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Designates Meeting Wednesday, May 9, 2012

Overview of Fiscal Year 2012-2013. Designates Meeting Wednesday, May 9, 2012. Doing More with More: More Creativity, More Collaboration. Primary goal is to retain core services to our local school districts District demand for ISD services continues to increase Funding continues to decline.

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Designates Meeting Wednesday, May 9, 2012

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  1. Overview of Fiscal Year 2012-2013 Designates Meeting Wednesday, May 9, 2012

  2. Doing More with More: More Creativity, More Collaboration • Primary goal is to retain core services to our local school districts • District demand for ISD services continues to increase • Funding continues to decline

  3. Budget Development - Funding • Local School District Funding • Based on student count & foundation allowance (70%) • Intermediate School District Funding • Based primarily on property tax revenue (90%)

  4. Property Tax Forecast Property Tax decline from base year – FY 2008 Fiscal Year 2008-09 -.0075% - $ - Fiscal Year 2009-10 -3.8% - $ (8.2)M Fiscal Year 2010-11 -11.9% - $ (32.9)M Fiscal Year 2011-12 -7.5% - $ (46.7)M Fiscal Year 2012-13 -3.0% - $ (51.8)M Fiscal Year 2013-14 0% - $ - Fiscal Year 2014-15 0% - $ - Fiscal Year 2015-16 2% - $ - Fiscal Year 2016-17 1% - $ - Annual property tax collection has declined from FY 2008 to FY 2014 by 23.9% Accumulative loss from FY 2008 to FY 2014 is $191.6 million FY 2008 base year tax levy was $216.9 million FY 2014 expected tax levy is $165.08 million

  5. Oakland Schools Property Tax Revenue

  6. Cost Containment • Staff cumulative loss of 8% to salaries (freezes, furloughs, increased premium sharing over last 4 years) • Reduced staff by 30% since 2002-03 • Continued planned spend down of fund equity to 5% • Lower pay rates for contractors • Less frequent equipment replacement • Lease consolidation • Lower energy consumption

  7. Oakland Schools Financial Impact of Benefit Plan Changes

  8. 94% of Oakland Schools Budget is Spent on Services to Local Districts

  9. Services to LEAs • Services are prioritized by local superintendents and their staff through a survey done every 3-4 years. • Usage data from District Service Report • Feedback on services is collected annually from each referent group (HR, finance, instruction, technology, etc.) • Input to Oakland Schools – Continuous Improvement Plan • Instructional Initiatives driven by LAC-O priorities • State & Federal mandates

  10. Oakland Schools Programs & Services • Increase Student Achievement • Serve diverse needs of schools • Decrease costs/increase efficiencies

  11. 2005-06 – 2011-12 MEAP Reading & Math Grades 3-8 Combined for African American Students

  12. 2005-06 – 2011-12 MEAP Reading & Math Grades 3-8 Combined for Hispanic Students

  13. 2005-06 – 2011-12 MEAP Reading & Math Grades 3-8 Combined for Students Eligible for Free or Reduced Price Lunch

  14. 2005-06 – 2011-12 MEAP Reading & Math Grades 3-8 Combined for English Language Learners

  15. 2005-06 – 2011-12 MEAP Reading & Math Grades 3-8 Combined for Students with I.E.P.s

  16. Professional Development and Instructional Services • More than 61,990 participants attended 2,368 ISD and regional events • Pearson Inform is used by 25 districts at a cost of $2.00/student with a 50% subsidy from Oakland Schools.  The FY2012 Oakland Schools’ subsidy is $155,723 • 754 Special Education students received 2,867 services: direct, consultations, short term problem solving and evaluations • More than 8,000 hours of Instructional Services assistance provided to LEAs

  17. Professional Development and Instructional Services • $2,527,784 worth of materials provided to students with special needs • 1,511 students served by Homeless program • 856 students served by Wraparound program • 1,940 Back to School pupils served (increase of 698) • 1,219 Truant pupils served (increase of 195) • $31,351,294 saved by districts using Career Focused Education programs, including the Oakland Schools Technical Campuses

  18. Technology, Business and Operational Services • SPAM filtering blocked more than 1.4M SPAM emails/day • Student information system (MiStar) saved $56,800 each for 20 districts totaling $1,136,000 • AMS Business/Finance/HR application saved 6 districts $85,800 each, totaling $514,800 • Tech Services fielded and resolved 20,368 technical assistance calls from local districts • Internet Service Provider for all districts resulting in savings of more than $1M

  19. Technology, Business and Operational Services • Transportation collaboration helped reduce Special Education bus mileage by 266,396 miles with an estimated savings to 20 school districts of $1.5M • PolyPlot Transportation Routing serviced 26 districts • Bus Driver Safety Education for 1287 staff (235 beginning bus driver and 1052 advanced bus driver) and specialized training for over 270 staff • $2.8M volume of cooperative purchases in Oakland County; participated in more than $13.2M of purchases in statewide competitive bids

