DATE: March 25, 2004

TO: MMSD Board of Education

CONTACT: Don Severson, President

238-8300

RE: 2004-2005 Proposed Budget (Memo 3)

The following recommendations relate to considerations for the 2004-2005 budget in the areas of functional and cost-benefits analyses, maintenance and special education.

The board and administration does not have an objective nor complete understanding of the administrative and business side functions and costs of conducting the district’s operations. Board discussions have demonstrated a lack of information regarding the functional requirements and, therefore, staffing needs for business operations. Recent board discussion has shown an awareness of the possible value of an ‘outside’ assessment of the operations. We recommend the board take action immediately with an initiative to assess the functions and costs of the business operations. This initiative should involve functional and cost-benefit analysis expertise from private business as well as educational administration. The analyses should include such dimensions as 1) federal and state reporting and administrative mandates; 2) board policies impacting upon operational functions; 3) delineations of functional requirements, functions needed for decision-making and “nice to have” but not necessarily needed; 4) planning and budgeting processes. The information identified through these analyses is vital to appropriate planning and decision-making by the board for its fiscal responsibility and accountability regarding the district’s limited financial resources and for stewardship of the district’s assets and operations.

ENERGY: A district administrative report this week identified a savings of $4.7 million in energy costs over the past few years. We commend the efforts that have resulted in these savings. We believe, however, that the public deserves to have further information regarding the true value of these reported savings. The requested information is crucial to any discussions about a possible future maintenance referendum that has been suggested by the administration and the board. Our review of the “Maintenance Referendum Project Report” [10/24/03, through four of the five years of referendum monies] shows that 34 of the 105 completed projects could be deemed “energy” related. These 34 projects translate to a completed cost of $5,654,593 as a part of the total cost of $15,935,737 for the 105 projects. Answers to the following questions are necessary and should be reported to the board and public to develop a complete understanding of the costs and benefits for the reported energy savings. It is requested the data be reported on a building-by-building and project-by-project basis for only those initiatives paid for as a part of the maintenance referendum allocations. 1) What were the cost bases and time frames for calculating the energy savings? 2) What incentives were provided by the utilities and product / service vendors; and were these incentives calculated in the reported savings? 3) What were the costs of energy saving devices and projects? 4) What are the pay-back amortization schedules for installed equipment, fixtures, etc.? 5) How have the reported energy savings been spent: a) for additional energy-saving maintenance projects? B) for general maintenance operations? C) for other general fund operations?

We re-iterate a few of our recommendations regarding the special education considerations of the budget. 1) hold harmless any reduction of special education classroom teachers and aides; 2) establish cost analysis and cost-benefit analysis models for conducting due diligence as to the real costs and benefits of the special education program and services. Differentiate analyses and budget allocations as appropriate for the areas of instruction, services / staffing and administration; 3) seek collaborative partnerships for services and funding options; and 4) reduce by 5% the number of pupils identified and retained in the program with special needs.

Active Citizens for Education offers to discuss and provide assistance to the Board and administration in the consideration and implementation of these recommendations.