Ann Arbor school district may see $3.9M budget surplus, preliminary first-quarter report shows
Ann Arbor Public Schools budgeted for a worst case scenario for the current fiscal year — a conservative approach that translates into about $4.3 million in unexpected revenue, district officials said this morning.
Nancy Hoover, director of financial operations, said the district anticipated an additional $268 loss in per pupil funding — along with the $154 per pupil loss during the 2009-10 school year. However, it doesn’t appear additional funding will be lost.
“We budgeted not to have that $268, and it looks like we’re going to get it,” she said. “So we put it back in (to the budget), and we haven’t increased expenditures to match this increase.”
The unexpected revenue means the district predicts a $3.9 million budget surplus for fiscal year 2011.
Legislation passed in September by the Michigan Legislature restored part of the $165 per student that was taken from school districts during the last school year. Hoover said the state still hasn’t figured out exactly how much of that will be given back.
Hoover presented the information in the preliminary first-quarter budget report to the Board of Education’s Performance Committee today.
Trustee Glenn Nelson said the surplus is a testament to the district’s budget planning team and getting all factions of the district to pull together.
“Financially, that means there’s money to share with the employees — the whole idea was to get everyone rowing in the same direction,” he said.
The final first-quarter report will be presented to the full school board at its next meeting on Dec. 8. The board is expected to make three amendments to the budget — an appropriations of funds in the athletic budget, an appropriation in the general fund and approval of first quarter expenditures.
Trustee Simone Lightfoot said she was concerned the district was toying with the community by saying there would be funding cuts and then having them never materialize.
Hoover said it's a problem, but the district can only work off of the projections it has in the spring.
“It’s the crux of our problem,” she said. “The projections were coming in worse than we thought. Every district in the state budgeted a $268 loss, but it does make us look bad.”
Nelson told Lightfoot that projections sometimes work the opposite way as well.
He said the district worked off projections that were overly optimistic in past years, creating problems during the ensuing fiscal year.
“Last year the state came in $400 less than expected,” he said. “So far this year, it’s coming in better than we expected but we still don’t know the final number. Last year illustrates that sometimes we’re too optimistic.”
Trustee Andy Thomas said he still believes the district has about a 50-50 chance of seeing another mid-year funding cut, similar to what happened last year.
Thomas also expressed concern at the hiring of new teachers, due to what the financial report termed an enrollment increase.
The district expected to gain more students from schools of choice at some schools where enrollment is actually down, Thomas said. He said the report needed better reasoning when it's finalized.
“We still succeeded in decreasing the number of teachers, but just not as much as I thought,” he said. “And the reason we did not reduce them as much as we thought they would ended up being varying reasons.”
Kyle Feldscher covers K-12 education for AnnArbor.com. He can be reached at kylefeldscher@annarbor.com.
Comments
douleureuse
Sun, Dec 12, 2010 : 1:04 a.m.
The comments here about how the district's budget is "phony" is why we need to put more money in education. Teachers take pay cuts, government makes reforms, and people like "charlesmancherian" and "MjC" think the millage was unnecessary. Doesn't take an idiot to understand that if the money isn't coming, then the school MUST take steps to cut expenses and corners, including budgeting for the worst possible scenario It's as if I whacked you over the head with a baseball bat, got reported to the police by you, and then be glad I broke your damn skull because you got me in so much trouble. You started it when you rejected the millage. Don't feel good about grabbing your money away from children in schools. Would you be smug in self-satisfaction if you wrenched away a lollipop that a toddler "stole" from you?
skfina2
Thu, Dec 2, 2010 : 1:49 p.m.
"There were good reasons to put in Prop A, one of them was to equilize the amount of money that went into the schools..." Then why does the district where I work, Plymouth-Canton, get almost $3000 LESS per pupil from the state than Ann Arbor Public Schools? Prop A, while noble in theory, did not do anything to equalize school funding. It is time to revisit it, and take out the provision that does not allow local districts to raise their own taxes if they so desire. I won't even address the ridiculous comment that teachers are way overpaid.
Jay Thomas
Wed, Dec 1, 2010 : 2:02 p.m.
If there is a 3.9 million surplus then for heaven's sake... hold on to it! It is rather typical that people either insist on being refunded the money or immediately giving it to the teachers, when we are living in such financially uncertain times.
