We Have a 2011-2012 Budget

At a special meeting on Monday night, June 20, the Madison School Board adopted a preliminary budget for the 2011-2012 school year.

In March, we had received preliminary budget recommendations from the superintendent that I wrote about earlier.  The proposals were constructed around our anticipated spending limit based on the Governor’s budget bill recommendation.  The projected numbers called for a property tax levy of about $243 million, down from this year’s figure of about $245 million.

As I have also discussed, the Governor’s budget bill was amended so that school districts that last year had not imposed the highest allowable tax levy – like Madison – could carry forward their unused levy amount.  This works out to about $10 million in extra levy authority for our district.  This extra authority gives us more flexibility and explains why the motions we considered on Monday primarily called for additional spending.

Monday Night Motions

Here is a brief description of the ten motions we acted on during our Monday night meeting, along with the votes (with the Board members voting against the motion listed in parentheses).  You can find the motions here.   We concluded our meeting with the unanimous passage of a motion that approves and adopts our preliminary 2011-2012 MMSD budget, as amended throughout the meeting.

1. Family Engagement Coordinator. Creates a new position, Family Engagement Coordinator, with the responsibility to develop better strategies for engaging and working with our families in the elementary schools.  The emphasis will be on working with the families of our students of color.  The annual cost of $79,915 is expected to be paid out of carryover Title I funds.  Motion passed 7-0.

2. Maintenance.  Spends an additional $1 million on school maintenance needs, with the one-time funding to come from the school district’s fund balance.  I discuss this motion in some detail below.  The motion failed 3-4 (Howard, Passman, Silveira, Mathiak).

3. Director of African American Achievement.  Creates a new administrative position at an annual cost of up to $136,144.  I discuss this motion below.  Motion passed 6-1 (Hughes).

4. Raise the tax levy.  As noted above, since our property tax levy carryover authority was preserved in the state’s budget bill, we are not limited to the $243 million property tax levy that we had initially anticipated and that formed the basis for the superintendent’s balanced budget recommendations in March.  This motion increases the property tax levy from the lower amount so that it equals our property tax levy for this year, which is about $245 million.  This enables us to increase our spending by about $1.9 million.  The motion passed 6-1 (Mathiak).

5. Funding for Occupational Therapist Assistants.  As part of his balanced budget recommendation in March, the superintendent proposed laying off the district’s staff of Occupational Therapist Assistants (OTAs) and replacing them with a smaller number of Occupational Therapists.  This was expected to save the District $373,471 next year and similar amounts annually thereafter.  At an earlier meeting, the Board voted to reject this proposal and instead come up with the required $373,471 out of fund balance.  This motion raises the $373,471 from the tax levy (out of the additional $1.9 million in tax levy that we had just authorized) rather than take it out of fund balance.  The motion passed 7-0.

6. New TAG Positions.  As part of the District’s effort to come into compliance with our state obligations with respect to Talented and Gifted (TAG) programming, we are planning to hire additional TAG staff.  The new hires are projected to cost $602,631.  The Board had previously voted to proceed with this hiring.  This motion pays the cost out of our additional $1.9 million tax levy.  The motion passed 7-0.

7. Expansion of AVID.  Earmarks $144,325 of the new tax levy money for expansion of the AVID program to middle schools.  Next year the program will be piloted at Blackhawk and Toki Middle Schools, while all middle schools will receive an additional .25 allocation for planning the implementation of the program in the 2012-2013 school year.  The motion passed 5-2 (Howard, Mathiak)

8. Mental Health Proposal.  The administration has been working for several months on a plan to provide a tiered level of services for middle school students with mental health needs.  The plan has evolved toward eventually providing in each middle school a staffed “transition” classroom for students who would benefit from the option of a different setting for part of the school day, as well as an in-school “alternative” program for students with Emotional Behavioral Disability who demonstrate the need for higher levels of support.  The most recent iteration of the plan can be found here.  The motion dedicates $432,633 out of the $1.9 million increased tax levy toward piloting the program next year at Whitehorse Middle School. The motion contemplates that the Board will continue to discuss the substance of the plan at our meeting on June 27.  The motion passed 7-0.

9. Phoenix Program Expansion.   The Phoenix Program, new during the 2010-2011 school year, is designed as an alternative to expulsion.  Most students recommended for expulsion can agree instead to attend the Phoenix Program at the Doyle Building for about a semester.  They avoid expulsion if they successfully complete the program.  The initiative is currently understaffed.  The motion calls for $177,247 of the additional tax levy money to be spent on more staff, support, and transportation for the program.  The motion passed 7-0.

10. Maintenance Again.  Sets aside for maintenance needs the remainder from the $1.9 million in additional tax levy that hasn’t previously been spoken for, a total of $68,146.  The motion passed 7-0.

