Positioning the District for a New Direction FY16 General Fund Budget

Positioning the District for a New Direction

FY16 General Fund Budget

The tentative Fiscal Year 2016 General Fund Budget not only outlines the Atlanta Public

Schools’ (APS) revenue and expenditure plan for school year 2015-2016, it also reflects the

District’s position for a new direction. This new direction seeks to increase instructional quality

and efficiency to assure successful achievement of the District’s vision and mission.

This budget is not only a balanced budget, but a strategic and more efficient one that drives the

District to higher student outcomes and sets the course for APS to operate in the proper capacity

and at the right size for many years to come. This book illustrates to stakeholders how the

District demonstrates organizational integrity and fiduciary responsibilities in the way it

generates revenue and allocates funds in an equitable manner.

In short, this budget is a result of a close examination of the APS mission, vision, strategic plan

and guiding principles with a goal of addressing equity and enabling all students to graduate

ready for college and career.

As the District prepares for its implementation of a charter system operating model, it has

adopted a multi-year budget strategy that features the following:

 Evaluating all funding requests for alignment to the district’s mission and vision

 Identifying the resources required to support enrollment trends and to implement strategic

priorities, initiatives and budget parameters

 Reducing general administration and central administration costs to redirect resources to

support strategic priorities including initial efforts to right-size the district at the school

level

 Accelerating a tax-neutral strategy for pension benefits, and

 Leveraging new revenue options.

The tentative FY16 General Fund Budget currently stands at $682.8 million, about a $25 million

increase over this year’s fiscal budget of $657.6 million. As the FY16 Budget Overview shows,

the budget displays a significant decrease of $23 million in General Administration expenditures

and shifts an additional $35.2 million to Instruction. This is indicative of the APS goal to

increase flexible spending at the school level as much as possible.

FY16 Budget Overview

FY15 Amended FY16 Proposed Change

Beginning Fund Balance: 86.3$ 61.3$ (25.0)$

Revenue:

Local 467.1 478.2 11.1

State 151.2 177.9 26.7

Other 14.3 26.7 12.4

Total 632.6 682.8 50.2

Expenditures:

Function

Instruction 412.2 447.4 35.2

School Administration 43 47.0 4.0

Pupil Services 27.3 31.6 4.3

Staff Services 34 26.6 (7.4)

General Administration 44.3 21.3 (23.0)

Transportation 26.7 26.2 (0.5)

Maintenance and Operations 70.1 82.7 12.6

Total 657.60 682.8 25.2

Ending Fund Balance: 61.3$ 61.3$ -$

Additionally, the District projects about $29 million in mandatory increased expenditures for

special education, pension funding and teacher retirement contributions as well as increased

enrollment in APS charter schools and a decline in enrollment in other APS schools. This

required $4 million in reductions in district schools, programs and operations.

On the revenue side, the District projects to have about $25 million more in new resources - $11

million from local and state and approximately $14 million from other sources.

Local Tax Revenue

$ 478.2 million

Real property and personal property, recorded as local taxes, are the primary revenue sources for

APS. The local tax revenue is projected at $478.2 million and will be used to support the FY 16

general fund.

FY 2014

Budget

FY 2015

Budget

FY 2016

Budget

Current Property Tax

$391,000,000

$455,085,000

$468,200,000

Prior Year Property Tax

3,000,000

Intangible Tax

3,000,000

Real Estate Transfer Tax

2,000,000

Interest & Penalties

2,000,000

Total

$401,000,000

$465,085,000

$478,200,000

Taxes levied on real and personal property are based upon assessed values as of January 1. The

real estate transfer tax, which is based upon the sales price of property, is an excise tax on the

privilege of selling property. This tax is distributed by the Georgia Department of Revenue to the

City of Atlanta for allocation between the City and the Atlanta Independent School System based

upon gross millage rates.

Mandatory

$29 million

projected

increased

expenditure

State Revenue

$177.9 million

Atlanta Public Schools receives minimum education funding from the state through the Quality

Basic Education (QBE) program. State funding normally consists of support for the QBE program

and categorical aid for specialized programs and initiatives. APS is budgeted to receive $177.9

million in state funding in fiscal year 2016.

