FY 2020-21 Recommended Budget

Based on Budget Advisory Committee and Staff Recommendations

June 15th, 2020

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Priorities and Values

Pg. 3 Date:6/15/2020

PREPARING FOR FY20-21: CRISIS PRIORITIES

The Board of Education directs the Superintendent to use the priorities to develop the strategies and guide the planning to reopen school in 2020-2021:

● Crisis Priority 1: The superintendent will address the health and safety needs of all students and employees, focusing on our most vulnerable students.

● Crisis Priority 2: The superintendent will address the social-emotional and mental health needs of all students and employees, focusing on our most vulnerable students.

● Crisis Priority 3: The superintendent will engage all students in learning and mitigate unfinished learning, focusing on our language learners, students with disabilities, students experiencing poverty, and students of color who have historically been marginalized and underserved.

Coronavirus Relief Funds (CRF) Stimulus funds can be used to support all three crisis priorities on a one-time basis and must be used by Dec, 31, 2020..

Pg. 4 Date:6/15/2020

GUIDING PRINCIPLES FOR FY20-21

We remain committed to our core values, and we have aspirations and commitments about good outcomes for next year, despite the challenges presented by COVID and an anticipated decrease in funding. The following principles guide our work in this time:

● EQUITY. In our design, planning, instruction, and resource allocation, we will prioritize our most vulnerable students so they can thrive academically, socially, and emotionally. This includes our students who have historically been marginalized and underserved including students learning English, students with disabilities, students experiencing poverty, and students of color . It also includes students who are experiencing the impacts of COVID-19 most acutely.

●

● PEOPLE FIRST. Across our family of schools, we will support the social and emotional needs, health, safety and well-being of students, employees, and families, as we navigate how to learn and work together to ensure all students thrive.

● COOPERATION. We will build unity and create connections so that we emerge as a stronger Team DPS. We strive to establish a culture and system of cooperation (as opposed to competition) among our family of schools and Team DPS. Externally, cooperation includes working with our city and state counterparts, as well as community organizations, to add capacity in the implementation of our crisis priorities.

● RESPONSIVENESS. We will be realistic about what we can take on successfully and focused on achieving our goals. This means being responsive to data and adapting to address the lived experiences of our students and staff. We will also be realistic about, and accountable to, the uncomfortable realities this crisis exposes about our systems and structures.

● STEWARDSHIP: In conversation with our Budget Advisory Committee, we will be thoughtful and strategic about our use of taxpayer dollars, as a resource provider, employer, and education provider. We will be mindful of the ways our decisions affect the community during this unstable and uncertain time. We will be good stewards of district funding in both the short and long term, as we work under constantly evolving financial scenarios and outlooks based on the federal and state response.

Pg. 5 Date:6/15/2020

THEMES AND VALUESFeedback from the Budget Advisory Committee

What we heard in the budget development process:● Equity: Keep equity at the forefront -- carefully consider impacts on most

vulnerable populations, with a particular focus on employees at the lower end of the wage scale.

● Students First: Limit impacts on students to the greatest degree possible in Academics, Personal Relationships and Physical and Mental Health.

● Cooperation: Recognize DPS’ role as one of the largest employers in the metro area and minimize layoffs in a high unemployment environment.

● Fiscal Responsibility: Balance one-time and ongoing solutions to come to a budget solution that is sustainable in the medium to long term.

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Economic Outlook

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ECONOMIC OUTLOOK

Overall Economic Update

▪ Colorado’s economy came to a standstill during the COVID-19 outbreak in March, creating a ~$900M deficit in FY19-20 revenue and a projected deficit of ~$2.4B in FY20-21 due to decreased income, sales, corporate income and use tax collections

▪ Currently the unemployment rate in the United States is 13.3%, or over 21M people

▪ The unemployment rate in Colorado is expected to rise sharply from 2019 to 2.8% in 2019 to 10.1% in 2020 ▪ While these amounts are expected to decrease in the coming months as

businesses slowly reopen, unemployment is expected to remain high as many businesses will not be able to continue as they feel the impact of cautious spending by consumers and ongoing restrictions

