MMSD 2020-

2021

Budget

Development

March 9, 2020Operations Work Group

Objectives

• Continue development of the 2020-21 budget

• Review the potential Strategic Equity Projects

and related Central Office repurposing

• Obtain feedback on current health care

recommendations

2020-21 Budget Timeline

NovemberBudget Kickoff: Budget Overview, Revenue Projections & Strategy

December

Budget Kickoff, continued: Budget Overview, Revenue Projections & Strategy

January

March

- Healthcare/Benefits Overview and Direction- Ongoing and new Strategic Equity Projects- Early Votes: Summer School, Healthcare, and potentially a few Equity Projects

April- Pulling it all Together: Draft Budget Overview for both budgets- Regular Board Meeting Presentation of Preliminary Budget Proposal (April 27)- Start Community Feedback Phase on Draft Budget

Budget Development: Educational Equity Policy - Budget Goals & Guiding Principles, and Core Assumptions

Finalize: Staffing Projections/Workbook Releases; Summer School BudgetFebruary

2020-21 Budget Goals

In line with these Board approved policies, the budget development

process will focus on these major goals:

• Distribute equitable use of resources to support students with

highest needs

• Reduce the number of sections below minimum of the Board’s class

size policy, thus allowing for more targeted resource allocation

• Utilize the Board’s Educational Equity Tool for decision making

outside of already approved Board policies (i.e. past and future

Strategic Equity Project investments)

• Invest in a focused set of priorities aimed at multi-year investments

to meet persistent equity needs in the schools

• Provide total compensation (steps + base wage) to employees

equal to or greater than estimated cost of living (COLA) @ 1.8%

4

2020-21 Guiding Principles

• Build two budgets, both in consideration of November 2020

potential referendum results

• Allocate resources in line with District core values and aimed at

greatest impact on District’s Strategic Framework goals

• Commit to a multi-year, long range perspective on both

revenue sources and uses to sustain momentum on academic

outcomes

• Maximize efficiencies and use of taxpayer approved revenue

authority to ensure stability in schools

• Build on previous practices that are showing promise for the

future

5

6

Revenue Forecast

Strategic Equity Actions

Employee Benefits Plan

Salary & Wage Plan

Required Allowances

Staffing Plan

6

Revenue Forecast

Strategic Equity Actions

Employee Benefits Plan

Salary & Wage Plan

Required Allowances

Staffing Plan

Budget StrategyPass two balanced budgets in June

IF there is an Operating

Referendum, and

IF the Operating Referendum

passes

IF there is no Operating Referendum,

or, IF the Operating Referendum

does not pass

Revenue Forecast: $13.6 M

(IF $6M Operating ask in 20/21)Revenue Forecast: $7.6 M

IF Operating Referendum, and

IF Operating Referendum

passes

IF no Operating Referendum, or, IF

Operating Referendum

does not pass

Steps & Lanes (fully

fund with FICA, etc.)

Base Wage (max 1.8%; 1%)

$5.3 M

$4.7 M

Budget ScenariosBoard parameters built into the budget model

Employee Benefits

($3.0 M)Staffing: District & School

Strategic Equity

Projects (SEP)

$0

$1.7 M

Other:$1.9 M ($0.5 M)

Req. Allowances (2x,OE,etc.) $3.0 M $2.3 M

$5.3 M

$2.5 M

($3.0 M)

$0

$1.0 M

Educational Equity Policy 9001

...As a system committed to equity, MMSD seeks to disrupt societal

and historical inequities and eliminate disparities based on race and

socioeconomic status so that our entire learning community, including

all staff and all students, benefit and thrive. Schools will be excellent

only when all students in the DISTRICT are achieving or exceeding

universally high goals…

As such, it is the policy of the BOARD to promote educational equity

amongst all DISTRICT students through the budgeting process, the

allocation of resources and development of BOARD policies in order to

realize the DISTRICT’S vision that every school will be a thriving

school that prepares every student to graduate from high school ready

for college, career and community...

8

Core ValuesGoal 1Every child is on track to graduate ready for college, career and community.

Goal 2The district and every school in it is a place where children, staff and families thrive.

Goal 3African American children and youth excel in school.

9

Core Values

Districtwide Special Education investments

+ 5.8 FTE Cross Categorical Teachers/Special

Education Assistants ($500,000 repurposed

local funding)

Accelerated Licensure in Special Education (March early action)

+ Second year of Cohort 1 ($50,000 local)

+ Cohort 2 (External grant funding applied)

ESL/Bilingual Education Certification

(March early action)

+ Cohort 1 (External grant funding applied)

10

20-21 Strategic Equity Projects Trained, qualified and diverse staff in support of hardest to fill

areas

Core Values

Intensive Support Investments, planned expansion:

+ Behavioral Health in School (BHS) 3 additional schools

($120,000 local, March early action)

+ Elementary Mental Health Bounce Back 4 additional schools

($40,000 local, March early action)

+ High School 9th Grade CBITS in 3 high school settings

($55,000 local, March early action)

11

20-21 Strategic Equity ProjectsIn addition to last years investments, $215,000 more for mental

health supports to students.

