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Fiscal Forecast 
School Operating Fund 
SCHOOL BOARD & BOARD OF SUPERVI SORS 
JOINT WORK SES S ION 
NOVEMBER 2 5 , 201 4 
Preliminary Information for Planning Purposes Only - No School Board Action Has Been Taken
Looking Back 
2 
WHILE EXPERIENCING CONTINUED 
ENROLLMENT INCREASES AND SHIFTS IN 
STUDENT DEMOGRAPHICS, FCPS TOOK 
SIGNIFICANT BUDGET REDUCTIONS
Looking Back: Student Enrollment 
3
Looking Back: Changing Demographics 
4 
23,978 
21,771 
32,945 
25,697 
32,103 
52,654 
60,000 
50,000 
40,000 
30,000 
20,000 
10,000 
0 
Special Education 
Unduplicated Student Count 
English for Speakers 
of Other Languages 
Students Eligible for Free or 
Reduced Price Meals 
Number of Students 
Student Demographic Trends and Percent of Total 
Enrollment 
FY 2008 Approved FY 2015 Approved 
14.5% 13.8% 13.2% 17.2% 20.0% 28.2%
Looking Back: Enrollment Growth 
5 
Since FY 2008 FCPS’ enrollment increased by nearly 
22,000 resulting in increased costs of more than $190 million
Looking Back: Budget Reductions 
Since FY 2008 
6 
 FCPS identified nearly $435 million in budget savings and 
reductions including the elimination of more than 2,175 positions 
Significant reductions to central office and school support 
Class size was increased 3 times resulting in an increase of 
1.5 - 2.0 students per teacher 
Programs were eliminated or redesigned 
FCPS Budget Summary 
($ in millions) FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 
Budget Reductions -$54.5 -$77.6 -$40.4 -$76.7 -$27.9 -$60.0 -$97.8 
Cumulative Total -$54.5 -$132.1 -$172.5 -$249.2 -$277.1 -$337.1 -$434.9 
 Compensation actions 
Contract-length reductions for more than 3,000 employees 
Pay frozen in FY 2010 and FY 2011 
No step increases in FY 2010, 2011, 2013, and 2014
Looking Forward 
7 
TO FY 2016 AND BEYOND
Looking Forward: Strategic Plan 
8 
Strategic Plan Process 
 During the 2013-2014 school year, the division partnered with ECRA 
Group, Inc. to develop a strategic plan to document the current state 
of the division and determine a future direction. 
 The strategic planning process asked Board members to participate 
in interviews and stakeholders to participate in focus groups and 
surveys. 
 Approximately 30,000 stakeholders provided input during the 
strategic planning process. 
 The final strategic plan will provide a framework for planning and 
decision-making. 
 Funding may be needed for initiatives identified as the Strategic Plan 
is developed and implemented
Budget Drivers for the Foreseeable Future 
9 
Growing Student Population with Diverse Needs 
 Student enrollment continues to increase and student demographics 
continue to shift, reflecting increased needs 
Competitive Compensation 
 Employee salary increases are a divisionwide priority and FCPS behind 
in competiveness in the region 
 Virginia Retirement System rates are set by the state and will increase 
substantially in both FY 2017 and FY 2019 
Limited Revenue Growth 
 The use of one-time money to meet ongoing needs has resulted in a 
structural deficit that needs to be eliminated 
 State funding for K-12 remains below FY 2009 level and is at risk as the 
state must address a significant revenue shortfall in FY 2016. Policy 
shifts have reduced funding for FCPS, and the Local Composite Index 
will be recalculated for FY 2017 and FY 2019. 
