143 150 155 141 Credentialed 50 55 93 95 125 135 131 Credentialed Advanced Diploma 21 21 40 50 37 54 66

29

DPS: Performance Trends – Graduation Rates

4-year cohort graduation rates:

• Class of 2018: 449 students (375 completers)*

– Advanced Diploma: 125 – Standard Diploma: 214 – Special Diploma: 22 – Other (Modified, General, GED, Certificate of Completion): 14

* Completers include students who graduated, as well as students who received a GED or Certificate of Completion

Source: VA Department of Education

Grad aduat ation Rates ( s (% % of

• f 4

4-year co r cohort) 201 014 201 015 201 016 2017 17 201 018 Roanoke City 83.4 85.6 87.5 89.7 90.0 Hopewell 79.5 81.9 85.1 85.2 90.9 Harrisonburg 86.7 89.5 89.4 87.4 88.2 Lynchburg 81.2 82.3 85.5 86.4 86.4 Pittsylvania County 90.6 91.1 93.1 91.9 91.3 Danv nville 75.7 75.7 79. 79.1 81 81.0 77. 7.2 80.6 80.6

30

DPS: Performance – College Enrollment

Of students graduating from high school within four years and enrolling in a post-secondary institution within 16 months of their graduation date: DPS Class of 2016 four-year cohort: 360 graduates:

– 74 (20.5 percent) enrolled in four-year public institutions. – 32 (8.9 percent) enrolled in four-year private institutions. – 108 (30 percent) enrolled in two-year institutions.

Source: VA Department of Education

Colle llege Enrollme lment nt Rate tes 20 2012 12 201 013 201 014 201 015 201 016 Roanoke City 60% 65% 61% 56% 56% Pittsylvania County 70% 65% 67% 67% 62% Lynchburg 66% 63% 65% 66% 65% Harrisonburg 65% 68% 69% 68% 57% Hopewell 51% 50% 47% 57% 41% Danv nville 72% 72% 70% 70% 71 71% 69% 69% 59% 59%

31

DPS Strategic Plan

• Vision:

– Empower and engage families and encourage the larger community to value and invest in education and lifelong learning. – Develop curriculum that meets the evolving needs of the community and employers and continues the tradition of excellence. – Aggressively recruit and retain teachers and staff members who are innovative, engaged, and passionate.

32

DPS Strategic Focus Areas

• Student Achievement

– Develop and implement aggressive curriculum that challenges and inspires every student.

• Community Engagement

– Engage the community to embrace their role in a comprehensive approach that realizes each child’s potential.

• Operations and Infrastructure

– Create and maintain infrastructure and operations essential to dynamic 21st Century learning.

• Personnel Development

– Attract and Invest in employees and their professional development.

• Environmental Factors

– Identify and address the physical, emotional, and social needs of each child.

33

Budget Overview

34

Starting Year: 2018-19 Budget

• The charts below show the major categories of DPS’s 2018-19 budgeted

total revenues and total expenditures ($65.77 million). – State sources account for 64 percent of revenue, while the City’s contribution provides an additional 34 percent. – Salaries and employee benefits make up 86 percent of DPS spending.

Salaries 61% VRS Benefits 9% Health Insurance 7% Social Security 5% Other Benefits 3% Purchased Services 4% Supplies 4% Other Expenditures 7%

Budg udgeted E d Expend pendit itur ures es 2018 2018-19 19

State Funds 64% City Contribution 34% Other Funds 2%

Budgeted R Revenues 2018-19

35

Historical Revenues

• State funds and City funds have accounted for an average of 64 and 34

percent of annual revenue, respectively, from 2014-15 through 2018-19.

$0 $10 $20 $30 $40 $50 $60 $70 Actual Actual Actual Adopted Budget Adopted Budget 2014-15 2015-16 2016-17 2017-18 2018-19 Millions

Historic ical R l Rev evenu nues es 2014 2014-15 15 to 2018 2018-19 19

State Funds City Funds Other

36

State Funding Trends

• State funding per pupil increased from 2014-15 to 2018-19, driven mostly

by increases in Basic Aid and Lottery Funding.

• DPS received two on
• ne-tim

ime funding sources in the State’s adopted budget for the 2018-2020 biennium for the 2018-19 and 2019-20 school years.

$6,752 752 $6,827 827 $7,064 064 $7,432 432 $7,789 789

$0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 $8,000 $9,000 2014-15 2015-16 2016-17 2017-18 2018-19

State F e Funds unds p per er P Pupi pil 2014 2014-15 to 2018 2018-19 19

Basic Aid All Other SOQ Sales Tax Lottery Funding Incentive Programs Categorical Programs

37

City Contribution Trends

• The City’s contribution has increased while enrollment has declined,

resulting in higher levels of per pupil funding from the City.

$2,573 $2,445 $2,860 $3,734 $4,171

$0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4,000 $4,500 2014-15 2015-16 2016-17 2017-18 2018-19

Total City Funds per Pupil 2014-15 to 2018-19

FY13 13 FY14 FY15 15 FY16 FY17 FY18 18 FY19 19 17.8% 19.1% 16.5% 16.0% 14.9% 19.0% 18.8%

Cit ity’s C Con

• ntribution a

as a Percent of

• f Total C

Cit ity B Budget

*FY2018-19 Includes $2 million of carryover 38

Historical Expenditures

• Personnel costs (salaries and wages, and employee benefits) account for

86 percent of budgeted DPS general fund expenditures for 2018-19.

$0 $10 $20 $30 $40 $50 $60 $70 Actual Actual Actual Adopted Budget Adopted Budget 2014-15 2015-16 2016-17 2017-18 2018-19

Millions

Historic ical E l Expen pendit ditures 2014 2014-15 15 to 2018 2018-19 19

Salaries and Wages Employee Benefits Purchased Services Utilities and Other Charges Materials and Supplies Other

39

Personnel Cost Trends

• Personnel costs have increased on a per pupil basis from 2014-15 to

2018-19.

• Salaries and benefits per pupil increased by about 2.9 percent per year

while enrollment has declined by 2.4 percent per year over the five-year period.

$6,014 $5,935 $6,211 $6,765 $7,445 $0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 $8,000 2014-15 2015-16 2016-17 2017-18 2018-19

Salaries and Benefits per Pupil 2014-15 to 2018-19

40

Significant Historical Budget Drivers

• Increases in revenue have been driven by the City’s contribution.
• Although Basic Aid from the State increased on a per pupil basis, total

revenues for this source declined because of declines in enrollment.

• Salaries and healthcare are major drivers of expenditure growth over the

period.

10.1% (0.1%) (0.5%) 3.7% 3.7% 0.9% 2.9% 8.5% (2.0%) 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% City Contribution All Other State Basic Aid Total revenues Total expenditures Pension Salaries Healthcare

Annual Revenue & Expense Growth 2014-15 to 2018-19

41

Baseline Financial Projection

42

Developing a Baseline Projection

• The process of creating the five-year budget model started with analyzing

DPS’s historical budget data.

• Line-item detail was organized into categories representing DPS’s major

revenues and expenses.

• Growth rates were applied to these categories to project revenues and

expenses in future years.

• The project team worked with DPS to understand the drivers of revenues

and expenses in order to select growth rates.

• For the baseline forecast, growth rates reflect inflation, known or assumed

growth in revenues and expenditures, and other known events.

• The projection model uses the 2018-19 adopted budget in its baseline

forecast and applies growth rates to those amounts to project future years.

• The baseline forecast is intended to show what DPS’s financial results

could be with no correctiv ive ac actio ion.

43

Revenue Growth Rate Assumptions

• State Direct Aid Payments account for 64 percent of total revenue in the

2018-19 adopted budget.

• The baseline financial projection makes the following assumptions for

factors impacting total state funds received: – Enrollment

• The baseline financial projection assumes a 1.6 percent per year

decline in enrollment, based on the historical 10-year enrollment compound annual growth rate (CAGR). – Composite Index

• The DPS composite index is held flat at 0.2546, which is the

amount included in the state’s Adopted 2018-20 biennial budget. – Sales Tax Allocation

• DPS’s sales tax allocation increases by 0.4 percent in 2019-20

based on the 2018-20 biennial budget.

• In each subsequent year, DPS’s sales tax allocation increases by

2.1 percent based on the five-year CAGR for statewide taxable sales from 2012 to 2017.

Note: Projections are based on the adopted 2018-19 General Fund budget.

44

Revenue Growth Rate Assumptions, cont’d.

• Funding received from the City of Danville accounts for 34

percent of 2018-19 revenue. – The baseline financial projection assumes the City’s contribution remains flat at the 2018-19 level of $20.6 million. – No carryover of City contributions are assumed during the projected period.

• All other revenue sources are held flat at 2018-19 levels for

the projected period.

Note: Projections are based on the adopted 2018-19 General Fund budget.

45

Expenditure Growth Rate Assumptions

• Instructional Salaries and Wages

– Account for 43.5 percent of total expenditures in the 2018-19 adopted budget. – Growth of 2.75 percent per year is assumed in financial projection.

• Other Salaries

– All other salaries are assumed to increase by inflation (2.3 percent) per year.

• Medical Plan Benefits

– Account for 7.4 percent of total 2018-19 budgeted expenditures. – Growth of 10.0 percent is projected in first projected year based on expected increase due to higher utilization. – Growth rate is reduced by 1 percent per year to 7.0 percent in 2022- 23 and held flat in 2023-24.

• Retirement Benefits

– Accounts for 6.9 percent of total 2018-19 budgeted expenditures. – Growth rate assumed to match weighted growth in salaries of employees enrolled in VRS (2.6 percent).

46

Unaligned Revenues and Expenditures

• Making these assumptions, without corrective action, DPS is projected to

experience annual deficits in each of the next five years.

$0.0 $10.0 $20.0 $30.0 $40.0 $50.0 $60.0 $70.0 $80.0 $90.0 Adopted Budget Projected Projected Projected Projected Projected 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 Millions

General Fund Budget Projections, FY 2019 – FY 2023

Revenues Expenditures

47

Key Future Budget Drivers

• Total expenditures are projected to grow by 3.1 percent per year over the

five-year period while revenues are projected to decline by 0.5 percent per year.

– Carryover funds are removed after 2018-19, which results in a decrease in the City’s contribution over the projection period. – Basic Aid funding decreases overall because enrollment decline offsets the projected increases in per pupil funding. – Consistent growth in salaries, pension, and healthcare expenses contribute to the growth of total expenditures.

(1.8%) 0.8% (0.6%) (0.4%) 3.1% 2.6% 2.6% 8.2%

• 4.0%
• 2.0%

0.0% 2.0% 4.0% 6.0% 8.0% 10.0% City Contribution All Other State Basic Aid Total revenues Total expenditures Pension Salaries Healthcare

Annual Revenue & Expense Growth: General Fund Projection, SY 2019 to SY 2024

48

DPS: Baseline Projection

• The chart and table below show the Division’s baseline financial projection

beginning with the proposed 2018-19 budget.

