Process underway to inform, engage staff
Volume 6, Issue 5: Thursday, Sept. 25, 2014
Managing public money is a matter of public trust, and a charge district leaders take very seriously. Our approach to ensuring a stable financial environment is both conservative and innovative, creative and strategic.
“We’ve invested wisely in our core academic work and innovative programs to build a reputation in Bloomington and the metro area,” said Superintendent Les Fujitake. “Unfortunately, what we have is not sustainable. In spite of our prudent financial stewardship, there are forces and factors that we can’t control.”
So, district leaders have developed a process to an create awareness and engage staff and community in a Right Sizing the Budget (RSB) financial planning process to bring district spending more in line with revenues.
Unlike the Budgeting for Success process in 2008-09, which sought suggestions for budget reductions and revenue enhancements on a large scale, the RSB process will utilize teams of staff to discuss and share insights into solutions for aligning spending with revenues.
Parents and community residents will also have opportunities to share comments, insights and feedback on options, which will include budget adjustments. A Right Sizing the Budget website is currently under development. It will include information about the RSB process, presentations, Frequently Asked Questions (and responses), and feedback opportunities. Frequent communication, like this column, will be shared in the INK Spot for all employees, School Pages for all residents, and other communication channels.
We welcome your feedback.
Factors leading to increased spending
Volume 6, Issue 4: Thursday, Sept. 18, 2014
Last week we provided information on two of the three factors –- state aid and declining enrollment –- that are contributing to the district’s need to Right Size the Budget. The third factor is an increase in district spending to sustain investments made to enhance and improve student achievement.
We have been innovative in the classroom with programs that have differentiated us from other districts –- early childhood learning, gifted and talented programs, hybrid learning to include more technology, intensive reading and math learning supports, small class sizes. And, we were innovative in how we developed our budget, so operations like transportation, food service and some fee-based early learning programs operated as self-sufficient. Managing programs like this helps the bottom line -- enough funds to sustain our core academic work.
Since 90 percent of the district’s General Fund spending is on salaries and benefits, it is understood that a majority of the increase in spending targeted staff. It was and still is a wise investment, largely because our stakeholders –- parents, businesses and community residents –- expect the best and brightest staff to teach, lead, guide and support our most precious resource, Bloomington’s children.
Unfortunately, what we have is not sustainable. We simply cannot continue to spend more money than we are taking in from a variety of revenue sources.
We have taken steps over the last two years to “right size the budget” by bringing expenses more in line with revenue. Planned spend-downs of the district’s fund balance by $2.5 million in 2013-14, and another $8.5 million this year have left the district’s “savings account” with a balance of $7.7 million.
Administration will recommend for Board approval a combination of deficit spending – another fund balance spend down – and budget reductions for the 2015-16 school year. The amount to be reduced depends on a number of factors that will play out over the next several months, but early estimates are in the range of $4 million to $6 million.
Next Week: Right Sizing the Budget Process, and how your involvement will help to shape the future.
Factors leading to declining enrollment
Volume 6, Issue 3: Thursday, Sept. 11, 2014
Last week we introduced the three factors – state aid, declining enrollment and additional district spending – that are contributing to the district’s need to Right Size the Budget.
As noted, for the past seven years the average increase to the district’s General Education allowance – a major portion of state revenues – has been approximately one percent annually, which does not cover inflationary increases or additional spending.
Student enrollment is a primary factor in determining how much revenue the district receives to fund its operations. The graph (at right) is BPS’ enrollment over the last 17 years, indicating a declining student enrollment trend line. The red line is the actual enrollment (based on Oct. 1 counts), while the blue line is a projection for 2014-15. For the first time in school district history, the enrollment is expected to dip below 10,000 students.
Based on U.S. Census data, the number of Bloomington children 18 years and younger is approximately 16,700. The number of birth to five-year-olds is 5,000, leaving a school-age population of 11,700 students.
The following pie chart reflects where the resident school-age children attend school:
Student enrollment is a primary factor in determining how much revenue the district receives to fund its operations. The graph (at right) is BPS’ enrollment over the last 17 years, indicating a declining student enrollment trend line. The red line is the actual enrollment (based on Oct. 1 counts), while the blue line is a projection for 2014-15. For the first time in school district history, the enrollment is expected to dip below 10,000 students.