Preliminary Information for Planning Purposes Only - No School Board Action Has Been Taken
FY 2015 Salary Comparisons 
10 
Starting Teacher Salaries* 
FY 2015 
Division Division Division 
Falls Church City $48,500 Arlington $77,093 Arlington $111,260 
Arlington $48,228 Alexandria City $76,626 Prince William $109,609 
Loudoun $47,500 Falls Church City $68,541 Alexandria City $107,259 
Alexandria City $47,242 Montgomery, MD $67,723 Manassas Park City $106,321 
Fairfax $46,756 Prince George's, MD $64,776 Montgomery, MD $105,189 
Montgomery, MD $46,410 Prince William $62,482 Loudoun $104,105 
Prince George's, MD $46,380 Manassas City $61,642 Falls Church City $103,960 
Manassas City $46,078 Fairfax $61,253 Manassas City $103,497 
Prince William $45,998 Loudoun $60,086 Fairfax $100,898 
Manassas Park City $44,490 Manassas Park City $58,373 Prince George's, MD $100,775 
Source: FY 2015 WABE Guide 
Teacher Salaries 
Beginning 10th Year 
+ Master Degree* Maximum Teacher Salaries* 
FY 2015 FY 2015 
*Of the Virginia school divisions impacted by the mandated VRS shif t and corresponding salary increase, all divisions except 
Loudoun and Prince William have completed the full 5 percent increase; Loudoun and Prince William have only completed 3 percent.
Virginia Retirement System Employer Rates 
VRS rates were 
artificially 
lowered in 
FY 2011 to help 
balance the 
state budget 
However, state 
law requires 
fully funding the 
actuarial rate by 
2019-2020 
VRS funded 
status for 
teachers as of 
June 30, 2013 
was 62.1% 
11
Local Composite Index 
Adjusts in FY 2017 and FY 2019 
12 
Arlington, 
Alexandria, 
Fairfax City, and 
Falls Church City 
have an LCI at 
the cap of .8 
Of the five 
Northern 
Virginia 
jurisdictions not 
already at the 
cap of 0.8, four 
saw an increase 
in their LCI for 
FY 2015 which 
resulted in a 
decrease in 
state funding
FY 2016 Fiscal Forecast 
13 
PRELIMINARY FORECAST
State Budget – Ominous News 
14 
THE FREE LANCE–STAR 
More school cuts possible, Virginia legislators say 
BY VANESSA REMMERS / October 26th, 2014, 9:36 pm 
“While K–12 education avoided recent state budget cuts, school board members 
should still keep something in their back pockets because additional cuts may be 
coming, the legislators said.” 
Richmond Times-Dispatch 
Legislator warns Henrico officials of tough budget times ahead 
By TED STRONG | Posted: Wednesday, November 5, 2014 10:30 pm 
“It’s possible that the state’s K-12 education system could suffer cuts…State Sen. 
Walter A. Stosch, R-Henrico and chairman of the Senate Finance Committee, 
noted that cuts made so far have spared public school divisions but said that 
Henrico officials should not count on that continuing to be the case.”
FY 2016 Fiscal Forecast 
15 
FY 2016 Fiscal Forecast Projections 
($ in millions) 
FY 2015 
Approved 
FY 2016 
Forecast Change 
Funds Available: 
Beginning Balance $ 48.5 $ 27.8 $ (20.7) 
County Trans fer (shown as level to project need below) 1,768.5 1,768.5 - 
State Revenue - Impact of Final FY 2015 State Adoption 405.9 401.4 (4.5) 
State Revenue - Impact of Enrol lment Growth 3.6 3.6 
State Revenue - Reduction Placeholder (19.4) (19.4) 
Sales Tax 173.8 178.8 5.0 
Federal Aid 42.0 42.0 - 
Fai rfax Ci ty and Other Revenue 61.6 62.8 1.2 
Funds Available $ 2,500.3 $ 2,465.5 $ (34.8) 
Textbook Reserve Beginning Balance $ 3.5 $ 6.1 $ 2.6 
Total Funds Available $ 2,503.8 $ 2,471.6 $ (32.2)
FY 2016 Fiscal Forecast 
16 
FY 2016 Fiscal Forecast Projections 
($ in millions) 
FY 2015 
Approved 
FY 2016 
Forecast 
Change from 
FY 2015 
Expenditures: $ 2,468.8 $ 2,468.8 $ - 
Enrollment and Demographic Changes 
Enrol lment Growth/Student Demographics 21.3 21.3 
Compensation 
Impact of Delayed Step from FY 2015 10.4 10.4 
Base Savings (due to turnover) (27.0) (27.0) 