▪ Forecasts remain uncertain, as extended or repeated periods of reduced economic activity to control the spread of COVID-19 will cause more severe and longer lasting State revenue impacts

Pg. 8 Date:6/15/2020

ECONOMIC OUTLOOK

FY 2020-21 Budget Impacts

▪ FY20-21 School Finance Act increased the Budget Stabilization Factor by $601.1M

▪ ~$61M reduction to DPS revenue▪ Assuming FY20-21 PPR of $8,226, a decrease of 5.9% from

FY19-20

▪ Additional one-time revenue from COVID-19 Relief funding will be received in FY20-21

▪ CRF▪ ESSER▪ GEER

▪ Effects of COVID-19 on District Enrollment and At-Risk (FRL %) is variable and unknown depending on economic recovery and potential shifts in student demographics

▪ Revenue losses have created a $64.5M budget shortfall in FY21, and an ongoing shortfall of $62M annually in the future without reduced expenditures or increased revenue

Pg. 9 Date:6/15/2020

Budget Stabilization Factor & Per-Pupil Funding

$-660-$1,317

● Assuming increase to the FY21 BS Factor of $601M, bringing total BS Factor to $1.17B● BS Factor DECREASED SCHOOL FUNDING BY $657/pupil over FY20 levels, this is nearly double last years

BS Factor of $660/pupil● Flat or continued increase to BS Factor expected in future years, resulting in stagnant or decrease school funding● Since the implementation of the BS Factor, DPS has lost over $940M in funding vs. the School Finance Act

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STATE REVENUE WILL TAKE YEARS TO RECOVERLoss of future tax revenue for State of Colorado due to COVID-19

● K-12 Education Funding comprises ~33% of the entire State Budget Allocation

*Data from Colorado Office of the State Controller and Legislative Council Staff May 2020 forecast update

Pg. 11 Date:6/15/2020

▪ TABOR (1992) and Gallagher (1982) worked together over the past 30 years to reduce residential property taxes in Colorado by gradually reducing the residential assessment rate & freezing the school finance mill levy at low levels for certain school districts in Colorado

▪ Potential decrease to Residential Assessment Rate will decrease local share and increase funding pressures on the State share of School Finance Act, potentially reducing future ability to fully fund School Finance Act

- Forecasts predict Residential Assessment rate to drop to 5.2 in the future

▪ TABOR and Gallagher work together to keep residential property taxes low -- and in turn keep k-12 funding below national averages

IMPACT OF GALLAGHER AND TABORDramatic Reduction of Property Tax Support of Education Since 1982

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UPDATED BUDGET TIMELINEBudget Approval Timeline for the FY20-21

Jan

Feb

Budget Update - Board of

Education MeetingApril 16th

Adopted Budget - Board of

Education Meeting June 29

April JuneMay

Mar

Updated Legislative

Council Forecast

May 12th

Apr Ap

r

Proposed Budget - Board of Education MeetingJune 15

Implement Budget Advisory

CommitteeEarly May

State Legislative

Session Resumes

• Final School Finance Act & corresponding Total Program Funding for DPS projected to be finalized in mid-June. Public Comment period shortened to 2 days, with Proposed Budgets required by June 25th

• Final FY21 Budgets must be Adopted by June 30, 2020

• Proposed budget to be presented to Board of Education on June 15. Public comment at special Board meeting on June 25. Vote on budget adoption June 29.

• Resulting impacts to DPS budgets can be adjusted by the Adopted Budget by the end of June or during the Amended Budget process through January 31, 2021

School Finance Act &

Long Bill Approved

School Finance Act & Long Bill Introduced

May 26th

Budget Public CommentJune 25

Pg. 13 Date: 6/15/2020

FIVE YEAR FORECAST- Base Case with no action Based on School Finance Act Fiscal Note of June 6

Assumptions• Assumes an increase in the Budget Stabilization Factor of $601.1 million. This has not been approved by

the State Legislature and reflects proposals as of June 6th, 2020

• In January, we projected $1.14M in revenue for FY21. This now represents a 5.3% decrease from the January 2020 Financial State of the District and a 3.3% decrease from 2019-20 funding levels.

