Budget Projections

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Berniece Clarke
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UTICA COMMUNITY SCHOOLS 2017-2018 Budget

1 UTICA COMMUNITY SCHOOLS Budget Projections and Reductions March 27,

2 Factors creating financial challenges 2

3 Foundation Allowance and Enrollment Trend Foundation Allowance Peak Foundation Allowance Enrollment $7,900 $7,800 $7,700 $7,600 $7,500 $7,400 $7,300 $7,200 $7,100 30,000 29,500 29,000 28,500 28,000 27,500 27,000 26,500 3 * Enrollment Projected

4 Real Growth in Foundation Allowance $7,800 $7,600 $7,624 $7,684 $60 over 10 years or $6 per pupil per year $7, $7,200 $7,000 4

5 $7,624 $7,085 $7,684 $7,511 Comparison of UCS Foundation Allowance to Minimum Foundation District $8,000 $7,750 $7,500 $7,250 Utica Community Schools $539 Minimum Foundation District $173 $7,000 $6,750 $6,500 $6,250 $6,

UCS has Received $366 Less in Funding Increases than Minimum Foundation Districts School District FY 2006-2007 FY 2016-2017 Total Increase Minimum

6 UCS has Received $366 Less in Funding Increases than Minimum Foundation Districts School District FY FY Total Increase Minimum Foundation Districts and Charter Schools $7,085 $7,511 $426 $366 Utica Community Schools $7,624 $7,684 $60 A difference of $10.1M for UCS annually 6

7 Michigan Public School Districts and Charter Schools 5% Districts Above State Maximum Foundation (Hold Harmless) $8,230 - $15,616 Troy, Warren Consolidated Districts between min. and max. foundation 11% Between Minimum and Maximum Foundation $7,512 - $8,229 Utica Community Schools Romeo, Rochester, L Anse Creuse 84% Minimum Foundation Districts & Charter Schools $7,511 Chippewa Valley, Plymouth-Canton 7

8 General Fund FY Budget Adjustment I General Fund as Revised 1/23/17 Revenue Expenditures Expenditures over Revenue $ 277.7M* (282.1)M $ (4.4)M July 1, 2016 Beginning Fund Balance 17.9M June 30, 2017 Estimated Ending Fund Balance $ 13.5M 4.8% *Includes one time land sale of $4.9M 8

9 Projected Budget 9

10 General Fund FY Projection Under Governor s Budget Proposal General Fund Projection Revenue $ 272.1M Expenditures Expenditures over Revenue (282.0)M $ (9.9)M July 1, 2017 Beginning Fund Balance 13.5M June 30, 2018 Estimated Ending Fund Balance $ 3.6M 1.3% 10

11 Governor s Budget Proposal FY UCS Estimated Impact Continuation of 2x Formula ($50-$100) Foundation Increase $93 UCS estimate $ 2.6M Additional $50 per high school student $ 0.4M At-Risk Funding increase: $1.6M Increase to Revenue & Expenditures $ -- Net Retirement Rate Impact $ 0.1M Reduction of Non-Public Shared Time $ (0.5)M Declining enrollment relief Requires decline greater than 5% $ -- Net Budget Impact $ 2.6M 11

12 Per Pupil Increase Comparison Per Pupil Increase Actual Governor s Proposal $112 $109 12

13 General Fund FY Additional Assumptions Student blended count Salary and wage at levels Teacher retirements/replacements 27,888 FTE 20 FTE Healthcare hard cap increase 3.3% Utility/gasoline increase 5% 13

14 Increases in Special Education Costs Compared to Foundation Allowance Fiscal Year UCS Unreimbursed Special Education Costs Percent Change UCS Foundation Allowance Percent Change 2007 $11.8M $7, * $18.3M $7,684 Change $6.5M 55% $60 0.8% 2017 Annual Impact $6.5M $1.7M Total special education costs less federal, state and local/county source revenue *Projected 14