Step Increase 39.8 39.8 
MSA 1% 19.6 19.6 
Benefi t Rate Increases (Includes heal th and FCERS) 2.8 2.8 
State Benefi t Rate Changes (2.8) (2.8) 
Other Pos t Employment Benefi ts (3.5) (3.5) 
Preliminary Information for Planning Purposes Only - No School Board Action Has Been Taken
FY 2016 Fiscal Forecast 
17 
FY 2016 Fiscal Forecast Projections 
($ in millions) 
FY 2015 
Approved 
FY 2016 
Forecast 
Change from 
FY 2015 
Ful l -Day Mondays (les s contract length reductions ) 6.3 6.3 
Blueprint for Change 4.9 4.9 
Divi s ion Reorgani zation Savings (0.6) (0.6) 
Contractual , Buses , and Leases 8.6 8.6 
Transfers Out 28.9 31.1 2.2 
Summer School , FECEP, Cons truction, and Adul t ESOL 
Total Projected Expenditures $ 2,497.7 $ 2,579.7 $ 82.0 
Textbook Reserve Ending Balance $ 6.1 $ 8.8 $ 2.8 
Projected Deficit Prior to County Transfer $ - $ (117.0) $ (117.0) 
County Transfer of 3.0% $ 53.1 $ 53.1 
Projected Deficit After 3% Transfer Increase $ - $ (63.9) $ (63.9)
FY 2016 Unfunded Needs 
18 
NOT INCLUDED IN FORECASTED SHORTFALL 
PRESENTED FOR FY 2016
FY 2016 Unfunded Identified Needs 
19 
Lower Class Size 
 Class sizes have increased three times during the economic downturn 
 Large class sizes are a challenge for students and teachers 
Family and Early Childhood Education Program 
 Expanding programs to eliminate the waiting list for pre-k services 
for students at risk is a countywide goal 
Student Technology and Connectivity 
 Students need access to technology and the internet at school and at 
home in order to learn and to compete in the world 
Innovation 
 Funding to ensure FCPS’ capacity to confront emerging needs, 
issues, and opportunities
FY 2016 Unfunded Identified Needs 
20 
Infrastructure 
 Preventive and Major Maintenance 
Recurring funding is essential to reduce long-term costs and 
extend the life of major systems 
 Replacement Equipment, Buses, and Vehicles 
FCPS does not currently have funding set aside for ongoing 
replacement of computers, technology equipment, and vehicles 
 ADA Compliant Playgrounds 
While playgrounds are addressed when buildings are renovated, 
because of the length of time in the renovation cycle, FCPS has 
playgrounds that need changes to meet ADA requirements
FY 2017 and Beyond 
21 
SIGNIFICANT COST DRIVERS CONTINUE 
STRATEGIC PLAN WILL PROVIDE A FRAMEWORK 
FOR PLANNING AND DECISION-MAKING
Budget Drivers – FY 2017 and Beyond 
22 
Local Composite Index 
 Will be recalculated which will likely reduce state funding 
Enrollment and Student Demographics 
 Projected increase in total students with continued increase in 
students who receive additional support and services 
Virginia Retirement System Contributions 
 Will increase from 80% to 90% of the actuarial rate 
Health Insurance Costs 
 Projected to increase 6% annually 
Salary Increases 
 Priority is to provide employees with predictable salary adjustments 
annually
FY 2017 Preliminary Forecast Summary 
23 
FY 2017 Preliminary Forecast Projections 
($ in millions) 
Change From 
FY 2016 
Funds Available: 
Beginning Balance $ (27.8) 
County Trans fer (shown as level to project need) - 
State Revenue - Impact of Enrol lment Growth 3.6 
State Revenue - Reduction Placeholder (13.4) 
Sales Tax 5.4 
Federal Aid - 
Fai rfax Ci ty and Other Revenue 1.3 
Total Projected Funds Available $ (30.9)
FY 2017 Preliminary Forecast Summary 
24 
FY 2017 Preliminary Forecast Projections 
($ in millions) 
Change From 
FY 2016 
Expenditures: 
Enrollment and Demographic Changes $ 21.3 
Compensation 
Base Savings (due to turnover) (28.6) 
Salary Increases (Step + 1% MSA) 62.3 
Benefi t Rate Increases (Includes VRS and heal th) 40.0 
Logistics 4.7 
Transfers Out (2.3) 
Summer School , FECEP, Cons truction, and Adul t ESOL 
Identified Instructional Needs ??? 
