8-16-07 MFT Contract negotiation session - OBSERVATION The session initiated at about 2:10. Emma started by introducing Mitch Trokman as special guest, and announced that he is currently Interim Executive Director of HR for MPS. Several other staffing changes from 807 were also noted during the meeting; another member of the administration, Laurie Steiger, is introduced later as an observer, and Dan Loewenson, who was previously Interim Executive Director of HR, tells me at the break that he is now the Board Liaison and interface with DPAC. Peggy points to a graph showing decreasing district enrollment from 1998 to 2010, and to a table and chart showing the sources of district revenue. She notes that 60% of district revenues come from state aid, next largest amount is from local property taxes. Peggy then notes that for the 07/08 school year, projected revenues fall short of projected expenditure by about $8 million. Peggy then steps through the other, designated, parts of the budget: Peggy then asks if there are any questions. A teacher asks if the administration has asked the governor or mayor for additional funds due to the impact of the bridge collapse. An administrator says that there are 60 MPS bus routes that went over the collapsed 35W bridge. He says that these routes are being changed, that the administration understands that there will be additional costs for this, and that the administration has discussed going to the governor or elsewhere to see if we can access some of the relief funds that are available in response to the bridge disaster. Peggy then passes out a sheet showing the accumulated deficit of the district for 06/07, 07/08, and the next four years, which reaches -$110 million by 2011/12. The accumulated deficit is shown as $14 million in 07/08 and it is noted the district has a fund balance of $29 million, which is exceeded with the projections for the 08/09 school year. There is a question from a teacher about how the deficit is calculated, and Peggy says that the major factors are an assumption of a 4% increase in total compensation spending for the district, the projected decline in enrollment, and state revenue that only keeps pace with inflation. Peggy notes that "this is a pretty grim picture” and that it means that we need to look at how to better use resources to serve students. She notes that we particularly need to look at areas growing faster than the rate of inflation, such as special education. (She comments that as total district enrollment declines, special education enrollment declines more slowly). Peggy says that it is a goal of the district's financial resource plan to create a financially viable system, which we do not have now. In response to a teacher question, Peggy says that she hasn't discussed in detail how to approach the budget deficits with the School Board, other than covering the policy about the use of reserve funds. Peggy later notes that maintaining an 8%-of-budget fund balance is Board policy, and good financial practice. A teacher asks about the excess MPS properties and how they affect the budget picture. Peggy talks about the possibility of selling or leasing some buildings, but notes that if we have debt on a property then we need to first pay building debt with any income from rental or sale of that building. She says that if we get dollars from a building beyond what is owed on that particular building, we are then obligated to retire other district debt with that money before it can be used for operating expenses. Peggy notes that this means that selling or leasing unused MPS properties does not directly create classroom dollars. However, retiring district debt with proceeds from leases or sales does reduce the amount of debt service payments. An administrator adds that any sale or lease of unused properties reduces some amount of operational expenses, and Peggy concurs, but notes that a more significant long-term savings comes from selling the property. Peggy highlights that one assumption in the budget deficit forecast is that the district is able to renew the excess levy referendum. This year, referendum funds are $44-45 million, which is about 10% of the general fund. Rob asks where the enrollment projections come from, and Marj responds that they are generated by the MPS student accounting department and demographer Hazel Reinhart. Marj and Peggy discuss that the student numbers used in the budget are the “most likely” estimate developed; other less-likely estimates were generated showing bigger and smaller enrollment changes. A teacher asks if the administration is contemplating a move out of the 807 Broadway building. An administrator responds saying that the 807 building has market potential, that they have had discussion about the sale of 807 with the city, and that this idea remains on the table. Rob asks about the budget shortfall numbers just presented, and he notes that they are different from a document that he received from a Board meeting some months ago. Peggy says that the budget picture has changed between then and now, notably that MPS received additional funds from the state. Rob asks if the teachers can see where these funds went, and another teacher notes that the unexpected state money this spring went to schools after budget tie-out. Peggy agrees with the teacher’s general assessment of where the spending money went, and then goes through the distribution in some detail, reading from a reference document. She reports that much of the money was distributed to schools based on student free-and-reduced-lunch status, and some was distributed to school just on a student per capita basis. A teacher wonders out loud what the schools did with the money and an administrator says that they bought teaching staff. There is some discussion of this, and an administrator confirms that the spring money did indeed buy 70 additional teachers in the district. Rob goes back to the budget deficit question, and asks the administration to clarify the facts. He reviews that before the new state money in the spring, the district projected a $16 million shortfall for this coming school year, but then developed a plan to save half of that. After developing that plan, the district got $16 million unexpectedly from the state, but now the projected deficit for next year is still $8 million. Peggy confirms this, and simply explains that the district spent all of the $16 million in spring money from the state, and none of it applies to the coming year’s budget. Rob then asks if we will have more teachers next year. Emma confirms that this is indeed the case, saying that she just learned this fact recently. Rob says that 200 teachers were just laid off, and he doesn’t quite understand how these facts match up. Generally, around the table, negotiators on both sides are surprised to learn that the total number of teachers will be higher this year than last. Even Peggy suggests that is a surprising result with declining enrollment, to which Emma responds, “Yea, go figure.” A teacher asks if having 11% of the budget dedicated to debt service is in line with other districts. Peggy responds that she does not know how this relates to other districts, but that she will investigate this and report back. Marj points out the fact that debt refinancing is something that the district does routinely, and that this is included in the debt service part of the budget. A teacher asks Emma to help explain how there can be more teachers when there are 190 layoffs. Emma responds with uncertainty, but notes that layoffs occur by licensure area, and that this can cause simultaneous layoffs and hiring. Emma further says that someone in her office is currently working on clarifying the total teacher staffing numbers. An administrator notes that