15 At-Risk Proposed Changes 40% increase UCS impact $1.6M Current at-risk funding 11.5% of foundation allowance x students eligible for free meals Proposed student eligibility expanded to include: Reduced price meals Food or cash assistance Homeless/migrant/foster 15

16 At-Risk Proposed Changes District eligibility expanded to include: Districts at or above the basic foundation allowance level Additional accountability measures Payments would equal 11.5% of the statewide average foundation allowance ($778) Some proration is expected to continue 16

17 Governor s Proposed Budget FY Additional At-Risk Funding $7,000,000 $6,468,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,780,000 $2,000,000 $1,600,000 $1,740,000 $1,000,000 $256,000 $600,000 $603,000 $727,000 $838,000 $1,027,000 $- 17

18 FY Michigan Public School Employees Retirement System (MPSERS) Proposal includes the assumed rate of return in the closed MPSERS plan from 8% to 7.5% to stabilize the system The cost would be shared between the state and local districts The percentage applied to wages would increase by.62% from 24.94% to 25.56% Increase is primarily covered by MPSERS cost offset categorical 18

$678 $706 $747 $769 $780 $820 $832 $888 $911 $1,069 2016-2017 State Funded Retirement Per Pupil Comparison $1,200

19 $678 $706 $747 $769 $780 $820 $832 $888 $911 $1, State Funded Retirement Per Pupil Comparison $1,200 $1,000 $800 AVERAGE $820 $600 $400 $200 $- SOURCE: March 2017 State Aid Financial Status Report/ Section 147a & c 19

20 Statewide Shared Time Membership Growth 16,000 15,000 15,578 14,000 13,000 12,000 12,936 11,000 10,000 11,381 9,000 8,000 Fall 2014 Fall 2015 Fall 2016 FTEs 20

21 UCS Shared Time Programs UCS currently provides public school classes to 213 nonpublic/home schooled students The Governor's Budget Proposal includes a reduction in the foundation allowance for shared time students of 48% or ($.8M) The elimination of shared time programs is ($.5M) 21

UCS Funding Sources Comparison to Regional Average $8,000 $7,000 $6,000 $7,721 $7,759 Total Revenue per Student Utica Community Schools $9,417 Regional Average $10,890 Difference -$1,473 $5,000

22 UCS Funding Sources Comparison to Regional Average $8,000 $7,000 $6,000 $7,721 $7,759 Total Revenue per Student Utica Community Schools $9,417 Regional Average $10,890 Difference -$1,473 $5,000 $4,000 $3,000 Regional Average $2,000 $1,000 $0 $1,836 $1,041 $718 $615 $324 $293 LOCAL SOURCES STATE SOURCES FEDERAL SOURCES OTHER FINANCING SOURCES SOURCE: Munetrix - Fiscal Year 2016; Regional Average includes Macomb, Oakland and Wayne County public schools Utica Community Schools 22

23 Expenditure per Student FTE UCS Expenditure Comparison to Regional Average $9,000 $8,000 $7,000 $6,000 $5,000 $4,000 $3,000 $7,593 $7,826 $7,510 $7,510 Salaries & Benefits Total Expenditure per Pupil Utica Community Schools $9,705 Regional Average $10,777 Difference -$1,072 Regional Average Utica Community Schools Salaries & Benefits $2,000 $1,000 $611 $534 $636 $255 $941 $577 $415 $391 $581 $122 $0 Teachers & Other Instructional Support School Administration District Administration Operations & Maintenance Transportation SOURCE: Munetrix - Fiscal Year 2016; Regional Average includes Macomb, Oakland and Wayne County public schools Athletics & Other 23

24 $9,151 $9,313 $9,417 $9,921 $10,527 $10,969 $11,085 $11,094 $12,632 $14,070 District Average Per Pupil Revenue Comparison $16,000 $14,000 $12,000 $10,000 AVERAGE $10,818 $8,000 $6,000 $4,000 $2,000 $0 Source: SOURCE: Munetrix Fiscal Year Average of selected school districts. 24

