I often wonder, when I step into Old Central, what district administrators think of school board meetings. It’s part of the job, of course, sort of like a priest having to go to funeral after funeral. Administrators all have advanced degrees and considerable expertise in their respective fields. Some have been with the district for many years and have forgotten more about the machinery of education than some Board members will ever know.
Overall, aside from a few strange, personal outbursts (“Member Johnston--that woman is not your spouse!”) administrators have generally acted professionally, though tight-to-the-vest, especially about money matters. Money has been a perennial problem for ISD 709 for several years. Sitting through multiple meetings in Old Central, I’ve often let my mind drift back to the venerable old building’s bygone days, when wrangling over the budget meant coming up with two dollars for a year’s worth of pencils.
Now the Board is wrangling over a budget of a hundred million, and, for good measure, they threw in a half billion dollar capital project. Recently the school board was forced to call a meeting with the express purpose of finding a way to shore up another multi-million dollar ($3.3 million) deficit in their finances. The burden of outlining possible solutions to this perennial, at times seemingly intractable problem, fell on the shoulders of administrative personnel. District bureaucrats sat around the table with the Board and made thoughtful suggestions about how best to wield the surgical knife without killing the patient.

Committee of the Whole Board meeting: 3/15/16.

Needless to say, this was not a joyous way to spend two and a half hours. Since the meeting was all about bookkeeping, I guess I’ll start at the bottom line. The district’s deficit for next year is projected to be $3.3 million. Administrators went over several parts of the budget, making a line-by-line justification for $271,000 of additional spending and $3,036,400 of cuts, leaving a little over a half million ($529,000) more cuts to still come up with to balance the books.

It was grinding, slogging through every item, but for the first time in my memory the process felt open and (if you could endure it) really did give good insight into the thought that had gone into every decision. You could also see that it had been a hard job requiring some hard decisions.
Of course deficits don’t happen in a vacuum. Today’s hard decisions were caused by yesterday’s bad decisions. On June 27th, 2011, three days before he slipped out the door, the human wrecking ball called Keith Dixon infamously observed: “I don’t see how this is going to get much better in the next few years.” Given the mess he left in his wake, it might take a couple of centuries. I’m not sure Bernie Madoff could have blown half a billion and left things much worse.
Our current Superintendent would certainly like to shed the headache. Last year he applied for, and nearly landed, a new job as top chief of a Twin Cities metro school district. Now, he’s doubling down. He recently announced that he is a finalist for the Super position in TWO districts--one in Arkansas and one in Seattle. Apparently his therapist told him the red dots he keeps seeing in front of his retinas are stress related and strongly recommended a change of scenery. This is how he was quoted in the paper of record: “It’s pretty clear that I have had some challenges and perhaps a fresh start would be good for a lot of us.”
Looking for a back door out of town? Stay close to our current Superintendent and I’m pretty sure you’ll soon find it.
After the Sup’s exiting strategy was announced, I received an email from a citizen, asking: “How much did ISD 709 pay towards his PhD to make him more marketable to job hunt his way out of Duluth?”

Meanwhile…another bare ISD 709 budget.

