Overview of Fiscal Year 2012-2013



1

Oakland Schools Proposed Budgets

Property Tax Forecast

2 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 Fiscal Year 2014-15 Fiscal Year 2015-16 Fiscal Year 2016-17 -.0075% - $ -3.8% - $ (8.2)M -11.9% - $ (32.9)M -7.5% - $ (46.7)M -3.0% - $ (51.8)M 0% - $ 0% - $ 2% - $ 1% - $ Annual property tax collection has declined from FY 2008 to FY 2014 by 23.9% Accumulative loss from FY 2008 to FY 2014 is $191.6 million FY 2008 base year tax levy was $216.9 million FY 2014 expected tax levy is $165.08 million

3

Fund Balance Target Setting Protocol

4

  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:  The State of Michigan’s economic environment  The financial condition of the LEAs  Maximize district support thru program support, subsidies and distributions Oakland Schools Board of Education approved the Protocol on 6/15/2009 Practice for the Special Education Fund is to distribute to LEAs the amount in excess of the target unreserved fund balance.

Oakland Schools Total Revenue Summary

5

FY 2013 $270.7 Million

Dollars in millions

Revenue Assumptions

6

 Property tax revenue decrease of 3%  Expected interest earnings are $895K total for all funds combined (FY 2007 $7.7 million)  Increased local district utilization of the student application & NextGen Exchange student programs. Stable revenue from GenNet online software, Rubicon West online software, Discovery/Learn 360 online software.  General Education Section 81 revenue stable  Special Education State funding stable  Career Focused Ed State funding stable  No Personal Property Tax loss forecasted in FY13

Operating Revenue per Countywide per pupil count (195,000)

7

 Revenue in the three major ISD operating funds since FY 08 has plunged by $51.8 Million, 23.9% decrease (Excluding Grants, Medicaid and Production Printing & Graphics)  Loss of $290 per pupil on a county wide basis  Includes PA-18 distribution reduction of $171 per pupil – all pupils, General Ed.

Operating Revenue Countywide per pupil basis

8

Operating revenue/per pupil $1,400 $1,200 $1,000 $800 $600 $400 $200 $0

$1,240 $950

2007-08 2008-09 2009-10 2010-11 2011-12 2012-13

Countywide pupil count

9

10

Oakland Schools Fiscal Year 2013 Total Expenditures Budget Type

P.S./Supplies

0.4% 5.9% 17.4%

Personnel Grants

27.1%

Transfers to LEAs

47.7%

$272.79 Million

0.1% 1.5%

Transfers to LEAs/Other Funds - $130.1

Personnel Purch Srvcs, Supplies, Dues/Fees - $16.1

Utilities - $1.0

Grant Related Expenditures - $74.0

Capital Outlay & Other - $0.3

Debt Service - $4.0

Dollars in millions

11

Notable Programs

 Continuation of the Oakland Opportunity Academy - Alternative High School program serves six districts w/ enrollment of 150 FTE. Tuition projected at $6,700 per pupil  Continuation of Widening Advancement for Youths - online program for 11 th and 12 th graders w/ enrollment of 240 FTE. Tuition projected at $6,500 per pupil  New: Virtual Learning Academy – Oakland - online program for K-8 students projecting enrollment of 240 FTE but could be significantly higher. Tuition projected to be $6,724 per pupil  NextGen continues. High School Study Abroad program for 12 th grade Chinese students with enrollment of 15  Work on the Common Core Curriculum progresses. Over a three year period (FY 2012-FY 2014) Oakland Schools will allocate $500K towards this County-wide initiative. Nearly half of this funding will come from a grant from MAISA

CPDI Fund

 The CPDI Fund (Collaborative Programs Development Initiative) has an estimated balance of $3.9 million.

