DATE: April 16, 2007

TO: MMSD Board of Education

FROM: Active Citizens for Education

Don Severson, President

238-8300, info@activecitizensforeducation.org

RE: 2007-2008 Budget Process and Proposed Cuts (Re-allocations)

There continues to be an approach of absolution of and by the majority of the Board of Education for responsibility and accountability for actions, or lack thereof, in the leadership and management of the district and its educational and fiscal stewardship.

It is recognized that the district cannot change the state revenue cap system, the state aid equalization formula, the QEO, state and federal unfunded nor underfunded mandates, etc. that cause financial stresses and strains. This Board and the administration can and MUST, however, manage how they handle and live with these current restraints until and unless the above conditions are changed.

Furthermore, the Board has NOT (but has the power to do so) deal with the systemic and infrastructure issues that could make significant positive fiscal and performance impacts for the district. There are three dimensions to these considerations: 1) revenue; 2) expenditures; 3) mandates (funded, under-funded and un-funded). The Board has continuously focused on more and more revenue, with little focus on managing and strategizing its fiduciary responsibilities regarding expenditures and mandates. Diligent exercise of these responsibilities and transparency in its accountabilities, reporting and communications are absolutely essential to public trust.

A constructive approach to working with budget constraints and fund-sufficient limitations is to conduct appropriate evaluations and make RE-ALLOCATIONS (not ‘cuts’) of funds to pre-determined priorities and cost-effective and higher performance programs and services. Lack of interest and consideration with statements such as “we can’t (translated: won’t) do that”, or “we have done everything we can” doesn’t build public confidence and trust. Listed below are several areas about which the Board should take a different and more significant assessment for the RE-ALLOCATION of funds to stay within the revenue caps. Board responsibility and leadership for the review and analysis of functional and object, as well as program and service, areas of the budget include, but are not limited to the following:

Cost/benefit analyses: Establish and initiate policies and procedures to conduct continuing cost/benefit analyses of all programs, services, positions and operations (functions and objects) within the district. Reduce and/or eliminate those which are less or not effective as others and re-allocate to those proven more effective and efficient. A proposal has been previously submitted to the Board.
Business functions: Analyze the status of development, cost and effectiveness of the Lawson-Davidson software system. Determine next step and finalizing strategies, differentiate between needs and wants and reduce costs. Analyze pupil transportation policies, processes and costs. Pursue more significant cost sharing collaboration with the City of Madison.
Systemic analysis: Address systemic issues with respect to special education mandates, policies, practices and funding. Reduce costs of un-funded and under-funded programs and services through efficiencies, collaborations or eliminations. Determine a more appropriate level of services to meet the educational needs of pupils.
Mandates: Analyze all federal and state mandates and the interpretations applied locally for the impacts of funding levels (funded, under-funded and un-funded).
Social Services: Re-position the District’s role in social services not directly engaged in the development and delivery of instruction and curriculum. Establish collaborative partnerships and services for fees with city and county services.
Administrative analysis: Evaluate the effectiveness and costs of the use of ‘outside’ consultants, including the use of retired district staff.

7. Educational Resource Teachers: Retain one resource teacher for staff

development for each line item position (15 FTEs) and return others (approximately 50+) to the classroom.

Health benefit costs: Obtain data necessary to make informed decisions on structural changes in health care coverage in order to offer MMSD employees quality health insurance while containing costs in the best interests of budgeting, students, teachers and taxpayers. Reduce costs and improve the administration of the mental health benefit for teachers. Proposals for the parameters for study, analysis and report of options and impacts have been submitted to the Board.
Teacher Emeritus Retirement Program (TERP): Re-consider the $10,000 plus per year for three years early retirement payout to eligible teachers. At its inception this program was an incentive to reduce the salary budget, but has become ‘institutionalized’ as a costly ‘entitlement’.
Substitute teachers: The costs and benefits for substitute teachers has become an enormous expense. The management and administration and use of substitutes regarding this line item deserves close scrutiny, as do the criteria for determining eligibility for benefits.

Community Services Fund (Fund 80): This fund, largely supported by taxpayer revenues outside the revenue cap limitations imposed by the state on the school district, has grown by over 250% in the past few years. The lack of Board oversight through policies and audits do not adequately ‘manage’ this fund. A thorough cost analysis should be conducted of all MSCR programs and services, including administrative costs, to determine the level of participant fees necessary to charge in order to make the programs and services ‘cost neutral’ to the taxpayers of the district (the net effect will be to reduce taxpayer subsidies). One example of a community service to consider for re-allocation is the “After School” programs. These programs should be returned for operation to local private providers, thereby reducing taxpayer subsidies of these programs. A request for an audit of Fund 80 and proposals for reduction of costs have been previously submitted to the Board.
Equity Resources Policy: The recommendations of the Task Force should be adopted, implemented and appropriate resources re-allocated to meet the requirements as determined by the policy.
Energy savings: In March, 2005, the District reported a savings of $4.7 million in energy cost as a result of Maintenance Referendum initiated projects. The District has yet to produce the true value of these reported savings and the continuing impact on the budget as to where and to what extent these savings have accrued. A formal request outlining the breakout of the pertinent data was submitted to the Board two years ago.
English as Second Language (ESL): Over $12 million is identified in the 2006-7 budget for this program, which has more than doubled in the past few years. Ways need to be found to reduce these costs through measures of effectiveness, efficiency and collaboration/partnering with community agencies, etc.
Reading Programs: The high cost, low achievement results (according to the District’s own evaluation) of the Reading Recovery program requires a re-structuring, reduction and re-allocation of funds for the program.
Legal Fees: In 2006, the District and MTI spent more than one-half million dollars ($500,000) in legal fees related to employee issues. Additional hundreds of thousands of dollars have been spent by the District with Madison law firms on a variety of matters. This expense is in addition to an in-house legal staff of more than five professionals. Management, administration and control of these costs is a must. Also required should be an evaluation of the conditions/climate which prompts such extensive use of legal services.
Extra-curricular activities: Define and identify all activities that are deemed as extra-curricular. Apply cost analysis methodologies EQUALLY to ALL activities defined as extra-curricular. Move to establish a multi-tier funding system. A detailed proposal for funding extra-curricular activities has been previously submitted to the Board.

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