We all waded into the weeds, the district’s top bureaucrat taking the lead. Using the soft, soothing tones of his former elementary teacher‘s voice to its full advantage, Mr.
Gronseth began his presentation gingerly: “It (this process) is really difficult. Budget discussions can be very emotional…We are going to talk about a lot of things tonight that are near and dear to a lot of people.” While explaining what had led everyone to the moment at hand, he claimed (as he has since the district’s financial shortcomings were revealed) that his administrative team saw the fiscal mess coming and “knew expenses would catch up with us…”
Yes, those expenses can catch you. Fully aware another deficit was coming, his savvy team evidently thought it seemed fiscally prudent to JUMP PAYROLL by millions. If Mother Minnesota and local taxpaying serfs hadn’t tossed a big wad of bills into the kitty, our school district would by now be in statutory debt. City officials would be jumping up and down ecstatically if they’d received the revenue jumps the public school system has seen over the past few years. Of course, Duluth being Duluth, we’d probably be building a new, newer library instead of fixing the streets…
This evening we were dealing with the school district’s problems, and we started off on the brighter side of things, i.e.--spending instead of cutting. Still using his soothing, teacher’s voice, Mr. Gronseth started outlining “some of the investments that we want to consider (that) are important to supporting (our) work.”
To be fair, when it came to the spending part of this budget, administrators were as parsimonious as little old grannies on a pension. $271,000 might sound like a lot, but spread out across a district as large as Duluth’s it’s pretty stringent. Another zero could have been added to the figure and, given the gnawed bones left from previous cuts, administrators still would have been hard-pressed to make a dent in the student/teacher ratio.
There were four areas of increased spending: (1) $75,000 to provide more time for district “leadership teams” to plot out ways to raise student achievement and close the achievement gap. (2) $105,000 to restructure the elementary specialist curriculum schedules from an eight-day rotation to five. (3) $45,000 to help support the Ojibwe immersion program. (4) $46,000 to employ a temporary clerk to help upgrade HR software.
The area of investment that got the biggest hurrahs from the Board was the change to the specialists’ schedule. The eight-day rotation has been a barely workable vexation in the public schools for a long time. Board member Oswald captured one of the evening’s rare happy moments around the table by drolly saying, “I just feel I’m hearing every parent scream, ‘Yeahhhh!’ to this change.” All the art and music teachers are indubitably shedding tears of joy as well.

Now to the hard part.

Some job positions will be lost in this proposed budget. The most controversial of these cuts was elimination of two mental health workers to help special education kids with various social and behavioral problems. Member Oswald feared that the loss of this support staff would cause parents to pull these kids from the public school system, adding to already plummeting enrollment numbers. She, and other Board members expressed genuine concern about what the future holds for these kids, if adequate staff isn’t available to help them make some good choices before they find themselves forever locked on the wrong side of the looking glass.
The district’s “Climate Coordinator” staff position is also being cut to half time. As the superintendent put it, “He was someone there, you could always call…” to deal with a sometimes very emotional crisis that can come up with troubled kids.
Another (less soft-hearted) point of view on this subject is that troubled kids with less support usually add up to more problems in the buildings. Last month, off the record, one Board member told me the primary complaint he keeps hearing about the schools is not large class sizes, but class disruption.
The educational marketplace is growing increasingly competitive. Much more disruption, and it won’t be the disruptors who are running for the door.
The proposed budget also eliminates the “Fireperson 1” positions. Among other duties, these people used to keep an eye on school boilers. This change has actually been an ongoing battle between the bargaining union and administration for some time. Some of the positions have been vacant and filled with subs for more than three years. There is an active grievance filed. The union objects to most of the duties of this position being shoved onto custodial staff personnel, who make about $6 an hour less. It’s questionable why this item was even included as a budget cut, when the Facilities Manager has already indicated to the Board that he’d like to use the $107,000 saved to boost the base custodial pay.
Some other proposed cuts were still very vague at this stage: $100,000 to eliminate two more unspecified maintenance positions, and another hundred grand saved by moving to a new (again unspecified) way to supervise lunch periods. A 100 Gs to supervise the kids eating? I was going to look closer into this one, but was afraid I might find myself in the middle of a food fight.
There was a whole list of other cuts, too numerous to go into in detail: $384,000 to eliminate four “Instructional Coaches,” support staff who helped teachers strategize ways to improve their teaching and evaluation methods, $200,000 to eliminate three “Innovation Specialists,” people who helped teachers find new ways to use technology in the classrooms.
There were about a million dollars more of administrative expenditure cuts, not directly resulting in the loss of jobs. Some “cuts” were shifts to other funding sources, and one was simply a fortuitous drop of a quarter of million dollars in unemployment expenses, due to fewer layoffs in recent years.
Music instruction will be the only subject remaining in the optional “zero-hour” that begins the school day in the high schools, saving $76,800. Even the student activities budget got whacked by $73,000, and administrators still have to come up with more than a half million dollars of cuts!