 There will be a subsidy from this fund of $190K to help start up the new Virtual Learning Academy-Oakland Program for 2012-13. This amount is to be repaid from VLA-O to the CPDI Fund via future tuition revenue collections  Prior initiatives partially subsidized by the CPDI Fund include:  International Academy  Refugees Support Programs in qualifying districts  W-A-Y Program (Widening Advancement for Youth)

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Summary Staffing Report

13 Business & Operations Departments

Administration Communication Services Community Programs & Special Projects Event Management Facility Operations Financial Services Fingerprinting Human Resources Legal Affairs Medicaid New Media Organizational Development Print Production & Graphics Purchasing Regional Services Administration Shipping/Receiving Technology Support / Service Center Transportation

Sub total: # of Employees 2008-09

10.10

4.00

0.90

7.00

8.00

10.00

0.40

10.00

2.00

6.00

0.00

0.00

2.10

5.00

2.85

4.45

0.00

4.00

76.80

# of Employees 2012-13 Difference

6.40

3.00

3.00

6.00

6.53

10.00

0.00

8.00

2.00

4.00

0.00

0.00

0.00

5.00

2.65

3.20

0.00

2.33

62.11

(3.70) (1.00) 2.10

(1.00) (1.47) 0.00

(0.40) (2.00) 0.00

(2.00) 0.00

0.00

(2.10) 0.00

(0.20) (1.25) 0.00

(1.67)

(14.69) Note:

PP&G moved to 75% f ee based in 2008-09 & 2009-10 and then 100% f ee based beginning in 2010-11

Summary Staffing Report

14 Programs & Services Departments

Career Focused Education (Campus) Career Focused Education (Non-Campus) Child Nutrition Early Childhood Government & Community Services Learning Services Research,Evaluation & Assessment School Quality Special Education Technology Services World Language Initiative

Sub total: Total Across All Departments: Other Programs & Services

External Cost Recovery Positions Homeless / Wrap Around (Grant Funded) Job Link (Grant Funded) Oakland Opportunity Academy Virtual Learning Program WAY Program

# of Employees 2008-09

191.00

23.00

1.00

12.00

10.90

37.50

8.00

10.50

100.00

55.00

1.00

449.90

526.70

# of Employees 2012-13

157.50

13.09

0.33

11.50

11.05

30.54

0.00

14.30

71.21

50.50

0.00

360.02

422.13

Difference

(33.50) (9.91) (0.67) (0.50) 0.15

(6.96) (8.00) 3.80

(28.79) (4.50) (1.00)

(89.88) (104.57) # of Employees 2008-09

2.00

11.10

32.00

0.00

0.00

0.00

# of Employees 2012-13

1.43

18.00

37.33

9.52

7.60

3.70

Difference

(0.57) 6.90

5.33

9.52

7.60

3.70

Salary & Benefits Comparison by Fund

(in $ millions)

15

Staffing Changes

16

 Two new consultant positions in Special Education  (1) Alternative/Augmentative Communication  (1) Visually Impaired  The new Virtual Learning Academy – Oakland, an online K-8 program requires at least 7 new positions, and possibly more depending on enrollment that is projected at 240 FTE

Personnel Costs

17

 Wage freeze in effect for third consecutive year, subject to collective bargaining  Furlough days (five for 12-month staff and three for 10-month staff) eliminated after two years in effect. Cost increase of $700K – All Funds  Retirement rate of 27.37% will increase costs by $1.08 million. This is an effective rate cost increase of 11.9%.

 Health Insurance “Hard Cap” will save $1 million. Plans offered may be affected by collective bargaining

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Oakland Schools Financial Impact of Benefit Plan Changes

Budgetary Factors

19



Michigan Tax Tribunal Expense (MTT)

 Doubled reserve in 2011-12 (from 1.5% to 3%)  Set reserve at 2.5% for 2012-13 which equates to $3.2 million in expense 

PA 18 Special Education Funding

 $4 million reduction in 2012-13 equates to -3.6% or an average loss per pupil in Oakland County of -$22 per pupil

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 – square footage based

 50% GE, 26% SE, 24% CFE

Cost Based Allocation – Transportation

 73% GE, 25% SE, 2% CFE Reference Enterprise Wide Summary Document

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General Education Fund Summary

