Superintendent Jerry Wartgow will present to the Board of Education tomorrow (Thursday, May 20) a proposed $565.6 million budget for the 2004-2005 school year that retains focus on the district’s three goals and continues the ongoing effort to strengthen the district-wide literacy program.

“The proposed spending plan will allow schools to work with students to continue to boost reading and writing skills and keep up the district-wide momentum we now enjoy,” said Superintendent Wartgow. “Coupled with our new mill levy resources, which target dollars to schools in a way that will greatly enrich academic experiences for all students, this budget keeps a strong focus on our three goals.”

The district’s three goals are to set high expectations for students, parents, teachers, principals and all other staff of DPS and the community it serves; improve the performance of all students; and close the gap between better and poorer performing students.

The budget will be presented during the 5 p.m. Regular Meeting of the Board of Education at the administration building, 900 Grant St.

Revenues
The new mill levy funding, approved by voters in November 2003, is earmarked for specific programs. The $20 million mill levy funds in the proposed budget provide $6.5 million for art and music teachers in elementary schools, $3.5 million to expand all-day kindergarten and early childhood education opportunities, $3.5 million for new textbooks, $2.5 million to revitalize 13 neighborhood schools; $2 million to support middle and high school reforms; and $2 million to increase funding for repairs and maintenance.

The proposed budget also includes compensation increases for all employees, including 2.6 percent increase for teachers and other staff represented by the Denver Classroom Teachers Association, 1.7 percent for principals and 1.49 percent for all other employees.

The proposed budget reflects an anticipated increase in revenues from the state of $12.7 million - or 2.6 percent. Local sources of revenue (excluding the mill levy funds and charter school Amendment 23 grants) are up by $1.7 million.

Expenses
While overall revenues increased, three main issues required that reductions be made in school and central office spending in order to present a balanced budget.

First, the district’s contribution to the Denver Public Schools Retirement System is currently under funded. An additional $7.9 million is required to boost the contribution rate from 4.98 percent to 8.12 percent. (This is largely due to lower market returns in recent years on investments of the pension system.)

Second, district enrollment is anticipated to increase next school year by 826 students (from kindergarten through grade 12). However, the district charter and contract school enrollment is expected to grow by 2,093 while enrollment in all other schools is expected to drop by 1,267 students. The anticipated drop in enrollment in neighborhood schools and the increase in charter school enrollment will generate a net increase in expenditures of $7.7 million. (The district passes through about 97 percent of per-pupil funding for those students enrolled in charter and slightly less for contract schools. Five new charter schools are opening next year, bringing the district’s charter school total to 17; in addition, there will be one more contract school.)

Third, the district is continuing an effort to eliminate the previous use of one-time funding sources from the base budget. This adds an additional $6.2 million cost to the 2004-2005 budget.

Additional stresses on the budget include an increase in the scheduled debt service for Certificates of Participation ($1.8 million) and miscellaneous technical adjustments ($1.7 million).

Shortfall
With these factors, the anticipated revenue is $25.3 million short of the anticipated expenses.

As a result, the budget reflects reductions that total $25.3 million, or 4.7 percent, as a remedy to make ends meet.

The proposed budget captures central office budget reductions totaling $8.7 million (13 percent of current year spending) and $8 million in school budgets (3 percent of current year spending).

Other reductions include $5.3 million from reserves and one-time reductions, $700,000 from use of RTD for high school transportation, $300,000 from alternative school budgets and $300,000 saved from closing a school.

“We know that schools have been asked to make changes based on budget pressures this year and we know that in many cases the cuts have led to some difficult decision-making,” said Superintendent Wartgow. “However, the overall number of teachers per student should not vary too much from the current year because of the additional resources being provided to schools through the mill levy.” Many schools are reducing teacher positions, he noted, because enrollment is projected to drop – not because of the district’s budget reductions.

Superintendent Wartgow said central office changes include the elimination of the Assistant Superintendent for School-Community Partnerships position and Community Relations office and the reorganization of the Office of Community Partnerships, among other changes. In all, the equivalent of 70 central staff positions are expected to be reduced. Superintendent Wartgow noted that every department made budget reductions.

Labor Agreements
While the proposed budget includes line items for various labor agreements, Andre Pettigrew, Assistant Superintendent for Administrative Services, noted that negotiations with the Denver Classroom Teachers Association are scheduled to resume in August with the use of a mediator.

“Of course we wish we had come to agreement now so that teachers would know this summer what salary increases to anticipate next school year,” said Pettigrew. “We believe that our current proposal is fair and reasonable, given the budget climate. The proposal prioritizes teachers in the context of all spending and all labor contracts.” Pettigrew noted that the 2.6 percent increase is worth an additional $5.5 million among teachers and includes a cost-of-living adjustment and funding of the traditional salary schedule. The salary schedule provides rewards for increased years of service, longevity, and additional educational credits.

Pettigrew said he expects that the teachers association and the district would resolve the negotiations issues in August and continue to work together toward the November 2005 vote on a proposal known as ProComp that will dramatically alter the structure for determining teacher salaries and, with community support, would pump $25 million annually into teacher compensation. If the $25 million were available this year, it would represent a nearly 12 percent increase in pay.

Under state law, the Board of Education must adopt a balanced budget for 2004-2005 by June 30.