2014-15 Budget
Presentation
June 25, 2014
District Vision: Educating our students for the challenges of tomorrow
District Mission: Providing an exemplary education for all learners
How does the State fund the
School Aid Fund?
5.39%
7.14%
Sales and Use Tax
Income Tax
12.98%
43.22%
State Education Tax
Federal Funds
13.28%
Lottery Revenue
17.99%
All Other
2
How does the State fund our
schools?
• The Foundation Allowance (FA) Grant
– Guaranteed Per Pupil Funding (Proposal A)
– The FY2014 LOCS FA is $7,877
• How is the Foundation Allowance funded?
– First with local levy operating taxes
• 18 mills levied on Non-Homestead Taxable Value
• Currently generates $916 per pupil
– Then “State Aid” back fills the balance of the FA
• For FY2014 – That’s $6,961
3
General Fund Operating Millage
• Funds the local portion of the FA
– Currently $916 per Pupil; $About $7.0 m total
• Levied on “Non-Homestead” property only
• Renewal proposal on the November ballot
– Authorization request is for 20.25 mills
• Headlee amendment limits future amount of levy
– Remaining Voter Authorization must always be above 18 mills
• District’s actual levy is 18 mills
– Levy amount is legally capped at 18 mills
• State’s calculation of the Foundation Allowance
– ALWAYS assumes the full 18 mills will be levied locally
– Does NOT backfill lost revenue due to under levy of 18 mills
4
We are very pleased to present to you
tonight a balanced General Fund Budget
that is compliant with our fund balance
Board policy!
General Fund FY2015 Budget Overview
Total Budgeted Revenue
$
Total Budgeted Expenditures
79,574,232
79,484,968
Net Operating Surplus(Deficit)
$
89,264
Fund Balance, June 30, 2015
$
8,131,462
Fund Bal. as a % of Expenditures
10.2%
5
Foundation Allowance
History
% Change
$ Change - Prior
Michigan
Prior
Year
Year
CPI
Fiscal Year
FA Amount
2006
7,934
175
2.26%
3.04%
2007
8,144
210
2.65%
1.80%
2008
8,218
74
0.91%
2.31%
2009
8,302
84
1.02%
-0.61%
2010
8,302
0
0.00%
0.78%
2011
8,302
0
0.00%
3.25%
2012
7,832
(470)
-5.66%
2.04%
2013
7,832
0
0.00%
1.57%
2014
2015
7,877
7,927
45
50
0.57% Est. 1.23%
0.63% Est. 1.61%
6
Enrollment History
Year
Blended
Count
Blended
Change
%
Change
2006
7,835
81
0.20%
2007
7,866
31
0.40%
2008
7,853
(13)
-0.17%
2009
7,834
(19)
-0.24%
2010
7,838
4
0.05%
2011
7,797
(41)
-0.52%
2012
7,729
(68)
-0.87%
2013
7,605
(124)
-1.60%
2014
7,522
(83)
-1.09%
*2015
7,656
134
*Blended count utilized in the FY15 adopted budget.
1.78%
7
Major Revenue Assumptions
• Resident District student count budgeted to decline by 85 FTE
• New SOC students budgeted to increase 218 FTE
• State aid weighting formula maintained at:
– 90% Sept. count plus 10% following Feb. count
• Foundation Allowance increased by $50 per pupil (net $18)
– Performance Funding reduced by $30 per pupil
– Best Practice Funding reduced by $2 per pupil
• Sec. 147c MPSER rate stabilization pass through revenue
budgeted at $3.66 million
– off set by corresponding expenditures – zero gain
• New categorical - Sec. 147d (est. at $580,000)
– Pass through like sec. 147c
8
General Fund Revenue
by Source
9
General Fund Revenue
Budget
Revenue
Local Source
State Source
Federal Source
ISD Source
Other Source
Total Revenue
2013-14 Final
Amend
2014-15 Proposed
Budget
$8,531,225
$8,495,692
60,937,940
63,309,178
2,329,386
2,329,386
5,029,680
5,079,977
360,000
349,596
$77,177,827
$79,574,232
10
Major Expenditure Assumptions
• Salary & wage related estimations included
• Staffing transitions, reductions and lay-offs have been
implemented
• MPSER retirement base rate set at 26.0%
• Healthcare insurance cost caps held to FY2014 levels
(excluding two person change)
• SEC. 147c MPSER rate stabilization included in
budgeted expenditures at $3.66 million
• SEC. 147d MPSER “one-time unfunded liability
payment estimated at $580,000
• Removal of several FY14 “one-time” expenditures
11
Cost Reduction, Containment,
Avoidance & Efficiency Efforts
• Employee related concessions
• Employee contributions to health care
• Support Services outsourcing
– DMBurr, PESG, etc.
