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Updates and Answers

January 24, 2012

Welcome to my blog!  Over the coming months I hope to use this space to answer questions, recognize the great teachers and best practices I see during my school visits, and to discuss the work we are doing to support you in developing Douglas County School District students to be the best prepared in the world.

Through these posts, I hope you get to know me a little better.  I also hope you will find factual, candid answers to your questions.  I look forward to providing interesting information about legislative activity impacting education, amazing things happening in our profession, and more.  From my view, a blog may not be as personal as an email, but this blog will allow me to differentiate – to provide quick, factual emails to those who aren’t as interested or don’t have the time for more while still providing an in-depth discussion of various topics for those who are interested.

Before I get started, I want to invite you to participate in a telephone town hall with DCSD parents on Wednesday, January 25 at 6 p.m.  Join the discussion by calling 877-228-2184, and entering the passcode 19350. As always, please feel free to email or call me at any time if you have questions or concerns.

Additional telephone town halls have been scheduled on the dates shown below. All town halls will begin at 6 p.m. and you can participate by calling 877-228-2184, and entering the passcode 19350.

January 25                  March 14               May 9
February 16                April 11                   May 23
February 29                April 25                 June 13

There have been many questions about budget and budget development, so I am going to start with an in-depth discussion about the key components of budget development.  I am going to start with a high-level status report and then move into the nitty-gritty of budget development.  After that, I’ll touch on a couple of other timely topics.  I have provided headings in hope that you can skip around – access the parts most important to you.  I realize it’s long.  I have tried to anticipate questions or moments of likely misunderstanding and address them along the way.  Again, don’t give up on novels…just go to the parts you want to know. 🙂

Budget – High Level Status Report

As you may know, Governor Hickenlooper has amended his proposed budget and has recommended that the $89 M cut to education be taken off the plate.  This is great news!  However, there is still a homestead senior tax credit that is to be reinstated for FY 2013 that will cost about $100 M, and is not addressed in his current budget.  In addition, the legislature has not given us their thoughts on the FY 2013 budget.  Therefore, while we are somewhat more optimistic than we were a few months ago, there is not enough evidence to completely change our budget development assumptions at this time.  We will continue preparing for multiple scenarios.

We have been preparing for what we believe is the worst case scenario, and from there, discussing what we will do in the event of a smaller reduction.  Our goal remains to bring the SBB reductions required for a balanced budget down, and while I am not able to discuss details (because they must go through negotiations), like I have said before, there is a pathway that gets us to zero furlough days.  That is a priority also.  I am hopeful that together we can bring our Board a final budget recommendation that requires zero furlough days, requires a $50 or less SBB reduction in our elementary schools (zero is the goal), a $100 or less SBB reduction in our middle schools ($50 is the goal), reduces class size and preserves electives in our high schools.

First Things’ First – Fiscal Years Defined

Ok so here is a piece of background knowledge you need for all of this to make sense.  School district budgets are done on fiscal years (FY) not calendar years.  Fiscal years go from July 1 to June 30 – they are aligned to school years and the FY number aligns to the second year in a school year.  For example, FY 2011 = school year 2010-2011.  We just completed FY 2011.  We are currently in FY 2012, and we are planning for FY 2013 (next year).  Got it?  Where’s the quiz? 🙂

Fund Balance & The Nitty Gritty of Budget Development

I need to take a minute here to explain budget vs. actual, fund balance, and carry forward money.  Each year we take the total revenues of the district and allocate them to our expenditures – this is the budget.  A budget is a plan for spending. (Note: approximately 90% of DCSD revenues go to salaries and benefits – I’ll come back to this.)  Once we allocate money to a budget, it is now that budget holder’s to use.  It might be completely spent.  If it is, the actual will equal the budget, and there will be no carry-forward money.  If the budget-holder does not spend the entire budgeted amount, the actual will be less than the budget and the difference will be part of the carry-forward.  In our district, school and department carry-forward go back to the budget-holder to use in the future.  However, that money shows up as part of the total district carry-forward amount even though it is promised to that budget-holder.