• This is a status quo projection, assuming no corrective action is taken.
• Under the baseline forecast the projected cumulative deficit over the next

five years is approximately $41.4 million.

201 018-19 19 201 019-20 20 2020 020-21 21 2021 21-22 22 2022 022-23 23 2023 023-24 24 Budget get Pr Proje jected Pr Proje jected Pr Proje jected Pr Proje jected Pr Proje jected Total Revenues $65,774,613 $63,811,539 $63,629,779 $63,688,799 $64,284,016 $64,347,943 Total Expenditures $65,774,613 $68,006,244 $70,089,618 $72,194,850 $74,323,248 $76,521,524 Surp rplus / / (Defi ficit) $0 $0 ($4,194, 94,70 705) 5) ($6,459 459,839 839) ($8,506 506,05 051) 1) ($10, 0,03 039, 9,23 231) 1) ($12, 2,173, 73,582) 82)

($0.0) ($4.2) ($6.5) ($8.5) ($10.0) ($12.2) ($15.0) ($13.0) ($11.0) ($9.0) ($7.0) ($5.0) ($3.0) ($1.0) $1.0 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 Budget Projected Projected Projected Projected Projected

Millions

General al F Fund B Budget P t Proj

• jecti

tions

Surplus / (Deficit)

49

Key Projection Factor: Declining Enrollment

• Enrollment levels directly impact the amount of payments from the State.
• Between 2007-08 and 2017-18, enrollment declined by 952 students, or

an annual rate of 1.6 percent.

• As shown in the table below, budgeting can be a significant challenge with

a declining student population. Enrollment has fluctuated significantly in recent years and must be estimated for the following year in the budget

• process. Daily enrollment and ADM are calculated differently.

School Year March 31 ADM Budgeted ADM Difference (#) Difference (%) 2007-08 6,471 6,450 21 0.3% 2008-09 6,203 6,375 (172) (2.7%) 2009-10 6,145 5,974 171 2.9% 2010-11 6,092 6,104 (12) (0.2%) 2011-12 6,016 6,040 (24) (0.4%) 2012-13 6,030 5,929 101 1.7% 2013-14 5,957 6,025 (68) (1.1%) 2014-15 5,976 5,897 79 1.3% 2015-16 5,935 5,961 (26) (0.4%) 2016-17 5,631 5,871 (239) (4.1%) 2017-18 5,519 5,569 (50) (0.9%) 50

Enrollment Projections

• The baseline projection assumes a 1.6 percent long-term decline (10 year

CAGR) in enrollment, using the Division’s 2018-19 adopted budget as the starting point, offset in part by an average 1.9 percent per year increase in State aid.

• This assumption results in a decrease of 80 to 86 students per year over

the five-year projection period.

• In the State’s 2018-20 biennial budget, a change of 25 students results in

a change of $460,000 in revenues for the 2018-19 school year.

DPS Adopted Budget, 5,420 State Budget 2018-19, 5,367 State Budget 2019-20, 5,212 4,900 5,000 5,100 5,200 5,300 5,400 5,500 5,600 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 Actual DPS Budget Projected Projected Projected Projected Projected

Danville Public Schools ADM Projections

Baseline

51

Enrollment Projections, cont’d.

• Three enrollment scenarios were also examined:

– An Optimistic s scenario in which enrollment declines by 50 students in 2019- 20, and then is held constant through 2023-24. – The Baseline ine s scenar nario with a 1.6 percent annual decline in enrollment. – The State b e budget t tren end scenario which reflects the state’s expected rate of enrollment decline, 150 students per year.

2018-19 Budget 5,420 5,005 5,370 4,670 3,500 4,000 4,500 5,000 5,500 6,000 6,500 7,000

Danville Public Schools Enrollment Scenarios

Baseline Optimistic Scenario State Budget Trend

52

Alternate Enrollment Scenarios

Enrollment nt S Scena nario io Cumula lative Defi ficit T Thr hrou

• ugh

2023 2023-24 Optimistic Scenario ($35.0 million) Baseline Scenario ($41.4 million) State Budget Trend ($47.6 million)

• Enrollment affects the amount of state aid received relatively rapidly, while

spending cannot be adjusted at the same rate.

53

Key Projection Factor: Capital Plans

• In December 2017, RRMM Architects presented estimated costs for new

construction and renovations for DPS buildings.

– Improvements at Johnson, Woodberry Hills, Langston, and George Washington were estimated to be $119 million. – Improvements at the remaining Pre-Kindergarten to Grade 8 schools were estimated to be $97 million under the proposed grade alignment (PK, K-3, 4-6, 7-8, 9-12) and $105 million in the current configuration.

• These estimates significantly exceed the current level of investment

available for DPS facilities.

– The City of Danville covers the costs of existing debt service for DPS, which will be $2 million in 2018-19. – The City eliminated its further contribution to the DPS capital improvement plan in the 2018-19 budget after the DPS received approximately $2 million per year since 2015-16.

• The need for facility improvements will be influenced by enrollment

levels, the needs of DPS students, and the condition of facilities.

– However, financial capacity will ultimately determine the level of investment that DPS can make in its facilities.

54

Key Projection Factor: Staffing Levels

• Academic initiatives, enrollment levels, class size targets, and the number

and configuration of the Division’s buildings all have an impact on staffing levels.

• If enrollment levels continue to decline based on historical trends, DPS

could achieve some savings with reduced staffing. – Lower enrollment may allow DPS to reduce staff by consolidating classroom space. – Depending on the magnitude of the enrollment decline, DPS may also be able to reduce the number of buildings in operation.

• Since the DPS would have to lose 15-25 students in a single grade in order

to consider the elimination of a classroom teacher, the reduction in enrollment and the potential for reducing staff are not precisely aligned.

• Building reductions could also lead to reductions in administrators and

building maintenance and operations staff.

• Not resizing staffing if enrollment declines over time will increase fiscal

pressures on DPS.

55

Key Projection Factor: Staff Retention

• DPS has identified attracting and retaining high-quality staff as a key goal

to improve academic performance and operational efficiency. – The Division’s salary study produced a recommended salary schedule for instructional staff that was adopted as part of the 2018-19 budget. – Further needs have been identified for classified staff, and the classification study may provide recommendations for compensation adjustments. – DPS staff have identified challenges in retaining enough bus drivers to operate its transportation routes, specifically noting the lack of benefits as a hindrance to recruitment and retention of bus drivers. – The City Plan targeted 2.0 percent overall annual salary increases for City employees, basing individual amounts on performance.

56

Key Projection Factor: Staff Retention, cont’d.

• The 2018-19 adopted budget includes $2.0 million in carryover funding

from the City to pay the costs of the teacher salary adjustment and other initiatives, but this only covers the 2018-19 year. – Step movement on the new teacher salary schedule is nearly 1.3 percent per year, and the estimated annual cost to maintain this adjustment is $370,000. – The annual adjustment for classified staff will be determined by the results of the classification study; however, these positions received a 4 percent increase in 2018-19.

• The potential adjustments for classified staff and increase in bus driver

costs would require additional resources for implementation.

57

Developing a Plan for Fiscal Sustainability

58

• There are no easy solutions to close DPS’s cumulative deficit.

Baseline Forecast in Context

Declining enrollment leads to decreased State funding… Increasing dependence on City allocation…. Salaries and benefits comprise the majority

• f the Division’s expenditures and increase

at a rate greater than revenues…. Competition for highly effective teachers….

1 5,100 5,600 6,100 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 20.0% 25.0% 30.0% 35.0% 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 80.0% 85.0% 90.0% 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19

1: Crane, John. “Kaine’s bill aims to combat teacher shortage in rural areas.” Danville Register & Bee, August 2018.

59

• With a structural deficit of $4.2 million growing by $2.0-$3.0 million

annually to a cumulative deficit of $41.4 million, DPS will need to make tough choices to balance the budget and identify resources to invest in programs and facilities.

• The Multi-Year Financial Plan for DPS is designed as a blueprint to

provide leadership with options to curb spending growth and implement targeted increases in revenue to create a structurally balanced budget.

– The Plan contains alternatives for program restructuring and service level changes. To the extent possible, the initiatives are data-driven and based on benchmark research, best practices, and DPS’s unique circumstances. – Many initiatives would bring DPS’s service delivery and structure in line with those of peer Virginia school divisions. – The Plan does not just identify recommendations that would only bring the budget into structural balance in the short-term. The

• verarching goal of the Plan is to allow the Division to make the

changes necessary to begin to invest in its future and increase the quality of education programs in a sustainable way.

The Challenge

60

Benchmarking Analysis

• In order to create the best plan for DPS, the Network team researched

comparable public school divisions and examined their demographic conditions as well as their operating practices.

• The team considered K-12 divisions similar in size and student

demographics and poverty rates in order to make appropriate

• comparisons. The benchmark divisions are regional urban school systems

in Virginia.

• In addition to the four benchmark divisions, the team included adjacent

Pittsylvania County in the benchmarking analysis.

• Data were collected and analyzed to provide comparative information in

developing the Plan.

School

• l Division
• n

Marc rch A Ave verage Daily ly M Membership English h Lear arner Econ

• nom
• mically

ally Disad advan antag aged Total R al Revenues Scho hools ( s (#) Danville lle City y 5,51 519 5. 5.8% 8% 55. 55.6% $72,239,791 11 11 Hopewell City 3,977 4.7% 54.1% $53,052,529 5 Harrisonburg City 5,887 43.3% 68.9% $79,318,238 9 Lynchburg City 7,979 3.2% 51.7% $112,973,408 16 Pittsylvania County 8,620 3.0% 53.3% $89,341,887 18 Roanoke City 12,823 12.7% 51.5% $199,114,932 24

Source: VA Department of Education

61

A Plan for Fiscal Sustainability

To achieve fiscal sustainability and invest in improving academic outcomes, the DPS Plan focuses on the following areas: 1. Reducing Costs

– Controlling Personnel Cost Growth – Right-Sizing Staff – Increasing Operational Efficiencies – Facilities – Capital Planning

2. Generating Revenue

– Enrollment Preservation – Revenues Alternatives

• The options put forth in this plan will allow DPS leadership to make informed

decisions to ensure sufficient resources to invest in DPS’s future.

• Because DPS will not be able to fund all of its desired priorities, it must

balance priorities with available funding, using potential areas of savings and operational change to maximize resources directed to top priority areas. DP DPS S will have e to make c e choices es a about wher ere e to comm mmit l limited d resources es.

62

Controlling Personnel Cost Growth

63

Salary Cost Containment

• DPS spends most of its General Fund budget on salaries and

benefits for its instructional and support positions – 86 percent of the 2018-19 budget.

