AAPS Superintendent Todd Roberts, flanked by members of his staff, begins presenting his administration's proposed 2010-11 district budget. Behind him, from left to right, are two members of his cabinet: Robert Allen and Randy Trent, and the three administrators of instructional services: Lee Ann Dickinson-Kelley, Larry Simpson, and Joyce Hunter. (Photos by the writer.)

However, multiple budget factors are still unknown: the state has not yet set the per-pupil funding amounts for next year; contract negotiations between AAPS and its teachers, bus drivers, and custodial/maintenance workers unions are still ongoing; and a possible countywide transportation consolidation plan is in the works, but has not yet been solidified. Depending on these outcomes, an additional 39 teaching and three administrative positions could be eliminated, and support services could still be outsourced. If layoffs are made, teachers will be notified by the end of April.

Though the board will hear an update on the proposed budget from the administration on April 14, board president Deb Mexicotte described that second briefing as a time when the board is “looking to have a general consent that this is the direction we are going, with the idea that we have legal obligations related to the budget that we are approving in June.” Two public forums are set for April 12 and 13, and a public hearing on the budget will be held before the board in late May. The district’s fiscal year begins July 1, 2010.

Wednesday’s meeting also covered a variety of other business: the second quarter financial report; a discussion regarding the necessity of maintaining the district’s fund balance; unanimous approval by the six trustees present to welcome “schools of choice” students to the district; and a special briefing which expedited the district’s ability to lease antenna space on the top of three district buildings to a wireless broadband Internet service provider.

2010-11 AAPS Budget Proposal

Roberts began his budget presentation by explaining that this year the budget process started earlier than usual, because of the complicated and uncertain funding scenarios that face the district. He reviewed how his administration had begun looking at ways to find savings last November, brought information to four budget forums in January, collected ideas from the community at those forums, and then returned to work at the district level. He thanked the many forum participants, as well as those who took the district’s online survey.

Roberts had given a preview presentation of the proposed budget to all AAPS staff on Wednesday afternoon, so many of the speakers during the first two hours of the meeting – before the budget presentation – made reference to various specifics of the proposal. In general, administration and board members referred to the budget proposal as having two parts – some called them part one and part two, while others referred to plan A and plan B.

The part one/plan A terminology refers to the vast majority of proposed cuts and new revenue options, resulting in a total budget reduction of $15.9 million. This core proposal would come close to balancing the 2010-11 budget (leaving a deficit of only $550,000), if there are no additional cuts to the state foundation allowance for the next school year.

However, because the state’s budget is not yet set, and because it is anticipated that the state may cut the school aid budget by an additional $200-$300 per pupil, AAPS administration has also put forth a second, complementary plan – part two/plan B – outlining an additional $4.1 million to $4.5 million in reductions that would be necessary to ensure a balanced budget regardless of what the Michigan legislature does.

This article organizes the budget presentation, interspersed with board members’ questions and comments, into the following main sections. First, there are seven sections on the core proposal: (i) how the AAPS budget is funded and allocated; (ii) proposed budget reductions to district-wide, non-instructional support services; (iii) proposed budget reductions to district-wide, instructional support services; (iv) proposed budget reductions to elementary programming; (v) proposed budget reductions to middle school programming; (vi) proposed budget reductions to high school programming; and (vii) proposed district-wide general savings and increased revenue. The budget reporting concludes with a separate section on additional options that were presented for addressing the remaining $4.4 million projected deficit.

2010-11 Budget: How the AAPS Budget Is Funded and Allocated

Robert Allen, AAPS deputy superintendent of operations (and chief financial officer), began by defining the foundation allowance as the per-pupil funding received from the state of Michigan. He then defined the blended membership count – the number of pupils in a district eligible for the foundation allowance. The blended count is determined by adding 25% of the student count in February of one school year to 75% of the student count in September of the following school year. Allen also explained how the recent loss of “20j” funding has resulted in a decrease in the AAPS foundation allowance – down to $9,490 per pupil.

Enrollment in the district has been declining since 2006-07, said Allen, and part of the proposed budget plan is to increase enrollment. He pointed out that the loss of funding expected in 2010-11 would take the foundation allowance back to 2001-02 levels, resulting in a roughly $20 million deficit for the coming year.

Allen then gave a brief overview of how AAPS spends its money. The majority of the general fund budget (82%) is spent on instruction and instructional support. The rest is spent on operations and maintenance (10%), transportation (4%), and central administration (4%). Allen echoed his refrain from the community budget forums: “The driving cost in our district is people.”

Before walking the board through three possible budget scenarios, Allen enumerated the assumptions underlying his revenue and expenditure projections. The projections assume:

• an enrollment increase of approximately 200 students;
• flat state funding or a decrease by as much as $300 per pupil;
• a slight decrease in interest income;
• a slight increase in local funding sources;
• an increase of 8% in health benefits over the next three years;
• an increase in the employer retirement contribution from 16.94% to 19.41%; and
• wage increases based on negotiated settlements.

Therefore, Allen stated, without budget reductions, if the state foundation allowance is kept constant, AAPS would end up with a $15.4 million deficit for the 2010-11 school year. If per-pupil funding is cut by $200 per pupil, Allen projects a $18.7 million deficit. And, he said, a $300 per-pupil cut would lead the district to the worst-case scenario: a $20 million shortfall.

Allen also walked the board through the details of that shortfall’s impact on the fund equity balance. This year, the opening balance in fund equity was $27 million, but nearly $5 million of that will need to be used by the end of this fiscal year to make up for mid-year reductions in state funding. That means the fund will open the 2010-11 year with a balance of $22 million.

If the district did nothing to reduce costs, it would need to spend its fund equity down almost completely next year. According to Allen, that would cause a number of cash flow and other problems for the district. [A longer discussion on the effects of spending down the equity, or "rainy day fund" took place during Allen's presentation at this meeting of the second quarter financial update, reported later in this article.]

Roberts then stepped to the podium. Before inviting administration officials to begin listing proposed cuts, Roberts highlighted the guiding principles that had been considered when developing the budget: that any changes were aligned with the district’s strategic plan; that a focus on academic excellence was maintained; that the district continued to offer a variety of programs, even if they were provided differently; that new revenue was sought instead of just cost reductions; and that non-instructional and administrative functions would be cut before cuts would impact instruction.

