Transcript Oakland Schools Budget Presentation 2011-2012 May 4, 2011 Doing More with More: More creativity, more collaboration  Primary goal is to retain core services to.

Oakland Schools Budget
Presentation 2011-2012
May 4, 2011
1
Doing More with More:
More creativity, more collaboration
2

Primary goal is to retain core services to our
local school districts

District demand for ISD services is growing in
many areas

Revenue to the ISD continues to decrease in
all funds
Key Factor in Budget Development
Local School District Funding
–
Student count & Foundation Allowance (70%)
Intermediate School District Funding
–
3
Revenue based primarily on property taxes (90%)
Property Tax Forecast
Property Tax decline from base year – FY 2008
Fiscal Year 2008-09
Fiscal Year 2009-10
Fiscal Year 2010-11
Fiscal Year 2011-12
Fiscal Year 2012-13
Fiscal Year 2013-14
-.0075% -3.8% -11.75% -7.5% -1.5% -0.0% -
$ $ 8.2M
$ 32.9M
$ 46.7M
$ 49.3M
$ 49.3M
Annual property tax collection has declined from FY 2009 to FY 2014 by 22.7%
Accumulative loss from FY 2008 to FY 2014 is $186.5 million
FY 2008 base year tax levy was $216.9 million
FY 2014 expected tax levy is $167.6 million
4
5
Dollars in millions
State Aid Reductions
General Education:

Section 81 - 5% reduction ($184,500)
($1.1M) decrease from FY 2009
Special Education:

Section 51a.8 elimination ($2.8M) = $14 per pupil
reduction – countywide
Career Focused Education

6
Held flat from prior year
($608,564) decrease from FY 2009
Cost Containment Reductions & Measures in
Response to Declining Revenue
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7

