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Home My WebLink About2005-25876 Reso 2005-25876 RESOLUTION NO. A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA URGING THE FLORIDA LEGISLATURE TO UTILIZE THE 2004 - 2005 DISTRICT COST DIFFERENTIAL ("DCD") UNTIL SUCH TIME AS A NEW AND EQUITABLE CALCULATION FOR THE DCD MAY BE DEVISED BY A QUALIFIED, UNBIASED THIRD PARTY AND URGING THE MIAMI-DADE LEGISLATION DELEGATION TO ADOPT THIS GOAL AS A MAJOR PRIORITY AND A NON-NEGOTIABLE OBJECTIVE FOR THE 2005 LEGISLATIVE SESSION. WHEREAS, the 2004 session of the Florida Legislature endorsed a new calculation of the District Cost Differential ("DCD") which purportedly adjusts educational funding for school districts both by cost of living and wage levels; and WHEREAS, the statistical methodology used for the DCD calculation has resulted in an Amenities-Adjusted Index which is based on the premise that, even with higher costs of living, teachers will offer their services at lower salaries in order to remain in a high amenity community; and WHEREAS, the validity of the statistical methodology for the DCD has not been independently reviewed by economists and educational finance experts, nor has the appropriateness of this statistical technique been evaluated and analyzed; and WHEREAS, the Florida Legislature never explicitly changed the statutory basis for the DCD calculation, but merely implicitly endorsed the use of the revised calculation by the Florida Department of Education; and WHEREAS, the use of the new Amenities-Adjusted Index damages and decreases educational funding for the Miami-Dade County Public Schools by over $26 million during 2004 - 2005, $58 million during 2005 - 2006, and $112 million when fully implemented in 2006 - 2007; and WHEREAS, similar damaging effects result from the use of the revised DCD in 38 other Florida school districts, including Broward, Palm Beach, Volusia, and Monroe Counties; and WHEREAS, the cumulative effect of this new version of the DCD will seriously impair the ability of affected districts to hire and retain qualified teachers and to offer a sufficient variety of educational programs to meet the diverse needs of its clients; and WHEREAS, the quality and viability of public education is a necessary component for the economic well-being and development of a community and region. NOW, THEREFORE, BE IT DULY RESOLVED BY THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA: That the Florida Legislature is hereby urged to utilize the 2004 - 2005 District Cost Differential until such time as a new and equitable calculation for the DCD may be devised, and furthermore, the Miami-Dade Legislative Delegation is hereby urged to adopt, as a major priority and non-negotiable objective for the 2005 legislative session, the freezing of the calculation of the DCD at its 2004 - 2005 level and the commissioning of a study by an unbiased, qualified third party to review the validity of the Amenities-Adjusted Index and to recommend a new more equitable calculation methodology. PASSED AND ADOPTED this 20th day of April, 2005. ~ Pat~ ATTEST: City Clerk Robert E. Parcher (Requested by Commissioner Matti H. Bower) APPROVED /ItS 1"0 fORM & lANGUAGE & FOR EXECU110N F:\attoITURNIRESOS\Calcutation of District Cost Differential. doc ~~ I-f - CJ --0$- Dat.tt c: mtlD m b!t~ CITY OF MIAMI BEACH Office of the Mayor and Commission Memorandum To: JORGE M. GONZALEZ CITY MANAGER From: MATTI H. BOWER -~ COMMISSIONER ./'l~ V Date: March 22, 2005 Re: AGENDA ITEM- MODIFICATION TO DISTRICT COST DIFFERENTIAL COMPONENT OF THE FLORIDA EDUCATION FINANCE PROGRAM Please place the attached resolution on the agenda for discussion at the next City Commission Meeting. MHB/as ...".....-."-.........---..-.--.1. C ,:i,~~ ::.',; ~. ~': ",/~: V;"! A J. I J 9S : I Hd 22 d~H SOOl '" .. I -"OJ.' ," ~-~ -' _.J .... Agenda Item Date R9C. ,...- l[ -JO-<J~ ~ ---, <",-";- 1.,0- c'....;.>>.:- giving our students the world Superintendent of Schools Rudolph F Crev"', E:i.O March 14, 2005 Miami-Dade County School Board Frank J Bolarlos, Chair Or' Robert B. Ingram. Vice Chair A.gLlstin J. Barrer(J Evelyn Langlieb Greer Perla Tabares i-Iantman Dr Martin Karp Ana Rivas LOr/an Dr tv!arta Perez [)r. Solomon C. Stinson The Honorable Matti Herrera Bower City of Miami Beach 1700 Convention Center Drive Miami Beach, FL 33139 . , -' , -, I ~' ~ - , Dear Commissioner Bower: The 2004 Florida Legislature passed a modification to the District Cost Diffdrential tOCD) component of the Florida Education Finance Program (FEFP) formula which resulted in a reauction of funding to high-cost districts. The FEFP is the funding formula that funds public educ~tjon in Florida. Since its inception in 1973, the formula has contained a variable to adjus~ ec;lch c;@trict's share of funding to reflect differing costs of living or price level differences faced by eacMchool district's employees. In the past, the Florida Price Level Index was annually ca'lculated by the Commissioner of Education measuring the cost of purchasing five specific market basket of goods and services in each