Budget = Actual = No Carry-Forward = No Fund Balance

As a high school science teacher, our department received an annual budget for supplies.  Each spring we would come together as a department to decide how to spend our budget.  If we didn’t spend it, we lost it.  Therefore, we worked very hard to spend every single dime.  I had a closet full of beakers and petri dishes because the goal was not to buy only what we needed, it was to spend the entire science department budget annually, and we did – there was no carry forward money.  Budget and actual usually matched.

Actual Is Less than Budget = Carry Forward = Fund Balance

As a high school principal in Iowa, I always included a snow removal line-item in my annual high school budget.  However, some years we got very little snow, and the money allocated for snow removal was not completely spent.  Therefore, I often had carry-forward money in my budget that I then allocated to one-time expenses.  I could not guarantee that there would not be a lot of snow the following year, so I couldn’t give out the money on an on-going basis, but I could use the money I saved that one year to purchase technology, books, and other items on my teachers’ wish lists.  Anything I didn’t spend went toward the district fund balance, as I was not allowed to carry forward money in my school budget – it all had to go back to the district.

In our district, a budget-holder is not forced to “use or lose” their unspent, budgeted dollars prior to June 30 (end of the fiscal year).  In our district, the budget-holder can keep his/her budgeted but unspent money year over year.  They have the option to save for a large, one-time purchase.  I find this a much better approach.

From Where Does District (or Unassigned) Fund Balance Come?

District fund balance can come from several places.  One is vacancy savings. For example, last year during my first several months in DCSD, I reduced over $500,000 from the cabinet.  I did this through reorganization and flattening the organization.  I am not a fan of bureaucracy and lots of layers – it reminds me of the game of telephone.  Anyway, those positions were budgeted the previous year (when I was still in AZ), so since I made these changes during the budget year, it led to vacancy savings and that money ends up in the fund balance of the district.  District fund balance can also come from district line-items like utilities that do not cost as much as projection or from our 1% contingency budget that if, knock on wood, no emergency arises, can go unspent and end up in the fund balance.

Breaking Down the FY 2011 (Last Year) Fund Balance

I know that $66 M minus $26 M = a hidden $40 M has been thrown around recently in an effort to insinuate that the district is hiding money, and therefore, does not actually require a reduction to balance the FY 2013 budget.  While that would be my dream come true – to end the annual budget cutting exercises of the past four plus years, this insinuation is unfortunate for the health of our district as well as being absolutely false.

If you include all general fund monies, the fund balance figure from our Comprehensive Annual Financial Report (CAFR) is just over $66 M. It is very important for you to understand how this figure breaks down – with the exception of a $15 M unassigned fund balance, all of this money belongs to a budget-holder or has been allocated to a known expense – a past decision that created a future obligation.  The notion that this is somehow hidden money is false. Let’s break it all down.

The $66+ M includes $543,000 that belongs to transportation, $784,000 to the risk insurance fund, $4.8M in ongoing obligations committed by the 2008 early retirement program, $21.3M that belongs to our schools and our departments, including $4.5M that is part of the all-day kindergarten tuition program, $11.7M TABOR Reserve, and $463,000 in supplies inventory.  Finally, with the $26.8 M of unassigned fund balance (11.7 M of that was “assigned” to offset cuts in the current year, 2012).  If you add all of those budgets together, you will see that they add up to $66 M, and all of this can be verified in our CAFR that is posted on our website. Please reference page 72 of the CAFR.

Do We Need a Fund Balance?

Maintaining a reasonable and healthy fund balance is critically important to the financial stability of the district.  Just like many of us try hard to maintain a savings account in our family budgets, the district must keep dollars available for emergency use – one time money for one-time expenses.  For instance, if a boiler breaks in one of our schools, we need funds available to replace it.  Our $15 M in fund balance (considering that $11.7 M of the original $26.8 M has already been assigned to the current year, FY 2012) is a responsible amount, and it meets the requirement of Executive Limitation (EL) 1.6.1 that requires we have a 3% TABOR Reserve + 3% Fund Balance + 1% Contingency (This was revised in 2010 to be 2% instead of 3 % so a total of 5%).

