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Meeting The Needs of Our Children During A Fiscal Crisis

Join us for a strategic planning session to discuss the challenges of our current fiscal crisis and explore solutions to meet the needs of our children. The session will include presentations, small group discussions, and feedback collection from educational stakeholders.

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Meeting The Needs of Our Children During A Fiscal Crisis

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  1. Meeting The Needs of Our Children During A Fiscal Crisis Reality Based Budgeting In Kent City Community Schools 2010-11 Strategic Planning Session February 15th, 2010 7 PM Middle School Cafeteria

  2. February 15th, 2010 Strategic Planning SessionAgenda • Call To Order (5:30 PM) • Closed Session For the Purposes of Evaluating the Superintendent • Public Comment on Agenda Items (7 PM) • Public Comment on Any Item • Presentation, “Meeting the Needs of Our Children During A Fiscal Crisis” • Small Group Discussion and Completion of Feedback Sheets • Closed Session to Discuss Bargaining • Adjournment

  3. Goals of this Presentation • Provide Clarity To What We Face In Michigan Today and Tomorrow • Review the History of Our Budgetary Journey • We Are Not Alone; Understanding What and How Others Are Dealing With Fiscal Challenges • Understand What We Can Do To Continue To Meet the Needs of Our Children? • Get Feedback On Specific Ideas Presented From Educational Stakeholders

  4. What Is Happening? School headcount is decreasing For Kent City, Based On Cohort Movement Will Drop Our Enrollment To 1249 Students Totaling $790,128 Per Student Funding Will Be Cut Another $268 Totaling $364,480 Metropolitan Grand Rapids Had The Highest Spike in Poverty In the Nation this Year Kent City Community Schools has a Free/Reduced Lunch Rate of 68% in our EL, 55% in our MS, and likely is over 50% in our HS Based on our Enrollment Changes, Kent City has had a staggering increase in multi-family dwellings living in Single Family Residences State funding is decreasing Local funding is decreasing Stimulus is running out THIS IS THE NEW REALITY

  5. The Fundamental Factors • Structure of school finance • 66% of School Funding Based on Sales Tax • 33% of School Funding Based on Property Tax (We Avoided A $127 Cut In Per Pupil Funding This Year Because Our Tax Courts Are So Far Behind In Hearing Property Tax Appeals-The Impact of this Will Be Felt in 2012) • Continued economic distress in Michigan • 70% of Industrial Jobs Have Been Lost In Michigan (Tax Base Built On Industry) • Majority of Michigan’s Economy Based On Service Industry Now (Majority of Tax Base Excludes Service Industry) • One-time nature of federal stimulus money • These Funds Filled Budgetary Shortfalls for 2008-09 & 2009-2010 • Decline in school-age populations in Michigan • Michigan’s Demographics Have Changed and Will Remain This Way for Many Years to Come www.pscinc.com

  6. Michigan’s Economic Tsunami 8 consecutive years of job loss Job losses will continue in 2009 and 2010 By 2011, state will have lost 70% of its automotive manufacturing jobs Other Sectors Also Lagging State’s per capita income is 11% below national average – 38rd in the nation New jobs will have lower-wages www.pscinc.com

  7. Key Findings • Fiscal years 2009–10 and 2010–11 will be most challenging years since 1994 enactment of Proposal A • Based on current assumptions and decisions, declines for Kent ISD local districts range from 2.4% to 13.9% over 2 years. (Kent City Community Schools Could Lose Between $1.2 and $1.7 Million) • Years beyond 2010–11 do not hold promise for material improvement www.pscinc.com

  8. The New Reality 2010-11 Will Be Our New Reality Unless We Have Significant Changes In Revenue (Overhaul of Michigan’s Tax Structure); We Can Expect That Michigan Will Be The Same In Ten Years From Now Now Is The Time to Reinvent Ourselves; We Have No Other Choice www.pscinc.com

  9. The Fiscal Journey for the Past 14 Months • Budgeting As a Vehicle for Accomplishing Priorities (2-16-09) • Retirement Costs Continue to Rise (24% is our expected costs-Largest Increase Ever) • For Every Dollar Spent in HR; We Spend An Additional $.38 on Retirement and Benefits • Insurance Premium Rates Are Expected To Jump by 13%

  10. The Fiscal Journey for the Past 14 Months • Budgeting As a Vehicle for Accomplishing Priorities (2-16-09) • Declining Enrollment Through Economic and Birth Rate Continues • Per Pupil Reductions Were Larger Than Promised

  11. The Fiscal Journey for the Past 14 Months • Budgeting As a Vehicle for Accomplishing Priorities (2-16-09) • Despite These Automatic Increases We Were Able to Make Fiscal Adjustments (HR Costs and Expenditures) that Allowed Increased Programs For Students and Fiscal Stability for the Anticipated Per Pupil Cuts of this Year.