  20. Technology, Business and Operational Services • Production Printing & Graphics produced more than 20M copies at reduced cost and free delivery to local districts, internal and municipalities • Local districts received $12,304,143 through Medicaid eligible services • Fee for service support to Brandon, Clawson, Madison, Oak Park and Pontiac • Technical Campus Student Enrollment 2011-2012 • 1st semester enrollment 2,851 • 2nd semester enrollment 2,650

  21. Program Highlights 2012-2013 • Oakland Opportunity Academy (OOA) • Widening Advancements for Youth (W-A-Y) • Virtual Learning Academy – Oakland • NextGen Program (F1 Visa Program for foreign students) • Continue to increase external services in respond to LEA requests • Continue to develop Common Core Standard Curriculum • Provide resources for formative student assessments aligned to state standards

  22. Program Support & Subsidies 2012-2013 • Shift existing resources to priority services (Grants, School Quality) • Increased Medicaid distribution & reduced fee, FY 2005 - 20% fee, current FY12 - 4.3% fee • Continue to subsidize ONE Network fees - $300,000 • Continuation of Inform subsidy - $150,000 • CFE Transportation Reimbursement - $2M • Continue CFE-Regional Program Relief Funds – $1.6M • Significant increase to Production Printing & Graphics services permitting continued low cost printing

  23. Program Support & Subsidies 2012-2013 • Common Core Curriculum support - $450,000 • Schools in need of targeted services - $200,000 • $18.7M for direct instruction of 2,800 students in high-end/high-tech programs at the Technical Campuses • Regional CTE program/staff support - $1.3M • Atlas-Rubicon West, curriculum management system subsidy - $132,000 • Discovery/Learn 360, video content streaming software subsidy - $123,000

  24. Program Support & Subsidies 2012-2013 • Regional Procurement Process (cooperative contract network with over $13.2M of annual usage) • AMS, Zangle, ONE Network technical support • Beverage Consortium - $70,000 • Continue Inter-district mail services • Continue Tri-County Alliance • Provide Special Education PA-18 funding and support - $110.5M (decreased by $34.7M from FY 2010)

  25. Overview of Fiscal Year 2012-2013 Oakland Schools Proposed 2012-2013 Budgets

  26. Fund Balance Target Setting Protocol • The proposed protocol for the development of each fund’s year ending fund balance target will be predicated upon: • 5 percent of the operating programs contained in said fund • Known economic liabilities or designated reserves of a specific fund • The fund balance target setting protocol recognizes the following: • The State of Michigan’s economic environment • The financial condition of the LEAs • Maximize district support thru program support, subsidies and distributions Oakland Schools Board of Education approved the Protocol on 6/15/2009 Practice for the Special Education Fund is to distribute to LEAs the amount in excess of the target unreserved fund balance.

  27. Oakland Schools Total Revenue Summary FY 2013 $270.7 Million Dollars in millions

  28. Revenue Assumptions • Property tax revenue decrease of 3% • Expected interest earnings are $895K total for all funds combined (FY 2007 $7.7 million) • Increased local district utilization of the student application & NextGen Exchange student programs. Stable revenue from GenNet online software, Rubicon West online software, Discovery/Learn 360 online software. • General Education Section 81 revenue stable • Special Education State funding stable • Career Focused Ed State funding stable • No Personal Property Tax loss forecasted in FY13

  29. Operating Revenue per Countywide per pupil count (195,000) • Revenue in the three major ISD operating funds since FY 08 has plunged by $51.8 Million, 23.9% decrease (Excluding Grants, Medicaid and Production Printing & Graphics) • Loss of $290 per pupil on a countywide basis • Includes PA-18 distribution reduction of $171 per pupil – all pupils, General Ed.

  30. Operating Revenue Countywide per pupil basis

  31. Countywide pupil count

  32. Oakland Schools Fiscal Year 2013 Total Expenditures Budget Type $272.79 Million P.S./Supplies Grants Personnel Transfers to LEAs Dollars in millions

  33. Notable Programs • Continuation of the Oakland Opportunity Academy - Alternative High School program serves six districts w/ enrollment of 150 FTE. Tuition projected at $6,700 per pupil • Continuation of Widening Advancements for Youth - online program for 11th and 12th graders w/ enrollment of 240 FTE. Tuition projected at $6,500 per pupil • New: Virtual Learning Academy – Oakland - online program for K-8 students projecting enrollment of 240 FTE but could be significantly higher. Tuition projected to be $6,100 per pupil

  34. Notable Programs • NextGen continues. High School Study Abroad program for 12th grade Chinese students with enrollment of 15 • Work on the Common Core Curriculum progresses. Over a three year period (FY 2012-FY 2014) Oakland Schools will allocate approximately $650K towards this countywide initiative. MAISA will contribute $240,000 of this funding.

