The Budget Committee met yesterday to review the reallocations of expenditures that were proposed by the administration in its revised FY15 budget issued on March 24. Under questioning by the Budget Committee members and other Board members in attendance, the administration held firm in its assessment that the increase of $63 million in expenditures, or 10.6% increase over the estimated $595 million expenditures in FY14 was completely reasonable and represented a “status quo” budget.
The Committee members tried to explore alternatives, but in each instance the administration remained firm that the $658 million in requested expenditures were not only reasonable, but – other than specific parameters requested by the Board – simply held the line on spending. Additionally, during the discussion, at no time did the administration offer any single spending concession and, while the Committee appeared to be searching for alternatives, the administration repeatedly rebuffed the idea that there was any additional savings that could be found in the budget.
While certain Board members clearly wanted the administration to provide alternative spending scenarios, they did not specifically give the administration a set of parameters to work under – and the administration was not offering any. At this point, unless the Board presses harder, the budget will likely pass as presented.
And now for some highlights of the discussions during the Committee meeting (as reported at Talk-Up APS – see here).
On reallocation of resources from administrative functions to in the school-house:
Brown:… In our original conversations we laid out several things with the administration we wanted to achieve (no furloughs, earlier start of budget process, etc.), then we wanted to see in the budget pushing more and more resources to the school level and giving principals opportunities to have control of that. I don’t see that in this budget. Can you help me with that? I feel like that is the big goal.
Superintendent Davis: Some will not be apparent in the numbers. For instance principal advisory council is helping me design the recruiting process, that would not be reflected in numbers. The principals number 1 item was SST and we’ve moved $4M into SST. Principals are now a much more integral part of the hiring process.
Comment – The response from Davis is completely non-responsive and misleading. The question was a reallocation of resources from administration to the school-house. The SST teams were funded by reallocating resources from other direct instruction functions.
Brown: I understand many of these buckets actually support our schools, but I’m not seeing a move into our schools, into our students and those who do not visit this building.
Davis: Moving more things to regions and direct school support and out of this office, as Karen [Waldon] said there will be 60 people fewer here next year…
Comment – Davis’ answer is completely misleading. The staff reductions he refers to are positions that are funded by Special Revenues that are being cut as the programs are no longer being funded by outside resources (prep for Common Core, etc.). However, a review of the staffing for Central Office School Administration does not show a single position being cut from the General Fund spending budget. In fact, the staff for Central Office School Administration is increasing by one. And the cost for this group is up by $1.5 million or 11.1% over FY14.
On tying spending to outcomes:
Brown: … I will also say that over the next very short period of time, I need to see cause and effect between dollars and outcomes. I am very frustrated that we don’t seem able to track that in many areas of this budget. I think we need to make that a very early priority so that a year from now we won’t have to have this same conversation.
Davis: When you take the new SST positions, we will be able to track those kids – however how much is due to the new SST roles vs higher quality teaching. Perhaps we can point more the elimination of barriers. We are bringing a lot of different things to bear on that student in the classroom and hopefully they will do better.
Comment – What else can you say other than completely non-responsive.
On changes to the Operations budget:
Westmoreland: It was explained at some point in the budget process was that we were not going to fire custodians but we were not going to fill their jobs when a vacancy occurred. So no one is leaving?
Hoskins: About 80% of our custodial activity is provided by contractors. As our folks leave, we outsource those services. From a financial standpoint that has worked very well in the past for us.
Comment – A non-responsive response. The question posed and rephrased is, why is the number of custodians in the FY15 budget – 161 – the same number as in the FY14 budget if vacancies are not being replaced? Hoskins obviously did not answer the question. Even more troubling is the fact that, due to changes in the cost of Employee Benefits, the overall cost of the in-house custodians has increased by 21% over last year. Unfortunately, the administration is not making any proposals on how to contain this cost or to move more aggressively to reduce it by expanding the outsourcing of custodians.
I will also add that the changes made to the Operations budget is the classic example that the administration is unwilling to budge an inch on proposed spending. In the original budget presented a number of painters and electricians were cut to save money. In the revised budget, utilities costs were reduced by $1 million. This is the type of cost savings that should drop to the bottom line. But no, all of the positions previously cut were restored and the Operations proposed budget did not change by a dime.
Note – At this point the Talk-Up APS blog ends. The remaining quotes are based on my recording of the budget session.
On the value of $25 million to APS:
CFO Burbridge then discussed the value of $25 million to APS – which represents the proposed use of the General Fund balance. Burbridge presented a slide show of what $25 million represents in several categories – personnel, fine arts, control functions, operations, etc. – but with the underlying implication that cutting anyone of the categories was completely inappropriate. Burbridge summed up his presentation by saying,
I would encourage us not to go down the path of trying to get $25 million out of it.
Comment – This was a close as we got to the administration providing alternative spending scenarios. Given the unstated presumption that cutting these functions out of the organization wholesale did not make sense and the administration was certainly not proposing that this be done, why was it even presented?
I would add that the more appropriate context would be that $25 million represents 4.2% of last year’s budget and 3.8% of the current proposed budget. There is a big difference between cutting out complete functions and trimming back the spending proposal by 3.8% – which would still leave a 6.4% increase in spending over FY14.
On finding more expenditure reductions in the budget:
Esteves: Is the contention that we cannot further streamline some of these operations?
Burbridge: That is not the contention of the presentation… Our record shows that we continue to strive to find operational efficiencies.
Esteves: …without any direction from the administration, it is very hard for us to have a discussion on what needs to be cut.
English: I want to push back on that last part a bit – they have told us we have too many schools.
Esteves: The administration should be telling us [by department] how it could be streamlined, and if it can’t, that is fine. But as a Board member it is hard to have those conversations when the only discussion is on the number of schools. What else is there? I can look for stuff, but to me that is micromanaging than anything else.
English: We can also have a conversation on capping spending altogether…When I receive the budget …it is an “ask” and that they have justified the “ask” …We have to react to it, and if we disagree, then we need to have the conversation on how it should be changed.
Brown: …My personal goal here is to pass a budget that our new superintendent can tweak, to modify… We have the ability to amend at some point, but we have to put the basic bones in place…Is it a perfect budget – no. Does it give us the bones to get a great start on next year – I suppose so.
Esteves: …one of my concerns is that we are not giving the next superintendent much flexibility when we are saying “hey, you are going to have to take $25 million out of the savings account.”
English: I am hearing concerns from everyone, but at some point we have to move to what specifically do you want… So the question is, what do you want to do?
Esteves: I think there are good things in this budget … but I do not feel like there has been sufficient streamlining of general operations in the school system and I am very uncomfortable with that… I think we need to discuss making cuts or capping spending and then if the next superintendent wants to increase spending, we can have that discussion at a later time.
English: What would you propose we cut?
Meister: I don’t think that is a question for us. What we need to say is that – we want a 3% cut – they need to cut it….and responsibly cut it.
Burbridge: …Given what we have today, we are given you our best shot at what we believe we need to operate this district.
Burbridge then stated,
This budget is a status quo budget… Of the $63 million in new spending, $29 is going to charter schools, $15 million to pay raises, the elimination of furlough days – we are not growing this district. You have asked us to hold the line – this budget does that.
It is likely that the Commission will meet one more time on the morning of the monthly Board meeting on the 14th. It is likely that the budget – as presented – will be passed on to the full Board at that time.
The Committee then moved into Executive Session to discuss personnel matters.
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