2013 14 budget update budget reduction recommendations n.
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2013-14 Budget Update & Budget Reduction Recommendations. Topics of Discussion. 2013-14 Budget Projection Update & State Budget Update Basis for recommendations & budget variables Budget Variables that could change projection EGR Now donations Enrollment Performance based funding

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Presentation Transcript
slide2

Topics of Discussion

  • 2013-14 Budget Projection Update & State Budget Update
  • Basis for recommendations & budget variables
    • Budget Variables that could change projection
      • EGR Now donations
      • Enrollment
      • Performance based funding
      • Negotiations
  • Review of budget focus groups recommendations
  • Proposed budget plan for 2013-14
    • Structural balance
    • Overview of proposed budget reductions
  • Budget process till adoption of budget
  • Discussion/Questions
2013 14 budget original projection
2013-14 Budget(Original Projection)
  • Key Assumptions:
    • No increase in per-pupil funding ($7,397)
    • Best Practices reduced from $52 to $16 per pupil
    • Step Increase = 1.8% of total salaries
    • Retirement Rate: 24.79%
    • Health Care: 3.5% cap increase per PA152
slide4

Change to Budget Projection

  • Title I funding:
    • Title I grant is annually $80,000 to $100,000, very small compared to most districts. Based on economic demographics of student population
    • Grant is applied to reading and math assistance at the Middle School, which is the district’s designated Title I building
    • With the constraints placed on Title I funds as a result of our “focus school” designation we have been reviewing the cost/benefit of continuing to apply for the grant
    • Not knowing what the recommendation to the Board would be, administration conservatively assumed we would not apply for the grant, but left the related expenses in the budget
    • Recommendation at this point is to continue to apply for the grant
    • Budget projection revised to include the $100,000 in Title I revenue
slide6

State Budget Update

  • Governor, House, and Senate have all introduced school aid budgets
  • Governor’s Proposal:
    • $34 equity payment to districts at base foundation ($6,966) bringing them to $7,000. Only proposed for 2013-14
    • No increase to foundation allowance for EGR ($7,397)
    • Continuation of MSPERS offset credit and reduced performance based funding grant
    • Reduction in Best Practices grant from $52/pupil to $16/pupil
    • Net impact for EGR: $36/pupil decrease from 2012-13($108,000)
slide7

State Budget Update

  • House Proposal:
    • $34 equity payment to districts at base foundation ($6,966) bringing them to $7,000. Only proposed for 2013-14
    • No increase to foundation allowance for EGR ($7,397)
    • Continuation of MSPERS offset credit and performance based funding grant at 2012-13 level
    • Elimination of Best Practices grant ($52/pupil in 2012-13)
    • Net impact for EGR: $52/pupil decrease from 2012-13 ($156,000)
  • Senate Proposal:
    • $34 equity payment for base foundation districts plus $50/$100 increase based on 2x formula.
    • EGR: $89/pupil increase to foundation allowance ($7,486)
    • Elimination of MSPERS credit funding ($105/pupil in 2012-13)
    • Elimination of Best Practices grant ($52/pupil in 2012-13)
    • Net impact for EGR: $68/pupil decrease from 2012-13 ($204,000)
slide8

Basis for recommendations

  • Structural balance:
    • Recommendation based on attempting to balance the budget without further use of fund balance
    • District has used approximately $2 million of its fund balance the last four years including this year
    • Structural deficit projected to increase the next 3 years with no overall increase in funding combined with projected personnel cost increases (approx. $400,000 to $500,000 per year)
  • Proposed recommendations:
    • Will highlight at what point administration feels the district isn’t “what it wants to be as a school district”
    • Designed to assist Board in terms of potential use of fund balance, application of EGR Now funding
slide9

Budget Variables affecting projection

  • EGR Now donations
  • Final State School Aid budget
  • Enrollment
    • Current projection is 3,000 student FTE
    • Small senior class (210) will assist 2013-14 total
    • If Kindergarten/Young 5 and incremental grade growth is normal, chance to exceed 3,000 student FTE
    • Kindergarten enrollment growing, but still need additional enrollees
  • Performance funding:
    • State budget will probably include performance grant that we did not qualify for this year. Could potentially qualify for between $30 and $100 per pupil.
  • Negotiations
    • One year agreement(s) expires
slide10

Budget Focus Groups

  • Three focus groups ranging from 6 to 9 members:
    • Two staff groups
    • One parent group
  • Objectives given to focus groups:
    • What do we want to be as a district?
      • Educational program
      • Co-curriculars
      • Organizational structure
    • Maximum efficiency
    • Structurally balanced budget
  • Each group held three two hour sessions
focus groups ideas to resolve budget deficit
Focus Groups Ideas to resolve budget deficit
  • All Three Groups:
    • Use of unrestricted fund balance ($500,000)
    • Reduction or elimination of elementary paraeducator support
  • Two Groups:
    • Administrative reductions
    • Food service cost efficiencies, additional revenue
    • Request PTA’s to partially support building budgets
    • Reduce high school guidance staffing
    • Eliminate intervention specialist position
    • Eliminate elementary general education social work
    • Eliminate elementary world language
  • One Group:
    • Partial reduction of elementary specials
    • Increase in pay to participate for athletics
    • Use of restricted fund balance for potential new programs
    • Negotiate a freeze of budgeted step increase
    • Incorporation of potential EGR NOW donations
slide13

Administrative Savings

  • Consistent with focus group recommendations, savings will approximate ½ of administrative position
  • Specific reduction will be determined in time for June budget hearing
  • Total: $65,000
slide14