Core Values

Promising Practices Investments:

+ Early College STEM Academy expansion to Cohort

3 for a total of 200 students ($250,000 repurposed

local & $500,000 in fundraising, March early action)

+ Expansion of Welcoming School curriculum across

the district ($30,000 local)

+ Continuation of MicroSchool at West and other

alternatives ($50,000 local and $250,000 in TID 25)

12

Strategic Equity Projects Build on previous practices showing academic growth

promise for the future

Core Values

Adopt K-5 reading materials in English and Spanish with an explicit structured approach to phonics (English)

+ Passing Budget 2020/21: $1,000,000 local

+ Non-passing budget:

➢ 2020/21: $400,000 local

➢ 2021/22: $600,000 local

13

Strategic Equity Projects Deeper learning experiences that engage, challenge and support

Core Values

Passing Budget Only Investments

+ Safety & Security Assistants job re-alignment

($156,000)

➢ 10% increase in hourly rate

➢ Additional 5 contracted days for PD

➢ Designated “High School Lead” role @ 7%

pay increase, to create leadership roles

and career pathway

14

Strategic Equity Projects New investments with targeted equitable outcomes

Discussion

15

Are there any questions or concerns for the

budgeting work moving forward?

16

Revenue Forecast

Strategic Equity Actions

Employee Benefits Plan

Salary & Wage Plan

Required Allowances

Staffing Plan

16

Revenue Forecast

Strategic Equity Actions

Employee Benefits Plan

Salary & Wage Plan

Required Allowances

Staffing Plan

Budget StrategyPass two balanced budgets in June

IF there is an Operating

Referendum, and

IF the Operating Referendum

passes

IF there is no Operating Referendum,

or, IF the Operating Referendum

does not pass

History of Health Insurance

2014-15: Health Insurance Budget Increase 5%

Added $20 Office Visit Copay to Reduce Cost

2015-16: Health Insurance Budget Increase 0%

Direct Negotiations with 3 HMO’s, No Changes Required

2016-17 Health Insurance Budget Increase 0%

Added a Tiered Employee Premium Contribution – Avg. 3.5%

2017-18 Health Insurance Budget Increase 0%

Moved to 2 HMO Plan Design (GHC and Dean)

Reinvested Savings into Employee Compensation

2018-19 Health Insurance Budget Increase of 4%

Direct Negotiations with 2 HMO’s, No Changes Required

2019-20 Health Insurance Budget Increase of 3.5%

Direct Negotiations with 2 HMO’s

Changed ER Copay from $50 to $150; Increased Employee Premium Contribution for

POS Plans

17

Current State: Enrollment

18

HMO POS

Active Employees

Dean (27%) 1020 52

GHC (73%) 2599 144

Single (28%) 1,100

Family (72%) 2,715

Retirees Under 65 (MMSD paid)

Dean 99

GHC 331

Current State: Eligibility & Premiums

19

Employee Type HMO POS

Educational Asst.

Food Service

Play & Learn

Security Asst.

1.25% 2.5%

Clerical

Custodial & Trades

Teacher

3% 6%

Professional 5% 10%

Administrator 10% 20%

Employee Premium Contributions (EPC) (percentage of premium paid by employee)

Current district contribution to healthcare is 97%

2016-17 district contribution to healthcare was 96.5%

Current State: Plan Design & EPC

20

Current State: Total Rewards

Comparables

21

Current State: Total Rewards

Comparables

22

Current State: Utilization

23

Insurance Carrier Goal

For every $1 in Premium:

$0.90 paid in Claims +

$0.10 in administrative costs

Anything above 90% limits

MMSD’s negotiating ability to

lower premium increases.

GHC (97%)

Dean (118%)

MMSD Actual

Under 65 Retirees

GHC (173%)

Dean(186%)

Discussion

24

Are there any questions about our current

healthcare plan?

FY21 Insurance Renewal

25

Initial Insurance Renewals 2020-21

GHC Renewal: $3.3M (7.5%)

Dean Renewal: $1.3M (6.9%)

FY21 Budgeted Insurance Premiums $64.8M

FY21 Projected Insurance Premiums $69.4M

Total Budget Difference $4.6M

Insurance changes are needed

to balance the budget this year

FY21 Path to Budget Allowance

26

Plan Design

Option 1

Plan Design

Option 2

Employee

Premium

Contribution

Budget

Allowanceand or =

Step 1: Change Employee Premium

Contributions ($1.8M savings)

27

Current FY21

Employee Type HMO POS HMO POS

Educational Asst.

