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East Lansing Public Schools

East Lansing Public Schools. BUDGET PLANNING and DEVELOPMENT FISCAL YEAR 2007/08 May 21, 2007. Table of Contents. I. Budgetary Challenges II. Budget Assumptions III. “Most Likely” Scenario IV. Proposed Solutions V. Additional Notations VI. Next Steps. I. Budgetary Challenges.

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East Lansing Public Schools

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  1. East Lansing Public Schools BUDGET PLANNING and DEVELOPMENT FISCAL YEAR 2007/08 May 21, 2007

  2. Table of Contents I. Budgetary Challenges II. Budget Assumptions III. “Most Likely” Scenario IV. Proposed Solutions V. Additional Notations VI. Next Steps

  3. I. Budgetary Challenges • State Budget/Revenue Outlook • Foundation Allowance • Student Enrollment • MPSERS Contribution Rate • Health Insurance • Fund Balance

  4. I. Budgetary Challenges – State Budget/Revenue Outlook • Total State Budget $41.7B • Two Major Funds: GF $9.2B, SAF $13.1B • January 2007 Consensus Revenue Estimating Conference • 06/07 State revenues significantly below projections • 06/07 GF shortfall estimated at $607 million • 06/07 SAF shortfall estimated at $377 million • SAF shortfall equates to $244 per pupil (ELPS $832,000) • SOS address Governor indicates she will not slash school funding mid-year (i.e. no pro-ration) • Governor and Legislators yet to reach a solution • Pro-ration letter has been issued to Districts • $122 per pupil pro-ration (approx. $416,000 to ELPS)

  5. I. Budgetary Challenges – Foundation Allowance Per Pupil Increases

  6. I. Budgetary Challenges – Declining Enrollment (Blended FTE)

  7. I. Budgetary Challenges – MPSERS Contribution Rate

  8. I. Budgetary Challenges – Health Insurance Annual Premiums

  9. I. Budgetary Challenges – IISD Districts Fund Balance % at June 30, 2006

  10. II. Budget Assumptions Major Revenue Assumptions: • Foundation Allowance – no increase; est at 06/07 level of $8,517 • Blended Enrollment – to remain constant at 3,410 • County Sp Ed – allocation to decrease 9% Major Expenditure Assumptions: • Employee Salaries - % increase from 1.75% to 1.50%; some groups remain unsettled • Moving Eligible Employees up on step and longevity • MPSERS contribution rate – blended rate of 16.84% • Health Insurance Premiums – 9.9% increase • Utilities – no increase

  11. III. “Most Likely” Scenario Projected 07/08 Budget Deficit: • Revenue decreases of $280,000 • Expenditures: • Salary and Benefit increases of $1,037,000 • Supplies/PS/Capital Outlay increases of $87,000 • 06/07 Structural Deficit $801,000 • Total Projected 07/08 Deficit of $2,205,000

  12. IV. Proposed Solutions 1. Impact of Voluntary Severance Plan (VSP) and modified staffing 2. Reduction of 22.0 full time equivalent (fte) (teaching & administrative staff) due to retirements, resignations, leaves 3. Significant thought and input from administrative group results in replacing 13.9 fte 4. 8.1 fte reduced as follows: • 3.0 fte @ Elementary Level (K-6) • .2 fte @ Middle School Level (7-8) • 2.4 @ High School Level (9-12) • 2.5 in Special Education (K-12)

  13. IV. Proposed Solutions (cont.) 5. Also, a reduction of 3.9 fte from the paraprofessional staff is proposed 6. Reductions in fte = $921,500 7. Additional savings from VSP/retirements = $214,000 8. Total “Staffing Reductions” from 06-07 to 07-08 = $1,135,500 9. Additional proposals impacting deficit (“Additional Impact”): • Reduce HS security = $8,000 • Reduce legal fees = $27,000 • 1 year delay on purchase of new busses = $130,000 • “Culture of accountability” leads to spending at 99% level = $320,000

  14. IV. Proposed Solutions (cont.) 10. Total “Staffing Reductions” + “Additional Impact” = $1,620,500 11. “Pending Issues:” • Non-core subject area service to parochial schools • Modifications to food service • Modifications to Title I 12. Potential favorable impact of “Pending Issues:” $254,000 13. If “Staffing Reductions” + “Additional Impact,” then deficit is approximately $584,500 leading to an anticipated fund balance of 8.1 % in June, ‘08

  15. IV. Proposed Solutions (cont.) 14. If “Staffing Reductions” + “Additional Impact” + “Pending Issues,” then deficit is approximately $330,500 leading to an anticipated fund balance of 9.0 % in June, ’08 . 15. A foundation allowance increase of $171 per student in 07-08 = $584,500 16. A foundation allowance increase of $97 per student in 07-08 = $330,500

  16. V. Additional Notations 1. A 07-08 general fund adoption based on the proposed solutions yields, among other things: • No program reductions, with the possible exception of minor changes in HS and MS non-core subject course offerings • Supply budgets remain the same as 06-07 • Modest increase in curriculum/textbook budget for 07-08 • New computers would be ordered and installed in K-4 schools • There would no need to layoff any member of the teaching staff prior to 07-08 due to financial considerations

  17. V. Additional Notations (cont.) • Up to 4 paraprofessionals could have reduced schedules or be notified that “there exists the possibility their services are not planned for in 07-08” • Could consider bus purchase and/or other issues in November, after enrollment and foundation allowance information is in hand. 2. Note: We are very concerned about the 08-09 fiscal year.

  18. Additional Notations (cont.) 3. Strategic Planning initiatives will need to begin in the early fall. Financial goals are prepared as follows: • Identify and develop collaborative partnerships (City of EL, State of MI, MSU, IISD, LEA) to improve efficient use of funds. • Develop and implement a standardized internal financial form for program evaluation (cost analysis). • Research and implement programs (health care, food services, purchase cards) to control costs.

  19. V. Additional Notations (cont.) • Gather RFPs of contracted services to ensure competitive quality and cost-effective standards are regularly evaluated. • Establish a culture where budget planning is considered a 12 month process (multi-year projections). • Explore zero based budgeting. • Communicate financial realities effectively to the East Lansing Community.

  20. V. Additional Notations (cont.) • Consider funding opportunities such as sinking fund, bond issues, enhancement millages, technology bond. • Evaluate and enhance opportunities for grants, donations, contributions and fees. • Study prospects related to commercialization (advertising). • Study opportunities for community education, recreation, child care expansion and enrichment programs.

  21. V. Additional Notations (cont.) • Undertake cost/benefit analysis of Schools of Choice program. • Monitor communication with key elected officials and civic groups. • Educate legislators regarding issues impacting public education.

  22. VI. Next Steps • 2007-08 Revised Budget Calendar • May 21st BOE meeting – proposed budget recommendations • June 3rd Notice of Public Hearing (Truth in Taxation) • June 11th BOE meeting – public hearing on proposed 2007-08 budget • June 25th BOE meeting – adopt 2007-08 proposed budget • By law BOE must adopt budget by June 30

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