District Underspends Budget By $4.6 Million

Cutting back on spending for supplies, fuel, extra manpower and a host of other things, the Rapid City Area Schools finished $4.6 million under budget for the 2008-2009 school year according to the District’s recently released annual report. These cuts to General Fund spending came on top of Board approved cuts that took place in the spring of 2008. With these savings, the District began the current 2009-2010 school year in a much more stable financial condition than had been predicted in the spring of 2008.

The Rapid City Area Schools grabbed headlines and packed nearly 1,000 people into the Central High School gymnasium in the spring of 2008 when the District announced that it would have to cut several million dollars from its budget. During public hearings and regular board sessions, the Board debated cuts to library staff, elementary band, custodial services and other programs. Additional cuts included the elimination of the Virtual High School program as well as several administrative positions. Although the Board approved cuts totaling nearly $2.2 million, the adopted budget was expected to reduce the District’s reserve or savings account to a level far below what auditors had recommended.

Without fanfare or public notice, however, over the course of the school year, administrators and staff cut an additional $4.6 million from the budget in an effort to stabilize the District’s financial position. The savings came from virtually every program covered by the District’s General Fund. In elementary instruction, for example, the District underspent its budget by $397,000 by eliminating extra duty for teachers, reducing the number of temporary teachers, noon duty supervisors and saving $84,000 on supplies. Middle school and senior high school administrators reduced spending by nearly $610,000 by adopting similar strategies.

Following the wishes of the Board and the suggestions of many members of the public, the Administration focused especially on cuts furthest from students. In Support Services, the District saved nearly $520,600 by reducing custodial services and building upkeep. Another $215,000 in expenses were avoided as prices fell and the District conserved on fuel, natural gas and electricity.

Across the District, employees cut back on supplies, with many departments spending only 50 to 60 percent of their usual budgets. Even the Board of Education pitched in. Underspending for Board travel, consulting, advertising and supplies resulted in a 10.6 percent savings compared to the original budget.

In fact, the overall effort to reduce spending was so pervasive that only a few programs failed to fall in line. Notably, high school athletics and activities came in over budget. Male athletics at Central and Stevens were over by 35 and 25 percent respectively. Female athletics at Central and Stevens overspent their budgets by 36.5 and 12.1 percents. Non-athletic extracurricular activities, for the most part, also ended the year over budget.

With the $4.6 million in additional savings, the District was able to end the fiscal year with $9.15 million in its reserve account or, in the language of school administrators, an 11.01 percent fund balance. At this level, the District is close to reaching its goal of having an auditor-recommended minimum fund balance of 12 percent to cover periods of time between tax collections when cash flows run low.

As the District begins the budget process for the 2010-2011 school year, the economic environment is not looking good. State tax collections have been hurt by the economy and legislators told school district officials this week that schools are unlikely to see much more than a 1 percent increase in state aid to education next year. Nevertheless, last year’s nearly heroic efforts by administrators and staff to hold the line on spending have averted a crisis for the moment and given some hope to students, parents and employees who feared another round of major budget cuts next year.

A copy of the District’s 2009 Annual Report is available here. (Warning: this file is 27 megabytes. Try right-clicking and saving the file if you have problems opening it.) The budget situation may also be affected by ongoing contract negotiations between teachers and the District. For an update on these negotiations, see Kayla Gahagan’s article in the Rapid City Journal.

Board Considers New Policies at Meeting Tonight

Members of the Board of Education for the Rapid City Area Schools will consider changes to District policies on attendance, nondiscrimination, dual enrollment and emergency evacuation plans for handicapped students tonight. The board switched is regular board meeting from Thursday to Tuesday this week to allow board members to attend the annual Associated School Boards of South Dakota convention in Sioux Falls.

The policy changes on attendance reflect the new state law that requires students to remain in school until they are 18 or graduate. The policy outlines the responsibilities of parents and school officials when it comes to enforcing the state’s mandatory attendance law.  New language also highlight’s the District’s ability to initiate truancy proceedings if students and parents fail to comply with the law.

Changes to the policy on nondiscrimination make it clear that students cannot be discriminated against because they are pregnant or married. Meanwhile, a new policy on emergency evacuation of handicapped students calls on the school officials to prepare an emergency evacuation plan at the beginning of each school year for handicapped students.

In addition to policy changes, the Administration will also present the schedule for the development of next year’s budget. Business manager Dave Janak has prepared budget assumptions for the board that call for a 12 percent fund balance. The plan also assumes that if any further budget cuts are needed they wil come first from support functions, rather than instruction. Within instruction, priority is given to programs that 1) support core graduation requirements; 2) provide the greatest impact on student achievement, and 3) align with the district’s mission and philosophy. The Administration also suggests that capital spending will revolve around the Master Facilities Plan developed last year by a nationally recognized consulting team.