Those red dots keep coalescing into a Red Elephant

Of course, a district budget discussion would not be complete without some mention of you-know-what, and…you-know-who brought it up.
“We’re pulling $3.4 million out of the General Fund (to pay Red Plan bonds),” Member Johnston pointed out, “and we’re looking at a $3.3 million deficit…We have to look at ways to stop taking that $3.4 million out of the General Fund…”
No other Board member backed Mr. Johnston up or showed any reaction, but some administrators (especially the assistant Superintendent) nodded their heads quite vigorously in agreement.
Not long ago, ISD 709 was pulling more than $7 million a year out of its General Fund to pay Red Plan debt. Millions have already been moved to the tax base (smashing Red Plan tax promises) and yet the $3.4 million coming out of the district’s budget is still contributing to the structural deficit.
Red Plan debt payments either come out of the budget or out of the taxpayers’ pockets. As much as it would help the district, my guess is the Duluth public wouldn’t be too happy about shouldering more of the burden.
I’m also not sure the $3.4 million appropriation can be converted to a levy. I met with the district’s CFO, Bill Hanson, recently and showed him a document from the district’s bond council, which states clearly that there is no cancellation clause for the lease/purchase agreement. He admitted he was not aware of the document and said he wasn’t a bond attorney and would have to check into it.
Mr. Hanson pointed out some other issues that would arise from trying to convert an appropriation to a tax. One issue is that a year lapses between when the Board certifies the levy and the money actually comes into the district. The district’s reserve fund is too depleted to make the interim payment. Obviously, that payment has to be made, or some Donald Trump-type moneymen will confiscate our schools. While Duluth’s kids cry, these Donald-lookalikes would probably tear all the buildings down and ship the materials south to build a wall on the Mexican border.
Member Johnston also strongly encouraged district administrators to look at what savings could be realized from refinancing the debt.
The $3.4 million drain from the budget to pay Red Plan debt brings into focus the biggest wrench in the plan’s financing scheme: the over-inflated savings claimed from “efficiencies.” I couldn’t get the State Auditor to open up this Pandora’s box, but the Auditor Manager did admit, after looking over all the evidence in my report, that the savings projections are “skewed.” So much about this claim is so loose and so absurd from an accounting standpoint, I could write ten articles about it.
As it is, I want everyone to know just a little about how we were skewed. The whole savings projection (laid out over 19 years, from 2010 through 2028) adds up to over $122 million. The savings were supposed to be realized in a given year, then put into a special designated account of the General Fund and used to pay Red Plan debt and do all kinds of wonderful things for our public school classrooms (“educational programs, curriculum upgrades and technology opportunities”) the next year. The savings amount grows 3% annually, an inflationary adjustment of dubious validity. By 2028, our public school system is projected to have $9,320,498.40 of free “savings” casino money to blow.
Next year, nearly seven million is supposed to be available. Obviously, if the Red Plan savings were happening as projected, appropriating $3.2 million to make bond payments should be no problem. More than half this stash of ‘savings’ should still be left over and available for improvements in the classroom. Instead, the budget is projected to be $3.3 million in the RED.
The city of Duluth was suckered into paying a gigantic pile of money to produce these “savings.” SKEWED? Especially citizens responsible for a property tax bill don’t need me to tell them what they should do with a “c” and “r.”
Frank Wanner, former President of the Duluth Federation of Teachers, once said: “We can afford state-of-the-art (what the News Tribune described as two ‘Olympic-sized’) swimming pools, but we can’t afford the teachers we need in our classrooms. I think that’s sad.”
The budget meeting in Old Central was definitely a sad and painful affair. Every person sitting around the conference table--administrator and Board member--cared a lot about education. As they looked over the cuts that had to be made once again in our public school system, I’m certain every single one of them would have loved having those promised Red Plan savings be real.