2010-11 Budget: Proposed Cuts to Non-Instructional Support

Allen, joined by Randy Trent, AAPS executive director of physical properties, then enumerated the following proposed budget reductions, totaling $4.4 million:

• Eliminate the facilities renovation support, emergency management coordinator, and, through attrition, two clerical positions ($340,000);
• Better educate staff on energy savings strategies, and better monitor building energy usage ($400,000);
• Reduce pool usage at middle schools, including designating two pools for year-round community use ($100,000);
• Reduce transportation costs by consolidating with WISD, modifying the contract held with current employees, or outsourcing services ($1.5 million);
• Reduce custodial and maintenance costs either by modifying the contract held with current employees or outsourcing services ($2 million); and
• Reducing services for contracted maintenance services ($100,000).

Allen added that, in terms of transportation services, the preferred option is consolidating services with other districts in the county, which would save 20-25% of the cost of services. In a follow-up call with The Chronicle, AAPS director of communications, Liz Margolis, confirmed that the Washtenaw Intermediate School District (WISD) transportation consolidation plan is “looking hopeful,” and that it could be implemented as soon as next fall. She explained that, if the plan comes to fruition, most if not all AAPS bus drivers would become WISD employees, and would remain in the state retirement system. Initially, parents in Ann Arbor would notice little difference in service at all, she said.

Margolis added that in April, the WISD will host a meeting of board members from all 10 districts in the county to explain the plan and gauge support. The WISD has been working with an outside consultant, and routers from interested districts have been involved in the planning process. At this point, Margolis said, at least five of the districts – Ypsilanti, Willow Run, Lincoln, Saline, and AAPS – are interested, and that may be enough to make the program work. Lastly, she added, the state has been pushing districts to find ways to consolidate services, so this transportation consolidation would meet that directive. A final decision is expected to be made on the possible countywide consolidation of school transportation services by mid-May, “a best-case scenario,” according to Margolis.

Margolis also updated The Chronicle on a recent meeting between AAPS and AATA in which the creation of a pilot program for high school students was discussed. The details of how the pilot program would work are still being figured out, but one possibility is that AAPS high school students within 1/4 mile of AATA bus services would be given a choice to either ride the AAPS bus to school, or receive a smart card allowing them unlimited weekday access to the AATA buses. Students choosing to ride the AATA buses to school would pay with their smart cards, allowing AATA to track each ride, and charge AAPS accordingly. Margolis stressed that the plan was still evolving, but that she was “very hopeful” it would be piloted next fall.

2010-11 Budget: Proposed Cuts to Instructional Support

Roberts, along with Lee-Ann Dickinson-Kelley, AAPS administrator for elementary education, presented the following proposed reductions to the budget for instructional support services, totaling $3.5 million:

• In special education services, eliminate 2.5 administrative positions, 10 paraprofessional positions, and eight teaching positions, such as school psychologists or social workers, in order to better align with contractual caseload limits ($575,000);
• In central administration, eliminate five positions, and add an administrator for curriculum and instruction ($390,000);
• Reduce textbook budgets by half, by moving from a five-year to a seven-year replacement cycle ($200,000);
• Reduce discretionary budgets, though with a more generous allowance given to elementary programming, since it uses more consumables ($400,000);
• Modify the delivery model for English as a second language (ESL) services, eliminating 3.5 staff positions, and assigning 75 ESL students per ESL teacher, as per their contract ($315,000);
• Reduce contract services for delivering professional development ($200,000);
• Limit district-funded conference attendance, and substitutes for professional development and clerical positions ($450,000);
• Reduce the general fund contribution to middle and high school extracurricular activities and athletics, including instituting pay-to-participate athletics, consolidating some sports teams between schools, and instituting a musical instrument rental/maintenance fee ($1.07 million).

Regarding the modification of ESL services, Dickinson-Kelley explained that part of the reorganization would include increasing professional development services so that all teachers would be better able to meet the needs of English-language learners. Dickinson-Kelley said that the Read 180 program employed in grades 3-12 throughout the district has been shown to be effective with many learners, including ESL students. She said the district is also considering dual-language immersion classes as part of the revised approach to meeting the needs of ESL students. Trustee Simone Lightfoot asked about the number of eliminated positions that would result in layoffs, and Dickinson-Kelley responded that though there were some retirements, she could not guarantee that no personnel would be laid off. She is trying to consolidate across schools, and just collapse positions into each other.

The curriculum and instruction administrator position was one that the district previously had, but it has remained unfilled in recent years. Trustee Christine Stead asked who had been covering the responsibilities of the position in the meantime, and Roberts answered, “Ostensibly, I’ve been in that role, which was my background before coming to this position.” He added that leaving the position unfilled initially was the right decision for the district, but that “it is an important position to have in the district going forward.”

Roberts also acknowledged the extra responsibilities assumed by Dickinson-Kelley, as well as by Joyce Hunter, administrator for middle and high school education/director of career and technical education, and Larry Simpson, administrator for student intervention and support services (special education). Roberts added that in some ways, the lack of a supervisor has been very helpful, since Simpson, Dickinson-Kelley, and Hunter had to work more closely to get their jobs done.

Board president Deb Mexicotte said she was pleased that the administration had found a way to reestablish the instruction administrator position. Irene Patalan, the board’s vice president, thanked the superintendent, as well as the current administrators, saying they “really did take on more than expected because it needed to be done.”

Lightfoot asked about the salary range for the additional position, and Roberts answered that it was set at $117,000. Also in response to a question from Lightfoot, Roberts said that all but one of the five central administration positions being reduced by attrition are due to retirements.

There was a lengthy discussion regarding the proposal to charge summer school tuition. Trustee Susan Baskett noted she had a lot of concern about this idea. She asked what the average elementary tuition would be, and how the process would work for getting a scholarship to attend. In response, Dickinson-Kelley asserted that summer school is a high priority for her, as a means for students to increase their skillfulness and prevent regression. A four-week session would cost $200, she said, which was determined in part by looking at Rec & Ed fees.

Dickinson-Kelley then outlined the summer school scholarship application process as follows. Teachers make recommendations, which go straight to the central office. Working with food service directly, the central office will stamp “paid” directly on application forms for families receiving free or reduced lunch. Dickinson-Kelley said that principals would counsel eligible families to sign up for the free and reduced lunch program, and that she saw many “compassionate conversations” occurring.

Mexicotte was unconvinced, saying she was “very troubled about charging tuition for the [AAPS] summer school program,” and that the district strongly needed to consider “the amount of savings we get versus the potential harm to student achievement.”

