AAPS Budget Forum Feedback

Ann Arbor Public Schools budget forum (November 14, 2011): It was standing-room only in the Pioneer cafeteria annex as over 140 people gathered to hear an overview of how the school district is funded, and to add their ideas to the mix as the district faces an anticipated $14 million shortfall in 2012-13.

The district’s approved budget for 2011-12 is $183.62 million.

As staff scrambled to bring in more folding chairs and photocopy additional handouts, AAPS superintendent Patricia Green and AAPS deputy superintendent of operations Robert Allen opened with a presentation on funding and budget challenges.

The presentation had been tweaked since a similar forum held last week. [For the details from that forum, see previous Chronicle coverage: "AAPS Seeks Public Input on Budget"]

This report highlights some of the changes made to the budget presentation, but focuses on the questions and suggestions offered by the community members who attended Monday’s forum.

Monday’s Budget Presentation

Most of the presentation remained intact from last Thursday to Monday, with some slight shifts in emphasis on three main issues: the school aid fund, use of fund equity, and the history of budget reductions.

Budget Presentation – School Aid Fund

In addition to the information outlined in the report on Thursday’s forum, Monday’s presentation included greater emphasis on the state of Michigan’s decision to reduce corporate taxes while using money from the School Aid Fund (SAF) to make up the lost revenue.

Allen said the SAF, which was created by Proposal A expressly to fund K-12 education, was recently used by the state government to: (1) make up nearly $600 million in revenue lost to tax reductions, including the elimination of the Michigan Business Tax; (2) fund nearly $700 million of higher education budgets; and (3) supplement funding for community colleges by nearly $200 million.

Allen questioned the legality of the state’s action, and contended that at least the spirit – if not the letter – of the law as stipulated in Proposal A was not to use the School Aid Fund for anything other than K-12 education.

Budget Presentation – Fund Equity

On a slide showing the district’s three-year budget projections, Allen highlighted the fund equity line. This year, 2011-12, Allen said, AAPS opened with a fund equity balance of just over $20 million. He observed that if the entire amount of the upcoming year’s budget shortfall were taken from that balance, fund equity at the end of 2012-13 will be roughly $6 million.

Projecting another year into the future, Allen said, if the district continues to use fund equity to address the structural deficit, the district would end the 2013-14 year $12 million in the red. And he explained that if the district runs a deficit, it would be at risk of being taken over by a state-appointed emergency financial manager, which he described as being “second to God” in terms of what such a manager can do. Under such management, Allen said, the board would be rendered helpless and all contracts – internal and external – could be voided.

He encouraged the community to realize that while no one relished making the tough decisions necessary to balance the budget, such decisions need to be made to keep the district under local control.

Budget Presentation – History of Budget Reductions

Allen reviewed the total budget reductions the district has made in the past five years: $5.7 million in FY 2007-08, $920,000 in FY 2008-09, $2.7 million in FY 2009-10, $18.6 million in FY 2010-11, and $12.6 million in FY 2011-12.

He also pointed out the areas in which cuts have been made, which include staff reductions, employee concessions, health care expenditures, operations and maintenance costs, legal services, and athletics. The district has also offered an early retirement incentive, consolidated substitute services, outsourced transportation, and reduced departmental budgets across the board.

Allen pointed out that from FY 2007-08 through FY 2010-11 class sizes remained steady, but this year the district had to increase class size targets.

Questions on the Budget Presentation

Before starting smaller group discussions at individual tables, Allen entertained questions from participants.

There was some confusion expressed by forum attendees about the money paid by the district to fund the state retirement system – the state retirement rate. Allen clarified that “for every dollar in salary that we pay out, we pay approximately $0.24 to the state.” He compared this scenario to private industry, where perhaps 8 cents on every dollar would go into a retirement pool. Allen also explained that the increases in the rate are due in part to the fact that the retirement system is a defined benefit plan (not a defined contribution plan) that includes health care benefits. The cost of health care benefits continues to rise.

Allen also explained that retirement costs are mandated, and cannot be addressed in collective bargaining with the teachers’ union. In closing, Allen noted, “this is not a problem that snuck up on anyone,” and encouraged the community to urge their legislators to take action.

A forum attendee asked whether the district would be in the same position now if voters hadn’t approved the construction of Skyline High School. Allen said that Skyline costs about $4 million a year to operate, and that it was built to relieve overcrowding. Before Skyline was built, he pointed out, Pioneer High School was the largest high school in the state, and Huron High School was the fourth largest.

Most of the questions posed to Allen were also reflected in the suggestions reported out from the tables at the conclusion of the forum. Many of the questions posed to Allen are folded into the table reports below.