DonBee
Wed, Dec 1, 2010 : 12:05 p.m.
@margie- Here is the language from the Teacher's Contract on the AAPS website with regard to pay increases : Each year the total general fund revenue will be compared to the previous years total general fund revenue. Example: 2010-2011 will be compared to 2009-2010 in November of 2011 and the result would be applied to the 2011-12 scale. Pattern repeats for the duration of the agreement. A. Any decrease in total general fund revenue will result in the pay scale remaining the same for the next year. B. If fund equity is great than or equal to 10% of expenditures then any increase in total general fund revenue will be allotted as follows: 25% to district 75% to employees AAEA receives this amount multiplied by the percentage of AAEA employment costs divided by total employment cost for all personnel for the previous year (for example - 2009-2010 school year 70%). This dollar amount will be converted to a percentage and applied to the salary schedule agreed upon for 2009-2010 or distributed as in D below. C. Future increases will be applied to the enhanced scale; increases to the pay scale do compound. D. The District and the Association may agree to use all or part of the cash amount to increase the districts contribution to health insurance, off scale payments, or as contributions to tax deferred accounts. E. This provision remains in effect until a minimum of $4,500,000 has been applied to the salary scale and/or health benefits. I will let our resident stay at home lawyer provide color commentary.
DonBee
Wed, Dec 1, 2010 : 11:54 a.m.
If AAPS is smart, they will put in in the bank and hold it there. Then if the budget cut comes mid-year, they have it to give back. If it does not come, they have it to deal with next year's cuts. Right now no one should reasonably expect that the state will find more money for anything. The Federal Government added big costs to the State budget with changes to Medicare and Medicade, then did not cover the cost they added. Those costs have to be paid first. This will be a no fun year for state and local government employees, people who drive cars, people who need state and local services, people who go to school...in general everyone. The state is even cutting the number of new pairs of underwear that prisoners get in a year. AAPS is better off than almost every other school system in Michigan. Dropping Proposition A could result in a massive lawsuit on civil right grounds, since the minority heavy districts in the state have the least ability to generate local taxes. Sure Ann Arbor will have theirs but we will end up an even bigger "have/have not" society than we are today. Sound good? Sound fair? If it does, you must be from the "I have mine, get your own" mindset. There were good reasons to put in Prop A, one of them was to equilize the amount of money that went into the schools and provide better education to districts that could not raise more money. Tax rates in Detroit on a millage basis, are much higher than Ann Arbor, but because property is worth more in Ann Arbor, Ann Arbor raises more money. Shame on people who are unwilling to provide an equal education to all children, shame.
jns131
Wed, Dec 1, 2010 : 11:19 a.m.
Selling out their transportation department is what gave them this windfall. Nothing else. 160 people lost their jobs and some got it back, but for others? Still looking. Let us integrate transportation and start over. WISD is still not doing a great job, still loosing people in the process. Custodians took a huge hit and should get some of this money back. Good luck. No to teachers getting anything. They make way too much as it is.
Kyle Feldscher
Wed, Dec 1, 2010 : 9:37 a.m.
@owlnight @sh1 The articles are concerning two different fiscal years. The article posted on Nov. 18 was concerning the audit for the fiscal year that ended in June 2010, whereas this story is concerning the current fiscal year that will end in June 2011. This information is just projections based off of a preliminary first quarter report.
jcj
Wed, Dec 1, 2010 : 9:05 a.m.
@ERMG This is a banner day! I actually agree with your statements. I am in favor of giving this surplus back to the unions. IF it starts at the bottom! That means everyone except the teachers and administrators! Of course that is if this is an actual surplus and not an illusion! Proposal A is one of the most unfair ways to collect taxes. It can mean a family of 12 that has owned a home for 30 years might pay X amount in property taxes while someone that buys the house next to them this year (of equal or lessor value )and has NO kids pays more than double in property taxes!
sh1
Wed, Dec 1, 2010 : 7:49 a.m.
@owlnight, I thought the same thing. Would like to see an explanation on the relationship between the two stories.
stunhsif
Tue, Nov 30, 2010 : 11:09 p.m.
Smoke and mirrors. The mirrors are going to break and that 3.9 million is going to go up in smoke!
margie
Tue, Nov 30, 2010 : 9:51 p.m.
