When the board of education trustees meet on Wednesday evening to pass the fiscal year 2011-12 budget for the Ann Arbor Public Schools, they will have to choose between what to cut now and what to cut later.
School districts across Michigan are facing an ongoing structural deficit in state funding, along with significant anticipated cuts in reimbursement for special education services, and increases in mandated payments into the Michigan Public School Employees Retirement System (MPSERS).
Since the AAPS board last met on May 25, Michigan legislators passed a budget for the upcoming state fiscal year, which begins in October 2011 – though it still awaits Gov. Rick Snyder’s signature. The budget includes a one-time provision to offset the increase in school districts’ MPSERS payments, as well as one-time grants to districts that meet at least four out of five “best practice” guidelines, as defined by the state.
For AAPS, this means the district could receive as much as $4 million more in state funding than anticipated when its 2011-12 budget was proposed – a $2.4 million retirement offset, and a possible $1.6 million in best practice grant funding. In light of these changes, AAPS trustees met Friday, June 3 to review possible amendments to the budget proposal they will be considering Wednesday. No binding decisions were made at the study session, and there was no consensus among trustees about how much to defer to recommendations brought by the administration.
Changes to transportation services and class sizes generated the most discussion. The proposed budget includes a reduction of 70 teaching positions, which would raise class sizes at all grade levels by two or three students per classroom. Administration has proposed bringing back 7.7 of those 70 positions, though trustees discussed whether the district should add back even more.
The board also discussed the possibility of proposing additional local millages. Revenues could be used to refresh technology districtwide and build more classrooms, allowing AAPS to offer all-day kindergarten at all elementary schools. Ballot language for any proposed millages would need to be completed by the end of August to be voted on this fall.
Two four-year terms for board of education trustees will also be on the Nov. 8 ballot, for seats currently held by trustees Simone Lightfoot and Andy Thomas.
AAPS Fund Balance and Possible Future Budget Cuts
AAPS interim superintendent Robert Allen opened the June 3 discussion by reviewing the district’s fund equity needs, and suggesting that trustees should first determine how much they want to retain in fund equity before deciding how to allocate any remaining funds. He noted that board policy is to maintain a fund balance of 15% of the district’s operating expenditures, but that if the budget passes in its current form, the fund balance at the end of the 2011-12 school year will be $18 million, which is under 10% of the projected expenditures of $182 million.
Allen also noted that the district needs to maintain a fund balance of at least $17 million to maintain its cash flow during the eight weeks of summer when it does not receive money from the state. Otherwise, AAPS would need to borrow money to meet payroll during those weeks, incurring the additional interest costs.
Finally, Allen noted that he has requested clarification from the state regarding its intentions behind the best practice grant criteria as currently worded, and cautioned trustees against relying on that funding. He also reported that the district had filled only 130 of the 170 spaces it had offered through Schools of Choice (SOC), which translates into a loss of $300,000 in expected revenue.
Most trustees felt it imperative that the district maintain a fund balance above the minimal level required to meet summer cash flow requirements. Trustees made many references to the state budget as passed by the Michigan legislature, noting that it is a departure from precedents established by the passage of Proposal A in 1994, since money from the School Aid Fund (SAF) was moved out of that fund to pay for other things.
“Any projections related to the [SAF] are now moot,” trustee Christine Stead asserted. “We no longer know how school will be funded … This [budget] sets us up for two more years of crisis.”
Trustee Irene Patalan asserted that “the community appreciates that we don’t gamble … We need more reserves.” She reminded other board members that last year they had to spend $11 million of fund equity mid-year when the state suddenly decreased funding, and noted that the scenario could repeat.
Trustee Simone Lightfoot concurred – maintaining a high fund equity balance has kept AAPS from having to make even deeper cuts made by other districts in Michigan, she said. “I am feeling the most fiscally conservative I’ve ever felt. To even have money … I don’t want to spend a dime.”
Trustee Glenn Nelson agreed that future budget projections need to take the state’s general fund into account, along with the SAF, “since they are essentially merged.” However, he took a somewhat different position than the other trustees, arguing that the state has made large cuts in funding this year in order to protect itself from having to make cuts in FY 2012-13, which is an election year for state legislators.
Nelson invoked the Biblical story of Joseph’s “seven good years and seven bad years,” and argued that while “we celebrate the wisdom of setting aside during the good years, the bad years are not the time to add to the reserve.” Suggesting that the state could not be counted upon to resolve the funding crisis being experienced by public education, board president Deb Mexicotte quipped, “Joseph did have a guarantee from God.”