Staff cumulative loss of 6% to salaries (freezes,
furloughs, increased premium sharing over last 3 years)
Reduced staff by 18% last year, total of 30% reduction
since 2002-03
Continued planned spend down of fund equity to 5%
Reduction in travel & other purchased services
Lower contractors’ pay rates
Less frequent equipment replacement
Lease consolidation
Lower energy consumption
Oakland Schools,
Current Benefit Plan Summary
January 2011 - Non-union
–
–
–
–
Health Plus PPO, employees premium share ranging up to 4.5%
Flexible Blue, employee paid bonus and H.S.A. contribution
Prescription co-pay changes from $10/$20 to $5 Generic and $30 Brand
Spousal surcharge raised to 6% of two person cost
July 2010 - Union
–
–
–
–
–
8
6% cap in place – year to year carry-over
MESSA Choices
Prescription benefit $10 generic and $20 brand name
Office visits $5 co-pay
Current contract expires June 30, 2011
Oakland Schools
Financial Impact of Benefit Plan Changes
Savings Over Six Years = $ 8,925,516
$ 7,508,139
Data Source:
McGraw Wentworth
Analysis of Actual Results
$ 6,764,089
$ 6,093,774
$ 4,656,274
Oakland Schools
Annual Savings
$ 1,628,613
$ 1,240,573
$ 4,524,888
$ 238,637
$3,126,854
$1,759,497
$ 5,491,541
$ 4,948,988
Annual Cost
If No Changes
$ 931,342
Oakland
Schools
Annual Cost
$ 4,524,888
$ 4,417,109
$ 4,017,646
$ 4,250,968
$ 4,465,160
$ 5,004,592
$ 4,381,285
Enrolled
405
Enrolled
397
Enrolled
400
Enrolled
405
Enrolled
402
Enrolled
385 / 313
Enrolled
279
2005
2006
2007
2008
2009
2010
2011
Note: 1. Enrollment is noted at the bottom of each bar (2010 enrollment shows prior/post July 2010)
2. Cost with no changes based on 11% annual rate of increase (most projections range from 7% to 13%)
3. 2010 savings based on actual 2010 BCBS rate renewal
4. 2011 cost based on Health Plus insured cost (including HRA participation rate reduction of 5%)
Over 94% of Oakland Schools Budget is
Spent on Services to Local Districts
FY 2012 Proposed –
$257.8 Million
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Includes GEF, SEF, CFEF and Grants
About those services to LEAs
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Services are prioritized by local superintendents and
their staff through a survey done every 3-4 years.
Usage data from District Service Report
Feedback on services is collected annually from each
referent group (HR, finance, instruction, technology,
etc.)
Input to Oakland Schools – Continuous Improvement
Plan
Instructional Initiatives driven by LAC-O priorities
State & Federal mandates
Oakland Schools
Programs & Services
• Increase Student Achievement
• Serve diverse needs of schools
• Decrease costs/increase efficiencies
Highlights from 2009/2010 District Service Report
12
District (Fall 2010 Count)
Bloomfield Hills (2249)
Birmingham (3687)
Rochester (6672)
Troy (5270)
Reading 09-10
Novi (2888)
Lake Orion (3515)
South Lyon (3256)
Clarkston (3606)
Berkley (2015)
Reading 08-09
Avondale (1549)
Walled Lake (6885)
Huron Valley (4443)
Royal Oak (2174)
Reading 07-08
Farmington (4935)
Oxford (2093)
West Bloomfield (2976)
Clawson (775)
Oakland (78837)
Reading 06-07
Brandon (1418)
Michigan
Holly (1565)
Clarenceville (822)
Reading 05-06
Waterford (4710)
Lamphere (1151)
Southfield (3591)
Madison (477)
Ferndale (996)
Hazel Park (1465)
Oak Park (1325)
Pontiac (2329)
Percent Proficient
What percent of our 3rd – 8th grade students Met Standards on their MEAP tests?
Reading 3-8
MEAP 2005-06 - 2010-11 Grades 3 - 8 Combined
Reading 10-11
100
90
80
70
60
50
40
30
20
10
0
District (Fall 2010 Count)
Bloomfield Hills (2267)
Birmingham (3703)
Novi (2888)
Rochester (6696)
Troy (5298)
Math 09-10
South Lyon (3255)
Lake Orion (3518)
Walled Lake (6936)
Huron Valley (4447)
Math 08-09
Clarkston (3612)
Oxford (2095)
Berkley (2014)
West Bloomfield (2986)
Math 07-08
Farmington (4943)
Royal Oak (2168)
Oakland (79043)
Clawson (775)
Math 06-07
Avondale (1549)
Brandon (1422)
Holly (1565)
Lamphere (1180)
Math 05-06
Michigan
Waterford (4709)
Clarenceville (822)
Ferndale (993)
Madison (488)
Southfield (3598)
Hazel Park (1458)
Pontiac (2336)
Oak Park (1322)
Percent Proficient
What percent of our 3rd – 8th grade students Met Standards on their MEAP tests?
Math 3-8
MEAP Fall 05 - Fall 11 Grades 3-8 Combined
Math 10-11
100
90
80
70
60
50
40
30
20
10
0
Professional Development
and Instructional Services
