← School Business Insider
School Business Insider
Strengthening School Leadership, Part 2: Budgeting & Resource Management
00:54:19
Loading summary
Transcript143 lines
- [00:01]
John Brucato
You're listening to ASBO International's School Business Insider. I'm your host, John Brucato. Each week on School Business Insider, I sit down with school business officials and industry experts from around the world to share their stories and explore the topics that matter most to you. Find out what it means to be a school business official and get your insider pass on all things school business. Hello everyone, and welcome back to School Business Insider. Budgets are more than numbers. They are a reflection of a district's priorities and values. But when funding is uncertain and financial pressures mount, school business officials must make tough decisions to ensure fiscal stability while while continuing to support students and staff. In part two of our Strengthening School Leadership series, I am joined by Jonathan Travers, President and Managing Partner of Consulting at Education Resource Strategies, or ers. ERS partners with school districts to help them strategically allocate resources, navigate budget shortfalls, and maximize the impact of every dollar. The episode is packed with practical insights for making informed, strategic budget decisions that keep your district on a strong financial footing. If you missed part one with Jim Rowan, be sure to go back and listen to our discussion on leadership ethics and decision making in uncertain times. Now, let's dive in. John, welcome to the podcast. I'm so happy to have you.
- [01:30]
Jonathan Travers
Thanks, John. Nice to be here. Good to see you.
- [01:33]
John Brucato
Yeah, I'm glad I could get you on for this, this two part series. I'm really excited to kind of explore a little bit more about, you know, navigating budgeting shortfalls and really maximizing resources. And you know, what we try to do every day is doing more with less. But before we dive into too much, can you just maybe give our audience a little bit of your background and the work that you do at ers?
- [01:52]
Jonathan Travers
Yeah. Okay, so ers Education Resource Strategies, we're a nonprofit based in Boston, but we work with districts all over the country and I say we are the time people and money folks. So we are studying and looking at resources and how we allocate and use resources in service of what we think is going to be most impactful for our students. I myself, my background started out actually as a teacher early days of Teach for America shifted over to budgeting and resource stuff. Stuff worked at the federal government very briefly at OMB and then shifted to a local level as budget director of the D.C. school System for a few years. And really since that point the last, I think I'm on my 25 years of budget cycles, have been studying what good budgeting, what effective practice looks like, what good resource allocation looks like and so that's largely what ERS is doing. We're helping districts either sort of in one off engagements or generally by putting info out into the field, helping them figure out how to do the most, get the best impact with the resources they have.
- [03:03]
John Brucato
Wonderful. Well, it sounds like I have the right man on the podcast today for this conversation. So, you know, that being the case, what do you feel is really some of the biggest financial challenges that school districts are facing right now? I mean, it seems year after year there's always something, but what is kind of the challenge du jour in 2025 in recent times?
- [03:23]
Jonathan Travers
Well, I'll tell you my answer if you tell me yours. So I was actually just at the ASA annual conference the last few days here and I, I was really interested to see like what, what's the vibe, what's on people's minds right now. And I will say I've been at this conference a number of times and obviously this is superintendents, not CFOs, not business officers. But resources, finances are on people's minds for sure in a way that's different this year than I've experienced in the past. You know, I think like the headline and I think you, you're wise to choose the podcast topic you have. The headline is uncertainty. I think people just don't have their arms around what is going to happen. I certainly don't and are feeling a lot of pressure and worry about what to do about that. Underneath that, I'm looking at enrollment decline in places that are funded on the basis of attendance.
- [04:32]
Jim Rowan
Right.
- [04:33]
Jonathan Travers
Chronic absenteeism as really significant revenue uncertainty, revenue drivers, and also a little bit of cost. I think coming out of COVID we've seen an increase in the districts that we're working with, like an increase in the underlying student need. So a lot of us have lost enrollment, but we actually have maintained flat special ed or even grown a little bit on special ed. So as a percent, actually, special ed is higher now.
- [04:57]
Jim Rowan
Right, Right.
- [04:58]
Jonathan Travers
And the level of need that folks are talking about of like the needs of those of those populations is actually different than it was pre Covid. There's this whole like post esser sustainability thing. I know your district's a little bit different from some of the ones that we're working with, but you know, that was a big chunk of change for a while.
- [05:18]
Jim Rowan
Right.
- [05:19]
Jonathan Travers
Maybe we, we built up a little bit of a fun balance, but we're drawing it down this year and maybe we see a path to a little bit more of a drawdown next year, but that's it. And who knows where federal is going to end up for next year?
- [05:29]
Jim Rowan
Right, Right.
- [05:32]
Jonathan Travers
And, you know, and like, you saw those NAEP results a couple of weeks ago. I mean, I think the imperative for improvement is stronger than it's ever been. And there's a pressure, like a political pressure around improvement that's pretty strong. Oh, and like, and also, you know, maybe AI changes everything and we should just totally figure out something else, you know, so. Yeah, yeah, it's a really uncertain.
