Daniel Romzek Assistant Superintendent of Business & Operations - PowerPoint PPT Presentation

Daniel Romzek Assistant Superintendent of Business & Operations

School Code requires each school district to hold a public hearing on its budget and proposed tax rates before adoption (MCL 141.411‐415, MCL 15.261‐275) The local unit shall give notice of the hearing by publication in a newspaper of general circulation within the local unit at least 6 days before the hearing. Proposed budget shall be available of public inspection prior to budget hearing.

Proposed School District budgets must be adopted before July 1 each year. Budgets must be adopted for General Operating and all School Service Funds. Budget must be consistent with Generally Accepted Accounting Principles. Adopted budgets must be posted on the School District’s Budget Transparency webpage within 30 days of adoption.

Percent 2015 2016 Change Primary Residency $104,132,327 $104,834,370 0.7% Industrial Personal $11,743,080 $11,743,080 0.0% Commercial Personal $9,834,580 $10,145,130 3.2% Non-Primary Residency $139,014,613 $142,993,690 2.9% All Properties $264,724,600 $269,716,270 1.9% 2016 total taxable value increased 1.9% over 2015 levels. 2016 taxable values are provided by Oakland County Equalization based on 2016 property assessments.

% of Percent 2015 2016 Total Change City of Hazel Park $167,989,910 $168,249,240 62% 0.2% City of Ferndale $96,734,690 $101,467,030 38% 4.9% All Properties $264,724,600 $269,716,270 100% 1.9%

6 mills will be levied on all commercial personal property and 17.856 mills on all other non‐primary residency property for operations in 2016/2017. This levy provides local portion of state aid at $793 per pupil, and state provides balance of foundation allowance in state aid. Millage reduction fractions impacted millage this year. Property values increased at a rate greater than inflation and millage is rolled back to rate of inflation. Millage permanently reduced by 0.144 mills to 17.856. State assumes collections of full 18 mills. Results in lost revenue of $20,591 for 2016/2017.

Estimated tax revenue is $2.6 million for 2016/2017. Millage will be levied 100% in summer to provide much needed operating cash flows due to deficit financial position. Current millage was renewed in 2014 and expires on June 30, 2021.

16.00 mills will be levied on all properties for debt service in 2016/2017. Millage will be levied 100% in summer 2016. Millage broken down as follows: 13.00 mills for Qualified Debt on 2011 and 2012 Refunding Bonds 3.00 mills for retirement of Unqualified 2012 Facility Bonds 16.00 mills total for debt retirement

16.00 mills will be levied on all properties for debt service in 2015/2016. Estimated tax revenue is $3.5 million for 2016/2017. No change over 2015 levels. Millage is required to cover principal and interest payments and eliminate deficit fund balances.

0.9952 mills will be levied on all properties for Capital Projects Sinking Fund in 2016/2017. Millage reduction fractions impacted millage this year. Total property values increased at a rate greater than inflation and millage is rolled back to rate of inflation. Millage permanently reduced by 0.0048 mills to 0.9952 mills. Results in lost revenue of $1,294 for 2016/2017

0.9952 mills will be levied on all properties for Capital Projects Sinking Fund in 2016/2017. Estimated tax revenue is $268,000 for 2016/2017. Millage will be levied 100% in summer. Current millage was approved in 2012 and expires on June 30, 2017. Millage will need to be renewed in 2017 to continue collections in 2017 tax year and later. Sinking Fund revenue can only be used for major facility repairs and improvements.

2015/2016 2016/2017 Change General Operations $2,561,272 $2,614,166 $52,894 Debt Retirement $4,235,594 $4,315,460 $79,866 Sinking Fund $264,725 $268,422 $3,697 Total $7,061,591 $7,198,048 $136,457

Proposed Final Final Proposed Budget Actual Amendment Changes 2016/2017 2014/2015 2015/2016 2016/2017 $35,950,085 Revenue $41,412,049 $37,266,703 ($1,316,618) $34,347,295 Expenditures $43,238,140 $35,651,632 ($1,304,337) $1,602,790 Budget Surplus (Deficit) ($1,826,091) $1,615,071 ($12,281) ($6,402,965) Beginning Fund Balance (Deficit) ($6,191,945) ($8,018,036) Estimated Ending Fund Balance ($4,800,175) (Deficit) ($8,018,036) ($6,402,965)

Increase in foundation allowance (state aid per student) of $110 per student to $7,724, in accordance with School Aid Act. 4% decrease in blended enrollment from 3,297 to 3,144 students. No change in At‐Risk grant funds at $1.77 million No change in one‐time MPSERS offset and unfunded liability funding of $2.81 million.