• The Administration and the Board have recognized the importance
• f providing a competitive compensation package to attract and

retain high quality employees.

• In 2018-19, DPS adopted a new salary schedule for instructional

staff and included funding to complete a compensation study for classified staff. However, these efforts will be unaffordable if DPS cannot identify new revenues or operational savings in other areas to support the increase in costs. DPS will need to balance its available resources with its ability to support increased personnel costs.

64

Salary Cost Containment, cont’d.

• The baseline scenario assumes 2.75 percent annual growth in instructional salaries,

which could include both step movement and an annual cost of living adjustment for teachers.

• The most straightforward way for DPS to achieve savings for salary costs would be to
• ffer increases that are lower than the baseline assumption.
• To provide a sense of the scale of the impact of such changes, three alternative

salary growth scenarios are shown below.

– Step M Movement O Only: teachers receive an annual salary increase from step movement, but receive no cost of living adjustments. – 1.5 P Percent t Sala lary G Growth C th Cap: teacher salary growth is limited to 1.5 percent per year. – 2.0 P Percent S t Sala lary G Growth th Cap: teacher salary growth is limited to 2.0 percent per year.

• Part of a strategy for structural balance will require an evaluation of the long-term

impact of personnel costs and in particular how to manage the number of positions and the competitiveness of teacher pay.

Salary Cost Containment: Salary Growth Scenarios 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 Cumulative Budget Projected Projected Projected Projected Projected Impact Step Movement Only $0 $235,406 $702,898 $1,189,285 $1,695,167 $2,221,158 $6,043,913 1.5 Percent Salary Growth Cap $0 $235,406 $642,069 $1,065,918 $1,507,516 $1,967,442 $5,418,351 2.0 Percent Salary Growth Cap $0 $235,406 $481,993 $740,164 $1,010,333 $1,292,927 $3,760,823 65

Healthcare Cost Containment

• DPS has already taken steps to reduce healthcare costs and limit the risk
• f significant healthcare cost increases in the future.

– In 2017-18, the Division participated in the State’s Local Choice health benefits program, resulting in cost savings. – In 2018-19, DPS increased the monthly employee contribution for single coverage to reduce the impact of the projected increase in premium costs.

• Over time the Division has also increased the employee portion of

healthcare premium costs. – Employees contribute an average of 12 percent of the premium costs for single coverage and over 88 percent of the costs of family coverage. – Nearly 91 percent of employees are enrolled in single coverage and

• ver 75 percent of employees are enrolled in the plan with a higher

annual deductible.

• These factors limit the applicability of some of the recommendations

included in the City’s multi-year financial plan.

66

Healthcare Cost Containment, cont’d.

• DPS should continue to seek additional areas to control the growth of

healthcare costs.

• These options may include conducting a dependent eligibility audit,

establishing wellness programs, or moving to a high deductible health plan.

• To illustrate the potential impact of these changes, the table below shows

the financial impact of an additional percentage point reduction in the growth rate assumption compared to the baseline projections.

Healthcare Cost Containment: Reduce Growth Rate by 1 Percentage Point 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 Cumulative Budget Projected Projected Projected Projected Projected Impact Annual Impact $0 $48,593 $105,933 $171,611 $244,831 $326,850 $897,818 Growth Rate ― 9% 8% 7% 6% 6% ― 67

Summary

• The Network team recommends that DPS pursue options to control

personnel cost growth: – Cap salary growth at 2 percent annually. – Control the growth of healthcare costs.

• Savings from these initiatives could be used to reduce the projected deficit

in the baseline scenario or to increase resources for other priorities.

• The table below summarizes the total potential savings from the initiatives

discussed in previous slides.

Potent ntial ial O Optio ions ns Cumula lative Impa mpact Cap teacher salary growth to 2.0 percent $3,760,823 Reducing healthcare cost growth $897,818

68

Right-Size Staffing

69

Administrative, Attendance & Health Expenditures

• DPS spends 8 percent of its budget on administrative expenses. The median of the

comparison group is 6 percent.

• Administration, Attendance, and Health includes:

– Administration: the Superintendent’s Office, Board Services, Chief Operations Office, Business Engagement Office, HR, and Finance. – Attendance: Truancy Office and Student Intervention Services. – Health: Nurses, Physical Therapists, and Psychologists.

• This equates to $933 per pupil, with DPS ranking highest among the comparison

group.

$436 $702 $754 $890 $933 $933 $0 $100 $200 $300 $400 $500 $600 $700 $800 $900 $1,000 Pittsylvania Hopewell Harrisonburg Lynchburg Roanoke City Danville

SY 2 201 018-19 Admin inistrat ation ion, A Attendan ance and H Health Expendit itures per P Pupil

The t team r m recommen mmends DPS S eval aluat uate i its staf affing ing config igur urat ation f n for these f functio ions i in

• rder

er t to e examine the po e possible rea easons for t the d e differences fr from

• m peer

peers.

70

Central Office Staffing

• DPS should explore additional areas where administrative and clerical

responsibilities may be combined.

– Management roles may need to be consolidated under other positions. – Analytical positions may be combined into a general “Data Analyst” role that can be assigned across offices. – Clerical staff may be able to be cross trained so that they can be assigned to

• ther offices or tasks as workloads fluctuate throughout the school year.
• This reorganization would require careful analysis of workloads and the ability

to consolidate roles and responsibilities for staff.

• The 2018-19 DPS budget includes 15 Central Office clerical positions. As of

October 18, there was one vacancy.

• The following initiative shows the impact of a scenario where DPS is able to

reduce its central office staff by position type.

Reduce Central Office Staff 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 Cumulative Budget Projected Projected Projected Projected Projected Impact Clerical Staff $0 $59,520 $61,400 $63,287 $65,165 $67,116 $316,488 Coordinator $0 $98,520 $101,298 $104,102 $106,919 $109,830 $520,669 Administrator $0 $133,912 $137,504 $141,141 $144,809 $148,592 $705,958 71

Instructional Expenditures

• DPS spends 72 percent of its budget on instructional

expenses, matching the comparison group median.

• Instruction includes the activities and interaction between

teachers, aides, or classroom assistants and students.

• This equates to $8,785 per pupil, with DPS ranking fourth

among the comparison group.

$6,639 $8,467 $8,785 785 $8,903 $9,751 $9,975 $0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 Pittsylvania Roanoke Danville Lynchburg Harrisonburg Hopewell

SY 2 201 018-19 I Instruct ction ion Expendit itures per P Pupil

72

Teachers & Instructional Staffing

• DPS authorized positions for 2018-19: 1,024.1 FTEs*
• 67.4 percent are teachers or paraprofessionals

– Teachers: 543.25 FTEs (Note: teacher subsets below overlap; will not total)

• 60 are Special Education
• 17 are Guidance Counselors
• 530.25 are based in schools
• 13 serve district-wide

– Content Specialists – Reading Specialists – Social Worker and Student Support – Special Education – Paraprofessionals: 147 FTEs

• 84 are Special Education

*Data includes Instructional staff at Grove Park and Northside Preschools and WW Moore Detention Center

73

Teachers & Instructional Support Staff

• Virginia’s K-3 Primary Class

Size Reduction program class size requirements and schoolwide teacher-to-student ratios:

– Forest Hills: 23 and 1-18 – Gibson: 19 and 1-14 – Johnson: 19 and 1-14 – Park Avenue: 20 and 1-15 – Schoolfield: 19 and 1-14 – Woodberry Hills: 19 and 1-14 In FY2018, DPS received approximately $2.2 million from the State to participate in the K-3 Primary Class Size Reduction program.

• Current Average Class Size

for 2018-19 for DPS (excluding classes of 10 students or less):

– Kindergarten: 14.6 students

– Grade 1: 16.6 students – Grade 2: 15.3 students – Grade 3: 14.1 students – Grade 4: 21.0 students – Grade 5: 21.9 students – Grade 6: 19.3 students – Grade 7: 21.1 students – Grade 8: 20.0 students

74

Teachers & Instructional Support Staff, cont’d.

• It is important to recognize the relationship between small

class size and student achievement:

– Smaller class size in grades K-3 can increase student engagement and boost achievement. – VA K-3 Primary Class Size Reduction program provides participating divisions with funding to maintain small class size in early grades. – Minority and low-income students show greater gains when placed in small classes in the primary grades. – Reducing class size will have little effect without well-qualified teachers.

• However, given the need to address its significant budget gap,

DPS must consider all options, including minimal increases to class size, particularly in grades 4-8.

Source: Project STAR (1985-1989); Jeremy Finn, Gina Pannozzo, and Charles Achilles (2003) 75

Teachers & Instructional Support Staff, cont’d.

• For Grades K-3, based on K-3 Primary Class Size Reduction

program standards, DPS could reduce the number of classes without shifting current enrollment patterns by: – 3 classes

• For Grades 4-8, DPS could reduce the number of classes

without shifting current enrollment patterns by:

– Option 1: Class size of up to 25 students: 13 classes – Option 2: Class size of up to 23 students: 5 classes – Option 3: Class size at least equal to current averages: 0 classes

• This would result in a potential adjustment of teaching

positions in Kindergarten through Grade 8.

Teachers and Instructional Staff: Reduce Staff through Adjusting Class Size 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 Cumulative Budget Projected Projected Projected Projected Projected Impact VA K-3 standard and class size

• f up to 25 (grades 4-8)

$0 $1,172,941 $1,212,738 $1,252,994 $1,293,489 $1,335,519 $6,267,681 VA K-3 standard and class size

• f up to 23 (grades 4-8)

$0 $586,470 $606,369 $626,497 $646,744 $667,760 $3,133,841 VA K-3 standard and class size

• f up to average (grades 4-8)

$0 $219,926 $227,388 $234,936 $242,529 $250,410 $1,175,190 76

Operations and Maintenance

• Danville Public Schools spends 12 percent of its budget on operations and
• maintenance. The median of the comparison group is 9 percent.
• Operation and maintenance expenditures include activities related to

keeping the physical plant open, comfortable, and safe for use, and keeping the grounds, buildings, and equipment in effective working

• condition. This includes maintaining safety in buildings, on the grounds,

and in the vicinity of schools.

• This equates to $1,427 per pupil, with DPS ranking second highest among

the comparison group.

$948 $1,005 $1,190 $1,342 $1,427 427 $1,681 $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 $1,800 Pittsylvania Harrisonburg Hopewell Lynchburg Danville Roanoke City

SY 2 201 018-19 Operatio ion an and Main aintenance E Expenditures p per Pupil il

77

Operations and Maintenance, cont’d.

• Operations and maintenance includes total spending on Building Services

(custodial services and building maintenance) and equipment maintenance, grounds, and security.

• DPS costs per pupil for operations and maintenance costs are above the

median of the benchmark divisions.

