Ann Arbor school board OKs budget with $3.84M in cuts
The Ann Arbor school board passed a $188.5 million budget Wednesday for fiscal year 2013 that gives money back to district administrators for possibly not cutting counselors or for restoring professional development or school improvement funds.
Ann Arbor Public Schools Superintendent Patricia Green and Deputy Superintendent of Operations Robert Allen presented a budget for approval that called for $3.84 million in cuts and the use of $6.04 million from the district’s $18.73 million fund balance, or main savings account.
Ann Arbor Superintendent Patricia Green and school board President Deb Mexicotte listen to a budget presentation at a May Committee of the Whole meeting. The board passed its $188.5 million budget for 2012-13 Wednesday night.
Melanie Maxwell I AnnArbor.com
Allen said there was one change to the projections since the public hearing and first reading of the budget May 23. AAPS recently received a larger-than-anticipated credit from the self-insured portion of the district’s health care costs. The difference between the estimated adjustment and the actual adjustment was slightly less than $1 million.
As a result, district administrators recommended using $6.04 million in fund equity, rather than the $7.05 million the board originally had targeted.
The elimination of four high school counselors — one from each Huron, Pioneer, Skyline and Ann Arbor Technological high schools — was approved as part of the budget cuts, as as were cuts to funds that pay for building improvement plans and professional development.
But because three weeks ago, at the last AAPS Board of Education meeting, the majority of board members were prepared to spend $7 million of their fund equity, Trustee Andy Thomas asked if his fellow leaders would like to revisit or take off the table any of the proposed spending cuts they previously had OKed.
He asked Green: “If you had a magic wand, which of the budget cuts would you resurrect?”
Green identified the high school counseling positions, valued at $400,000; the 10 percent reduction to the $5 million departmental discretionary fund; and the $200,000 allocated for school improvement plans. She said the elimination of these items, which in total would account for $1.1 million, would severely impact the work she and her team hope to do in the areas of social and emotional learning and the discipline and achievement gaps.
“I do feel very strongly about the role of counselors,” Green said. “That was something hard to put on the table to begin with… Those counselors are critical to some of the work we have coming forward.”
After further deliberation on the budget as presented, President Deb Mexicotte proposed “giving back” $500,000 of the nearly $1 million from the health care adjustment for district administrators to use at their discretion.
“With the idea being, we want support for the things Dr. Green has outlined,” she said, adding the $500,000 could be divided among counselors, professional development, school improvement plans or “anything else Dr. Green feels will promote the strategic plan.”
Mexicotte’s amended version of the budget passed 5-1, with Vice President Christine Stead opposing and Trustee Susan Baskett absent, bringing the total amount AAPS will spend from its fund balance to $6.54 million, leaving $12.19 million in the savings account.
AAPS needs a minimum fund balance of $9 million in order to make payroll during the summer months, school officials have said.
Stead argued the budget passed Wednesday puts the district in a weak position for next year.
Christine Stead
Stead added Gov. Rick Snyder indicated in FY 2014 he will reduce the amount of funding available to districts for meeting his “best practice” criteria as well as the state’s contribution to offset retirement costs. Combined, these two components account for 73 percent or $4.4 million of the $6 million in revenue AAPS is projecting for 2012-13.
She said the district also is facing increases in the cost of special education services and decreases in its special education reimbursement.
“I also do want us to at least use our past year's experiences as a data point,” she said.
After passing the FY 2012 budget, Ann Arbor Public Schools found it would be unable to hit its target for staff reductions, causing a “slippage” of about $1.8 million. This is because the district tries to reduce staff through attrition and retirements only, rather than through layoffs, Mexicotte said following Wednesday’s meeting.
“We had approximately 14 positions or so (last year) that did not get reduced because we wanted to reduce them by the most humane means possible,” Mexicotte said. “So those positions continued to exist and continued to cost us.”
Stead said per the district’s third- and fourth-quarter financial reports, AAPS could miss its 2012-13 revenue projections by about $500,000, bringing the district’s total slippage to $2.3 million.