county such as food, housing, transportation, apparel and health, recreation and personal services. The modification to the calculation of the DCD was based on a report prepared by the University of Florida. In lieu of the traditional market basket of goods approach to determine differences in costs of living among Florida's 67 counties, the methodology uses average wages, excluding teachers, along with some "statistical smoothing." These modifications are referred as an Amenity- Adjusted Index. The new Index is based on the premise that, even with higher costs of living, teachers will offer their services at lower salaries in order to remain in a high amenity community. Amenities are characterized as beaches, sunshine and nightlife. The modifications do not include teacher salaries in the computations because it was viewed as a variable which school boards could control through collective bargaining and potentially artificially increase in order to generate a higher DCD. The modifications are being phased in over a three-year period beginning with the current school year. This change will result in high cost districts losing millions of dollars that would have flowed to them under the traditional DCD. In year 1 of its implementation, 2004-2005, the District experienced a net loss of $12.6 million. The initial loss was $26.8 million, however, due to the leadership of the Miami-Dade County Legislative Delegation a hold harmless was applied mitigating the loss. If the policy continues as it currently exists, the District will lose $58.6 million in year 2 (2005-2006), and $102,7 million in year 3 (2006-2007). Page 1 of 2 Schoof Board Administration Building' 1450 NE. 2nd Avenue. Miami, Florida 33132 305-99!) .,1430 . Fax 305-995-14B8. www.dafJeschcofs,net The modifications resulted in a fundamental fiscal policy shift which will have long range impact on the ability of high cost districts to provide an education for each of their students that is "equal" to that provided in lower cost districts. The Florida Constitution mandates that every child have access to an "equal" educational opportunity regardless of where he/she lives in the State. In order to provide equity of educational opportunity, as required, the funding formula, FEFP, was developed to recognize varying local property tax bases; varying program cost factors; varying costs of living; and varying costs due to sparsely dispersed student populations. To review one variable of the formula in isolation would compromise the equity of funding among the 67 school districts. The School Board of Miami-Dade County has filed a lawsuit against the Florida Legislature challenging the constitutionality of this modification. I sincerely appreciate your commitment to the welfare and education of the children of this County and respectfully request that your governing body adopt the attached Resolution supporting the District's and the Miami-Dade Delegation's efforts in restoring equitable educational funding to Miami-Dade. Similar resolutions are currently being adopted by the Greater Miami Chamber of Commerce (GMCC) as well as a number of municipalities within Miami-Dade County. For your information, a Talking Points sheet is attached for use to present the Resolution. Additionally, staff is available to make a presentation to your governing body, if needed. Should you have any questions or need additional information, please contact Mr. Alberto M. Carvalho, Associate Superintendent, Office of Intergovernmental Affairs and Grants Administration, at 305 995-2532. 1~ Rudolph F. Crew, Ed.D. Superintendent of Schools RFC/AMC:lbd L1445 Attachments cc: School Board Members Superintendent's Cabinet School Board Attorney Dr. Magaly C. Abrahante Ms. Iraida R. Mendez-Cartaya Ms. Tabitha Fazzino Miami-Dade County Legislative Delegation Members Mr. Ronald L. Book Mr. Alberto R. Cardenas Mr. Thomas A. Cerra Dr. Richard H. Hinds Page 2 of 2 A RESOLUTION of the urgmg the Miami-Dade Legislative Delegation to persuade the Florida Legislature to utilize the 2004-2005 District Cost Differential (DCD) until such time that a new and equitable calculation for the DCD may be devised by a qualified, unbiased third party. 'WHEREAS, the 2004 session of the Florida Legislature endorsed a ne\v calculation of the District Cost Differential which purportedly adjusts educational funding for school districts both by cost of Ii ving and wage levels; and \VHEREAS, the entire calculation through a statistical technique allegedly adjusts wage levels for the value of amenities and trades wage levels for the imputed value of those amenities for wage levels; and WHEREAS, the validity of this economic theory has not been independently reviewed by peer economists and educational finance experts as well as the appropriateness of the statistical technique utilized for such an adjustment; and WHEREAS, the Florida Legislature never explicitly changed the statutory basis for the DCD calculation but merely implicitly endorsed the use of the revised calculation by the Florida Department of Education; and \VHEREAS, the use of the