AAPS Trustees Hear Michigan School Funding Overview

Ann Arbor Public Schools Board of Education regular meeting (April 19, 2017): Forsythe Middle School, 1655 Newport Rd

The Ann Arbor Public Schools (AAPS) Board of Education (BOE) trustees will vote themselves into executive session at 5:00 PM this evening, discussing two attorney/client privilege items. Executive sessions are closed to the public. The regular meeting begins at 7:00 PM.

There are two special commentary items on the agenda. Steve Olsen, Washtenaw Intermediate School District (WISD) board candidate, will speak to the trustees. A unspecified second agenda item is also listed.

Students from Pioneer High School will give a student leadership report. Representatives from each high school are invited to speak in front of the board once a school year.

The monthly budget monitoring report for March will be presented by Chief Financial Officer Jill Minnick. Minnick will also give an overview of Michigan school funding. The trustees will also hear Part II of the 2015 Bond Update. Part I was presented at the last regular meeting. Superintendent Jeanice Swift will give an update on the 2017 Sinking Fund Millage.

There are no first or second briefing items scheduled.


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Present: President Christine Stead, Vice President Susan Baskett, Trustees Jessica Kelly, Patricia Manley, Jeff Gaynor, Harmony Mitchell, and Simone Lightfoot

MOMENT OF SILENCE

A moment of silence is held in honor of Anna LeFort, a Forsythe student who passed away on April 5.

AGENDA APPROVAL

The agenda is approved, with a change of putting the special commentary item reserved for Steve Olsen, WISD Board candidate, at a later time in the meeting, after he arrives.

SPECIAL COMMENTARY: Staff Introduction

7:07 PM Superintendent Jeanice Swift introduces Shonta Langford as the new Executive Director of Human Resources/Employee Relations. Langford replaces Cynthia Ryan, who retired in December 2016.

PUBLIC COMMENTARY 

No one is signed up tonight.

ASSOCIATION REPORT: Student Leadership Report: Pioneer High School

Pioneer teacher Jodi Bullinger introduces seniors Hamza Baccouche and Emily Roopas who present this year’s documentary of Pioneer. Pioneer produces an annual video, highlighting the The two students give an overview of the year at Pioneer.

Lightfoot congratulates Roopas and Baccouche, saying she looks forward to their future. Baskett echoes Lightfoot’s compliments. She asks the students if there is something they would like the Board to focus on.

Baccouche responds, saying he wants to convey to students the need to take the M-STEP seriously. Bullinger recognizes the need to explain “the why” to students when it comes to testing.

Stead congratulates Baccouche on the video,

ASSOCIATION REPORT: Ann Arbor Administrators Association (AAAA)

Kerry Beal, Allen Elementary principal: It’s really good to be home, she says. Kids are excited about the new colors, furniture. She thanks the board for their commitment to Allen. Not only has it been the board, but it has been the Allen community, as well, Beal says.

Beal thanks the board for the upcoming sinking fund millage and the information they are providing. She also thanks them for working to make school happen on Good Friday, this past Friday.

ASSOCIATION REPORT: Ann Arbor Education Association (AAEA)

Linda Carter, AAEA President: She thanks Swift and Minnick for their presentation to the AAEA regarding the sinking fund. The Council voted yes to support the sinking fund millage. There is truly a need to fund repairs to the buildings. She also thanks Gaynor, Kelly, and Mitchell for attending the Elementary Caucus.

BOARD PRESIDENT’S REPORT

Stead says they will be spending time talking about the budget at a macro level at tonight’s meeting. Minnick will talk about how things will look for Michigan schools in general. She reminds the public that the sinking fund millage information meetings serve two purposes. It is to talk about the sinking fund millage, but they are also talking about the budget. She encourages the public to attend the information meetings if they are interested in learning about the FY 2018 budget.

Stead reflects on a question she answered for an article speaks a little about the financial costs of running a district. From 2007 to 2017, the contribution that AAPS makes into MPSERS has grown by 75%. Revenue coming in is dependent on the state. In 2007, the foundation allowance was $9667 per student. In 2017, the foundation allowance is $9230 per student. Over the past decade, while MPSERS has gone up 75%, the district’s Foundational Allowance has decreased 5%. She hopes the public will join her in voting yes for the sinking fund millage on May 2.

Stead says Michigan is the only state in the US who has such lax rules for charter schools. Charter schools in Michigan do not pay into the MPSERS account. As fewer people pay into MPSERS, that burden is born by those who continue to pay in.

