APS finds way to avoid layoffs for this year

Cash reserves tapped to partially replace $12.5M cut in funds

Albuquerque Public Schools found a way to avoid layoffs or furloughs as it covers a $12.5 million budget cut.

The district is taking $6.65 million out of cash reserves and making up the rest from a variety of areas, including substitute teacher funds, utilities and staff reductions by attrition.

Debora Warren, executive director of budget and strategic planning, said administrators scoured the district’s $680 million operating budget to find the best places to cut.

“It is difficult to do in the middle of the year,” Warren said. “Schools and departments have already spent most of their budgets.”

The $12.5-million cut came down on Jan. 31, about halfway through the current fiscal year, when Gov. Susana Martinez signed several solvency bills to pull from school district cash reserves in an effort to address a massive state deficit.

Though the reduction is tied to the amount of “working cash” each district has banked, administrators have flexibility to cover the cut from a variety of operational sources.

Earlier this month, the APS Budget Steering Committee posted a message to district employees stressing that every possibility was on the table, including up to 750 layoffs or a four-day district-

wide furlough. Warren said the budget team worked hard to come up with a plan that takes the majority of the cut from cash reserves.

Currently, the district has about $53 million in cash — money that helps maintain a positive credit rating and covers state and federal programs until government reimbursements come through. The reserve will fall to $46.35 million after the $6.65 million reduction.

“We don’t want to take all (of the $12.5 million) out of working cash, otherwise we could be writing hot checks,” Warren said.

APS looked to other sources to make up the total:

Reduce school non-salary budgets: $1.5 million

Each school conducted a budget review and found areas to cut like equipment and computer purchases.

Shift garbage collection budget to a capital fund: $1.1 million

Warren said this is a temporary fix — APS will pull the garbage collection money from a non-recurring capital fund.

Reduce property/liability premiums: $1 million

APS automatically transfers a set amount to an account to pay for insurance each month. That reserve has built up over time, so it was cut back, Warren said.

Reduce contingency balances: $1 million

School districts maintain contingency funds for unexpected expenses.

Reduce district utility budget: $500,000

APS has cut its natural gas and electricity spending, Warren said.

Fill only essential department positions for the remainder of the year: $500,000

The district is under a virtual hiring freeze for non-classroom personnel, though critical positions like police officers are still being filled.

Reduce substitute salary budget: $250,000

Fewer teachers have been taking sick days, so administrators feel comfortable reducing the substitute budget, Warren said.

With the fiscal year 2017 budget largely complete, APS is looking to 2018, which will likely include another cut.

Warren said the district plans to hold a public forum to discuss the financial outlook before the Legislative session ends on March 18.