Food Service

Play & Learn

Security Asst.

1.25% 2.5% 2.5%(GHC Family

($8.53/mo)

5%

Clerical

Custodial & Trades

Teacher

3% 6% 6%(GHC Family

($44.48/mo)

12%

Professional 5% 10% 10%(GHC Family

($74.13/mo)

20%

Administrator 10% 20% 12%($30.00/mo)

24%

FY21 Path to Budget Allowance

28

Plan Design

Option 1

Plan Design

Option 2

Employee

Premium

Contribution

Budget

Allowanceand or =

Option 1: Keep GHC & Dean (3.8M savings)

● Rate cap guarantees:

○ GHC 4.5% (2021) / 2.5% (2022) / 3.5% (2023)

○ Dean 6.9% (2021)

● Add $100 single and $200 family deductible

● Match RX to $6 / $15 / $30

● Future retirees move to Local Annuitant Health Plan (LAHP)

● $1M available to reinvest into budget

Step 2: Plan Design Changes

29

Step 2: Plan Design Changes

Option 1 - Retirees

30

Current Retirees: No changes

Future Retirees: Enrollment into Employee Trust Funds Local Annuitant Health

Program (LAHP)

● Greater choice in coverage (Dean, GHC, Quartz, WEA, and more)

○ National coverage

● Coverage available to those over 65

○ Better prescription drug coverage

● Increased negotiation ability for MMSD with insurance renewals

FY21 Path to Budget Allowance

31

Plan Design

Option 1

Plan Design

Option 2

Employee

Premium

Contribution

Budget

Allowanceand or =

Option 2: Move GHC members to Quartz (UW) &

Keep Dean ($3.8M savings)

● Rate cap guarantees:

○ Quartz 0% (2021) / 4% (2022) / 6% (2023)

○ Dean 6.9% (2021)

● Keep current Specialists

● No deductible

● Match RX to $6 / $15 / $30

● Retirees will continue on plan

● $1M available to reinvest into budget

Step 2: Plan Design Changes

32

Step 2: Plan Design ComparisonOption 1: Keep GHC & Dean ($3.8M savings)

● Add $100 single and $200 family deductible

● Match RX to $6 / $15 / $30

● Future retirees move to Local Annuitant Health Plan

● $1M available to reinvest into budget

● Rate cap guarantees:

○ GHC 4.5% (2021) / 2.5% (2022) / 3.5% (2023)

○ Dean 6.9% (2021)

Option 2: Move GHC members to Quartz (UW) & Keep Dean ($3.8M savings)

● Changes to Primary Care Providers but can keep Specialists

● No deductible

● Match RX to $6 / $15 / $30

● Retirees will continue on plan

● $1M available to reinvest into budget

● Rate cap guarantees:

○ Quartz 0% (2021) / 4% (2022) / 6% (2023)

○ Dean 6.9% (2021)

33

FY21 Path to Budget Allowance

34

Plan Design

Option 1

($3.8M)

Plan Design

Option 2

($3.8M)

Employee

Premium

Contribution

($1.8M)

Budget

Allowance

($1M)to be allocated April OWG

and or =

Next Steps

Lock in plan design changes with early vote,

March 23, 2020

○ Keep GHC and Dean with $100/$200

deductible, match RX and move future retirees

○ Keep Dean and Move GHC to Quartz and

match RX

Communicate with employees and future

retirees of plan changes

○ School visits

○ Group meetings

○ Individual consultation

35

Discussion

36

Are there any questions about moving ahead

with Option 1 or 2?

Appendix

37

Our Budget Planning Approach

The MMSD Budget Development process typically follows the

following sequence:

• Establish budget goals and guiding principles with Admin Team

and Board

• Create revenue forecast, assumptions and

projected enrollment

• Develop baseline staffing plan needed

• Determine compensation strategy

• Fund District strategic priority actions

• Finalize health care and benefit negotiations

38

Budget ScenariosBoard pre-budget work created

draft parameters built into the budget model

* CPI-u for July 1 contract is not available. July 1 est. is 1.8%.

** Healthcare negotiation has not started. Any increase would need to be off set through plan design and/or

employee contribution increases.

*** In all cases, we will work to minimize classes that are below class size or above class sizes whenever

possible.

Base Wage

(Total

Comp)*

FTE range

reduction

non-passing

budget

Maximum

Healthcare

% allowable

in budget**

Strategic Equity

Projects in non-

passing budget

Impact at Schools &

Central Office ***

1.8% (3.8%) 45 to 55 $0M max Difficult to fund Potentially over class size

policy & reduction at Central

Office

1% (3.0%) 35 to 45 $0M max $1M Within class size policy &

reduction at Central Office

.5% (2.5%) 30 to 35 $0M max $2M Within class size policy &

reduction at Central Office

39

Used for policy and decision

making:

• What data was gathered?