Source: Minnesota Department of Education (MDE)
The following pie chart reflects where the resident school-age children attend school:
Please note approximately 600 non-resident students are enrolled in BPS, which accounts for the district’s enrollment of 10,200 students mid-year in 2013-14.
Declining enrollment, state funding contribute to structural deficit
Bloomington Public Schools has long been considered one of the most financially stable school systems in the state. At a time when other districts were making significant budget reductions, the district maintained and grew its fund balance.
A fund balance is akin to a personal savings account, and is intended to “bridge” the gap when expenses are greater than revenue. The latter is what is known as a structural deficit. Administration was purposeful in building a fund balance to ensure it could sustain investments made to enhance and improve student learning -- staff and programing.
Student achievement thrives in a stable financial environment.
So, why the structural deficit? A simple answer to a complex question – state aid increases, declining enrollment and additional district spending.
For the past seven years, the average increase to the district’s General Education allowance – a major portion of state revenues – has been approximately one percent annually, which does not cover inflationary increases or additional spending.
The following chart reflects the annual percentage increase to the district’s General Education allowance.
While most metro area school districts were making significant budget cuts and layoffs over the past several years, Bloomington Public Schools was maintaining a strong financial picture. In fact, it was able to maintain and grow its fund balance thanks to conservative financial management practices and a stable student population.
While the district has made minor budget adjustments from time to time, it has managed its resources to ensure a fiscal balance for seven consecutive years. In other words, it wasn’t spending more than it was taking in from state and federal funding.
This year, the school board approved administration’s recommendation to spend down the district’s fund balance by $8.7 million. The reason: continued declining enrollment and the impact of the state budget deficits over the past decade that have caused the basic funding formula to lag behind inflation.
These factors are causing the district to “right size the budget.” District administration anticipates employing a combination of deficit spending (further fund balance spend down) and budget adjustments for the 2015-16 school year. The amount to be cut depends on how many students are enrolled this year, but early estimates are in the range of $4 million to $6 million.
A “Right Sizing the Budget” process of identifying reductions, revenue enhancements or other adjustments will include staff and community input.
We will feature stories each week in the INK Spot to help staff understand the issues affecting the district’s financial condition.
Volume 6, Issue 2: Thursday, Sept. 4, 2014
Bloomington Public Schools has long been considered one of the most financially stable school systems in the state. At a time when other districts were making significant budget reductions, the district maintained and grew its fund balance.
A fund balance is akin to a personal savings account, and is intended to “bridge” the gap when expenses are greater than revenue. The latter is what is known as a structural deficit. Administration was purposeful in building a fund balance to ensure it could sustain investments made to enhance and improve student learning -- staff and programing.
Student achievement thrives in a stable financial environment.
So, why the structural deficit? A simple answer to a complex question – state aid increases, declining enrollment and additional district spending.
For the past seven years, the average increase to the district’s General Education allowance – a major portion of state revenues – has been approximately one percent annually, which does not cover inflationary increases or additional spending.
The following chart reflects the annual percentage increase to the district’s General Education allowance.
Source: Association of Metropolitan School Districts (AMSD)
We will feature stories each week in the INK Spot to help staff understand the issues affecting the district’s financial condition.
District faces significant budget reductions after years of financial stability
Volume 6, Issue 1: Thursday, Aug. 28, 2014
While most metro area school districts were making significant budget cuts and layoffs over the past several years, Bloomington Public Schools was maintaining a strong financial picture. In fact, it was able to maintain and grow its fund balance thanks to conservative financial management practices and a stable student population.
While the district has made minor budget adjustments from time to time, it has managed its resources to ensure a fiscal balance for seven consecutive years. In other words, it wasn’t spending more than it was taking in from state and federal funding.
This year, the school board approved administration’s recommendation to spend down the district’s fund balance by $8.7 million. The reason: continued declining enrollment and the impact of the state budget deficits over the past decade that have caused the basic funding formula to lag behind inflation.
These factors are causing the district to “right size the budget.” District administration anticipates employing a combination of deficit spending (further fund balance spend down) and budget adjustments for the 2015-16 school year. The amount to be cut depends on how many students are enrolled this year, but early estimates are in the range of $4 million to $6 million.
A “Right Sizing the Budget” process of identifying reductions, revenue enhancements or other adjustments will include staff and community input.
We will feature stories each week in the INK Spot to help staff understand the issues affecting the district’s financial condition.