Board secretary Glenn Nelson, too, expressed concern about charging for the summer program. Citing global warming, mass dislocations of people, and the debt crisis, he asserted that children need the best education possible because the world is “getting harder.” He noted the care put into this proposal by administration, but concluded that the bottom line was that the investment in education was decreasing: “This in my mind is a bad thing for the children of our community, and what it does to their future.”

Roberts emphasized that it was a goal for extracurricular activities not to prevent any student from participating. The cost to participate in high school sports would be $150 for the first sport, and $50 for every sport thereafter. In middle school, there would simply be one $50 athletic fee for any number of sports played over one year. Scholarships would be available, he said, for athletics, as well as to cover the musical instrument fees. Roberts also pointed out that students had already been paying $50 to keep instruments over the summer, and that this would extend the fee to the whole year.

Baskett confirmed that extracurricular funding comes from the district’s general fund, not the school booster clubs, and that instrument rental begins in the fifth grade, when every student studies instrumental music. Mexicotte commented that she was uncomfortable with charging a fee for musical instrument rental, pointing out that “music is ‘extra’ neither for our curricular needs nor for our graduation requirements,” and saying that it reminded her of a previous debate over funding graphing calculators.

2010-11 Budget: Proposed Reductions to Elementary Programming

Dickinson-Kelley proposed the following reductions to elementary programming, totaling $910,000:

• Restructure the elementary “specials” to maintain art, music, and physical education experiences, while better emphasizing the acquisition of technology skills, adding a humanities strand, and eliminating nine media specialist positions ($810,000); and
• Reduce teacher clerk hours by aligning to contractual obligations ($100,000).

Dickinson-Kelley then outlined the revamped elementary specials program as it’s proposed. First, she said, all students will continue to receive the “threshold” experience each week of: a 60-minute art class; two periods of vocal music; two periods of physical education (PE); two periods of information literacy and technology (ILT); and instrumental music (fifth grade only).

What would be new, Dickinson-Kelley continued, is aligning the ILT special with statewide Michigan Education Technology Standards (METS), and adding a humanities strand for kindergarten through fifth grade. According to Dickinson-Kelley, that alignment would embed the application of technology skills in social studies and science lessons.

Dickinson-Kelley described the new humanities strand as “a deliberate series of interdisciplinary lessons … taught by specials teachers that align with the [Grade-Level Content Expectations] GLCEs.” Some examples she gave included: lessons on sound taught by music teachers, art teachers teaching students how to draw in science journals, and concepts of force and motion being applied in physical education class.

Dickinson-Kelley described “the new 3 Rs … [as] rigor, relevance, and relationships,” and argued that “embedded learning” would benefit students tremendously. By keeping special areas teachers more involved, she said, students gain knowledge by having concepts reinforced from different perspectives, and by different instructors. She also pointed out that, with the exception of the addition of world languages, there have not been any changes to the elementary “special areas menu” in 40 years.

Patalan asked how far along in development the humanities strand was. Dickinson-Kelley explained that it was not a new concept for music and art teachers, and that PE teachers were having meetings about it. The only part that would be new to media specialists, she said, was aligning the technology outcomes they already teach to specific science and social studies GLCEs. She added that humanities increases the relevance of core concepts by highlighting their application in the arts. Patalan called the plans “joyful.”

Baskett concurred saying, “If this is what I think it is, it sounds wonderful,” and got confirmation that humanities would begin in the fall. Nelson expressed how he thought the addition of this new strand was an example of the cumulative nature of the district’s educational goals, saying “one doesn’t start with freshmen and produce excellence.” Mexicotte noted that while the restructured program is “excellent … it does come with a cost.” She also asked Dickinson-Kelley to put up a Q&A about the humanities strand to stem the flow of questions from parents about what will be offered, and Dickinson-Kelley agreed to do that.

Lightfoot questioned how many layoffs would be caused by eliminating the nine media specialist positions. Dickinson-Kelley answered that some layoffs would need to occur, as some media specialist positions would now be shared between smaller schools.

Roberts emphasized that eliminating positions does not translate directly to laying off people. At least some of the positions will vanish through attrition, he said, but there is no way to know at this point how many retirements there will be, nor how many of the remaining teachers have multiple certifications that would allow them to transfer to other open positions.

As an example, a teacher in an eliminated ESL or media specialist position could be reassigned to teach another subject for which he or she is highly qualified, such as English or a world language. Seniority also plays a part in teacher assignments and voluntary transfers, as teachers move to fill open positions.

In response to further questioning by Lightfoot, Roberts explained that the administration has some legal timelines it must meet regarding layoffs. All teachers facing potential layoffs need to be notified by the end of April, he said, and could then be called back if possible. Roberts added that he hopes to be able to confirm the number of layoff notices that will need to be issued at the next board meeting on April 14.

2010-11 Budget: Proposed Reductions to Middle School Programming

Joyce Hunter, AAPS administrator for middle and high school education, then came to the podium. She mentioned that there had been over 22 meetings with people affected by the changes, and then proposed the following reductions to middle school programming, totaling $928,000:

• Eliminate 8.2 teaching positions by increasing class sizes in electives, but keeping core class sizes averaging 28 students ($738,000); and
• Eliminate 3.4 teaching positions by staffing middle school planning centers instead with trained, non-teaching staff ($190,000).

Trustee Christine Stead asked for examples of elective classes that would be affected by the increase in class sizes, and why the core class sizes would be kept lower than the range in the contract. Hunter answered that some individual electives would need be cut to increase class sizes in others, but that no entire program would be wiped out, even if enrollment was low. Hunter also pointed out that the maximum class size allowable by the contract is 33, but that it was strongly preferred that the average core class size would be lower.

Trustee Susan Baskett prompted Hunter to explain the current role and staffing of the middle school planning centers. Hunter explained that the planning centers are used to work with students in terms of discipline, mediation, and conflict management. She also added that the five centers (one at each middle school) are better aligned now than in the past – all use the same central database, and have a common brochure that explains their services. The reduction would be only 3.4 FTEs because Tappan is already using a paraprofessional instead of a teacher to staff its planning center.