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More than 54,500 participants attended 2,000 ISD and
regional events
Pearson Benchmark used by 26 districts and Inform by 27
districts with 50% subsidy ($600,000) from ISD
Nearly 537,000 assessments administered
3,644 Special Education students received direct services
More than12,000 hours of Instructional Services
assistance provided to LEAs
Professional Development
and Instructional Services
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$2,901,062 worth of materials provided to students with
special needs
Homeless served 1,511 students
Wraparound served 117 students
1,242 Back to School (decrease of 103) and 1,024 truant
students (decrease of 5) served
$31,540,342 saved by districts using Career Focused
Education programs, including the Oakland Schools
Technical Campuses
Technology, Business and Operational
Services
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SPAM filtering blocked more than 1.4M SPAM emails/day
Student information system (Zangle) saved $56,795 each for 17
districts totaling $965,515
AMS Business/Finance/HR application saved 6 districts $85,797
each, totaling $514,782
Tech Services fielded and resolved 21,586 technical assistance
calls from local districts
Transportation collaboration helped reduce Special Education bus
mileage by 189,396 miles with an estimated savings to 23 school
districts of $1.6M.
Technology, Business and Operational
Services
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$3.1M volume of cooperative purchases in Oakland County;
participated in more than $12.4M of purchases in statewide
competitive bids
Production Printing & Graphics produced 10.3M copies at reduced
cost and free delivery to local districts
Local districts received $6,947,146 through Medicaid Fee for
Service revenue
Fee for service support to Brandon, Clawson, Madison, Oak Park,
Pontiac, Southfield and South Lyon
Technical Campus Student Enrollment
–
–
23
1st semester enrolment 3,070
2nd semester enrollment 2,928
Program Highlights
Proposed 2011-2012 Budget
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24
Continue alternative high school program in Southwest
Quadrant at 120 FTE/ $6,700 per FTE
Provide resources for formative student assessments aligned to
state standards
Maintain resources for at risk schools
Place more external service staff in LEAs upon request
Increase Back to School program - over 1,000 middle school
students across the county (2009-10 had 103 fewer referrals
than 2008-09 but the numbers are way up in 10-11 or 448 more
referrals than in 08-09)
FY 2011-12 Budget Highlights
Program Support & Subsidies
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Shift existing resources to priority services (Grants, SQ)
Increased Medicaid distribution & reduced fee (For 6 years)
Continue to subsidize ONE Network fees
CFE Transportation Reimbursement - $2m
Increase Production Print & Graphics capacity in order to serve
more clients and maintain pricing & no operating subsidy
Use Qualified School Construction Bond for projects that
benefit the ONE Fund
FY 2011-12 Budget Highlights
Program Support & Subsidies
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Continuation of Inform subsidy - $400,000
ONE Consortium credit - $300,000
Common Core Curriculum support - $650,000
Targeted Schools
$19.3m for direct instruction of 3,000 students in high-end/high-tech
programs at the Technical Campuses
Regional CTE program support - $2.5m
Continue CFE-Regional Program Relief Funds – Only 2 years, ending
in FY 2013 ($1.6M for FY 2012 & FY 2013)
Atlas-Rubicon West, curriculum management system subsidy $143,000
Discovery Streaming, video content streaming software subsidy $127,800
FY 2011-12 Budget Highlights
Program Support & Subsidies
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Regional Procurement Process (cooperative contract network
with over $10.4 million of annual usage)
AMS, Zangle, ONE Network technical support
Beverage Consortium
Inter-district mail services
Tri-County Alliance
Provide Special Education PA-18 funding and support $116.4M (decreased by $29.2m from FY 2010)
Overview of Fiscal Year 2011-12
Oakland Schools Proposed Budgets
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Fund Balance Target Setting Protocol
The proposed protocol for the development of each fund’s
year-ending fund balance target will be predicated upon:


5 percent of the operating programs contained in said fund
Known economic liabilities or designated reserves of a specific
fund
The fund balance target setting protocol recognizes the following
economic realities:
–
–
The State of Michigan’s economic environment
The economic status of the LEAs that comprise the Intermediate
School District.
Oakland Schools Board of Education approved the Protocol on 6/15/2009
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Practice for the Special Education Fund is to distribute the amount in
excess of the target unreserved fund balance.
Oakland Schools
Total Revenue Summary
FY 2012 $271.4 Million
30
Dollars in millions
Revenue Assumptions
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Property tax revenue decrease of 7.5%
Expected investment rate of return is 1.5% on available
resources
Increased local district utilization of the student
application, GenNet online software, Rubicon West online
software and NextGen Exchange student program
General Education Section 81 reduced by 5%
Special Education Section 51a.8 eliminated - $2.8 million
All other State Aid held flat
County-wide per pupil operating
revenue
$1,240
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County-wide per pupil operating
revenue

Revenue in the three major ISD operating funds
since FY 08 has plunged by $54 Million, 22.7%
decrease (Excluding Grants, Medicaid & Production Print)
–
Loss of $241 per pupil on a county-wide basis

33
Includes PA-18 distribution reduction of $163 per pupil – all
pupils, General Ed
Oakland Schools Fiscal Year 2012
Total Expenditure Budget by Type
26.3%
$283.7 Million
3.8%
0.4%
4.3%
3.3%
0.4%
Transfers to LEAs - $128.2
Salaries & Benefits - $46.6
16.4%
Purchase Services - $12.2
Utilities - $1.1
Cash to LEAs
Supplies, Materials, Dues & Fees - 10.7
Grant Related Expenditures - $74.5
45.2%
Capital Outlay & Other - $9.5
Transfers to Other Funds - $1.0
34
Dollars in millions
Difference between Revenue & Expenditures
Total Difference: $12.3 Million
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35
Capital Projects Funds $(3.5M)
Debt Service payments $(8.8M)
Budget Highlights

MPSERS retirement rate budgeted at the blended rate of
23.52% (three months at 20.66% and nine months at
24.46%)
 Non-union staff healthcare insurance provider change
results in decline in expected premium rates of 16.8%
 Utilities cost decrease as a result of continued purchasing
on the open market
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Staffing Changes
# of
Employees
2009-10
Business & Operations Departments
Sub total:
75.15
# of
Employees
2009-10
Programs & Services Departments
69.51
# of
Employees
2010-11
# of
Employees
2011-12
67.94
# of
Employees
2011-12
Difference
(1.57)
Difference
Sub total:
431.30
348.96
342.05
(6.91)
Total Across All Departments:
506.45
418.47
409.99
(8.48)
Other Programs & Services
# of
Employees
2009-10
Field Services (Full Cost Recovery)
Oakland Opportunity Academy (Externally Grant Funded)
Homeless / Wrap Around (Externally Grant Funded)
Job Link (Externally Grant Funded)
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# of
Employees
2010-11
Note:
Reduction of (87.98) FTE from FY 2010
Reduction of (8.48) FTE from FY 2011
0.00
0.00
11.05
36.00
# of
Employees
2010-11
0.00
15.65
10.00
36.33
# of
Employees
2011-12
0.00
15.65
14.00
36.33
Difference
0.00
0.00
4.00
0.00
Budget Highlights
Non-union salary & wages:
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38
January 2011 we changed health care provider and lowered expected
premium by 16.8%
A wage freeze was implemented on January 1, 2010 for
non-union staff. Non-union wages follow the calendar
year.

5 unpaid furlough days for 12 month staff (2% salary decrease)

Continuation of current employee premium share program

The progression increment movement within the market
ranges plus the longevity stipends account for an average
of 0.5% annually.
Budget Highlights
Union salary & wages:
39

The OSTCEA and the Board of Education have a one year
extension on the existing contract, expiring June 30, 2011.

The contract includes a wage freeze implemented on July 1, 2010.

Three unpaid furlough days for 10 month staff (2% salary decrease)
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Continuation of the 6% health insurance cap with a higher
deductible plan.

