UCS Board of Education voted 6-0 to approve the recommended closing of four of the district’s 29 elementary schools

At its regular meeting Monday, April 12, the Utica Community Schools Board of Education voted 6-0 to approve the recommended closing of four of the district’s 29 elementary schools – Ewell, Rose Kidd, Magahay and Walsh – effective the end of the 2010-2011 school year.

The Board also approved new attendance area boundaries as part of its school closing plan.  Ewell students will be reassigned to Monfort, Switzer or Morgan Elementary.  Magahay students will be reassigned to Flickinger, Havel or Browning.  Rose Kidd students will be reassigned to Harvey or DeKeyser, while Walsh students will be reassigned to Schuchard or Plumbrook.

As part of the plan, residential neighborhoods will remain together and, in many cases, will actually reunite areas which had been separated in previous attendance area adjustments. Both junior high and senior high school attendance patterns remain unaffected by the Board’s decision.
Schools Superintendent Dr. Christine M. Johns emphasized that the next phase of the plan will be the implementation of transition activities for the new students.

”Our principals – both those whose schools are closing and those who will be receiving new students – will design activities with care and concern,” Johns said.  “We are committed to having the supports in place so that our students will very quickly acclimate to their new schools.”

Teachers and parents from both the closing and receiving schools will also be a part of the transition activities, Johns said.
The Board made its decision after review of a four-month-long study by the citizen-based Facilities Study Team (FST), whose charge was to review the efficient use of district schools and provide a recommendation.  The FST recommendation to close Ewell, Rose Kidd, Magahay and Walsh was presented to the Board at its regular meeting Monday, March 22.  Following the FST presentation, the Board directed Johns to have district administrators conduct meetings at each of the schools recommended for closure to gain parent input and answer questions.  Those meetings were conducted and all notes and materials were presented to the Board for its review prior to the April 12 meeting.
The decision to close the schools is another strategy used by the district to offset an anticipated $33 million deficit for 2010-2011.  The school closings will result in a savings of some $3.1 million annually. 
The $33 million shortfall is expected due to an anticipated $268 per student cut in state aid next year, in addition to the continuation of the 2009-2010 reduction of $165.  Further loss will come from ongoing decline in student enrollment, increasing costs in retirement payments to the state, rising health care costs and a decline in the sales, property and income taxes that serve as the basis for funding the state’s public school district.

Over the past seven years, the district has reduced spending by more than $46 million, including the elimination of more than 400 employee positions, sale of unused property, reduced-cost health care options and an aggressive energy management plan.

In 2009-2010, the district cut $4.3 million due to unexpected cuts in state funding, which provides more than 80 percent of its operating revenue.

At each of the school-level meetings, parents were encouraged to contact their state representatives demanding an accounting for ongoing failure by the state legislature to bring about stable and ongoing financial reform with regard to Michigan’s public schools.

The Utica Community Schools Board of Education approved a balanced budget for fiscal year 2010-2011

The Utica Community Schools Board of Education approved a balanced budget for fiscal year 2010-2011, one filled with nearly $33 million in employee concessions, staff reductions, program adjustments and use of fund equity.

While the Board was pleased its 2010-2011 financial target had been met, its long-term financial outlook remains uncertain, as the state’s structural deficit problem remains unresolved.

“The potential for additional red ink is not of our making,” said Board Treasurer Carl Territo.  “The voters of Michigan, when they transferred authority for funding schools from local taxpayers to the state legislature, did so with the expectation that schools would be adequately funded by the school aid fund. But since that time, the state has either raided the fund or cut the taxes that are used to provide monies for schools.”

The $266 million operating budget was unanimously approved by the Board at its regular meeting Monday, June 14, following a public hearing held earlier in the evening. Revenues are anticipated at $259 million while expenditures are estimated at $266 million.

The balanced budget was crafted through a combination of budget reductions totaling $18.7 million. They included the closing of four elementary schools, a redesign of many services such as transferring costs for crossing guards to the local municipalities as designated by state law, and a restructuring of the alternative education program and technology support services.

Fully $11 million of the $18.7 million in cost cutting – more than 50 percent of the total -- is directly attributable to employee concessions.  These included pay freezes, a 20 percent contribution to the healthcare premium, and furlough days.

The district also expects $2 million from senior employees retiring under the state retirement incentive.  In addition, about $6.7 million will be applied to the deficit from the district’s fund equity.

Revenue sources remain volatile, as the district’s dependency on the state legislature for funding continues.  Despite the district’s reputation for fiscal responsibility, Utica Community Schools – like every other public school district in the state – has weathered substantial funding cuts, an offshoot of the way districts are funded since voters approved Proposal A in the 1990s. 

Proposal A shifted majority funding for schools from local property tax and to a combined system of state sales tax, income tax and local property taxes.  Each revenue source has been negatively impacted by the state’s significant economic downturn.  Therefore, the state legislature, which is responsible for funding districts under Proposal A, has reduced funding levels over time to 2007-2008 levels. 

Additionally, costs such as the state-mandated employee retirement rate have increased substantially, amounting to an additional cost of some $143 per student, totaling some $4.2 million.

Some of the state’s cutbacks have come in mid-year. This year, for example, the district had to absorb a reduction of $4.8 million in December 2009, the result of the state legislature’s cut in October of $165 per pupil funding for the 2009-2010 school year.

“These mid-year reductions and other unexpected changes to our revenue make it extremely difficult to plan efficiently for our students and our programs,” said Stephanie Eagen, assistant superintendent for business and finance. “Through no fault of our own, our finances remain in a constant state of flux.”

Despite the poor economic forecast, the district has developed its operating budget with focus on student learning while providing stability in the classroom, said Schools Superintendent Dr. Christine M. Johns.

“Throughout the year, we have kept our focus on adjusting to our changed economic landscape,” Johns said.      

The superintendent cautioned that even with a balanced operating budget for 2010-2011, fiscal year 2012 is not without problems.
She pointed out that stimulus money from the federal American Recovery and Reinvestment Act (ARRA) – one-time revenues designed to support school districts and municipalities through the early stages of the recession – will expire in 2012.

“Unless there are additional changes to how schools are funded and/or the economy improves significantly, all school districts – including the Utica Community Schools – will face similar funding shortfalls in 2012,” Johns said.

In accordance with the law, the Board also expanded its school breakfast program to an additional seven schools, bringing the total to 24.

As part of its budget consideration, the Board of Education also set its debt retirement millage rate at 3.75 mills for 2010-2011.  The increase from 3.5 mills was necessary to meet the district’s debt obligation as required by state law after a more than 10 percent drop in property assessments.

Eagen said that it is anticipated that the majority of residents will see an actual reduction in their property taxes next year. As taxable values decline, the millage rate, though increasing, will actually generate approximately $1 million less in property tax revenue. 

For example, a house which in 2009 was valued at $200,000 is most likely now assessed at $180,000.  The 3.5 mills debt levy would have generated $350 in taxes in 2009.  Because of the 10 percent reduction in taxable value, the adjusted tax would now be $338, even with the higher millage rate of 3.75 mills.

“Our challenge throughout this crisis has not been just to cut costs, but to re-imagine and then redesign aspects of how we do our work. Our budget process has supported those efforts.  Next year, our budget will be balanced and we will continue to offer our students the academic stability our community has come to expect. We will continue to do so as long as we can.”