Supt. Message: APS Strategic Budget Redesign Process

APS Budget Redesign Process image - Books and Piggy BankAPS:

We are grateful that Aurora voters approved our $300 million bond measure, which will benefit every school and student in our district. While bond funds may be used for capital construction or technology improvements, they cannot be used for any school district costs such as staffing, educational programs, materials or operations.

This long-term investment by our community will help address our historical growth and overcrowding by funding many building, safety and technology improvements.

Historical Student Enrollment Trends

As a district, we have experienced an average of 2.5% growth in student enrollment for the last ten years. This long-term pattern of growth shaped our budgeting and staffing approach for at least the last decade, where each year we planned to serve significantly more students across the entire district. This historical budgeting assumption was challenged last year when APS and many other Denver metro districts saw a slowdown in the rate of growth. In the 2015-16 school year, we implemented several short-term budgetary methods such as reducing district level expenditures and spending down $8.2 million of our fund balance (you might think of this as our short-term “savings account”) to address the unexpected change in growth rates.  As we prepared for 2016-17, we set conservative parameters for our budget, including limiting compensation increases.

As you know, 2016-17 enrollment in our traditional and charter schools are down by more than 700 students. This enrollment shift now represents a trend as well as the first actual decrease in overall enrollment in APS since 2007.  Because of this shortfall, we were forced to spend an additional $9.6 million of our fund balance and reduce our current year budget by approximately $3 million. Even though these budget-balancing measures impacted the level of service that schools receive from district offices, we worked to keep budget cuts away from schools and classrooms this school year by reducing central office expenditures as we did in the 2015-16 school year.

As we begin the process of developing the 2017-18 budget, we have to consider whether our historical pattern of planning for increased enrollment is valid. While there are many data points to consider, there are two significant factors which seem to be driving our enrollment shift: the increasing costs of living in Original Aurora and the effect of declining birth rates during the Great Recession. The declining birth rates during that period have resulted in fewer kindergarten students, which will over time impact our upper grade enrollment numbers. While these and other factors are likely to result in fewer overall students, they do not necessarily impact overcrowding in parts of the district.

Compounding Budgetary Factors

Historically, APS has also seen a continued increase in our at-risk percentage, which includes students who qualify for free lunch as well as a subset of our English language learners. This has resulted in supplemental funding from various state and federal sources. Over the last two years, in addition to an overall enrollment decline, our at-risk percentage has dropped sharply from 65.2 percent in 2014-15 to 59.9 percent this year. We are forecasting that our at-risk percentage will continue to decline, resulting in even less supplemental funding.

Furthermore, state funding for K-12 education has been greatly impacted by the “Negative Factor”. The negative factor is a state budget balancing measure that allows state government to reduce revenues to K-12 education. For APS, this has meant a reduction in revenues of about $280 million since the 2009-10 school year. For next year, we are anticipating another $43 million reduction in K-12 funding statewide due to the negative factor.

2017-18 Budget Planning

This represents a “new normal” for our district and challenges us to think differently about how we develop our budget and serve our students. We need to eliminate our reliance on short-term budget-balancing measures and begin to implement long-term structural changes. As a result, we are developing a 2017-18 general fund budget of approximately $319 million. This is a change from the 2016-17 budget of approximately $350 million, which will require us to reduce our budget by $31 million. This figure includes an expected reduction in school-based staffing due to our enrollment decline.

We need your input

As we begin our budgeting process for the 2017-18 school year and beyond, I am asking for your input and ideas. We want to know how you think we can better use our limited resources to serve our students and families. We have developed a Strategic Budget Redesign Process form for you to share your thoughts and suggestions with us.

Strategic Budget Advisory Committee

As we collect your feedback, we will be forming a Strategic Budget Advisory Committee to help inform our budget redesign. The committee will consider the ideas collected from our Strategic Budget Redesign Process and provide recommendations to the APS Leadership Team. Committee members will include representatives from the Board of Education as well as APS staff, parents and community members.

Once the committee has finalized their recommendations, we will present ideas to our community for feedback in a series of open houses in January. We will provide you with more information about these open houses in the coming weeks.

Next Steps

Once we have incorporated our staff, parent and community feedback, the Leadership Team will present our preliminary 2017-18 budget to the District Accountability Advisory Committee in April. We will then propose the budget to our Board of Education in May.

I know that tough decisions lie ahead and I recognize that these budget conversations will be difficult. I am confident that together we can find solutions that continue to help every APS student shape a successful future.

Rico Munn
Aurora Public Schools

“My job is to accelerate learning for every APS student, every day.  I do my job by making sure we have the right people, doing the right work, with the right resources in the right way.  My community needs me to do my job.”