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Government of the District of Columbia
Office of the Chief Financial Officer
1350 Pennsylvania Avenue, N.W., Suite 203, Washington DC 20004 (202) 727-2476
www.cfo.dc.gov
Natwar M. Gandhi
Chief Financial Officer
May 10, 2010
The Honorable Adrian M. Fenty
Mayor of the District of Columbia
1350 Pennsylvania Ave., NW — 6th Floor
Washington, DC 20004
Michelle Rhee
Chancellor, District of Columbia Public Schools
1200 First Street, NE — 12th Floor
Washington, DC 20002
Dear Mayor Fenty and Chancellor Rhee:
I have completed the fiscal analysis of the proposed contract (Tentative Agreement) between D.C. Public Schools (DCPS) and the Washington Teachers' Union (WTU). Since receipt of the Tentative Agreement, my staff has worked closely with DCPS executive leadership and agency program staff to resolve the funding issues related to the Tentative Agreement and the FY 2010 spending pressures. After careful consideration, and pursuant to D.C. Official Code Section 1204.24d(14), I hereby certify the availability of funding for the Tentative Agreement. I further certify that the proposed revisions to the DCPS FY 2010 budget and the FY 2010 through FY 2013 financial plan are balanced.
This certification is based upon our understanding that the following actions will be taken:
• DCPS staff will work with ()CFO staff to execute the necessary adjustments to the FY 2010 DCPS budget, reflecting the adjustments proposed by the Chancellor in her letter to me of May 7, 2010 (see Attachment 1)
• The Mayor will submit to the Council a letter to request amendment to the FY 2010 through FY 2013 budget and financial plan, reflecting further adjustments proposed by the Chancellor (see Attachment 2)
• The Office of Budget and Planning will implement the proposed changes to the Mayor's proposed FY 2011 budget, submitted on April 1, 2010
• The Office of Budget and Planning and the DCPS Interim CFO will work in conjunction with DCPS executive leadership to ensure that the requested changes are fully implemented and requisite spending freezes are in place
• DCPS legal staff will work with DCPS executive leadership and WTU to ensure the Tentative Agreement complies with local and federal Anti-Deficiency Act requirements, and provides that selection of the annuity vendor will be made by the Chief Financial Officer, pursuant to the Home Rule Act
As always, my staff and I stand ready to work with both of you and your staffs to ensure the successful implementation of the new contract following its approval by the Council of the District of Columbia.
Sincerely,
Natwar M. Gandhi
Attachments
cc: The Honorable Vincent G. Gray, Chairman, Council of the District of Columbia
The Honorable David Catania (At-Large)
The Honorable Phil Mendelson (At-Large)
The Honorable Kwame R. Brown (At-Large)
The Honorable Michael Brown (At-Large)
The Honorable Jim Graham (Ward 1)
The Honorable Jack Evans (Ward 2)
The Honorable Mary M. Cheh (Ward 3)
The Honorable Muriel Bowser (Ward 4)
The Honorable Harry Thomas Jr. (Ward 5)
The Honorable Thomas Wells (Ward 6)
The Honorable Yvette M. Alexander (Ward 7)
The Honorable Marion Barry (Ward 8)
District of Columbia Public Schools
825 North Capitol Street, NE Washington, DC 20002 T 202.442.5885 F 202.442.5026 www.k12.dc.us
May 7, 2010
Natwar M. Gandhi, Chief Financial Officer
John A. Wilson Building
1350 Pennsylvania Ave., NW
Room 203
Washington, DC 20002
Dear Dr. Gandhi,
I am writing to confirm the specific manner in which DCPS has proposed to realize the $38.8 million needed in Fiscal Year 2010 to support the proposed contract with the Washington Teachers' Union as well as address spending pressures identified by your office. We have identified a series of reductions as well as offsetting adjustments as outlined below.
The following are the offsetting adjustments totaling $20.1 million:
• Shift available balance of completed Saturday Scholars program for a savings of $100,000,
• Reduce the budget to reflect an anticipated under-spend in special education for a savings of $1 million,
• Reallocate school savings on supplies and equipment, for a savings of $7 million,
• Reduce contracted services in Human Resources for a savings of $500,000,
• Reduce contracted services in the Office of the Chief Academic Officer for a savings of $1 million,
• Defer implementation of math intervention programs, for a savings of $2.1 million,
• Reduce personnel and planned expenditures in the Office of Local Education Agency Grants for a savings of $1 million,
• Begin after-school programming on the Tuesday after Labor Day unless funding is restored, for a savings of $550,000,
• De-obligate purchase orders for various purchases, for a savings of $3.6 million,
• Shift available balance of under-spend in security contract for a savings of $1.9 million,
• Delay expenditure of a portion of supplies and materials for the warehouse for a savings of $500,000,
• Delay expenditure of a portion of equipment for the Early Stages program for a savings of $500,000; and
• Delay expenditures of contracts related to advanced programs until funding is restored for a savings of $350,000.
I do want to note that many of the above adjustments may be short-term in anticipation of receiving $16.6 million in private funds to support teacher salaries and the tentative agreement.