•
•
•
•
•
Facility and energy management systems
Restructuring of bus fleet & trans routes
Restructuring voted and non-voted debt
Use of shared personnel & services
Operational restructuring - print shop operations,
facility operations, custodial privatization…
12
Historical Cost (Budget) Reductions,
Eliminations, and Avoidance (1999-2014)
Fiscal Year
Costs Reduced, Eliminated, & Avoided
1999-03
3,269,414
2003-04
3,526,157
2004-05
3,326,265
2006-07
1.796,260
2007-08
1,918,854
2009-10
130,000
2010-11
2,025,100
2011-12
3,023,184
2012-13
2,650,000
2013-14
2,420,000
TOTAL
24,085,234
13
Retirement Rate History
Retirement $
Total
Amount (Net of Sec. Expenditures (Net
Fiscal Year
Weighted
Retirement
Rate
147c/d pass through
costs)
of Sec. 147c/d pass
through costs)
Retirement as a
% of
Expenditures
2005
14.87%
5,752,370
70,976,606
8.10%
2006
16.34%
6,834,177
75,975,985
9.00%
2007
17.74%
7,740,484
76,666,402
10.10%
2008
16.72%
7,362,084
77,009,100
9.60%
2009
16.54%
7,561,608
76,454,936
9.90%
2010
16.94%
7,935,250
83,274,629
9.50%
2011
2012
20.66%
24.46%
8,730,756
10,637,327
78,697,132
79,245,461
11.10%
13.42%
2013
**25.00%
10,222,732
77,773,265
13.14%
*2014
**25.50%
10,280,556
76,662,657
13.41%
*2015
**26.00%
10,613,393
75,824,968
14.00%
* FY2015 Budgeted figures
**Weighted average rate not inclusive of the pass through "MPSERS UAAL Rate Stablization" portion.
14
Proposed 2014-15 Fund Budgets
• General Fund (11 – 19)
– Special Education (12) & Athletics (19)
• Food Service Fund (25)
• Community Services Fund (23)
– Childcare Services & Enrichment Programing
• Debt Service Fund(s)
– Energy Bond Fund (33) & Voted Bond Funds (37,38,39)
• Capital Project Fund(s)
– Energy Bond Capital Project Fund (43)
– District Capital Projects Fund (44)
• Risk – Internal Service Fund (81)
15
FY2015 General Fund Budget
By Object
Salaries & Wages
15.66%
Benefits
51.36%
All Other
32.99%
16
General Fund Budget
Expenditures
2013-14 Final
Amend
Expenditures
Basic Programs
Added Needs
Pupil Support Services
Instruction Improvement
Educational Media Services
Technology Assisted Instruction
Instructional Staff Supervision
General Administration
School Administration
2014-15 Proposed
Budget
38,777,217
39,233,021
10,519,979
10,597,149
6,662,114
6,604,127
505,584
511,778
1,010,497
1,040,497
344,336
355,512
637,249
646,190
853,603
825,226
4,522,299
4,613,487
Continued on next slide
17
General Fund Budget
Expenditures
Expenditures
Business Services
Operations and Maintenance
Transportation Services
Communication Services
Human Resources
Technology Services
Athletic Activities
Community Services
Other Financing Uses
Total Expenditures
2013-14 Final
Amend
2014-15 Proposed
Budget
963,800
1,011,152
5,739,882
5,400,239
3,641,651
3,674,226
157,833
157,833
741,763
750,704
1,347,552
1,354,093
1,191,442
1,176,981
298,819
301,054
958,785
1,231,699
78,874,405
79,484,968
18
Continuing Revenue
and Cost Pressures
• FY2015 passed SAF budget contains a net cost of
$(16) per pupil for LOCS
–
–
–
–
•
•
•
•
LOCS’s FA increases $50 per pupil (pp)
LOCS’s Performance Funding categorical decreases $30 pp
LOCS’s Best Practice categorical decreases $2 pp
LOCS’s MPSERS employer rate increases $66 pp
Slow growth in the ISD PA-18 SE Revenue
Retirement related (MPSERS) cost increases
Personnel and other operating cost increases
Instructional, infrastructural, and facility capital needs
19
General Fund Fund Balance
• The reasons for a Fund Balance have not changed
– Cash flow
– Uncertainty of revenues
– Unanticipated expenditures
– Allows for proactive approach to programming
– Auditor recommendation
• Existing Policy targets 10% to 15% Fund Balance
• The District has intentionally added to Fund Balance in past
years
• Beginning with FY2008-09, the Board began to judiciously use
those funds to guide us through the economic storm
• FY2015 we are proposing a balanced budget ($89k surplus)
• FY2015 proposed GF fund balance is 10.2% of expenditures
20