APS Teammates:

This is the second of several budget communications I will be sending you this spring as we progress through the budget development process. I am impressed on a daily basis by how hard our team is working for the students of APS. It is remarkable to see the diligent work that is going into aligning resources across the district as allocations have had to be reduced by over $10 million over the next year as a result of declining enrollment.

First, let’s discuss this school year. Division heads have been asked not to spend their entire budget this year (2007-2008 school year) as a belt tightening effort to offset lost revenues. The spending caps established are as follows:
Division of Support Services 92%
Division of Instruction 90%
Division of Superintendent 90%
Division of Finance 90%
Division of Human Resources 77%

Note: The Division of Human Resources has a smaller account and we have a larger percentage reduction because some contingency money is not needed for this year.

The general fund is used for the overall operations of the district and has a total budget amount of $246 million this year. Employee salaries and benefits make up 84% of this budget. Operating within spending caps and reduced budgets will not be easy and division heads, principals, and department heads are analyzing and determining how best to meet the necessary reductions. Because we are not cutting positions like many other districts, operating costs will be greatly impacted. The focus throughout this process will be to minimize the impact on the classroom and students, but every one of us will be impacted in some way.

Now, let’s discuss the next school year. Declining enrollments have significantly reduced revenues, and at the same time we have increasing costs such as health care, utilities, fuel, compensation, and state mandated contributions to PERA (.9% of salaries per year through 2013). The Consumer Price Index of 2.2%, which measures general inflation, does not cover the increased cost of doing business.

Enrollment is the key variable that impacts recurring revenues coming into the district from state school finance funds. As a result enrollment drives the degree to which a district can increase its recurring costs such as salaries, benefits, supplies, purchased services and equipment. Much like our personal check books, the recurring revenue must equal or exceed the recurring expenditures. When it does not, we must dip into one-time monies that sit in savings, regularly referred to as fund balance in the district’s general fund. This will happen to the extent necessary to help bridge the gap in funding until enrollment stabilizes and increases, recurring expenditures are further reduced, or revenues are increased. This cannot happen on an ongoing basis or the district will go into a deficit condition. I have committed to the BOE that APS will never go into a deficit. As a result, we are undergoing the current and future reduction in spending.

One mechanism available to school districts for increasing general operation revenues is asking its voters to approve a mill levy override. The last time APS did this was in 1990. Over the next several months the board of education will consider the option of placing a mill levy override question on the November 4, 2008 ballot.

Also, I have had questions on using some of the construction money for our new schools at the Quest Academy and Boston to offset the $10m challenge. Money comes in various “colors” for the budget and we are not allowed to mix them. For instance, we cannot take construction money that was approved by the citizens of Aurora for salaries or supplies.

Be assured that our focus remains on student achievement and the implementation of VISTA 2010 is our means to be more competitive with Charter Schools and thereby increase our enrollment. We are also starting to recruit parents who have left APS as well as new parents. We all need to market our district so don’t hesitate to explain to folks the great things that are happening in APS.

I want to emphasize that our challenge in finding over $10 million for the next school year is due to decreased enrollment, not our strategic plan, VISTA 2010. Portions of the fund balance (like a savings account) were earmarked as “one-time money,” not recurring money from the general fund, to fund VISTA 2010 initiatives. The majority of strategic plan costs are not recurring and are removed from the budget when the action is complete, such as the rollout of Mondo materials at the elementary level and readers/writers workshops at the secondary level. The strategic plan as a whole, with all of its components successfully implemented, is our “vehicle” to get us out of declining enrollment. It will provide the framework, structure, and delivery of instruction that will allow every student in APS to achieve at their fullest potential and give every student the choice to attend college without remediation. This is how we will become more competitive and increase our enrollment. We have to stay true to this course.

Thank you for your support as we face these difficult financial times. As well, thank you for helping to make APS the greatest district in the state. We’ll see the day again when our student growth is only upward!

John L. Barry, Superintendent
Aurora Public Schools
15701 E. First Ave., Suite 206
Aurora, CO 80011
303-365-7800

“There are risks and costs to a program of action, but they are far less than the long-range risks and costs of comfortable inaction.”

John F. Kennedy