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The District of Columbia Public Schools
Children First Their Future is Now
Special Education Investment and Cost Savings Plan
December 18, 2002
SUCCESS FACTORS IN IMPROVING EDUCATIONAL OUTCOMES FOR DCPS STUDENTS
Improved results for all DCPS students
- Build local school capacity to serve all students
- Develop and Implement early intervention strategies
- Ensure appropriate special education identification
- Ensure fiscal responsibility so dollars can be re-invented in
children
- Ensure compliance with IDEA and other requirements
- Resolve disputes at local school, prior to due process
- Collaborate with IHE to create wrap-around, quality programs
- Improve special education curriculum and outcomes
AREAS COVERED
- Elements of Tobacco Settlement Savings Fund
legislation
- Special Education in Washington, DC Then & Now
- DCPS Special Education Investment and Cost Savings
Plan
- Satisfying the requirements of the Tobacco legislation
TOBACCO LEGISLATION
Tobacco Settlement Savings Fund Amendment Act of 1999
(D.C. Law 130-38; D.C. Official Code §7-1811.03(b):
The plan shall commence no later than October 1,
2003, and generate savings comparable to the funds allocated to
special education programs from the annual savings in Fiscal Year 2003.
WHAT ARE SAVINGS?
Avoidance of Costs Actions taken by DCPS to prevent expenditures on projected cost increases.
Cost Reductions Actions taken by DCPS to decrease real cost of delivering services.
Increase Non-Local Revenue DCPS actions to increase Federal funds, in the form of Medicaid
recovery or IDEA grant dollars, over FY02 levels.
STATE OF SPECIAL EDUCATION: JANUARY 1, 2001
Prior to implementation of 7 Point Plan, special
education in the District of Columbia looked like this:
| |
Special education students as % of total enrollment
|
# of special education students in nonpublic placements
|
Total Special Education Cost (in millions)*
|
|
FY99
|
11.4%
|
>1,636
|
NA
|
|
FY00
|
13.3%
|
1,782
|
$220.0
|
|
FY01
|
15.4%
|
1,841
|
$232.4
|
|
FY02
|
16.8%
|
1,965
|
$254.2
|
*Total cost is all fund types and includes Special Education budget, nonpublic
tuition, attorney fees, transportation and weighted student formula.
DCPS SPECIAL EDUCATION POPULATION HAD BEEN INCREASING RAPIDLY
Number of special education students
MOST SPECIAL EDUCATION COST DRIVERS ARE MOST SPECIAL
EDUCATION COST DRIVERS ARE INCREASING, MANY OF WHICH ARE
INTERRELATED
| Special Ed cost driver: |
Cost
Driver
Direction: |
Comment: |
| Number of referrals to special ed |
Even |
- Total # new referrals in SY'99-'00 = 1,931;
SY'00-'01 = 2,635; SY'01-'02 = 2,249
- Number of new referrals has been
increasing rapidly in recent years, but may be leveling-off
|
| Average cost of non-public placements |
Up |
- Greater than 90 non-public programs used by DCPS (vs.
~50 in state of Maryland)
- Non-public day and residential costs are
significantly higher than the cost of public programs
|
| Number of non-public placements |
Up |
- Percentage is significantly higher than other
districts, in part because DC does not have city or state-run programs (such as a state school for the
deaf)
- Non-public placements could increase dramatically given
increasing # of referrals
|
| Average cost per due process hearing |
Up |
- Cost has increased with elimination of the attorney
fee cap Average cost of $2,315 per hearing in FY2001
|
| Number of due process hearings |
Up |
- DCPS had >2,205 hearing requests filed in FY2001
& >2,700 in FY2002
- DC represents ~40% of due process hearing requests in the
country (<1% of special education students)
|
| Cost per student for transportation |
Up |
- Cost to transport non-public placements is twice that
of public placements
- Cost of transportation continues to increase annually
(space constraints of current bus fleet to support ESEA and NCLB will
further increase costs)
|
Cost per student of
special ed staffing |
Up |
- Need for related service providers increases with
referral rates and enrollment
- Additional need for monitoring staff to
return students from non-public placements
- Compliance specialists must
improve capacity to implement HODs and SAs
|
Collection of
other revenues |
Even |
- Lack of management has led to lost revenues, errant
projections, inappropriate payments to providers, and legal fees
|
7 Point Plan for Strategic Reform
- 7 Point Plan developed in August, 2001 after a deficit
was discovered in DCPS Operating Budget. The Plan was implemented in January, 2002.