• DPS costs per pupil for Building Services are significantly above the median of

benchmark school divisions. If DP DPS re redu duced d it its Buil ilding S Servic ices s spending t to t

• the m

media dian amount, t this is c cou

• uld

d ge gene nerate ne nearly $1 $1.3 mi million i in s n saving ngs o

• n an

n an an annual bas asis.

Costs per Pupil (2018-19) Operation and Maintenance Building Services Roanoke City $1,681 Hopewell $1,090 Danville $1,427 Danville $1,088 Lynchburg $1,342 Pittsylvania $882 Hopewell $1,190 Roanoke City $815 Harrisonburg $1,005 Harrisonburg $791 Pittsylvania $948 Lynchburg N/A Median (excluding DPS) $1,190 Median (excluding DPS) $849 Difference (DPS vs. median) $238 Difference (DPS vs. median) $239 DPS Rank 2 of 6 DPS Rank 2 of 5 78

Building Services Expenditures

• Danville Public Schools spends 9 percent of its budget on building

services, which is higher than the comparison group median of 7 percent.

• Building Services includes activities related to keeping the physical plant

clean and ready for daily use such as operating the heating, lighting, and ventilating systems; repairing and replacing facilities and equipment; and property insurance.

• This equates to $1,088 per pupil, with DPS ranking second highest among

the comparison group.

$791 $815 $882 $1,088 088 $1,090 $0 $200 $400 $600 $800 $1,000 $1,200 Harrisonburg Roanoke City Pittsylvania Danville Hopewell

SY 2 201 018-19 Buil ilding S Services Ex Expendit itures per P Pupil il

79

Custodial and Building Maintenance

• Building Services includes custodial services and building maintenance.
• Compared to the benchmark school divisions:

– DPS custodial staffing per building is slightly above the median of the benchmark school divisions. – DPS maintenance staffing is significantly above the median of the benchmark school divisions.

Buildings Custodians Custodians Per Building Maintenance Employees Maintenance Employees Per Building Hopewell 8 34.5 4.3 Lynchburg 35 2.9 Roanoke City 33 135.5 4.1 Danville 13.0 1.6 Danville 15 59.0 3.9 Roanoke City 24 0.9 Harrisonburg 12 42.0 3.5 Pittsylvania 17 0.8 Lynchburg 21 72.0 3.4 Hopewell 3.5 0.2 Pittsylvania 27 70.0 2.6 Harrisonburg 7 0.2 Median (excluding DPS) 3.7 Median (excluding DPS) 0.8 Difference (DPS vs. median) 0.2 Difference (DPS vs. median) 0.8 DPS Rank 3 of 6 DPS Rank 2 of 6 80

Custodial Staffing

• DPS budgeted for 63.8 FTEs in Custodial Services; as of October

2018, there were 7.3 FTE vacancies.

• DPS should consider maintaining current vacancies in Custodial

Services until a comprehensive review of its staffing and costs is completed. – Upon completion of the review, DPS should evaluate whether additional savings could be achieved through competitive contracting.

• Leaving current Custodial Service vacancies unfilled as of October

2018 would lead to some savings compared to the baseline projections.

Custodial Services: Leave Vacancies Unfilled 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 Cumulative Budget Projected Projected Projected Projected Projected Impact Annual Impact $0 $259,769 $268,003 $276,262 $284,482 $293,021 $1,381,538 81

Pupil Transportation Expenditures

• DPS spends 4 percent of its budget on pupil transportation, which is lower

than the comparison group median of 6 percent.

• Pupil transportation includes activities related to transporting students to

and from school (as provided by state and federal law) and includes trips between home and school, and trips to and from school activities.

• This equates to $433 per pupil, with DPS ranking fifth among the

comparison group.

$371 $433 $720 $765 $773 $881 $0 $100 $200 $300 $400 $500 $600 $700 $800 $900 $1,000 Hopewell Danville Harrisonburg Lynchburg Pittsylvania Roanoke City

SY 2 201 018-19 Pupil il T Transpor

• rtat

ation ion E Expendit itures p per Pupil il

82

Technology Expenditures

• DPS spends 4 percent of its budget on technology, while the comparison

group median is 3 percent.

• Technology includes activities related to any services (i.e., distance

learning) involving technology for instructional, public information, administration, or any other use.

• This equates to $440 per pupil, with DPS ranking third among the

comparison group.

$244 $409 $412 $440 $607 $616 $0 $100 $200 $300 $400 $500 $600 $700 Pittsylvania Roanoke City Lynchburg Danville Hopewell Harrisonburg

SY 2 201 018-19 T Tech chnology Ex Expenditures p per P Pupil

83

Safety and Security Expenditures

• DPS spends 1 percent of its budget on safety and security. The October 2018

position database includes 13.1 FTE (school security).

• Safety and Security activities are related to maintaining order and safety in

school buildings, on the grounds, and in the vicinity of schools at all times and includes policing for school functions, traffic control on the grounds, building alarm systems, hall monitoring services, and School Resource Officers (SROs) paid directly by DPS.

• This equates to $124 per pupil, with DPS ranking second highest among the

comparison group.

$0 $2 $36 $124 $348 $0 $50 $100 $150 $200 $250 $300 $350 $400 Pittsylvania Harrisonburg Hopewell Danville Roanoke City

SY 2 201 018-19 Saf afety an and S Secu curit ity Expendit iture p per P Pupil il

84

Reduce Turnover

• Studies have shown the negative impacts of high levels of

teacher turnover on student achievement.

• A three-year trend shows an average teacher turnover rate of

16.8 percent at DPS.

• Recent actions by the Administration and School Board are

targeted to decrease turnover rates and increase the retention

• f high quality teachers.
• By October 1 of the current school year (2018-19), DPS had

filled 97.2 percent of the budgeted teacher positions – In comparison, by October 1 of 2017-18, DPS had filled 89 percent of budgeted teacher positions.

• Total cost of substitute teachers in 2017-18 was $1,076,763.

85

Reduce Turnover, cont’d.

• Reduced staff turnover will have a notable impact of the ability of DPS to

achieve student achievement targets outlined in the strategic plan.

• The financial impact of reduced staff turnover will likely be minimal for

administrative costs and negative for total personnel costs, however. – Administrative functions such as the Human Resources do not appear to have been backfilled with temporary staff, so decreased vacancy and turnover will grow total costs. – Personnel costs would most likely rise as teachers remain with DPS for longer periods of time. – Increased costs of salaries and benefits would most likely be greater than savings from lower spending on substitute teachers and budgetary savings from high levels of staff turnover.

• However, the instructional benefits from reduced turnover will likely

exceed the financial costs of higher levels of staff retention.

86

Summary

• The Network team recommends that DPS pursue options to right-size

staffing, evaluating options including: – Reduce Central Office staffing. – Reduce instructional staff by increasing class size to the Division average. – Reduce staffing in custodial services by maintaining current vacancies.

• Savings from these initiatives could be used to reduce the projected deficit

in the baseline scenario, or to increase resources for other priorities.

• The table below summarizes the total potential savings from the initiatives

discussed in previous slides.

Potent ntial ial O Optio ions ns Cumula lative Impa mpact Central Office staff reduction $316,488 to $705,958 Instructional staff reduction $1,175,190 to $6,267,681 Leave custodial vacancies unfilled $1,381,538

87

Increasing Operational Efficiencies

88

Operational Savings

• The team has explored alternative models of service provision, and the

initiatives in this section focus on operational areas where DPS exceeded the comparison to its peers or may be able to streamline its services.

• These options are categorized into two areas:

– Shared ed s services es partnerships within DPS or with the City or other related entities to streamline operations of services provided by both

• rganizations.

– Man Manag aged competit itio ion to determine if services should be provided with DPS personnel or contractors.

• The team contacted benchmark school divisions to determine if they use a

shared services model or managed competition for transportation,

• perations and maintenance, back office administration, or health and

social services.

• The team also contacted Albemarle County because that government

shares administrative functions between the municipal government and the school division.

89

Operational Savings, cont’d.

• The following slides provide:

– A summary of shared services examples and information on those services in other divisions. – Potential options for DPS to consider in regards to shared services or managed competition. – A list of pros and cons of those models for DPS.

• These slides are intended to outline the range of options available

to DPS rather than advocating a particular approach to staffing or structuring operations.

• The Network team developed initial cost estimates for some options

to show the relative impact of these decisions. However, the team does not recommend cuts to specific offices or functions without further analysis, given the limited information available for this report.

90

Service Evaluation

• For each initiative, DPS will need to work with administrative staff

and counterparts in the City to conduct more thorough review of: – Current staff capacity and workload, and the potential savings from combining jobs; – Job descriptions and assigned roles to determine what classification of position should be used for new roles; and – Differences in pay equity or benefit levels.

• Evaluations of services should include the direct cost impacts as well

as indirect impacts to DPS or other organizations. – If the proposal generates minimal savings, the additional costs

• f oversight or administration may offset any benefit provided.

– Functions should be evaluated for core similarities that can easily be combined or scaled without significant alterations to roles or skill levels. – Ancillary effects such as creating full time positions qualifying for health care.

91

Service Evaluation, cont’d.

• Some guiding questions to use throughout this process would

include: – What meaningful measures can we use to evaluate service needs? – What processes will change, and how will we design new processes? – Will the change require investment in other areas, such as staff skills or new equipment and tools? – Who will manage the planning and implementation of the change, including communicating the changes to staff, the School Board, the City, residents, and other stakeholders?

92

Shared Services in Albemarle County

• Albema

emarle e County has several shared administrative and operational functions between the county government and the school division.

• Main areas of collaboration include finance, human resources, and some

grounds maintenance tasks at school buildings.

• Previously the County and School Division also shared legal and

information technology functions. However, the County has moved away from these arrangements because of differences in needs.

• In addition, the County has a joint capital planning process involving

stakeholders from both the county government and school division.

• Across all shared functions, employees and related costs are allocated to

either the county government or the school division.

– Service agreements outline the scope of shared services if all costs are allocated to one component and services are provided to both entities.

• County and School Division administrative offices are located in the same

building, which provides additional opportunities for efficiencies and collaboration across functions.

93

Shared Services Examples from Peers

• Hopewell City provides maintenance for the Hopewell C

City y Sc Schools

• ols

bus fleet.

• Harrisonburg City’s public transit system provides transportation for

students in Harri risonburg rg Cit City y Sc Schools

• ols.
• Lynch

chbu burg Cit City S y Scho hools s information technology departments for the city and the school division share office space.

• None of the other peer school divisions reported shared services

arrangements in the benchmark survey.

94

Shared Grounds Keeping

• Albemarle County provides some services to the School Division with

County parks staff, which supplement School Division staff.

• DPS may be able to share grounds keeping responsibilities with the City’s

Parks Maintenance Department.

• The

e team m suggests sts that at D DPS PS an and the City y eval aluate this o

• pportunity in

in t the context of ap appar arently ly limited join int s savings.

