Ann Arbor Public SchoolsAnn Arbor Public Schools Budget Update Budget Update

Ann Arbor Public SchoolsAnn Arbor Public Schools Budget Update Budget Update

March 21, 2011March 21, 2011

TonightTonight’’s Agendas Agenda

I. Welcome and Introduction

II. Overview of the 2010-11 AAPS BudgetIII. Presentation of Governor’s Proposed

Funding for K-12 and the Impact on the AAPS Budget for 2011-12

IV. Information on May 3, 2011 SpecialEducation Millage

V. Questions & Discussion

Overview of 2010-11 Overview of 2010-11 AAPS BudgetAAPS Budget

Specific Fund UseSpecific Fund Use• General Fund – Used for general operating expenditures of the

school district such as salaries and benefits, utilities, supplies, equipment etc.

• Grant Funds - Restricted by the grantor, i.e Title I, IDEA , Career & Tech Ed., etc.

• Bond Funds – Restricted by the voters to fund capital projects such as building construction, technology, bus purchases, etc.

• Debt Service – Restricted by law to fund debt service for bonds.

• Sinking Fund – Restricted by state law to fund capital projects including land acquisition and remodeling, and repairing of current facilities by contracted sources.

• Special Revenue Funds – Restricted for specific purposes such as Food Service and Rec & Ed.

Analysis of Operating Budget Analysis of Operating Budget Fiscal Year 10-11Fiscal Year 10-11

• Basic & Added Instructional Needs $102,817,739 56.48

• Adult Education 68,492 .04• Student Support Services 42,372,937 23.27• Executive Administration 1,594,487 0.88• Central Administration 5,764,377 3.17• Operations & Maintenance 18,052,380 9.92• Business Services 2,149,503 1.18• Transportation 6,044,285 3.32• Community Services 663,802 0.36• Outgoing Transfers 2,529,508 1.39

Total $182,057,710100.00%

Expenditures as Percentage of Total Expenditures as Percentage of Total Budget FY 2010-11Budget FY 2010-11

WhatWhat’’s Included?s Included?

Instruction & Support

• Teachers• Teacher Assistants• Technical Assistants • Coordinators• Building Administration• Building Secretaries

Administration & Support

• Central Administration• Directors/Supervisors• Administrative Support

(Executive Secretaries)• Custodial/Maintenance• Transportation

DefinitionsDefinitions

Foundation Allowance: A funding formula providing for a per pupil distribution of

State Aid based on the district’s previous combined state and local revenue, the growth in the State’s School Aid Fund and legislative action. Since determined in 1994, growth can only occur by legislative action.

Blended Membership Count: The actual number of pupil membership (converted to

full-time equivalent) for the February and September counts. A 25% to 75% blend respectively of these counts determines the number of pupils eligible for Foundation Allowance Funding.

State

Homestead

Non-Homestead FY 2010/11 Per Pupil Allocation

18.00 mills $3,432 Local Non-Homestead Commercial, Industrial, Rental, and Seasonal Homes (Variable) $4,824 State Contribution (Variable)

$ 0 State Contribution -20J Hold Harmless

$8,256 Foundation Allowance (Base)

$1,234 Hold Harmless (fixed)

Revenue Sources:Sales, Income, Use, Cigarette, Liquor, Excise Taxes, Lottery, etc.

6 mills (fixed)

4. 5344 mills (variable)

Valuation $3.00 Billion

Valuation $4.45 Billion

Building a Foundation AllowanceBuilding a Foundation Allowance

6 mills

(fixed)

$9,490 Foundation Allowance (per-pupil funding)

Funding ReductionFunding Reduction

• 2009/10$233 Per Pupil cut in 20j Funding

• 2010/2011$0 Increase in Foundation Allowance

• 2011/2012$454 Decrease in Foundation Allowance

Funding Allocation Since Proposal AFunding Allocation Since Proposal A

Projected

Impact of GovernorImpact of Governor’’s s Proposal on 2011-2012 Proposal on 2011-2012

AAPS BudgetAAPS Budget

Projected surplus:

2011-12: $631 million

2012-13: almost $1.07 billion

State Revenue Projections forState Revenue Projections forSchool Aid FundSchool Aid Fund

Revenues driven by two major Factors:

Student population (blended count)

State revenues (dependent on state economy)

Revenue ProjectionsRevenue Projections

Stable enrollment

Foundation allowance decrease by $300/pupil

Other local funding to remain flat (i.e., Interest Income, Tower Rentals, Universal Service Fund (USF), Parking Project

Assumptions Used for Revenue Assumptions Used for Revenue ProjectionsProjections

Key Components: Incremental Budget Increases

(Step, FICA, Retirement)

Fringe Increases(Health, Life, Dental, etc.)

State Retirement RateContract NegotiationsOther

(Legal, Liability Insurance, Utilities, etc)

Expenditure ProjectionsExpenditure Projections

Annual expenditure increase of 8% over the next three years for health benefits

Retirement rate will increase from 20.66% to 24.46% for FY 11/12

Retirement rate will increase to 27.37% for FY 12/13 and to 28.87% for FY 13/14

Assumptions Used forAssumptions Used forExpenditure ProjectionsExpenditure Projections

Current2011-12 2012-13 2013-14 2014-15

Blended Count: 16,532 16,532 16,532 16,532

TOTAL REVENUE (in millions) $188.03 $180.05 $177.51 $179.54

EXPENDITURES:        