21



Total Revenue: $17.4 Million

 Property tax – $9.8M (56% of total revenue)  Other local revenues – $3.5M

 State sources revenues – $3.5M

 Other financing source revenues – $.6M



Total Expenditures: $17.8 Million

 General Administration – $1.5M

 Finance and Operations – $6.8M

 Instructional Services – $8.8M

 Plant and fixed charges, transfers to LEAs – $.7M

General Fund Overview

22 $35 $30 $25 $20 $15 $10 $5 $0 2003 2004 Revenue 2005 2006 2007 Expenditures 2008 2009 2010 Fund Balance 2011 2012 Amend#2 2013 Proposed

Dollars in millions

Fiscal Year 2013 Fund Balance

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END OF YEAR: Unassigned: Assigned: $ 2,209,700 Prepaid, Inventory and Deposits Total Budgeted Ending Fund Balance _______________________________________________________ 5% of GEF operating expenditures ($17.8M): $ 0.9M

State Aid exposure 50% of Section 81 $ 30,700 $ 2,240,400 $ 1.7M

Fund Balance Protocol Target: $ 2.6 M

Fiscal Year 2013 District Debt

24

GEF Debt Principal: CFEF Debt Principal: QSCB Debt Principal: Total OS Bonded Debt: Amount $ 4,030,000 $42,875,000 $13,412,500 $60,317,500 Average Annual Payment $ 765,000 $ 3,100,000 $ 1,111,000 $ 4,976,000 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 2020

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General Fund Five-Year Forecast

in millions

Revenue: Expenditures: Proposed 2012-13 17.45

17.88

Projection 2013-14 Projection 2014-15 Projection 2015-16 Projection 2016-17 17.39

17.79

17.45

17.76

17.66

17.99

17.78

18.08

Operating Excess (Deficit) End of Year Fund Balance: End of Year Unreserved FB as % of Expenditures (.42) 2.24

12.5% (.39) 1.84

10.35% (.30) 1.53

8.66% (.32) 1.21

6.75% (.30) .91

5.02%

ISD Budget Resolution

26 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

General Education Fund

27

 Questions & Comments

Special Education Fund Summary

28



Total Revenue: $128.2 Million

 Property tax – $124.7M (97% of total revenue)   Other local revenues – $.8M

State sources revenues – $2.5M

 Other Financing Sources - $.2M



Total Expenditures: $128.2 Million

 Program supervision and direction – $2.3M

   Program operations – $7.1M

Plant and fixed charges – $8M LEA transfers and program subsidies – $110.8M

Special Education Fund Overview

29 $180 $160 $140 $120 $100 $80 $60 $40 $20 $0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Amend#2 2013 Proposed Revenue Expenditures Restricted Fund Bal Restricted Fund Bal - Facilities

*FY 2004 contains “ one time ” operating adjustment for prior years **Dollars in millions

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Fiscal Year 2013 Special Education Program Support and Subsidies

PA-18 Base Distribution Extraordinary Contingency Section 24 subsidy/other Group Homes Havenwick SEI Regional Day Treatment Total $ 108,560,000 $ 100,000 $ 100,000 $ 1,200,000 $ 150,000 $ 450,000 $ 110,560,600 PA-18 Base Distribution declined $(4.1M) from FY 2012

Oakland Schools Special Education Expenditure Budget Comparison

31 Transfers to LEAs OS Operations 180 160 140 120 106.9

100 80 60 40 20 0 18.5

110.09

23.4

145.8

27.4

137.8

134.7

16.02

16.9

143.4

17.66

160.7

18.6

148.18

18.9

156.8

18.5

143.24

16.05

114.72

110.56

17.9

17.72

Dollars in millions

PA-18 Base Distribution FY 2003-2017

32 Trend Line: Red After Property Tax Decline: Blue 200 180 $171.0

$174.0

$177.0

$180.1

$167.0

160 140 $155.0

$142.1

$148.0

$130.9

$133.7

$141.9

$143.1

$143.2

$142.8

$160.0

120 $128.4

$109.5

$112.0

100 2003 2004 2005 2006 2007 2008 2009 2010 2011 $116.6

$115.5

$112.7

$108.6 $109.8

$111.3

2012 2013 2014 2015 2016 2017

Dollars in millions

Fiscal Year 2013 Special Education Fund Balance

33

END OF YEAR: Restricted: Restricted: $ 886,900 Future SE Center Facility Renovations Total Budgeted Ending Fund Balance _________________________________________________________________ 5% of SEF operating expenditures ($17.7 m): $ .886M