• The table below estimates the financial impact of shifting the grounds

keeping function from DPS to the City. – Initiative assumes that all six positions are shifted to the City. – Additional savings may be achieved by reducing the number of positions and sharing workload and equipment with the City’s existing staff.

Grounds Keeping Consolidation Shared Savings: Shift to City Staff 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 Cumulative Budget Projected Projected Projected Projected Projected Impact DPS Impact $0 $396,463 $413,267 $430,695 $448,721 $467,897 $2,157,043 City Impact $0 ($334,668) ($341,006) ($347,472) ($354,070) ($360,801) ($1,738,017) Total Impact $0 $61,795 $72,261 $83,223 $94,651 $107,096 $419,026 95

Shared Information Technology

• None of the benchmark school divisions reported full consolidation of

information technology with other entities:

– Albemar arle C Count nty y previously shared some functions across the County and school division, though each component has become more independent in recent years. – Lynchburg C Cit ity Sc Schools reported that the information technology departments for the City and the school division share office space.

• Shifting technology demands in the school environment limits the ability to

consolidate information technology resources across the City and DPS.

• However, t

the team am suggests tha hat D DPS PS explo plore t the o he oppo pportunity to combine e som

• me a

adm dminis istrative I IT s support rol

• les w

wit ith C Cit ity s staff.

• The following initiative assumes that the staff re-structuring allows DPS to

reduce its IT staff by one administrative support position. City staff are assumed to be able to accommodate the support functions with current staffing levels.

IT Consolidation Shared Savings: Reduce Support Staff by One Position 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 Cumulative Budget Projected Projected Projected Projected Projected Impact Annual Impact $0 $72,037 $74,205 $76,386 $78,565 $80,824 $382,018 96

Shared Human Resources and Finance

• As noted previously, Albema

emarle e County shares human resources and some finance functions with the county government and the school division. – Most human resources staff are School Division employees, while most finance staff are County government employees. – The School Division also retains some finance and budget staff to prepare the annual budget and report data to the State.

• DP

DPS s S should explo lore t the f feasib ibili lity y of sharing hum uman n reso sources an and finan ancial al m management f functions wit ith t the City. – Human resources staff, offices, contracted services, software, and

• ther operating costs could be shared across the City and DPS.

– Some financial management functions may also be able to be combined with the City, however, these opportunities may be limited.

• DPS administration should work with the City Manager and other City

stakeholders to evaluate the functions performed by these offices and determine if efficiencies could be gained from consolidation.

97

Shared Vehicle Maintenance

• As noted previously, Ho

Hopewell ll C Cit ity Pu Public lic Schools reported that the City provided maintenance for the School Division’s bus fleet.

• DPS previously used this model, however, this practice was abandoned

because of the levels of maintenance required by State regulations for school buses.

• It is unclear if DPS would be able to realize savings by sharing vehicle

maintenance functions with the City.

– DPS currently employees 2 service technicians and 2 fuel attendants. – Savings would only be generated if staffing levels can be reduced by combining workloads for efficiencies across DPS and City operations. – DPS may encounter other operational complications due to current staffing levels for bus drivers. – Staff reported that mechanics and transportation administrators sometimes drive school buses due to a lack of drivers.

• Sharing vehicle

le main aintenance w with the Cit ity would be w worth explo lorin ing if effic icie iencies f from c combin ined w worklo load ads would r result in savings and a allow DPS PS to contin inue to meet S Stat ate regulat ations.

98

Other Shared Service Options Considered

It does n not ap appear ar that at s shar aring cust ustodial l se services a and bui uilding ng mainten enance e wit ith the Cit ity would l lead ad t to mean aningful savings.

• Shared Custodial Services

– Sharing custodial services staff between the City and DPS would most likely prove to be logistically challenging and deliver limited savings. – Staff scheduling and building usage would limit the ability to share staff between the City and DPS.

• Custodial staff would need to remain on-site for the day shift.
• Shared time would most likely occur during the second or third shifts.
• Any efficiencies gained would most likely be offset by travel time between buildings and

scheduling staff to ensure cleaning is completed.

• Further complications would arise when school buildings are used for special events after

hours or over weekends.

• Building Maintenance

– Consolidation of building maintenance functions between the City and DPS would present challenges due to the operational needs of school buildings.

• General maintenance functions would continue to require a regular on-site presence, and there

would be limited opportunities for savings from combined workloads.

– Specialized maintenance functions for trades such as carpentry, electrical work, and plumbing are performed differently in the City and DPS.

• The City currently uses contracted services to provide many of these functions such as HVAC

repair, painting, and electrical maintenance.

• These services are provided by school division staff in DPS.

99

Managed Competition

• DPS maintains the right to subcontract work and to set standards of

service to be offered to citizens.

• Outsourcing decisions can be subject to a “managed competition” process

where DPS staff bids against private service providers to compete on cost. – The Government Finance Officers Association considers managed competition a best practice and recommends that governments identify and evaluate service level, cost, efficiency, effectiveness, quality, customer service, and the ability to monitor the service provider’s work. – Well-prepared internal bids in managed competition are often provide savings while services stay in house.

• A managed competition process would allow DPS to explore alternative

models without committing to a particular course of action.

• The competitive process associated with managed competition helps to

ensure that costs remain low. Research indicates that a price differential

• f less than 10 percent between government in-house costs and private

sector contract costs can help achieve cost savings.

100

Managed Competition: Custodial Services

• DPS reviewed proposals for custodial services in the past and determined

that the cost savings would not be justified given the proposed levels of service.

• DP

DPS s S should re-evalua uate th the potent ntial sa saving ngs from o

• uts

utsour urcing ng cust ustodial l services.

• Ideally this process would take place after DPS has evaluated its current

levels of service and adopted performance measures for these services.

– Some of these steps have taken place under the direction of the Director

• f Maintenance & Operations.
• To illustrate the potential impact of improved efficiencies, the table below

shows the financial impact a managed competition process.

Custodial Services: Reduce Costs by 10 Percent through Managed Competition 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 Cumulative Budget Projected Projected Projected Projected Projected Impact Annual Impact $0 $234,464 $241,895 $249,350 $256,769 $264,476 $1,246,954 101

Managed Competition: Building Maintenance

• DPS should

d evaluate e its n need eed for trades des positions to det eter ermi mine e if there is a case se for pur ursui suing ng additiona nal l sa saving ngs th through cont ntracted se services.

• In some cases, there could be important reasons to continue to use DPS

staff for trades maintenance.

– For example, DPS may require a significant amount of plumbing work during the school year, and the workload may lead to savings by providing repairs with school division staff. – In other areas, there may be a limited market for trades professionals in the Danville region and it may be more cost-effective to retain School Division staff.

• To illustrate the potential impact of improved efficiencies for building

maintenance, the table below shows the financial impact of a managed competition process.

Building Maintenance: Reduce Costs by 10 Percent through Managed Competition 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 Cumulative Budget Projected Projected Projected Projected Projected Impact Annual Impact $0 $94,569 $97,388 $100,226 $103,063 $106,003 $501,249 102

Managed Competition: Grounds Keeping

• In the 2018-19 budget, DPS shifted to using in-house personnel for

grounds keeping after contracting for the service in prior years.

• DP

DPS s S should cont ntinu nue to pur ursu sue a additiona nal sa saving ngs f for ground nds keeping ng through man anag aged competition.

• To illustrate the potential impact of improved efficiencies, the table below

shows the financial impact a managed competition process.

Grounds Keeping: Reduce Costs by 10 Percent through Managed Competition 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 Cumulative Budget Projected Projected Projected Projected Projected Impact Annual Impact $0 $39,646 $41,327 $43,070 $44,872 $46,790 $215,704 103

Managed Competition: Student Transportation

• As noted previously, Har

Harris isonburg C Cit ity Schools reported that the division receives transportation services through the city’s public transit system.

• This model is sometimes used in other urban school systems around the

nation where the local transit system has sufficient capacity for students. – In Pennsylvania, school districts in Philadelphia and Erie provide transportation for a portion of their student populations through their local transit agencies.

• DPS should

d explore e this option with t the C e City to det eter ermi mine if shifting some me bus routes t to t the D Dan anville T Tran ansit it Sys ystem would result in in sa saving ngs. – The Danville Transit System may not have enough capacity to accommodate transporting all DPS students, but perhaps the shift of students and some funding could help support the system. – Transportation for middle and high school students may be the best

• ptions for collaboration with the Danville Transit System.

– Fixed routes could be established from neighborhoods to stops within walking distance of the schools.

104

Managed Competition: Student Transp., cont’d.

• The operational changes required by this initiative would present an
• pportunity to re-align resources for both the City and DPS.

– Expanding the capacity of the Danville Transit System may be required to accommodate the ridership demands for school schedules. – Cost savings from the reduced need for yellow school bus transportation could be used to invest in the Transit System. – Drivers could be shifted from DPS to the Transit System to take on the new routes from neighborhoods to the schools.

• Even if the initiative does not lead to overall cost savings for both the City

and DPS, the transition may provide other secondary benefits.

– Expansion of the Danville Transit System’s bus routes would create a wider transportation network for city residents. – Regular use for school transportation would expand the ridership base for the Transit System. – Shifting some routs to the Danville Transit System could alleviate some of the pressure on the DPS to recruit and retain school bus drivers.

• The team does not have enough information to estimate the financial

impact of this initiative because it would depend on significant changes in current operations for both the City and DPS.

105

Summary

• The Network team recommends that DPS pursue options to reduce the

costs of its operations by exploring shared services and managed competition.

• Savings from these initiatives, which in some cases will have to be shared

with the City, could be used to reduce the projected deficit in the baseline scenario, or to increase resources for other priorities.

• The table below summarizes the total potential savings from the initiatives

discussed in previous slides.

Potent ntial ial O Optio ions ns Total Potent ntial ial Savings Shared Grounds Keeping $419,026 Shared Information Technology $382,018 Managed Competition: Custodial Services $1,246,954 Managed Competition: Building Services $501,249 Managed Competition: Grounds Keeping $215,704

106

Facilities

107

DPS School Facility Basics

• DPS has 12 total school facilities, one of which is leased (the City
• wns the Galileo building; DPS does not have a lease payment but

is responsible for building repairs).

• DPS recently reconfigured grade structures, reopening Woodrow

Wilson as a grade 4-5 school and making Johnson and Woodberry Hills elementary schools into K-3 schools, with the intention to move toward an elementary school, intermediate school, middle school, high school grade configuration model system-wide.

• Across DPS buildings, the division may be able to find better ways

to optimize academic and career programs based on current space utilization.

• As shown in the following slides, over 30 percent of the DPS’s

school buildings have at least 40 percent capacity available.

• While not all rated capacity is usable, the division’s high levels of

available space indicate opportunities that should be evaluated.