Basic Expenditures $183.07 $186.41 $195.16 $201.78

Salary Differential/vacancy Savings   $0.00 0.00 0.00 

Step, FICA, Retirement, Fringes $1.72 $1.76 $1.77

Fringe Increase   $1.57 $1.69 $1.83

Retirement Rate Adjustment $1.33 $4.09 $3.17 $1.65

Utilities Increase $0.00 $0.00 $0. 00

Skyline High School $0.00 $0.00 $0.00

AAEA negotiations settlement $0.00 $0.00 $0.00

Other Barg. Units (settled contracts) $0.00 $0.00 $0.00

WAY, ECA, IB Programs $1.37 $0.00 $0.00

Sub-Total   $191.02 $191.07 $196.14

Budget Reduction Plan   $0.00 $0.00 $0.00

TOTAL EXPENDITURES $185.30 $195.13 $201.78 $207.03

Balance/ Deficit $2.64 ($15.11) ($24.27)

($27.49)

Fund Equity - Beginning Balance $16.96 $19.60 $4.49 ($19.78)

Fund Equity - Ending Balance (Est.) @ $19.60 $4.49 ($19.78) ($47.27)

Three-Year Budget ProjectionThree-Year Budget ProjectionPROJECTED

Important Budget IssuesImportant Budget Issues

AAPS cut $18.6 million from the FY 2010/2011 expenditure budget

AAPS is projecting a $15 million deficit for FY 2011/2012

The $15 million deficit assumes passage of the countywide Special Ed. Millage renewal on May 3, 2011

If the millage fails, AAPS stands to lose an additional $6 million

Budgeted Expenditure ReductionBudgeted Expenditure Reduction& Fund Equity Usage& Fund Equity Usage

Budgeted Expenditure ReductionBudgeted Expenditure Reduction2006-20112006-2011

Possible Means to Address/Manage Deficit

Lobby the State for Change in the Way Schools are Funded

• Increase local control over school funding• Changes to the funding of retirement costs

Focus on Increasing Student Enrollment• 100 new students equals $966,700 in additional revenue• Approximately 1,274 K-12 students live in AAPS district

and attend charter schools and other public schools within the county

Where do we go from here?Where do we go from here?

Continue to Focus on Consolidation and Collaboration With:

• Local Universities• WISD• Other area ISD’s• Other local school districts

Private Giving• Seek private funding (donations and grants) for programs• Work of PTO’s, Booster Clubs, Ann Arbor Educational

Foundation…

Continue to Make Reductions

Where do we go from here?Where do we go from here?

Special Education Millage Renewal

Vote May 3, 2011

25

Student Intervention & Support Services

In the AAPS, Special Education Services is provided through Student Intervention & Support Services (SISS)

Our Mission Statement:Our mission is to ensure that every special needs student has access to, and progresses in, the general education curriculum. Each student with special needs will be provided appropriate supports, interventions and strategies to afford s/he an opportunity to receive the highest quality education in the least restrictive environment.

Special Education Millage RenewalRenewal of 0.985 mill for seven years for special education will help maintain programs for ALL children in Washtenaw County public schools by reducing support for special education from the general fund.

Who Receives Special Education Services?

On average, 1 in 7 students, or 3 in a classroom of 24, receive some form of special education services.

This year in the AAPS, 2,093 students are receiving special education services (total AAPS students enrolled: 16,569)

The table on the next slide provides a list of the disability categories for our students and the number of students that comprise each category

Who Receives Special Education Services?

Disability # of Students

Specific Learning Disability 602

Emotionally Impaired 124

Cognitive Impaired 67

Severe Multiple Impaired 26

Autism Spectrum Disorder 241

Visually Impaired 11

Hearing Impaired 22

Physical Impairment 25

Early Childhood Developmentally Delayed 96

Otherwise Health Impaired 324

Speech & Language Impaired 548

Traumatic Brain Injury 7

Total 2,093

AAPS Special Education Trends

Moving average trend line

AAPS Special Education Trends

Moving average trend line

Autistic Spectrum Disorder is a type of disorder that has been increasing nationally. We anticipate that this type of need will only increase in the foreseeable future. The costs for ASD students are higher than some other categories.

Special Education Cost Category Costs

Special Education Instruction $15,737,263

Support Services $16,495,268

Indirect Cost & Capital Outlay $3,381,193

Transportation $1,508,051

Services Supported by Federal IDEIA Grant $2,424,438

Total $39,546,213

Special Education Costs FY2010

Special Education Services is comprised of several different cost categories. Last year, the total cost of these services was almost $40M.

WISD Special Ed Funding to AAPS

Ann Arbor $5,767,020

Chelsea $752,360

Dexter $790,300

Lincoln Consolidated $1,464,120

Manchester $281,540

Milan $403,480

Saline $1,349,460

Whitmore Lake $296,100

Willow Run $542,640

9 Public School Academies $189,980

Total $14,000,000

Estimated disbursement to local school districts based on 09/10 reimbursable costs at renewed millage rate of 0.985:

Millage Impact to AAPS

Since this millage is a renewal (of 0.985 mills) and there have been declining property values, the revenues from the renewal will not cover costs:

Vote on May 3

Passe

s

Fails

$(942,000)

$(6,710,000)

Even if the millage passes, the general fund will have to contribute about $1M for special education in AAPS, requiring cuts in other parts of the general fund budget.

If the millage fails, AAPS will have to use an additional $5.8M from its general operating fund for special education, in addition to the $1M noted above, or almost $7M total (as shown).

QUESTIONS?QUESTIONS?

Contact us…Contact us…

Robert Allen - allenr@aaps.k12.mi.usInterim Superintendent

Liz Margolis - margolis@aaps.k12.mi.usDirector of Communications

Board of Education Office - osinski@aaps.k12.mi.usAmy Osinski

Board of Education Trustees - boe@aaps.k12.mi.us