Saline Area Schools faces budget deficit for upcoming school year
If tough decisions aren’t made prior to July 1, Saline Area Schools could find itself adopting a deficit budget for 2012-13.
It would join Willow Run Community Schools, Ypsilanti Public Schools and charter school Victory Academy on a list of Washtenaw County public schools operating with a deficit.
The district depleted its fund balance from about $2.75 million to a projected $1.16 million in a year, said Interim Finance Director Janice Warner at Tuesday’s Board of Education meeting.
The fund balance as of June 31, 2011, was about 5.39 percent of the district’s annual general fund expenditures, while the $1.16 million Saline is expected to retain by June 30 of this year is just 2.25 percent of its approximately $51 million operating budget.
The district has a policy stating it will maintain a minimum unassigned fund balance of 5 percent of its annual expenses in an effort to “protect against cash-flow shortfalls and to maintain a budget stabilization commitment.”
If the fund balance falls below 5 percent, the district’s policy calls for the board to replenish the equity within two years.
Superintendent Scot Graden said in 2011, the district took a "three-legged" approach to balancing the budget that included concessions, raising additional revenue and reducing expenditures. He said if the board were to do something similar for this year, Saline would run out of money by November or December.
“We are in a very different position than we’ve been in in the past,” Graden said. “The plan from last year is not a viable plan for this year.”
Warner explained the district experienced a net loss in projected revenue of about $153,000 for 2011-12. It also experienced an increase in expenditures of about $138,000.
Add these numbers to the loss in fund equity and an anticipated loss of about 120 kindergarteners — or about $820,000 using this year’s foundation allowance — and Saline could be looking at a $5.14 million deficit.
Graden said when it comes to looking at ways to cut expenses, personnel is the “largest piece of the pie.” He estimated about 85 percent of the general fund budget is for staff.
“That’s an area that is going to need to be looked at,” he said.
Saline’s three labor unions — the Saline Education Association, Saline Area Schools Administrators Association and the Saline Education Support Personnel — all have contracts that expire June 30.
The best revenue-gaining option is adding more students, Graden said, followed by increasing services through the district’s community education department. But generally, neither of these options comes without an initial cost to the district, he said.
“This is sobering,” added Board Trustee David Holden.
Holden said the district must bring the fund balance back up so there is money when schools have emergencies, such as the hot water heater breaking at Harvest Elementary School.
“This will test the resolve of this board, but it is something we need to do for the long-term viability of this district,” he said.
Some reasons, Warner said, that Saline experienced a loss in revenue were:
- It projected a loss of 25 students from last year to this year and actually lost closer to 50, for an estimated foundation allowance reduction of $314,000.
- It eliminated two sections of extended day option kindergarten for a loss in tuition of about $129,000.
- It lost about $99,000 in grants from various outlets.
Staff reporter Danielle Arndt covers K-12 education for AnnArbor.com. Follow her on Twitter @DanielleArndt or email her at daniellearndt@annarbor.com.
Comments
Poorman
Mon, Feb 27, 2012 : 2:18 a.m.
According to The Saline Reporter, "W-2 forms for the district noted a $1 million increase in payroll from 2010-2011, even with a freeze on cost-of-living adjustments and higher contributions on healthcare premiums". This is unsustainable, selfish, irresponsible, and unrealistic in a time when the state revenue was in decline. They must not teach Economics in Saline. I believe in fair pay for our teachers, but this is a very irresponsible group.
Tom Frederick
Fri, Feb 17, 2012 : 3:57 p.m.
@Jimmy As for your concerns about teachers not paying the medical benefits previously, I would counter that those were times when the economy was doing much better and in the private sector, employees were getting annual increases in pay much more than teachers were getting, as well as annual bonuses from $5K to $20K depending on the line of work. Again, I think the $2000-$4000 teachers did not have to pay (about 20% of the medical benefits) compares to what the private sector was getting in bonuses. Would you imply that when the economy goes south that teachers owe backpay for the benefits of years past? Would you also ask all the private sector employees to take larger pay cuts because they earned bonuses from the good years? I think that is double dipping. Years ago, the reasoning was "teacher salaries are so low, we deserve better (ie., no cost) benefits. Well, i'd venture to guess that after 20 years, your salary is pretty comparable to many other occupations that have taken a hit and pay (and have paid) lots more for less benefits. I'm sorry, but these are the times we live in. I know most teachers in Saline do a great job, and we thank you for that, but no one has ever shown me a study that just throwing more money at public education increases the results (our kids education).