Baskett, Simone Lightfoot, and Deb Mexicotte each questioned the need for maintaining the planning centers at all. Baskett pointed out that paraprofessionals staffing the centers might not be qualified to help students with the lessons they are missing, and that when she came on the board seven years ago, some students at that time were calling the planning centers “blacks incarcerated centers.” Baskett concluded, “I think it’s time to look at getting rid of these things.” Lightfoot asked how hiring new people to staff the centers would save any money, and mentioned that the counselors are also available for conflict resolution. She, too, asked, “What about doing away with them all together?”

Mexicotte echoed these sentiments, and provided some history. She said the board had looked extensively at the planning centers over 10 years ago, when they were viewed solely as “disciplinary dumping grounds.” Back then, a decision was made to staff them with certified teachers in the hopes of increasing their effectiveness. In deciding to remove teachers from the planning centers, Mexicotte argued, “we are now moving back to the model that was seen as less good.”

Stating that she understood staff and principals’ needs for “something,” Mexicotte said that the mixed history of the planning centers led her to question if the district could find another way to meet the developmental and academic needs of these middle schoolers. She asked, “I can’t see that this is the best choice … What are our goals? Can we do this very differently?”

In response to the concerns stated by board members, Hunter mentioned that the principals did feel strongly that the planning centers be maintained, and that the hope would be that the district would receive enough applicants to staff them with qualified, certified, former teachers at a lower cost. Given the issues raised, Hunter said she would take the board’s concerns back and talk to the principals directly. She also agreed to collect feedback on the planning centers from parents and from school staff as a whole.

2010-11 Budget: Proposed Reductions to High School Programming

Hunter then continued with the high school portion of the proposed budget reductions, totaling $2.325 million:

• Eliminate two high school assistant principal positions ($260,000);
• Eliminate five teaching positions at the alternative high schools by reducing some electives and increasing class sizes ($450,000);
• Eliminate 11 teaching positions at the comprehensive high schools by reducing some electives, increasing class sizes, and providing less assistance for music classes ($990,000);
• Eliminate two counseling positions to better align student-counselor ratio ($180,000);
• Eliminate six clerical positions and lunchroom supervisors, having administrators and community assistants cover lunches ($320,000);
• Eliminate two community assistant positions ($80,000); and
• Reduce event security costs, such as police presence at certain athletic events ($45,000).

Stead asked how many of these staff reductions would take place through attrition, and Hunter answered that there would be some retirements, but also some layoffs.

Prompted by Baskett, Hunter defined the roles of the community assistants as follows – they monitor behavior in the halls and in the cafeteria, they assist with conflict resolution, and they also help during class time. Mexicotte suggested using community assistants instead of the student planning centers in middle school, since they are seen as such an asset at the high school level.

Lightfoot expressed concern that the community assistant positions “seem invaluable as it relates to discipline,” and said it greatly concerned her to reduce them. She said she would like to register her concern about losing the community assistants, who are the ones who “step in when other folks turn their heads.”

Baskett also asked about current event security costs and whether the district could get even more savings there. Roberts gave the example of Pioneer High School, saying outside security costs there were about $70,000 per year. You couldn’t eliminate that completely, he said, citing the importance, for example, of maintaining security at a Pioneer-Huron football game. Instead, he said, the reductions target those events that might not need an officer at all, or at least not two.

2010-11 Budget: District-Wide General Savings and Increased Revenue

Roberts pointed out some general savings the district anticipates, totaling $2.23 million:

• Savings built in to employee 2010-11 contracts ($1.2 million);
• Reduction in overtime costs, in part by passing the costs onto the activities/events occurring on the weekend, evening, or over the summer ($800,000);
• Savings by moving school board elections to November ($90,000); and
• Using Power School software to reduce printing and mailing costs ($140,000).

Also included in the budget plan, Roberts said, are the following new sources of revenue, totaling $1.648 million:

• Two additional cell antennas added to existing towers ($45,000);
• An increase in University of Michigan football game parking revenue ($75,000);
• Increased rental of school facilities and possible renting of school buses ($75,000);
• Providing management services for consolidated services in the county ($90,000);
• Increased enrollment of 20 students in the Options Magnet program ($135,000);
• Increased enrollment of 150 additional students through Schools of Choice ($780,000);
• Additional program support from the AAPS Education Foundation ($200,000); and
• Increasing enrollment at Roberto Clemente and Stone schools through cooperative agreements with other districts in the county ($248,000).

There was no discussion on the general savings or suggested revenue options.

2010-11 Budget: Options to Address the Remaining $4.4 million Deficit

Roberts then gave an overview of the proposed reductions to this point – the “core proposal” – resulting in $15.9 million in savings. Of the 80.6 positions proposed for elimination, 9.5 of them would be in administration, 50.1 would be teachers union members, nine would be office professionals, and 12 would be paraprofessionals. This, Roberts pointed out, was consistent with his stated goal at the beginning of this process to focus cuts on non-instructional and administrative functions instead of instructional services. The core reductions overall represent a 17% cut to administration and a 5.5% cut to instruction.

However, Roberts then placed the bulk of the remaining deficit of $4.4 million primarily on the teacher’s union to resolve. He explained that it was his hope that teachers would agree to reduce their salaries and benefits instead of cutting positions, but that if they would not, the administration would propose moving forward with the following reductions:

• Eliminate 14 elementary teaching positions, increasing average class sizes to 26, and increasing the number of split classes ($1.26 million);
• Eliminate eight middle school teaching positions by increasing class sizes ($720,000);
• Reduce or eliminate some middle school counselor positions ($270,000);
• Eliminate 14 high school teaching positions, including at the alternative high schools, by increasing class sizes, and reducing the number of elective sections ($1.26 million);
• Not add the Chief Academic Officer position, and eliminate a clerical position ($200,000);
• Eliminate two additional maintenance and custodial administrative positions ($160,000);
• Reduce supplemental pay, and eliminate some extracurricular paid positions ($180,000); and
• Further reduce substitutes for professional development ($100,000).

Roberts said that when he comes back to the board on April 14, a decision would have been made on covering the remaining $4.4 million deficit. He reminded the board of the district’s legal obligation to let teachers know by the end of April if they are being laid off, and said that by the next board meeting, “we’ll be closer to knowing how many layoff notices we may need to send.” In a follow-up phone interview,  district spokeswoman Liz Margolis confirmed the district’s position: “Unless something magical happens at the state, there is an anticipation that pink slips will be issued.”