- [05:59]
John Brucato
Yeah, I couldn't agree more. I think, as I kind of preface my question, there's always some level of uncertainty, and I think that's kind of like just the space we operate in in education. You know, you never really know what the next policy is going to be, what the next mandate is going to be. But I think the politics of education has really just ramped up in the past few years, and especially now where I, you know, maybe for right or for wrong, I think education has been viewed as just that same sacred cow, that there's always going to be funding for it. There's always going to be priority around funding for education, but I don't know that that's the case so much anymore. And I think that is a new, unprecedented level of uncertainty that we're not quite used to kind of living in. And, you know, who knows? But that's going to play out in the next year or four or six, who knows? But I think it's up to us to kind of strategize and kind of get uncomfortable with where the uncertainty lies, because Covid was its own level of uncertainty, but we were able to react. The federal government was a backstop for that, and some districts are now feeling some pain points not having that funding anymore. But the premise of just not having really potentially any funding going forward really is a huge, huge issue. So I agree a lot with what you said, and I just don't know that there is a clear path forward. It's just, you know, every day seems to be another challenge and another hurdle. So, you know, I think a lot of this is going to play out in the, in the political arena. I still think there is some sacred cow to education. I mean, that's one of the pillars that the United States is really founded on, is just providing a public education for its citizens. So to strip away the funding, I would hope is an unlikely scenario, but not without some kind of battle, not without some pain points and some pressures along the way. So I think, you know, to. To kind of build on your, your what, what, what are districts kind of leveling with? That's, that's really what I'm seeing from, from my vantage point.
- [07:59]
Jonathan Travers
Yeah. Like maybe just building on that a little bit during COVID I feel like the nature of the uncertainty we were facing was like what do we do tomorrow?
- [08:10]
Jim Rowan
Right.
- [08:10]
Jonathan Travers
You know, like our, our, our, our vision was pre, you know, previously. It's, you sort of want to be on the horizon. Right. As a, as a financial leader. Let me, let me understand what the horizon, what I can see on the horizon and manage toward that. We shifted to looking straight down at our feet, like how do we get to the next day?
- [08:26]
John Brucato
Yeah, those survival instincts allowed us to kind of be a little bit more comfortable with uncertainty because we were dealing day by day, not all right, what does the next two years look like?
- [08:34]
Jonathan Travers
Right, right. But I think, I mean we're now in a different kind of uncertainty, like a more maybe existential that is more back to horizon level. But it's like what, like really how is this going to play out over the next two or three years and what does that mean for the choices that we need to be making? You know, we're right now largely planning FY26, you know, largely planning for next school year. How do you make choices now that preserve the discretion you're going to need to be able to move forward with next year in a way that does right by kids, but also is just right by the what is currently unknown.
- [09:12]
Jim Rowan
Right.
- [09:12]
John Brucato
And I think having lived through some of this just in my career of a lot of uncertainty, something like this, I mean, when we get to maybe a more of a plateau in terms of where we are in education and education funding specifically, Hindsight is always 2020. I think there's going to be some districts that really kind of buckled down and saved every penny and built up large surpluses that may not have needed it or the opposite could have happened. It's like, well, we need to do everything we can now. And now they've spent down all their fund balances and they're kind of in a, in a really financial difficult position. Maybe similar to those that have spent down esser monies and weren't matching, you know, one time revenues with, you know, one time expenditures. But again, I, I, I know this is kind of a non answer, but I don't know that we know what the right approach is because I can't think of a time in recent history where we've had to deal with this long term existential uncertainty. You know, right.
- [10:09]
Jonathan Travers
Right.
- [10:10]
John Brucato
So when we think about uncertainty, specifically with the budget, how would you really kind of define that? I mean, you went through, there's enrollment issues, there's just issues with like federal funding and just kind of funding in general. But what to you is budget uncertainty, and how does that really define the critical issue for the sbo?
- [10:26]
Jonathan Travers
Yeah, I mean, just to start really simply A minus B equals C, revenue minus expense equals surplus or deficit. And so the uncertainty is with A and B. How comfortable am I with what I think is going to happen on C?
- [10:46]
Jim Rowan
Right.
- [10:49]
Jonathan Travers
We're obviously trying to do that in the context of serving students. And so I think one, I know as part of the definition of budget, budget uncertainty, but a premise of it is we need to manage uncertainty at the same time as we need to manage our ability to serve students effectively. And so we can't. Like, we are in the business of serving kids. We're not in the business of preserving fiscal sustainability. Right. We have to do the former, we have to do the latter in service of the former, not the other way around.
- [11:19]
John Brucato
Right, right.
- [11:20]
Jonathan Travers
And so, you know, let's just sort of set that as a premise first. But you know, like, really just again, just sort of basic level, when you're in budget building times, the uncertainty is largely going to be on the revenue side. And because you're still in a position of being able to have some influence over where you think your expenditures are going to be. And as you get clearer about revenue, then you need to make better decisions or tighter decisions then about expenditure. Once you get far enough into that, once you flip into the, into the current year, then it's almost like it reverses. Like generally, then revenues are pretty much certain or like the variability is very low at that point. Although this next year, who knows. And then it's much more about like, okay, so what exactly is my vacancy rate? Like, where exactly are we on? You know, very, on very small things, but so the magnitude, A, it shifts and B, the magnitude gets much smaller.
- [12:12]
Jim Rowan
Right, right.
- [12:13]
John Brucato
And I'm curious your thoughts on this next question. You know, what are some of the common mistakes that districts are kind of making with these financial uncertainty? I mean, you know, one that I've seen locally here in New York is there was, it was, I believe, last year, the year prior, there was potential major funding cuts to our major aid formula in New York. And some districts really took that as gospel right out of the gate and made huge sweeping cuts across their budget. And so much so where the state came out a month later saying timeout like, you know, basically not saying we didn't mean it, but just to be prepared for it. But I think I've seen a lot of. I don't want to say overreaction, but just maybe being too diligent on preparing for some kind of revenue shortfall. But what are you seeing most commonly, districts doing those mistakes specifically with these uncertain times?