Stead talks about their efforts to change the way school funding works in Michigan. There is a lot that could be done to improve the way schools are funded and that can protect K-12 education. The sinking fund millage is one way that the district can levy local money that stays in Ann Arbor.

SUPERINTENDENT REPORT

Swift leads the reopening of Allen Elementary. The students and staff at Allen are back in their school after the flood in August 2016 236 days ago. Swift thanks Beal and says how impressed she has been with the teachers and staff at Allen.

Swift thanks Jenna Bacolor, Executive Director Community Services & School Wellness, and the Rec & Ed team for the spring break camps.

Mitchell Elementary was reviewed this past week for International Baccalaureate (IB) verification. The district is fully certified at the high school level for IB.

Swift continues by touching on accomplishments and highlights across the district, from students to teachers to programs and events. She notes Ann Arbor was ranked as the #1 city to live in by niche.com.

Upcoming Sinking Fund Millage presentations: Tappan Middle School: 4/20; Clague Middle 4/25; Slauson Middle 4/27

COMMITTEE REPORTS

Planning: Manley reports that the next meeting with 4/24 at 9 AM at Balas.

Performance: Next meeting 4/20 at 4 PM at Balas.

Governance: Stead says they had a mini work session to go over LGBTQ and non-discrimination policy this past Friday. They are looking to get best thinking across the US to go into the creating of district policy.

The board will have a mini retreat coming up, which could add to policies created.

INFORMATION ITEM: Monthly Budget Monitoring Report: March

Chief Financial Officer Jill Minnick reports. Swift notes that this is the time of year where things “really begin to line up.”

Comparison of Summary of All Funds Report. Compares revenues and expenditures of March 2016 with March 2017.

YTD revenues exceed revenues collected last year by 8%. Result of increased enrollment and special education reimbursements.

YTP Expenditures exceed expenditures last year by 15%. This year, March is a three-pay period month. Last year, the three-pay period was in April. Still in excess of last year’s expenditures because of increased staffing costs and Allen flood event.

Cash & Investment Holdings Comparison. This month, there is a negative variance on cash holdings because of the three-pay period in March. Minnick says that will rectify itself next month.

As of March 31, 75% of fiscal year has passed and 85% of the school year has passed. Overall, percentage of budgets collected and expended fall within those percentages.

Lightfoot asks if there are any anticipated costs or revenue that are expected. Minnick says there is nothing new on the horizon that the trustees haven’t already been made aware of. Stead says the biggest adjustment will be from the Allen costs. She asks when they will see that come up. Minnick says once all the expenditures are known, they’ll be able to submit for the insurance reimbursement.

Swift says Minnick and Jen Hein, Executive Director Physical Properties, are working to make sure that whatever can be charged to the sinking fund is, as well as everything that can be reimbursed by insurance will be reimbursed for Allen.

INFORMATION ITEM: Michigan School Funding Overview

Swift says it is the Board’s fiduciary responsibility to pass a balanced budget by June 30, and it is her responsibility to recommend a balanced budget. No matter how hard they work at a local level, they cannot rise above a flawed funding method at the state level. What was most shocking, Swift says, that the executive and legislative branch have the opportunity and they could solve the funding problems for public schools in Michigan.

Better understand the context at the state level to better understand how they do their jobs as board members, as superintendent, as community to advocate for change at the state level. Swift says, “We have work to do.” Following this presentation, she says, she is ready to drive to Lansing. Their efforts are best made when they can pause and think of best practices.

Minnick prefaces this presentation, saying it is a very broad overview. This presentation is an adaptation too the Michigan School Business Officials (MSBO) update that was given on March 16. This is a discussion of state funding of the schools.Two primary sources of funding at the state level: the General Fund (GF), which is similar a school district’s General Fund, and the School Aid Fund (SAF).

Minnick gives credit to the three organizations that prepared the slides.

The SAF pays for operations of public schools to “maintain and support free public  elementary and secondary school as defined by law.”

SAF provide 28 community colleges and 15 universities, as well.

Budget $12.4B. SAF sources:

  • Sales tax (44%)
  • State income tax (22%)
  • State education tax (15%)

Total funding for schools by fiscal year – level of SAF is nearly equivalent to funding seen in FY 2017 (around $11.5B).

Foundational Allowances Increases and Decrease since FY1996, when Proposal A was passed. The 2x formula: minimum funded districts receive two times the funding of higher funded districts.

