DDN Investigates: Where DPS spends its money

How Dayton Public Schools spends $266M

Dayton Public Schools receives more than a quarter billion dollars a year in state and local tax dollars and spends most of it on employees, and mandated payments to charter, private and other schools.

It’s also projected to have a nearly $100 million surplus. School board members haven’t decided how — or if — to spend it.

How local governments spend tax dollars reflects the priorities of their leaders. That’s why the Dayton Daily News dug into the district’s spending as part of our Path Forward project to find solutions to the biggest issues facing our community.

We asked every school board member, other community leaders and our readers what the district should do with its surplus.

Our investigation found:

• Unlike many neighboring districts, DPS gets 74 percent of its funding from the state because property values in Dayton are so low. This puts the district’s finances at the mercy of the Ohio General Assembly.

• After wages, the second largest cost for the district is money transferred to other schools when students leave DPS via open enrollment, vouchers and charter schools. Only Youngstown loses a higher percentage of its students to charters, vouchers and open enrollment statewide.

• Dayton’s per-pupil spending ranks sixth of Ohio’s eight large urban districts.

• The district made a dramatic financial turnaround. It brought its cash reserves from a slim $7.96 million in 2014 to a projected $96 million this year, about half of which is available to spend.

• The board of education has no plans for what to do with that surplus. One board member says there hasn’t been enough strategic planning by the board.

• Smaller surpluses are projected in the future after the district starts spending $12 million a year on deferred building maintenance.

• Community leaders and respondents to an informal Dayton Daily News online survey listed mental health resources and busing among their top spending priorities for the district.

Funding for Dayton Public Schools
Photo: Staff Writer

The Dayton school board members have drafted a strategic plan of their overall goals for the district. But they haven’t identified how much money to put behind those goals and exactly how to spend it.

“We need to focus our efforts on adjusting our salaries so we can recruit and retain the best employees. We also need to focus our efforts on behavioral/mental health specialists along with the Ohio Department of Education,” DPS Superintendent Elizabeth Lolli told the Dayton Daily News in an email.

“We need to focus efforts on the preventative maintenance and repair of our buildings. Very importantly we need to focus on busing for high school students! Other programming needs specific to our students are also needed,” she said. “The board is reviewing all of these things in their strategic plan — they just haven’t put (dollar) amounts to the items yet.”

Spending ‘controlled and conservative’

The board created a policy in 2014 after its reserves dropped to low levels to require them to set aside 10 percent of expenditures, a recommendation of financial rating agencies.

District leaders cut costs and they hit the 10 percent reserves goal by 2016. They then continued to add more than $16 million a year to those rainy day funds.

“The district budgeting process has been very controlled and conservative based upon past requirements of previous boards,” Lolli said.

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About $13 million of the current projected reserves came from a surplus in the district’s self-insurance program, according to a five-year forecast from Treasurer Hiwot Abraha.

“The district financially is in good condition,” Abraha said. “We watch our expenditures and we know our revenues.”

Because the district relies on the state for most of its revenue, it’s unclear until the next two-year state budget is approved in late June if the surpluses will continue. But expenses are expected to increase after teacher pay raises last year and nearly $12 million a year was budgeted for capital spending.

The five-year forecast projects annual spending deficits starting next school year and growing in coming years. But that’s because Abraha budgeted increased costs and flat revenues without knowing what state funding will be. That’s also typical in five-year forecasts; even wealthy districts often project deficit spending in the later years of their forecast then adjust them when the numbers come in.

The 10 percent savings policy means the district can’t spend $28.3 million of this year’s reserves. Best accounting practices say they should actually have the equivalent of 60 days operating costs in the bank, according to district officials, so that takes about $45 million off the table.

How DPS compares to other districts

The board of education controls a general fund of about $266 million. That money comes primarily from state funding and local property taxes. The district also receives about $40 million from the federal government, but that’s earmarked for specific purposes, such as school lunches.


How Dayton Public Schools spending stacks up

The Dayton Daily News analyzed how DPS spends its money, how that compares to Ohio's other large urban districts, as well as how they rank statewide.