• This assumption includes no change to compensation agreements or additional operational efficiencies• Includes Enrollment & Free and Reduced Lunch (FRL) projections consistent with previous forecasts

• Both Enrollment & FRL are likely to be impacted but the extent to which and direction is unknown

• This assumes no additional revenue from passage of a Mill Levy

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FIVE YEAR FORECAST Based on School Finance Act Fiscal Note of June 6

Long Term Operating Gap• Only recurring expense changes reduce the long term operating gap; one time revenues and one-time

expense savings do not reduce the operating gap

• Additional revenue from Mill Levy Overrides or Budget Stabilization Factor decreases/increases in school funding could improve the long term outlook

$60M to $65M On Going

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Economic Outlook Summary

● The State economic outlook is challenging over the next few years especially given the impacts of Gallagher, the uncertain timing of recovery and the State’s use of one time fixes to solve part of the $3.3 billion revenue drop.

● DPS was on sound economic footing before the pandemic, but now has a significant structural deficit that needs to be addressed. All districts are facing a similar challenge.

● Colorado ranks in the 40s out of States in funding K-12 education, and the BS Factor next year will be over $110 million impact to DPS alone.

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DPS Budget Recommendations

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STAFF BUDGET RECOMMENDATION

The recommendation from DPS staff aims to accomplish five objectives in alignment with the recommendation by the Budget Advisory Committee:

● Streamline central supports. Maximize savings from central supports to keep impacts from directly impacting students,

● Focus on equity. In all compensation options, protect workers at the low end of the wage scale.

● Minimize layoffs at a time of high unemployment.

● Protect school budgets to keep impacts away from students to the greatest degree possible

● Build a long-term solution. To the greatest extent possible, use options that provide on-going savings.

Pg. 18 Date:6/15/202018

We heard you say...

● Focus on reductions in Central Supports while trying to avoid layoffs

Pg. 19 Date:6/15/2020

MAXIMIZE SAVINGS IN CENTRAL SUPPORTS

What we heard from the BAC. Maximizing savings in central supports to keep impacts away from students as much as possible is a priority, but should be balanced by minimizing layoffs.

● $28M ongoing reduction in central office over a 2 year period● Re-organizing support functions is $1.8M more in reductions than what was

announced previously

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MAXIMIZE SAVINGS IN CENTRAL SUPPORTS Focus on Independent Contractors

Independent Contractors ● The district cannot meet all of its obligations through internal employees alone and uses

independent contracts for some critical and legally required services.● DPS spent $52M on 3rd Party Contracts in 2018-19 (5% of total General Fund expenses)● Some of the contracts from 2018-19 have been identified as part of budget gap savings for

2020-21 (Trans (ALC), RevGen, RELAY, UVA)

75% of contract expenses across DPS are in these 8 functions

28

Pg. 21 Date:6/15/2020

From school year 2018-19 to 2020-21

DPS has reduced $28M on recurring basis from the budget over the past two years. Nearly all of this reduction ($24.4M) is from School Supports and Headquarters, representing a decrease of nearly 20%.

CHANGES IN CENTRALIZED SUPPORTS

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ALIGNMENT WITH BAC RECOMMENDATIONS

How does the recommendation align with BAC recommendations?● Each item considered within the tiers identified by the

Budget Advisory Committee● Compensation considered separately with all items

considered together○ 5 compensation items in Tier 1, Tier 2 or top of Tier 3○ Items have interacting effects on each other

Pg. 23 Date:6/15/2020

BAC & DPS RECOMMENDATIONS - TIER 1

Budget Option (BAC Vote For-Against)$ BAC

Recommendation $ DPS Recommendation

Software Savings (14-0) $500k $700k

Bell Times (13-0) $3.7M $3.6M

CARES (CRF) - (13-0) Variable: ~$0-$15M $10M

Travel (13-0) 0-$1M $600k

Reserves (12-2) Variable

Variable - Depending on amount remaining to

balance budget

Curriculum Purchases (One Time) - (9-3-1) $0-$5.5M $3.5M

All Non-Compensation Recommendations

Pg. 24 Date:6/15/2020

BAC & DPS RECOMMENDATIONS - TIER 2

Budget Option (BAC Vote For-Against)$ BAC

Recommendation $ DPS Recommendation

Bond 2020 Capital Transfer (no comments or objections) $0-$3.7M

$3.7M, depending on Board approval and passage of 2020 Bond

Supplies & Extra Pay - Not budgeted at Schools; (no comments or objections) $0-$3M $2.4M