25 $100,617 $102,077 $105,099 $105,292 $106,726 $107,245 $109,184 $109,476 $112,900 $118,979 District Average Administrator Salary Comparison $140,000 $120,000 $100,000 AVERAGE $107,760 $80,000 $60,000 $40,000 $20,000 $0 Source: SOURCE: Munetrix Fiscal Year Average of selected school districts. 25

26 District Average Business & Administration Ranking School District Fiscal Year Farmington 461 Ann Arbor 534 Warren Consolidated 609 Livonia 657 L'Anse Creuse 663 Rochester 723 Troy 776 Chippewa Valley 791 Plymouth-Canton 830 Utica 834 Bulletin

$80,000 $70,000 AVERAGE $73,714 $60,000 $50,000 $40,000 $30,000

27 $66,223 $69,196 $71,564 $72,572 $72,580 $73,603 $76,169 $76,465 $78,435 $80,334 District Average Teacher Salary Comparison $90,000 $80,000 $70,000 AVERAGE $73,714 $60,000 $50,000 $40,000 $30,000 $20,000 $10,000 $- Source: 2016 Bulletin 1014 Average of selected school districts. 27

28 FY FY FY FY FY FY FY FY FY Gov's Rec (Dollars in Millions) School Aid Fund in Postsecondary $700.0 $600.0 $500.0 $400.0 $300.0 $200.0 $100.0 SAF Revenue Supporting Postsecondary and GF/GP Supporting K-12 $208.4 $30.2 SAF in Postsecondary GF/GP in K-12 $459.6 $18.6 $78.6 $398.1 $398.1 $282.4 $149.9 $571.2 $461.9 $33.7 $55.1 $497.5 $630.8 $218.9 $215.0 $0.0 $0.0 28

29 Foundation Allowance Gap History $8,433 $8,489 $8,489 $8,489 $1,229 Effective (Not Statutory) Minimum and Basic Foundation Allowances $8,019 $8,019 $8,049 $8,099 $8,169 $8,229 $8,279 $ $7,204 $7,316 $7,162 $7,146 $6,846 $6,966 $7,076 $7,251 $7,391 $7,511 $7, Minimum Basic Gov s Rec 29

30 General Fund FY Projection Under Governor s Budget Proposal General Fund Projection Revenue $ 272.1M Expenditures Expenditures over Revenue (282.0)M $ (9.9)M July 1, 2017 Beginning Fund Balance 13.5M June 30, 2018 Estimated Ending Fund Balance $ 3.6M 1.3% 30

31 General Fund Reductions & Adjustments Reduction Strategies Included in the Projected Budget Transfer from Community Education Fund $ 1,422,600 Employee Group Compensation at Levels 3,700,000 $ 5,122,600 31

32 General Fund Reductions & Adjustments Budget Reductions March 27, 2017 Increase transfer from Community Ed fund - Expand use of contract service staff $ 500,000 Position elimination administrative position 116,000 Position elimination exclusion 63,000 Position elimination security 47,000 Consolidation of positions 178,000 Building allocation per student ($5) 140,000 Operating costs of closed buildings (pending) 120,000 $ 1,164,000 32

33 General Fund FY Projected Budget Proposals Expenditures over Revenue Governor $ (9.9)M Proposed Reductions March M Adjusted Expenditures over Revenue $ (8.8)M Beginning Fund Balance - July 1, M Ending Fund Balance - June 30, 2018 $ 4.7M Fund Balance as a % of Expenditures 1.7% 33

Daniel Romzek Assistant Superintendent for Business Affairs

Daniel Romzek Assistant Superintendent for Business Affairs Develop a budget recommendation for the 2014/2015 fiscal year that contains a balanced and equitable spending plan that is sustainable and promotes