- [13:06]
Jonathan Travers
Yeah, I see three things. One, I see folks being defensive about the uncertainty and feeling it's a reflection on. And going about it in a way, as though it's a reflection on their management.
- [13:23]
John Brucato
It's such an interesting point.
- [13:24]
Jonathan Travers
Like, we didn't do this to ourselves. This is being done to us.
- [13:28]
John Brucato
Right.
- [13:29]
Jonathan Travers
And so I don't. And like, the, the irony of, like, the irony of that is then if you are sort of private about it and you, you know, it's. Sometimes it sort of, it, like, leads to downplaying it. It's like, yeah, well, you know, but I'm managing it like, I know what I'm doing. It's going to be okay.
- [13:50]
John Brucato
So where do you think that comes from? Is it just a pride in the work and wanting to know and have the answers for your community? Like, where does that defensiveness come from?
- [13:58]
Jonathan Travers
Do you feel, I mean, like, you know, you've been. You've been in a board meeting and like, those board members are asking you the question, and like, you want to give the answer. You want to give a answer you don't want to give. Well, it is this + or -25%, right?
- [14:10]
John Brucato
Right.
- [14:10]
Jonathan Travers
Or it is. It is this, this, this, or this, and I don't know which one.
- [14:13]
Jim Rowan
Yeah.
- [14:14]
Jonathan Travers
You know, it's like we're all human. Let's recognize that SPOs are people, you know, and we. And we are the ones that are supposed to know the answers to the questions.
- [14:22]
Jim Rowan
Right.
- [14:23]
Jonathan Travers
To the financial questions. And so, like, I. The m. The consequence of doing that sometimes, I think, is that you then own the problem.
- [14:32]
Jim Rowan
Right.
- [14:33]
Jonathan Travers
It's like you haven't been transparent about it. And so then time passes now all of a sudden, because you haven't raised it. Now, this is actually, this is your problem to solve, and it doesn't have to be our collective problem to solve. The other very related thing and I think, I mean, it's like, I don't know, maybe choose two different sides of the same coin is sometimes you don't want to be transparent about something until you have a plan for what to do about it.
- [15:04]
Jim Rowan
Right.
- [15:05]
Jonathan Travers
And so, yes, I know I don't really have a scenario for what happens if title two doesn't come through next year. True thing may not come through. I don't have a plan for that yet. So I'm not going to really engage others in that until I feel like we have a plan buttoned up.
- [15:22]
John Brucato
Yeah, because you're just kind of breeding more unrest because it's like, well, why would you talk about it if you don't have a follow up?
- [15:27]
Jonathan Travers
Right. But I do think that there's like, you know, we, we encourage folks to, to be clear that this is the thing, this is the unknown, this is the timeline for the unknown becoming known. And here's our process given that timeline. And so no, we're not in a position right now to tell you exactly what we would do if this thing happened, but we would be able to position in a position to, to, to share that at this future point because we will have more information at this other, you know, at this time. So the whole thing about being differentiating between the transparency around the issue and the transparency around the solution, like I think those are important distinctions. And then the other thing just to end where you started is I think folks are sometimes too conservative too fast.
- [16:19]
Jim Rowan
Yeah.
- [16:20]
Jonathan Travers
And you lock into the worst case and you build on that and then you end up probably causing a lot of stress. And I mean obviously sometimes politically like you people need to go through that in order to be ready to actually make those decisions. But we sometimes budget toward the bottom end of the possible outcome. And as a result, like, you know, you leave impact on the table and.
- [16:47]
John Brucato
So how do you strike that balance? Is it, is it just experience knowing how these political winds change? I mean if I'm thinking, if I'm a new school business official and I'm seeing all of these headlines, I don't know, maybe my, my reaction is to just be as conservative as possible because I don't want to be on the other end of things and have to cut mid year or something like that. But you know, how do you strike that balance? I mean where, where do you, where do you source your information? Where, where, where do you get the, the most center view on like what you should be doing?
- [17:18]
Jonathan Travers
Yeah, I mean, I think the short answer is right now I'm not sure where to get good information on at least where federal stuff is going to head.
- [17:30]
John Brucato
Sure.
- [17:34]
Jonathan Travers
I think different folks have different relationships with their seas, with the state ASBO chapters. And I know that there are individuals, different states have different partners that help them predict where state revenue is going to end up and so on. So I think those things are all important. I do think that there is value in scenario planning.
- [17:57]
John Brucato
Yeah.
- [17:58]
Jonathan Travers
And just understanding, okay, if we did need to get to this target, what. What do we see as a path? And maybe we're not, you know, maybe you're doing that as an individual first, then you're doing that with your soup or soup and team. And then maybe you're. Maybe you get to the point of engaging the board in that exercise, but you are thinking about multiple scenarios. I also think in. I probably should have started with this. Like, it's important to have criteria and priorities. And I think another challenge that we see, particularly in reduction periods of reduction, is that the expedient beats the trumps the strategic. Because we haven't done the work upfront of really being clear about what's most important to us and having criteria for decisions that aren't just like, what's the thing that we can get away with easiest?