The board meeting starts at 5:30 p.m., Tuesday, August 4 in the Council Chambers in the City/School Administration Building at 300 Sixth Street. A copy of the agenda is available here: Board agenda 8409

Annual Meeting Tonight Will Seat New Board Member and Elect New Officers

A new member and potentially new officers will be installed when the Board of Education for the Rapid City Area Schools holds its annual meeting tonight, Thursday, July 16 at 5:30 p.m. Following tradition, the “old” board will meet for the first half of the meeting and conclude the business of the 2008-2009 school year. Then the old board will step down and the new members of the board will be sworn in and seated. With this transition, Arnie Laubach will complete his three-year term. Suzan Nolan will be sworn in to represent Area 1 on the board. Doug Kinniburgh and Sheryl Kirkeby will be sworn in to new three-year terms.

The agenda for the “old” board tonight includes a number of important items, including final approval of the proposed 2009-2010 budget. The Rapid City Journal, however, posted news on Wednesday that the District will receive an additional $7 million from the federal government as part of the stimulus program. It remains to be seen whether the board will give the public a chance to see and comment on how the District plans to spend this money before the board approves the budget. Currently, this item is on the “consent calendar,” which means that the board will vote on it without discussion. However, any board member may ask that the item be removed from the consent calendar.

The old board is also slated to approve a number of revisions to district policies relating to attendance, nondiscrimination, dual enrollment in high school and post-secondary institutions (e.g. WDT and SDSMT), and emergency evacuation plans for handicapped students.  

There may be some controversy over the presentation of a proposed new high school activities handbook. Some board members have concerns about some of the language in the handbook and rules that seem to set different standards for student academic performance based on which activity the student is involved with.

The old board is also being asked to approve a partial payment to a consultant hired to develop a new budget format for the District. In a July 5 editorial, the Rapid City Journal echoed the sentiments of some board members who expressed concerns about paying a consultant to do work that should be done by the District’s administrative staff.

When the new board is seated midway through the overall meeting, the first order of business will be to elect officers for the 2009-2010 fiscal year. Current Board President Sheryl Kirkeby has expressed her willingness to continue to serve as an officer, but she is likely to be challenged for the president’s position by Wes Storm. The board will also elect a first and second vice president to fill out the officer slots.

As it does every year, the new board will set the schedule for board meetings for the coming year and designate various officials to represent the District, including the District’s lawyers. Before the annual meeting adjourns, the board is expected to set a date for a special study session to discuss the proposed plans for renovating Central High School.

The public is encouraged to attend the meeting. A copy of the agenda is on the District’s website. Click on the meeting link in the calendar box.

Federal Funds Request Will Exceed $9.8 Million

Administrators will ask the school board to approve the District’s application for $9,820,854 in federal funds at the board meeting on Thursday, June 18. This year’s grant application is the largest ever and hopes to tap some of the stimulus funds made available by Congress and President Obama.

Given the state of the economy and recent budget cuts locally, this federal money will play a larger role in the District’s general fund budget next year than ever before. If the application is funded, federal dollars would account for nearly one in eight dollars spent by the District from its general fund in 2009-2010. 

The increasing importance of federal money follows a trend that has been ongoing for the last five years. In 2004-2005, the District received $7.67 million for operations from Uncle Sam. If approved, this year’s grant would cap a five-year rise that has seen federal funding grow from 11.1 percent of the general fund budget in 2004-2005 to nearly 12.5 percent in 2009-2010.

Board Agenda Highlights

• 2009-2010 budget update
• contract approvals for Western Dakota Tech bargaining groups
• contract approval for food service employees
• Board of Education legislative resolutions  including requests that the Legislature: allow cities to enact a 1 cent sales tax to support local schools; provide enhancements to the education funding formula to take effect after the federal stimulus money runs out, provide additional funding for technical education, and provide additional funding to meet the needs of students enrolled as a result of a court order.

The biggest share of the District’s federal funds come under the provisions of Title I of the Elementary and Secondary Education Act. Passed originally in 1965, this act has been amended many times. In 2001, it was relabeled the No Child Left Behind Act.

Title 1 funds can be used to provide supplementary educational services to schools with high percentages of students whose family incomes are below the poverty level. For next year, these schools include Black Hawk, Canyon Lake, General Beadle, Horace Mann, Knollwood, Rapid Valley, South Park and Valley View elementary schools, as well as North Middle School. Supplementary educational services can include instructional services for reading and math, professional development and support for parental involvement.

Although Title I dollars come from Uncle Sam (or more accurately those of us who pay federal taxes), the money is actually awarded to the Rapid City Area Schools and other districts by the state Department of Education. According to Lisa Plumb, who oversees federal grants for the District, the award is generally made in August shortly before school starts.

This year, Plumb says, administrators have been particularly challenged to identify effective ways to spend an expected $3 million in one-time federal stimulus funds without creating expectations for continued operational funding in future years. “We have looked particularly at technology purchases,” Plumb says, “like Promethean boards in the classroom.”