Tom Frederick
Fri, Feb 17, 2012 : 3:56 p.m.
@Jimmy You are right that we started paying 10% medical benefits in 2011. The state imposed its 3% reduction of gross pay for funding medical benefits in 2009-2010. The latter was litigated and ruled unconstitutional but the state appealed and has decided to continue taking the 3% even if its legality is in question. The reduction of pay for pension benefits has always been in effect. If I were to take all the money I paid into my pension over a 30 year career and put it into a 401k for that time, assuming the average growth for the DOW over a 20 year period I would retire with $400-500K. I could then take out an amount equal to my pension for about 15 years. That is for a 30 year career. That does not include what the state matches. I believe you will find it quite comparable to the private sector.
Didymus
Thu, Feb 16, 2012 : 3:45 p.m.
@Towny "Manchester and Milan schools have passed saline in superior education." Can you share the test scores/graduation rates or other data you are basing this on? "From other near community's all I hear from them are Saline Schools has way to many drugs in them. Sorry, to say but this is what I have been hearing." Not a very potent argument. Do you have any facts to back this up? If what you say is true, we need to act fast to help our kids with this serious problem. That may cost money for more security guards, counselors, and others who can help intervene to stem the tid of this epidemic. That would be the sane and prudent thing to do. Instead, you seem to hide out, fire a shot randomly in the dark, then apologize b/c you know that such behavior is wrong...Can you add some supporting evidence to your posts?
towny
Thu, Feb 16, 2012 : 12:13 p.m.
Unfortunately, the days of the once all mighty saline schools is over. The days of ridiculous spending is over. Taxpayers have had enough. Manchester and Milan schools have passed saline in superior education. From other near community's all I hear from them are Saline Schools has way to many drugs in them. Sorry, to say but this is what I have been hearing. I am not saying this is true I do not know. But, why is this what I am hearing from several different directions.
Jimmy Olsen
Thu, Feb 16, 2012 : 3:18 a.m.
@Tom Frederick Tom, just curious, the $150 for your health care...you started paying that when ? and the $200 to the state for health care started when ? I'll bet the $150 started this year (so 19 years of not paying for health care). The state money - this year or last ? or was that always there as part of the retirement health care package, along with the pension ? Years ago, the reasoning was "teacher salaries are so low, we deserve better (ie., no cost) benefits. Well, i'd venture to guess that after 20 years, your salary is pretty comparable to many other occupations that have taken a hit and pay (and have paid) lots more for less benefits. I'm sorry, but these are the times we live in. I know most teachers in Saline do a great job, and we thank you for that, but no one has ever shown me a study that just throwing more money at public education increases the results (our kids education).
jns131
Thu, Feb 16, 2012 : 2:46 a.m.
Saline is going to do what Ann Arbor did. Privatize their food service workers, their transportation dept and the custodian all to preserve the integrity of the teachers and their administrate salaries. What a sad day this has become. Politics aside.
brightlights
Sun, Feb 19, 2012 : 1:19 a.m.
You need to do your research on A2 and then re-post what you find.
Sara T.
Wed, Feb 15, 2012 : 10:02 p.m.
I have to add....I know of almost no teachers that work 5 days a week, 7 hours a day, 180 days a year. I am a teacher and typically during the week I work 9 hour days (and I usually work through lunch, meeting with students that struggle to help them). When do you think the planning and grading happens? As for 180 days a year, my school ends at the end of June, and I am typically back in my classroom early-to mid August. The days in between are often used for taking (and paying for) classes to keep my certificate current. I tutor kids for free after school, I run programs for free during the summer, I answer e-mails from parents and students all weekend long, and I am happy to do it. I am passionate about my job, and always try to do what is right for the children. The parents of students in my classroom are always very appreciative. That being said, I work very hard and deserve to be able to pay my bills. It is exhausting to put your heart and time into a position and read so much teacher bashing. How much time have you actually spent in a classroom or a school to see what goes on there? Please consider taking these steps, and walking in a teacher's shoes, before deciding you know what is best.
jns131
Fri, Feb 17, 2012 : 5:24 p.m.
Don't need it. The money you make thru the MEA says it all. So, enjoy your 4 days off after correcting those papers after what? 2 days? Gee, must be nice to make the money and take the days off.
a2flow
Fri, Feb 17, 2012 : 2:54 a.m.