DistrictInstructional Expenditure Per Pupil FY18State rank
Orange (Cuyahoga Co.)14,053.471
Cleveland9,660.5610
Oakwood *8,244.3043
Youngstown8,204.4745
Akron8,011.3363
Canton7,806.7380
Columbus7,663.3396
Toledo7,397.64133
Dayton7,311.36145
Cincinnati7,023.06199
Springboro **5,073.60596
Toronto (Jefferson Co.)4,631.49607
* -- Highest local, ** -- Lowest local  
Source: ODE district profile reports 
DistrictClassroom Teacher Avg. Salary FY18State rank
Beachwood (Cuyahoga Co.)90,533.051
Oakwood *71,629.0749
Cleveland69,899.8063
Columbus68,828.5870
Cincinnati68,659.5875
Akron68,650.8776
Canton65,159.34110
Toledo59,441.50222
Dayton50,337.14525
Youngstown49,023.33557
Jefferson Twp. **43,323.50597
Green (Scioto Co.)33,910.89607
* -- Highest local, ** -- Lowest local  
Source: ODE district profile reports 
 

The largest expense in the general fund is employee salary and benefits. The Dayton Daily News analyzed state data and found average salaries for Dayton’s teachers and administrators are both below the statewide average and among the lowest in Ohio’s large urban districts. The board has approved pay raises.

“We have made strides in bringing our teacher salaries up to in the neighborhood of surrounding districts but we’re not there yet,” Romick said.

RELATED: Amid reforms, Dayton schools headed in wrong direction in key measures

The next highest cost for the district is open enrollment, charter and private schools. The state pays DPS for the more than22,000 school-aged children in its boundaries. But DPS only teaches about 53 percent of them. The district, as required by state law, then passes on the funding to the other schools for each DPS-resident student they teach.

The only district that has lost a higher percentage of its students to charters, vouchers and open enrollment is Youngstown, which educates fewer than half of the children in its jurisdiction, according to state data. It was also the first district in Ohio taken over by the state for poor performance.

Overall, Dayton Public Schools spends $14,069 per pupil, 53rd highest among the state’s 608 school districts. This is comparable to most of the state’s other large urban school districts, according to state data.

Board debate

And as the district struggles with dismal attendance and low student test scores that put it at risk of state takeover, many in the community say it’s time to stop saving and put some of that money to use.

How much, if any, of the excess $50 million to spend and what to spend it on is a difficult question, school board members told the Dayton Daily News.

“Some board members would like to dramatically increase spending and also advocate for a property tax increase proposal on top of it. I disagree with that philosophy wholeheartedly,” board member John McManus said.

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He advocates a 4 percent annual increase in curriculum and instruction spending, which is part of the strategic plan adopted by the board last year.

“The citizens of Dayton are living under an absurdly high rate of taxation already. Conservative financial management, coupled with measured spending is, in my opinion, the best approach,” he said. “Dayton Public Schools could be Wright State University in the blink of an eye if some on the board did not restrain others from blowing through our cash reserves.”

Board member Mohamed Al-Hamdani said, “We do have to spend some of this money, not horde money waiting for a rainy day when it’s been raining for a long time.”

“We have to invest that money into making sure we have the support staff we need for all students, enough teachers,” he said. “We’re going to have to spend some of this money, but we have to spend it wisely.”

Spending could help with music and arts programs, Al-Hamdani said, and continuing education for teachers. He pointed to their strategic plan and its goals, such as increasing student academic growth, increasing student and staff attendance, and establishing parent-teacher organizations.

RELATED: You can help Dayton Public Schools students make music

But board member Sheila Taylor said the board’s strategic planning process has been inadequate and that the strategic plan lacks any spending priorities.

“The public needs to know there is not really any kind of strategy the board is working on,” she said. “We do not discuss what direction the board wants the district to go in.”

The district must keep enough reserves to cover building maintenance before it becomes an emergency, Taylor said. After that, she advocates spending more on extracurricular activities, and health and social workers.