Reduce Third Party contracts (14-0) $0-$2M $1.9M

Reorganize School Support Functions -- eliminate central supports (14-0- voted June 10) $0-$4M $4.5M

SPF Weight (in schools budgets) (11-3) $0-$2.2M

$0M (recommending elimination of funding for 21-22 and repurposing for

other school based funding)

Athletics 2020 (One Time) (8-6 voted 6/10)Other Items: $0-$3.6M $400k

2020 MILL LEVY $0-$10M$10M, depending on Board approval and

passage of 2020 Mill Levy

All Non-Compensation Recommendations

Pg. 25 Date:6/15/2020

BAC & DPS RECOMMENDATIONS - TIER 3

Budget Option (BAC Vote For-Against)$ BAC

Recommendation $ DPS Recommendation

School Mergers (Tier 3 based on original Balancing Act & BAC vote) Up to $2M $0

Eliminate All Non-Special Need Transportation (Tier 3 based on original Balancing Act & BAC vote) Up to $8M $0

Increased class size or school site reductions in "purchasing power" (Tier 3 based on original Balancing Act & BAC vote) Variable Up to $4M $0

All Non-Compensation Recommendations

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We heard you say...

● Focus on equity and protect workers at the low end of the wage scale

Pg. 27 Date:6/15/2020

BAC COMPENSATION RECOMMENDATIONS

Budget Option $ Amount

BAC Recommendation

Tier Other Details & Considerations

Furlough Non School Employees (8-5, voted on 6/5/20) ~$400k-$1.2M 1

How will these furloughs interact with other proposed furloughs (excluding the low wage scale)

Progressive Pay Reduction Excl Low Wage (9-5 voted on 6/10/20) $6.7M 2

Exclude low end of wage scale; 1-3% pay reduction

Furlough Days All Employee (7-7-1, voted on 6/5/20, dropped from Tier 1) $0-$9.9M 2

Average amount in simulations: $3.7M (one day district wide excl low end pay scale)

Pay Reduction All Employees 1% Excl Low Wage (6-7 voted on 6/10/20) -- Dropped From Tier 2 Based on Balancing Act $5.1M 3 Excl Low End of Wage Scale

No Organization Wide Cost of Living Increase (COLA) (5-9 voted on 6/10/20)-- Dropped From Tier 2 Based on Balancing Act $10.5M 3 Excl Low End of Wage Scale

● Voting on each budget option independent of other compensation options

Pg. 28 Date:6/15/2020

Budget Option $ Amount

BAC Recommenda

tion TierOther Details & Considerations

Incentives for School Leaders (4-10 Tier 3) -- Dropped From Tier 2 Based on Balancing Act $6M 3

Most incentives are based on role and school type

Freeze Teacher Steps (Tier 3 based on original Balancing Act & BAC vote) $9M 3 Recurring budget savings

Health Benefit Credit (Tier 3 based on original Balancing Act & BAC vote) $6M 3 For Grandfathered Employees

Implement Low Wage on City of Denver Timeline (Tier 3 based on original Balancing Act & BAC vote) $1.5M 3

DPS planned to accelerate ahead by 6 months

Freeze Teacher Grades (Lanes) (Tier 3 based on original Balancing Act & BAC vote)

Estimated $2-$3M 3 One Time Savings

BAC COMPENSATION RECOMMENDATIONS

● Voting on each budget option independent of other compensation options

Pg. 29 Date:6/15/2020

DPS COMPENSATION PROPOSAL

The Budget Advisory Committee had five compensation items with interacting impacts with varying level of supports, but all would be required at some amount to address the budget shortfall:

● Tier 1 (furloughs for non-school employees)● Tier 2 (furloughs for all employees and progressive pay

reductions) and● Top of Tier 3 (COLA freeze, organization-wide pay

reductions).