In addition to the identified reductions, I propose to maximize federal stimulus funds, federal payment funds and Title I dollars to support this effort. The fiscal impact of this policy will be incorporated in FY 2010 by utilizing existing funding sources. The following proposals, totaling $18.7 million, will not require a further budget adjustment:
• Continue to maximize the projected $12.6 million remaining in the State Fiscal Stabilization Fund to support teacher salaries,
• Utilize the projected $3 million remaining in Title I funds to support teacher salaries,
• Apply $2 million from accrued federal payment funds for salaries; and
• Use existing 0-type fund balance of $1.1 million available from FY 2009.
Please note that the above adjustments are in addition to adjustments for Fiscal Years 2011, 2012 and 2013 that we identified earlier.
Thank you for your support and assistance in moving forward with this historic contract.
Sincerely,
Michelle Rhee
Chancellor
cc: Adrian M. Fenty, Mayor, District of Columbia
ADRIAN M. FENTY
MAYOR
May 10, 2010
The Honorable Vincent C. Gray, Chairman
Council of the District of Columbia
1350 Pennsylvania Avenue, NW
Washington, DC 20004
Dear Chairman Gray:
The purpose of this letter is to amend the Proposed FY 2011 Budget and Financial Plan, and the revised FY 2010 Budget and Financial Plan, submitted to the Council on April 1, 2010. I propose an amendment to revise the budget for the District of Columbia Public Schools (DCPS) to maximize the funds available to reward high-performing educators and to ensure that sufficient funding sources are available to support the proposed contract with the Washington Teacher's Union. This amendment also accounts for :he impact on the General Fund of the annual required District contribution to the teachers' retirement plan.
I propose to redirect funding of $38.8 million in FY 2010, $12.6 million in FY 2011, $7.3 million in FY 2012, and $7.2 million in FY 2013. The fiscal impact of this policy change will be incorporated into the Proposed FY 2011 Budget and Financial Plan.
Proposed FY 2010 Budget Adjustments
I propose to adjust the DCPS FY 2010 budget to realize $38.8 million to support the proposed contract with the Washington Teachers Union and to address any outstanding spending pressures identified, to date, by the Office of the Chief Financial Officer.
The fiscal impact of this policy will be incorporated in FY 2010 by utilizing existing funding sources. The following proposals, totaling $18.7 million, will not require a further budget adjustment:
• Continue to maximize the projected $12.6 million remaining in the State Fiscal Stabilization Fund to support teacher salaries
• Utilize the projected $3 million remaining in Title I funds to support teacher salaries
• Apply $2 million from accrued federal payment funds for salaries
• Use existing 0-type fund balance of $1 1 million available from FY 2009
• support the proposed contract with the Washington Teacher's Union, the following offsetting adjustments of $20.1 million to the DCPS FY 2010 budget are required:
• Shift available balance of completed Saturday Scholars program for a savings of $100,000
• Reduce the budget to reflect an anticipated under-spend in special education for a savings of $1 million
• Reallocate school savings on supplies and equipment, for a savings of $7 million
• Reduce contracted services in Human Resources for a savings of $500,000
• Reduce contracted services in the Office of the Chief Academic Officer for a savings of $1 million
• Defer implementation of math intervention programs, for a savings of $2 1 million
• Reduce personnel and planned expenditures in the Office of Local Education Agency Grants for a savings of $1 million
• Begin after-school programming on the Tuesday after Labor Day unless funding is restored, for a savings of $550,000
• De-obligate purchase orders for various purchases, for a savings of $3.6 million
• Shift available balance of under-spend in security contract for a savings of $1.9 million
• Delay expenditure of a portion of supplies and materials for the warehouse for a savings of $500,000
• Delay expenditure of a portion of equipment for the Early Stages program for a savings of $500,000
• Delay expenditures of contracts related to advanced programs until funding is restored for a savings of $350,000
Proposed FY 2011 Budget and Financial Plan Adjustments
To support the proposed contract with the Washington Teacher's Union, the following offsetting adjustments to the proposed DCPS FY 2011 Budget and Financial Plan are also required:
• Freeze non-critical vacant positions in the DCPS central office for one year for a savings of $1 million in FY 2011, and eliminate central office positions for a savings of $250,000 in FY2011 and $1.8 million in FY 2012 and FY 2013
• Align security budget with planned contract spending for a savings of $1 million annually in FY 2011 to FY 2013
• Reduce the number of school vacancies for a savings of $7.6 million in FY 2011
• Renegotiate food services contract and maximize revenue and efficiencies in food service operations for a savings of $1.8 million in FY 2012 and $2.8 million in FY 2013
• Align assessment and accountability budget with planned spending for a savings of $1.5 million in FY 2011, $1.5 million in FY 2012, and $1 million in FY 2013
• Moderate growth in professional development programming funding for a savings of $620,000 in FY 2011 and $600,000 in FY 2012
• Maintain Saturday Scholars program funding consistent with the projected fiscal year 2010 expenditure level for a savings of $600,000 annually in FY 2011 to FY 2013
Thank you for your consideration of this change. I look forward to continuing to work with you and the Council on the FY 2011 budget.
Sincerely,
Adrian M. Fenty
Cc: Natwar M. Gandhi, Chief Financial Officer
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