LRSD budget, contd. UPDATE | Arkansas Blog

Tuesday, January 13, 2009

LRSD budget, contd. UPDATE

Posted By on Tue, Jan 13, 2009 at 12:47 PM

Little Rock School Board member Baker Kurrus has added his voice to the discussion over Superintendent Linda Watson's proposals to cut the budget to adjust for declining enrollment.

It's a scathing assessment of the district's spending and performance. He is another voice calling for administrative cuts before other steps, along with more coherent leadership from Watson. The district's problem, says Kurrus, might have been too much money -- spent inefficiently.

UPDATE: Following Kurrus' letter is a response from Supt. Watson to the letter we published yesterday from Board member Melanie Fox on this subject. Then there's a response from Board member Katherine Mitchell.

LETTER FROM BAKER KURRUS

Memorandum

To: Dr. Linda Watson
From: Baker Kurrus
Date: January 12, 2009
Re: LRSD budget cuts

You have asked that I provide further guidance in writing regarding proposed budget cuts for the Little Rock School District.  I have articulated my thoughts repeatedly, beginning two years ago.  I will offer a recapitulation of several of the themes I have emphasized.

Our budget problems cannot be understood fully without reference to the adequacy studies conducted by the Arkansas Department of Education.  These comprehensive studies analyze the costs of educating students in Arkansas.  School districts receive funding in the amounts deemed necessary to provide an adequate and suitable education in Arkansas.  Specific funds are allocated for specific purposes, and additional funds are allocated for districts with specific challenges, such as large numbers of students who receive free or reduced-cost lunches or students who require alternative learning environments.  In addition, LRSD receives money based on the high millage we collect over and above the uniform rate of taxation established by Amendment 74.  Furthermore, through the desegregation settlement we have been receiving additional money over and above our normal state equalization.  In summary, we are a very rich school district which has received enhanced funding for desegregation and for students in racially isolated schools.  The state generally does not require money to be spent as it is allocated.  It does not appear that the additional money we have received has been used effectively.

I noted more than six months ago that our administrative costs, as a percentage of our total budget, are excessive in comparison to other districts in the state.  You may recall that I cited the statistics provided by the Bureau of Legislative Research.  This imbalance reduces the percentage of our budget that is devoted to instruction in schools.

I have stated repeatedly that our administrative functions are so scattered and Balkanized as to be almost impossible to supervise.  I suggest again that you bring your key personnel into one central location.  This would save millions of dollars and would also give you some sense of operational control.  I cannot count the number of separate offices we maintain for all sorts of our district’s operations.  Security, technology, instructional resources, maintenance, student registration, food service, Title I, grants, etc. are scattered in multiple locations.  This is inefficient and costly, and promotes a lack of cohesiveness.  I would support moving all of our administrative functions to one location. 

Over the past year and a half or so I have consistently voted against administrative pay increases, the addition of personnel, and the reclassification of certain personnel at higher rates of pay.  I did these things because I thought that our enrollment was going to drop, and because we were considering these additional expenses at a time when we did not have a budget.  We had not come to terms with our teachers on their pay for 2008-2009.  I also knew then that our desegregation payments will be dramatically diminished in the future.  I had also noted that our academic performance, as a school district, was lagging and that we were going to lose a number of high achieving students to our competitors because we disregarded the views of their parents.  I have said that we need to change, rather than reward ineffective performance.  Instead, the board lurched ahead and settled unsubstantiated lawsuits, granted pay hikes, added personnel, and generally disregarded the plain warnings of impending financial trouble. 

I voted against the hiring of outside consultants to align our teaching methodologies to the state benchmark examinations.  This action was taken in a series of confusing and hurried votes at a time when LRSD did not have a budget or a budget projection.  As I said then, LRSD already employs curriculum and instructional specialists who should be able to align our efforts with the stated requirements of the state benchmarks.  The state has done a great deal of work to articulate the state standards and to provide curriculum guidance to districts.  LRSD has spent a lot of time and money aligning our curriculum with state standards, yet LRSD hired outside consultants to do more of this because we were ineffective.  I find this to be an accommodation to failure, rather than a step toward success.  If we are going to outsource this basic need, then we should be able to reduce personnel who were doing this work previously.  The scope and cost of Target Teach appears to me to exceed the authority granted by the board, but I voted in the minority on these matters. 