This EL is not new – it has been a board policy for many years.  You might be wondering how we met this EL in previous years when our fund balance was much lower.  In prior years the district administration had to request a waiver from this EL, as they could not meet it. Please keep in mind that I, and my team, prepared the current year budget – FY 2012, and we are preparing next year’s budget, FY 2013.  We did not prepare the FY 2011 budget.  We inherited it.  This is the budget that ended with $26.8 M in unallocated fund balance.  It was, however, our recommendation to use $11.7 M of that $26 M in FY 2012 to stave off cuts, and I am glad we did.  It was the right decision.

Can Fund Balance Be Used to Help Cut the Cuts?

Finally, since the close of the FY 2011 books, my team has been combing through all of the district expenditures (actuals) to find budget line items that have been consistently higher than spending – in other words, actual expenditures are significantly lower than budgets year after year.  We are doing this so that we can decrease the budget to more closely match actuals so that we are no overstating the need.  This process allows the reallocation of ongoing monies to support the FY 2013 budget and reduce the cuts to our schools.  We want to use those dollars to bring down the reductions we need to have a healthy, balanced FY 2013 budget – next year.  You will find these on Bonnie’s budget presentations in the category “cost of doing business.”

So far, we have found “extra” dollars budgeted in utilities, substitutes, and the medical fund.  These dollars plus the Governor’s new budget has allowed us to move those SBB cuts we projected to be approximately $366 per student to $50 in elementary school and $100 in middle school.  We hope to get these down even further.  It has also allowed us to develop an innovative path away from furlough days for all employees.

Professional Development

This year we have 15 schools across our district piloting staff development on backward planning and world-class education, and staff participating in these opportunities are earning additional pay for their work – carry forward (previously unspent) skill-block dollars.  In addition, we have launched (and I believe it is full) restorative practices professional development opportunities (kudos to Wanda Wilson for leading this effort).  Finally, I currently teach an instructional leadership class for principals, and I am now going to launch a professional development opportunity this month for teachers on world-class education.  This will be an opportunity for teachers to fully explore the world of education and construct their own mental models and paradigms about the future of American education.  I believe our professional development efforts, led by Pat McGraw and his team, are extraordinary and expanding/improving every day.  As you probably know, Pat has a long history of professional development in the district, and he continues to lend his expertise to our new effort – to our priority to offer differentiated growth and development to all staff that both model and teach modern, best practices for our students.

Employee Survey

Many of you expressed concerns to me about a survey that was done (not by the District) in November via email.  Some were frustrated that they were not included (early childhood is one example).  Others were upset by the questions, and still others unhappy by the lack of notice/explanation (leaders).  In an effort to quickly address these concerns and more, I sent a note with the factual information I had at that time.  As you may know, a limited portion of the results have been shared with some staff and with the media.  As I promised some of you who emailed me directly, and as I stated to the Denver Post reporter, we absolutely pay attention to data – we value you and we care about what you think.  That said, in an effort to avoid the pitfalls clearly demonstrated by NCLB regarding the collection and (mis)use of limited data, in DCSD we are committed to looking at bodies of evidence.  We value multiple, high-quality data and triangulation of data.  A district that has principles and values should have them all the time – refer to and model them in all circumstances.  Our commitment to using data correctly and to having high quality assessments is an important one.

We should not judge student performance based on one data point and we will not judge teacher performance based on one data point.  This has been our commitment to you as we have developed CITE, LEAD, our balanced assessment system, our system performance framework, and pay for performance – all found in our Strategic Plan.  As you know, this survey is one data point, so we will pay attention to it and continue collecting additional data as we move forward.

During my first board meeting (summer 2010), employee survey data was presented to the board.  Last spring we participated in the TELL survey.  You might be aware that several members of my team are on listening tours and have been in schools collecting information from our staff – another data point.  In addition, Dr. Syna Morgan is currently working to develop a spring survey for our stakeholder groups.  I believe she is inviting stakeholders to be part of developing that instrument.  We are committed to collecting data – a lot of data and all kinds of data.  We want to learn from the past ten years of NCLB where there were too many decisions and statements made based on one data source – high stakes tests.  We know better now, and we will do better now, and if you’d like to be part of this process, please let Dr. Morgan know.