Total Projected Expenditures $ 97.4 
Projected Deficit Prior to County Transfer $ 128.3
Planning for a Sustainable Future 
25 
Both the County and Schools have experienced many 
consecutive years of slow revenue growth, and 
program reductions and further cutbacks without 
significant programmatic impact are unlikely 
As such, the limited revenue growth outlook and the 
already pared down budget will challenge our ability 
to maintain the status quo in instructional programs 
and service delivery, as well as challenge our capacity 
to confront emerging needs, issues and opportunities

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Fiscal Forecast School Operating Fund

  • 1. Fiscal Forecast School Operating Fund SCHOOL BOARD & BOARD OF SUPERVI SORS JOINT WORK SES S ION NOVEMBER 2 5 , 201 4 Preliminary Information for Planning Purposes Only - No School Board Action Has Been Taken
  • 2. Looking Back 2 WHILE EXPERIENCING CONTINUED ENROLLMENT INCREASES AND SHIFTS IN STUDENT DEMOGRAPHICS, FCPS TOOK SIGNIFICANT BUDGET REDUCTIONS
  • 3. Looking Back: Student Enrollment 3
  • 4. Looking Back: Changing Demographics 4 23,978 21,771 32,945 25,697 32,103 52,654 60,000 50,000 40,000 30,000 20,000 10,000 0 Special Education Unduplicated Student Count English for Speakers of Other Languages Students Eligible for Free or Reduced Price Meals Number of Students Student Demographic Trends and Percent of Total Enrollment FY 2008 Approved FY 2015 Approved 14.5% 13.8% 13.2% 17.2% 20.0% 28.2%
  • 5. Looking Back: Enrollment Growth 5 Since FY 2008 FCPS’ enrollment increased by nearly 22,000 resulting in increased costs of more than $190 million
  • 6. Looking Back: Budget Reductions Since FY 2008 6  FCPS identified nearly $435 million in budget savings and reductions including the elimination of more than 2,175 positions Significant reductions to central office and school support Class size was increased 3 times resulting in an increase of 1.5 - 2.0 students per teacher Programs were eliminated or redesigned FCPS Budget Summary ($ in millions) FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 Budget Reductions -$54.5 -$77.6 -$40.4 -$76.7 -$27.9 -$60.0 -$97.8 Cumulative Total -$54.5 -$132.1 -$172.5 -$249.2 -$277.1 -$337.1 -$434.9  Compensation actions Contract-length reductions for more than 3,000 employees Pay frozen in FY 2010 and FY 2011 No step increases in FY 2010, 2011, 2013, and 2014
  • 7. Looking Forward 7 TO FY 2016 AND BEYOND
  • 8. Looking Forward: Strategic Plan 8 Strategic Plan Process  During the 2013-2014 school year, the division partnered with ECRA Group, Inc. to develop a strategic plan to document the current state of the division and determine a future direction.  The strategic planning process asked Board members to participate in interviews and stakeholders to participate in focus groups and surveys.  Approximately 30,000 stakeholders provided input during the strategic planning process.  The final strategic plan will provide a framework for planning and decision-making.  Funding may be needed for initiatives identified as the Strategic Plan is developed and implemented
  • 9. Budget Drivers for the Foreseeable Future 9 Growing Student Population with Diverse Needs  Student enrollment continues to increase and student demographics continue to shift, reflecting increased needs Competitive Compensation  Employee salary increases are a divisionwide priority and FCPS behind in competiveness in the region  Virginia Retirement System rates are set by the state and will increase substantially in both FY 2017 and FY 2019 Limited Revenue Growth  The use of one-time money to meet ongoing needs has resulted in a structural deficit that needs to be eliminated  State funding for K-12 remains below FY 2009 level and is at risk as the state must address a significant revenue shortfall in FY 2016. Policy shifts have reduced funding for FCPS, and the Local Composite Index will be recalculated for FY 2017 and FY 2019. Preliminary Information for Planning Purposes Only - No School Board Action Has Been Taken
  • 10. FY 2015 Salary Comparisons 10 Starting Teacher Salaries* FY 2015 Division Division Division Falls Church City $48,500 Arlington $77,093 Arlington $111,260 Arlington $48,228 Alexandria City $76,626 Prince William $109,609 Loudoun $47,500 Falls Church City $68,541 Alexandria City $107,259 Alexandria City $47,242 Montgomery, MD $67,723 Manassas Park City $106,321 Fairfax $46,756 Prince George's, MD $64,776 Montgomery, MD $105,189 Montgomery, MD $46,410 Prince William $62,482 Loudoun $104,105 Prince George's, MD $46,380 Manassas City $61,642 Falls Church City $103,960 Manassas City $46,078 Fairfax $61,253 Manassas City $103,497 Prince William $45,998 Loudoun $60,086 Fairfax $100,898 Manassas Park City $44,490 Manassas Park City $58,373 Prince George's, MD $100,775 Source: FY 2015 WABE Guide Teacher Salaries Beginning 10th Year + Master Degree* Maximum Teacher Salaries* FY 2015 FY 2015 *Of the Virginia school divisions impacted by the mandated VRS shif t and corresponding salary increase, all divisions except Loudoun and Prince William have completed the full 5 percent increase; Loudoun and Prince William have only completed 3 percent.