She said she would have liked AAPS to have budgeted for a 2013-14 slippage of at least $2 million.
However, Mexicotte said she does not believe the $500,000 will save or doom the district.
“But it may allow us to implement some of the things Dr. Green has been proposing. And we need some momentum around the discipline and achievement issues,” she said, adding if momentum is obtained, the board will know it needs to protect and preserve some of these items in next year’s cuts.
Mexicotte added there are slippage adjustments the school district has to make every year; it is the nature of school funding. She also said the district does not know what its retirement costs or employee pension contribution rate will be yet, as the state has not voted on the Michigan Public School Employee Retirement System (MPSERS) reform legislation. She said both of these pieces are critical to AAPS moving forward with the budget it passed.
The complete list of reductions and savings included in the budget passed Wednesday:
- Eliminating three middle school athletic directors ($37,500)
- Eliminating four high school counseling positions ($400,000)
- Prohibiting the use of general fund money for voluntary, non-league sporting events ($58,000)
- Changing high school lacrosse from a varsity sport to a club sport ($93,000)
- Outsourcing the district’s noon hour supervisors ($75,000)
- Restructuring the information technologies department ($200,000)
- Reducing the substitute teachers budget ($200,000)
- Discontinuing early notification incentives for retirements ($40,000)
- Combining bus runs for Bryant and Pattengill elementary schools ($16,560)
- Eliminating mid-day shuttles between Community High and the comprehensive high schools ($230,184)
- Returning salaries for the Community Education and Recreation executive director and office professionals to the department budget ($205,000)
- Eliminating the district’s contribution to summer music camps ($60,000)
- Eliminating the police liaison officers at the high schools ($350,000)
- Discontinuing 4 p.m. buses for the middle schools’ after-school programs ($84,284)
- Reducing the district-wide departmental discretionary fund ($500,000)
- Eliminating funding for school improvement plans ($200,000)
- Combining Roberto Clemente Student Development Center’s summer schools with Pioneer High School’s ($80,000)
- Restructuring busing to Ann Arbor Open school ($98,800)
- Hiring about 32 new staff to fill positions left open by retirements ($960,000)
Source: Ann Arbor Public Schools
Staff reporter Danielle Arndt covers K-12 education for AnnArbor.com. Follow her on Twitter @DanielleArndt or email her at daniellearndt@annarbor.com.
Comments
GoNavy
Thu, Dec 13, 2012 : 3:18 p.m.
I would like it if somehow we could get a link to the full proposed budget (what was provided above comes nowhere close). It is impossible to analyze choices in isolation -
jns131
Mon, Jun 18, 2012 : 5:39 p.m.
Looks like the middle school is closing its doors by 3:30. No more after school anything. So sad to hear. Can't wait to see what happens now with children and nothing to do.
Here
Thu, Jun 14, 2012 : 5:25 p.m.
I'm no financial genius, but I think I would put a different headline on this article: "Ann Arbor school board OKs plan to become insolvent in 18 months".
Beth
Thu, Jun 14, 2012 : 5:24 p.m.
How can they cut the substitute teacher budget by $200,000? Tell teachers not to take sick days? I am a sub in AA, and there are days that I cover teacher meetings or conferences. But if those aren't held during the school day, they become one more burden that falls on teachers after school hours, on top of the many other professional development and staff meetings they already have after school. I get paid $75 for a full day - I simply don't understand how there can be $200,000 to cut. Subs have already been outsourced - if there now will be less sub jobs available, that's going to make things even more financially difficult for us. AnnArbor.com, can you get any details from AAPS?
Bob B
Thu, Jun 14, 2012 : 6:17 p.m.
It's simple, just have the teachers cut out 2,666 sick days and voila you have $200,000 savings (@$75 per day) That should be simple right???
a2schoolparent
Thu, Jun 14, 2012 : 4:19 p.m.
So the late bus is cut. How will middle school kids go home, then, if they want to participate in after-school sports or academic clubs? Or are these clubs only for kids whose parents have flexible work schedule or don't need to work? What a selection mechanism.
jns131
Tue, Jun 19, 2012 : 1:40 p.m.