Step increases are provided by contract for an average of
1.2% annually.
Allocation of costs
General Allocation
50% GE, 25% SE, 25% CFE
Activity-based Cost Allocation–FTE based
23% GE, 25% SE, 52% CFE
Abraham & Gaffney – sq footage-based
50% GE, 26% SE, 24% CFE
Cost-based Allocation – Transportation
73% GE, 25% SE, 2% CFE
Reference Enterprise Wide Summary Document for more information
40
General Education Fund Summary
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Total Revenue: $17.8 Million
– Property tax – $10.1M (56% of total revenue)
– Other local revenues – $3.7M
– State sources revenues – $3.5M
– Other financing source revenues – $.5M
Total Expenditures: $18.0 Million
– General administration – $1.5M
– Finance and operations – $6.5M
– Instructional services – $9.2M
– Plant and fixed charges, transfers to LEAs – $.8M
General Fund Overview
42
Dollars in millions
Fiscal Year 2012
General Education Fund Balance
END OF YEAR:
Unassigned:
$ 2,172,000
Assigned:
Prepaid, Inventory and Deposits
$
29,000
Total Budgeted Ending Fund Balance
$ 2,201,000
_______________________________________________________
5% of GEF operating expenditures ($17.8M):
State Aid exposure (sec 81):
Fund Balance Protocol Target:
43
$
$
$
0.9M
3.5M
4.4 Million
Fiscal Year 2012 District Debt
Amount
GEF Debt Principal:
$ 4,415,000
CFEF Debt Principal:
$41,670,000
QSCB Debt Principal (funds): $14,800,000
Total OS Bonded Debt:
$60,885,000
44
Average Annual
Payment
$ 750,000
$ 3,100,000
$ 850,000
$ 4,700,000
NOTE: Debt Service for the Administration Building
Project Bond (2003) and QSCB issue is pre-funded in Debt Service
Fund 310 & 313 and Debt Service for the campus renovations bond
(2007) is pre-funded in Debt Service Fund 312 through FY 2019
General Fund Five-Year Forecast
Projection
2011-12
Projection
2012-13
Projection
2013-14
Projection
2014-15
Projection
2015-16
Revenue:
17,892,900
18,038,850
18,231,077
18,429,443
18,582,956
Expenditures:
18,031,900
18,266,991
18,486,737
18,743,464
19,034,345
Operating Excess (Deficit)
(139,000)
(228,141)
(255,661)
(314,021)
(451,390)
Assigned: Prepaid, Inventory
and deposits
29,000
29,000
29,000
29,000
29,000
Unassigned
2,172,000
1,943,859
1,688,199
1,374,178
859,749
Total
2,201,000
1,972,859
1,717,199
1,403,178
951,788
End of Year Unreserved FB
as % of Expenditures
12.12%
10.80%
9.29%
7.49%
5.00%
End of Year Fund Balance:
45
ISD Budget Resolution
Revised School Code 380.624 - Overview
1.
Not later than May 1 of each year, the ISD shall submit
proposed budget for next fiscal year to the board of each
constituent district for review
2.
Not later than June 1 of each year, the board of each
constituent district shall review the proposed ISD budget,
shall adopt a board resolution expressing its support for or
disapproval of the proposed budget
3.
Mail copy of resolution indicating support or disapproval (with
rationale) to the Oakland Schools Board of Education
46
General Education Fund
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47
Questions & Comments
Special Education Fund Summary
48

Total Revenue: $132.8 Million
– Property tax – $128.6M (96% of total revenue)
– Other local revenues – $1.4M
– State sources revenues – $2.6M

Total Expenditures: $132.8 Million
– Program supervision and direction – $2.4M
– Program operations – $7.2M
– Plant and fixed charges – $6.8M
– LEA transfers and program subsidies – $116.4M
Special Education Fund Overview
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*FY 2004 contains “one time” operating adjustment for prior years
**Dollars in millions
Fiscal Year 2012 Special Education
Program Support & Subsidies
PA-18 Base Distribution
Extraordinary Contingency
Section 24 subsidy
Group Homes
Havenwick
SEI Regional Day Treatment
Michigan Rehab Services Cash Match
Total
$ 114,080,600
$
250,000
$
100,000
$ 1,200,000
$
150,000
$
450,000
$
180,000
$ 116.410,600
PA-18 Base Distribution declined $(29.2M) from FY 2010
50
Oakland Schools Special Education
Expenditure Budget Comparison
51
Dollars in millions
PA-18 Base Distribution
FY 2003-2016
52
Dollars in millions
Trend Line: Red
After Property Tax Decline: Blue
Fiscal Year 2012
Special Education Fund Balance
END OF YEAR:
53
Restricted:
Restricted:
Future SE Center Facility Renovations
$
835,700
$
386,000
Total Budgeted Ending Fund Balance
$ 1,221,700
5% of SEF operating expenditures ($16.3 m):
State Aid exposure (sec 51a, 51a.2)
Fund Balance Protocol Target:
$ .815M
$ 2.6M
$ 3.415 Million
Special Education Five-Year Forecast
Projection
2011-12
Projection
2012-13
Projection
2013-14
Projection
2014-15
Projection
2015-16
Revenue:
132,849,200
131,646,025
131,995,730
132,346,477
132,377,299
Expenditures:
132,789,100
131,520,830
131,882,006
132,234,477
132,264,739
Operating Excess (Deficit)
60,100
82,746
125,195
113,724
112,580
Restricted Center Program
Facility Renovation
386,000
486,000
586,000
686,000
786,000
Restricted Special Ed
835,700
860,895
874,619
887,093
899,653
Total
1,221,700
1,346,895
1,460,619
1,573,093
1,685,653
End of Year Restricted
FB % net of LEA O.T.
5.00%
5.00%
5.00%
5.00%
5.00%
End of Year Fund Bal:
54
Special Education Fund

