The resolution to put off consolidation for one year – some fiscal implications

Many of you have asked for some feedback regarding the asking Judge Mays to put off the consolidation for one year. I have some that I would like to provide. Basically, I took the following budget(that I created from a power point  document that I attached in February and created a view for me to study. I had two views: One was if we merged and one was if we did not. Here is a link to the documents I used:

school budget if not consolidated

SCS budget consolidated

Here is what I found and this is an order of magnitude since these numbers may have shifted a little but but it will reflect the impacts. But it is for comparison purposes only.

If we consolidate the system in July, based upon the original numbers(updated for cuts,etc) the district shows a 40 million dollar deficit. Since we have not received transportation plan yet, I cannot include those numbers but we could be down to around 35 million.

If we do not consolidate in July and postpone a year and if we roll back all staffing adjustments,custodial, transportation, central office inefficiencies  etc.  we would be at a total deficit of 124 million based upon the original numbers.

That is a difference of 84 million.

If the county commission, funded a 40 million increase, that would cost .25 on the tax rate. If the county commission funded, 124 million increase, that would cost .78 on the tax rate.

So how does this impact the suburbs?

If the county commission raises our taxes .78 then the entire county will pay a maintenance of effort of .78 going forward to the new SCS schools which cannot go down. This is called Maintenance of Effort.

If we consolidate in July, we have a good chance at a minimal county tax increase which could be better spent on your municipal tax rate than the county tax rate.

If the cc does not give any increase, then we will have to cut. Mostly staff cuts in the SCS and more huge cuts in the old MCS. So there is NO guarantee that we will preserve staffing if we wait a year.

Now, we can try and goad the Memphis City Council into settling on 57 million but I firmly believe that will only happen if we allow consolidation finish this year.


Things for me to consider when considering this resolution. I am looking to get more updated view but this gives me a place to start..

 

 

Advertisements

Pruning the Vine

Central Office

Over the past several days, our district has begun to work on what we would term the “bureaucracy” of the school district: the Central Office. The central office cost itself is around 75 million dollars which is about 5% of the overall school budget. The original recommendation is 26% cut of about 18 million.

BCG(one of our professional consultants) helped create a new central office model based upon the TPC recommendation of the new administrative model. They also helped create the new pay bands based upon school districts of comparable size. As a result, the SCS posted a list of new positions. And like many companies it was a fairly hierarchical model creating silos and multiple managerial levels.

But creating the new model based upon industry practices without applying fiscal realities was a mistake. As a result, Superintendent Hopson began to flatten the org structure and reflect the real targeted salaries. He also eliminated auto allowances for many folks as well. This will result in more savings.

There is also an effort to look at particular job types and determine whether or not they really need to be a 12 month contract, 11 month contract, or 10 month contract. Moving some positions from 11 to 10 month could result in significant savings as well.

Lastly, I believe that our audit committee could order a full forensic audit of the district to wring out money that is somewhere in the pipeline of the district. Hopefully, we can find money to help drive this deficit down.

Salary Modifications

There has been lots of discussion lately about how we best make sure salaries are equitable across the district. That would not only include principals and teachers but any other support personnel in the district. Principals in the SCS make more, Teachers in the MCS make more. The cost to level up to the higher salary ranges would cost 11 million dollars per year. State law gives the board 3 years to level the salaries. I have to say that I empathize with any employees who feels like they are being treated differently. And we will remedy the salary issues within our statutory time frame. But I have to say, to level up these salaries year 1 would cost:

Significantly more teacher cuts across the county

So I cannot support a change in pay year 1. Also in parallel, our board is looking at a new compensation model for the entire district which could include school performance, size of the school, etc.. I cannot reconcile a principal running a high performing high school of 2200 students vs. a low performing school of 300 and paying them the same salary. It is not logical for me in any sense. So I do believe we owe an explanation of the process to our principals and a plan with a timeline for complete resolution of this issue. I think it is only fair that if teacher pay is going to be tied to performance then so should the principals.

What is next?

We have our board working session next week at the TLA at 5:30. The slate of discussion does not seem to be too over the top except we will begin the discussion about looking at more school closures next year. We have a special called meeting as well to consider our bussing solution, custodial, etc.. That meeting is scheduled for Thursday at 5:30 but I suspect it may get moved to Tuesday. either way, we will let you know.

Also, members of the Memphis City Council have reached out to me ready to mediate the 57 million to a conclusion.I fully expect for final negotiations to begin soon to close that chapter. We need some of that this year and I think some are willing to help some

Current projected funding gap places the district around 35 million in the red which means we have cut out another 33 million. We continue to look for savings, inefficiencies, funding sources, etc.. Tough job…

Have a good weekend!