They won't, Every thing is cut and the children either have to walk home or catch a cab. From what I was told parents are still working and these children will be forced to catch the school bus home. Sorry to say, this is the end of after school anything unless you have someone who can drive.
Jrileyhoff
Fri, Jun 15, 2012 : 1:51 p.m.
Cutting the late middle school bus runs is counterproductive to closing the achievement gap. Many students will no longer be able to attend the Homework Club where they receive free tutoring & help with school assignments. Sad.
Blerg
Thu, Jun 14, 2012 : 3:18 p.m.
Does "hiring about 32 new staff to fill positions left open by retirements" mean that high school classes won't be at the rumored levels of 38 per section? Will any of these decisions bring down class sizes to the upper 20s, low 30s?
longtime AA
Thu, Jun 14, 2012 : 2:56 p.m.
Please, everyone, read the numbers in the projection. We have a serious problem NOW, and yet the Board, and the parents, and the citizens, choose to look away and not address the problem. Instead, we cut away the little things, cut away the items which have the quietest supporters. Yes, I know there is a reason for having savings, and there are times to use savings. But I would prefer not to use savings to balance a structural deficit and end up hiding the real problems. Unfortunately, its easier to do short term solutions, keep your elected positions, and pass the problem on for a future Board.
Jan Tripp
Thu, Jun 14, 2012 : 2:37 p.m.
I didn't see any discussion reported here about how AAPS is dealing with the ever decreasing equity fund balance. It looks like the fund is projected to be empty by 2014/15 and below the $9M needed to make summer payroll in in 2013/14. It doesn't like like a budget surplus is going to boost the equity fund anytime soon. Maybe increasing tax revenues in the form increased home values to balance the budget? Or perhaps a tax hike is looming in our future?
Stephen Lange Ranzini
Thu, Jun 14, 2012 : 2:16 p.m.
@Bob B.: Great leaders ALWAYS lead by example. If I were the leader of an organization that faced cuts, I would FIRST allocate any discretionary funds I controlled to whatever was being funded from there that *was* absolutely necessary and zero out that fund BEFORE I asked the employees for *any* cut or sacrifice. I would probably take a pay cut and ask my key lieutenants to take one too, of greater magnitude than what I asked from the rest of my team, again *before* I asked the employees for *any* cut or sacrifice. Lastly, I wouldn't tell the "shareholders" or customers "you'll have to file a FOIA request to get that information" when they ask questions about my budget recommendations!
Stephen Lange Ranzini
Thu, Jun 14, 2012 : 3:18 p.m.
@alarictoo: I was trying to be polite with my choice of words, hence the *probably*. Also, please do differentiate in your mind between "mega banks" and "community banks", as they are very, very different!
alarictoo
Thu, Jun 14, 2012 : 2:35 p.m.
Stephen - While I do agree with you an many things a couple of things in your post here struck a tinny note... "I would ###probably### take a pay cut... *before* I asked the employees for *any* cut or sacrifice." Leaving a bit of wiggle room there, I see. Keep in mind, AAPS' previous superintendent did lead by example in this area. All of this has been undone by the BoE (in hiring the new sup), and Ms. Green (in the raises she gave to her cabinet members, more than negating the 4% they gave up a few of years ago). "Lastly, I wouldn't tell the "shareholders" or customers "you'll have to file a FOIA request to get that information" when they ask questions about my budget recommendations!" I'm sorry, but with the banking industry bail-out that occurred a few years ago we all got to see what paragons of transparency that industry consists of. Otherwise, though, we're good. ;-)
Bob B
Thu, Jun 14, 2012 : 2:22 p.m.
And I'm guessing you wouldn't cut services to your customers while giving raises to your executive team!!
Bob B
Thu, Jun 14, 2012 : 1:42 p.m.
Anyone else see the irony in the School Board cutting Lacrosse as a varsity sport after Pioneer becomes the first public school to play for the State Championship this past Saturday and their coach (James Corey) coached the team while forfeiting his coaching salary. Sometimes leaders have to lead by example.
snoopdog
Thu, Jun 14, 2012 : 1:06 p.m.
