The Minneapolis Public Schools Board of Education Finance Committee met May 3 to review the proposed 2022-2023 budget. As announced at the April 13 finance committee meeting, Davis Center department budgets will be cut by 5%. The cuts to administration will include cuts to academic programs, custodial services, ventilation upgrades, and state-leading programs to train, hire, and retain teachers of color.
The district reversed a planned 3% cuts to schools and will now increase overall school building budgets by 1%. This increase is not being allocated equally across schools.
By state law, the school board must vote to pass a balanced budget by the end of the fiscal year, June 30, 2022. Before this vote, planned for June 14, the finance committee must vote to send a budget resolution to the full school board. The committee will meet again May 17, where the focus will be on the budget allocations to individual school buildings. The committee would then take the budget to the school board where it will be reviewed. At a second meeting, June 14, the board will vote on whether to approve the budget. In previous budget cycles where significant cuts have been made, like the 2018 board vote for the 2018-2019 budget, board members have brought forth amendments to amend the proposed budget before voting for approval.
The finance committee is composed of Committee Chair Kimberly Caprini, Directors Siad Ali, Jenny Arneson and Sharon El-Amin, Board Chair Kim Ellison, and Senior Finance Officer Ibrahima Diop.
On May 3, Senior Financial Officer Diop presented an overview of the updated budget, including changes to how the ESSER III COVID relief funds will be used.
The district is changing its plan for ESSER III federal COVID relief funds to allocate 78.5% ($125.2 million) to “continuity of services.” Originally the district was planning to allocate 46.7% ($74.6 million) to this category. Diop explained “continuity of services” means keeping staff in school buildings that would have otherwise been cut in order to match staffing levels to the large declines in enrollment in 2020-21 and 2021-22 school years, plus the further declines anticipated in 2022-23.
The ESSER III funds for continuity of services will be allocated through the 2023-2024 school year. There will be no ESSER III funds remaining for the 2024-2025 school year.
Twenty percent of the ESSER III funds, $31.9 million, are required by federal law to be used only for “learning loss”. One and a half percent, $2.5 million, in ESSER III funds will be allocated to community partnership contracts for culturally specific programs to support students and families.
The district is also planning to use a portion of its estimated assigned general fund balance to balance the budget. The assigned general fund balance is general fund revenue that has been designated for a specific purpose by the board or superintendent. Diop stressed that it is the assigned fund balance, not unassigned, that is being used to balance the budget.
“Touching [the unassigned fund balance] would inevitably lead to a downgrade in the bond rating. And if we are talking about the capital plan… we do want to approach those transitions with a good bond rating,” Diop said. The bond rating signifies the riskiness of the district’s bonds and determines the interest the district must pay on the bonds it issues. A higher bond rating means the district is rated as less risky, and can raise funds by issuing bonds at a lower cost.
Diop also noted that the adjustments to the capital plan that were presented at the April 26 committee of the whole meeting were necessary, not just because of the supply chain issues Senior Office Karen DeVet mentioned in her presentation, but because of constraints on the district’s ability to borrow capital funds. Board policy 3290 currently limits the portion of the operating revenue that can be used for debt payments to 15%.
Because of declines in enrollment, and the associated declines in revenue, the district cannot meet its original capital plan while following that policy.
The leaders of each administrative department presented on how they will implement the 5% budget cuts to their respective departments.
At the meeting, Davis Center departments presented what they are cutting from their budgets. The departments that presented were: Board Office, Superintendent’s Office, General Counsel, Communications, Academics, Information Technology, Accountability, Research & Equity, Finance, Operations and Human Resources.
Overall, department budgets were reduced by 5%, which allowed the district to increase budgets to schools by 1%. Initially, the district had anticipated reducing school building budgets by 3%. In total, Davis Center department budgets were cut by $37 million, with $30.5 million of the cuts coming out of programs that would have been funded with the ESSER III. Those ESSER III funds are now being used for continuity of services.
The largest department cuts are happening in Operations with nearly $18 million in cuts from an overall budget around $70 million. This department includes transportation, custodial services, and capital projects. The leader of Operations, Senior Officer Karen DeVet, said that the $17.3 million cut from ESSER III funds allocated to Operations will primarily impact ventilation upgrade projects. The district is looking to other sources of capital funds to be able to carry out those projects. The department will also eliminate 29 existing vacancies for custodial staff and external contracts it had been using to fill those positions temporarily.
The academics department will eliminate both vacant, planned and current positions as it cuts nearly $8.3 million from its budget.
Academics leader Senior Office Aimee Fearing said that the Academics Department faced cuts from the general fund budget and ESSER funds. Fearing said she was able to preserve some programming, particularly around early literacy professional development, through the use of the ESSER funds specifically dedicated to learning loss.