Possible Budget Amendments
The board’s discussion on budget amendments centered on six main possibilities: (1) increasing walk zones; (2) cutting noon-hour transportation; (3) creating common pick-up points; (4) eliminating high school busing; (5) lowering class sizes by hiring more instructional staff; and (6) decreasing noon-hour supervision costs.
Possible Budget Amendments: Walk Zones
There are two types of walk zones: “school walk zones,” which refer to a radius around schools, outside of which busing is offered; and “bus stop walk zones,” which refer to the distance that students need to walk to reach a bus stop. Trustees discussed the potential savings that could be gleaned from increasing each type of walk zone, as well as the effects that such changes would have on students and families.
The school walk zones are currently set at 1.5 miles for all AAPS schools – elementary, middle, and high school students are currently not offered bus service if they live within 1.5 miles of their home school. Interim superintendent Robert Allen suggested that increasing the school walk zone for all grades to 2 miles could save $800,000.
In addition, Allen said that enforcing existing board policy to be sure that bus stop walk zones are properly spaced could save another $500,000. Current policy states that no student should have to walk more than 0.5 miles to reach a bus stop, but it has not been enforced.
Board members were universally supportive of having their existing policy enforced regarding the spacing of bus stop walk zones. There was less consensus regarding the expansion of school walk zones.
Multiple trustees commented that they’ve received many e-mails suggesting that increasing the school walk zones would be a good way to aid in the fight against childhood obesity, as well as a good way to save money. Most people around the table noted that parents are quite supportive of increasing school walk zones until it is their first grader walking an hour, in the dark, in a snowsuit. Liz Margolis, AAPS director of communications, confirmed that increasing walk zones would disproportionately affect elementary students – 50% of those students would be affected.
Andy Thomas suggested possibly increasing walk zones for only middle and high school students.
Christine Stead said on the surface she liked the idea of increasing walk zones very much, but suggested there might be safety issues with increasing some of the zones, such as problems caused by lack of sidewalks on busy roads. Allen explained that the policy makes exceptions for safety issues, such as being sure students do not have to cross busy roads.
The board made numerous requests that additional data regarding student use of AAPS bus service be brought to the next meeting, including the exact number and location of households with students who ride the bus. Administrative staff explained that it is a challenge to determine exactly which students are riding the buses, as ridership is very fluid, changing on a day-to-day basis as affected by weather, sports seasons, and numerous personal factors.
Possible Budget Amendments: Noon-Hour Transportation
Allen reported that AAPS could save $400,000 by not offering transportation home to morning kindergarteners. Some considerations, he noted, were that parents or caregivers needed to be available anyway to care for the child in the afternoon, and that parents have an option of having their children stay all day if there is no way to get them home.
Margolis added that most of the 228 kindergarten families (18% of all kindergarteners) that would be affected by the change would have other means of getting their children home, according to a recent survey undertaken by the district. She added as an example that one of the elementary schools has only one student who rides the bus home at mid-day, but that requires a whole bus.
Glenn Nelson expressed apprehension at possibly losing kindergarten students due to lack of busing, because once they are gone, they might not return to the district.
Possible Budget Amendments: Common Pick-Up Points
Another suggested amendment, Allen said, was to add high school busing back into the budget, but create common pick-up points for high schoolers at their neighborhood elementary schools. Using common pick-up points instead of traditional bus stops would save $600,000, he said, explaining that AAPS would have the flexibility to name the pick-up sites.
Margolis added that a few bus runs could be added to focal points along the outside ring of the district for students who live too far out to walk to elementary schools.
Most board members expressed a general interest in using common pick-up points, but again, the board requested that a visual aid – showing the possible locations of common pick-up points – be brought to the next meeting.
Possible Budget Amendments: High School Busing
The elimination of high school busing would save the district $1.3 million, and is currently a part of the proposed budget.
Many board members expressed that the appeal of changing service for high school students was that they had been with the district a while, and that families with high schoolers would be more motivated than those with younger students to find a way to stay in AAPS.
Mexicotte also explained that she had anticipated “backfilling” in areas where the community indicated there was a problem created by eliminating busing, such as places without AATA service. Margolis responded that AAPS could not backfill by offering bus service to only some high school students.
Mexicotte said she did not mean to backfill with buses, but that the district could use cabs or organize carpools. She also suggested that older students could drive younger ones in their neighborhoods.
Margolis clarified that state law prohibits AAPS from offering non-equitable services within grade levels. For example, the district could offer common pick-up sites to all high school students, but could not send buses only to a few neighborhoods.
There was some debate among trustees as to how much to defer to AAPS administration regarding the choice of suggested transportation budget reductions.