new amenities-adjusted DCD damages and decreases educational funding for the Miami-Dade County Public Schools by over $26 million during 2004-2005, $58 million during 2005-2006, and $112 million when fully implemented in 2006-2007; and \VHEREAS, similar damaging effects result from the use of the revised DCD in 38 other Florida school districts, including Broward, Palm Beach, Volusia, and Monroe Counties; and WHEREAS, the cumulative effect of this new version of the DCD will seriously impair the ability of affected districts to hire and retain qualified teachers and to offer a sufficient variety of educational programs to meet the diverse needs of its clients; and WHEREAS, the quality and viability of public education is a necessary component for the economic well-being and development of a community and region; THEREFORE Be it resolved by the that the Miami-Dade Legislative Delegation adopt as a major priority and non-negotiable objective for the 2()OS legislative session, freezing the calculation of the DeD at its 2004-2005 level and the commissioning of a study by an unbiased, qualified third party to review the validity of the amenities-adjusted Den and to recommend a new more equitable calculation methodology. Talking Points District Cost Differential Update · The Florida Legislature modified the methodology used in the calculation of the District Cost Differential based on a report published by the Bureau of Economic and Business Research, University of Florida. · The report raised serious questions as to the underpinning logic behind the economic, political and mathematical assumptions used to develop the suggested funding redistribution. The gist of the new economic theory is that the monies allocated to fund real cost of living differentials between counties should be reduced because the value of property is artificially driven up by the desire to live and work in certain counties. The term used in the report is Amenity Adjustment. · Other concerns with the methodology are as the use of average wages within counties as the impact of immigration upon those wages and the average wages of teachers were not factored into the calculation. · There is a concern over discarding a tried and true index, the Florida Price Level Index (FPLI), as the chief driver of the DCD calculation. The FPLI is based on the national Consumer Price Index (CPI) calculation and has been modified several times over the years by the Bureau of Economic and Business Research to make it a more comparative tool between Florida counties. · The DCD was created to rectify inequities among the districts related to their cost of doing business. The DCD has been studied year after year and has been determined to be an equalizing factor for all districts. In fact, as recent as two years ago, an outside consultant hired by the State's task force, and chaired by then Senator Horne, studied the DCD and substantiated its purpose. Furthermore, the policy has been validated by the Florida Courts. · The School Board of Miami-Dade County, Florida has sought legal relief through the court system due to the draconian modification to the Florida Education Finance Program (FEFP), which will have drastic fiscal implications to the district's students and community. The District filed a temporary injunction to the implementation of the amenities-adjusted District Cost Differential (DCD), in an attempt to delay any changes to the formula pending the court ruling on the issue. · The temporary injunction was denied by Judge Kevin P. Davey. Counsel advises that the motion was denied based solely on the Defendant's representation that the Department of Education has procedures in place to restore lost FEFP funds if the District prevails, The judge agreed to expedite the trial and work with parties in establishing a trial date as soon as practically possible. However, at this time, trial is not expected until late Mayor June. · An action plan has been developed in an attempt to overturn the current amenities- based Florida Price Level Index (FPLI) used for the District Cost Differential (DCD) for fiscal year 2004-2005 and distributed to the Board on July 23, 2004. The proposed plan has several facets including academia, legal, administrative, legislative, and grassroots. The plan entails obtaining experts in educational finance and economists to provide an analysis and recommendations related to the University of Florida's Bureau of Business and Economic Research report; contracting with legal counsel; engaging the South Florida business community in our plight; a public relations campaign; as well as periodic meetings with the Miami-Dade Legislative Delegation. · Since filing the complaint, Volusia County School Board, Broward County School Board and Palm Beach County School Board have voted to join the lawsuit. . Financial Impact: Year 1: 2004-05 $26,857,146 loss for M-DCPS (includes CSR) Mitigated by $14,231,828 One-year fix of approximately 50% Year 2: 2005-06 $58,604,842 loss for M-DCPS including CSR (no fix) Year 3: 2006-07 $102,778,1811055 for M-DCPS including CSR (no fix)