The View from the Loser’s Side

Here are some comments on the two motions from Monday night where I was on the losing side.

First, I was the only Board member to vote against the creation of a new administrator position titled Director of African American Achievement.

I certainly agree that, in general, we are not seeing anywhere near the level of academic success for our African-American students that we would like.

I also agree that we should be thinking hard about what we can do differently to improve matters.  I think the start of 4-year-old kindergarten should be beneficial.  (In 2011, the percentage of our youngest incoming students who tested as kindergarten ready included 78% of white students but only 31% of African American students.)

If we can bring more consistency to our curriculum we’ll be doing a favor for all our underperforming students, particularly those whose circumstances require them to switch schools. (African American students either moved between MMSD schools or from another district during the 2009-10 school year at a rate of 33.6 per 100 students.)  We’re working on it.  We’re in the process of identifying on a district-wide basis the sets of common skills that students should be learning each year in the core subject areas of math, English, science and social studies.  Once these academic standards are established, we’ll have to follow up by ensuring that those standards are in fact consistently taught in all our schools.  I am strongly in favor of this initiative.

I also support the portion of the school district’s strategic plan that calls for implementing culturally relevant teaching strategies, in particular addressing African American students, across the content areas to enhance all students’ achievement levels.  Pilot programs for research-based implementation of this goal are underway at Mendota, Falk and Lowell elementary schools.  We’ll see if these programs actually help our African American students learn more effectively.  If they do, we should expand the beneficial aspects of the program more widely throughout the district.

I don’t think we need a new administrative position.  In the last couple of years we went through a review of our administrative structure and tried to slim the administration down.  This is a step in the other direction.  It obligates us to a significant continuing outlay for salary and benefits for another position in the Doyle Building and doesn’t have any direct impact on any classroom.  The position does not fill a need identified by the administration.  Instead it seems to me that it was proposed more out of a sense that we ought to be doing something and this is something we can do.

Like any initiative that is adopted by the Board over my opposition, I hope I am proven wrong and the decision to establish a Director of African American Achievement ultimately turns out to be a good one.

I was also on the losing side of the one motion that failed on Monday night – to spend an additional $1 million on maintenance needs.  This one requires a little more explanation.

Our District policy (adopted this year) is to maintain a fund balance that currently works out to somewhere between $31 and $46.6 million.  We started the fiscal year with a balance of $40.5 million.  It looks like our revenues for this year will exceed our expenditures by somewhere between $5.8 and $6.6 million.  So, our projected year-end fund balance will be somewhere between $46.3 and $47.1 million, pushing the upper limit of our recommended range.

We constantly struggle with balancing the many needs of our schools against the limits of what we can tax and spend.  So an unanticipated surplus at year-end is unalloyed good news.  It provides us with extra funds to meet our pressing needs without the burden that raising taxes imposes on local property owners.

At the recommendation of our Assistant Superintendent for Business Services Erik Kass, we have decided to use $4.2 million of our fund balance to essentially pre-pay long-term debt that will come due over the next three years.  The state’s notorious school funding formula punishes school districts like Madison that exceed 90% of the state average of per-student spending.  So every extra dollar we spend results in a reduction in the state aid we receive.

We know that for 2011-2012 we will take a 10% cut in state aid, which for next year is the maximum any district can sustain.  Since we’re already maxed out on our state funding decrease for next year, we can suffer no greater harm as a result of increased spending this year.

This creates an incentive for us to accelerate into this year any spending that we know we’re on the hook for in future years.  So we’re taking $4.2 million from fund balance and spending it this year to fund an escrow account that will pay long-term debt obligations over the next three years, thereby immunizing those three years of payments from generating losses of state funding in those years.

Even accounting for this use of $4.2 million (which doesn’t really amount to new spending), we still have at least $1.6 million in this year’s surplus of at least $5.8 million to devote to one-time needs while still leaving our fund balance at the same healthy level as it was at the beginning of the year.

Arlene Silveira proposed a budget amendment to devote $1 million of fund balance to maintenance needs.

Here is what the amendment said:

Now that the maintenance referendum has expired, the amount of funding the district has available for maintenance in the proposed budget is dramatically lower than the amount spent on maintenance in the last 5 years.  As our schools get older, maintenance needs increase.  It is critical that we stay on top of our maintenance needs in order to ensure a welcoming, safe and nurturing learning environment for our students and staff.

Savings / Added Costs:

Recommendation to take $1,000,000 from fund balance to be used for maintenance needs for the 2011-2012 school year.

Impact:

Our fund balance is healthy right now and meets the criteria set forth by the Board in the new fund balance policy.  I believe the use of fund balance for maintenance is a good use of this money as the maintenance expenses are for one time expenses.  Therefore, we could use fund balance for maintenance needs and not set up a larger gap for 2012-13 and beyond.