On one hand, Nelson and Patalan suggested greater deference to the administration would be appropriate. “I want you and your people to do your work,” Nelson said to Allen, “and tell me in your professional opinion what to do.” Patalan added that, though she likes to totally understand everything, she believes that central administration has put a ton of thought into the suggested cuts, and she is happy to defer to them. At one point, she asked, smiling, “What am I supposed to be doing here – you want my opinion?”
On the other hand, Thomas suggested that the administration had not provided the board with enough data to make a good decision. He argued that there was not time to implement major changes in transportation services in time for next fall. He noted that the board could not say exactly who would be affected by eliminating high school busing, and whether they would be able to find alternate transportation. Thomas asserted that the board should leave transportation services entirely in place for 2011-12 while they “take a year and figure out how to do it right.”
Trustee Susan Baskett agreed, saying, “I will not commit to anything until I see maps.”
Stead and Mexicotte expressed concern that not eliminating high school busing would be risky. “If we shoot for $1.2 million [in savings], we’ll get $1 million,” said Mexicotte. “I want to try to get the largest savings possible.” Stead argued that the board needed to be prepared for another mid-year funding reduction from the state, even with only the summer months to plan for a big shift in services.
Lightfoot and Stead questioned whether consolidating transportation services with the Washtenaw Intermediate School District (WISD) had saved the district the money it was promised to save. Stead also asked if WISD had any recommendations for AAPS. Allen answered that, other than enforcing the bus stop walk zones, the WISD was considering adding another garage site to cut down on “deadhead miles,” or miles that buses are driven without any students on them.
The only public commentary at the study session was offered on the issue of transportation by Martine Perreault, a representative from the Parent-Teacher-Organization Council (PTOC). She urged the board to consider that the district could lose students in higher numbers than it will gain money by cutting high school busing. She noted that there are numerous private and charter schools in the area, and that these students might choose to attend other schools “that are happy to run a bus to them.”
Possible Budget Amendments: Instructional Staff and Class Sizes
The proposed budget includes a reduction of 70 teaching positions, or FTEs (full-time equivalents), which would raise class sizes at all grade levels by two or three students per classroom. At the June 3 study session, interim deputy superintendent of instruction Lee Ann Dickinson-Kelley proposed adding back 7.7 positions: (1) 6.5 FTEs to address some “uncomfortable” class sizes and split classes at the elementary level created by the proposed reductions; (2) an 0.2 FTE to deliver Reading Apprenticeship (RA) programs in a common way across all middle schools; and (3) 1 FTE for a liaison position at Scarlett Middle School to work with the Mitchell Elementary-Scarlett-University of Michigan partnership.
Dickinson-Kelley acknowledged that adding staff positions is a longer-term commitment than making budget adjustments in transportation. But she argued that raising class sizes to the degree originally suggested in the proposal will make it hard to deliver the curriculum in some cases.
She also explained that some FTEs, such as math support positions in each of the middle schools, could be saved by selectively applying special education funding, and grants from the AAPS Educational Foundation.
Baskett, Lightfoot, and Patalan supported Dickinson-Kelley’s amendment to add 7.7 FTEs back into the budget, though some concern was expressed about funding the Scarlett liaison position. Dickinson-Kelley explained that she was only requesting such funding for one year, after which the duties of the position would be absorbed by other administrators.
Nelson argued that the board can add back in a significantly larger number of FTEs by using the new money expected from the state, as well as maintaining a lower fund equity balance. He suggested adding back at least 20 FTEs, spread over all grades, but being especially conscious of maintaining low class sizes in grades K-2. “The scale of the cuts is too large, in view of the harm we’re doing to students,” he said.
Thomas calculated the numbers differently, and suggested instead that AAPS could afford to hire closer to 12-14 additional teachers. Stead supported that idea, saying she’d rather lower class sizes and cut more in transportation.
Mexicotte noted that Nelson’s suggestion would amount to lessening the class size increase by roughly one student per classroom. She questioned whether the difference of one student per room was worth the cost, rather than saving the money in fund equity.
Thomas then suggested adding back additional FTEs in a more concentrated way rather than across the board, to keep a set of classes at significantly lower levels, such as K-2 or middle school classes.
Allen suggested adding teaching aides instead of teachers to help with the increase in class size.
Mexicotte supported Dickinson-Kelley’s original recommendation of adding back in 7.7 FTEs, but both she and Lightfoot said they would consider adding back more teaching staff if they would be used in a targeted way that would make a real difference, as suggested by Thomas.
There was some discussion of whether it would be fair to hire any new teachers at all, knowing they may all be laid off next year. Mexicotte summed up board sentiment by saying, “This is the ‘crossing that bridge when you come to it’ piece.”