Looking at the three year projection in the fund balance, it will go from plus 18.73 million to negative 29.02 million. This is not just kicking the can down the road, this is pure insanity. The Pink Elephant is still sitting in the corner very quietly and very happy that no one is smart enough or has the guts to call it out ? Where does 80% of the budget get consumed folks ? Good Day
DonBee
Fri, Jun 15, 2012 : 6:12 a.m.
So based on Ms. Arndt's comment, expect a WISD wide enhancement millage vote in May for 2 more mills. After all AAPS has never met a tax option they did not love.
Danielle Arndt
Thu, Jun 14, 2012 : 7:47 p.m.
Snoopdog, the fund balance actually only would accrue to a negative $29.02 million if the administration and the Board of Education took no action to address the district's structural deficit and reduce expenditures or increase revenues over the next two years. So AAPS would be at a negative $29.02 million only if it did nothing and kept operating the same way. Thanks for your comment.
Bob B
Thu, Jun 14, 2012 : 6:22 p.m.
The problem lies more in the pension and retirement benefits. The same problem Ford and GM were having. These costs are swallowing the budget and our kids futures. Need some sort of reform on the retirement and we need to address the bad teachers who make $100k+ per year issue. Anyone with kids in AAPS knows of at least one of these clowns. I have no problem paying great teachers 100k but we can't afford to pay a bad teacher 100k just because they have been in the system 25 yrs. Need to reform that too.
sh1
Thu, Jun 14, 2012 : 5 p.m.
You can cut as many teacher salaries as you want but it won't raise 40 million.
Bob B
Thu, Jun 14, 2012 : 1:05 p.m.
The Board and Administrators say they want to cut spending where it doesn't affect the students, but everything they cut does!! If they TRULY don't want to affect the students, then implement a 10% pay cut to the "Executive Cabinet" and all the Principals (and asst's) in the district. By my quick math, Balas would generate $80k, and a 10% cut to all the principals would net $520k (roughly 45 FTE) before fringe savings while still paying these folks well over $100k per. With $600k payroll savings and the $5M discretionary fund, you could add back ALL of the cuts and have $1.5M left over while NOT affecting the students at ALL. As anyone who works in business knows, when your revenues decrease year after year after year and you CAN'T control the revenues, you either cut heads or reduce salaries. The State has cut the annual revenues for years and it WILL continue. It is not rocket science!!! Our Executives make TOO much for the current revenue model, we need a reset.
DonBee
Thu, Jun 14, 2012 : 3:19 p.m.
Total administrative and overhead spending is in the range of $25 million (up $4 million in the last few years), according to AAPS filings in the state FID database. So a 10% reduction would be $2.5 million. Reducing it back to prior levels would result in a reduction of $4 million, which should be the minimum goal in my mind.
Madeleine Borthwick
Thu, Jun 14, 2012 : 1:37 p.m.
Thank you Bob!!!!
Stephen Lange Ranzini
Thu, Jun 14, 2012 : 11:40 a.m.
For those of you following school board issues, my column this week touches on the AAPS's attitude towards the Freedom of Information Act (FOIA). See: http://www.annarbor.com/news/opinion/ann-arbor-city-council-and-school-board-both-need-lessons-in-open-government/#comments
squidlover
Thu, Jun 14, 2012 : 11:21 a.m.
So the Superintendent's "magic wand" wish to keep the 4 high-school counselors ($400,000) and the funding for the school-improvement plans ($200,000) still get eliminated, but is granted $500,000 for discretionary use? How does this make any sense? And I don't want to hear that the $500,000 will be put to use for closing the disciplinary and achievement gaps; the outlines that have been presented for those plans are still too vague to justify that kind of money. AAPS has already spent a lot of money on PEG. If the results are not what are expected (which I'm guessing they are not), it's time to stop writing checks to them.
alarictoo
Thu, Jun 14, 2012 : 2:22 p.m.