State Aid exposure (sec 51a, 51a.8) $ 726,300 $ 1,613,200 $ 0M Fund Balance Protocol Target: $ 0.886 Million

Special Education Five-Year Forecast in millions

34 Revenue: Expenditures: Proposed 2012-13 128.29 128.29

Projection 2013-14 128.61 128.46

Projection 2014-15 128.93 128.77

Projection 2015-16 131.44

131.22

Projection 2016-17 132.72

132.51

Operating Excess (Deficit) End of Year Fund Bal: Restricted Center Program Facility Renovation Restricted Special Ed Total End of Year Restricted FB % net of LEA O.T.

.0029

.154 .726 .887

1.613

.936

.831

1.767

5.00% 5.00% .153

1.15

.774

1.920

5.00% .224

1.36

.788

2.144

5.00% .214

1.57

.793

2.359

5.00%

Special Education Fund

35

 Questions & Comments

Career Focused Education Fund Summary

36



Total Revenue: $31.6 Million

 Property tax – $30.5 M (96% of total revenue)  Other local revenues – $0.5 M  State sources revenues – $0.4 M  Other financing source revenues – $0.2 M 

Total Expenditures: $32.2 Million

 Campus and other program administration – $20.8 M  LEA transfers and direct program operations – $4.9 M   Facility and technology maintenance/renovations – $0.08 M Plant and fixed charges – $6.4 M

Career Focused Education Fund Overview

37 Revenue Debt/Capital Expense Restricted Fund Balance $45 $40 $35 $30 $25 $20 $15 $10 $5 $0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Amend#2 2013 Proposed

Dollars in millions

Fiscal Year 2013 Career Focused Education Fund Balance

38

END OF YEAR: Restricted: $ 4,156,700 Non-Spendable: Prepaid, Inventory and Deposits $ 69,500 Total Budgeted Ending Fund Balance $ 4,226,200 _______________________________________________________ 5% of CFEF operating expenditures ($27.5): State Aid exposure (sec 61a.1): Fund Balance Protocol Target $ 1.6 M $ .4 M $ 2.0 Million

Career Focused Education Five-Year Forecast in millions

39 Revenue: Total Expenditures: Operating Excess (Deficit) Proposed 2012-13 Projection 2013-14 Projection 2014-15 Projection 2015-16 Projection 2016-17 31.65

32.26

31.74

32.12

31.82

32.14

32.43

33.36

32.75

33.69

(.60) (.38) (.31) (.92) (.94) End of Year Fund Balance Restricted End of Year Restricted FB as % of Expenditures 4.22

13.1% 3.84

11.9% 3.52

10.9% 2.60

7.8% 1.65

4.9%

Career Focused Education Fund

40

 Questions & Comments

Proposed Grants and Funds Projects Summary

41

 Total dollar award value of all current grants and funded projects: $74 M  New Awards $60.5M

 Carry Over $13.5M

 Direct transfer to districts: $62.8M

 ISD administered grants and projects: $11.2M (Includes JobLink $7.1M)

Other Funds

42



Cooperative Activities Funds:

    271 – Oakland Network for Education (ONE) 272 - Alternative Education High School (OOA) 273 – Medicaid 274 – Widening Advancement for Youth (W-A-Y)  275 – Virtual Learning Academy – Oakland (VLA-O ) 

Debt Service Funds:

 310 – Administrative Building Bond 2003: Ending 2018  312 – CFE Campus Renovations Bond: Ending 2036  313/314 – Qualified School Construction Bond: Ending 2027

Other Funds

43



Capital Projects Funds:

 404 - CFE Technical Campus Renovations Phase II Project    406 – Admin Bldg Renovation & Maintenance 408 – Qualified School Construction Bond 409 – JobLink facility 

Production Print Fund 710 – Enterprise Fund

 Risk Related Activity Fund 810 – Internal Service Fund (unemployment pre-funded)

Questions & Comments

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44