APS FY14 Preliminary Budget – Summary of Findings & Recommendation – Let’s Get it DONE!

Over the course of the last month, we have looked in depth and analyzed the spending for every major function in APS and now the long slog through the “financial deconstruction” phase on the FY14 Preliminary Budget is complete. Digging deep into the details helps to gain “financial clarity” and the information leads us to the “right” financial decisions (but not always the easy ones). It is now time to come “up from the details” and summarize where we are:

  1. Revenues of $570.5 million, expenditures of $590.5 million and the use of $20 million of General Fund reserves.
  2. To get to the $590.5 million in expenditures, the Administration has proposed $20.4 million in cuts, the largest being no district wide bonus ($9.6 million), better Vacancy Management ($5.9 million), reduced cost of implementing a police force ($1 million), savings in Custodial staffing ($500k) and reduced energy cost ($500k).

In addition, based on the review of the FY14 Preliminary Budget, the following are my recommendation on where additional cuts should be made:

APS FY14 Summary of Cuts 052713

Implementing these cuts will not be easy, as it is never easy to do the same with less. However, it is the “right” thing to do. Why? The answer is simple – to reduce the “class size waiver” to a limit of three students over the State maximum, the cost is approximately $7.3 million. This reduction in class size would have a significant impact on Elementary and Middle Schools – where the problems are most acute.

And the “right” financial decision in this case is very straightforward – reallocate the $8.25 million to Direct Instruction and reduce the Elementary and Middle School “class size” to no more than a max of three district-wide.

As they say – no excuses – let’s get it DONE!

2 Responses to APS FY14 Preliminary Budget – Summary of Findings & Recommendation – Let’s Get it DONE!

  1. Tom says:

    Bob has been doing a great job of analyzing the budget, but this analysis ignores the issue of selling property to AIS to help fund the deficit. This is a short-sighted, one-time fix that does nothing to solve the overall finanical situation and in fact hurts APS’ financial status by basically giving away a valuable asset at below market rates. This analysis also ignores the ignores the huge spending increases in foreign language, fine arts and physical education. I don’t know exactly where this new spending is going (and I wonder if APS does), but this is not the time to increase spending. Better times are ahead, housing prices are on the rise, but APS won’t seen increased revenues until FY15. Let’s get the budget under control now, find out where all the money is going and then develop a responsible budget that does not depend on deficit funding.

    • Tom – Lots of good stuff here. A couple of thoughts on your comment. First, I am not a real estate expert and so have left the sale of property issue to others who are far more familiar with the specifics than I am. Your point is well taken and several Board members are in full agreement with your position. Second, on the apparant increased spending in Fine Arts, Foreign Language and Athletics – I had not updated the Blog on the issue, but all that has happened is that teachers in these disciplines were taken out of the Classroom Instruction Department budget and placed in either new or existing Departments to better track spending. There is no actual spending increase, just simply more precise tracking of costs for specific disciplines. I would hope that in the future, APS does more of this so that we could see better detail on where funding is going (i.e. Math and Science teachers, Elementary Schools, Middle Schools and High Schools, etc.). Third, I agree with you that the deficit spending has to stop, and unless something significant happens in FY14 on the revenue upside, the deficit spending has reached its limit. CFO Burbridge has indicated that the General Fund reserve should not fall below 6-8% of the General Fund expenditures as the cash flow commitments for the system will be placed at risk. The current budget, with its use of $20 million of the General Fund reserve takes it down to that level. As such, it is unlikely that General Fund reserves will be available to the system in future years without placing the financial condition of the system at risk. Finally, the reliance on “one time” revenues (E-rate, TAD, property sales, etc.) is a real problem, as sooner or later, these items will not be there. My sense is that this will be a major issue next year. Again, thanks for the comment.

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