Saturday, March 6, 2010

Retirement, Privatization Details

If you didn't read Jennifer Coffman's excellent article in the Ann Arbor Chronicle about the mid-February AAPS board meeting (it was published during school break, so I just read it), I encourage you to read it. The article is full of interesting, important, detailed information, particularly in these areas.

Retirement Funding Scenarios
Although Steve Norton of Michigan Parents for Schools had explained quite a bit about the retirement issues at the state level (which you can read about in my post here, including the comments section), there is more detail here, from Todd Roberts, AAPS Superintendent. Note, however, that is is a statewide issue and thus is applicable to every district in the state. It's complex, and I'm not going to try to summarize Jennifer's summary, but one important thing to know is that this decision is out of "our" (local school districts') hands, just as the amount that we get from the state per-pupil is also out of "our" hands. Many people point to the retirement funding as the "source" of school funding woes. I would point to our tax system and per-pupil funding, but it is absolutely true that the retirement funding is something that school districts don't have control of, is run by the state, and is not (generally) negotiable in teacher contracts.

And there is this:
Robert Allen reiterated that the AAPS projected budget had allowed for a 1.5% increase in retirement contributions. However, he said that the new state-mandated increase of 2.47% will translate to an extra cost per public employee equal to 19.41% of employee’s salaries.  That means an additional $1 million in payments to MPSERS during the 2010-11 fiscal year.
That’s an additional million-dollar budget shortfall. (Emphasis added.)

Revised Budget Projections
Regarding next year: 
Todd Roberts presented a series of budget scenarios based on three variants of state funding: (i) no additional cuts to the foundation allowance, (ii) an additional $200 per pupil cut, and (iii) an additional $300 per pupil cut.
Regarding this year: 
First, he pointed out two factors that have changed since the community budget forums – an adjustment in the student count number from 16,489 down to 16,440, which currently translates to a $476,427 loss of per-pupil funding. The second factor is the increase in employer retirement contribution rate described earlier in this article.

(I will note, this is still higher than the original per-pupil count, which was originally 68 students higher than expected.)

Privatization of Bussing, Maintenance, and Custodians
This is a very long and very interesting discussion. Among the tidbits (tidbits, to me, because I hadn't thought about these particular ideas):

During earlier public commentary time, [Kathy] Griswold had argued that privatization is racially-biased and a distraction. She contended that there is no financial reason to outsource, and that it is not in the best interest of students. (Emphasis added.)
Kathy Griswold makes the assertion of racial bias because, as a group, the bus drivers and custodians are more likely to be people of color than other groups (for example, teachers) in the school district. Anything that affects them could be construed as having a disparate impact.
Disparate Impact:  Even where an employer is not motivated by discriminatory intent, Title VII prohibits an the employer from using a facially neutral employment practice that has an unjustified adverse impact on members of a protected class. 
New Hires: No Comparable Wages and Benefits, Leaving Aside Retirement
We already knew that the privatization savings come largely from excluding retirement, but here is some additional information I didn't know.
The most contentious community voice came from a man who took issue with Allen’s assertion that wages and health care benefits would remain the same. Also using the district’s food service as an example, he asserted that food service workers are not in fact paid the same across the board. He contended that new hires are paid $9 per hour, and given health insurance with co-pays that cost $3,000 per year rather than $500 per year.
Allen allowed that while the food service workers were paid exactly the same wage at the time they transferred from AAPS to Chartwells, the district’s contract with an outsourced company does not extend to new hires: “They [Chartwells] are a company … they have a right to do that.” The public commentary speaker concluded with, “You should not be misinformed about what happened to the health care of these employees … Basically, at $9, they cannot afford the health care plan.” Mexicotte’s [Board President] response was, “That’s often what happens with outsourcing … It’s not a perfect world.” (Emphasis added.)
I have to say that I resent that "It's not a perfect world" response. I know it's hard for the school board to balance the budget, but still--I tell my kids that "Everybody is doing it" is no excuse for doing something wrong.

Community Responses to Budget Survey
Margolis [Communications Director] began by cautioning that the surveys were “unscientific” because a single responder could have submitted multiple responses, or completed both surveys. Further, not all respondents commented in every are making the “total” number different for each category. The online Zoomerang surveys garnered 338 responses, and 519 surveys were completed at the budget forums.
I think the surveys from the budget forums are obviously useful, since those were accompanied with discussion and the presentations from the AAPS staff. On the other hand, I've noticed AAPS relies a lot on those online zoomerang surveys, and given the caveats above, I have to ask, are they useful? It's easy to rely on a survey and forget its limitations. So--to what end are they useful?

Simone Lightfoot noted that,
“These online results were clearly different from what I saw at the town hall meetings.”
So the question is--why? Is it because it drew in a different group of people? Or because people did the survey more than once? (I only did the survey once, but I did also go to a budget forum--I don't think the survey asked if people had been to a budget forum so I don't think you could assess the overlap.)

Employees and Students Opting into the District

Final comments on the survey responses came from a community member concerned with what would happen to the children of district employees who currently attend AAPS if those employees are outsourced. He estimated that this situation would affect approximately 70 students. Some students are able to attend AAPS schools based a parent’s employed with the district, not residency in the district. (Emphasis added.)
I had no idea about this! 
Deb Mexicotte answered first, saying that the question was interesting . . . Baskett [school board member] asked for clarification of board policy on the issue, and Roberts answered that currently in that situation, the student would leave with the departing staff member.

In other words--we could LOSE 70 students (over half-a-million dollars) in this privatization deal. Has that been figured in?

There's much more. Read the article yourself.


  1. And one more thing--Todd Roberts mentions that over 70 teachers have already submitted "Intent to Retire" forms--which could mean the final number will be over 100. There are just over 1200 teachers in the district, so I am curious about how many of the teachers spots will not be filled, and how many will be...

  2. You don't know if they will lose the 70 students, that's a lot of money, a deal will probably be worked out, especially if they want to open up the school to other districts.
    I don't think they are picking on bus drivers and custodians because they are minorities, I think it'll be a cold day in hell when the teacher's agree to privatization. The bus drivers et al just don't have the clout. The school isn't even required to have buses for non special ed kids, so it's still a freebie.
    Of course the privatizing company hires in cheaper workers, that's what companies do. Step increases, guaranteed bennies, that's kind of a thing of the past for so many people.
    It must be very disorienting to staff to hear these things being threatened.
    I feel bad for the bus drivers and I pray Obama gets his health care reform bill through this month.

  3. I manage rental houses in one of Ann Arbor's poor/working neighborhoods where people have jobs like working in school cafeterias and driving school buses. I can attest to the fact that many people in this neighborhood move there in order to get their kids into AAPS as opposed to other districts with lower cost housing. If they cannot afford to live here because their wages are cut, they will move and take their children with them.