Buffalo Public Schools 2024-2025 Budget Update and Two-Year Plan

1. Buffalo Public Schools Buffalo Public Schools 2024 2024- -2025 Budget Update 2025 Budget Update – – Level 3 Budget A Two A Two- -Year Plan to Align Staff Counts to Enrollments Year Plan to Align Staff Counts to Enrollments Level 3 Budget Finance & Operations Committee Meeting – Wednesday May 1, 2024 Dr. Tonja M. Williams – Superintendent of Schools Mr. Jim Barnes – Chief Financial Officer BOE Member Cindi McEachon – Chairwoman Finance and Ops. Committee “Equity for all, in all that we do” “Equity for all, in all that we do” 1

2. 3 Stretch Goals for the Superintendent 3 Stretch Goals for the Superintendent The Board has identified 3 Goals for the Superintendent by 6/2024. To support the achievement of the following goals and student growth: 1. The percentage of BPS third grade economically disadvantaged students proficient in Reading as measured by the end of year (EOY) Dibels Assessment will increase from 33% in June 2023 to 39% by June 2024. 2. The percentage of BPS third grade economically disadvantaged students proficient in Math as measured by the EOY iReady Assessment will increase from 13.3% in June 2023 to 15.9% by June 2024. 3. The percentage of “Unofficial” 4-year graduation cohort students who complete stateand district graduationrequirements will remainconsistent from75.7% in June 2021 to 75.7% in June 2024. The Budget for 2024-2025 demonstrates : A. Detailed strategy to equitably disburse funds, while maintaining fiscal wellness B. Great sensitivity toward student needs C. Prioritization of Five by 2025 initiatives that the district has made investment into. 2

3. Objectives for Tonight Objectives for Tonight • Discussion of the Big Picture • Sharing the Budget Process – Levels 1 – 5 • Informing of the SBB vs. Munis FTE reconciliation and Superintendent Add Backs • Identifying and updating on BPS’ plan to Mitigate layoffs • Reviewing the Level 3 Budget Summary and Detail • Explaining what happens in the Level 4 Budget Process • Beginning to discuss the Updated 4 Year Plan due June 30, 2024 • Summarization • Responding to Questions 3

4. The Big Picture The Big Picture • The Superintendent is keenly aware of the needs of our students, schools and departments and is leading the charge to provide the necessary resources to meet the needs all to the best of her ability for in the 2024-25 budget. • Dr. Williams has decided upon a two- year plan to address the structural issues facing the district. This decision is based upon the loss of $90 million in funding, aligning total FTE count to declining enrollments, the continuing challenges facing our students and the financial strength of the district. • The two-year Plan must reduce the total FTE count (at schools and central office) to right size staff and costs to the decrease in enrollments of 3,400 students over the last several years. • The Superintendent’s Plan has the dual (and competing) objectives of reducing our staff costs while at same time mitigating layoffs, as much as possible. • The 24-25 Budget will begin to address the District’s structural challenges as we develop a fiscally responsible update to the 4 Year Plan. • The Plan to mitigate layoffs includes: • Implementing a hiring freeze (except for essential positions). • Cutting non-mandated vacancies at both central office and schools, as best we can. • Reducing Coach/TOSA/ITC positions and moving staff back to classrooms, after detailed analysis. • Not filling projected non-mandated retirements (we are taking a 2-year outlook on retirements). • Commitment to use of up to $80 million in District Reserves in the 24-25 Budget Year. • The success or failure of the Plan will depend upon all of our collective discipline as an organization to not fill vacancies or retirements over the next two years and not process unbudgeted requests during the year. • The Superintendent is dedicating up to $80 million of District Reserves to implement the two-year Plan. 4

5. The 24 The 24- -25 Budget Process Approval Levels 1 25 Budget Process Approval Levels 1- -5 5 • Level 1 was the “worst case” budget scenario used to provide an initial projection based upon known revenues, moving all 313 ARP/ESSER FTES into the General Fund, the impact of contract, step and longevity increases & the associated increases in benefits, projected Charter school enrollments, minimal changes to non staff expenditures and updated Debt Service. Level 1 showed a $102 million deficit. • The Level 2 Budget was based upon the Governor’s proposed budget. The formula based SBB process were incorporated into the budget and a Superintendent Equity Holdback was established. Non staff expenditure requests were entered by the departments. Benefits ($226 million), Charter Tuitions ($175 million) and Debt service ($92 million) were updated. Level 2 Budget showed a $79.8 million deficit. • During Level 3 - Revenues were revised for the final State Budget. The Superintendent has put together a specific list of additional School Based FTEs to add back to the budget. Further meetings with departments were conducted to review non staff budget submissions. Level 3 Budget shows a $83 million deficit. • During Level 4 - The Superintendent is recommending to use Reserve amounts to close any deficit and balance the budget. The Superintendent will allocate the add backs to specific locations. One last review for expenditure costs at Central Office. The final Level 4 budget including updated SBB books will be presented to the Board for approval at the May 15thBoard Meeting. • Level 5 is when the Board Approved budget. All accounting allocations will be made in Munis. This will be imported into the Munis accounting system for the July 1, 2024 – June 30, 2025 fiscal year. 5