Communication

In addition to telephone town hall meetings mentioned above, we are continually building our website and our publications to include helpful, factual information.  You might visit the Cabinet Communique or take a look at THINK.  This week, we will launch a “Budget Facts” page so you can keep up with the latest news about the budget.

As always, please feel free to email or call me at any time if you have questions or concerns.


19 Responses to “Updates and Answers”

  1. Jason Says:

    Thank you for you considerate response to several issues, and especially the ones I personally asked about at the last Board meeting. I most appreciated the link to the CAFR from 2011 and your explanation of the district’s policies for allowing budget managers to retain all of their positive variances from year to year. That would explain a good deal of the strong growth in fund balance demonstrated in the district’s financial reports.

  2. Jennifer Miller Says:

    Our children attend Roxborough Primary/Intermediate. Rox was recently ranked 5th from the bottom for ALL DC schools on the Coloradoschoolgrades.com website. Those ranking lower includes two other elementary schools (I believe in Castle Rock) and a handful of web-based schools. I find this completely unacceptable. The Rox Primary principal says the rankings were based on just a small slice of data (CSAP). Our school sponsored a hug-a-teacher day on a teacher in-service day after the fall election (funding) results rolled in (they encouraged students and parents to arrive at the school early so they could greet the teachers with cheers and signs of support and encouragement … including a sign that said please don’t leave ) but can never seem to offer up any practical or realistic support for parents or students. They appear to want to take an Eeyore approach to things as far as the economics of things go while continually patting themselves on the back at the same time about how wonderful everything is .. which obviously is not the case. I believe parents, admin and teachers all need to take responsibility for the things that clearly are not working instead of only giving ourselves kudos. How can I teach our children to succeed when their school is failing??

  3. Sean Burke Says:

    Jennifer, thank you for caring enough to post a comment. I can answer your question….your school is not failing you. Unfortunately, you fell into the “School Grades website trap” as many others have done. I encourage you to do more digging into exactly what information that site is posting. The site measures a fraction of the overall educational experience of your children, especially at Roxborough Elementary. I encourage you and others to get more involved as you will discover that the educational experience of students at Roxborough Elementary exceeds that of many other elementary schools in the area. If you research other area schools, you will find that they are cutting programs each year (programs such as science, music, art, technology, PE). Leadership at Roxborough Elementary, SAC and PTIC (the Parent Teacher group) joined forces to protect those educational programs for our students and we continue to offer them. Parents who attend Roxborough SAC meetings quickly discover that Roxborough is performing well in many areas. Yes, there are areas that need improvement. Both SAC and school leadership are working hard to continuously improve in areas that need work – writing is one of them (as it is for many schools across the State of Colorado). Also, the “hug-fest” was not a school-sponsored event…it was sponsored by involved parents and PTIC in support of the ROXE Staff. What can you and others do? Get educated – come to SAC meetings, PTIC meetings, Project PEAK meetings, get involved in any way that you can. Please contact me if you would like to discuss further….I am in the school directory. Thank you!

  4. Jennifer Miller Says:

    Mr. Burke,
    I respectfully disagree with you. I am a PTIC member and have attended their meetings and SAC. I have had face-to-face meetings with both principals about various school issues. Just because you don’t know who I am does not mean I am an uninvolved parent. In fact, I believe if you checked with either principal or my children’s teachers they would tell you the exact opposite. I believe you and I both want what is best for our kids. Keep up the good work and I will do the same.

  5. John Says:

    Hello Dr. Fagen,

    Thank you for starting this blog and for making yourself available for questions and concerns from parents. I have several questions regarding your discussion about the District budget and finances.

    First some general questions from the CAFR:

    • Looking at the income statement of the Combined General Fund (page 73 in the 2011 CAFR and page 83 in the 2010 CAFR) I see that revenues are essentially the same ($457M in 2010 and $455M in 2011). That’s good news, right? But then I see Instructional Services expense (which I assume are primarily teachers salaries) drop over $50M over the same time period ($286M in 2010 to $231M in 2011) and Central Supporting Services expense increase $15M (from $50M to $65.5M). Can you explain why Instructional Services decreased so significantly and why Central Services increased while Revenue stayed the same?