So where's your proof? I haven't seen it and I don't recall voting on it. Been this way as long as I can remember. I hope you have something better than that. Otherwise, it sounds like an opinion without any information. How long have you taught in Ann Arbor Public? If you haven't, how do you know? Just provide some proof and I will be grateful for your knowledge.
jns131
Fri, Feb 17, 2012 : 2:45 a.m.
Uh huh. You keep believing that and I have some red shoes to sell you. Believe me, they really take you to the land of oz.
a2flow
Fri, Feb 17, 2012 : 2:18 a.m.
@jns...this has nothing to do about the teachers. I haven't seen any union push for how our schedule functions. My guess, like most things, it's based on what parents want. I would prefer to have less vacation (and get out earlier), or at least have it better spread out. The beginning of the year is a brutal stretch of many responsibilities with no time off. Beginning in late December to the end of the year, there are many breaks thrown in. For the exam period, that is only for the high schools. After taking three hour exams, would it be helpful to keep the students at school for the rest of the day or let them go home and study for the next one? What about the teachers that have to grade 150 essays? Middle/elementary don't get off the time. Monday was a grading day, Tuesday was pd. The kids get the the time off (4 days, not 5), we had to work. You obviously don't teach, otherwise you would never say it's the teachers pushing for more pd. Most complain about it. It's not that we don't like learning, but oftentimes what we do doesn't pertain to things that are high on the priority list for our classrooms. How pd works is this, year after year we get introductory lectures on something that we didn't ask for. The teachers are not typically given input on what they want or need to do to grow professionally. Most would prefer to be teaching over sitting through another full day of pd. Too many assumptions, which is typically for posts on annarbor.com.
jns131
Thu, Feb 16, 2012 : 2:49 a.m.
They don't. Take a look at the hi school calendar for Ann Arbor. The children there had almost 3 weeks off, then a week later took off for MLK then a week later? 4 half days for exams and then off again for nearly 4 or 5 days. Now who in their right minds gives the children this much time off? Ann Arbor to keep their union teachers happy. No wonder we get out so late. A lot needs to give.
Tom Frederick
Wed, Feb 15, 2012 : 9:38 p.m.
Buttstone, I agree with you that running a world-class school district comes with expenses that are commensurate. I also agree that Saline has one of the best school districts (academics, athletics, facilities, and all extracurriculars) around. Just one point that I want to clarify. I have taught in Saline for 20 years and I pay just under $300 per month for my pension (staff have always paid a portion of their salary toward state sponsored pensions), I pay $150 per month for my health care (soon to be double) and $200 per month on top of this to the state of Michigan to cover "health care costs". I admit this may be less than some, but just for the record, the benefits are not free by any stretch of the word. I also work 10 hours per day (more in season when I am coaching). I work for 4-6 hours most weekends. More when I have a lot of grading to do. I coach all summer long for 3-4 hours 4 days per week. I do concede that I have more vacation than you as described in your post. I CHOSE to teach--with all of its pitfalls and benefits--and I LOVE my job. I CHOOSE to do all the extra duties and work the extra hours that I do because I make a difference in peoples lives. If I could roll back the clock 20 years I would make the same choices.
Buttstone
Wed, Feb 15, 2012 : 9:20 p.m.
All of these negative posts come from either teachers (or those affiliated with the union) or cheap people with no clue of the costs to support a world class school district. No question, our facilities are some of the best I've seen. People that visit our facilities outside the school district are completely jealous of what we have. I'm proud of what we have and if I could turn the clock back I'd vote in favor of them all again. These facilities cost money to run. Do you enjoy the benefits of being one of the best school districts in the state and having one of the best high school's in the nation? Then suck it up! These facilities encourage people to move here and have helped keep all of our home values from falling off the ledge. It is clear that the primary cost of running the district lies with salary and benefits. We are no different than any other district. What really gets me is listening to those employed by the district at the "injustices" of having to pay for some health care or even the thought of pay cuts. Nothing but enetitlements for this crowd. I have NO pension and pay $400 a month for health care (not including out of pocket expenses). I work 10 hours a day, 5 days a week and get 2 weeks vacation. Who's geeting the bad end of the deal?
Didymus
Wed, Feb 15, 2012 : 9:12 p.m.
As regards the link to Saline employee salaries provided on Jay McNally's web site, perhaps Jay (or salinetaxpayer1) could do some research and adjust the 2010 Saline staff salaries to reflect only base compensation (removing coaching, extracurricular duties, course overloads, vocational certificate stipends, and class size overages). This may provide a fairer picture for comparison.
towny
Thu, Feb 16, 2012 : 11:56 a.m.