- Initial presentations made to City Council in
November, December, and February.
- Among the seven strategic goals are strategies to
control costs in Special Education and provide services in a more economical manner.
- Real cost savings realized quickly.
SAVINGS SINCE PLAN IMPLEMENTATION
Fiscal Year 2002
| $2,960,000 |
Increased Medicaid recovery
- Revenue collected above original
estimate of $16.7 M due to better contract management and cleaner data
collection
|
| $2,866,000 |
Renegotiation of attorney
fees
- Actual savings based on stringent
bill review by OSE and OGC
|
| $1,000,000 |
BOE-imposed cap on fees for
independent evaluations |
| $340,000 |
Review of contracted related
services |
| -$914,000 |
Overages in nonpublic tuition |
| $6,306,000 |
TOTAL FY2002 SAVINGS |
FISCAL YEAR 2003
Fiscal Year 2003
| $3,600,000 |
Increased Medicaid revenue and administrative
claim
- Continue to collect quality data
|
| $3,866,000 |
Reduction in attorney fees
- Bill review will again save $3.9 M
above projected amount of $14 M ($11 M total paid plus $3 M avoided in FY02)
|
| $1,083,000 |
Greater utilization of grant
funds |
| $750,000 |
Decreases in nonpublic tuition
- OSE/CFO collaboration in bill review
and DCPS beginning to contract with nonpublic providers
|
| $500,000 |
Decreased PS expenditures |
| $500,000 |
Reduction in related service contracts |
| $10,300,000 |
FY2003 Reductions |
|
|
| $8,500,000 |
FY2003 Cost Avoidance
- Nonpublic tuition costs saved
against projections
- Savings from fee cap on independent
evaluations
- Transportation savings from travel
training more students to ride Metro
- Ongoing review of related service
contracts
|
| $18,800,000 |
TOTAL FY2003 SAVINGS |
FISCAL YEAR 2004
- FY2004 local budget is held flat from FY2003, adjusted
for inflation.
- As a result of the $10.3 million based reduction
in FY2003 and historic $10 million budgetary increases, a flat FY2004
budget is $20 million less than what OSE was on track to spend.
- As part of the Individuals with Disabilities Education
Act, federal funds must be used to supplement not supplant
local funding.
ACTUAL VS. PROJECTED SPENDING LOCAL FUNDS
Actual & Projected Trend
SPECIAL EDUCATION POPULATION MAY NOW BE STEADY OR DECLINING
It is important to note that it is too early to determine
whether this decrease is a downward trend.
AREAS OF FOCUS FOR SPECIAL EDUCATION PLAN IN FY2003 FY2006
INVESTMENT, SAVINGS AND INCREASED REVENUE
- Additional Non-local Revenue
- Nonpublic Tuition
- Attorney Fees
- Improved Management
- Transportation
- Academic Program Investments
ADDITIONAL REVENUE
- Additional revenue is estimated
against FY02 baseline of $16.7 M
- Current collection efforts and the
transfer of the Medicaid Recovery Unit to OSE will bring recovery efforts closer
to the goal of collecting $25 million by FY2006.
| Medicaid |
| 2002 Actual |
2003 Budgeted |
2004 Proposed |
2005 Projected |
2006 Projected |
| $2,961,340 |
$3,600,000 |
$6,830,609 |
$7,249,609 |
$7,914,551 |
NONPUBLIC TUITION
- Historically, nonpublic tuition
increases 7% per year.
- DCPS will increase capacity by 250
seats per year beginning in FY2004. In FY2003, capacity was expanded by 100 seats.