Title I, Title II, and Title III federal grant program allocations are estimated at 15/16 levels. New grant programs for early literacy from MDE and Oakland Schools and Project Lead the Way. $1.78 million budgeted for PA18 special education millage funds from Oakland Schools. $1.27 million in indirect costs and rent from Center Programs. Contract settlements for all employee groups equivalent to 2% of salary.

$366,000 cost savings from teacher retirements. New 21 st Century Learning, Curriculum, and Custodial/Maintenance Administrators funded from savings in other discontinued positions. Reduction of 2 alternative education administration positions through consolidation of program leadership. 2 new literacy coaches funded by 31a and early literacy grants. 3 elementary social workers funded by 31a grant

2 preschool academy teachers funded by tuition revenue and 31a grant. MPSERS rate at 36.64% of salary with 24.74 for normal pension cost and 11.70% for unfunded pension liabilities. $100,000 unemployment costs budgeted, reduced by $200,000 from 15/16. Medical insurance costs budgeted according to collective bargaining agreements and hard cap limits.

$250,000 funded for curriculum and/or program initiatives, to be determined. No General Fund subsidy for Food Services or Child Care (Latch Key) programs. No change in worker compensation or property/liability insurance over 15/16 levels. 2% increase in utility costs.

Proposed Final Final Proposed Budget Actual Amendment Changes 2016/2017 2014/2015 2015/2016 2016/2017 $35,950,085 Revenue $41,412,049 $37,266,703 ($1,316,618) $34,347,295 Expenditures $43,238,140 $35,651,632 ($1,304,337) $1,602,790 Budget Surplus (Deficit) ($1,826,091) $1,615,071 ($12,281) ($6,402,965) Beginning Fund Balance (Deficit) ($6,191,945) ($8,018,036) Estimated Ending Fund Balance ($4,800,175) (Deficit) ($8,018,036) ($6,402,965)

14/15 15/16 16/17 Projected Budgets Actual Budget Budget 17/18 18/19 19/20 $41.4 $37.3 $35.9 $35.8 $35.9 $36.3 Revenue $43.2 $35.7 $34.3 $34.2 $34.3 $34.7 Expenditures ($1.8) $1.6 $1.6 $1.6 $1.6 $1.6 Budget Surplus (Deficit) ($6.2) ($8.0) ($6.4) ($4.8) ($3.2) ($1.6) Beginning Fund Balance (Deficit) Estimated Ending Fund Balance ($8.0) ($6.4) ($4.8) ($3.2) ($1.6) $0.0 (Deficit) • Proposed 16/17 budget continues positive trend of $1.6 million annual deficit reduction. • School District must maintain vigilance in eliminating deficit by 2020.

Projected enrollment drop of 2% in 17/18, 1% in 18/19, and 0% in 19/20. 1% annual increase in foundation allowance increase of 1% annually. Staffing adjusted by enrollment changes. Annual $250,000 earmarked funds for new curriculum and program initiatives. Annual allowances for capital improvements and technology in 17/18 and thereafter. Annual allowances for compensation restoration and/or adjustments.

$8,200 $8,000 $7,800 $7,600 $7,724 $7,400 $7,614 Projected 1% $7,200 $7,000 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

2,500 3,000 3,500 4,000 4,500 5,000 5,500 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 3,144 2017 2018 Projected 2019 2020

$57.5 $55.0 $52.5 $50.0 $47.5 $45.0 Millions $42.5 $40.0 $37.5 $35.0 $32.5 $30.0 $27.5 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Revenue Expenditures

$2 $0 ‐$2 Millions ‐$4 ‐$6 ‐$8 ($8.0) ‐$10

This budget recommendation is based on a series of assumptions Actual outcomes may vary from these assumptions There are many variables that could change. Student enrollment remains the single most critical component of budget. 90% of fall count is used for funding formula. Employee retirements and final staffing changes. Other unanticipated items.

Special Ed Child Food Total Center Care Service School Fund Fund Fund Service Revenue $8,414,466 $93,800 $1,434,164 $9,942,430 Expenditures $8,414,466 $93,800 $1,432,421 $9,940,687 Budget Surplus (Deficit) $0 $0 $1,743 $1,743 Beginning Fund Balance $0 $0 $0 $0 Ending Fund Balance $0 $0 $1,743 $1,743 Special Ed Center Fund includes $1.3 million transfer to General Fund for building rent and indirect costs. Food Service Fund reflects budget for in‐house operations by Chartwells.

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