I voted against the new accountability department which you recommended.  Again, the hiring of additional personnel at a time when we had no budget and we anticipated a decrease in revenue was inexplicable to me.  Apparently now this department will not be constituted, although you are under a board directive to do so.  You have hired a department director, but there is no department. 

By way of example, we added an assistant auditor, when we have yet to define the role of the auditor we now have.  We added costs in the communications area.  We retained additional personnel in Title I. 

We did all of these things without regard to the financial consequences.  At the same time, we were not addressing parental concerns effectively, thereby causing enrollment losses.  I believe we will continue to lose students in the coming years because of the failure to address parental concerns.  We as a district also fail to reward our successful principals and teachers, and we fail to have any consequences for ineffective performance.  Parents will not tolerate ineffective building leadership.  Parents with choices will elect out of the LRSD if their concerns are not addressed.   

My view is that the current financial difficulties of LRSD were caused by two primary problems:   (i) having too much money, rather than by not having enough; (ii) failing to listen to our committed volunteers, constituents and patrons.  The first problem caused inefficiencies and bloated administrative departments.  These departments do not work well.  The second problem results in our loss of students and our reduced revenues.  If we fail to address the second problem, we will be in a downward spiral of cuts in services which will cause additional enrollment declines, more revenue losses, and more budget cuts.  We must take dramatic action now.  

We no longer have the luxury of departments and personnel that are not considered necessary by the Arkansas Department of Education.  We cannot continue to jump from grant to grant, and program to program, and waste the energy required to keep this failing aspect of our district afloat.  I would reduce and then eliminate almost all of the grant-based activities which occupy so much of the district’s efforts and personnel.  There is virtually no long-term impact from this type of experimentation.  The administrative load caused by these activities is substantial, and the payback is most uncertain.  We must undergo systemic change, rather than programmatic change.

As I have said in public meetings, I will not vote to reduce or eliminate services in schools unless and until we make administrative cuts that reduce our costs to or near the state average.  This will be a difficult and painful process, and I do think you made a mistake when you announced that no job losses would occur.  We must reduce our administrative personnel.  We are losing teachers by attrition, and we will certainly not need as many teachers as we have employed in the past due to our decreasing enrollment.  We also must eliminate a number of mid-level managers, or move them into positions where they directly impact teaching and learning. 

In reviewing our budget I cannot isolate the total costs of the Instructional Resource Center.  The facilities costs are listed, but the personnel costs appear to be spread in many other areas.  I would like to know if we can eliminate instructional personnel who are not school-based.  I suggest you analyze this for potential reorganization.  Perhaps these persons could assume active roles in schools, without the necessity for the administrative costs associated with the current delivery system. 

We continue to budget for the Office of Desegregation Monitoring.  What is our legal obligation in this regard?

Although block scheduling is under consideration, it appears to me that the primary problem relates to the size of many classes.  I do not think that block scheduling is critical in middle schools.  I think it can be effective in high schools, but needs to be examined in high schools that fail to fill the classes which are offered.  A simple measurement which is most revealing to me is a school’s average cost per pupil.  Our best-performing schools often have the lowest cost because they are efficient. 

These are general thoughts only.  You are responsible for taking a leadership role.  I think it is important that you make recommendations, rather than offer up a menu of actions that you think the board might consider.  I have given you my broad concerns, but I will be relying on you to examine our operation and make the cuts that meet the concerns expressed by the board as a whole.  I speak only for myself, but you have my perspective now in writing.  I will be supportive of the district, as I have been in the past, but we need major systemic change.  It will be necessary for you as the administrative leader of the district to explain the changes and build support for these changes within the district and the community.  The board, and particularly the president of the board, will also need to assist in building support. 