    • The 2011 CAFR shows Capital Outlay expense of $12M vs. $832K in 2010 and $1.2M in 2009. Why was there a 10x increase in Capital Outlay vs. prior years?

    • Staying on the Income Statement, page 75 of the 2011 CAFR shows Revenue and Expenses for both 2010 and 2011. The 2010 figure for Instructional Services on this page is $44M less than what is shown in the audited 2010 CAFR report. All the other line items are identical. Why is 2010 Instructional Services expense different between the two reports?

    • Similarly, it looks like the Expense Detail section was also updated after the Board approved the CAFR. Page 91 of the 2010 CAFR shows Salaries of $254M and Employee Benefits of $76M. But page 74 of the 2011 CAFR shows 2010 Salaries of $262M and Employee Benefits of $70M. How can actual expense for the same year change like that?

    • When looking at the Fund Sources/Uses section of the Income Statement, 2011 shows $46M being allocated to Charter Schools. I assume the District had this expense in the past but it was not included in the Income Statement of the Combined General Fund in any previous year. Why was this Use of Funds included in 2011?

    • There are two graphs on the DCSD website (budget/budget overview/financial transparency) showing General Fund Revenues and Expenses for 2011-2012. These figures don’t look to be the same that those found in the 2011 CAFR…can you show me where to look?

    Clarifications of your blog:

    • You mentioned that approximately 90% of DCSD revenues go to salaries and benefits. Looking at the 2011 CAFR (page 74), I see that salaries and benefits ($314M) total 69% of 2011 General Fund revenues ($455M on page 73). The percentage for 2010 was 72%. Can you explain how you got 90%?

    • You state that if actual expenses are less than budget then the difference is part of the carry-forward. I assume that this is what caused the $8.5M balance in School Carryover Funds and $8.3M in Department Carryover Funds in 2011. So can I assume that there will be $16.8M additional funds available in 2012 for Schools and Departments? Is this allocated to the specific schools and departments that came in less than budget? Is there a report which shows which schools/departments have additional funds available?

    • Despite your best efforts in describing the Fund Balance, I am still having trouble understanding some things. The CAFR shows Fund Balances increasing from $20M in 2008 to $21M in 2009 to $46M in 2010 to $66M in 2011. Wow, that is some growth! You state that, with the exception of the $15M unassigned fund balance, all of this money in 2011 is spoken for. I don’t see the $15M in the CAFR…is this part of the Unreserved General Fund? Speaking of the Unreserved General Fund, what is this for? This has gone from $7M in 2008 to $6M in 2009 to $22M in 2010 and $27M in 2011. Why is this Fund increasing so significantly? Since monies in this Fund are not already spoken for, can these funds be used to offset any additional budget cuts?

    • You mentioned that $11.7M of the Unreserved General Fund was “assigned” to 2012. Can I assume that the operating budget for 2012 then would increase at least $11.7M offsetting future budget cuts? That’s great news!

    • You said that you did not prepare the FY 2011 budget. But you did manage the results. Revenue came in $5M over Budget and Expenses were $26M less than Budget. Can the District not find a better use of these excess funds then putting them into an unassigned balance? As a stakeholder (parent), I’d like these excess funds to be put to good use educating our kids.

  6. Barbara Says:

    Can you clarify something about the town hall meetings please? I have heard callers asking their own questions but I cannot seem to figure out how to ask question. Is there a button I push during the town hall to get placed in the queue? Is there a place to sign up ahead of time?

    The questions also seem to be current and topical, but it does seem like the answers are prepared. Do you select questions ahead of time and develop the answers before the town hall starts?

    I generally like the format and appreciate that it is a new way to communicate that really hasn’t been done here before, but I really haven’t been able to participate as fully as I would like.

  7. Jason Mumm Says:

    I echo the comments left here about the financial reporting. The CAFR is a critically important public accountability document and what it shows is the District has continually posted large revenues in excess of expenditures for the past three fiscal years at least (I didn’t look farther back than that). I don’t much care for Dr. Fagan’s explanation that budget holders get to keep all their carryover. If we are talking about real carryover, then we would expect the amounts to be spent in a subsequent period, but they are not. Instead, the “carryovers” are still being carried, evidently, and not spent but placed into a “restricted” fund balance. This is why your fund balance keeps growing; that and the fact that revenues are increasingly much greater than expenditures. It’s all there in black and white; it’s very simple to read and understand: you make more money than you spend by quite a healthy margin.