Teacher Early Retirement Incentive

  • Board of Education and Teacher Association have agreed to offer an early retirement incentive program this spring
  • Program requires a minimum of 4 teachers to elect the incentive
  • Incentive is a sliding scale ranges from 25% (4 teachers) to 40% (10 or more teachers) of this year’s base salary
  • 2013-14 savings will be approximately same at 4 or 10 teachers
  • 2014-15 and beyond savings will be much greater, assisting structural balance for future years
  • 2013-14 Savings: $80,000
slide15

Athletics

  • Outsource non-staff coaches: $30,000
    • Coaches that have no other employment through the district besides coaching would be outsourced to a third party company. Savings would be not incurring state retirement costs less third party fees.
  • Pay to participate increase: $50,000
    • Proposal is to increase pay to participate to $250 per sport, with removal of the annual family cap. Current program is $190 per sport, with a $475 annual family cap
slide16

Food Service efficiencies/revenue increases

  • District has continued to struggle to breakeven since the consolidation with Grand Rapids.
  • Avoiding further deficits, or utilizing profit to offset indirect expenses would assist the General Fund budget
  • At current meal sales, staffing can be reduced in High School kitchen.
  • Meal prices have not been raised in several years
  • Total: $25,000
slide17

Reduce secretarial staffing

  • Staffing will be reduced by 0.5 FTE
  • Specific reduction will be identified at the June budget hearing
  • Total: $30,000
slide18

Eliminate elementary paraprofessional positions

  • Current staffing levels:
    • Young 5’s: 2 hours per day for half day program
    • Kindergarten: 2 hours per day for full day program
    • 1st grade: 2 hours per day
  • Some assistance from parent volunteers, but there will be a loss of service and flexibility for the classroom(s).
  • Total: $140,000
slide19

Reduce one section of 2nd grade

  • Due to projected low class sizes in next year’s 2nd grade
  • 3 sections currently totaling 53 students will reduced to sections
  • Total: $90,000
slide20

Eliminate intervention specialist position

  • Service provided at elementary and middle school levels designed to help struggling general education students
  • Intervention specialist position is a portion of a full time position
    • 0.8 FTE intervention specialist, with individual teaching one class at middle school
  • Service will be not be backfilled by other staff
  • Total: $90,000
slide21

Eliminate elementary world language

  • Full elimination of K-5 program
  • Middle school program will be adjusted in the future to accommodate students not having the elementary experience
  • Total: $270,000
slide22

Eliminate one high school guidance counseling position

  • Currently have three staff members providing guidance counseling services
  • Increased workload for two remaining staff members
  • Some services restructured or eliminated
  • Other responsibilities shifted to administration and the guidance secretary
  • Total: $120,000
slide23

Eliminate elementary art

  • Elementary students receive specials in a half day block once a week. Classroom teachers receive their weekly planning time during this half day
  • Students from 3 classrooms will be spread into the two remaining specials, physical education and music, during the once per week half day
  • Total: $180,000
slide24

Eliminate general education social work

  • Social work/counseling services at the elementary level will be reduced to only those required through special services
  • Total: $75,000
slide25

Summary of Reductions

  • Administrative Savings: $65,000
  • Early Retirement Incentive: $80,000
  • Outsource non-staff coaches: $30,000
  • Increase pay to participate to $250/sport: $50,000
  • Food Service staffing reduction/meal price increase: $25,000
  • Reduce secretarial staffing: $30,000
  • Elementary paraprofessional positions: $140,000
  • Reduce one section in 2nd grade: $90,000
  • Intervention Specialist position: $90,000
  • Elementary world language: $270,000
  • One high school guidance position: $120,000
  • Elementary art: $180,000
  • Elementary general education social work: $75,000
  • Total: $1,245,000

Beyond the line, administration feels the district is no longer “what we want it to be”

slide26

Additional concepts being investigated

  • Offset a portion of PAC management costs: $20,000
    • Researching potential for additional rental revenue, booster support of a portion of PAC management costs
  • Restructuring of in-house/contracted maintenance staffing/costs: TBD
    • Reviewing the cost benefit of in-house maintenance staff versus outside vendor support
  • Partnership with neighboring district to assume our transportation needs: TBD
    • Operational savings might not be significant
    • Cost avoidance for future by not having to refresh bus fleet
    • More reliable staffing and bus availability during peak usage
revised budget projection1
Revised Budget Projection

Recommend eliminating remaining $183,685 through use of fund balance or compensation savings.

focus groups ideas to resolve budget deficit1
Focus Groups Ideas to resolve budget deficit
  • All Three Groups:
    • Use of unrestricted fund balance ($500,000)
    • Reduction or elimination of elementary paraeducator support
  • Two Groups:
    • Administrative reductions
    • Food service cost efficiencies, additional revenue
    • Request PTA’s to partially support building budgets
    • Reduce high school guidance staffing
    • Eliminate intervention specialist position
    • Eliminate elementary general education social work
    • Eliminate elementary world language
  • One Group:
    • Partial reduction of elementary specials
    • Increase in pay to participate for athletics
    • Use of restricted fund balance for potential new programs
    • Negotiate a freeze of budgeted step increase
    • Incorporation of potential EGR NOW donations

Items shaded in red are included in final proposal

slide29

Budget Process – Remainder of year

  • Collective Bargaining with employee associations
    • Starting in late April
  • Monitor state budget process until state budget is adopted
    • Adjust budget assumptions if there are modifications from the Governor’s proposal
  • Monitor potential legislation in Lansing that might affect the district budget
  • Community & Staff discussions about budget proposal
    • Now through the end of May
  • June Budget Hearing with Board of Education
  • Adoption of 2013-14 budget – June Board of Ed meeting