Finance Committee - 4/12/24

Board of Directors - 4/17/24

LCPS 2024-25 BUDGET Preparaton

2023-24 Timeline Overview

Month to Month - where we are headed!

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July to January Summary

Revenues and Expenses

Summary - MYP (unchanged since March report)

Summa

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Summary - Updated MYP

Summa

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February: Making Targeted Investments: Includes the board approved teachers’ compensation increases

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February: Identifying FTE reductions / consolidations for subsequent years: In each of the scenarios, we will need to have some level of reductions.

• FY25 will begin implementing staffing reductions - Evaluating 10-15 FTE reduction.
• FY26 will fully implement reductions due to sunsetting funds (Note: FY 26 does not include any new state revenue in the form of grants at this time)

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March: Approved Material Revision for Lighthouse K-8

• Lighthouse K-8 material revision was officially approved to add TK (40 students) and 25 students for our middle school (total - 65 student increase)
• The current MYP update assumes the material revision is approved and that we add TK in FY26

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April: Our Teachers in Training Model (24 budgeted/12 at each site in FY 23-24):

• We are evaluating the short and long term viability for our Teachers in Training. These roles are funded by our after school program related grants, receive CTC (teacher preparation) grants for their degree and credential/residency costs, and our one time funds (which are rolling off). We are awaiting a couple of key grants that would fund these critical roles

Proposal 1: Move to a Partially Outsourced Custodial Model & Restructured Internal Staffing Model to Lower Cost & Increase Quality

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*Link to Overall Proposal, including SWOT, Bid & Staffing Model Analysis found here.

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Summary:

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• Existing Challenges: Due to a variety of challenges related to maintaining staffing that meets our quality standards at a reasonable cost, LCPS staff began exploring the possibility of outsourcing part of our custodial services and restructuring our remaining internal staffing to maximize efficiency, quality, and cost.

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• Opportunities: We have worked with custodial services in the past and have outsourced other seasonal services. Based on recent reduced pricing with our sub service, we decide to explore the possibility of further cost savings through such a model and began a deeper analysis of current vs. alternative staffing models.

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Proposal 1: Move to a Partially Outsourced Custodial Model & Restructured Internal Staffing Model to Lower Cost & Increase Quality

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*Link to Overall Proposal, including SWOT, Bid & Staffing Model Analysis found here.

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Analysis & Vendor Selection Process:

• Conducted a thorough and competitive bidding process and received 3 competitive, responsive bids for custodial services in line with our fiscal policy requirements.
• Analyzed how to restructure remaining roles due to shifts in responsibilities that would come with a partially outsourced model to increase efficiencies & cost savings.
• Determined the process we would use to select existing staff for remaining roles and worked with all bidders to ensure current staff could potentially be hired by vendor to reduce impact on staff whose jobs would be consolidated.

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Conclusion:

• LCPS can achieve ~20-25% reduction in overall staffing and outsourcing costs totaling $200-225K annually by partially outsourcing it’s custodial staffing and restructuring remaining staff for more cost-effective and higher quality operations.
• LCPS staff recommends the LCPS Board approve Rich to enter into a contract with the selected vendor (Rojas Janitorial) for up to $26,910 per month not to exceed $322,920 for the 2024-2025SY following legal review of the contract.

Proposal 2: Meal Service Contract Vendor Selection & Contract Award Recommendation

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*Link to RFP & Process Documentation.

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Summary:

• LCPS needed to enter into a new three year meal service contract per federal nutrition policy (and was overdue per recent audit findings in doing this).
• We currently contract with LunchMaster and previously contracted with Revolution Foods. Post-pandemic nutrition services vendors have consolidated and closed resulting in fewer responsive bidders.

Proposal 2: Meal Service Contract Vendor Selection & Contract Award Recommendation

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*Link to RFP & Process Documentation.

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RFP & Vendor Selection Process:

• We contracted in the fall with School Food Solutions to provide consultation and management of the RFP process to vet and complete the selection process for a new meal service vendor in compliance with Federal nutrition policies..
• Conducted a thorough and competitive RFP process resulting in 2 competitive, responsive bids in compliance with federal requirements for meal service vendor selection RFP process.
• As part of the process conducted two taste tests and additional surveying of families and students regarding the vendors.
• Recently completed final review and rating of both proposals resulting in recommendation of contract award.

