Deputy Superintendent of Operations Robert Allen presents a financial update to the Board of Education in this 2012 file photo. On Wednesday, Allen explained how the district became over-budget by $2.5 million for the 2012-13 academic year.
Danielle Arndt | AnnArbor.com
As a result of district officials missing the mark on their staffing projections, combined with a change in Gov. Rick Snyder’s “best practice” funding, the Ann Arbor Public Schools is $2.5 million over its budget for the 2012-13 academic year.
Outgoing Deputy Superintendent of Operations Robert Allen and Director of Finance Nancy Hoover presented Wednesday the district’s second quarter financial report to Board of Education members, who were beyond concerned by the news.
Board Secretary Andy Thomas highlighted that the district projected an increase in student enrollment for the current school year, but ended up about breaking even.
“But then we somehow missed our budget in FTEs in the opposite direction and we don’t learn about this until the end of February?” he said. “To me this is unacceptable. This is one of the reasons we’re in the financial pickle we’re in. We need to do a better job of managing our expenses and managing our FTEs, and matching the number of FTEs with the number of students we have.”
Vice President Christine Stead also expressed her disappointment, as well as her concern for the district’s fund balance, or primary savings account, which again will need to be dipped into to remedy the current-year budget situation.
“We’ve got to turn the ship around,” she said. “We can’t afford to have $2.5-million misses every quarter.”
When the board passed its nearly $188.5 million budget in June of 2012, trustees approved using $6.04 million from the district’s $18.73 million fund balance. Another $2.5 million dip would bring the savings account to approximately $10.19 million headed into the budget cycle for the 2013-14 academic year, for which school officials already will need to cut $17 million to $20 million to balance the budget.
The additional 24 teacher assistants and five teachers account for about $1.4 million of the district’s current-year budget shortfall. Allen said eight of the teacher assistants were for classroom “overages.”
In the current collective bargaining agreement AAPS has with the teachers union, there is a stipulation that if the target class size for a particular grade is exceeded, that classroom teacher is eligible for either a teacher assistant or extra pay.
By contract, teachers are entitled to one or the other if the district goes above the targets, Allen said. In the past, most teachers have opted for the payout. But this year, Allen said more teachers than expected requested a classroom assistant.
The remaining extra teachers and teacher assistants were necessary by law to accommodate the district’s special education programs, based on the number of special needs’ Individualized Education Plans (IEPs) the district has this year, Allen said.
Thomas was still puzzled. He said with enrollment for 2012 about equal to 2011, he couldn’t imagine that many more special education students, so the only major change the district could have experienced would have been a shifting of student populations from one school to another.
“If a class size at one school has gone up, it would seem a class size at another school has gone down. It bothers me we would underestimate our staffing needs by that much,” he said, adding a couple extra teachers or assistants would be understandable, “but 20-some? I don’t get it.”
Allen explained an increase of two or three students in a grade at one school may be enough to push a classroom over its target, but it may not be enough to warrant eliminating a teacher at another school in the same grade.
In the district’s 2012-13 budget, school officials projected AAPS would receive $2.6 million from the state for meeting Snyder’s best practice criteria. However, the district now is expected to receive just $860,000.
Board Treasurer Glenn Nelson said he is less bothered by major changes to the projected revenue side of the budget than the expenditures side.
The district can’t control changes to state legislation, but expenditures — “that’s what we can control,” he said.
He added school officials missed their staffing projections last year as well, resulting in the budget being off about $3.5 million.
“Thinking about both last year and this year, what is the explanation for us going over what we budgeted?” Nelson asked.
Allen said in the past, district officials built in more cushions in terms of their projections. He said they’ve tightened up the budget so much to try to minimize the impact of yearly cuts that he believes there actually is less room in the budget now.
He also said the number of IEPs was higher than officials anticipated, so they will do a more detailed review of the number of special education students and historical trends for next year’s budget.
Danielle Arndt covers K-12 education for AnnArbor.com. Follow her on Twitter @DanielleArndt or email her at daniellearndt@annarbor.com.