Monday, January 23, 2012

Willow Run Deficit

I know a little bit about the Willow Run deficit and student counts. That's because I requested the powerpoint presentation that was made to the Willow Run board at the beginning of December. The presentation has quite a bit of information in it, and it's too bad that nobody is regularly covering the Willow Run school board meeting, because Willow Run's meeting minutes are extremely terse. As in,
Bert Emerson gave a presentation and PowerPoint update on the financial standing of the District. He stressed the necessity of financial change within our district. (Quote taken from the 12/1/11 meeting minutes.)
Yes, that's it. No details at all about the finances--although the minutes do note that district employees would be getting the information the following week. Which means what? That they get to worry about additional concessions? The teachers have already made concessions that are approximately 10% of their salaries!
Willow Run has already closed schools, reconfigured the whole flow of students in the district, and asked teachers for very significant concessions. What kind of "financial change" can possible be created?

The short story is that, although Willow Run's initial budget (which, like Ypsilanti's, was part of an approved deficit elimination plan) showed higher revenues than expenditures (positive by over $411,000), by mid-November the district had figured out that things looked much, much worse--their expenses are going to exceed revenue by $1,165,017. School fiscal years start in July, so this analysis was done about 1/3 of the way through the school year. Obviously, the further you get into the school year, the harder it is to reduce the deficit.

As you might suspect, a big part of the problem is in enrollment:

There are fewer kids enrolled in the following grades: K, 1, 4, 5, 7, 9, 11, and 12. There are a lot of kids in the Washtenaw Alternatives for Youth Program, and a few in the Washtenaw International High School and Early College Alliance--but a lot of the funds that come in for those students then has to go out to pay for the kids. 

So overall, they lost 66 students, which is over 4% of their student body, following a trend that has been true for over ten years. (Honestly though, considering that a new charter high school opened nearby, I thought they might have done worse than they did.) Like everyone else, Willow Run also lost a big piece of their foundation grant from the state, $530/student, which is almost 7% of their foundation grant. And--again, like everyone else--their retirement costs have gone up again and are ridiculously high.

Here is the summary of the last slide of Bert Emerson's presentation:

Problem = Cash

• 1. State Aid is cut: out of business in 2 weeks
• 2. Keep spending = drawn out insolvency
• a. We could not get the State to authorize increased borrowing w/
August State Aid note.
• b. Can’t get “bridge loan” approved w/o approved Deficit
Elimination Plan.
• c. If we cut spending enough to get renewed approval of DEP, cash
problem diminishes.
You can take a look at the powerpoint presentation yourself here

Did I mention that cutting $1.165 million would mean cutting about 6% of their budget?

Did I mention that they have lost students every year for more than ten years?

Did I mention that they now have high school grades of fewer than 75 students?

Willow Run did such a good job of restructuring over this past year. If they had restructured three or four years ago, instead of sticking their head in the sand then, maybe they would still be viable now. I do believe that their school board is much more focused, and willing to work together, then it was a few years ago.

It's my opinion (I know, most of what I write is opinion, but I really want to call this out now as opinion) that they shouldn't be talking about transportation consolidation with Ypsilanti. First of all, that is not going to solve Willow Run's problems, and second of all, the two weakest districts in the county coming together is just going to weaken both of them.

Of the two districts, I've always had more faith that Ypsilanti can pull through than Willow Run. Historically Ypsilanti has dealt with their financial issues more quickly than Willow Run. (See my last post for an example--I have not yet heard of any layoffs in Willow Run.) Second of all, Ypsilanti has a real downtown, and many community boosters.  In other words, although both districts are financially weak, Ypsilanti is by far the stronger district.

It's my opinion that Ypsilanti should not be partnering with Willow Run for transportation. Ypsilanti should look for a stronger partner.

It's my opinion that the pro-active thing for Willow Run to do would be to close their district down--whether by splitting it into pieces or by merging with another district. To me, it would make more sense to split it into pieces--it's surrounded by other districts--Van Buren, Lincoln, Ypsilanti, Ann Arbor, and Plymouth-Canton.

But--I haven't seen Willow Run be truly proactive yet, so I don't hold out much hope for them to take my advice. To wit, action on the finances wasn't even on the agenda for January 5th, 2012. In fact, in print, I have not yet seen any of their board members even float the idea of closing the district. I'm hoping that in 2012, their school board will be proactive.

Hope is the thing with feathers
That perches in the soul,
And sings the tune without the words,
And never stops at all
(Emily Dickinson)


  1. From what I understand from an "inside source", i.e. a teacher in the Willow Run District, the Administration approached the union and wanted to open the contract up for concessions; the contract does not expire until 2014. The source told me that the union is standing firm that they will not open the contract. The teachers feel that they will be beter off at this point merging with another District and letting the Administration stew in their own mess. BTW they were told they would run out of money by March 2012.

  2. That sounds believable--but sad. The teachers have already taken a significant cut so I can understand why they feel that way. And if an emergency manager gets appointed their contract could be abrogated anyway. The report from mid-December finance committee meeting loosely puts the deficit at $1.5 million.