- [19:00]
Jim Rowan
Right, right.
- [19:01]
John Brucato
And you know, one thing I would add to that, too. I would also recommend leaning on your veteran colleagues. When I started out, you know, their history does tend to repeat itself in many iterations. And I found myself asking some of my veteran colleagues, you know, this seems similar to six years ago when we had this financial issue. I'm just speaking hypothetically at this point, but, you know, I would lean on them to say, well, how did you approach this? Like, what resources did you go to? Like, what state resources? Where. What publications? Like, where are you sourcing your information? And I think being able to forge those relationships with veteran colleagues is crucial because they almost have that muscle memory in terms of how to react to these challenging situations. So I think being able to recognize kind of those leaders in your. Your area, whether it be in your state or international, really proves to be a great resource because, you know, that they've maybe have that muscle memory and that intuition to. To kind of navigate these. These challenging times.
- [20:00]
Jonathan Travers
Nice. Agree.
- [20:02]
John Brucato
So let's really talk about the practical then. So if. If someone listening to this is kind of nervous about what the horizon is and what the uncertainty brings, if they're potentially in a revenue shortfall scenario, what are those first steps? I mean, what should school business officials really be reacting to and deciding to keep their budget sustainable to keep kids educated in the classroom.
- [20:28]
Jonathan Travers
Yep. So I do want folks to start with priorities and criteria. And sometimes that is an expression of or that is expressed in a strategic plan.
- [20:45]
John Brucato
Sure.
- [20:46]
Jonathan Travers
Sometimes strategic plan sort of is almost a political statement, and you actually need to have a sort of a separate thing to articulate budget or resource priorities.
- [20:54]
Jim Rowan
Right.
- [20:57]
Jonathan Travers
The other thing that we're actually getting some traction on recently is return on investment of existing investments. So sometimes we think about ROI as a way of evaluating what we should, what we should initiate.
- [21:12]
Jim Rowan
Right.
- [21:13]
Jonathan Travers
And I think we're now in a phase where there's a lot of value in reflecting on the ROI of what we've done. You know, like there's been a moment this past year as ESSRA was winding down that a lot of folks had choices. Do we, do we find General Fund resources to continue the things that we launched with Esser? And if so, then we're going to have to displace, discontinue some things that have legacy things that we've been funding. Previously on General Fund can say a bunch more about ROI and how we think about it, but giving folks, not the cfo, like giving folk, other folks in the, in the, in the district time and a structure for reflecting on the ROI of existing investments is an important step toward actually building a robust, more of a robust menu of what our options are to shoehorn into whatever targets we feel like we need to.
- [22:14]
John Brucato
So with a study on ROI and a practice on evaluating your programs and what's best serving you, your district and your students, I mean, what happens when you have multiple programs that are showing a strong return? Is it just kind of a sliding scale of we're going to have to cut something so it's whatever falls to the bottom. Is it what most aligns with your strategic priorities? Talk to me a little bit more about really making those tough decisions. And maybe you have a few programs that are really doing well, but you can't sustain all of them.
- [22:41]
Jonathan Travers
Yeah, yeah. I think there. So as we think about roi, we think that the center of it and we have a whole thing on our website, if you just.eurostrategies.org and then ROI, you'll see a whole toolkit that I think has got some nice resources. But we think laying out the theory of action of the investment is a really important first step. So what is the logic chain that gets us from the input from the investment that we're making to the outcome that we're aspiring for? And just understanding all those little pieces is really important. There's very few things that we're doing unless we've partnered with some university to set up the right experimental design. The nature of what we're doing is that there's so much going on in our systems that it's almost impossible to isolate an impact to an Individual investment. So having that whole logic chain where you're looking at, where you can see, okay, well, what are our implementation metrics? What is our cost per. Before we even talk about income, about impact, what's the cost per student served? The actual cost, not the budgeted cost, the actual cost per student served, not students plausibly served. Like, how much do we actually spend per student on this? What was the need profile of those students? Like, how much do we match the students we served to the folks that we were intending to serve with this?
- [24:14]
Jim Rowan
Right.
- [24:15]
Jonathan Travers
What are the leading indicators that we're seeing from. From this? So we, if we, if we're doing sort of a, you know, social emotional thing, investment, we are unlikely to be able to tie an outcome, at least in the short term, an outcome to the investment. But we know from research that there are leading indicators that are maybe about student satisfaction, maybe about student attendance.
- [24:37]
John Brucato
Sure.
- [24:38]
Jonathan Travers
A number of things that are in between the input and the outcome. And can we measure those as if we better understand those, and we know from research that there is this relationship between the leading indicator and the outcome, then we can feel confident that the thing that we're doing is in fact moving us toward the impact that we want. So I just think that being able to conceive of a broad set of things that we can actually do this ROI kind of work on, understand the cost per student served, understand some of the leading indicators, like we are going to get to be able to make some choices and we are going to see actually that. That different things are having. Are serving different student populations better and worse.
- [25:23]
John Brucato
Sure.
- [25:23]
Jonathan Travers
And yeah, then it comes back to who's furthest behind, what's most impactful, what's most efficient, and can we put together a set of things that pull back on some of the things that maybe are duplicative, maybe that are, aren't as. Appear to be as impactful as some others, and double down on the ones that are.