  • 11. Virginia Retirement System Employer Rates VRS rates were artificially lowered in FY 2011 to help balance the state budget However, state law requires fully funding the actuarial rate by 2019-2020 VRS funded status for teachers as of June 30, 2013 was 62.1% 11
  • 12. Local Composite Index Adjusts in FY 2017 and FY 2019 12 Arlington, Alexandria, Fairfax City, and Falls Church City have an LCI at the cap of .8 Of the five Northern Virginia jurisdictions not already at the cap of 0.8, four saw an increase in their LCI for FY 2015 which resulted in a decrease in state funding
  • 13. FY 2016 Fiscal Forecast 13 PRELIMINARY FORECAST
  • 14. State Budget – Ominous News 14 THE FREE LANCE–STAR More school cuts possible, Virginia legislators say BY VANESSA REMMERS / October 26th, 2014, 9:36 pm “While K–12 education avoided recent state budget cuts, school board members should still keep something in their back pockets because additional cuts may be coming, the legislators said.” Richmond Times-Dispatch Legislator warns Henrico officials of tough budget times ahead By TED STRONG | Posted: Wednesday, November 5, 2014 10:30 pm “It’s possible that the state’s K-12 education system could suffer cuts…State Sen. Walter A. Stosch, R-Henrico and chairman of the Senate Finance Committee, noted that cuts made so far have spared public school divisions but said that Henrico officials should not count on that continuing to be the case.”
  • 15. FY 2016 Fiscal Forecast 15 FY 2016 Fiscal Forecast Projections ($ in millions) FY 2015 Approved FY 2016 Forecast Change Funds Available: Beginning Balance $ 48.5 $ 27.8 $ (20.7) County Trans fer (shown as level to project need below) 1,768.5 1,768.5 - State Revenue - Impact of Final FY 2015 State Adoption 405.9 401.4 (4.5) State Revenue - Impact of Enrol lment Growth 3.6 3.6 State Revenue - Reduction Placeholder (19.4) (19.4) Sales Tax 173.8 178.8 5.0 Federal Aid 42.0 42.0 - Fai rfax Ci ty and Other Revenue 61.6 62.8 1.2 Funds Available $ 2,500.3 $ 2,465.5 $ (34.8) Textbook Reserve Beginning Balance $ 3.5 $ 6.1 $ 2.6 Total Funds Available $ 2,503.8 $ 2,471.6 $ (32.2)
  • 16. FY 2016 Fiscal Forecast 16 FY 2016 Fiscal Forecast Projections ($ in millions) FY 2015 Approved FY 2016 Forecast Change from FY 2015 Expenditures: $ 2,468.8 $ 2,468.8 $ - Enrollment and Demographic Changes Enrol lment Growth/Student Demographics 21.3 21.3 Compensation Impact of Delayed Step from FY 2015 10.4 10.4 Base Savings (due to turnover) (27.0) (27.0) Step Increase 39.8 39.8 MSA 1% 19.6 19.6 Benefi t Rate Increases (Includes heal th and FCERS) 2.8 2.8 State Benefi t Rate Changes (2.8) (2.8) Other Pos t Employment Benefi ts (3.5) (3.5) Preliminary Information for Planning Purposes Only - No School Board Action Has Been Taken
  • 17. FY 2016 Fiscal Forecast 17 FY 2016 Fiscal Forecast Projections ($ in millions) FY 2015 Approved FY 2016 Forecast Change from FY 2015 Ful l -Day Mondays (les s contract length reductions ) 6.3 6.3 Blueprint for Change 4.9 4.9 Divi s ion Reorgani zation Savings (0.6) (0.6) Contractual , Buses , and Leases 8.6 8.6 Transfers Out 28.9 31.1 2.2 Summer School , FECEP, Cons truction, and Adul t ESOL Total Projected Expenditures $ 2,497.7 $ 2,579.7 $ 82.0 Textbook Reserve Ending Balance $ 6.1 $ 8.8 $ 2.8 Projected Deficit Prior to County Transfer $ - $ (117.0) $ (117.0) County Transfer of 3.0% $ 53.1 $ 53.1 Projected Deficit After 3% Transfer Increase $ - $ (63.9) $ (63.9)
