APS – A Couple of Quotes for the Record

July 13, 2012

During the Board of Education discussion regarding the approval of the Drew Charter High School this past Monday night, there were a couple of very interesting points made. While I do not have exact quotes, I will paraphrase them as follows:

Board Member – Courtney English: “Each time I think of APS, I think of two numbers – 50% and 4,700. The 50% represents the number of students who enroll in 9th grade in APS and then subsequently drop out. The 4,700 is the number of APS students who leave our system each year. As a system we are failing large numbers of students and it is not getting better. When this is the case, why are we looking to limit the number of students that might attend Drew which is performing at levels far superior to APS? The right question to ask is – how many more student will they take?  This is what we need to ask if our priority is to educate the students in Atlanta.”

Bravo Mr. English! Well said – and BTW, the Administration was not able to give a reasonable and relevant response to the question posed.

Superintendent Davis: “There is no question that as a system, we have not worked well with the Charter Schools in our district. We have not supported them as well as we should and we have not learned from their strengths and their accomplishments.”

I will not go into a discussion on either of the quotes above, but wanted to place them on the record for the time being. However, I will come back to both of them in future posts.

APS – Beverly Hall’s Legacy – Four Disasters – 1 Down – 3 to Go

July 12, 2012

Recently, Superintendent Davis issued his monthly letter in which he indicates APS is nearing an end to removing those involved in the CRTC cheating scandal. He states quite forcefully that:

 “If they are culpable, it is vitally important for these individuals to be off the district payroll and out of APS once and for all. […] My effort from here will be to continue to drive this [ethical behavior] culture change throughout the organization.”

Excellent! It will be good for all when this scandal is finished – and Dr. Davis’ efforts have had a significant impact in putting this behind us.

But the cheating scandal is only one of four disasters created and advanced by Dr. Hall. Her legacy (and any Board of Education members that approved of it) also includes the following disasters that flourish to this day:

  1. In FY06-07 she started a building spree and over $100 million was spent for three new high schools that opened in FY08 and FY09. At the time the new high schools were planned, there was already 15% excess capacity in the high school system – when the new high schools were complete the excess capacity skyrocketed to 35%. APS is still struggling with the issue today and appears to have few, if any, answers to correct the problem. So in addition to the $100 million plus for new buildings that were not needed, every year millions more are spent on maintaining the excess capacity.
  2. In FY08 she started on a “reform program” kick and spent over $40 million on staff and consultants to implement the “reforms”. And what were the results of the millions spent? Take a look at the Report Card prepared each year by APS – if you find any improvements, please let all of us know because I certainly can’t find any. Credit is due to Dr. Davis for winding these reform programs down and quickly. However, the costs of the programs are still with us. As I noted in earlier posts – as the new “one time” costs associated with the reform programs were wound down, instead of being eliminated from spending, they were simply transferred to the School Administration Division budget. So over the course of five years, the number of “administrators” increased dramatically – and at a cost of over $60 million. And this cost lives on today at approximately $12 million per year for extra administrators – a cost that was readily approved by Dr. Davis and the Board of Education – and with no end in sight.
  3. As the spending spree began for buildings and for “reform programs”, clearly it was necessary to add a lot of additional General Administration positions to manage it all. And so they did. In FY07, spending on General Administration was approximately $49 million. By FY10 it had increased to $76 million – a 56% increase in just two years. Since then, General Administration spending has decreased; however, the FY13 Budget of $57.1 million still represents an $8.2 million (nearly 17%) increase over what was being spent in FY07. Again, remember the context – enrollment is down, spending per student for direct instruction is down and teaching positions are down – but the number of General Administrators and corresponding spending is way up. When is the reality of a downsized system going to affect General Administrators? So far, there is no answer.

So we have four disasters created by Beverly Hall and, as I noted above, Superintendent Davis has vigorously addressed one of them. When will the Board of Education and the Superintendent address the next three? If the FY13 Budget is any indication of their intent, the problems certainly will not be addressed in this coming year.

Ethical conduct is absolutely critical and we would expect ethical people to make competent decisions in favor of their primary mission of educating students. I would suggest that the spending splurge that focuses dollars on buildings and administrators instead of on direct student education is neither a competent or an ethical decision. What do you think?

APS – Drew High School Charter Approved!

July 9, 2012

Tonight the APS Board of Education unanimously approved the granting of the Drew Charter High School for up to 600 students. In addition, the Board, on a 6-3 vote, approved the expansion of the K-8 school which can now add an additional 400 (approximate) students. All the details are in an article by Paul Peralte at EastAtlanta.Patch.

Congratulations to the parents, teachers and administrators at Drew. Their tireless efforts on behalf of their students and the community they serve has earned them a well deserved opportunity to expand on their undisputed success to-date. Well done!