6. The SBB vs. CY Munis FTE Reconciliation The SBB vs. CY Munis FTE Reconciliation C Y FTE S INC LUDING ALL AR P/E S S E R (R E DUC TIONS )/ ADDITIONS IN MUNIS L3 S BB E QUITY BAS E D FOR MULA VAC ANC IE S AND R E TIR E ME NTS OBJE C T C ODE 110-TE AC HE R ON S PE C IAL AS S IG NME NT 112 and 166 -AS S IS TANT and AIDE S 100, 120 and 121 -TE AC HE R S PR E K - 6 130 and 136 -E L7-8C OR E /K-12C UR R E X 140-PUP PE R S ONNE L S TAFF 141-TE AC HE R S HANDIC APPE D 143-LIBR AR IANS 148-C OOR DINATOR S 156-PR INC IPALS S E C HS 157-AS S T PR IN S E C HS 163-S C HOOL C LE R KS 165-S TAFF 79 927 732 1,405 254 849 116 1,001 770 1,510 304 857 (37) (74) (38) (105) (50) (8) (1) (3) - (11) (3) (1) 8 56 37 50 7 56 5 3 3 7 10 1 36 6 60 113 105 37 9 60 124 108 1 G rand Total 4,566 4,897 (331) 243 LE S S 141 - TE AC HE R S HANDIC APPE D 849 857 (8) 56 TOTAL NE T OF S PE D 3,717 4,040 (323) 187 6

7. Superintendent Equity Add Backs Superintendent Equity Add Backs COST WITH BENEFITS 1,815,660 5,544,000 2,891,252 ITEM FTES COST/UNIT 117,900 TOTAL COST 1,296,900 660,000 3,960,000 675,600 126,675 2,065,180 150,000 NOTES AP'S AIDES/ASSTS PUPIL PERSONNEL MUSIC SCHOOL 084 OTHER TEACHERS/SUBJECT AREAS ORCHESTRA CAMP 11.00 22.00 44.00 8.00 1.50 24.44 30,000 90,000 84,450 84,450 84,500 924,000 945,840 177,345 Reduced Program from CY TOTAL 110.94 8,934,355.00 12,298,097.00 The add backs above will be allocated to the schools at the discretion of the Super. and no formulas apply. These add backs do NOT provide the schools with the same FTE counts as in CY 23-24 because vacancies and retirements will not be filled due to enrollment declines. 7

8. Updates to the Plan to Mitigate Layoffs Updates to the Plan to Mitigate Layoffs • Hiring Freeze – will remain in effect except for essential positions. • Retirements – in addition to the vacancy cuts we have identified 42 retirements that will not be filled at the end of this year. Retirements are running lower than projected in 23-24 but we expect it to pick up substantially in the 24-25 year. • Vacancy Cuts: CY Revised B udg et F T E A ll F unds at J an 2024 5,177 Vacancy Cuts % 4.90% 2.80% C entral Office S chool Based 857 42 145 T otal 6,034 187 3.10% 1. As of 4-25-24 we have identified a total of 187 vacancy cuts that will be processed in both the current year and the 24-25 Budget. 2. Vacancy cuts mean this position is reduced in position control and no further posting for these jobs can occur. T hey are eliminated from our Budgets. 3. T he 187 above is less than the 300 total vacancies that exist. T he difference is because we cannot cut mandated positions and must account for essential positions and hirings in progress (which will stop). • We will reduce 35 Coach/TOSA/ITC positions and move staff back to classrooms. This will result in “bumping”. • Use of District Reserves – the Superintendent has committed up to $80 million in District Reserves to implement the plan to begin aligning staff to enrollments, mitigate layoffs and close the remaining deficit. • We are estimating total layoffs of 30 staff based upon information above. This number could change based upon greater retirements, impact of bumping, change in “leaves” and several other factors. 8

9. Projected Impact on Staffing Vs. Enrollment Issue Projected Impact on Staffing Vs. Enrollment Issue PROJ ECTED FTE REDUCTION IN 24-25: C O VAC ANC Y C UTS S BB VAC ANC Y C UTS R E TIR E ME NTS POTE NTIAL L AY OFFS 42 145 42 30 9 T OT A L FT E R E DUCT IONS 259