In FY 2012, there was a reduction of $470/pupil across the state in foundation allowance. Lightfoot notes that districts have not recovered from that reduction. Minnick replies that minimally funded districts have more than made up that $470 – they are now up by $665. For districts like AAPS, they are only up $210 over the course of the last five years.

Stead notes the state eliminated section 20j funding in 2012, which was supplementary funding payments for districts like AAPS, who had been taxing itself at a higher rate prior to the passage of Proposal A.

For the 2017-18 school year, Minnick draws the trustees’ attention to the constitutional limit. There is a constitutional limit for taxation.  For FY16/17, the state of Michigan is taxing its residents under $9.2B.

Lightfoot asks if it would have to come by ballot or if it could be put in place by policy. Minnick is not prepared to answer that, but says it could be raised through fees or other policies. Right or wrong, she says, it is impacting funding for schools.

Stead says former trustee Glenn Nelson used to talk about how much they are not spending when it comes to taxes.

From the Executive Branch proposal: As typical SAF revenue increases, there is a corresponding General Fund decrease for schools. Had the GF allocations been constant from 2016 to 2017, there would be an increase of 1.9%.

The state mandated retirement rate for FY 17/18 is 25.56%. The current retirement rate in FY 16/17 is 24.97%. There is a 2.5% increase in the retirement rate. This translates to an increase of $925K.

Lightfoot notes that this is an increase of almost $1M, which doesn’t even take into account any raises.

The SAF has been shifting to the funding of some community colleges and universities. In FY 16/17, $260M of the SAF is allocated to community colleges. $237.1M is allocated to universities.

Net funding for community colleges and universities have increased by $133.4M.

Lightfoot expresses her dismay that this kind of shift of SAF monies pits K-12 education against community colleges and universities.

Mitchell asks how this can be legal. She says it is like the State reached into our pockets one time and we didn’t say anything. And so now they keep doing it. She asks when the people of the state are going to get tired of it and change the constitution.

Stead says there was legal review of the sentence that allowed the State to take money from the SAF to fund higher education. The language was vague enough that it legally allows the State to do such a thing.

Minnick directs this who are interested in learning more about Michigan school funding to the organizations who put together the presentation slides.

Lightfoot says she looks forward to having more conversations about what kind of actions they can take as a Board to respond to the issue of public school funding at the state level. “If the only level of relief they can get is in the courts,” then that is what they need to do, argues Lightfoot. She is concerned about getting the spigot turned off.

Kelly says she is stymied by how frustrating this is. She wonders if there is a primer of the history of Michigan public school funding. Minnick says she will share some with Swift, who can pass it along to Kelly.

Manley is amazed, saying she has heard about the impact Proposal A has had on school funding, but now she is seeing it. It would be good to get other districts on board to fight with AAPS. This is one of the things that helps the public understand why the district comes to them for millages and bond approvals.

Gaynor says he is not going to express mock outrage because this has been going on for a decade or more. He doesn’t want to fall into a tug of war with higher ed, because they are underfunded, as well. AAPS is still better off than most districts in Michigan. He agrees with Manley, saying that it needs to be a joint effort, but it is necessary to recognize AAPS’s privilege. Rhetoric isn’t going to be enough, he says. Until Lansing recognizes the need to raise taxes,

Minnick responds, saying that when there was a reduction of $470 per pupil in 2012, that was devastating for all schools in Michigan. This presentation, she says, is about funding for all public schools in Michigan.

Mitchell says it’s not rhetoric; she means it. She needs to put action behind it. “Everybody is getting screwed,” she says. She highlights the priorities of the state, noting that 2% of the state budget is allocated to the SAF, while 19% is allocated to corrections. She said if those numbers could be changed, then they wouldn’t need to put that much money into corrections. Prison sales are made in advance based on the number of students who can read by the 3rd grade level, Mitchell says. And now with the 3rd grade reading bill, there is a way to explicitly track that number.

Baskett tells Mitchell, “You are learning fast.”

Stead responds to Gaynor, saying no other district in Washtenaw County lost $733 from 2011 to 2012. When Snyder took over, his $470 decrease was a big shock to everyone, Stead says. Gaynor says he in no way is implying AAPS is adequately funded. A yes vote on May 2 is protecting education more than the State allows.

Maybe the best case for fighting at a state level is to talk about a different trajectory for Michigan, says Stead. If Michigan wants to become a Top 10 state, education needs to be much better funded. Last year, Michigan was the only state to decline in student achievement.

