AllentownSchool District

2018-2019 Budget Update and Bond Information

LetterheadApril 26, 2019

Dear ASD Community,

Yesterday, the Allentown School District Board of Directors was asked to vote on an arduous recommendation. Although the decision the board was asked to make was thoroughly researched and vetted at state and local levels, it was still one of the last options available to close an immediate and urgent gap in the district budget. We recognize the challenging long-term position this may create; however, we cannot ignore the current short-term financial needs of the District and ultimately our staff, students, and families.

While this proposal was not successful, we understand and appreciate the fortitude of our leaders as we move through these dire circumstances. As we have fielded many questions and concerns from the community this morning, please allow me to share some context to the District’s financial situation.

As ASD has committed to “righting our ship” several significant cost drivers have been identified that have put continued stress on our finances. Growth in these areas impact the resources we have available to provide equitable opportunities for our students. Three examples of these drivers are: 
• Charter School tuition costs 
• Special Education student needs
• English Language Learner costs

The Allentown School District is projected to pay approximately $56 million (17% of the annual budget!) in charter school tuition fees this year. This is the second largest expense after employee costs. Charter tuition costs increased by 285% over the last six years. Our tuition rate for Special needs students is over $22,000 per student.   Our internal resources do not support our district spending a commensurate amount on the children we serve in ASD, for an increasing population. 
 

BudgetPieChart

This year the District is projected to spend more than $42 million on Special Education programs to meet the needs of our most vulnerable student population.  These costs have increased by 22% over the last six years. As an example, Autistic support needs continue to increase, with five new Autistic classrooms (student-teacher ratio 8:1) projected for 2019-20 at a cost of more than $1 million to the District. 

AS Classrooms

English Language Learner student enrollment has increased by 60% since 2010-11. Due to decreases in funding, the District has seen an 11% reduction in English Language Learner staff. The percentage of English Language Learner students in the Allentown School District exceeds the state average by 196%.  

Over the past 18 months, the District has promoted systemic change within the Allentown School District. This process, which began in August of 2017, prioritized the financial state of the District and the need to assess fiscal challenges.  As a continuation of the internal systems review initiated in 2017-18, the District partnered with Carbon Lehigh Intermediate Unit 21 (CLIU21) to improve internal processes in the Business Office and Human Resource systems.  

The District has faced a long-standing budget challenge which has finally reached the deficit cliff. Through a fiscal review and projection of the District’s finances, PFM, LLC, an independent third party, identified a structural deficit (right column below).  At the same time, the District’s year-end audit identified the same structural deficit over the past five years of fund balance reflected in the table below.

PFM Projections Table

Just four years ago, our district had a $31M fund balance.  The structural deficit has depleted that reserve.

Despite the District’s fiscal challenges, our leaders remain committed to equity. This commitment is demonstrated through promoting the equitable allocation of resources to promote empowerment and engagement with our families and community.  This means our children, families, and teachers deserve the same opportunities as other families and educators in the Lehigh Valley and Commonwealth of Pennsylvania.  

Our district has been financially challenged for the past few years. We continue to applaud the wealth of technical assistance and support that our local legislators, as well as the Pennsylvania Department of Education, have provided to our district. Without this support we would be sharing a much bleaker picture.

Finances are undoubtedly a hurdle for our district. This fiscal cliff is something that has been coming for several years in ASD. We are not shying away from our commitment to excellence, our commitment to our children and families, and our commitment to our staff.  As we continue to address these longitudinal fiscal concerns, we must preserve our academic programs and services in our schools and classrooms. Our children deserve it and we must ensure they have it!

Now is the time to change the narrative in our district. We must own our past and present issues with finance and budgeting. For far too long, we have been organizationally quiet about other significant issues that impact our ability to provide meaningful services for our children.   

These are the realities that we face. As a Superintendent, and parent in ASD, I am committed to advocacy on behalf of the children that we serve in this district each day.  

Sincerely,


Thomas E. Parker
Superintendent, Allentown School District