CEDAR FALLS – Mississippi Bend Area Education Agency received approval Thursday from the Iowa State Board of Education for a two-year budget that puts it back in the black after years of negative fund balances.
But Chief Administrator Bill Decker faced tough questioning from the board during its meeting at Cedar Falls-based Central Rivers Area Education Agency. Several board members asked how the Mississippi Bend AEA fell out of compliance with its balanced budget requirements. In the end, the board voted 7-2, with Angela English and Joshua Byrnes dissenting.
The action followed the board’s rejection of Mississippi Bend’s 2018-19 budget earlier this year, which projected a negative ending balance of $3.75 million. The agency was required to provide assurance in writing by May 10 that it would construct a plan to balance the budget within two years and submit that plan by Sept. 1.
The new budget shows a negative fund balance of $2.04 million for the current fiscal year, ending June 30, 2019. For the 2019-20 fiscal year, the document shows an ending fund balance of $332,135. It’s the first positive balance since 2015.
Decker discovered the agency was about $100,000 in the hole in late June of 2015, about a year after he started in the position. Last year, the fund balance sunk to more than $5 million in debt.
“This has been on our radar almost throughout my entire tenure at Mississippi Bend,” Decker told the board. He noted that, starting in 2012-13, staff began growing at the agency and continued to grow beyond the 70-85 percent of the budget that AEAs normally spend on employees. “I don’t think, in my opinion, that was appropriate.”
He added, “From June of 2015 you will see us getting back to normal.” Since then, there has been a 38 percent cut in administration at Mississippi Bend, a 36 percent cut in non-certified staff and an 11 percent cut in certified staff working directly with students at schools. Decker noted if current certified staff levels are compared to 2011-12, the cut is actually a little more than 3 percent.
“So, how do we keep it from happening again?” asked board member Mike May.
Decker reiterated their efforts to make staffing reductions largely by not filling positions as they came open.
“One specific measure that we got out of wack with, that’s just what percentage of money is being spent on staff,” he said.
If it was discovered in June 2015, though, English asked, why wasn’t this cleared up sooner?
Decker noted that the next year’s budget had already been set when the deficit was discovered. “The ‘15-’16 year started (with us) knowing that we had to take some steps,” he said.
An early retirement incentive was put in place for 2016-17 and the administration “opened up contract negotiations” with employees. He said those negotiations have resulted in savings on personnel without significantly affecting the agency’s work with students.
“As far as services to students, there’s nothing we’re not equipped to do,” said Decker.
“We could’ve done a massive reduction in staff,” he noted. But in that case, the agency “couldn’t tell you” that it had maintained its mission of serving students and school districts. “Our mission has been continued even through that time of reduction in budget.”
When Decker started in the position, “it was very obvious we were deficit spending.” That was stopped with the help of the staff reductions. Administrators also instituted a new monthly treasurer’s report for the agency’s board of directors that allows members to see how expenditures stack up with the current and past budgets.
“We will not be getting ourselves back to that spot,” said Decker.
In other business, the board heard an update on the Davenport School District’s efforts to correct compliance issues related to federal requirements for educating students with disabilities. A report was presented to the board in August on an Iowa Department of Education program accreditation and finance team’s visit to the district Jan. 30 to Feb. 1, and monthly updates on the situation have been requested.
The audit indicated that disproportionate numbers of minority students were identified for special education services and have been subjected to disciplinary actions. That includes suspensions and expulsions as well as the use of seclusion and/or restraints. Among other actions, the district must reconvene individualized education plan meetings for hundreds of students to determine if they are owed compensatory education services.
Sandy Schmitz, who has been hired as an implementation adviser, told the board that 599 of those students were reviewed over the summer and during the school year there are another 1,100 students “potentially needing to be re-evaluated.” She explained, “There is a thought that perhaps some of the students that were identified for special education were not eligible.” Trainings are planned for educators and three different experts will be brought in to talk to staff about the issue of disproportionality.
While Schmitz said it may be a little early to identify the direct causes of these problems, she agreed that this is not an isolated issue in the district.
“It’s definitely about the entire system,” she said. “This is not just about special education.”