- [25:45]
John Brucato
And to your point, it's not just the school business official doing this in a silo. So who is working on this kind of ROI evaluation and what is the role of the school business official in this process at large?
- [25:56]
Jonathan Travers
Yeah, yeah, that's like a really important thing. Like we are not the arbiters of what's working and what isn't. And I can say, like, we don't make. I aspire for us not to make the resource allocation decisions. I aspire for us to run the process to enable leadership to make those decisions. And so we, I think we want to Partner with our colleagues to create process where these kinds of questions on impact and efficacy are part of a budget decision making process and to invest others in actually like understanding the importance of having this information and being able to talk openly about it in order to make those decisions. I think, you know, culturally and the systems that we are supporting over the years, like, there's a lot of pressure when we're running, when we're accountable for running an initiative or running some part of the system strategy for it to go well. Of course we want it to go well.
- [27:04]
John Brucato
Sure.
- [27:04]
Jonathan Travers
I also think, like, the role that the CFO can play, I think culturally is actually rewarding an ability to discern that something isn't having the impact that we want and rewarding its discontinuation or rewarding its scale back. It's so important that we don't try to declare success on everything so that we have the opportunity to innovate and improve. And so I do think that the CFO can be a really important cultural leader in just valuing improvement and valuing when folks step up and pull back on the things that they're responsible for.
- [27:43]
John Brucato
Well, I mean, it could be argued that there is success in realizing that a program is not successful. Right. Because you're not continuously involved or investing money and resources into something that really isn't producing outcomes for students. So I think you make a great point.
- [27:56]
Jonathan Travers
Love it. Yeah, exactly.
- [27:58]
John Brucato
So speaking of resources, are there frameworks or tools that ERS provides that districts can better align their budgets with student outcomes? I mean, you mentioned your website. I'm sure there's plenty on there. But tell me a little bit more about getting into the weeds of what you guys can do and provide for districts.
- [28:15]
Jonathan Travers
Yeah, yeah. So sometimes we are partnering directly with a district. So we've got a, you know, got a team that's helping folks navigate through that. Direct support can have a variety of forms. Just first understanding, like how actually are we spending our resources and what do we see as potential opportunities? I can talk more about that separately, but let me just direct talk about a couple tools that are just out there and available. And I will sort of make a distinction. There's process tools and then there's content tools on the process side. So how do we actually engage in better decision making here? The whole SSROI toolkit. So SSROI system strategy, Return on investment. That's what we call it. Just go on the site, you'll see a bunch of stuff that I think is helpful there. The other thing that we have that John, you May have seen this before is Budget hold'em. That if you're familiar with our Budget hold'em tool. Yep. But that it started as a teaching tool to help folks understand trade offs. So each budget holding card is a budget investment or a reallocation. And there's a generic, you know we have online you can get a generic hand, so to say. Okay, so here are my, here's a set of options. And I've got a budget target. So I need to play cards to net to the target. And that's really helpful for leadership teams, for boards to help them understand the trade off. It's sometimes interesting how much things cost. Oh, I thought that was, would be much more expensive than it is. I didn't know. Class size. Class size reductions. Oh, that's very expensive. Okay, I didn't know.
- [29:58]
John Brucato
I think the Budget hold'em has been a standing session at ASBO International too.
- [30:02]
Jonathan Travers
Yeah, I think that's pretty integrated in a bunch of ASBOs.
- [30:05]
John Brucato
Yeah, yeah.
- [30:06]
Jonathan Travers
And so, yeah, I mean that's like, it's a classic. Help me understand my trade offs.
- [30:11]
Jim Rowan
Right.
- [30:11]
Jonathan Travers
And you know, I think online now we've got like a customized interface also so you could build out for your district. Here's my 25 choices that I need people to prioritize. And so sometimes a fun thing is you, you have like different teams. You do community session or principal session where you've got, each team is building out their hand. And then you see, okay, we have six groups that have built their hands. Let's see, you know, what are the cards that each team played that were all the same and were the ones that were very different. And now let's talk about that. What does that mean for where we are as a, as a, as a whole, as a full district?
- [30:46]
John Brucato
So you're really getting an idea of what each individual's priorities are. And then does that kind of fit into the broader alignment of where the district is headed?
- [30:54]
Jonathan Travers
Exactly, exactly like that. It's data collection for you and for the superintendent to say, okay, I now understand where my principles are. This is helpful. Now I can understand a little bit more about what I would need, how I need to respond to that. Anyway, so budget hold them. Great. You can customize it to your role thing or you can just play generic hand to help people understand how to make good trade off choices on the content side. You know, like we've got a bunch of things that dig into what we know from research about what good resource allocation looks like. So we're, if we're Investing in the teaching job and teacher compensation and teacher roles. Like, there's a whole part of our work that is about how to make, how to create strong value propositions for teachers that enable you to get the most teaching effectiveness from your. Out of the. The team that you have. Like one very classic little example of that we know from research. And if you do analysis in your system, you will see that your teacher turnover is greatest. And when people are just coming into the profession, Turnover after year one is greater than year two, greater two is greater than year three, and so on up until about 5, 6, 7. That's where it begins to flatten off. Sure, this is nationally, your district might be a little bit different, but this, of course, yeah, it's going to be. And then it's flat. And then as retirement opens up, then it ticks back up. And so you could imagine structuring a pay schedule that is responsive to that reality of our attrition. So really important to have quick raises and to have an ability to ease out the folks that maybe this isn't the right fit for them the beginning of their career, but for the folks who it is, you gotta keep them. And so some quick raises and then a little plateau and then maybe the focus on the retention after that is more about differentiated role teacher leadership opportunities. Teachers who leave their teaching job from about year 10 onward are mostly leaving for leadership roles in schools or leadership role in system. And so that's then. So how do we, how do we sort of respond. Respond and capture that? So it's one example of that same thing on tutoring high school schedule design. So anywhere where we feel like there's a lot of resources in play and there's clear research on what we think good effective practice can look like, we've tried to lay that out in our different design guides.