In addition, the Academics department eliminated several new positions. “We had wanted to put more support to schools in the areas of the strategic plan such as literacy, math, social studies, science and STEAM,” Fearing said.“We wanted to help our teachers with that content knowledge, as well as help with instructional practice.” Fearing said the planned positions will not be created. The department also eliminated some existing positions in math, literacy and advanced learners.
Fearing said there were also cuts to professional development.
“It’s important for board members and the public to know that our expectations of academic outcomes are still going to be the same next year, regardless of how much professional development we’re able to offer,” Fearing said.
Fearing also said that they were able to keep the K-2 literacy coaches at each school, because those support the strategic plan. But, she said, they decided to cut the differentiation coaches. Differentiation coaches help teachers plan instruction to meet the needs of students who are in the same classroom, but have a varying degree of proficiency relative to grade level.
There has been a reduction in the number of students who qualify for special education services because of declining enrollment. Fearing said Academics will reduce staff support in this area, but will maintain service levels beyond the minimum requirements.
In reaction to the budget cuts presentation, Director Sharon El-Amin said, “I am concerned about the academic loss that will continue…I know we don’t want to get to the point where we are reducing staff, but I also … want us to be giving our students the best academic experience possible that they can have in MPS.”
Superintendent Ed Graff acknowledged El-Amin’s concerns.“We tried to prioritize the schools as much as possible,” Graff said, “We tried to make adjustments to our departments in ways that do not impact students and schools directly, but that’s almost impossible because we are here to serve our students and schools.”
Director Jenny Arneson asked for clarification about what types of expenditures can be made with the ESSER III funds specifically set aside for learning loss.
“One could argue everything we do is academics,” Arneson said.
The Finance Department representative said that the district distinguishes the learning loss category as programs where the district could directly show that the programming was addressing the academic impact the pandemic has had on students. Literacy professional development for educators is an example of the type of program that could be defined as learning loss support. .
Graff said the district is being very deliberate about what they label as learning loss support for the purposes of the ESSER III grants because of the need to be in compliance with federal guidelines for these funds.
Director Arneson also asked about the elimination of the differentiation coaches at K-5 schools. Differentiation coaches help teachers plan instruction to meet the needs of students who are in the same classroom, but have a varying degree of proficiency relative
“I will fully admit that we are not serving those students well, either, “ said Senior Officer Fearing about advanced learners in the district. She went on to explain that the differentiation specialists had been put in place three years ago, and that she does not believe that the model is functioning well for students. “I think we have pockets of success, but if you give it three years, we should have more than pockets of success,” she said about the differentiation specialists.
Director Arneson defended the differentiation specialists saying “I think that those positions have… only been around for two years so I hesitate to say whether or not those people have been successful or not.”
The Human Resources department is proposing cutting all of its state-leading programs that were targeted at training new teachers of color.
Candra Bennett, who is serving as the interim senior Human Resources officer after the departure of Maggie Sullivan at the beginning of April, said that her department will be reducing staffing that recruits and retains “top talent.”
Human Resources is also losing $1.1 million in ESSER III funds as those funds are going to continuity of services. That funding was being used to support a number of programs to expand and diversify the teaching workforce.
“I don’t know if you are aware, but we are leading the state in innovative ways to get …mainly people of color into the classroom, mainly by way of [alternative] licensure pathways. With the reduction of $1.1 million we’ll have to do away with those [programs],” Bennett said.
Those programs include a licensure program within the district to license staff who already have a Bachelor’s degree, and a program for educational assistants to work towards completing their BA while also working towards licensure. The cuts also include the teacher pathway program, which prepares current high school students for careers in education, and the residency programs in special education and elementary education. These programs would have supported the second goal of the new strategic plan: “Effective Staff- School and district staff approach all work centered on students and equity.”
Bennett did clarify, in response to a question from Board Chair Kim Ellison, that the Black Men Teach program will continue. There is grant funding for those positions at two schools next year.
Arneson also asked about the cuts to the Finance Department and how that might impact the annual audit report finding on segregation of duties. Diop responded, “The segregation of duty finding has been coming up on every audit because we know that even with the efforts that we have made in the finance office, I know what the adequate number in the finance office should be and we are not there yet. We are closer than we were 4 or 5 years ago.”
Diop said finance staff are currently working with the auditors on ways to use existing staff so that duties are sufficiently separated within the department to avoid having that finding again. He said the department needs significantly more employees in order to avoid that finding in the future.
The finance committee meets only in person. There is no recording or streaming option. The next meeting is May 17 at the Davis Center at 5 p.m.. Allocations to schools will be the focus of that meeting.