10. Level 3 Budget Summary Level 3 Budget Summary VARIANCE (L3 - 24-25 BUDGET) 24-25 L1 24-25 L2 24-25 L3 23-24 BUDGET % NOTES REVENUES (NO USE OF RESERVES) 1,079,409,600 1,082,300,178 1,082,196,582 1,065,000,000 17,196,582 1.61%FINAL STATE BUDGET. SEE DETAILED ANALYSIS. INCLUDES SBB RECONCILIATION AND SUPER EQUITY HOLDBACK WITH STEP, LONG AND CONTRACT INCREASES. BENEFITS AND CHARTER INCREASES. SEE DETAILED ANALYSIS. EXPENDITURES 1,180,566,596 1,162,158,360 1,165,486,885 1,102,725,000 62,761,885 5.69% SURPLUS (DEFICIT) (101,156,996) (79,858,182) (83,290,303) (37,725,000) (45,565,303) 4 YEAR PLAN SURPLUS (DEFICIT) (29,400,000) (29,400,000) (29,400,000) FTES - GENERAL FUND + ARP/ESSER 5,318 5,102 5,101 4,936 165 3.34%CY REVISED INCLUDES CO VAC REDUCTIONS. BEGINNING GEN FUND - FUND BALANCE TOTAL (AUDITED) L1 DEFICIT PROJECTED END FUND BALANCE 375,527,368 (101,156,996) 274,370,372 375,527,368 (79,858,182) 295,669,186 375,527,368 (83,290,303) 292,237,065 The Level 3 budget shows a 1.6% increase in revenues and a 5.7% increase in expenditures. The Total General Reserves would be reduced from $375 million to $292 million. Please remember Total Reserves are reduced by restricted and allocated items totaling about $200 million in the current year. 10

11. Level 3 Budget Detail Level 3 Budget Detail - - Revenues Revenues 23-24 CY REVISED (70,718,966) (11,500,000) (3,000,000) (4,847,051) (53,200,000) (918,838,464) (2,895,519) (1,065,000,000) Revenue Category City Interfund Medicaid Other Sales Tax State Aid Tuitions to Other Districts 24-25 LEVEL 2 (70,718,966) (3,700,000) (3,000,000) (4,958,909) (56,000,000) (940,326,884) (3,595,519) (1,082,300,278) 24-25 LEVEL 3 (70,718,966) (3,700,000) (4,000,000) (4,958,909) (56,000,000) (939,223,188) (3,595,519) L3 - CY 23-24 7,800,000 (1,000,000) (111,858) (2,800,000) (20,384,724) (700,000) (17,196,582) % Change - 0.00% -67.83% 33.33% 2.31% 5.26% 2.22% 24.18% - - - Grand Total (1,082,196,582) 1.61% Revenue numbers appear as negatives (credits) in the Munis system. The Final State Budget did NOT result in any additional State Aid to the District in 24-25. L3 Revenues are up $17.2 million or 1.6% from the Current Year. State Aid revenues are up $20.4 million or 2.2%. 11

12. Level 3 Budget Detail Level 3 Budget Detail - - Expenditures Expenditures 2023-24 REVISED BUDGET FTE 4,936 399,759,105 5,101 425,207,355 165 25,448,250 - 213,072,279 - 226,635,057 - 13,562,778 - 38,671,642 - 50,718,602 - 12,046,960 - 158,918,700 - 175,012,600 - 16,093,900 - 62,990,131 - 63,959,347 - 969,216 - 105,851,299 - 95,912,634 - (9,938,665) - 1,825,514 - 1,158,492 - (667,022) 8-Equipment, Rentals, Repair, Custodian - 42,950,699 - 49,065,107 - 6,114,408 9-Supplies, Textbooks, Software - 22,404,735 - 27,267,087 - 4,862,352 10-Tuition - 35,101,047 - 35,076,757 - (24,290) 11-Utilities - 12,112,337 - 12,473,846 - 361,509 12-Contingency - 9,067,512 - 3,000,000 - (6,067,512) 2024-25 LEVEL 3 FTE - CY REV FTE 2024-25 LEVEL 3 BUDGET -CY REV BUDGET 2023-24 REVISED BUDGET 2024-25 LEVEL 3 FTE 2024-25 LEVEL 3 BUDGET % Change from CY Revised Row Labels 1-Salaries 2-Benefits 3-Contracts 4-Charter School Tuition 5-Transportation 6-Debt Service 7-Interfund Transfer 6.37% 6.37% 31.15% 10.13% 1.54% -9.39% -36.54% 14.24% 21.70% -0.07% 2.98% -66.91% Grand Total 4,936 1,102,725,000 5,101 1,165,486,884 165 62,761,884 5.69% L3 Expenditures are up $63 million or 5.7% from Current Year General Fund expenditures. The L3 budgeted FTE count is up 165 positions from the Current Year General Fund. This is the net impact of adding ARP/ESSER FTEs, cutting vacancies, retirements and layoffs and the Super. add backs. 12