108

Facility Consolidation/Reconfiguration

• DPS

PS’s p project cted ed bud budget d def eficit a and nd p pattern o

• f decl

eclining enr enrollment requires the division

• n t

to

• examine s

school b

• l build

lding c con

• nsoli
• lidation,

changes t to zoning p patterns, a and b build lding clo losures.

• The number of school buildings drives non-personnel costs (e.g.

utilities, building maintenance, capital investment, etc.), which could be reduced through consolidation.

• School consolidation and right-sizing could also reduce the number
• f teachers, administrators, and staff in the system. Reducing the

number of school-level staff would result in significant savings over time.

• Operating savings from reductions in the number of teachers should

be dedicated to improving teacher salaries and improving teacher quality.

Note: Johnson has the Success Schools pilot program with additional funding from a partnership with Smart Beginnings Danville.

109

Facility Consolidation/Reconfiguration, cont’d.

• In reviewing options for building consolidation and right sizing, the

DPS should consider a number of factors, including but not limited to, the following: – Where decline/growth is happening in the Division. – Establishing clearer feeder patterns for DPS schools. – Potential reconfiguration of buildings or programs. – Building staffing levels and potential staffing in combined facilities. – Building capital needs. – Division’s borrowing capacity (through the City) and capital spending priorities.

110

DPS Grade Configurations and Capacity

Total S

• Sq. F

Ft Total l Classroom

• oms

Enrollm llment Capacity Cu Current Enrollm llment Excess Capacity % E Excess Capacity Cu Current Enrollm llment/ Classroom

• oms

K-5 Forest Hills 33,236 15 315 250 65 21% 16.7 Gibson 63,150 35 749 623 126 17% 17.8 Park Avenue 53,229 30 616 458 158 26% 15.3 Schoolfield 62,000 34 761 551 210 28% 16.2 K-3 Johnson 57,640 32 596 334 262 44% 10.4 Woodberry Hills 39,022 20 397 290 107 27% 14.5 4-5 Woodrow 45,092 22 325 311 14 4% 14.1 6-8 Bonner 165,000 51 866 651 215 25% 12.8 Westwood 92,000 40 859 615 244 28% 15.4 9-12 G Washington 332,450 100 2507 1201 1306 52% 12.0 Galileo 32,918 20 630 289 341 54% 14.5 K-12 12 Alternative P Program Langston Focus 103,268 35 825 55 770 93% 1.7

111

Data-Based Feeder Pattern Zoning

• DPS

PS should engag age the Cit ity of Dan anvil ille’s G GIS d div ivis ision for s support in establishing f g feede eeder patter ern z zoning. g.

• Basic data needed:

– Demographic data

• Maps showing land use and planned developments
• Demographic maps showing students by home address (by grade levels)

– Facilities data

• Total number of classrooms at each facility
• Known needs for renovations or capital improvement
• Campus acreage and amenities (playgrounds, etc.)

– Enrollment data

• Enrollment projections by grade
• A school zone map
• Division student transfer policies and trends

– Cost data

• Cost to operate each school per year (excluding teachers who will be needed

whether school is open or not)

– Program data

• Special program needs and/or wants

112

Data-based Feeder Pattern Zoning, cont’d.

• Types of feeder patterns:

– Linear – consistent by school enrollment into a single destination school. – Mixed – consistent by school enrollment into multiple destination schools. – Split – non-geographic criteria, based on school programmatic

• fferings (curriculum, etc.).
• Re-zoning can address:

– Under-enrollment or over-crowding issues. – Equity issues (enables students access to schools outside their neighborhoods). – Enrollment projections aid in long-term planning.

113

Higher Growth Census Tracts

Households with children under 3 years

• ld:

High growth tracts: Tracts 1, 4, 8, and 10.

Households with children between the ages of 3 and 4 years:

High growth tracts: Tracts 1, 8, and 9.

Households with children 5 years old:

High growth tracts: Tract 4, 8, and 10.

114

Options to Consider - Feeder Patterns

• Option 1: Establish two distinct feeder patterns

– Northeast of the Dan River – Westside – Citywide enrollment at high school

• Option 2: Establish mixed distinct feeder patterns based on:

– Geographic location/bus routes. – Equity – increase diversity and reduce the concentration of poverty in schools.

• Option 3: Establish split feeder patterns based on curriculum or

programmatic offerings. Middle schools can offer students specific curriculum and CTE pathway preparation.

– Bonner Middle offers Academically Gifted programming and CTE pathways. – Westwood Middle offers New Tech and CTE Pathways. – Expanded IB Programme to include students in grades 7-12.

115

Galileo and J.M. Langston Campuses

• DPS has to make decisions on how to utilize these

two buildings:

– Galileo:

• DPS does not own the building.
• Building has considerable maintenance needs.
• Building limits the expansion of the IB Programme.

– Langston:

• Currently underutilized.
• Houses various school division programs.
• Has substantial community history and significance.

116

Galileo Campus

• Galileo High School is housed in a building owned by the City, and though

DPS does not pay for a lease on the building, DPS is responsible for all building repairs.

• The building has significant roof issues and the parking lot is in need of

repaving and painting. The building does not have a full library, gym, or adequate auditorium space.

• The program has a current enrollment of around 300 students, including

about 10 students from other school divisions who pay tuition to attend.

• Moving Galileo (the IB Programme) to another division building may enable

DPS to grow the program to accommodate more students, add a middle school component, and potentially bring in more out-of-division students.

• In addition, on top of avoiding renovation costs on the current facility, DPS

may be able to reduce some support staff and services (for example, custodial/maintenance services) if Galileo High School is re-located to another campus.

117

Galileo - Options to Consider

• Expand and relocate the IB Programme

– DPS should implement an IB Middle Years Programme

• Middle school students have access to an IB Programme

curriculum.

• Incoming high school students are better prepared to succeed in

the IB Diploma Programme after completing the IB Middle Years Programme.

• IB Middle Years Programme attracts or retains (high-performing)

middle school students.

118

Options to Consider – Galileo cont’d.

• Option 1: Relocate Galileo IB School (7-12) to the J.M. Langston campus.

– Renovations to the Langston campus could be completed in phases. – Galileo IB 7-12 maintains its status as autonomous school with citywide enrollment.

• Option 2: Relocate Galileo High School to the George Washington High

School campus.

– George Washington has substantial excess capacity for students. – All high school students (except alternative program students) would be located at one facility. – Galileo would not maintain its status as autonomous high school but would become a program within the high school.

• Option 3: Relocate Galileo IB School (7-12) to the Bonner or Westwood

Middle School campus.

– Bonner has excess space that could be renovated for Galileo programs. Some Bonner middle school students can be shifted to Westwood, which is located next door, to accommodate enrollment of Galileo students. – The Westwood campus has excess capacity for students but less space to renovate for expanded IB Programme program needs. – Galileo IB 7-12 maintains its status as autonomous school with citywide enrollment.

119

Langston Campus

• The J. M. Langston campus includes six buildings and is currently

home to DPS’s alternative education program, the Parent Resource Center, Adult Education, and extended day after-school programs, including a program for students with IEPs.

• The campus also has to a small history museum documenting the

School’s history; the school has significant community value.

• The gym building is used for George Washington High School JV

athletics, and Galileo students use it for track. The City also rents the gym space for youth activities and tournaments.

• The building is in need of significant repair, in particular the ceilings,
• utdoor walkways, cafeteria space, locker rooms, and security
• systems. In addition, the campus is not ADA compliant. The current

capital program targets $19 million for J.M. Langston capital spending.

120

Langston Campus, cont’d.

• According to the August 31, 2018 enrollment snapshot, Danville

Alternative programs at Langston enrolled 47 students. According to DPS staff, the program typically averages an enrollment of 120 students

• annually. The program includes elementary, middle and high school

students.

• DPS reported that students are typically placed in the program for nine

weeks and then evaluated to determine whether or not they are ready to return to their school; many students remain in the program for an entire school year. Based on data provided in September of 2018, the average expected length of stay in the program for students enrolled is 128 days.

• The alternative program now includes younger students and there is no

appropriate playground space for those students.

• Danville Alternative programs at Langston currently employ:

– Instructional: K-5 teachers (2), middle school teacher, high school math, PE, science, social studies, and English teachers, a Special Education teacher; an instructional aide. – Parent Resource Officer and Guidance Counselor. – Two custodians.

121

Langston Campus, cont’d.

• Adult Education Program

– In Virginia, there are 22 regional adult education programs. DPS serves Region 12, which includes Franklin, Henry, Patrick and Pittsylvania Counties and Martinsville City. – The DPS Adult Education program enrollment was reported at 12 students (August 31, 2018 snap shot); during a school year, the program is expected to serve about 266 students, according to DPS.

• Title I Family Resource Center

– Educational resources are available to Title I families and their children. – Families can use the Center’s internet-equipped computers. – Center staff provide assistance and referrals to community agencies. – Offers the Title I Family Learning Program where parents receive GED prep, basic academic, or computer/keyboard skills instruction.

• Extended day after-school programs and a program for students with IEPs.

122

Langston – Options to Consider

Relocate current programs.

• The Alternative Education Program:

– DPS has a plan for the future of the Alternative program.

• The Adult Education program:

– The George Washington High School campus has classroom capacity to accommodate the Adult Education program.

• The Adult Education program could take advantage of CTE classrooms

and instructors.

• The Coordinator of CTE and Coordinator of Adult Education is the same

person. – DPS should explore options to partner with Danville Community College and

• ther community-based organizations to implement the Adult Education

program.

• The Parent Resource Center could be housed in an elementary or middle school.
• Extended Day programs could be housed elsewhere.

123

Langston – Options to Consider, cont’d.

Option 1: Relocate an expanded IB Programme to the Langston campus.

– Close the Galileo campus and offer a 7-12 IB Programme to students in the Langston Building.

• Relocate the alternative education and adult education programs.

– Langston has capacity and renovations to the campus could be completed in phases. – Students continue to access CTE classes at the George Washington campus. – Galileo IB 7-12 maintains its status as autonomous school with citywide enrollment. – The IB Middle Years Programme and IB Diploma Programme retain and attract students to DPS.

• DPS reports that 10 out-of-division students are currently enrolled at

Galileo High School.

124

Langston – Options to Consider, cont’d.

• Option 2: Establish a STEM Academy at Langston.

– Emphasizes the proximity to SOVAH Health – Danville Regional Health Center. – DPS to provide a focused STEM curriculum at Langston campus, serving grades 7-12.

• Shift CTE Health Careers Academy from George Washington to

Langston.

– Langston STEM Academy could serve as a feeder for the Piedmont Governor’s School located on the Danville Community College campus.

• May attract Pittsylvania County students who are

interested in STEM and/or seek to enroll at the Governor’s School in 11th and 12th grades. – Co-locate Galileo IB School on the Langston campus with the STEM Academy.

