ANALYSIS: Ann Arbor school district's total revenue debated

Some think the district should count every dollar in revenue in every fund toward that total figure.

Ask district administrators that question and they’ll focus on the general fund: about $181.2 million.

But ask the same administrators a few questions and you'll learn about additional revenue they get through things like federal grants and how they're able to use that to supplement the general fund money. That elevates the total budget by $53.4 million.

The difference, they say, is that they control the general fund - and those other revenue streams can only be used for certain projects or programs.

The issue of district spending - and overall revenue - has surfaced in recent months as voters turned down a countywide schools millage and the state cut hundreds of dollars in per pupil funding slated to go to the district.

Administrators are currently working to slice $20 million from the district's budget - 11 percent of the general fund or 8.5 percent of the total revenue, depending on which figure is used.

The big picture

The money the district spends can be divided in a number of ways, but if you throw it all in one big pot, you’ll end up with slightly more than $234.6 million spent by the district in the 2008-09 school year.

That includes the general fund, the 2004 bond fund, the 2006 bond fund, the 2008 bond fund and a grouping of funds the district calls the non-major governmental funds.

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The district spent $195.5 million in the combined general fund in 2008-09, records show. That included the $181.2 million general fund that pays for the day-to-day operations. The other component of that combined general fund is a $14.2 million fund made up of grant revenues.

The district also uses money from three different voter-approved bond program funds. Those funds - which were a combined $804,944 in 2008-09 - can only be spent on items allowed by state law, including construction of buildings.

The district's revenues classified as "non-major governmental funds" are made up of special revenue funds, debt service funds, the sinking fund, capital needs and prior years bonds. That’s another $38.3 million.

“It seems to me that if you’re talking about how much money the school district can spend, you should include all that money,” said parent Philip Dale. “The district chose to ask voters for the bonds and are using money to repair buildings that would have come out of the district’s operating (general) fund to make some of those upgrades.”

District officials say if voters had turned down those special bonds, they wouldn't have embarked on several projects that money is paying for - like building Skyline High School.

Spending it

The disagreement over which overall budget figure to use -  general fund versus overall revenue -highlights the crux of the dispute between some parents and administrators.

The district's user-friendly budget posted to its website included a chart of “total revenue for the district as whole for the fiscal year end June 30, 2009.”

Nestled in the notes below a graphic of the revenue and funds is a note: “Total revenue available for AAPS operation $183,112,900 (general fund and capital needs).”

That’s an accurate representation of the money the district has direct control over, said Robert Allen, the district’s deputy superintendent for operations and top finance person.

“We are legally restricted on what we can spend that money on,” Allen said. “It’s not like we can transfer bond money to pay for teachers.”

Not everyone agrees only the general fund and the capital fund should be counted as available for district operations.

“Look at the athletics fund (which is part of the nonmajor governmental funds),” said parent Walter Ramsey. “They are proposing to get savings from that fund by cutting back on busing kids to events and adding revenue by adding pay-to-play. Seems like they control those funds and (those funds) should also be counted as paying for district operations.”

District officials themselves sometimes reference other funds when asked about spending.

For example, when asked about lower district spending per student at Mitchell Elementary School, Superintendent Todd Roberts and Allen both were quick to point out the district spends more - thanks to a couple of federal grant programs and district decisions on how to spend that money.

Why it’s important

The disagreement over how much money the district has to spend goes deeper than a simple squabble.

It comes as the district is facing a projected $20 million shortfall over this school year and next.

Roberts has repeatedly said his administration is looking to keep as many of the cuts as possible away from the classroom.

That’s led several people to suggest the district look at transferring as many costs as possible out of the general fund, where the budget deficit resides, into other funds.

The district is doing that as much as possible, officials say, and they're also lobbying in Lansing to expand laws governing how they can use some funds, like the sinking fund. Their goal is to use those funds on such items as technology instead of general fund dollars.

“We’re really focusing on high student achievement and are trying to look first at non-instructional items,"  Roberts said. "We’re also looking at new revenue options. It’s going to take both to solve this deficit.”

David Jesse covers K-12 education for AnnArbor.com. He can be reached at davidjesse@annarbor.com or at 734-623-2534.