To reflect the principles in those items, the DPS recommended budget includes a proposal for progressive pay adjustments.

Pg. 30 Date:6/15/2020

DPS COMPENSATION PROPOSALProgressive Pay Increases & Decreases for 2020-21

● All increases subject to each bargaining units determination of wage increase implementation, with total allocation for increases matching the % listed above

● Decreases across non-school leadership will be determined as a either a salary reduction, implementation of furlough days, or a combination of both

● Decreases represent averages; additional adjustments will be made to ensure Equity among organizational structure and address salary structure compression issues

*Includes all School-Based Employees over $100k

Employee CategoryProposed Wage

Change FTE's% of Total

FTE's$ Impact - Salary &

Benefits

All Employees <$15/hr 1.9% Increase 1,525 12.5% $655,994

All Employees >$15/hr <$20/hr 1% Increase 1,522 12.5% $442,434

All Employees >$20/hr <$25/hr .5% Increase 846 6.9% $181,036

All Employees >$25/hr* 0% Increase 8,096 66.4% ($12,428,413)

All Non-School Based Employees Over $100k Annual Salary .75% Decrease 142 1.2% ($146,375)

All Non-School Based Executive Directors, Associate Chiefs, Instructional Superintendents 1.5% Decrease 45 0.4% ($112,361)

Chief & Senior Leadership Employees 2.5% Decrease 9 0.1% ($44,421)

Deputy Superintendents & Superintendent5% & 10% Decreases 5 0.0% ($77,049)

Total 12,190 100% ($11,529,155)

Pg. 31 Date:6/15/2020

DPS PROGRESSIVE PAY ADJUSTMENTSProgressive Pay Increases & Decreases

● By utilizing a progressive pay adjustment structure, employees at the lower end of the payscale will continue to receive wage increases

● In this structure, 98% of employees will not have their pay reduced, with 32% receiving pay increases

Pg. 32 Date:6/15/2020

COMPENSATION EXAMPLES - SCHOOL-BASEDCompensation Examples for School-Based Positions

Non-Teacher Compensation increases based on DPS Proposal:

DPS Proposal assumes 0% COLA for all employees earning over $25/hour

PositionFY20 Hourly

RateFY20 Annual

SalaryProjected

FY21 COLA %

Projected FY21 COLA

$'s % Increase

Principal $64.60 $120,420 0.0% $0 0.0%

Office Support II $18.88 $33,229 1.0% $332 1.0%

Paraprofessional - Gen Assignment I $13.69 $15,210 1.9% $289 1.9%

*All positions based on 1.0 FTE

● The district was in the process of reviewing and updating leader compensation (Principals, APs, Deans, etc.) to align more to ProComp 3.0 structure. This was put on hold as it would require increased costs of over $1 million related to hold harmless funding and market adjustments.

Pg. 33 Date:6/15/2020

COMPENSATION EXAMPLES - CENTRALCompensation Examples for Central and School Support positions

PositionFY20 Hourly

RateFY20 Annual

SalaryProjected FY21

COLA %Projected FY21

COLA $'s % IncreaseAverage Central Office Employee $38.55 $71,475 0.00% $0 0.0%

Individual Central Office Examples:Executive Director $74.00 $140,000 -1.50% ($2,100) -1.5%Manager, Technology Services $61.00 $115,101 -0.75% ($863) -0.8%Program Manager $45.62 $85,767 0.00% $0 0.0%ELA Program Coordinator $41.57 $78,153 0.00% $0 0.0%Project Specialist, Curriculum & Instruction $34.44 $64,738 0.00% $0 0.0%Accounts Payable Specialist $23.91 $45,907 0.50% $230 0.5%

Central Office Compensation increases based on DPS Proposal:

Other School Support position increases based on DPS Proposal:

Central Office Employees based on 1,242 FTE’s working in Central Departments, does not include DCTA, Custodial, Transportation, or other Support ServicesHourly Rate based on actual salary & work days, averaging 231 Days per year