Stead says they need to work together at a state level to change the fact that Michigan has been disinvesting and not funding public schools over the past decade. But they need to work locally first to show that public schools work.

Minnick says she will update the trustees on the House budget at the next meeting.

9:17 PM The trustees take a 5 minute recess.

9:27 PM The meeting is resumed.

INFORMATION ITEM: 2015 Bond Update Part II

In the spring of 2015, voters supported a bond approval, which was raised with no additional levy for the taxpayers. At the last meeting, the trustees were given Part I of an update on the Bond. At this meeting, Swift showcases a Bond overview brochure that will be released to the public.

The brochure highlights work already completed, work in progress, and work that would be done if the sinking fund millage is approved. New furniture and new instruments are not legally allowed to be paid for out of a sinking fund, however. Every single dollar of the sinking fund would go directly into the schools. It is really about repair and construction of the schools, says Swift.

INFORMATION ITEM: Sinking Fund Millage Update

Swift compares the debt levy by district at the county level and by district at comparable districts. Ann Arbor is on the low end at both the county level and at comparable district level.

She also runs through charts that show the cost to homeowners and businesses. AAPS again falls at the middle to low levels for each of those charts.

Baskett offers the suggestion to add a footnote to explain the mill levy. To translate, she says, although they are a large district, the amount of mills they ask to levy the district taxpayers is the lowest of Washtenaw County.

Stead says these charts help put it into perspective.

Swift also shares a report entitled “High Performing School Buildings for All Children.” It’s a report that considers the ideals of   high performing school buildings. It focuses on the environment of the physical buildings, environmental stewardship, community, and financial stewardship.

Swift says she is renewing the commitment of her team to those ideals of high performing school buildings.  It’s not her goal to bring the buildings to where they were, but to think critically of how they can move them to a “new and better place.”

Swift highlights the “Virtual Building Tours” that are available for viewing on the district website. It allows members of the public to take a look inside each of the district’s buildings.

Baskett thanks Swift for the report. Swift says she met with the labor unions to share with them the direction the district is looking to move towards. They offered their support for the district, she says, and they said they heard Swift say how it expensive it will be to remove old playground equipment. The union leadership told Swift they would like to take that on as a project for their interns. They will start with King Elementary, as that is a pressing need with the modular classrooms going in there over the summer.

Gaynor says he was one of the two trustees who voted against putting this on the ballot back in January because the info wasn’t available. He says that has been rectified. “Some of us  [teachers],” he says, “aren’t used to having what we really need.” There has been massive concern for overheated buildings, for the need for blinds. Funding is inadequate; as much as AAPS is funded more than other districts in the area, he is behind the millage request. When you look at the big picture, he says, the needs are certainly there.

CONSENT AGENDA

The trustees vote to approve

  • Approval of Minutes from the March 29, 2017 Regular Meeting & Study Session
  • Approve Minutes of the March 15, 2017 Executive Session
  • Approval of Trustee Expense Reimbursements
  • Donations

Gaynor asks for clarification on the trustee expense reimbursements. Swift says that she was curious about that, too, since it doesn’t normally come up. Most items are paid through the district; however, items like mileage need to be approved by the board. Baskett says she is asking for reimbursement for mileage and for some costs related to the National School Board Association Conference.

The consent agenda is approved unanimously.

ITEMS FOR AGENDA PLANNING

Stead notes they are having a mini board retreat on May 3. At that retreat, the trustees will be sharing

ITEMS FROM THE BOARD

Baskett: The Breakfast Optimists Club is honoring two Pathways students with scholarships. She invites the board to attend the ceremony the morning of Wednesday, April 26.

Kelly: invites the public to the Westgate Sweetwaters Friday morning to have some coffee or tea with her.

Gaynor: is having a meet and greet Thursday morning 8:45-10:00 AM at the cafe inside Plum Market at the corner of Plymouth and Green Roads. He talks about the issue of standardized testing. He is concerned with the fact that they are now high stakes testing. Gaynor shares a personal anecdote to illustrate how testing is used to the exclusion of teachers and professionals with experience. He shares some letters written by teachers who left their jobs.

Kelly thanks Gaynor for his statement. She is excited to share with the other trustees information about a seminar she attended concerning testing.

Stead: continues work on Equity and Equality across the County – meeting tomorrow night. She and Lightfoot will be holding a Coffee with a Trustee – 4/22 at the downtown Sweetwaters.

10:27 PM MEETING ADJOURNED


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