The Ann Arbor Public Schools Board of Education met Thursday night at the Earhart Road Building and passed a resolution approving staff reductions and corrective action on budget cuts that must be reported to the State of Michigan by April 15. We discussed developing a plan. At the meeting, the board also voted on a recommendation to limit the number of seats in selective schools, a policy that allows students to choose to attend a school different from their district, and a resolution authorizing the issuance of a memo. Expectations for state school aid.
A March 13 letter from Interim Superintendent Jazz Parks, who is in negotiations with the AAPS Board of Directors for the permanent superintendent position, says the district is making immediate cuts, including layoffs. They say they are facing financial issues that need to be addressed. Former AAPS Chief Financial Officer Marios Demetriou, who was recently asked by Parks to provide financial advice to the district, said he would increase the board's operating budget for the 2024-25 school year by $2,500 to correct financial problems. He said he is recommending a reduction of $1,000,000.
The meeting began with public comments from 143 people, including teachers, parents, students, and local residents.
A2 STEAM teacher Jessica Bell asked the board to consider the impact the cuts would have on students' educational experience.
“When we cut teachers, we lose students and families,” Bell said. “This leads to less power in school districts, which leads to more families and teachers leaving, which in turn further reduces the power of school districts.”
In a report to the board on behalf of the Ann Arbor Education Association, AAEA President Fred Klein called on the board for more honest and direct communication with teachers. Klein said a step toward more open communication is to listen to the advice of the Blue Ribbon Advisory Group, an organization that recognizes academic achievement in public and nonpublic schools.
“Listen to us,” Klein said. “Listen to the recommendations from the Blue Ribbon team. Listen and act on what educators will share in upcoming community forums. We need to start demanding increases in funding that will increase the cost of living for everyone and reduce exorbitant out-of-pocket medical costs for people facing hardship.”
During his presentation on the budget, Mr. Demetriou discussed possible ways to reduce the general fund budget (which includes district expenditures such as payroll, wages and maintenance) and possible financial scenarios for each budget reduction. Did.
Demetriou developed five alternative scenarios that would save $25 million in one year. These scenarios include a reduction only with no other budget cuts, a reduction and a $15 million reduction, a reduction and a $20 million reduction, a two-year reduction and a $25 million reduction, and a four-year reduction and a $2,500 million reduction. This includes a reduction of $1 million.
After the board submits its financial plan to the state, the state board will review it within 10 days and determine whether it believes the district is in financial distress, Demetriou said. If the state determines it has financial difficulties, the Treasury Department could take several options, including appointing an emergency manager or filing for bankruptcy. Unless the state determines that AAPS is in financial trouble, the district will likely meet monthly to discuss the budget with the Treasury Department, Demetriou said.
“It depends on what kind of deficit elimination plan we submit,” Demetriou said. “If it is determined that there is no financial hardship, then the state will decide whether to meet with us once a month, send someone from the Treasury Department, or whether we go to the Treasury Department every month. We will submit the cash flow until they are satisfied that it is OK.”
The district's endowment balance, or the percentage of its budget remaining at the end of the fiscal year, is projected to be 1.96% from 2023 to 2024, according to Demetriou's presentation. If a school district does not have a positive general fund balance of at least 5% in each of the two most recently ended academic years, AAPS must submit budget assumptions to the state.
Demetriou created five-year projections for the five scenarios presented. He recommended a $25 million annual reduction scenario, which would leave the district with a fund balance of about $11.2 million in 2024-2025, and said the fund balance would return to a maximum of 5% of revenue. . Demetriou said this does not meet the board's own policy, but the district will meet both the requirements and policy starting in the second year.
Another option the board discussed at the meeting was a two-year, $25 million reduction scenario, with $12.5 million in cuts each year. Demetriou said under this scenario, it would take three years for the district to meet the state's minimum fund balance requirements.
“(If we follow this scenario) it will be 1.6% by the end of next year,” Demetriou said. “And the second year it would be 4.47%. The third year would actually meet his 5% requirement for the state.”
Board Treasurer Susan Ward Schmidt said it was important to make decisions quickly based on the scenarios presented, given that AAPS employees have a right to know whether they will return after summer break. He said there is.
“Waiting to let people know if they're going to be laid off right before school ends…I don't know how people feel about that,” Schmidt said. “We need to right the ship now. It's hard to make this decision, but I don't know if it's better to prolong this and have our teachers and community question what's going on.”
Board member Rima Mohamad said a scenario in which AAPS would cut $25 million from the budget over two years would give everyone more time to consider.
“If we do it all at once, if it affects student enrollment, if it affects teachers who stay with us, it seems like it's a bigger shock to the system,” Mohammad said. he said. “Even if I didn’t reach my goal, at least I gave myself time.”
Board member Ernesto Queligero said he understands the reasoning behind the proposed $25 million cut, but wants more information before the board approves staff reductions.
“I have been communicating with employee groups and the public and there is some reluctance to approve layoffs,” Querillero said. “The reason I'm not happy with it is because I want to hear from our union leadership and our community. We don't know what the cause and effect are and what the benefits are.”
The resolution approving the layoffs passed 4-3 and was approved by Trustees Susan Baskett, Krystle Dupree, Torchio Feaster and Schmidt. Trustees Jeff Gaynor, Mohammad and Querillero voted against the resolution.
The board approved a resolution authorizing the issuance of the note in anticipation of state school aid. The resolution could be up to $35 million, depending on how much the district cuts its budget.
“If the 25 million is reduced, we'll probably end up borrowing between $10 million and $15 million,” Demetrius said. “Otherwise, you would have to borrow 35 million. It's called 372 days. So if you don't pay the interest within 365 days, you'll probably have to borrow even more than you're currently asking. It won't happen.''
Dawn Linden, assistant superintendent for teaching and learning, proposed limiting the number of selective schools for the 2024-25 school year. Michigan allows school districts to participate in the School of Choice program. Since 2010, the AAPS Division of Teaching and Learning has been seeking approval for limited school choice quotas that designate available space for each grade level, Linden said.
“In terms of eligibility, there are provisions for all school applicants, and acceptance is contingent on a record of conduct received by the district,” Linden said. “We believe this mechanism is critical for a variety of reasons, as increased mobility in Michigan has become increasingly pronounced and prevalent since COVID-19. , a way for families to remain enrolled even if they have to relocate outside of Ann Arbor Public Schools boundaries.”
A resolution limiting choice schools was approved by the board. The first window will be open from April 16th to May 10th, and the second window will be open from May 29th to June 28th.
Daily News contributor Gina Ko can be reached at: hwko@umich.edu.