The Administration has cautioned the Board that increased federal funding has come with higher expectations for reporting and accountability for student success. “Moreover, the district must use the grant monies to supplement, not supplant local monies,” the Administration’s memo concludes. In other words, board members, legislators and taxpayers shouldn’t look to the federal government to solve Rapid City’s educational funding issue. If local and state dollars don’t keep pace with federal funding, Uncle Sam’s dollars may not be forthcoming at the same level in the future.

Final Budget Awaits Outcome of Negotiations

Despite the Board’s approval of a list of cuts, there still remains some uncertainty about next year’s budget for the Rapid City Area Schools. Administrators are assessing the impact of federal stimulus money. Some final decisions about retirements are still pending. Meanwhile, negotiations have begun with the District’s various unions. As those negotiations are completed over the next few weeks and months, the District’s financial situation will be clearer. 

Every year, as the snow begins to let up and the grass starts to grow, bargaining groups from each of the District’s unions sit down with a negotiating team of administrators to talk about wages and working conditions. The unions include a local affiliate of the International Brotherhood of Teamsters, which bargains on behalf of bus drivers, boiler technicians, high school custodians, security officers, warehousemen and a host of other employees. There is a Secretarial and Clerical Unit. Administrators and Technicians have a bargaining group that currently includes school principals and most District administrators, as well as network technology associates, payroll managers, psychologists and others. 

The most important agreement, because it covers the largest group of employees, is with the teachers who belong to the Rapid City Education Association (RCEA). The RCEA is the local chapter of the National Education Association, the nation’s largest professional organization and largest labor union. NEA represents more than 3.2 million members in 14,000 communities. With their annual dues, RCEA members receive a number of benefits from the union, including representation at the bargaining table. The contract negotiated and approved by the RCEA, however, covers all teachers, whether they are members or not.

The Bargaining Process  

As bargaining begins in the late winter and early spring, each of the District’s employee groups engages in a separate negotiating process.  The first of a series of meetings starts with both sides discussing ground rules and establishing a preliminary schedule. Some of the bargaining groups have a professional representative join them.  Others are represented by leaders chosen from among the employees.

The Board of Education is represented by a team of administrators led by Assistant Superintendent for Human Resources Steve Hengen. Although the Board can decide this issue anew every year, in recent years Board members have chosen to participate only as observers in the negotiations rather than take an active part in the back and forth at the table.

The actual negotiations are tightly bound by the rules established in the beginning. They govern who can speak, who can ask questions, and how proposals will come to the table and be considered. Salary increases are always a critical part of the bargaining process, but so are other issues related to leave, work rules, the number of days covered by the contract and more. Often, the two sides will reach a “tentative agreement” on an issue and set it aside so they can continue to work on unresolved questions.

The process ends when the issues have been resolved, the union’s membership ratifies the agreement and the Board of Education approves it. If the two sides cannot agree, they can turn to the South Dakota Department of Labor and ask the department to hear the issues from both sides and then issue findings and recommendations. The findings and recommendations, however, are not binding. They are intended to put pressure on the two sides to reach an agreement. If the sides still can’t agree, the Board of Education is required to impose its last best offer. The union can then appeal the Board’s decision by going to the courts.

Usually, the Board and the unions are able to reach agreement, but in recent years, the Board has occasionally imposed contracts — once on the teachers, and another time on the Teamsters — when the bargaining teams were not able to reach agreement. This year, with the District once again facing financial hard times and the economy as a whole in trouble, bargaining may be especially difficult. The State Legislature has promised a three percent increase to the school districts. Employees will want some of that increase to flow into their paychecks. But since the federal stimulus will provide a significant portion of the District’s three percent raise, the District’s money managers may need to be cautious.

Stay tuned for some resolution on the negotiations and the budget by early this summer. To read about last year’s negotiations, see Kayla Gahagan’s article from September, 2008 and the article she wrote when teacher negotiations were resolved in October.

Judge Rules Against Schools in Funding Lawsuit

Judge Lori Wilbur today rejected the arguments of students and parents who sought to force the State to provide more funding to education in South Dakota. Rapid City was one of the districts in question in the lawsuit. In her decision, Wilbur essentially accepts the State’s argument that Rapid City’s budget problems over the last ten years are a product of declining enrollments and a reflection of the district’s own spending priorities. She also accepts the State’s implication that some of Rapid City’s problems result from poor decision-making by the administration and the board.  

The plaintiffs in the case may choose to appeal the decision and, no doubt, some legislators will feel vindicated. Students, parents and teachers in Rapid City, however, will find no remedy for the frustrations they feel. Teacher work loads continue to increase, diminishing the ability of teachers to forge strong connections with individual students. Drop out rates remain high and graduation rates comparatively low. Meanwhile, student achievement for advanced students continues to fall.

When the lawsuit was filed, many people, including Governor Rounds, argued that education funding issues didn’t belong in the courts. Clearly, those of us who believe we have a moral obligation and an inherent self-interest in doing more for our children need to continue to make our case in the most important court in South Dakota – the court of public opinion.

To read Chet Brokaw’s full story, check out Education Week at http://www.edweek.org/ew/articles/2009/04/08/261150bcsdschoolfundinglawsuit_ap.html