    Two key questions come to mind: 1) with such large revenues over expenditures posted in 2009, 2010, and 2011, why did the District ask for an operating mill levy increase in 2011?, 2) with such large and obvious (and repeated) revenues over expenditures, why is the District further looking to cut operating budgets?

    If the Board is looking to cut operating budgets, I would respectfully ask that you – Dr. Fagan – clearly state those reasons. Shortage of revenues is, as a matter of fact as presented in your own independent audit, not a reason.

  8. Ray Alexander Says:

    Jason, your thoughts represent a very static and linear view of a budget that assumes the discrepancy between revenues and expenditures are all predictable, fixed, and accountable in your so-called black-and-white as if it is a zero-sum game. I also don’t think it is a fair representation to say they “posted such large revenues in excess of expenditures” as if there is excess fat every year from overly abundant revenue streams and/or over-budgeting. Based on what you pointed out, you focus on the bottom line without looking at the ingredients or line items that led to this bottom line. Many of these reports show snapshots in time (budget sheet) or actual cash flows over a specified time. It does not reveal things we can not see behind the scenes in the development of a budget. That would be like my HOA saying we need to lower dues because you posted an $8,000 excess fund balance in 2011 and $5,000 in 2010, without seeing that we had to forgo painting and general maintenance items in order to cover unpredictable variable costs (snow removal, lack of dues from foreclosures, etc). Although we were able to manage some excess funds due to low snow in the fall, we have potentially less marketable homes and cannot cover a $22k painting cost going forward. My point is, it doesn’t change the fact that major cuts are made so that worst-case scenarios can be met, but some of these cuts have to come back into the budget in the near future. Would you rather a reserve that may eventually cover some of the future needs when coupled with revenues, or an eventual mill levy much larger than the recent ones averaging $45 per year, per household in DC, as those two most recently shot down? Have you seen the number of double-wide trailers that are located on campuses now? Where do you put the 1200 new students per year without new school sites? I can tell you this much, the marketability of homes in DC is not what it once was for families seeking good school districts and supportive residents. That, as you say, is in the black-and-white of reports I’m seeing. But, keep cutting teachers and support staff and keep logging those excess funds. Let’s see where under-funding annual growth needs gets us. It hasn’t seemed to work for any of the companies I analyze in the private sector.

  9. Missy Shields Says:

    Last night on Fox 31 news at 9 you stated: School supplies cost $763,000.

    “It includes things like inventory in our warehouse, all papers, glue sticks in inventory has be reported as fund balance,” says Douglas County Superintendent Liz Fagen.

    I have taught in DCSD for a long time…parents provide supplies for their child, and their child’s classroom. We don’t receive supplies from a warehouse. In the past couple of years with more and more families facing financial hardship many are unable to provide the necessary supplies for their children…teachers are buying these supplies out of their own pockets for their students and classrooms. As schools continue to face large cuts items such as butcher paper, copy paper, easel/chart paper, science kit supplies, staples, white out, and other school wide supplies are no longer available…again, teachers are purchasing these out of their own pockets. I am utterly confused that Liz Fagen explains $736,000 of the surplus as school supplies. Who is getting these school supplies?

  10. Beth Chapman Says:

    Good Afternoon. I know that at my school copy paper, pens and pencils for teachers, white board markers, white board erasers, staplers, staples, paper clips, rubber bands, etc. that I use in my classroom are provided by the school. I have always assumed that money budgeted for these items came from the district. I understand that we run out sometimes; couldn’t this be a problem of not being thoughtful in our usage? I know that I sometimes copy entire classroom sets in advance and then don’t end up using them. Knowing that our budget is in need of reform, I have been more diligent. I believe this is the money Dr, Fagin is speaking to.