PositionFY20 Hourly

RateFY20 Annual

SalaryProjected FY21

COLA %Projected FY21

COLA $'s % Increase

Facility Manager II $23.99 $47,016 0.5% $235 0.5%

Bus Driver (32 Hour) $21.60 $31,098 0.5% $155 0.5%

Custodian $19.09 $37,416 1.0% $374 1.0%

Food Service Worker II $14.42 $20,996 1.9% $399 1.9%

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COMPENSATION EXAMPLES Current DCTA Agreement

FY20 Hourly Rate

FY20 Annual Salary

Projected FY21 COLA

Projected FY21 Step Increase

Total Projected FY21 Increase % Increase

Average DCTA Teacher $43.80 $65,528 $1,039 $1,477 $2,516 3.8%

Individual Teacher Examples:Step 1, Grade 1 $30.62 $45,800 $1,039 $1,069 $2,108 4.6%Step 8, Grade 3 $41.49 $62,070 $1,039 $1,676 $2,715 4.4%Step 15, Grade 5 $53.61 $80,205 $1,039 $1,740 $2,779 3.5%

Compensation increases BASED ON CURRENT DCTA CONTRACT.

DCTA Teachers based on all DCTA employees in Teacher positions, does not include SSP’sBased on 4,763 FTE’sDoes not include any increases for Grade Movement

DCTA is the only employee association with an agreement that extends into 2020-21.

Turnover savings are looking very low as current separations are below last year's numbers at this time, which was already at recent historic lows. If this trend continues we could see retention rates at the 90-95% level.

In 2019-20, DCTA bargained salaries ranged between $45.8k and $104k

Individuals returning and also changing “grades” can see between ~$2.5k to ~$8k increases in pay in addition to other changes.

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DPS Budget Proposal and BAC Recommendation Summary

● DPS proposal is based on the recommendation of the BAC

● The proposal includes actions on all of the tier 1 and 2 non compensation recommendations.*

● For compensation, the DPS proposal works to balance all the different recommendations in a way that addresses the interactions between options and honors the following ideals:○ Protect workers that earn lower wages○ Earners at the top of the pay scale take more of the burden○ Shared commitment in solving the budget shortfall while

avoiding layoffs

* SPF weight recommended as 2021-22 change and proposed for repurposing to nursing or other areas rather than cutting funds from school budgets

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DPS BUDGET RECOMMENDATION SUMMARY

● Including all DPS Budget Recommendations, there is still a $24.5M Budget shortfall, with an on-going shortfall of $42.5M

Budget OptionOn-Going Savings

One-Time Savings

Total FY21 $ Savings Description

Central Support Efficiencies $10M $0 $10MBell Time Adjustments, 3rd Party Contracts, Central Office Reductions, Travel, etc

Central Support Efficiencies $0 $8M $8MCurriculum Purchase Delay, Extra Pay Reductions, Misc. Central Office Re-Orgs, Athletics

Compensation Adjustments (Non-DCTA) $5M $0 $5M

No Impact to Employees on lower range of payscale. Progressive pay adjustments, including freezing COLA and reductions to Employees on higher range of payscale

Compensation Adjustments (DCTA) $7M $0 $7M0% COLA. Current DCTA Agreement requires flat $ COLA, adjustment to 0% requires negotiation.

CARES Act Revenue $0 $10M $10MUtilization of federal relief funding to support programming

Total Recommended Options $22M $18M $40M

Total FY21 Budget Shortfall ($64.5M) ($64.5M)

Remaining FY21 Budget Shortfall ($42.5M) ($24.5M)$24.5M FY21 gap with $42.5M On-going gap

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REMAINING BUDGET SHORTFALL & ADDITIONAL BUDGET OPTIONS

Budget OptionOn-Going Savings

One-Time Savings

Total FY21 $ Savings Description

2020 Mill Levy $10M $0 $10M Assuming passage of 2020 MLO

2020 Bond $3.7M $0 $3.7M Reallocate current Capital Projects to 2020 Bond

Freeze DCTA Steps $9M $0 $9M 1-Year Freeze of Steps for DCTA, resuming in FY22

Furlough Days (1 day is $3.5M) $0 $3.5M $3.5MNo Impact to Employees on lower range of the payscale. 1 Furlough Day for all other employees

Additional Pay Reductions Up to $6M $0 Up to $6M Pay Reductions for larger population of employees

