SAULT STE. MARIE AREA PUBLIC SCHOOLS. Board Budget Workshop March 26, 2013

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1 SAULT STE. MARIE AREA PUBLIC SCHOOLS Board Budget Workshop March 26,

2 MISSION STATEMENT The Sault Ste. Marie Area Public Schools, in partnership with students, parents, and the community, will provide all students with opportunities to attain a high quality education in a safe, positive environment and to maximize their intellectual, physical, emotional, and social skills, preparing them to be productive, responsible citizens. 2

3 KEY POINT Cutting programs, buildings, and services is very difficult. Every dollar we spend is important to somebody. We must do what is best for the majority of our nearly 2,500 students. 3

4 Our Goals Provide a high quality education in a safe environment Improve student achievement Be fiscally responsible 4

5 Total Cuts yr total We cut Curriculum $ 2,350,000 We cut Technology $ 1,500,000 We cut Maintenance $ 1,100,000 Staff Reductions $24,584,000 Retirement Savings $ 4,925,000 Closed Buildings & Programs $ 6,060,000 Bus Purchases $ 495,000 Athletics $ 885,000 Total Cuts $41,899,000 5

6 District Operations Days and hours have been cut Positions have been eliminated More mandates from State and Feds Below average raises/freezes/concessions Caps on ALL insurance costs New insurance programs - ALL employees have a less costly insurance program than they did a few years ago. 6

7 Budget Percentages Salaries and Benefits as a percent of the total budget Total Cost Salaries Retirement Fringes of Staff % 9.70% 16.30% 85.20% % 10.50% 17.20% 86.80% % 8.97% 15.05% 82.20% % 8.64% 15.04% 80.09% % 8.99% 19.45% 82.55% % 14.38% 14.75% 80.86% % 16.06% 13.75% 80.56% est % 16.50% 12.95% 79.86% 7

8 Retirement Rate (Tax) Percent Payroll Costs % x $13,752,568 = $2,247, % x $13,274,146 = $2,354, % x $12,020,398 = $2,009, % x $12,091,815 = $1,999, % x $11,903,676 = $2,016, % x $11,299,951 = $2,334, % x $10,880,615 = $2,661, est 24.68% x $10,719,577 = $2,645, est 24.79% x $10,719,577 = $2,657, est 25.78% x $10,719,577 = $2,763,507 8

9 General Fund Salaries Instruction Pupil/Building Support Principals/Secretaries Operations Transportation Other 9

10 Foundation History $6, $7, $7, $7, $7, $7, $6, $6, est. $6,966 10

11 Special Education Costs Special Education costs for were: Program costs $2,353,805 Sp. Ed. Transportation 429,667 These are funded by: Total $2,783,472 General Fund $1,366,588 State Funds 536,404 Federal Funds 371,412 EUPISD 509,068 Total $2,783,472 11

12 ISD Regional Funding The EUPISD is 1 of 57 ISDs in Michigan We are #1 in terms of total square miles: 3,776 We are #56 in terms of levied millage: mills We are #57 in terms of Tax Revenue per Pupil: $247 If we had the state average millage rate, mills, we would have $904 per student in ISD revenue to support our operations For the Sault that would be $1,600,000 in additional funding support every year 12

13 Budget Outlook Foundation allowance is proposed to be $6,966. Mid-year in 02-03, 03-04, and the state cut $256,000, $215,000, and $406,000 respectively. Many one-time accounting fixes by the state; including a proposed onetime equity payment of $34 per pupil in Enrollment projections predict decreasing enrollment for the next couple years. Budgeted enrollment is a -60 change. 13

14 Budget Summary Current deficit for : $ - 541,572 Decreasing enrollment (-60) - 417,960 Equity payment ($34 per pupil) + 82,715 Labor costs (including insurance)? - 0 Retirement rate increase to 24.79% - 12,000 Staff retirements replaced (4) + 120,000 Staff reductions (4) + 360,000 ISD special ed distribution - 105, Budget Deficit $ - 513,817 (Not including increased costs for fuel, utilities, liability insurance) 14

15 Looking Ahead to Projected deficit: $ - 513,817 Decreased enrollment (15) - 104,490 Equity payment ($34 per pupil) - 82,715 Labor costs? - 0 Retirement rate increase 25.78% - 106,124 Staff retirements replaced (4) +120, Budget Deficit $ - 687,146 (Not including increased costs for fuel, utilities, liability insurance) 15

16 We still have to cut If we don t make additional cuts Fund Equity June 2013: $ 1,482,871 Fund Equity June 2014: $ 969,054 Fund Equity June 2015: $ 281,908 This is dangerously low; going negative is illegal and we won t be going there We must make additional changes 16