• Who does it burden/benefit?

• How will it advance equity?

• Are adequate resources

allocated to implement well?

• What are the measures of

success?

• How will you engage those

most affected?

• How will you monitor and

communicate results?

41

Education “Equity Tool” (https://equity.madison.k12.wi.us/files/equity/uploads/mmsd-equity-tool-final.pdf)

Resource Allocation ReviewPast Strategic Equity Project Equity Tool Review

42

Strategic Equity Projects (previously Priority Projects) are resources allocated from

within the MMSD budget targeted to accomplishing the district’s educational equity

vision, designed to meet one or more of the MMSD Strategic Framework goals.

Started in 2014-15 as a way for the Board of Education to highlight *new or expanding*

projects intentionally designed in line with the Board’s Educational Equity Policy. They

are just a small part of our overall resource alignment with equity.

This year, the SLT reviewed all past Equity Projects to ensure relevancy and highest

best use:

● All ongoing projects have been reviewed through the MMSD Equity Tool by the

Senior Leadership Team.

● Confirmed at least three projects have ended after initial evaluation. Over time,

those resources were allocated to higher leverage investments.

● All remaining projects have been determined to be moving in the right direction, but

at various stages of implementation (pilot, scale, and ways of working).

Ways of Working

• Instructional focus for Deeper

Learning:

– Common Core Implementation

– Dual Language / Biliteracy

– Advanced Learning Access

– Technology: staff and students

• Student Supports:

– SEA salary, hours and training

– Academic and Career Planning,

Counselors & Social Workers

– Family & Community

Engagement

• Climate & Culture

– BEA staffing

– Restorative Justice/Equity PD

– Developmental Design Training

43

Resource Allocation ReviewPast Strategic Equity Project Equity Tool Review

Scaling

• Instructional focus for Deeper

Learning:

– Grow Your Own Programs

– AVID expansion

– Personalized HS experiences

– Youth Leadership & Mentoring

– Early Literacy curriculum

– Welcoming Schools curriculum

– Forward Madison Partnership

• Student Supports:

– 9th Grade focus

– Mental Health:

BHS/BounceBack/CBITS

• Climate & Culture

– Student & Staff Wellness

Employee Premium

Contribution v Salary

44

*FY20 insurance premiums are used in this example

Current State: Total Rewards

Comparables Detailed Information

45

Eligibility for Insurance

46

Eligibility for Insurance(first of month following hire date, including summer months)

Employee Type Hours/FTE

Educational Asst.

Food Service

Play & Learn

Security Asst.

Hourly Staff

19+ hours per week

Clerical

Custodial & Trades

Teacher

Hourly Staff

19+ hours per week

Salaried Staff

50% FTE

ProfessionalSalaried Staff

50% FTE

AdministratorSalaried Staff

50% FTE

Retiree Insurance Information

47

Accumulated Sick Leave is converted dollar for dollar and put into an account to

pay for insurance once retired

● Avg beginning balance $32,000, providing around 2 years of paid insurance

● Insurance limited to doctors in Dane County and surrounding areas

Can stay on MMSD insurance as a retiree until age 65, even if accumulated sick

leave

● Active employees & MMSD are subsidizing retiree health insurance premiums

and coverage

Insurance Terms

48

● Insurance Provider

○ The network of providers you see when enrolled in the plan. Dean uses SSM St.

Mary’s, GHC uses GHC primary & UW speciality and Quartz uses UW.

● Deductible

○ The amount a person pays out-of-pocket before the insurance plan begins to cover

services. This amount resets annually.

○ Coinsurance is the amount a person pays after the deductible. MMSD’s HMO plan

has a 0% coinsurance (employees pay 0% after the deductible is met).

○ Deductible resets on January 1 of every year

● Copay

○ A flat dollar amount a person pays when they have an office visit, urgent care visit

or emergency room visit.

● Prescription tiers ($6 / $15 / $30)

○ $6 are generic drugs

○ $15 are preferred brand-name drugs

○ $30 are brand-name drugs where there is a generic available

Insurance Timeline

49

January - February, 2020

● Analyze plan changes

● Review options with MTI

● Negotiate with carriers

December, 2019

● Develop renewal strategy

● Receive preliminary renewal

information from insurance

carriers

March, 2020

● Present at OWG

● Lock into plan changes (3/23)

○ MMSD & carrier contract

development and

approvals

July, 2020

● Plan design & rates locked in

● Update EPC & payroll

● New insurance cards delivered

May, 2020

Communicate plan design

June 29, 2020

Budget(s)

approved

April, 2020March, 2020

Present at OWG

Early Vote to Lock

Plan Changes 3/23

April-June, 2020

● Develop & execute

communication strategy

● MMSD & carrier systems setup