Didymus its pretty obvious where you work.
Didymus
Wed, Feb 15, 2012 : 9:07 p.m.
SalineTaxPayer1, you raise a good point. Your characterization of teacher salaries seems to indicate they are a bit out of sync with the "private sector" as you allege. However, you leave out some details. (1) The salaries that you cite over $80k are for the most senior employees, these salaries also include coaching, class overages, and extracurricular assignments that teachers take on beyond the regular school day. That aside, if you would like to compare these salaries to other related professions, please see: <a href="http://www.payscale.com/best-colleges/degrees.asp" rel='nofollow'>http://www.payscale.com/best-colleges/degrees.asp</a> for salary comparisons. Be careful to look at the "mid career" median pay column on the chart. I believe that you will see a much more "in sync" picture. (2) Be careful when making comparisons that you are comparing apples to apples. Keep in mind that it is desirable for school district staff to live in and be part of the school community. In so doing, the staff member can better serve as a coach, extracurricular adviser, band director, or in a whole host of beneficial roles that require proximity to the schools. In Saline, that means a staff member must be able to afford a home and other associated expenses...in Saline. For a better comparison of salaries it may serve one to walk around a mid-range neighborhood in Saline, say Warner Creek, or Northview, to ask home owners for salary comparisons. It may be disingenuous to compare teacher salaries to "national averages". (3) One can argue about teacher hours on the job from both sides. You seem to allege it is a 7 hour per day job for 180 days a year. I am not sure that is accurate. If you want teachers who arrive at the first bell, leave at the last bell, and do zero planning/grading outside of the classroom, you are correct. Is that the kind of teacher you have experienced in Saline? Is that the kind of teacher you want teaching your child? I am sure there are some teachers reading this who could chime
Didymus
Wed, Feb 15, 2012 : 8:42 p.m.
Towny, you have a lot to say. In response... (1) The faucets are not gold-plated, I can assure you, I have seen them. In fact, the last time I was in the new high school I was shocked to see that many faucets are damaged/broken and most of the electric hand dryers are broken (replaced with old towel dispensers???). It would seem that the district just cannot afford these routine maintenance tasks, and has prudently lived within her means. (2) It was the community, in partnership with the district, that came up with the plan for the new schools (I think it began with a program called "Goals 2000"). None of this was foisted upon you. It was done in a time when enrollment and funding were up and all projections seemed to indicate a continuing trend. It is the responsibility of all stakeholders to to be part of the process. "Monday morning quarterbacking" does not serve any purpose now. (3) You seem to imply that the school is looking to taxpayers and employees for the funding shortfall when they should be looking at themselves. I am not sure what you mean by that. The schools serve the community and are funded by the community. The employees make up a large part of the budget. It would make sense to go to the community and the employees when times are tight, no? Are you implying that Mr. Graden or the board members to pay the deficits out of pocket? (4) To be reasonable, an increase of expenditures on a $50 million budget is rather small. It is like your home expenses going up $138 for an annual family budget of $50,000. I do not know the details, but a number like this could easily come from the increased cost of electricity, diesel fuel, paper, etc...I think one would be hard pressed to paint that amount as extravagance.
towny
Thu, Feb 16, 2012 : 12:01 p.m.
Prudently lived within her means. Are you kidding. Who do you think you are fooling. You are completely out of touch with the real world. Yes, taxpayers do fund the schools with there tax's and I seem to remember what happened to the last 2 millage requests. You want to talk about reasonable you do not touch a couple of other subjects at all 2.5 million and school of choice.
towny
Thu, Feb 16, 2012 : 11:54 a.m.
Blah Blah Blah and some more, You changed intent of my post to favor your opinion. Everyone knew what I meant in my post. Spending is way out of hand.
Didymus
Wed, Feb 15, 2012 : 8:41 p.m.
Does anyone know what the details of the "three legged approach" that Mr. Graden allegedly spoke of was? How much did the revenues increase? What was the sum total of the employee concessions? What was the net result of the reduction in expenses? These facts would be good to know.
Salinetaxpayer1
Wed, Feb 15, 2012 : 8:28 p.m.