Conclusion:

• LCPS staff recommends the LCPS Board approve Rich to enter into a contract with the selected vendor (LunchMaster) for XXX following legal review of the contract.

Upcoming: Safety Grant Project RFPs for Visitor Management System & New Camera System

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Summary:

• LCPS was awarded a three-year federal safety grant that provides $700K per year for a variety of safety initiatives.
• Due to the funds being federal funds, we have to follow our federal procurement policy to ensure funds are correctly expended. Due to this, we will need to use an RFP process for any use of funds above $10,000 where we don’t want to be required to use the lowest price as the criterion for awarding a contract (as in both the small procurement and IFB processes).
• We have identified two sub-projects that require us to conduct an RFP process:
• A $35-50K project to purchase a visitor management software system–Awarding this contract will not require Board approval as it falls under Rich’s purchasing threshold
• A ~$350K project to purchase and install and newer camera system-Awarding this contract will require Board approval as it is above Rich’s purchasing threshold
• Next Steps:
• Staff will work with legal counsel to draft and post both RFPs and conduct a compliant process to solicit proposals and conduct demos with vendors with a goal of bringing a contract for Board approval to the June 12th Board meeting.

From Previous Board Meetings

2nd Interim Summary

Revenues and Expenses

*Note:Last Year of ESSER, Educator Effectiveness, Strong Workforce, A-G Learning - We will be winding down spending by the end of the school year for these grants.

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Revenue Assumptions for 2nd Interim (March) for 2023-24

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To have a strong fiscal close to the end of the FY:

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• LCFF: Increase our attendance rates to improve ADA. This requires us push second semester to get to a 92% attendance rate or higher for the end of the year.

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• Restricted Funding: We are on pace to spend down all restricted funding budgeted for this FY, including ESSER and other one time related grants that end this summer.

• Restricted funds coding : Ensure that expenses are properly coded to restricted

funds when intended since restricted funds counts as deferred revenue where it is only earn when it is appropriately expended

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• Connectivity Grant : We are verifying a $200k grant as a part of the one time emergency connectivity fund that will offset costs incurred for network improvements

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Expenses Assumptions for 2nd Interim (March) for 2023-24

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To have a strong fiscal close to the end of the FY:

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• 1000, 2000, and 3000: We are on pace to be within our budget for all certificated and classified employees, as well as for benefits costs. Summer programming costs were added to match the increase in summer revenue funds that were noted in the previous slide

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• 4000 and 5000: Here, we expect to be under budget, as historically, spring spending at the end of the year was largely for school readiness for the next. One shift in our accounting we want to make is to book revenue/expenses for purchases for the following SY
• Note: this will have implications / shifts to our 2nd interim and end of year close that may be slightly different from adopted budget.
• Next level streamlining of Tech, Operational, SPED Contracting, and Curriculum management.

• Unbudgeted Expenses: Continue to monitor substitute, legal, facilities costs (example: city taxes were unbudgeted for Lodestar’s 15 parcels).

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Summary - MYP - 2nd Interim

Summa

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Summary - MYP

Summa

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Making Targeted Investments: Includes the board approved teachers’ compensation increases

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Identifying FTE reductions / consolidations for subsequent years: In each of the scenarios, we will need to have some level of reductions.

• FY25 will begin implementing staffing reductions
• FY26 will fully implement reductions due to sunsetting funds (does not include any new state revenue in the form of grants at this time)

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Working Toward our Material Revision for Lighthouse K-8 and Full Enrollment of our High Schools

• We will be bringing a discussion around a material revision to add TK (40 students) and 25 students for our middle school (total - 65 student increase)
• The current MYP update assumes the material revision is approved and that we add TK in FY26

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Our Teachers in Training Model:

• We are evaluating the short and long term viability for our Teachers in Training. These roles are funded by our after school program related grants, receive CTC (teacher preparation) grants for their degree and credential/residency costs, and our one time funds (which are rolling off).