17 Projected Enrollment K S.E K Change Based on Enrollment Projections from March

18 Staff Students SAULT STE. MARIE AREA PUBLIC SCHOOLS Sault Schools - Staff & Enrollment 360 3, , , , , , , , ,000 District Total Staff Fall Enrollment 18

19 Pupil to Teacher Ratio Neighborly comparisons (from the Bulletin 1014): Pupils Ratio Marquette 3, Gaylord 3, Iron Mountain 1, Petoskey 2, Gladstone 1, Gladwin 1, Sault Schools 2, Escanaba 2, Cheboygan 2, (all districts listed declined in enrollment except Gladwin & Sault Schools) 19

20 Budgets + or -? Some Federal and State Programs Will go up in funding next year Will go down in funding next year Will be eliminated next year Federal Sequestration (Cuts) ALL of these funding sources are limited as to what we can do with the money. We are audited every year. 20

21 FUND EQUITY Fund equity is a district s savings account intended to cover shortfalls in state funding, district cash flow, or to cover special projects. The state recommendation is 12-15% of a district s annual budget. Michigan School Business Officials (MSBO) recommends 15-20% MEA recommends 15% Current level won t sustain more reductions. 21

22 % of Expenditures SAULT STE. MARIE AREA PUBLIC SCHOOLS Unreserved Fund Equity as a % of General Fund Expenditures 20.0% 15.0% 10.0% 5.0% 15.2% 17.8% 16.2% 15.2% 11.5% 8.7% 7.5% 8.7% 4.0% 6.0% 9.9% 9.4% 6.8% 4.5% 1.3% 0.0% -5.0% -10.0% * 2014* 2015* % 15.2% 17.8% 16.2% 15.2% 11.5% 8.7% 7.5% 8.7% 4.0% 6.0% 9.9% 9.4% 6.8% 4.5% 1.3% Year Ending 22

23 What does this mean? Fund Equity Borrowing District Cost $2,048,972 $ 0 $ $1,746,338 $1,750,000 $ 69, $1,981,175 $1,900,000 $ 43, $ 954,659 $2,500,000 $ 71, $1,319,825 $2,700,000 $ 57, $2,168,038 $2,500,000 $ 40, $2,024,443 $ 995,000 $ 10, est $1,482,871 $1,550,000 $ 24, est $ 969,054 $2,100,000 $ 43,000 23

24 Regionalization of Services Technology Special Education Services and Transportation Career Center Programs Staff Professional Development Curriculum Grants Administrative Team/Planning Transportation and Building Maintenance Business Services 24

25 SUMMARY Enrollments are projected to decrease for the next couple years. Total revenues continue to decline. Costs continue to rise. Reserve funds are dwindling quickly. District spending is in line or below state and local averages. We will continue to change how we operate. 25

26 Positive Points MEAP Scores are up Many AP classes covering all Core Areas Highly Qualified Staff Career Center Quality Athletic Programs MITES/Skills USA/BPA State and Nationals Evening with the Arts Band/Performing Arts FIRST & LEGO Robotics Teams Health Center (SHACC) Expansion Washington Elementary and Soo Township Elementary - Blue Ribbon Schools 26

27 Students SAULT STE. MARIE AREA PUBLIC SCHOOLS Students are choosing Sault Schools 100 School of Choice Students Schools of Choice Students 27

28 THE CHALLENGE How do we work together to maintain the QUALITY EDUCATIONAL SYSTEM that we currently have through the next few years? 28

29 Budget Process 29

30 Budgeting Process Calendar 2013 March 26 March 28 April 8 May 13 May June 10 Board budget workshop at 5:30 p.m. Public meeting at 7:00 p.m. Board adopts budget plan Board receives budget proposal for consideration State Revenue Consensus Conf. Board receives final budget proposal for consideration and action 30

31 CONCERNS Maintaining high quality educational programs Meeting accountability standards Minimal curriculum spending Minimal preventative maintenance spending Aging technology Aging bus fleet Aging elementary buildings Aging classroom equipment and furniture Increasing complexity and number of special needs students Fund balance will be exhausted unless changes are made 31

32 CONTACT STATE LEGISLATORS Governor Rick Snyder P.O. Box Lansing, MI Phone (517) Fax (517) State Senator Howard Walker State Representative Frank Foster P.O. Box P.O. Box Lansing, MI Lansing, MI Phone (517) or (517) or Fax (517) Fax (517)

33 DISCUSSION Strengths/Points of Pride Opportunities for Improvement Future = Premiere 33