125

Langston - Options to Consider, cont’d.

• Option 3: Utilize space to implement a community schools strategy that provides

integrated services for children and families. – Schools represent an excellent location or conduit for services because of their regular contact with children and families. Research indicates that most successful collaborative services are located in or near school buildings. – Consider using school space after class hours or utilizing excess space for service delivery. – Develop strategic partnerships to align school and community resources - combining academic programs with support for family and youth development, health, and social services. Potential city/county services include:

• Adult Services.
• Energy Assistance, SNAP, and TANF satellite offices.
• Neighbors Helping Neighbors/United Way partnership.
• Parks and Recreation.
• Library.

– Lease unused or underutilized Langston space and buildings to external service providers, enabling DPS to keep the historical campus and continue to house the history museum.

• Under this arrangement, Adult Education, the Parent Resource Center, and

Extended Day programs) could remain at Langston and DPS could continue to rent the gym or other space to the City or other organizations.

126

Langston – Options to Consider, cont’d.

• Option 3, continued – National examples include:

– Union Public Schools (Oklahoma):

• Full-service medical clinics located in two schools (available to

community).

• City-County Health Department offers nutrition, health, and

wellness programs in schools.

• After-school programming offers a range of activities (through

various providers) for students and families. – Oakland Community Schools (California):

• School-based health center provides medical, dental, and mental

health services. – Hartford Community Schools (Connecticut):

• Adopted a “lead agency” model where the school partners with a

community-based organization that provides and coordinates services.

127

Langston – Options to Consider, cont’d.

• Option 4: Close and Sell the Building.

– Remove all programs and market the Langston campus for sale. – Seek to include a covenant preserving historical amenities.

• Current unoccupied school buildings include:

– Taylor (K-5) – was rented to Carlisle (private school) but lease ended this year. – W. Townes Lea (K-5) – returned to City. – Glenwood (K-5) – returned to City.

• When a building is vacant and the DPS does not plan to utilize the

facility, the building is returned to the City. If the building is sold, 50 percent of the proceeds of the sale will be returned to DPS for capital spending.

Facilities: Impact of Langston Closure 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 Cumulative Budget Projected Projected Projected Projected Projected Impact Annual Impact $0 $250,000 $255,500 $261,121 $266,866 $272,737 $1,306,223 128

Consider a Regional CTE Academy

• DPS, Pittsylvania County Public Schools, and Danville Community

College offer a four-year Precision Machining Pathway.

• In 2017, the Virginia General Assembly approved $100,000 to

identify CTE needs in western Virginia. The study recommended a regional CTE academy to provide advanced levels of training. – Pathways are based on regional workforce needs. – Students gifted in CTE would qualify for enrollment (much like the Governor’s School).

• DPS

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Expand C CTE E offer erings t to incl nclude I e IT/Cyber bersec ecurity, A Avi viation Mechani nics, a and T Trans nsportation L n Logistics academies.

129

Capital Planning

130

Capital Planning

• DPS has a substantial planned capital investment, and the City also has

unmet capital needs. However, no additional capital funds are anticipated in the City Plan.

• Recurring DPS capital maintenance costs need a stable funding source.
• New debt service costs to support DPS capital investment will have to be

integrated with the overall level of annual City support for the School Division, and in many cases may need voter approval.

• The disposition of buildings currently operated by the DPS affects both

governments:

– Proceeds from buildings relinquished by the DPS and later sold have traditionally been divided equally between the City and the School Division. – The City has potential uses for the facility occupied by Galileo if that program were to move elsewhere. – There could be alternative uses for other current school buildings.

• Giv

iven t the in interrelat ationship between the City an and DPS PS on cap apital, t the t team recommends that at the t two entities coll llaborate on c cap apit ital al plan lanning, budgetin ing and long-ter erm fundi ding, g, e even en if gaming g funds ds b become e available. e.

131

Capital Planning, cont’d.

• As

s par art o

• f

f this jo his join int p plan anning e effort, D DPS sho should ha have a a mult lti-ye year capi pital pl plan t that a addr ddresses a all of it its s infra rastru tructu ture re a and c capita tal maint ntena nanc nce need needs, a and nd t takes int nto a acco ccoun unt t the e bui building o

• ptions

and nd f feed eeder er p patter erns d descr cribed bed a abo bove. e.

• Projects should be prioritized based on agreed upon criteria

including: – Teacher and student health and safety. – Basic building systems (roof/envelope, HVAC, etc.).

• Avoidance of operational costs.
• Potential for operational savings.

– Availability of external funding (e.g. grants, gaming revenue).

• Investments in renewal, replacement and consolidation should be

aligned with efforts to create innovative learning spaces.

• DPS should also monitor local/regional planning bodies to stay up

to date on any development that could have an impact on school capacity or feeder patterns.

132

Capital Planning, cont’d.

• DPS’s 2017 Capital Plan identified four buildings with significant

capital improvement needs, totaling $119 million: – Johnson - $19 million – Woodberry Hills - $15 million – Langston - $19 million – George Washington High School - $66 million

• The annual debt service for borrowing of $119 million would exceed

the level of additional funding the City can provide, even if no new funds were used to fill the projected DPS budget shortfall.

• As DPS considers which buildings to maintain, renovate, or close, it

is important to consider the scale of capital need relative to building(s) utilization.

• DPS

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133

Enrollment Preservation Strategies

134

Enrollment Preservation

• DPS enrollment is tied to the demographics and economy of

the City.

• DPS has a critical role to play:

– Align CTE offerings to meet the needs of the community and potential businesses. – Expand access to engaging, innovative, and challenging curriculum to retain and attract students into the division. – Focus on student engagement and support to proactively reduce dropout rates.

• Focus on enrollment because:

– It’s the right thing for kids. – State funding is distributed with an enrollment-based funding formula.

135

Reduce Dropout Rates

• DPS has a proportionately high number of dropouts (grades 7-12).

– Danville enrollment makes up 0.46 percent of the State but accounts for 1.2 percent of the State’s dropouts. – In 2016-17, DPS reported 97 students dropped out.

• Black males: 45%; Black females: 33%; White Males: 12%
• 2016-17 Dropouts by Grade Level:

– 9th graders: 18 – 10th graders: 38 – 11th graders: 28 – 12th graders: 13

• Fiscal Impact of Reducing Dropout Rates

– In the State’s 2018-20 Biennial Budget, every change of 25 students in the ADM calculation results in a change of $460,000 in revenues for the 2018-19 school year. Reducing the number of students who drop out can increase the amount of revenues received from the State.

Source: VA Department of Education

136

Student Engagement and Support

In 2015, DPS reorganized to Create the Office of School Safety, Community Engagement, and Student Discipline to promote a safe and supportive environment for learning.

• Provides a division-wide safety net for students at risk of disengaging from and

dropping out of school.

• Connects students and families to the services they need to be successful in

school, serving as the link between schools, families, and social service agencies.

• Provides:

– Agency referrals. – Home visits. – Positive Behavioral Interventions and Supports (PBIS). – School Security Officers and School Resource Officers. – Rehabilitation Plans (includes counseling, community service, and academic supports). – Truancy Response teams. – Court interventions. – Church-based and after-school tutoring. When the needs of students go unaddressed, the impact extends beyond the schools to the City and community.

137

Truancy Reduction

• Students who have high rates of absenteeism are more likely to drop out.
• Attendance Rates/Absenteeism

– In 2017-18, 388 DPS students (5 percent) missed 36 or more instructional days.

• In 2017-18, a disproportionate number of students missing 20 percent or

more days of school were poor: – 68 percent (259) of chronically absent students were economically disadvantaged; 42 percent of all DPS students were economic disadvantaged.

Source: VA Department of Education

Percent of

• f Days

s Abse sent 201 014-15 15 201 015-16 16 201 016-17 17 2017 17-18 18 0-10% 5,638 5,524 5,082 4,957 10-15% 502 546 603 569 15-20% 244 231 296 280 20+% 359 365 378 388

138

Truancy Reduction, cont’d.

• DPS works with parents to reduce truancy.

– After 5th unexcused absence, DPS develops an Attendance Plan with parent(s). – After 7th unexcused absence, Truancy Response team meets with parent(s) and child. – After 8th unexcused absence, DPS hosts Pre-Court Filing meeting. – After 9th unexcused absence, DPS may file complaint with Juvenile and Domestic Courts.

• Number of students with whom a conference was held:

– 2014-15: 310 – 2015-16: 446 – 2016-17: 470

139

Truancy Reduction, cont’d.

• Strategies to reduce truancy:

– Continue to use a tiered intervention structure (prevention, early intervention, and intensive intervention focused on recovery). – Create a strong attendance data system that serves as an “early warning indicator.” – Address barriers such as transportation and safety. – Allocate revenues from fines and court fees to strategies that improve student attendance.

• Truancy reduction is worth the costs and effort:

– Increased academic performance. – Reduced dropout rates. – Increase ADM (impacts enrollment/funding). – Criminalization of truancy can place additional financial stress

• n families and the City’s Justice System.
• Fines and court fees.
• Costs of enforcement burden the justice system.

140

Suspension Rate Reduction

• 2016-17 DPS disciplinary actions include:

– Out-of-school suspension (995 students in 2016-17). – No students served in-school suspensions. – No students were expelled.

• 18 percent of all enrolled students were suspended in 2016-17.

– Down from 19.5 percent in 2015-16.

• Disproportionate percentage of African American students are

suspended.

– 87.7 percent of suspended students were African American; 68 percent

• f DPS students were African American.

“We cannot continue to use access to education as a punishment for student conduct and expect positive results.”

• Suspended Progress 2017, Legal Aid Justice Center

Source: VA Department of Education

141

Suspension Rate Reduction, cont’d.

• In order to reduce suspensions, DPS has initiated the following:

– Alternative educational placement:

• Transfer to another school in division.
• Home-based instruction.
• Twilight Program – a computer-based program for student with an

Individual Education Plan (IEP).

• Extended Day Program – a computer-based program for regular

education students.

• Assist Program – Medicaid-based treatment through a local

provider.

– Behavior Intervention Teams. – Alternative to Suspension (ATS) Initiative. – Short-term and Long-term Suspensions Appeals Process.

142

Revenue Alternatives

143

State Aid

• Changes in enrollment and resulting State funding levels have had and will

have a significant impact on the trajectory of DPS’s finances.

• State educational associations have documented the slow recovery from

state aid cuts during the Great Recession, and the proportionately smaller increases for education as Virginia’s revenues have grown in recent years.

• DPS and the City should collaborate to seek enhanced state funding:

– Overall state subsidies could be increased; $100 million in additional state aid would generate approximately $600,000 for DPS at current enrollment levels. – Targeted subsidies that help DPS could be included in future State biennial budgets, such as the Small School Division Enrollment Loss subsidy included for 2018-19. – Legislators and school leaders in other rural and small urban areas could be approached to build a coalition.