  11. Nikki Kuosman Says:

    On the district website (as of Feb 12) on the budget facts page, The following information is posted….”The State of Colorado
    Colorado’s school finance act distributes state and local dollars to the State’s school districts for K-12 public education. These monies are allocated under the “Public School Finance Act of 1994″ and may be annually amended by the most recent school finance bill. Funding to school districts is based on a per-pupil formula. For each pupil funded, the formula provides a base per-pupil amount of money plus additional money to recognize district-by-district variances in: (a) costs of living, (b) personnel costs and (c) sizes. The amount also includes additional funding for at-risk pupils. For FY ’12, the District is to receive $6,212 per In-District funded pupil and $5,914 for each Online Funded Pupil.”

    The principal at our home school is telling us that for our school the Student Based Budget was $3,318 last year. With anticipated budget cuts for the 2012-2013 school year, he is now expecting a SBB of $3268. Could you please tell me how the District calculates the money received by each individual schools? I can not seem to find the formulas that are referred to on the website. Also, how exactly does the district spend/ allocate the remaining $2944 ($6212 – $3268 = $2944) that it receives from the State for each In-District funded pupil?

    I am trying to understand how the budget trickles down to impact students and individual schools and would greatly appreciate some clarification. Thank you!

  12. Susan Meek Says:

    Dr. Fagen,

    I have a few questions concerning the recent audit of the 2011 financials:

    1. Has the Central Supporting Services line item in the budget been significantly revised from past years? As reflected on page 66 of the CAFR, the Central Supporting Services line item was budgeted at $52 million and the actual expenditures came in at $65 million – $13 million (or 25%) over budget. This seems to be in direct contrast to what is implied on page 9 of the CAFR where it points out significant cost savings in administration. The overall amount of money spent in Central Supportive Services is significantly higher (32% higher) than the previous year.

    2. The Departments’ carryover has almost doubled from $4,873,589 to $8,302,279 between 2010 and 2011. Why wouldn’t this carryover money be used to offset the overspending in Central Supporting Services? While I understand the purpose of schools carrying over money, what is the purpose of Central Supporting Departments carrying over money?

    3. When did the Board provide approval for an unbudgeted one-time transfer increase of $5 million in preparation for IT upgrades (reference page 18 of the CAFR)? This money was transferred out of the General Fund Balance into Capital Projects. If this transfer did not take place the increase in General Fund Balance would have been $25 million instead of $20 million in 2011. Therefore, the UNASSIGNED General Fund Balance grew from $10 million in 2010 (page 112 of CAFR) to $32 million last year ($27 million + $5 million transferred to Capital Projects – pages 112 & 18 of CAFR). The UNASSIGNED portion of the fund balance actually grew $22 million or 220% in 2011!

    4. Why are we talking about cutting schools’ budgets when the unassigned portion of the fund balance can sufficiently keep any cuts from needing to happen in our schools? Clearly, the unplanned growth in UNASSIGNED fund balance is an ongoing problem that needs to be addressed before making deeper cuts to our schools.

    Thank you for your time and I look forward to your reply.

  13. Hailey Howell Says:

    So the real question here is why is your school getting budget funded money for school supplies and hers not? Dr. Fagen, can you elaborate please?


  14. Our “supplies warehouse” includes art supplies (paint, construction paper, crayons etc.), custodial (paper towels, toilet tissue, approved cleaning supplies and instruments), paper (art and copy paper). We order in bulk and “sell” these items to the schools at a lower price than they could purchase on their own. We also have seasonal items like ice melt in stock, as you can imagine a big winter like this one we use a great deal of this.

    About four years ago we eliminated what we call office supplies and have a contract with Office Depot to supply those, ordered by the individual schools or departments with their p-cards and delivered the next day.

    To see a list of items stocked in the supplies warehouse, visit the DCSD website, and click W in the A-Z to select Warehouse.

    Our supplies warehouse inventory has an average of $279,757.00 in stock and we deliver to all schools once a week. Some of the other inventory costs are in the O&M Warehouse which stocks only items that are used by O&M and facilities to repair buildings etc.

    We also sell to other entities out of our Warehouse. Other entities using our Warehouse:

    -All of our Custodial Contractors – One Choice, Master Klean, Triad, JJ Maintenance, Sunshine, All Star and Varsity.

