Transcript 2010 / 2011 BUDGET PRESENTATION

2011 / 2012 BUDGET
PRESENTATION
FORMAT
Available on website in order to save paper.
Same format as last year.
Fairly easy to interpret – based on “Function Code”.
Some changes coming next year
- Breaking out grant funds separately
- Differentiating FICA & Retirement from “Fringe Benefits”.
The initial budget is a “Best Guesstimate”.
Utilizes past history and most recent discussions and
information.
This budget is a general guideline for the year.
The February “Revised Budget” is Key.
2010/11 RE-CAP
The initial 2009/10 projected deficit was ($765,000)
After audit, deficit had increased to ($2.5-Million)
The initial 2010/11 projected deficit was ($5.1-Million)
Projected $433 Reduction in Foundation Allowance
- Saved by ARRA Funding - $630,000
- Saved by Edu-Jobs Funding - $1,015,000
Anticipated loss of 100 Students, lost 36.
Lower than anticipated health insurance costs
Changes in other benefits (RX, Section 125, PA-106)
Anticipated balance as of June 30th, ($1.9-Million)
Better than anticipated – ($2.8-Million)
2011-12 GENERAL OUTLOOK
Starting 2011/12 with an anticipated ($1.9-Million) deficit
Economy “appears” to be accelerating.
State revenue outlook up.
ARRA funding ending.
New Governor / Republican philosophy.
- Who’s getting the money?
- Why not Public Education?
- What about Proposal A?
Impact on School Districts
- $470 per pupil permanent State Aid reduction
Unlike last year, this years budget is NOT worst case scenario.
Working together / not new at this.
Threat of Emergency Financial Manager
THE BIG HITS
Things that will drastically affect the Districts budget in 2011/12:
Foundation Allowance Changes.
- Southgate’s foundation allowance is currently $7,535 per pupil.
- $470 per pupil “permanent” cut = ($2,468,910).
- $100 per pupil add back for District incentives = $528,200*
- $107 per pupil add back for MPSERS = $565,174*
- Ending foundation allowance for 2011/12 is $7,065 per pupil.
Reduction in Property Tax Base.
– $836,663,487 in 2010/11 vs. $740,633,639 in 2010/11
– Increase Property Tax Rate for Debt Payments to 5.15 mil
Anticipated reduction of 100 Students ($710,128)
Expiration of Federal ARRA Funds.
Anticipated employee step increases ($560,000)
* Probable one time adjustment.
THE OBSTACLE
With the carry over of the ($1.9-million) projected deficit from
2010/11, the initial 2011/12 budget deficit before any
expense reductions is anticipated to be:
($5,527,294)
THE THREAT
Emergency Financial Manager (EFM)
- The Powers of an EFM
- 18 “Red Flags” to qualify for an EFM.
- Southgate School District has three.
Breaking the Law
- When a District does not pass a balanced budget.
- When a District overspends it’s revenues and fund balance
Deficit Elimination Plan
- A good thing!
- MUST follow the plan.
THE PLAN OF ATTACK
KEY expense reduction/elimination items being discussed….
- Restructuring of District Custodial Operations* - $520,000
- Elimination of General Ed Transportation* - $645,000
- Employee Layoffs and Retirement - $1,410,000
- 5-6% employee salary/benefit concessions - $1,870,000
- Health insurance administrative savings - $250,000
- Closing of Anderson swimming pool - $80,000
- Employee step concessions - $310,000
- Cuts in discretionary spending - $350,000
- Other miscellaneous cuts - $161,431
The TOTAL proposed reductions would equate to approximately:
$5,596,431
THE GOOD NEWS
The GREAT news is that these changes could bring
the District out of deficit in June – 2012.
There has been MUCH collaboration with ALL of the
employee bargaining groups.
The FIT (Financial Input Team) has been established
to keep all units informed and on the same page.
The State is officially out of the recession.
There appears to be a sign that the State is seeing
increased revenues, which should equate to stronger
school funding.
THE BAD NEWS
Stronger school funding is not in the forefront of the State
government. Others are getting OUR money:
- Higher Education / Corrections / Etc. (call your legislator)
These budget numbers are contingent on the outcome of the
2010/11 Budget.
The 2011/12 Budget represents an “Optimistic” viewpoint.
The State “Carrots” appear to be for only a one-year period.
Health Insurance costs are still climbing and questionable.
To achieve our financial goals, SO much needs to be sacrificed
- Maintenance / Transportation / Other Jobs
Worst of all, if there are further cuts in 2012/13, they will end
up reaching within the classroom.
WE ARE NOT ALONE
One of the State requirements to receive back per-pupil
dollars is to bid “non-educational” services such as
Maintenance and Transportation.
In 2010/11, we were one of 43 districts in deficit in a State
with well over 500 school districts in it. This year the number
of deficit Districts could triple.
Districts all around us are eliminating/outsourcing services,
reducing staff, demanding concessions, cutting programs,
eliminating sports, and increasing class sizes.
THINGS TO LOOK OUT FOR
Mid-Year reduction from State
Increase in health insurance and prescription costs.
Another increase in retirement in 2012/13 (to 27%)
Loss of additional students.
Higher than anticipated energy costs.
Low funds for equipment replacement.
Falling State scores and/or drop out rate.
THINGS WE CAN DO
Save on Health Insurance Costs.
- Self Funding - District pays for every health care dollar spent
- Wellness Plans and Health Savings Programs.
Energy awareness and conservation.
Eliminate stigma regarding Special Education.
Increased use of bidding and use of consortium bids
Consolidating services with surrounding entities
- Technology / Voc-Ed / Admin Building / Other?!?
Continue to use technology and create new efficiencies.
Assess school saturation levels and plan for school closing(s).
New Grants.
Parent Involvement
User Groups and Communication!
BOTTOM LINE IS THE BOTTOM LINE?!?
The 2011/12 School year will undoubtedly be the
worst financial year EVER for school districts.
A lot has been done to keep our heads above water,
we must keep treading water.
The FIT will work closely to help keep the budget on
line.
Potential for two-year “flexible” contracts to help us
proportionally reduce expenses and proportionally
share in the District financial successes.
Follow new Strategic Plan to keep us focused on the
REAL bottom line…
OUR STUDENTS!
WHAT WE NEED TO DO - LONG TERM
Work together as ONE entity…ONE family
– School District and Community
– Administration and Bargaining Groups
A successful Southgate School District means:
– More families wanting to attend our schools.
– Better home sales & higher property values.
– More funding for classes and other programs.
Work on “positive press” including:
– Sports programs
– Music programs
– Most importantly…academics