• It is unlikely that additional subsidies alone will eliminate the projected

budget gap for DPS; however, additional state revenue could be part of the effort to stabilize DPS’s finances and support programs. To the extent that balancing the budget depends on more state aid, contingency plans should be developed.

144

Local Contributions Per Pupil

• The City of Danville’s contribution to DPS accounts for 34.4 percent
• f its 2018-19 revenue.
• Danville’s contribution to DPS is equal to $4,171 per pupil, ranking

fourth among the comparison group. The media of the group is $5,537.

• Without the $2 million carryforward, Danville’s contribution per

pupil would be $3,802 in 2018-19.

$2,164 $3,802 802 $4,171 171 $5,306 $5,769 $6,323 $0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 Pittsylvania Danville (No Carryforward) Danville Lynchburg Harrisonburg Roanoke City

SY 2 201 018-19 I Instruct ction ion E Expendit iture p per Pupil

145

Local Contributions, cont’d.

• The City of Danville would need to contribute the following increased

amounts in order to match the per pupil funding of the peers it is currently trailing.

Contribution N Nece cessary t y to Match ch P Per P Pupi pil Amounts Total C al Contribu bution Difference ce f from C Current Danville lle C Contribu bution Roa

• anoke C

Cit ity $34,268,963 $11,662,393 Harrisonburg $31,266,660 $8,660,090 Lynch chburg $28,756,299 $6,149,729

146

Local Contribution Options

• To illustrate potential options for increases in Danville’s

contribution to DPS, the following scenarios were prepared:

– Use a for

• rmula

la, s simila lar t to

• Roa
• anok
• ke C

City, that would contribute 40 percent of general property and other local taxes to schools. – Cont ntribu bute $5, e $5,00 000 p per pup upil, moving closer to the comparison group median of $5,437. – Ma Match ch L Lync nchbu burg’s p per er pup upil co cont ntribu bution a amoun unt, as Danville’s next highest peer.

• The scenario in this Plan assumes phased in growth in the

City contribution of $2.0 million each year for three years, beginning in 2019-20.

City C Contribu bution Change nges Total al Contr tributi tion Increase fro rom Current D Danville lle Contr tributi tion Increase fro rom Danville lle C Contribu bution wit ith No No Carryforward Contribute 40% of Property and Other Local Taxes $23,387,480 $780,910 $2,780,910 Contribute $5,000 per student $27,100,000 $4,493,430 $6,493,430 Match Lynchburg's Per Pupil Contributions $28,756,299 $6,149,729 $8,149,729

147

Other Options to Consider

• City could identify a portion of the property tax or other levies dedicated to

DPS for Instruction, Infrastructure, and Innovation (I3) – Funding for the Schools I3 Fund would:

• Fund school consolidations, freeing up savings for teacher quality,

reducing concentration of poverty and improving student performance.

• Support funding for capital maintenance and building repair,

eliminating deferred maintenance.

• Absorb the current cost of debt service funded through the City’s

General Fund.

• Target tobacco tax funds to provide some of this support.
• Other options include:

– Combining a smaller property tax increase with an increase in the sales tax or imposition of a wheel tax. – Seeking state legislation for alternative tax options. – Voluntary negotiation of Payments in Lieu of Taxes (PILOTs) with major tax exempt property owners.

148

City-DPS Education Compact

• Although DPS and the City of Danville currently have a collaborative

relationship, some cities and school systems have a formal education compact.

• A DPS-City Education Compact would help address the priorities

described above, and: – Institutionalize City-Schools collaboration. – Establish a commitment to develop and execute a shared funding strategy and capital budget to ensure resources are available to meet the needs of the City’s children, families, and schools. – Establish a shared framework for establishing goals, metrics for success and accountability that includes DPS and City departments.

149

City-DPS Education Compact, cont’d.

• Roles: to provide Guidance, Vision, Accountability, and Coordination.
• Responsibilities:

– Develop and refine a Common Vision for change, including goals. – Use data to inform strategy development and track progress using agreed upon indicators (metrics within the State Accountability model). – Meet regularly to review progress, plan, and coordinate efforts.

• Compact Committee to assist in the implementation of the
• Compact. Membership may include:

– DPS leadership and representatives. – City leadership and Council representatives. – Representatives from higher education Institutions. – Representatives from the business community. – Philanthropic partners. – Other community stakeholders.

150

Education Compact Examples

• City of Richmond and Richmond City Schools

– Established a shared framework for establishing goals, metrics for success and accountability, and a shared strategy for identifying and meeting the needs of the school system’s students and families:

• Shared commitments to organizational collaboration.
• Shared commitment to transformational improvement in

academic progress and improving the lives of children

• utside the classroom.
• Shared commitment to developing a resource strategy

allowing the City and School Division to achieve shared goals. – Set academic and student support goals. – Institutionalized a shared funding strategy.

151

Education Compact Examples, cont’d.

• City of Waco, TX and Waco Independent School District

– Prosper Waco, a collective impact model, provides vision and coordinates resources of partners (city, school

• district. higher education institutions, nonprofit
• rganizations, and service providers).

– Prosper Waco goals:

• Increase the percentage of Kindergarten-ready students.
• Increase the percentage of third graders reading above or at

grade level.

• Increase the percentage of students who complete a

workforce certificate or college degree.

152

Education Compact Examples, cont’d.

• Miami-Dade County Public Schools and City of Miami Beach:

– District and City collaborate to develop a supplemental incentive program for teacher recruitment/retention. – City will work with the District to foster local business support for education, including internship initiatives. – The City and District will collaborate to implement an IB program; the City will provide funding for the program and support funding from partner

• rganizations for annual fees, teacher training, Diploma Programme

coordinator, and student exam fees.

• The Philadelphia Great Schools Compact

– Support innovation and diversity. – Provide specific, clear feedback and support to chronically poor performing schools. – Coordinate planning for growth. – Support the District to right-size its facility inventory. – Ensure student funding is driven by student needs rather than the characteristic of schools. – Treat recruitment, development, and retention of talent as a citywide priority, collaborating on professional development and career-development pathways.

153

Five-Year Financial Plan Scenario

154

Five-Year Financial Plan Scenario

• The Network team has put together one potential path to financial stability with

the following elements. The City and DPS can adjust these options and add additional initiatives to reach a solution that works for Danville.

• PFM’s scenario for discussion includes:

– A formal compact between the City and DPS encompassing the City’s

• ngoing financial commitment and DPS’ performance goals and metrics.

– Slow and then halt the decline in enrollment.

• The decline, around 100 students per year recently, must be limited to

50 students in 2019-20 and eliminated completely thereafter. – Limiting future salary growth to 2.0 percent for all employees. – Adjust class sizes to the 23 student option. – Move the magnet program to Langston and close Galileo so that the Division maintains fewer buildings. – Provide $500,000 per year in targeted spending to improve attendance, improve participation in and expand magnet and career offerings. – Phase in additional City contributions to DPS of $2.0 million per year in 2019-20, 2020-21 and 2021-22.

155

Five-Year Financial Plan Scenario, cont’d.

• The results of the changes listed on the previous

slide are shown below:

201 018-19 19 201 019-20 20 2020 020-21 21 2021 21-22 22 2022 022-23 23 2023 023-24 24 Budget get Pr Proje jected Pr Proje jected Pr Proje jected Pr Proje jected Pr Proje jected Total Revenues $65,774,613 $66,012,762 $68,358,475 $70,953,272 $72,101,399 $72,722,454 Total Expenditures $65,774,613 $67,366,195 $69,118,754 $70,878,267 $72,646,009 $74,466,943 Surp rplus / / (Defi ficit) $0 $0 ($1,35 353, 3,43 433) 3) ($760, 60,279 79) $75, 75,004 04 ($544, 44,609) 09) ($1,744, 44,489) 89)

$0.0 ($1.4) ($0.8) $0.1 ($0.5) ($1.7) ($3.0) ($2.0) ($1.0) $0.0 $1.0 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 Budget Projected Projected Projected Projected Projected

Millions

5-Year Plan Budget Projections

Surplus / (Deficit)

156

Addressing the Remaining Gap

• As shown on the previous page, the proposed scenario only

balances the budget in one year, and generates a cumulative DPS budget gap of $4.3 million through 2023-24. – After DPS reaches balance in 2021-22, the structural gap reappears and increases.

• To balance the annual budgets and fill the structural gap, DPS

will likely have to take some of the other actions identified in this plan: – Administrative staff reductions. – Review areas where spending is higher than peers. – Shared services and managed competition. – Move Galileo to Bonner rather than Langston; close Langston. – Adopt the higher 4-8 class size option.

157

Addressing the Remaining Gap, cont’d.

• Increasing enrollment and significantly increasing state aid

are also options, and should be pursued, but cannot be relied

• n in building a sustainable financial plan.

– The Plan already includes an end to enrollment decline after 2019-20, and historical growth levels in state aid.

• Rather, to the extent that DPS is successful in increasing

revenue beyond the assumptions here, there can be less reliance on expenditure reductions.

• Given the Division’s capital needs, some funding will also be

needed for capital.

158

Five-Year Financial Plan Additional Steps

• Halting the enrollment decline, improving programing, and increasing City

funding will turn around a negative budget trend. However, long-term financial stability will require additional actions on the part of the DPS and the City, as described on the previous pages.

• The Network team recommends that as part of their Educational Compact,

DPS and the City also agree to additional actions that may include but are not limited to: – Focusing limited capital funds on ensuring that remaining DPS buildings have basic integrity, including secure roofs and reliable HVAC.

• Borrowing without voter approval is capped at $6.0 million per year.
• The City and the DPS should collaborate on a capital needs

analysis and resulting prioritized capital plan. – Adjust the DPS budget to acknowledge an annual vacancy rate of 2.0 percent, and budget the funds needed to fill any substitute teacher positions as a result. – Review the numerous other spending control and revenue initiatives included in this plan to see if any may provide savings or new funds to direct to the remaining fiscal gap or any desired new programs.

159

Next Steps

160

What’s Next?

• The School Board and Superintendent should consider the scenario

included in this Plan, an the various alternatives that might also allow the DPS to improve performance and become financially stable.

• The Board and Superintendent should approach City Council and the City

Manager for an update on the status of the City Plan and to engage in dialogue about funding and collaboration including: – The potential for an Education Compact. – Joint efforts to halt enrollment decline. – Investing in innovative programming. – The City’s ability to support phased increases in financial support. – Opportunities for shared services, competitive contracting, and joint capital planning (including building utilization). – A strategy to increase State aid to education.

• Using the budget modeling tool, staff can model the impacts of the chosen

initiatives to ensure that the DPS and the City have the resources necessary to sustainably fund school division priorities.

161