APS – One Final Post on Behalf of Drew Charter High School

July 8, 2012

The main plank of the resolution before the Board to deny the Drew Charter High School is based on an often quoted number – 6,200 seat over-capacity in the high schools. In prior posts, I have questioned the relevancy of this number to the issue.  Why? If it is appropriate to use the entire high school over-capacity issue in the Drew case, then it certainly should have been relevant when the decision was made to build the new North Atlanta High School. But you say that is ridiculous – North Atlanta is overcrowded and had to have more space. And you would be right in saying so – the 6,200 is absolutely irrelevant to the North Atlanta High School decision. The decision had to be made based on the number of seats available in the local area. And for the same reason, the 6,200 number has no place in the Drew decision – it is simply irrelevant misdirection and not germane to the decision at hand.

What is relevant is that Jackson High School has a capacity of 1508 and a current enrollment of approximately 900 or 59% of capacity. When the argument is framed with the right numbers, then a whole new set of questions arise that no one seems to have addressed. Even if the Drew charter is denied, where are the additional 600 students coming from to fill up Jackson? My sense is that you hear the same crickets chirping that I do.  Clearly, denying the Drew the additional charter will do nothing to fill up seats at Jackson. But if Drew is granted the charter, will it increase the over-capacity problem at Jackson? The answer to this question is entirely in the hands of the APS Administration. Either they rise to the occasion and provide the best alternative offering or they retain oversight over a competitor that is more capable of delivering what the parents and students want.

If Jackson is better, then parents will gravitate there – if not, parents will go to the better alternative. So who wins if the charter is granted? In any reasonable outcome, the students and parents win as they will have additional choices and improved educational outcomes at either location. In addition, APS also wins by granting the charter. How? Either APS takes the steps required to improve its offering at Jackson (making the students winners as well) or APS becomes more cost efficient as it uses Drew as a proxy to deliver a high quality education to students in the Drew/Jackson area.

The 6,200 number is irrelevant and should be ignored and the focus should be on what are the best outcomes for all constituents. And when the relevant issues and questions are addressed, it is clear that the granting of the charter to Drew for a new high school is a win-win for students, parents, educators and the taxpayers!

APS – Funding for Charter Schools Cut Back Severely – The Reasons Given Are BS!

July 7, 2012

The AJC article “Budget cut, charter school to close” announced that:

“Atlanta Tech High will shut down after an eight-year run, citing budget cuts by Atlanta Public Schools. Those cuts could cause hardship for other Atlanta charters, and may lead to lawsuits because of a controversy over pension debt.

The school system informed Tech High May 31 that it would be taking $360,000 [a 16% cut] out of its budget […] the cut was due largely to an APS decision to pay more into the teacher pension fund to cover past liabilities.

APS spokesman Keith Bromery confirmed that pension liabilities caused some of the shortfall but said two-thirds of the cutback was due to an unexpected drop in property tax revenue. He noted that regular Atlanta schools are enduring the same cutbacks.”

The article also notes that the student performance is poor – and if this is the case, then by all means shut it down. [Update: a highly knowledgeable commenter notes – “Their graduation rates have averaged the mid-ninety percent consistently. APS grad rates come nowhere near.”]

However, what strikes me is the hostility that is now openly being shown by APS towards the Charter Schools is simply stunning – and the reasons provided are pure BS. Let’s look at the statements made by the APS spokesperson:

  1. Caused by Lower Property Taxes – “two-thirds of the cutback [to Atlanta Tech High] was due to an unexpected drop in property tax revenue” – What cave has this spokesperson been living in? Property taxes are projected to drop 7.4% in FY13 as compared to FY12 – and this has been common knowledge since at least April of this year. Unexpected? Hardly. Two-thirds? BS!
  2. APS Has to Cut Expenses – “Regular Atlanta schools are enduring the same cutbacks” – this is incredible miss-direction! Total revenues from Local and State sources for APS are only down 1.7% as compared to FY12. And yes, APS has to cut expenses – not because its revenues are down – but because it refused to rein in spending in prior years and has been operating with significant budget deficits. The $360,000 decrease in funding for the Charter School is comparable to an $87 million reduction in APS funding. Apples and oranges – or let’s just make up stuff on the fly that sounds good.
  3. “Pension Liabilities Caused Some of the Shortfall” – Some or most? Given that their earlier statements related to revenue and expenses are flat-out wrong or misleading – my sense is the statement is provably false. And to top it off, it now appears that APS is going forward with charging the Charter Schools with the cost of the underfunded pensions. This is a complex issue, but suffice it to say that APS incurred over a $500 million liability as the result of prior Administrations not funding the pensions properly. Since FY06, the annual cost to correct this has been $36-43 million per year – a cost that will continue until 2025. How is this related to the funding of the current Charter Schools? It is not – but it serves as a convenient mechanism to try to kill them off!