Usage of Reserves $0 Variable Variable Remainder of FY21 Budget Shortfall

Additional Budget Options that can be implemented to solve the long-term budget shortfall include:

● 2020 Bond and Mill Levy require voter approval

● Adjustments to Steps, Lanes and pay reductions require union negotiation

● Any usage of reserves is considered one-time funding and does not solve long-term budget shortfalls

Shortfall Beyond FY21

Current FY21 Budget Shortfall

Remaining FY21 Budget Shortfall ($42.5M) ($24.5M)

Pg. 38 Date: 6/15/2020

FIVE-YEAR FORECASTImplementing Additional $24M of On-Going Savings options in FY21

Assumptions• Assumes an implementing current DPS Budget Proposals, plus an additional $24M in on-going

savings options in FY20-21

• Options for On-Going savings/revenue include:• Passage of 2020 Mill Levy ($9M)• Passage of 2020 Bond ($3.7M)• Permanent Furlough Day ($3.5M/Day)• Additional pay reductions (up to $6M)• Freeze DCTA Steps ($11M)

• Even by implementing additional $24M in On-Going Savings/Revenue in FY21, the DPS Budget is still at a shortfall of ~$18M annually due to utilizing $18M in one-time savings in FY21

Pg. 39 Date: 6/15/2020

FIVE YEAR FORECASTImplementing Additional $24M of One-time Savings options in FY21

Assumptions• Assumes an implementing current DPS Budget Proposals, plus an additional $24M in One-time

savings options in FY20-21

• Options for One-Time savings/revenue include:• Usage of District Reserves (up to $24M in FY21)• Furlough Days ($3.5M/Day)

• Even by implementing additional $24M in One-time Savings/Revenue in FY21, the DPS Budget is still at a shortfall of ~$42M annually due to utilizing $42M in one-time savings in FY21

Pg. 40 Date: 6/15/2020

FUND BALANCE FORECASTVariations on Fund Balance Based on Policy Options and assuming no other future actions

Fund Balance Summary of 5 Year Forecasts

• Budget changes that are recurring revenue or permanent reduction in expense are the ones which will improve our trajectory

• The Board Fund Balance Policy targets 10% of revenue; forecasts show the district far below this target• TABOR requires 3% cash fund balance which is around $30M depending on the year

Approximate TABOR Reserve Req

Pg. 41 Date: 6/15/2020

Next step on DPS Budget Proposal● The DPS Budget proposal provides various options on how to solve

the financial shortfall caused by the pandemic

● DPS must balance the use of one-time vs ongoing solutions in order to ensure that the budget is sustainable given likely slow state revenue recovery

● There still is significant uncertainty with the budget due to many factors including 2020-21 reopening plans, future federal relief funds, voter action related to Gallagher repeal, Initiative 271 (Fair Tax Colorado), and potential DPS ballot initiatives for 2020 Bond and 2020 Mill Levy Override

● The remaining $24.5 million shortfall will be discussed in upcoming town halls, conversations with the Board, and public comment/feedback; the final budget presented will have a recommendation on how to solve the remaining $24.5 million shortfall.

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COVID-19 Relief Funding

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CARES STIMULUS FUNDING: CRF, ESSER, and GEER

Category Coronavirus Relief Fund (CRF)

ESSER GEER

Source of Funding U.S. Treasury U.S. Department of Education U.S. Department of Education

DPS Allocation (Net of Charter & Non-Public)

$45M-$50M $14M-$15M TBD (competitive)($33M available statewide)

How can funds be used? Direct COVID response. Guidance forthcoming from U.S. Treasury Department and CDE.

Direct COVID response, with some degree of flexibility. Application has been received from CDE and is being prepared. DPS plans to use funds to cover direct costs of COVID from Spring 2020 and return to school in 2020-21.

P-20 innovation projects available through a competitive process. Application forthcoming from CDE.