  12. The Fiscal Journey for the Past 14 Months Community Input Was Shared on 3-23-09 Actual FTE Cuts Were Larger Than Community Input Administrative Cut Occurred Through Shift of Job Title (Description)

  13. The Fiscal Journey for the Past 14 Months Community Input Was Shared on 3-23-09 Closing the Upper Wing of the EL Was Minimal Savings (Cost Prohibitive to Gain Utility Reductions)

  14. The Fiscal Journey for the Past 14 Months • Community Input Was Shared on 3-23-09 • Most Significant Savings Would be Through Closing the MS-Despite Capacity Issues With Facilities • Gym • Computer Labs • Administration/Governance • Technology

  15. The Fiscal Journey for the Past 14 Months Community Input Was Shared on 3-23-09 Not Possible to Just Close EL-Capacity Issues

  16. The Fiscal Journey for the Past 14 Months Community Input Was Shared on 3-23-09 Pool Costs Are Minimal in the “Big Picture” and once closed; future revenue uses are eliminated

  17. The Fiscal Journey for the Past 14 Months Community Input Was Shared on 3-23-09 We Have Modified and/or Consolidated Routes Leading to Significant Savings

  18. The Fiscal Journey for the Past 14 Months • Community Input Was Shared on 3-23-09 • Outsourcing All Non-Instructional Staffing Provides Savings-Significant Savings When No Insurance Is Provided • Pro’s and Con’s To This

  19. The Fiscal Journey for the Past 14 Months • Community Input Was Shared on 3-23-09 • We Actually Have Had Significant Savings Since Outsourcing Maintenance (21% Savings in HVAC Costs in the first 12 Months)

  20. The Fiscal Journey for the Past 14 Months • Community Input Was Shared on 3-23-09 • Potential Savings of between $670,422 to $1,000,671 have been identified through community involvement • $600,000 savings have been obtained

  21. The Fiscal Journey for the Past 14 Months Budgetary Conversation with Staff on May 12th, 2009 An All Staff Meeting Was Held-85% of Our Costs are HR Related

  22. The Fiscal Journey for the Past 14 Months Budgetary Conversation with Staff on May 12th, 2009 Tough Choices… Closing the Final $400,000 Shortfall (then) Was Significant

  23. The Fiscal Journey for the Next 14 Months • Contractual Concessions Led To Savings (10-16-09) • Teachers and Support Staff Received a 0% Raise for 2008-09 & 2009-10 School Years • Teachers and Support Staff Deferred Any Step Increase Until Departure From the District (Savings of $95,000) • Support Staff Have Agreed to Changes in Insurance Benefits (Savings of $20,000)

  24. The Fiscal Journey for the Next 14 Months • School Aid Fund Update/Clarification (10-16-09) • The Department of Treasury issued a memorandum to Governor Granholm indicating they believe that the shortfall will be approximately $264 million or $165 per pupil for fiscal year 2009-10. • This is on top of the $165 cut per pupil cut in the 2009-10 School Aid Act.

  25. The Fiscal Journey for the Next 14 Months • School Aid Fund Update/Clarification (10-16-09) • Many administrators have been receiving updates from different sources indicating that their total proration will now be $300 per pupil total. • For Kent City that will equal $408,000 one quarter of the way through our current budget. • For 2010-11, per pupil funding cuts are expected to be between $350 to $900 on top of the $300 cut this year or ($1.2 Million).

  26. The Fiscal Journey for the Next 14 Months • School Aid Fund Update/Clarification (10-16-09) • The 2010-11 Budget Must Be In Place by June 30th, 2009. • All Indications Lead to A Cut of between $300 to $600 per pupil cuts for 2010-11. • Our Target Must Be Cutting $600 to $1,200 in per pupil costs to stay even! (Continue to Use Savings to Pay for Expenditures-Savings are Gone!)