Roberts also pointed out that one of the main issues affecting the outcome of negotiations between the AAPS administration and its teachers union is the effect of a possible increased employee contribution to the state retirement system. If teachers are forced to cover an additional 3% of their retirement costs, as Gov. Jennifer Granholm’s proposed budget suggests, they may be less willing to reduce their pay locally. Other legislation being considered – on health care, consolidation, and contract services – could also impact the budget, according to Roberts.

Nelson asked Robert Allen a question about his calculation of the base educational expenses in the budget scenarios, and Allen acknowledged that the estimates were conservative, and based on changes in the budgeting of capital needs. Nelson commented that he was “very comfortable” with this conservative approach, saying he agreed with the adage, “Don’t count your chickens before they’re hatched.”

Nelson also pointed out that a millage provided a large amount of the support for special education services. Roughly two-thirds of the $30 million needed for the district’s work with special education students is locally provided, Nelson said, thanking the local community for providing this support. He reminded the board that “these millages expire” and asserted, “We need to take responsibility locally – there is a big part of this that is under our control.”

Roberts closed by recognizing and thanking the work of his administration, the bargaining units, principals, and staff. He acknowledged, “It’s been a stressful time, for newer staff especially,” and assured the board and public that AAPS was committed to maintaining a high quality of education for all students.

Public Input in Strategic Planning on AAPS Proposed Budget

At the end of the budget presentation, Roberts commented that AAPS would continue to face funding challenges over the next few years, and invited all interested members of the community to participate in the next phase of the district’s strategic planning process, beginning in late April. After reviewing the plan and updating its goals, the strategic planning team will be forming action teams in May. These teams will then develop recommendations regarding the district’s programming, services, and facilities usage, and bring them to the board by December 2010.

Roberts also announced that the district would provide detailed budget information on its website, as well as hold two additional “budget forums” to review the proposed budget plan with the community before it comes to the board for a second briefing on April 14. On Thursday, these public meetings were announced on the AAPS website, along with a composite of the proposed budget numbers presented to the board, and FAQs about the proposed budget. The public budget presentations will be held on Monday, April 12, and Tuesday, April 13, in the Little Theaters of Pioneer and Huron respectively, and each begins at 6:30 p.m.

First Briefing: Second Quarter Financial Report and Fund Balance

Nancy Hoover, AAPS director of finance, began the second quarter financial report by requesting the board’s consideration of three resolutions: an amendment to the general fund; an amendment to the millage and capital needs fund; and approval of second-quarter disbursements. These resolutions, she explained, would make necessary adjustments to reflect changes in revenue and expenditures. Revenue to the general fund decreased overall by $2.7 million in the second quarter, as increases in some areas were offset by greater losses in other areas:

• Lower interest rates (-$250,000);
• Loss of 20j state funding (-$3.737 million);
• Lower enrollment than projected, resulting in a lower foundation allowance (-$470,000);
• An increase in Scio Township DDA excess capture (+$1 million);
• A transfer from the Millage and Capital Needs fund for textbook adoptions (+$500,000); and
• Receipt of 2004-07 Smart Zone capture from the City of Ann Arbor (+$200,000).

Hoover added, “When you look at the declining fund balance, less money earns less interest,” and noted that the AAPS finance team tries to be conservative in what it budgets, but was off this time. “We had thought it would come back,” she said, “but it did not.” Hoover also pointed out the following increases to general fund expenditures, totaling $1.8 million:

• An increase “due to the establishment of the budget for the transfer to the Millage and Capital Needs Fund,” which represents a change in accounting ($1.5 million); and
• An increase for textbook adoptions ($300,000).

Trustee Glenn Nelson asked if there was anything particularly significant at the state level that would cause a major shift in numbers in the third quarter. Hoover answered no, saying that the third quarter projections include the state of Michigan’s receipt of the second portion of state fiscal stabilization funds, and that there should be no impact on the fund balance.

Trustee Deb Mexicotte asked for clarification on the reason for the lower foundation allowance. Superintendent Todd Roberts confirmed that the lower amount of per-pupil funding received did not reflect a loss of 49 actual students, but rather 49 fewer than projected students: “There was a lower enrollment than had been projected.”

Nelson then mentioned how he had gone back and looked at the 2001-02 audit, which was the first he had reviewed as a board member. Per his review, he said, he calculated that state funding has dropped from 56% of the total AAPS budget to its current 42%, without even adjusting for inflation. Nelson argued, “This reinforces the point that we do need to be politically active at the state level.”

Trustee Susan Baskett noted that her committee was very grateful to Hoover in terms of her diligent attempts to acquire the Smart Zone money owed to the district.

Fund Balance Discussion

Allen then connected the second quarter’s losses to the effect on the district’s fund equity – or “rainy day fund,” as he acknowledged it is sometimes called. Allen began by showing a slide from the 2008-09 audit that broke down the fund equity by use. The majority of the fund balance (62%) is used to manage cash flow, primarily in the eight weeks a year when the district does not receive state aid payments, but must still issue paychecks. The remainder is designated as follows: 15% is for compensated absences; 7% will be used to make up the 2009-10 budget shortfall due to mid-year state funding reduction; 5% is saved for risk management expenses; 1% is reserved for inventory, or other expenses that cross fiscal years; and 10% is undesignated.

Allen expressed concern about using fund equity – as has been suggested by some bargaining units – as a way of covering the projected 2010-11 shortfall. He displayed a slide showing the district’s fund balances over the past six years, from $27,568,571 in 2004-05, up to $31,145,180 in 2007-08, and down to $19,400,000 for this year. He pointed out that the fund balance is supposed to be used for unforeseen things, such as roof repair that was not part of regularly scheduled maintenance. He also pointed out, “this year, when funding was cut mid-year, we did not have to do mid-year layoffs like other districts.” Roberts asserted that having fund equity “buys us time,” and had given the district choices to be able to weather the tumultuous changes in state funding.

Trustee Christine Stead asked if the $19.4 million fund equity balance shown for 2009-10 was what the district has right now, or if it was what was projected for the end of the fourth quarter. Allen said he expected the district would end the year with the balance at that amount. Nelson asked whether or not the current 2009-10 budget reduction plan would indeed save the $2.6 million it was intended to save, and Allen said it may be a challenge. “We continue to monitor that … There is a possibility we may not get there by the end of the year.” [The expected opening balance for the fund equity in 2010-11, as noted earlier in the article, is $22 million, and assumes the intended $2.6 million savings.]

