Board of Education Director Abdullah Abdi presided over his first meeting as the newly selected Chair of the Minneapolis Public Schools Board of Education Finance Committee on January 17. Joining Abdi at the dais were committee members Ira Jourdain, Kimberly Ellison, Sharon El-Amin and Sonya Emerick, along with Senior Finance Officer Ibraihima Diop. Diop introduced the committee to what he called “phase one” of a three part plan to respond to the status quo budget projection shared in the pro forma in November 2022. 

“Priority based budgeting is the first phase of these three phases. And the goal is to make sure that we have a strong baseline or foundation to build upon,” Diop told the committee.

Without changes, the pro forma predicts the district faces a $15 million budget gap next school year, and a $100 million budget shortfall in the 2024-25 school year as federal ESSER are exhausted, district costs continue to increase and enrollment continues to decline.

In previous pro formas, the district had anticipated exhausting its unassigned general fund balance- essentially the district’s financial reserves- in the current school year, 2022-23. Using a combination of pandemic aid and savings from a significant increase in staff vacancies to fill its budget gaps and avoid making operational changes, the district has been able to delay the anticipated budget crisis until the 2024-25 school year.  

“The question is, how long can we continue functioning that way? I feel like we should be looking at the content of the pro forma and making the changes that are required,” Diop told the finance committee. 

These changes would be significant. “I have not seen a school district in my twenty-eight years that has made those changes in a year or two. And so, what I suggested to the superintendent is that we do a phased approach,” he explained.

The first of the three phases will be a move to priority-based budgeting for departments at Davis Center. “Why do we do that? Because if we have to change the trajectory from running out of money by 24-25, we would have to change the basic way we budget,” said Diop. He noted that for the first time in his eight years with the district, he feels there is a cohesive strategic plan to guide the district in linking its budget to its priorities.

“We feel that the budget is the foundation of what we need to do to address the district. Anything that we would do in phase two or phase three would be based on the budget. The budget has to be robust. It has to be accountable. It has to be understandable by the great majority of the community,” Diop added.

He also noted that part of the budget process will include meeting with community members and responding to their questions.

Priority-Based Budgeting

Phase one of the three phase plan will begin this year, with the introduction of priority-based budgeting for departments at Davis Center. According to Diop, phase two and phase three will be shared with the Finance Committee at their meetings in February and March. 

Priority-based budgeting will require departments to show how the programs they operate align with the district’s strategic plan goals, which include improving academic outcomes, student well-being, staff effectiveness, and school and district climate. Currently, departments at Davis Center are working to categorize their current programs in one of three groups: programs mandated or required by labor contracts, programs essential to operating the district, and programs provided for other reasons, according to Director of Budget Planning and Analysis Thom Roethke.

An example of something mandatory would be paying district employees, according to Roethke. He said his own department is required by statute to submit data to the state of Minnesota, so this would fall under the first category. He gave custodial services as an example of something that is essential to district operations, although not required by a particular statute or contract. 

“We don’t have to do them because anyone told us to do them. We have to do them to make everything work,” Roethke explained.

As for the third category, Roethke explained that everything else would fall into this category. “That’s really going to be the bulk of the programs.” He added, “We want them to really take those programs and tailor them to the strategic plan.”

Departments are being asked to answer two questions about their current and proposed programs: “Are these the best way to deliver on the strategic plan goals?” And, if yes, “could we be doing them better or more efficiently?” These answers will be presented to a Budget Alignment Committee in February. The committee includes Interim Superintendent Cox, Senior Officers Shawn Harris-Berry, Diop and Candra Bennett, Executive Director Sarah Hunter, Roethke, Linh Phan, and principals Tara Fitzgerald and Jessica Skowronek. The two principals on the committee were recommended by the Principals Forum to participate.

Diop said that in previous years, when department leaders would present to the cabinet during the budget process, “Money is what we would be leading with. Priority-based budgeting is forcing all of us to lead with the programs that we feel … are effective for the strategic plan.” 

Directors Ellison, Emerick and El-Amin expressed concerns about whether the departments will have had enough input from the community about which programs they feel should be a priority during the budget process. 

“When the departments are putting together their proposals, how are the departments getting feedback from the community and across stakeholder groups so that they have an awareness of what’s important to families, to students, to educators, building staff, so that those are taken into consideration when they’re preparing their proposals?” Emerick asked. They added, “I’ve been hearing from a lot of directions that some feel that it’s very important to create a way to fund librarians, media specialists, in more of our buildings. I know that because I’ve been engaged with by the union, by community members, by teachers when I’ve visited schools. How does that information get to the departments so that they can have the consideration of the different priorities of different community groups?”

Roethke responded that part of the presentation on each program to the Budget Alignment Committee will need to include how the presenters have gathered feedback, who they have consulted about the program. 

El-Amin added, “I would have also liked to have seen maybe some representation from our PACs, maybe one of our parents, so we can always keep the focus on parent voices behind the decisions that are being made within the schools.” 

After the program presentations, the Budget Alignment Committee will assess and prioritize each program based on its alignment to the strategic plan goals, effectiveness (or potential effectiveness for new programs), and “sustainable return on investment.” Next, the district will match programs with potential funding sources. Priority for funding will start with special education services, and funding to schools to meet the predictable staffing model. 

Principals will receive their school allocations on February 13. At that point, principals will create their building budget for the 2023-24 school year. Parents can provide input to principals on their budgets through their school’s site council. 

On March 3, building budgets are due back to the district for review. During this review, Davis Center staff will check to make sure the budgets align with the predictable staffing model, that categorical aid has been allocated to allowed uses, and that budgets meet the requirements of labor contracts. The district refers to this process as “budget tie-out”, sometimes abbreviated as BTO.

Additional Updates and Highlights

-Executive Director Derek Francis presented background information on the Achievement and Integration funding the district received from the state of Minnesota. This funding is earmarked to reduce disparities in academic outcomes, promote racial and economic integration, and increase access to effective and diverse teachers. The board must approve a new 3-year Achievement and Integration Plan at its March board meeting. The new plan is due to the state of Minnesota on March 15.

-The Budget Department developed a Popular Annual Financial Report that summarizes the district’s financial statements for fiscal year 2022, which ended June 30, 2022. The information is designed to be more understandable for the general public. This does not replace the district’s annual budget book. Diop said the Finance Department is three years behind in producing the annual budget book because of the disruption of the pandemic, but is working on updates.

-Interim Superintendent Cox was unable to attend the meeting because of travel delays. She delivered a video message to the board at the meeting. Cox noted the district will continue to advocate at the state level for the special education and English learner cross-subsidies to be closed. 

The Finance Committee will meet again on Tuesday, February 21 at 5 p.m. at Davis Center. These meetings are not streamed or recorded for the public. Minneapolis Schools Voices remains committed to sharing this vital information with readers and the public.