  • 18. FY 2016 Unfunded Needs 18 NOT INCLUDED IN FORECASTED SHORTFALL PRESENTED FOR FY 2016
  • 19. FY 2016 Unfunded Identified Needs 19 Lower Class Size  Class sizes have increased three times during the economic downturn  Large class sizes are a challenge for students and teachers Family and Early Childhood Education Program  Expanding programs to eliminate the waiting list for pre-k services for students at risk is a countywide goal Student Technology and Connectivity  Students need access to technology and the internet at school and at home in order to learn and to compete in the world Innovation  Funding to ensure FCPS’ capacity to confront emerging needs, issues, and opportunities
  • 20. FY 2016 Unfunded Identified Needs 20 Infrastructure  Preventive and Major Maintenance Recurring funding is essential to reduce long-term costs and extend the life of major systems  Replacement Equipment, Buses, and Vehicles FCPS does not currently have funding set aside for ongoing replacement of computers, technology equipment, and vehicles  ADA Compliant Playgrounds While playgrounds are addressed when buildings are renovated, because of the length of time in the renovation cycle, FCPS has playgrounds that need changes to meet ADA requirements
  • 21. FY 2017 and Beyond 21 SIGNIFICANT COST DRIVERS CONTINUE STRATEGIC PLAN WILL PROVIDE A FRAMEWORK FOR PLANNING AND DECISION-MAKING
  • 22. Budget Drivers – FY 2017 and Beyond 22 Local Composite Index  Will be recalculated which will likely reduce state funding Enrollment and Student Demographics  Projected increase in total students with continued increase in students who receive additional support and services Virginia Retirement System Contributions  Will increase from 80% to 90% of the actuarial rate Health Insurance Costs  Projected to increase 6% annually Salary Increases  Priority is to provide employees with predictable salary adjustments annually
  • 23. FY 2017 Preliminary Forecast Summary 23 FY 2017 Preliminary Forecast Projections ($ in millions) Change From FY 2016 Funds Available: Beginning Balance $ (27.8) County Trans fer (shown as level to project need) - State Revenue - Impact of Enrol lment Growth 3.6 State Revenue - Reduction Placeholder (13.4) Sales Tax 5.4 Federal Aid - Fai rfax Ci ty and Other Revenue 1.3 Total Projected Funds Available $ (30.9)
  • 24. FY 2017 Preliminary Forecast Summary 24 FY 2017 Preliminary Forecast Projections ($ in millions) Change From FY 2016 Expenditures: Enrollment and Demographic Changes $ 21.3 Compensation Base Savings (due to turnover) (28.6) Salary Increases (Step + 1% MSA) 62.3 Benefi t Rate Increases (Includes VRS and heal th) 40.0 Logistics 4.7 Transfers Out (2.3) Summer School , FECEP, Cons truction, and Adul t ESOL Identified Instructional Needs ??? Total Projected Expenditures $ 97.4 Projected Deficit Prior to County Transfer $ 128.3
  • 25. Planning for a Sustainable Future 25 Both the County and Schools have experienced many consecutive years of slow revenue growth, and program reductions and further cutbacks without significant programmatic impact are unlikely As such, the limited revenue growth outlook and the already pared down budget will challenge our ability to maintain the status quo in instructional programs and service delivery, as well as challenge our capacity to confront emerging needs, issues and opportunities