If the mid-year budget reduction plan does not save as much as anticipated, the remainder will need to be taken from fund equity to balance the budget, along with the $4.9 million already being withdrawn this year. Though it is board policy not to allow the fund equity to drop below 15% of the overall budget, Allen acknowledged, “This year, we are going to be below that.”

Baskett asked how the retirement incentive being considered by the Michigan legislature would affect compensated absences, and how the new federal health care plan’s provision to allow coverage to minors up to age 26 would affect the district’s health care costs. Allen answered first that the district currently covers dependents through age 25, so it would cost one more year of coverage for those young adults. He then confirmed that the district’s current fund equity would be sufficient to cover any pay-outs resulting from an increase in retirements, but projected that many retirements would be rescinded if the legislation to increase the retirement multiplier does not pass.

Stead added that the federal health care legislation, passed that week, phases in over time, and that the district should expect some major changes by 2014. She argued that AAPS needs to be “very conservative” when it comes to health care, and warned that health care plans may increase rates up to 45%.

Nelson asked for confirmation that approximately $16.7 million of fund equity had been needed to cover cash flow in 2008-09, a number he had calculated roughly by taking 62% of the total fund balance. Allen agreed with Nelson’s calculation, and pointed out that the lower the fund equity balance, the higher the percentage needed to cover cash flow, such as summer payroll.

Patalan asked what would happen if the district couldn’t make payroll due to a fund equity shortfall. Allen explained that the state maintains a low-interest bond fund, and allows districts to borrow against their future state appropriations at a favorable interest rate. But, as Nelson had pointed out earlier, “those interest payments are true costs.” And, Allen, added, if a district borrows money to make payroll, the state considers it “insolvent” and requires it to submit a deficit reduction plan, losing some local control. Nelson concurred, pointing out two “sister districts” to AAPS that had a negative fund balance at the end of 2009. Nelson warned: “Study Willow Run and Ypsilanti to see what happens when you start out the year with a negative fund balance.”

First Briefing: Policy Updates

All board policies are periodically reviewed in a five-year cycle, according to board bylaw #1520, named “Sunset Provisions.” The administration is charged with reviewing the policies, and presenting any suggested changes to the planning committee. After planning committee review, the policy updates are brought to the board for review and adoption. Before the board on Wednesday was the first briefing of policy updates for review by the full board. These updates will be considered for adoption at the April 14 board meeting.

Irene Patalan, chair of the board’s planning committee, presented minor changes to seven policies, in order to better reflect procedures already in place in the district, and asked the board for any feedback.

Susan Baskett suggested standardizing references throughout the policies that refer to the position currently held by Robert Allen. It is sometimes referred to as “deputy superintendent of operations,” and other places called the “chief financial officer.”

Simone Lightfoot asked if bullying falls under the “safety, injuries, and emergencies” policy under review, and Todd Roberts answered that there is a separate bullying and harassment policy in the district. Lightfoot asked that the district’s bullying and harassment policy be reviewed, in light of a recent lawsuit in another district resulting in a large payout by the schools. She argued, “We need to be sure our policy is as current as it needs to be to prevent a revenue hit.” Patalan answered that her committee had been charged only with reviewing policies which were on the verge of expiring, but that it would add the bullying and harassment policy to its list of policies to be examined, given Lightfoot’s concern.

Deb Mexicotte asked board secretary Amy Osinski to list each policy separately on the consent agenda for the next meeting, in case a trustee would like to remove a single policy from it, and Osinski agreed.

Special Briefing: Cell Tower Leases

A special briefing is an item that is new to the board, but that eschews the first and second briefing process. It allows the board to take action on an item immediately.

Randy Trent, AAPS executive director of physical properties, made a short presentation, asking the board to approve the installment of three wireless broadband antennas on existing cell towers or chimneys, one each at the AAPS transportation building, Skyline High School, and Slauson Middle School. He explained that the lease with Clearwire Inc., an internet-service provider, would be for 20 years, and would bring in an additional $45,000 of revenue each year of the agreement, and a one-time $45,000 fee for improvements to these three buildings. Trent pointed out that increased revenue by leasing cell towers was a potential revenue source identified and encouraged by the community during the budget forum process.

Baskett challenged Trent on a number of fronts. First, she asked whether Trent had invited local residents to discuss the new antennas, and he confirmed that while he had invited all residents within 300 feet, only one family had shown up. Baskett then disputed many aspects of the proposed leases: their duration, their cost, and the timing of their approval.

Trent defended his proposal, arguing that it was beneficial for the district to lock a company into a 20-year lease, as “cell phone towers are going away … the market is decreasing.” Regarding the payment, Trent pointed out that the district’s contract gives companies a price break if they install multiple towers; it costs $25,000 for one tower, $20,000 each for two, and $15,000 each for three installations. He said that AAPS works with the companies to increase the number of sites, and asserted that the district is “very well-priced for the market.” Lastly, in terms of the timing, Trent maintained that market competition was the driving force behind asking for a quick turnaround: “If it takes three months to get through process with us, but 12 months with others, they come to us.”

Mexicotte supported Trent’s professional judgment about “what these companies like about [AAPS],” but Lightfoot also expressed concern about both the length of the lease and its price. She suggested that using “we’ve always done it that way” as a rationale was questionable and that AAPS should try to get as much as it can without chasing away clients.

Baskett asked that the lease agreement be moved off the consent agenda, and discussion on the item continued. When pressed by Mexicotte about whether she had any further questions for Trent, Baskett answered that no, she did not want to belabor it, but that she “didn’t hear a satisfactory answer.”

Stead and Nelson each expressed support for Trent’s proposal. Stead pointed out that getting requests each year to reduce contract prices – as Trent had described happening – proved to her that securing a longer lease seemed “fairly astute” on the part of AAPS administration. Nelson added that “we have our administration so busy right now,” that it’s not the right time to ask them to do further market research.

Baskett closed by saying that she was bothered by the inconsistency in process, and that she “would have expected the staff to do a little more homework.” Essentially, she said, she was looking for a second briefing.

Outcome: Approved. Nelson, Mexicotte, Lightfoot, Patalan, and Stead voted yes. Baskett voted no.

AAPS Now “Schools of Choice” for Washtenaw County

Superintendent Todd Roberts reviewed the Schools of Choice resolution with the board. If approved, he said, it would open 170 AAPS seats to students from other WISD districts. Applications would be accepted beginning April 1, through April 30. Trustee Glenn Nelson asked why the budget proposal only listed 150 seats, and Roberts confirmed that administration was being conservative in case there is less interest than anticipated from out-of-district families.