- [33:25]
John Brucato
So that really speaks to the true relationship between the finances and recruiting and retraining qualified people. I mean, you're really kind of restructuring your budget mindset and your negotiation strategy to attract the very best and retain the very best talent. And, you know, you're going to have to change kind of your philosophy in terms of, all right, we're not just going to budget the same every single year. If we have, you know, a bunch of retirements, we may have to rethink of how we're approaching the recruiting process in terms of how we're negotiating these salary schedules or things like that. So that's, that's fascinating. And I'm assuming that requires a strong relationship with your unions. And a strong relationship with your administrative team as well, right?
- [34:07]
Jonathan Travers
Yeah, absolutely. I mean, what we want to do is help folks understand what is likely to be most impactful and then work backward from that to figure out what can we actually accomplish given our context. And I know historically there's a lot of value in a step in lane system. If we're going to, if we're going to negotiate it, it's going to be the same percentage across every single cell.
- [34:36]
Jim Rowan
Right.
- [34:36]
Jonathan Travers
And if that's the baseline, then, you know, are there conversations that we can have that share pain points, that membership feels as well that might lead to something that better aligns resources to the specific challenge or specific problem we think we need to solve?
- [34:53]
John Brucato
To your earlier point about having a strategic plan that actually is substantive and not just kind of like this political document, if that's the case, how can school business officials work with their superintendent, their board, their leadership team to ensure that the budget is aligning with district priorities and that there is sustainability in those decisions that are being made?
- [35:14]
Jonathan Travers
Yeah, I do not know what your strap plan looks like. A really common strategic plan structure has as the last, if there's, there's like usually like five tenants or five core things, maybe sometimes it's six. The last one is always align resources and use resources efficiently or effectively or something like good, good fiscal stewardship.
- [35:40]
Jim Rowan
Right.
- [35:41]
Jonathan Travers
Like, I don't know, 90% of plans, that's the last thing. I sometimes wonder whether that's right. Like maybe actually the better way to think about it is that that is a premise. Of course we're going to try to be good fiscal stewards. And so really the structure of the plan is about how we do that, not whether we should do that.
- [36:02]
Jim Rowan
Right.
- [36:04]
Jonathan Travers
And you know, I don't know, maybe it's a little bit of like columns and rows kind of a situation. But I think the, the more that we're thoughtful as we put plans together, that where we're not building a laundry list of, here's all the initiatives that we're going to unleash upon our schools and teachers. But like, this is a pathway, this is what we think the pathway is toward a destination. And these are the decisions that we, the research decisions that we need to make as part of it. I think it's probably a big step forward. The other thing that isn't part of a strategic plan typically is what we're not going to do. But I think that's, you know, in a world where we're not getting 7 to 10% revenue increases every year. Of course, if we're going to do some improvement and do some things differently, that means that we're going to do some new things and we're going to not do some things that we've previously done. So it's hard when these documents are so political. But I really, I would aspire for an authentic plan to be clear about the trade offs that are embedded in achieving whatever the plan goals are.
- [37:25]
John Brucato
So the concept of articulating what you're not going to do, I think is novel in a sense, but very much crucial because I think as educators we just, we add and add and add and add and never maybe cut things loose that aren't working for us. How would you even, you know, articulate that this isn't something we're going to do anymore? Do you, do you kind of buttress it with what we're doing instead or how we're supplanting or supplementing some efforts? I mean, what, how would you even go about articulating something that we're. Well, listen, we're just not doing this anymore.
- [37:58]
Jonathan Travers
Yeah. I mean, let's be clear, like programs, initiatives have constituencies and it's not a simple thing, I'd say. First of all, I do think telling the return on investment story is a really important part of improving something along the way and then also making a decision ultimately on whether we should scale it back or not. Second thing is the clearer we can be about how our student needs are evolving and changing. I mean, I think it's a really important thing that if, if our student populations and our vision for what success looks like, looks like for them evolves, then of course the way that we spend our money should evolve consistent with that. So we would expect that there would be a flow, an adaptation and evolution. And that's just, that is a premise of good fiscal stewardship. Another thing, maybe one more thing on this is the role of comparative data. It is helpful, I think, to be able to look at how we're spending money is similar and different to other systems, similar and different to what we understand effective and efficient practice to look like. And just because we're doing something different. Different is I don't think it's inherently good or bad, but we should understand why and we should own the why. And so sometimes having a finance leader who's able to hold up those comparatives and engage in thoughtful, pragmatic conversation about those, that can be a stepping stone toward those sort of ultimate pullback decisions.