 

The Next Round of Bruises

I thought it would be a good time to inform the faithful on what is getting ready to hit the board and I don’t think you will be surprised.

1) Central Office Positions – out of control with the number of Director and exec Director Positions. We are getting ready to battle.

2) School Closures – the original list of school closures is about to come back and we may see the push to significantly close more schools this year before school starts to push teachers back into the classroom. Originally I opposed large amounts of school closures, but now that the pain is reaching the classroom. It’s time to talk.

3) Athletics Funding – heavy discussion on what we are spending outside of the classroom. This is a sacred cow in Memphis. We must discuss.

4) I would be very surprised to see non-critical policies come before the board before the merger. These sidetrack major business of delivering out budget..

5) Many MCS principals are demanding a pay increase to level with SCS principals. They believe it is an equity issue and could result in litigation. I disagree. I don’t support leveling up this year.

6) I have asked for an opinion on staff level augmentation for those schools that are losing resources. Can a PTA or a Foundation(or both) fund or volunteer staff some of the positions for some of those schools that are losing resources? Can school based personnel voluntarily contribute % of their pay to help keep some of the positions that are key? If the answer is yes, then we have some options. If not, I may need to change a policy if it is not in conflict with state or federal law.

7) And last but not least, there is a very real possibility that we may have a special election this year to fill the expanded SCS board. Although not perfect, as long as it is done by voters and not appointments, it works for me. There will be two suburban seats added. One in the south and one in the North. Get ready.. Wild ride coming..

School Based Cuts… Just Painful…

I have received numerous calls and communications over the past week in regards to school based cuts. And all of our schools are being impacted. Many have opinions on whom is to blame and hate Memphis among other things. And yes, the charter surrender contributed to the pain. However, I want to make sure that we are all educated on what has been going on the past few years.

On April 10th, I received the following message from David Stephens, Chief of Staff:

“The annual process of staffing schools has started for the 2013-14 school year. School-based staffing is driven every year by projected student enrollment and the budget. Given the significant budgetary constraints we face heading into the unified district, the staffing formula for all schools had to be adjusted. Principals have been receiving their staffing information over the last week and are making faculty and staff aware of the adjustments for the coming year.

Importantly, the staffing reductions are not solely the result of the merger. Legacy Shelby County Schools implemented an abundant staffing model over the years, supporting additional teachers with its fund balance. However, the fund balance would not have been available for the 2013-14 school year, so modifications to school-based staffing could not be avoided.

Although the revised formula will require some administrators to do more with less, we are confident that even with the adjusted formula, we will still be able to provide a quality educational experience in all of our schools.”

Several years ago, as part of the Race to the Top(First to the top) effort to improve education in Tennessee, Shelby County Schools received a substantial amount to improve education in Shelby County. This money was to support efforts to get school districts compliant with No child Left Behind Standards. As a result, the Shelby County Administration used these funds to better staff school teacher ratios and investing in school support personnel(clerical, ed assistants, etc). These positions were key to driving educational outcomes in the county schools as standards got tougher.

Unfortunately, those funds (known ans ARRA funds) had a finite life and expired the year before last. At that point, the SCS had to fund the increased number of school based employees by funding out of our fund balance(savings account). With no annual increases from the county commission over the past 7 years, the SCS had already begun to deplete its savings. This is the reason why we have had a reduction in force effort over the past year when we back fill positions. Both John Aitken and the Board knew without more state or local funding, that we were facing cuts as early as last year.

Then we had the charter surrender. The charter surrender brought with it a financial gap generated from the loss of Memphis contribution to education of about 60 million dollars.

However the school based cuts were opportunistic as there was a gap in the school staffing models. The administration (led by Aitken) developed the staffing model that we have today to help balance the budget. However, school staffing is not the only area that will fill the pain. Custodial workers are being outsourced. Bussing could be outsourced. Athletics could be taken down. Arts could be cut.

Charter schools and the ASD are draining resources out of the district.(money and teachers). It almost seems like a perfect storm generated to put the county district out of business and we all happen to still be a part of it. I believe that the goal of this state administration is to dismantle the educational system in Shelby County. The municipalities will come back as municipal districts and the old Memphis City School system will be a system of ASD and Charter Schools.

If there is anything that the best charter schools(like Soulsville) is beginning to prove, its that smaller is better.

So the 2013-2014 will be a tough year on our schools and I believe before it is over, it will be tough our the MCS schools.. My mom is a SPED assistant in Shelby County. I can’t tell you whether or not she will have a job. My kids and their schools are all impacted by this shift. So I have some skin in the game. I wish that there was more that I could legally do.

In an effort for better transparency, I will request an update from the administration on the process for the reduction in force because I don’t understand how the came up with the “excessing” requirements.