Trustee Irene Patalan asked for confirmation that the Schools of Choice program as presented was only a one-year program. Jane Landefeld, director of student accounting, confirmed that was correct. If it doesn’t work out, the district does not have to offer the program again, but any students already admitted will be able to continue in AAPS until graduation.

Patalan also asked what the effect would be if the majority of the open seats get filled with special education students. Landefeld reiterated that the district cannot discriminate in any kind of way, and that all the seats being filled with high-needs students was “a chance that we take.”

Landefeld argued that, overall, the program would still be a financial benefit, even if some students who enter AAPS cost more to educate than the foundation allowance they bring with them. Glenn Nelson added that special education students would bring additional state and county funding with them, and only a fraction of the additional costs would be borne by the district’s general fund: “The finances work fine, if that’s the root of the question.”

Outcome: The Schools of Choice proposal was passed unanimously by trustees as part of a consent agenda that also included approvals of meeting minutes and gift offers.

Public Commentary

In addition to members of the Skyline High School robotics team, described below, nine additional speakers contributed to public commentary, all opposing the district’s consideration of privatizing custodial and maintenance workers, from different angles.

AAPS custodians hold signs outside the AAPS board meeting on Wednesday night.

Two of the speakers were parents – one expressed appreciation of her daughter’s bus driver for bringing order to the bus. She also gave the example of how private workers would put more wear and tear on the buses, since they would not be as invested in their maintenance. The other parent mentioned that he was invited to the meeting by his daughter’s custodian, pointing to that as an example of the community ties that would be broken by privatization. He pleaded with the board to reconsider giving up their control over who is coming into contact with his kids.

The remaining seven speakers were either union staff or workers from the district service areas being considered for privatization. Their comments fell into two main categories: the state of collective bargaining between AAPS and the local custodial and maintenance workers union, and reasons not to privatize.

Public Commentary:  AAPS & Custodial/Maintenance Collective Bargaining

Custodial/maintenance staff and union officials spoke up regarding the current contract negotiation process between AAPS and their bargaining unit. They made several claims: that the district was being unreasonable in not working with them on the issue of using furlough days to save money; that the district did not furnish documents they had requested, which hampered their ability to find the savings necessary to preserve their jobs; that the district was being obstructionist in terms of not allowing access to board members; and that the district had not formed a quality assurance committee when it should have. Still, the closing note of one speaker was positive: “Hopefully, we can iron this out and continue to have a good working relationship.”

Public Commentary: Reasons Not to Privatize

Multiple speakers mentioned the lack of accountability shown by the board to the public on the issue of privatization, one asking, “Why is the board not listening to the public?” Another speaker praised AAPS parents for their “forceful rejection of privatization,” and accused the board of “defy[ing] the will of those they are entitled to represent.” Still a third speaker echoed this concern, arguing that the district had woefully misrepresented the views of community members regarding privatization expressed at the community forums, and saying that administrators were “ignoring public sentiment.”

Some speakers made personal appeals, saying they just could not afford higher benefits co-pays, and that the cuts being considered by the board would “lead some workers into poverty.” Instead,  it was suggested that the administration look at ways to decrease management costs instead of workers’ salaries and benefits.

Multiple speakers also referenced safety issues with outsourcing custodial, maintenance, and transportation workers. One suggested that if the board outsources, “[it] will have more problems than [it's] currently experiencing.” Another suggested that the responses to the RFP’s question on litigation by the two companies with bids under review by AAPS were paltry at best, deceptive at worst. The general message was: “If you choose to outsource, you are choosing to risk the safety of all of our kids.”

Association Reports

The board receives regular reports from the Youth Senate, the Black Parents Student Support Group (BPSSG), the Ann Arbor Parent Advisory Committee on Special Education (AAPAC), the Parent-Teacher-Organization Council (PTOC), the Ann Arbor Administrators Association (AAAA), and the Ann Arbor Education Association (AAEA). The Youth Senate and BPSSG did not report at this meeting.

Ann Arbor Parent Advisory Committee Report

Maria Huffman reported for the AAPAC, describing the disability awareness workshops as being “in full swing.” These workshops are an opportunity, she said, for fourth graders throughout the district to develop “an empathetic understanding of physical, developmental, and learning disabilities … [as well as to] spread the message that disability is a natural part of the diversity of all communities.” She also pointed out that this year is the first time AAPS has not had to rent the equipment to do these workshops, and thanked Steve Swartz for his work in making the workshops a success.

Also, Huffman announced that AAPAC would be presenting a free workshop to parents, staff, and caregivers about assistive technology (AT), and how some students could benefit from having an AT plan. The meeting will be Wednesday, March 31, at 7 p.m. at the WISD.

PTO Council Report

Martine Perreault, chair of the PTOC, used her report as an opportunity to praise parent involvement in the district, and to issue a call to action for all parents to educate themselves about school funding and consider joining the PTOC. Currently, the PTOC has representatives from 73% of the district’s PTOs and PTSOs, but the goal is 100%, she said.

Perreault then updated the board on the work of the PTOC’s newly-formed advocacy committee. The committee, she said, has developed talking points and identified priority groups to receive basic presentations on school funding, including all school PTOs, and community mothers’ groups. Perreault urged parents to get involved, join the advocacy committee by contacting Donna Lasinski at 734-997-7265 or by e-mail at ptoc.a2advocacy@gmail.com, and/or contact their legislators about securing stable school funding.

Ann Arbor Administrators Association Report

The AAAA representative began her report by concurring with AAPAC that the disability awareness workshops were a truly amazing experience for students. She then spoke “with mixed emotions” about the upcoming budget cuts, saying that plan A and plan B differ substantially. She applauded her colleagues who have had difficult conversations with their staffs, acknowledged the “tireless work” of the central administration, and valued Todd Roberts’ leadership.

Ann Arbor Education Association Report

Brit Satchwell, president of the AAPS teachers union, began by saying he was pleased at the increased political activism coming from the PTOC and the board: “I’m very encouraged that we’re starting to talk about increasing revenue – you fish where the fish are.”

Before continuing with his prepared comments, which were quite positive, Satchwell said, he wanted to comment on some of the public commentary heard from fellow union members. He suggested that the district dig deeper into fund equity, and then lead a united front to Lansing to look for longer-term solutions. He disagreed with asking people who are already at the bottom of the pay scale to give up their retirements, resubmitting the idea of “going to the well beyond your comfort level,” and acknowledging that while some fund equity can’t be touched, some of it can. He also asserted that he would poll his members, asking them how low they’re willing to go on pay and benefits.