Really? 70% of the 4.3 million. Ha! Ha!.... The belief that teachers will get any of this money via salary never ends. If teachers do get any of this money is because the earned it by working on behalf of the children and families in the school district. Support public education by not hating the teachers and making sure funds for schools are spent to benefit children, families, teachers and the support staff that work on their behalf daily.
margie
Tue, Nov 30, 2010 : 8:43 p.m.
If this happens I suggest that AAPS think about the following options... 1. increase the budget to schools so teachers aren't force to buy their own paper or asked parents to purchase paper for them (this is currently happening in schools because of the slashed budgets to schools despite the district having a very paper-driven curriculum in various subjects); 2. restore the salaries of the custodians and return to the practice of school-based custodians instead of being scheduled at multiple schools; 3. increase the salaries of the bus drivers which were cut similar to the custodians; 4. stop the outrageous salary increase of the incoming superintendent; 5. buy and update the furniture/chairs at the elementary level because year after year teachers/staff are constantly begging and trading old furniture with one another which is now increasing looking terrible; 6. restore a full-time media specialist at each elementary school.. the closure of a school library for a day or half-day or more is a say reflection of any school district who claims to be exceptional. 7. restore the full-time status of all music teachers and art teachers at each school (esp. elementary schools) to make sure our schools remain exceptional like the slogan; 8. fund a full-time reading intervention teacher at every school in order to serve the needs of all students reading below grade level or struggling; 9. fund a full-time social worker at each school to implement social skills training to every classroom throughout the year & to deal with the multiple issues children/families are facing; and lastly, restore the 3% cut the state took from all teachers while increasing all benefits, suspending salaries and now asking us to beg parents for more and more supplies. I got more but I think this would be a good start.....
johnnya2
Tue, Nov 30, 2010 : 7:52 p.m.
Its a no win situation for the whiners on here. If the article said "district may see $3.9M budget SHORTFALL" they would say administrators are failing. WHen it says "district may see $3.9M budget SURPLUS" they are failing, and if it said "district may see budget RIGHT ON TARGET" it won;t be good enough. It s a target that can not be hit. If you want a great analogy, imagine your boss tells you, I will pay you $1000 a week. You rent an apartment for $1000 a month, but then your boss suddenly tells you, you will now make $500 a week, even though you are 5 months into your lease. The "surplus" is actually your savings account. It is the school board taking a worst case scenario look at the situation. It is your boss saying you would make $500, but if things went well he would give you a raise to $1000. The entirre school funding system in the state is ridiculous. Prop A was NOT a tax cut as it was sold to the people. I hope you all remember that in exchange for this proposal we took a FIFTY PERCENT increase sales tax. The state government has had a structural problem with budgets ever since.
local
Tue, Nov 30, 2010 : 6:58 p.m.
WOW, now the next Super in the district can earn an increase from 245,000 to 300,000 with the surplus.
Andrew MacKie-Mason
Tue, Nov 30, 2010 : 6:19 p.m.
And now we can blow it on raises for administrators! Great plan, Ann Arbor.
charles mancherian
Tue, Nov 30, 2010 : 4:27 p.m.
Who can believe the A2 Schools? They're broke. Then they have a surplus. Then they're broke. Then they have a surplus. Kangaroo budget numbers. Phony as can be. They obviously have our money stashed away. If only we were so fortunate. I thought the millage defeat was doomsday for the schools. The nerve of them asking the voters for a tax increase when a few saving steps can create a surplus. Hey school board, don't come back to us voters again for more money.
skigrl50
Tue, Nov 30, 2010 : 4:16 p.m.
It would be nice if the pay cuts that some of the unions took would be reversed.
MjC
Tue, Nov 30, 2010 : 3:32 p.m.
"The unexpected revenue means the district predicts a $3.9 million budget surplus for fiscal year 2011" And to think Ann Arbor voters were led to believe that AAPS would face financial disaster because the Countywide School Enhancement Millage failed back in November. I'm glad I voted no.
A2Susie
Tue, Nov 30, 2010 : 2:59 p.m.
No. We've already paid those taxes. Give teachers a proportional bonus if the surplus does pan out, which we don't know yet. Teachers work hard to educate this town's kids, and we need an educated citizenry. At the moment, evidence seems to say we don't exactly have that.
InsideTheHall
Tue, Nov 30, 2010 : 2:51 p.m.
Give the people their money back!