13. The Level 3 Expenditure Budget The Level 3 Expenditure Budget • Please refer to the bound Level 3 Budget Books for detailed analysis. • The largest increases in costs are: • Salaries and benefits increased by a combined $39 million or 12.6% due to an increase of 165 FTE’s and contract and associated benefit increases. • Charter Tuitions increased by $16 million or 10.1% due to projected higher enrollments and large and negative increases to the underlying formulas for both General and SPED populations. • SPED related budgets increased by 45 FTE’s and over $5.9 million to a total of $143 million. • Contracts increased by $12 million or 31.1% due to carryovers from ARP/ESSER in IT $3.77 million, Staff Development $2.2 million, Health Services (nurses) $1.6 million, Summer School (Say Yes) $1.5 million, Pre-K 3Y (Say Yes) $1.45 and Security $560,000 (training for security officers). • Equipment, Rentals, Repair increased by $6 million or 14.2% due to increase in IT $5.7 million (student and staff devices replacement), and Plants $2.3 million (land improvement – Riverside Stadium, and playgrounds construction). • Supplies, Textbooks and software increased by $4.8 million or 21.7% due to increases in WOZED $3.3 million, IT $920,000 (Software), and Security $848,000 (Evolv Software & Service). • Offsetting these increases are decreases in the following areas: • Debt Service will decrease by $9.9 million or 9.4% as we continue to pay off our existing debt. This decrease will be offset by a similar decrease in Building Aid. • Contingency will decrease by $6 million or 67%. The current year amount of $9 million was due to an estimate of the BTF contract increases in year 2 of the new contract. 13

14. What Happens in Level 4 What Happens in Level 4 • The Superintendent will decide upon the allocations of the 110 School Based FTE addbacks. • The budget department will complete meetings with all cost centers for final review of 24-25 budget submissions. • The Superintendent has requested another review of Central Office staff levels. • The budget department will update projections/budgets for the following expenditures totaling approximately $393 million next year: • Benefits. • Charter Tuitions. • Further meetings with Board members and Cabinet. • Grants will continue to look for new funding opportunities. Not to add staff but move it from the general fund. • At the end of Level 4 we produce a Superintendent Proposed 24-25 Budget with all final reports including final SBB summaries. 14

15. Updated 4 Year Plan Due June 30, 2024 Updated 4 Year Plan Due June 30, 2024 • We manage our finances in the short term with detailed reviews of current year spending versus the Approved Budget, monthly monitoring of critical variables, Quarterly Reports to the Board and cash flow management. • More importantly we project and plan our district finances according to a 4 Year Plan that incorporates the projected consequences of the decisions we make every budget year on our Fund Balances. It also incorporates detailed projections on enrollment, Charter enrollment and Foundation Aid. • The 4 Year Plan includes projections for all funds including; General, Grants, Debt Service and Capital Projects. The updated 4 Year Plan will include our first borrowing in approximately 10 years to include the DaVinci/Buffalo State Project and select projects from the Building Condition survey. • The 4 Year Plan will include accelerated planning for building closures over the next 2-3 years. • Our updated 4 Year Plan is due to the CITY, BFSA and State around June 30, 2024. 15

16. Summary Remarks Summary Remarks • While focused on the short-term loss of ARP/ESSER revenues and the longer-term structural issues we should not lose sight of the good that has been accomplished the last couple of years and that is included in the 24-25 budget once again. • We are in a better position to deal with the current challenges than most districts. Our plan revolves around flat non staff budgets AND a hiring freeze, cutting vacancies, a review of the TOSA/Coach positions and utilizing retirements to avoid layoffs. • The 4 Year Plan is the key financial planning tool for the District. It incorporates future year projections for the decisions made during the current year budget process and the impact on our fund balance. The Updated 4 Year Plan will include plans to keep the District in strong financial health as it meets the structural (and other) challenges. • From a financial planning and cash flow perspective there will no longer be substantial “vacancy savings” to rely upon for budgetary savings. We have to manage better with the resources provided within the budget. There is no room for unbudgeted requests in the coming year. 16

17. Buffalo Board of Education Buffalo Board of Education Dr. Tonja M. Williams, Superintendent of Schools Hon. Sharon M. Belton-Cottman, President and Ferry District Board Member Hon. Dr. Kathy Evans - Brown, Vice-President of Executive Affairs and East District Board Member Hon. Lawrence L. Scott, Vice-President of Student Achievement and Board Member-at-Large Hon. Terrance L. Heard, Board Member-at-Large Hon. Cindi M. McEachon, North District Board Member Hon. Jennifer L. Mecozzi, West District Board Member Hon. Dr. Ann R. Rivera, Board Member-at-Large Hon. Theresa Schuta, Park District Board Member Hon. Paulette Woods, Central District Board Member Ms. Daijha Mims, Student Representative 17