Budget Suggestions

People gathered at tables in small groups for just over half an hour, and produced several suggestions. Here, those suggestions are broken into four main categories – additional information requested, inclusion of parents in the budgeting process, budget suggestions and priorities, and revenue enhancement.

Within each category, some attempt has been made to clump items together into thematically-related clusters.

Suggestions: Additional Information Requested

• Break down all costs by student, building, educational level, subject area, and square footage and put it all on the AAPS website.
• Give a more detailed budget breakdown at every table, and on the website.  (“You can’t use a scalpel on the budget if the information you have is at the meat-ax level.”)
• Give the cost of professional development days.
• Show how teacher salaries compare to other districts, adjusted for cost of living.
• Provide salaries and job descriptions of all administrators.
• List the history of administrative cuts – both central administration and building administration.
• Give the history of budget cuts broken down by full-time equivalent positions.
• Give the district’s history of enrollment numbers, and projected enrollment.
• Project the cost of cutting teachers in the long run.  (Does cutting preschool teachers mean you need more aides later on?)
• Provide list of mandated services – special education, transportation, school lunch, etc.
• Show cost versus income for preschool programs.
• Explain the budgetary effect of moving to all-day kindergarten.
• Separate items into those requiring legislative action versus options under local control.
• As soon as possible, make clear which budget cuts you are considering.
• Provide real numbers on how much it takes to keep each activity going (for example, theater, crew, etc.) – otherwise parents just fight for their own kids’ activities.
• State whether required programs are required by federal or state mandates, and what funding is restricted to those required programs.
• Explain the burden of unfunded mandates on the district.
• Provide information on  any real estate owned by the district that could be sold.
• Give more information on how the state has borrowed from the pension fund.
• List all contracted services.
• Explain what the Washtenaw Intermediate School District provides to AAPS. (Does AAPS have the ability to opt out of any of those services?)
• Estimate what it really takes to provide a quality education.  (What would it cost if we “did it right”?)

Suggestions: Inclusion of Parents in Budgeting Process

• Connect with parent groups who already have a history of lobbying the state legislature.
• Put together talking points for parents to address the legislature.
• Be a more unified lobbying force to reach systemic solutions.
• Use PTOs as channel for lobbying.
• Focus less on state-level legislative problems, since we cannot affect them this budget cycle.
• Be more transparent and proactive.
• Have a series of small focus groups with parents who know nothing, to help shape these budget presentations before they come to a large group.
• Hold more meetings throughout year with specific topics to inform the public.
• Hold more frequent, smaller meetings.
• Explain why some of these suggestions are not viable.
• Explain why you are not enacting some of the ideas presented.
• Address perception that in the past decisions had already been made before the budget forums were held.
• Give feedback from this forum at future forums.
• Leave longer time for feedback.
• Make a video recording of the presentation.
• Communicate, communicate, communicate.
• Make spreadsheets available.
• Do an online survey.
• Try to regain trust. (Administrators need to show good faith and willingness to make cuts.)
• Don’t use meetings like this to pit groups against each other.