“I do think we’ve put a lot of money into education; I think we basically have what we need in those areas for education,” she said. “But I think we need to do what our type of students need in addition to that, to give them support so they can obtain the education they need.”

‘A good problem to have’

Board member Jocelyn Rhynard called the surplus and debate over how to spend it, “a good problem to have.”

She advocates new music teachers, counselors, higher teacher pay and better students supports.

“It feels good to be in a healthy place financially so we can look at what our strategic priorities are in our strategic plan and really put our money behind that,” she said.

But she noted the need to balance what can they afford now with an uncertain future.

“It’s very easy to say, ‘Let’s do this right away,’ and not ask, ‘Is it sustainable?’” she said.

RELATED: Answers to key questions about a possible takeover of Dayton schools

Board member Karen Wick-Gagnet said “absolutely we should be spending (some of the reserves).”

She suggested the money could be spent on building maintenance, as well as for teacher compensation and wrap-around services for students.

“The money should be spent on our students, on our teachers,” Wick-Gagnet said. “In my opinion those are the things that are going to move progress in our district forward.”

One mechanism to deliver such services is neighborhood school centers, which are in six of the district’s 27 schools. They incorporate after-school programming, summer schooling and partner with community groups to offer students academic and social services support. Currently the school district spends $165,000 at all six schools combined, and the rest of the funding comes from grants and private donors.

Board member Robert Walker said he’s still assessing the district’s financial situation and considering what the spending priorities should be.

“We’ve made some significant improvements in the last few years in terms of strengthening our financial position, and I think we have some plans to continue that,” he said.

Board President William Harris didn’t respond to requests for comment.

Mental health and busing

The Dayton Daily News surveyed parents and community members online and interviewed community leaders, asking if the district should spend some of its surplus, and if so, how it should prioritize that.

More mental health services topped the list as a priority for many leaders and community members.

“Expand mental health services for all students, not just those on the right insurance,” wrote Alta Mozee.

Lolli was recently asked by a state school board member what one thing about the district she would change if she had the money to do so.

“I would prefer that we had money enough to hire behavioral and mental health specialists for every school,” she said. “I believe that students need extra supports and with those extra hands inside a school building, we could actually offer parent and student counseling and work together to make sure we are serving the whole child and making sure we provide those family supports that we so need.”

Dayton teachers union President David Romick said mental health and behavioral support services are “up near the top of that priority list,” along with strengthening English language learning programs.

Amaha Sellassie, a sociologist and community organizer, said the needs he sees in the community are largely centered on social and mental health services — hiring counselors and training teachers and staff on trauma-informed care.

“They should be spending the money on school (mental health) counselors and support for the students,” he said.

RELATED: Study: DPS should focus on high-performing schools

He added extracurriculars to the list, such as band, arts and athletics — “things that create a sense of belonging and pride inside the school.”

“Invest in community schools providing wrap-around supports, which would include, but not limited to mental health,” said Zakiya Sankara-Jabar, co-founder of the civil rights group Racial Justice Now, in response to the online survey.

Other respondents favored paying teachers more and bringing back high school busing, the absence of which has been identified by the district as a contributor to their low attendance rate.

“Our attendance rate is 50 to 63 percent at our high schools and most of it’s because, in my opinion, it’s because of transportation issues,” Lolli said in a recent meeting.

The district is in discussion with the Montgomery County Regional Transit Authority about how much it would cost to bring back the dedicated RTA yellow line for high schoolers.

The service was cut in the face of a budget shortfall in 2008. At that time, the contract with RTA cost $2.8 million a year. It’s unclear what it would cost today.

“Busing is a huge issue as well, so I would agree with bringing that back,” Sankara-Jabar said.

Respondents to the informal online survey identified other needs such as newcomer programs for new students, more English language learners programs, paraprofessionals and field trips.

Some readers also suggested the district cut taxes.

“Why not keep doing what you’re doing and return some money to property owners?” said Dougie Imfeld. “Start taking less revenue but more than what you’re spending, now give out a refund and next time you do need money … the voters could be more apt to give it to you.”

The district hasn’t passed a levy in a decade and gets about 19 percent of its revenue from property taxes.

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