In a prior post I noted that APS would fight tooth and nail to preserve its monopoly position – it is now clear that they have taken off the gloves and the naked hostility is on display for all to see.

APS – School Administrators – How Many is Too Many? 135 Too Many!

July 5, 2012

Just before the FY13 Budget was approved by the Board of Education, I sent a brief note to them suggesting that 20-25 positions in the School Administration Department should be cut (Note: School Administration is separate and distinct from APS General Administration). After further analysis of the departments run by the Deputy Superintendent for Instruction – I now know I was way off base!

But before I update the analysis, here is some important context. Since FY09, school enrollment is down 4.6%; the number of teaching positions is down by 397 or 12.0% and the number of schools (as measured by the number of Principals) is down by eight or 8.3%.

In the face of a decline in all the key factors that would establish the baseline for the number of school administrators needed – the following is what we see:

  1. The FY13 Budget includes 542 School Administration positions – up 74 from FY07 or 15.7%.
  2. In FY13, the cost per student for school administrators is $1,033 – up from $764 per student in FY09. That is a $269 per student increase or 35.5%.
  3. In FY07 there was one school administrator for every 7.3 teachers – today that ratio is down to one school administrator for every 5.5 teachers.

And the higher cost of an ever increasingly bloated School Administration Department has been huge. If we simply used the cost per student incurred in FY09 as a baseline, the excess costs spent on school administrators since then amounts to nearly $60 million!

The problem is obvious – too many school administrators in a system that has been downsizing over the last 5 years. But how many is too many? It took a bit of digging, but it appears the school administrator positions started to explode in FY08-09 timeframe. So let’s use FY07 as a baseline to establish how many administrators are needed for the size of the current school system. As noted above, in FY07 there was one administrator for every 7.3 teachers. If the same ratio were applied to the system today, the number of administrators needed would be around 400 – not 534.

So as I noted earlier – I was wrong in my preliminary assessment that 20-25 positions needed to be eliminated from this Department – in fact the number is 130-135! Given the average compensation and benefits for this group, the annual savings would be in the $12-13 million per year range – which would make a huge dent in the projected FY13 deficit.

The questions that APS has to answer are clear. How has the explosion of school administrators improved educational outcomes? Who has benefited from the increase? What improvements were achieved? Unfortunately, no answers are forthcoming – just hazy statements about “good intentions” versus concrete results.

It is now time to make the tough decisions and to bring the School Administration department back into line with the reality of a shrinking system.

Note: In a subsequent post, I will analyze the process that got us to where we are now – and it is not pretty.

APS – FY13 Budget Cushions – How Big Are the Built In Contingencies?

July 3, 2012

It is common – and fiscally prudent – to build in cushions in a budget to cover the cost of unexpected expenditures that often arise during the year. The question is always how much cushion has been built in and for what purposes will any excess cushion be used. As I reviewed the detailed FY13 Budget, it is possible that there is as much as a $20.5 million cushion that is currently built in – which exceeds the projected FY13 Budget deficit of $15.3 million. The following table presents the estimated cushions:

  1. Employee Benefits – as noted during the review of the FY13 Proposed Budget, the Employee Benefits were inconsistent and were subsequently revised in the Approved Budget. However, the percentage applied to Salaries for Employee Benefits of 27.1% is above the historical average by 2.2% – resulting in a likely budget cushion of $6.9 million.
  2. State Unemployment Reserve – as a result of the layoffs, APS may have to increase its payments to the State for Unemployment Benefits. The amount budgeted in FY13 is $6.0 million, or $4.0 million higher than the historical amount. However, the actual amount that will have to be paid to the State is dependent on how many employees are actually laid off versus reduction due to attrition.
  3. Early Intervention Program – as noted in a prior post, there is a problem with the budget for this program. Either the Salaries are too high; the employees are to low; or a combination of both. For this analysis, I am estimating that the error is approximately 50% of the calculated amount, or $5.3 million.
  4. Special Revenue Fund Transfers – the FY13 Budget includes a transfer of expenditures from the Special Revenue Fund of $1.5 million that is related to the administration of the district Charter Schools. The annual audit report does not include fund transfers with General Fund expenditures and so the amount likely represents an overstatement of expenditures.
  5. Reserves for Capital Projects – prior to approving the FY13 Budget, the budgets for the CFO, CIO and Operations were increased by a total of $5.0 million for potential capital improvements. However, there were no details provided regarding how these funds would be used. If in fact they are for Capital Projects, then similar to the above, the amounts will be treated as a fund transfer.
  6. Textbooks – as noted in a prior post, the Textbooks is likely under-budgeted and therefore offsets the other potential cushions.

Over the course of the next year, I will be monitoring these accounts closely to determine if they represent budget cushions and, if so, then how the funds are used. My hope is that any cushion are used to reduce the deficit.

%d bloggers like this: