Clouds Part Over AISD Budget Forecast
AISD looks to be less squeezed for money than previously predicted
While the current budget for the Austin Independent School District went through major rewrites up until the board of trustees approved the numbers, staffers this year are already predicting little will change between now and the final version. Back in February, the administration presented to the board of trustees a draft budget for fiscal year 2011 totaling $838 million. AISD Chief Financial Officer Nicole Conley-Abram expects the headline numbers to remain the same when she returns in June. "I don't see any new relief or any major changes in our revenue from what we presented," she said.
What is changing is the source of the cash. Throughout the current budget cycle, the district has been working on a gloomy forecast from the Travis Central Appraisal District predicting an 8% decline in property tax rolls. However, while total residential values have dropped by 1.6%, a predicted 15% collapse in commercial property values never materialized. So while final certified numbers will not be available until July, that 8% now looks to be closer to 0.5%. However, Conley-Abram warned against thinking this means free money. The chief appraiser "changes those values every month," she said. Until the numbers are certified in June, she explained, it all remains a prediction, and she's still working on a 6.5% drop in tax rolls from 2009.
One budget component is already partially locked. On April 22, the board approved a maximum $7 million dip into savings for what Conley-Abram called "mission critical initiatives." The board had initially requested that Superintendent Meria Carstarphen present a balanced budget, said board President Mark Williams, but "she came to us with a list of things that weren't in there," including $3.7 million for the first wave of Turnaround Initiative projects. This triggered "a process discussion" on how to fund these vital new programs.
With no new revenue stream, the board reconsidered its stance on spending reserves. State financial solvency standards require a district keep 14.5% in unallocated funds: For AISD, that would be $121.5 million, but the district is now forecasting reserves of $132 million, providing some leeway. Board Vice President Vince Torres described this sum as not a commitment but "a line of credit. ... If [Carstarphen] goes over her recommended budget for these types of items, we're not going to cut her legs out from under her." If revenues improve, he said, then there will be no need to touch the reserves.
There are still some potential savings to be made. The district is considering shifting to self-insurance, and while the fund balance will need to rise to cover liabilities, that could save $6 million annually. AISD is already saving $3.6 million by cutting administrative and support positions. When the district went through a staff reduction in 2003, more than 600 positions were lost; the latest round, Chief Human Capital Officer Michael Houser explained, "has been a small bite at that apple." Out of the 113 positions to be eliminated, 30 are vacant positions which will remain unfilled, and 43 were dealt with through internal transfers. Out of the remaining 40, 24 staff have resigned, retired, or been reassigned, leaving 16 currently on the payroll until June 30 but with no job in place after that date. However, since most of those employees hold teaching credentials, the district is asking them to apply for any of the anticipated 600 teaching positions that will open up over the summer and has offered to cover their certification costs. "If they want to, they can return to the classroom and never really leave the system," said Houser. That does, he admitted, still leave those who don't have teaching credentials, which makes them hard to place unless an administrative position opens up.
So what's the union's take on the process? "Hate the policy, love the internal process," said Education Austin President Louis Malfaro. While he noted that the district has both statutory and policy requirements to relocate qualified employees where possible, he praised Houser's office for working with the union to cut staff levels through attrition rather than firings. He said, "They have gone above and beyond the letter of the law."
Staff may also breathe a sigh of relief that additional major cuts this year are now virtually impossible. By rejecting the administration's February request to declare financial exigency, the board denied the right to summarily cancel contracts. "We're always going to look for ways to optimize," said Conley-Abram – but as for staff reductions this year, she said, "We've already closed that window." While there will be no further cuts this year, that doesn't mean there will be no cuts ever. Though the 2011 budget is close to locked, "We need to think about 2012," Conley-Abram warned.