This is probably one of many reasons why Saline Area Schools faces a budget deficit. The infomation below is just over a year old and some salaries have increased, not to mention these figures do not factor in the school districts hefty pension plans. Don't get me wrong, teachers have a very important role and I beleave they should be compensated well, but this is getting a little out of hand. Below is a link of Saline district wages from 2010 tax information. For 180 school days (less than 1/2 of a year) where a class day is 7 hours, there were 166 teachers making over $80,000. This is significantly more than our nation's average wages for the teaching profession. Wages for teachers have not adjusted with the private sector tax base. <a href="http://jaymcnally.com/saline-area-schools-employee-wages-for-2010/" rel='nofollow'>http://jaymcnally.com/saline-area-schools-employee-wages-for-2010/</a>
towny
Wed, Feb 15, 2012 : 7:58 p.m.
Numbers can be made to look like what ever you want if you have a sharp enough pencil. How do you experience an increase of expenditures of $138,000.00. If only we all could throw around money like this. A minimum unassigned fund balance of 5% or 2.55 million that's a lot of digits ( $2,550,000.00 ). Come on join the real world. You need 2.55 million dollars sitting just in case. Please.............................. Where and when did these extravagant expenditures and unassigned fund balances begin. Go to your employees and the tax payers for the money. Heaven forbid you look at your self. When are you going to gold plate the facets in the bathrooms. Glad you built all the new schools at heavy district taxpayer expense and then filled them with school of choice students whose parents property taxes do not support this district.
Didymus
Wed, Feb 15, 2012 : 8:36 p.m.
Towny, you have a lot to say. In response... (1) The faucets are not gold-plated, I can assure you, I have seen them. In fact, the last time I was in the new high school I was shocked to see that many faucets are damaged/broken and most of the electric hand dryers are broken (replaced with old towel dispensers???). It would seem that the district just cannot afford these routine maintenance tasks, and has prudently lived within her means. (2) It was the community, in partnership with the district, that came up with the plan for the new schools (I think it began with a program called "Goals 2000"). None of this was foisted upon you. It was done in a time when enrollment and funding were up and all projections seemed to indicate a continuing trend. It is the responsibility of all stakeholders to to be part of the process. "Monday morning quarterbacking" does not serve any purpose now. (3) You seem to imply that the school is looking to taxpayers and employees for the funding shortfall when they should be looking at themselves. I am not sure what you mean by that. The schools serve the community and are funded by the community. The employees make up a large part of the budget. It would make sense to go to the community and the employees when times are tight, no? Are you implying that Mr. Graden or the board members to pay the deficits out of pocket? (4) To be reasonable, an increase of expenditures on a $50 million budget is rather small. It is like your home expenses going up $138 for an annual family budget of $50,000. I do not know the details, but a number like this could easily come from the increased cost of electricity, diesel fuel, paper, etc...I think one would be hard pressed to paint that amount as extravagance.
ypsilistener
Wed, Feb 15, 2012 : 6:07 p.m.
Why would they be losing 120 kindergartners?
Didymus
Wed, Feb 15, 2012 : 8:38 p.m.
I think that is due to the state mandating that the school goes from 1/2 day to full day kindergarten in order to not lose funding. Some families did not think their children were ready for all day kindergarten. That is a reasonable choice and a side effect to a state mandate that perhaps was not well thought out...
Danielle Arndt
Wed, Feb 15, 2012 : 5:34 p.m.
This story has been updated to reflect the correct current operating budget for Saline Area Schools.
Paula Gardner
Wed, Feb 15, 2012 : 3:13 p.m.
This story has been corrected to reflect that - as jmac pointed out - it's Victory Academy and not Fortis on the state's list.
Didymus
Wed, Feb 15, 2012 : 2:30 p.m.
Isn't the Saline District budget circa %50 million? Where does the $101 million number come from? <a href="http://www.salineschools.com/files/Budget%20Transparency%20Operating%20FY2011.pdf" rel='nofollow'>http://www.salineschools.com/files/Budget%20Transparency%20Operating%20FY2011.pdf</a>
Buster W.
Wed, Feb 15, 2012 : 5:26 p.m.
I'll bet I know where the numbers came from...and you never want to go there.
towny
Wed, Feb 15, 2012 : 2:14 p.m.
The Crying has already started. Graden do your job that is what you make the big money for. Go ahead add more school of choice students and slap all the taxpayers of the district in the face again. Wait to see what State of Michigan will give per pupil for next year. Governor Snyder has already said increases will happen. A new millage proposal is probably already drawn up. That is always the answer right. Go ahead can't wait to turn down. Prediction three in a row same result.
jmac
Wed, Feb 15, 2012 : 1:08 p.m.
You have the wrong charter school in the story. It's Victory Academy Charter School, not Fortis Academy, that's running a deficit. Please correct your story, facts are important!