FPS makes sacrifices to eliminate $3.5 million budget deficit
February 13, 2013
FERNDALE — A recent mid-year budget adjustment made by the Ferndale Public Schools Board of Education to erase an unexpected shortfall will result in reducing teaching positions through layoffs and attrition, as well as utilizing a chunk of the district’s fund balance.
On Jan. 28, the School Board voted unanimously in favor of the proposed budget amendment, which features a series of cost reductions designed to eliminate a decrease in state funding of more than $3.5 million. The changes were recommended to the board by Maureen Adams, executive director of finance for Ferndale Schools.
School officials stressed that making the cuts necessary to absorb a monetary blow of this magnitude was not an easy decision. According to Stephanie Hall, Ferndale Schools’ director of community relations and pupil services, the district finds itself in good overall financial shape, despite these cuts. But as Adams pointed out in her budget report to the board, numerous fiscal challenges still remain.
“The failure of the state to provide adequate funding, along with this year’s anomaly regarding enrollment, has made it increasingly difficult for the Ferndale Schools to maintain the high level of programming to which we have always strived,” she wrote. “While a less than full-service school district is not an option, neither is a budget that cannot be balanced annually. Going forward, difficult decisions will need to be made regarding programming and staffing levels in the Ferndale Schools.”
According to Adams, the primary reason for the district’s $3.5 million loss in state-shared revenue was the enrollment “anomaly.” This year, Ferndale’s blended student enrollment decreased by about 449 students from the roughly 3,938 students that were budgeted for in the original 2012-13 budget. The majority of that decline came from the district’s alternative education program at the Digital Learning Center (DLC), where 2012-13 enrollment was projected at 1,000 students but came in around 632 students after the fall Count Day.
Hall explained that this huge drop in enrollment was mostly the result of adjusting to the way that students are counted at the DLC. The school, formerly known as the Taft Education Center, is in its first year of a new digital model in which students do the majority of their work from home on a school-provided laptop computer while receiving one-on-one, online instruction from an academic case manager. Although Ferndale Schools actually enrolled about 960 DLC students last fall, not all of them ended up being counted by the state.
“Our challenge with a blended-learning school like the DLC is that the standards of attendance are very strict,” Hall said. “This has been a very frustrating process because we actually have significantly more students attending the school than those numbers show. If a (DLC) student is required to log on, say, 10 times a week and they only log on nine times, then they are not counted at all and we receive no state funding for them.”
To help compensate for this deficit, the school board opted to follow Adams’ recommendation to lay off two academic case managers at the DLC, reduce a special education teacher at Ferndale High School and Coolidge Intermediate School from full-time to part-time, eliminate a handful of staff positions through attrition, make cuts to district goods, services and supplies, and reallocate various transportation, maintenance and technology projects. The board also decided to dip into the district’s fund balance, or rainy day fund, of nearly $4.7 million and use approximately $1.4 million to cover the remaining balance.
“That’s our rainy day fund, and this is a rainy day,” Hall said. “We don’t want to have to use those funds, but the reason why we have them in the first place is to deal with situations like this.”
According to Adams, these expenditure cuts were purposely implemented in areas that would not impact the district’s core instructional programming or become disruptive to district operations. This sentiment was echoed by school board President Jim O’Donnell.
“It’s very difficult to use some of our fund balance, but this really was the least bad solution available to us,” he said. “It would have been much worse if we would have had to make cuts to our academic or extracurricular programs. This is a one-time deficit that was primarily the result of the startup phase at the Digital Learning Center. We should have a balanced budget ready later this year with no cuts to school programs.”
Hall pointed out that other factors also contributed to the district’s need to utilize part of its fund balance, including reductions of about $733,000 in the federal Education Jobs Fund and about $212,000 in the state’s Economic Vitality Incentive Program (EVIP) best practices grant.
“Yes, our enrollment was lower than we anticipated,” she said, “but this was a perfect storm of different factors. The enrollment was one part of it, but not the whole thing.”
O’Donnell was particularly disappointed by the decrease in best practices revenue from the state.
“Those EVIP funds are down to just $52 per student this year, which is a two-thirds reduction from where we were last year,” he said. “That’s not much of a financial incentive for us to comply with what they’re asking for. If the state wants school districts to meet these best practices, then they have to give us more meaningful rewards for doing it.”
Looking forward, Hall noted that district officials are already making adjustments that they will bring to this year’s budgeting process.
“We decided to be more conservative this year when predicting enrollment for the DLC,” she said. “Making sure that all of our DLC students are counted — that’s something that we will work to improve during the next budget year. We’ve been very fortunate in recent years that our K-12 enrollment has actually come in higher than projected.”
As a member of the board for less than a month — along with new trustees Amy Butters, Kevin Deegan-Krause and Raylon Leaks-May — O’Donnell admitted that the mid-year budget amendment proved to be somewhat daunting. Still, he feels confident that this is only a temporary setback that will not affect the future of Ferndale Schools.
“I definitely think this was our best compromise,” he said. “But it’s certainly very difficult joining the board for your first term and facing a multimillion dollar deficit the moment that you walk in the door. Everyone is still getting used to their new roles and responsibilities, but I feel pretty good about where we stand right now. One of our biggest goals is to improve student retention, which will help our overall student enrollment and ultimately stabilize our finances.”
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