    -Elbert, Kiowa, Parker Fire, South Metro Fire and Fairmount Fire.

    -Town of Castle Rock – Fire, Police, ITS, Utilities, Public Works, Recreation Center, Daycare, Main Offices including Admin, Finance and Development Services.


  15. Push *3 to ask a question

    Push *9 to exit the call early and leave a voice mail

    While questions are not specifically selected in advance, we do invite people to submit questions on Facebook, and consider those and other questions we have received when preparing to conduct a Telephone Town Hall.

  16. tinky2jed Says:

    it seems this is the better place to post a question than on Facebook. So,

    Dr. Fagen,

    I watched your presentation on the budget this week. I appreciate you taking the time to put it together and provide the information.

    You pointed out that there was approximately $.5m in overage in transportation. You also mentioned that there is a large amount of money that is reserved for emergencies or unexpected costs. So,

    Since there was an overage in the transportation budget, should the district consider refunding all or a portion of bus fees (if fees>overage) to the families that paid? (Since there is an unexpected cost fund if next year’s costs are more than planned).

    Sincerely,

    Jed S. Walker

  17. Jason Mumm Says:

    re: Ray Alexander
    I really don’t think that my comments reflect a static point of view. It’s a fact that revenues exceeded expenditures every year for past few at least, and not by a small amount. It’s a fact that those funds have not been spent, but have been accumulated. It’s a fact that the board is designating these fund balances into little “reserved” accounts -but it’s also a fact that the board can choose to accumulate funds to those little accounts or not. If the board is saying that it’s going to take funds from its operations to pay for capital expenditures, much to your point of paint and trailers, then that is something that needs to be clearly stated as an explanation to the original question of why these fund balances are continuing to accumulate at $25 million a year. The board needs to say “we are cutting operating expenditures so we can pay for the capital expenditure of X” if that is really what they are doing. My point is that not only did we not need an operating (not to be confused with the bond levy) mill levy increase in November, but we also do not need to force such drastic cuts as currently proposed. The case has not been made for such cuts since the plain black and white reports show that the district consistently spends less than its contingency-laden budget which is why we see large variances of revenues over expenditures, and why the fund balance keeps moving up. The questions that are being asked are good ones; the answers so far have not been all that good.


  18. The District will soon present the 2013 school year budget; as part of the budgeting process we will look at whether transportation fees are warranted moving forward.
    While we would prefer to drop the transportation fee, it currently appears that DCSD will continue to face decreasing revenues. If that is the case and we choose to decrease transportation fees (or any other revenue source), we would be forced to cut from another program in order to balance the FY 2013 budget.
    Some have also questioned transportation’s fund balance. Keeping some money in the transportation fund is prudent financial management, given the potential spikes in prices.
    Fuel prices are extremely volatile. Since these increases happen fairly often, it is best to budget for those variances rather than relying on the District’s emergency fund.
    Within a short amount of time they can skyrocket, as shown in 2008 when gasoline prices hit the record price of $4.01 in Denver. With gas prices currently on the rise, there is the potential to spend the entire transportation budget in FY 2013.
    The Transportation fund balance at the end of the 2011 school year was about $543,000. About $280,000 of that fund was in fuel inventory. That leaves a balance of about $260,000, which is not very large when you consider that we spend about $18 million on transportation every year.
    To put this into perspective, the remaining transportation fund balance is about 1 percent of our total transportation expenditures. It is also important to remember that the fund balance is one-time money and therefore should not be used for recurring expenses.


  19. Thank you for the questions and comments that were posted on my first post. I provided some additional information related to those questions directly on the page of the post, and also spent many hours in small group and one-on-one meetings to address specific, detailed questions about the budget and the fund balance. DCSD leaders and Board of Education members have attended and hosted a number of events in an effort to answer questions and provide more information about the 2012-2013 budget. Fiscal Oversight Committee meetings, School Accountability Committee meetings, school visits and Board of Education meetings are some of the events where the budget has been discussed.

    Up-to-date information is available on the Budget Facts page within the DCSD website. In addition to the DCSD website, we have launched a number of communication vehicles to keep you informed, including Newsline, Board Briefing, THINK (employee newsletter) and Telephone Town Halls.


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