● All Federal Stimulus are one-time funds

Pg. 44 Date:6/15/2020

CRISIS PRIORITIES: CARES FUNDINGCrisis Priority 1: Health and Safety needs of all students and employees

● Provide additional nursing supports including additional FTE’s and expanded nursing stations to provide safe treatment of all students

● Provide PPE supplies to front-line workers to ensure safety of all students and staff

● Increase Custodial Services, including frequent deep-sanitation cleaning at school locations

● Increase Bus Driver FTE’s and improve routing to ensure safe-distancing during transportation to and from school for students, as well as additional cleaning for vehicles between routes

● Classroom Renovations such as purchasing individual desks as opposed shared tables to promote safe-distance learning, water-bottle filling stations, and additional cleaning supplies

Crisis Priority 2: Social and Emotional health needs of all students and employees● Provide Community Grants for programs which increase supports for addressing social and emotional

health of students and employees, including additional social workers, counselors, psychology resources, and additional before & after school programs, if allowable.

● Potential to provide Child Care for employees during remote-learning periods

Crisis Priority 3: Engage all students in learning and mitigate unfinished learning● Provide additional resources, training and professional development for School-based staff to

maximize learning potential in a remote/hybrid learning environment

● Includes training courses, additional online curriculum programs, and technology products required to implement longer-term remote learning

All costs will align with federal guidance; DPS Staff are working with CDE to identify appropriate expense

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INCREASED INVESTMENTS IN NURSING

Using all funding sources, how could DPS move to a full time nurse in every school in 2020-21?

● First half of 2020-21: CARES (CRF) funding

● Second half of 2020-21: Support from potential 2020 Mill Levy

● 2021-22: Combination of Mill Levy and redirecting SPF factor that is currently part of SBB formula

Pg. 46 Date:6/15/2020

CARES STIMULUS FUNDING: CRF

Expenditure CategoryEstimated $

Amount Description

School Support for Hybrid/Remote Learning $3M-$15MAdditional Training, Summer Professional Development and Resources for School-based Staff

Current and Additional Nursing Supports $6.7MAdditional Nursing FTE's to support growing health needs for students

Current and Additional Custodial Supports $6.5MAdditional Custodial FTE's to ensure clean and safe learning environments

Community $0 - 5M

Provide Community grants to support programs such as mental health, emotional needs supports, and before & after school programs for students if guidance allows

Child Care for Staff $0 - 5MProviding Child Care for Employees during remote-learning days depends on Hybrid model type

Classroom Renovations $3.75M

Setup changes for classrooms to support safe learning environments, including desks, water bottle stations, safety equipment & fixtures

Nursing Stations $3.6MExpand health care areas to provide additional nursing services to students

Transportation & Facilities $3MAdditional Bus Drivers & routing adjustments to support safe distancing, and disinfectant supplies

PPE Supplies for School Workers $2M Providing PPE supplies for front-line workers at School locations

Total Coronavirus Relief Fund Expenditures $28M - $52M

● One-Time Funding, for expenditures from March 2020 through December 2020

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APPENDIX

Pg. 48 Date:6/15/2020

DETAILED CENTRAL OFFICE CHANGES(1 of 2)

Detailing slide on central support savings from earlier in the presentation

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DETAILED CENTRAL OFFICE CHANGES(2 of 2)

Detailing slide on central support savings from earlier in the presentation

Pg. 50 Date:6/15/2020

“UNDESIGNATED” BUDGET CATEGORY

In the budget development process, a question was raised about an “undesignated” budget account and its availability to address the budget deficit. This is a account in the Special Projects Fund that is set up for accounting purposes. The net budget impact of this fund is $0, because funds flow into it as revenue and are then drawn for particular uses. The actual expenses hitting this BR are fairly limited and include (FY19 activity):

● $16.4M for PERA Special Funding Situation. This is a Government Accounting Standards Board (GASB) required entry to record an expense for the District’s share of state funding of PERA offset by an entry to revenue. The net effect of the entry is $0 to both the budget and the District’s financial statements.

● $3M of Student Activity Funds in Fund 74. These are budgeted in the aggregate for the fund and not at an individual school level as each school or club is limited to spend funds they have raised through fundraising or student fees.

● $4M of Health Savings Account DPS contribution that is budgeted centrally for employees that elect one of the District’s health plans.

● Other miscellaneous items related to retiree life insurance trust fund (closed plan applicable only to retired employees) and other items that are budgeted centrally.