55
Questions & Comments
Career Focused Education Fund
Summary
56

Total Revenue: $32.7 Million
– Property tax – $31.5 M (96% of total revenue)
– Other local revenues – $0.6 M
– State sources revenues – $.4 M
– Other financing source revenues – $0.2 M

Total Expenditures: $32.5 Million
– Campus and other program administration – $21.3 M
– LEA transfers and direct program operations – $4.9 M
– Facility and technology maintenance/renovations – $0.3 M
– Plant and fixed charges – $6.0 M
Career Focused Education
Fund Overview
57
Dollars in millions
Fiscal Year 2012
Career Focused Education Fund Balance
END OF YEAR:
Restricted:
$
5,288,900
Non-Spendable:
Prepaid, Inventory and Deposits
$
67,200
Total Budgeted Ending Fund Balance
$ 5,356,100
_______________________________________________________
5% of CFEF operating expenditures ($27.5):
State Aid exposure (sec 61a.1):
Fund Balance Protocol Target
58
$ 1.4 M
$ .4 M
$ 1.8 Million
Career Focused Education
5-Year Forecast
Projection
2011-12
Projection
2012-13
Projection
2013-14
Projection
2014-15
Projection
2015-16
Revenue:
32,793,500
32,485,508
32,573,281
32,673,274
32,673,585
Total Expenditures:
32,510,000
33,803,771
32,852,911
33,392,651
34,011,770
Operating Excess (Deficit)
292,500
(1,318,263)
(279,630)
(719,376)
(1,338,185)
Restricted
5,356,100
4,037,837
3,758,208
3,039,831
1,700,646
End of Year Restricted FB
as % of Expenditures
16.48%
11.94%
11.44%
9.10%
5.00%
End of Year Fund Balance
59
Career Focused Education Fund
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60
Questions & Comments
Proposed Grants and Funded Projects
Summary

Total dollar award value of all current grants and
funded projects: $74.5M

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61
New Awards
Carry Over
$51.8M
$22.7M
Direct transfer to districts: $62.8M
ISD administered grants and projects: $11.7M
(Includes JobLink $5.5M)
Other Funds
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Cooperative Activities Fund 271 – Oakland Network for
Education (ONE)
Cooperative Activities Fund 272 - Alternative Education High
School
Cooperative Activities Fund 273 – Medicaid
Debt Service Fund 310 – Administrative Building Bond 2003:
15 years, ending 2018
Debt Service Fund 312 – CFE Campus Renovations Bond:
29 years, ending 2036
Debt Service Fund 313 & 314 – Qualified School
Construction Bond:17 years, ending 2027
Other Funds
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
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63
Capital Projects Fund 404 - CFE Technical Campus Renovations
Phase II Project
Capital Projects Fund 406 – Admin Bldg Renovation & Maintenance
Capital Projects Fund 408 – Qualified School Construction Bond
Capital Projects Fund 409 – New JobLink facility
Production Print Fund 710 – Enterprise Fund (subsidy eliminated)
Risk Related Activity Fund 810 – Internal Service Fund
(unemployment pre-funded)
Questions & Comments
64