- [39:42]
John Brucato
Yeah. You know, to your point, it just, it makes so much sense on its face to say if our, the needs of our students are changing, so should our programming and our financial priorities. But it just seems all too often, I mean, government's a slow moving beast and you know, it just doesn't seem to flow one for one. But you know, when you talk about like, why wouldn't we change how we're budgeting, why wouldn't we change what programs are being offered based on what our student needs are? But you know, the, the, the phrase we've always done it this way just kind of creeps up in the back of my head when you know, you were talking about that. But it's, it takes a lot of courageous leadership to really kind of let things go and realize that maybe we can't be doing these XYZ programs anymore and we need to invest more in some exploratory programming and what truly is our ROI on what we're offering students. So you make some great points there. You spoke to this a little bit earlier, but talk to me more about scenario planning, contingency budgeting and financial sustainability. How do those three things really coalesce into making sure that you're on the right path? You, you're protecting your district, but maybe to your earlier point, not being too conservative in your budgeting practices.
- [40:49]
Jonathan Travers
Yeah.
- [40:53]
John Brucato
Yeah.
- [40:54]
Jonathan Travers
I mean it's only, maybe this answers the question in part. But as I was saying before, finance leaders I like, we generally don't make the big decisions, but we do control the process for the leadership to make those big decisions. And so we have, I think a lot of responsibility to be able to create process that brings together the things that you're saying where we have clear articulation of our aspirations. We have a clear, as clear as we can sense of our current financial picture of where we are. And then we're constructing process to give people options, scenarios, details on how we're going to use what we have to achieve, what we are accountable, what we've said we want to achieve. I think the two parts to that high level process that are really important, one actually I mentioned, alluded to it previously, is just having clear priorities or guiding principles that effectively become criteria. And the more that we're criterion based, the less expediency and politics win the day. The other thing that I'd say about our process is how do you get people to engage in trade, in actual trade off decision making and not like I like trade offs, I don't like serial, so serial decision making. We're going to decide this. Okay, done. We decided it. Now we're going to decide this. Done. And so when you are deciding budget, your budget moves one at a time, then where you are in the order makes a huge difference.
- [42:41]
John Brucato
Well, I, I also think you're setting the stage in the sense that you don't have an unlimited pool of resources either. So trade off decision making is really keeping you within the guardrails of what you're able to do from a financial sustainability mindset, right?
- [42:54]
Jonathan Travers
Yeah, exactly, exactly. So if you're deciding things serially, then when you're out of money, then everything after that is no.
- [43:00]
Jim Rowan
Right.
- [43:01]
Jonathan Travers
Independent of whether it was a better, better or worse idea than anything that happened to have come before it. And there's this other thing. You know, we did this thing analysis where we looked at this systems. It was mostly districts, but there were some charter systems, CMOs in there as well that were sort of getting better than expected outcomes given their student population and looked at how they made resource allocation decisions and found that actually. So two things we found that actually they were using their resources, they were spending their money in ways that were actually a little bit different than a number than others. And so that was significant. The other thing was we looked at the process and one of the things that they had in common was that the leadership team of the system district or CMO engaged in the decision making together. And there was this culture that I know there's, there's often fiefdoms and silos and that is just, I mean that is a little bit of a reality. But those districts and CMOs, they were deliberately trying to engage in decision making that elevated that, you know, the language would be for this convo, for this meeting, you get your system hat on, not your department hat. So take off the department hat, put the system hat on. Okay, now we can begin there. Now we can begin our meeting right There was a really explicit calling out of system leadership responsibility different from departmental. And so the team then took collective ownership over that decision. And so of course the, the CEO understood the nuances of the transportation resource allocation decision differently than the academics person.
- [44:48]
Jim Rowan
Right.
- [44:49]
Jonathan Travers
But that team together was understanding the relative weighting that they were placing on strong operations and sort of long term efficiency with academic programming, student wellness or whatever, the more student phase, the outcome focused.
- [45:06]
John Brucato
Well, I have to imagine that probably plays and played a huge role in improving just culture overall because everybody is seeing how they fit into the systemic approach to building budgets and sustainability with districts. Because I've been in plenty of meetings where you have all those People at the table, but they don't necessarily have an active and engaged role in the conversation. Because you could be talking about curriculum, but the transportation supervisor is thinking, what am I even doing here? I'm wasting my time. I could be doing routes, I could be doing something totally different. But to be able to kind of all put your systematic hat on and play a vital role in this conversation, I think is hugely successful in the sense that everybody, to your point, has that sense of ownership in the organization.
- [45:53]
Jonathan Travers
I think they get to that sense of owner. I mean, I aspire for them to.
- [45:56]
John Brucato
Get to the sense of ownership.
- [46:00]
Jonathan Travers
Even if they don't feel like they agree with it, they understand it.
- [46:04]
Jim Rowan
Right.
- [46:04]
Jonathan Travers
You know, and like having that understanding the why of why we're, why we're prioritizing A over B, even if you as an individual person who has responsibility for B doesn't, you know, really wish you could have done B, like you get that at the end of the day, yes, we're accountable for all of these things. And the team's chosen this. And okay, I'm, I'm gonna, I'm on the bus, so I'm gonna, I'm gonna get with it.
- [46:30]
Jim Rowan
Right.
- [46:30]
John Brucato
So do you have any specific strategies that school business officials can use to really build financial resilience and long term stability with school district budgets? I mean, do you have certain metrics that you put in place? Like you should be generating like X percent of fund balance every year. You know, you should be finishing your budgeting process with projections in the next five years that look like X, Y and Z. Do you have any specific strategies that you can kind of, you know, impart on our audience today?