  27. The Fiscal Journey for the Next 14 Months

  28. The Fiscal Journey for the Next 14 Months • 2009-10 Funding Reduction Will Be Approximately $381,605 per report. • 2010-11 Funding Reduction Will Be: • “Most Likely” $440,456 • “Worst Case” $1,201,077 • “PERT” $533,218

  29. Look to the Future…

  30. Four Years Out…

  31. If We Had Our Count Day Today… • Our Actual Enrollment As of Today is 1,231 • EL is 559 • MS is 254 • HS is 418 • It is typical to have a smaller count in February than in September, but it is also typical that next year’s count is closer to the February count than the one last September

  32. Fiscal Impact by Year… • The Financial Impact of Student Loss in: • 2009 is $417,012 • 2010 is $36,580 • 2011 is $212,164 • 2012 is $124,372 • Total Fiscal Impact to the District in Four Years is $790,128

  33. History of Our Budgetary Journey • February 12th, 2009, Budgeting As a Vehicle for Accomplishing Priorities • Stabilize Enrollment • Balance Budget • May 12th, 2009, Budgetary Meeting With Staff • $400,000 in Savings • Community Input Throughout the Entire Process Resulted in Ideas and Priorities

  34. What We Could Face in 2010-11 That We Must Prepare For Immediately… • $622,400 of HR Increases in the 2008-09 & 2009-10 Budget That Has Depleted Our Fund Balance (Budget Adjustment 12-14-09 Board Meeting) • $224,400 Reduction in Operational Dollars As A Result of the $165 Cut Per Pupil (Fall of 2009) • $489,600 Reduction in Operational Dollars As A Result of Declining Enrollment for 2008-09 and 2009-10 School Years • $715,000 Reduction in Operational Dollars for the 2010-11 School Year Based on Continued Declining State Revenue That Supports the School Aid Fund

  35. WE MUST… Provide More Opportunities For Our Students While Reducing HR Costs Significantly And Stabilize Enrollment Despite Economic Motivated Relocations and Declining Birth Rates Through Unique Programming Essential; Lower Expenses and Increase Revenue…

  36. Community Input Throughout the Entire Process Resulted in Ideas and Priorities Keeping “Stakeholder Budgetary Priorities” in mind, which include: No elimination of Transportation. No elimination of Athletics. No increase in Class Size (student to teacher/adult ratio) No elimination of programs for students.

  37. The Challenge… “Right-Size” Our 2010-11 Budget and Eliminate $1.2 to $1.7 Million Without: • Eliminating Transportation • Eliminating Athletics • Increasing Class Sizes • Eliminating Programs For Our Children

  38. We Are Not Alone

  39. We Are Not Alone • EGR Has A Much Higher Per Pupil Funding Level Than Kent City Community Schools • EGR, Despite More Funding, Will Be Cutting In Areas That Provide Supports For Students; Areas That KC Has Already Been Forced To Cut

  40. We Are Not Alone

  41. We Are Not Alone • Rockford, for the first time in recent years, actual declined in enrollment • As A Much Larger District, Rockford Has Layers That Can Be Cut Before Students Are Impacted; KC Does Not Have This Luxury

  42. We Are Not Alone

  43. We Are Not Alone • Kenowa Has Been Fortunate That They Have Been Able to Avoid Drastic Cuts to Support Staff in Prior Years; Unlike KC Which Has Already Cut Significantly in Our Support Staff Numbers (We Rank Near the Bottom In The State In Support Staff Staffing Expenses)

  44. We Are Not Alone

  45. We Are Not Alone Comstock Park Mid-Year Cuts Will Lead to Class Sizes in the Elementary to 29+ in Some Situations Comstock Park Will Continue to Cut Staff That Will Lead To Reduced Programs For Students

  46. We Are Not Alone

  47. We Are Not Alone Godrey-Lee Is Very Similar To KC in Size G-L Has More Federal Funding Than KC

  48. We Are Not Alone

  49. We Are Not Alone Many of the Areas that G-L is Exploring Have Already Been Explored and/or Implemented in KC

  50. We Are Not Alone

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