Bob B - Any of our current trustees stepping aside so that others can make the tough choices is, as we all know, highly unlikely. Most of the current BoE members have their own agendas. And, those agendas are not hard to see if one watches their votes.
Bob B
Thu, Jun 14, 2012 : 1:33 p.m.
The $500k they want to add back is to be added to the $4,500,000 already in the budget for discretionary use. Why would we cut $3.8M in targeted items that hurt the kids but give the Super Duperintendant the discretionary use of $5M. Un-Freaking-believable!! I understand the Board of Trustees make next to nothing for alot of work, but they need to stand up for the kids, or step aside and let someone else who will, be a trustee. Trustee Stead not approving the budget is the only one acting on the kids behalf last night.
jcj
Thu, Jun 14, 2012 : 11:13 a.m.
AAPS recently received a larger-than-anticipated credit from the self-insured portion of the district's health care costs. The difference between the estimated adjustment and the actual adjustment was slightly less than $1 million. Maybe they need to go back to basic math!
sh1
Thu, Jun 14, 2012 : 11:13 a.m.
And elementary classrooms are bursting with 30+ students per class. Good luck closing the achievement gap that way.
Topher
Thu, Jun 14, 2012 : 12:38 p.m.
But remember that many Republicans have been using the McKenzie report to justify large classes. 22-24 should be the goal. This, I have found, is the most that I can handle in regard to rigorous writing assessments, and enough one-on-one time with each student. 30+ is insane, sad, and a waste of money. This might work for lecture based classes, but not for any classes that will be required to restructure under the Common Core State Standards.
grye
Thu, Jun 14, 2012 : 11:56 a.m.
The same goes for the middle schools. My wife had 39 students in one of her classes. With the extra desks, there was very little room to move around the classroom, let alone try to address the learning styles of each child.
Jim Osborn
Thu, Jun 14, 2012 : 11:01 a.m.
This article was not clear about what type of counselors were being cut. Also, why they are being paid over $100,000 with benefits, a year, which is high, especially for a 9 month year. This is much higher than the national or regional averages.
Danielle Arndt
Thu, Jun 14, 2012 : 11:29 a.m.
Jim, the counselor positions were eliminated through attrition or retirements, so I was told the positions were filled by highly educated and experienced individuals, which would put them at the top end of the pay scale. For budget projections, AAPS consistently estimates these types of individuals cost the district about $100,000 per person. This includes both salary, benefits, the retirement contribution and what the district pays in FICA, or insurance costs. I hope this helps! Thanks for your comment.
A2Girl63
Thu, Jun 14, 2012 : 11 a.m.
Once again no cuts to fat at the top of Balas ..Come on Dr Green step up and make administration take cuts like the rest of us. I am thankful my kids only have a few years left in AAPS. .
G2inA2
Thu, Jun 14, 2012 : 10:19 p.m.
A2Girl--that has been the question for years, and years, and years. But we never seem to see cuts that "hurt" the Balas administration building.
Stephen Lange Ranzini
Thu, Jun 14, 2012 : 10:51 a.m.
Wow 1) The board voted to amend the budget and reverse the proposed $500,000 cut to the $5,000,000 discretionary fund account which is spent at the sole discretion of the Superintendent. 2) This year's results will be a $2.3 million deficit because "We had approximately 14 positions or so (last year) that did not get reduced," even though the approved budget called for them to be cut, and the budget was never officially changed, nor was the change ever requested of the board. Translation: 1) The board gives way too much latitude to the Superintendent to spent money however she sees fit. $5 million of purely discretionary funding?!!! 2) The budgeting process is meaningless anyway, since the administration is allowed to ignore it anyway. To put this decision into context of the bank I am CEO of, we've got $28 million a year in revenue and 303 employees and my discretionary authority to spent money is $25,000. For any item above $25,000 that is not budgeted, I must seek board of directors approval *prior* to agreeing to the expenditure. All expenditures are specified in our budget, there is no "other" or "miscellaneous" category. Not even $1. The complete lack of effective governance over monetary expenditures of the AAPS is rather amazing.