State Revenue

FY 2014

Budget

FY 2015

Budget

FY 2016

Budget

Quality Basic

Education (QBE)

$144,000,000

$151,162,248

$175,800,000

State Grants

2,200,000

2,157,898

2,100,000

Total

$146,200,000

$153,320,146

$177,900,000

Quality Basic Education Program – The revenue provided by the State of Georgia is allocated

to the District based upon enrollment, program weights, teaching, and experience factors.

$401

$465

$478

$300

$320

$340

$360

$380

$400

$420

$440

$460

$480

2013-2014 Budget 2014-2015 Budget 2015-2016 Budget

Local Tax Revenue

2014-2016

Local Tax

Revenue

State Grants – This fund contains resources which are state awarded grant funds.

Other Sources of Revenue

$26.7 million

Revenue of $26.7 million from various sources is projected to support the fiscal year 2016

operation of the Atlanta Public School System. These sources include tuition, investment income,

fees from rental of facilities, sale of school assets, and reimbursements for lost and damaged assets.

Other Sources of Revenue

FY 2014

Budget

FY 2015

Budget

FY 2016

Budget

Tuition

$10,000

Investment Interest

1,000,000

Indirect Cost Federal Project

3,500,000

3,200,000

Rent and Leases

1,000,000

Sale of School Assets

8,850,000

E-Rate

5,000,000

3,500,000

Intergovernmental Agreement

14,000,000

Other Sources

4,050,000

6,626,664

4,050,000

Total

$23,410,000

$17,136,664

$26,750,000

$146

$153

$178

$20

$40

$60

$80

$100

$120

$140

$160

$180

$200

2013-2014 Budget 2014-2015 Budget 2015-2016 Budget

State Revenue

2014-2016

State

Revenue

Tuition – Payments from non-resident students attending Atlanta Public Schools. This represents

the non-state reimbursed cost for education of each student.

Investment Interest – Revenue earned from the district’s short-term cash management activities.

Rental of Facilities – Revenue produced from rental of facilities owned by the school district.

Sale of School Assets – Proceeds from the sale of school equipment that is no longer serviceable.

This equipment is sold via a public auction.

Other Local Sources – Represents funds from various sources such as transfers from other funds,

field trips, reimbursement from professional organizations, etc.

E-Rate - Reimbursement for telecommunication charges.

Last fall, the Atlanta Board of Education approved parameters for the FY16 budget that directed

the District to focus on such areas as achieving equitable distribution of resources, funding

pension obligations and prioritizing special education and achievement in math and literacy. In

addition, the transition to the new operating model led to the commitment to push more flexible

money for staffing and programming to the school level.

This budget works hard to right-size the district in alignment with the new operating model. To

that end, this budget creates efficiencies in central administration ($5.1M), school administration

($3.8M), and teaching staff ($8.8M). The District will continue to look for opportunities to find

efficiencies at all levels in the organization to further reduce overhead costs for the school

district. In further preparation for the new operating model, APS had to consider changing the

staffing methodology.

In the previous methodology, core teachers were assigned based on projected student enrollment

and class-size maximums while non-core teachers are assigned by a mixture of methods—

formula, program needs and state/federal requirements. However, with these methods, schools

are not allowed any flexibility in course offerings and cannot exchange core allocations for non-

core allocations. As part of this budget, the District employed a significant change in the method

it uses to allocate staff for our schools. The new method combines resources for core and non-

$23.4

$17.1

$26.7

$5.0

$10.0

$15.0

$20.0

$25.0

$30.0

2013-2014 Budget 2014-2015 Budget 2015-2016 Budget

Other Sources of Revenue

2014-2016

Other Sources of Revenue

core staff and uses a formula that allocates staff based on what schools need to teach the core and

non-core classes.

This methodology provides for a new direction for the District and places APS on the path of

putting more decision-making and discretion at the school level, which is a goal of the new

operating model for APS. This budget offers each school a level of flexible dollars so they can

tailor more staffing and programs themselves to address the unique needs and demands of their

students.

Great things lie ahead for Atlanta Public Schools. The District is laying the groundwork for

improved quality and increased efficiency. And Atlanta Public Schools is positioning for a new

direction with a strategic focus on delivering a high-quality education to the children of Atlanta

that is supported by a responsible, transparent and efficient budget process.