Possible Budget Amendments: Noon-hour Supervision
Trustees questioned the wisdom of the proposed $200,000 of cuts to noon-hour supervision. Dickinson-Kelley explained that the cuts are not actual positions, but represent an accounting shift from district to building management of noon-hour supervision costs. Stead confirmed that the ratio of supervisors to students on the playground will remain 1 to 35.
Nelson expressed concern that principals not be given too much latitude in terms of managing their own budgets without oversight. Joyce Hunter, assistant superintendent for secondary education, said she has been monitoring building-level budgets, and that most of the building-level savings has come from consolidating high-level classes. For example, the highest level world language classes may only be offered at one location instead of in multiple high schools.
Patalan thanked the administrators for participating in the study session, and for being so conscientious in their decision-making and budget recommendations.
Another piece of the state budget passed by the legislature was the state’s intention to phase out full funding for kindergarten students, so that beginning in FY 2012-13, districts would receive only half of the per-pupil foundation allowance for half-day kindergarten students.
At the June 3 study session, Mexicotte picked up on a reference made by Nelson at the previous board meeting, and suggested that the board should begin discussing what the district would need to do in order to be able to offer all-day kindergarten at all elementary schools.
Baskett asserted that offering all-day kindergarten was important, saying that “more hours with everyone has a better return,” and that she paid for it for her son when it had not been a standard option. Mexicotte suggested that the board should approach the question of whether or not to offer all-day kindergarten from a philosophical standpoint as well as being driven by a state mandate. It’s a “both/and” proposition, she said.
AAPS offers all-day kindergarten at a handful of elementary schools, and Dickinson-Kelley acknowledged that the district does not currently have the building capacity for all students to be in kindergarten for a full day.
Technology and Construction Millages
Mexicotte said the board should give more consideration to increasing revenue, and asked trustees to weigh in on whether or not AAPS should consider proposing a new millage to voters this November. She suggested that prospective thinking about all-day kindergarten, which would require construction of new classrooms at some buildings, could be bundled with a bond to fund an update of the district’s technology.
Mexicotte also recommended that AAPS consider working with the new superintendent of the Washtenaw Intermediate School District (WISD) on another enhancement millage to “backfill around our [decreasing] special education funding.” Though state law currently prohibits individual school districts from enacting a millage to cover operational expenses, ISDs are allowed to request such a levy from voters countywide, with funds then distributed proportionally to member districts. Individual districts are only allowed to request a tax increase from their residents to fund capital improvements.
Stead responded favorably to the idea of a construction and technology bond, but cautioned that the district should be very thoughtful about what it asks for so that any millage approved will last for as long as possible. Lightfoot agreed, saying the board should “ask for enough to get the job done,” and that if the community votes down the requested amounts, the board can ask again for less.
Nelson, too, asserted, “The excellence of this district is in jeopardy if we don’t look at revenue enhancement.” He noted that the state budget includes huge tax breaks, and provides for “amazingly lower public services in response.” All a millage would do, he said, is transfer a small fraction of the state tax breaks back into education.
Stead also asserted that the defunding of education in this state budget provides an opportunity to reinvigorate the push for legislative reform that has gained momentum this year. “We need to negotiate hard … We need local level authority [for operational expenses],” she said.
Thomas said he would support a technology bond, and that “people in this community understand the importance of technology.” He also reminded the board of a recent discussion they had while debating the purchase of a new assessment tool for the district in which the cost of the product license was dwarfed by the cost it would take to purchase the technology to use it. Thomas was less confident about the need for new construction to facilitate all-day kindergarten, asking, “What would we really need, and how much would it cost?”
Lightfoot and Baskett each also questioned whether construction and technology millages should be bundled. Baskett suggested that the technology was “a no-brainer,” but that she was not certain the community would support all-day kindergarten for everyone. She also noted that the incoming superintendent, Patricia Green, was going to be “hit with everything at once.”
Patalan said that, while she supports countywide consolidation efforts, she would be “delighted” to ask only AAPS voters (not the whole WISD district) for something. “I think our neighbors, our friends, our colleagues are really friends of education. Our community would enjoy the conversation.”
Mexicotte said she would direct the board’s executive committee to look into scheduling further board discussion of possible millages.
Allen reminded the board that planning a budget is only making a “best guess,” and that the process requires continual adjustment throughout the year.
Present: President Deb Mexicotte, vice president Susan Baskett, secretary Andy Thomas, treasurer Irene Patalan, and trustees Simone Lightfoot, Christine Stead, and Glenn Nelson.
Next regular meeting: Wednesday, June 8, 2011, 7 p.m., at the fourth-floor conference room of the downtown Ann Arbor District Library, 343 S. Fifth Ave. [confirm date]