- Strong bill review process and
increasing the number of nonpublic providers with contracts with DCPS will bring
down high tuition costs.
| Reductions and
Savings Against Projections |
| 2002 Actual |
2003 Budgeted |
2004 Proposed |
2005 Projected |
2006 Projected |
| -$918,044 |
$7,704,089 |
$15,523,073 |
$23,426,788 |
$31,906,375 |
ATTORNEY FEES
- Savings are against FY02 baseline of
$13.9 M.
- DCPS Student Hearing Office will
transfer to the Citys new Office of Administrative Hearings in FY04 this will
lower the number of due process cases going to hearings.
- Better bill review through hiring
staff dedicated for this purpose has already saved $3 M.
| Savings From
Projected Spending |
| 2002 Actual |
2003 Budgeted |
2004 Proposed |
2005 Projected |
2006 Projected |
| $2,866,000 |
$4,254,918 |
$5,436,171 |
$6,558,628 |
$7,729,842 |
IMPROVED MANAGEMENT
Replacing related service contracts
for OT/PT, speech and language therapy and social workers with DCPS FTE will
significantly lower the cost of providing these services.
Board of Education cap on fees for
independent educational evaluations saved $1M in FY2002 and will continue to save
money in the out years.
| Savings From
Projected Spending |
| 2002 Actual |
2003 Budgeted |
2004 Proposed |
2005 Projected |
2006 Projected |
| $1,340,000 |
$2,270,961 |
$3,132,660 |
$3,195,313 |
$3,259,219 |
TRANSPORTATION
- Savings are based on transitioning
appropriate students from bus transportation to riding Metro. Each student using Metro
and not riding a bus saves approximately $9,700 per year.
- Moving appropriate junior high and
high school students from bus to Metro will reduce stigma issues associated with
bus ridership.
| Savings From Adding
Metro Riders |
| 2002 Actual |
2003 Budgeted |
2004 Proposed |
2005 Projected |
2006 Projected |
| $0 |
$970,000 |
$1,455,000 |
$1,940,000 |
$2,245,000 |
PROGRAM INVESTMENTS
- DCPS will expand capacity by 250
seats each year beginning in FY2004. In FY2003, capacity was expanded by
100 seats.
- Investments include costs associated
with program expansion and development to serve more students within DCPS.
- Investments will be funded through
savings in other areas.
| Investments in
Programs |
| 2002 Actual |
2003 Budgeted |
2004 Proposed |
2005 Projected |
2006 Projected |
| $0 |
$0 |
$6,427,500 |
$6,556,050 |
$6,687,171 |
SAVINGS REALIZED FROM PLAN
- Annual savings will exceed $27M by
FY2005.
- Cumulative savings by FY2006 are
expected to exceed $133M.
| Savings |
| |
2002 Actual |
2003 Budgeted |
2004 Proposed |
2005 Projected |
2006 Projected |
| Annual |
$6,249,296 |
$18,799,966 |
$25,950,013 |
$35,814,239 |
$46,547,817 |
| Cumulative |
$0 |
$25,049,261 |
$50,299,274 |
$86,813,513 |
$133,361,329 |
SATISFYING THE REQUIREMENTS OF THE TOBACCO LEGISLATION
The plan shall commence no later than October 1,
2003
YES, the Special Education Reform Plan was
implemented beginning January 2002.
.and generate savings comparable to the funds
allocated to special education programs from the annual savings in Fiscal Year
2003.
YES, since its inception, the plan has saved $18.8
million to date through cuts to the Special Education base,
increasing Medicaid recovery and avoiding historical increases and will
annual savings of $35.8 million by Fiscal Year 2005.
SUCCESS OF REFORM PLAN IS DEPENDENT ON $27 MILLION
DCPS revised FY2003 Local budget relies on $27 Million
- 75% of special education budget
($107.6 million) is mandated costs
- The FY2003 local budget relies on
the $27 million
Reducing FY2003 budget repeats the vicious cycle of the
past
- Further cuts can only occur in programs
- Results in under investment in local programs and early intervention
- Increased referrals and reduced local capacity
- Increased non-public tuition, transportation and legal costs
|