We now have a chief financial officer.  I am not fully familiar with Ms. Elfrink and her experience, but I hope that she can provide you with financial guidance and planning services.  I am most reluctant to suggest any additional personnel of any kind, but I do think we as a district could benefit greatly from the work of someone experienced in district operations and staffing. 

LINDA WATSON RESPONSE TO MELANIE FOX

Mrs. Fox:

I read your email on yesterday; but, was quite busy and I didn’t have time to respond to all of the issues you mentioned.  However, as Superintendent, I am well aware of the complete picture the district is in regarding District-wide School Improvement and also issues regarding the budget. 

We are currently completing the request regarding the responsibilities of the individuals who work at the IRC and Central Office. We are also completing the final draft regarding the insurance incentive pay so that employees may take advantage of it in a timely manner.  As staff members make their decisions, we will be able to assign/administratively move IRC and other Central Office Staff into some positions.  I have been compiling a preliminary list, due to the inquiries/calls that staff and I have received.  However, it would not be wise to release the list at this time.  The deadline to take advantage of the program is March 31, 2009.  At that time, I will have a more detailed picture and will be able to assign people through attrition as well as alleviate some positions in meeting the May 1, 2009 deadline to notify employees of their assignments. 

In your email, you also made statements regarding the Bureau of Legislative Research.  We have been in contact with them because we believed the percentages listed in the report were calculated with inaccurate codes/data.  Mrs. Elfrink, CFO, was told on yesterday that a revised report is forthcoming.  This report will lower the administrators’ percentage which may affect some of the other data. The revision(s) should be completed soon.  However, on today, it was explained that the entire report would have to be revise.  Therefore, she has requested a letter verifying the data that will show a decrease in the District’s administrative percentage.  Also, I have requested a list of grants and the dates they will sunset because they include individuals who increase the number of district administrators. 

The other districts have opportunities to participate in educational coops that provide professional staff development.  The three school districts in Pulaski County have not been afforded that opportunity which may also be a factor in increasing our administrative cost.  If the IRC is reduced to a large degree, we will decrease the amount of support that is currently being provided to teachers and students.  Also, we have just settled several issues regarding the last reorg and we do not want to repeat substances that could lead to more settlement agreements.  Therefore, we are being cautious as we move forward. 

I have worked with Staff to present a viable plan to reduce the budget which included replacing administrators via attrition. 

LW

LETTER TO BOARD FROM KATHERINE MITCHELL

Our district (like many school districts, agencies, local, state and national government,  businesses, families, etc.) will experience financial challenges resulting from our economic situation. We can face these challenges successfully if we work together. Working together forbids that everyone will get what he/she proposes or wants. It requires some sacrificing and focusing on our purposes, goals, and outcomes.

I realize that the district is not an employment agency but it does have some employees who  have shown dedication and commitment in their job performance. I feel that the district will have an opportunity to reduce its workforce (in all areas) by attrition. There are some suggestions included in the budget reduction recommendations that will allow some employees to take advantage of opportunties to leave gracefully. This will allow positions to be filled without suggesting terminations prior to May1, 2009. I prefer using attrition rather than create a chaotic environment by naming positions and persons that will be terminated.

The board has approved some academic programs that will enhance student performance. We have many of them. Our PRE Department will provide us with program evaluations and at that time we can determine what programs are working and suggest programs to keep and the ones to discontinue.

I applaud our CFO, Mrs. Elfrink, for discovering the error in the percentage of funds our district spends on adminstrative salaries. Maybe that will clear up some misconceptions some of us and our patrons have based upon the statistical report from the Bureau of Legistlative Research. I understand from Dr. Watson's e-mail that the bureau will recalculate it and it can be made public.

We do have some challenging decisions, but we can make them in the best interest of our district by working together and realizing that all of us must make some sacrifices. Because of our faith and belief, our situation will improve and we will be able to face the challenges successfully.

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