while North side schools are cutting classrooms, South side schools are adding some classrooms. Rob asks Peggy if she can summarize the approach used in projecting the budget. Peggy responds that it is a not highly precise process; it is just a simple projection of current trends in student enrollment, state revenue, and district expenditures. She also notes that these projections contain certain risks, that the possibility of the referendum not passing is perhaps the most significant risk, but also that state funding of special education and compensatory education have potential for unexpected changes. Everyone at the table again agrees that successfully passing the referendum is critical, [although it is remarkably discussed as if the successful passage, and really the whole budget mess, is someone else’s problem.] There is a discussion about a story in that day’s paper describing what the Anoka-Hennepin district will have to cut if they don’t pass a referendum. Emma says that the district needs to somehow present a unified face to the voters for the referendum, and notes that it is really "do-or-die" time for the district. MFT proposes a break for caucus discussion and they leave the room, but they ask Peggy and Marj to stay and be available after he caucus discussion. The teachers all leave the negotiation room, and the administrators decide they don’t need to caucus, so they (and I) just wait in the negotiation room, engaged in informal conversations until the teachers return. The break starts at 3:20 and ends at 3:50. When the teachers return, Rob returns his questions to the details of the MPS budget and projection numbers. He references other documents that MFT had previously requested, and keeps asking about how the slightly older numbers are different than the numbers that MFT is currently being presented with. Peggy again tries to describe how the numbers can change over time, and says that the MPS administration just got final 06-07 numbers, and they hope to review these quickly enough that we can make adjustments to the current year. Rob again points out that he finds the changed numbers concerning, saying “Here is the dilemma we face. When we look at what is presented to us, it is very different from other district information.” Rob asks if a small group can get together, to sit down and look at the numbers and come to an agreement about what are the right numbers. Emma and other administrators agree, and it seems to be identified that the small group will consist of Rob, Emma and Peggy. An Administrator returns to the topic of the student enrollment decline and talks about general population trends of declining numbers of children, about how the children of baby boomers are just now finishing their public school experience. Peggy points out that we still need to see if the Northside initiative will work, if it will draw more kids back to MPS (or less), and she again mentions how critical it is to pass the referendum. Rob says again that “we have a lot of questions on our side”, which seems to prompt Emma to say that the administration in general, and Peggy in particular, agree that we need a more comprehensible and transparent budget. Rob acknowledges that Peggy has been very helpful and communicative with him and MFT, and reiterates his concern about the budget numbers saying that “the numbers are a little chaotic in places.” It is agreed that he, Emma and Peggy will meet to discuss the numbers in detail, and after this, Peggy and Marj are thanked for their time, and they leave, at 4:20. After Peggy and Marj depart, there is some discussion about a next agenda item, but nobody seems to want to take on any new issues, instead, the group launches into a general discussion about topics that have been brought up in the preceding conversation. A teacher asks about how many more buildings will be closed, to which an administrator replies that they will start to look at that question in September, and that there will probably be more school building that will close. Another teacher asks about some of the already-closed Northside schools, saying that Jordan Park and Lincoln have more building debt than market value. An administrator acknowledges this issue, but then points out that the Anistinabe building has debt but market potential. Another teacher asks about moving the administration out of 807, and the administrator replies (again) that the administration is thinking about that, and he notes that some central district functions have been moved into empty space in the North Star building. Rob brings up the issue of staffing, and brings up the question again about comparing teacher staffing this year to last year. An administrator replies that the layoffs this year were between 47 and 49 teachers. [Nobody disputes this, despite the fact that MFT has previously described the number of teachers laid off as 190 and 200. This may be the difference between including non-tenured teachers or not.] Rob reiterates his understanding, that from last year to this year, enrollment dropped, class size stayed the same, and the number of teachers increased. He says that this must mean that there are now more teachers that are not in the classroom. There is a general discussion about that, during which Emma repeats that HR is working on getting the numbers of teachers employed by the district. Another administrator says that HR could generate a staffing report in maybe about three weeks, but she points out that HR doesn’t really track what teachers are in a classroom, and what teachers are not. The administrators say that they know what building each teacher is in, but they really have no way of knowing what the teachers do in the buildings, if they are specialists, or classroom teachers, or fill some other role. The whole group seems sort of surprised by this, and Rob asks about how the administration determines class size, if they don’t know what teachers are doing in a building. An administrator suggests that some other part of the administration does count the number of active classrooms in each school, so possibly class size is determined by dividing the total number of students in a school by the number of classrooms. Another administrator says that for the STARS report that the district has to file with the state in January, the administration has to count all the teachers and identify that they each have appropriate licensure, but it takes until January just to get all that data together for that report. Another administrator says that part of the problem is that there are two different systems used to count students and teachers. Student Accounting keeps track of the students and HR keeps track of the teachers. A teacher suggests that this might be an appropriate time for the negotiators to look back on the priorities of the negotiation process, and see if they are being addressed. Nobody seems terribly interested in that specific proposal, but Emma and Rob launch into a discussion about what remains to be done in the negotiating process. Emma says that she thinks there are a few issues still to be wrapped up, but that maybe the negotiators could start drafting proposed contract language changes. Rob replies that there are several serious issues that still need to be addressed, but suggests that the team is making progress. A teacher humorously says that they are giving up on the desk-for-every-specialist proposal, and Emma suggests that they can have the desks on the building roof. Rob replies that they are not giving up on the desk for every specialist, in a way that I can’t tell is joking or not. The next meeting is noted to be the following Thursday, August 23, at 2:00. The agenda for that meeting is: The negotiation ends at 4:50, with a summary word from each participant. |