Board Reviews Financial State of the District, Changes in Student-Based Budgeting

The Board of Education tonight continued its discussions on the district’s long-range financial forecast, with Chief Financial Officer Mark Ferrandino and his team presenting the State of the District. The focus of the night’s discussion hinged on a key area of change proposed to the district’s School-Based Budgeting or SBB process — weighting budget allocations based not only on enrollment and average salary increases, but also on the number of “direct certification” students a school serves.

Because of gentrification in Denver, schools are losing critical federal Title I funds to serve their lowest-income students. As a result, the district is proposing a new tiered calculation to provide more funds for schools whose low-income populations are right below the current eligibility level to receive Title I funds. This is intended to soften the blow of the budget loss.

Potential Impact of Switch to Direct Certification as Indicator of Income

Under the proposal, DPS would continue to weight budget allocations on free and reduced lunch status but would also add direct certification as an indicator of those students most disadvantaged and in need of greater support. Direct certification refers to students who qualify for free lunch without filling out an income verification form.This includes students who receive Supplemental Nutrition Assistance Program (SNAP) or Head Start benefits, or are homeless, foster or migrant students.

While 68% of DPS students are free and reduced lunch (FRL) eligible, 60% are free lunch eligible and only 30% are direct certified — making it a strong measure of student disadvantage. As an example, a family of four with an annual income of $44,955 could be FRL eligible, while a direct certified family is most likely below the poverty line with a household income of $24,300.

Direct Certification Numbers Vary Widely from School to School

Schools with similar FRL numbers can vary widely in the number of students who are direct certified. That gap suggests there may be real differences in how disadvantaged the two schools’ populations are. Altogether, 24 DPS schools have student populations where more than half are direct certified.

Tonight’s proposal would provide an additional $80 per direct certified student, in addition to funding the district already weights for FRL eligible students. DPS already weights funding allocations in a number of other priority areas, including for students identified as Certified English Language Acquisition (CELA) and those identified as Gifted & Talented.

Proposal Increases School Budgets by $46 Million, Plus 2016 Mill Levy

The finance team also proposed increasing school budgets by roughly $2.5 million to keep pace with average salary increases and changes in enrollment. An additional $44 million is being shifted from centrally budgeted school supports to the school’s budget, including about $21 million for Early Childhood Education. And, the 2016 mill levy will bring an additional $25 million to school budgets for key district priorities, including Teacher Leadership & Collaboration, Whole Child supports, technology, early literacy efforts and concurrent enrollment.

The budget is expected to come to the board for final approval in May, but the finance team is releasing guidance to school leaders on Thursday in budget meetings.You can read the full presentation here.