Topher
Thu, Jun 14, 2012 : 6:38 p.m.
@Stephen - Thanks! It seems like the discretionary fund is used for worthwhile items, but some transparency would probably be extremely helpful. Who keeps the superintendent in check for the 5 million? From a previous article: Allen said each building is allocated some money from the discretionary budget, and some is used for conferences, travel and office supplies. Another large portion of the discretionary budget is for hourly or temporary employees, he said.
Stephen Lange Ranzini
Thu, Jun 14, 2012 : 3:21 p.m.
@Floyd: All well run private sector firms and public sector entities are run the way I describe. I'm only giving the example I know best since I happen to be the CEO of a bank, but it could be a bowling alley or fire department, it really doesn't change the principles of good crisis leadership! As CEO of a bank, I am familiar with the management strategies and dynamics of a wide range of industries because we have loan customers engaged in a wide range of industries.
Stephen Lange Ranzini
Thu, Jun 14, 2012 : 2:03 p.m.
@Topher: previous articles have noted that this fund is under the control and spent a the discretion of the Superintendent.
Floyd
Thu, Jun 14, 2012 : 2:02 p.m.
How has it become a common talking point that our public education system and other societal programs should be run like a bank? We've seen what motivates bankers and the damage they can wreak and we are still living in that misery. Schools should NOT be run like banks!
blahblahblah
Thu, Jun 14, 2012 : 12:56 p.m.
Perhaps they know it will be an easier sell to go back to the taxpayers for more money once the school district is broke. The tech bond approval on top of all the others, has resulted in a moral hazard type attitude, that the taxpayers stand waiting with a blank check in hand to help rescue the district.
Topher
Thu, Jun 14, 2012 : 12:45 p.m.
Still, 5 million seems like a lot to have as "discretionary funding" - who checks this funding and holds the departments accountable?
Topher
Thu, Jun 14, 2012 : 12:42 p.m.
I am confused - how do you gather that the 5 million is up to the discretion of the Superintendent? It says departmental discretion, which I assumed meant that each department within each school has a little bit of money to work with. I feel like I'm missing something.
Jim Osborn
Thu, Jun 14, 2012 : 11:07 a.m.
I, too, was amazed at the lack of coverage of how certain expentitures were to be spent. I "loved" the line, "These counselors are criticlal to some of the work that we have coming forward". Oh, their good works on our dime.
Carole
Thu, Jun 14, 2012 : 10:42 a.m.
Out sourcing noon hour will only put dollars in the pockets of the company hired to do so. The noon hour program is essential to the safety and welfare of the children at noon hour, and have over the past years done an excellent job being very much underpaid for the work that they do -- lowest paid salary workers in the community at that. Maybe some of the high end administrators should consider taking a cut in their salary.
tim
Thu, Jun 14, 2012 : 4:09 p.m.
Can't se how in the world they are saving money by outsourcing , doubt if you could pay anybody less and have them show up.
Carole
Thu, Jun 14, 2012 : 3:47 p.m.
These employees get "no benefits" other than knowing that they are doing a very important job for the AAPS -- usually they only work 1 3/4 hrs. to 2 hrs. per day at around $10 per hr. average. And, when you reach the top ($11.6&), you stay there and I know noon hour staff who have remained at the amount for a large number of years. One thing the administration might consider is consolidating this in with childcare who also work part time -- the concern there then for them is if the employee goes over 20 hrs. per week (I think) they are entitled to some benefits.
tim
Thu, Jun 14, 2012 : 3:28 p.m.
Did these noon hour employees get health insurance benefits? I'm sure that the out sourced employees won't have health insurance other wise I can't see how the AAPS is saving money.
Madeleine Borthwick
Thu, Jun 14, 2012 : 1:34 p.m.
Carole, not a bad idea but that's not too likely to happen(I'm rolling my eyes at this point),but thank you again for sticking up for us!!!! we get too little appreciation as it is.
Jim Osborn
Thu, Jun 14, 2012 : 10:52 a.m.
When I was in school, the teachers did this on a rotating basis, why not now?