I thought this was a sound proposal.  Here is what I wrote almost exactly a year ago in one of my first posts on this blog:

As a budget-reducing measure for the 2009-2010 school year, the Board voted not to spend about $3 million of the $5 million in spending authority that was approved in the 2005 maintenance referendum.  That money is not coming back.  The 2005  maintenance referendum has now expired.

Over the last couple of years (and perhaps longer, I don’t know) the district has budgeted about $4 million in maintenance spending each year out of the overall operating budget, apart from  the maintenance referendum funds.  This resulted in about $9 million available for maintenance each year.  (We are told that a recommended benchmark for maintenance funding is 2% of replacement cost.  For MMSD, this works out to about $15.5 million per year.)

We no longer have the $5 million in spending authority from the maintenance referendum and so we do not include that in the budget for 2010-2011.  Our initial same-service budget tabbed about $4.4 million in maintenance spending for 2010-2011.  One of the proposed Tier 2 cuts in next year’s budget was a reduction of about $436,000 from the maintenance budget.   The Board ended up approving a reduction of $332,496.

This leaves us with a maintenance budget of about $4.1 million for next year, less than half of what it has been for the past several years.

I was writing about our budget for 2010-2011, the fiscal year that is just coming to a close.  Our proposed budget for next year includes a lower amount for maintenance than this year’s.  So taking advantage of this year’s surplus to boost spending on maintenance by a million dollars next year certainly seems like a sound decision.  It is still not enough, but it gets us a bit closer to the $15 million or so that we probably should be spending  on maintenance each year.

Long story short, the motion to spend $1 million of fund balance on maintenance needs failed on a 3-4 vote.  I voted for it, as did Maya Cole and Beth Moss.  James Howard, Marge Passman, Arlene Silveira and Lucy Passman cast the four votes against it.

I’m not sure why the motion went down to defeat.  Some Board members seemed to feel uncertain about how much fund balance we had committed to other uses.  But there was no mystery about this – when all was said and done on Monday night, that total came to only about $215,000 for tools and supplies, other than the $4.2 million to pre-pay long-term debt expense.

There was also some talk to the effect that we do not have a list of maintenance projects to approve.  But no one ever requested such a list to be prepared.  Plus, to my mind, the Board isn’t really qualified to critique effectively whatever list of maintenance priorities Erik Kass and his team would develop.  I for one don’t feel like I’d be in any position to say, for example, no, we shouldn’t be fixing the roof at Hawthorne but instead should be repairing the HVAC at Franklin.  We don’t need a list in front of us to know that we should be spending more on maintenance.

This was a lost opportunity to make a prudent investment in our facilities for the betterment of the District.  It follows in an unfortunate tradition of our short-changing our maintenance needs – whether it’s leaving millions of dollars authorized by the 2005 Maintenance Referendum unspent or preferring to let millions sit unneeded in fund balance while our facilities decay.

* * * * *

I appreciate that there is a lot of information in this post.  If readers have any questions about what we did or (to the extent it can be explained) why, feel free to leave a comment and I’ll do my best to respond.

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4 Responses to We Have a 2011-2012 Budget

  1. Kristen says:

    Ed, thanks for taking the time to type up your notes. Regarding the $$ for maintenance, is the board aware that Erik is leading a “Facility Reinvestment Committee?” I’m on it, along with representatives from Durrant, McKinstry, the community and MMSD. We’ve only met once, but my impression is that there is a very long list of *critical* maintenance projects throughout the district. My understanding is that this committee will take on task of prioritization, meeting 2x a month throughout the summer and into the school year. After reading the March 2010 Facility Assessment Report from Durrant (easily available to all on the MMSD website,) I’m discouraged to see the vote against directing additional funds to our building needs. They clearly addressed, by individual school, the most urgent needs and provided a detailed list of what needs to be done.

    But I’m excited about the expansion of AVID. That is good news!

    • Thanks for mentioning the committee, Kristen, and for being willing to serve on it. I was thinking of adding a mention to the committee in my post but I figured it was already too long. The charge to the committee is “To provide advisory leadership and recommendations to address the district’s facility needs over the next 5 to 10 years. This will include both infrastructure needs as well as education and learning needs for our schools. The focus will be to help prioritize projects over this time period along with recommend ways to fund these projects.” We were told Monday night that the committee wouldn’t have its recommendations for at least several months.

  2. Eric says:

    Thanks for posting all of this! It’s great to get this sort of information about school board meetings. As a parent of two MMSD students.I always like to learn more about the board and the decisions it’s making.

  3. Ed

    I can’t find a preliminary budget anywhere. I can find a cost-to-continue, Supt Recommendations, Amendments…but no “preliminary budget.” Would it be the compilation of these? Does that satisfy statute 65:90 (http://legis.wisconsin.gov/statutes/Stat0065.pdf)?

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