Satchwell then picked up his prepared comments, saying that the AAEA and AAPS collective bargaining process has made progress, but has been hampered somewhat by uncertainties at the state. He thanked Roberts for giving his members a preview of the proposed budget, and credited Robert Allen, as well as AAPS assistant superintendent for human resources and legal services, Dave Comsa, and AAEA’s executive director Paul Morrison as being “creative thinkers, fair bargainers, and enjoy[ing] each other’s trust.” He said the downsizing that was necessary could be done “without major disruptions or draconian measures” and encouraged the board to maintain its political leadership, and “lead us to Lansing.”

Board Committee Reports

The board has two standing committees, where many items on the board’s agenda get a first look – performance and planning. Each board member except for the president is assigned to one or the other – Susan Baskett, Glenn Nelson, and Randy Friedman sit on the performance committee, and Irene Patalan, Christine Stead, and Simone Lightfoot sit on the planning committee. In their reports, both committee chairs – Baskett and Patalan – mentioned welcoming a large number of high school students to each of their most recent meetings. The students were there as a part of a class assignment. All performance and planning committee meetings are open to the public.

Performance Committee Activities

Baskett reported that the performance committee had reviewed the second quarter financial report [which was presented to the full board at Wednesday's meeting], as well as a series of policies that were sent back to administration to amend in light of Race to the Top legislation. The committee, she said, is also looking at a variety of issues: the potential impact of becoming a School of Choice on the children of non-resident employees currently attending school in the district; questioning the role of board members as political advocates, both individually and as a unit; and “reimagining” AAPS alternative programs.

Planning Committee Activities

Patalan noted that, in addition to reviewing the policy updates, and cell tower lease agreements, both of which are described earlier in this article, the planning committee had a conversation about how the new term “college and career-ready” could be helpful to the district.

Items from the Board

Baskett called for increased community activism, and support of the AAPS Education Foundation campaign being launched soon. She suggested, “All these elected officials in primaries should be asked what they are doing to stabilize education funding … Let’s keep the pressure on.”

Lightfoot reported on a community meeting she had attended the night before hosted by the Ann Arbor Citizens for Responsible School Spending (A2CRSS), which The Chronicle also attended. Lightfoot described A2CRSS as “the folks on the opposite side of the millage.” Saying the room was full of “smart, passionate, and experienced people,” including many AAPS administrators, Lightfoot summarized the bulk of A2CRSS budget suggestions as “not as feasible [as other options].”

Lightfoot credited Allen and the instructional services administrators in attendance with doing a good job of explaining the district’s position – at one point, Allen had questioned whether A2CRSS was “comparing apples to apples.” Lightfoot said AAPS should continue to lead public discussion about the district’s budget. Lightfoot closed with “I can say ‘we’re transparent,’ but if we keep getting the same critique, we need to lead in this area.”

Awards and Accolades

A number of awards are typically presented at board meetings, and Wednesday’s meeting was no different.

Michigan Social Studies Award

Leon Pescador, a student at Clague Middle School, was at the meeting to accept an award for being named Middle School Student of the Year by the Michigan Council for Social Studies. A representative from MEEMIC insurance company was on hand to present Pescador with a $250 check for Clague, in addition to his award certificate. Pescador thanked his principal, teacher, and the other “people who run [his] school.”

Leon Pescador accepts his award as Middle School Student of the Year from the Michigan Council for Social Studies, and a $250 check for Clague Middle School.

Board members Baskett and Nelson asked Pescador about his social studies accomplishments. Pescador described the Social Studies Olympiad as, “like the Olympics, but for social studies and not as popular. You get to hear about people from the UP griping about the drive [to the competition].” With some prompting from his mentors, he also mentioned how he had crafted a map about current events in Zimbabwe, and a PowerPoint presentation about renewable energy in Michigan.

Skyline Robotics Team

Two students from the Skyline Robotics Team spoke during public commentary, announcing that they had won the Ann Arbor district competition and that they were hoping to win the Rookie All-Star award at the upcoming state competition. The students closed by soliciting sponsorship from local area businesses to support the team’s trip if they are invited to the national competition.

Later in the meeting, Baskett praised Robotics Team Day, which she attended, as wonderful and “hard to leave.” She echoed the team’s appeal for funding, saying that if everyone just gave a little bit, it would help them should they be chosen to continue competing.

Bands in Review & Choral Cavalcade

During items from the board, Nelson mentioned his recent attendance at the district’s “Bands in Review” performance, which brings together middle and high school bands, as well as the Choral Cavalcade North at Skyline. He pointed out the arts excellence in AAPS is impressive, and that it develops over time: “it does not happen in one year.”

Challenge Day

Nelson’s closing meeting comments also touched on Challenge Day, which he described as “really moving.” Nelson thanked those who support this day, which he described as “building a community of support and understanding for all of us in the room.” One of the things, Nelson said, that really hit him as a Challenge Day participant is that the recession is really affecting the district’s students on an emotional level, but that these students are receiving support from administration, teachers, and other students.

Superintendent’s Report

AAPS superintendent Todd Roberts began his report after midnight, noting the time but saying he would not defer his report, and that it was important to him to share the many good things going on in the district.

He went on to list many awards received by schools, as well as individual staff and students, many of which are detailed in his weekly “This Week” column on the district’s website.

Roberts mentioned that Ann Arbor’s selection as one of the top 10 college towns was due in part to the quality of public education here. He also praised students at Huron, Clague, Forsythe, Community, and Skyline for various accomplishments. He mentioned that Pioneer bands would soon be performing in China, and that a host of AAPS schools have achieved “emerald green” status through the Michigan Green Schools initiative.

The meeting was adjourned by president Deb Mexicotte.

Present: President Deb Mexicotte, vice president Irene Patalan, secretary Glenn Nelson, and trustees Susan Baskett, Simone Lightfoot, and Christine Stead. Also present as a non-voting member was Todd Roberts, AAPS superintendent.

Absent: Treasurer Randy Friedman.

Next Regular Meeting: April 14, 2010, 7 p.m., at the downtown Ann Arbor District Library’s fourth floor meeting room, 343 S. Fifth Ave. [confirm date]