- [46:57]
Jonathan Travers
Yeah.
- [47:00]
John Brucato
Or is it not that technical? Is it more just kind of ebb and flow year to year?
- [47:03]
Jonathan Travers
Yeah, no, I think there, I think some technical stuff is really important. And while it may feel like it just ebbs and flows, you know, it's actually, it's interesting. Things were happening so quickly during ESSER and we were making. I don't know about how. I know you probably didn't get a massive ESSER allocation, but you just had to make those decisions quickly and they were happening outside of the formal annual budget process. And I feel like we lost a little bit of discipline as a field on having strong decision making process and structure because, like. Cause it made no sense to do that given that moment.
- [47:51]
Jim Rowan
Right.
- [47:51]
Jonathan Travers
But we, you know, that's done. That chapter of our history is over. And so I do think having those, like that strong process where we are looking at multi year, we're doing our multi year forecasting. We have a multi year plan. We're understanding the relationship that enrollment and other compensation like we understand the building blocks of the forecast and the choices that we need to make over, you know, I don't three years, five years, I don't really care. But some multi year thing, I think that's really important. I share with you this aspiration for having a strong fund balance that we can draw on in tough times and different states have different mandated floors and ceilings. Even so, yes, it should be something, it should be something significant. ERS doesn't say it shall be 4% and no more, no less. I think it's contextual. I would go one, one, I would go like 50 yards upstream from this question though and say that there are resource health indicators that are different from financial health indicators. I look at particularly in the larger systems that we're serving. You know, a lot of us are managing enrollment decline. And so you know, I would say all costs are variable with passage of time.
- [49:19]
Jim Rowan
Right.
- [49:19]
Jonathan Travers
In the short term, you know, within a year, almost no costs are variable across two years. Some costs are, you know, like the, it's. You sort of step into it and you can think about costs being variable on a per pupil basis, per school basis, per teacher basis, per cluster basis. Like there's a whole way of thinking about how you evolve to match costs to match shifts in enrollment. That's important. So we look at, in terms of resource health, we look at enrollment, we look at school size and we look at dollar per pupil of each school relative to size. Smaller schools are typically going to be more expensive.
- [50:03]
Jim Rowan
Right?
- [50:04]
Jonathan Travers
That is an endemic reality of our work. They got much more expensive for elementary below 350, for middles and highs below 500. It's important that we understand that and as we're seeing our enrollments slide down that we get ahead of that. So that's an important resource health indicator that fits into a long term forecasting thing. The other big one is special ed. So a, what's our composition of population? How are we distributing students between resource inclusion versus self contained and then what's our fill rate? How tightly are we configuring our students to the particularly self contained class sizes and the resource caseloads that we've got for them? Often lots of non deliberate inefficiency because of how we're just assigning out. Because the way that the IEP process goes, the staffing process goes in special ed we end up with pretty significant mismatch between what our policies on special resource allocation are and what the practice is. And then maybe one long, longer term, smaller, bigger thing is, you know, I think the John Dillinger quote was like why do you rob banks? His answer was because that's where the money is.
- [51:18]
John Brucato
Right.
- [51:19]
Jonathan Travers
So like we need to understand our teacher compensation and our investment in teachers because that's the single biggest thing that we invest in all systems. And so even just understanding from a sort of long term resource health care, what's our distribution of teachers within the pay schedule, where are we on steps and lanes and what do we see coming in terms of change in average teacher cost? Really important long term health indicator.
- [51:47]
Jim Rowan
Right.
- [51:48]
John Brucato
So the district's struggling financially, you know, as we wind down here. How can ERs support them and how can they aid them in their financial decision making strategies?
- [51:59]
Jonathan Travers
Yeah, I do feel like we've got great resources online. I think if you haven't checked out though, if you are thinking about where do we disinvest, what are the things that we need that we can pull back on? I'd say please look at that SSROI toolkit and see what comes to mind. We've got a piece that people, if people. If you can't find it, just email me at the end of this called Rocks to look under. And so this is our sense of 30 places where, when folks are, when you're needing to pull back on resources. These are like tenths of a percent kinds of things. These are not like game changing things but like let's at least have looked under all of these rocks. Yeah, yeah, that, that's, I think that's sometimes a helpful resource. It's not really a strategic kind of thing but it's more of just a good budget hygiene kind of thing. And then I do think the hold'em game as you think about, okay, how can I engage my team in a process? Take a look at the hold'em, see what's helpful. If you're feeling like, gosh, there's a lot here, I'd love to have yours facilitate a hold em session for me. Or I'd love to see what ers would say. Should be my hold'em deck of cards.
- [53:23]
Jim Rowan
Right.
- [53:23]
Jonathan Travers
Then definitely reach out and we could, we can figure out what that looks like.
- [53:28]
Jim Rowan
Great.
- [53:29]
John Brucato
Well I'll be sure to include all those links in the show notes. So anybody listening can just go to the description of this episode, click on those and you'll get right to all those great things that Jonathan had mentioned. But Jonathan, thank you so much for joining me on School Business Insider today. You've offered some wonderful advice to our listeners, and I hope to speak to you soon.
- [53:47]
Jonathan Travers
Awesome. Thanks, John. Good to talk.
- [53:50]
John Brucato
Thank you for tuning in to School Business Insider. Make sure to check back each week for your favorite topics on school business.