  35. CPDI Fund • The CPDI Fund (Collaborative Programs Development Initiative) has an estimated balance of $3.9 million. • There will be a subsidy from this fund of $190K to help start up the new Virtual Learning Academy-Oakland Program for 2012-13. This amount is to be repaid from VLA-O to the CPDI Fund via future tuition revenue collections • Prior initiatives partially subsidized by the CPDI Fund include: • International Academy • Refugees Support Programs in qualifying districts • W-A-Y Program (Widening Advancements for Youth)

  36. Summary Staffing Report

  37. # of # of Programs & Services Departments Employees Difference Employees 2012-13 2008-09 Career Focused Education (Campus) 191.00 157.50 (33.50) Career Focused Education (Non-Campus) 23.00 13.09 (9.91) Child Nutrition 1.00 0.33 (0.67) Early Childhood 12.00 11.50 (0.50) Government & Community Services 10.90 11.05 0.15 Learning Services 37.50 30.54 (6.96) Research,Evaluation & Assessment 8.00 0.00 (8.00) School Quality 10.50 14.30 3.80 Special Education 100.00 71.21 (28.79) Technology Services 55.00 50.50 (4.50) World Language Initiative 1.00 0.00 (1.00) Sub total: 449.90 360.02 (89.88) Total Across All Departments: 526.70 422.13 (104.57) # of # of Other Programs & Services Employees Difference Employees 2012-13 2008-09 External Cost Recovery Positions 2.00 1.43 (0.57) Homeless / Wrap Around (Grant Funded) 11.10 18.00 6.90 Job Link (Grant Funded) 32.00 37.33 5.33 Oakland Opportunity Academy 0.00 9.52 9.52 Virtual Learning Program 0.00 7.60 7.60 WAY Program 0.00 3.70 3.70 Summary Staffing Report

  38. Salary & Benefits Comparison by Fund(in $ millions)

  39. Staffing Changes • Two new consultant positions in Special Education • (1) Alternative/Augmentative Communication • (1) Visually Impaired • The new Virtual Learning Academy – Oakland, an online K-8 program requires at least 7 new positions, and possibly more depending on enrollment that is projected at 240 FTE

  40. Personnel Costs • Wage freeze in effect for third consecutive year, subject to collective bargaining • Furlough days (five for 12-month staff and three for 10-month staff) eliminated after two years in effect. Cost increase of $700K – All Funds • Retirement rate of 27.37% will increase costs by $1.08 million. This is an effective rate cost increase of 11.9%. • Health Insurance “Hard Cap” will save $1 million. Plans offered may be affected by collective bargaining

  41. Budgetary Factors • Michigan Tax Tribunal Expense (MTT) • Doubled reserve in 2011-12 (from 1.5% to 3%) • Set reserve at 2.5% for 2012-13 which equates to $3.2 million in expense • PA 18 Special Education Funding • $4 million reduction in 2012-13 equates to -3.6% or an average loss per pupil in Oakland County of -$22 per pupil

  42. Allocation of Costs General Allocation • 50% GE, 25% SE, 25% CFE Activity Based Cost Allocation – FTE based • 23% GE, 25% SE, 52% CFE Abraham & Gaffney – square footage based • 50% GE, 26% SE, 24% CFE Cost Based Allocation – Transportation • 73% GE, 25% SE, 2% CFE Reference Enterprise Wide Summary Document

  43. General Education Fund Summary • Total Revenue: $17.4 Million • Property tax – $9.8M (56% of total revenue) • Other local revenues – $3.5M • State sources revenues – $3.5M • Other financing source revenues – $.6M • Total Expenditures: $17.8 Million • General Administration – $1.5M • Finance and Operations – $6.8M • Instructional Services – $8.8M • Plant and fixed charges, transfers to LEAs – $.7M

  44. General Fund Overview Dollars in millions

  45. Fiscal Year 2013 Fund Balance END OF YEAR: Unassigned: $ 2,209,700 Assigned: Prepaid, Inventory and Deposits $ 30,700 Total Budgeted Ending Fund Balance $ 2,240,400 _______________________________________________________ 5% of GEF operating expenditures ($17.8M): $ 0.9M State Aid exposure 50% of Section 81 $ 1.7M Fund Balance Protocol Target: $ 2.6 M

  46. Fiscal Year 2013 District Debt Amount Average Annual Payment GEF Debt Principal: $ 4,030,000 $ 765,000 CFEF Debt Principal: $42,875,000 $ 3,100,000 QSCB Debt Principal: $13,412,500$ 1,111,000 Total OS Bonded Debt: $60,317,500 $ 4,976,000 NOTE: Debt Service for the Administration Building Project Bond (2003) and QSCB issue is pre-funded in Debt Service Fund 310 & 313 and Debt Service for the campus renovations bond (2007) is pre-funded in Debt Service Fund 312 through FY 2020

  47. General Fund Five-Year Forecast in millions

  48. ISD Budget Resolution Revised School Code 380.624 - Overview • Not later than May 1 of each year, the ISD shall submit proposed budget for next fiscal year to the board of each constituent district for review • Not later than June 1 of each year, the board of each constituent district shall review the proposed ISD budget, shall adopt a board resolution expressing its support for or disapproval of the proposed budget • Mail copy of resolution indicating support or disapproval (with rationale) to the Oakland Schools Board of Education

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