Suggestions: Budget Reductions and Priorities

• Look at best practices in other school districts.
• Use fund balance to offset budget shortfall until the economy bounces back.
• Focus on large budget items.
• Compare the AAPS budget to budgets of other “hold harmless” school districts.
• Do an across-the-board cut.
• Do research on districts that are running efficiently, even out-of-state districts.
• Negotiate prices for mandated services.
• Consolidate human resources, legal, finance with the other districts in the WISD.
• Join forces with other districts and make a cohesive plan.
• Don’t assume that one class size fits all.  (Class size should depend on age and subject.)
• Provide incentives for better teachers to teach larger classes.
• Use staff efficiently. (Be sure teachers have full schedules.)
• Reduce instructional staff, because the retirement costs are so problematic.
• Re-open union negotiations.
• Bargain lower benefits costs for teachers.
• Freeze all step increases for teachers.
• Ask teachers to pay up to 50% of fringe benefits.
• Ask teachers to help with the budget.
• Give teachers pay that would otherwise go to compensate substitutes, if they don’t use sick days.
• Figure out how to retire poor-performing teachers faster.
• Devise a way to make it easier to get rid of poor teachers.
• Look at privatizing non-instructional employees.
• Reduce administrators, especially principals in schools with multiple administrators.
• Spend administrative dollars on those who have interaction with students.  (Do not do principal-sharing.)
• Hold forum with AAPS employees so everyone understands where the money is going, and ask employees to make suggestions.
• Reduce consultants.
• Reduce teacher aides.
• Audit custodial and security staff and reduce if possible.
• Outsource custodial, maintenance, secretaries, payroll.
• Reduce administration.
• Sharing principals is preferable to increasing class size, but neither is a good option.
• Ask parents what not to cut. (Find consensus.)
• Reduce the breadth of programs, and focus on what we do well.
• Cut athletics instead of arts.
• Maintain athletics and arts.
• Don’t cut athletics. (It’s only 1.2% of the budget.)
• Don’t increase pay-to-participate. (It may disadvantage low-income families disproportionately.)
• Not in favor of pay-to-participate.
• Have pay-to-participate for all extracurricular activities.
• Keep athletics intact.
• Share sacrifice.  (Do not pit arts against athletics.)
• Don’t alter athletics, music, art. (If these activities are taken off-budget, certain populations will not have equitable access, and student transfers out of AAPS will likely increase.)
• Shift athletics and extracurricular activities to Rec & Ed.
• Separate athletics from general fund, perhaps by moving it to WISD.
• Pursue consolidation wherever possible.
• Audit open space in schools – not all rooms are used.
• Engage staff in energy reduction planning.
• Require mandatory closing of buildings for a month in the summer.
• Repurpose buildings.
• Close “boutique” schools.
• Consolidate elementary schools.
• Move alternative education programs into comprehensive high school buildings.
• Move all high school students back to Pioneer and Huron, and rent Skyline to a community college.
• Consolidate Ann Arbor Technological High School and Roberto Clemente Student Development Center.
• Don’t eliminate Clemente. (It is successful and worth preserving.)
• Don’t merge Clemente into another school.  (Merging will not preserve core community of program.)
• Consolidate Community High School with Skyline High School.
• Increase collaboration with the University of Michigan.
• Consolidate with University of Michigan for maintenance, lawn care, snow removal
• Collaborate with local universities – they have an obligation to support us.
• Ask local universities to provide guidance counseling, and reduce guidance counselor positions.
• Cut transportation costs.
• Collaborate with the Ann Arbor Transportation Authority on busing.
• Consider K-12 neighborhood busing.
• Reduce buses between Community High School and other high schools.
• Lengthen school year, and consider alternative scheduling.
• Reduce the length of the school day.
• Hire students to mow lawns and clean buildings.
• Ask students to bring more of their own supplies.
• Consider using iPads instead of textbooks.
• Eliminate programs that are not working.

Suggestions: Revenue Enhancement

• Have booster clubs run parking for University of Michigan football games.
• Increase parking revenue for University of Michigan football games.
• Increase pay-to-participate for athletics.
• Consider corporate sponsors for certain programs or sports teams.
• Partner with Google Adwords.
• Have advertising on uniforms.
• Allow advertising signage in schools.
• Advertise museums, farmer’s markets, higher education institutions on inside of buses.
• Revisit countywide enhancement millage.
• The enhancement millage was supported by Ann Arbor voters though it didn’t pass countywide.  Take advantage of that goodwill.
• Maybe Rec & Ed does not have to be cost-neutral – it could be a revenue enhancer.
• Provide other services to WISD member districts, such as finance, human resources, legal services.
• Increase enrollment in all ways possible.
• Improve customer service to retain students.
• Increase online course offerings.
• Recruit more students.
• Market AAPS by MEAP scores.
• Market top programs, such as music education.
• Do more exit interviews when students leave the district – find out at what age the district loses students to charter schools and why.
• Start magnet programs at the middle school level (such as talented and gifted, math, or information technology magnets) to attract private school students.
• Lobby state legislature to give School Aid Fund surplus back to K-12 schools.
• Lobby to repeal the Headlee amendment.
• Political campaigning.
• Be more aggressive about enacting legislative changes.
• Have a whole program on how the community can take a stand in Lansing. The district should function as a community organizer.
• Lease AAPS-owned land.
• Lease facilities to other organizations after school hours.
• Increase parking fees for students and staff.
• Raise funds directly from the alumni base.
• Allow parents to donate money directly to AAPS.
• Allow earmarking AAPS educational foundation donations for specific programs.
• Ask parents to contribute to their schools, with portion to be given to other schools to ensure equity.
• Seek corporate sponsorships.
• Get aggressive at grant writing. Grant money might be temporary, but it’s still real.
• Figure out how to ask University of Michigan for money.
• Can we put together an Ann Arbor Promise like the Kalamazoo Promise – a billion dollar endowment? We have a lot of people here who are good at raising money.
• Fund a bond to move to geothermal heat, get good at it, and sell power to University of Michigan.

Allen closed the forum by thanking each table for their suggestions, and said he would try to put together answers to Frequently Asked Questions on the AAPS website. He also thanked administrators and the three board members who attended – Andy Thomas, Irene Patalan, and Glenn Nelson. Green added that listening to all the community’s suggestions was very powerful: “It’s a big step when we can come together in open conversation.”

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